::Welcome to Pete Bruinsma Realty::

Current Events
(updated 11/11/08)

NEW! Unexpected Rise in US Home Sales in Month of September
NEW! Low Interest Home Improvent Loans funded by MSHDA
NEW! 2008 VS 2007 "Breaking Trends" Charts show that search requests have flooded the GRAR MLS in 2008 despite a slight decrease in sales, suggesting at all times an active Real Estate market with a discriminating buyer!
NEW! Study Predicts: Buy a $115,000 home in Grand Rapids MI in 2008, gain $44,000 in equity by 2012

MORE ARTICLES HERE

NEW 2008 Home Sales and Listings Monitor:

Statistics show that search requests have flooded the GRAR MLS in 2008 as well as a considerable decrease in the average price. This shows that we have a very active Real Estate Market with historic deals on homes!

• MLS Facts Figures & Charts
• Mortgage Rates Chart

Article Archive

• (09/2008) NAR Chief Economist Yun Speaks Out
• (08/2008) Grand Rapids to Reopen Rental Rehab Program
• (08/2008) CNN places Grand Rapids MI in "10 Fastest Growing Real Estate Markets!"
• (08/2008) Trott & Trott Resumes Control of HUD Foreclosures as of May 2008
• (08/2008) RightPlace.Org West Michigan's Newest Visitors Site
• (08/2008) Study Shows: Buy a $115K or less home in Grand Rapids in 2008, gain $44K in equity by 2012
• (08/2008) NAR Chief Economist Predicts and Explains Market Trends
• (07/2008) Federal Housing and Economic Recovery Act is signed into law by Bush.
• (06/2008) Suberbs: A Mile too Far for Some (Wall St Journal)
• (05/2008) CNN Places Grand Rapids, MI in "10 Fastest Growing Real Estate Markets!"
• (03/2008) The Mortgage Forgiveness Debt Relief Act of 2007
• (03/2008) Sparta Fire Dept Smoke Detector Tests Yield Surprising Results
• (12/2007) Grand Rapids Public Schools Reshaped
• (9/2007) Grand Rapids housing market on the TODAY SHOW
• (9/2007) Grand Rapids Ranked a "B+" for Kids, Top 20 Nationwide
• (8/2007) Countrywide’s CEO sees housing-led recession
• (7/2007) U.S. home foreclosures drop in June - But default rates expected to escalate as mortgages reset
• (6/2007) The Boston Ledger: "Why Cant We Be More Like Grand Rapids?"
• (6/2007) East Hills, Cherry Hill Districts a Good Investment
• (5/2007) Rising Foreclosures have Widespread Fallout
• (2/2007) Western Michigan Economy Continues to Lead the State
• (1/2007) BUBBA: Friend or Foe?
• (12/2006) All HUD Homes Must Go!
• (10/2006) Hype About Downtown Grand Rapids Projects!
• (9/2006) Grand Rapids, MI Undergoes Urban Revitalization
• (9/2006) The New York Times: "36 Hours in Grand Rapids"
• (7/2006) Single Women Have Come a Long Way in Real Estate
• (7/2006) McMansions' appeal to buyers is shrinking
• (3/2006) Housing Market Readjusting to Normal Balance
• (3/2006) Do-It-Yourself Staging is an Investment
• (3/2006) Coming Soon: 50-Year Mortgage Loans
• (8/2005) Shrinking Detroit Has 12,000 Abandoned Homes
• (7/2005) Mayor Heartwell's Wireless Broadband Initiative
• (6/2005) Fed Warns of Risky Home Loans.
• (6/2005) Grand Rapids-Wyoming Second Most Affordable Housing Market in U.S.
• (4/2005) Residential Real Estate Sales Expected to Reach Near-Record Highs in 2005
• (10/2004) Americas Overextension Creating Housing Bubble?
• (10/2004) Zero-Down Legislation Stirs Debate Over Impact

Video Archive

• (10/2008) Biggest Pillow Fight Ever - Rosa Parks Circle, Grand Rapids (video)
• (4/2008) Grand Rapids Then and Now (photo montage)
• (1/2008) Rogue Wave - "Lake Michigan" (music video)
• (1/2008) Moxy Fruvos - "Michigan Militia" (music video)
• (1/2008) Yesterdog Documentary Trailer
• (08/2007) Grand Rapids Mariott (video rendering)
• (08/2007) Anthony Kiedis / Red Hot Chili Peppers - "Especially in Michigan" (music video)
• (08/2007) "Especially in Michigan" Grand Rapids Video Adaptation of Red Hot Chili Peppers song (photo montage)
• (08/2007) Grand Rapids Through the Eyes of a First-Time Visitor (photo montage)
• (08/2007) A "Love Letter" to the City of Grand Rapids - historical photos (photo montage)

If you like these videos, Check here regularly (Rapid Growth Media) where there's always local news about Metro Grand Rapids and a locally-produced video featurette.

Cumulative West Michigan Real Estate Market Research

Current Single Family Listings

As Of This Date / How Many "Current" Listings
4/8/2008 / 10775
8/23/2007/12062
5/3/2007 / 11309
12/28/2006 / 10273
7/21/2006 / 10903
6/8/2006 / 10888
3/26/2006 / 9881
2/28/2006 / 8957

Chart:

Ongoing Mid-Year Statistics:

January-August Single-Family Home Sales in Greater Grand Rapids
Year / Avg Sale / Days on Market/ Number of Homes Sold
2000 / 133,273 / 79 / 5366
2001 / 139,564 / 79 / 5838
2002 / 146,064 / 86 / 5927
2003 / 152,565 / 82 / 6329
2004 / 157,438 / 90 / 6594
2005 / 162,728 / 92 / 6953
2006 / 161,761 / 99 / 6207
2007 / 159,055 / 103 / 5868
2008 / 143,742 / 102 / 6684

By the Numbers - 2007 Review
Homes Sold: 9097
Homes Listed: 24929
Over 90 days on market: 43.8%
avg Sale Price: $149800
avg List Price: $186500
avg sale price was 19.7% below the average listing price

By the Numbers - 2006 Review
Homes Sold: 9648
Homes Listed: 25141
Over 90 days on market: 42.5%
avg Sale Price: $162100
avg List Price: $215200
avg sale price was 24.7% below the average listing price

By the Numbers - 2005 Review
Homes Sold: 10867
Homes Listed: 24036
Over 90 days on market: 39.6%
avg Sale Price: $162200
avg List Price: $194400
avg sale price was 16.6% below the average listing price

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Mortgage Rates

Interest rates will vary daily by company, this is just a loose reference point.
:: Rates Based on No Points, Good Credit, Conforming, Conventional Mortgage ::

