Home Sales Ease, Conditions Mixed

Existing-home sales declined slightly in February, with modest gains in the Northeast and Midwest offset by softer sales in the South and West, NAR says. Sales slipped 0.6 percent nationally to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January, but are 7 percent higher than the 4.69 million-unit pace in February 2009.  “Some closings were simply postponed by winter storms,” says Lawrence Yun, NAR chief economist.  “Although sales have been higher than year-ago levels for eight straight months and home prices are much more stable compared to the past few years, the housing recovery is fragile at the moment.”  Housing inventories at the end of February rose 9.5 percent to 3.59 million existing homes for sale, which represents an 8.6-month supply at the current sales pace, up from a 7.8-month supply in January.  Unsold inventory is 5.5 percent below a year ago.  “The key test for a durable recovery comes in the next few months as the tax credit deadline approaches,” Yun said.  The national median existing-home price for all housing types was $165,100 in February, 1.8 percent below February 2009.  Distressed homes, generally sold at discount, accounted for 35 percent of sales.

Fixer-Upper Financing

203k Program Provides Buyers with Renovation Funds
"The word ‘as-is' can indeed be one scary phrase.  Especially when buying a home in today's market where foreclosures and short sales that need fix-up work are plentiful.  But a little-known Federal Housing Administration (FHA) loan program that's been around since 1978 can help take the sting out of ‘as-is.'  Only 219 borrowers took advantage of the FHA's 203k program in 2009.  Continued "

February 2010 Market Report for Albuquerque and Rio Rancho areas

Monthly Highlights

• February saw 380 single-family detached home sales, up 10.79 percent from February 2009 and up 8.88 percent from the previous month.

• Pending sales for single-family detached homes are up 46.98 percent from the previous year and increased 5.27 percent from the previous month.

• Market activity in the Rio Rancho areas shows significant improvements when compared to February 2009, with a 37.35 percent increase in detached home sales and a 104.11 percent increase in the number of Pending sales.

 Read the full February 2010 Market Report

Commercial Market Improvement Will Come Slowly

NAR Chief Economist, Dr Lawrence Yun, predicts high vacancy rates and ubiquitous commercial rent concessions.  Slight employment improvements will help absorption rates for office/warehouse space, and SIOR's (Society of Industrial and Office Realtors) recent survey confirms the forecast of easing in this sector.  More than half the members of SIOR® expect an improvement in Q2 2010.  Rents are down for Office, Industrial, Retail and Multifamily, but not by as much as in Q4 2009, and the trends are improving slightly.  To read the February Commercial Forecast and table on specifics of four commercial sectors, click here.

Home Sales Down But Higher Than a Year Ago

Existing home sales fell in January but are above year-ago levels and prices show signs of stability, NAR says.  Existing single family, townhome, condominium and co-op sales dropped 7.2 percent to a seasonally adjusted annual rate of 5.05 million units in January from a revised 5.44 million in December.  Compared to January 2009, sales were 11.5 percent higher.  "Most of the completed deals in January were based on contracts in November and December, "says NAR Chief Economist Lawrence Yun.  "People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple of months to close those sales.  Still, the latest monthly sales decline is not encouraging, and it raises concern about the strength of the recovery... Read more.

Home Sales Down in January but Higher than a Year Ago; Prices Steady

Nationally, existing-home sales fell in January but are above year-ago levels, according to the National Association of REALTORS®.
Existing-home sales, including single-family, townhomes, condominiums and co-ops dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.
In the greater Albuquerque metro area the housing market followed in line with the National trend but January was the fifth consecutive month where closed sales have increased over the same month in the previous year. It’s a trend that started in September 2009...
Continue reading

Great Time to Invest in Rental Property

If you're thinking about investing in a rental property, experts say low home prices combined with low interest rates make this the best time in years to become a real estate investor.

What's more, the real estate market is starting to recover: U.S. houses lost $489 billion in value during the first 11 months of 2009, but that was significantly lower than the $3.6 trillion lost during 2008, according to real estate Web site Zillow.com,

"We haven't seen home prices this low in so many years -- coupled with the rates being so low," says Jill Sjolin, an agent with Windermere Real Estate in Woodinville, Wash., who specializes in investment properties.  "When the money is cheap to borrow and the houses are cheap to buy, it's absolutely the best time to invest."

While the timing may be right, the following five tips can help first-time investors take advantage of what might be the opportunity of a lifetime...

1) Know your options.  Since all investment properties are not the same, it's important to determine what type of property fits your strategy, says Harrison Merrill, chief executive officer of Merrill Trust Group, a real estate investment company based in Atlanta.  Do you want to become a landlord or would you rather restore and resell properties?  Are you interested in apartment buildings and other commercial real estate or buying land that can be developed?  First-time real estate investors may want to start with residential housing, since commercial real estate and land development still face challenging market conditions, Merrill says.

