Average Square Footage

What is the average square footage of homes being purchased today?  What is the historic average square footage?  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

The National Association of Home Builders (NAHB) is reporting that after growing in square footage for nearly three decades, the average floor space of the single-family home is now reducing. In 2007, the average single-family home in the United States peaked at 2,521 square feet. That number did not vary greatly into 2008. However, according to a 2009 report from the Census Bureau, it’s now at an average of 2,438 square feet. “The decline of the early 1980s turned out to be temporary, but this time the decline is related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home,” said NAHB Chief Economist David Crowe, in a statement. “Many of these tendencies are likely to persist and continue affecting the new home market for an extended period.” The report adds that fewer bedrooms and bathrooms are being built into houses. The Census numbers are based on housing completions, the NAHB adds. Source: HousingWire

So if you are looking at smaller homes then you ever thought you would when considering Tucson Real Estate, you are not alone.

Real Estate News

Are you having trouble selling your Tucson Real Estate?  Have you considered foreign buyers?  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

International home buyers are increasingly attracted to property in the U.S., according to the National Association of Realtors 2010 Profile of International Home Buying Activity. Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country. NAR President Vicki Cox Golder said The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country.” The survey released today, covers the period between April 1, 2009, and March 31, 2010. During that time foreign buyers, including those with residency outside the U.S. as well as recent immigrants and temporary visa holders, are estimated to have purchased $66 billion of U.S. residential property, or 7 percent of the residential market. Several factors have contributed to an increase in international buyer interest in the U.S., said Golder. A large majority of Realtors report the changes in value to the U.S. dollar have had a strong impact on the international real estate business. In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value. Source: National Association of Realtors

The housing market has improved in the last two years to the extent that John Burns Real Estate Consulting sees the market as possibly approaching the beginning of its next up cycle. Three factors needed for such a transition include demand, supply and investment, as the firm noted in a March 2008 report. More than two years later, job growth is coming back slowly and renters are beginning to recognize favorable buying conditions. New home construction is at an all-time low and is likely to remain low until REO inventory clears. As for the investment situation, rates on home loans and home prices fell dramatically since March 2008, creating the best buyer affordability conditions in about 30 years, the firm said. “We are at Stage 1 (The Bottom) and heading into Stage 2 (The Beginning),” CEO John Burns said in a statement today. “While we think Stage 2 will last longer than usual, we want to point out that the downside of investing in housing right now is about as low as you will ever see.” Source: HousingWire

Building and modifying homes to accommodate multiple generations is increasingly popular as more Americans struggle to accommodate both their older parents and their grown children under the same roof. The National Association of Home Builders International Builders Show this year featured a single-level residence with a master suite at each end. “The grandparents suite included universal design elements along with a small kitchenette,” says Stephen Melman, director of economic services at the NAHB. “The concept for this home was that the parents could get help with their kids from the grandparents, while the grandparents benefited by having household maintenance chores and meals taken care of for them. Melman said that it is difficult to predict whether this trend will diminish when the economy improves, but he pointed to the growing number of ethnic groups where multi-generational living is expected as a sign that the trend may stick.

Source: Washington Times

There is more than one option when it comes to marketing your Tucson Real Estate.

Will Future Housing Trends Be Greener?

It appears, according to one analyst, that the future of housing may be a greener one.  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

At a recent meeting of the Urban Land Institute of Minnesota, Senior Fellow John McIlwain said “a new normal” will be created in the housing market over the next 10 years, and he marked the end of “the suburban century.” He noted that markets offering “a vibrant 24/7 lifestyle” will see the most robust activity, “net-zero-energy” units will become the norm, and the rental market will expand as homeownership rates fall to more historic levels. Suburban town centers will gain popularity among those wanting an urban lifestyle without living in a big city. Over the next decade, McIlwain said four demographic groups will fuel the housing market. He said older baby boomers increasingly are moving back to the central city, while younger baby boomers are finding it more difficult to relocate for jobs because they cannot sell their suburban houses. Meanwhile, millennials are more environmentally aware and will seek urban lifestyles, and immigrants who cannot afford large suburban houses to shelter multiple generations will increase demand for rentals. With 1.5 million housing units per year needed to accommodate the shift to normal levels of household formation, McIlwain said zoning, financing, and regulations need to be rethought to meet housing demand. Source: minnpost.com

