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It seems that this may be another in what is appearing to be a string of articles about the possibly recovering housing market. After years of continuous bad news, the housing market continues to surprise.  Last week, the latest good news came in the form of the monthly Existing Home Sales report.

An “existing home” is a home sold by an existing owner as opposed to a developer.  It’s non-new construction property, and in our market in Philadelphia and New Jersey, it is overwhelmingly the largest portion of the housing stock

The data on Existing Home Sales was noteworthy for its trends:

1. Sales volume rose over four straight months for the first time in 5 years
2. Sales volume rose year-to-year for the first time in 4 years
3. Median home prices fell for the first time since April

Furthermore, first-time home buyers and buyers of “distressed” homes accounted for nearly one-third of the market activity each.

But, before we declare a bottom in housing, it’s important that we remember the First Rule of Real Estate — All Real Estate Is Local, and Philadelphia and the surrounding areas have always been more resilient than most markets throughout the country.

The Existing Home Sales report is not neighborhood-specific.  It lumps cities like San Diego and Saint Paul into a giant sample set and fails to account for regional differences in real estate, let alone neighborhood ones.

This is the primary reason why on-the-ground real estate agents are better sources for a market pulse versus a report from a national trade group.  The national group can’t know the happenings of every street and every home in a market, and our market has not had some of the issues wuth fraud found in other states, nor the huge amount of speculative building that was part of the market problems in others.

That said, however, the national data isn’t completely useless.

Looking at the long-term patterns in the Existing Home Sales report, we can infer that ample supplies, low mortgage rates and tax credits are spurring home sales in a lot of U.S. markets. As a result, our offices are seeing more activity, both from our agencies and other firms, and we see properties going under agreement more rapidly, with multiple offer situations again being created.

Eventually, this will lead home prices higher.

Related articles

• Shrinking Inventory May Indicate Housing Recovery Start (movephilly.blogspot.com)
• July Home Sales Soar to Largest Monthly Increase in 10 Years (abcnews.go.com)

Foreclosure-tracker RealtyTrac reports that the number of foreclosures nationwide rose 7 percent on a month-to-month basis last month.

However, 3 states dominated the foreclosure list, tallying more foreclosures between them than the rest of the country combined.

• California : 30.0 percent
• Florida : 15.7 percent
• Arizona : 5.4 percent

On a per-household basis, the states ranked 2, 3 and 4. Only Nevada’s foreclosure rate was higher.

Now, we point out these statistics for two reasons.

The first is to remind you that foreclosures can be highly local.  For all of the foreclosure-related stories that run in the papers and on TV, defaults make a much larger impact on home values in some areas versus others. In Pennsylvania for example, there are only 1 foreclosure for every 1030 housing units as opposed to New Jersey where there is one foreclosure for every 541 housing units, or the national average of one foreclosure for every 355 household units.

And, second — foreclosures can represent a terrific buying opportunity.  Not every foreclosed home is in pristine condition, but there is a plethora of affordable housing out there, suitable for first-time buyer, move-up buyers and investors, too. By buying a home after the foreclosure sale, all liens and encumbrances are removed, and the buyer will have title as clear and pristine as in any other type of sale. Title Insurance is still needed for the buyer’s protection, but is normally provided at settlement.

Furthermore, as banks get better at disposing of foreclosed homes, the process of buying one isn’t as challenging as it was, say, 12 months ago.

As part of its research, RealtyTrac.com catalogues a lot of foreclosed homes and lists them online.  However, you may find it better to start your search with a local real estate agent that knows the foreclosure market.

So long as buying foreclosures is a high-touch process — and it is a high-touch process — you may want to have a human face and agent to guide you through it. To search for foreclosure properties , just check the Century 21 Advantage Gold Web site.

The complete RealtyTrac report is available online.

If you’re looking to add invisible shelves in your home or workplace, you can either buy them on Amazon.com for $14 a piece, or you can build them yourself with a just a few simple tools.

In this 3-minute video, life-help website VideoJug shows how to install invisible shelves in an easy-to-understand, anyone-can-do-it fashion.  The acting is a little goofy, but the instruction is right on.

Invisible shelves can be used to store and display books, clocks, knick-knacks and photos.  They’re called “invisible” because objects appear to float on the walls on which they’re shelved.

