Ultimate Open House


The 20 Healthiest Housing Markets for 2010

March 4, 2010

Filed under: Builder's Corner, Your Home Your Money — uoh @ 4:54 pm

From Builderonline.com

Housing economists have long held that the housing rebound, when it comes, will be uneven. The markets that benefit first will be the ones with the strongest core dynamics; places where house prices never got out of hand, cities where a diverse and progressive employment base drives job creation, towns that continue to draw population despite the economic recession.

Now that the housing recovery is nearly upon us–most economists expect a full-fledged recovery to begin this year–it’s time to figure out which markets will be the front-runners. Based on last year’s performance, especially the level of building permits pulled in the fourth quarter, it’s already clear that some markets are poised to grow at a faster pace this year than others in 2010.

Green shoots may be sprouting in markets throughout the country, but which markets will flower first? That’s the question we attempt to answer with the Builder Market Health Index, compiled by Hanley Wood Market Intelligence, our market research arm. Market Intelligence (MI) first input 2009 data and 2010 projections for household formations, resale values, and job and income growth. Then, after sprinkling in some secret sauce to weight these drivers, it ranked by health the top 100 housing markets (determined by permits pulled in 2009).

Not surprisingly, many of the markets that topped our 2009 list are on the 2010 leader board, including most of the major markets in Texas, where low development costs kept a lid on house prices during the boom, and strong local economies provided a cushion from the blow of a national recession.

But Lone Star markets were eclipsed this time around by some relatively hot markets in the Carolinas, which accounted for seven of the top 20 spots. Many of the major cities along the Mid-Atlantic seaboard continue to benefit from a strong influx of people drawn by a comfortable way of life, affordable housing, and growing employment prospects.

As with last year, markets that hit the trifecta–having within their borders a state capital and a big university along with a diversified economy–dominate our list of hottest markets. A strong base of government employment, whether it be from the state or the military, has helped stabilize some markets through the housing recession. In many cases, the government is the biggest employer among the 20 markets on our list.

We present this data with one big caveat. These markets may be healthier than others, but they aren’t healthy in the way they were during the housing boom, when it was common to find rising population, employment, and income. Virtually every housing market still has at least one blemish. And for that reason only two received a rating of 50 or more, indicating they are truly healthy. That’s an improvement, though; only one scored 50 or higher last year.

Hanley Wood Market Intelligence, which took into consideration forecasts from Moody’s Economy.com and other sources, is looking for several of these healthiest markets to break out this year. A few of them witnessed dramatic increases in building permits pulled in the fourth quarter of last year, momentum that is expected to carry over into 2010. Several of the markets on this list are poised for double-digit growth. See all 20 markets here.

16. Portland-Vancouver-Beaverton, OR-WA

Market Health Indicator: 34.4

2009 Total Building Permits: 3,821

2010 Building Permit Forecast: 10,156

Builders in the Portland area are placing their bets on a strong recovery in 2010; they pulled 17% more permits in the fourth quarter of last year than they did a year earlier, with nearly all the strength in single-family. The locals are betting on some strong underlying demographics, including a projected 2% increase in household growth and continued in-migration from more expensive California markets. The industry doesn’t appear deterred by the region’s urban growth boundaries or its new eco-districts. Market Intelligence is predicting big things for Portland–an increase of 6,200 in building permits. While Portland’s Renaissance Homes became one of the first major builders to emerge from Chapter 11 proceedings, two others–Legend Homes and Pacific Lifestyle Homes–are still working on their reorganization plans.


Take Advantage Of The Home Buyers Tax Credit

January 28, 2010

Filed under: Ulitmate Home Shoppers, Your Home Your Money — uoh @ 5:14 pm


December Existing-Home Sales Down but Prices Rise; 2009 Sales Up

January 26, 2010

Filed under: Your Home Your Money — uoh @ 2:40 am

From www.realtor.org

After a rising surge from September through November, existing-home sales fell as expected in December after first-time buyers rushed to complete sales before the original November deadline for the tax credit. However, prices rose from December 2008 and annual sales improved in 2009, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.

