How the $8,000 tax credit can be used with FHA loans

Earlier this month the National Association of Realtors reported the $8,000 first-time home buyer tax credit would be an allowable form of downpayment for FHA (Federal Housing Administration) loans. FHA loans have become popular over the last two years because they allow for a low downpayment of 3.5%.

The details of how the tax credit can be used with FHA loans were announced on Friday. The $8,000 tax credit cannot be applied toward the minimum downpayment of 3.5%; however, the credit can be applied to a downpayment amount above and beyond the minimum 3.5%. It can also be used to cover closing costs and buy down the interest rate on the buyer's mortgage.

You'll find more details here.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Home sales across the 50 states - mapped

This graphic from mint.com paints a good picture of the market across the country. Home sales in the first quarter of 2009 actually increased in states like California, Arizona, Nevada and Florida. Each of these states had very over-heated markets where prices crashed before buyers started jumping in in larger numbers.


Sales in most other states decreased in the first quarter.


Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Madison foreclosures by zip code, 2000 through 2008

Andy Lewis from the UW Extension and Russ Kashian from UW Whitewater have assembled foreclosure data from the Wisconsin Circuit Court database that shows how foreclosures have grown by location. Here's a look at foreclosures by zip code on both the east and west side of Madison.

Madison East: Foreclosures were up across the board. The 53704 zip code led the east side with 159 foreclosures in 2008.




Madison West: Foreclosures increased in every zip code in 2008, with the exception of 53715. Foreclosures increased by at least 41% in every other west side area. The 53711 zip code led the west side with 86 foreclosures in 2008.

Keep in mind a higher number of foreclosures does not necessarily imply a higher density of foreclosures. The zip codes with the most housing units will tend to have the most foreclosures.

You'll find our full summary of foreclosures by location, including a summary for Dane County communities, on the economic trends page at DaneCountyMarket.com.

Have a good night,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Another large-scale auction

JP King is conducting another large-scale auction. This one will be for 47 condos in the Rhapsody development on Lake Delton. The auction will be take place on Sunday, June 21st at 1:00 PM. You'll find more details on page 10 of today's Wisconsin State Journal real estate section.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

The second half of the peak buying season is here

Believe it or not we've already entered the second half of the peak buying season. Check out this graph. Year in and year out the peak month for closings is the month of June.

Most of the offers for this June's closings have already been made, so if you need to sell, there is no time like the present to make sure your pricing and marketing are on the mark. Buyer traffic will subside as we make our way through the summer months. The buyers who end up shopping for homes in August and September will have more leverage than today's buyers. And the buyers shopping in the late Fall and early Winter will have more leverage than buyers at any other time of the year.

One wild card is the expiration of the $8,000 first time homebuyer tax credit on December 1st. What will happen to the market after the credit expires? It's hard to say. Housing demand could drop next year due to the number of first-timers buying into this year's tax credit. The economy could get better. It could get worse. On the other hand it's possible another housing stimulus package gets passed into law next year.

The one sure thing is the demand for housing is higher right now than it will be at any other time for the remainder of the year. If you need to sell, your best window of opportunity over the next 9 months is right now.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Where's Rex?

You'll see from this listing photo he's watching TV in the living room.

With 90% of all home buyers shopping on the web, a home's online appearance is a critical part of any marketing plan. That's why we and other Realtors offer staging, professional photos, and a virtual tour as standard listing features.

Here's our standard marketing plan. You'll find many more marketing tips and ideas on the selling real estate page at DaneCountyMarket.com.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Mortgage rates remain near historic lows

Freddie Mac published the results of its most recent mortgage market survey on Thursday. The average commitment rate for a 30 year fixed rate mortgage was 4.82%. The average rate for a 15 year fixed rate loan was 4.5%.

Here's how rates have trended over the last 20 weeks.

A number of local lenders currently offer 30 year loans for fixed rates at or below 5%. For the latest on local rates, you can view our daily mortgage rate updates on the buying real estate page at DaneCountyMarket.com.

Have a good one,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

First time home buyer seminar presented in Spanish this Saturday, 10:15 AM

The Realtors Association of South Central Wisconsin is hosting a seminar in Spanish for first time home buyers this Saturday, May 23rd at 10:15 AM. The seminar will be held in the ATC Community Room at 2300 S Park St. The event is free and open to the public. Those who attend will learn more about financing, the benefits of home ownership, and understanding a closing statement. Appetizers and beverages will be served.

