Tri-State Real Estate Blog

How the new MOBI Home Search Works

NEW - Search for Homes from Your Cell Phone using GPS

Search all homes for sale in the Tri-State Area from your personal cell phone.

 

One of the top real estate agents in the Tri-State Area announced today that cell phones can be turned into the ultimate house-hunting tool. John & Mary Luca with The Luca's Tri-State Team at Prudential Fox & Roach is providing consumers with a mobile application called Homes for Sale that makes it possible to search all local property listings from their phone, regardless of whether it is listed by John Luca or another broker/agent. Homes for Sale can be downloaded to cell phones, iPhones and BlackBerry devices by visiting www.TriStateTeam.com.

 

With Homes for Sale, consumers can be in any neighborhood and view detailed home information at the touch of a button. The GPS technology in the mobile phone, where available, locates users and pulls up addresses and information on property listings in their immediate area. Sales price, square footage, tax information, beds/baths, interior and exterior features and pictures become available instantly in the palm of their hand.

 

Consumers can also search by city, zip code, address, or community name when GPS is not available, or if they want to search for real estate in a particular area other than their current location.

 

The “Call to See” feature within the Homes for Sale application will connect users to John Luca if they have further questions or want to schedule a tour of the property.

 

"We're all about providing excellent service to our clients by combining the technology they need with our personal market expertise,” said Mary Luca, who is e-Pro Certified.

 

When downloading the application from John and Mary’s website, www.TriStateTeam.com, consumers will find a "Search for Homes from Your Cell Phone" tool which provides instructions on how to send the application to their personal cell phone. Users simply select their cell phone carrier, the make/model of their device and enter their cell phone number into the downloader tool. Instantly, the application is sent via text message and downloaded to their cell phone just like a game or ringtone.

 

Homes for Sale is available across every carrier and mobile device via a fully downloadable application or mobile web (WAP) version. The fully downloadable version is live on hundreds of cell phone models on AT&T, Sprint and T-Mobile. If your carrier or cell phone model is not listed on the downloader tool, simply select ‘Other’ and download the mobile web (WAP) version. Smarter Agent is also available on BlackBerry devices as well as the iPhone. The fully downloadable version for Windows Mobile devices, as well as other devices and major carriers, will be added over the coming months.

 

Homes for Sale is free to download on BlackBerry devices across all carriers and the iPhone, in addition to the free WAP version. For other devices, a nominal monthly carrier charge may apply, dependent on device and carrier, billed directly to your carrier statement.

Market Update

Pending sales for April 2009 in the $150,000 & Under price range are up for April by almost 12% compared to April 2008.  This is great news for the housing market and also means that the $8000 tax credit for First Time Buyers, along with the historic low interest rates, are definitely stimulating the housing market in this price range.  Over time this will have a positive effect on the higher price ranges, as sellers will now be in a better position to “move-up” buying more expensive homes, which for now are still selling at rates below sales numbers for 2008. 

Other positive data includes signs of price stabilization in the $150,000-$400,000 price range where the average sold price for the first 4 months of 2009 is 99.6% of the average sold price compared with the first 4 months of 2008. 

If you have a question about your particular home or market sector, feel free to give me a call at 302-999-6966.  John

Pricing Your Next Home - Bidding Based on One Comparable Property

The question below gives a high level idea of the financial risk you take when bidding on real estate if the property is not valued properly.

Q: Someone in our online forum asked if it was okay to pay $620k for a completely updated dated 3br 2.5ba house in Greenville, Delaware, stating that a house next door sold for that much in 2006.

A:  Without seeing the property and comparing it to other sold homes in the area, it would not be possible to give you an accurate answer and would do you an injustice to try to give a yes or no at this point. Meeting with a professional realtor who has experience in studying and pricing homes accurately, and negotiating is recommended to inform you and protect your interests.

However in general, the market is down since 2006. For all of 2006 in the Greenville, Hockessin, Centreville area, the average sold price for homes (that settled in the $50k to $2mm range) was $556,906. Whereas the average sold price for the same range of homes from July 2008 through Feb 2009 was down to $490,602.

To peg the bid for your next home strictly on one home's sales price next door that sold in 2006, would be risky. If you would like an analysis prepared for you, please contact a professional realtor. Typically real estate agents do not charge to work with buyers (we do not), and therefore your representation is free - from finding a home with you, through negotiations (and re-negotiations after a home inspection if needed) - all the way through settlement.

Please let us know if you have further questions or would like a detailed analysis prepared for you.

Sincerely,
John Luca - Licensed in PA, DE & MD
Full Time Expertise - Working Full Time for You!

Walk Score - Compare Walkability of Homes for Sale

When researching where you want to live, a handy reference tool is WalkScore.  Walkable neighborhoods offer surprising benefits to our health, the environment, and our communities.  Use the WalkScore tool below to type in your current address or the address of a home you are considering. 

DSHA has once again lowered its rates

Things keep getting better for first time home buyers. DSHA has once again lowered its rates for the assisted and non-assisted loans.

Non-assisted loan: 5.5%

Assisted loan: 6.25%

    www.destatehousing.com

Call me if you have any questions.

