I'm escaping the cold in the warm sun and blue waters of St. Barths right now. Be back soon!
Absolutely beautiful home in the Peninsula! 5 bedroom, 4 1/2 bath home professionally decorated on canal with a pool. Over 3100 square feet with amazing views from everywhere in the home. Boat access, elevator, state of the art electronics, Australian Cypress hardwood flooring, 20K worth of appliances, custom staircase & 40' boat slip & quick access to the Sound!
Fun home, quality built & the nicest home out there in this price range. You couldn't even begin to reproduce this home for this price. Rentals projected by Stan White around 40k!
Close to the Beach, downtown Manteo, shopping, restaurants & Oregon Inlet world class fishing.
THIS IS A MUST SEE HOME--MAKE AN OFFER or call for a showing 252.202.4271.
Semi Oceanfront gorgeous home in Nags Head just reduced to $996,500.
8 bedrooms, 8 and 2 1/2 baths, in the upscale Villages of Nags Head. Just under 4300 square feet, this home is immaculate and bargain priced! Great location, easy private beach access with bathrooms & showers. 8 master bedrooms, large pool area, tiki bar, outdoor shower & professionally landscaped.
Hardwood floors, tasteful decor, upgraded kitchen & the best part of all, almost $95,000 in annual rental income! That's a 10% ROI! Offers subject to bank approval.
Call for more info or a showing 252.202.4271.
Stakes Are High as Government Plans Exit From Mortgage Markets Washington Post, By David Cho, Neil Irwin and Dina ElBoghdady
January 25, 2010
For more than a year, the government pulled out the stops to revive home buying by driving down mortgage rates.
Now, whether the housing market is ready or not, the government is pulling out.
The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble, and it would deal a body blow to President Obama's efforts to get the economy on track.
Keeping the mortgage rates at historic lows, which required a commitment of more than $1 trillion, was viewed within the administration as a central plank of the economic strategy last year, senior officials said. Though the policy did not attract as much attention as rescue efforts to bail out banks, it helped revitalize home buying in some parts of the country and put money in the pockets of millions of homeowners who were able to refinance into lower monthly payments, the officials added.
"We did what we thought was necessary to stabilize the market, but we don't think the government should continue special efforts forever," said Michael S. Barr, an assistant secretary at the Treasury Department.
"As you bring stability, private participants come back in. We do expect this now that the market has stabilized. I'm not going to say there will be no effect on rates, but we do think you are seeing market signs and market signals that there should be an orderly transition."
A few federal officials and many industry advocates disagree, saying the government is exiting too soon. They offer dire warnings of higher rates and a slowdown in home sales. Fed leaders say they will end a marquee program supporting the mortgage markets in March. Obama's economic team, led by Treasury Secretary Timothy F. Geithner, has decided not to replace it and has been shutting down its own related initiatives.
Over the past year, these programs have enabled prospective home buyers to get cheap loans, helping those buying and selling property as well as those eager to refinance existing mortgages. If the end of the initiative drives up interest rates, say from 5 percent to 5.5 percent, homeowners could be deterred from refinancing, industry officials say. A sharper increase in rates could make homes too expensive for many buyers, forcing them from the market and causing the recent pickup in home sales to stall.
"Mortgage rates are the lifeblood of the housing market, and we have cautioned the Fed about the sudden stoppage of this program," said Lawrence Yun, chief economist of the National Association of Realtors.
But senior government officials said it could be hard to reverse course without damaging the credibility of the Fed and the administration. If the government loses the trust of the financial markets, preparing them for policy changes could be tougher, possibly resulting in economic disruptions. The officials said they also worry the mortgage market is becoming overly dependent on federal support, inserting the government too deeply into private enterprise.
Only a new crisis would be able to persuade the administration and the Fed to change their minds, officials said.
"This is a worthy experiment to see if they can begin exiting after providing an unprecedented amount of money to one sector of the economy," said Mark Zandi, chief economist at Moody's Economy.com. "It's a close call, though. I can see why they are debating it."