For more information, please feel free to contact Jose Maria Donoso at 469-6874.

Have a good weekend,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

How the condo market is trending

Last month 7% of all Dane County condo listings were under contract. This month the number is up to 10%. For every one condo listing currently under contract, another 9 condo listings are working for an accepted offer.

Here's how the percent under contract by price range has changed from last month to this month.

As you can see from the table above, the condo market varies a lot by price category. We are seeing an increased level of buyer interest for condos priced under $200,000. Our impression is the $8,000 first-time homebuyer tax credit is helping the condo market. We'll take a similar look at the condo market later this summer.

Have a good one,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

How the single family home market is trending

Last month we looked at the percent of Dane County homes under contract. At that time 18% of all Dane County single family home listings had an accepted offer. The number is now at 22%.


The table below shows how the percent under contract has been trending by price range.

The market for starter homes is very hot right now. The hottest price range is the category of homes priced between $125,000 and $149,999, with 34% of these homes currently under contract. In other words for every one home in this price category under contract, there are 2 other listings working for an accepted offer.

The market for higher-priced homes is softer. For example only 6% of the homes priced between $500,000 and $599,999 are currently under contract. For every one home in this price category currently under contract, another 16 listings are fighting for an accepted offer.

One thing to keep in mind is the market can vary a ton by location. Here's a good example: Last weekend we provided a buyer a list of all MLS listings in the Sunset Village and Westmorland neighborhoods priced at $250,000 and under. An amazing 55% of these listings were already under contract. Because of this we recommended an automated search for this buyer, so she can receive an email with a link to the online listing whenever a new listing matching her criteria hits the MLS. With this approach if she likes what she sees online, she can then set up a quick showing before the sign goes up in the yard.

We'll be taking a similar look at the condo market in a future post.

Have a good night,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Appraisers have a tough job in this market

We listed a home for a client in February. Even with the down market we were optimistic our client's home would sell quickly. We worked with her to price her home right based on our thorough review of the neighborhood. And she had done an excellent job of staging her home and preparing it for sale.


The listing received 3 offers in 4 weeks, and the third offer was accepted by our client. The buyer completed his inspection and the inspection contingency was cleared. The buyer's lender also issued a loan commitment, which was subject to an appraisal that supported the purchase price. Everything was on track.


Then the property was appraised. As it turns out the appraisal came up more than $11,000 short of the contract price. Both the seller and the buyer were shocked. The seller had done everything right to sell her home quickly at a fair market price. And the buyer had toured dozens of homes before deciding that this home was the one that met all of his needs at a fair market value. The buyer did not have $11,000 in extra cash to bring to the closing table. And the seller did not want to lower her price.


Appraisers have a tough job in this market. Prices have been changing quickly, and with fewer sales these days it can be a challenge to identify a solid group of comparable properties in some neighborhoods. But we were surprised to see that two comparable homes from the same neighborhood were excluded from the appraisal, while two properties located a mile away and in another city were included.


Both the buyer and the seller felt strongly that the appraisal was incorrect and that a second appraisal should be ordered. It wouldn't be that easy, however. The appeal process would involve a lot of work, time and patience. We'll cover what happened next in a future post.


Have a good night,


Dan Miller, Keller Williams Realty and DaneCountyMarket.com

April home and condo sales down 19%, median price down 5.2%

Our preliminary numbers from the South Central Wisconsin MLS are in. A total of 391 Dane County homes and condos were sold in April, down 19% from the 483 listings sold a year ago. The April median price of $201,900 decreased by 5.2% from the April 2008 price of $213,000.

We've noted the recent shift toward the starter home. The April numbers bear this out. Fifty percent of the homes and condos sold in April went for under $200,000, compared to 44% from a year ago.


You'll find our full preliminary report on the month of April, including the breakdown for homes and condos, at DaneCountyMarket.com.

Have a good weekend,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

The $8,000 tax credit may now be used as a downpayment

This news was just announced from a National Association of Realtors press release:

"Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment."

This is another nice carrot for first-time homebuyers. We'll share more information as the details of this plan become clearer.

Have a good day,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Dane County housing starts lower by 53% in April

Dane County housing starts totaled 42 in April, down 53% from the 90 housing starts recorded in April of 2008. Here's how housing starts have been trending since 2005.




