Lee Morof's Real Estate Blog

Everyone knows that first impressions are important. By carefully staging your home, you can positively influence the feelings your potential buyers have when they are viewing the property.

Staging is the art of decorating and arranging the spaces within your house to make it more appealing to buyers. If you can adapt the rooms to create an attractive and welcoming zone that home buyers can see themselves in, they will be more likely to buy your property.

One of the most important rooms to stage is the living room, because it is such a central part of the house. This is where a lot of the social activity occurs, so it should appear comfortable and welcoming.

Here are some tips to keep in mind when staging your living room before the next showing of your home:

• Clear out the clutter. The most important step is to de-clutter, because a mess will turn off potential buyers. Clear away any papers, toys and other items to make your living room as clean and minimalist as possible.

• Go zen. The main purpose of a living room is for relaxation, so make the space look as comfortable as possible. Try a soft throw on the sofa, plush cushions and a big chair that is just begging you to come curl up with a book.

• Strategically place furniture. Arrange the living room furniture to create areas of conversation, such as two sofas facing each other with a low coffee table in the middle.

• Depersonalize. Remove your personal items. If you have too many family photos and personal effects in the room, it can make it difficult for your potential buyers to imagine their own family living there.

• Remove the bulk. If your living room feels small, you can remove some of the furniture to give it the illusion of being bigger.

• Channel your green thumb. You might want to consider bringing in some plants to make the space feel fresh.

• Brighten it up. If your living room has dark corners, invest in upright lamps that will help illuminate the space and provide an aura of intimacy.

With these seven tips, the living room in your Birmingham home will be much more appealing to potential buyers.

If you are ready to get your home sold, call your trusted real estate agent for a personal consultation to get the best return on your real estate investment.

Mortgage rates rose last week with average rates a 30-year fixed rate mortgage rising from last week’s 3.35 percent to 3.42 percent with buyers paying all closing costs and 0.7 percent in discount points.

Average rates for a 15-year fixed rate mortgage rose from 2.56 percent to 2.61 percent with buyers paying their closing costs and 0.7 percent in discount points.

Freddie Mac also reports that average rates for a 5/1 adjustable rate mortgage rose from 2.56 percent last week to 2.58 percent with buyers paying their closing costs and 0.5 percent in discount points. 

Here are noteworthy points from last week’s economic news:

Monday:  In spite of improving economic conditions, a majority of participants in the Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that their lending institutions would not be relaxing residential mortgage lending standards. Lenders perceive a significant risk in terms of being required to absorb losses incurred on defaulted mortgage loans. 

Mortgage owners including Fannie Mae and Freddie Mac, along with mortgage insurance companies can require mortgage lenders to buy back defaulted loans or make them whole for losses related to foreclosed and otherwise defaulted mortgage loans.

Tuesday: CoreLogic reported an increase of 1.9 percent in national home prices for March. This news represents the 13th consecutive increase and a year-over-year increase of 10.5 percent.

Home prices were boosted by strong increases in the West; Nevada posted a 22.2 percent gain from last March and California posted a 17.2 percent year-over-year gain. 

CoreLogic predicted a year-over-year increase of 9.6 percent for home prices for April, with a monthly increase of 1.3 percent increase expected between March and April.

Thursday: Weekly jobless claims brought good news as they came in at 323,000; this was lower than expectations of 335,000 new jobless claims and the 327,000 new jobless claims reported in the prior week.

Friday: The Treasury Department reported that the federal budget has a surplus of + $113 billion for April. This was $54 billion higher than for April 2012 and the highest monthly surplus since April, 2008.

Increasing home values and federal budget surpluses, along with falling consumer debt pointed the way toward overall as well as personal economic recovery last week.

What‘s Coming Up 

This week brings a couple important economic reports affecting the real estate industry including the Home Builders Index on Wednesday and the Weekly Jobless Claims and Housing Starts numbers released on Thursday.