Filling in the Void
The Fed's policymaking body sets a key interest rate at periodic meetings, which in turn influences other rates for all kinds of loans. But mortgage rates also are shaped by the health of the market financing these loans.
Banks typically create giant pools of home loans and turn them into securities that can be traded on the open market. When the system is working, many investors buy these mortgage-backed securities, providing a stream of money for lenders so they can make loans at relatively cheap rates. But the trading of these securities seized up when the financial crisis struck and panicked investors. Government officials feared that the mortgage market would collapse.
The Fed and the Treasury stepped into the breach, becoming the only major buyers of these mortgage-related securities, and they kept the mortgage market flush with cash. The Treasury spent about $220 billion, and the Fed pledged $1.25 trillion, the single largest foray the central bank has made into the markets since the onset of the crisis. In essence, the Fed has been printing money and funneling it to people looking to buy a house or refinance an existing mortgage.
At the same time, the federal government stood behind the mortgage-finance companies Fannie Mae and Freddie Mac by taking them over and pledging to cover their losses. That helped the firms lower their borrowing costs, since lenders know they can't fail, and the companies passed on their savings to mortgage borrowers in the form of low rates.
Combined, these federal efforts helped push down the rates ordinary Americans pay for a mortgage. The 30-year fixed-rate mortgage declined from 6.04 percent in November 2008, according to Freddie Mac data, and hit an all-time low of 4.71 percent about a year later.
Refinancings surged, while home buying perked up. Existing-home sales climbed nearly 10 percent in September, their highest level in more than two years.
The policy was the government's most effective salve for the ailing housing market at a time when other initiatives, such as the administration's attempts to modify the mortgages of struggling homeowners, produced far more disappointing results.
Now the government wants to end its support for low rates and has been striving to persuade others to buy mortgage securities.
The success of this approach hinges on the willingness of private investors, from China to big Wall Street funds, to buy large amounts of the mortgage securities and fill the void left by the government.
On Christmas Eve, Treasury officials announced a move that would cover losses suffered by investors who buy these securities from Fannie Mae and Freddie Mac, which together now back about half of the nation's $12 trillion mortgage market. The goal was simple, officials said. They wanted private investors to be reassured that mortgage securities are safe to buy.
Exit Strategy
As the economy showed signs of recovery at the end of last year, the administration and the Fed decided to end their support.
The Treasury stopped buying mortgage securities in December. The Fed said it would taper off purchases gradually, ending them completely by March 31.
Obama's economic team could have raised the limits on how much mortgage securities Fannie and Freddie can buy, allowing those firms to replace the Fed's purchasing program. But Barr said the administration believes that the mortgage business will stand on its own without such special assistance, similar to the way the nation's biggest banks weaned themselves off federal bailout funds by raising private capital.
"The basic goal is to implement a gradual process where the government's role in the economy goes down," Barr said.
"It has to be consistent with the basic goal of stability, but it is appropriate."
Administration and Fed officials expressed confidence that rates will rise only modestly -- perhaps a quarter of a percentage point. They attribute their optimism to the lengthy advance notice they have given the market. The markets already should have anticipated the government's exit by adjusting interest rates higher. Yet mortgage rates, in fact, have been falling slightly over the past few weeks.
The optimism at the White House and the Fed, however, is not shared across the government. A few senior policymakers at the central bank view the economic recovery as still too fragile, suggesting that purchases perhaps should expand further. These dissenters also warn that mortgage rates could shoot up, perhaps to 6 percent or higher, because private investors buying securities would demand a greater rate of return than the Fed. To reach it, lenders may have to raise rates for consumers.
"Presumably, there is pent-up demand from the private sector, but the question is: At what rate are they going to be interested?" said Eric S. Rosengren, the president of the Federal Reserve Bank of Boston, who has indicated that he supports expanding the Fed's mortgage securities purchase program.