Jason Infanti
Mortgage Consultant
Trident Mortgage Company (302) 999-6940 (302) 999-0578
Jason@JohnLuca.com

Opportunistic Market for Buyers and Sellers - Here's Why:

How’s the real estate market? Well compared to the stock market – I’d say pretty good!

This is actually the most opportunistic market I’ve seen in years.

And I’m very excited about the opportunities for both Buyers and Sellers.

The first-time buyer tax credit of $8000 recently passed by Congress is already jump- starting the activity in the first time buyer price range 0- $200,000.

The great news for sellers is home values have only declined modestly in our area compared to other parts of the country. So now would be an excellent time to make a move up, downsize or head to warmer markets where the deals are fantastic.

New Castle County Real Estate Market for February 2009, had an increase in homes under contract along with an increase in homes sold vs January 2009. In addition we saw a decrease in the number of homes “On the Market” dropping from 3977 to 3866 (3% decrease). This continued a 3 month trend of a lower Month’s Supply of Inventory (MSI). The MSI tells how many months it would take to sell all the homes in the county at the current monthly sales average. The MSI is a calculated by taking the current number of homes on the market divided by the average monthly sales number, with the assumption that no more homes would come on the market over that period. We know that homes will continually be coming on the market, but for the purpose of this calculation we use only the number of homes on the market as of right now. For Example, currently there are 3056 homes on the market with an average monthly sales volume of 360 homes sold. Dividing 3056 by 360 equals the number of months it would take to absorb this inventory or 8.5 months. In a strong seller’s market the MSI could be as low as 2-3 months like what had in 2004-2006. In a strong buyer’s market the MSI, would be anything above 10 months of inventory. I consider the market to be a “Neutral Market” whenever the MSI ranges between 5-7 months.

The median sold price and the average sold price continue to decline. The average sold price for the county in Feb 09 was 235,000 and the median was $200,000 - down from $269,000 and $230,000 respectively, from Feb 2008 numbers.

Download March 2009 Newsletter NCCO report  

If you have specific questions on buying, selling or investing - please call me (John Luca) at 302-999-6966.  Have a great day - I'm off to shovel a driveway at a vacant home for my seller - we've got a buyer touring it today :)

 

Further explanation on $8000 Refundable Tax Credit

The 2009 First-Time Homebuyer Tax Credit

Ken Trepeta

Director, Real Estate Services

National Association of Realtors®

February 19, 2009

Overview

·         In 2008 Congress created a $7,500 First-Time Homebuyer Tax Credit.

·         It went into effect April 8, 2008 and was set to expire July 1, 2009.

·         The big problem: It had to be repaid over 15 years. People viewed it as a debt and not a benefit. 

 

NAR Proposes Changes

In 2008 NAR began advocating to:

·         Remove the repayment feature of the credit

·         Extend the credit to the end of 2009

·         Make the credit available to every home buyer

 

The 2009 Tax Credit

Working with Realtors® across the country:

·         We succeeded in removing the repayment  requirement for 2009.

·         The credit has been extended to on or before November 30, 2009 and can be claimed by those who closed on homes on or after January 1, 2009.  It is still repayable for 2008 purchases.

·         The credit has been expanded to $8,000. 

·         But, it is still only for first time homebuyers

 

Credit Details

•The new Credit is an $8,000 REFUNDABLE Tax Credit (or up to 10% of the purchase price).

–So if the property is $75,000, the credit is only $7,500. (Assume a property over $80,000 for the rest of the discussion).   

•Refundable means that if your total tax liability in the given year is less than $8,000, the IRS will send a refund for the balance. 

 

Refundability –Why it’s Important

 

·         Many taxpayers do not have tax liability that exceeds $8,000.

o       For example, according to the 2008 IRS Tax Tables:

·         A single filer would need $46,600 in taxable income to have $8,000 in tax liability.

·         A couple would need $58,600 in taxable income to have $8,000 in tax liability.

·         Those with less tax liability will in most cases get a refund meaning they get the full value of the credit.

 

Who cannot take the credit?

If any of the following:

–Your income exceeds the phase-out range. This means joint filers with Modified Adjusted Gross Income (MAGI) of $170,000 and above and other taxpayers with MAGI of $95,000 and above.

–You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.

–You stop using your home as your main home.

–You sell your home before the end of three years.

–You are a nonresident alien.

 

First-Time Homebuyer Definition

•Defined as someone who owned another main home at any time during the three years prior to the date of purchase.

–For example, if you bought a home on January 15, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another home at any time from January 15, 2006 through January 15, 2009.

–So if the last time you owned a home was 2005, you are eligible for the credit even though it is really not your “first” home. 

–For married joint filers, both must  meet the 1sttime homebuyer test to take the credit on a joint return.    

 

More on Income Limits

Type                            Income Limit               Phase Out Start

Single Filer                  $ 95,000                      $ 75,000

Married Filers             $170,000                     $150,000

 

 

This means that for singles making over $75,000 and couples making over $150,000, the credit is proportionately reduced as incomes approach $95,000 and $170,000 respectively.

So if a couple makes $165,000, the excess amount is used to create a fraction  15,000/20,000 (.75) times the credit amount.  75% or $6,000 of the credit would be disallowed.  They would still get a $2,000 credit. 

