Quality of Home Construction on the Rise

September 15, 2009

Builders may not be putting up as many houses as they did during the boom, but what they are building, they’re building better.

According to the J.D. Power and Associates 2009 U.S. New-Home Builder Customer Satisfaction Study, overall customer satisfaction increased for the second consecutive year, up 32 points to 811 on a 1,000 point scale.

Satisfaction with the quality of the home also grew, to 825 up from 799. The rate of customer-reported problems dropped to 9.55 problems per home down from 11.51 problems in 2008.

“Fierce competition among home builders has led to a market where only the strongest companies have survived,” said Paula Sonkin, vice president of the real estate and construction industries practice at J.D. Power and Associates. “This is great news for new-home buyers — particularly first-time buyers — since builders are offering unprecedented high levels of quality, value and service at relatively low prices.”

Various California markets, plus Phoenix and Tampa, Fla., recorded the greatest gains in overall satisfaction. Those are all markets hit hard by the real estate bust and they have lots of unsold inventories.

construction

J.D. Powers rates satisfaction on nine criteria: workmanship/materials; builder’s warranty/customer service staff; price/value; builder’s sales staff; construction manager; home readiness; recreational facilities provided by the builder; builder’s design center; and location.

The quality of workmanship and materials has become significantly more important to consumers, the study found, while the construction manager and readiness has become less of a concern.

“Fewer home buyers are spending large amounts of time working with construction managers or are concerned about home readiness, since many builders have large inventories of homes that are already complete at the point of purchase,” said Sonkin. “For homeowners, this can make for a smoother, turnkey ownership experience, with fewer unanticipated delays.”

Instead, she added, “Upgrades, like granite countertops, have become the norm.”

Of the 23 markets covered by the report, Pulte brands, which include Del Webb, DeVosta Homes and Pulte Homes, led in satisfaction in 12 of them. Other market leaders include Ashton Woods, Brookfield Homes, Centex Homes, Darling Homes, David Weekley Homes, K. Hovnanian, Lennar, M/I Homes, Pardee Homes, Shea Homes, Standard Pacific Homes, and Village Builders.

The survey is based on responses from 26,231 buyers of newly built, single-family homes who have lived in their homes an average of four to 18 months.

Source: CNNMoney.com

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Written by djumper · Filed Under Real Estate Blog 

U.S. Homebuyers Paid $7,039 Less Than Listing Price in July

September 15, 2009

Amid continued falling home prices, U.S. homebuyers are negotiating even more discounts at the bargaining table, according to July’s Zillow Real Estate Market Reports. Buyers paid 3.3%, or a nearly $7,039, less than the last listing price on homes for sale during the month of July 2009. That is down slightly from 3.5%, or $7,630, in June, and substantially down from 4.6% ($10,260) in January.

Meanwhile, 22.8% of all homes listed for sale on Zillow had at least one listing price reduction as of Sept. 1, 2009. The median U.S. price reduction was 6.5% off the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days, up from 91 in July.

Florida homebuyers had the most negotiating power in July, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 10.2%, or a median $23,500, less than the last listing price. Buyers in the Sarasota MSA paid 8.2% less than list price. The Naples, Daytona Beach, Miami-Fort Lauderdale, Panama City, Punta Gorda, Melbourne, Ocala, Tampa, Jacksonville, Port St. Lucie, Gainesville and Lakeland MSAs also ranked, in that order, in the top 25 markets for negotiation. There was less or no room for negotiation in some California markets that have been hard-hit by foreclosures. In the El Centro MSA, buyers paid 1.8%, or a median of $2,150, more than the listing price. In seven California markets- Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City and Fresno- asking price and sale price were the same.

“The strong summer selling season in 2009 has led to a decreasing difference between the last listing price and final sale price, but most buyers are still getting some additional discount at selling time,” said Zillow Chief Economist Dr. Stan Humphries. “We expected list-to-sale price ratios to fall as the sales volume picked up during the summer, and the California markets are showing strong declines in the discount off the last listing price, relative to levels at the start of the year. This is fueled both by increased sales and high proportion of foreclosures re-sales, which are already priced relatively low.

“The fact that many Florida markets are still showing comparatively higher differences between the last listing price and final sale price suggests that inventory levels are still relatively high, keeping considerable downward pressure on prices and encouraging buyers to seek large discounts off the listing price. Overall, buyers are finding favorable conditions for negotiating prices, and now can be a good time to buy, provided homebuyers are financially prepared with healthy down payments and intend to stay in their home for a minimum of five to seven years.”

