Home Sweet Home, Insider-Tips on Minnesota real estate.

House votes to give homebuyers 3 extra months

Homebuyers would get an extra three months to complete their purchases and qualify for a generous tax credit under a bill overwhelmingly passed by the House on Tuesday. The bill passed 409-5. It now goes to the Senate.

Read the full story by Stephen Ohlemacher, Associated Press and published in StarTribune

 

FHA Fee Increase

Information is circulating on the Internet questioning the rationale of House-passed legislation authorizing FHA to improve its financial stability by increasing the monthly mortgage insurance premium. The premium would increase to .85 percent from .55 percent. FHA is seeking the increase so it can decrease the upfront premium it charges borrowers, which is 2.25 percent of the loan amount.

This increase will rebuild FHA reserves faster than it otherwise could, and lowering the upfront premium will provide homeowners with greater equity. NAR supports the FHA change and estimates that on average it will increase monthly payments by $33. The Senate still must act on the measure. | MORE INFO

Source: National Association of REALTORS®

Weekly Market Activity Report

The Twin Cities housing market continues to adjust to a world without a fancy tax credit. Pending sales leveled off following the slight gains seen the prior week, squatting at 645 signed contracts for the week ending June 19.

While that's steady compared to last week, it's anemic compared to last year at this time when the market posted 1,156 signed contracts. If you're keeping track of percentages, that means we're down 44.2 percent from a year ago—the sixth consecutive week of year-over-year declines exceeding 30 percent.

New listings are also down from a year ago, posting a drop of 8.4 percent from a year ago to 1,712 for the most recent reporting week. Any sort of "return to normalcy" is going to take some time.

VIEW FULL REPORT| VIEW MORE RESEARCH REPORTS

Extended Home Buyer Tax Credit Expires

Although the Extended Home Buyer Tax Credit expired on April 30, 2010, home buyers who signed a written, binding contract by that date and close before July 1, 2010 may still be able to claim the credit. Below you will find general information about who can claim the credit and how. 

If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Latest News
(June 25, 2010)—NAR is working very closely with key Members of Congress and the Senate on a possible extension of the June 30, 2010 deadline for closing contracts eligible for the Homeowner Tax Credit. NAR is pursuing all possible options to determine what other legislation may be available for passing a June 30 extension. Each of the possible options face difficult obstacles, but NAR's efforts to clear the way are on going. The Senate will not have any votes today, June 25, which will push the Tax Credit Extension deadline to the week of June 28, 2010. In the meantime, those impacted should proceed as if the June 30, 2010 date is binding.

Special Note for Overseas Military Personnel and Federal Employees 

Military personnel and some federal employees serving overseas may still be able to claim the credit on home purchases made before April 30, 2011. Consult the IRS web site for more information on the Extended Home Buyer Tax Credit provisions for qualified military personnel and federal employees

Mortgages Face New Rules

Some Worry About Higher Costs, Fewer Choices for Borrowers

The kinds of mortgages you see today—fixed-rate loans [or] if it's an adjustable rate, it's pretty conservative in its terms—those are going to be the loans you see for a long time in the future," said Glen Corso, managing director of the Community Mortgage Banking Project, which represents small, independent mortgage lenders. "There's not going to be any room for experimentation or trotting out loans that have new features."

To read the full article By NICK TIMIRAOS And JAMES R. HAGERTY published in Wall Street Journal

Pricing forward

Understand "forward pricing.” When pricing your home — the first step in the negotiation process — "don’t simply take what the last home in the neighborhood sold for and make that your price,”

Instead, use forward pricing: If homes in your area are appreciating by, say, 10% annually, and the last comparable home sold six months ago for $300,000, then yours should be priced at $315,000 (half of 10% of $300,000 equals $15,000, which is the amount that should be added to "forward price” for this home).  "That’s pricing it forward to the current market,

What if homes in your area are depreicating?  If the last comparbable home sold six months ago for $300,000 that price is no longer the current market; you should be priced at $270,000.

Both examples are pricing it forward to the current market.

Beware of Mr Nice Guy Realtor

Beware the "Mr. Nice Guy” agent. When deciding upon a real-estate agent, "I want an agent who represents me to be hard-nosed, irritating and determined; to have learned his or her business in the backrooms; and to tell it like it is and get what he or she goes after,” writes

Robert Irwin, author of "Tips and Traps When Negotiating Real Estate” and "Tips and Traps When Selling a Home,” among other books. "I want the other guy to have the ‘nice’ agent.” The lesson: Don’t choose just on personality, but effectiveness

Scamming the system for $8,000 tax credits

NEW YORK (CNNMoney.com) -- Some homebuyers are angling to claim the $8,000 tax credit even though they missed the deadline.

To claim the credit, buyers had to sign contracts by April 30 and close the sales by June 30. But real estate agents say some buyers are demanding quick closing dates to meet the June 30 deadline, even though they failed to meet the April 30 deadline.

Read the complete article By Les Christie, staff writer published by CNNMoney

Housing Expert: 'The Suburban Century Is Over'

At a recent meeting of the Urban Land Institute of Minnesota, Senior Fellow John McIlwain said "a new normal" will be created in the housing market over the next 10 years, and he marked the end of "the suburban century."

He noted that markets offering "a vibrant 24/7 lifestyle" will see the most robust activity, "net-zero-energy" units will become the norm, and the rental market will expand as homeownership rates fall to more historic levels.

Suburban town centers will gain popularity among those wanting an urban lifestyle without living in a big city.

Over the next decade, McIlwain said four demographic groups will fuel the housing market. He said older baby boomers increasingly are moving back to the central city, while younger baby boomers are finding it more difficult to relocate for jobs because they cannot sell their suburban houses. Meanwhile, millennials are more environmentally aware and will seek urban lifestyles, and immigrants who cannot afford large suburban houses to shelter multiple generations will increase demand for rentals.

With 1.5 million housing units per year needed to accommodate the shift to normal levels of household formation, McIlwain said zoning, financing, and regulations need to be rethought to meet housing demand.

Source: minnpost.com, Brad Allen (06/21/2010)

Mortgage rates for June 24th

Today's mortgage rate info from Royal Credit Union:

30-Year Fixed:
4.620% 0 Points
4.570% 1 point

20-Year Fixed: 
4.379% 0 Points

To view more on today's rates go to Bringmethenews.com