In time for spring house-hunting, an end to Fed’s role

As spring real estate season kicks in and the tax-credit deadline for sale agreements approaches, the government is ending a program that has kept interest rates low and housing-affordability levels high for months.

On March 31, the Federal Reserve will stop buying mortgage-backed securities from Fannie Mae and Freddie Mac, returning control of interest rates to private investors.

For months, industry observers have predicted that once government supports are removed, interest rates will rise quickly, pushing many of the first-time buyers critical to housing's recovery out of the market.

In late summer and fall 2009, lured by fixed 30-year mortgage rates under 5 percent and the first $8,000 tax credit, which expired Nov. 30, first-timers pushed sales of previously owned homes to the highest levels in at least three years, reducing record inventories and braking price declines.

That tax credit was renewed Nov. 5 and expanded to buyers who had not purchased a property in five years, although the credit for repeat buyers is $6,500.

The second credit expires April 30, is unlikely to be renewed, and remains the engine moving buyers.

"Not a single one has expressed concern about interest rates," said Cheryl Miller of Long & Foster Real Estate in Blue Bell, acknowledging that "there is, I suppose, a false sense of security regarding rates remaining low."

As the date for the Fed pullout approaches, analysts now generally agree that an immediate rate spike is no longer the likely result.

"We think there will be a significant increase in private demand [for mortgage-backed securities] to take the place of the Fed," said David Berson, chief economist at PMI Group in Walnut Creek, Calif. Not enough to offset the Fed's departure, he said, with rates possibly increasing a quarter of a percentage point, "but a significant one."

Bankrate.com columnist Holden Lewis said rates are so low now - averaging 4.87 percent for a 30-year fixed this week - that an increase "is inevitable. But maybe they'll rise gradually instead of jumping" April 1.

The Fed says it will stop buying "by" March 31 instead of "at" the end of the month, meaning that it likely has reduced its purchases and rates haven't risen, Lewis said.

Moody's Economy.com chief economist Mark Zandi, based in West Chester, said rates will "drift" higher in summer and fall, with the half a percentage point the Fed's action cut working its way back in - mainly because investors believe the government would return if they got too high.

For that reason, Philadelphia mortgage broker Fred Glick said, rates won't change.

"If the old buyers don't come back, the Fed will intercede again to ensure rates during a continued slowly recovering economy will not go so high as to stymie a positive direction," Glick said.

Buyers of these securities "now see that the lenders have instituted rigorous standards to ensure that the Fannie Mae and Freddie Mac paper they are buying are very good loans," he said.

On the other hand, said Holland, Bucks County-based economist Joel L. Naroff, low rates are not sustainable, and "the only way to get the market to stand on its own is to get people to become realistic again about prices and rates."

Rates will likely rise, but "the level will still be historically low," Naroff said.

When rates do rise, likely by year's end, it won't be because of the Fed's action, but "natural macroeconomic forces" like a recovering economy and the high budget deficit, said Lawrence Yun, National Association of Realtors chief economist.

The possibility of renewed Fed intervention will likely prevent rate increases resulting from private investors demanding large risk spreads, said economist Brian Bethune of IHS Global Insight in Lexington, Mass.

As a result, Bethune and IHS economist Patrick Newport believe, the rate will be at only 5.25 percent by the fourth quarter.

Many Fed officials have emphasized that "high unemployment and tame inflation warrant a continued promise to hold rates very low for a long time," said Peter Buchsbaum, of Arlington Capital Mortgage in Horsham.

Some analysts expect the expansion to ease, "and I am sure the Fed does not want to extinguish the fragile recovery," Buchsbaum said.

Treasury bond yields "did not move much after the Fed completed its $300 billion in purchases in November," said Jerome Scarpello, of Leo Mortgage in Spring House, "meaning they were able to exit and not disrupt that market."

Rates will rise, he said, but not as high as the one percentage point others predict.

