Does It Makes Sense To Buy A New House Before Selling The Old One?

Does It Makes Sense To Buy A New House Before Selling The Old One?

Does It Makes Sense To Buy A New House Before Selling The Old One?

You’re interested in moving. You need to sell your old house first before buying a new one, right? After all, you don’t have enough of a down payment for the new house without selling the old one, and you are pretty certain your bank will not qualify you for two mortgages.

You are in a dilemma; houses in your area are currently receiving multiple offers. Inventory is low. Sure, you can sell your house under the same circumstances, but will you be able to identify a new house so that you can simultaneously move from the old house to the new one? Unlikely. Do you sell the current house, move to a rental [or hotel) while you identify and try and close on the new house? Is the extra hassle of moving twice and the added stress of the inability to simultaneously close on the sale and purchase the new worth it? IF you could purchase a new house while still living in the old house, is it worth the added costs involved with having a second mortgage until you sell the old house? How much is “peace of mind” worth in not having the pressure of having to purchase a new house (because you sold the old house too soon)?

These questions are a reality in today’s world in many parts of the country, specifically, the San Francisco Bay Area, because of the real estate rebound after the Great Recession. According to Jeff Stricker, a real estate professional with Alain Pinel Realtors specializing in the Silicon Valley in California, his clients are faced with these exact situations much of the time, as property is swooped up almost as soon as it hits the market, and, many times, with multiple, over asking prices. Jeff states that, although it is great for his clients as sellers, those same clients face challenging hurdles when buying a replacement property; competing against other buyers, some with cash only offers, who are willing to bid up a property far beyond the asking price in many circumstances. Some buyers are just so frustrated with the process of competing and getting outbid that they act in ways that they normally would never have thought. Overbidding. Settling for a house that they may not have originally envisioned. The list goes on.

Jeff, however, decided to think outside the box. What would happen if another house was purchased (without the added pressure of “living out of a suitcase”, if you will) prior to the sale of the old house? Is it even possible with the banking regulations that were placed upon financial institutions as well as homeowners over the past decade due to the “mortgage meltdown” that happened in 2008 and on? Dodd Frank rules that placed inordinate restrictions on the ability of homeowners to obtain financing left many people unable to get loans in which they previously were easily able to qualify.

Jeff decided to come up with a spreadsheet wherein, if he plugged in some assumptions, he could figure out if it would make economic sense to acquire a new house before selling an old house. The other part of the equation was to find a lender who would allow for a homeowner to purchase a new home without first selling the old home; thus, carrying two mortgages at the same time. Since most conventional lenders would not touch this, Jeff had to look to alternative sources. He found a company called Pacific Private Money, in Novato, CA that specializes in such a product.

Pacific Private Money can lend enough to the borrower to purchase the new home if there is enough equity in the old home to justify a combined Loan to Value (LTV) of 70% or less. Sometimes, if there is not enough equity in the old home, the borrower needs to add cash to bring the LTV to 70%, but, the ability to purchase a new home without having to sell the old one first can solve many issues for the homeowner. First, the new home can be identified without adding pressure since the homeowner is still living in the old house until the new house closes escrow. Second, the stress of moving twice is eliminated. Third, and probably the best (and possibly most surprising) is that this solution may actually cost LESS in terms of increasing net equity to the household than selling the old house and buying a new house with the proceeds from the old house (and new mortgage) in most circumstances wherein the new house is more expensive house than the old house.

In a rising market, the earlier the purchase of the more expensive new house and the delay of the sale of the old will increase the net equity to the homeowner more than the costs associated with carrying two mortgages.

For example, let’s assume the old house is worth $1,000,000 and there is currently a 1st mortgage of $200,000. The homeowner desires to purchase a new home for $1,400,000 and has $100,000 in the bank that can be used for a down payment. We will look at two scenarios; the first is where the homeowner sells the current house, rents for a period of time, and then purchases a new home. The second scenario is where the homeowner borrows the money in order to secure the new home while owning the old home.

Obviously, there are many moving targets with both scenarios, such as how much it will cost to rent a place (in the event of selling the old house first) as well as how long it takes to identify and close on the new house, storage costs for belongings, the cost of obtaining a private loan, and the appreciation assumptions for both houses, just to name a few.

