From HUD: Upcoming Increases to Mortgage Insurance Premiums

Today the HUD announced changes to the premium structure for FHA-insured single family residential mortgages.  According to the press release, “FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount.  Upfront premiums (UFMIP) will also increase by 0.75 percent.”

The premium increases will be rolled out in the next few months.  Starting April 1st 9th, 2012, all FHA-insured loans will see the 0.10% increase in MIP.  Loans over $625,000 will be assessed an extra 0.25% increase in MIP starting June 1st 11th, 2012, to reach the total 0.35% increase.

The increase in UFMIP will bring this charge from 1% of the base loan amount to 1.75% starting April 1st 9th, 2012.  This change will amount to approximately $5 a month increase to borrowers, on average. The FHA will still allow borrowers to roll this charge in with their mortgages.

The HUD press release about these upcoming premium increases can be read here. What are your thoughts about these increases? Do you think the increases will achieve the goal the FHA has set out for these monies– to contribute to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund?

EDIT: On March 6th HUD released Mortgagee Letter 12-4 which contains the exact roll out dates of the MIP and UFMIP for new FHA borrowers. The press release sited in this blog post used the language “on or after …” when indicating the projected roll out dates. I’ve updated the text above to reflect the actual roll out dates contained within Mortagee Letter 12-4.

January 2012 Statistical Reports for Mercer Island, Seattle, Eastside and King County

Absorption rate, the leading indicator of trending market activity, is up remarkably in January 2012. This tells us that of all of the homes available for sale, a larger and larger chuck are being sold (absorbed) by the buying public. With absorption rates this high, buyers will find themselves competing for the more-desirable homes on the market. The laws of supply and demand would indicate this is an ideal time for home sellers to come to market if they have a home they need to sell this year.

Footnote: The Mercer Island stats are very skewed by a significant number of lower end sales. This happens because with only 13 sales any few sales can create the appearance of a trend.

2012-01 Seattle Metro

2012-01 Mercer Island

2012-01 Eastside

2012-01 King County

2012-01 Summary

2011 Mercer Island Year in Review — Full Report

Yesterday you were able to see a sneak peek of the 2011 Mercer Island Year in Review. Today, you can access the report here. Plus, you can also read the 2011 year in review for Seattle and the Eastside.

Of the year’s sales, 88 were above $1,000,000 while only 15 were below $500,000. Bank-owned and short sales made up only 10% of the sales in 2011—one of the region’s lowest ratios of distressed property sales.

~ Excerpt from 2011 Mercer Island Year in Review

Let’s Celebrate Windermere’s 40th Anniversary!

Back in 1972, Windermere opened its first office. Real estate was a different animal back in the early ’70s. Think about it— no email or fax, no internet, no digital photography. While the tools of the trade have drastically changed, the foundations which the Windermere company were founded upon are untouched by age. Today’s Windermere agents have a steadfast commitment to their clients and their communities, just like the agents who worked out of that first Windermere office.

In less that 2 weeks, Windermere agents from across the western United States will gather in Seattle for Windermere Symposium. During this annual event, agents will learn about new products and services to help them better serve their clients. They’ll network with their peers while discussing today’s important real estate topics and sharing ideas. During the Symposium, Windermere agents will also help kick off the company’s 40th Anniversary celebration in style!

While reminiscing about the past 40 years, some interesting statistics caught our eye.

Even though purchase & sale agreements contain more pages and Windermere now has 300 offices, that same 1972 business ethos, centered on community and mutual respect, remains the Windermere cornerstone. It remains central, even over the years, because it helps us every day to give you, our clients, the best service possible.

December 2011 Stats Are Out

The most notable aspect of the December 2011 stats is the continued trend toward high pending sales volume despite the softening of sales prices. Listing inventory is down markedly compared to inventory levels for the past three years in the month of December. With interest rates below 4% buyer interest has remained very strong and multiple offers are not unheard of–albeit at much more modest prices than in years past. Having been burned once, buyers are cautious of overpaying and are negotiating for a fail-safe price.

2011-12 Summary

2011-12 Mercer Island

2011-12 Eastside

2011-12 Seattle Metro

2011-12 King County

Redesigned & Revamped: Windermere.com is ready for 2012!