"With unemployment high and foreclosures an issue, a significant rate increase can push home prices down," Scarpello said, "and hamper the slight recovery we now have.

By Alan J. Heavens

INQUIRER REAL ESTATE WRITER

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Nancy M. Alexander
Stone Harbor and Avalon NJ Real Estate

Stone Harbor Real Estate Activity Update for March 4 to March 25, 2010

Stone Harbor Real Estate Sales Statistics Single Family and Condos Under Contract and SOLD March 4 to March 25, 2010

Stone Harbor Real Estate Activity Update for March 4 to March 25, 2010


There are currently 105 single family homes for sale in Stone Harbor, ranging in price from $499,000 for a two bedroom home on Linden Lane to $6,500,000 for a new beach front home at #1 105th street.


Average list price is $2,207,436 and average time on market is 323 days.


There are six single family homes currently Under Contract in Stone Harbor


1- 338 93rd street, a 4 bedroom,2 bath home on a 55x110 lot listed for $949,000,goes to settlement on 3/26/2010



2-149 106th street, a 3 bedroom,1 bath home on a 50x110 lot listed at $1,299,000 goes to settlement on 3/31/2010



3-8500 Pennsylvania Avenue, a 4 bedroom,2 bath home on a 75x110 lot and listed at $1,800,000 goes to settlement 5/3/2010


4-12 90th street, a 4 bedroom ,3 bath beach block home listed for $1,995,000 on a 69x73 lot, goes to settlement 4/15/2010



5-131 97th street, a 5 bedroom,4 bath home on a 50x110 lot, goes to settlement 4/30/2010



6-153 102nd street, a 5 bedroom,4 bath home on a 55x110 lot goes to settlement 7/15/2010



One single family home SOLD in Stone Harbor since 3/4/2010



1- 298 90th street , a 6 bedroom,6 bath home on a 98x110 lot and listed for $2,095,000, SOLD 3/10/2010 for $2,050,000



Stone Harbor Condo/Townhouses Now For Sale

There are now 65 condos for sale in Stone Harbor ranging in price from $309,000 for a 1 bedroom,1 bath unit at 9511 Sunset Drive to $1, 095,000 for 3 bedroom,2.5 bath unit at 9508 Sunset Drive



The average list price is $702,127 and average days on market is 250 days



The data for this market report is based on statistics provided from the Cape May County MLS (private sales are not included)



Buying or Selling a home in Stone Harbor or Avalon, or if you need a Summer Rental, it would be my pleasure to help you with your Real Estate needs.



You can reach me by e~mail me at Nancy@NancyMAlexander.com or Call me! I love to talk Real Estate! Call my cell 609.425.7521



Please visit The Address For Luxury Real Estate at http://www.nancymalexander.com// . I'd love to be your Realtor



Nancy M. Alexander
Stone Harbor and Avalon NJ Real Estate

Avalon Real Estate Sales Update March 4 to March 25 , 2010

Avalon Real Estate  Single Family and Condo/Townhouse Sales Activity


Avalon Real Estate Sales Update March 4 to March 25 , 2010



Avalon Real Estate Sales Update March 4 to March 25 , 2010



Avalon Real Estate Statistics Single Family Homes and Condos Under Contract and SOLD February 15 to March 4, 2010


There are currently 223 single family homes for sale in Avalon



Average list price is $2,487,762 and average days on the market is 305 days.


These properties range in price from $499,000 for a two bedroom home at 138 29th street to a whopping $16,875,000 for a seven bedroom south Avalon beach front home on 75th street on a 120x110 lot.


There are Ten single family homes Now Under Contract in Avalon.



