New HVCC regulations

The new HVCC regulations explained by a local Mortgage professional:

It’s a new law that just went into affect on May 1^st…..appraisals can no longer be ordered by the loan officer….they are ordered randomly through an appraisal management company….which means we have no idea who is doing the appraisal, how much they charge for the appraisal, how long it’ll take to get the appraisal done….and most importantly, how much the appraised value will be until it’s too late (that applies more to refinances than purchases).

In a nutshell, mortgage companies have NOTHING to do with appraisal ordering anymore. The purchase market won’t be affected quite as much because the Purchase & Sales contracts will be submitted with the appraisal orders.

MA ranked #7 on Top 10 list of "Where Americans are Taxed the Most", but...

Forbes.com released an article on March 30, 2009 that ranks the Top 10 states who tax their residents the most (when looking at all state tax revenues combined and averaged per person). Although MA ranked #7 and RI did not rank at all, I found the comment made by Forbes in their article positive overall.

The exact quote from the article reads:

7. Massachusetts
Population: 6.4 million
Average tax burden per person: $2,953
At $12.4 billion, or $1,925 per person, Massachusetts garnishes more in personal income taxes (both at the gross and individual levels) than just about any state in the country. Still, Bay Staters pay very low property tax based on Census figures, though combined with the pinch from sales tax ($929 per person), it's enough to land the state in the top 10.

Source: Forbes.com "Where Americans are Taxed Most"
Matt Woolsey, 3/30/2009

Regionally, our team sees many families moving from RI to MA, for lower Real Estate taxes. Generally speaking, we (personally) find that Real Estate taxes are generally 50-100% higher in RI, than MA for similar homes. In conjunction, the size of most parcels of land tend to be larger in MA than properties in RI.

Federal & State incentives for installing efficient appliances & systems

The RI Home Show was hosted last week at the RI Convention Center. Meridian Custom Homes hosted their own booth, as they do every year at the show. During my time at the show, I was able to take some time and walk around to visit some of the other booths at the show.

In speaking to heating and air-conditioning professionals I was made aware of a website that outlines all tax incentives for installing efficient appliances, heating systems, air conditioning systems and other "green" technologies.

I found this website very informative and valuable. The site can be found at:
www.dsireusa.org

Many of the tax incentives that were available in the past have been dramatically increased with the new "stimulus" bill that was just pasted in Congress.

The Mello Group awarded Top 25 Team in New England!

The Mello Group in January 2009 was ranked #18 on the list of top 25 teams in all of New England, within the RE/MAX Network. The following is the detailed list:

1 Barbara Todaro, Franklin, MA
2 Stephanie Ellison, Milford, CT
3 Robin Spangenberg, Medfield, MA
4 Eduardo Marines, Providence, RI
5 Gil Campos, Foxboro, MA
6 Thomas Piantadosi, Cumberland, RI
7 Rocco LaCivita, Winchester, MA
8 Michael Hughes, Waltham, MA
9 Katie Friel, Arlington, MA
10 Elizabeth Luis, Methuen, MA
11 Sharyn Kirsner, Foxboro, MA
12 Constance Corbett, Waltham, MA
13 Bill Gassett, Hopkinton, MA
14 Carole Cressy, Marblehead, MA
15 Leo Tatangelo, Coventry , RI
16 Lynn O'Neill, York, ME
17 Vivian Nelson, Foxboro, MA
18 Gary Mello, North Providence, RI
19 Patricia Marcotte, Beverly, MA
20 Thomas Beauchemin, Goffstown, NH
21 Karl Martone, Smithfield, RI
22 Jeanne Smith-Haroian, North Kingstown, RI
23 Dennis Page, Chelmsford, MA
24 Preben Christensen, Northborough, MA
25 Julie Duncan, Lexington, MA

Portsmouth RI Leading the way in Green Innovation

The Town of Portsmouth has funded the deployment of a wind turbine to harvest wind energy, saving tax payers money and setting an example for other communities throughout America.

This turbine generates enough electricity for approximately 460 homes, but will be used to power schools and other municipal buildings instead, and will also generate income for the Town by reselling excess energy back to the power company.