For all of 2009 there were 5,156,000 existing-home sales, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008; it was the first annual sales gain since 2005.

Lawrence Yun, NAR chief economist, said there were no surprises in the data. “It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit,” he said. “We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year.”

An NAR practitioner survey2 shows first-time buyers purchased 43 percent of homes in December, down from 51 percent in November. Repeat buyers rose to 42 percent of transactions in December from 37 percent in November; the remaining sales were to investors.

The national median existing-home price3 for all housing types was $178,300 in December, which is 1.5 percent higher than December 2008. “The median price rose because of an increased number of mid- to upper-priced homes in the sales mix,” Yun said. It was the first year-over-year gain in median price since August 2007.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said market conditions are challenging in some areas. “There’s a shortage of lower priced homes for sale in much of the country, resulting in multiple bids in some areas,” she said.

“Raw unsold inventory has been trending down. As the market heats up again this spring, buyers may need to be prepared to move quickly on a particular home – the best advice is to begin working with a Realtor® now to be able to use the tax credit and benefit from the increased buying power in the current market,” Golder said.

Total housing inventory at the end of December fell 6.6 percent to 3.29 million existing homes available for sale, which represents a 7.2-month supply4 at the current sales pace, up from a 6.5-month supply in November. Raw unsold inventory is 11.1 percent below a year ago, is at the lowest level since March 2006, and is 28.2 percent below the record of 4.58 million in July 2008.

Distressed homes, which accounted for 32 percent of sales last month, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area. For all of 2009, the median price was $173,500, down 12.4 percent from $198,100 in 2008; distressed homes accounted for 36 percent of total sales last year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.93 percent in December from 4.88 percent in November; the rate was 5.29 percent in December 2008.

Single-family home sales fell 16.8 percent to a seasonally adjusted annual rate of 4.79 million in December from a pace of 5.76 million in November, but are 12.7 percent above the 4.25 million level in December 2008. For all of 2009, single-family sales rose 5.0 percent to 4,566,000.

The median existing single-family home price was $177,500 in December, which is 1.4 percent above a year ago. For all last year, the single-family median was $173,200, down 11.9 percent from 2008.

Existing condominium and co-op sales fell 15.4 percent to a seasonally adjusted annual rate of 660,000 in December from 780,000 in November, but are 34.7 percent higher than the 490,000-unit pace a year ago. For all of 2009, condo sales rose 4.8 percent to 590,000 units.

The median existing condo price5 was $183,700 in December, up 1.0 percent from December 2008. For all of last year, the median condo price was $176,100, which is 16.1 percent below 2008.

Regionally, existing-home sales in the Northeast dropped 19.5 percent to an annual level of 910,000 in December but are 21.3 percent above a year ago. The median price in the Northeast was $241,700, up 3.2 percent from December 2008.

Existing-home sales in the Midwest fell 25.8 percent in December to a level of 1.15 million but are 8.5 percent higher than December 2008. The median price in the Midwest was $143,200, which is 1.8 percent above a year ago.

In the South, existing-home sales dropped 16.3 percent to an annual pace of 2.01 million in December but are 15.5 percent above December 2008. The median price in the South was $152,000, down 1.0 percent from a year ago.

Existing-home sales in the West declined 4.8 percent to an annual rate of 1.38 million in December but are 15.0 percent higher than a year ago. The median price in the West was $236,000, up 2.7 percent from December 2008.


2009-2010 Home Buyer Federal Tax Credit Fact Sheet

January 25, 2010

Filed under: Your Home Your Money — uoh @ 5:19 pm

From www.federalhousingtaxcredit.com

Who is Eligible

  • First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $8,000.
  • Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $6,500.
  • All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

  • Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
  • For married couples filing a joint return, the combined income limit is $225,000.
  • Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
  • The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

  • The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify

  • All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.  