 

The Home

•Must be the “main home” i.e. principal residence.  Which is generally considered to be the home where you spend 50% or more of your time.  It can be a condo, Single Family detached, co-op, townhouse or something similar. 

•The home must be located in the United States. 

•Vacation homes and rental properties are not eligible.

•For new construction, the “purchase date” is the date you occupy the home.   So the move in date must be before December 1, 2009. 

 

Recapture-3 Year Residency

•If the home is sold prior to three years of ownership, the tax credit must be repaid.

–This is an improvement from the prior credit.  That credit needed to be repaid in total over 15 years or the balance had to be repaid on sale. 

•This provision is designed to prevent flipping homes in order to get the credit. 

 

Other Provisions

•The new credit is available to residents of the District of Columbia

•Purchasers who utilize state/local revenue bond financing can now use the credit.

•Purchasers who bought before January 1, 2009 are still subject to the terms of the repayable credit. 

 

When Can You Claim the Credit?

•It can be claimed on your 2008 Tax Return (to be filed by April 15, 2009), an amended 2008 Tax Return, or your 2009 Tax Return. 

•NAR and industry partners tried to get the credit made available at closing but policymakers balked.  In addition, it was explained that even if a system could be devised, it would delay closings by several weeks. 

 

Conclusion

 

•The new credit is greatly improved compared to the old credit.

•It is a true credit and does not need to be repaid as long as you occupy the home for 3 years. 

•NAR estimates that hundreds of thousands of potential buyers will take advantage of the credit.

•For more info on the credit and the 2009 Stimulus legislation visit http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home?lid=ronav0019or consult your tax adviser. 

 

CAVEAT

This is information is accurate based on information available as of February 19, 2009.  As with any tax law change, check with a tax advisor if there are any questions regarding using this provision. 

 

Download Recovery and Reinvestment QA

Download Government_affairs_homeb_tax_credit

First Time Homebuyer Tax Credit - $8000

FIRST-TIME HOMEBUYER TAX CREDIT 

As Modified in the American Recovery and Reinvestment Act

Major Modifications Shaded

February 2009

FEATURE	CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008	REVISED CREDIT – EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit	Lesser of 10 percent of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.	No change All principal residences eligible.
Refundable	Yes.  Reduces (or can eliminate) income tax liability for the year of purchase.  Any unused amount of tax credit refunded to purchaser.	No change Purchasers will continue to receive refund for unused amount when tax return is filed.
Income Limit	Yes.  Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).  Phases out above those caps ($95,000 and $170,000).	No change Same income limits continue to apply.
First-time Homebuyer Only	Yes.  Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.	No change Still available for first-time purchasers only.  Three-year rule continues to apply.
Revenue Bond Financing	No credit allowed if home financed with state/local bond funding.	Purchasers who utilize revenue bond financing can use credit.
Repayment	Yes.  Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.	No repayment for purchases on or after January 1, 2009 and before December 1, 2009
Recapture	If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.	If home is sold within three years of purchase, entire amount of credit is recaptured on sale.  Applies only to homes purchased in 2009.
Termination	July 1, 2009  (But note program changes for 2009)	December 1, 2009
Effective Date	Purchases on or after April 9, 2008 and before January 1, 2009.  Repayment to begin for 2010 tax year.	All revisions are effective as of January 1, 2009

 

For more information contact Jason Infanti at 302-999-6940 and Jason@JohnLuca.com

Or John Luca at 302-999-6966 and John@TriStateTeam.com

What is Title Insurance and Why do you need Owner's Coverage?

Title insurance is protection against loss arising from problems connected with the title of your property. Some common title problems are unsatisfied liens, forgeries, fraudulent conveyances, incapacitation and trust and estate open interests.

 

Many people ask why they need title insurance if a search has been preformed on the property.  Title insurance is issued after a careful examination of copies of the public records.  But even the most thorough search cannot absolutely assure that no title hazards are present, despite the experience of attorneys and title examiners.   Moreover, searches cannot reveal issues such as forgeries and fraud. 

If you plan to mortgage a property, your lender will require that you purchase them a lenders policy of title insurance.  However, a lenders policy alone will not protect you.  Title insurance policies protect against loss, and a lender policy would only cover the lender's loss.  You must purchase an owners policy to cover owner losses.  Owner losses can be quite substantial; therefore no homeowner should be without title insurance.

 

 

This is not intended to be legal advice and does not constitute an attorney client relationship. 

January Brought Good News on the Home Front

I would like to announce a little good news occurring in the New Castle County Real Estate Market for January 2009. We have had a $15,000 increase in the median home price average compared to December 2008 and a $9000 increase in the average sold price compared to December 2008. Comparing these levels with averages from one year ago, I am also encouraged by the fact that the decline in the median home price average is only 2.2% and the average sold price is only 4.2%. As a whole our county along with the Philadelphia Metro region, is fairing much better than most of areas across the country. Additionally our 9.7 Months Supply of Inventory (MSI) is at its lowest level since September 2008 when it was 9.2, which again compares favorably with national levels.