For CNN coverage on this topic click on the following link.
Harnessing the wind

[This story was generated by CNN on 3/19/2009 on their national website]

National Grid offers Free Energy Audits!

This past week I had an energy efficiency audit done by National Grid at our primary residence. This is a free service offered by National Grid for all current residential customers free of charge!

The auditor reviewed the following:

• All exterior walls, attics and spaces that require insulation to ensure the home is properly insulated
• Electricity use, including appliances to identify appliances that use a great deal of electricity
• All lighting in the house:  He proceeded to replace the majority of the lighting with CFL's (Compact fluorescent light bulbs) for FREE.
• Did an efficiency test on our oil-fired heating system and recommended that we replace it as soon as we can afford to (it is only heating at 75% efficiency: They test this by putting a probe in the vent pipe of the heating system. The probe tests combustion, carbon monoxide and carbon dioxide levels to determine the efficiency level it is operating at)
• The windows in the house to determine if they are performing adequately
• Among many other features of our home

The gentleman from National Grid provided a report at the end of the appointment summarizing his findings and counting the number of lights we changed to CFL's.  In total we replaced over 30 lights in the house valued over $400 in lights for free.

We also found that we had inadequate insulation in the attic.  He provided a quote over $2,000 for installing new insulation in the attic and proceed to inform us that it is heavily subsidized through an efficiency program and that we would only have to pay $700 of the total cost to have the work performed.

This appointment absolutely exceeded our expectations.  The auditor mentioned that the free lights are sponsored by a program funded by all National Grid customers automatically, through a small fee paid by every customer per month.

I strongly recommend setting up an appointment for this audit to all home-owners.  Although I live in MA, the auditor mentioned that RI has a similar program also.  

Keep in mind, I made my appointment on December 9, 2008 and my appointment was on March 5, 2009, but it was well worth the wait!

To request an appointment click on the following link: (For MA Customers)

https://www.nationalgridus.com/masselectric/business/forms/4_small_form.asp

NECN Interview with MA Association of Realtors President: First time home buyer credit explained

Click on the link below for an overview of the new $8,000 tax credit to first-time home buyers:
http://www.necn.com/Boston/Business/2009/03/03/How-the-firsttime-home-buyers/1236127882.html

MA Home Sales, Prices fall in January

This article was release on 2/24/2009 by Providence Business News.
By Kevin Shalvey, PBN Staff Writer

BOSTON – January sales of single-family homes in Massachusetts fell 10.3 percent compared with a year ago, while sales in Bristol County fell 12.82 percent, according to data released this morning by real estate tracker The Warren Group. Statewide house sales fell to 1,908 last month from the 2,126 sold in January 2008. The median price of Bay State homes sold in January fell 20.23 percent to $259,250 from $325,000 a year ago.

In Bristol County, single-family home sales dropped to 136 last month from 156 in January 2008. The median price of homes sold during the month fell 21.18 percent to $218,680 from the year-ago $277,450. “This is a really slow start to this year’s housing market,” The Warren Group CEO Timothy M. Warren Jr. said in a statement this morning. “It’s not entirely unexpected that sales and prices are off,” he added, “because the employment picture and foreclosure activity really [haven’t] improved much. We had seen a little improvement in single-family home sales late last year – with sales transactions climbing three out of the last four months in 2008 – but that didn’t carry over to January.”

Meanwhile, condominium sales in the Bay State plunged last month to a 17-year low. The 806 condos sold statewide in January represented a decline of 330 units, or 29 percent, from the 1,136 sold in January 2008. The median price of condos sold during the month fell 22.2 percent to $209,900 from the year-ago $269,950.

In Bristol County, January condo sales fell 37.21 percent to 27 units from the year-ago 43 units. The median price of condos sold locally during the month dropped to $164,000, a 21.87 percent decline from the $209,900 median sale price of January 2008. “The drop in condo prices is huge,” Warren said. “It’s the steepest percentage drop in monthly median condo prices, year over year, since we started looking at the housing market over two decades ago.“This shows that condo prices are finally starting to give, after holding up much better and longer than single-family home prices.”

The Warren Group Inc. is a provider of New England real estate data and the publisher of Banker & Tradesman and other journals. Additional information is available at www.TheWarrenGroup.com.

