First Drop Expected for Home Prices This Year

 

The national median price for existing homes is expected to drop this year for the first time since the National Association of Realtors began keeping records in the late 1960s.

 

The NAR is forecasting a 0.7% dip in 2007 for the national median price for existing homes after a 1% gain last year.

 

NAR spokesman Walter Molony said "most areas should see modest gains, but some will see price declines. On balance, he said, prices should be flat.

 

The national median new-home sale price is projected to rise 0.4% after a 1.8% gain last year, according to the association. 

 

According to Molony, new-home prices did decline 2.4% in 1991.

 

What is your opinion about the condition of the real estate market in U.S. now? Share your opinion with us.

 

 

Real Estate Investment Opportunities Abound

 

Real estate has its market cycles like any type of investment, and lately it's been getting bad press. Investors may have second thoughts about putting money in this asset class right now, what with all the talk about a bursting housing bubble, the glut of unsold condominiums and homes, declining property values and the growing number of foreclosures.

 

But there's still a buck to be made in real estate, even in good and bad economic times. Everybody has to live somewhere, work somewhere, shop somewhere — and someone has to provide them with space in which to do those things.

 

In fact, the depressing news may mean that this is an opportune time to get into real estate.

 

"Owning some paid-for, income-producing real estate can be a very good thing,"  says radio talk-show host Dave Ramsey, best-selling author of "The Total Money Makeover."

 

What do you think about investing in real estate property now? If you have any questions/concerns relating to real estate investment you may contact us or leave us your comment below.

 

5 Mortgage Mistakes

Before applying for a mortgage, get your credit in shape.  Any of these five moves could sabotage your mortgage approval:

 

1. Ignoring your credit reports

 

The key to getting the best mortgage rate is good credit.  A 2004 study by the U.S. PIRG, the federation of state Public Interest Research Groups, found that one in four adults have serious errors on their credit reports.  Not small errors either.  The Fair Credit Reporting Act requires credit-reporting agencies to fix these mistakes, but it's up to you to find the problems and to ask for the errors to be corrected.

 

2. Closing credit card accounts

 

While paying down your credit card balances will improve your financial picture, this is not the time to close credit accounts because reducing the amount of credit available to you can actually lower your credit score.  "Don't assume you should just get rid of it," says Pat Vredevoogd Combs, a practicing residential broker in Grand Rapids, Mich., and president of the National Association of Realtors.

 

3. Getting rid of HELOC

 

If you already own a home and have an existing home equity line of credit, or HELOC, Combs recommends that you not get rid of it in preparation for a new home purchase. "I think you ought to leave it alone.  Sometimes buyers are going to need it; they can use it as an easy bridge loan (to cover the down payment temporarily until you sell the old home) so they don't have to go through the trouble of getting one." 

 

4. Getting in over your head

 

There is a difference between the maximum payment a borrower can qualify for (which can sometimes be surprisingly high) and the amount you can comfortably afford, says Combs.  "Each person has to know the difference in his own mind," she says.  "If you're just getting by with your current rent payment, and the lender says you can qualify for more, give it some thought."

 

5. Switching jobs

 

Lenders like to see a steady history of employment and frown on job changes while your application is pending, unless the new job is in the same field and at the same or greater pay.  If you do take a new job, experts suggest getting a letter stating you've completed the probation period for a new job to allay lender concerns.

 

Are you familiar with any of these mistakes? Share your experiences with us by leaving your comment below.

 

 

Home Prices Go Negative

 

U.S. home prices continued to fall with prices in 10 major cities now down 0.7% year-over-year, according to Standard & Poor's and MacroMarkets LLC, which lately released the Case-Shiller price indexes.

 

The 10-city index is down 0.7% in the past year, the first year-over-year negative reading since 1996. The 20-city index is down 0.2% year-over-year. A year ago, prices were rising 15%.

 

"The annual declines in the composites are a good indicator of the dire state of the U.S. residential real estate market," said Robert J. Shiller, chief economist at MacroMarkets, in a statement.

 

"We look for price declines in the bubble regions but flat prices nationally," wrote Michelle Meyer, an economist for Lehman Bros. Goldman Sachs economists said they expect prices to fall 5% in 2007 compared with 2006.

 

Read more about the house price indexes released by Standard & Poor's and MacroMarkets LLC…

 

Then leave us your comment about the article. We would love to hear from you!

 

 

Ways to Avoid Mortgage Trouble

 

Here are some ways to keep from getting into trouble with your mortgage:

 

1. Keep a close eye on your mortgage and your finances. Be sure you know when your bills are due so you can pay them on time.

 

2. If you find you're having trouble making your payments, don't be embarrassed to talk to your lender. They can help you find out if you have the most appropriate mortgage for your situation. Plus, it's less expensive for them to help you than it is for them to foreclose your home and have to sell it.

 

3. If you have an adjustable rate mortgage (ARM):

• Know when the rate will reset (adjust) and how high it will go so you can be prepared for any increases in your mortgage payment.

 

• Look into refinancing to a fixed-rate mortgage. Interest rates are still low and will offer long-term stability and predictability when it comes to budgeting your finances every month.

 

4. If selling your home is the only option, you could sell faster if you can offer some help to the buyer.

•  Offer to pay some or all of their closing costs. This may include paying points to help the buyer get a lower interest rate on their financing.

 

• Consider offering seller concessions (monetary allowance) for landscaping, interior design, etc.

 

 

Read about other ways to keep from getting into trouble with your mortgage…

 

Do you know any other ways to avoid mortgage trouble? If you have any questions/suggestions you may contact us or leave us your comment below.