Archives for December 2013

U.S. Homes Worth Over $25 Trillion

December 31, 2013 by admin

San Francisco Skyline - Wallingford Real Estate

Los Angeles, San Fransicso, And NYC Acccount For Over $4 Trillion In Home Value

If you wanted to buy up all the homes in the country you would need to write a check for over $25 trillion dollars, according to a Zillow estimtae. It is estimated that the cumulative value of all homes in the U.S. at the end of 2013 is approximately $25.7 trillion, an increase of $1.9 trillion over 2012.

This represents the second yearly annual gain for U.S. housing stock. Duing the dark days between 2007 and 2011 the total value of the nation’s homes fell by almost $6.3 trillion – it is estimated that in 2008 alone home values fell by $2.67 trillion. With the gain in value this year homes have recouped $2.8 trillion in value. Future gains in value are predicted to be close to historical norms of 3% and 5% per annum.

U.S. housing stock is a huge asset. The $25.7 trillion in valuation exceeds the combined Gross Dosmestic Product (GDP) of both the United States and China for the year 2012.

New York City and Los Angeles alone account for over $4 triliion in combined housing value.

Wallingford PA Real Estate – Wallingford, PA 19086

What Is Ahead For The Housing Market In 2014

December 30, 2013 by admin

1. Mortgage Rates Are Expected To Rise

Mortgage rates increased approximately 100 basis points in 2013 and are likely to rise in 2014. 30-year fixed-rate mortgages last week averaged 4.48 percent. At this time last year 30-year fixed-rate mortgages averaged 3.35 percent.The new chairman-designate of the Federal Reserve, Janet Yellen, is expected to continue the policies of Chairman Ben Bernanke.The Federal Reserve last week said it would in January start tapering economic stimulus that has helped keep interest rates low. Rates are expected to be above 5% by year’s end.

2. More Homeowners Will Emegre From Underwater

Rising prices helped 2.5 million homeowners who were previously underwater regain positive equity status during the second quarter of 2013. However, approximately 7.1 million homes were still in negative equity at that time and an estimated 10 million homeowners, or about 21.1% of all homeowners with a mortgage have less than 20% in home equity. The good news is that prices are expected to continue rising in 2014, which will lift more homeowners into positive territory.

Homeowners who purchased in 2006 and 2007 at the peak of the market and thus those who experienced the sharpest price declines are now nearly in positive equity. Moderate price growth in 2014 will help to further close this gap.

3. Foreclosure Activity Is Expected to Slow

Foreclosure sales are likely to play a minimal role in the housing market in 2014. September 2013 was the 36^th consecutive month with a year-over-year decrease in foreclosure activity. Foreclosure inventory has dropped to multi-year lows, down nearly 33 percent since the end of 2012. Foreclosure starts were down 39 percent in the third quarter of 2013 to the lowest level since the second quarter of 2006. In Wallingford there have been 8 bank owned forclosures reported year to date, accounting for 4.2% of sales.

4. Further Declines in Home Affordability Are Expected

The National Association of REALTORS®’ Home Affordability Index, which compares home prices with income, dropped to a five-year low in 2013 as price increases outpaced income growth. If the U.S. economy begins to grow at a faster pace and incomes begin to rise, though, the affordability index will slide further due to rising mortgage rates.

Wallingford PA Real Estate – Wallingford, PA 19086

Commissioners Trim Nether Providence Tax Increase To 2.04%

December 20, 2013 by admin

When the proposed budget for next year was discussed at a Board of Commissioners meeting in November, Nether Providence officials were proposing a tax hike of 6.16%. Cost cutting over the last month helped drive the township’s tax increase for 2014 to its lowest level in recent memory.

The final vote on December 12 trimmed the tax increase to 2.04%. Previous years saw increases of 3.82 % in 2009, 3.72% in 2010, 4.97% in 2011 and 6.7% in 2012.

The board also voted 7-0 in favor of a boost in the annual sewer fee paid by property owners. The new rate will be set at $368, up from $342 this year.