Neighborhood Stabilization Program: 20% of Purchase price is free money!

New RI Housing Program, made possible by the Federal Neighborhood Stabilization Program:

NSP Homebuyer Assistance provides up to 20% of the purchase price to income eligible homebuyers purchasing foreclosed 1-4 unit properties (NO CONDOS) located in certain designated neighborhoods impacted by the foreclosure crisis.

Eligible Use:

To purchase and occupy or purchase, rehab and occupy foreclosed residential properties located in certain census tracts in Providence, Pawtucket, Cranston, Central Falls, Woonsocket, Johnston, Warwick, West Warwick, North Providence, East Providence and Cumberland. (These are very large areas, for instance, almost all of Providence is in the designated area.)

NSP Assistance:

Up to 20% of the purchase price in down-payment assistance is available to borrowers in the form of a deferred payment, subordinate lien.

This deferred payment, subordinate lien is forgiven after five years of owner occupancy. If the property is sold or transferred within the first five years the lien along with accrued interest is due and payable.

Eligible Properties:

1-4 unit properties only. No condominiums. NSP eligible properties must be purchased at a minimum of 10% below fair market value. Values is determined by a standard residential appraisal completed by a Rhode Island licensed appraiser during the lending process. The following link will bring you to a page that allows you to click on a city or town and will map out all the designated areas so you can search by street address. You may have to copy and paste to your browser.

http://www.rhodeislandhousing.org/sp.cfm?pageid=726

Economic Stimulus Package: Federal Tax Credit for First-Time Home Buyers

$8,000 Home Buyer Tax Credit at a Glance:

• The tax credit is for first-time home buyers only.
• The tax credit does not have to be repaid.
• The tax credit is equal to 10% of the purchase price of the home up to a maximum of $8,000.
• It is only available for purchases between January 1, 2009 and December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

In my personal opinion:

"This bill will have very little effect on the housing market, as it is only a tax credit for a specific type of buyer, who has a specific salary range. Its disappointing that Congress cannot come up with a more substantial fix for a very substantial issue; In fact our Congress has grossly failed the American people, in my opinion".

Concepts that would really work, include:

• Taking billions and working with Lenders to refinance homeowners who are in trouble today to refinance their notes into lower rate mortgages that the homeowner could afford. (Rates that are dramatically lower, in my estimation 4.0-4.5% would have a real impact). If we can stop the flood of foreclosures, we can begin to reduce the inventory of homes for sale, which will then impact the entire market.
• Having the government finance a period of very low interest rates available to everyone. This would:

1. Allow current home-owners who are not in trouble, but "just meeting their monthly obligations" to refinance and save real money every month. This would free up Billions for consumer spending to revitalize the economy.
2. Motivate buyers who have been on the sidelines waiting for the "perfect time" to make a move and lower our inventory of properties for sale, which would in turn help stabilize values and set the stage for a gradual increase in values over time.
3. Make housing more affordable for families who have not yet realized the "American Dream".
4. Increase consumer confidence and establish more of an environment of hope and a return to more normal conditions.

• Have the government provide dramatic tax credits to investors who rehab properties that are in disrepair. This will (a) remove abandoned properties from the open market, reducing the inventory (b) help stabilize neighborhoods where foreclosures have left many homes abandoned, thus leaving other home owners with homes that have seen dramatic value reductions due to the number of foreclosures in their neighborhoods and (c) generate new spending and new jobs in the construction and other industries

[Update 2/24/09: Since I originally wrote this article, I have become aware of a new program through RI Housing, made possible through Federal funding, that provides financial assistance to buyers who purchase foreclosed properties; This is a step in the right direction and will have an impact, but I believe we need more dramatic programs, described in this section. For information on this RI Housing program, see the entry above this one titled "Neighborhood Stabilization Program: February 23, 2009]