Image by Getty Images via Daylife

About two and a half years ago, while my daughter was still in undergraduate school, she came home for a visit and during one of our discussions said, “Mom, Bill ‘friended’ me on Facebook and it creeped me out”. Bill is my partner and friend. I said, “Well, did you accept?”. To which she replied, “No, I haven’t done anything”.

Flash forward about 6 months. I just finished a management meeting where Bill gave us an overview of something called ‘social media’ and what we needed to do to keep up with it all. So, I joined Facebook, among other social media sites. By this point, my daughter had accepted Bill as a friend and was even willing to be my friend.  Facebook opened up her world to me. I now got to see her friends at school, what parties she was attending, when she was coming home for a visit and where she was planning her spring break vacation. Before Facebook  the communication with my daughter was to her need for money or help, which were pretty infrequent. If I was lucky, after meeting her needs, I got two sentences about her life before the call was over. Facebook changed our connections in a very positive way and we don’t even have to talk on the phone.

By February of 2009 I had become a veteran Facebook user. All of sudden old friends appeared. Within a few weeks several people that I had gone to elementary school with found me on Facebook. We started catching up on life and thought it would be fun to see if we could locate others from our class and try to get together. Within 10 days, we had a group email that included aobut 25 people from our class and in May 2009, we held a reunion brunch that 22 people attended, traveling from Ohio, Utah, DC, NJ, Florida, etc.  The stories we shared and the bound that we have is amazing. This experience is something that the people that have grown up with Facebook will never have. Whether they see each other or not, they never have to lose connections with the people they grew up with and went to school with.

As Facebook becomes more populated, more things occured, even impacting my business. For example, someone I knew from high school who now lives in Colorado needed to sell a relative’s house in my area. Because of our Facebook connection she knew that I was in real estate, and knowing she could trust me,  reached out to me for help. Another friend from elementary school needed help for her daughter who wanted to buy a house. Guess who had the priviledge of helping her ? Another person had a friend whose mother had passed away and needed to sell the house. I guided them through that process. And now another friend from high school now in Arizona has a mother-in-law t whose housing needs have changed, and to help her I’m on the job! All of these friends would have been forced to deal with strangers if not for Facebook.  I know this for sure.

Some say they don’t have time for social media or think that people are losing personal connections because of computers and electronic stuff. I say, WRONG! Yes, it takes more time, but that’s because we’re making reak connections. It’s opened wonderful doors both personally and professionally and I hope it never goes away.

Maybe I’ll see you on Facebook too!

The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

It also reiterated plans to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the U.S. economy is “leveling off” and that financial markets continue to improve.

The change in verbiage is the rosiest from the Fed since the start of the recession and it may signal that the downturn’s end is near.

That said, the Fed highlighted lingering economic soft spots that could still impact a recovery through the end of 2009 and into 2010.

1. Ongoing job losses
2. Reduced “housing wealth”
3. Tight credit conditions

Furthermore, rising energy costs remain a threat to inflation.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to honor its $1.25 trillion commitment to the mortgage bond market.

Market reaction to the Fed’s press release is muted.  With no real change in message and a basic confirmation of what most investors already knew, Wall Street sees no reason to panic.  Mortgage rates are unchanged.

The Fed’s statement is another of a growing list of indicators that while we may have hit the bottom of our economic issues, they are not yet over. However, from my vantage point as a layman, it seems to me that real estate might once again see signs of the recovery before the entire economy does. Just as we were the first sector of the economy impacted by the economic woes, we might just be one of the first sectors to feel the benefits of the recovery. Sort of a “first in, first out” scenario. Of course, I temper that by

Image via Wikipedia

reminding the reader that I am no economic expert, and my guesses are as invalid as any of yours.

The FOMC’s next scheduled meeting is September 22-23, 2009.

The above video was created by the Federal trade Commission to help people understand that dangers they face when the stress of their situation allows them to fall prey to people who would take advantage of them.

Thanks to Jay Thompson at ThePhoenixRealEstateGuy for the tip!

The national home supply is falling, down to its lowest levels since December 2008.

In June, there was 9.4 months of supply, down from a year-ago level of 11.0 months. It’s one more sign that the housing market may be mending itself.

Housing supply is an important metric because home values across every U.S. market are rooted in Supply and Demand. When the supply of available homes outpaces buyer demand, home values tend to fall. And, by contrast, when homes are relatively scarce, values tend to rise.