Date / Rate
11/11/08 6.250%
10/10/08 5.900%
09/09/08 5.900%
08/25/08 6.500%
02/21/08 6.600%
02/01/08 6.250%
12/14/07 5.875%
11/15/07 6.125%
09/25/07 6.250%
08/10/07 6.500%
07/12/07 6.650%
06/12/07 6.750%
06/07/07 6.625%
05/22/07 6.250%
05/03/07 6.125%
02/23/07 6.000%
12/30/06 6.000%
12/01/06 5.750%
10/01/06 6.375%
08/08/06 6.375%
06/29/06 6.875%
05/24/06 6.500%
04/11/06 6.375%
02/28/06 6.000%
01/17/06 6.000%
10/22/05 5.875%
09/01/05 5.400%
07/28/05 5.875%
06/27/05 5.380%
04/21/05 5.750%

Article Archives

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NAR Chief Economist Predicts and Explains Market Trends

FROM DR. LAURENCE YUN, NAR CHIEF ECONOMIST:
* 53% OF ALL FORCLOSURES ARE FROM SUB-PRIME MORTGAGES
* 9% OF MORTGAGES ARE SUB-PRIME LOANS
* 35% OF HOMES ARE OWNED FREE AND CLEAR
* 56 % OF MORTGAGES ARE FHA, VA, OR PRIME
* NATIONAL FORECLOSURE RATE IS CURRENTLY 2%, HISTORICALLY THE AVERAGE IS 1%
* EXISTING HOME SALES FOR THE PAST YEAR HAVE BEEN STABLE AND AT A LEVEL EQUAL TO THE LATE 1990'S
* INVENTORY OF NEW HOMES BEING BUILT HAS DROPPED SIGNIFICANTLY OVER THE PAST TWO YEARS
* GIVEN THE LOW INVENTORY OF NEW HOMES ON THE MARKET AND NEW HOME STARTS ALONG WITH THE CONTINUAL DEMAND FOR HOUSING A SHORTAGE OF HOUSING COULD START AS EARLY AS 2010
* INTEREST RATES ARE PROJECTED TO BE STABLE FOR THE NEXT THREE YEARS
* THE NATIONAL MEDIAN HOME PRICE IS PROJECTED TO RISE 10% OVER THE NEXT THREE YEARS.

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The Deadly Truth - Sparta Fire Dept Tests Smoke Detectors
Full Story, Click Here

The Deadly Truth
Study by Lt. Dan Harkema of the Sparta Fire Department
(Click here for other related information)

A thanks to Rogers Hardware of Sparta for donating smoke detectors and Honeywell for allowing us to use their oxygen sensing equipment for our tests.

--------------------------------------------------------------------------------

Peacefully sleeping, unaware of the smoldering fire in the other room. Smoke begins to build... will the smoke detectors work? Will they go off in time to save you and your family's life?

In doing research about the types of detectors (not the brand) that people are using in their home, 95% are using a detector that is IONIZATION (i) technology.

There are 2 types of technology available IONIZATION (i) and PHOTOELECTRIC [P] smoke detectors. (i) types are designed to activate with a free burning type of fire, such as a trash can on fire in your kitchen. [P] types are designed to activate when there is a smoldering type fire, such as a cigarette on a couch cushion.

We tested 8 smoke detectors in a room using both (i) and [P] together. What we discovered was unbelievable. We ran 2 separate tests in the room with the following results. Keep in mind that a fire can double in size ever 30 seconds.

Test #1 We lit a small amount of paper on fire in a metal trash can. About 30-40 second into this test, all 8 detectors went off. This is what you need to happen in order for you to get yourself and your family out safely.

Test #2 We took a small heat iron and placed it into the foam cushion on a couch. These results will surprise you. As the room started to fill with smoke, the first detectors to alarm where [P] type detectors. It took 4 of them 13-15 minutes to alarm. So after test #1, you would think that the (i) type would be ready to go off at anytime.

Well, 20 minutes into it and we are still waiting for the last detectors to go off. 30 minutes and still no alarms. Now the oxygen level in the room is dropping and the carbon monoxide is increasing. 40 minutes into the test and still waiting! Finally, the first (i) type detector activates at 42 + minutes. About ever minute and a half, the other (i) types activate. The last one sounded off about 49 minutes from the start of the test.

You never know what type of fire may occur in your home, or when it will start. If you have only 1 type of smoke detector in your home, is it going to wake you up in time to escape to safety? That fire may smolder for hours in a wall, at the opposite end of the house, no where near the smoke detector. Are you going to be able to get out?

Please go home and look at the type you have in your home. I would strongly suggest that you also buy [P] types if you only have the (i) type now. Don’t have the attitude of “it won’t happen to me”. Your family deserves to be better protected.

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Grand Rapids Public Schools Reshaped
Full Story, Click Here

December 13, 2007
The Grand Rapids Public School system now faces a massive job of upgrading its facilities to establish state-of-the-art learning environments for the 21st century.

The task is not that different from what private industry has had to do in the past 30 years. Not long ago, the near downtown area of Grand Rapids had many older factories which ultimately were replaced by modern manufacturing facilities. And numerous old buildings have either been replaced by new construction or converted to other uses such as loft housing, retail and offices.

The average age of city school buildings is approximately 65 years old. That means many of the buildings were built before OPEC and modern energy conservation standards; before the Americans with Disabilities Act and laws guaranteeing accessibility for people of all physical ability; and before the advent of the personal computer. Nearly all of the systems in GRPS buildings – roofs, boilers, electrical, mechanical, windows, etc. – have reached or are beyond their life expectancy.

Phase I of the Grand Rapids Facility Master Plan – funded by a $150 construction bond approved by city voters in 2004 – focused on renovating or replacing the worst elementary and middle schools. The public school system has done an excellent job with these projects. If you live in the city, you really owe it to yourself to visit these schools.

The projects included replacing old buildings with new schools at:

Alger Middle
Sibley Elementary
Martin Luther King (formerly Henry)
Gerald Ford Middle (formerly Madison)
Dickenson Elementary (under construction)

They also included extensive and excellent renovations at:

Harrison Elementary & Middle School
Burton Elementary & Middle Schools (now under construction)
Palmer Elementary
Kent Hills Elementary
Even with the high escalation of construction costs in the past five years, these projects have been constructed within budget. In fact, GRPS leaders added an entirely new school, Hall Elementary, which will be built in 2009.

Building on this success, Phase II of the plan is now being developed. It will likely focus on city high schools. This is not to say that all of the elementary and middle schools are done. But Phase I did little to address the high school needs.

High schools, like the manufacturing plants of the past, are undergoing massive changes throughout the country. There is a much greater focus on smaller more effective high schools; developing high schools in partnership with other community stakeholders such as business, industry, and medical care facilities; and designing buildings which are flexible to adapt to future changes and showcase extensive technology.

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Grand Rapids Housing on the Today Show
Full Story, Click Here

An East Grand Rapids Colonial is compared to a 400-square-foot apartment in Brooklyn NY, listed at the same price!

