Chief economist for NAR says we will know soon if the housing stimulus worked or not.

“If the pause in housing activity only last another month . . . then I think we’re on our way to a decent recovery,” Lawrence Yun, chief economist of the National Association of Realtors told St. Louis Realtors on Monday. “But if the pause lasts beyond August, then we’re looking at trouble.”

Yun also sited jobs creation as a major indicator for an economic turnaround.   “If we see 1/2 million jobs created in the second half of this year – that is a good sign that the economy is turning around,” Yun said.  “Unfortunately, it may take over four years for us to recover from all the job losses we have sustained so far.”

“A possible ‘Double-Dip’ in the housing market is a concern, but it would be mild considering the huge drop in home values we have already seen,” Yun said. “The bigger fear is whether consumer psychology is damaged enough to create an ‘over-correction’ in prices.”

Yun also warned that Realtors must get used to dealing with short sales and foreclosures because they are not going away.  “Distressed home sales will continue to be over 1/3rd of the St. Louis housing market,” he said.

In regards to the housing stimulus, Yun says the National Association of Realtors estimates that nearly an additional one  million buyers entered the housing market to take advantage of the tax credit for homebuyers.  “These are buyers we estimate would not have bought homes if the incentive wasn’t available,” he clarified.

Yun also spoke about the possibility of a ‘housing shortage’ within the next 2-3 years.  “Household formation is poised to rebound,” he says. The recession has forced college graduates to move back in with their parents and for some to “double-up” with roommates.  “If housing starts continue to drop as the economy improves, there will be a lot of people looking to buy houses.”

Visit your St. Louis Real Estate Information site for more details.

In St. Louis county, during the past 6 months, 3072 homes were sold.  During that same period of time, 3694 homes expired out of the Multiple Listing Service (MLS) without a successful sale.  Most St. Louis real estate listings do not sell.

Marketing exposure contributes to this lack of success.  But I believe the most significant reason that homes do not sell is pricing.  You see, by virtue of the fact that they are included in the MLS, they are getting a great deal of exposure.  All real estate agents have access to the listing.  And remember that most buyers find a house through a Realtor.

But Buyers and their Realtors typically do not look at overpriced listings.  And if they do, they usually do not make realistic offers if they have to suffer the stress of “low-balling” the seller.  I talk to sellers everyday who say, “Let’s start the listing high and see what happens.”  What happens 99 out of 100 times is that the house gets no showings.  By the time we get realistic with the price, the “Days on Market” make the house look like it must have some defect.

St. Louis, and the rest of the country, has been experiencing a real estate recession.  The best way to combat this crisis is to work with a Realtor who know how to price homes.  You must have a Realtor who researches prices every day and knows how to apply them to your situation.  For more information, please visit http://www.RussellNolting.com.

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via Median Price for Single Family Properties in BALLWIN, MO 63011.

Front of 217 Glen Cove Drive in Chesterfield

JUST LISTED in Chesterfield — popular Westbury Manor. This home is not in MLS. Seller is listed with Nolting Real Estate but is not cooperating with outside agents! Please call Russell at 314.267.2636 for details about this 5 bedroom (3 main floor, 2 in LL/big windows). Hardwood floors, protected by carpets, look great where visible. Three bedrooms and two full baths on main floor. New tile in baths. Kitchen has been opened up and now features stainless appliances — brand new. Large living room/dining room combination as you enter this home. Anderson wood windows are older but very high quality. Brick four sides with enclosed soffits. Lower level is finished and has 2 large bedrooms with full windows, and a large rec room with door to nice patio. Also another full bath. Furnace, hot water heater, AC, and roof are new!! Call Russell for more details and disclosure statement.  You can also visit this Westbury Manor ranch on my website.

We.ve seen a solid increase in St. Louis real estate sales this year.   Lawrence Yun, chief economist of the National Association of Realtors is predicting a 20% increase in home sales for the first half of 2010.  We can count on 2.6 million home purhcasers taking advantage of the credit.  Yun admits that his prediction is assuming that we will continue to see historically low interest rates of around 5.0 to 5.5% — for today’s rates contact my mortgage partner Matt Eversgerd of Stifel Bank at 314-620-7227.

Currently, the Fed plans to end its purchase of Mortgage Backed Securities.  We will see rates rise on this action.  But we shouldn’t see rates go through the roof — they will likely land in the high 5s.  The rate change from today’s 4.875 for 30 year fixed rate money to the likely 5.875% we will see in 2010, means that every $100,000 that you borrow will cost you an additional $60 per month.