There also could be unintended consequences to the government's pull-out. Last year, big investors such as Pimco sold their mortgage-backed securities to the government and used that money to buy bonds and stocks.
That extra cash, which propped up stock prices, could drain away after federal support ends.
Real estate and mortgage finance officials said the timing of the government's exit seems especially ill-conceived, since the Fed's support would end just a month before a homebuyer tax credit program, which the real estate industry has credited with jump-starting home sales.
Given the importance of the housing market, some industry officials doubt whether the government will follow through with its pledge to exit the mortgage market in March. Fannie and Freddie officials say that the companies together can buy about $300 billion of mortgage securities by the end of the year before they hit their federally mandated limits. Though it appears reluctant to do so, the administration could use that buying power to cushion the blow after the Fed's program ends, the industry officials said.
"I believe they do want to end it in March, but it's like all new year's resolutions," said Mark Vitner, a senior economist at Wells Fargo Securities.
"The Fed's New Year resolution is to go on a diet, go to the gym, give up drinking and clean the garage. They might be able to do one of those things, but to do all four is tricky. They have to drain all the liquidity they added to the financial market so we don't see a resurgence in inflation but do it in a way so that the economy does not slip into recession."
I received my SFR certification today from the National Association of Realtors as a Short Sale & Foreclosure Resource Specialist. It's NAR's only distressed property certification for real estate professionals!
A New Year: Good Prospects, Lingering Challenges
By Lawrence Yun, Chief Economist, NAR Research
Happy New Year! I think we were all glad to say good-bye to 2009 and to the recession, a suffering job market, and at least for most of the year, very sluggish housing activity.
Fortunately, towards the end of last year things were looking up for housing (finally). As we saw, the first-time home buyer tax credit provided a strong incentive for buyers to enter the market. From a sales pace of 4.5 million units (at a seasonally adjusted annualized pace) in the immediate months prior to the tax credit stimulus, existing-home sales soared to 6.1 million and 6.5 million in October and November, respectively. Now with the tax credit having been extended (and expanded) and the new deadline not looming until the middle of 2010, the deep cold winter will bring us a few calm months before another surge in home sales in spring and early summer. Of course, the big question is, once the tax credit goes away in the second half of the year, what can we expect?
The key to a real and sustainable housing market recovery can be summed up in one word: jobs! The job market continues to struggle despite recent respectable gains in production. That is, total production as measured by GDP grew for the first time in two years in the third quarter of 2009, by a decent 2.2 percent growth rate. Early indications are that the economy expanded by better than 4 percent in the final (fourth) quarter of 2009. Based on many economic indicators – from consumer credit and retail sales to the need for inventory restocking and rising exports – GDP is expected to expand by close to 3 percent for all of 2010. While that 3 percent GDP growth is somewhat lackluster coming out of a deep recession, the worst is definitively over.
Even as production rises, companies coming out of a recession push their existing workers to do more rather than hiring new workers to raise production. Not surprisingly, the unemployment rate remained high at 10 percent in December as far fewer people were working (or even looking for work)during the month. In December a net 85,000 payroll jobs were lost according to company survey data in December tracked by the Bureau of Labor Statistics. In a separate survey of households which asks people whether or not they have a job, there were 589,000 net fewer jobs. Since the beginning of the recession two years ago, the country has shed 7.2 million jobs. Over the short term, the unemployment rate will, I’m afraid, go higher – possibly even to 10.5 percent, particularly if many of the discouraged workers re-enter the labor force and start applying for a job.
However, there are several signs pointing towards potentially consistent job creation in the second half of the year. In December, temporary help employment rose for a fifth straight month. Because many companies first turn to such “temp” jobs coming out of a recession, this rising trend should imply permanent job creations starting in few months. Past historical experience also show that temp jobs rise before permanent jobs.