We’re still a long way from historical averages, but dwindling home inventory may be one reason why the national median sale price rose by $7,000 last month.

A reduction in inventory may also explain why two other popular home value metrics — the government’s Home Price Index and the private-sector’s Case-Shiller Index — are each showing signs of a rebound, too.

However, before we get too excited, it’s important to remember that home sales of late have been spurred by low mortgage rates and by the First-Time Home Buyer Tax Credit. A real estate trade group says first-timers represent 29 percent of the market, for example.

But so long as rates remain low and buyer stimulus is in place, we can expect that the recent trends in real estate will continue. Inventory should continue to drop and prices should start to rise. And in a market like Philadelphia, where our inventory was not as large as some of the hard hit areas around the country, this may be even more significant. It would seem that for most home buyers, especially first time home buyers, now is certainly the time to act.

Therefore, if you’re planning to buy a home in the next 12 months, buying sooner rather than later may be a smart way to save on your next home.

After starting the week with a run lower toward 5 percent, mortgage rates have reversed course.

It started mid-day Tuesday and the culprit is Basic Economics.  Here’s why.

Mortgage rates are based on the price of mortgage-backed bonds and — like most things — mortgage-backed bonds prices are based on Supply and Demand.

When bond supplies grow faster than the corresponding demand for them, bond prices tend to fall and when bond prices are down, bond yields are up.

Meanwhile, this week, the U.S. Treasury is making its largest weekly auction in history.  $115 billion in new debt, to be exact.  This means that before the week is through, $115 billion in new bond supply will have been introduced into the market and — so far — demand hasn’t kept pace with the new supply.

Prices are plunging.

For home buyers and rate shoppers, this is especially bad news because mortgage-backed debt is less desirable to investors than is treasury debt.  As a result, when treasury debt loses values, mortgage-backed debt tends to lose value, too.  Not always, but most of the time.

So, beginning with Tuesday afternoon’s auction, debt supplies have been growing faster than buyer demand.

Bond markets are suffering from an abundance of debt supply and it’s been a big reason why mortgage rates are rising.  The week’s not over yet, either.  $28 billion is due for auction Thursday.

If demand at the auction is similarly low, watch for mortgage rates to spike again.

Once again, the housing market is showing that its worst days may be over.

According to the Census Bureau, the number of new homes sold in June leapt by 11 percent from the month prior.  It stands as the biggest one-month jump in 8 years.

A “new home sale” is when a home in any stage of construction — not yet started, under construction, or already completed — goes under contract, often with a builder.  It’s the opposite of an “existing home sale”.

In addition to surging sales, the monthly supply of new homes fell to its lowest level in 11 years. In our market, where there are not as many new homes as in expanding markets out west or in the retirement areas of the south, this supply is not perhaps as siginificant, but the number is important nonetheless.

Because home values are based on the relative supply and demand for a particular home in a particular area, anytime that demand for homes grows faster than supply, we would expect prices to rise.

Indeed, that’s what we’ve been seeing.  The combination of low interest rates, seller-paid incentives and a first-time home buyer tax credit is bringing buyers into the market faster than new supply can come online.  It’s one reason why home prices have stopped falling across many parts of the country.

It’s also why home buyers may find it tougher to get “a good deal” in real estate later this year and into 2010.  If demand stays high and supplies fall further, sellers should regain the upper-hand in contract negotiations. Brokers are already seeing signs of of this in the number of “low ball” offers that are being rejected by sellers in favor of better offers and the re-emergence of multiple offer situations on well priced homes.

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• Housing Bounces Back? New Home Sales Soar (abcnews.go.com)
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In every yard and every garden, weeds happen.  It’s a fact of horticultural life.

There’s no way to prevent weeds, but there is a proper way to treat and remove them.  Chemical treatments like Round-Up are one option, but many gardeners prefer pulling weeds by hand.  I only know these things from hearsay, since I am not, by any stretch of the imagination a gardener – however, through the magic of the Internet, I can find stuff to blog about and seem to be an expert – even if only an expert at finding things to share with you.

In this short video from Expert Village, Doug Smiddy shows us how to properly remove a weed by it roots to prevent regrowth.  All it takes is a simple hand-tool to do the job right.

He also reminds us that having a weekly weeding schedule makes the job easier to finish.