And here's how housing starts have stacked up for each of the last 11 Aprils:

• April 1999: 195
• April 2000: 179
• April 2001: 211
• April 2002: 230
• April 2003: 246
• April 2004: 250
• April 2005: 188
• April 2006: 166
• April 2007: 127
• April 2008: 90
• April 2009: 42

Housing starts this past April were down 83% from the peak April in 2004.

You can check out our full report on the real estate trends page at DaneCountyMarket.com.

Thanks to Dominic Collar from MTD Marketing Services of Wisconsin for sharing his data. For more information, you can contact Dominic at 920/993-8435.

Have a good one,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Dane County foreclosure filings up 29% in April

A total of 150 new foreclosures were filed in April, up 29% from the 116 filed in April of 2008.

Year-to-date foreclosures totaled 543, up 24% from last year.


This second graph puts foreclosure growth in perspective. The 543 foreclosures filed through April surpass the total number of foreclosures filed during each of the first 6 years of the decade.

It can take months for a foreclosed home to hit the market. Given this we should expect the number of foreclosed homes on the MLS to continue to rise for the foreseeable future.

For our full foreclosure report, you can check out the economic trends page at DaneCountyMarket.com.

Have a good night,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Three tips for first-time homebuyers in this market

We've noted how a lot of starter homes are getting gobbled up quickly by homebuyers seeking to take advantage of the $8,000 tax credit. The competition for starter homes is fierce right now. Our buying clients are learning that a lot of the listings priced below $250,000 already have accepted offers.

Here are 3 things you can do to help ensure you are able to purchase the home you want:

#1: Work with your lender to get your loan pre-approval before you start touring homes. You'll need that pre-approval to compete with other buyers that may be making offers on the same home as you.

#2: Have your buyer agent set you up on an automated MLS search. The auto search will send you an email as soon as a new listing matching your criteria hits the MLS. It will also send you an email whenever an existing listing matching your criteria undergoes a price change.

#3: Don't wait for the weekend to tour a home that really intrigues you. Try scheduling a showing during the work week (during the lunch hour or after work). Starter homes that show well and are priced right can sell in a matter of days in this market.

For more buying tips, check out the buying real estate page at DaneCountyMarket.com.

Have a good weekend,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

How long does a buyer agency agreement last?

For as long or a short as you want it to last. There is no set timeframe for a buyer agency agreement. The length is completely customizable. It can even be written to apply to a specific property.

We've found many buyers like the idea of a single property buyer agency agreement. It offers two nice advantages.

First, it allows the buyer to have full representation during the negotiation and offer process. Second, it gives the buyer and the buyer agent some time to work with each other before they commit to a longer time period. Sometimes the buyer and buyer agent click; sometimes they don't. Taking a baby step with the buyer agency contract is a good way to find out.

Have a good night,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

May first-time home buyer seminars

Both the UW Credit Union and the Dane County Housing Authority offer home buyer seminars during the month of May.

The next UW Credit Union Seminar is Tuesday, May 12th from 6:30 to 8:00 PM.

The next Dane County Housing Authority seminar is a two-part series with sessions on both Tuesday, May 5th and Tuesday, May 12th. Both sessions run from 6:00 to 9:00 PM. Click here for more course details and registration info.

Have a good one,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Google Trends says home sales may be on the rise

Data enthusiast Andy Lewis from the UW Extension Center for Community and Economic Development recently shared this graph from Google Trends. This is the graph you get when you go to Google Trends and enter the search term "homes for sale in Madison".

More Google users are entering this search term than at the same time last year. If there is a correlation between internet search patterns and buyer activity, then we may see rising home sales in the near future.

We believe there is some truth to this, as we're seeing a ton of activity in the starter home category. But we don't see any evidence right now that sales for homes priced at $400,000 and up are on the rise. We'll share our data on sales by price category as we progress through the year.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Swan Creek and Oak Meadow open house event is this Sunday, noon to 4:00

If you have an interest in Fitchburg real estate, Sunday May 3rd will be a great day for you to get out and see what's on the market. Twenty homes and condos from the Swan Creek and Oak Meadow developments will be participating in the event, which runs from noon to 4 PM. Prices range from $184,900 to $459,900. All of the participating properties are 5 years of age and younger.

For a complete list of participating listings, check out the Sunday real estate section in the Wisconsin State Journal.

Have a great weekend,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com