Looks to be another scorcher today and for most of this week! Take advantage of the great late summer weather and cool off at the lake. While you're relaxing, take a look at what our regular contributor Stephanie Dunn has to say about the housing market and mortgage lending:
I don't know about you, but I'm getting tired of bad news in the economic and housing market. So today we're going to take a look in the other direction - the POSITIVE direction.
In today's market of foreclosed inventory, lower home prices, and historically low interest rates, there are ALOT of potential homebuyers out there who don't realize that they can afford to buy their first home, or qualify for the special mortgage programs that are available.
And frankly, it's up to us - the realtor and mortgage professionals - to inform them. We already market to current homeowners, and potential homebuyers who know they can qualify. But in order to clean out this inventory of foreclosures (and boost the future market), we need to proactively create the market of new, young homebuyers who until very recently could NOT afford to buy.
Let's look at an example of a $200,000 purchase with an FHA 30-year fixed at 5% (being very conservative). In order to qualify for the front debt-to-income ratio (housing only), the potential homebuyer(s) would need to gross $55,000 per year. As a single person, that equates to a full-time job at $26.44/hr. As a couple, that equates to two full-time jobs at $13.22/hr. This is well within reach of alot of young people who are renting because they think they can't afford to buy!
So, HOW do we create the market? Talk it up. Talk to any young person who will stand still long enough to listen! Or perhaps we could work together to host an informational get-together targeted at these folks. For those of you who are adept at the social networking sites, this would be a great topic of conversation.
And then don't forget to call us for the pre-qualifications! If we work together, we could turn our local market around faster than otherwise anticipated.
There's a new piece of technology out there that is growing in popularity all over the world. QR Codes are becoming more widely accepted by various companies, industries, and real estate agencies. What's a QR Code? Basically it's a kind of bar code that can be scanned. Once scanned all kinds of information can be accessed.
So what does this mean for the Real Estate business and the people who are in the market for a new home? "For Sale" signs are starting to include a QR Code that can be scanned by an interested buyer. Once scanned the potential buyer can view photos of the house, find out how much the seller wants for it, how many bedrooms or bathrooms it has, and even take a virtual tour!
Scanning a QR Code couldn't be simpler. All you need is a smart-phone, iPhone, or any related product that has a camera. Run a Google search for software that is compatible with the model phone you have, here's a few programs that you can start with.
This could be the future of how people check out properties. You could be driving by a "For Sale" sign on your way to work, obviously you wouldn't be with an agent but you could easily get some quick information about the property.
For more information about QR Codes, check out this website.
Update on Kingswood Regional School Complex Construction, Wolfeboro NH
With the new school year almost upon us, check out this website for the latest on the Kingswood Regional School complex construction and changes in traffic patterns. http://www.govwentworth.k12.nh.us/ This year will certainly prove to have some interesting challenges for students, faculty and the motoring public!
Lakes Region 31st Annual Fine Arts and Crafts Festival-August 28th and 29th
If you have some free time this weekend, be sure to check out the Lakes Region Fine Arts and Crafts Festival held at the Mill Falls Marketplace in Meredith. This is one of the finest arts and crafts festivals in the area and features highly juried artists and craftsmen, entertainment and culinary treats to delight even the most discriminating palate.
For more information and to see a full listing of other events in the Meredith area, go to www.meredithareachamber.com.
Old Home Day Parade, Scavenger Hunt, Lakes Region Happenings!
This Saturday, August 14th, The Alton
Business Association will be putting on, for all Lakes Region
communities to enjoy, a good old fashion parade! The parade will begin
in the parking lot of the Alton Bay at 11am and will end at Railroad
Station Park at 12pm. At that time there will then be a carnival in the
park, where Maxfield Real Estate will be sponsoring the Dunk Tank!
There will also be a great scavenger hunt for the kids! The
scavenger hunt will begin and end at Maxfield Real Estate’s Alton office
after the parade ends.
It looks like this years Old Home Day is going to be great, so come on out on August 14th and enjoy the Lakes Region community!
Things in the fun-packed, laugh-a-minute Mortgage World are changing every day, and it can be a challenge to see what direction we're moving in, so I'll make this as concise as possible.
