Sussex County, Delaware Home Sales - as of July 24, 2009

THe National Association of Realtors reports that existing home sales is up for the third month in a row. So, for our local market, things are looking up! The real estate market, albeit sluggish, is still continuing to surprise us with sales! Below is a breakdown of what has sold this year.

Single Family - 763
Condos / Town Homes - 267
Mobile - 115
Multi Family - 3
Lots / Land - 162
Farms - 6
Commercial - 22

The total closed real estate transactions for this year thus far is 1,338. The average list price, as of June 30, 2009, was $321,130, and the average sales price was $298,522. Homes are selling at 93% of list price, and averaging 201 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Mortgage applications rebound

Requests for home loans and refinancing activity increased last week after falling to 7-month lows the week before.

NEW YORK (Reuters) -- Demand for mortgages to buy homes and refinance loans bounced from seven-month lows last week, with average 30-year borrowing rates unchanged, the Mortgage Bankers Association said on Wednesday.

The industry group's total loan applications index rose a seasonally adjusted 10.9% to 493.1 in the week ended July 3, after slumping the prior week to the lowest level since November.

Last week's report was adjusted to account for the Independence Day holiday on Friday.

A sudden spike in home loan rates from record lows in the spring had derailed a race by homeowners to cut monthly costs by refinancing.

The group's seasonally adjusted refinancing index rose 15.2% last week to 1,707.7, after a 30% plunge in the prior week.

Purchase applications, which lagged refinancing demand all through the spring home sales season, rose 6.7% last week to 285.6.

The average 30-year mortgage rate stayed at 5.34% last week. That was up from the record low 4.61% in late March, based on MBA data, but sharply below 7.04% in the same week a year ago.

On a four-week moving average, which smooths out volatility, the purchase index rose 1.4% and the refinance index fell 10.9%.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County, Delaware Home Sales - as of July 15, 2009

Times are changing, and with that brings a busy real estate market. Summer has been good for the county so far, and we hope it will continue. Our website, www.beachtobayrec.com, is the only one in the county to offer an exclusive FORECLOSURE/BANK OWNED page, and in the past 2 weeks, I have noticed very few new ones come on the market, and quite a few that have sold or under contract. This is encouraging news when you look at the big picture. This is an indication that the economy is turning slightly. Let's jsut keep our fingers crossed!

Here is a breakdown of what has sold this year thus far.

Single Family - 708
Condo / Town Home - 238
Mobile - 107
Multi Family - 3
Lots / Land - 156
Commercial - 22
Farms - 6

The total closed real estate transactions for 2009 is 1,240. The average list price as of June 30, 2009, was $321,130, with an average sales price of $298,522. Listings sold at 93% of list price and average 201 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of June 23, 2009

Despite all the rain we have had, buyers are out in full force, looking for deals and new homes! It has been a busy Spring/Summer so far ... at least in our office. Below is a breakdown of what has sold this year thus far.

Single Family - 585
Condo / Town Home - 192
Mobile - 93
Multi Family - 3
Lots / Land - 136
Farms - 4
Commercial - 19

The total closed real estate transactions for the year thus far is 1,032. Seventy-one homes sold since my last update, which was June 15, so that is a great indication that things are really moving. The average list price, as of May 31, was $316,358, with an average sales price of $294,883. Homes sold at 93.2% of list price and averaged 199 days on market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

300 Lakeside Drive

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

18528 Big Burn Lane

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

403 Rehoboth Avenue

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

30190 Whitehall Drive

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

27159 Indian Meadows Circle

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Steady home sales could be positive signal

April sales are a sign to some economists that the worst of the housing downturn may be over.

NEW YORK (CNNMoney.com) -- Sales of newly constructed homes were almost flat in April -- but in a sickly housing market, economists saw a few reasons for hope.

The Commerce Department said new home sales ticked up 0.3% last month to a seasonally adjusted annual rate of 352,000. That was from a downwardly revised reading of 351,000 in March.

Analysts were looking for the rate of new home sales to rise to 360,000, according to a consensus estimate of economists compiled by Briefing.com.

