Mortgage Business

Some Quick Real Estate News: Affordability, Home Inspections, investors

Home affordability took a turn for the better in the fourth quarter. Among the biggest cities, homeowners in the most expensive metropolitan area need to earn nearly $100,000 more than borrowers in the least expensive area. In Cleveland, a homeowner needs an annual salary of just $19,435 in order to afford a median-priced home in the area — the lowest of any of the 25 biggest metropolitan areas. The value was determined from the National Association of Realtors’ fourth-quarter data for median home prices, while the salary needed was based on average rates for a 30-year fixed home loan. At the other end of the scale was San Francisco. Someone looking to buy a home in the City by the Bay would need to earn $115,510. The findings were discussed in a report issued by The average salaries were based on principal and interest payments and excluded property taxes, insurance and other expenses. “In the most recent update of the study, using data from the fourth quarter of 2013, found that affordability has increased significantly since the third quarter of 2013 as home prices and rates on home loans have fallen,” the report said. Source: Mortgage Daily

Home inspections have the power to send all parties back to the negotiation table. As such, some sellers are taking the precautionary step of having an inspection done before listing the home for sale. Real estate professionals say that having a home inspection prior to listing can offer several benefits to the seller. “The buyer has the upper hand when they have an inspection,” says Jessica Edwards, Coldwell Banker consumer specialist and real estate professional. “If you are willing to do it ahead of time, you give the control back to the seller.” Sellers who have a home inspection upfront also can identify any major problems that could potentially derail a sale later on at the closing table. Any major repairs can be addressed beforehand. Doing repairs ahead of time might also be more cost-effective than having to pay a buyer’s own licensed contractor do the work. “If you have the items repaired or replaced ahead of time and it doesn’t come up with the buyer, it’s a non-issue,” says Edwards. Edwards says having a home inspection beforehand can also help sellers adjust their asking price if they aren’t willing to do certain repairs. Leslie Piper, consumer housing specialist for, suggests sellers consider a pest and roof inspection before listing. “The costs of repairs or the replacement of a roof can vary and could be a big-ticket item a seller may want to be aware of before they choose the price they are hoping to get for their home,” Piper says. “Having these inspections can be beneficial for a successful home sale, and also beneficial for a seller’s future budgeting plans.” Source: FOX Business

Many housing experts have predicted a slowdown in investor activity this year, but investors don’t appear to be fading away from the market. They might just be shifting their focus to different types of properties, as distressed inventories dry up in many markets. “There has been a clear rebound in investor participation in the housing market,” says Thomas Popik, research director for the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which showed strong activity among investors in December 2013. “The statistics for the housing market, particularly the non-distressed segment, remain generally strong, but investors still are increasing their activity.” Investors are increasingly targeting non-distressed properties. In November, investors accounted for 13.2 percent of purchases of non-distressed properties based on a three-month moving average. That’s up from 10.5 percent in August, marking a seven-month market share high for investors, according to the HousingPulse survey. Investors had started pulling away from the market in March 2013 as home prices soared, with their overall market share dropping to 16 percent, according to a survey by the National Association of Realtors®. But by December they bounced back — ending the year strong with a 21 percent market share — about the same level at which investors’ presence peaked during the foreclosure crisis. Source: RISMedia

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