 

Before we get too excited, there has been a fairly significant reduction in the number of homes selling. Home Sales for January 2009 are off 33% at 207 sales compared to 309 sales for Jan 2008. Heading into to Spring, I would say as long interest rates remain low we will have decent activity and sales in the market. The key for sellers is to be aggressively competitive to stand out. Buyers are still looking for deals and will find them because they are out there.

For more details download the charts below, or contact me at 302-740-5872

Regards,John Luca

 

Download Jan 2009 Median-Sold Avg

 

Download Jan 2009 Mo. Supp Inv

 

Download Jan 2009 Sales NCCo

 

 

 

DSHA - New Bond and Grant Money

DSHA just issued new Bond and Grant money this morning

Grant money

Old rate:  6.75%

New rate: 6.50%

Bond money

Old rate:  6.25%

New Rate 6.00%

These rates are for new reservations only.  Please call me if you have any questions 302-999-6940 or John at 302-999-6966.

-Jason

NEW - Access SOLD Data on our site

• Did you ever wonder what the house down the street sold for? 

• Did you ever wish you could set up up a search so that you can be updated when homes sell in a certain area, or a certain size?

We've worked extremely hard to get you that data, and are pleased to announce it is available NOW on our site at www.TriStateTeam.com

Why? 

1. We want to offer our clients the tools you need to make you home search easier. 
2. We are always striving to provide you with exceptional Value - whether it be in our technology or negotiating the best deal for you with our full time market expertise. 
3. We believe the more Value we provide you, the happier you will be as our clients (and we like happy clients!)

We hope you enjoy using this new Active & Sold Listing Search Tool, and will call on us when you are ready to Buy or Sell real estate, and remember to refer your friends to us. (302-740-5872)

Click here to give it a test drive:

Have a great evening,

Mary & John Luca

Waterfront Anyone?

I thought you'd enjoy this shot of my brother, Mike, on Red Mill Pond from this weekend.  As my brother says, only three months until we can put the boat in :) .

 

While we're waiting for the thaw, let's take a look at market price activity for single family homes in Sussex County over the past five years.  

I looked up some stats in the Sussex MLS, and although the market is down you’ll see it’s not drastic -  we are much better off than other sectors of the nation (John could go into more specific detail, as he’s the real market man - feel free to call him on 302-740-5872).  

Here’s just a few Sussex numbers:

5 year Residential Single Family Median and Average Sold Price History:

Year	Average Sold Price	Median Sold Price
2004	$343,188	$240,000
2005	$413,605	$285,000
2006	$404,951	$284,250
2007	$404,414	$286,950
2008	$378,989	$265,000

By simple calculation you can see that we are only about 7% off the high Median Sold Price for Single Family Homes in Sussex (dropping from $285k to $265k).  Yet we are still in gain territory versus prices in 2004.  I know those are high level numbers, but I start in generalities until someone wants a detailed drill down of a specific area.  In addition, it sometimes helps to step back and look at the bigger picture.

Have a nice evening – and let’s think spring so we can enjoy more outdoor activities soon (and get that boat in!)

Mary

Pickup in Buyer Activity

After witnessing (by radio) the uplifting the Eagles’ win yesterday, I thought you might enjoy some positive news on market activity.

Market activity can be measured in many ways (as you’ve seen from the statistics on this blog), however there are a couple anecdotal signs of positive market activity that I tend to take notice of when they occur.  First, when a home goes under contract within the first 7-10 days that it’s on the market, and second, when I see another realtor showing the same house at the same time that I’m showing it to a client.  Well I witnessed them both firsthand yesterday.

First, imagine my surprise when I pull up to the home where I’m about to meet my clients for a showing, and the “For Sale” sign in the yard has another little sign rider, attached to the top of it which says “Sale Pending” (when setting up the home for the tour less than 24 hours prior, it was not pending and had only been on the market 9 days).  This home was priced in the mid- $400’s and was located in PA (Delaware County).  This represents a perfect example of when a home is priced properly from the start, it can sell quickly, even in a “slow” market. 

My second wonder of the day occurred at the third home of yesterday’s tour.  On a day when a high percentage of the Delaware Valley population was watching the Philadelphia Eagles win their big playoff game with the Giants, there happened to be another realtor showing the same house I was about to show.  This used to be quite common just a few years ago, when the market was going strong, but rarely does it happen these days.  

Does this mean that the real estate market has turned around overnight?  No, but this is truly a great time to be in the market either buying or selling.

With the interest rates once again at historic lows, and home prices at affordable levels, buyers can take advantage of a great opportunity.  Sellers also stand ready to benefit. 

The sellers who have chosen to price their home in the market can also take advantage of this opportunistic time when winter inventories are a little lower and the current buyers are ready, willing and able.

If you have any questions on buying or selling in this market, don't hesitate to call me at 302-740-5872.

Regards,

John

Comparing 1990 with 2008

In a conversation with a broker the other night, it came to mind that the market today, actually has shorter Days on Market (DOM) than back in 1990-1991 when interests rates were significantly higher than they are today. 

To prove whether memory served correctly, I've dug up old MLS books from New Castle County for the 1990-1991 era for DOM statistics to compare to today.  You'll notice that with the change in technology and measurement capabilities, I have data for 6 month time periods for '90-'91 versus monthly data for 2008, however, the point is proven.