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Grand Rapids Ranked a "B+" for Kids, Top 20 Nationwide
Full Story Here

Greater Grand Rapids is regularly recognized as one of the more appealing family towns in America. But how child-friendly really is the city today? And what would it take to make the place better for kids to live? One way to answer these questions, and improve the lives and futures of our children, is to apply some sustainable-city thinking.

Lynn Heemstra, administrator of the city’s Office of Children, Youth, and Families, points to the Kid-Friendly Cities Report Card to get the conversation started. The report card, sponsored by Population Connection, an activist outfit based in Washington, D.C., uses several variables - public health, safety, environmental quality, etc. – to assess the quality of the lives of children in U.S. urban areas.

Cities are graded based on the individual indicators; assigned an overall grade of A, B, C. D, or F; and then ranked in order in a way that distinguishes major cities from the merely large places like Grand Rapids.

How did GR do? Not bad. With a credible – even enviable – overall grade of B+, the city earned a ranking of 20th in the list of the largest cities with less than 2.5 million in population.

Clearly, the immediate question is ‘what must the city do to get an A?’...

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Countrywide’s CEO Sees Housing-led Recession
Mozilo tells CNBC that credit market turmoil will take time to work through
link to full article

MSNBC News Services
Updated: 3:33 p.m. ET Aug. 23, 2007

Calling the current credit crunch “one of the greatest panics I've ever seen in 55 years of financial services,” Countrywide Financial CEO Angelo Mozilo said Thursday that the ongoing housing slump will likely push the U.S. economy into recession.

The financial markets took some solace from news that the largest U.S. mortgage lender had taken steps to shore up its finances as it struggles with a liquidity crunch with an infusion of $2 billion from Bank of America to help stabilize the company.

But Countrywide still faces longer-term problems as the financial storm rocking the credit markets continues. Mozilo said the turmoil in the mortgage market and the ongoing housing slump are far from over......cont'd

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U.S. home foreclosures drop in June
But default rates expected to escalate as mortgages reset
link to full article

U.S. home foreclosures drop in June
But default rates expected to escalate as mortgages reset

“The outlook isn’t terribly optimistic for the rest of this year,” Rick Sharga, RealtyTrac’s vice president of marketing, said of foreclosure forecast for the rest of the year.
View related photos
Joe Raedle / Getty Images

NEW YORK - U.S. home foreclosures fell in June after jumping to a 30-month peak in May, but default rates will escalate as a horde of mortgages resets at higher loan rates, real estate data firm RealtyTrac said on Thursday.

Foreclosure filings fell 7 percent in June to 164,644 after jumping 19 percent in May, but they remain 87 percent above last June’s pace, with one filing for every 704 households, RealtyTrac said in a monthly report.

“The outlook isn’t terribly optimistic for the rest of this year,” Rick Sharga, RealtyTrac’s vice president of marketing, said in an interview.
Story continues below ?advertisement

“There are, depending on whose numbers you believe, somewhere between $600 million and $1 billion worth of adjustable-rate mortgages that are going to reset in the second half,” he said. “We anticipate a fair number of those are going to go into default, so we really do expect probably to see another spike in the Fall” for foreclosures.

June’s downturn in filings was broad-based, with 33 states reporting monthly decreases, but the drop may be a leveling off after a large rise in May, according to RealtyTrac.

“What we don’t know is if that’s a one-month blip or if it’s going to continue,” Sharga said. When foreclosure filings start rising again, “we suspect that the states that have had the most severe problems will probably continue to be the ones with the most severe problems for the rest of the year, barring any unforeseen calamities in some of the other states.”

RealtyTrac’s foreclosure filing rate represents default notices, auction sale notices and bank repossessions.

Nevada’s foreclosure rate, with one filing in June for every 175 households, topped the list for the sixth straight month and was more than four times the national average. The state’s foreclosure filings dropped by 10 percent from May but remained three times the year-earlier level.

California had the second-highest and Colorado the third-highest foreclosure rates. Florida, Arizona, Ohio, Michigan, Georgia, Connecticut and Indiana rounded out the list of the 10 states with the highest foreclosure rates in June.

“In states like Florida and Nevada, what you’re seeing is the fallout from an awful lot of speculative buying. You have investors that have had high-risk purchases go south on them,” said Sharga.

“In states like Michigan, Ohio and Indiana, the foreclosure rates are driven largely by higher-than-average unemployment rates.”

California’s downturn is correcting from an extremely hot real estate market. Foreclosures are mounting there also because of a high concentration of subprime home loans to struggling borrowers, and also above-average mortgage fraud, according to Sharga. Subprime loans are extended to borrowers with spotty credit histories.

As for the total amount of foreclosure filings, the largest were in California, Florida and Ohio, RealtyTrac said.

Florida reported 21,035 filings during the month, a 3 percent drop from May but still more than twice the number in June 2006. The state’s foreclosure rate of one filing for every 347 households was more than twice the national average and ranked fourth-highest among all the states.

More on this story
Home prices expected to rebound in 2008
Agencies cut ratings on risky home loans
CNBC Video: Home builders digging a hole

The other seven states with the biggest foreclosure filing amounts were Michigan, Texas, Georgia, Illinois, Arizona, Colorado and New Jersey.

Six California cities dominated the 10 metropolitan areas with the highest foreclosure rates in June. The four at the top of that list — Stockton, Merced, Modesto and Riverside-San Bernardino — posted rates more than five times the national average.

Las Vegas’s foreclosure rate of one filing for every 138 households put it in fifth place. Greeley, Colorado, Detroit and Miami were among the cities with the highest foreclosure rates last month.

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The Boston Ledger on Grand Rapids
original article link
link to NY Times Article on Grand Rapids

COMMENTARY - AMERICA’S HEARTLAND - Why can’t we be more like Grand Rapids?
By JOANN FITZPATRICK

It’s such a big country, America. I don’t know it well, haven’t traveled from sea to shining sea, except by airplane from East to West several times. Last weekend I was in Michigan, not quite the heartland but close enough.

The combined effect of television programs, chain stores and restaurants and electronic gadgets is that we think we’ve been homogenized.

But it’s not so, thank goodness.

I know that when I visited New Orleans, before and after Hurricane Katrina, this is a place very different from Boston or anywhere else in America.

Texas, too. But what of the vast Midwest? Is it really different from New England or California?

Darned right, it is. I was in Grand Rapids, Mich., for a wedding. What I knew about Grand Rapids before going there was that it was the hometown of President Gerald Ford and site of his presidential library and museum. And also the home of Amway, though I and other out-of-town guests had only a vague idea of what Amway sells.

The small talk that predominates at events like this was punctuated repeatedly by wedding guests proclaiming to one another, ‘‘What a nice town, what a surprise!’’ Many if not most of the guests flew in from both coasts and interesting places in between, such as Santa Fe. There was elitism to spare but at the same time a willingness to be charmed by a place that truly seems to represent good old-fashioned American values.