Source: RISMedia

Popularity: 2% [?]

Written by djumper · Filed Under Real Estate Blog 

House for Sale Comes With a View: The Obamas

September 15, 2009

CHICAGO — There is a “for sale” sign in the front yard, not that potential buyers would see it. The street is closed to nonresidents by order of the United States Secret Service.

The house at 5040 South Greenwood Avenue, next door to the Hyde Park residence of President Obama and his family, hit the market here over the weekend. And in a summer of real estate doldrums, it is causing quite a stir, not simply because it is a gracious, century-old, 17-room house with elaborate stained-glass windows and a charming carriage house in the backyard.

ObamaNeighbor

Here is what the owners say makes it a real deal: you just could not get more impressive neighbors. They are downright stately, and they come with a full-time security staff that keeps an eye out like no Neighborhood Watch in the world.

Bill and Jacky Grimshaw are the empty-nesters who are selling their 6,000-square-foot house after 36 years.

The price? Hard to know, real estate agents say, because not since Richard M. Nixon lived in a New York City apartment has the market tried to assess the value of immediate proximity to the president in a dense urban neighborhood. (The Greenwood Avenue neighbors are separated by about 20 feet, a line of thin trees and an iron fence that is more decorative than forbidding.) The Grimshaws paid $35,000 in 1973; other homes in the area have sold for $1 million to $2.5 million.

“We think there’s a premium,” said Matt Garrison, the listing agent with Coldwell Banker, who does not intend to put an asking price on the house. “We don’t know what the Obama effect is.”

Mr. Garrison said he had tried to scout similar parcels of residential property, but pointed out that there was no family living next door to the White House.

“I tried to look at 12 Downing Street, but that’s all offices,” Mr. Garrison said, referring to the building next door to the British prime minister’s residence in London. “Here we are looking out the kitchen window at the president’s back porch. Buyers establish the market. Stuff sells for what people are willing to pay.”

On the third floor, in a playroom, a large picture window offers a sweeping view of the red brick Georgian-style house that Mr. Obama bought in 2005 for $1.65 million.

Looking out that window, Mr. Garrison was taken by surprise. “Obama’s roof needs some work,” he said. Well, at least now they know, he joked: “The Secret Service is probably looking at us, reading our lips.”

Still, the Grimshaws — he a professor of political science at the Illinois Institute of Technology and she a transit expert and Democratic political activist — said they had managed to have an easy, neighborly rapport with the Obamas, who shot a commercial in the Grimshaws’ living room during the campaign.

“They didn’t want to mess up their own house,” Professor Grimshaw said in jest. “Thirty people came traipsing in asking, ‘Are these the best chairs you have to set at the table?’ I thought, ‘What a nutty lark this is.’ ”

The Obama children, Sasha and Malia, are known to stick their hands through the fence to pet the Grimshaws’ boxer, Roxy.

Everyone involved in the sale agreed that prospective buyers would have to be screened for security reasons before being taken seriously, but a spokesman for the Secret Service would not comment on that process or anything related to the house.

Professor Grimshaw, an almost-retired 71-year-old, said he never had to lock his doors. “But I also know that there are some people who would never live under these circumstances,” he said. “I’m just hoping for a good patriot, a good family man, a good Democrat.”

Would he sell to a Republican?

“Only if push came to shove,” he said.

So far, all the shoving seems to be from the curious who want to get a peek inside the house. Already more than 7,000 people have visited the broker’s Web site,www.5040Greenwood.com.

A visit — if one is qualified to be granted a private showing — will reveal that the house is also a fixer-upper. The Grimshaws did not tamper with its original fixtures or woodworking. The electrical switches are from 1907. The kitchen and bathrooms are worn. The third floor probably needs to be gutted.

“I didn’t lavish attention on the house,” Professor Grimshaw admits. Mocking an outraged, imaginary potential buyer, he said: “Where’s the granite? How can people live like this?”

Professor Grimshaw has been in poor health lately. The property, which sits on a 12,000-square-foot lot, requires too much upkeep now, he said.

Even looking back to when he bought it, Professor Grimshaw said, “We had no means to support a place like this.”

He says they had no idea, back then, about how the larger middle- and working-class area would evolve into a premier address.