Factory-built homes are gaining popularity among buyers who appreciate the speed with which they can be constructed as well as their discounted price – 10 to 35 percent less compared to stick built, according to the Manufactured Housing Institute. One problem is the difficulty potential buyers have finding information and qualified builders. “We have not, as an industry, learned to promote our homes,” admits Vic DePhillips, chairman of the National Association of Home Builders’ (NAHB) Building Systems Councils. Some locales still aren’t accepting of factory-built technology, but increasing numbers of zoning boards have come to understand that finished factory-built homes look no different than stick built, says John Perry, chief executive of Contempri Industries Inc., a modular house manufacturer in Pinckneyville, Ill. Source: Chicago Tribune

Trees can save homeowners money. The following information is taken from the Realtor® Content Resource:

Three properly placed trees could save home owners between $100 and $250 a year in energy costs, according to the U.S. Department of Energy. Their shade cuts cooling costs in the summer. In winter, they serve as windbreak and help hold down heating costs.
The National Tree Calculator estimates that a 12-inch elm in an Omaha yard can save $32.43 a year on homeowners’ energy bills; the same tree in Atlanta would save them $11.89 annually. The 12-inch elm adds $40.23 to the Omaha home’s value and $57.33 to the Atlanta home. As trees grow larger, they can add even more value.
Source: National Association of Realtors®

So it may be better to consider more walkable neighborhoods and low impact building options when considering a purchase of Tucson Real Estate.

Predictions Are Worthless

When it comes to the housing market, predictions are worthless.  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

We have talked about how hard it is to predict the future many times in the past. However, when you pay economists the big bucks, they have to lay it out on the table. Many predicted an economic slowdown for the second half of the year. But how many predicted record low rates? Again and again we published quotes from respected analysts indicating that rates would be rising this year. Obviously, these predictions have not come to bear–yet. Now many are predicting that these rates will stay with us for the foreseeable future based upon the economic crisis in Europe and the flight to safety we are experiencing as investors purchase US Treasuries.

Our advice? Don’t get comfortable. Remember when many predicted that housing prices had to fall based upon the spectacular increases we saw just a few years ago? The housing market kept on going, regardless of these predictions. Then it ended when few were expecting the end. Here is a recent quote from business analyst, Allan Sloan, in the Washington Post: In the long run, markets are rational. In the short run, anything can happen. Far be it for us to add fuel to the fire, so we are not going to make predictions regarding where rates will go in the second half of the year. However, we will say this: there is more room for rates to rise than to fall at this point. So if someone is thinking about financing a home, car or another major purchase, now could be the time.

While the short-term could go any direction, the long-term will more than make up for it when considering a purchase of Tucson Real Estate.

FHA Home Loans – Fixes To Common Problems For Borrowers – Part 3

If you have been considering an FHA home loan to finance your Tucson Real Estate but have been having problems, there may be fixes on the horizon.

…More and more homebuyers in the current market are using FHA Home loans for the purchase of their homes.

These types of loan offer lower down payments then conventional home loans and are often the preferred home loan for first time home buyers, which make up a large percentage of the current home buying market.

Not only are down payments lower, but these are government backed loan programs that offer low interest rates and fixed terms. However, it is also very important that in the current marketplace, home buyers are prepared for some of the potential issues that they may run into with an FHA loan.

That is to say that to obtain an FHA home loan there are sometimes different standards that properties are held to. This week will present additional information on another potential issue in regard obtaining an FHA home loan and how to get past it.

POTENTIAL PROBLEM: DEBT TO INCOME RATIO

Your debt to income ratio is the amount of income you earn each month, versus the amount you spend each month paying debts such as a mortgage, credit card payments, car payments and student loans.

The FHA has limits for how high a borrower’s debt to income ratio can be. In many cases, borrowers who end up spending more than 31 percent of their monthly income on a mortgage payment or 43 percent on all debts combined will have a harder time getting an FHA loan, as these are standards limits for FHA home loans.

SOLUTION: TOTAL Underwriting

If the home a borrower is considering will push them over the set debt to income limits that the FHA sets, then their lender can run the loan scenario of purchasing that home through the FHA’s TOTAL automated underwriting system.

As part of this system, approved lenders can enter a borrower’s information and get an almost instantaneous credit approval or denial from the FHA. The system often accepts higher debt to income ratios than those accepted in a manually underwritten loan.