The total 2014 Nether Providence Township budget has expenditures of about $6.1 million and calls for the millage rate to remain at 4.68. As in years past, the largest outlays will go to police and public works costs, at about $2 million and $1.3 million, respectively.

In related tax news the Delaware County Council last week approved the originally proposed 2.8% tax hike for Delaware County residents.

Wallingford Real Estate – Wallingford, PA 19086

Protecting Your Home From Winter Weather

December 15, 2013 by admin

Heavy snow and rain can be more than just a nuisance. They can also do considerable damage to your home if you’re not careful. The number-one thing homeowners should do is protect their home’s foundation. This is the core of the house and what holds it together. An essential first step is ensuring good drainage by cleaning gutters regularly and placing downspouts so they direct water away from the house.

In addition, make sure to test your sump pump regularly, and if you don’t have one, consider having one installed. The sump pump is often the difference between a dry and flooded basement, so ensuring it works properly is important. It may also make sense to invest in a battery-operated pump which will still work in the event of a power outage.

Another preventative measure in protecting your home from water damage is checking regularly for leaks, especially after a particularly heavy storm. Ongoing leaks can lead to mold, mildew and rot. In some cases, wet wood can even attract termites and carpenter ants which do further damage. When doing your inspection, look for dark spots under pipes inside sink cabinets, stains on ceilings, toilets that rock and drips inside your home. You should also inspect your roof annually and repair any missing, loose or damaged shingles.

Wallingford PA Real Estate – Wallingford, PA 19086

New Mortgage Rules Ahead In 2014

December 10, 2013 by admin

In 2010 a voluminous piece of legislation almost 2,300 pages in length was signed into law. The new financial legislation is known as the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Dodd-Frank legislation was enacted with the intention of addressing problems in the mortgage and lending arenas that led to the 2008 U.S. housing and financial crisis.

Many of these new requirements have already gone into effect, and in January 2014 the latest rules and guidance will be implemented.

The new Consumer Financial Protection Bureau (CFPB) was created to enforce the new rules which include:

Qualified Mortgage

The CFPB’s Qualified Mortgage (QM) rules go into effect in January. Essentially, these rules require lenders to prove borrowers’ ability to repay a loan by meeting several guidelines, including a maximum debt-to-income ratio of 43 percent. While many lenders already limit borrowers to a similar maximum debt-to-income ratio, the new rules won’t allow for any compensating circumstances such as significant cash reserves or a large down payment to be considered in order to offset a higher debt ratio.

Self-Employed Borrowers

Self employed borrowers will be the subject of additional scrutiny under QM rules. These borrowers already find it more difficult to obtain a mortgage because they must prove their income based on tax returns and profit-and-loss statements, rather than standard paystubs and W2 forms. The “ability-to-repay” feature of QM rules requires all borrowers to prove they have the cash flow to make payments on their mortgage. Self-employed borrowers often have fluctuating income and rely on cash reserves to pay bills in-between payments, but the emphasis on cash flow can make it harder for lenders to approve a loan even for someone with significant funds in the bank.

The 3 Percent Rule

The new QM requirements also limit fees for originating a loan to no more than 3 percent of the loan amount. When financing a more costly home, such as a $400,000 home or more, the lender can easily keep fees under 3 percent, which in this case would be $12,000. However, if you’re refinancing a smaller loan balance or purchasing a less expensive home – for example, for $80,000 – the lender might find it more difficult to keep all fees under $2,400. Mortgage lenders will be less likely to offer loans for smaller amounts since their profit margins may be too thin.

Potential Lower Loan Limits

The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced in October that plans to reduce the maximum loan limits for conventional conforming loans will be delayed until later in 2014. Typically, loan limits are adjusted on Jan. 1 of each year, but the agency decided to wait to see the impact of the introduction of QM rules before making changes. Currently, the limits are $417,000 in most housing markets and rise to $625,500 in high cost areas.

Ability To Repay

The Ability-to-Repay rule requires that specific financial documents be provided and verified. Under these new rules, for most consumers, the mortgage underwriting process will feel more rigid and require more documentation.

Wallingford PA Real Estate – Wallingford, PA 19086

Archives for December 2013

S. Clark Kendus