2010: A Year in Review…what was the best and worst of the year in the real estate market? Here are my thoughts:
The Best
1. The First-Time Home Buyer Tax Credit of $8,000.
April 30, 2010 was the end of the first-time buyer tax credit of $8,000 and move-up buyer credit of $6,500. It increased sales in March and April, helped us sell through stale inventory, and got many buyers off the fence.
Don’t forget: Military personnel (both active and retired) are eligible until April 30, 2011.
2. Interest Rates Hit ALL Time Lows.
Interest rates on a 30-year fixed loan hit the low 4% mark, and even under 4% on other loan products (think 7/1 ARMs or 15-year mortgages). Money was so cheap to borrow this year, people who bought and/or refinanced this year got a STEAL on their mortgages.
3. Prices Came Up: Arlington Median Sale Price Up 3.3% Year To Date.
Using the median sale price, excluding subsidies, the year to date price is 3.3% higher than this time last year.
4. Foreclosures Down.
Arlington County peaked at almost 7% of all sales in 2009; this year, we hung around 5%. My prediction for next year: it’ll be even lower than 5%.
5. Humanitarian Best: Foreclosure Freeze From Dec 20th – January 3rd.
Santa came early this year, when several large banks including Fannie Mae and Freddie Mac decided to postpone ALL foreclosures on occupied properties from December 20, 2010 through January 3, 2011. While I do think it’s only postponing the inevitable, it’s a nice thing of them not to evict people around the Holidays and New Years.
The Worst (and The Ugly)
1. The Ugly: Foreclosure Freeze Due to Incompetence.
Embarrassing. The only word that comes to mind. “Robo Signing” followed by illegally approved foreclosures meant stopping all foreclosures while some of the big banks got their paperwork straight. How did these banks become some of our countries biggest? Beats the heck out of me.
2. Banks Looking Out for Themselves, Not the Consumer.
I wrote a letter to JPMorgan Chase about their lack of ability to actually HELP anybody, although they’d have you believe they’re on your side. Recently my friend and a fellow Realtor(R) in Utah, Chris Nichols, wrote a blog post about his experience with SunTrust Mortgage and how they stole $2,711.84 from him. It’s kind of disgusting, actually, that these HUGE banks kick everyone around.
3. FHA Raises Monthly PMI by 63%
If you read my blog often, you should recall how often I said this year that the FHA is running out of money. Well back in October, they raised the monthly PMI rate from 0.55 to 0.90, but lowered the Upfront Mortgage Insurance Premium from 2.25 to 1%, which actually increased monthly costs. If you recall in April they initially increased the UMIMP from 1.75% to 2.25%.
4. FHA Gets Rid of Condo Spot Approvals, Requires Entire Condo Project to Obtain Approval.
FHA tightened up lending guidelines by putting additional restrictions on buying a condo. They changed a lot of regulations that caused additional time to buyers between contract and closing. Again, running out of money?
So that’s my year in review. Some highs, some lows (some REALLY low lows), but overall a strong recovery from 2009. If you haven’t read them yet, read my 2011 predictions.