Here you can keep up to date about the goings on in the real estate industry!

MATURE TREES BRING VALUE TO SINGLE-FAMILY HOMES
Using information from the Counsel of Tree & Landscape Appraisers, researchers have found that those houses with mature trees average two percent more in value than single-family homes without mature trees. Mature trees add value because they help deter soil erosion and offer privacy, are pleasing to the eye, and their shade may help lower utility bills. Researchers studied a sample of single-family homes in Baton Rouge, La., with mature trees'those greater than nine inches in diameter. Although the results may vary according to location, the multiple regression analysis formula can be applied in other markets. Because mature trees are difficult to transplant, they're intrinsically tied to the value of the home and can make a significant value contribution to the property that shouldn't be overlooked during appraisal.

HOME SIZES SET TO EXPAND WHILE FURNITURE TAPERS BACK
According to the National Association of Home Builders, the average size of new homes is expected to grow this year while furniture will take up a smaller portion of the increased space. After holding steady at about 2,200 square feet for most of the past decade, the average size of new homes is expected to grow by nearly 100 square feet over the next year or two. At the same time, the size of furnishings is expected to diminish. Massive chairs are no longer in vogue and today's trendy sofas are as much as a foot shorter than the typical eight-foot-long behemoths of the late '90s. In the kitchen, big stainless-steel ranges are giving way to homier-looking models.

SMARTNESS OF HOMES IN THE FUTURE TO BE A MATTER OF DEGREE
Homes in the future are likely to become more technologically "smart." In many homes, this transformation is already happening. "Everybody's going to get a smart house, it's just a matter of how smart the house is," according to Michael T. Rose of Rosemark Designbuild in Laurel, Md. The components of a smart house can include anything from home security, Internet access in different rooms and through different sources, and home entertainment systems. Because of the current high cost of incorporating automated technology into the home, there are very few homes today that are smart. As costs lower and demand rises among homeowners, however, wired homes will likely become more common. For now, today's homes typically have one or two sophisticated technological components, such as a security system or home entertainment, says Larry Zarker, a technology analyst at the National Association of Home Builders. "They're not smart yet. But we're getting there," adds NAHB's Gopal Ahluwalia of today's houses. In the future, homes will take on a more productive role. Rather than waiting for an occupant to give orders, smart homes will act automatically.

EMPLOYMENT PROJECTIONS AUGUR WELL FOR REAL ESTATE:
Industry economists state that real estate activity follows employment. That being the case, the future looks bright for the industry. The Bureau of Labor Statistics reports that total national employment is expected to increase 14% by 2008, with service-producing industries accounting for virtually all the growth. Also projected: Labor force participation rates of women in nearly all age groups will increase, with the aggregate share of women in the labor pool increasing to 48% in 2008. The Hispanic share of the labor force will grow to 13%;, the "Asian and other" population group, to 6%. Meanwhile, employed white, non-Hispanics will account for only 71% of the labor force in 2008, decreasing from 74% in 1998.

MULTIPLE OFFERS ARE COMMON IN CALIFORNIA
The multiple offer market has become an "integral component" as buyers "compete for a dwindling supply of homes". So reports the California Association of REALTORS in its recent quarterly housing survey. CAR President Richard F. Gaylord states in the report that "During the fourth quarter of last year, about a third of all homes received more than one purchase offer." REALTORS responding to the reports survey noted that 22.7% of homebuyers submitted an offer on one other property before buying a home and 20.1% made offers on two or more properties before buying. Other key features of the report:.....26% of sellers used all of the net cash proceeds from the sale of their homes as a downpayment on their next home......11.5% of buyers said the stock market played a role in their decision to acquire a home......15% of buyers and sellers said they used the Internet to assist in the sale/purchase transaction.

Recently published article on the state of the market in our area...What a real-estate market we have'if you're a buyer you might complain (a little). What is going on? Is this market similar to the brisk market of 1990? (Not really). In contrast to 1990 this market could continue to surprise us. There is a sizable amount of money out there thanks to the stock market, dot com companies, other high multiple, yet liquid tech stocks, and a booming real estate market in the Bay Area and Silicon Valley, which has eased off a little but is still for the most part hanging in there.

But interestingly first time home buyers are also driving this market'according to Fred Flick The National Association of Realtor's (NAR) Vice President of economics, in a recently released 'NAR Profile of Home Buyers' Flick notes that first-time buyers accounted for 42% of all transactions in 1999'ignoring higher interest rates and higher home prices. So what elements do we need for this market to continue? 1). First-time homebuyer, 2). Interest Rate stability, 3). Company relocation to our area, 4). Continued Relocation, 5). Personal Income Growth.