If there are surreptitious litter police, they keep themselves well hidden, but the streets of Grand Rapids are as gleaming as the refurbished buildings throughout the downtown. Community pride is everywhere. I couldn’t help but compare what I saw to cities and towns back home.

Don’t get me wrong, I love Boston and New England, from the coastline to the old mill towns like the one where I grew up, Manchester, N.H. But there’s no disputing that the quality of life in this area continues to deteriorate. We blame government for not investing more in parks and beaches, but who’s dropping the garbage? It’s not the government; it’s us. The mounds of Dunkin’ Donuts cups scarring off-ramps on our highways is disgusting. Local streets are no better and because we seem not to care, the habit just grows.

In Grand Rapids, Midwestern friendliness and helpfulness were everywhere. I left my camera in a cab and within minutes of calling the hotel, staff was on the case. They called back 15 minutes later, not having located it yet but to let me know I had not been forgotten. I nearly fainted from the shock of random kindness. (Yes, I got it back.) When was the last time someone actually cared that you lost an item in their store, or even that you were shopping there?

Downtown Grand Rapids, a city of about 200,000, is a laboratory of urban renewal. Formerly a manufacturing city - home of Kelvinator, for example - it faces a huge challenge in reshaping its economy. The state of Michigan is no help, since its automobile-reliant economy has been in the hopper for years, with more bad news sure to come.

So what is Grand Rapids turning to? Health care. And here is where it could be interesting to Massachusetts. Spectrum Health, Grand Rapids’ biggest employer, is creating a cancer center and also expanding its medical research, including a new center for molecular medicine. Michigan State University is moving its medical school to the city. You may say, ‘‘So what?’’ But think about all those Boston-area college graduates, our biggest source of human capital, and the cost of living in Massachusetts, and then compare it to Grand Rapids. There you can buy a five-bedroom house in the historic district for $400,000. Yup, $400,000, and you could walk to work, breathe clean air and not worry about litter blowing in your face. And your children could attend a neighborhood school. The historic district, a microcosm of American architectural styles, was rehabilitated decades ago solely because of the efforts of public-spirited citizens.

I am not writing this to encourage young people to leave Massachusetts. I think it’s important to recognize, though, that we don’t necessarily have it all here. We have first-class hospitals and colleges with costs to match and housing prices that make building a future here ever more difficult. We also have a shortage of the kind of community spirit I saw in Grand Rapids.

There, the Amway Corp. and its founders put their names all over downtown, investing in public buildings they hope will rejuvenate the city.

Here, corporations hand out a few dollars to local charities, but there is less to donate as they are bought up by national companies more interested in naming rights on arenas than in philanthropy or rebuilding communities.

Look around your town: Can it be improved? Probably. I am tired of dirty streets and blaring car horns, bad manners and shoddy service. We’re better than that, aren’t we?

JoAnn Fitzpatrick, former editorial page editor, can be reached at joannftzptrck@yahoo.com .

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East Hills, Cherry Hill Districts a Good Investment
read the full article here
source: rapidgrowthmedia.com

East Hills-Cherry Hill Investing Guide
By: Tommy Allen
May 31, 2007

Buoyed by an influx of new residents and a reenergized civic spirit, the commercial districts in the East Hills-Cherry Hill area are attracting a wide variety of original small businesses, many of them locally owned.

More importantly for investors: residents are genuinely dedicated to helping these businesses succeed. So new storefronts now open regularly. And they tend to stay open.

But anyone looking to this part of the city to either open a business or buy a home should act quickly, according to Diane Griffin, a realtor with Keller Williams.

“The time to get in is now,” Griffin says. “This neighborhood is the hottest market in the entire city. But the secret is getting out and the deals will not last long. People are beginning to take notice of the many good things happening in East Hills.”

The list of early birds to the area includes some of the city’s leading urban redevelopment firms. Second Story Properties. Rockford Construction. Bazzani Associates. These are the companies that laid the foundation for the revival of such thriving districts as Heartside, Center City, and Monroe North. And now they are targeting the East Hills-Cherry Hill area for the next chapter in Grand Rapids renaissance.

In the wake of such an aggressive reinvestment strategy, the area is seeing a flood of new eateries, boutiques shops, and art galleries to serve residents and visitors alike. But it is also drawing architects, lawyers, nonprofit groups, banks, builders, and other entrepreneurs who aim to capitalize on East Hills’ growing popularity.

{excerpt 2:}

A place for entrepreneurs
The East Hills-Cherry Hill district is actually made up of seven neighborhoods, each with its own unique charm and character. They include:

* Wealthy Heights (south of Cherry, north of Wealthy, east of Diamond, west of Fuller)
* Fairmount Square (south of Cherry, north from Wealthy, east from Eastern, west of Diamond)
* Cherry Hill (north from Wealthy, south from Cherry, east of Union, west of Eastern).
* Fitch Corners (Union, Fulton, Eastern, Cherry)
* Diamond Gate (Diamond, Fulton, Fuller, Lake)
* Congress Park (Eastern, Fulton, Diamond, Cherry)
* Orchard Hill (Diamond, Lake, Fuller, Fairmount)

Prospective homebuyers can expect to pay anywhere from $64,000 for a fixer upper in the Diamond Gate neighborhood to upwards of $250,000 for a turnkey home in the Cherry Hill historic district. The new town houses Bazzani Associates intends to construct on Cherry Street will range in price from $155,000 to $210,000. Property values are steadily escalating throughout the district.

The area also includes three distinct business districts – East Hills, East Fulton, and Wealthy Street – all of which are flourishing in the wake of the growing housing market. The newest businesses include a wide selection of restaurants, art galleries, antique shops, and boutique shops. A growing number of offices also are locating in the area.

read more here

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Rising Foreclosures Have Widespread Fallout
read the full article here

Filings in the U.S. were up 47% in March from a year ago, leaving a wake of vacant homes and overgrown yards for state and local governments to contend with. Even lenders are trying to help troubled borrowers.
By Melinda Fulmer
© BananaStock/SuperStock

The number of foreclosure filings -- from default notices to repossessions -- continued to surge in March, increasing 47% from the same period a year earlier and 7% from February. The 149,150 filings represent a foreclosure rate of one in every 775 households, according to Irvine, Calif.-based RealtyTrac.

The March increase in foreclosures bucks the historical trend, lenders say. Typically, foreclosure activity declines in March, as more homeowners use tax refunds to bail themselves out of mortgage shortfalls caused by job loss, health problems or divorce.

But this year, industry insiders and economists expect it only to get worse, as more adjustable-rate mortgages reset and borrowers with risky loans continue to falter.

"I don't think we've hit the bottom of the market yet," says Rick Sharga, RealtyTrac vice president. "We should see at least one more short-term spike," as more subprime loans continue to go into default.