However, if you have red flags on your credit report, such as recent missed payments or many derogatory accounts then it may be more difficult to get approved with higher debt to income ratios.

In these cases however, you may still be able to use compensating factors such as at least three months’ worth of mortgage payments in reserve, a down payment larger than 10 percent or a history of making a large housing payment.

Thus, if a borrower is considering purchase a home on the upper limit of their debt to income ratios, running their loan through the FHA’s TOTAL Underwriting can be a solution to one of the key limitations to homeowners looking to obtain an FHA loans for the purchase of their new home.

The information above was received from www.strategicmtgaz.com.

FHA Home Loans – Fixes To Common Problems For Borrowers – Part 2

If you have been considering an FHA home loan to finance your Tucson Real Estate but have been having problems, there may be fixes on the horizon.

As we discussed in our previous article, more and more homebuyers in the current market are using FHA Home loans for the purchase of their homes.

These types of loan offer lower down payments then conventional home loans and are often the preferred home loan for first time home buyers, which make up a large percentage of the current home buying market.

Not only are down payments lower, but these are government backed loan programs that offer low interest rates and fixed terms. However, it is also very important that in the current marketplace, home buyers are prepared for some of the potential issues that they may run into with an FHA loan.

That is to say that to obtain an FHA home loan there are sometimes different standards that properties are held to. This week will present additional information on another potential issue in regard obtaining an FHA home loan and how to get past it.

POTENTIAL PROBLEM: Appraisal Values

In today’s market, where the majority of sales are short sales and foreclosures, appraisals are now a major issue in that there is a definite potential for the appraised value of a purchase price to come in at less than the purchase price.

Of course when this occurs, this causes issues with obtaining an FHA home loan, as the FHA will use the lower of the appraised value or purchase price to value the loan they will give you on the home.

Meaning that if you agree to purchase a home for $100,000, but the home only appraises for $90,000, the FHA will consider $90,000 to be one 100% of the purchase price. What this means is that you will now need to bring about an additional $10,000 down payment to close on the home. This is obviously a transaction breaker for many buyers and a problem that needs a solution.

SOLUTION: Renegotiate the price
In recent history if a property appraised for below the purchase price, the onus was often put upon the buyer to either come up with the difference between appraised value or purchase price or cancel the contract.

However, in the current marketplace, this is not the case anymore as even though there is a healthy appetite for bank owned homes and other properties, sellers are now more than ever inclined to reduce the sales price if a property does not appraise at the purchase price.

That is because if the property does not appraise for the buyer now, it will most likely not appraise for the next buyer either. Furthermore, FHA appraisals also stay with properties for six months, meaning that if a new buyer were to try and purchase the home shortly after using FHA financing they would run into the same issue.

Therefore, more and more often now, if a property does not appraise and the buyer documents this information to the seller, there is a higher chance that they can renegotiate the property purchase price to the appraisal price.

Of course, there is also an appeals process to the FHA for what may be considered a low appraisal. In this case documented, verifiable comparable sales that were not considered o the original appraisal itself can be submitted and asked to be considered for a new value, but this more often than not may be the best solution as the FHA already has in place strict standards for the comparables that must be used for an acceptable FHA appraisal.

However, asking the seller to reduce the sales price of a home based on a lower appraised value can be a solution to one of the key limitations to homeowners looking to obtain an FHA loans for the purchase of their new home.
This is just one solution to potential roadblocks for FHA home loans. Next week we will provide even more tips and solutions for common problems for borrowers obtaining FHA home loans.

The information above was received from www.strategicmtgaz.com.

FHA Home Loans – Fixes To Common Problems For Borrowers – Part 1

If you have been considering an FHA home loan to finance your Tucson Real Estate but have been having problems, there may be fixes on the horizon.

More and more homebuyers in the current market are using FHA Home loans for the purchase of their homes.

These types of loan offer lower down payments then conventional home loans and are often the preferred home loan for first time home buyers, which make up a large percentage of the current home buying market.

Not only are down payments lower, but these are government backed loan programs that offer low interest rates and fixed terms. However, it is also very important that in the current marketplace, home buyers are prepared for some of the potential issues that they may run into with an FHA loan.

That is to say that to obtain an FHA home loan there are sometimes different standards that properties are held to. This week will present information on one major potential issue in regard obtaining an FHA home loan and how to get past it.

