My Real Estate Blog

Republicans plan a house vote next week on a bill that would cut spending and increase the governments debt limit to passage of a constitutional amendment requiring a balanced budget. This vote would signal the GOP's seriousness about controlling the government's spending. This vote would likely be a symbolic one, since the bill would likely face opposition and little chance of becoming law.

Republicans want to cut spending, while not raising any taxes. The Democrats propose spending cuts while raising taxes on the wealthy. With an August 2nd deadline looming, the talks are at an impasse. What affect does this have on an already fragile economy?

The jobs picture shows numbers worse than earlier in the year. Unemployment still remans high. The real estate market, at least in the Chicago area, is sluggish. Borrowing restrictions are some of the problem. But is it that people are afraid to do anything at the moment due to fear of the economy?

Whatever your political views, urge your representatives to find a solution to the economic crises we currently face. The U S defaulting would catastrophic.

The home inspection, something to fear? When performed by a truly qualified professional home inspector provides the best pre-emptive defense against negative surprises after the sale. The benefits of a competent inspection serve the needs of all parties in a real estate transaction, by reducing the likelihood of conflicts after the sale. Buyers should have the prudence to do this for themselves.

What about the list that the inspection produces. What should be addressed?

Home inspection is a routine process today in nearly all home purchases. In most transactions, sellers are not required to repair every defect that is listed in the report. Some of the requests may be reasonable while others have a nit-picky flavor.

Minor items not worth a haggle include such things as loose moldings or a faulty drain stopper in the bathtub. Items of greater importance can be the bathroom exhaust fan, because venting to the attic is not legal, or the recommendation is to have the air conditioner unit professionally serviced. Anything with potential of moisture intrusion could be significant.

The main thing to keep in mind is that repair lists arising from home inspections can be viewed as requests rather than demands. Except for repairs and upgrades required by law or specified in the sales contract, all property defects are matters to be negotiated between buyers and sellers.

A significant majority of the 108 economists and experts participating in MacroMarkets June Price Home Expectations panel believe that the bottom for home prices arrived in the first quarter or will arrive sometime before year end.

Despite persistent macroeconomic uncertainty and unprecedented housing market dysfunction, almost 2/3 of the panelists see the U. S. residential real estate market is at an historic turning point, says Robert Shiller, MacroMarkets co-founder and chief economist.

However, expectations for the pace of recovery fell. The group of 69 panelists who are currently forecasting a 2011 turning point predict less than 2% average annual growth in nominal home prices over the 5 year period ending December 2015. The average expected cumulative home price change between quarter 4 2010 and quarter 4 2015 is just 5.71%, $1.2 trillion less in aggregate U. S. single family housing wealth at the end of 2015 than projected just six months ago.

Terry Loebs, MacroMarkets managing director confirmed that a wide variety of individual views continue to be expressed by the panel. The most optimistic panelists project 15.3% average price growth between 2010 and 2015. The most pessimistic panelists project 6% average price erosion from 2010 levels. The spread is huge. Which will it be?

Economic growth would certainly help. With jobs, the real estate market will have a chance to recover. Market analysis shows that most of the Chicagoland area is currently stable, not depressed as some areas of the U. S. are. There is hope for the future.

Illinois home sales have been trending positive month to month since February 2011 as prices have improved up for the last 3 consecutive months, all good signs for a market working to recover in a restrictive lending environment. According to the Illinois Association of Realtors hone sales (single family and condominium) were up 13.9% in May from April 2011, although still down 16.8% from May 2010,

The trend in rising home sales and median prices is a positive direction for the housing market as a whole with high affordability conditions continuing. The rise in sales prices despite the fact that this year there is no tax incentive. Brokers across the state report that the biggest road block for getting a home loan today is that lending is too strict for even qualified buyers. A return to robust yet responsible lending will result in more sales and a stronger economy.

The economic impact of a healthy housing market cannot be discounted. Just 1 home sale generates $28,581 in direct expenditures made by both the seller and the buyer, according to a study Chicago Economic and Financial Consulting.

The resulting ripple affect across multiple industries for home improvements warehousing and others adds up to $7.9 billion a year in direct and indirect expenditures.

Some good news for the Illinois home sales market is welcome news for all.

The decision to buy or sell a home is perplexing. A lot of buyers  and sellers are still wondering if now is the right time to be in the market.

Ideally, buyers would like to know that the market has hit bottom and that the value of what they buy won't decline. Sellers who will sell at a loss today wonder if they should get out now or wait for a better market to sell.

When will that better market appear? It's impossible to time the market. We'll know that we hit bottom after the market turns around, not before. Some economists think this will take another 2 years; others expect a turn around in five to six years. Other economists think we're at or close to the bottom. However, it's expected that the market will be rocky for some time with seasonal changes. For example. it's typical that home sales decline in the winter months.

Good news and bad news can affect whether buyers fell optimistic about home buying. The fact that the conforming jumbo loan limit is likely to drop to $625,000 from $729,750 could spur home sales in higher priced markets between now and September, when the higher loan limit expires.

Interest rates have been fluctuating but remain below 5% for conforming fixed rate mortgages. Interest rates and affordability in general have a great impact on the strength of the housing market.

March brought good news as home sales volume nationally picked up 3.7% from February, according to the National Association of Realtors. However, the sales were primarily driven by investors buying cheap foreclosures. Although the investor purchases were up, the percentage of first time buyer purchases was down, possible due to tough mortgage qualifying criteria, which is not expected to improve going forward.

Trends do fluctuate throughout the country according to differences in individual neighborhoods.

The bottom line: Keep an eye on trends, but focus on your local neighborhood when making marketing decisions about buying and selling.

Boivin appraisals, Inc will gladly help in this process by determining the current market value of your property. Feel free to contact us at www.boivinappraisals.com