The Kestner Team

FEBRUARY HOME SALES INCREASE; PENDING SALES CONTINUE TO RISE

There were 1,308 home closings reported for the month of February, according to figures provided by the Greater Nashville Association of REALTORS®. 

This represents an increase of 3.2 percent from the 1,267 closings reported in February 2009. Year-to-date closings through February are 2,341, a 4.5 percent increase from the 2,241 closings reported through February 2009.

“The number of closings are up from last year, which has been the case now for five consecutive months. Pending sales have also increased, which is a positive sign for what we can anticipate for the spring,” said GNAR President Lucy Smith. “With median residential prices virtually the same as last year, median condo price down slightly and interest rates still remarkably low, the overall market remains stable with some cause for optimism as people take advantage of these conditions.

“It was expected that the market would stabilize after the significant increases in closings at the end of 2009 due to the tax credit deadline. But, with the next deadline at the end of April, it is reasonable to think that we could see another burst of activity in spring and early summer. And, with increased activity and energy in the marketplace, it is possible that there will be more closings beyond first-time homebuyers in the upcoming months,” Smith continued.

A comparison of sales by category for February is:

There were 1,614 sales pending at the end of the month, compared with 1,452 pending sales at this time last year. The average number of days on the market for a single-family home was 89 days.

The median residential price for a single-family home during February was $159,900, and for a condominium it was $149,950. This compares with median residential and condominium prices of $160,000 and $151,120, respectively at this time last year.

Inventory at the end of February was 23,159 up from 23,122 in February 2009. The current inventory of properties by category, compared to last year, is:

“Inventory is up slightly from last month and pretty even with levels from last year,” added Smith. “With less than 60 days left until the homebuyer tax credit deadline, excellent interest rates and a good variety of homes available in the Greater Nashville market, the spring and summer selling seasons could be better than what was the case during the past two years.”

The Greater Nashville Association of REALTORS® is one of Middle Tennessee’s largest professional trade associations and serves as the primary voice for Nashville-area property owners.  REALTOR® is a registered trademark that may be used only by real estate professionals who are members of the National Association of Realtors and subscribe to its strict code of ethics.

©Copyright 2007-2011 GNAR.

Federal Reserve Vows to Keep Interest Rate Low

By Tom Petrun

RISMEDIA, March 18, 2010—(MCT)—Steady as it goes, Federal Reserve policymakers recently declared in their post-meeting statement. They left their benchmark short-term interest rate unchanged in the range of zero to 0.25% and once again pledged to keep it low for an “extended period”—retaining the phrase they’ve used for the past year.

The central bank continued to sound relatively upbeat about the economy, saying the data it looks at suggest that “economic activity has continued to strengthen and that the labor market is stabilizing.”

10 Staging Tips to Help Your Home Sell

An article from RISMEDIA, March 19, 2010—(MCT)—

Want to sell your home? Get out the bucket, mop and Mr. Clean. The key to making a positive first impression is simple, said Sandra Rinomato, host of HGTV’s popular “Property Virgins” show.

“Get it clean, clean, clean,” said Rinomato. “If your house isn’t clean, it instantly sends up negative thoughts that the home is not well maintained. If your house is spotless, you’re ahead of the game,” she said.

But don’t stop there, advised Rinomato. To increase your chances of making a sale, “stage” the house to make it as attractive as possible. Until recently, “Staging meant pulling out all the stops—setting the dining table with your best china and crystal, arranging flowers, lighting candles,” she said. “Now we take the minimalist approach. Basically, you want to strip the house to its bare essentials, depersonalize it so potential buyers can superimpose themselves and their lifestyle on the house.”

Rinomato offered the following tips for staging a home:

1. Visit model homes and examine shelter magazines for inexpensive decorating ideas. Always keep in mind you are not decorating for yourself but for the general public.

2. Start with the outside. Give the house a fresh coat of paint, add shiny hardware to the front door and plant a few flowers to send a subliminal message the house is loved and well cared for.

3. Declutter every room to make it look larger. Get rid of family pictures, trophies and knickknacks. Closets and drawers should be no more than 30% full.

4. Invest in eco-friendly but bright lights. Open the drapes or remove them completely. “Light, bright rooms give the impression this is a happy place—and everyone wants to move into a happy place,” said Rinomato.

5. Feature only a few pieces of furniture with mainstream appeal. Pull pieces away from walls to make rooms look bigger.

6. Make sure a room’s primary use is obvious. A bedroom should look like a bedroom, not an office, hobby center or gym.

7. Bedrooms and kitchens are difficult to stage because they are in daily use, but make the effort. Clear everything off the counters and nightstands, roll up the rugs and hide the laundry hamper. Buff the cabinets with car wax and clean under the sinks. Invest in pristine white bed linens and towels.

8. Minimize the “pet effect.” Remove food bowls and litter boxes to the utility room. Deodorize thoroughly.

9. Organize the utility room and garage. Hang up the bicycles, roll up the hose. Renting a storage locker is worth the cost if it helps you sell faster and for a higher price.

