The Kestner Team

YEAH, RAH!!! THINGS ARE PICKING UP!

In an article posted by RisMedia, The National Association of Realtors® reported pending home sales increased as more buyers took advantage of improved affordability conditions. Big gains in the South and Midwest offset modest declines in other regions. (As always, the real estate market in the South (currently except for Florida) is much stronger than other regions.)

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in December, rose 6.3% to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1% higher than December 2007 when it was 85.9. Lawrence Yun, NAR chief economist, “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month,” he said. “The biggest gains were in areas with the biggest improvements in affordability.”

NAR’s Housing Affordability index rose 10.9% in December to 158.8, the highest on record. The HAI shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

The Pending Home Sales Index (PHSI) in the Northeast slipped 1.7% to 62.1 in December and is 14.5% below a year ago. In the Midwest the index jumped 12.8% to 83.7 but remains 1.2% below December 2007. The index in the South surged 13.0% to 96.8 in December and is 1.6% above a year ago. In the West, the index fell 3.7% to 97.5 but remains 17.5% higher than December 2007.

The National Association of Realtors continually lobbies for the stimulus package to include fixes that will turn around the housing market which will in turn boost the economy.

So, FINALLY, home buyers are understanding that there has never been a better time to buy a home. Again:

. PRICES ARE LOW

. THERE’S A LOT TO CHOOSE FROM

. INTEREST RATES ARE AT OR BELOW 5%

Most home buyers are purchasing with FHA loans. Through FHA, you can put down as little as 3% on your loan! You can also negotiate for the SELLER to pay part of your closing costs thereby getting you into your dream home with little money out of your pocket! And FHA’s requirements for credit scores, etc. are not as high as a typical lender’s.

Example: You have your eye on a home that is listed as a foreclosure. They are asking $200,000 and you think there is no way you can afford it. But, YOU CAN! Here’s how it works!

1. Because it’s a foreclosure, you have much more negotiating ability – you can make them an OFFER.

2. You could offer the seller $190,000 and ask the seller to pay your closing costs (which would be about $5,000). You get an FHA loan with 3% down ($6,000).

3. So, you would be purchasing a home for $190,000 that will be worth $240,000 again in a couple of years, you got the seller to pay your closing costs, and you only have to put $6,000 down on your loan. AND YOUR MORTGAGE PAYMENT WOULD ONLY BE $1,000 A MONTH!!!!

4. AND, your realtor informs you that the previous owner paid $240,000 for this home in 2005. We know the real estate market will come back, so this means you already have built-in equity of $50,000!

YOU can do this, and we’re here to help!