1- 254 6th street, a 3 bedroom,1 bath home on a 50x110 lot listed for $1,095,000 is Under Contract after just 7 days on the market, and goes to settlement 4/30/2010



2- 7036 Ocean Drive, a 5 bedroom,4 bath home on a 65x100’ lot and listed at $1,249,000 , goes to settlement 5/3/2010



3- 36 west 12th street, a 4 bedroom,3 bath home on a 50x110 lot, listed for $1,469,000 goes to settlement 3/12/2010


4- 247 61st street, a 5 bedroom,4 bath home on a 40x110 lot and listed at $1,500,000,goes to settlement on 5/10/2010



5-121 12th street, a 5 bedroom,4 bath home on a 50x110 lot and listed at $1,750,000,goes to settlement on 7/2/2010



6--242 6th street, a 5 bedroom,4 bath home on a 50x110 lot went Under Contract in just 7 days and goes to settlement 4/30/2010


7-2888 Ocean Drive, a 5 bedroom,4 bath home on a 50x110 lot and listed for $1,995,000 goes to settlement 3/1/2010.



8- 74 E. 25th street, a 5 bedroom,4 bath home on a 50x110 lot and listed for $2,099,000,goes to settlement 5/15/2010.


 9- 50 E.15th street, a 5 bedroom,4 bath home on a 50x110 lot and listed at $2,795,000 , goes to settlement on 3/10/2010


10-4806 Fifth Avenue, a 7 bedroom,4 bath bay front home on a 60x155 lot, which is listed for $3,195,000 .Goes to settlement on 3/31/2010



Five Single Family home SOLD in Avalon since Mar 4,2010

1- 613 Sunrise Drive a 3 bedroom,2 bath home on a 50x130 lot listed at $1,750,000,SOLD 3/15/2010 for $1,200,000

2-238 41st street, a 5 bedroom,4 bath home on a 50x110 lot and listed for $1,599,000,goes to settlement on 3/22/2010


3-109 40th street, a 4 bedroom, 2 bath home on a 50x110 lot, and listed for $1,595,000,goes to settlement on 3/20/2010


4-170 36th street, a 5 bedroom,4 bath home on a 40x110 lot listed at $1,895,000 SOLD 3/10/2010 for $1,825,000


5-321 75th street, a 6 bedroom,4 bath home on a 55x133 lot listed at $2,750,000,SOLD 3/16/2010 for $2,450,000


Avalon Real Estate Condo/Townhouse Sales Activity

March 4 to March 25, 2010

There are now 135 condo/townhouses for sale in Avalon ranging in price from $165,000 for an efficiency unit at 7900 Dune Drive, up to $2,095,000 for a 4 bedroom, 3 bath unit at 65 E. 28th street


Average condo list price is $ 776,106 and the average days on market is 282 days.


Six condos in Avalon are now Under Contract

1-478 20th street, a 3 bedroom,2 bath unit listed at $550,000,goes to settlement 4/2/2010


2-2248 Avalon Avenue, a 3 bedroom,1 bath unit listed at $669,000 ,goes to settlement 4/30/2010


3-277 27th street, a 4 bedroom,3 bath unit listed at $626,000,goes to settlement on 6/9/2010

4-251 24th street, a 5 bedroom,3 bath unit listed at $759,000,goes to settlement 5/15/2010

5-3434 Dune Drive a 3 bedroom,3 bath unit listed at $875,000,goes to settlement 3/30/2010


6-2069 Harbor Avenue, a 4 bedroom,3.5 bath bay front unit listed at $950,000,goes to settlement 4/12/2010



One Avalon Condo/Townhomes SOLD since 3/4/2010

1--1688 Ocean Drive, a 3 bedroom,2 bath unit listed at $899,000,goes to settlement 3/12/2010



The data for this market report is based on statistics provided from the Cape May County MLS (private sales are not included)


Buying or Selling a home in Stone Harbor or Avalon, or if you need a Summer Rental, it would be my pleasure to help you with your Real Estate needs.

I can be reached by e~mail at Nancy@NancyMAlexander.com or Call me! I love to talk Real Estate! Call my cell 609.425.7521
Please visit The Address For Luxury Real Estate http://www.nancymalexander.com/. I'd love to be your Realtor
















Nancy M. Alexander
Stone Harbor and Avalon NJ Real Estate