Is remodeling worth the cost in today's market?

The 2008 NAR (National Association of REALTORS® Cost vs Value Report is in!

Every year, REALTORS® are asked to offer their opinion of the net value of thirty home projects. This year, new siding appears to be the favorite improvement, providing better returns than boring old kitchen and bath remodels, window replacement, and finishing basements.


The losers (home projects that pay back the worst returns): sunrooms, master bedroom suites, and roofs.

Seattle was notable as a market with more than 100% return on decks and minor kitchen remodels. Pacific Northwest cities recorded the best payback on remodeling for the second consecutive year. It was also noted that high rates of recovery were seen in both strong markets and weak ones.

The complete report can be found at the NAR website.

NAR fighting to reinvigorate housing market

NAR Urges Passage of 4-Point Housing Stimulus Plan and Return of Congress for Lame-Duck Session

WASHINGTON, October 15, 2008

The National Association of Realtors® will offer a four-point legislative plan to reinvigorate the housing market, calling on Congress to act during a lame-duck session. NAR believes the plan will give a boost to the economy and help to calm jittery potential homebuyers.

The plan features such consumer-driven provisions as eliminating the repayment of the first-time homebuyer tax credit and expanding it to all homebuyers, making higher mortgage loan limits permanent, pushing banks to extend credit to Main Street, and prohibiting banks from entering into real estate.

“Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible,” said NAR President Richard F. Gaylord. “It is vital to the economy that Congress take specific actions to boost the confidence of potential homebuyers in the housing market and make it easier for qualified buyers to get safe and affordable mortgage loans. We are asking Congress to act right away.”

Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said NAR, as the leading advocate for homeownership and private property rights, believes it is important for Congress to address the concerns and fears of America’s families, much in the way it has addressed Wall Street turbulence. “Housing is and has always been a good, long-term investment and a family’s primary step towards accumulating wealth,” Gaylord said.

NAR recommends Congress pass new housing stimulus legislation that includes the following priorities:

1. Remove the requirement in the current law that first-time homebuyers repay the $7,500 tax credit, and expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.

2. Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for homebuyers in high cost areas.

3. Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury department should be required to use the newly enacted Troubled Assets Relief Program to push banks to:

• Extend credit down to Main Street, making credit more available to consumers and small businesses;

• Expedite the process for short sales;

• Expedite the resolution of banks’ real estate owned (REOs) properties.

4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

Gaylord said that NAR will strongly pursue those proposals and is calling on Congress to return to enact housing stimulus legislation in a lame-duck session after the national elections in November.

reprinted by permission of the National Association of Realtors

Outlook bright for future mortgages

RISMEDIA, Oct. 11, 2007-Conditions in the mortgage market are improving for consumers, which should help to release some pent-up demand in early 2008, according to the latest forecast by the National Association of Realtors(R).



Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. “Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said.

Yun said it’s important to place the current housing market in perspective, and that 2007 will be the fifth highest year on record for existing-home sales. “Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year — a lot of people are, in fact, buying homes,” he said. “One out of 16 American households is buying a home this year. The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.”

He emphasized all real estate is local with naturally large variations within a given area.

“Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year,” Yun said. “Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.”

Existing-home sales are expected to total 5.78 million in 2007 and then rise to 6.12 million next year, in contrast with 6.48 million in 2006. New-home sales are forecast at 804,000 this year and 752,000 in 2008, down from 1.05 million in 2006; a recovery for new homes will be delayed until next spring.

“A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices,” Yun said. Housing starts, including multifamily units, are likely to total 1.37 million in 2007 and 1.24 million next year, down from 1.80 million in 2006.

NAR President Pat V. Combs, from Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt, said, “Housing is still a good long-term investment, and we’ll be seeing a broad, modest improvement in home prices in 2008. With widely varying conditions, the best advice for consumers is to consult a Realtor(R) in their area to learn about local market conditions because supply and demand can change from one neighborhood to the next.”

Existing-home prices will probably slip 1.3% to a median of $219,000 in 2007 before rising 1.3% next year to $221,800. The median new-home price should drop 2.1% to $241,400 this year, and then increase 1.0% in 2008 to $243,900.

The 30-year fixed-rate mortgage is expected to average 6.4% for the next two quarters and then edge up to the 6.6% range in the second half 2008. Additional cuts expected in the Fed funds rate will help to keep mortgage interest rates historically favorable.

Growth in the U.S. gross domestic product (GDP) is estimated at 2.0% this year, below the 2.9% growth rate in 2006; GDP is likely to grow 2.7% next year.

The unemployment rate is forecast to average 4.6% this year, unchanged from 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.8% in 2007, compared with 3.2% last year. Inflation-adjusted disposable personal income will probably increase 3.6% in 2007, up from 3.1% last year.

The National Association of Realtors(R), “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.