The Fed isn’t as optimistic about the economy, and it’s determined to keep rates low.

“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” read the Federal Open Market Committee’s statement on Wednesday. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”

The Fed says it will keep the key federal funds rate near zero until late 2014. Previously, it had committed to keeping the rate low until mid-2013. While the federal funds rate isn’t directly tied to mortgage rates, it influences their direction.

It also will continue to reinvest in long-term securities and mortgage-backed securities, which is another way to keep rates low.

RATEFORECAST
Jan 27^th
Will rates rise or remain relatively unchanged this week?
Industry experts and analysts provide their insights.

 31% of respondents expect rates to fall in the coming weeks  
44% predict a further increase in mortgage rates while the remaining 
25% forecast that mortgage rates will remain more or less unchanged

Counties assess and certify mill levies and tax amounts annually on real property. This process is typically completed the end of December or early in January. Tax notifications are sent out in January, and property owners have two options for payment. First, they may divide the amount into two installments with the first half of taxes due by February 28th and balance by June 15th. Second, they may pay the full amount on or before April 30th.

How does this affect your closing?
Depending on the time of year in which you close, there are several ways in which taxes will be accounted for at closing. One item found on settlement statements is a proration between buyer and seller. Since we pay taxes in arrears, the seller credits the buyer for the portion of the current year in which they have owned the property.

If the closing takes place early in the year before counties have certified mill levies, the closing agent will typically escrow 125% of the prior year’s tax amount (or use the most recent assessed value if higher). Escrows are held until the certified amount is available, taxes are then paid, and any excess amount is refunded to the seller. If the certified amount is available at closing, that amount will be collected and paid upon closing on the seller settlement.

If a lender is involved in the purchase early in the calendar year, they may request a different means of paying taxes other than in entirety by the seller on the HUD-1. Ultimately, the seller will either pay or credit the full amount due to the buyer on the settlement statement with varying line item descriptions.

What happens when tax payments have been sent to the county but not yet processed?
Tax escrows may be collected and held by the closing agent until the treasurer’s office is able to verify payments have posted for the property. Counties may take a few days to post payments near due dates because of the heavy volume. Once verification is received from the treasurer’s office, any excess escrows are returned to the seller.

On occasion, both the lender and closing agent may submit payments to the treasurer’s office particularly near due dates. If this occurs, then either the lender or closing agent will return the tax escrow to the seller after they receive funds from the treasurer. When closings happen near due dates, it may cause additional delay in refunds due to the high volume of payments being processed.

What is the owner’s responsibility in paying property taxes?
Failure to receive a tax notice does not relieve an owner’s responsibility for paying taxes on time. If you are purchasing a property near year end, please note that your tax statement could be delayed to correct for the new ownership. Closing agents and lenders are not liable for such tax payments, it is solely the responsibility of the property owner.

If you need help Buying or Selling a property, don’t hesitate to contact Terry Robinson & the Early-Group, your Mountain Area Specialists!  303.748.3838 or email info@early-group.com

There is a website that lists the names and contact information, including websites, for the Colorado County Treasurer’s offices. Click this link to be connected…

http://www.e-ccta.org/CCTA_home_page.htm

The slightly higher costs should not have a major impact on the demand for mortgage loans because rates will remain attractive, Walsh says, owner of a mortgage company in CT.

 “Still, I don’t like anything that takes steam out of the purchase market,” he says. “This country desperately needs the housing market to get back on its feet. That’s why the Fed is trying to keep rates artificially low.”

The Fed says it will keep the key federal funds rate near zero until mid-2013 and continues to reinvest in long-term securities to help keep rates low.

But Congress has pushed rates in the opposite direction. The Fannie and Freddie hikes resulted from the extension of the payroll tax cut, passed in late December. The tax cut, which allows workers to take home a larger share of their pay, was extended for another two months. Congress mandated Fannie and Freddie to raise their fees to make up for the nearly $36 billion cost of the extension.

RATEFORECAST
Jan 12^th, 2012

Will rates rise or remain relatively unchanged this week?
Industry experts and analysts provide their insights.
·       6% of respondents expect rates to fall in the coming weeks  
·       47% predict a further increase in mortgage rates while the remaining  
·       47% forecast that mortgage rates will remain more or less unchanged

As real estate professionals, we strive to keep in touch with my clients and provide them with information that I hope they will find useful. This Blog gives us an opportunity to let you know about the state of the market and current trends. It may even touch on ways that you could enhance your home’s value. I hope the market data  will help you with understanding real estate today and help you with your real estate decisions. If you have any questions, please do not hesitate to contact us.

Terry Robinson & The Early-Group
303.816.7516
info@early-group.com

Dec 30th, 2011 

Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain.

Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage,” he said.

“November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead,” Yun added.