I've also included data from our mortgage consultant (Jason) showing the significant difference in interest rates between the two time periods.  

The point is - the market is slower, and it slowed down faster this time, however, in some ways it's still not as bad as it has been in the past, and we recovered then.

Just food for positive thought.

Have a great day,

Mary 

 Download DOM Chart

       

Download Mortgage Chart

   

 

December 2008 Market Analytics + 2 year summary

It's no surprise that market activity has slowed down in the last couple years, however, being a statistical person, I enjoy studying charts (I was a technical trader on the "street" for JP Morgan trading federal funds, eurodollars, derivatives, treasuries, etc. using chart analytics, and I consider it fun).   Meanwhile, John not only studies the statistics, he lives in the market daily with the clients and has a feel for the market that goes beyond stats. 

Being the techy, I wanted to get the charts out right away now that 2008 has wrapped up, in case any of you like to study the numbers in the market.  While I've created all the analytics below for both December and the past two years for your own review, I think it's always helpful to know a couple high level statistics to see the overall flow.  

As you can see from the 2 years charts for New Castle County:

• Monthly Supply of Inventory has risen from Dec. 2006 at 6.1 months to Dec. 2008 at 11.9 months, meaning at the current sales rate, it would take almost twice as long to sell all the homes currently on the market as it would have taken two years ago.

• This is supported by the fact that while Properties for Sale only increased 10.8% between Dec. 2006 and Dec. 2008, the purchase of those home slowed as Sold Homes dropped by 54.1% at year end 2006 vs. 2008.  

• Another important statistic is that Sold Homes Average Days on Market (DOM) increased from 45 days to 88 days from Dec. 2006 to Dec. 2008- almost doubling. 

From all this we take, what we mostly knew - there are not significantly more homes for sale on the market, just longer days on market due to less buyer contracts.  A bright spot I see here is, it could be worse - there could more significantly more homes on the market in addition to less demand.  So when buyer confidence returns, the MSI should be able to drop back down faster than in an environment where the homes for sale increased significantly. 

Now for fun I'd love to study these trends using technical analytics like Bollinger Bands or Fibonacci retracements, however, I don't have that software right now to apply to these statistics and need to get back to work on more meaningful systems for our clients such as updating our MLS Home Search Software (look for Sold Home data to appear there soon!). 

John is at work on another computer right now, but hopefully will get to post some market "color" for you from his experience in the market in December (the market is still moving - we were able to help 5 buyers and 1 seller settle in December alone).  Until then, feel free to give him a call if you'd like to get that color over the phone or have specific questions answered (302-740-5872; 302-999-6966)

Happy New Year - Mary Luca

Download NCC Supply and Demand Analysis John Luca Dec 2008

Download NCC Home Price Analysis John Luca Dec 2008

Download NCC Month Supply Inventory Analysis John Luca Dec 2008

Download NCC Month Supply Inventory Analysis John Luca 2007- 2008

Download NCC Home Price Analysis John Luca 2007- 2008

Download NCC Supply and Demand Analysis John Luca 2007- 2008

Seller's Market? Yes, one does exist!

Currently in the areas of Elsmere, Newport and Pike Creek (referred to as NCC Zone 3), in a perfect first-time buyer price range of $0-$160,000 we have a bona-fide seller's market.  

What is "seller's market"?  The National Association of Realtors defines a seller's market as any area that has 6 months of inventory or less.  The current inventory level of Zone 3 for $0-$160k is 47 units with an average of 11 sales per month, which equates to just 4.3 months of inventory. 

New Castle County as a whole has an 8.6 months supply of inventory.  Looking at the remainder of NCC from $0-$160k it's even longer - a 10.7 month supply.  Both of these numbers point to a buyer's market in NCC on the whole, as opposed to a seller's market in Zone 3 in this price range.

Are you looking to buy or sell?  Let me help you find value in today's market. 

John Luca  (302) 740-5872  John@TriStateTeam.com 

(in which we happen to have a hot new listing)

Nov. NCC Market Analysis + Charts, Tables, Price Trends

Click on the links below to view the market statistics for November 2008 for the past year. 

As far as inventory is concerned, you'll notice that the For Sale, Sold and Under Contract average Days On Market (DOM) for New Castle County (NCC) crept up in November, while Months Supply of Inventory (how long it would take to sell all the inventory currently on the market at today's sales rate) crept up as well. 

While that shows what we all know, that the market has slowed on average there are positive notes.  In addition to the anecdotal evidence of John's previous post this week noting sales contracts for homes that are priced right and show well and the bonus buyers and sellers receive from the drop in interest rates, there are statistical bright spots.  On a positive note for sellers, the number of new properties For Sale and New to market each month has been steadily declining for the past few months.  That's less competition entering the field each month.

In addition, John's daily work in the market is showing him where pockets of activity are - he'll be posting on a seller's market he's discovered tomorrow.

If you have an area you are interested in buying or selling in, don't just go by what the headlines say and make a local assumption.  Talk to someone who is working in the market all day, every day - who has a feel for it through actual market experience and negotiations.  Someone who will study pockets of local activity where your specific area of interest lies.  Then, once you have that expert advice from your real estate consultant, decide what makes the most sense for you at this point in your life. 