• Have the government provide funding to states to allow state and local governments to purchase abandoned properties in locations where acquiring such properties could be useful in (a) developing public parks (b) erecting new government buildings (c) building new schools or (d) building community centers for purposes that effect the common good of citizens
• Provide a tax credit to Home Builders; Doing so (a) could help companies survive (b) could help keep people employed (c) could help stabilize new construction and the need to meet housing needs and (d) would help set the stage for return to normal conditions in the economy
• and finally, but most importantly, establishing strict financing guidelines for the purchase of Real Estate. Guidelines must begin with the qualification of buyers. Anyone who finances real estate should have the financial ability to do so. All buyers (a) must have a reasonable debt-to-income ratio (b) must inject a deposit (amount to be determined) to generate a true sense of ownership and value invested (c) must have both their income & job status verified. When the market does return to "normal conditions", 100% financing and other Wall street developing financing vehicles must be outlawed to prevent an artificial "run-up" and balloon in the real estate market again. When people are allowed to purchase real estate with no money down, and use very risky financing vehicles to finance speculating in the market, home prices will always rise artificially and create an unstable environment. It will take time for the economy to regain confidence and for the housing market to improve, but when it does happen, these rules must be in place to ensure the Real Estate market returns to what it always was, a gradual increase in value over time, with short-term corrections from time to time. Making the housing market as speculative as the stock market is damaging to Americans, our most valued assets and the foundations of our economy.

For additional information concerning the Federal Tax Credit, visit:

http://www.federalhousingtaxcredit.com/

RI Single Family Sales Statistics: Year End 2008

This report was release to members of the RI Association of Realtors on February 6, 2009.
Source: RI Association of Realtors

Single family home sales dropped 12.5 percent in 2008, from 7600 in 2007 to 6648 in 2008 according to year-end sales statistics released by the Rhode Island Association of REALTORS.

Year-over-year sales began to increase in September however, and have risen each month since, with the exception of November. Sales were up 1.4 percent in the fourth quarter, from 1549 from October to December 2007 to 1570 during the same time period in 2008. In December, single family home sales increased 7.4 percent from 455 in December 2007 to 491 last month.

The increased sales have been sparked in part by the falling prices which accompany distressed sales. Distressed sales - short sales or foreclosures - accounted for 26.3 percent of total sales in 2008. Year end sales statistics show the median price of a single family existing home in 2008 was $234,900 compared to $275,000 in 2007, a decrease of 14.6 percent. The median price of those that weren't sold as distressed sales last year was $265,000.

In the fourth quarter the median price fell 20.8 percent ($259,000 in 2007 to $205,000 in 2008.) The fourth quarter non-distressed median sale price was $250,000. More than one-third (35.6 percent) were distressed sales.December closed the year with 43.4 percent of the single family sales, (213 of the 491,) sold as short sales or foreclosures. The December median price declined 24 percent from $250,000 in December 2007 to $190,000 last month. Non-distressed sales fared better, matching the December 2007 median price of $250,000.

Consumer Profile Report

This report was developed by the Massuchusetts Association of Realtors and made public to its members on February 9, 2009.

The report discusses:

• The leading role the Internet is playing in the Real Estate industry
• The fact that Social Networking websites are increasing in popularity and
• Up-to-date sales data for Massachusetts

WALTHAM, Mass. – February 9, 2009 – A new study on Massachusetts home buyers and sellers found that over 90 percent of all home buyers and sellers are using the Internet as part of their home buying and selling process. Yet despite the increased Internet usage, over 90 percent of buyers and sellers are also choosing to work with a real estate professional as well. The data is from the 2008 Massachusetts Profile of Home Buyers & Sellers, compiled by the National Association of Realtors® (NAR), on behalf of the Massachusetts Association of REALTORS® (MAR).

“The Internet continues to make the home buying and selling process much more efficient,” said MAR President Gary Rogers, broker at RE/MAX First Realty in Waltham. “With access to extensive amounts of real estate data, clients are much more knowledgeable about the market and focused on what they want to do, yet at the same time they are relying more and more on REALTORS® to help interpret that data, to provide local market insight and to guide them through the complexities of buying and selling.”

The study also found that 47 percent of home buyers reported using social networking web sites, such as MySpace, Facebook, LinkedIn, and Friendster, which is up from 34 percent last year. Among home buyers aged 18 to 24, 87 percent reported using social networking sites, which is up from 50 percent last year. Twenty-seven percent of the 18 to 24 year-old group reported using them every day or nearly every day.