Subprime loans add to problem

Subprime lending has grown rapidly in recent years. These loans accounted for 2.4% of all outstanding loans in 2000, according to the Mortgage Bankers Association. But by the end of last year, they accounted for 13.7%.

Nevada, which has had a lot of speculation and risky lending, had the highest foreclosure rate in March. The number of filings there increased 29% in the last month to 4,738, or one new filing for every 183 households. This was more than triple the amount reported the same time last year and four times the national average. Las Vegas had one of the nation's highest metro foreclosure rates in March, second only to Detroit.....

{click link above for rest of article}

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Western Michigan Economy Best in State
read the full article here

Western Michigan economy continues to lead the state
Thursday, February 08, 2007
By George Erickcek

The fact that the western Michigan economy is doing better than the rest of the state should come as no surprise to anyone. Nevertheless, I think it is still useful to separate the western portion of the state from the whole to understand some of its strengths as well as its challenges.

I am defining western Michigan as the six metropolitan areas of Battle Creek, Grand Rapids-Wyoming, Holland-Grand Haven, Kalamazoo-Portage, Muskegon-Norton Shores and Niles-Benton Harbor.

The following is what I take away from comparing the performance of the west side of the state to the rest of the state and the nation during the past five years. During this period, employment in western Michigan fell by 3.1 percent. In the remainder of the state it dropped 7.3 percent, while it was up 3.1 percent nationwide...

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Don't Be A BUBBA!
"Buyers Unrepresented By Buyers Agents"

BUBBA is often:

Confused Over Commission
95% of FSBOs are sold by realtors. Sellers know that, and are ready to pay a buyers agent commission. If they aren't, youre going to need a lawyer anyway.

Looking for the "Big Savings"
You think an FSBO seller is going to pass their listing-agent commission savings on to you? Good One! By the time theyve found their first qualified buyer, they've put 80+ hours into selling their home. Theyre going to keep that "savings" as a reward if they can. Even if its their Grandma!

Thinking Buying A House is Like Buying a Car
An experienced Real Estate Pro will bring this to the table:
*Find the Right Home for you
*Help Negotiate Price
*Handle the legal paperwork
*Determine what comparable homes are selling for
*Help determine how much you can afford

Afraid of Being Pressured by working with a REALTOR
My fav: Sign up for Autosearch! No phone calls, no contact unless you want it! Plus, you can pick your own search perameters.

For a great Buyers Agent, try an ABR.

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All HUD Homes Must Go!
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FHA BRINGS THE HOLIDAYS HOME WITH A SPECIAL HOMES SALES EVENT
HUD-owned single-family properties across the country
WASHINGTON - To help increase homeownership opportunities during this holiday season, the U.S. Department of Housing and Urban Development is launching its special "FHA Brings the Holidays Home" sales campaign. This campaign is especially designed for low- to moderate-income families that may believe homeownership is out of their reach, by offering special incentives on the sale of HUD-owned single-family properties across the country.

"Buying a home is always an important event for a family," said Federal Housing Commissioner Brian D. Montgomery. "We want to make the homebuying process even more special this holiday season, by helping more families realize the American dream."

During the "FHA Brings the Holidays Home" sales event, homebuyers who purchase a HUD-owned home and finance the purchase with an FHA-insured loan will be entitled to valuable sales incentives including:

$2,500 Holiday Home Improvement Allowance
$500 Selling Broker Bonus
Minimum Required Downpayment of Only $100
The incentives are effective for HUD homes sold between Friday, December 8, 2006 and Friday, January 5, 2007 to homebuyers who intend to occupy the property as their primary residence for at least 12 months and who do not currently have an FHA-insured mortgage.

In addition to the special holiday sales incentives, buyers may also receive a credit for up to three percent (3%) of closing costs, a benefit HUD provides on most of its home sales.

This special sales offer may not be combined with other HUD discount sales including sales under the Good Neighbor Next Door Program, sales to nonprofit organizations, or sales to disaster evacuees.

More information about this initiative is available by calling 1-800-CALL-FHA, or on the Internet at www.hud.gov and espanol.hud.gov.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

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Hype About Grand Rapids Downtown Projects!
Story by Andy Guy;
Photo of Grand Rapids Construction Project: unknown
Taken from Rapid Growth GR

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Urban Revitalization in Grand Rapids
Through Avenue of the Arts Story by Christine Foust, photo by Brian Kelly
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36 Hours in Grand Rapids: New York Times Profile
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By BETH GREENFIELD
Published: September 6, 2006

If furniture-makers and sculptors share anything beyond their flair for the creation of solid objects in space, it’s the unlikely lure of Grand Rapids, home of Amway and the Gerald R. Ford Presidential Museum. By the early 1900’s, Grand Rapids had produced enough tables, desks and chairs to be dubbed the Furniture City. Though much of the industry has faded, Steelcase and American Seating are still based here, while Herman Miller, maker of the famed Eames chair, is based in nearby Zeeland. Sculpture, meanwhile, is everywhere, from city hall to the banks of the glistening Grand River. They include impressive large-scale works by such artists as Alexander Calder, Andy Goldsworthy and even Tom Otterness of New York, who joined the party this summer by presenting his whimsical bronze creatures in a special outdoor exhibit that will last through Sept. 10.
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Adam Bird for the New York Times

"La Grand Vitesse," a sculpture by Alexander Calder, brightens up Grand Rapids city hall.

Friday

4 p.m.
1) GO WITH THE FLOW

Catch some late-day rays with a stroll along Riverwalk, two miles of peaceful paved paths that edge each bank of the Grand River. Whichever stretch you choose, you’ll pass leafy elm and cottonwood trees and a series of playful sculptures from local artists, like the massive red (and climbable) “Lorrie’s Button,” by Hy Zelkowitz, which sprouts from the lawn like a Pop Art flower. The “Grand River Sculpture and Fish Ladder,” by Joseph Kinnebrew IV, was built to help spawning fish in their struggle to swim upstream. Its bridge draws scores of onlookers in spring and fall, when leaping salmon and steelheads put the creation to good use.

5:30 p.m.
2) THE ART BEAT

The Grand Rapids Art Museum (155 North Division Street, 616-831-1000; www.gramonline.org) is the place to be on Friday nights, when a cash bar and live jazz or blues bands add spark to the collection, which includes works by Ellsworth Kelly, Andy Warhol, Richard Pousette and Robert Motherwell. Next spring, the museum will open a sleek 125,000-square-foot space just around the corner. Friday admission is $3. From the museum, swing by the Urban Institute for Contemporary Art (41 Sheldon Boulevard SE, 616-454-7000; www.uica.org), an interdisciplinary complex where you’re bound to find an art show, film screening, reading, music or dance performance — or maybe a little of all of it at once. Admission is usually $7 to $12.

