J.J. Ballard's Blog

Existing home sales rose 4.3% in January to a seasonally adjusted annual rate of 4.57 million units from a downwardly revised 4.38 million units in December. The inventory of unsold homes on the market decreased to 2.31 million, a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.

Retail sales rose 3% for the week ending February 18, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 3.2%.

New home sales fell 0.9% in January to a seasonally adjusted annual rate of 321,000 units from an upwardly revised rate of 324,000 units in December. The initial December reading was 307,000. The November rate was also revised higher to 318,000 units. At the current sales pace, there’s a 5.6-month supply of new homes on the market, the lowest reading in six years.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending February 17 fell 4.5%. Refinancing applications decreased 4.8%. Purchase volume fell 2.9%.

Industrial production at the nation’s factories, mines and utilities was unchanged in January after advancing an upwardly revised 1% in December. Compared to a year ago, industrial production is up 3.4%. Capacity utilization fell slightly to 78.5% in January from 78.6% in December.

Initial claims for unemployment benefits for the week ending February 18 were unchanged at 351,000. Continuing claims for the week ending February 11 fell by 52,000 to 3.392 million, the lowest level since August 2008.

From Prospect Mortgage Economic Update

As one of the oldest and still most highly prized types of flooring in the nation, hardwood has nothing to prove when it comes to desirability. However, on the commonly held belief that hardwood is a healthier flooring than carpet (because hardwood doesn’t provide a place for dust and mold to hide) the verdict isn’t exactly cut and dry.

Does Carpet Affect Allergies?
There are many people out there who believe that dust mites, pollen, and other allergens can easily become trapped in your carpet. Perhaps surprisingly, the carpet industry supports this belief. According to Carpet-health.org, studies comparing airborne particles levels in carpeted rooms to non-carpeted rooms showed carpeted surfaces trapped more particles so that walking [over the floor] disturbed fewer particles. Result: less dust in the breathing zone over carpeted floors. To put it more bluntly, the website tells us, clean, dry, well maintained carpet actually improves indoor air quality.

On the Other Hand…
Producers of hard flooring are quick to point out that just because the allergens are trapped, they are still present. From their prospective, having dust you can see and remove on your flooring is a better situation than having trapped particles all over your house. People other than hardwood flooring manufacturers share this view, as well. According to the AAFA (Asthma and Allergy Foundation of America), Hardwood floors are an ideal type of floor for persons with allergies and asthma.

The Problem with Moisture Issues
One place where everyone can agree that carpet DOESN’T belong is in moist areas. The Center for Disease Control firmly tells homeowners to “Remove and replace flooded carpets to reduce the likelihood of mold growth (a situation that can become decidedly serious).” The CDC also makes a point of telling homeowners, “Do not carpet bathrooms” for the same reason.

Note: Any moisture rich area is generally considered a bad place to install carpet, but since moisture can have extremely detrimental effects on hardwood, too, the clear winners in basements, bathrooms, and laundry areas are other forms of hard flooring like tile, stone, and concrete.

Is One Flooring Healthier than the Other?
If you take care of your flooring and replace it when necessary, there’s nothing to strongly suggest that either hardwood or carpet is a significantly healthier option. However, homeowners who like the comfortable feel of carpet should be aware that proper cleaning and maintenance are essential to keep it as healthy and attractive as possible.

It should be noted that some have made a case for hardwood being healthier on a global scale. When sustainably grown and harvested, wood flooring is a very environmentally friendly product whose long life expectancy suggests that it won’t be taking up landfill space any time soon!

by John Nunan from ServiceMagic Newsletter “The Neighborhood”

It wasn’t long ago that some economic forecasters anticipated a turnaround in the home-sale market by 2012. When the economic recovery stalled and the housing market showed no sign of turning around quickly, projections for a housing recovery were pushed out two, three and even seven years.

Ken Rosen, chairman of the Fisher Center for Real Estate & Urban Economics at the University of California, Berkeley, believes that home prices have bottomed and are increasing in areas powered by strong job growth. However, even in places where prices are rising, they are not rebounding.

Not all economists agree that home prices have hit bottom; many anticipate another 5 percent price decline over the next two years.

Rosen gives a 65 percent probability that the recovery will be choppy. He forecasts a 5 percent chance of a strong recovery and a 30 percent chance of a double-dip recession. Factors holding a recovery back: a general sense of uncertainty that undermines consumer confidence; millions of unsold foreclosure properties; high unemployment; cutbacks in services; and tight credit conditions.

In some urban areas of the country, like Atlanta, Chicago, Miami and Phoenix, it may be more advantageous to buy than to rent. Apartment rents have been rising due to increased demand for rentals from people who have lost their homes in foreclosure, empty nesters trading down, people with jobs who have decided not to buy, and people who would like to buy but who can’t qualify.

The same lenders who gave risky mortgages to buyers who couldn’t afford them in 2005 and 2006 are now making it difficult for qualified buyers to get financing. It used to take a credit score of 620 or more to qualify for a conventional mortgage. In those days, loans to buyers with 5 to 10 percent cash down were readily available.

Today’s buyers need a credit score of 760. Some conventional lenders require a 20 percent cash down payment. If the buyers are self-employed it can be more difficult to qualify. It’s a great time to trade up, but most buyers can’t qualify to buy the new home without first selling their current home.

One of the best things that could happen to the housing market at this point would be an easing of credit-qualifying standards — not to the ridiculously low level of several years ago, but to a level that would enable more creditworthy buyers to take advantage of today’s low interest rates and relatively low home prices.

Good news lately bodes well for the future, but you should anticipate continued volatility. The jobless rate dropped to 8.6 percent nationally in November, the lowest level in 2 1/2 years. The consumer confidence index rose 15 points in November, to 56. Although encouraging, if the economy were on solid ground we would expect a reading of 90.

HOUSE HUNTING TIP: It’s a good time to buy a home in many areas of the country. However, it’s only a good time if you buy for the long term and you have realistic expectations about what buying a home will entail. It will require maintenance, which costs money and takes time.

Your home is unlikely to be the cash cow that most buyers expected — and many achieved — during the bubble years. According to Robert Shiller, Yale University economist, home prices track, on average, with the inflation rate over long periods.

Renters with good incomes and good credit who are tired of moving could benefit from buying a home now. Just be aware that if we go into a double-dip recession, prices could drop another 10 percent in some areas. That’s why you don’t want to buy for the short run.

THE CLOSING: Buyers having trouble amassing 20 percent for a down payment should check with independent banks that have more flexibility in their qualifying criteria.

By Dian Hymer, Monday, January 9, 2012.

Inman News®

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”