Smart Growth Awards Promote Smart Growth

Manhattan joined Portland, OR; Seattle, WA; Vermont and Barnstable, MA, as the nation's smart growth leaders for 2007.

The accolades, the 2007 National Award for Smart Growth Achievement, are granted for innovative community development that protects the environment, preserves community identity and expands economic opportunity.

The Environmental Protection Agency sparingly doles out the awards to promote smart growth strategies, because such efforts help communities enjoy cleaner air and water, open space and critical habitat preservation, and redevelopment of vacant land -- qualities that make for a nice place to live.

Smart growth efforts also preserves community identity and expands economic opportunity.

Winners were selected based on how effectively they used smart growth strategies to improve their communities and how well they engaged citizens and fostered partnerships.

The details are available online on the EPA's Smart Growth Achievement page, but here are some highlights revealing why the winning communities are smart growth leaders.

# The award for "Overall Excellence" went to the Housing Authority of Portland, OR. The agency created a public-private partnership to redevelop an isolated and distressed public housing site into New Columbia, where local residents engaged in design workshops and were employed for portions of the construction. The project increased the number of houses, including affordable units and maintained the neighborhood's ethnic diversity.

# For "Built Projects" the Seattle Housing Authority, similarly turned a dilapidated neighborhood into High Point, a mixed-use, mixed-income, and environmentally sensitive community. Using green building principles, High Point's more than 1,700 new units are expected to consume less water, electricity, and natural gas than the old community's 716 units. The new community includes new parks, a public library, and a health clinic. Retail space will come in 2009.

# The Vermont Housing and Conservation Board (VHCB) got the nod for "Policies and Regulations." The independent, state-supported agency, promotes compact settlements surrounded by countryside, pursues affordable housing, land conservation, and historic preservation initiatives. Since 2002, VHCB investments have supported developing more than 3,000 affordable homes, the preservation of 44 historic buildings, and the conservation of more than 37,000 acres of farmland, natural areas, and recreation lands.

# Barnstable, MA, created a development strategy for one of its seven villages, Hyannis, to encourage growth and development in the town center and reduce growth pressure on environmentally sensitive areas along the coast to win the "Waterfront and Coastal Communities" award. These policies have resulted in almost 100 new residential units (nine of which are for lower-income households), with nearly 150 more planned; 22,000 square feet of commercial space, with another 100,000 square feet planned; and more than 300 jobs.

# Manhattan shines in the area of "Equitable Development" thanks to its cooperative strategy to expand the housing and commercial options for central Harlem. Work in the Abyssinian Neighborhood Project area, once marked by vacant lots and abandoned buildings, employed comprehensive programs linked education, job training, and cultural enhancement; developed 200 affordable housing units, with an additional 200 planned; and created 15,000 square feet of commercial space for five local businesses. The project also increased access to public transit, created new green space, and minimized storm water runoff by reusing paved surfaces.

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source: luxuryvirginiahomes.com

Real Estate Outlook: A Mixed Message as Mortgage Rates Drop

The economy's messages for real estate in the past week have been just about as mixed as you can get.

On the one hand, mortgage rates dropped to their lowest levels in more than two years. Anyone with reasonably good credit and a downpayment can now qualify for a 30-year fixed rate loan for 5 percent … and a 15 year loan for 5 percent, according to the latest survey from the Mortgage Bankers Association.

These low rates, in turn, are stimulating a giant, end-of-the year rush to refinance-and should help pull at least some previously reluctant home buyers off the side lines and into serious shopping mode.

Also on the plus side: Big job growth numbers -- 189,000 new private-sector payroll jobs came online last month, far beyond what Wall Street analysts expected.

Add to that an impressive jump in U.S. employee productivity -- up by 6.3 percent in the third quarter, the largest increase in four years according to the Bureau of Labor Statistics -- and you've got a picture of a strong and growing national economy. It's a solid building block for real estate's long-awaited turnaround.

But there's a sobering flip side to all this: The national delinquency rate for U.S. home mortgages increased to 5.6 percent of all outstanding loans in the third quarter. That's the worst rate since 1986, according to the Mortgage Bankers Association.