Positive News:
Reliant's processing and underwriting is IN-HOUSE! This is a big deal and can make a huge difference in the succesful outcome of a mortgage application. Our processor is right here in the Alton office, our underwriters accessible and responsive to us, and they work very hard to approve loans.
USDA has re-funded and is available once more for single-family purchases at 100% financing. Rates are slightly higher than FHA, but still excellent (in mid-high 4's). Debt-to-income ratios are tighter than FHA, but fico scores can be a bit lower (620 mid-fico).
FHA interest rates are moderating slightly, but still phenomenal. Holding pretty steady at 4.5% with no points for a 30-year fixed!
Conventional rates are still great, and we can still do up to 95% financing on conventional purchase.
In the category of "Sounds Positive, but Isn't":
As of September 7th**, all new FHA case numbers assigned will go under the new MI guidelines of 1% up-front MI premium, and .9% annualized MI, which is divided over 12 months (so referred to as "monthly MI"). This replaces the current rates of 2.25% UFMIP and .55% monthly MI. On the surface it sounds better, but here's the real story that the numbers tell...we will use 4.5% as the interest rate for today's comparison.
FHA case number assigned prior to 9/7 for a $200,000 purchase with 3.5% down payment (minimum) - with the current 2.25% UFMIP, the loan size is $197,342. The monthly payment, including principle, interest and monthly MI is $1090.34
FHA case number assigned after 9/7 for the same $200,000 purchase and down payment. The loan size will be $194,930, but the monthly payment for principle, interest and monthly MI is $1133.87
That's $43.53 more per month, and $2612 more over the minimum 5 years that the monthly MI must remain in place.
If you have buyers who are fence-sitting, you might prompt them a bit with this. We can assign a case number to a buyer who is pre-qualified and has made, or is about to make, an offer on a property. The case number is property specific, but the address can be changed if they ultimately settle on another property.
And certainly another prompt for ANY buyer is that these interest rates are not going to last forever. There are murmerings of rates beginning to rise in the near future. No crystal ball, so of course it's just speculation.
Please call us with any questions, concerns, or if your clients need pre-qualification. We always keep the borrower's best interest as our foremost concern.
**IMPORTANT UPDATE: The FHA's change in UFMIP and monthly MI has been postponed from Sept 7th to October 4th.
Be sure to set aside time this weekend for 2 fun-filled days at the 73rd Hospital Aid Street Fair on Friday August 6 & Saturday August 7 from 10AM-10PM at Monument Field in Wolfeboro, NH. There will be great food, rides, a book tent, jewelry, clothing, sporting equipment and much more fun for the entire family.
As a native to Wolfeboro my fondest memories as a child revolve around this special event. My mother hosted the clothing booth and I was lucky enough to get first dibs on some neat clothes, well, neat to me when your 8 years old! The best fun I had was winning a fire truck ride as a prize. I'm not sure if they still have the punch board, but if so, check it out with your kids. This great community event brings together all sectors of the community and is a great place to get a bargain, meet friends and help support a great cause.
Chris Strong, VP of Marketing and Development for Huggins hospital had this to say "The hard work of many volunteers and community citizens help raise over $100,000 for Huggins Hospital. This year proceeds will go to benefit the patient care at the hospital's Back Bay Rehab, Emergency Department, Nutrition Department, Cardiopulmonary Services, Medical Imaging and ICU."
To check out the new hospital and its services, visit www.hugginshospital.org or contact the Office of Development at 603.515.2094
TitlePro Celebrates its 10th Anniversary this Year! Mortgage Rates from TD Bank! Congratulations to our Top Agents of 2009!
It's an exciting time for our friends at TitlePro; this year they will be celebrating their tenth year of being in business! Congratulations you guys! Here's some info on who TitlePro is and what they can do for you: " The title and real –estate closing company was founded in 2000 by Sharon Worster and Attorney Phil Stiles. TitlePro, LLC is located in Alton, convenient to Strafford, Carroll and Belknap Counties, and offers services state-wide. Today’s markets present many challenges, with foreclosed properties and short sales. Sharon and Phil are very experienced professionals. Each has worked for more than thirty years in the title industry. Their experience works for you, keeping the closing process smooth and on schedule." You can contact them at 1-866-875-4400 or info@titlepro-nh.com.