For example, a $250,000 loan today has a principal and interest payment of $1324. If rates increase a full percentage point, as expected by mid-2010, that same loan amount will cost you $1480.

I’m optimistic about 2010.  Throughout this past year the St. Louis real estate market has had it’s ups and downs, but my sense is that our outlook is better than it was a year ago.

One of the reasons for my optimism…. During 2008 and 2009, while the overall St. Louis transaction volume sank by 30%, mine went up.  I’ve sold 80 homes during the 08/09 decline.  So, Nolting Real Estate is doing something right for St. Louis real estate buyers and sellers.  Check us out.

The President has approved an extended and expanded tax credit for home buyers

The 2009 housing tax credit applied to first time home buyers only.  The new tax credit has expanded to include repeat home buyers — you may be eligible.  St. Louis real estate is turning around as a result of this tax credit.

**To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
**The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
**The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
**The tax credit applies only to homes priced at $800,000 or less.
**The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
**Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

With a 98 to 0 vote, the senate voted to extend the first time homebuyer tax credit yesterday.  Moreover, the vote also calls for an expansion of the credit to current homeowners.

The details:

The current first time homebuyer tax credit is set to expire November 30, 2009.  This means that a closing must take place by this date.  In other words, the current credit is over.  Today’s the 5th of November.  With Thanksgiving just around the corner, it would be hard to put a home under contract today and confidently expect it to close before December.  It can be done, but it’s not a guarantee.

The extension calls for a credit to be given for all contracts written by April 30, 2010 and closed by June 30, 2010.  I’m not sure how that will be monitored if it goes in to effect.  In other words, I’m not sure how you could stop a buyer from back-dating a contract — we’ll just have to see.

Regarding expansion, the new credit — if passed — would allow existing home owners who have lived in their current home for 5 years or more to take a $6500 credit if they buy a new home.

Also, the Senate bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

A short sale can be time consuming and complex

A short sale is the selling of property to avoid foreclosure, the catch being that the property is being sold for less than the amount owed on it.  Short sales are becoming more and more popular in the St. Louis, MO, real estate market. What makes a short sale tricky is that the sale price is not up to the seller, the lender has to agree to the purchase price.  The home owner isn’t walking away with any money at closing in the case of a short sale so he doesn’t care if the home sells for a dollar, the bank’s involvement is to reduce their loss as much as possible and the buyer just wants a bargain.

The basic process of a short sale is:

• Borrower must be in arrears on loan payments
• Borrower or broker contacts lender to discuss the possibility of a short sale
• Potential buyer makes offer, knowing what is owed by borrower/owner of property
• Lender reviews loan and offer
• Borrower has to show/prove financial hardship
• Lender and broker discuss value and condition of property and examine any offers
• Lender makes final call

The short sale process looks easy on paper, follow the steps and the deal is done, short sale completed.  However, in reality the communication between the borrower, lender, Realtor and potential buyer is complex and time consuming.  Simply wanting a short sale won’t make it happen.  Using a CDPE (Certified Distressed Property Expert) eases the pain and insures you better success when trying to complete a short sale.  There are few CDPEs in St. Louis county.  Nolting Real Estate has 2 on staff.  Being in financial stress is not easy on anyone and using an expert will help you get the job accomplished in a more timely manner and help create a successful real estate transaction.

If you’d like more assistance, please call me at 314-267-2636.  And if you’re searching for a home, please check my St. Louis Real Estate Listings resource.

1. Short sales are impossible and never get approved. It is true that short sales are more difficult but they are not impossible. A Certified Distressed Property Expert has extensive training to help homeowners in distress.
2. Banks Don’t Accept Short Sales. In reality, banks are doing whatever they can to avoid a foreclosure.
3. You must be behind on your mortgage to negotiate a short sale. Many lenders today focus on verifiable hardship, monthly cash flow shortfall and insolvency - not just people in default.
4. Buyers Avoid Short Sales. Many agents report that buyers call them looking for short sales. Short sales are becoming synonymous with a “good deal”, specifically with international buyers.
5. Listing your home as a short sale is embarrassing. Recent estimates state that 1 out of 5 homeowners in the U.S. is in this situation. You are not alone!
6. Banks prefer to foreclose. Banks do NOT want to foreclose. Banks, investors and the federal government have all publicly stated that if a person qualifies for a short sale, then the deal needs to be considered.
7. There is not enough time to negotiate a short sale before my foreclosure. Many lenders today will stall a foreclosure up to the final day of the process, with a legitimate contract.