2) Partner with experience.  First-time investors should find a Realtor experienced with investment property deals who can help you locate promising properties.  "Look for relational brokers who expect to do business with you again and therefore are going to be much more careful with what they recommend," says Merrill. 

A second option is to collaborate with a more experienced real estate investor and close a deal together.  In this economy, an experienced real estate investor may be willing to work with you in exchange for the capital you can provide, giving you the opportunity to glean investment knowledge and experience firsthand, Merrill says.

Even if you don't collaborate with other real estate investors, talk to them about pitfalls they've experienced.  "Go down to the general district court in your area and listen to some landlord/tenant cases so you can get a sense of what kind of challenges landlords face," says Jeffrey Taylor, author of "The Landlord's Kit."

3) Look for the right location.  If you buy a property with hopes of renting it out, location is key.  Homes in high-rent or highly populated areas are ideal; stay away from rural areas where there are fewer people and a small pool of potential renters, suggests Sjolin.  Also, look for homes with multiple bedrooms and bathrooms in neighborhoods that have a low crime rate.  "Renters gravitate to a safe neighborhood, and if they have kids they will want a good school district," Sjolin says.

Think about potential selling points for your property.  If it's near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers if you decide to sell later.  The more you have to offer, the more likely you are to please potential renters, says Sjolin.

4) Have capital lined up.  Speak to potential lenders or even a financial planner about whether you have enough assets to handle the ups and downs that could come with investing.  Even if you plan to rent out the property, count on paying the mortgage whenever there's a vacancy.  "If you can have about six months of mortgage payments saved up, it's there if you need it, and you can use that money for repairs," says Sjolin.  Even if you're planning to fix up a home and sell it, you may end up holding onto it for several months in the current market, Sjolin adds.

5) Build a supporting cast.  Don't wait until a rental property needs repairs to find someone to handle them.  "Line up maintenance individuals who can take care of the different challenges that occur so you can simply call the person when a particular issue comes up," says Taylor. 

Other sources you may want to have relationships with are an attorney to consult with on tenant issues, a property management firm to handle the day-to-day rental affairs and an accountant to help you understand the tax ramifications of investing.  The more support you have, the better you will be able to handle the problems that come your way.

Whatever you do, understand that buying investment property is an entirely different experience than buying your primary residence.  "When you go to buy your own home, you usually have emotions in it," says Sjolin.  "When you go to buy an investment property, you need to put all that aside and ask, 'What makes sense?'"

By: Tamara E. Holmes

What's Needed to Claim Tax Credit?

The IRS has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.  Read more >

Best Retirement Cities Includes New Mexico

Las Cruces and Santa Fe are among AARP report listing popular spots for new retirees.  Read more >

Fourth Quarter Home Sales Surge 13.9%

Largely attributed to the first-time home buyer tax credit, most areas of the U.S. saw fourth quarter existing-home sales climb and prices pick up, according to a recent NAR survey.  Read more >

Crunching the Albuquerque Market

This number crunch article takes a close look at the inventory of homes currently for sale in the Greater Albuquerque market areas.  Information such as average list price, days on market and a breakdown of where homes are being sold will provide a clear picture of what is going on in the local Albuquerque real estate market. 

Quarter Sales Report and the 2009 Annual Sales Report, both found at http://www.gaar.com.

---

Market Conditions for Single-Family (Detached) Homes for Sale
Average Days on Market: 119
Median Original List Price:  $235,000
Current Average List Price: $315,460
Current Median List Price: $227,250
Average # of Photos (per listing): 13
% of Listings with Virtual Tours: 17%
% of all Residential property inventory: 85.10%

Breakdown of Inventory by Area:

MLS Area	Area Name	% of Inventory
10-121	City of Albuquerque	60.54%
130	Corrales	2.12%
140-162	City of Rio Rancho	16.65%
170	Bernalillo/Algodones	1.45%
180	Placitas	1.64%
210-293	East Mountains/Estancia Basin	7.87%
690-760	Valencia County	9.74%

---

Market Conditions for Condo/Townhomes, (Attached) Homes for Sale
Average Days on Market: 124 
Median Original List Price: $165,000 
Current Average List Price: $315,460 
Current Median List Price: $227,250
Average # of Photos (per listing): 13
% of Listings with Virtual Tours: 13%
% of all Residential property inventory: 10.5%

Breakdown of Inventory by Area:

MLS Area	Area Name	% of Inventory
10-121	City of Albuquerque	87.41%
130	Corrales	0.68%
140-162	City of Rio Rancho	6.97%
170	Bernalillo/Algodones	0.68%
180	Placitas	N/A
210-293	East Mountains/Estancia Basin	N/A
690-760	Valencia County	4.25%

