Askins Online Real Estate Blog

In recent months, real estate professionals have had to hold their breath as they waited for an appraisal on a property to come back. Would it be lower than the agreed-upon selling price -- and by how much?

Many real estate professionals have blamed a high number of derailed transactions on low-ball appraisals.

But now the industry is noticing a change in appraised values: Appraisals are getting more in line with the agreed upon selling price, CNNMoney reports.

Appraisers are valuing homes at or above their selling prices as home prices nationwide climb and inventories of homes decrease, says Lawrence Yun, chief economist for the National Association of REALTORS®.

For example, in Wallingford, Wash., real estate pro Michael Ackerman told CNNMoney that he was concerned a transaction would fall apart when a buyer agreed to pay $755,000 for a home since other comparable homes in the area had sold for $690,000.

“Everybody’s jaws dropped” when the appraised value came in at the full, agreed-upon selling price,” says Ackerman.

In some cases, appraisals are even coming in higher -- which was practically unheard of just a few months ago. For example, real estate pro Cara Ameer in Jacksonville Beach, Fla., says with home prices in the area rising 15 percent over the past year, she was concerned the appraisal on a two-bedroom townhouse wouldn’t reflect the current rise. A buyer offered to pay $5,000 above the $189,000 asking price. The appraisal came in above the selling price, Ameer says.

source:  CNNMoney

Off-market listings—also referred to as “pocket listings”—are hurting the housing market by depriving home buyers of a full perspective of what’s actually for sale, some real estate agents say. They argue homes that aren’t ever listed on the MLS are then not available to be used as comparable properties for appraisals, other sales, or mortgage refinancing—leaving a skewed picture of the housing market, according to a recent article in The Cleveland Plain Dealer.

A growth in homes unlisted on the MLS in Northeast Ohio is prompting real estate leaders there to speak out, concerned it’s a growing trend. The MLS is a way to share property information and compensation between real estate companies but “pocket listings” are a way for some agents to “keep a bigger piece of the pie” for themselves, says Jeff Russell of Russell Real Estate Services in North Ridgeville, Ohio.

"We see this as a tremendous disservice to our clients," Russell says. "In my opinion, it's limiting the exposure of listings to the market .... While it might be good for the broker, it's not good for the consumer."

“Pocket listings” are only permitted if the seller agrees to it. If so, agents can withhold the listing from the MLS and just reserve promoting the home among close associates, on the company’s web site, or through word of mouth. Some agents may be tempted to keep the listing internal because they then may be able to keep nearly every aspect of the sale internal and collect full commission, critics say.

Russell and John Lynch of Keller Williams Realty Greater Cleveland West are board members for the Northern Ohio Regional Multiple Listing Service and they say the organization is discussing “pocket listings” and whether rules need to change to reduce the number of off-market real estate deals.

"You can't put a gun to somebody's head to make them put their listing in the MLS," Barbara Kohl, executive vice president of the West Penn Multi-List, a listing service covering Pittsburgh and southwestern Pennsylvania, told The Cleveland Plain Dealer. "You have a right as a home owner. But what we want to make sure of is that the agent is really acquiescing to the homeowner's wishes."

source:  The Cleveland Plain Dealer

When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck.

This year is no different: REALTORS^® recently rated many exterior improvements as among the most valuable home investment projects as part of the Remodeling Cost vs. Value Report.

Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.

The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project — upscale vinyl — rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.

According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS^® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.

The reportcompares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau.

HouseLogic.com, NAR’s consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average.

The report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.

source: NAR

Construction on new homes posted a 16.5 percent drop in April after reaching a nearly five-year high the previous month, the Commerce Department reports. 

The National Association of Home Builders called the dip in April a “correction from an unsustainably high level of production on the volatile multifamily side.”

“The big decline in April housing production was mostly on the multifamily side, which recorded a similarly dramatic increase in the previous month,” says NAHB Chief Economist David Crowe. 