Here is a calculation making the following assumptions; it takes nine months to close on a new house after selling the old house; houses in the area (both old and new houses) are appreciating at 1% per month; interest earned on bank deposits are at 1% per annum; storage costs are $1,000 per month, a conventional bank loan is not available because the homeowner does not qualify and has to use a private loan company; the costs for the private loan are 9% plus 2 points; the interest rate on the old house is 3% per annum.

As you can see, in a rising market, where the new house is worth more than the old house, there is a significant benefit to using a private loan to purchase the new home and sell the old home at a later date. Waiting 9 months to eventually acquire the new house has tremendous opportunity costs, as compared to a net benefit of purchasing the new house right away and eventually selling the old house.

Although assuming a 1% per month appreciation of real estate may seem aggressive, the San Francisco Bay Area, and specifically the Silicon Valley, has experienced such growth. However, even if we lower the appreciation to .5% per month, we still see a fairly significant benefit to purchasing the new house now rather than waiting to first sell the old house and then buy the new house.

Aside from the economic benefit, other factors need to be considered; the lack of stress of moving twice should the homeowner decide to sell the old house first and then purchase the new house; what if the homeowner finds the house of his/her dreams now and does not want to let the house slip away? In today’s market, sellers are not willing to take contingent offers. Can the homeowner budget for both houses at the same time while waiting for the old house to sell? Is the market rising? Is the new house more expensive than the old house? How long will it take to sell the old house? These are just some of the issues to consider before deciding one way or the other; however, and this can’t be stressed enough — when a homeowner finds a house they like, they do not want to lose the opportunity of buying it. This means that they can start looking at new houses before putting their old house on the market. This also allows them time to make any repairs or fix up their old house so as to maximize its value prior to putting it on the market.

Once homeowners know that there is a potential to purchase a new house before selling their old house, they can be proactive in obtaining a commitment letter from the lender. Of course, homeowners should see if they qualify for a conventional loan for buying the new house (owning two houses at once), but they should keep their minds open to procuring a private loan should the bank turn them down. Pacific Private Money is such a private loan company.






What To Do When Your Home Isn’t Selling

What To Do When Your Home Isn’t Selling

What To Do When Your Home Isn't Selling

When sellers start the home-selling process, no one wants to think “What would happen if my home doesn’t sell?” But before you panic, recognize that there are many things that you can do so you don’t wind up in that position.

Tip 1: Understanding the real estate market and the value of your home will help you avoid this dilemma. The first key point is to get educated about the market. Read your newspapers, online real estate sites, and consult with the best experts in real estate for your area to determine the sales price.

While all that may seem basic, you’d be surprised how many sellers rely on emotion to dream up a selling price for their home. Some have done little, if any, research on even their own neighborhood. Instead, their strong ties to their homes cause them to imagine that their home should sell for the price they want. Or they base the selling price on how much they owe which is, of course, of no significance to buyers.

Tip 2: Fix up your home. Most buyers don’t want to purchase a big list of must-do fixes in order to live in the home they just bought. Yet, some sellers think that it’s a waste to spend money on a home that they’re moving out of soon. That’s quite a predicament. Both sides have valid points except one side-buyers-might be in a stronger position. The seller wants out and if the home is a mess, many buyers will simply move on to the next best house.

Yet, if a buyer wants it badly enough, he/she might agree to purchase your home but it’s guaranteed you’ll take a financial hit as the buyer will want to discount the price for the problems that need fixing. In the end, you might have to fix the issues before the sale anyway. So, starting with a house that is in relatively good order is the best way to begin. Read some of my other columns to see which renovations give a good return.

Tip 3: If you need to sell your home, don’t pull it off the market because you think the season isn’t right. Buyers who need to buy a home will keep hunting through all the seasons. There may be some slow times but if people need a house, they’ll keep looking even in the unlikely times.

Tip 4: Consider incentives. Yes, you can make your home more appealing by tossing in some incentives. It’s best to speak with your REALTOR® about which incentives are best for you to offer. Even practical incentives can help get buyers to your home to view it. These incentives can help encourage the buyer to move forward, especially if other challenges arise.