---

Market Conditions for All Residential Property Types (Detached, Attached, Manufactured)
Average Days on Market: 120
Median Original List Price: $219,000
Current Average List Price: $292,843
Current Median List Price: $209,500
Average # of Photos (per listing): 12
% of Listings with Virtual Tours: 16%

Breakdown of Inventory by Area

MLS Area	Area Name	% of Inventory
10-121	City of Albuquerque	61.48%
130	Corrales	1.91%
140-162	City of Rio Rancho	15.28%
170	Bernalillo/Algodones	1.38%
180	Placitas	1.41%
210-293	East Mountains/Estancia Basin	8.22%
690-760	Valencia County	10.33%

Source: Southwest MLS, Inc.  Information deemed reliable but not guaranteed. 

January 2010 NM Market Report

Monthly Highlights
• January is the fifth consecutive month where closed sales have increased over the same month in the previous year.
• January saw 349 single-family detached home sales, up 7.72 percent from January 2009.
• Pending sales for single-family detached homes are up 29.60 percent from the previous year and
increased 55.46 percent from the previous month.
 Read the full January 2010 Market Report 

4th Qtr Home Sales Surge in Most States, including New Mexico!

Strong gains in existing-home sales were the predominant pattern in most states during the fourth quarter, with many more metro areas seeing prices rise from a year earlier, according to the latest survey by the National Association of Realtors ® .
Sales increased from the third quarter in 48 states and the District of Columbia; 32 states saw double-digit gains. Year-over-year sales were higher in 49 states and D.C.; all but three states had double-digit annual increases.
Continue reading 

4 Reasons to Sell Now

Selling a property in this tough market can seem like a challenge. Here are four factors that actually make this a good time to post a For-Sale sign.

• Sell low and buy low. Because all property values are down, the loss on the property a home owner sells is really only a paper loss because the next property he buys also will be a bargain. If he buys smartly, when prices come back up in a few years, he’ll be in better shape.
• Down-payment help is widely available. While nothing-down loans have disappeared, it is easy to find down-payment assistance for lower-income and first-time home buyers. Programs vary all over the country, but one good way to find them is to search online for “down-payment assistance programs” and the name of your region.
• Your uncle has money to share. Besides the $8,000 first-time home buyer tax credit and the $6,500 move-up credit, there are an array of energy tax credits that can make home improvements pay off in cash.
• Good help is available. Really talented real estate practitioners, contractors, and designers are available and eager for business.

Source: McClatchy Tribune, Kate Forgach (02/07/2010)

NEWS YOU CAN USE

Freddie Mac CEO: Housing Is Near Bottom
Inventory of foreclosed homes poses the biggest risk to the markets, but overall the housing sector seems to be at or near the bottom, says Freddie Mac CEO Charles Haldeman.  Read more.


Fannie to Offer Closing Cost Aid on Foreclosures
Fannie Mae plans to pay 3.5 percent in closing costs on purchases of foreclosed homes in its inventory.  Read more.

FHA Relaxes Anti-Flipping Rule
The Federal Housing Administration has changed an "anti-flipping rule" to try to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes.  Read more.

2009 Year End Home Sales Report

The Greater Albuquerque Association of REALTORS® tracks sales figures and other statistical data for the Albuquerque housing market and the surrounding areas. In all, there were five months where closed sales improved from 2008 figures and six months where pending sales also increased. There were also five MLS areas in the Greater Albuquerque Metro experiencing an increase in the average sales price from 2008.
 Read the full 2009 Year End Home Sales Report 

WHO SAYS REALTORS DON'T EARN THEIR MONEY???

FINALLY CLO$ED these unique buyers/preservationist after showing homes since 2007...  Offering on a few, waiting on Short Sales, arguing with prideful sellers, backing out of one that didn't appraise.  Then, after seeing every unique, beautiful, scary, stupid home around, we landed on this one that is perfectly stuck in time: http://tinyurl.com/yzjnnhc . But it didn't appraise either! So, after fighting with the appraiser and lender to no avail, I told him how it could generate income from the growing film industry in NM by being a historical set. He bridged the gap with cash, and already started a website: http://bivenshouse.com ... whew!

