Real Estate Recap: July 31, 2012

From the Baton Rouge Business Report, Real Estate Weekly:

By the numbers: The percentage of Baton Rouge homes in foreclosure fell to 2.36% in May, according to a report from CoreLogic, down from 2.39% from the month previous and 2.47% in May 2011. The local mortgage delinquency rate—that is, the percentage of home loans three months past due or more—also fell in May to 5.39%. That’s down from 5.54% in April, and 5.59% a year ago. Daily Report has the full story here.

Game on: Pinnacle Entertainment plans to officially open the doors of its $368 million L’Auberge Casino & Hotel in Baton Rouge at 7 p.m. on Wednesday, Aug. 29. Pinnacle says the grand opening will “feature memorable entertainment, dining experiences and an unveiling ceremony capped off with a stunning fireworks display.” Details on entertainment specifics were not released but are expected as the opening date nears.

No finer place for sure: U.S.-based IT services firm Ameritas Technologies plans to open an “information technology center” in the Chase Tower South downtown. Ameritas says it will begin hiring in September, plans to open by October, and hopes to have 300 employees by 2016, with the jobs paying an average of $63,000 annually, plus benefits. The company was lured to Baton Rouge with an incentives package, the full details of which you can get from Daily Report here.

This week’s poll question: If you built a new house, would you include energy-efficient and maintenance-free amenities?

B.R. ranked in the middle for affordable housing

From the Baton Rouge Business Report, Real Estate Weekly:

Of the roughly 200 U.S. metropolitan areas surveyed for the new “Paycheck to Paycheck” report on first quarter housing affordability from the National Housing Conference and the Center for Housing Police, Baton Rouge ranks No. 83 on the list of most expensive metros to buy a home. On the same report for the first quarter of 2011, Baton Rouge was ranked No. 81. The report says  the average home sale price dropped to $157,900 in the first quarter, down from $160,600 in the opening three months of 2011. New Orleans is ranked No. 91 on the list, up from No. 95 last year, with an average sale price of $147,500 in the first quarter of 2012. The Capital Region appears to be more affordable for renters, according to the report, which ranks Baton Rouge No. 128 on the list of the most expensive metros for renters. The average rent for a two-bedroom unit in Baton Rouge is pegged at $752 in the report, much lower than the national average of $949 among the largest 200 metros. New Orleans is ranked at No. 58 on the rental list, with a $948 average. You can get more details and access the complete report here.

June home sales jump 13.5% in Capital Region

From the Baton Rouge Business Report:

Halfway through 2012, home sales in the eight-parish region tracked by the Greater Baton Rouge Association of Realtors were up 19% over sales recorded six months into 2011. Year-to-date figures were aided by another strong sales month in June, during which 776 homes were sold, a 13.5% increase over the month last year, according to the GBRAR’s latest tally. Sales numbers have been up every month this year, with a total of 3,739 through last month, compared to 3,142 through June 2011. East Baton Rouge Parish has led the sales increases in 2012, up 19.9% with 2,059, compared to 1,717 last year. Ascension Parish’s rate of increase isn’t far behind, up 19.1% with 710 sales, compared to 596 last year. Livingston Parish sales this year are up 15% to 638, from 555 through June 2011. Sales in the five other parishes lumped into GBRAR’s “other” statistical category—West Baton Rouge, Iberville, East Feliciana, West Feliciana and Pointe Coupee parishes—are up 22.2% at 332, from 274. Total year-to-date volume of homes sold in the entire eight-parish region was $706.5 million through June, up 17% over the $603.4 million sold in the same period last year. See the GBRAR’s complete sales report here.

Tips for buying a house

From CNN Money

The top 10 things you need to know when buying a home.

1. Don’t buy if you can’t stay put.

If you can’t commit to remaining in one place for at least a few years, then  owning is probably not for you, at least not yet. With the transaction costs of  buying and selling a home, you may end up losing money if you sell any sooner -  even in a rising market. When prices are falling, it’s an even worse  proposition.

