CaryRealEstate.com | Cary NC | Local Specialist for Cary Real Estate
Cary Real Estate Reports: Why FHA Financing Could Become Out of Reach For Many
David Williams (left) & FHA Commissioner David Stevens at National Association of Realtors Convention
It may become more difficult for a home buyer to obtain FHA financing. In Washington there’s pending legislation to increase the requirements for buyers using FHA as the source of their home financing. These new regulations would make it more difficult for buyers to qualify. It’s called the “FHA Taxpayer Protection Act of 2009″. The reasoning behind the new regulations is to shore up the stability of FHA – this in itself is a controversial topic – FHA maintains reserves in the event of borrower defaults – how much should be in those reserve accounts and how they are calculated are often disputed – go figure, right!
Here’s the bottom line of the new proposed FHA Home Loan Requirements:
1) Increase the minimum buyer down payment from 3.5% to 5%
2) Reduce the amount the home seller can contribute as concessions (seller paid closing cost) from 6% down to 3%
3) Raise the minimum credit score requirement
Just a heads up – if you’re planning to purchase a home using FHA, now may be the time – before it becomes more difficult!
Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams
David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com
Cary Real Estate Spends a Few Minutes with National Association of Realtors Chief Economist
Last week I had the pleasure of attending the National Association of Realtor’s Convention in San Diego – One of the sessions was led by Dr. Lawrence Yun, Chief Economist for the Association. During the presentation Dr. Yun shared his forecast for the 2010 National Real Estate Market – here are few highlights.
I hesitated to write this post, as I’ve often been quoted as saying that looking at the national real estate news is like listening to a national weather forecast - the national numbers represent averages – what’s truly important to you is understanding your local market. I decided to write the post, mainly to share my takeaway – on a national level the real estate forecast for 2010 is positive news. I concur, on a local level we are seeing an increased number of properties going under contract and closing.
The Tax Credit Stimulus for 1st Time Buyers generated an additional 300,000 – 400,000 buyers – total of 1.5 million frst time home buyers for 2009.
47% of ALL Home Buyers were First Time Home Buyers – This is the Highest percentage in years, usually hovers around 40%
15% Increase in the number of sales transactions – which represents an additional 800,000 sales!
We’ve seen 8 Straight Months of Increase in Number of Pendings (numbers adjusted for seasonal averages)
3-5% Average Appreciation will return
9 Month Current Supply of Homes Priced under $250,000
10 Month Current Supply of Homes Priced $250,000 – $500,000
15 Month Current Supply of Homes Priced Over $500,000
Current National Average Supply of Homes: 8 Months – We hit a low of 4 months supply in January 2005 and hit a high of 12 months average supply – so the numbers are improving.
Helpful Point – a ‘balanced’ market has a 6 month supply of homes – when you have more than 6 months supply it represents a buyers market.
Dr Yun also noted that new home construction starts are now well below average – which could lead to a lack of supply of new homes as the market strengthens.
The continued recovery of the real estate market hinges significantly on home prices stabilizing – should the market see another decline in home values, that would create a ripple effect of ’strategic defaults’ – that is home sellers choosing foreclosure as their home would be valued less than what they owe. We are fortunate in the Cary market area, our foreclosure rates are well below the national average.
Conversations on a Plane, Home Seller is Looking for that Special ‘Someone”
I boarded a SouthWest Jet this morning at Raleigh-Durham, headed to sunny San Diego for the annual Realtor convention. The inevitable happened – the conversation with a stranger – it was the gentleman on the adjoining aisle seat – after learning more than I really needed to know about him etc etc he asks what I do and where I’m headed – once the subject of real estate surfaced an interesting yet typical conversation unfolded – I thought to myself – I’m gonna blog about this!
I would do the cool dialogue format back and forth on what he said and what I said, but, ohm, just assume I was nodding and smiling
The gentleman is trying to sell his home – he has it listed with an ‘experienced’ agent but he is not willing to accept that his house is not worth what it was 2-3 years ago – granted it’s a high end subdivision and we are talking about a price swing over $100,000, I feel his pain – but his strategy is to just keep it priced at the old higher value “cause somebody will come along”
REALLY? Somebody’s going to come along . . .
So even though a stock is trading at $50 a share you think somebody will offer you $75 a share cause that’s what it traded at 2 ½ years ago? Who is this ‘someone’ and where do ‘they’ come from? And what about the ‘experienced’ agent that has their sign in the front yard with a non realistic price? Who is that helping?
As I nodded and smiled I played through the conversation in my head that I would be having with this gentleman if I was at his dining room table instead of an airplane – I know one thing for sure – my sign would not be in the yard of a grossly overpriced listing.
Lot’s of thoughts are dancing through my head on information I could share about fair market value, absorption rates etc – but you probably don’t want to hear about that right now and I’m off to bed – need a good nights sleep for a full day of Convention tomorrow!