Tax Credit is Refundable

  • A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
  • For example:
    • A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 tax credit).
    • A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 tax credit).
  • All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

  • The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.


Ten Cities To Go From Renting To Buying

January 21, 2010

Filed under: Portland Style, Your Home Your Money — uoh @ 3:11 am

From Forbes.com

The U.S. government has pushed hard to make homeowners out of one-third of Americans who still rent their homes. It introduced and later extended a tax credit for first-time home buyers, and has kept federal interest rates at their lowest levels since the 1940s.

Market conditions are such that now is a particularly good time for some renters to take the hint.

In Portland, San Francisco, Minneapolis and Washington, D.C., the premium to buy–the spread between what you’d spend on renting and what you’d pay each month for a mortgage–is far narrower now than its 15-year average. And economists predict a significant home-price hike in five years. So upgrading will cost much less than usual, and home buyers are likely to get a good return on their investment.

Note that buying isn’t necessarily cheaper than renting in these metro areas. In fact, it often remains a more expensive proposition. But for those determined to own, that investment is a better one now than it normally is.

Take San Francisco. To live here has always required a hefty bump in monthly costs from renting; it’s normally an incredible 296% more expensive to buy than lease a home, and the city’s residents know this. That’s why 42% of them stick to renting. Even though in the third quarter of 2009 the premium was still in the triple digits–233%–it had shrunk by 63 percentage points from the above 15-year average. As with the other cities we’ve highlighted, you’re not getting nearly as good a deal by renting as you might have just a few years ago.

“Rents are falling, but not nearly as rapidly as home prices,” says Ron Witten, founder of Dallas-based Witten Advisors, an apartment market consulting firm. “Part of the reason is a shift away from home ownership toward renting,” he says, in part because mortgages have become harder for many to obtain.

Behind the Numbers
To find cities where it’s a good time to go from renting to buying, we used data from Witten Advisors, which calculated the premium to buy for 42 Metropolitan Statistical Areas across the country using data from the U.S. Census, the National Association of Realtors and a blended average of fixed- and adjustable-rate mortgages from the Federal Housing Finance Agency (which oversees and regulates lenders). We compared the premium in the third quarter of 2009 with the average premium over the last 15 years to find the biggest drops.

We also wanted to pinpoint markets where home buying is a smart investment, so we factored in the five-year forecast in the S&P/Case-Shiller Home Price Index from Moody’s ( MCO – news – people )Economy.com. The cities on our list have some of the biggest discounts on the premium to buy coupled with big projected increases in home prices over the next five years.

One major market we didn’t look at is New York City, another spot where rents have softened less than home prices. Witten Advisors doesn’t track the metro area because accurate historical data on rental costs there is exceedingly difficult to obtain.

Quality of Life, at a Discount
Portland, Ore., makes our list for much the same reason that San Francisco does: It’s a picturesque, culture-driven city with good local services and amenities. The city is still not particularly cheap for buyers–but it’s cheaper than normal.

A family hoping to put down roots there would normally pay a 62% premium to go from renting to buying. In the third quarter of 2009, however, that premium shrank by 16 percentage points. At the same time, Moody’s Economy.com anticipates that home prices will jump 19% over the next five years. That’s partly because, like San Francisco, Portland has strict government limitations on building and a coastal location that keep sprawl in check.

“Portland has one of the most controlled environments in the country in terms of development rights,” says Stuart Gabriel, director of the Ziman Center for Real Estate at the UCLA Anderson School of Management. “Those supply constraints will push prices up.”

Jobs Stability
The presence of jobs–along with strong industries that will keep generating new ones–is a big factor in keeping demand for homes, and therefore home prices, high. The weak national economy has helped reduce the premium to buy for the time being, but where the labor market is relatively healthy, home prices are predicted to shoot up.

In Minneapolis, for example, where large companies including Target ( TGT – news – people ) and General Mills ( GIS – news – people ) have their corporate headquarters (and there’s a large university system), home buyers will only pay 14% more than if they were renting (24 percentage points lower than average), and home prices should climb by 15% in five years.