2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must  make sure your credit history is as clean as possible. A few months before you  start house hunting, get copies of your credit report. Make sure the facts are  correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about  two-and-one-half times your annual salary. But you’ll do better to use one of  many calculators available online to get a better handle on how your income,  debts, and expenses affect what you can afford.

4. If you can’t put down the usual 20 percent, you may still qualify for a  loan.

There are a variety of public and private lenders who, if you qualify, offer  low-interest mortgages that require a down payment as small as 3 percent of the  purchase price.

5. Buy in a district with good schools.

In most areas, this advice applies even if you don’t have school-age  children. Reason: When it comes time to sell, you’ll learn that strong school  districts are a top priority for many home buyers, thus helping to boost  property values.

6. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings,  most new buyers (and many more experienced ones) are better off using a  professional agent. Look for an exclusive buyer agent, if possible, who will  have your interests at heart and can help you with strategies during the bidding  process.

7. Choose carefully between points and rate.

When picking a mortgage, you usually have the option of paying additional  points — a portion of the interest that you pay at closing — in exchange for a  lower interest rate. If you stay in the house for a long time — say three to  five years or more — it’s usually a better deal to take the points. The lower  interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.

Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

9. Do your homework before bidding.

Your opening bid should be based on the sales trend of similar homes in the  neighborhood. So before making it, consider sales of similar homes in the last  three months. If homes have recently sold at 5 percent less than the asking  price, you should make a bid that’s about eight to 10 percent lower than what  the seller is asking.

10. Hire a home inspector.

Sure, your lender will require a home appraisal anyway. But that’s just the  bank’s way of determining whether the house is worth the price you’ve agreed to  pay. Separately, you should hire your own home inspector, preferably an engineer  with experience in doing home surveys in the area where you are buying. His or  her job will be to point out potential problems that could require costly  repairs down the road.

How to Determine How Much Home Can You Afford

From Fox Business:

Interest rates are low and home prices have plummeted from their 2008 highs,  making it an ideal market for homebuyers. But before even starting the hunt,  every buyer needs to determine exactly what they can afford and how much they  will need for a down payment.

While a down payment is sure to be in the thousands, 90% of new mortgages are  government-backed FHA loans, according to Bob Walters, chief economist at  Quicken Loans, that only require 3.5%-9% upfront, compared to the standard 20%.  Veteran Home loans or VA loans sometimes finance the entire home purchase and  don’t require a down payment.

“Most clients that apply for an FHA loan put down the lowest available down  payment of 3.5% to 5%. This is the major advantage of an FHA loan,” say Noah  Brown, a mortgage loan originator at American Mortgage Group. Keep in mind that  if you don’t put down 20%, you’ll likely have to pay for private mortgage  insurance on top of your mortgage payment until you have enough equity in the  home.

Calculating How Much Home You Can Afford

When you get pre-approved for a loan, the lender will tell you the maximum  you can borrow based on your debt to income. Most banks set the debt to income  ratio at 45% to 50%, which means you’re debt can’t exceed 50% of your income.  Once your debt to income ratio is determined, the bank will tell you how much of  a home you can afford.

Experts warn buyers that just because they are approved to borrow a certain  amount, it could be more practical to borrow less to have more flexibility with  other lifestyle spending. If you like to eat out every night, enjoy weekly  shopping trips or have an expensive lifestyle buying the maximum house you can  afford could leave you strapped for cash. “Some clients may not feel comfortable  with a debt-to-income ratio of 50% and thus look for a lesser value home, with  the knowledge of what they can afford / qualify for,” says Brown.

Once you know what you can afford, next you need to figure out the down  payment amount and how to come up with it. According to Brown, you should never  use the majority of your assets to for your down payment—putting 20% down  instead of 25% will leave some emergency funds in the bank.

Collecting funds for the down payment also varies by financial situation.  According to Walters of  Quicken Loans, the majority of people use money  from their savings account or from the sale of a previous home as the down  payment.