7:30 p.m.
3) GRAND HOTEL

Check out the 1913 Pantlind Lobby of the city’s crown-jewel hotel, the Amway Grand Plaza (187 Monroe Avenue NW, 616-774-2000; www.amwaygrand.com). You’ll find elegant gold-leaf ceilings, crystal chandeliers and a fountain encircled by a deep-green velvet banquette. Then you can dine at the hotel’s opulent 1913 Room, where the menu offers delicacies like osso bucco with crispy veal sweetbreads, organic beef pot au feu and roasted rack of lamb served with an onion-fig timbale. Entrees are upward of $30.

8:30 p.m.
4) BABBING FOR APPLE MARTINIS

The B.O.B. (20 Monroe Avenue NW, 616-356-2000; www.thebob.com) — or “The Bab” in the local variant of the Great Lakes accent — is a true urban-renewal success story. An acronym for “Big Old Building,” the four-story brick behemoth, which dates from 1903, is a former grocery warehouse transformed into an entertainment complex with three restaurants, a microbrewery, two dance clubs and a comedy club. It attracts a mix of elegantly dressed couples and posses of college students, so beware of entrance delays caused by thorough ID checks.

Saturday

9 a.m.
6) CONSIDER A FORD

Grab an espresso and a bagel at the Four Friends Coffeehouse (136 Monroe Center, 616-456-5356) and meander across the pedestrian bridge to the surprisingly compelling Gerald R. Ford Presidential Museum (303 Pearl Street NW, 616-254-0400; www.fordlibrarymuseum.gov), dedicated to Grand Rapids’s favorite son. Detailed galleries contain everything from televised debates and interviews to the lock picks used during the Watergate break-in and a glamorous array of Betty Ford’s gowns.

11 a.m.
7) THE CITY SCULPTURE

Alexander Calder designed a site-specific sculpture, “La Grande Vitesse,” to grace the front of city hall in 1969, and Caldermania has gripped Grand Rapids ever since. You’ll notice small depictions of the sculpture on everything from street signs to the city’s Web site, but be sure to visit the actual piece itself. Its huge red waves of steel anchor Calder Plaza, along with Mark di Suvero’s interactive “Motu Viget” and Joseph Kinnebrew IV’s “Dissected Pyramid.” Maya Lin’s “Ecliptic” — an amphitheater that converts into a public skating rink in winter — is a short stroll away.

1 p.m.
8) THE MYSTERIOUS EASTOWN

Eastown is Grand Rapids’s very own bohemian neighborhood. Grab coffee where the cool cats slouch over laptops at Kava House (1445 Lake Drive, 616-451-8600), browse for indie comics at Magnum Opus (1422 Wealthy Street SE, 616-336-9922) and stop for a bite at Yesterdog (1505 Wealthy Street SE), a quirky hot-dog restaurant that figured in the 1999 film “American Pie” (the writer, Adam Herz, grew up here), or Rafav’s (1441 Wealthy Street SE, 616-458-1457), a Mexican restaurant with a trippy, sculptural facade.

3 p.m.
9) ART IN THE PARK

The Frederik Meijer Gardens and Sculpture Park (1000 East Beltline Avenue NE, 616-957-1580; www.meijergardens.org) comprises 125 acres of meadows and wetlands, featuring a tropical conservatory with a butterfly exhibit each March and April, a children’s garden and indoor galleries. And, of course, there are 35 acres of sculptures, dotted with eye candy including Henry Moore’s “Bronze Form,” Nina Akamu’s version of Leonardo da Vinci’s “Horse,” Keith Haring’s bright yellow “Julia” and a recent addition: Andy Goldsworthy’s “Grand Rapids Arch.” Now through Sept. 10 is when you can catch the five pieces at the park that are part of “Tom Otterness in Grand Rapids: The Gardens to the Grand.”

7 p.m.
10) TAPAS THE EVENING

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Single Women Have Come a Long Way in Real Estate
By Dana Dratch • Bankrate.com

These days more than one in five home buyers is a single woman.

Spurred on by a healthy real estate market, a variety of new loan options and more buying power than they had in the past, single women have become a powerful demographic in the real estate market.

"We saw the trend starting 10 years ago, and it became so common three to five years ago that we don't notice it anymore," says Ron Phipps, broker with Phipps Realty in Warwick, R.I.

In 2005, 21 percent of all home buyers were single females, up from 16 percent in 1993, and were the second-largest group of home buyers, according to statistics from the National Association of Realtors.

"It's a wonderful phenomenon," says Ilyce Glink, author of "100 Questions Every First-Time Buyer Should Ask." "There has been a real change in the sophistication of single women in response to their own money -- they feel they can do it."

A long way, baby
It wasn't always that way. In the 1950s and 1960s, single professional women had a hard time even getting a mortgage, says Richard Gaylord, Realtor with RE/MAX Real Estate Specialists in Long Beach, Calif., and first vice president of the National Association of Realtors. His mentor in the business -- a woman -- had to fight to get mortgages for her clients. And while it seems unthinkable now, he remembers her telling him that even with an independent, high-dollar income, banks worried, "what if she becomes pregnant and can't work?" he says.

Glink recalls going to a bank with her husband in 1989 for a mortgage. She started talking about her paycheck and remembers being told, "Don't worry honey, your income doesn't even count," she says.

These days, mortgage lenders are actively courting single female customers. And many real estate agents and consumer finance gurus believe that the increasing number of different loan products is at least partially responsible for the trend.

With things like 5/1 adjustable-rate mortgages or new, no- or low-down payment loans, loans have become "more creative and more flexible," Glink says.

Thomas Stevens, president of the National Association of Realtors, agrees. "There are so many new loan products that where there's a will, there's a way," he says.

Other factors that may be helping are the large variety of home-improvement shows and the wealth of do-it-yourself products and seminars from big-box retailers.

"The modern media kind of reflects this," Glink says. "Women are seeing women who are out there buying and selling. It gives women a lot of confidence."

It's creating "a ripple effect," says Rachel Drew, research analyst with the Joint Center for Housing Studies at Harvard University. "As more women are buying homes on their own, their friends are seeing that happen and saying, 'Maybe I could buy a home.'"