The percentage of homes in the foreclosure process also rose -- to 1.69 percent -- the highest ever in the delinquency survey's history, which extends back to 1972.

There is no way to see the delinquency and foreclosure numbers as anything but grim. Perhaps the only spark of good news on this front came last Thursday, when Treasury Secretary Hank Paulson's plan to stimulate rapid, private sector relief for hundreds of thousands of financially-distressed subprime borrowers was unveiled.

The mortgage and bond industries estimate that this voluntary, non-governmental effort, including five-year interest rate freezes for between 350,000 and 600,000 borrowers heading for delinquency and loss of their homes-should sharply cut the foreclosure rate in the coming months.

That should relieve pressure on unsold real estate inventories, stabilize prices in some neighborhoods, and help local real estate conditions in dozens of local markets across the country.

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source: luxuryvirginiahomes.com

A Little Holiday Secret

Think of the holidays, and what comes to mind? If you're like many people, you probably envision a decorated home warmed by a roaring fire; a welcome refuge on a crisp winter's day or night.

Guess what? Home buyers love to tour homes for sale this time of year precisely because so many of them are cheerfully adorned in the holiday spirit. They like to buy homes this time of the year, too.

Ah, but here's the rub: Many agents stop working during the holidays, literally or figuratively (that is, they mentally shut down and get by with the "wait until next year" philosophy).

Not those who have made it to the top, however. Indeed, top agents often kick things into overdrive during the holidays while their colleagues take long winter naps. And they often end up closing more business during the holiday season than some agents close the entire rest of the year.

My point is this. The holiday season is no time to rest -- especially in a down market. Following are 12 of the best ideas from the top agents across North America; in the spirit of the season, I've compiled them as their gift to you, to help you stay focused and close more business. Following their sage advice can help you finish out the year closer to your goals, while providing a boost heading into 2008.

* 1. Let sellers know that, contrary to what they may have been told by someone else, now is a great time to list. Let them know that homes look terrific and enticing decorated for the holidays; they show very well and create a warm and welcoming environment.

* 2. Buyers who are relocating often make buying trips during the holidays. They are motivated buyers who often have relocation assistance which enables them to close quickly.

* 3. Hand-deliver a gift (such as a small poinsettia or 2008 calendar) to past clients. Remember: They are always your best source of referral business.

* 4. Get involved in holiday neighborhood and community events. Volunteer to help deliver food baskets, collect donations or serve meals. Get out and meet people. We derive our livelihood from our communities; it is important to give back, and there's no better time than the holidays to do so.

* 5. Attend all of the parties you can! Everyone asks at some point, "What do you do?" Don't be shy -- tell them. Don't be a "Secret Agent." Carry business cards. And always, always, ask for email addresses. Tell them you will send them interesting information that will keep them apprised of the real estate market in their neighborhood.

* 6. Continue to advertise online. People have more time to surf the Web during the holidays. Keep this fact front and center every day: 80 percent of consumers search online before they are ready to talk to an agent. Go where the consumers are.

* 7. Send out holiday cards -- really nice ones. Send them out early; you'll be remembered if yours arrive in mailboxes first. People place holiday cards on their mantles.

* 8. Send out Thanksgiving cards thanking customers for their business and support throughout the past year. People love to be appreciated and remembered. You can even make it an e-postcard, with graphics.

* 9. Hold open houses. I know many agents really don't like this part of the job. But even if you haven't been doing it all year long, this is a good time to start. With so many other distractions vying for our time -- shopping, parties, etc. -- the people who are out looking for homes during the holidays tend to be serious. Use that to your advantage by holding open houses.

* 10. Call your friends just to wish them happy holidays. Offer to send them a market update. Place them on a drip email campaign or your newsletter -- with their permission, of course.

* 11. Vacation homes are still being purchased at record rates. Run a clever, memorable ad. Remember Eartha Kitt's classic song, "Santa Baby"? ("Santa cutie, and fill my stocking with a duplex, and checks, sign your X on the line…").

* 12. Take time to thank your lenders, title company representatives, escrow or closing officers, loan processors, etc. for a good, hard, interesting, or something kind of year. Let them know how much you appreciate their help and support throughout the year -- and, of course, their business.