The study also found that because of the run up in oil prices in 2008, that commuting costs were considered as very or somewhat important by 84 percent of buyers when considering which home to purchase. For the timing of the home purchase, 43 percent of buyers reported it was just the right time for them, 16 percent noted they had to purchase when they did, and 30 percent reported it was either due to improved affordability of homes or availability of homes for sale. Only four percent stated they wished they had waited to buy.

While the number of foreclosed homes for sale increased in 2008, only three percent of buyers bought a home that was foreclosed. According to the study, 35 percent of buyers did consider purchasing a foreclosed home, but either could not find the right home, or found the purchase process to be too difficult.

“The home buying and selling process can be difficult to navigate in even a ‘simple’ transaction, and that difficulty level can go up by a factor of 100 or more when it comes to foreclosures and short sales. As these types of deals continue to increase, working with a REALTOR® who is especially trained in loss mitigation is often the only way to keep these complicated deals together,” said Rogers.

The median age of home buyers in Massachusetts in 2008 was 39 years old, which was the same as last year. The median income (which is reported from 2007 household data) was up to $88,100 compared to $84,400 in 2006. Fifty-eight percent of home buyers were married couples, 18 percent single females, 12 percent single males, and 10 percent unmarried couples. Ten percent of home buyers reported they were born outside of the United States compared to nine percent nationally.

The median age of the first-time home buyer was 31, which was down from 32 years of age in 2007. Fifty-three percent of first-time home buyers were between 25 and 34 years old. First-time home buyers accounted for 48 percent of recent home purchases and had a median income of $80,600 compared to $60,600 among first-time home buyers nationally.

Despite the credit issues in 2008, 90 percent of buyers financed their home purchase (98 percent of first-time buyers compared to 82 percent of repeat buyers). Savings was the chief source of the downpayment for 74 percent of first-time buyers with 44 percent of repeat buyers using proceeds from the sale of their primary residence.

Forty-seven percent of all buyers believe that their home purchase was a better financial investment than stocks, with an additional 30 percent of buyers feeling their home purchase was at least as good an investment as stocks. However, to make their home purchase, 57 percent of home buyers reported that they had made sacrifices, such as reducing spending on luxury items, entertainment or clothing.

The median age of the home seller was 47 years (which is up from 43 years in 2007) and they had a median income of $105,500. The typical seller owned their home for seven years. Sixty-nine percent of home sellers were married and 61 percent had no children under 18 years old living at home.

When it came to selling, 37 percent of home sellers did not reduce their asking price before the home was sold. Recent sellers typically sold their home for 95 percent of the listing price. Thirty-three percent of sellers did offer incentives to attract buyers, most often that assistance was applied to closing costs and home warranty policies.

[The Mello Group already has a presence on Facebook and LinkedIn. We agree social networking sites will continue to grow in popularity and will also impact the Real Estate industry].

New Listing Sells in 12 Days!

Our Team, "The Mello Group" listed a condominium in Providence on January 8, 2009 that went under agreement on January 20th, (Only 12 days later). Properties are selling in this market, and in some cases they are selling fast! We believe the factors that contributed to the success of this sale were:

• Professional grade photography & Virtual Tour online, which can differentiate a property and increase a buyer's interest in a listing


• An elaborate and extensive marketing plan that engages buyers where they search for homes (This is a key component of our Team's marketing strategy)

Contact our Team today to find out why we are different from other Agents in our area. One meeting with us and you will see how our team can really make a difference! Contact us today at 401-339-1506.

2009 New England Housing Market Outlook

The Following report was release by RE/MAX New England on January 8, 2009. The report outlines the state of the Real Estate Market in MA and RI. For a complete market report featuring all states in New England, please email Gary Mello at gary.mello@yahoo.com


Massachusetts

Transportation considerations and bargain-seeking in urban areas hit by the sub-prime crisis proved a noticeable trend in 2008, as Bay State buyers leaned toward towns near public transportation and investors made moves on income-producing properties.

REALTORS across the state expect those trends to continue in 2009, with historically low interest rates and realistic pricing ushering in some hopeful signs by the third and fourth quarters.