Their welcome to the area back in the 1970s? Some rough teenagers from a few blocks over broke in before they had even unpacked their boxes.

Somehow, Professor Grimshaw said, he is pretty sure the new owners will not have to worry about things like that.

Source: The New York Times

Popularity: 1% [?]

Written by djumper · Filed Under Real Estate Blog 

Time May Be Running Out to Get Home Buyer Credit

September 14, 2009

Barring a last-minute extension from Congress, first-time home buyers aiming to take advantage of an $8,000 federal tax credit are running out of time to get a deal in place.

With the time it takes to arrange financing, inspections and the other steps that go into closing a home purchase, home buyers should have a contract no later than the end of October, but preferably within the next few weeks, local real estate agents and lenders say.

The deal has to be completed no later than Nov. 30 to qualify for the credit.

Agents and bankers say they expect they’ll be able to handle the anticipated added workload without delays, but that buyers shouldn’t chance it. Most advise having a home under contract by Oct. 15.

“We are doing purchase loans in under 30 days right now,” said Sharon Decker, director of mortgage lending for Fifth Third Bank. “But if there is a big surge (in applications), all the lenders will be behind the 8-ball.”

The market for lower-priced homes in Louisville has already seen a surge and the final days of the housing credit could bring a wave of last-minute buyers making offers for starter homes, said Jan Scholtz, president of the Greater Louisville Association of Realtors.

After being outbid on two houses, Gina Scarpino, a 24-year-old hair stylist, recently found one in Schnitzelburg. With someone else making an offer the same day, she agreed to pay $124,000, less than $1,000 below the seller’s asking price.

“It was actually super-difficult because everyone was looking to buy a house with the tax credit,” she said. “They are being snapped up.”

But while the market for starter homes has improved because of the credit, it’s rarely come to bidding wars, said John Oldfather, Scarpino’s real estate agent. He noted there are still more than 3,800 listings for houses priced from $75,000 to $200,000 in Louisville, as of Monday. “And we don’t have that many buyers in the market,” he said.

The $8,000 credit is available typically to first-time home buyers, but can also be used by anyone who hasn’t owned a home for at least three years prior to the purchase. As a credit, the buyer’s tax bill is reduced by $8,000; buyers whose tax bill isn’t that big will collect the money in the form of a government refund.

Source: Courier Journal

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Written by djumper · Filed Under Real Estate Blog 

More Home Sellers Cutting Prices

September 14, 2009

More than one in four U.S. homes for sale on Sept. 1 had their prices cut at least once since landing on the market, up slightly from a month earlier, a study showed on Friday.

As of Sept. 1, a total of 26 percent of homes had their prices reduced, up from 25 percent on Aug.1, Trulia.com said in its monthly price report.

Driving the increase was the pending expiration of the government’s $8,000 tax credit for first-time home buyers — part of the stimulus bill — and summer months which are the peak sales period, according to data compiled by Trulia.com.

The average discount was 10 percent from the original price, unchanged from August. On average, sellers dropped their price by $39,378, Trulia said.

“Housing data has shown us that sales are on the rise this summer and aggressive pricing is one of the factors driving these sales,” said Pete Flint, Trulia co-founder and CEO, in an interview with Reuters. “The other factor is the $8,000 first time home buyers credit which we believe will continue to drive a high volume of sales for the next few months.”

Home sellers looking to sell their property before the tax credit expires in November will continue to cut prices in hopes of attracting home buyers in search of discounts, he said.

Several cities have seen consistent month-over-month increases in the percentage of listings with price reductions from June 1 to Sept. 1. They include Kansas City, Missouri; Colorado Springs, Colorado; Omaha, Nebraska; Atlanta, Georgia; Indianapolis, Indiana; Memphis, Tennessee; Milwaukee, Wisconsin; and Raleigh, North Carolina, Trulia said.

Nationwide, in dollar terms, $28.5 billion has been reduced for all homes for sale on the market on September 1, up by more than $1.1 billion from June to September, the data showed.

Of the luxury homes, categorized by those costing $2 million or more, 26 percent have seen a reduction, up from 25 percent. The average decrease for a luxury home was 14 percent off the original asking price, the data showed.

For homes listed for less than $2 million, 25 percent have seen a reduction, consistent on a month-over-month basis. The deduction, however, was only 9 percent off the original asking price, the data showed.

