Lexington Named to Top 10 Places to Live in America

Relocate America has named Lexington one of the best places to live in AMerica...

Read Article on Lexington Here.......

See all 10 here...

New Construction Permits Up- Another Positive Sign?

There is an article in todays Lexington Herald Leader, that says construction activity is up 40% this year from last year. Good news unless you consider it was virtually zero for last year.....but all being told I think this is a good sign, see article here.

http://www.kentucky.com/181/story/766496.html

Pace of building picks up in Lexington
By Scott Sloan and Greg Kocher -
Long associated with only doom and gloom, the economy became the reason for hope last week when Lexington Mayor Jim Newberry pitched a city budget that proposed a 1.5 percent increase in spending for the next fiscal year.
Citing a 40 percent increase in building permits for single-family homes, Newberry said there's "legitimate optimism" about city revenues.
It's an optimism shared by those who follow building trends around Lexington, although it appears to have not yet spread to surrounding counties. Those in the city say the rise in permits might be an indication that the housing business, whose mortgage meltdown fueled the recession, could finally be turning around. .......................................

3 reasons why now’s the time for renter’s to become home owners.

If you are currently renting a home or apartment now is the time to consider becoming a home owner. There are 3 very simple reasons why this is true and here they are.

Sellers are motivated and there are some great deals out there
Over the past couple of months I have seen my clients get some great deal on property. I have had clients buy homes for several thousand dollars below appraisal. I have also had customers who have purchased foreclosures that require very little if any work and save a ton of money. In many other cases I have seen sellers make concessions like replacing old carpet, updating fixtures and paying all closing costs and pre-paid’s. The bottom line is if you don’t have a house to sell you are positioned as good as you could possibly be to get a great deal on a home. Make sure you are connected with a great Realtor and they will help you find it.

Mortgage Rates are at Historic Lows
The Federal Reserve is currently purchasing Mortgage Backed Securities in an effort to drive mortgage rates down to boost the housing market. (For an in-depth explanation of this see Marty Preston’s Blog entry titled A Mortgage Pro’s Take on the Market from April 2nd) What this mean to you is that interest rates have dropped to low’s that have never been seen. Take this example; I have a first time buyer client who was renting a 2 bedroom town home in the Hamburg Pavilion area for just over $900 per month. With the help of a local Realtor, we were able to find her a 3 bedroom home less than a mile away. The home was in great shape and needed no repairs. With a 3.5% down payment on an FHA loan (that was gifted to her by her parents) and today’s low rates we were able to get her a payment $10 per month less than her rent including taxes and insurance! At today’s low rates you can own a home for about what you are paying rent. Because of the amount of money the government is pumping into the financial system inflation will soon be on the rise. When it does mortgage rates will be to. Take advantage of the low rates now before it is too late.
The Government is going to give you an $8000 Tax Credit to Buy
As part of the recently passed stimulus package you will get an $8000 tax credit if you have not owned a home in the last 3 years and do it before December the 1st of this year. What this means in very basic terms is as long as you make less than $75,000 if your single and less than $150,000 if your married you will receive a line item credit for $8000 on your 2009 tax return. So think of it this way, if you normally get a refund take that amount and add $8000 bucks to it. If you normally pay, take $8000 away from what you would owe. This is a great incentive and something that everyone who can should take advantage of.

2009 is going to be the year of the first time buyer. The bottom line is if you choose to buy you are going to get a great deal, at a historically low rate and the federal government is going to give you 8 grand to do it. If you would to get to get pre-approved and receive a FREE Home Buyers Handbook give me a call today!

Happy Home Buying!


Brad Hacker, Senior Mortgage Planner
mymortgagepro
Toll Free Phone (866) 293-0411
Fax (859) 293-0511
Mobile (859) 351-6495

It's Everywhere

Now even the radio ads for cars are making uninformed remarks about the real estate market. Not that a KIA dealer would have any insight or knowledge of ANY real estate market in my opinion, but this advertisement caught me in a strange way.

Really Deep Cheesy Narrator "Would you pay 60% too much for a new house?"
Clueless buyer "Not in this market!"

So that leads me to the natural question, in what market would you ever pay 60% too much for a house?
She must be from Florida somewhere like Miami, or maybe California, Phoenix, or Las Vegas. One thing for sure she was not anyone I know. So if there are any real KIA shoppers out there willing to pay 60% too much, heck even 10% too much for a home, let me know. I have a bunch you can buy. And yes you will only need a job and a down payment.....