Tip 5: Stage your home. This is not the same thing as fixing up your home. Fixing up your home includes daily maintenance and repairs. Staging your home involves using experts to make your home showroom-ready–like a model home. I know you might say that all your friends tell you that you have fantastic taste but, trust me, if you’re serious about selling your home, then it’s worth at least having a consultation with an expert in the industry.

Here’s why: They are trained to stay on top of the trends that have mass appeal. They also offer a fresh set of eyes on your home. They might easily point out something that you never saw before because you’ve been living in your home for a long time. They will look at your home from an “outsider’s” perspective and that’s exactly what you need.

Taking the time to, at least consult with experts, allows you to gain knowledge and information about your home and the market place. What you do with that is up to you, but it may just be the difference between a For Sale sign and a Sold sign hanging outside your home.

Home Negotiation tips to close the deal

Home Negotiation tips to close the deal

  There is no simple formula for home negotiations.  There is no if C happens then you should go to counter F.  It’s not that simple.  Some of it comes with past experience.  Some if it comes with being able to read the opposite party and to read between the lines.  This home negotiation tip is for both buyers and sellers.  Negotiating the sales price or repairs on a home is so different than many other types of sales negotiation. That is what confuses people. Here in Detroit we have many Tier 1, Tier 2 and 3 negotiators that deal with Ford, GM, and Chrysler. These negotiators are hard nosed and good at what they do, and they wonder why the tactics they use everyday do not work with home sales.  In most cases you cannot be a hard nosed negotiator and expect the other party to succumb to your demands or to close the deal.

There are a few reasons why hard nosed negotiations do not work and why some negotiators end up frustrated and not at the closing table.  After all the ultimate goal is to get to the closing table.

1.) There are emotions involved. Sellers have an emotional attachment to the house because they have remodeled the home, or raised their children there, or think the house is the greatest in the world even though it needs major updating. Seller’s sometimes have the rose colored glasses on. Buyers are usually less emotional about the house, but they too get emotional sometimes when the negotiations get tough. In car sales, equipment sales, and many other types of sales and sales jobs there is no emotions. It’s about product and price. Not so with all home sales.

2.) In equipment sales or negotiating with the big auto companies both sides want to make the deal work and work hard to come to an agreement.  They are negotiating to meet in the middle because there are a limited amount of companies to deal with.  There is may be prior relationships between the companies.  In house sales that is not always the case.  Seller’s usually DO NOT HAVE TO SELL THE HOUSE, nor DO BUYERS HAVE TO BUY.   The buyers can move onto the next home, and the sellers can keep turning down offers as long as they want. In equipment sales there are usually only a few companies to choose from. Not in real estate there are always more homes coming to the market. They may not be as nice, or as updated, but there will be more homes coming to the market if you are willing to wait.  They can put up the house for sale next year, or wait until spring to buy.

It is the same with sellers. I just heard yesterday about a seller that has turned down 5 offers. After 5 offers you should get an idea of what a buyer is willing to pay for your home. Yet there are some unreasonable sellers that will still want more after multiple offers on their house. The seller just rejected my clients offer that was higher than the previous 4 offers.  Sellers and buyers do not have to close the deal. And it is common for buyers or a seller to quit negotiating and walk away from the deal. Sometimes they just don’t care or are unreasonable in their demands and wants. It is common for one party to base their price in reality and the other party in the transaction living in dream land.

So when negotiating on a sales price you want to be the one grounded in reality. You want your agent to look at the recent solds in the neighborhood. That way the agent or you can look at the recent sold prices of comparable homes and be able to give a range of what the home is worth. That is so important whether you are the seller or buyer. Know what the current market value of the home is your priority.

