$6,000 Government Housing Grant Approved

Utah is leading the way in economic recovery by choosing to ACT now and make smart decisions on our future and what drives our economy. Amazingly enough if you go downtown right now you will find more building construction going on then in most of the country given the current economic state. Construction drives this great state and Utah would like to get housing construction back on track. One way to do this is to clear out builders standing inventory and Utah has just approved a new grant to help do so.

With Governor Jon Huntsman’s encouragement our state legislature has passed a state sponsored housing stimulus program this week. This down payment assistance program, administered by the Utah Housing Corporation (UHC), will be available to qualified buyers of newly constructed homes. A total of $10 million has been appropriated by the state legislature. This appropriation will provide $6,000 grants for 1,666 Utah home buyers.



Just as the state acted quickly home buyers must also act quickly to claim their grant. Once the money for this program runs out.... It's gone.


To apply for a grant, an application must be submitted by the homebuyer’s lender. A grant can only be locked in when the loan is fully underwritten. The funds are wired in by UHC at time of closing and can be used to pay closing costs, buy-down rates, or as the down payment towards the purchase of any newly constructed home.


You do NOT need to be a first time home buyer to apply for this grant, however if you are a first time home buyer you can use this grant and still qualify for the $8,000 first time home buyer tax credit.

As long as the buyer meets income requirements of $75k for an individual and $150k for couples filing jointly a Home Run grant can be used on the purchase of any newly constructed home.

Key Program Facts

• The $6,000 Home Run grants can be used with the $8,000 federal tax credit
• Funds are immediately available at closing
• Home Run grants are only available for newly constructed homes
• Must be occupied as principal residence within 30 days after closing
• Co-signer can sign on loan but not on Title
• Income limits are the same as the Federal First Time Home buyer Tax Credit
• Deal must be fully underwritten in order to apply for grant
• Mortgage lender must request the funds for the buyer by submitting the following:
o Appraisal
o Certificate of Occupancy
o “Clear to Close” Form
o Grant Request Certification
• Conventional, FHA, UHC, USDA, VA and other loan types are eligible as long as it is a 30-year fixed rate loan
• $6,000 grant may need to be claimed as taxable income (a definitive ruling from IRS is pending)

My team is currently leading the way on this new grant and working with lenders in the know to make this grant a reality for as many as possible. Rates are low, new construction home prices are down, and down payment assistance is back for a limited time!

If you are in the market for a newly constructed home purchase I would love the opportunity to help you take advantage of this new program.

Please visit our new site www.ListedInUtah.com where you can view eligable properties by clicking on the "Home Run" button. If you have any specific questions please call me any time

-Dave 801-330-3963

Winning industry innovation

Has officially teamed up with:





Listed In Utah.com has recently been completely redesigned to give the buyer the complete online buying experience without all of the fluff. This is a completely listing centric website designed around properties NOT agents. You can search all homes listed on Utah's MLS system updated in real time.

Listed In Utah.com brings you the best local search around allowing several advanced searching techniques such as:

• Search filtering right down to the finest detail, find the home you really want!
• Search by price changes, catch a new hot deal the moment it is changed.
• Search by BANK OWNED properties specifically
• Search APPROVED SHORT SALES
• Save your searches and allow for price change e-mails
• All this and more in an easy to use search platform that will allow you to search directly from the home page. No more searching through mounds of mindless information just to find the search button!

We have now added the powerful RealEstate.Com brand to further support our growth. RealEstate.com will dramatically increase traffic to our listings by allowing your home to be posted on the LARGEST national Real Estate stage in the nation.

The Process:

• When a prospective buyer visits RealEstate.Com, your home will show up as a featured home and seperated from the rest since you have listed your home with a RealEstate.com agent.
  
• When the buyer shows interest in your property and requests more information the will be contacted within 30 seconds!!! While they still have your listing up on their computer screen.

With our award winning call center there is NOBODY in the industry that can provide this kind of customer service and response.

The key to selling your home is MAXIMUM exposure. Many companies can say they give you maximum exposure but do they really? It's not about getting you ON all the websites it's about where you land on those sites. Don't get lost in the crowd.

New Housing bill H.R. 3221 Passes...

H.R. 3221 passed

The long awaited housing bill passed and is awaiting a signature from President Bush who is expected to sign the bill Tuesday July 29, 2008. Below I will break down each part of the bill and explain what this actually means. There are a lot of items addressed in the bill and it is important to understand how this will help and hinder in each case.