Ty

Commercial Lending

I would like to get someone to talk about their experiences lately with commercial lending, any takers let me know. I am currently in the process so I will throw my two cents in too.

FINALLY!!!!

I finally found it, a positive real estate article online. It is pretty generic and basically what we say everyday, but none-the-less....

http://realestate.yahoo.com/promo/10-mistakes-first-time-home-buyers-make.html

The market is really heating up, every agent I talk to is as busy now as ever.....

$8,000 Tax Credit for First-time Home Buyers

New $8,000 Tax Credit for First-time Home Buyers

Great news for first-time home buyers in 2009! The stimulus plan that President Obama signed into law contains a new $8,000 tax credit for qualified first-time home buyers. And, unlike the $7,500 tax credit from last year, this credit does NOT have to be repaid to the government, as long as you stay in the home for at least 36 months after the purchase date.
Remember, a tax credit is much more valuable than a tax deduction. A tax credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. This means the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.

Who?
First-time buyers or anyone who hasn't owned a home in the 3 years prior to a purchase of a primary residence may qualify for a tax credit of up to 10% of the purchase price or $8,000, whichever is less. To qualify for the full credit, the buyer's modified adjusted gross income must be less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a
joint return. Partial credit is proportionally reduced for incomes under $95,000 (single) or $170,000 (married). For married taxpayers, the homeownership history of both the home buyer and his/her spouse are taken into account. This means if you or your spouse has owned a principal residence in the last 3 years, neither you nor your spouse qualifies for the credit.

What?
According to the IRS, a primary residence is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence. If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

When?
The $8,000 tax credit is available for qualifying home purchases made from Jan. 1, 2009, until Dec. 1, 2009. This is not a typo. To receive the credit you must purchase a qualified home before December 1st, 2009 – not the end of the year.

How?
Unfortunately, you can NOT use the credit as a down payment. To receive the credit, you must purchase a qualified home first and then claim it on either your 2008 or 2009 taxes. If you make a qualified purchase after April 15, or after having already filed your 2008 taxes, you and your tax professional can submit an amendment to your return. To claim the credit, use
form 5405.

Why?
The current combination of lower home prices and lower interest rates makes for an amazing opportunity to buy real estate. Add to that this $8,000 gift from the government, and renting a home just doesn't make much sense.

If you or someone you know is ready to stop paying the landlord's mortgage and start building equity in your own home, give
us a call. We'll run the numbers and see what makes sense for your individual financial needs.

Sincerely,
Wade Kundinger
Royal Mortgage Company, Inc.
(859) 264-8183
wkundinger@insightbb.com

Mike Gooch Auctioneer

Here is the question session with Mike Gooch with the Gooch Auction Group, the name that sells!

1. What is your single best piece of advice for sellers in today’s market?
Price it right. Make it saleable (i.e. Clean the carpets, increase curb appeal etc.). Every seller really does not have the best house on the street. Take a reality check.

2. What is your single best piece of advice for buyers in today’s market
For them too, to take a reality check. We are not in Detroit, Las Vegas, or Florida. The market here is OK to good at best. If you want to make ridiculous, low ball offers, do it somebody else’s watch. I have sold 3 properties in the past week that have been scheduled for auction, before the auction, for good prices. Does that happen in a bad market? A big NO!!!

3. Where do you see the residential owner occupied market going in the:
a. Next 6 months?
Stabilizing
b. Next year?
Stabilizing
c. 5 years?
Who knows?! Better economists than me have guessed and failed, I’ll plead the 5th on this one and the next one
d. 10 years?
4. If someone has to sell a home before they can buy what strategy do you recommend currently
Explore the benefits of an Auction of course. No question.. Take a look at www.goochsells.com

5. Do you think it is a good time for investors to be in the market?
Absolutely!

6. What area of town or state do you see having the most attractive upside the next few years?
A place called Chicken Bristle, KY.. Definitely room to expand there!

7. What do you think are the most attractive features buyer are looking for today in a home?
Unfortunately -Price. Turn off the TV and get real.

8. Where do you see real estate, as a profession, going in the future?
Only the strong will survive. The 20% that is already doing 80% of the biz will be fine. The “part-timers”.. well the outlook is grim.