Having the knowledge of the range of what the home is worth gives you a basis of what to offer (if you are the buyer ) or what to accept (if you are the seller). If you are unreasonable in what you want then do not be surprised when the other party stops negotiating or walks away. It is the same way for you. If the other party is unreasonable in their demands then it is smart for you to walk away.   The other party has an incentive to close on the home, but they cannot be forced to accept what you think or what you want. Even if you are right on, they may be the unreasonable one. There is nothing you can do about it. Many buyers do not have to buy the one house or the seller does not have to sell.  That is the difference in home sales in most cases…. they do not have to.  If you are a hard nosed negotiator you may learn the hard way and lose the house.  So the key is how bad do you want to buy or sell?

I hope this negotiating tip of understanding the mind set of the opposite party, and what has to be done in the home sales process will help make your home sales negotiation more fruitful. It will save you aggravation if you understand this up front. It does not matter if it is waterfront home for sale in Oakland County or any home in Mesquite, NV. …..realize that many times hard nosed negotiations fail in the real estate business.

The goal should always be to find a win win for both parties.




Why Do Home Buyers Wait For Spring?

Why Do Home Buyers Wait For Spring?

Search Mesquite NV. homes for sale at;

Why Do Home Buyers Wait For Spring?

Why do they wait until the competition ramps up and all the other buyers are ready to buy? Why do buyers wait for the “hot” spring market with its price increases and multiple offers?

  • Some buyers delay because they are doing what is expected – “we’re always done it this way” thinking is common in real estate.
  • Others may need the first warm rays of sun and the fragrance of spring flowers for motivation.
  • There may be more listings later in the spring, as sellers react for the same two reasons above, but increased buyer competition may cancel out advantages.Indications are that this will be an active spring market with real estate price and mortgage rate increases which extend deep into 2017. Getting ahead of this momentum may bring benefits and real estate you can love.

    You’re got nothing to lose by shopping now and a lot to gain. Here are Five Smart-Buying Tips for Getting a Jump on Spring:

    Tip #1: Find a real estate professional who is has a lot of experience in the locations you’d consider and with the type of property (detached house or condominium) you want to own.

    Learn what you need to do to prepare to make an offer and what to look for in the properties you’ll view. You’ll also discover the listing price range to shop in and which are the best locations in your buying range. If you don’t start this strategic relationship first, you’ll miss out on many of the advantages of an early start.

    Tip #2: Build your professional team to be ready for offer time.

    Your real estate professional may have recommendations for mortgage brokers, home inspectors, real estate lawyers, and surveyors. Take three names for each and interview them to determine the fit and what they consider the extent of their professional responsibilities to you.

    • For example, concentrate on locating a mortgage broker who has the experience, contacts, and interest to help you finance your purchase. The questions you ask the real estate professional about price range, size of mortgage, and steps in the buying process should also be directed to the mortgage broker. The mortgage pre-approval letter, which may be essential at offer time, will only be truly useful when you’ve been professionally vetted and stamped as mortgage-worthy.

    #Tip 3: Stop Wasting Time and Concentrate on Real Estate.

    There’s a lot to learn and to think about when buying real estate, so your productivity matters. The US 2016 versionof Deloitte’s sixth annual Mobile Consumer Survey revealed more online time wasting than ever:

    • More than 40 percent of consumers check their phones within five minutes of waking – text messages (35%) and email (22%)
    • Each day is disrupted since we look at our phones approximately 47 times. Sleep is disrupted: more than 30% check their devices 5 minutes before sleep and about 50 percent in the middle of the night.
    • Every 60 seconds on Facebook, 510,000 comments are posted, 293,000 statuses are updated, and 136,000 photos are uploaded. The average Facebook visit is 20 minutes; Facebook reports visitors spend more than 50 minutes a day using Facebook, Instagram and Messenger. (Source: Zephoria)
    • Millennials (25 to 34-year-olds) demonstrated higher levels of mobile device interest and use than the phone-hooked younger demographic.
    • Postpone binge watching the latest hyped series until after you buy your dream home.

    Tip #4: Sell Yourself on Success

    According to sales inspiration Dale Carnegie, author of How to Win Friends and Influence People, “The only way to influence someone is to find out what they want, and show them how to get it.” To achieve success, clarify, with the help of professionals, exactly what you want and need from a real estate purchase. Then decide to get it. The professional team you select will provide the know-how and will help you refine your dreams into an achievable goal for the location and price range involved. Do your homework, so you understand what they show you.