Similarly, in Washington, D.C., government jobs are plentiful, and anticipated to stay that way. The 6.1% unemployment rate here is well below the national average, which is partly why Moody’s anticipates a five-year jump in home prices of 15%. And, at the moment, the premium to buy is 20 percentage points lower than its usual 57%.

Of course, whether buying or renting is best is ultimately an individual choice, and one driven by a lot more than map coordinates. When subprime lending was rampant, many without the means to buy were encouraged to do so anyway–and it’s no secret how that turned out.

“If there’s anything we should have learned from this housing cycle, it’s that the decision to buy or rent ought to be a personal lifestyle decision,” says Witten. “In part, it’s a question about, ‘Do I want to be a homeowner’ in general, and specifically, ‘Do I want to be a homeowner now, with this economic uncertainty?’”


Applying the Home Buyer Tax Credit to Your 2009 Return

January 20, 2010

Filed under: Ulitmate Home Shoppers, Your Home Your Money — uoh @ 5:06 pm

To claim the credit as part of your 2009 return, you will need: The standard Form 1040 and Form 5405 for the home buyer tax credit.

  1. First begin Form 1040.
  2. Be sure to take note of your adjusted gross income, which you enter on lines 37 of the form. Form 5405 actually requires you to note your modified adjusted gross income, but that affects few people, so most will just use their adjusted gross income.
  3. When you come to Line 69 you’ll be asked to enter your tax credit amount. To do that, you’ll need to first complete Form 5405.
  4. Once you complete Form 5405, enter the amount on Line 69, then complete your return.
  5. Attach Form 5405 to your return.

Collecting Your Refund

Any refund for which you qualify will be sent to you.


Home Buyer Tax Credit at a Glance

January 15, 2010

Filed under: Your Home Your Money — uoh @ 2:52 am

From federalhousingtaxcredit.com

$8,000 First-time Home Buyer Tax Credit at a Glance

  • The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
  • The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
  • For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
  • For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

  • To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
  • The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
  • Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.


Tax Credit Expands Home Buyer, Economic Opportunities

January 5, 2010

Filed under: Ulitmate Home Shoppers, Your Home Your Money — uoh @ 5:06 pm

The National Association of Home Builders (NAHB) is spreading the word to consumers about an important new law that extends and expands an attractive tax incentive for potential home buyers.  The Worker, Homeownership, and Business Assistance Act of 2009, signed into law by President Obama on Nov. 6, extends the deadline for the first-time home buyer tax credit and gives a larger group of home buyers the chance to take advantage of this government program.

“The tax credit has already proven to be an effective means of boosting economic activity,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We hope that the government’s action to enhance it will have the intended additional stimulative effect that will help get housing and the economy back on solid ground.”

The new law extends the $8,000 first-time home buyer credit through April 30, 2010, giving buyers who have signed a sales contract by that deadline until June 30 to close their deal. A new credit of up to $6,500 was created for repeat home buyers who buy a principal residence if they have been residing in the home they currently own (or previously owned) for five consecutive years out of the eight years preceding the purchase of the new home.

“It’s not just a first-time buyer tax credit anymore,” Robson said. “Move-up buyers, move-down buyers, and others who have previously owned a home can now qualify as well. In fact, close to 70 percent of all potential home buyers should now qualify for some form of the credit.”

Income limits for eligible buyers have also been increased to allow more consumers to qualify, particularly those in markets with a higher cost of living. Now single taxpayers with incomes up to $125,000 and married couples earning up to $225,000 may be eligible. Partial credits are available to home buyers who earn up to $20,000 more than the limits.

A leading source of consumer information on the tax credit is NAHB’s Web site at www.federalhousingtaxcredit.com, which saw a huge increase in visits in the days after the new law was signed. It provides basic information about the first-time and repeat buyer credits, detailed question and answer sections, and links to additional home-buying resources for consumers.