I also got some info from TD Bank in Wolfeboro, NH about their current mortgage rates and how they serve their customers. Right now they offer competitive rates, 1/8% off rate for purchase mortgages. They also offer the following:
* Same day decision making *
* Hassle Free Mortgage Guarantee *
* Mortgage Rate Security. If rates drop after you’ve made 12 timely payments, you may be able to lower your rate without financing.
* Mortgage Resource Center. Loan calculators, FAQs on loan programs & rates, questions about applications, and definition of terms.
I would now like to take a moment to offer some congratulations to a few of our agents at Maxfield Real Estate. Yes, I know that this information will be a little old, but this blog is new, and they deserve some recognition! I would like to recognize Carol Bush, Randy Parker, Jep Possee, and Denise Williams, our top agents from our Wolfeboro Office, who each produced over $4 million in sales last year. John Byers and Bronwen Donnelly, who each produced over $2 million in sales, our top agents from the Center Harbor Office. John Byers gets some extra congratulations as he produced a grand total of $7,607,000 in sales last year, making him Maxfield's top producer of 2009! Our top producers for the Alton office include Bob Buchanan with $3.6 million in sales, followed by Karen Melanson with $3.3 million in sales and closely followed by Zannah Richards with $2.9 million! Thank you to all of our agents for making 2009 such a successful year for everyone involved with Maxfield Real Estate, we look forward to seeing what the rest of 2010 will bring!
Today in History: On August 3, 1958 the world's first nuclear powered submarine, Nautilus, completed an undersea voyage to the North Pole. Beginning the voyage from Point Barrow, Alaska the submarine traveled a total of 1000 miles beneath the Arctic ice cap.
The Rural Housing Funding Bill and "Unnecessary Farce" brings laughter to the Lakes Region
“This program enables people in the lowest of financing brackets to
get into homeownership with little to nothing down. A great first time home
buyer program” ~ Chip Maxfield[Read More]
Well I hope you’re all enjoying this wonderful 85° weather today, looks like the Lakes Region will be getting more of the same tomorrow after some thunderstorms during the night. It’s perfect weather to enjoy Lake Winnipesaukee! Call out sick from work, go ahead, we won’t tell.
I got some information from our friends at Reliant Mortgage. I asked what the current FHA rates were looking like today and this is what they had to say:
Today’s FHA 30 year fixed rates are:
0 points – 4.625% (5.12% APR)
1 point – 4.375% (4.87% APR)
FHA 15 year fixed rates:
0 points – 4.25% (4.745 APR)
FHA 5/1 ARM rates:
0 points – 4% (4.495 APR)
1 point – 3.625% (4.12 APR)
If you’re in the Lakes Region right now, and you’re looking for something fun to do, might I make a few suggestions? Tonight, July 28th, and Tomorrow, July 29th, the Kingswood Children’s Summer Theater will be performing “Alice in Wonderland” at 7pm at Prospect Mountain High School (there will also be a 1pm matinée on Friday, July 30th). If you’re looking for a night out, why not treat yourself to Winnie Belle Thirsty Thursday Cruise! Every Thursday at 6:50pm they leave from the Wolfeboro Town Docks and give you a chance to enjoy a few drinks and live entertainment. Maybe music is your thing, well YOU’RE IN LUCK! The A Cappella group, “Tuckermans at 9” will be performing at 7pm at the Cate Park Bandstand in Wolfeboro. For more information about events going on in the Lakes Region community, check out their chamber of commerce events page!
Today in History: July 28th, 1914, marked the beginning of World War I as Austria-Hungry declared war on Serbia in response to the assassination of Archduke Franz Ferdinand, the heir to the Austria-Hungarian throne, a month prior.
It would appear that my
assurances of not
over burdening you with newsletters has proven credible. I pass along a
few
statistics for your information along with a brief conclusion. As always
the
last half of the real estate year is critical. Over 65% of the business
gets
done between now and November 15th. Our offices are tracking
with
the market.