POTENTIAL PROBLEM – Property Condition

The Federal Housing Administration expects homes to be livable upon purchase. As a result, the agency has a strict inspection requirement intended to catch any potential health or safety hazards.

Potential issues could be things such as a broken window, holes in walls or damage to the flooring. A photo submitted to a bank by the FHA appraiser that appears to show a problem with the home’s condition can trigger a repair and reappraisal delay lasting weeks.

With many resales being foreclosed or short sale properties, there is the potential for some damage in these otherwise quality homes and this must be considered.

The obvious answer is to ask the seller to correct these defects; however, in many cases the seller may be unwilling or unable to do so. That is where you need an alternative plan of action.

SOLUTION: FHA’s 203K Home Loan Program

If a property needs repairs that are somewhat major or the seller is unable or unwilling to work with you, the FHA’s 203K home loan program can be your solution. The 203k home loan program allows homeowners to borrow up to $35,000 for nonstructural repairs to bring the home up to speed before moving in.

Of course there are certain restrictions as to what can and can not be repaired using a 203K home loan. And in addition, the work must be often be completed by a licensed contractor. However, this program provides a solution to one of the key limitations to homeowners looking to obtain an FHA loans for the purchase of their new home.
This is just one solution to potential roadblocks for FHA home loans. Next week we will provide additional tips and solutions for common problems for borrowers obtaining FHA home loans.

The information above was received from www.strategicmtgaz.com.

The Short-Run vs. the Long-Term Picture

If you have been thinking about purchasing Tucson Real Estate for a long-term investment, now might be a good time.  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

Never did we see a more important dichotomy in the releases on the state of real estate in the past week. First, Standard and Poor’s released a report that stated it will take three years to clear the shadow inventory from the markets, though this number will vary widely based upon location. Three years of shadow inventory indicates that the real estate market will continue to be a drag upon the economy for the next few years. Second, an article was released by CNN/Money that indicates we are heading towards a long-term housing shortage (See Real Estate News Section For More Information). There is plenty of present excess inventory as the amount of shadow inventory has been estimated at anywhere from four to eight million homes, however, in the long-run we are not building or replacing enough units to keep up with the long-term demand of population growth. What does this say? It says that real estate is a great long-term investment, especially at today’s prices and rates. The problem always arises when we think about real estate in terms of the short-run. During the boom everyone was looking to make a killing. However, real estate is a long-term investment and anyone purchasing a home should be measuring its worth over decades, not months.

Meanwhile, there seems to be some life in the markets. In the past several weeks the stock market seemed to be taking every piece of news negatively while it adjusted to the fact that the economy was growing more slowly. The past week was not only the second positive week in a row for the markets, when negative news was released the markets seemed to bounce back more quickly. For example, the housing start and permit data was well below expectations on Wednesday and jobless claims rose more than expected Thursday. However, each day the markets ended the day recovered from early losses. Could this be the turn after a correction? Oil prices seem to be reacting pretty much the same way. Higher oil prices point to markets that are seeing brighter days ahead for the economy. Of course two weeks do not constitute a trend, but certainly the period provides fodder for optimists.

While the short-run doesn’t look great, the long-term will more than make up for it when considering a purchase of Tucson Real Estate.

Never a Bad Time to Upgrade

Here is an interesting article I stumbled across on the Internet.

Mad for makeovers
By Marni Jameson, Special to The Times

IN a booming housing market, people are quick to spend money to fix up their homes.
What’s surprising is that in today’s depressed housing market, people are still quick to
remodel — and, in fact, are remodeling at a near-record pace.

“In an up market, people fix up the houses they want to sell and the ones they buy,” said
Richard Johnston, senior researcher at the Home Improvement Research Institute in
Tampa, Fla. Home improvement and moving go together. But, apparently, so do home
improvement and not moving.

“Remodeling in a down market can make a lot of sense,” said Dan Fritschen, author of
2005′s “Remodel or Move? Make the Right Decision.” “You just have to be smart about
it.”

A national survey that Fritschen’s Web company, RemodelEstimates .com, conducted last
fall among 5,000 homeowners found that folks are planning to spend as much as ever on
home improvements in 2008 but that they plan to do so more carefully. And we are
talking billions.

“A year ago, high home prices were causing homeowners to feel the wealth effect, and
they were remodeling with a blank-check attitude,” he said. “Our survey shows that
homeowners are planning to get more for their dollars by doing more of the work
themselves.”