To contact John for a private local analysis for yourself or a friend, just drop him a line at John@TriStateTeam.com or call me on 302-740-5872.

Download NCC Home Price Analysis John Luca Nov 2008

Download NCC Supply and Demand Analysis John Luca Nov 2008

Download NCC Month Supply Inventory Analysis John Luca Nov 2008

 

Mary B. Luca; MBA; ePro; Realtor DE & PA; Mary@TriStateTeam.com

There is Life in the Market!

I've experienced a little spike in the local market just in the past week as I've been blessed to help clients get 3 signed contracts - 2 for our buyers and 1 for our seller.  So there is still life in the market! 

Additionally, interest rates have dropped in the last couple weeks - and this provides a benefit to both buyers (whose purchasing dollars are stretched farther by saving interest) and sellers (whose homes become more affordable for buyers).

Look at this simple example:

As of yesterday, the 30 year fixed was hovering around 5.625%   Back on 11/20, we were around 6.125%  Here are different payments these rates would imply, principal and interest (taxes and home owners insurance not included.)

 6.125%      $150k mortgage = $911.41/mo         $400k mortgage = $2430/mo

 5.626%      $150k mortgage = $863.48/mo            $400k mortgage = $2302.62/mo

As you see the $150k buyer would save about $575 per year in payments, while the $400k buyer would save about $1528 per year! 

To learn more about the market activity or how these rates might affect your buying or selling ability, please feel free to call me at 302-740-5872 or shoot me an email at John@TriStateTeam.com

Have a great day!

John Luca 

 

NCC Market Analysis + Charts,Tables, MSI, DOM, Price Trends

To View the Latest New Castle County Market Analysis either click on the charts below to enlarge or use the Download links to view the files:

Download NCC Month Supply Inventory Analysis Oct 2008

Download NCC Home Price Analysis Oct 2008

Download NCC Supply and Demand Analysis Oct 2008

To discuss home buying or selling related to these statistics, contact John Luca 302-740-5872

   

 

 

 

Mortgage Rate Drop:

5.625%    30 year fixed……zero points

Contact Jason for details - Jason@JohnLuca.com 

(302) 999-6940 (302) 999-0578

What makes a good investment?

The Key to a good investment is the Rate of Return, otherwise known as ROI for Return on Investment.  The historical ROI on real estate has been approximately 11%. 

Statistics will prove, if a person:

1. buys a rental property,
2. rents it out at a break even from a cash flow standpoint - {which means the monthly income (rent) equals the monthly expenses (principal and interest payment + taxes + insurance + maintenance)}
3. purchases with a 20% down initial investment and a 15 year mortgage,
4. and has no appreciation on the rental property over the 15 year period,
5. the ROI would equal approximately 11%. 

How can this be?

Let's use the following example:

A person buys a $100,000 investment property with a 15 year mortgage.  15 years later the home is sold for $100,000.  The net return is $80,000 for a $20,000 initial investment.  The ROI is 10.78%. 

Appreciation and a positive monthly cash flow, are "icing on the cake". 

The bottom line is, you can still have a large ROI without appreciation or a positive cash flow.  

For an in-depth discussion on investmenting in real estate, contact John Luca - John@TriStateTeam.com 302-999-6966 

Your credit report: Knowing is half the battle

Your credit report: Knowing is half the battle

Your credit score can either be a badge of honor or a dark cloud over your head. Good credit gets you low rates on mortgages, low rates on auto loans, and any credit card that you choose. Bad credit gets you turned down for mortgages, sky-high interest rates on auto loans, and secured credit cards that are worse than the terms that a loan shark would give. Nowadays employers, the military, and even your children’s private school may request a copy of your credit report.

If you are reading this blog, then most likely you are shopping for a home. If you do not know if your credit is good enough to buy a home, now is the time to check your report. I have had many people call me who had been shopping for homes online for months without having their credit checked. Some of them were quite surprised to find items on their credit report that they did not recognize. Some of these were negative items, often referred to as “derogs” (short for derogatory.) In some cases these potential buyers were unable to get the lowest rate, or even worse get approved at all.

There are so many websites and so many people that want to tell you how to have great credit. Many of them are confusing, and many of them are contradictory. I prefer to keep things simple, start by getting a copy of your report. In my opinion annualcreditreport.com is the best site on the internet to get a free copy of your report. Take a good long look at the report and ask yourself the following questions:

1) Do I recognize every account?

This happens more than you may think. It is one thing to have a derog on your report if you are at fault; it is another if it is not. If you believe that an account on your report does not belong to you, follow the instructions on annualcreditreport.com to dispute it.

2) Should this old debt STILL be on my report?

Old collection accounts and tax liens should only be on your report for seven years since their last activity. Are they older than this? Dispute them.

3) Was I really late on my bill that month?

I recently had a woman come to me with a credit report that stated that she was four payments behind on her credit card last year. This was during the time that she was having a charge reversed to a merchant who charged her for merchandise that she never received. She disputed it, the lateness was corrected.

The best part about your credit report is it tells you how to improve it! Somewhere at the top or the bottom of every report is a list of the four things that you can do to improve your score. These are not generic suggestions; these are suggestions that are customized to you based upon your report. The worst thing that you can do when the stock market is down is to not open your monthly statements. The worst thing you can do when you fear that your credit score is down is to not look at your report. Until you know what is on your report, you will never know how to improve it.

