Monthly Archives: May 2010

Gen X Homebuyers are Trading Up, Not Trading Off

This post is the second in a series of three articles about generational home-buying preferences.  Author, John Tarducci, discusses baby boomer, generation X and generation Y purchasing trends.  Stay tuned for his last installment!
When it comes to Generation X, many of whom represent the current wave of new homebuyers, smart home builders and real estate professionals are thinking outside the box.

That’s because Gen X buyers – those born between 1965 and 1979 and who are now in their 30s and early 40s – comprise many of today’s “trade up” buyers. And they’re looking for homes that suit a lifestyle that’s very different than that of their baby boomer parents.

The Gen X population, estimated at 81 million strong, dwarfs the baby boomer generation, which numbers roughly 67 million Americans.

Numerous surveys, focus groups and studies reveal a number of Gen X characteristics that affect their home buying preferences.  These include a growing environmental consciousness, a tendency to delay starting a family that’s due, in part, to challenging economic conditions, an increase in non-traditional households (where more people are living without a spouse or roommate) and an increase in single-parent households.

As a result, Gen X homebuyers…

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Lenders Crack the Whip

For those of you getting close to the finish line in the home-buying process, be careful, there may be one more hurdle to cross.  With tighter regulations being enforced by the government, lenders have been moving towards implementing stricter standards to better prevent careless underwriting and fraud on behalf of borrowers.  In the past, a combination of monkey business by lenders and borrowers – including intentional misinformation submitted by borrowers on their applications, lenders approving borrowers with unsatisfactory credit histories, distorted home appraisals, lenders downplaying the risks of “teaser” rate ARM loans and much, much more — led to a slew of problems in the housing market, which most of us have become all too familiar with.

But the ghosts of housing crisis past seem to be moving on (however slowly) and the market is beginning to show signs of modest improvement.  A combination of aforementioned stringent regulations and a more cautious consumer have led to a more straightforward, honest lending process.

So that hurdle I mentioned earlier?  Once the closing process is reaching its tail end, many are tempted to open new lines of credit, either to furnish the house, purchase new appliances or adorn the driveway with a shiny new drop-top convertible.  It’s best not to succumb to the credit line high as by June 1st, many lenders, led by Fannie Mae will likely be running an additional screening right before closing to see if you’ve shopped for new debt.  If you happen to have taken out new loans that are sizeable enough to change your debt-to-income ratio, your closing could be in jeopardy….Kenneth R. Harney, a frequent Washington Post contributor, writes a great article about this impending regulation that you can read here-

May 21, 2010

How Do Mature Homebuyers Want to Feather Their Nests?

This post is the first in a series of three articles about generational home-buying preferences.  Author, John Tarducci, discusses baby boomer, generation X and generation Y purchasing trends.  Stay tuned for his future installments!

Buyers ages 55+ have distinctly different ideas about the kind of housing they want to live in, according to a 2009 survey on buyer preferences.

The study by the National Association of Home Builders (NAHB) and MetLife Mature Market Institute reflects the shifting priorities of seniors when compared to the general population.

Housing Type and Location

Most respondents (53%) preferred a single-family detached home; 13% preferred a condominium. According to the survey, roughly equal percentages (32%, 31% and 28%, respectively) preferred living in a suburb outside a city, an outlying suburb or a rural community; 9% preferred city life.


Mature Home Buyers

Respondents liked living near shopping centers (57%), hospital/doctor’s offices (55%) and drug store (49%) while fewer desired proximity to a bike trail (12%) or golf course (8%).

Interestingly, a February 1, 2010 U.S. News & World Report story suggested that older baby boomers approaching retirement will increasingly choose condominiums in pedestrian-friendly “urbanized suburban town centers.”

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May 14, 2010

Quarterly Real Estate Outlook

It’s a pretty exciting time for the real estate industry–major indicators are at last pointing towards the beginning of a recovery in the housing market.  After consecutive years of uncertainty, fear and an all out loss of hope that things would get better, strong first quarter numbers are showing thawing compared to last year and green shoots for the spring market.  The Commerce Department last week reported that new home sales in March were up by 27 percent, hitting their highest levels since summer of 2009.  And a hot-off-the press report by the National Association of Realtors stated that pending home sales in March rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0.

A granular look at state activity helps reinforce some of these numbers:

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May 6, 2010

Understanding Home Loans

Author Matthew Amster-Burton posted an article, titled “Understanding Home Loans,” with a humorous take on the current state of the mortgage industry.  His posting offers clear insight to anyone who feels overwhelmed when trying to understand what different home loan options are available. Do acronyms like “FHA,”  “5/1 ARM” and “7/1 ARM” inspire a mental haze?  Don’t feel alone. Ever since the collapse and current recovery of the housing market, there has been confusion on what loans are and aren’t currently available to prospective homebuyers and those looking to refinance.  Many people fell prey to sub-prime loans that littered the market over the past 5 or so years.  Lenders strayed from traditional practices as demand for loans grew amongst high-risk borrowers with less-than-great credit ratings.  Borrowers were happy because they were living the American dream (or so they thought) of owning a home and lenders were heavily profiting off of each transaction.  Lenders began to package these loans and sold them as Mortgage-Backed Securities-MBS’s (another acronym for you) to leading banks.  However, housing prices began to fall, homeowners defaulted on their mortgage payments and banks began to incur heavy losses on once rosy MBS’s.  And so the subprime crisis began.

Good news is, a lot has changed since then.  Due to government overhaul, mortgage brokers have returned to more traditional lending practices. Amster-Burton quoted Frank Ruzicka of Cornerstone Mortgage regarding mortgage options. “In terms of products available, it’s very old-school at this point. Gone are the crazy things.  You don’t see the pay-option ARM’s anymore.  You’re not doing subprime lending anymore.”  Check out the rest of Amster-Burton’s article to see what’s available for all you loan shoppers out there…  And while on the topic of loan shopping, according to the US Department of HUD, William Raveis Mortgage falls in the top 1% of all lenders nationwide, offering a full array of loan programs for you to choose from.  During the housing crisis, our mortgage company took great care in maintaining exceptional ethical standards and did not participate in sub-prime lending.  Take a look at for more information.

May 1, 2010