Real Estate Listing Mistakes

There is a right way and a wrong way to sell a home. Here are some of the wrong ways. I Want to List it High Because I Know Someone Will Offer Less When a home seller interviews a real estate agent it's easy for them to get caught up in the excitement of choosing a sales price. If they can get more money for the home, it means more financial opportunities for the homeowner. Maybe it means they can afford to buy a larger, more expensive home, pay off some bills or take a vacation. Unfortunately, uninformed sellers often choose the listing agent who tells them they will list it at the highest list price. This is, by far, the worst mistake a seller can make. Establishing Value The reality is that it doesn't matter how much money you think your home is worth. The only person whose opinion really matters is the buyer who is going to make an offer, and of course, the appraiser. Pricing a house is part science and part art. It involves comparing similar houses in similar communities, ect... This is the same method appraisers use to evaluates a house. No two appraisals are exactly the same; they are however, generally close to one another. There is no hard and fast way to just stick a price on your home. Is the Price Too Low? Houses sell at a price a buyer is willing to pay and a seller is willing to take. If a house is priced too low the seller should expect to receive multiple offers and drive up the price up to the market value. There is not much danger in pricing a home under its actual value and your competition. The danger is in pricing it too high and haveing the house sit on the market for months. How It Starts To Go Wrong The seller of a home didn't interview her real estate agents. She pick the first agent off the Internet because, "He looked like a nice guy." The agent priced her house at $250k. After 90 days of sitting on the market, the listing expired. It Continues To Go Wrong The next agent she hired listed the house at $235k. Months passed and eventually she dropped the price to just under $220k, still no offers. A few people looked at the house, but no serious buyers came forward. More Than a Year Later By the time she hired the last agent list her house, the seller had grown exhausted and weary. It was now more than 12 months later. The seller and her agent then priced the home at $195k and it sold very quickly. The sad part is that the comparable sales in the neighborhood fully justified a price of $220k, but the home had been on the market for too long at the wrong price, and now the market had slowed. Protect Yourself The question is how much money expired listings cost the real estate owner? The financial losses often exceeds the extra mortgage payments paid and goes beyond the cost or the hassle factor of trying to keep a home spotless during the listing period. It affects the value that a buyer ultimately chooses to pay because it is no longer a “fresh” listing. It's now stale, dated, a home that was overpriced for too long. Don't let it happen to you. Don't be that seller of an expired listing. Be sure to hire a professional Realtor to price your house correctly from the beginning. Source: www.brokeragentsocial.com

2009 Housing Reports

Click here for the National Housing Report.

and

Click here for the New Mexico Housing Reports.

6 Surprising Facts About the Buyer Tax Credit

The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it.

• To qualify for the move-up tax credit, a home owner must have occupied the same principal residence for five of the last eight years consecutively.
• Buyers can elect to claim the credit on either their 2009 or their 2010 tax return, whichever is best for them.
• Buyers who claim the credit in 2009 can’t file electronically because the Internal Revenue Service hasn’t put the required forms on line. The wait for a refund is three or four months.
• The home can be a mobile home or travel trailer that is fixed to land owned or leased by the home owner. A mobile home or travel trailer that is actually mobile doesn’t qualify.
• The home can’t be purchased from a close relative, including a parent, spouse, child, grandparent or grandchild.
• A buyer who earns no taxable income or doesn’t owe any federal income tax can qualify for the tax credit and file a tax return just to claim it.

Source: Bankrate.com, Marcie Geffner (01/21/2010)

Read More
Learn the Basics of the Extended Home Buyer Tax Credit

HUD Takes Action to Speed Resale of Foreclosed Properties to New Owners

In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD recently announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. . . . Continued.

2009 4th Quarter Home Sales Report for the Albuquerque Area

The fourth quarter 2009 report details sales statistics for homes listed or sold from October 1, 2009 through December 31, 2009. The data is for existing home sales for single family homes and condos/townhomes in the Greater Albuquerque market areas.

Read the full 2009 4th Quarter Sales Report

Expanded Tax Credit Offers Big Opportunity

A new April 30 deadline is in place for buyers to take advantage of a federal home-buyer incentive, which now allows certain repeat buyers, as well as first-time buyers, to get a tax break.

In addition to promoting home-buying based on today's lower home prices and historically low interest rates, it is also important to realize that there is no requirement that you sell your current residence at once — or ever.

Continue Reading 'Expanded Tax Credit Offers Big Opportunity'

New Low Flow Toilet Requirements for Albuquerque

A new ordinance taking effect in the City of Albuquerque will require low-flow toilets and fixtures within 90 days after the sale. The ordinance went into effect on January 6, 2010 applies to any structure built before 1994 and served by the Bernalillo County Water Authority under the jurisdiction of the city of Albuquerque.

Find out how you can receive a $200 rebate from Bernalillo County if you upgrade to high-efficiency toilets> http://www.abcwua.org/content/view/133/230/

Albuquerque Area December 2009 Market Report

Monthly Highlights

• There were 543 single-family detached homes sales in December, the 9th consecutive month home
sales were above 500 in 2009.
• Rio Rancho single-family detached home sales are up 55.38 percent from December 2008.
• $175,875, the median sales price for single-family detached homes, is on the rise for the third
consecutive month.
Read the full December 2009 Market Report

What’s Ahead for Home Loans in 2010

This year could bring significant changes from 2009 for those seeking home loans. Over the last year, home prices fell to 2003 and earlier levels in many parts of the country. In addition, home loan rates declined to the lowest levels on record and this combination led to the highest home affordability levels ever recorded. Here's a recap of what happened in 2009 and what you need to know for the year ahead.