Sector by sector, manufacturing companies continue to bleed heavily while jobs are still being cut sharply in construction because of weak housing starts and near total collapse in new commercial real estate construction. Jobs at state and local governments fell slightly in December. There will be continuing pressure throughout this year for further job cuts as most state and local governments are running relatively high budget deficits and generally by law have to balance their books.
There are some bright spots. Those sectors that have been gaining jobs consistently have been in health care service and in education. For a recent college graduate with a nursing or education degree, the job prospects are much better. Another sector that had been hammered badly but is now showing job additions is the professional business service sector (e.g., accounting, management consulting, and law offices) which added about 50,000 payrolls in December. That could signal some good news for commercial real estate: these job gains will require office space, so this could be the very first sign of potential improvement and business opportunities for commercial REALTORS®.
Another bright spot: 2010, fortunately, happens to be the year of the Census and the counting of people. Consequently, the government will hire about one million people this year to collect and process the data. Yes, these jobs will be mostly temporary. But nonetheless it will provide jobs and income support until the private sector begins to add jobs on a permanent basis. Currently, the private sector is on the sidelines with a wait-and-see approach. But with overall production continuing to gain respectably, the private sector will eventually need to boost payroll. As the home buyer tax credit expires in June, private sector job creation will be key to a sustainable housing market recovery. My best guess is about 100,000 net job gains per month in the second half of the year.
Assuming the job market does turn around then, home sales for the year will be about 10 percent higher in 2010 compared to 2009. With inventory being absorbed, home values will likely squeak out a gain for the year as a whole. That is important in terms of boosting consumer confidence about home buying.
Home values are also important for boosting income for REALTORS®. Residential brokerage commission fell in 2009 by 6.2 percent to $40.6 billion according to Real Trends. That figure is roughly in line with NAR’s estimated 8 percent decline in average commission income based on 5 percent higher unit sales but 13 percent decline in home values in 2009. While it’s true that REALTORS® were much busier than normal in 2009 – both in terms of having more customers as well as having to spend longer on home sales transactions (particularly in regards to short-sales) – lower home values led to overall reduction in income on average.
Based on our home sales and home price projections for 2010, I think we can expect about a 12 to 19 percent rise in overall commission income in 2010. The forecast is never “on the money” (no pun intended) and the actual figure could be measurably higher or lower. Still, I’m comfortable in saying that following four years of a housing market recession, aggregate income is more likely to be up because of the tax credit in the first half of the year and the job creation in the second half.
However, any rise in the aggregate commission income for REALTORS® as a whole may not be reflected in the income for individual REALTORS® if many more people enter the profession. (Remember, this happened during the housing boom years.) Those contemplating entering the profession need to be aware of the business challenges in the early years of a real estate career. The average income of REALTORS® with less than two years of experience is well below $20,000 per year before expenses. In addition, referrals and personal relationships have been the dominant factors in drawing new clients. Over 80 percent of recent home buyers and home sellers recommend (or will likely recommend) their specific REALTOR® to colleagues, friends, and family members. As with any dynamic entrepreneurial business, there will be some start-ups who will do very well, but the initial edge in real estate business will be with veterans who have served their clients well in the past.
Incredible value for new construction is MLS #64643. Located just blocks to the Ocean & Sound in one of the best neighborhoods in Kill Devil Hills. Perfect for your year round or second home!
3 bedroom, 2 baths, media room, office and a garage. 1,726 heated living space, hardwood & cork flooring, upgraded lighting & plumbing fixtures, stamped concrete driveway, custom tile work, gas fireplace, Pottery Barn paint colors, on a cul-de-sac with many live oaks for ambience and privacy. Even room for a pool if you'd like one!
Professionally decorated and SOLD COMPLETELY FURNISHED AND READY TO MOVE IN! Built by award winning builder, Doug Burlage Homes and includes a one year home warranty. Learn more about Doug at www.dougburlagehomes.com.
Convenient location at mile post 5 near shopping, restaurants, bars, activities, schools, movie theater, fishing pier, new public boat ramp & new Soundside bike/running path!