While home sales dropped by 13 percent in 2008, and sales prices dropped by 9 percent, some communities felt less of a blow.

Communities like Arlington, Woburn, Medford, Wakefield, Reading, Abington, Waltham and Kingston have shown strength in the downturn, due to their proximity to Boston or their location on commuter rail corridors.

“When gas prices spiked up people started buying closer to Boston and in towns with rail service,” said Gary Rogers, Associate at RE/MAX First Realty in Waltham and President of the Massachusetts Association of REALTORS. “The areas between routes 128 and 495 without public transportation declined faster.”

Home sales prices dropped statewide by 13 percent in 2008, led by urban areas with higher concentrations of foreclosure activity. The pressure on prices lured investors seeking bargains on multi-family units, with strong activity in communities like Lawrence, Lowell, Worcester, Brockton and New Bedford. Broker/Owner Terry Sullivan of RE/MAX Advantage Real Estate in Beverly reported that 2008 multi-family sales were up 85 percent in Essex County compared to 2007.

“However, the multi-family market is only 3 percent of the total market,” Sullivan said. “But the fact remains that investors are recognizing good buying opportunities.”

Foreclosure activity has pushed prices lower in traditional vacation areas such as Cape Cod as well. In Hyannis, the average sales price dropped from $607,000 in 1997 to $436,000 in 2008 due to foreclosure pressure. Only waterfront properties on the Cape maintained value in 2008; all other areas showed decline.

Over-55 communities have seen a dramatic slowdown in sales as well as construction. Developers are attempting to change restrictions so they can market the stagnant units to younger buyers.
Rogers says that a disproportionate number of houses on the market now are overpriced, but he expects that a surge of new, better-priced listings will come online after January.

“If interest rates go the way they are forecast to go, we will see a resurgence of activity in the housing market,” he said. “It’s not a cure all, but it will address the number one issue causing market unrest—consumer confidence.



Rhode Island

Foreclosure activity had a dramatic impact on the Rhode Island real estate market in 2008, particularly in urban areas such as Providence, Pawtucket and Cranston. The foreclosure market drove home sale prices in Rhode Island down 16 percent in 2008 compared to 2007, the biggest price drop of the New England states.

However, several communities weathered the 2008 foreclosure and economic storms fairly well, according to Broker/Owner Rob Scaralia of RE/MAX 1st Choice in Cranston.

“There are certain communities that went unscathed by the short sale and foreclosure activity that drove home prices down in other parts of the state,” said Scaralia. “Exeter, Charlestown, Narragansett, Barrington, Warren and the east side of Providence seemed fairly immune to the price pressures.”

In some of those communities the average sales price rose in 2008, Scaralia added.

Overall, 1,697 fewer houses changed hands in Rhode Island in 2008 than in 2007, a 15 percent decrease. On a bright note, home sales dropped less in Rhode Island than in any other New England state in 2008 except Massachusetts.

The big dip in sales prices, however, is directly connected to the high level of foreclosure activity in the Ocean State. Through the second quarter of 2008, about 1.2 percent of Rhode Island homes entered foreclosure, compared to the national average of 1.1 percent. About 27 percent of 2008 home sales in Rhode Island were attributable to short sales or foreclosures.

But there may be a silver lining in these numbers, according to Scaralia.

“These sales are removing a good portion of inventory excess from the market, and the sooner we do that the sooner we’ll come back to a healthier market,” Scaralia said.

First-time homebuyers were active at about the same level in 2008 as in 2007, Scaralia said, and indications are strong that they’ll become more active in 2009. Historically-low interest rates and an abundant supply of bargains, along with an expected ease in credit markets amid the federal bailout plan, will motivate first-time buyers. The only reservations some buyers may have is that the value of their new home will decline after they purchase. These concerns may keep some buyers on the fence as they wait for prices to fall further. But interest rates and tax credits will continue to pull buyers into the market.

“It’s all about affordability now. Buyers need to get in and they need to be able to stay in. The big outcry last year was that people couldn’t actually afford the homes they just purchased. We’re seeing that change now,” Scaralia said.

Another bright spot: Pending sales. They’re up compared to this period last year, Scaralia said.