Monthly Archives: February 2011

A New Must-Have Book for Buyers

Over the past two days, I’ve had the pleasure of co-touring with Michael Corbett, best-selling real estate author and host of NBC’s Extra’s Mansions and Millionaires, to spread the word about his new book, Before You Buy, in which I was honored to be a contributor.

Jim Gillespie and Michael Corbett in studio for book launch

As many of you know, I have been in the real estate industry for more than 35 years now, and I still get the same thrill out of helping people achieve home ownership as I did when I began my career as an agent. When Michael asked me to write the foreword and share insight for this book, I was once again reminded of how satisfying it is to help people buy the home of their dreams and ensure they feel protected, especially in these tough times.

With so many choices and such a unique market, it’s more important than ever for buyers to be well-informed. During a media interview yesterday, Michael and I were discussing an interesting paradox: in spite of the vast and helpful resources available (especially online), recent surveys indicate that home buyers are overwhelmed.  They’re confused – and some of them are downright afraid about making a mistake in what could be the biggest investment of their lives. They need to work with a trusted real estate agent so they can make a smart decision.  Michael’s book Before You Buy breaks down everything buyers need to know, step-by-step, so they’re educated and prepared for every single part of the process. 

There’s no question that now is smart time to buy a home for those who are financially prepared, and Michael touches upon exactly how financially-ready one needs to be. For example, he recommends that ideally, buyers should be able to put 20 percent of the home’s value in a down payment. He also recommends that buyers look for homes priced less than the maximum their lender allows them to borrow.  For those interested in rental properties, Michael has a helpful section on becoming a landlord and “getting strangers to pay your mortgage.” He delves into foreclosures, and “bargain home buying,” among many other timely topics.  Thankfully, with inventory and prices where they are today, there are plenty of fantastic homes on the market for buyers in any price bracket.

Do you have questions about buying a home?  Let me know.

Existing-Home Sales Rise Again in January

Washington, DC, February 23, 2011

The uptrend in existing-home sales continues, with January sales rising for the third consecutive month with a pace that is now above year-ago levels, according to the National Association of REALTORS®.

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010. This is the first time in seven months that sales activity was higher than a year earlier.

Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” Yun said. “The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”

A parallel NAR practitioner survey2 shows first-time buyers purchased 29 percent of homes in January, down from 33 percent in December and 40 percent in January 2010 when an extended tax credit was in place.

Investors accounted for 23 percent of purchases in January, up from 20 percent in December and 17 percent in January 2010; the balance of sales were to repeat buyers. All-cash sales rose to 32 percent in January from 29 percent in December and 26 percent in January 2010.

“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said.

All-cash purchases are at the highest level since NAR started measuring these purchases monthly in October 2008, when they accounted for 15 percent of the market. The average of all-cash deals was 20 percent in 2009, rising to 28 percent last year.

The national median existing-home price3 for all housing types was $158,800 in January, down 3.7 percent from January 2010. Distressed homes edged up to a 37 percent market share in January from 36 percent in December; it was 38 percent in January 2010.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the median price is being dampened by unusual market factors. “Unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts, undoubtedly pulls the median price downward,” Phipps said. “Given the levels of inventory we see today, we believe that traditional homes in good condition have held their value.”

Total housing inventory at the end of January fell 5.1 percent to 3.38 million existing homes available for sale, which represents a 7.6-month supply4 at the current sales pace, down from an 8.2-month supply in December. The inventory supply is at the lowest level since December 2009 when there was a 7.3-month supply.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.76 percent in January from 4.71 percent in December; the rate was 5.03 percent in January 2010.

Single-family home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.69 million in January from 4.58 million in December, and are 4.9 percent higher than the 4.47 million level in January 2010. The median existing single-family home price was $159,400 in January, down 2.7 percent from a year ago.

Existing condominium and co-op sales increased 4.7 percent to a seasonally adjusted annual rate of 670,000 in January from 640,000 in December, and are 7.9 percent above the 621,000-unit pace one year ago. The median existing condo price5 was $154,900 in January, which is 10.2 percent below January 2010.

Regionally, existing-home sales in the Northeast fell 4.6 percent to an annual pace of 830,000 in January from a spike in December and are 1.2 percent below January 2010. The median price in the Northeast was $236,500, which is 4.0 percent below a year ago.