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McMansions' Appeal to Buyers is Shrinking
June 24, 2006
By June Fletcher
The Wall Street Journal

McMansions' appeal to buyers is shrinking
Higher borrowing, energy costs among reasons big homes are taking longer to sell

What's the hurry? Down the street in their leafy subdivision, two similar-sized houses also are on the market, and around the corner, five more have for-sale signs. The Finns, who paid $692,000 for the new house in 2002, recently retired and, with their two children grown, they're eager to move to a place half the size. "We don't need this big a house anymore -- if we ever did," says Finn, age 63.
The golden age of McMansions may be coming to an end. These oversized homes -- characterized by sprawling layouts on small lots, and built in cookie-cutter style by big developers -- fueled much of the housing boom. But thanks to rising energy and mortgage costs, shrinking families and a growing number of retirement-age baby boomers set on downsizing, there are signs of an emerging glut.
Interviews with dozens of real-estate agents, sellers, developers and housing economists turn up signs across the country. In an affluent Dallas ZIP Code, where half the houses have four bedrooms or more, home sales fell 31 percent in the first quarter compared with the previous quarter.
But sales rose 23 percent in a nearby ZIP Code where 7 percent of houses have that many bedrooms. In Santa Fe, N.M., homes in the 2,000-square-foot range sell within weeks, while larger ones languish for months, says broker Pat French. In the Boston metro area, sales of homes with four or more bedrooms were flat in the first quarter from a year earlier; sales of homes with three bedrooms or fewer rose 14 percent. New Jersey appraiser Jeffrey Otteau says the inventory level statewide for large, $1 million-plus houses stands at 13 months, more than twice the state's overall average of six months.
There is no formal definition of what constitutes a McMansion. (Some would say it's any home bigger and showier than your own.) One broadly accepted definition, used for this article, is a house larger than 5,000 square feet -- about double the national average -- with four or more bedrooms that is built cheek by jowl with similar houses...

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Housing Market Readjusting to Normal Balance
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A lower level of home sales expected this year will create a more level playing field for buyers and sellers on the heels of a five-year sellers’ market, according to the NATIONAL ASSOCIATION OF REALTORS®.

David Lereah, NAR’s chief economist, said the number of homes on the market has been improving nicely. “The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they’ve seen in the last five years,” Lereah said. “Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year.”

The national median existing-home price for all housing types is projected to rise 5.8 percent in 2006 to $220,300. The median new-home price should increase 5.4 percent this year to $250,200.

Existing-home sales are expected to fall 5.7 percent to 6.67 million in 2006 from the record 7.08 million last year. At the same time, new-home sales are forecast to decline 7.7 percent to 1.18 million from a record 1.28 million in 2005 – each sector would be at the third highest year following the tallies for 2005 and 2004. Housing starts are likely to total 1.98 million this year, down 4.3 percent from 2.06 million in 2005.

NAR President Thomas M. Stevens from Vienna, Va., said some home buyers and sellers have unrealistic expectations. “Some sellers in markets that have had rapid appreciation are listing the price of their home too high, but those homes are just languishing on the market,” said Stevens, senior vice president of NRT Inc. “At the same time, some buyers who have believed hype about a housing bubble are hoping prices will drop, but that’s not happening either.

“Consumers need professional assistance to understand and negotiate the current market realities. Sellers should listen to their agent’s advice to competitively price and show the home, and buyers may want to choose a buyer’s agent to represent their interests and help them negotiate favorable terms. Today’s market has changed a lot from the conditions we’ve seen during the last five years.”

The 30-year fixed-rate mortgage should increase gradually to 6.9 percent in the fourth quarter.

Inflation as measured by the Consumer Price Index is projected at 3.3 percent this year. Inflation-adjusted disposable personal income is expected to grow 3.7 percent in 2006.
Growth in the U.S. gross domestic product is forecast at 3.5 percent in 2006, while the unemployment rate is seen to average 4.8 percent this year.

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Do-It-Yourself Staging is an Investment
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Sellers shouldn’t look at the cost of staging a home. Instead, they should consider how much more it will allow them to make on their house, says Peggy Selinger-Eaton, who has recently published a book and DVD entitled, Stage Your Home for Profit.

Here are Selinger-Eaton’s suggestions for do-it-yourself stagers:
Remove clutter except for a few wisely chosen accessories (candles, fresh flowers, crystal).
Bedrooms should have beds: If you're a bed short, use an inflatable mattress and some boxes to create a faux bed.
Light and more light: Raise window blinds and remove screens from windows to let in as much natural light as possible.
Modernize fixtures: Replace boring or tarnished light fixtures. Trade in old lampshades for new ones. Replace sink and tub fixtures with modern, shiny ones.
Deep-six shabby furniture. Selinger-Eaton recommends buying cheap-chic replacements at Target.
Create life: Set the table, leave on the big-screen TV, play background music.
Source: Christian Science Monitor, Keith Rockmael (03/13/2006)

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Coming Soon: 50-Year Mortgage Loans
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Fifty-year mortgage loans are the buzz of the lending industry, with 40-year mortgage loans becoming more popular in California and other parts of the country where many buyers are priced out of the market.

About one-quarter of the loans closing in California have 40-year terms, says John Marcell, president of the California Association of Mortgage Brokers.

Fannie Mae says it plans to expand its purchase of 40-year mortgages, making them an option for more lenders. For 50-year loans to become a reality, Fannie Mae would have to agree to purchase them as well. Mortgage brokers hope that will happen.

"It's a good idea for consumers," says Marcell. "There's nothing wrong with a 50- or 60-year mortgage."

Source: Inman News, Janis Mara (03/11/2006)

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Shrinking Detroit Has 12,000 Abandoned Homes
Source: Agence France Presse (08/14/05)

August 16, 2005 -- Crime, a municipal budget squeeze, poor-quality schools, abandoned homes, poor roads, and steep taxes-among other factors-have left Motor City USA a shell of its former self.

After thriving in the 1950s, Detroit has since lost more than 50 percent of its population. White flight into the suburbs and layoffs at the city's automotive plants has left behind a predominantly black and working-class community, with nearly a third living below poverty level.

"Detroit has become an icon of what's considered urban decline," says June Thomas, urban and regional planning professor at Michigan State University. "The issue is not just getting people in the city. It's getting people in the city who can become property owners and stay property owners and pay taxes."

Currently, more than 12,000 vacant residential properties litter the city's streets. Eliminating the abandoned real estate is critical to efforts to fill 36 square miles of vacant Detroit land with small farms and community gardens.

"It's partly a resource issue and partly a bureaucracy issue," says Eric Dueweke of the University of Michigan's College of Architecture and Urban Planning. "It takes [city officials] forever to find the proper owners of the properties and serve them with the proper paperwork. They're tearing them down at a rate of 1,500 or 2,000 a year, so they're really not cutting into the backlog in any significant way because that's how many are coming on stream."

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Mayor Heartwell's Wireless Broadband Initiative
Link to the web site: www.GRWireless.com

Last year Mayor Heartwell outlined his vision for bringing a wireless broadband network to our community. City Manager Kurt Kimball assigned a City team to research wireless technology and staff began researching what other cities were doing, best practices, funding models, applications, the types of technology available, and how each worked.