Submitted by: Jason Infanti

For further assistance contact Jason via email:  Jason@JohnLuca.com or phone:  302-999-6940 referencing his blog article

Fannie Mae and Freddie Mac - how it affects you and the market

Earlier today, Treasury Secretary Henry Paulson announced that Fannie Mae and Freddie Mac have been placed into conservatorship by the Federal Housing Finance Agency (FHFA).  This is the most important event our industry has experienced in the past three years.  This is good news for both the mortgage and real estate markets.

This government takeover will be a catalyst for the following changes:

• Immediate reduction in mortgage rates due to the narrowing of Fannie/Freddie yields over Treasuries
• Stabilization of credit markets
• Positive changes in investor psychology
• Positive impact on real estate market due to lower rates.  When combined with the first-time buyer tax credit, this will stimulate the first-time home buyer market, which will unlock the trade-up market

In the future, we will look back on this event as the beginning of a slowly improving real estate market.  Please pass this positive news on to our sales associates and employees.

     Larry

(quote from: Larry Flick IV, Chairman and Chief Executive Office of Prudential Fox and Roach Realtors printed with permission)

President Bush Signs into Law Housing and Economic Recovery Act of 2008 - First Time Home Buyer - $7500 Tax Credit

On Wednesday, July 30, 2008, President Bush signed into law:

The Housing and Economic Recovery Act of 2008, which:

1. authorizes the Department of the Treasury to purchase obligations of housing Government Sponsored Enterprises (GSEs);
2. reforms the regulatory supervision of the housing GSEs;
3. provides reform of the Federal Housing Administration;
4. provides homeownership assistance and reforms to mitigate recent increases in foreclosures;
5. and contains housing-related tax incentives and other tax provisions.

according to the official White House web site:  http://www.whitehouse.gov/news/releases/2008/07/20080730.html

How does this benefit the First Time Home Buyer???

The primary focus of the housing bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. The tax credit can be used for homes purchased between April 9, 2008 and July 1, 2009 - a date that was extended from April of 2009 due to the campaining of the National Association of Home Builders. This tax credit is expected to provide significant, albiet temporary, incentive and opportunity for the the first time home buyers.

Download tristateteam_housing_and_economic_recovery_act.pdf

You'll see from the summary document (link above) that it is a credit which is paid back over the course of up to 15 years.

To discuss this $7500 incentive, as well as other financial advantages available to First Time Home Buyers in Delaware, contact John Luca and his team of specialists at 302-999-6966 and start shopping for your next home using our top-tech search tools at www.TriStateTeam.com . 

Tax law can be complicated, so as always, please check with your CPA or Lawyer for your complete education and representation in areas of law and tax.

Relocating?

Relocating after 30 years can be a frightening experience - especially when you don't know the area. I was lucky in that I choose to work with John Luca of the Tri-State Team of Prudential Fox Roach. John and his team were terrific. They listened to what my wants were in a house and were tenacious through their website and their personal efforts in finding me homes that fit my criteria. John had the patience of a saint when it came to showing me selected properties. What I liked the most was his honesty in his assessment of the houses we looked at. He looked at everything with a critical eye and readily vocalized concerns he spotted in things like condition, size, even the length of my commute.

Most of all I felt comfortable with John and his team. The house hunting experience was a process of discovering what is really important in my next home while developing a friendship with my real estate advisor. By the time I found my new home, John and his team became my friends and we easily laughed and shared stories of our lives and experiences. I trusted John and it paid off. My husband and I now own a beautiful new home in New Castle County with a stunning pool and enough property for my 3 dogs to romp. The neighbor fits our lifestyle and the commute is a breeze. From the purchase of my new home to financing - John and his group steered me in the right direction. I would recommend the Tri-State Team without hesitation.

Chris Corsette,

Former New Yorker

First Time Homebuyers

John Luca: 

Chris, what programs are out there to help First Time Home Buyers?

Chris Cox: 

John, the most prominent is the Single Family Mortgage Revenue Bond Program, nicknamed as the state bond loan.  This is the subsidized loan offered by the state for individuals and families who have not owned any real estate in the previous three years.  There are 2 different variations on this program.  The first is a 97% loan to value loan or lower that does not require a grant or assistance and is paid back over 30 years. The second is the most popular, which is a 30 year fixed loan at 97% and allows the state to give a grant towards the down payment or the closing

costs.  The grant is calculated by taking 3% of the loan amount. Either the 30 year with the grant or the 30 year without the grant can be underwritten through FHA guidelines or through Fannie Mae guidelines.  If underwritten through Fannie Mae guidelines, the credit score must exceed 680 to receive the subsidized private mortgage insurance.

If underwritten through FHA guidelines, the credit score can be below the new standard of 580 for a credit score.   A home inspection is highly recommended but not required.  “First time home-buying counseling” is now required.  A 1 to 2 person family purchasing in New Castle County may not have combined income greater than $74,300 from all sources.  Families of three or more cannot exceed $85,445.  (Kent and Sussex Counties have a maximum income of $67,500 for a 1-2 person family or $104,020 for a 3-4 person family.)  Persons purchasing a “targeted” home have higher income limits.