NATIONAL RATE SURVEY RESULTS

Dec 30th, 2011

30-year Conventional:         
4.21% – with avg. points: 0.37 pts

15-year Conventional:         
3.44% — with avg. points: 0.37 pts                                                                                          

30-year FHA:          
3.98% — with avg. points: 0.37 pts

5-year Conventional ARM:           
3.20% — with avg. points: 0.37 pts

COLDWELL BANKER HOME LOANS –   Slightly Higher    

DAILY RATE CHANGES – LAST 5 BUSINESS DAYS

 Date           Conventional            FHA                VA          
12/29           Unchanged        Unchanged    Slightly Lower                  

      ·             10 Year Treasury Yield opened at 1.91

 12/28           Unchanged      Slightly Lower   Slightly Lower                  

      ·             10 Year Treasury Yield closed at 1.91

 12/28 (2)     Slightly Lower      Lower              Lower                                   

      ·             Rate change for the better!

 12/27           Slightly Higher        Higher              Higher                  

      ·             10 Year Treasury Yield closed at 2.01

 12/23           Unchanged    Slightly Higher   Slightly Higher                     

      ·             10 Year Treasury Yield closed at 2.03

12/22           Unchanged        Unchanged       Unchanged               

      ·             10 Year Treasury Yield closed at 1.95

12/21           Unchanged        Unchanged       Unchanged               

      ·             10 Year Treasury Yield closed at 1.97

12/20           Higher                 Higher              Higher                  

      ·             10 Year Treasury Yield closed at 1.92

Will rates rise or remain relatively unchanged this week?

Industry experts and analysts provide their insights.

·       23% of respondents expect rates to fall in the coming weeks  

·       23% predict a further increase in mortgage rates while the remaining  

·       54% forecast that mortgage rates will remain more or less unchanged

To be sure, 2011 was anything but predictable. On top of the tepid economic recovery here in the U.S., there was one crisis after another around the world – the Japanese Earthquake and Tsunami, the “Arab Spring” uprising, a spike in oil prices, political standoffs on Capital Hill, the debt limit ceiling and downgrade of U.S. debt, and most recently the sovereign debt crisis in the eurozone and the subsequent stock market volatility here at home.

But there was reason for encouragement for our local housing market. Colorado’s real estate market did show some positive signs of rebounding this year despite skittish consumer confidence and the sluggish economy.

Existing home sales in the Denver Metro Area in October – the most recent figures available – jumped 12 percent in October a year ago, according to Metrolist. Through the first 10 months of this year sales were up fractionally compared to the same period in 2010.

The median sale price for a single-family home was $226,021 in October, down 1.8 percent from the same month last year, while the median price for a condo rose 1.2 percent to $125,000, Metrolist reported.

Distressed home sales

One of the reasons for the increased number of sales but lower median prices overall is that entry-level homes and distressed properties continue to be the lion’s share of transactions in many areas as bargain hunters rush to take advantage of attractive prices and low interest rates.

One trend we’ve noticed of late is a drop in the number of bank-owned properties that are listed for sale and an increase in short sales. The reason may be that government regulations and controversies over “robo-signing” have kept more foreclosures from coming on the market. As banks put the robo-signing debacle behind them, we may see more REO properties released in 2012.

While the release of additional distressed properties could keep prices of all homes down in 2012, we suspect that strong demand by investors for these homes will probably keep prices from falling much further. We’ve seen multiple offers for many bank-owned properties, sometimes all cash offers, as investors snap up what they believe to be great bargains.

At the other end of the spectrum, the luxury market has remained fairly stable through much of 2011 in the Denver Metro Area. While the number of million-dollar sales did drop sharply in October from the same period last year, overall this year sales edged higher. Through the first 10 months of the year there were 460 transactions in excess of $1 million versus 455 a year ago, according to a report by Chicago Title Co.

Non-distressed mid-market

Homes that fell somewhere between distressed and luxury properties – the bulk of the market here in Colorado – probably were the most challenged in 2011. One big reason for the softness is that we didn’t see very many move-up buyers trading their entry-level homes for larger, more expensive properties as they have traditionally done in the past.

Equity homeowners stayed on the sidelines, perhaps due to a lack of confidence in the housing market and the economy in general. They may have been frightened away by doom and gloom news headlines about the housing market, or maybe fear over whether they might lose their job should the economy stumble again.

This uncertainty and lack of confidence, I suspect, will continue to some degree into 2012 until there is more positive improvement in the economy.

But as we approach the new year there are glimmers of hope that the housing recovery could finally gain some traction.

Gradually we’re seeing fewer distressed sales and more “normal” transactions. Additionally, the high-end market remained fairly strong this year, which is a good omen for the entire market.

In the past, luxury homebuyers – the so-called smart money – are often the first to declare a market bottom and jump back in because they have the means to do so once they are convinced the time is right. The other segments eventually follow.

The inventory of available homes on the market continues to shrink rapidly. In fact, the inventory of unsold homes in the Denver Metro Area fell to its lowest level of the year in October, down 33 percent from a year ago, Metrolist data showed.