And while I'm on the subject of saying thanks, let me thank all of you for your interest, emails, comments and support in 2007. I look forward to continuing our conversation next year.

Until then, have a wonderful and safe holiday season!

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source: luxuryvirginiahomes.com

Rates Always Higher After the Last Fed Cut

The trick is guessing which cut will be "the last one"!

Bear with me here:

* Four weeks ago Wall Street expected no rate cut.

* Three weeks ago Wall Street thought maybe 1/4 point.

* Two weeks ago Wall Street thought 1/2 point would be more likely.

After last Friday's Unemployment Numbers were released showing 94,000 more jobs created (higher than the anticipated number) and the unemployment rate remained steady at 4.7% all these "smart" economists are predicting (drum roll, please):

* Maybe a rate cut but if there is one only a 1/4% drop. (do these experts actually get a paycheck for these predictions?)

This time they got lucky, or got it right, as the Fed in fact cut rates by a quarter point.

But why do rates go up after each rate cut?

You can look it up. Previous Fed cuts started a temporary euphoria in the stock and credit markets, but soon they sobered up and rates started going up again, erasing any gains they'd previously earned.

Mortgage rates are tied to their respective mortgage bond, which are traded throughout the day.

Mortgage bonds ANTICIPATE Fed moves ... they don't REACT to them.

If the mortgage markets (and other securities) figure the Fed is through with cutting rates that means the economy is most likely on the mend.

A healing economy drives up demand for products and services. A healing economy can stir up inflation.

Future rate moves now mean rate increases. And mortgage rates will hinge not on the likelihood of a Fed move but whether inflation is on the horizon.

If the Fed cuts rates by a quarter point then consumers get the wrong impression that their mortgage rate went down by 1/4%.

I will get calls from clients and the calls will go like this:

"Hey David, that's probably the last rate cut. I want to lock in now."

"Okay, but the rates are higher than they were before the cut," I say.

"Huh?"

Loyal readers of this column will know why rates went up and that's because bond traders figure the Fed has done enough (or too little, depending upon your perspective) and now the opposite is likely to occur and mortgage loan rates will back up to the mid to high six percent range.

(If you're counting, that's still pretty darned good)

If rates are always higher after the last Fed cut, how do you know when the last Fed cut will be?

You don't know. You have to guess, just like those economists who were all over the map predicting this last Fed cut.

But do you want to know a secret? The very best rates come just days before the last Fed cut. That's when you lock in. And how do you know when the last Fed cut is going to be?

You don't know. You have to guess.

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source: luxuryvirginiahomes.com

Long- and Short-Term Rates Reverse Trend and Rise This Week

McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.11 percent with an average 0.5 point for the week ending December 13, 2007, up from last week when it averaged 5.96 percent as well. Last year at this time, the 30-year FRM averaged 6.12 percent.

The 15-year FRM this week averaged 5.78 percent with an average 0.5 point, up from last week when it averaged 5.65 percent. A year ago at this time, the 15-year FRM averaged 5.86 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.89 percent this week, with an average 0.6 point, up from last week when it averaged 5.75 percent. A year ago, the 5-year ARM averaged 5.92 percent.

One-year Treasury-indexed ARMs averaged 5.50 percent this week with an average 0.6 point, up from last week when it was 5.46 percent. At this time last year, the 1-year ARM averaged 5.45 percent.

"November's employment report showed stronger job growth, no change in the unemployment rate and a jump in wages, suggesting to some market participants that the probability of an upcoming recession might be lower than originally thought," said Frank Nothaft, Freddie Mac vice president and chief economist. "This led to a rise in interest rates for U.S. Treasury securities this week and mortgage rates followed."

"However, against that backdrop, serious delinquencies (90 days or more delinquent or in foreclosure) on prime conventional mortgages rose to 1.31 percent in the third quarter of 2007 from 0.79 percent in the same quarter in 2006. And serious delinquencies for subprime loans rose to 11.38 percent from 6.78 percent over the same period, so the housing segment of the economy still has a way to go before bottoming out."

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source: luxuryvirginiahomes.com