    Tip #5: Motivate Yourself During This “Buy-athon”

    What motivates you to want to own real estate? Postpone as many non-real-estate distractions as possible. Clarify what will sustain you through the often-stressful buying process. Use slogans, affirmations, or whatever it takes to persist. You may make offers and lose out on one or more properties before you find yours. Persist using self-motivation – that’s your job. No one else can motivate you. No one cares as much about the outcome as you do.

    What are you waiting for? Get the jump on spring!

    Final Smart-Buying Tip:Don’t get in the way of the professionals finding out what you want and helping you get it.


Nevada Real Estate

Nevada Real Estate laws and practices differ from other states. I will help you navigate the complexities and pitfalls of property purchases. I understand the market in the area you desire and will be your advocate throughout the process. Isn’t it nice to know that you have someone on your side looking out for your interests? I trust that you will find your experience pleasant and are confident that once you use me as your Agent you will insist in doing so in all of your future Real Estate purchases.


Vacation and Second Home Properties

Whether you are considering a vacation or second home for a weekend escape or a family legacy property let your me guide you through the decision making process as well as the transaction assuring a smooth and enjoyable experience.

Many of these properties are located in resort areas not in the same State or region as your primary home and are subject to local restrictions, taxes and regulations. Dealing with homeowners associations, management companies, local lending, Insurance, covenants, building regulations, Title issues, well permits, weather conditions that might affect value, transportation and technology options can all be a challenge particularly if you are trying to deal with these issues from a distance. Often times I can show you how you can turn these possible pitfalls into advantages with their local knowledge and expertise.

I want you to enjoy your vacation or second home property bringing you and your family great memories for years to come. By using me as a resource before, during and after the transaction with their attention to detail and guidance will allow you this opportunity.


Many second home owners find that condominiums are an attractive property type for a variety of reasons. They allow more time for enjoyment without a lot of worries like maintenance and daily tasks. They can also offer amenities that are not easily available to single family home owners like swimming pools, shuttle services, game rooms, etc. In many areas the possibility also exists that your unit can be rented out to tourists on a nightly or weekly basis helping offset some of your ownership costs. Naturally there is a fee for all of these services but since the costs are shared amongst all of the owners may make it more manageable for the individual owners.

All complexes should have a Home Owners Association (HOA) and in many states it is required. In most cases the HOA contracts with a management company to handle the day to day items needing attention as well as provide a reservation service to manage the rentals. In most cases the HOA meets annually to discuss items pertaining to the property and the management of those items. It is important prior to ownership to understand how the HOA functions and what their contractual relationship is with the management company. Review the HOA financials, Rules and Regulations and, at least, two years of HOA and Board of Directors meeting minutes. Often these will not be released to you until you have a unit under contract. Meet with the President of the HOA as well as the property manager to better understand if this is a complex that appeals to you. Remember also that once you are an owner you are part of the HOA and part of the decision making process.

HOA dues can cover a variety of items and it is important to understand what those items are. Dues can cover trash service, water, common amenities such as hot tubs, television, exterior building insurance, lawn and driveway maintenance, etc. HOA dues may be collected on a monthly, quarterly or yearly basis.

Most management companies provide the HOA a ten or twenty year forecast of what maintenance issues might be upcoming, like replacement of roofs or sidewalks and the approximate costs involved. This is how the HOA can determine the HOA fees to the individual property owners (usually allocated on a sq. ft. basis). If the property is in a short term rental location they will most likely manage your unit and take care of guest check in, cleaning and maintenance. Their fee is a percentage of the rental income. Find out what this percentage is and what they provide for this fee.

In situations where short term rental income of your unit is possible the management company may inspect and rate your unit annually. The management company’s desire is to attract as many return guests as possible so they generally rent the nicest units first meaning more income for the owner (and perhaps more wear and tear). In many instances the management company has someone on staff that can guide you through the cost benefit or upgrading your unit. Find out what your unit is rated and if there is a benefit to upgrading the unit. Also get rental income figures for like units understanding that individual units may vary due to location within the project and owner usage.