The Consumer Sentiment and Leading Indicators reports will round out the week on Friday. Consumer Sentiment is important in terms of housing markets and mortgage lending; consumers typically don’t buy homes or move up to a larger home if they aren’t feeling secure about economic conditions. 

This week’s economic data may provide further evidence of a stronger U.S. economy as well as a snapshot of retail spending and consumer costs.

RealtyTrac recently reported that national foreclosure filings are down while foreclosure filings are seeing marked increases in some states.

There are two systems for foreclosing residential real estate in the United States; judicial and non-judicial foreclosure. The states individually decide which foreclosure process will be followed in their state.

Click Here To Download An Overview Of The Foreclosure Process

Judicial foreclosure requires action by the courts because the mortgage is not written including a “power of sale clause”. Judicial foreclosure proceedings generally take longer than non-judicial processes due to this court involvement.

A log-jam of delayed judicial foreclosures are beginning to move through backlogged courts with the result of higher numbers of foreclosures started, foreclosure auctions scheduled, and properties either sold to third parties at foreclosure auctions or repossessed by mortgage lenders.

In states allowing non-judicial foreclosure, the matter may be handled outside of the judicial system as the mortgage is written with the power of sale clause which allows the lender to take control of the mortgaged property to satisfy the outstanding lien.

Here are highlights of April’s foreclosure report:

Nationally, 144,790 foreclosure filings were made in April, a decrease of 5 percent compared to March and representing an annual decrease of 23 percent year-over-year. 

Overall, April’s residential foreclosure activity was at its lowest since February 2007. About one of every 905 U.S. housing units had a foreclosure filing during April.

Due to the aforementioned backlog of judicial foreclosures, scheduled foreclosure auctions hit a 30-month high in April rising by 22 percent between March and April.

Some states had markedly higher rates of foreclosure sales scheduled in April 2013 as compared to April 2012. Examples include Maryland (+199 percent), New Jersey (+91 percent), Ohio (+73 percent), Oklahoma (+57 percent), and Florida (+55 percent)

Foreclosure auctions scheduled in non-judicial states were 7 percent lower in April as compared to March, and were an encouraging 43 percent lower in April 2013 as compared to April 2012; this was the lowest reading for non-judicial foreclosure sales scheduled since December of 2005.

Non-judicial foreclosure sales were impacted in some states as the result of legislation affecting foreclosure procedures. Affected states included Arkansas, California, Nevada, Oregon and Washington.

70,133 U.S. homes went into foreclosure in April 2013, which is 40 percent lower than for March 2013 and 28 percent lower than during April 2012.

With home values increasing and large numbers of delayed foreclosures clearing the books, this data offers further evidence that the U.S. real estate market is steadily improving.  As more foreclosures are removed from the housing inventory, home prices should continue to stabilize and increase in the Royal Oak area.

Whether you’re looking to buy a new house this month or do a little remodeling, take advantage of the opportunity to give the mom in your life a present she’ll appreciate every day.

Below are a few ideas for housing priorities and renovation projects that typically rate high on women’s wish lists for their homes.

Open Living Areas

The open floor plan is usually a big plus for any mother. They want to be able to cook dinner in the kitchen while monitoring their children’s schoolwork at the dining table.

So look for a house that affords this visual luxury or consider the generous gift of getting dirty and knocking down some walls.

Large Closets

What woman doesn’t need more room for her clothes, shoes and purses? If you’re looking at houses, keep in mind how much closet space will work for your wife or mother.

If it’s not enough, see if there’s another area you could convert to create a custom closet. Another great gift would be to upgrade your mom’s closet with a new shelving and organizing storage system.

And great storage doesn’t stop in the bedroom. Most women like to keep the family’s things organized and put away, so think about upgrading some of the other cupboards and closets in the home as well.

Low-Maintenance Living

Some women are expert gardeners or love home-improvement projects; however, many just want to leave those tasks to someone else.