GSE Reform:

GSE is "Government Sponsored Enterprise" (or entity), otherwise known as Fannie Mae and Freddie Mac. GSE reform will include a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median price, capped at $625,000. The effective date for reforms is immediate upon enactment, except loan limits which go into effect December 31, 2008 after the expiration of the economic stimulus limits.

This permanently increases the conforming loan limit. This will allow more people to get into homes without entering the "Jumbo" category and paying a higher interest rate.

FHA Reform:

FHA reform will include permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price capped at $625,500. FHA reform also includes streamline processing for condos. The effective date for the reform is immediate upon enactment, and the loan limits go into effect at the expiration of the economic stimulus.

This is a big win for all as FHA is quickly becoming the financing type of choice, and this will increase the loan limits for this type of financing.

Home buyer Tax Credit:

As I have recently blogged about, a $7500 tax credit that would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years. For more information on this topic please see my blog titled "Home Buying Tax Advantages".

This is an incredible incentive for first time home buyers when used properly and can be a great financial tool.

FHA Foreclosure Rescue:

A refinance program for home buyers with problematic sub prime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. There are some important time limits on this and it is a rather lengthy topic I will be blogging about separate this week.

This will help stop the stream of foreclosures and keep people from walking away from their sub prime mortgages.

Seller-Funded Downpayment Assistance Programs:

This portion codifies existing FHA proposal to prohibit the use of down payment assistance programs funded by those who have a financial interest in the sale. This prohibition does not go into effect until October 1, 2008. If you are looking to buy a home and need the seller to pay your 3% down payment, I would recommend you do so now!

Seller funded down payment works like this; FHA says that your down payment of 3% can come from a non-profit organization. For years the work around has been non-profit organizations set up to assist in this process. The seller would agree to contribute 3% to a non-profit such as Nehemiah and in turn the non-profit would pay your down payment minus a fee for the service. According to the bill a non-profit can still pay your down payment however it can no longer be funded by anyone with a financial interest in the property i.e. the seller.

This means buyers are going to have to have some skin in the game. The seller can still pay your closing costs in many cases but the buyer will be responsible for bringing in the 3% for their down payment.

Believe it or not this is actually a good thing for our market. Studies have shown that the less money someone brings in on a home the more likely they are to default.
VA Loan Limits:

This is a temporary increase of VA loan limits to be the same as the economic stimulus limits through December 31, 2008. If you are going to get a VA loan and you want to be able to go up to a higher loan amount you have until the rest of the year to do so.

GSE Stabilization:

This allows the treasury department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

The last few weeks the stability of both Freddie Mac and Fannie Mae have driven the markets down. This information confirms the continued stability and support for these organizations.

Mortgage Revenue Bond Authority:

Authorizes $10 billion in mortgage revenue bonds for refinancing sub prime mortgages.
National Affordable Housing Trust Fund:

Develops a trust fund funded by a percentage of profits from the GSEs. In it's first years the fund would cover the costs of any defaulted loans in FHA foreclosure program. In out years the trust fund would be used for developments of affordable housing.

CDBG Funding:

Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

LIHTC:

Modernizes the low income housing tax credit program to make it more efficient.

Loan Originator Requirements:

Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC - insured banks. The purpose is to prevent fraud and require minimum licencing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state.


In Conclusion:

This is simply an outline of the bill and I will be tackling each item individually through out the week to further explain the effect this bill will have on an item by item basis. This was a much needed bill for the nations real estate market and will help to get things back on track.

If you are thinking of buying a home this year and would like to know how this bill will affect you please contact me as soon as possible to discuss your situation.

Correction: 1101 homes sold in June

Last minute numbers came trickling in:

The county recorders office was caught off guard in June and wasn't prepared to record 1101 sales. It took a little longer for everyone to get all the information in and recorded but now near the end of July we have a final number of 1101 homes sold in Salt Lake County in the month of June.