The maximum purchase price for New Castle County is $456,054, for Kent County is $444,189, and for Sussex County is $384,868.  Persons purchasing a “targeted” home have higher purchasing limits. (In New Castle County, the “targeted” homes are located in sections within the city limits of Wilmington and are generally near the center of that city or just to the east of the downtown area.)

Another program that can be utilized is the DHP.  This is a silent second loan.  The interest rate is 6% but does not have to be repaid until the first mortgage has been paid in full.  The loan will still accrue interest until the loan is satisfied.    The loan can only be used for the minimum down payment and for the closing costs.  First-time Homebuyers counseling is required and a complete home inspection by a ASHI regulated home inspection company is also required.  This program is very much confused as a $10,000 grant.  It is not a grant.  It is a loan.  The best advice to a person who is receiving the DHP is to always pay the interest each even though it isn’t required.

There is the Live Near Where You Work program, which is also subsidized.  However, the employee must live close to where she/he works.  The employer must be on the state’s list of approved employers.  In New Castle County, there is a “front door” program.   The legal name is the Federal Home Loan Bank of Pittsburgh program.   Only direct lenders may participate.  Trident is not a direct lender for this program.  Wilmington city and Newark city have a program that is similar.  Both programs are income dependent.  Typically the funds are used to assist with the down payment.  Counseling program is required.  (Wilmington city also has a program for current homeowners.  This program provides a forgivable loan but can be used only to make a home more energy efficient.  This includes a new roof, insulation, windows, exterior doors, etc…) The maximum loan is $25,000. 

CRA (community reinvestment act) is offered by Trident but the rate is not as competitive as can be found in the New Castle county financial community.  The income limit is $59000 or less.  The CRA funds are typically used for a second mortgage to eliminate the need for PMI.  The first mortgage at 80% of the sales price is predicated upon the borrower’s credit and ratios and that interest rate can fluctuate accordingly.  Most of the time, the CRA program follows the guidelines of a FHA mortgage.   Your debt-to-income ratio cannot exceed 41%.   

FHA assistance programs.  This program isn’t limited to first-time homebuyers.  However it works roughly like this:  The seller of the property agrees to give a 6% sellers assistance of which half of the sellers assistance is sent to a non-profit agency plus an administrative fee.  This is remitted back to the buyer for the buyer’s 3% required funds.  The balance of the sellers’ assistance is used towards the buyer’s closing cost.   Example:  Sales price of $200,000.  Borrower must place 3% into the transaction or $6000.  The seller agrees to give a 6% assistance.  A check is sent to the non-profit agency for $6000 plus a $350 administrative fee.  The non-profit sends a check to the settlement table for the $6000 which will allow the buyer’s 3% requirement to be met.  This shows up on the HUD-1 as Gift funds.  The balance of the sellers’ assistance shows up on the HUD-1 settlement sheets as a sellers concession.

John Luca:

Thanks for that invaluable information Chris.  First time homebuyers can contact me at John@TriStateTeam.com or 302-999-6966 and we can work together to find you not only the best home for you, but also the most advantageous financing to go along with it. 

What Does it take to Sell a Home Today?

Q:  What does it take to sell a home today?

A:  Overall many homes' conditions are excellent and they just need some minor updating.   

Having sold approximately 100 homes in the past 2 years, my philosophy is to be 100% straight forward with my opinions and expertise on what a home needs in order to sell to buyers in this market (with the 2 biggest factors being condition and price).  I could easily tell someone what they want to hear, like many agents and do, in hopes of getting the listing, but I would rather be honest up front and turn down a listing – than take an over-valued listing and let the seller down in the end.

I believe it takes a special agent to do business in the current market.   Homes sales are down 31% in New Castle County in 2008 compared with one year ago yet you will find agents who are still able to help sellers sell their homes, and buyers find the right home.  For example, my numbers for 2008 are actually ahead of last year’s total of 49 sales – successful agents will do business and perform for their clients regardless of the market.

Another interesting statistic is the median selling price for 2008 is actually $4000 higher than last year.  So prices are fairly stable and people are willing to pay for what they perceive as value. 

As always, if you have any questions pertaining to real estate, please do not hesitate to contact me.

Respectfully,

John Luca  (john@tristateteam.com 302-740-6872 www.TriStateTeam.com  www.TriStateExpert.com )

Buyers want Turn-Key Homes - even down to the Pools

John

Click Here to: LISTEN to John

  Looking at the market at New Castle County, we've seen an increase in sales for homes featuring in-ground pools.  For example, I currently worked with abuyer and we looked at several properties that have in-ground pools and of course many homes that didn’t have pools – well after about 6 weeks of searching I went back through the MLS to check on the pool homes we had already seen to look for price adjustments and found that three of the ones we toured had gotten contracts in the last 30 days. This shows that the buyers are looking for homes that are turn-key, with the pool already installed, even though they have a lot more homes to choose from without a pool.  Buyers definitely want the pool already there and they are willing to just choose from a smaller supply instead of buying a home and putting one it.  As a matter of fact, I had a client recently purchase a home with a pool and it was a great value and the buyer is thrilled!