Would You Like a Sweetener with that Rate?

Interest rates throughout 2009 were artificially low. That's because in late 2008, the Federal Reserve put into place a program for purchasing Mortgage Backed Securities with the intention of lowering mortgage rates. They were successful with reported rates by Freddie Mac falling below 5.00% several times in 2009.

Without this program mortgage rates would have been at least 1.00% higher, and potentially even higher than that. Did you know that a change of 1% in a home loan rate impacts the amount someone can borrow by roughly 10%? For example, if rates are in the low 5.00% range today and they shoot up to the low 6.00% range, $250,000 home buyers may become $225,000 home buyers.

Look for rates to return to 2008 and previous levels as the Fed ends the program on March 31, 2010. While rates will not immediately increase to 6.00% or higher, know that without additional intervention, rising rates are inevitable. Expect that under worst case scenarios, rates could dance around the 7.00% range.

Show Me Your Docs

Contrary to what you may see or hear in the media, money is widely available for people who want to finance their homes. There is one caveat, though. People need to be able to demonstrate that they qualify for the loan amount they are pursuing and that they have been willing to repay debt they have accepted in the past.

To obtain financing today, a borrower needs to supply the lender with all documentation pertaining to their income, liquid assets and potentially items related to their credit reporting. The best preparation path to follow is to gather most recent paystubs for 30 days of earnings, two years W-2s with complete tax returns and three months statements, all pages, for any liquid assets used for qualifying.

The free wheeling days of borrowing whatever people thought they could repay are gone. While some exceptions may be granted for strong compensating factors, total debt to income level will be capped at 45%.

If you haven't checked out your credit reports recently, now is a good time to do so if you plan on seeking financing in the next 12 months. You can pull up your reports for free at AnnualCreditReport.com. Examine your reports for any inaccuracies and work to get them corrected prior to seeking financing. You can also seek assistance from your mortgage professional.

Have We Hit a Bottom in Housing?

If you simply look at the data that is reported, one could surmise that the bottom in U.S. home prices was hit in 2009. One nationally respected index for home price reporting, the S&P/Case-Shiller Home Price Indices, indicates that home prices turned for the better around mid-year in 2009.

While all markets are different and some may continue to show signs of weakness, most communities have demonstrated strength and should continue to do so. However, some potential headwinds do exist for the second and third quarter of 2010, following the expressed expiration dates of several stimulus programs: The Mortgage Backed Securities purchase program and home buyer tax credits, both of which are directed at the housing and the mortgage markets.

Foreclosures and short sales will also continue to influence many of the hardest hit markets as unemployment and resetting adjustable rate mortgages weigh on distressed homeowners.

Dates to Remember

Two dates lie on the horizon that will impact interest rates and potentially home prices. The first program scheduled to end is the Federal Reserve's program for purchasing Mortgage Backed Securities. Announced in November of 2008, the Fed began purchasing $1.25 trillion in mortgage bonds in 2009 which will culminate at the end of March. As the intention and result of this program was to lower rates, mortgage rates will likely begin to rise after the program concludes.

In addition, April 30, 2010 is the last day to enter into a home purchase contract and still potentially qualify for a federal income tax credit of up to $8,000 for first-time home buyers and up to $6,500 for repeat home buyers. The credit can be claimed only on contracts that close by June 30, 2010.

Act Now...Not Later

While no one knows for certain what the future holds, one thing does appear clear. Home loan rates and home prices both will be higher in the future. If you or anyone you know is looking to purchase or refinance a home, waiting could be costly!

November home sales soar 7.4 percent

Home resales surged last month to the highest level in nearly three years, reflecting an extraordinary level of federal support that has pulled the housing market back from the worst downturn since the Great Depression.

Buyers were racing to complete their sales before the original expiration date of a tax credit for first-time buyers that was scheduled to expire Nov. 30. Last month, Congress decided to extend and expand the credit to ensure the housing market could sustain its recovery.

"Things are stabilizing," said Pete Flint, chief executive of real estate Web site Trulia.com. "There is a significant amount of buyer interest out there."

About 2 million homebuyers have taken advantage of the credit so far, the National Association of Realtors said Tuesday. The group forecasts that another 2.4 million will use it by the middle of next year. First-time buyers made up about half of all transactions last month, driving sales up 44 percent above last year's levels, a record jump.

"In the short run, its an effective stimulus," said John Ryding, chief economist at RDQ Economics. "If you give someone money to spend on something, they will spend it."

November's sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million, from a downwardly revised pace of 6.09 million in October, the Realtors group said. It was the highest level since February 2007. Sales had been expected to rise to an annual pace of 6.25 million, according to economists surveyed by Thomson Reuters.