If our largest segment of buyers exist in the first time home buyer arena, then do we have the continued growth in income to support this segment of the market? NAR shows us that entry-level buyers earned a median income of $49,700.00 with a typical down payment of $5,000.00, equating to a 140K home mortgage (assuming buyer has no debt). We are seeing a number of companies uproot, and move to our area'bringing in new bloods (first time homebuyers who are salivating at our attractive real estate prices). Here is the related variable, in conversation with local area lenders what seems to be a more common type of loan today for the first-timer is 100% financing, suggesting an ease of money that is unprecedented. If the home is that easy to get, if something goes wrong'what will the commitment be? Here the word credible takes on its true meaning.

As far as rate stability goes (which will ultimately effect what a buyer can or cannot afford) we seem to have found a temporary top in the long bond market. Mortgage rates have topped out near 9% further lending to price stability within the market. However, lack of supply and good economic times have helped the market gap upwards, (it's amazing what buyers are settling for now that they would previously shudder and wince at a short nine months ago). All the basic ingredients are present for this market to continue.

Things to watch out for: 100-125% mortgages (when the overall market corrects mortgage failures could shock and depress the market for some time). Continued aggressive building in new home construction (although right now most builders are up to six months behind and cannot fill their demand). Rising interest rates or rates sustained at a level above 9%. A further drop in home values in the Bay Area, and Silicon Valley. Further gapping in home prices (on the upside) with continued low supply, or a significant drop in the stock market.

All types of markets go through cycles and nothing goes up forever. Be cautiously optimistic and don't look for the top'but if you are lucky enough to find the top of this cycle and you're a seller, congratulations! If you're the buyer think long-term.

Ed Fitch, ABR, GRI
Century 21 Select Roseville

Weekly article slated to be published...Just when you think you've seen it all'Jane bought a house from Jim and Nancy contingent on her house closing escrow, and contingent upon buyer(s) (Ned & Alice), of Jane's house closing on their home. The buyer(s) of Ned & Alice's home were using their military benefits to obtain a loan. Everything was going along fine'every party was in tune with the transaction (it appeared). Disclosures were signed by all parties, loans were approved; inspections (pest and home), and the final walk-thru and repair for the various transactions were performed in a timely manner. The date of closing was rapidly approaching and all the parties were notified to sign off (or on) to their various transactions. On the eleventh hour, the day before funding, Jane's escrow notified brokers/agents that loan documents were not in place for the buyer(s) of Ned and Alice's home. The agents representing the buyer(s) of Ned and Alice's home (loan and real estate) allegedly 'dropped the ball' and failed to notify any of the other parties of their problem obtaining loan documents'realtors were soon to learn that the problem was a major one threatening to hold up all transactions for 30 days! As it turned out that story had a happy ending, and with diligent effort from a very special group of people all transactions intertwined closed five days later.

But what were the repercussions'two parties Jane, and Jim and Nancy had FHA loans'all transactions were supposed to close at the end of the month...they didn't. FHA immediately charges one month interest if you roll over from the end to the beginning of a new month. The buyer(s) for Jane's house (Ned and Alice) were senior citizens (but youthful), they had moved out all their belongings to storage, sold heavy equipment and tools that they couldn't use or keep anymore. Jim and Nancy had vacated their home and allowed Jane use of their garage for storage. On the flip side, buyer(s) Ned and Alice had a loan lock that was ready to expire, and Jane's loan documents were on the verge of expiring also. Most everyone lost sleep. Hair color on some of the agents turned from gray to white overnight'and for a few just a deeper shade of gray'others struggled with generous fallout.

Useful Hints:

1). Stress the need for your agent to keep you within the closing timelines, ask your agent when they expect to see buyer's loan documentation in escrow and feel free to enquire with escrow if loan documents have arrived'and when they are slated to be signed.

2). Check to see that the buyer's appraisal has been ordered'if it hasn't, and the closing date is drawing near'you know you have a situation that needs attention.

3). If your buyer is obtaining government financing look for pre-approval...be very critical of pre-qualification...have them prove to you that the buyer is solid. If the buyer's loan is Cal Vet (a wonderful low interest loan for buyer's) expect a 90 day close (at minimum).

4). Make sure that you perform all your obligations i.e., repairs and inspections agreed to in the contract in a timely manner'if your transaction falls through you will be ready for a quick and uncomplicated sale.

5). Know that some transactions do fall out of escrow'have your agent quietly look for back up offers all the way to closing.

Keep these helpful hints handy, as they will help you and the buyer to have a smooth, and organized transaction. Your agent'advice...hair color for men.

Ed Fitch, ABR, GRI
Century 21 Select, Roseville