"We aren't seeing a huge upswing in market conditions. But we aren't seeing things fall apart again, either," said Mike Larson, real estate and interest rate analyst at Weiss Research, in a research note.
New home sales -- which have plunged as builders struggle to construct homes to compete with drastically cheapened foreclosure properties -- were 34% below the same month a year ago, when they estimate stood at a 533,000 annual rate.

The median sales price of new homes rose to $209,700 in April, up nearly 4% from a revised median home price of $202,200. That was still 14.9% behind the median price of $246,400 the same month a year ago. The average sales price was $254,000, down 1% from a revised $257,100 in March.

Inventory reduced: Drastically reduced prices have lured in enough buyers to start chipping away at the glut of inventory that has been weighing down the market. At the end of April, the seasonally adjusted estimate of new homes for sale was 297,000, or a 10.1 month supply at the current sales rate. In January, there was a revised 12.4 months of supply on the market.

"Inventory levels continued to improve and broke through 300,000 for the first time since 2001," said Adam York, economist at Wachovia, in a research note. "We are encouraged by the relative stability in sales and the continued improvement in inventory levels."

Plunging mortgage rates also served to attract buyers into the market. But as Treasury yields have risen recently, so have mortgage rates. According to a weekly survey from Bankrate.com, the 30-year fixed mortgage rates rose to 5.45% in the week ended Wednesday, up from 5.24% in the prior week.

However, last week's rate was still significantly below the 6.20% of a year ago, and the historically low rates could continue to bring buyers, according to one economist.

"We still think the combination of very low mortgage rates and falling inventory will entice people back into the market in greater numbers over the next few months," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a research note.

But he called the April sales rate "a bit disappointing, given the hefty increase in homebuilder sentiment in the past couple of months."

Slow and steady: Going forward, if indeed the worst is over, economists say improvement will be slow and steady.

"Looking back, January may turn out to have been the bottom in new home sales," said Wachovia's York. "We do not expect a major pick-up in the near term, but stability over the summer would not be a surprise."

Even with home inventory levels shrinking and home prices attracting new buyers, "there is no evidence whatsoever of a renewed housing boom -- just a gradual increase in activity in some markets, brought about by lower prices, lower mortgage rates, and tax and builder incentives," said Weiss' Larson.

By Catherine Clifford, CNNMoney.com staff writer, last updated: May 28, 2009: 12:07 PM ET
http://money.cnn.com/2009/05/28/real_estate/new_home_sales/index.htm?postversion=2009052812

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Lower taxes: Silver lining of falling home prices

Home price declines are causing tax assessors to revalue properties downward. Taxes will follow.

NEW YORK (CNNMoney.com) -- Your home value has sunk like a stone, and you're so far underwater you'll have to hold your breath for years. Can you at least get a break on your property taxes?
In some cases, yes. Many municipalities' tax bills are due in May, and the tab for 2009 could be lower.

As a rule, city and county assessors reappraise property values annually or biannually, using recent sales of comparable homes in the neighborhood to set values. So in areas that have seen significant drops in home prices, appraisals - and thereby property taxes - could also drop.

"Assessors have been flooded with requests from homeowners to reassess their home values," said Los Angeles County Assessor Rick Auerbach.

California is a special case, however, thanks to Proposition 13, a 30-year-old amendment to the state constitution that limited property tax increases to 2% per year. That meant that as California markets churned out double-digit price increases year after year, assessed values soon fell way behind market values.

As a result, only people who purchased homes at or near the market peaks are likely to have their homes revalued down. Those bought before 2003 likely have their assessed value still lagging market values.

For example, if you bought a home in Santa Monica in 1998 for $300,000, the home may still be worth $1 million - even after losing 25% of its value during the past two years. Meanwhile, its assessed valuation has only crept up about 25% to $375,000. No soup for you. As a matter of fact, your assessment should rise 2%.

However, recent buyers in areas such as Merced and Los Angeles, where prices have fallen more than 50% from their peak, should get tax breaks. Someone may have purchased a Merced house two years ago for $200,000, but the property is now valued at $100,000. The assessment, and the taxes, will be cut to reflect that decline.

