You can find great local Baton Rouge, LA real estate information on Localism.com William D. Cobb FHA Home Appraiser is a proud member of the ActiveRain Real Estate Network, a free online community to help real estate professionals grow their business.
The KCM Blog (Keeping Current Matters…building a home for real estate information) has posted financial tips advice on refinancing in today’s low mortgage rate environment: To Refi Or Not To Refi….THAT Is the Question . Read the entire article at this link and Buzz is providing a few snippet paragraphs below:
“Holy Cow! Have you taken a look at where interest rates are these days??? There are Ten Year Mortgages in the 3.75% range for heaven’s sake! Yes, 3.75%!!! What are some of the issues to consider as you (and all of America) contemplates a refinance?”
1. Does it make financial sense?
If you are considering a “rate/payment reduction” refinance, I typically recommend that people do one simple calculation.
2. What about a refinance to shorten the term of a mortgage?
When examining the possibility of cutting years off your mortgage, you should take a good hard look at how such a move can affect your monthly cash flow.
3. What will my home appraise for?
This is the biggest challenge facing most people. With so many homes underwater, there are many people who won’t be able to refinance.
4. Should I lock in?
Even though conventional wisdom is that rates are likely to stay low for a while, history has shown that when they do go up, they go up quickly and dramatically; therefore, my advice is that if you like the rate you are quoted, lock it and sleep well.
5. How will my income and credit be looked at?
Your refinance creates a new loan that will likely be bundled and sold in a new mortgage-backed security; therefore, this new loan will be underwritten to today’s guidelines (which are tighter than they were a few years back).
The most important thing is to speak with a solid mortgage professional and try to address any hurdles BEFORE you spend your money. Compare the proposed savings; honestly assess your home’s value; review your income, assets and credit; all ahead of time to improve the likelihood of a desired outcome.”
“A real estate appraisal is an estimation of market value. Lenders usually require appraisals for homes on which they are asked to lend money in the form of a mortgage or home equity loan. Appraisals are performed by trained professionals who are licensed by the state in which they operate. The appraiser may be hired by you or by the lender, but is an impartial third-party who provides an objective analysis of the property’s value.
An assessment, on the other hand, is conducted by a municipality when evaluating properties for the purpose of levying property taxes. Municipalities look at the overall value of properties in an area and the specific use of a particular property. For example, commercial properties like professional offices are assessed at a different rate, even though they may be in buildings that are just like homes in the same area. Property tax may also vary depending on the last date the property changed hands. Today, computer technology streamlines the process of assessment and allows for sophisticated statistical models. Many states offer homeowner’s exemptions, which reduce the assessed value of a property when it is the owner’s primary residence.
Municipalities typically send assessment notices yearly in advance of the issuance of property tax bills for the year. A provision is made for an appeals process if the property owner does not feel that the assessment is correct.
In a stable real estate market, appraisal and assessment values may be similar, but never make the assumption that if you have one that you know the other. Market fluctuations, lag time from assessment to notification, and recent renovations or improvements may cause a disparity between the two numbers.”
Solds In South Point from 1/2010 to 8/31/2010 revealed:
Average Sales Price: $147,476
Average Sold Price Sq. Ft.: $88/sf (-$5.33/sf Decline From 2009) Median Sold Price: $149,500 (+4,500 Increase From 2009)
Number of Sales: 21
Low To High: $106,500 to $198,500
Number of Sold REO/Foreclosures Noted In MLS: 5
Current # Listings: 26 (NOTE: MORE LISTINGS THAN SALES)
Current Listings Prices: $103,500 To $198,900
The BIG Change is that while the Median Sales Price has increased +8.1%, the Average Sold Price Per Sq. Ft. has declined by -$5.33/sf. And, there’s more listings now than total sales in all of 2010.
http://www.denhamspringsappraisers.com/ – Bankrate.com: Summary Of Real Estate Appraisal Rule Changes In Dodd-Frank Act 2010. These are the new rules that apply to Denham Springs Louisiana Home Appraisals!
“According to Lucien Salvant, a spokesman for the National Association of Realtors, or NAR, in Washington, D.C., the law is intended to:
*Strengthen appraiser independence.
*Sunset a problematic industry agreement known as the Home Valuation Code of Conduct, or HVCC.
*Regulate appraisal management companies.”
“Buyers, sellers can inform appraisers
That said, the end of the HVCC should help to clear up widespread confusion over who can present information — including data about recent sales — to an appraiser.
“The intent of the HVCC was to put a firewall between the lender and appraiser, but it put up such a big wall that everybody was afraid to talk to appraisers,” Salvant says. “The (new law) does say that Realtors and sellers and buyers can talk to (appraisers).”"
“Appraisal management companies
The new law also regulates appraisal management companies, or AMCs. AMCs aren’t new, but they have gained more control over real estate appraisers and appraisals in the 15 months since the HVCC was implemented.
The financial reform law requires federal oversight of AMCs controlled by federally regulated financial institutions. It also requires state registration of all other AMCs, according to the Appraisal Institute.”
“Questions to ask (editor’s note: should be rephrased “Questions AMC’s should be asking those appraisers they intend on hiring for the appraisal order”)
If there is an upside to the confusion over appraisals, it’s that homebuyers, sellers and homeowners are now more aware of these issues, says Richard Koestner, a partner at Koestner, McGivern & Associates, an appraisal firm in Davenport, Iowa. He says they are more likely to ask questions about the appraiser’s experience and expertise and calls the development “encouraging.” He also offers a few examples of questions buyers and sellers might want to ask:
How long have you been an appraiser?
How many appraisals have you completed?
