Realtor Magazine takes a look at the year ahead and what sections of the market will be hot and best bets.  They focus on both residential and commercial.  From the residential stand point international investors will play a large portion in the US market given the economic situation outside of the US.  Also distressed inventory in centrally located neighborhoods will continue to draw attention as well as good rental units.  On the commercial end of the market they target, office and retail space as well as warehouse space and multifamily units.

In the Stowe market we will see all of these areas take shape in one form or another.  Stowe offers opportunities in all of these categories, so it becomes attractive to buyers.

The Year Ahead: Real Estate’s Best Bets in 2012 | Realtor Magazine.

Interesting article in the USA Today, regarding housing demands and how they relate to buyers confidence and buying fundamentals.

Why housing demand defies real estate fundamentals – USATODAY.com.

This week’s edition of the Stowe Reporter featured McKee’s monthly real estate article.  This month McKee explored first time home buyers.  Here’s a copy of the article:

Purchasing a Home and Getting a Loan in Today’s Market

Although inventory in Stowe declined by 15% in 2011, this is still considered a buyer’s market, but people are buying as evidenced by the 23% increase in sales volume this past year.  For those buyers thinking about starting their search understanding the mortgage process is paramount to reaching the goal of homeownership.

Today’s lending environment has changed dramatically from before the economic downturn.  Financial institutions became extremely cautious following the downturn as reflected in their lending standards.

“Mortgage rates are near historic levels. Even though lenders have tightened up lending guidelines, with the right preparation and expectations, it is possible to take advantage of the current low rates,” according to Mark Stanton, CMP, of Primary Residential Mortgage, Inc. located in Stowe.  For a buyer taking advantage of these rates this means often being able to afford more at a lower monthly payment.

As a buyer searches out a realtor they should also be contacting a bank, mortgage broker or other financial institution to help determine what they can afford.  Key to navigating the lending process is having a strong team with good communication.

When preparing to purchase a home, here are a few items buyers should prepare:

• Check your credit score and status.  Make sure to check with each of the three major credit bureaus – Equifax, Experian and TransUnion.  Your lender can help with this.
• Prepare your documents; pull together recent pay stubs, portfolio, bank, credit card, and loan statements.
• Employment verification; have your HR department prepare an employment letter stating history and salary.  Prepare them to verify this information again as you get close to closing.
• Figure out your down payment.  To take advantage of the best rates many lenders require a 20% down payment of the purchase price.  Know how much you have to put down and where it’s coming from.
• Two Years Tax Returns.  If you are a salaried employee this helps to verify your income.  If you are self employed or receive a 1099, this will establish and verify your income.

In a recent CNN Money article, Greg McBride, senior financial analyst for Bankrate.com, even expects that lenders will ease up on borrowing requirements — marginally — in 2012.  “Instead of requiring a 740 credit score for the best rates, lenders will dip their toes into 720 waters,” he said.  Knowing your score ahead of time will help you and your team best determine the right loan and property.

Vermont has the lowest foreclosure rate in the country and that is a result of local lenders and mortgage brokers helping Vermonters find the right product.  “There are still great programs out there to help borrowers with little or no down payment.” says Jeff Teplitz, Residential Mortgage Loan Consultant with EverBank, located in Stowe.  “FHA requires a 3.5% down payment, Rural Development and VA allow for no down payment.  All three programs allow the seller to contribute up to 6% of the purchase price towards closing costs.  If you have 5% to put down, Fannie Mae and Freddie Mac are still offering very competitive products as well.”

The forecast for rates in 2012 is that they will remain historically low, this coupled with continued affordability should help the national and local markets continue to stabilize.  Locally our market is viewed as a stable market and is attractive to lenders.  For buyers, Stowe continues to be a sound place to invest in real estate.

McKee Macdonald is a broker with the Smith Macdonald Group, part of Coldwell Banker Carlson Real Estate of Stowe. Comment on this article at stowereporter.com, or email letters to news@stowereporter.com <mailto:news@stowereporter.com> .

To read the article at the Stowe Reporter click here.

Another sign that housing continues to turn around is that banks are starting to loosen credit standards in 2012.  Since the banks currently have money available to lend they are looking at lowering certain standards like credit levels from around 750 to 720 and perhaps lower.  They are also looking to lower their loan to value ratios which will help buyers afford a bit more with less of a down payment.  Read more below.

Housing Crisis to End in 2012 as Banks Loosen Credit Standards.

According to a recent Wall Street Journal article and based on the year end numbers from our local market, now is a good time to buy a house.  Over 71% of people surveyed in a recent study felt that it was a good time to purchase a home.

Locally this holds true, Stowe and the surrounding area have continued to remain affordable for buyers.  The historically low interest rates are helping purchasers get into homes that might otherwise be out of reach.  That and the seller’s realization that by making adjustments to their asking price can result in finding a buyer.

Read the WSJ article here:

Will the Housing Market Finally Start Rebounding in 2012? – WSJ.com.

The market had a rebound in December for existing home sales, jumping 3.6% compared to December 2010 according to statistics provided by The National Association of Realtors.  Overall inventory also decreased, sales in the Northeast rose 3.3 percent compared to December 2010.

Click here to read more from NAR December Existing-Home Sales Show Uptrend.

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Stowe, VT Real Estate Report

It is our pleasure to inform you that Smith Macdonald Group of Coldwell Banker Carlson Real Estate has released its 2011 Year End Report, our survey of residential real estate sales in Stowe, Lamoille County and Waterbury. This report compares data based on deals that closed by the end of 2011 (January 1 through December 31) with those closed in the prior quarter and in 2010.

The momentum generated by the Stowe area real estate market last year has continued in 2011.  Market-wide, sales transactions increased 23% versus a year ago.  While inventory has decreased by 15% in 2011 compared to 2010.

As always, we continue to follow closely this area’s sales activity and trends in residential and land real estate, and would welcome the opportunity to answer any questions you may have about the report or the market generally.

Request your copy of the 2011 Year End Smith Macdonald Report.

An Example of a Home in Poor Condition

We are often asked what are good projects and items to do to increase or keep the value of your home.  In the following article you will see what exterior projects are the most important in terms of an investment by homeowners.  Curb appeal is key, not only from the actual street, but from the web as well.  If your home does not present itself well in either the likelihood it will be shown and sold is greatly reduced.

In Vermont with the weather we get it is important to take care of exterior features to maintain value.  Roof’s and siding can easily fall into disrepair if they are not cared for.  These are two areas we see sellers having to fix or address after a building inspection.  Keeping those items up to date and in good shape will help sellers realize great returns on their homes.

To reach more about exterior replacement project, click below.

REALTORS® Identify Exterior Replacement Projects as Best Investment for Homeowners.

The FHA (Federal Housing Association) will continue to allow buyers to purchase distressed homes owned by the bank or HUD using FHA-insured financing.  Interesting article, see below.

FHA Waives Anti-Flipping Rule Through Year-End to Speed REO Sales.