The commercial side of foreclosures are just beginning. “Hang on, this pony’s gonna buck!” Concerning the “big” picture this is probably going to hurt lenders more than the residential side. i.e. – Goodies/Circuit City etc. – (just to name two, there are many more!) going under pulling out of major strip centers & malls.

9. What has surprised you the most the last year in real estate?
Unreasonable Buyers & Sellers alike. Sellers wanting more than the property is worth, buyers wanting to pay less. We aren’t selling used cars here. It’s real estate.

10. What changes have you made in your business plan to adjust to this market?
The thought of hiring more help. My business has never been better.

Thanks to:
Mike Gooch, AARE Auctioneer/Broker
1795 Alysheba Way #1101
Lexington, KY 40509
Phone: (859) 494-SOLD (7653)
Fax: (859) 543-1644
info@goochsells.com

National Article = Local Effects

Gain Seen In Pending Home Sales, Housing Affordability Sets New Record

WASHINGTON, April 01, 2009
Pending home sales have edged up, hinting at a possible pickup of sales activity in coming months, according to the National Association of Realtors®.
The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in February, rose 2.1 percent to 82.1 from a reading of 80.4 in January, but is 1.4 percent below February 2008 when it was 83.3.
Lawrence Yun, NAR chief economist, said the market is continuing to underperform. “Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we’ll see additional sales gains,” he said. “More buyers are getting into the market to take advantage of stimulus incentives and much improved housing affordability conditions, but it will take a few months before we could see this turn up in measurable sales contract activity.”
Also in February, NAR’s Housing Affordability Index2 rose to a new high.
The PHSI in the Northeast rose 10.6 percent to 63.9 in February but is 11.2 percent below a year ago. In the Midwest the index jumped 14.5 percent to 83.1 and is 3.4 percent higher than February 2008. The index in the South rose 4.4 percent to 85.8 in February but is 0.1 percent below a year ago. In the West the index fell 13.5 percent to 89.6 and is 1.7 percent below February 2008.

Link to Entire Article:
http://www.realtor.org/press_room/news_releases/2009/04/phs_gain

My Questions Answered

Here are a few of the questions I asked other agents to give me their input on, but here are my responses....

1. What is your single best piece of advice for sellers in today’s market? Set your price for this market, not last year or two years ago. Also the condition of the home needs to be ready to sell, don't price or list it for sell with the idea that you can negotiate the price or fix it later. There probably will not be an offer to negotiate on...

2. What is your single best piece of advice for buyers in today’s market?- Just because it listed for $X does not mean that you can get it for a lot less. You still have to be willing to pay what it is worth, and the seller may have priced it at 100% of its real value. Do some research with your agent to see the real value. Use the real total value and cost, not just the list price as your gauge.

3. Where do you see the residential owner occupied market going in the:
a. Next 6 months? - Inventory coming down, prices stable. Good areas and first time buyer price ranges may be stronger than others.
b. Next year? - I think there will be a good demand for new construction as right now there are virtually none being built, but that is a good thing I think.
c. 5 years? - I think the demand for higher energy efficient homes and neighborhoods with a good community feel will be in demand.
d. 10 years? - Who knows, but I bet the ones who buy today will be very happy....especially with these rates.

How Weather Affects the Effect

The last few days are a classic spring in KY case study. Which gives an interesting chance to get into the psychology of how that affects buyers and sellers. One of my theories on real estate is that this time of year your clients motivation, and activity are directly affected by the weather. Take for instance this past weekend, weather was nice and sunny and people were driving around and the activity was high. Today its cold and about to snow and the activity is way down as a result. I relate it to the mindset of the economic factors that are currently in place, the "economic incentives to buy", i.e. tax credits, super low rates, high inventory, natural cycles, etc., are like the weather. When they are good, its good. When they are bad, its bad. But at some point both reach a tipping point, and too much of a good thing gets old and as a result has little effect. And it takes a little blip in the cycle, like the weather today, to cause you to step back and realise how nice it really was yesterday. So if you didn't take advantage of yesterdays weather, don't let the other good things pass you by don't wait for the next sunny day. Because you never know when that will be, and then when the incentives slowly start going away, you will be wishing you hadn't.

Buyers Coming Out of Woodworks?

I have spoken to several other Realtors and lenders the past few days, and we all agree on two things:

1. We are all busier than we have been in a year or two
2. Everybody "says" they want to buy, and are looking, but are they and can they?

