Shore to Shore
Lake Lanier GA and AL Gulf Coast Real Estate News
December 28, 2009
In this Issue:
The NorthGaLife.com Team: Buyer web traffic – heavy year end buyer traffic as is normal starting after Christmas day.
Buyer internet activity should increase through the year until Fall when school starts back. Those looking to list should be proactive at this time. Buyers should be proactive as well with preferred properties.
The GulfShoresLife.com Team: Ditto above – buyers will begin getting off of the fence as Holiday activities end on New Years Day and will have more time to devote to real estate activity through the winter doldrums.
Buyers that have spotted bargains should become motivated to make offers before someone else picks off these bargains with year end bonus money.
Special Report: Exterior remodeling best bang for your buck
Featured Article: Why your credit score is even more important
Recommended Resources: Confessions of an underwater homeowner
The NorthGaLife.com Team
“2009 is coming to an end and buyers are coming out to take advantage of the great deals in the area. The New Year will only be more promising as buyers are realizing that now is the time to buy. There are some great deals for the buyers out there! - Juli Bowman
Buyer registrations have increased significantly since Lake Lanier got back to full pool. Low interest rates and reduced prices will present many opportunities going in to 2010. Many buyers progressing through the typical “just looking” period indicates 2010 should have substantial increases in buyer activity.” – Laura Carter
“I’m out showing property” – Ryan Kowalske
The GulfShoresLife.com Team
“The year 2009 saw strong condo sales in Gulf Shores
and Orange Beach.
Recorded sales are over 900 units and including remaining developer
inventory and large auctions, the total number of units sold is at
1,000 plus. The buyers have been motivated by significant price
reductions which have now bottomed out in many developments.” – Des Gatti
“Buyer activity has increased significantly as a result of price reductions in the real estate market in the last quarter of 2009. Numerous buyers believe the market is at or near the bottom and have decided that now is the time to buy. They are now taking actions to position for the future. Also, many buyers have been disappointed to learn that homes they wanted to see and possibly "offer" on have been sold as a result of this very active buyers market.” - Wayne Walker
"Didn't get exactly what you wanted for Christmas? Buy yourself a condo!" – LaSha Powell
“I’m out with buyers!” – Ron Buttarazzi
“I’m working on new listings!” – Jason Will
"I'm preparing for multiple showings this week!" - Susan Trawick
“Looking forward to starting the New Year off with a total redesign of our follow up systems, our focus will be to provide more useful information on a timely schedule throughout the year and to be there when “buyers are ready to buy” and “sellers are ready to sell”. I am in hopes that we become great providers of information not only for those that are “ready, willing, and able”, but also for those whose plans are further in the future and those who have already taken action.” – Cal Carter
Remodeling Best Bang for Your Buck
The U.S. National Association of Realtors recently released its annual “Remodeling Cost vs. Value Report,” and renovations this past year did not bring the bang for their buck they did in 2008, according to the report.
The average remodeling job cost $50,908 in 2009 and added $32,497 to the value of the home, a ratio of 63.8 percent, according to the report. That was down a bit from a cost-to-value ratio of 67.3 percent in 2008, when the average project was $49,866 and the added value was $33,568.
Of course, these figures are to be taken with a grain of salt. For example, in some markets rapidly falling home prices can skew the value of homes. And in some markets, remodeling costs are substantially lower than in other markets.
In any event, the report seemed to reveal that in a slower real estate market, such as the one the U.S. is experiencing now, curb appeal is best improvement investment a home owner can make.
On a national level, eight out of the top 10 projects in terms of costs recouped were exterior replacement projects that cost less than $14,000, according to the NAR’s news release. Said the NAR:
“Certain types of door and siding replacements, as well as wood deck additions all returned more than 80 percent of project costs upon resale. A steel entry door replacement – a new addition to this year’s list – recouped 128.9 percent of costs, followed by upscale fiber-cement sliding replacements at 83.6 percent. Wood deck additions recouped 80.6 percent of costs.”
“Once again, this year’s Remodeling Cost vs. Value Report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, in a released statement.
Why Your Credit Score is Even More
Fannie Mae announced this month that it was raising its credit score requirement for borrowers, even if they have 20 percent as a down payment.
Fannie Mae is the government-sponsored entity that purchases loans from banks, making it the leader lenders follow when it comes to home-loan rules. It was announced that even with a 20-percent down payment, borrowers will now need at least a 620 credit score to qualify for a loan. This is up from a 580 score.
While it shouldn’t come as any surprise that standards are tightening again as banks try to reign in their risks as mortgage delinquencies continue to rise, this latest requirement could bog down your efforts to finance a home if you’re already close to buying one.
There are, however, some ways to bump your credit score by a few points in a relatively short amount of time:
Get a copy of your report
Yes, every article ever written about credit scores tells you to do this. You read it constantly. Everybody does. But not everybody takes the advice and looks at their reports frequently enough. You should do this once a year, and if you’re looking to buy a house, do it soon!
Any and all possible mistakes or issues should be addressed. Write letters, make phone calls, challenge derogatory information. The time spent is well worth the effort. Get any mistakes OFF your report!
Don’t open new accounts
If you’re going to apply for a home loan soon, don’t apply for another credit card or open a new retail store account just to save money on your next purchase. Newer accounts can cost you a few points, score-wise. Wait until after your home loan is approved. That brings us to the next point …
Don’t close existing accounts
The age of your accounts affects your score, as does your ratio of credit used to credit available. The more credit you have that you are not using, the better. So even if you’re tempted to close that account after you’ve paid it off; don’t. In fact …
Ask for credit increases
Because of that ratio of available credit to credit used, you can often bump your score by improving that ratio a little bit. One way, of course, would be to pay down debt you have – reducing the credit used; that’s an obvious route. But the other side of the coin is to increase the amount of credit available. You can call or write to have your limits increased. A small increase on every account you have can add a few points to your scores.
NOTE: The caveat to this approach is that while having more available credit than you’re using will help your actual scores, having TOO much credit available could hurt your chances for qualifying for a home loan because of your debt-to-income ratio. You want to make sure that all your minimum monthly payments, plus any other fixed, long-term debt (car, student loans) is equal to less than 31 percent of your monthly gross income.
You probably aren’t going to be able to go from Fannie Mae’s previous standard of 580 to the new 620 in a very short period of time, but if you’re out looking at houses now, it never hurts to bump your scores by a few points before you have to apply for financing. A better score helps you get a better interest rate, too, remember.
of an Underwater Homeowner
The media are full with doom-and-gloom stories about the foreclosure crisis, “underwater” borrowers and falling home prices. The headlines are enough to make you wonder why anyone would want to buy a home.
Of course, it’s the sensational headlines that sell. I recently found an article about an underwater homeowner, and it’s a pragmatic, honest first-person account of someone who owes more on their mortgage than their home is worth. The buyer isn’t a sub-prime borrower and doesn’t see himself as a victim of predatory lending. This un-sensationalized look at one family’s situation is definite recommended reading! The article comes from the Wall Street Journal via Yahoo! Finance.
Have a great week!
The Gulfshoreslife.com Team