Existing-home sales in the Midwest rose 1.8 percent in January to a level of 1.14 million and are 3.6 percent above a year ago. The median price in the Midwest was $126,300, which is 3.2 percent below January 2010.

In the South, existing-home sales increased 3.6 percent to an annual pace of 2.02 million in January and are 8.0 percent higher than January 2010. The median price in the South was $136,600, down 2.1 percent from a year ago.

Existing-home sales in the West rose 7.9 percent to an annual level of 1.37 million in January and are 7.0 percent above January 2010. The median price in the West was $193,200, down 5.7 percent from a year ago.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, which is posted with other tables at: For information on areas not included in the report, please contact the local association of REALTORS®.

Tourism Generates Jobs

by NAR Research on Friday, February 11, 2011 at 10:57am
  • Travel and tourism are important contributors to the U.S. economy.  The United States hosted approximately 60 million international visitors in 2010.  According to the International Trade Administration, tourism generated over $120 Billion of expenditures in 2010 based on tourist spending on transportation, lodging, restaurants, and other services.
  • Approximately 1 million U.S. jobs are directly supported by international visitors, and more than 8 million jobs are tied to travel and tourism in the United States.
  • Anecdotally, REALTORS® who have had foreign clients buying a home in the U.S., particularly in Florida, indicated initial visits to the states a tourist that raised interest in buying a permanent property.

This is why Governor Christie’s aggressive decision to get Atlantic City back on track towards becoming  ‘A Vacation and Convention Center for the World’…is so critical and such a Landmark Plan.


Mortgage rates back above 5%

MBA survey shows weak demand for purchase, refinance loans

By Inman News, Thursday, February 10, 2011.

Inman News™

Signs that an economic recovery is picking up steam sent mortgage rates surging this week, with 30-year fixed-rate mortgages breaking through 5 percent to their highest level since April 2010, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.

A separate survey by the Mortgage Bankers Association suggests rates were already under pressure last week, denting demand for refinance and purchase mortgage applications.

According to Freddie Mac’s survey, rates on 30-year fixed-rate mortgages averaged 5.05 percent with an average 0.7 point for the week ending Feb. 10, up from 4.81 percent last week and 4.97 percent a year ago.

The 30-year fixed-rate mortgage hit a low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11.

Rates on 15-year fixed-rate mortgages averaged 4.29 percent with an average 0.7 point, up from 4.08 percent last week but down from 4.34 percent a year ago. The 15-year fixed-rate loan hit a low in records dating back to 1991 of 3.57 percent in November.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.92 percent with an average 0.6 point, up from 3.69 percent but down from 4.19 percent a year ago.  The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.

Rates on 1-year Treasury-indexed ARMs averaged 3.35 percent with an average 0.6 point, up from 3.26 percent last week but down from 4.33 percent a year ago.

The MBA survey detected a surge in rates a week earlier, pegging the average contract interest rate for 30-year fixed-rate mortgages at 5.13 percent during the week ending Feb. 4, up from 4.81 percent the week before. Points decreased to 0.84 from 1.02 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The rate increase helped push applications for refinancings down 7.7 percent from the week before, the MBA said, and purchase loan applications were also off a seasonally adjusted 1.4 percent. Demand for purchase loans was down 16.6 percent from a year ago.

“Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated. Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance,” said Michael Fratantoni, MBA’s vice president of research and economics.

“We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis.”

In their most recent rate forecast, MBA economists said they expect rates on 30-year fixed-rate loans will climb to an average of 5.5 percent during the fourth quarter of 2011, and to an average of 6.1 percent during the final three months of 2012.

The MBA survey covers more than 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

Freddie Mac’s survey is based on lender quotes for first-lien prime conventional conforming mortgages with a loan-to-value of 80 percent. Rates and points are indicative of what a consumer could expect to be offered if they were to request a loan on that day.

About 25 lenders from each of Freddie Mac’s five regions are surveyed each week. The mix of lenders surveyed approximates the volume of mortgage loans that each lender type originates nationwide.

How to Steal a House…Legally!

State By State Housing Market Infographic

Real Estate is local and prices differ from market to market. Wouldn’t it be great if you could see home prices and data across markets in one place on a handy dandy map? Yeah, that’d be nice so we thought we’d create one.

Click on the map below to launch an interactive infographic to check out your state to see the NAR data for metro areas.