Is now the right time to buy?  Believed the be the question without an answer.  We’ve written about home prices raising artificially due to increases in demand because of the Home Buyer Tax Credit.  Is that a nationwide issue, or only in certain communities?  If it is significant, how much exactly?

Interest rates on 30 year mortgages are going to steadily increase from now until the end of the year.  Exactly how much?  No one really knows.  That increase, I believe, is much more important as far as keeping money in your pocket is.  If decide to wait until after the expiration of the Tax Credit you will miss out on either $8,000 or $6,500 in tax credits as well as increases in interest rates.

How much does interest rate cost me?  Well, that really depends on how much you borrow and for how long.  With residential homes, most loans are 30 year and to get a good interest rate you are expected to put 20% down.  So for a residential home, on a $250,000 loan a one percent variance in interest rate could mean an additional $70,000 over 30 years.  That is quite a bit.

Does this mean I should buy now?  Yes, and no.  If you’ve found the home that is right for you, it may be beneficial to roll up your sleeves and make sure you’re able to go under contract before April 30th, and secure the best possible interest rate.  If you haven’t done so, it could be a mistake as finding the right home for you is the most important part of home buying.  This is a 30 year major financial commitment.  It would be wise not to take the decision lightly.

With mortgage rates near a 50 year low why are there not more borrowers taking advantage of the low rates and refinancing?  With many borrowers able to drop their rate by a full percentage point, and more than half able to drop their rates by three-quarters of a point it would seem the time is right.  It seems with house values plummeting and incomes falling equally as fast that a full percentage point (or even three-quarters) would be the thing to turn things around for many home owners in need.

Tightening credit restrictions, sky rocketing fees, and lacking equity, that’s not going to happen.

In 2008 Fannie Mae and Freddie Mac began instituting fees that, even for borrowers with good credit could face fees equal to 1% of the loan amount, or more.

On Monday the Obama Administration extended a year long program started in April to help borrowers who owe between 80% and 105% of the value of their home to refinance.  In September that program grew to include borrowers who owe up to 125% of the value of their homes.  The plan was thought to save millions when first launch, but less than 2,000 home buyers have taken advantage.

The Administration is looking into creating additional help for home owners in need.

Have you had a similar experience with securing refinancing?  Do  you know someone who has?  If you have any questions about any of the information feel free to contact us or feel free to discuss!

An article on The Wall Street Journal Online is discussing Harvard plan to sell up to $500 million in real estate assets.  Although Harvard’s endowment has approximately $5 Billion in real estate and future commitments to the properties.

Here’s an excerpt from the article about the losses posted and a little on the plan to sell:

Harvard’s own real-estate portfolio “suffered a loss of over 50%” for the fiscal year ended in June, according to a September report from Jane Mendillo, head of the company that manages the endowment, the nation’s largest. Harvard’s endowment posted miserable overall returns last year, declining 27.3% for the year that ended in June.

In November, Harvard began marketing a portfolio of stakes in more than 30 real-estate funds, ranging in size from $50 million to $500 million through Credit Suisse Group, according to several secondary-market buyers and intermediary firms familiar with the offering.

Some of the largest commitments are with real-estate-investment companies such as Beacon Capital Partners, Lubert Adler, Lone Star Funds and Westbrook Partners, according to documents reviewed by The Wall Street Journal. Close to 60% of the funds are in North America, but there are also a number of commitments with real-estate companies in Europe, Asia and South America, according to the documents. A spokesman for Credit Suisse declined to comment.

I really do not see this as a surprise at all.  Last year was not a great year for many investments at all, and really to see a 50% loss on real estate values isn’t as bad as some have seen.  Losing 27% of the total endowment is a strong blow, but when you have an endowment the size of Harvard’s (currently $26 billion) you generally have some room for ups and downs.

The Article states Harvard Yard is not for sale, but I am very interested in the price it would fetch.  I would also be interested in knowing if it’s true that everything is for sale, for the right price.

With home sales slowing down and with internet sales rising, it only makes sense to combine the two. Countdowntobuy.com has created and innovative way to hopefully move foreclosed homes.

The idea is relatively simply. To give the banks a fair shake the price is set just above the assessed value for 10 days, and then drops a percentage point everyday for the next 30 days.

Example:

A foreclosed home worth $500,000 goes on Countdowntobuy.com for $550,000 and it sits for 10 days. On the 11th day the price will drop 1 percentage point (of the $500,000 Estimated Market Value) to $500,000, then to $450,000, $400,000 and so on until either the 30 days expires, or a bid is higher than the days value.

Users will bid what they believe the home is worth. You can see how many bids there are, as well as a great deal of information regarding the property, but not the value of the bids.

Confused much?  Don’t worry, I was at first as well.  To us, this seems very much like Ebay, for foreclosures, just backwards.  I know that likely does not help with your

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We appreciate all the feedback and will be sure to address anything you have an interest in.  You can find Proper Realty Group on Facebook  at facebook.com/ProperRG and Twitter @ProperRG.  We can respond to any questions sent to Info@ProperRealtyGroup.com.  Thank you and we look forward to helping Boston LIVE PROPER.