Right before the holidays, Windermere launched their newly updated Windermere.com. The website redesign includes more than just aesthetics. The newly revamped website contains more search options, including Windermere’s Modern Properties program. Premier Properties are prominently showcased on the home page of the website. Windermere’s Blog, Neighborly News, is linked on the home page. Visitors to Windermere.com can click on the photo link to open the blog in a new window for easy browsing. If you’d like to share information from Windermere.com with your social media network, or via email, user friendly buttons are available throughout the website. The revamped Windermere.com also contains information on Windermere’s Building Communities outreach, including Windermere Foundation, Community Service Day and annual Community Events.

The cool, new “Discover Your Neighborhood” feature on Windermere.com enables searchers to look at community details either through a specific address search or basic search. With the basic search, the state must be identified along with one “radio button” — the button choices are city, zip code, county, school, district or neighborhood. The community information includes demographics, local school information (both public & private) with ratings, nearby businesses and recent home sales data. Searchers can also generate a comparative community overview by picking that tab, located in the second row of tabs along the top of the “Discover Your Neighborhood” search results. The comparative community overview generates a side-by-side comparison of the demographics of both neighborhoods.

In addition to the new features listed above, registered users of Windermere.com can save listings and searches. Plus, the listing result detail pages contain more mls data fields and are integrated with Bing maps. The Buyer and Seller sections on Windermere.com have been expanded, and the agent / office search has been upgraded. The nice write-up about the updated Windermere.com in InmanNews outlines these new features and upgrades.

The redesign of the company website is part of a company-wide technology upgrade spearheaded by Windermere Solutions, a technology company spun from the real estate branch of Windermere. In November, new agent websites were launched. In January 2012, upgraded office websites will launch. Both of these products have been designed to smoothly integrate with Windermere.com.

Holiday Myth Debunked: The Holidays Can Be a Great Time To Sell Your Home

At this time of year, buyers know that home inventory shrinks. The holidays are notorious for active listings migrating to TOMK(Temporarily Off Market). This migration, while predictable, does not necessarily mean it’s a best business practice for the sellers out there.

Buyers who are looking during the holiday season are typically serious buyers. People often have time off work during the holidays. This time off is a boon for viewing homes, especially for couples whose work schedules don’t mesh. Some home buyers even prefer looking at homes after the summer rush, when there’s more time to put together viable deals and negotiations are less stressful. Also, the predictable shrink of home inventory can definitely be an advantage to sellers who keep their homes on the market during the holiday. In fact, in a recent Realtor.com survey, 61% of the realtors polled felt the reduced competition was of great benefit to their sellers.

There are many ways to put a listing’s best face forward during the winter months, especially around the holidays. First, sellers can use the cheer of the holidays to their advantage. Staging a home to promote warm and cozy can be so much easier during December and into the New Year. Tasteful holiday decorations, a fire in the fireplace, the lingering aroma of baking spices– these details conger up sentimental thoughts. Sellers who are successful in creating such an atmosphere help buyers imagine their own families celebrating within the walls of the listed home. However, reign in clutter by focusing on just three decorated areas, for example the front door, the fireplace mantel and living room. An evergreen wreath or white lights around the front door makes the entry of the home inviting. Adding some splashes of coordinated holiday colors in the living room pulls the room together and gives off a festive glow. Greenery, or a candle display, looks really sharp on a fire place mantel.

One of the challenges for showing during the holidays, and the following winter months, is the decreased amount of daylight. One way to combat the lack of light is to keep all the lights on when the home is showing. Make sure to change burned out bulbs ASAP, and don’t forget the outside lights. Even if no showings are scheduled, keep the outdoor lights on for curb appeal–someone driving by might be enticed to schedule a showing because the house appearance is welcoming. Also, encourage daytime showings. Your agent can make the suggestion in the listing’s marketing remarks, and you can help out by being ready for viewings by 9 am daily.

One last item to consider: snow and wet weather can present a problem when buyers come to look at a home. In snowy areas, keep walks shoveled and take measures to de-ice the walks around the house. Rainy areas– double check downspouts and gutters to make sure they are doing their job. Seasonal outwear– both your own and buyers’– must be considered. Come up with a plan to contain your coats, hats, gloves and boots. A decorative container near the entrance your family uses can stash away hats and gloves. Keep the coats in the coat closet to a minimum. Take the time to hang your coat up in your bedroom closet to keep that clutter down. Buyers will probably keep their coats with them, but their shoes will be wet, and possibly muddy. If there is room, consider providing them a place to sit down and remove shoes. Even a pretty rug right inside the door, to wipe shoes on, will be a big help. Also, maintain a warm inside temperature, but not too warm. 65 degrees is good for winter showings, where buyers arrive bundled up due to the cold weather outside.

