From dreamer to first-time home buyer

With the variety of choices available to home buyers and the hope that anxious home sellers will give them a break, some first-time home buyers may be tempted to take on a home purchase as a “do-it-yourself” project.

Before jumping into the real estate market, consumers should consider that they are about to make what is not only the biggest financial investment of their lives but also an emotional investment. Home buying, especially for the novice buyer, involves complex decision-making that will have long-term consequences for their entire household.

First-time buyers can benefit from taking a home-buying class offered by a local real estate office, nonprofit association or government agency.

Most home buyers begin by educating themselves about their local real estate market and the home-buying process by searching the Internet.

According to the National Association of Realtors’ (NAR) 2006 Profile of Home Buyers and Sellers, nearly three-fourths of home buyers found the Internet to be a very useful tool while searching for a home. About 85 percent of buyers also opted to work with a real estate agent during the process.

Home prices: No relief on horizon

NEW YORK (CNNMoney.com) — Home prices have shown few signs of any turnaround, and a new report sees the downward slide continuing.

On Tuesday, Standard and Poor’s said its nationwide S&P/Case-Shiller Home Price Index fell 3.2 percent in the second quarter, compared with a year ago. For the three months ended June 30, prices dropped 0.9 percent from the first quarter.

Major housing markets showed worse declines. The Case-Shiller index covering 20 top metro areas for the month of June fell 3.5 percent, and the 10-city index dropped 4.1 percent year-over-year.

“The pullback in the U.S. residential real estate market is showing no signs of slowing down,” Robert J. Shiller, Chief Economist at MacroMarkets LLC said in a statement. “The year-over-year decline reported in the 2nd quarter of 2007 for the National Home Price Index is the lowest point in its reported history, which dates back to January 1987.”

The slump in housing prices began in mid-2005 when appreciation rates first started to slow and then reverse. During the past few months a credit crisis and a huge jump in default rates and foreclosures contributed to market declines.

Defaulting home owners have unleashed many new homes onto already sizable inventories. It’s the biggest glut of homes on the market in about 16 years. There’s now a 9.6 month supply of homes on the market at current rates of sale.

Demand has fallen as home loans of all types have become harder to obtain, taking many potential home buyers off the market. First, it was subprime borrowers who began having trouble arranging financing. Then Alt-A mortgages (usually low- or no-doc loans) dried up.

Lenders have also tightened the screws on jumbo loans. These big-ticket mortgages do not have a guaranteed secondary market because they exceed the dollar limits that of loans Freddie Mac and Fannie Mae, the government sponsored agencies created by Congress to add liquidity to housing markets, will buy.

As Mortgage Mess Unravels, Some Investors Clean Up

 By Thomas Heath and David Cho

Washington Post Staff Writers
Tuesday, August 28, 2007; Page D01

Joe Robert watched his real estate investment firm’s stock tumble to five-year lows this month as Wall Street punished any company linked to the mortgage mess. But where others panicked, Robert saw opportunity. From Aug. 9 to 16, he scooped up about $8 million worth of his firm’s shares. They have since risen about 25 percent.

“We are in,” Robert said of the buying opportunities created by the battered markets.

Robert, chairman and chief executive of J.E. Robert Cos. in McLean, has a knack for making fortunes off market pullbacks. “The market is oversold. . . . This is typical of any kind of financial crisis, credit crisis, real estate recession — whatever you want to call it.”

The biggest names in American capitalism — from bankruptcy whiz Wilbur Ross to Bank of America — are finding cut-rate deals within the widespread financial misery that began when record numbers of homeowners defaulted on their mortgages.

Home Buyers Forced to Change Tactics

The credit crunch has turned $417,000 into the magic number for home buyers shopping for mortgages.

Rattled investors have become reluctant to buy loans for more than that amount — known as jumbo mortgages — and that in turn has pushed some lenders to raise interest rates. Caught in the middle are potential home buyers who are getting walloped by higher rates or shut out of the market.

The phenomenon is particularly significant in Washington, where half the homes sell for more than $417,000. Here, home buyers are figuring out how to adapt to the new circumstances by making larger down payments or splitting their purchase into two loans to dodge higher rates. Others are sitting tight until the rates go down.

The course they take can have deep implications for the mortgage industry, the housing sector, and by extension, the economy. If too many potential jumbo-loan borrowers wait it out, chances are the excess supply of homes on the market will swell, further dragging down prices. Home values fell in 15 of 20 large metropolitan areas in the second quarter from a year earlier, according to a report yesterday from S&P/Case-Shiller. They fell 7 percent in the Washington area.

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By Dina ElBoghdady

Washington Post Staff Writer
Wednesday, August 29, 2007; Page D01

Mosquito busters for your backyard

It’s summertime, and the livin’ is … buggy. In much of the country, Swat Season is in full swing, and the shelves sag with products that claim to help you survive in comfort.  Unfortunately, most of these items are little better than the pests they purport to defeat, homing in on your desperation like a female skeeter chasing carbon dioxide.

We asked some of the nation’s foremost mosquito experts to evaluate the claims of popular products now available. You may be surprised at what truly delivers relief.