“The federalhousingtaxcredit.com Web site had more than 70,000 visits on the Monday after the President enacted the law,” said Robson. “Since the site was established in mid-2008, there have been more than 6 million visits by people seeking information about the home buyer tax credits. That tells you how hungry consumers are for easy-to-understand information on this great opportunity that has been opened to them.”

NAHB estimates that the home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes.


Forecast 2010: Residential Rebounds While Other Sectors Struggle

January 2, 2010

Filed under: Your Home Your Money — uoh @ 2:41 am

After three years of declines, the construction market may be eyeing a rebound in 2010 thanks to a much improved residential sector, but for designers and contractors in other building sectors, it could be too soon to celebrate.

McGraw-Hill Construction is forecasting that total construction starts will climb 11% to $466.2 billion in 2010, following an estimated 25% decline in 2009.

After a 39% drop in construction between 2006 and 2009, an improving residential market and signs of strength in select public-sector markets such as transportation and infrastructure could spark an overall turnaround in 2010, says Bob Murray, vice president of economic affairs for McGraw-Hill Construction.

“This is not a booming market; it is just inching upward,” Murray says.

The main buoy for the industry is single-family housing, which could rise 30% from an estimated 430,000 units started in 2009 to 560,000 starts. That would be on par with 2008 when 549,000 units were started.

Read full story at northwest.construction.com.


Housing rebound unlikely soon Experts predict ‘tedious’ recovery for Portland area

December 3, 2009

Filed under: Ulitmate Home Shoppers, Your Home Your Money — uoh @ 8:23 pm

By Jon Bell, The Portland Tribune

State economist Tom Potiowsky turned to lyrics from a classic song by The Doors to sum up his outlook Wednesday morning during the Home Builders Association of Metropolitan Portland’s annual housing forecast.

“I’ve been down so long that it looks like up to me,” he said. “It looks like things are getting better, but we’re still at the bottom of the pit.”

The economist’s take on the current state of the state worked equally well on every topic touched at the event, from the unemployment rate and housing starts to job growth and housing permits. Joining Potiowsky as presenters were Jerry Johnson, a local real estate consultant with Johnson Reid LLC and David Crowe, chief economist for the National Association of Homebuilders.

Both Reid and Crowe echoed Potiowsky’s views. The national recession is over, Crowe said, but because the housing market has dropped off so dramatically and because credit markets are still “healing,” the recovery will not be as strong as those seen after prior recessions.

“It will be a slow, tedious recovery,” Crowe said. “It will still be a recovery, but it will be nowhere near as fast or as comfortable as you’d like to have it.”

Here in Oregon, the recession is either over or just about to be, Potiowsky said. But don’t expect any huge changes in hiring until well into 2010. Employers first need to jettison the furlough days, shift cuts and other measures they’ve put in place to keep their heads above water. The state also has the fifth-highest unemployment rate in the nation – 11.3 percent – and the seventh-slowest rate of job growth.

With all this as backdrop, Potiowsky noted that the housing market in Oregon will continue to remain fragile. Housing starts improved in the second half of 2009 but are still 40 percent below historical averages and aren’t expected to return to those levels until 2015.

He also noted that permit levels, particularly for multifamily housing units, have been hammered as well. For example, the entire state saw only four permits for multifamily housing units in September – and all of those were for duplexes.

Although housing prices in the Portland region have fallen of late, Johnson said the area is still 5 percent above historical trend lines and it appears as if pricing adjustments will have been played out by early 2010. That said, he noted that 23 percent of mortgages in Oregon are now considered “negative equity mortgages,” which means people owe more on their houses than they’re worth.

Some of the more positive news to come out of the presentation included the fact that Portland’s housing inventory levels are down to between two and four months for new homes and between nine and 11 months for all homes. In addition, interest rates are expected to remain low, topping out at 6 percent by 2011.

“We should have a better forecast next year,” Johnson said at the end of the event, “because, again, there is nowhere to go but up.”

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