What if you already temporarily took your home off the market for the holidays, before considering all the benefits of listing through the end of the year? Talk to your agent. It’s not difficult to bring the listing back to active, and your agent to ready (and willing) to help you navigate the busy holiday season in conjunction to having a home listed for sale.

All of us at Windermere R.E. / Mercer Island hope you and your family have a wonderful holiday season. Cheers to a Happy New Year!

Now it’s your turn– have you ever sold, or bought, a home around the holidays. What was the most helpful tips you received?

Introducing HARP 2.0

Back at the end of October, Mercer Island Pulse helped spread the word about the announcement from Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac regarding changes to Home Affordable Refinance Program (HARP). The expanded and upgraded HARP program, dubbed HARP 2.0, was unveiled this week. Zillow published a clear, basic guide about Harp 2.0 and at the top of the guide is a calculator to see if you qualify for the program. If you have a blog and would like to share the calculator, Zillow even went so far as to give the widget code so you can publish it over at your place.

So here are the updates, at a glance:

  • No underwater limits beginning 1st Quarter of 2012
  • Eliminating appraisals and underwriting for most homeowners
  • Modified fees
  • Extended deadline for a HARP refi now Dec. 31, 2013

Now it’s your turn– what are your thoughts about the updates in HARP 2.0? Will you consider utilizing them? Is Zillow’s eligibility calculator helpful?

October is Mixed Bag for the Island

October’s stats contain the good, the bad and the ugly!

The good: inventory is down 58% from the same time last year, the Average Sale Price is higher, $/sq ft is higher, and the absorption rate is holding steady.

The bad: Pending sales are down 20% from a year ago, the gap between original list price and sale price is larger (83% as compared to 88%) and the # of months inventory on the market has grown to 10.3 months.

The ugly; Closed sales totaled out at a meager 11 as compared to 26 in October 2010.

The “Rent or Buy” Quandry

The question, “Is it better to buy or to rent?” is on so many minds these days. And it’s understandable, with historically low interest rates and reduced home prices. Yet, there is no canned answer to this question, because there are too many angles which need to be examined to arrive at an accurate answer. The “rent vs buy” discussion is highly personal– there is no one view that “fits most” in today’s housing and employment market.

If this question is one you have been pondering, there are resources to help you arrive at an answer. A good place to start is with an interactive buy or rent calculator, like this one published in the New York Times. You can fill in your own personal information to produce a graph which examines your circumstances and analyzes what might be a better option for you.

Freddie Mac has a web page that discusses “Is Buying or Renting Right For You?” This web page offers bullet points to examine. Do you plan to stay in one place longer than 4 years, have good credit, reliable income, the ability to put down 5+% down and pay closing costs? Perhaps purchasing a home makes more sense for you. Does your career require frequent or sudden moves, you don’t want to deal with home maintenance/improvements, or your finances have experienced a setback? Maybe renting would be a better choice for now. Zillow also examines Owning Vs Renting a Home. Part of the Zillow discussion centers on tax deductions for home owners and the building of equity, both note-worthy issues to consider.

Are you just starting to explore the “rent or buy” question? Keeping track of your expenses and creating a monthly budget is always important; if you are considering a home purchase, it is imperative. Freddie Mac offers a monthly budget worksheet to help with this process. The Women’s Institute for Financial Education (WIFE) offers a Rent Vs Buy Worksheet, so you can examine personally your financial and tax consequences connected to each housing option.

It’s also a good idea to examine your local housing market. A real estate broker would be happy to speak with you. If you have examined the current monthly lease prices in your market area, and compared it to how much of a mortgage you could afford, have you also looked at what kind of home is available at your price point? Is it fairly easy to secure a rental home? A broker will be able to help you find answers to these questions. Also, a broker is a terrific resource for connecting with reputable mortgage professionals, if you would like to discuss the mortgage lending process.

To quote a title of an article written by Knight Kiplinger, A House Is Just A Home. Whether you rent or buy, the end result is you will have someplace to call home. What is important is to make the decision to rent or buy based on sound financial data, in conjunction with how the final decision fits with your current life circumstances and emotions.