In Los Angeles, the savings could be substantial; the average owner of those properties Auerbach is now reassessing should save an average of about $1,300 a year.

Less likely to get cuts
In other states, even if tax assessors reduce appraised values to reflect market conditions it still does not automatically mean a property tax cut. Localities could still raise their tax rates, the percentage of the home's value that is used along with the assessed valuation, to calculate the final bills.

"Taxes are based on property values times [the tax rate]. We could have declining values but make up for it by raising the rate," said Bill Donegan, the property appraiser for Orange County, Fla., which includes Orlando.

This year, though, the value drops are so steep that any rate rise will probably not offset the lowered assessments. Plus, governments usually can't just raise rates indiscriminately.
"In most places there's a statuary limit to rate increases," said Ken Wilkinson, the property appraiser for Lee County, Fla., where Cape Coral home values have plunged 44% from their peaks. "In Florida, they can't be raised more than 10%."

That should lead to substantial savings. In Orange County, the average taxpayer paid about 8% less last year, or nearly $130. "They may see a bigger drop this year," said Donegan.

The savings will be more modest, or non-existent, in states with lesser price declines. Many localities will raise rates enough to offset lower assessments, according to Joseph Henchman, the Director of State Projects for the Tax Foundation, a group that studies tax policy.

"The actual [revenue] collections could still rise or stay about the same," he said.
Governments may also raise fees on water, sewage and other services to keep up with looming budget deficits. They could even create entire new taxing entities, known as tax district, to fund fire departments, law enforcement, even libraries.

The local governments must keep revenues up to pay for programs they initiated during more flush times.

"We often see a ratchet effect," said Henchman. "Spending goes up when collections are strong but stay up even when collections go down."

Les Christie, CNNMoney.com staff writer, last updated: May 27, 2009: 2:25 PM ET
http://money.cnn.com/2009/05/27/real_estate/property_tax_breaks/index.htm?postversion=2009052714

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

May foreclosures fall - but still high

Foreclosure filings fall 6% from April but still post third worst month on record.

NEW YORK (CNNMoney.com) -- Lenders filed fewer foreclosure notices in May, but the total number of filings was still the third-highest monthly total on record.

One of every 398 households in the United States received some kind of filing, including notices of default, scheduled auctions or bank repossession, during May. That was a decline of 6% from April but an increase of 18% compared with May 2008.

And the ultimate type of foreclosure filing - bank repossessions - increased during the month, according to RealtyTrac CEO James Saccacio.

"While defaults and scheduled foreclosure auctions were both down from the previous month, bank repossessions, or REOs, were up 2%" he said, in a prepared statement. "We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end."

But overall, the May statistics underscore what may be a slight improvement. The number of filings trailed off toward the end of the month, according to RealtyTrac spokesman, Rick Sharga.

"We're still coming through a three-month period like nothing we've ever seen before," he said, "with nearly a million filings in all."

The month saw big increases of repossessed homes in several states, including Michigan, Arizona, Washington, Nevada, Oregon and New York. In Michigan alone bank repossessions went to 6,246 from 3,560 in April, a 75% increase.

And it could have been worse. Sharga said he's been hearing anecdotal reports of banks taking homes all the way through the foreclosure process and then suspending further action.

"We hear the servicers are pulling back from the brink," he said. "They want someone in the house."
Vacant homes are subject to vandalism and looting and often quickly lose whatever value they have. Thieves crash through plaster walls to get at copper wiring and plumbing or strip aluminum siding from exteriors, in many cases eliminating any chance of salvaging the property.

States of foreclosure
The foreclosure problem is widespread but reaches plague proportions in 10 states; those hardest-hit areas account for 77% of all foreclosure filings. California had more than any other state with with 92,249 - nearly 29% of all U.S. filings.

Florida posted the nation's second highest number at 58,931, up 50% from May 2008. Other top 10 states were Nevada (17,157), Arizona (16,865), Michigan (13,891), Ohio (11,360), Illinois (10,942), Georgia (10,516), Texas (9,813) and Virginia (5,385).

Nevada had the highest foreclosure rate with one filing for every 64 households. California, with one for every 144, and Florida, with one for every 148, were second and third respectively.