Single Family Homes

Whether your desire is to own a secluded cabin in the woods or a home on a golf course, beach or ski slope determining your needs and how you plan on using this home are essential to your selection process. Will you be using this property seasonally or just on weekends, as a gathering place for friends and relatives for holidays or simply an escape from the stresses of everyday living?  Emotions play a large part in your property selection, as it should. However don’t allow your emotions to be the overriding decider.

There are many factors that need to be considered to insure that you will be able to enjoy your escape property. Most important on this list is what will happen to the home when you are not there? What attention to the home might be needed in your absence?

The benefit of single family home ownership is that you have more flexibility on individual choices. The challenge is more daily attention may be required. There are management companies who specialize in caretaking of single family homes and many offer a menu of options. Understanding the costs and paring down what you need or desire will help you determine what the costs might be. Also understanding local zoning regulations and common interest community’s rules and regulations might determine if this home is appropriate for your desired use.

Other determining factors might be property taxes (some states charge higher property taxes on out of state owners), utility costs, transportation costs and options. Local issues such as snow load or flooding, pest control or mold are also vital pieces of information. Once under contract an inspection should be conducted and in many areas of the United States radon can be a factor. This is relatively simple and inexpensive to mitigate and often something the Seller will pay for.


Perhaps instead of purchasing a pre existing condominium or single family home your desire is to build your dream home. One might think that land would be fairly straight forward to purchase. However there are many things to think about particularly as you move forward to building that special home. Again, understand the covenants of the neighborhood and what you can and cannot do on your property. Are there Square footage minimums or maximums? Perhaps there are architectural guidelines or an architectural committee that must approve your design and finish.

Be sure and negotiate the seller providing you with a survey. During your inspection period it might be a wise idea to have an engineer conduct a soils test to see how easy or difficult it will be to build on the site. Is the municipal water and sewer? If so are there tap fees to hook on. If municipal water and sewer are not available is it possible to dig for a well and at what cost? What type of water is generally found in the area? Check to see if the local regulations allow for a leach field or merely a sewer vault and determine what the cost is to pump out the vault. What is your source of heat? Check to see if natural gas is available or if you need to go with an individual propane tank. Understand the plusses and minuses of owning or leasing the tank.

Interview a local architect or two who can give you an approximation on a dollar per square foot basis on building in the area. Check with the City or County building department to see what the set-backs are and if there are any governmental regulations that you should be aware of.


As you can see there are a myriad of issues that need attention and direction to insure that your choice of product type will bring you and your family the enjoyment of ownership and usage that you are seeking in a second home or vacation property. Particularly if you are attempting to do much of this from afar the task can be daunting. Remember that you are not alone in this process. I’m here to help you navigate through the issues and process until your purchase comes to fruition. In most cases I will continue to be a source of information and advice long after your purchase. Isn’t it assuring to know that you have a trusted advocate in your corner and on your side?

Housing Considerations For Retirement Living

When the topic of Retirement Living comes up there are a number of special considerations that are usually included in the conversation. This article will discuss some of the absolutes in any search for property for a retired homeowner.

Low maintenance.

Usually one of the reasons for a move is to avoid some of the maintenance obligations that come with a larger traditional home. A good home for the retirement lifestyle will either be low maintenance or there will be a dedicated maintenance crew to take care of the maintenance. Often the best home with combine both. As an example a condominium normally will have a crew to take care of the exterior and sometimes this same arrangement would cover interior maintenance items like plumbing, heating, and air-conditioning

Easy on the knees

Even if there are no mobility impairments now, a good home for retirement will take into account that there will likely be mobility impairments in the future. That is why the vast majority of retirement communities have all the primary living spaces on the main floor. If more space is needed for things like visitor rooms they often go on upper or lower floors. And don’t forget the entryway to the home. If is always best if there is space for a ramp from the garage or a convenient exterior door. Even if you don’t need it, it is likely that some of your visitors may.

Convenient to activities

Another important aspect is convenience to various activities. Those activities are very different for different people but they often center around golf, fishing, church, or family. Sometimes the retirement community is built around these activities, sometime they are nearby. Consider how those retirement hours will be spent before your purchase.