But Crowe says the dip in building activity will likely be temporary. Housing permits—a gauge of future homebuilding—rose 14.3 percent in April over the previous month. It’s at its highest level since June 2008. Broken out, permits for single-family housing construction rose 3 percent in April, and soared 37.5 percent in the multifamily sector.

Regionally, housing starts for both single-family and multifamily construction in April rose 10.9 percent in the Midwest, but fell 27.9 percent in the South, 12.8 percent in the Northeast, and 6.2 percent in the West. However, the Midwest, South, and West all posted double-digit gains in housing permits for future construction. 

“While builders today are considerably more optimistic than they have been at earlier stages of the housing recovery, numerous challenges are slowing their ability to get new projects underway,” says Rick Judson, NAHB chairman. “In particular, limited access to construction credit, tough qualification standards for mortgage borrowers, and rising costs for building materials, developable lots and labor are impacting the pace of construction activity.”

source: National Association of Home Builders and Reuters

Home sellers are more than twice as likely to get their homes sold if they use a REALTOR®, rather than trying to sell their home on their own, according to a survey conducted by HomeGain of 400 home owners nationwide.

Seventy-three percent of the home owners surveyed said they used a REALTOR®. On the other hand, 21 percent of those surveyed said they tried to sell their home themselves.

The survey found that 66 percent of the home owners who used a REALTOR® were able to successfully sell their home compared to 30 percent of for-sale-by-owners.

What’s more, the survey found that 22 percent of the for-sale-by-owners eventually decided to use a REALTOR® to try to sell their home. More than half of those who did were then able to sell their homes too, the survey found.

“The value of a REALTOR® in a real estate transaction is made strikingly apparent in our 2012 FSBO verses REALTOR® survey of home sellers,” says Louis Cammarosano, general manager of HomeGain. “A qualified REALTOR® understands the dynamics of the market and can better assist home sellers in the pricing and preparation of their homes for sale.”

source:  HomeGain

Builders are feeling more confident about new-home sales, sales expectations for the next six months, and prospective buyer traffic, according to the May reading on the National Association of Home Builders/Wells Fargo Housing Market Index. 

The index—which gauges builders’ sentiment on those three indicators—rose three points to 44 in May. Still, it takes a number over 50 on the index to indicate that more builders view conditions as good rather than poor.

All three indicators posed gains in May, with expectations for future sales reaching 53 on the index—the highest level since February 2007, NAHB reports.  

"Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates, and strengthening local economies," says NAHB Chairman Rick Judson. "This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots, and labor." 

The new-home sector continues to battle against low inventories. It will take time for builders to “re-establish themselves following recession-related cutbacks,” says NAHB Chief Economist David Crowe. “Builders’ view of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force.” 

source:  National Association of Home Builders

Low mortgage rates and stabilizing incomes are keeping home affordability high and giving home buyers “ample buying power,” according to the National Association of REALTORS®. 

The Wall Street Journal highlights the following example on just how affordable housing has become: “Assuming a 5 percent down payment, a 3.5 percent mortgage rate, and 25 percent of a gross income devoted to mortgage payments, a buyer would only need an income of $36,500 to buy a house at the median price. With a 10 percent down payment, the required salary falls to $34,600, and with a 20 percent down payment, it falls to $30,700.”

In the first quarter, the median family income nationwide was $62,200.

Housing affordability remains high despite recent reports that show home prices in 150 U.S. cities saw their biggest year-over-year gains in more than seven years, according to NAR’s most recent report, reflecting data from the first quarter of 2013. The median price of a single-family, existing home was $176,600 in the first quarter of this year, an increase of 11.3 percent from year ago levels, NAR notes. 

Areas with strong job growth are posting some of the largest home price gains, including: 

• Akron, Ohio: +32.7%
• San Francisco By area: +32.6%
• Reno-Sparks, Nev.: +32.1%
• Silicon Valley area surrounding San Jose, Calif.: +31.7%
• Atlanta: +31.1%
• Phoenix: +30.1%

source:  Wall Street Journal