Sales are now up 46 percent from the bottom in January, but down 10 percent from the peak more than four years ago. The inventory of unsold homes on the market fell about 1 percent to 3.5 million. That's a healthy 6.5 month supply at the current sales pace, the lowest level in three years.

The median sales price was $172,600, down 4.3 percent from a year earlier, and up 0.2 percent from October.

The housing market recovery, however, is still facing strong headwinds.

Unemployment is high and employers are going to be slow to rehire because economic growth is weaker than expected. The economy grew at a pace of 2.2 percent in the third quarter, which was lower than the initial 2.8 percent reading, the government said Tuesday.

What's more, mortgage defaults are still setting records, and lenders are regularly rejecting applications from borrowers who don't have good credit or enough money for a down payment.

Many experts warn that hundreds of thousands of foreclosed properties have yet to be put up for sale. Plenty of traditional sellers are also keeping their homes off the market, hoping for a better price.

"When they start thinking they can sell them, we could see a surge in homes for sale," wrote Joel Naroff, president of Naroff Economic Advisors.

In the meantime, home buyers can take advantage of record-low mortgage rates, deeply discounted prices and federal incentives. Besides the existing tax credit of up to $8,000 for first-time buyers, homeowners who have lived in their current properties for at least five years can now claim a tax credit of up to $6,500 if they relocate. To qualify, buyers must sign a purchase agreement by April 30.

Analysts expect that the new tax credit deadline means sales will drop during the winter months and recover in the spring.

Without the looming deadline, "buyers have no sense of urgency now," said Gary DeRosa, an agent with ZipRealty Inc. in Seattle.

By ALAN ZIBEL (AP)

November 2009 Home Sales Market Report

Monthly Highlights

• Single-family, detached home sales in the Greater Albuquerque market areas are up 57.18 percent from November 2008.
• The Albuquerque, Rio Rancho, Corrales, Placitas, Bernalillo, East Mountains and Valencia County MLS areas all had at least 50 percent increases in single-family, detached home sales compared to the previous year.
• Pending homes for single-family, detached homes increased 20.69 percent from November 2008.
• A new color map showing Rio Rancho/Sandoval County home sales has been added and can be found on page 14.
Read the full November 2009 Market Report

House Flipping Makes a Comeback

SCOTTSDALE, Ariz. -- Four years after the collapse of the U.S. housing bubble, flipping homes is back in fashion.

Jon Mirmelli, a Phoenix real-estate investor, learned late in the morning of Sept. 28 that a never-occupied custom house on the northern fringes of this Phoenix suburb was going up for auction around noon the same day. The six-bedroom home, built on a three-acre desert plot, has a kitchen with two dishwashers, four ovens, "antibacterial" copper sinks, and a master "spa" bathroom with space for a flat-screen TV visible from the tub.

Flipping Foreclosures

Avraham Azoulay, left, and Donna Valva looked over their list of foreclosed houses outside the Maricopa County Court building during an auction in Phoenix, Dec. 3, 2009.

The minimum bid, as set by a unit of Citigroup Inc., which had a $1.3 million mortgage on the home, was $379,900. After several minutes of bidding among investors and their representatives, some wearing shorts and flip-flops, Mr. Mirmelli won the home for $486,300. A week later, he agreed to sell it for $690,000 to a woman who moved in this month.

During the housing boom, millions of Americans tried to make money by buying and then quickly reselling new houses and condominiums. That kind of flipping stopped several years ago as home sales stalled amid a surge in foreclosures and curtailed lending.

Now, a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom-time flippers, the latest generation needs cold cash, lots of local-market knowledge and strong nerves.

Investors compete mostly with other full-time professionals who monitor foreclosure auctions at county courthouses across the country. The bidders often haven't had a chance to inspect the property or determine whether it's occupied by tenants, who may be hard to evict.

Sometimes "you have half an hour to make a half-million-dollar decision," says Damon Lines, an executive at PostedProperties.com, a Phoenix firm that provides information to foreclosure investors and bids on their behalf. "That's something most people can't or aren't willing to do."

In the states where home prices have fallen the most, many local real-estate markets are dominated by foreclosed property, dragging down the value of neighboring homes. Barclays Capital estimates that banks and mortgage investors have 639,000 foreclosed homes for sale across the U.S., largely concentrated in Florida, California, Arizona and Nevada. That's equivalent to more than 10% of expected U.S. home sales this year.

— Charlie Rose

Flippers swoop in at public auctions of foreclosed homes, known as trustee or sheriff sales. In many states, the lender sets the minimum bid, and takes possession of the property only if no one bids more. In the past, the minimum generally was about equal to the mortgage balance due. But in today's market, in which many home values have dropped far below the loan balance, lenders wouldn't attract investors if they set the minimum at that level.