Buyers are far more active right now and that, coupled with tight inventories, is helping to firm up pricing while getting serious buyers to be a little more realistic when making offers–especially in the entry-level arena. Properties priced correctly and that show well are getting a tremendous amount of traffic as well as multiple offers in some cases.

Additionally, we are finally seeing many banks starting to process short sales in a more streamlined fashion, allowing us quicker short sale approvals.

Finally, the news media are starting to join the chorus suggesting a turnaround is near and that now is the time to get back into the housing market. A recent Fortune magazine article declared, “Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.” And The Wall Street Journal followed with a headline declaring, “It’s Time to buy that House.”

So will 2012 usher in a steady, predictable economic recovery at long last or another wild rollercoaster ride of economic and political surprises? Only time will tell how it all plays out. Fasten your seat belts!

But the crash in home values that began in 2008, coupled with rising unemployment, caused consumers for the first time to begin putting a higher priority on making credit card payments over mortgages and auto loans.

“Consumers see that as their home values declined, credit cards represented liquidity, which is a more valuable commodity during an economic crisis,” Chaouki says.

The economy may be improving, but the underlying factors that put credit cards at the top of the bill-payment hierarchy persist, he says.

“We may see the payment hierarchy revert to the more-traditional setup where people pay their mortgages first when there is some real home equity to protect, or when credit becomes so freely available that it won’t be seen as a rare commodity to preserve,” Chaouki says.

It “will probably be a long time” before consumer credit lines, which many lenders cut during the crisis, become so abundant that consumers feel they can put credit card bills lower on the priority list, he says

NATIONAL RATE SURVEY RESULTS
Dec 9th, 2011 (Bankrate.com)

30-year Conventional:         
4.24% – with avg. points: 0.36 pts

 15-year Conventional:         
3.48% — with avg. points: 0.36 pts                                                                                          

 30-year FHA:          
3.97% — with avg. points: 0.36 pts
5-year Conventional ARM:           
3.18% — with avg. points: 0.36 pts

“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” said Terry Edwards, Executive Vice President of Credit Portfolio Management, Fannie Mae. “No family should have to give up their home during this holiday season.  Fannie Mae is committed to helping borrowers avoid foreclosure whenever possible and we encourage any homeowner who is having difficulty making their payment to reach out for help.”

Homeowners with Fannie Mae-backed loans can call 1-800-7FANNIE or visit www.knowyouroptions.com for information and resources on foreclosure prevention options, including contact information for the Fannie Mae Mortgage Help Center or a HUD-approved counseling agency in their area. 

FHA Loan Limits

Last Friday, the President signed a bill that enables HUD to restore the previous FHA loan county limits. This would mean that the FHA loan limits would be the greater of the current limit or the limits made available under the Economic Stimulus Act of 2008. While this is welcomed news, HUD must provide guidance on how they will be implementing this change in order for Coldwell Banker Home Loans to determine what action can be taken and when.

As soon as HUD provides guidance on their approach, the announcement will be reviewed and an FYI will be issued to provide detailed instruction with Coldwell Banker Home Loans policy and release timeline.

VA Funding Fee

On November 21, 2011, the President signed a bill to revert the funding fees back to the previous/higher level through September 30, 2016. The VA is expected to release a circular with additional detail very soon. The VA Funding Fee Payment System (FFPS) site is instructing lenders not submit payments for loans closed on or after November 22, 2011 until their system has been updated to return the previous higher fees again. FYI 11-270 will be reissued this week, notifying external partners and correspondents.

Click HERE to link to the FHA Loan Limits per State & County. Please save this Link to you favorites and you will have this tool at your fingertips.

1 – Buyers who look for a home during the holidays tend to be more serious about buying.

2 – Serious buyers have fewer homes to choose from during the holidays, which means less competition and more money for you.

3 – History shows that the amount of listings dramatically increase after January 1st. With more properties on the market, there is more competition and less demand for your particular home.

4 – Homes show better in the winter months when decorated for the holidays!  Buyers are more emotional during the holidays, so a warm and comfortable  environment adds to their appeal to buy your home.

5 – Often buyers have more time to look for a home during the holidays than  during a regular work week, especially with their additional vacation time near Thanksgiving, Christmas Hanukka and Kwanzaa.

6 – Many people want to buy before the end of the year to take additional tax advantages.

7 – Traditionally, January is the month for corporate transferees to begin new jobs. Since transferees cannot wait until Spring to buy, you must be on the market during the holidays to capture that market and close very early in the calendar year.

8 – You have the option to keep your home on the market while simply restricting showings during specific times to accommodate your special family celebrations and holiday events.

9 – You may have the option under contract to close before the year’s end, but delay possession or negotiate rent-back of your home until early next year.

10 – By selling now, you may have the opportunity to be a non-contingent buyer in the Spring when many more homes are on the market for lower asking prices. This will allow you to sell high, buy low, and increase your contract negotiating power.