Many moms love easy-to-wipe-down granite counters and hardwood floors.  These can be beautiful and functional home upgrades all at the same time.

And especially if you’re shopping real estate for an elderly mother, consider looking at Bloomfield Hills homes that are new construction, have easy-to-care-for landscaping and maintenance-free siding or brick.

Easy-to-Use Security System

While security is important to everyone, it ranks high on most women’s list of priorities. As a Mother’s Day gift, research providers and have a security system installed.

Whether your mother is living alone or your wife is worried about the family’s safety, this practical present will give everyone peace of mind.

Make a big gesture this Mother’s Day by giving the woman in your life that renovation project she’s been pining over.

And, if looking at buying a new home, keep in mind what’s important to Mom. 

Finally, if you’d like more tips on Mother’s Day home shopping or upgrades, call your favorite real estate professional for the best advice.

The Bureau of Labor Statistics released its monthly Non-farm Payrolls and National Unemployment Rate for April last Friday. These two reports are collectively called the Jobs Report.

165,000 jobs were added in April, while the unemployment rate dropped from 7.60 percent in March to 7.50 percent in April. 673,000 jobs have been added since January. Jobs were added in employment sectors including business and professional, health care and eating and drinking establishments.

The main impact of the jobs report on home sales and mortgage lending is the ability of would-be home buyers to qualify for mortgage loans.

Long term unemployment and under-employment has worked against consumers wanting to buy homes when interest rates and home prices hit significant lows.

 Falling Long Term Unemployment Numbers Help New Home Buyers Buy Homes

Long-term unemployment (workers unemployed for 27 weeks or more) fell by 258,000 workers to 4.4 million in April. The share of long term workers among all unemployed fell by 2.2 percent to 37.4 percent of unemployed workers.

Since January, the number of long-term unemployed has decreased by 687,000 workers and 3.1 percent. Gaining employment is a plus for the economy and for households facing financial stress due to unemployment.

Another significant data set in terms of U.S. jobs measures workers who are working part-time, but who want to work full time. This sector increased by 278,000 in April to 7.9 million.

February and March 2013 Non-farm Payrolls numbers were revised upward. In February, jobs added were changed from 268,000 to 332,000. In March, jobs added were revised from 88,000 to 138,000. This adjusts the number of jobs added for February to March by an additional 114,000 new jobs.

Federal Reserve Bond Purchase Point To Continued Low Mortgage Rates

The Federal Reserve is continuing its program of quantitative easing (QE) by buying $85 billion in bonds and mortgage backed securities (MBS) monthly.

Reducing or eliminating QE would lessen the demand for bonds and MBS; when bond and MBS prices fall, mortgage rates usually rise. Lower mortgage rates can help offset rising home prices and allow more consumers to buy homes.

While home prices are gradually increasing, mortgage rates are still low. This helps moderate-income home buyers with affordability, but these conditions won’t last indefinitely.

In some regions, such as the West, available homes and land are in short supply, which is driving up home prices. This trend is helping home owners, and potentially home sellers, gain higher sales prices for their real estate. Overall, increasing the number of jobs is positive for the economy.

Contact your trusted mortgage lender for a personalized mortgage interest rate quote and to learn more about affordable home loan options.

In almost every Bloomfield Hills home, there are awkward spaces that are difficult to utilize.

Especially in older houses, there are rooms, closets and nooks that once had a purpose that is now outdated.

So before you try to cover it up or fill it with junk, take a look at the smart solutions below to see how you can revitalize those problematic spaces and turn them into something useful.

The Space Under The Stairs

While this is likely to be more of a hiding spot for dust-bunnies than teenage wizards, it is valuable space that you don’t have to board up. Use it for storage!

Create custom storage cabinets, or if it’s near the kitchen, build in a wine refrigerator or display shelves for china.

You could also build in a coat or shoe closet if the stairs are in the front entryway.