Working through the problem
The foreclosure boom has depressed home prices and that has brought homebuyers back into some markets. In fact, sales volume is much stronger in many states compared with 2008, and affordability has improved to levels not seen in many years.

"In some of the 'ground-zero' places, like Stockton, parts of Phoenix, San Diego and some others, buyers are bidding bank-owned homes up, way, way over the the asking prices" said Sharga.

What could slow down this market revival, however, is the recent bump in mortgage interest rates.
Rates for a 30-year, fixed-rate loan have jumped to about 5.5% from about 4.8% five weeks ago. That adds about 12% to monthly mortgage payments, almost as if the house increased that much in price.

If the higher rates cause demand for foreclosures to slacken, the nation could see further addition to its supply of repossessed homes. That could send more home prices plummeting, pushing more mortgage borrowers underwater (owing more than their properties are worth) and closer to foreclosure.

By Les Christie, CNNMoney.com staff writer, last updated: June 11, 2009: 9:01 AM ET
http://money.cnn.com/2009/06/11/real_estate/May_foreclosures_decline/index.htm?postversion=2009061109

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of June 14, 2009

There has been a flutter of activity in the locate real estate market, and it is showing in the statistics. The season is beginning for the summer guests, the interest rates, although slowly climbing, are still enticing people to purchase homes, and we are seeing more homes close successfully. Below is a breakdown of what has sold this year thus far.

Single Family - 547
Condo / Town Home - 182
Mobile - 84
Multi Family - 3
Lots / Land - 124
Farms - 3
Commercial - 18

The total closed real estate transactions for 2009 thus far is 961. The average list price as of May 31, 2009 was $316,358, and an average sales price of $294,883. Homes are selling at 93.2% of list price, and averaging 199 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

15 Coventry Rd, Rehoboth Beach

37357 8th Street, Rehoboth Beach

20311 Petronia Circle, Rehoboth Beach

33280 Wandring Lane, Lewes

10911 Ryans Run, Lincoln

$8,000 fast cash for first-time homebuyers

HUD plans to tweak $8,000 tax credit rules so first-time homebuyers can get instant down-payment assistance.

NEW YORK (CNNMoney.com) -- Home prices are cheap. Affordability is at a record high. And the market is littered with distressed properties looking for a buyer.

But there is one big obstacle for many first-time house hunters looking to take advantage of the market: cash for down payments. The typical first-time buyer has only saved enough to cover 4% of the purchase price, according to the National Association of Realtors.

As part of the stimulus package, Congress created a refundable first-time homebuyers tax credit in hopes of helping on-the-fence buyers to take the home-purchase plunge. But buyers couldn't collect the $8,000 credit until tax time, rather than at closing time - when it's needed.

Now the U.S. Department of Housing and Urban Development is planning to change that. The agency is working on a plan that will allow Federal Housing Authority-approved lenders to provide buyers with the tax credit cash up front.

"We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment," said Shaun Donovan, HUD secretary, in a speech last Tuesday before the National Association of Realtors.

States first
Donovan did not reveal many details, but the plan could be modeled after programs in Colorado, Missouri, New Jersey, Pennsylvania, Tennessee and Washington. To quickly infuse cash into their housing markets, these states created "bridge loans" that allow buyers to borrow against the $8,000 credit and then repay it with their tax refunds.

The first state to launch such a plan was Missouri, which rolled out its Missouri Housing Development Commission Tax Credit Advance Loan program on January 14 - a month before Congress approved the stimulus package. Since then, Missouri has approved applications by more than 300 borrowers and closed on 128 of them.

Lamar Cherry and his wife, Chrishanna, used the program to augment their down payment when they bought their home in Kansas City.

The couple purchased a four-bedroom, three-bath split-level home for $150,000, putting about 6% down. Much of that $9,000 came from the loan program, which they tapped so they wouldn't have to drain their reserves.

"We had money saved up that we were going to use for the down payment," said Cherry. "Now we can use some of that to buy some things we need for the house."