Pulling numbers:

I went back to re pull numbers because of a disturbing article I found in the Real Estate section of CNN money. This article was speculating on the expected drop in median home price in 75 of the 100 largest cities. Obviously I looked down the list to find Salt Lake City as we have been tracking the growth of the sales price. To my surprise I saw Salt Lake City expected to lose 9.8% of it's value on median home price. A 9.8% drop in the median home price in one year is completely unheard of in Salt Lake City and I can't find a year where that has happened. One article prior on the same web site shows a first quarter median home sales price INCREASE of 3.5% listing the median home sales price in Salt Lake City at $225,700. The article that shows the decline between now and may of 2009 shows our median home price at $229,000, published may 8th 2008, which would mean by a little over 1 month into the second quarter we were showing another 1.5% increase. Bringing the total increase in 4 months to 5% by their own reporting. How can someone report a 5% increase in the first part of 2008 to a 9.8% drop by May of 2009, in my opinion based solely on speculation and mere guessing, with a straight face?
Anyone that has done any serious tracking of Salt Lake City's home market can see that there has not been a single month since 1995 that our home sales price has dropped by more than 2 or 3% and furthermore will not find a year with an average home sales price drop.

The reason I investigate these articles is because I track the numbers very close for Salt Lake County and report and source them right here in this blog. When I see this kind of malicious speculation by a well known source it is easy to pick out the manipulation of the article. $229,000 is a healthy median home price for Salt Lake City. The average home sales price in Salt Lake County for June of 2008 was $278,042 as reported by the Wasatch Front Regional Multiple Listing Service. This is higher than reported in 159 of the last 162 months.

This is not an attempt to slander anyone:

I am not trying to put down the credibility of any organization. I am simply calling for a large scale public awareness to common media manipulation. The thought pattern that "if it's on the internet it must be true", has become a reality. The kind of reporting that I have seen over the last 12 months has been malicious and dangerous and this is simply a call to action for all of us to question the corporations that have better ratings when the news is bad. If you would like a copy of the statistics from the Wasatch Front Multiple Listing Service please e-mail me.

Home Sales Up In June

Utah is no longer considered part of the West?

CNN reported today that ALL of the West experienced a drop in home sales. Once again our actual numbers reported by the Wasatch Front Regional Multiple Listing Service paint a very different picture. I think it is safe to say the number of homes sold in June are in and have been reported at 1,074 homes sold in Salt Lake County. This is up from May's 1,064, and Aprils 997. The average list price and reported sold price are both up as well. The average list price for June was $286,887 up from May's $281,180 and April's $278,355. The sold price is up to $279,401 up from May's $274,294 and April's $271,198.

Are you ready for the big number?

Home sales are up 69.13% since the beginning of 2008. The average sales price is up 4.2% in Salt Lake County since January of 2008. We have come a long way this year and are hitting some very positive numbers.
Do you remember the last housing crisis?

If we are in a housing crisis this year with the total number of homes sold for June at 1,074 then by that very definition you must clearly remember the housing crisis of 1996, 1997, 1998, 1999, 2000, 2001, and 2002 right? Well don't feel bad I don't remember those housing crisis years either and we are above or close to June numbers for all of those years.

Homes sold in June Historically:

1996 - 933
1997 - 886
1998 - 1027
1999 - 1146
2000 - 1173
2002 - 1158
2008 - 1074

If those years were not considered "Housing Crisis" years than it must be said that in the best of those years 99 home sales separate a "good year" from a "crisis year". What can be said for 1996 and 1997? We had sold 208 fewer homes in June of 97 and 141 fewer in June of 1996. How did we ever manage to pull out of that one?

Ignore the negativity and do what makes sense to you:

We have not had a crisis year in Utah. In fact historically we have not had a crisis year. We have sold a few less homes this year than last year. Our property values continue to increase and we have better and safer loan choices available to us now. We are not a dramatic state in increase or in decline so don't expect dramatic headlines from me. If it makes sense for you to sell your home or a buy a new one, if you need to down size or your family is growing, you can feel safe that you are in a great place to do so.

Salt Lake County Home Prices Rising

Can it be true?

I hear so many people talking about home prices dropping by incredible numbers each and every month and many times I have found myself questioning where this data comes from. The truth is that home prices in Salt Lake County are increasing, and have been since November of 2007. When a home is bought or sold through the MLS, and most are, that data is recorded. The MLS tracks the total number of homes sold, the total volume, the average list price, the average sold price, the list to sale ratio, as well as days on the market per county. This information is the most accurate and up to date data available. I am constantly blogging this information to the public to help raise awareness about what is really going on, so here is another attempt to try and bring clarity to an otherwise confusing housing market.