In the survey, conducted last fall, 36% said that in the coming year they planned to be
their own contractors — up from 25% in 2005 — and 64% planned to do some of the work
themselves, up from 60% in 2005.

The Harvard University’s Joint Center for Housing Studies noted that while home fix-up
spending dropped 2.3% in 2007 over the previous year, it was still the second-highest
year on record — $173.6 billion, compared with $177.7 billion in 2006, according to
third-quarter reports.

“That’s nowhere near the drastic declines we’re seeing in other sectors, such as new
residential construction, starts and sales, where declines are in the double digits,” said
Abbe Wills, a Joint Center researcher who tracks home improvement spending.

The National Assn. of Home Builders also reported that remodeling activity held up well
for the third quarter of 2007.

“The remodeling market is not experiencing the dip in production and sales being seen in
the new-home-building sector of the industry,” said NAHB Remodelers Chairman Mike
Nagel.

… Nonetheless, if you’re leery about investing in your home when the market is softer than a feather bed, here are some guidelines:

… Make low-cost, high-impact improvements. Fritschen recommends investing in
inexpensive upgrades that yield great results. Upgrading baseboards and doors is a good
example. “For between $5,000 and $7,000 you can greatly enhance the look of the
average home. Throw in some fresh paint and new carpet, and the change is dramatic,” he
said. Fix eyesores. Don’t neglect home maintenance. A sinkhole in the driveway, a leaky
roof, damaged flooring — all need to be repaired to protect your investment, regardless of
the market.

If you sell the house, these problems will be noticed in a home inspection, and buyers
probably will want you to fix them. Also, many maintenance issues just worsen and get
more expensive if postponed.

… Put your bucks into great kitchens and bathrooms. If you want to increase the value
of your home, remodel the kitchen and bath, advises researcher Johnston.

Upgrades in these rooms are more likely to pay off, plus you can enjoy them in the
meantime, with a few key exceptions. If you’ve already built a really nice kitchen and just
want to change it, you won’t get that money back at resale. Or if you put a Mercedes
kitchen in a Hyundai neighborhood, don’t expect to get that money back either. But if all
the homes on your street have three bathrooms, and your home has one, adding a bath is a
sure bet. Just don’t exceed the norm of the neighborhood….

Los Angeles Times January 06, 2008

Please visit Marni’s website.

And remember, it’s never a bad time to upgrade your Tucson Real Estate.

Consumer “Bill of Rights” From Arizona Department of Real Estate

Before purchasing or renting Tucson Real Estate it is important to know your rights. When selling Tucson Real Estate it is important to know the rights of the buyer and be sure to disclose any “material” information regarding the property. Both Buyers and Sellers should be aware of information regarding their real estate “Rights”. Here is some information from the Arizona Department of Real Estate:

Arizona home Buyers’ and Renters’ Bill of Rights (A resource for all real estate consumers)
The Arizona Department of Real Estate, in cooperation with industry professionals and the public, created this “Bill of Rights” to help educate you, the consumer, of your rights when purchasing property. As a buyer of real estate in Arizona, you have the right to know material information about the property.
The following list represents some of the important material facts you should educate yourself on before purchasing any type of property in Arizona.
You have the right to know:

• If the property is located in an incorporated city or unincorporated part of the county.
• If title insurance is available and if fire insurance can be acquired.
• If you will have fire and police protection an, if so, who provides this service.
• If the roads provide access for fire protection and police service.
• If the roads are maintained, and by whom.
• If utilities are available, and who provides them. (Water, Electric, Gas, Sewer, Trash)
• If the water supply is adequate.
• If If the jurisdiction the property is located in has conservation restrictions and policies.
• If the property is located in a school district, and the distance to the closest schools.
• If there are any natural or geological hazards, pests or wildlife.
• If there are essential services near the property such as grocery and medical services.
• If there is crime in the area and the crime rate.
• If there is a Seller’s Property Disclosure Statement or an Arizona Subdivision Public Report. You have the right to review these documents before you purchase property.

There may be other items not listed above that you should educate yourself on before buying or renting property. For a larger list, please reference the Buyer’s Advisory Guide found on our website.

Visit www.AZRE.gov to begin answering your questions! We are here to protect you and the public.

Remember, it is important to know your rights when buying Tucson Real Estate.  Likewise, it is important to know your responsibilities when selling Tucson Real Estate.