So lenders, or the loan-servicing firms that represent banks and investors, are increasingly likely to set the minimum much lower. Their goal is to tempt others to buy the house and spare banks the headaches and costs that come with taking possession.

Sean O'Tool

By JAMES R. HAGERTY

Foreign Buyers Taking Advantage of Slashed Prices

International investors bought 154,000 homes and condos in the 12-month period ending in May, and are continuing to take advantage of the weak dollar. The U.S. dollar has dropped 9 to 11 percent since June against foreign currencies like the Japanese yen, the European euro and the Canadian dollar. Another attractive feature is that, while the U.S. dollar has weakened significantly, the economy is showing signs of stabilizing along with the housing market. Nearly 46% of international home buyers paid cash for homes purchased, and the median price foreign buyers paid for a home was nearly $80,000 greater than the U.S. national median price. According to msnbc.com buyers from Brazil, Canada, France, and the Netherlands have paid mostly cash for second homes ranging from $6 million to $15 million in condo buildings.

World on the Mend

While housing markets in the world’s leading economies remain distressed, hope is on the horizon. According to globalpropertyguide.com of the 27 countries which have already published their Q3 data, 16 countries have experienced rising prices and falls in only 11 countries. Economies such as the UK, Canada, Germany, Singapore, and South Africa are finally noting positive price changes quarter-on-quarter after being negatively affected during the economic slump. Of this group, the rising prices in the UK, Canada, Germany, and South Africa are the first after suffering declines every quarter since 2008. While some markets’ increases are more modest than others, the over-arching trend is toward recovery. More information on specific housing markets is available at globalpropertyguide.com.

Federal Short Sale Guidance Out

Short sale procedures for loan servicers are standardized in guidelines released under the federal government's Making Home Affordable loan modification initiative for troubled home owners. The guidelines create a path for a short-sale or deed-in-lieu of foreclosure for eligible borrowers for whom loan modification isn't a viable option. The guidelines provide $1,500 in federal funds to help borrowers relocate, $1,000 to help servicers offset their processing costs, and up to $1,000 to investors to secure release of subordinate liens. For each $3 an investor pays to secure the release of a lien, the investor receives $1 in assistance. The guidelines prohibit a reduction in agreed-upon commissions (if they're not more than 6 percent) and take effect April 5, 2010, but can be implemented by servicers at any time. Fannie Mae and Freddie Mac are expected to follow this release with their own rules based on these guidelines.

Read NAR summary.

Read the entire guidelines.

Commercial Real Estate Mired in Quicksand despite Signs of Economic Recovery

The third quarter of 2009 brought signs of relief to a U.S. economy fighting to emerge from what has been coined the Great Recession. Most measures of economic activity moved in upward trends—gross domestic product turned positive after four quarters of decline; industrial production gained; stock market indices have been surging.

However, commercial real estate did not find its footing in the constantly shifting terrain of weak fundamentals and timid transaction activity. Demand for commercial properties continued on a downward path, adding pressure on prices and rents. Moreover, credit conditions continued to tighten as banks moved to strengthen their balance sheets. As a result, vacancy rates have been rising and the volume of distressed properties has grown. Nonetheless, it is worth noting that the pace of decline in fundamentals is slowing, and sales transactions are posting positive growth.

NAR FORECAST: Commercial real estate is expected to see negative absorption, higher vacancies and declining rents. Commercial financing still poses the main challenge stabilization. While CMBS markets have been revived, volume is insufficient to address maturing debt.

For the 4^th Quarter 2009 report, please visit: http://www.realtor.org/research/research/commercialhome

9 Consecutive Gains for Home Sales

Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”

By Region

• Pending sales in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago.
• In the Midwest, the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008.
• Sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago.
• In the West, the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.
  

Not Out of the Woods Yet
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.
Source: NAR

Learn About Making Your Home Affordable Again

Your Path to a More Affordable Mortgage ... http://www.makinghomeaffordable.gov/

Home Sales Record Big Gains

Home sales are up and listings are down, thanks in large part to the home buyer tax credit.

Read more >.

See how New Mexico trends stack up to national numbers.

Realtors Help Buyers Attain Short Sales Success

San Diego, CA - November 16, 2009 - (RealEstateRama) — Not all buyers are suited for a short sale. This was one of the messages delivered at “Short Sales from the Buyer’s Perspective” during the 2009 REALTORS® Conference & Expo today.

According to the latest Realtors® Confidence Index, one out of 10 recent buyers purchased a home through a short sale. The survey also showed that Realtors® are concerned about the hurdles buyers face in short sales.

Primary reasons that short sales fail, include an incomplete short sale package, an offer that is too low, and inaccurate appraisals. Buyers who are good candidates for short sales are very patient – it can take some lenders four months or longer to approve a short sale – have their financing in order, and don’t have any contingencies in their purchase offer.