How often do you appraise homes in this area?
How familiar are you with the local market?
Where do you get the data that you use in your appraisal reports?”
This morning, “The Guys” from TBWS reported existing home sale fell 27.2%, the lowest number of sales since 1968, see the video below.
The Baton Rouge Business Report is reporting on a National Assocation of Realtors housing study and I quote: “Sales of previously occupied homes fell to the lowest level in 15 years last month as the economy weakened. The National Association of Realtors says July’s sales fell by more than 27% to a seasonally adjusted annual rate of 3.83 million. It was the largest monthly drop on records dating back to 1968. June’s sales pace was revised downward to 5.26 million. Home sales picked up in the spring when the government was offering tax credits. But the market has struggled since the tax credits expired on April 30. It would take 12.5 months to sell off the 4 million unsold homes on the market at the current sales pace. The median sale price was $182,600, up 0.7 percent from a year ago.” I have included three charts below from Mortgage News Daily’s July Existing Home Sales: Recap and Charts to help put this in perspective. I then discuss the local Baton Rouge Housing Market Numbers.
While the NAR study covers the entire U.S., how do the local Western Livingston Parish housing sales numbers compare? By Western Livingston Parish, I’m defining Denham Springs, Watson and Walker, MLS Areas 81, 82 and 83, the more active portion of Livingston Parish. The answer is that I see Western Livingston bucking the national trend. Within the Greater Baton Rouge Association of Realtors data extracted from 1999 through August 25, 2010, covering almost 12 total years, the lowest yearly rate of home sales was in 1999 with 759. As of 8/25/2010, there have been 654 home sales. If this pace of home sales continues, 2010 projections will be approximately 980 sales, which would conclude a healty housing market.
The chart below, extracted from data from the GBRMLS on August 20, 2010, shows that the median sales price in MLS Area 81, Denham Springs north of Interstate 12, has continued to remain stable to increasing slightly. The chart actually shows an increase in median sales price from 8/2009 to 8/2010 of +3.49%. The chart also shows a fairly low 7.4% REO or Foreclosure Rate for this market as well, 235 foreclosures out of 3,175 homes sales since 1/1/2004.
HOWEVER
I want to responsibly point out that just because the NATIONAL “number” of home sales have been declining in 2010 doesn’t mean the LOCAL “housing prices” are equally declining significantly! And, this is an important point. As a home appraiser, the one thing I hear from local homeowners is a misunderstanding of the local market. They say things to me like, “I know this is a horrible time to be refinancing and getting an appraisal with the housing market the way it is, but we just couldn’t pass up the low mortgage rate”. I hear this constantly from locals and you can’t watch the national news and apply that to our local market. Linda Fredericks, former President of the Greater Baton Rouge Association of Realtors, is correct when she delivered the message that housing marketings are “local” and you can’t apply the national news headlines to a one size fits all local housing market!
The Baton Rouge Business Report is reporting on a National Assocation of Realtors housing study and I quote: “Sales of previously occupied homes fell to the lowest level in 15 years last month as the economy weakened. The National Association of Realtors says July’s sales fell by more than 27% to a seasonally adjusted annual rate of 3.83 million. It was the largest monthly drop on records dating back to 1968. June’s sales pace was revised downward to 5.26 million. Home sales picked up in the spring when the government was offering tax credits. But the market has struggled since the tax credits expired on April 30. It would take 12.5 months to sell off the 4 million unsold homes on the market at the current sales pace. The median sale price was $182,600, up 0.7 percent from a year ago.”
While the NAR study covers the entire U.S., how does the local Baton Rouge housing sales numbers compare? The answer is that I see a similar trend. Within the Greater Baton Rouge Association of Realtors data extracted from 1999 through August 24, 2010, covering almost 12 total years, for all of East Baton Rouge Parish itself, the lowest yearly rate of home sales has been in 2010 with 2,032 year-to-date. If this pace of home sales continues, 2010 projections will total 3,048 sales, the lowest within the 12 year period.
What about a monthly sales numbers comparison? This comparison leads to the same conclusion. The two lowest monthly housing sales periods in East Baton Rouge since our MLS began tracking the numbers in 1999 have taken place in 2010, see chart.
The Baton Rouge Business Report Daily PM Report is report a Capital Region home sales plunge of 21% in July 2010. “The number of homes sold in metro Baton Rouge fell by 21% in July compared with the year before, as the market corrected itself after being bolstered by the federal homebuyer tax credit. There were 523 homes in the Capital Region sold in July, compared with 665 sales in July 2009, according to figures from the Greater Baton Rouge Association of Realtors Multiple Listing Service. An $8,000 tax credit for homebuyers expired earlier this year, and transactions had to be under contract at the end of April to qualify for the money. That led to Capital Region home sales posting 21% and 28% increases in April and May over last year. The average sale price in July was $197,076, down from the $203,735 average in July 2009. Sales were down nearly 31% in Ascension Parish in July, from 111 in 2009 to 77. Livingston Parish saw a 25% drop, from 114 homes changing hands to 85. In East Baton Rouge, there was a 24% drop in home sales, from 414 to 313. The other category, which includes MLS sales in West Baton Rouge, Iberville and the Feliciana parishes, actually saw an 85% increase, from 26 to 48. Through the first seven months of the year, home sales continued to run slightly ahead of the 2009 pace. There were 4,107 homes sold through the end of July, up 3% from the 3,985 sales total at the end of July 2009.”
http://www.batonrougerealestatebuzz.com/ – Baton Rouge Real Estate: To Refi Or Not To Refi. THAT Is the Question In September 2010
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