10. Once your house is staged, invite your friends or Realtor over and walk them through to get an objective opinion.

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I received an article by Mr. Mike Larson today that was forwarded to me by one of mortgage brokers.   It’s an interesting article regarding the housing market and thought I would post it for all to see.   As always, I’m compelled to remind everyone that the media reports “national” market information which is highly fueled by those cities with the worst economy i.e. Los Angeles, Los Vegas, Phoenix, Cape Coral, etc.  Always remember that although Nashville is also in a housing “correction”, our economy is much stronger and our housing market has not suffered nearly as much as other cities.  Here’s the article:

Name: Mike Larson
Title: Interest Rate and Real Estate Analyst

Recognized as an interest rate and mortgage market expert, Mr. Larson’s views have been quoted in numerous publications nationwide, including the Washington Post, Chicago Tribune, Dow Jones Newswires, Associated Press, Reuters, CNNMoney.com, Sun-Sentinel, Tampa Tribune and the Palm Beach Post.  His in-depth analysis of the housing and mortgage market and accurate forecast of the subprime crisis has lead to frequent appearances on CNBC, CNN, Fox Business News, and Bloomberg Television, as well as many nationally syndicated radio shows.  Mr. Larson’s understanding of the U.S. real estate market has also been recognized overseas, having recently been featured in a documentary on the subject produced by a Barcelona-based television station.  In addition, his writing has been acknowledged by both the National Association of Real Estate Editors and the Massachusetts Press Association.

Among the first analysts to call the housing slide, Mr. Larson’s policy paper, “How Federal Regulators, Lenders and Wall Street Created America’s Housing Crisis: Nine Proposals for a Long-Term Recovery,” received broad media coverage following its July 2007 submission to the Federal Reserve and FDIC.  In the paper, Mr. Larson accurately predicted the long-term impact of the deepening subprime mortgage crisis on the broader economy that the nation faces today.

Mr. Larson holds B.A. and B.S. degrees from Boston University.

Another Report from the Housing Market’s Front Lines

by Mike Larson   02-26-10

I’ve been talking about interest rates an awful lot lately … and for good reason. The next BIG story in the bond market is clearly the sovereign debt crisis.

But I don’t want to ignore the housing market, either.

My best-case forecast is still a recovery — albeit an anemic, lackluster, moribund one. Some of the latest numbers leave a few questions in my mind, though. So let’s recap where we stand …

Price Declines Ebbing as
Inventory Overhang Shrinks

Home prices have been plunging for a lot of reasons:

• They got way too expensive relative to incomes.
• The monthly cost of ownership got way out of whack with monthly rents.
• The supply of homes for sale exploded, while the qualification standards for home mortgages tightened.

But many of those underlying issues have been corrected by falling home prices.

As I’ve told numerous reporters over the past couple of years, falling home prices were ALWAYS part of the solution to the housing crisis. They would eventually restore price-to-income and own-vs.-rent ratios back to their historical norms … and bring out bargain-hunting buyers.

Now you’re starting to see the results of that in the home price data. December figures from S&P/Case-Shiller show that prices rose 0.3 percent from a month earlier. That was the seventh straight gain.

Prices still fell from the year-ago level. But the 3.1 percent decline was the smallest going all the way back to May 2007. Prices actually rose in six cities, led by San Francisco at 4.8 percent and Dallas at 3 percent.

A key driver of this improvement is the shrinking supply of homes for sale, which I described for you a couple weeks ago. Total new and existing home inventories have shrunk by 1.4 million from their peak more than two years ago.

Sticking to Tradition - Baby Boomers Have Few Roth IRA Conversions Planned in 2010

RISMEDIA-While the upcoming Roth IRA conversion changes may be a silver lining for Baby Boomers with recession-battered IRAs, a new survey by financial services company USAA found that most baby boomers plan to keep their Traditional IRAs intact instead of turning their tax-deferred savings into tax-free retirement income next year.

According to the survey, the majority (73%) of Baby Boomers who own an IRA are not planning to convert their Traditional IRA to a Roth IRA in 2010, which is when the household limit of $100,000 in modified adjusted gross income is scheduled to be lifted. Any investor who converts in 2010 can pay the tax bill over a two-year period.

The survey also found that conversion plans are not more prevalent among higher-income households that benefit from the income limit changes.

For respondents who own an IRA and have a household income of $100,000 or more:

• More than half (57%) are not aware that income limits on Roth IRA conversions are scheduled to be eliminated next year.
• Two-thirds (62%) are not aware that the converted funds are subject to tax.
• Only nine percent are planning to convert in 2010.

"There may never be a better time than in 2010 to create a tax-free income stream for retirement," said Terri Kallsen, senior vice president, USAA Wealth Management. "The combination of lower account values, historically low income-tax rates, conversion income limits lifting and the ability to pay the tax bill over two years provides a rare opportunity to potentially increase your income in retirement by hundreds, and even thousands, of dollars each month by eliminating taxes through a Roth IRA."

Some investors appear more likely than others to take advantage of the conversion changes next year, including:

• Investors with both a Traditional and Roth IRA are three times more likely (15% vs. 5%) to plan on converting than those who own a Traditional IRA only.
• Younger Boomers (aged 45-54) are more likely than older Boomers (aged 55-64) to say they plan to convert their Traditional IRA to a Roth IRA next year (11% vs. 5%), even though older Boomers are more aware of the income limit changes than younger Boomers (41% vs. 26%).
• However, most (67%) IRA owners surveyed aren't aware that any taxes would be due on converted funds. Of the one-third (33%) who are aware taxes would be due, one in ten (11%) didn't realize they would have the ability to spread the tax bill over two years.

"While a Roth IRA conversion may not make sense for everyone, it's important to understand the options available and the implications of taking, or not taking, action," said Kallsen. "Working with a salaried, credentialed financial planner can help you determine the best decision for your situation."

For more information, visit www.usaa.com.

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