SALES DATA FOR THE LAKES
REGION IN THE
COUNTIES OF CARROLL AND BELKNAP
The Lakes region real estate
is alive and
well. Sales through the first half of this year are 15% higher than the
first
half of 2009.
The average sale price in the
first half
of 2009 was $218,000. The average price in the first half of 2010 was
$267,638.
NOTE: This does not mean
prices have risen
but rather that there were a larger number of high end sales.
The total number of
residences sold in the
first half of the year was756 in 2009 and 868 in 2010.
Current inventory of homes is
3,189.
Luxury real estate faired
even better.
Luxury is defined as having a value greater than one million.
In 2009 for the first half
year10
properties were sold at an average price of $2,400,000
The total homes sold in the
first half of
2010 was 20 at an average price of 1,926,000
NOTE: The reduction in
average price is
not a reflection of a drop in value but rater that there were mores
sales in
the lower end.
Current inventory of
homes196.
Sales are usually 20% to 30%
higher in the
second half of the year.
The market continues to be
active.
However, with the current inventory of homes running around two to three
years
we will not see any increase in prices until inventories get into the 6
month
bracket. It appears we are in for a level stretch of values for three
years
with a few exceptions in either direction along the way. Low interest
rates and
the availability of money to qualified buyers is what is keeping the
market
alive and well. 15 year mortgage rates are running in the 4% range while
30
year fixed are running at 4.5%. Who would have imagined these kinds of
rates 10
years ago?
The sales and listing
information provided
by the Northern New England Real Estate Network for the time frames as
provided
in the counties of Carroll and Belknap.
The last quarter of 2009 gives hope to the up coming market in 2010. Having spoken with a number of different agents, owners and brokers around the region I am satisfied that the market is in the early stages of rebounding. Let me define what I mean by rebounding. Rebounding means that more buyers will purchase this upcoming year than did last year. It means that we should begin to see more properties sell than get listed. It means that prices are bottoming out. How rapidly inventories decrease is anyone’s guess. An educated guess is between 2 and 3 years before inventories reach a level where prices might rise. There is definite pent up demand. This can be measured somewhat by looking back over the past five years and seeing how the number of sales has dropped in this last year to somethingless than 50 % of what was sold at the peak of the market five years earlier. The population is increasing due to births and immigration. People are migrating to places like New Hampshire. We are seeing more and more buyers coming back into the market and the fourth quarter was one of our best.
Based on a five year look at the market in all sectors we currently have between one and five years worth of inventory. This is gauged by looking at the number of properties sold versus the number of properties for sale. For example in the towns of Wolfeboro, Tuftonboro and Alton in the $400,000 to million dollar rangethere arecurrently 121 properties for sale with a total of 28 having been sold in ‘09 It would take almost five years at this years sales rate to sell all 128 homes.
The higher the price range the larger the inventory relative to sales and the longer it takes to get sold. This is a curious circumstance which comes about due to lack of motivation to get sold and the Sellers ability to “hang onto” their home. It is the “I do not need to sell” syndrome. About 25% of our higher end inventory has been sitting unsold between one to three years. There have been very few foreclosures in this bracket so there has not been much market pressure to lower prices. What has sold in the upper reaches in the last two years has been from %5 to 15% off of peak prices. Out of 142 active listings around the Big Lake in the 1 million and up range there have been a total of 26 properties sold in 2009.
Generally speaking in order for prices to rise the stock of homes for sale would be at 50 % of what has been sold in order to create the demand for prices to go up. In 2009 in the $80,000 to $160,000 bracket of homes there were 100 sales in 2009 and there are currently 100 homes for sale. Prices in this range are not rising but remain relatively level. Low interest rates, and five years of a declining real estate market are bringing the buyers back into the market. Despite the number of sales being level with the number of homes sold prices still aren’t on the rise. Continued foreclosures and ample inventory are the basic reasons behind this situation.
Pricing your home right and confidence in your real estate agent go hand in hand. One cannot be accomplished with out the other. Be very wary of agents that price high. In today’s market overpricing can be very costly down the line. Price right today and save thousands.