Source: CNBC

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Written by djumper · Filed Under Real Estate Blog 

Bank of America Still in Talks to Exit Government Pact

September 14, 2009

WASHINGTON – Bank of America Chief Executive Ken Lewis said his company is still in talks with U.S. officials on how to compensate the government for a prior loss-sharing agreement, according to a letter released by a watchdog lawmaker on Thursday.

Lewis called the government talks “thoughtful and professional” and said Bank of America was confident it would resolve the issue, in a Wednesday letter to Rep. Edolphus Towns, chairman of the Committee on Oversight and Government Reform.

Bank of America has been negotiating how much it must pay for an agreement — part of a $20 billion bailout for the firm — in which the government said it would share losses on $118 billion of toxic assets.

Towns called on Lewis to repay the taxpayers and stop “stonewalling.”

“It seems that the bank wants to have it both ways — all the benefits of government insurance without having to pay a dime for all of its benefits,” he said in statement.

Towns’ committee is examining the role of the government in Bank of America’s buy of investment bank Merrill Lynch.

Source: Reuters

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Written by djumper · Filed Under Real Estate Blog 

FHA Claims It Won’t Need Bailout

September 11, 2009

As foreclosures continue to rise, there’s been a lot of talk lately about how well-capitalized the FHA is to handle defaults on all the loans it backs. The FHA, which doesn’t make loans itself, estimates it will insure over $400 billion in loans just this year.

FHA now backs around 23 percent of U.S. home loans, compared to the barely 3 percent slice it backed at the height of the housing boom.

The percentage of FHA loans in delinquency has gone from 5.4 percent last year to almost 8 percent in the latest delinquency survey from the Mortgage Bankers Association.

Critics claim the FHA will not meet its capital requirements by the end of its fiscal year (Sept. 30).

Thanks to new legislation to help housing recover, the FHA now backs loans up to $729,750, while it used to back loans only up to $417,000.

Yes, borrowers pay an insurance premium for that backing, but is it enough?

The FHA’s new commissioner, David Stevens, says yes:

“We will not comment directly on the FHA’s capital reserve ratio until we receive the annual actuarial study. However, contrary to certain misconceptions, the Congressionally-mandated capital reserve ratio, which the annual actuarial study calculates, measures EXCESS reserves above and beyond projected losses over the next 30 years. Even if that level falls below 2%, FHA continues to hold more than $30 billion in its reserves today, or more than 5% of its insurance in force. Given this reserve level, FHA will not need a congressional subsidy even if the congressional capital reserve ratio falls below 2%. Furthermore, FHA’s full faith and credit insurance means that there is no risk to homeowners or bondholders independent of the congressional capital reserve requirement. New FHA loans being issued today are not only critical to our economic recovery, but in addition, FHA continues to make money for the taxpayer; in fact, we project FHA’s FY 2010 book of business will produce $1.4 billion for the U.S. Treasury.”

Source: CNBC

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Written by djumper · Filed Under Real Estate Blog 

Buyers Remain Largely in the Driver’s Seat

September 11, 2009

Homebuyers continue to drive hard bargains, holding down prices while allowing properties to sit on the market for an increasing length of time, according to Zillow.com’s market report.

Nationwide, buyers paid 3.3 percent, or nearly $7,039, less than the last listing price on homes for sale during the month of July. That is a slight improvement over June, when the discount was 3.5 percent and significantly less than the 4.6 percent discount in January.

For Sale

Meanwhile, 22.8 percent of all homes listed for sale on Zillow had at least one listing price reduction as of Sept. 1. The median U.S. price reduction was 6.5 percent off the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days, up from 91 in July.

Florida homebuyers got the best deals with buyers in the Vero Beach area, paying 10.2 percent, or a median $23,500, less than the last listing prices. Other Florida cities with a percentage of discount in the top 25 nationally were Naples, Daytona Beach, Miami-Fort Lauderdale, Panama City, Punta Gorda, Melbourne, Ocala, Tampa, Jacksonville, Port St. Lucie, Gainesville, and Lakeland.

In California, the situation is swinging in the other direction. In El Centro, Calif., buyers paid 1.8 percent, or a median of $2,150, more than the listing price. In seven California markets – Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City and Fresno – asking price and sale price were the same.

Source: REALTOR.org

Popularity: 2% [?]

Written by djumper · Filed Under Real Estate Blog 

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