So the buyers are coming out of the woodworks right? Are they really buyers or are they just tire kickers? That is the current trend I am watching and I will be asking everyone I talk to the next couple of days, as it will be the unofficial holiday weekend in Lexington, the first weekend of Keeneland, there will likely be a lot of voice mails being reached the next few days. Including mine I am taking the day off, BUT not for Keeneland.

Ty

Mortgage Pro's Take on Market

IS NOW THE TIME TO REFINANCE MY HOME LOAN?

Rates are at all-time lows
Freddie Mac, www.freddiemac.com, is reporting the average 30 year fixed rate to be 4.85% with 0.7% in points payable. This is the only source I use to track interest rates because these numbers are based on actual loans instead of advertised “quotes”. As we all know, many lenders tend to “low ball” their advertisements in an attempt to make the phone ring and unfortunately we find all too often that the advertised rates aren’t actually what gets sign at closing.

How did they get here?
Before we can understand where rates are heading, we must first understand how they got here. Mortgage rates are set based on the yield and price being paid for their bonds which are called mortgage backed securities. These bonds trade on an open market just like any stock you would look up. The lower the yield paid on the bond, the lower rates are at the time. Over the past 6 months, the US Government has invested hundreds of billions of dollars into these mortgage backed securities in an attempt to get the yields low and to keep them there. The first installment came from the Treasury under the direction of Hank Paulson and there have been two additional announcements from the FED. The most recent commitment was made from the FED on March 18th.

Where are they going?
The Treasury’s first injection in early November 2008 of approximately $500 billion pushed mortgage rates from over 6% down to just above 5% in just over a 30 day span. In early December the FED announced a similar investment commitment and projections of 4% rates began to run wild in the media. Jim Cramer predicted a 3.80% mortgage on his CNBC broadcast, WRONG! Those of us who follow these markets closely immediately realized the difference between the two plans and cautioned our clients that rates would not be hitting 4%. The Treasury bought the securities in bulk thus pushing the yield down very rapidly. The FED’s plan called for the purchases to occur over a 180 day cycle. This meant rates would remain low for the next six months as opposed to going significantly lower for a short period of time. The FED’s most recent announcement does the exact same thing except extends the time-frame through the end of this calendar year. The bad news is that rates aren’t going much lower. The good news is that rates aren’t going much higher.

Don’t take my word for it
On March 27th, Bloomberg quoted John A. Koskinen, Freddie Mac’s Chief Executive Officer, stating “mortgage rates are probably as good as they’re going to get and the housing market is likely to rebound sooner than some forecasts.” He went on to say, “interest rates are probably close to bottoming out, and therefore we are telling people to buy a house now.”

Now is the best time in the history of our market to either purchase a home or refinance your existing home loan. The key is working with someone who understands how a mortgage should properly integrate into your overall financial plan. Although a 30 year fixed mortgage is a simple product, you can cost yourself thousands of dollars by not having it tailored to fit your financial plan. The simple fact is that someone planning to move in the near future, someone with children entering college in the near future, and someone planning on living in their current home for the rest of their lives, all require a different plan. If your lender is simply quoting you a rate from today’s pricing sheet, there is a great chance you are about to cost yourself a lot of money.



Best,
Marty

Contact:
Phone (859) 293-0411 x234
Fax (859) 293-0511
www.martypreston.com
mymortgagepro

Pulse of KY Real Estate

I would like to know what is moving out there in the real -real estate world in KY, and what buyers looking for, besides repos, want to know or aare thinking, and what is working for other agents and buyers/sellers etc. So over the next several weeks I am going to send questions to a few agents, builders, and clients asking them. I will post them here. Stay tuned to learn more....

Today 4-1

One strange trend I am following, actually a multi-part trend. as activity is picking up, it seems every deal lately involves some sort of bank concession. That is good, banks are finally allowing people to explore options to sell homes short. At least in theory. They say they will explore the option, but getting there is in my experience a different story. One LARGE lender, that I will not name but is lets say, wide spread across the country, is simply a nightmare to work with on this type of sale. Now when any agent sees that the deal is a "possible short sale" the first question is: is it _____(that company?) The nightmare stories are too many to count. So I guess it is a good sign that they are allowing people the option more to do so, but I hope it is not just lip service to appease the federal money coffers. I have a side story on my other BLOG on that story go here to read it...www.TySellsHouses.com