“Short sale buyers need to have the time to be able to wait for the lender’s approval; some lenders get several hundred contacts every day. Buyers must also be willing to make an offer that has a reasonable chance of closing and take guidance from their agent. If the offered price is too low, there is a good chance the lender won’t respond or approve the contract.”

“As short sales become more commonplace, both buyers and sellers need the help of seasoned, experienced professionals to help them navigate the complexities of a short sale transaction,” said National Association of Realtors® President Charles McMillan. “As the first, best source for real estate information, Realtors® provide valuable insights and experience that can help buyers realize their homeownership goals, whether through a short sale or other means.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

2010 Home Sales to Rise 15 Percent

Home sales will increase 15 percent next year, NAR Chief Economist Lawrence Yun predicted in his residential economic update during NAR Annual Conference and Expo. Read more >

Foreclosures Decline for Third Month

Foreclosures fell 3 percent from September to October, but are up nearly 19 percent from October 2008. Read more >

Commercial Real Estate Encouraging News

Commercial real estate owners got some encouraging news recently. Economic reports showed promising signs, and the FDIC made clear how it is looking at commercial real estate loans sitting on the books of banks. Their 33-page policy statement is aimed at easing concerns over souring commercial real estate loans sitting on banks' books. The best news may be for borrowers and banks struggling with a matured loan in which the borrower is strong and the collateral has sustained a loss in value or tenants, but there's good and sufficient cash flow to cover debt service. In that case, the FDIC allows the bank to continue to carry the debt without a negative classification, even though the loan-to-value could be more than 100 percent. Read more...

October 2009 Market Report

Monthly Highlights

• Single-family home sales in the Greater Albuquerque market areas are up 10.59 % from the previous month and increased 43.05 % compared to October 2008.
• October 2009 is the 2nd highest sales month for this year and the 3rd highest sales month since September 2007.
• Pending sales for single-family homes in the Greater Albuquerque market areas rose 56.52 % when compared to October 2008. This is also the 4th time this year pending sales have been 900 or higher.

Read the full October 2009 Market Report

States See Surging Sales, Moderating Prices

Total state existing-home sales, including single-family and condos, increase 11.4 percent in third quarter.

Read more >

Albuquerque Area Spotlights

Looking for information about a particular Albuquerque Area?

GAAR creates and posts Area Spotlight articles that include boundaries, statistics, school information and more.

Click here to view a list of MLS Area Spotlight articles.

Home Buyer Tax Credit Extended !!!

In a major victory for NAHB that will boost the fledgling housing recovery and help struggling business owners nationwide, Congress today approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers. The bill also provides relief to cash-strapped home builders by providing broader tax benefits for businesses with net operating losses (NOLs).

The legislation, which will be signed into law shortly by President Obama, will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new primary residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their primary residence for five consecutive years out of the last eight.

In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples. NAHB’s consumer-oriented Web site,www.federalhousingtaxcredit.com, will provide complete details on the enhanced home buyer tax credit after the bill is signed into law by the President.

For NOLs, the new law will allow all businesses -- regardless of size -- with operating losses in 2008 or 2009, not both, to claim refunds on taxes paid up to five years ago. Businesses can offset 100% of taxable income with NOLs carried back in years one through four and offset 50% of income in year five. Small businesses with less than $15 million in gross receipts would be able to claim a five-year carryback for 2008 losses under the American Recovery and Reinvestment Act and for 2009 losses under the new law. The new net operating loss provisions will throw a lifeline to struggling businesses, allowing them to continue making payrolls, paying business loans and otherwise keep their doors open until the economic recovery takes hold.

Last Action on the Home Buyer Tax Credit

Even as Congress neared completion on the legislation, proponents made it perfectly clear that the home buyer tax credit would not be extended when it expires next year. Sen. Johnny Isakson (R-Ga.), a long-time champion of the home buyer tax credit, said: "This is the last extension of the home buyer tax credit. Tax credits like this only work by creating the sense of urgency to take advantage of it, and to bring the market back."

On the floor of the Senate, Finance Committee Chairman Max Baucus (D-Mont.) said that, “It’s important that this tax credit does not become a permanent fixture in the tax code. Our amendment would end the credit on April 30 of next year. This extension would get us through the winter – traditionally the worst season for real estate. Our amendment would jump-start the housing market as it enters the summer months of 2010.” Baucus added that the seven-month extension of the tax credit would be “long enough to encourage home buyers to buy homes, but it’s short enough to remain fiscally responsible.” ...
Joe Robson, 2009 NAHB Chairman

More information on the tax credit and what it means to you:

Changes to the Homebuyer Tax Credit Law
Frequently Asked Questions About the New Bill
In Depth: 2009 First-Time Homebuyer Tax Credit