Compare to anything and everything else in this price range and you'll see the unsurpassed quality at such an unbelievable value! Call for more information or a showing. Can also be sold unfurnished or partially furnished.
FHA to Lift Mortgage Insurance Fees Wall Street Journal, By Nick Timiraos
January 20, 2010
The Federal Housing Administration will announce more-stringent lending requirements and higher borrower fees on Wednesday to cushion against rising defaults and stave off the need for a taxpayer bailout of the agency.
The FHA, which has taken on a major role in the housing market during the economic downturn, doesn't lend money to home buyers, but insures lenders against default on loans that meet FHA criteria. In exchange for that backing, borrowers who take out FHA-backed loans must pay an upfront insurance premium, currently set at 1.75% of the total loan amount. The premium can be rolled into the loan.
The FHA is set to raise that fee to 2.25%, the second increase in the past two years, according to people familiar with the matter. The value of the FHA's reserves to cover losses has fallen to $3.6 billion, about 0.5% of the $685 billion in loans outstanding, down from 3% a year earlier. Congress requires the agency to maintain a 2% capital-reserve ratio. If the larger upfront fee had been in place last year, the FHA would have boosted its reserves by more than $1 billion.
Also to boost the reserve, the FHA will ask Congress to increase a separate insurance fee that borrowers pay annually, people said. If the agency were to run short of cash to cover projected losses, it likely would have to ask Congress for money for the first time ever.
FHA officials declined to comment.
The FHA, which backs as many as half of all new loans in certain housing markets, has come under fire for insuring loans with little or no money down as home prices have plunged over the past three years. With its reserves falling, the agency has been forced to walk a tightrope between protecting taxpayer dollars and helping to facilitate the housing recovery.
The FHA will keep minimum down payments at the current 3.5% level for most borrowers. But the agency will require riskier borrowers with credit scores below 580 to make a minimum 10% down payment. While the FHA doesn't have a credit-score cutoff, most lenders require a minimum 620 score.
Some housing analysts have pushed for higher down payments on FHA-backed loans, and a bill in Congress would raise down payments to 5%, from the current 3.5%.
Instead, the FHA will reduce the amount of money that sellers can kick in for closing costs to 3% of the sale price, down from the current level of 6%. The higher cap led to abuses where sellers "heavily marked up the purchase price," says Lou Barnes, a mortgage banker in Boulder, Colo.
The FHA is also set to announce a series of measures to boost its ability to oversee and take action against lenders that originate loans with FHA backing.
"Mortgage lenders will find the new rules painful but necessary," says Howard Glaser, an industry consultant.
He says the rules were overdue given that "an 'anything goes' environment" had prevailed in recent years as former subprime brokers migrated into FHA-backed loans.
MLS # 61235 was just reduced to just $524,900 and is a gorgeous custom CANALFRONT 4 bedroom, 3 1/2 bath home in exclusive Southern Shores.
Well established neighborhood, over 3000 sq. feet of living space, completely remodeled, new flooring, paint, cabinets, appliances & landscaped yard fenced in the back.
Lots of space, large bedrooms, FROG, office/study & full attic. The owners have put so much work in this home and it's evident. Shows like BRAND NEW!
Call for a showing or more information 252.202.4271.
Upscale Oceanfront home in the exclusive community of the Villages at Nags Head. $1,475,000 is asking price for this 5 bedroom, 4 1/2 bath home with nice large dune and incredible Ocean views!
Luxurious home over 3000 sq. feet, soaring ceilings, large windows, lots of sliders leading to decks with Atlantic views. Ideal layout with two master suites on separate floors, panoramic views from almost every room, wood & tile floors throughout, professionally decorated, hot tub, private gazebo & a gas fireplace.
Grill, basketball court, volleyball & the Villages tennis courts and pool have easy access as well as the Links golf course along the Sound just across the street.
Central location and priced well. Call for rental income and more information 252.202-4271.