I hope you enjoy our new website. I would invite you to explore. For those who just want listing info the quick search and pre searches will get you there fast. Once you get there we have school information and morgage calculators. These calculators can give you an idea of monthly payments and what you might be able to afford.
We have a new section for subdividions and projects. As we have just gone live we have only one of our projects posted. It is a honey though. We are offering covered boat slips at Channel Marine starting at $69,000 for a 30 foot slip.
From time to time I will be posting news about the vitality of the regional market. As you will see I have a few postings already from a month or so ago. I hope you enjoy the site and if you want regular listings in a specific catagory just sign on to our automatic e-mail lisings results. Get the new listings hot off the press.
Just over two decades ago in the mid 1980's real estate began a meteoric climb.
1985 through 1989 real estate values increased by 150%. Took 5 short years.
1990 through 1996 real estate values dropped from 20% to 50%. That's four years of decline and two years at the bottom or flat.
1996 to 1998 saw prices rise to previous peak levels. Took two years
1999 to 2005 saw values more than double. Time; Six years
2006 to present values have declined. 3 and 1/2 year time frame waterfront 15%, residential 25%.
2009 to 2011 prices will bottom and remain flat for two years.
2011-12 we anticipate prices will rise.
The time period going forward from today's date is modeled after the 1990's real estate market and as you can see the pattern between the two periods is remarkably similar. I can still remember how in the 90's we all expected things to turn around about 3 years before they actually did. This caused a lot of sellers to lose more value and more equity on their real estate as they failed to respond to the market as it was.
In the mid 1980's to mid 1990's period a huge number of Savings and Loans failed and many military bases were closed affecting the economy in many states. The economic news was bleak The stock market saw large movements both up and down. In October of 1987 Black Monday happened. "The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%). The DJIA did not regain its August 25, 1987 closing high of 2,722 points until almost two years later."(Wikipedia). There were dire predictions about the health of the economy and some real doom sayers.
I think that today's economy woes are more wide spread. We are in worse shape than the 1990's economy but I am still optimistic that things will eventually turn around and that the time tables between the two periods will continue to mirror each other.
Chip Maxfield
May 5th 2009
Update July 22, 2009
The lower end of the market continues to sell at a reasonable pace while the upper end remains sluggish due to seller's unwillingness to recognize the economy for what it is relative to the value of their waterfront holdings. A few who have responded and lowered their price accordingly and have met with success selling anywhere from 5% to 15% off peak sales prices.
The preceding 12 months (July 08 to July 09) the number of properties selling at 1 million and above was 33 homes. In the 12 months prior (July 07 to July 08) the sales volume was 65. This is a reduction in homes sold of 50%. The total number of properties for sale in this million and up category is 184. If no new listings came on the market and sales remained level it would take 5.5 years to sell these homes. Waterfront sellers need to pay attention and get the full story from their agent. It could mean a great deal economically.
The Good News: Buyers pay attention
1996 to 1998 saw the vast majority of the real estate market regain all of its losses with a return to the peak values of 1989. Commercial and condos lagged by a year or so as their losses were so deep. (As a foot note at the 1989 peak market, real estate values had climbed by as much as 150% over a five year period.)
1999 to 2005 saw a very strong market with annual increases in value in the 20% range.
All of this activity came on the back of one of our worst real estate markets ever. During the down period 1990 though to 1996 people were afraid their value would never go up. Well it did and it did it with a vengeance.
I personally purchased three properties in the 2003 to 2004 time frame. This was two to three years before the market began to rise again. We are currently in that same place as I was in when I made my move in the market. To this day those properties are all valued about 150% higher than what I paid for them even taking into account the downturn of the market.
Knowing the past is a good indicator of the future. As long as the number of people born exceeds the number of people who are dying and as long as conservation measures are being taken to preserve open lands, and as long as planning boards make it more difficult to create new housing there will always be a strong demand for housing. The rise in property values over time will always beat inflation.
Interest rates in the 90's were in the 6 to 5 % range much as they are today. Huge inventories allowed for favorable terms and negotiations. Large inventories also allowed for more choice. You cannot beat the current market for opportunity and choice.
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