The Bedroom Too Small For A Bed

You might have an office that sometimes needs to be used as a bedroom or a bedroom that could fit a bed and nothing else.

If these issues strike a chord, then you might want to invest in a Murphy bed.

These space-saving inventions allow you to use a small space for another purpose during the day, and then miraculously have a place to sleep at night.

The Unused Closet

Especially in an older home, you’ll run across closets that just don’t make sense. If you don’t need it for storage, then turn it into something creative, such as a small library or toy room.

Take off the door, add adjustable shelves, build a comfortable cushioned bench and install attractive lighting. Now you and your family can curl up for story time in your new book nook.

Or put in a desk or countertop, an office chair and table lamp and use it as an office nook that can be closed off when you’re not using it.

Don’t write off awkward spaces in your home as lost causes. With a little ingenuity, hard work and smart design, you can create a useful area that everyone in your family can use and enjoy.

Mortgage rates fell last week and approached or reached record low levels.

According to Freddie Mac, the average rate for a 30-year fixed rate mortgage (FRM) fell from 3.40 percent to 3.35 percent. Average rates for a 15-year FRM moved from 2.61percent to 2.56 percent.

Average rates for a 5/1 adjustable rate mortgage (ARM) fell to 2.56 from last week’s average of 2.58 percent Discount points for last week’s mortgage rates ranged from 0.7percent for 30 and 15 year FRM loans to 0.5 percent for a 5/1 ARM.

Rock-bottom mortgage rates can offset the impact of rising home prices.

Last Week Was A Strong Showing For The US Economy

Last week’s economic news provided further indications of economic recovery, with housing related reports contributing to overall confidence in a stronger economy.

Highlights of last week’s news include:

Monday: Pending home sales moved up to 1.50 percent in March from February’s -1.07 percent. This reading also surpassed Wall Street’s forecast of 0.90 percent for March.

Tuesday: The Case-Shiller Home Price Index for February reported that the national average home price had increased by 9.3 percent year-over-year between February 2012 and February 2013. By comparison, the average national home price between January 2012 and January 2013 increased by 8.1 percent year-over-year. Rising home prices are contributing to the economic recovery, but in some areas demand for homes exceeds supply, which also contributes to rising home prices.

Wednesday: The Federal Open Market Committee (FOMC) issued its scheduled statement after its meeting concluded. Committee members noted signs of an improving economy, and cited housing markets as a leading contributor to the recovery. The FOMC statement also indicated that economic conditions were not sufficiently improved for the FOMC to change or cease the Federal Reserve’s quantitative easing policy. The Fed’s goal for its current quantitative easing program is keeping long-term interest rates including mortgage rates low.

Thursday: The weekly Jobless Claims Report brought better-than-expected news with new jobless claims coming in at 324,000, less than the expected reading of 345,000 new jobless claims and also higher than the previous report’s reading of 342,000 new jobless claims.

Friday: The Bureau of Labor Statistics issued its monthly “Jobs Report,” which consists of the Non-farm Payrolls Report and the national Unemployment Rate. Again new jobs added exceeded expectations for April with 165,000 jobs added against expectations of 135,000 new jobs added. April’s reading also surpassed the March reading of 138,000 new jobs.

The unemployment rate dropped to 7.5 percent as compared to a consensus of 7.6 percent and last month’s reading of 7.6 percent. To put this reading in perspective, the FOMC has targeted an unemployment rate of 6.5 percent as a benchmark for adjusting its current policies including quantitative easing.

What To Look For This Week

This week’s economic events include latest Jobless Claims report on Thursday. It will be interesting to see if this week’s reading will be lower than last week’s reading of 324,000 new jobless claims.

On Friday, the Federal Budget will be released; this could influence financial markets depending on what programs and services are cut or reduced.

Wednesday’s Federal Open Market Committee (FOMC) statement indicates the Federal Reserve’s commitment to keeping long term interest rates and inflation under control.