Additionally if you want to increase your chances of having visitors consider moving to an area close to national attractions. This is one reason there are so many retirement communities near the Disney theme parks.

Easy to travel

One aspect that sometimes gets neglected when choosing a retirement community is access to easy travel. You don’t want to be isolated so consider how you will travel and how friends and family might travel to you.


One final aspect to consider is security. Ideally you want the ability to close your door and travel without worrying about having your home burglarized. Gated communities often help owners feel more secure. Having friends in the development who can check on your home is another option to consider.




Mesquite NV. Market Conditions


Market Conditions Summary for Mesquite, Nevada

Check your local neighborhood sales statistics for more detailed information.

National Summary (U.S.)
Pending Home Sales Rise in January to Highest Level in 18 Months

WASHINGTON (February 27, 2015) — Improved buyer demand at the beginning of 2015 pushed pending home sales in January to their highest level since August 2013, according to the National Association of REALTORS®. All major regions except for the Midwest saw gains in activity in January.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, climbed 1.7 percent to 104.2 in January from an upwardly revised 102.5 in December and is now 8.4 percent above January 2014 (96.1). This marks the fifth consecutive month of year-over-year gains with each month accelerating the previous month’s gain.

Lawrence Yun, NAR chief economist, says for the most part buyers in January were able to overcome tight supply to sign contracts at a pace that highlights the underlying demand that exists in today’s market. “Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” he said. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”

Yun also points to more favorable conditions for traditional buyers entering the market. All-cash sales and sales to investors are both down from a year ago1, creating less competition and some relief for buyers who still face the challenge of limited homes available for sale.

“All indications point to modest sales gains as we head into the spring buying season,” says Yun. “However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices. Appreciation anywhere near double-digits isn’t healthy or sustainable in the current economic environment.”

The PHSI in the Northeast inched 0.1 percent to 84.9 in January, and is now 6.9 percent above a year ago. In the Midwest the index decreased 0.7 percent to 99.3 in January, but is 4.2 percent above January 2014.

Pending home sales experienced the largest increase in the South, up 3.2 percent to an index of 121.9 in January (highest since April 2010) and are 9.7 percent above last January. The index in the West rose 2.2 percent in January to 96.4 and is 11.4 percent above a year ago.

Total existing-homes sales in 2015 are forecast to be around 5.26 million, an increase of 6.4 percent from 2014. The national median existing-home price for all of this year is expected to increase near 5 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.

Check your local neighborhood sales statistics for more detailed information.


The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.


Mortgage Rates

Mortgage Rates Fairly Steady to Begin Week

Mortgage rates were mostly flat again today, despite bond market weakness (lower bond prices generally mean higher rates).  Between MBS (the mortgage-backed-securities that underlie mortgage rate movement) and US Treasuries (the risk-free benchmark for all US debt/bonds), the latter fared worse.  In other words, mortgage bonds outperformed Treasuries.  That’s one of the reasons we didn’t see much movement in mortgage rates today.

The other reason was as simple as the shape of market movement on Friday.  Bonds improved throughout the course of the day but most lenders didn’t adjust rate sheets to reflect that improvement.  As such, today’s weaker bond market levels ended up being fairly close to those that were in effect when lenders last set rates on Friday morning.

The absence of change continues to be a good thing given that rates remain very close to their lowest levels in more than 8 months.  Only a handful of recent days have been any better.  4.0% is the most prevalently-quoted conventional 30yr fixed rate on top tier scenarios, though a few of the aggressive lenders remain at 3.875%.

Today’s Most Prevalent Rates

  • 30YR FIXED – 3.875-4.00
  • FHA/VA – 3.5-3.75%
  • 15 YEAR FIXED – 3.125-3.25%
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm
  • Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April.  Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher.  Geopolitical risks would also need to avoid flaring up (more than they already have)
  • For the first time since the election, we’re in a rate environment where you wouldn’t be crazy not to lock at every little opportunity/improvement.  Until/unless it’s broken, the highest rates of early-2017 mark the ceiling, and we’re now waiting to see how much lower we can go from here.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.



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