At closing, the Cherrys, like all buyers in the program, signed for their first mortgage, plus a second mortgage issued by the state. The second note is good for 6% of the price of the home, up to $6,750; there is a $350 set-up fee, but no interest is charged if the debt is repaid by June 2010.
In Missouri, borrowers can only access $6,750 of the $8,000 credit for down payments. "We wanted them to have a cushion below that $8,000 in case other tax liabilities show up," said Greg Spurgeon, the single-family homeownership administrator for the Missouri Housing Development Commission.

If borrowers don't pay off the note, it becomes a 10-year fixed-rate mortgage with an interest rate one-half percentage point above that of their first mortgages. For example, borrowers paying 6% on their first mortgages would be charged 6.5% on the second.

So far, Spurgeon said, a significant proportion of participating homebuyers have repaid their loans. He expects most of the others to do the same before the deadline.

Cherry has claimed the federal tax credit on his 2008 taxes, but he hasn't gotten his refund yet. He definitely intends to repay the loan before the 2010 deadline because, he said, not doing so would add about $75 a month to his house payments.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

A not-so-awful bad housing report

Government report shows surprising sharp drop in housing starts and building permits, but single-home data show signs of stabilization.

NEW YORK (CNNMoney.com) -- Initial construction of U.S. homes and building permits both sank to record lows in April, according to a government report released Tuesday, but the same report also showed signs of stabilization in the single-family core of the housing market.

"Markets trade on headlines but the details of this report are less bad," said Ian Shepherdson, Chief U.S. Economist at High Frequency Economics, in a research note.

While the housing sector overall remains weak, the headline numbers of this report were dragged to record lows by the staggering multifamily sector.

"The devil is in the details here," said Mike Larson, real estate and interest rate analyst at Weiss Research, in a research note.

"The weakness in April was concentrated in the multifamily sector of the market - condos, apartments, and so on," said Larson. "That likely stems from the ongoing condo glut and the tighter financing conditions we've seen in the commercial real estate arena."

Record lows: Housing starts fell 12.8% to a seasonally adjusted annual rate of 458,000, down 12.8% from a revised 525,000 in March, according to the Commerce Department. The reading is the lowest level since the government began keeping records in 1959. The second lowest reading came in January, when the rate of housing starts was 488,000.

Economists were expecting housing starts to come in at 520,000, according to a consensus estimate compiled by Briefing.com. Compared to the same month last year, privately owned housing starts were 54.2% below the revised April 2008 rate of 1,001,000.

Applications for building permits, an indicator of future construction activity, fell 3.3% to a seasonally adjusted annual rate of 494,000 in April. The measure for building permits was also a record low, going back to January 1960, the furthest back the government has records. Economists were expecting permits to come in at 530,000 in April, according to the Briefing.com consensus.

Silver lining: The silver lining in an otherwise grim report was that new construction of single-family homes, considered the core of the housing market, rose 2.8% in April over the prior month, to an annual rate of 368,000. New construction of multi-family homes with 5 units or more sank to an annual rate of 78,000, down 42% from a revised 135,000 in March.

Similar to housing starts, the majority of the drop off in building permits was centered in multi-family homes. Building permits for single family homes rose 3.6% in April to a seasonally adjusted rate of 373,000. Building permits for multi-family units with five or more units fell 21% to an annualized rate of 103,000.

"All the drop in both starts and permits is in the hyper-volatile and hyper-depressed multi-family sector," said Shepherdson. Despite month-to-month volatility, the single family housing market has showed signs of a revival.

Going forward: Stability in the single-family sector combined with a recent uptick in builder confidence, according to a report from the National Association of Home Builders/Wells Fargo released Monday, indicate the rate of deceleration in the construction market could begin to slow.

"Homebuilders are more optimistic, according to the NAHB survey, so it seems reasonable to expect the rate of decline of new construction to slow," said Shepherdson.

Larson said that the single-family market would still have to contend with a glut of inventory, "but these figures add to the evidence of potential stabilization in that part of the industry."

Another economist echoed the sentiment that the report could point to a bottoming out in the sector.

"Single-family activity managed a second straight gain, giving some credence to a bottoming process," said Adam York, economist at Wachovia, in a research note. Even as the single-family sector shows signs of life, York expects the multifamily sector to "likely remain under pressure."

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.