The Fed will continue monitoring inflation, but does not expect inflation to rise more than 0.50 percent above its target rate of 2.00 percent over the next one to two years.

Ongoing monitoring of inflation and unemployment, as well as developing economic news, will guide the Fed in its future determinations concerning policy for its present iteration of quantitative easing (QE3).

Currently, the Fed purchases $85 billion of treasury securities and mortgage –backed securities each month with the goal of keeping long-term interest rates lower.

This includes mortgage rates, which can assist homebuyers with qualifying for mortgage loans in an environment of increasing home prices. Other goals include stabilizing the labor market, and limiting inflation.

Job Growth To Be Determining Factor On Fed Interest Rate Action

The statement also noted that the Fed will keep its interest rates between 0.00 and 0.25 percent, until the Fed sees the national unemployment rate fall below 6.50 percent.

While noting that the housing sector is improving, the Fed stated concerns about ongoing high unemployment rates. Jobs are a key aspect to supporting the economy, as 70 percent of the U.S. economy involves the purchase of goods and services by consumers. 

The Fed also repeated its position to evaluate the efficacy of its quantitative easing program; if the agency finds that the program is not achieving their desired objectives, changes to the program can be expected.

While a clear majority of FOMC members voted to keep current policies intact, one member voted against this course of action citing the potential for continued quantitative easing at current levels to fuel inflation.

The bottom line for today’s statement is that the Fed continues its “wait and see” position concerning quantitative easing and low federal interest rates.The committee also re-asserted its intention to gradually reduce quantitative easing when it’s time for a change.

In addition, the Fed is committed to monitoring a wide range of economic data with an eye toward adjusting its policies in the best interest of economic recovery. 

Housing markets continue to improve according to the S&P Case Shiller Home Price Indices released April 30 for February’s data.

The Indices consist of a 10-City Composite Index and a 20-City Composite Index with housing markets for each city reported based on a three-month rolling average of home prices.

Case Shiller Posts Highest Growth Rates Since 2006

The data released yesterday comprised the Indices’ highest growth rates since May 2006.

For the 12 months between February 2012 and February 2013, the 10-City Composite Index reports that average home prices posted a gain of 8.6 percent and average home prices for the 20-City Composite Index grew by 9.3 percent on a non-seasonally adjusted basis. 

All 20 cities posted a year-over-year gain for at least two consecutive months.

The 10-City Composite Index grew by 0.4 percent between January and February, while the 20-City Composite Index grew by 0.3 percent for the same time period.

16 of the 20 cities reported rising annual growth rates for home sales between January and February 2013, while four cities including Detroit, Miami, Minneapolis and Phoenix saw decreases between -0.1 and -0.4 percent in annual home prices between January and February 2013 readings.

Longer-term readings provide a more positive light, as with the example for Phoenix, Arizona.

The month-to-month reading of annual home prices indicated a decrease, but the reading for Phoenix year over year indicates a + 23.0 percent increase in average home prices.

Ten Metro Areas Gain Double Digits Over Past Year

10 cities posted double-digit year-over-year growth rates; they include Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa.

San Diego and Tampa have joined the double-digit cities in February with average home prices increasing for each city of just over 10 percent.

Phoenix, San Francisco, Las Vegas and Atlanta posted the highest year-over-year gains in average home prices.

Three older cities, New York, Boston and Chicago posted the lowest year-over-year rates in average home price readings.

Atlanta and Dallas achieved the highest annual growth rates since the inception of the 10-City Composite (1991) and the 20-City Composite (2001).

Improving Housing Markets Seen As Beacon Of Economic Recovery

Improving housing markets are considered a leading indicator of overall economic recovery as home ownership typically increases wealth and leads to more spending.

Economists note that while current news for housing markets is good, average home prices remain at 2003 levels, which can be very good for new home buyers.

Shortages of available homes in some areas and news that apartment construction is increasing can impact availability and ultimately, the sale of single-family homes.