If you don’t have adequate savings for the payment, you can tap your 401(k)  or IRA, although experts warn you could be hit with significant penalties for  withdrawing early. Most lenders allow a portion of the down payment to come from  a gift as long as it’s a gift with no strings attached. “Lenders want to make  sure it’s a gift and not a loan,” says Walters. “They don’t want an over  leveraged client.”

You can not charge your down payment or otherwise borrow money through an  unsecured loan because they will increase your debt-to-income ratio.

There are non-profit companies that offer eligible buyers assistance in  buying a home. For instance AmeriDream, a non-profit focused on helping people  find affordable housing, helps people with low and moderate incomes buy homes by  offering down-payment assistance. Buyers who are approved for an FHA loan, but  don’t have the money for the down payment can apply for the AmeriDream down  payment assistance.

The Nehemiah Program, which is a down payment assistance program that offers  help to buyers who qualify for an FHA loan. With this program there are no  limits on income or assets.  For a list of down payment assistance programs click  here.

Read more:

Real Estate Recap: Zachary named among 10 best towns for families in America

From the Baton Rouge Business Report, Real Estate Weekly:

Plan on it: While recently breaking up and approving items within Mayor Kip Holden’s $11.1 million budget supplement, the Metro Council voted to approve $200,000 for the planning of Smiley Heights, marking some of the first dollars appropriated for implementing the FuturEBR master plan for land use and development. The city-parish envisions that Smiley Heights—a mixed-use development including education, retail, residential and commercial components in the Melrose East community, where Greenwell Springs Road and Ardenwood Drive intersect—will encompass 3,500 new households and create 20,000 new jobs by 2030. Read the full story from Daily Report here.

Certifiable: A 204-acre “development ready” site in Port Allen is slated for certification under LED’s Certified Sites Program. LED officials say the site—known simply as “All Star” for its ownership affiliated with the All Star Automotive Group—is located north of Interstate 10 on Court Street, about midway between La. 415 and La. 1. The site is one of three LED-certified sites in the Capital Region, including a 60-acre site at the Donaldsonville Industrial Park and a 44-acre site at the Pointe Coupee Port and Industrial Park. Daily Report has the full story here.

Like a good neighbor: Family Circle has included Zachary on its new list of the 10 best towns for families in the United States, noting the city’s relatively high median income ($65,749), low average home price ($180,000), low student/teacher ratio (21:1) and high overall schools rating (it gives it a 9 of 10). “The [school] district has been rated the best in Louisiana for the last seven years and was the only one to receive an ‘A’ rating from the state in 2011,” the magazine notes. Check out the complete list here.

Real Estate Recap: June 3, 2012

From the Baton Rouge Business Report, Real Estate Weekly:

Hammering away: With a 13% construction employment increase in May—an addition of 4,900 jobs since May of last year—the Capital Region was the 11th-best performing city among 337 U.S. metro areas tracked by the Associated General Contractors of America. Baton Rouge had a total of 43,600 people working in the construction industry as of May 31, according to the AGCA’s latest jobs report. Read the full story from Daily Report and access the complete metro rankings here.

Inch by inch: Baton Rouge’s foreclosure rate edged down 0.18 percentage points in April to 2.39%, compared to the rate in April 2011, according to a new report from CoreLogic. That’s a scant 0.02 percentage points down from the March rate. Still, Baton Rouge’s foreclosure rate remains well below the 3.41% national average and is also lower than Louisiana’s rate of 2.49% in April, which represents a decrease of 0.11 percentage points from a year ago. Get the full story from Daily Report and access a map of foreclosures by ZIP code in the Capital Region here.

Second chance: Even if you weren’t able to make the Center for Community Progress’ 2012 Reclaiming Vacant Properties Conference: Remaking America for the 21st Century, which recently wrapped up in New Orleans, you can check out most of the training seminars and presentations online. Topics range from urban blight to vacant and abandoned property and productive reuse. Check out available presentations here (click on the speaker’s name below the presentation for a PDF download).

This week’s poll question: When purchasing new appliances, lights and other electrical items for your home, do you generally choose a more energy-efficient product even if it means a higher price?