The Numbers Through June:



As you can see from the chart above, since the begining of the year both the listed price and the price homes are selling for has continued to climb. The rate of appreciation is lower but homes are still appreciating. When I hear that home prices are falling by as much as 10% I am forced to go to the numbers and see for myself. Home prices are up around 2% from January to June of 2008. Another number that sticks out to me is the DOM field or "Days On Market". The average time it takes to sell a home in Salt Lake County currently is 60 days. Sixty days on the market is not very long especially when I am hearing comments like "Homes are not selling", or "Homes are just sitting". The truth of the matter is that Utah has a strong economy and a very strong housing market and prices are continuing to increase at a healthy rate. All of the numbers for June are not in yet but it is looking like we will break 1100 homes sold in June. This is exactly what I had expected as pointed out in my previous blog post.

How the numbers are reported:

The media typically will report over a time frame which fits their story. For instance if home sales are up from last month but they are down from this time last year they will use a year over year scenario. If we are up from last year but down from last month you will reiceve a month to month blurb about the housing market. Up to this point the news that I have seen has been comparing 2007 - 2008 simply because the last half of 2007 was down and into the first half of 2008. There is an interesting scenario about to happen and I am curious to see the outcome. As we have reached the half way point in 2008 and the market is really stabalizing and improving at a healthy rate, the media will no longer be able to make a year over year comparison to promote bad news. July of 2007 showed the first significant drop in home sales and average home sales price. If the media is consistant and makes their year over year comparison for July they will have to report a huge increase in number of homes sold and will no longer, by their definition, be able to report a troubled market. In July for the first time in a year you will either have: A) Good news from the main stream media about the housing market, or the more likely scenario B) No news at all because good news typically does not sell. Homes, on the other hand, do sell!

It's STILL a great time to buy and you CAN still get a loan. If you would like the actual statistics for any other county in the state of utah feel free to send me an e-mail and I will send you the data so you can compare the numbers for yourself.

Salt Lake County Breaks 1000 Homes Sold In May

What is a normal Market?

You have seen the headlines, "Home sales drop dramatically", "Home sales decline 50%", etc, etc. If you are a regular visitor to this blog, then you already know I like to challenge headlines with "actual" numbers. Often we forget to look at where these numbers are coming from. We had a housing boom, although it was slightly more modest in the great state of Utah, we were affected by artificially inflated home sales. Many would consider the housing boom to have begun early in 2004 and to have tapered off here by the 2nd half of 2007. Taking a look at housing numbers during the boom will give us a clear understanding of what inflated housing sales numbers look like. Lets take the best months and compare straight across. The following numbers reflect homes sold in Salt Lake County.




As you can see here our sales really peaked in 2005 and 2006 with a high of 1953 sales in June of 2005. Since the June numbers are not in for 2008 yet lets look at May across the board. If you were to take May of 2007 and compare it to May of 2008, you could make a really strong case and a very misleading headline that home sales in May were down 65% from last year to this year. However the numbers on this chart are inflated quiet a bit due to the housing boom.

2000-2003 compared to 2008

Comparing 2000-2003 to 2008 will give a better comparison of a normal Real Estate market for Salt Lake County outside of a housing bubble setting.



If we take the same comparison as above you can see that we are getting very close to our 2000, 2001, and 2002 numbers. 2003 inched higher on the verge of the housing boom. While there is no doubt that 2008 has been the worst year on record in the last 8 years, is it really as bad as it looks when compared to more accurate data? In fact if you only take March to April data over the last 8 years we are mirroring 2002 and 2003, some of our healthiest years on record, where Aprils housing numbers increased over March.

The 8 Year Look:

Comparing year over year on the eve of a housing boom and right in the middle of a mortgage crisis can give very entertaining numbers. Remember bad news and wacky news sales. Over the last 2 years I have yet to see one news story that has made these gigantic comparisons with an explanation of what is normal and healthy. It is impossible to determine what a normal market is on such a small scale, specifically year over year. So lets see how we are doing since the start of the century:



Looking at this graph you can clearly see the housing boom. I urge you to print this off, take out a pen, and draw a line from May of 2000 to May of 2008 to get a more accurate feel of where our market currently is. I am sure you will see that our market is making a strong push back to a healthy, "Normal", market.

June is already looking good:

The numbers for June are not in yet but the mortgage and real estate professionals I have spoken with are busy right now working with buyers and new borrowers. My prediction is that June will stun us all pushing numbers well beyond 1100 homes sold in June. May's numbers have already told me that the decline is over and the numbers are beginning to level off. I believe June will only further make make this case. We live in a conservative state, our housing boom was conservative, and our decline in home sales was small compared to the rest of the nation. We have made it through the "housing crisis". Pat yourselves on the back and get ready for another 8 great years of steady economic growth in the state of Utah.