In February 2005, the City issued an RFP for wireless demonstration networks to be installed and operated at the vendor's expense. The City accepted all qualified bids. Ten cutting edge innovative companies are participating in the City's demonstration project. All participating vendors have 3 or more significant outdoor deployments. Networks are being deployed in a phased approach over the summer months. Wireless network use is free to all for the duration of each demonstration- at least 8 weeks. Demonstration networks are a minimum of a ¼ square mile in size, several will be significantly larger. The Police Department "hot zone", provided by Grand Rapids based Freedom Net, was first to go “live” at the kick-off news conference on May 23. The City Hall demonstration zone, provided by Nortel Networks, opened May 31 and includes internal access inside of City Hall. A third downtown location, the VanAndel Research Institute provided by Sprint, will be available soon.

Phase II of the deployment includes wireless networks in an additional seven locations including: Kent County Fuller Campus, Creston High School, Covell Fire Station, Seymour Branch Library, Wealthy Theater, Walker City Hall Complex, and Kentwood City Hall Campus. These networks are scheduled to be open and available for eight weeks each beginning sometime in July (see table for site specific schedule).

Demonstration results and recommendations regarding an optimum course of action will be documented and presented in the fall. A formal request for proposals for a citywide network will be issued following evaluation of the demonstration networks.

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Fed Warns of Risky Home Loans
Source: Philadelphia Inquirer (06/09/05); Torres, Craig; Strahan, Amy

(June 9, 2005) -- Relaxed lending standards and the increased popularity of interest-only mortgages are sparking home-price speculation and threatening the stability of the U.S. banking system, according to the Federal Reserve, the Office of Federal Housing Enterprise Oversight, and other regulators.

In a letter to lenders and bank examiners, the agencies wrote, "Financial institutions may not be fully recognizing the risk embedded in these portfolios."

Problems are not evident at the present time, as a May report from the Federal Deposit Insurance Corp. reveals that net loan losses at U.S. banks hit their lowest level in nearly five years, coming in at $7.2 billion for the first quarter.

Still, OFHEO chief economist Patrick Lawler cites a dependence on interest-only loans, the use of adjustable-rate mortgages at a time when short-term rates are on the rise, and a boost in the number of investment purchases as evidence of speculation.

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Grand Rapids-Wyoming Second Most Affordable Housing Market in U.S.

The Grand Rapids-Wyoming area was the second-most affordable housing market among major metros with populations over 500,000, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) for the first quarter of 2005.

The metropolitan statistical area comprisingYoungstown, Warren and Boardman, Ohio (which includes some neighborhoods across the Pennsylvania border) is the nation’s most affordable market. Also near the top of the affordability scale among major metros with populations over 500,000 were Dayton, Ohio; and Buffalo-Niagara Falls, N.Y., respectively.

At the other end of the scale, Los Angeles-Long Beach-Glendale, Calif. was rated the least affordable major metropolitan area with a population greater than 500,000. Looking at smaller metros with populations under 500,000, Lima , Ohio rated tops for housing affordability and was the most affordable statistical area ranked overall. Cumberland , Md. -W.V. and Canton-Massillon , Ohio were the second- and third-most affordable smaller metros, respectively. The least affordable small metro area ranked by the HOI was Salinas, California

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Residential Real Estate Sales Expected to Reach Near-Record Highs in 2005

Sales price increases forecast to slow from 2004 pace
Tuesday, April 12, 2005

Source: Inman News
www.inman.com/inmannews.aspx?ID=45693

The median price of existing homes is expected to grow 6.3 percent this year, reaching $196,900, according to the latest forecast by the National Association of Realtors. The median price for new homes, meanwhile, is projected to rise 5.6 percent this year, reaching $232,800.

Sales of existing-homes, including single-family and condo, should ease 2.4 percent to a total of 6.62 million this year, second to the record 6.78 million sales in 2004, the association announced. New-home sales are forecast at 1.14 million sales in 2005, or 5 percent less than the record of 1.2 million last year. Housing starts are expected to rise 1.4 percent to 1.98 million units in 2005, the highest level of housing construction since 1978.

David Lereah, NAR’s chief economist, said the supply of homes remains tight. “The simple fact is we still have more buyers than sellers in most of the country,” he said. “This supply-demand imbalance is continuing to put pressure on home prices, but we should get closer to equilibrium by the end of the year.”

In a balanced market, home prices typically rise at the rate of inflation, as measured by the Consumer Price Index, plus 1 to 2 percentage points, the association also noted. With pressure from higher oil prices, Lereah forecasts the Consumer Price Index to rise 3 percent this year. “Relative to inflation, home prices will continue to experience above average returns in 2005,” Lereah said.

He expects the 30-year fixed-rate mortgage to rise gradually to 6.8 percent in the fourth quarter, and for all of 2005 the rate should average 6.3 percent.

Al Mansell, association president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said even with an expected rise, mortgage interest rates remain historically affordable. “Aside from the last two years, we have to go back to the mid-1960s to find an interest-rate environment as favorable as expected this year,” he said. “Combined with the expansion of mortgage instruments designed for first-time buyers, we have an open window for people seeking the American dream of home ownership.”

The U.S. gross domestic product is expected to grow 3.8 percent this year, while the unemployment rate is projected to average 5.1 percent.

Inflation-adjusted disposable personal income is forecast to rise 3.5 percent in 2005, while the consumer confidence index is expected to average 102 this year.

The next existing-home sales release will be April 25; the Pending Home Sales Index is scheduled for May 2; and the next forecast will be May 9.

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America's Overextension Creating Housing Bubble?
Source: Monterey County Herald (10/29/04); White, Ben.

From U.S. households were saddled with a whopping $9.7 trillion in mortgage and consumer debt through the first half of the year, accounting for more than 80 percent of the nation's gross domestic product during that time, the Federal Reserve reports.

According to Wells Fargo Chief Economist Sung Won Sohn, mortgages represent about 70 percent of current household debt. The level of household debt has risen to 21 times the debt level ofU.S. households in 1970, but the increase in home values has advanced at an even more dramatic clip.

With interest rates having declined to historically low levels in recent years, millions of Americans have used their homes as a cash resource by refinancing mortgages and taking out equity to pay for residential upgrades and general spending. Although home prices are not likely to fall nationwide, economists continue to express concern that a real estate bubble would result in a loss of wealth for millions of homeowners and reduce available household cash.

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Zero-Down Legislation Stirs Debate Over Impact
Source: Los Angeles Times (10/17/04); Newman, Morris.

The Zero Down Payment Act of 2004 has the potential to put 150,000 low-income households into their first homes in the first year of the program, according to the Department of Housing and Urban Development.

During hearings of the House Finance Services Committee earlier in the year, critics expressed concern that nothing-down mortgages would saddle low-income home buyers with higher insurance premiums. They also stressed that financial counseling would be needed to prevent defaults and foreclosures.

According to a Congressional Budget Office analysis of the legislation, which was introduced in February by U.S. Rep. Patrick J. Tiberi (R-Ohio), "On average, borrowers with less equity … have higher default rates than borrowers with more equity."

However, others say that strict underwriting would keep foreclosures in check for the loans, which would be guaranteed by the Federal Housing Administration.

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