2009 has been a year of mixed signals to the new home market.  In our regional markets we started to see daylight with some areas showing actual increases in overall unit sales, while most areas that showed decreases in sales experienced smaller decreases than in 2008.  To be certain, we are not experiencing a “boom” time yet, but the signs of stabilization are certainly present.  Inventories have been pared to levels where absorption rates are returning to 2005 -2006 levels.  Prices have not been severely impacted either.  In fact, one segment of the Quad City market had a 7% increase in the average new home sales price over the last year.

The Quad City area continues to see new construction very differently depending upon whether you are in Scott County, IA or in Rock Island County, IL. The Illinois side saw its market share of new construction sales dip below the 20% mark again in 2009, even though it experienced a slight increase in unit sales.  Overall unit sales fell 15% from 2008 levels in the Quad Cities.  House sales took the bulk of the loss, as overall condo sales were only down 2% from 2008.  Since 2004, house sales have fallen from 67% of unit sales to 61% of sales in 2009.  Inventory levels have stabilized and appear well balanced with the price points of recent sales.  The over-development of residential building lots in some areas of this market has left a legacy that is yet undetermined.  Will the need to liquidate lots lead to some lower housing prices or just slower absorption rates?  The coming months will reveal the strategies of lenders and developers alike. 

Current sales patterns reveal pockets of success at various price ranges, but many terrific areas are going unnoticed by consumers who, even in the face of upcoming deadlines for tax and other incentives to buy, do not seem to feel any great sense of urgency.  Coupled with the fact that buyers can choose from a wide variety of settings, home styles and prices, the current tax incentives and still low interest rates will hopefully be enough to “thaw” the winter sales chill and bring buyers back into the marketplace in time to take advantage of these conditions.

Residential New Construction Coming Back to Life in
Scott and Rock Island Counties

The Quad Cities area residential new construction market is starting to show signs of life. 

At the end of November a number of indicators pointed in a more positive direction. The inventory of new homes has steadily declined over the past two years, with a number of segments of the market approaching inventory levels that appear depleted, rather than excessive.  The decline in overall unit sales from previous years has slowed, with November house closings and pendings exceeding those of ’08 by nearly 60% in Scott County, and with November closings in Rock Island County up by 40% for houses and condos combined.  Year-to-date closings reflect an overall decline of 20% in unit sales in Scott County, but a 17% increase in unit sales in Rock Island County, compared to 2008.  These figures are both improvements since the end of the previous quarter and scheduled December closings look to be even better.

Condos priced up to $175,000 continue to lead the way, with substantial sales increases in the entire market.  In fact, this price range shows the strongest condo and home sales on both sides of the river, but suffers from an extreme shortage of available inventory, as first-time buyers take advantage of local, state and federal incentives.  At this time there are only two new construction houses listed for sale up to $175,000 in the Scott and Rock Island counties.  High land prices, high costs of construction and increasing regulatory costs plus heightened consumer expectations, continue to make the construction of homes in this price range a very difficult task in our market. 

Most price ranges above the $175,000 level report either stable or declining sales when compared to 2008, but there are pockets of activity spread throughout the Quad Cities region at just about every range.  The exception is condos above $300,000 in Scott County, which have experienced a 92% reduction in sales since last year. 

However, as sales figures continue to recover, the impact is lessened by the declining available inventory of new construction homes in the QCA.  As choices become more limited, consumers must increasingly choose between their “dream” of a new home and the existing home marketplace.  Fewer buyers have the luxury of time that is often required to build a home to their specifications and decide to make the more expedient choice of purchasing an existing home instead.  Fewer choices lead to fewer sales, fewer sales lead to still fewer choices and so on and so on.  Reduced new home sales then become a “self-fulfilling prophecy” and not a result of lack of real demand.  Restoration of confidence on the part of consumers, builders and lenders is required to restore this sector of our area’s economy to the level of several years ago.

Once again time, expectations, confidence and patience become key factors in this recovery.

A family-owned company since 1862, Ruhl&Ruhl REALTORS annually sells approximately 3,400 homes in eastern Iowa, western Illinois and southwestern Wisconsin.  Caroline Ruhl is the President and owner of Ruhl&Ruhl REALTORS, and is the fourth generation of the Ruhl family to lead the residential brokerage and home services company.  Headquartered in Davenport, Iowa, the company has 250 sales associates and 60 employees based in sales offices located in Bettendorf, Bellevue, Clinton, Coralville, Davenport, DeWitt, Dubuque, Maquoketa, and Muscatine, in Iowa, and in Moline, Illinois.  In addition to residential sales, Ruhl&Ruhl offers services in relocation, new home sales, farm sales, property management, senior services, and mortgage services through 1862 Mortgage.  For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com

Ruhl&Ruhl REALTORS is one of only three real estate firms in the State of Iowa to achieve Prime Select Broker status with Primacy Relocation. The broker is the only firm in eastern Iowa to achieve this recognition.

Ruhl&Ruhl received this distinction based on our agent’s ability to price properties within 5% of their ultimate selling price year over year, said Veronica Pianca, Vice President, Relocation & Business Development for Ruhl&Ruhl.

“We have been successful meeting this goal over the lifetime of our relationship with Primacy and specifically in the past three years when the market has been more volatile,” Pianca said.

In addition to meeting pricing targets, this award is also based on service evaluations from Primacy’s corporate clients and transferees, as well as communication between Ruhl&Ruhl’s Relocation Department and Primacy Relocation.

Ruhl&Ruhl joins two firms in Des Moines, Coldwell Banker Mid America Group and Prudential First Realty, as the only three firms in the State of Iowa to achieve these remarkable results.

Primacy Relocation is a full-service relocation provider, addressing both U.S. based and global needs for companies around the world.  Primacy offers the full range of global relocation and assignment management services, providing turnkey support in home sales, destination services, household goods move management, program administration, and international assignment support.  In addition to its Memphis headquarters Primacy has offices in Chicago, Dallas, Los Angeles, Minneapolis, Omaha, Sacramento and Washington D.C., as well as Basel, Geneva, Lausanne, London, Montreal, Munich, Neuchatel, Singapore and Zurich.  Primacy is online (in eight languages) at www.primacy.com

A family-owned company since 1862, Ruhl&Ruhl REALTORS annually sells approximately 3,400 homes in eastern Iowa, western Illinois and southwestern Wisconsin.  Caroline Ruhl is the President and owner of Ruhl&Ruhl REALTORS, and is the fourth generation of the Ruhl family to lead the residential brokerage and home services company.  Headquartered in Davenport, Iowa, the company has 250 sales associates and 60 employees based in sales offices located in Bettendorf, Bellevue, Clinton, Coralville, Davenport, DeWitt, Dubuque, Maquoketa, and Muscatine, in Iowa, and in Moline, Illinois.  In addition to residential sales, Ruhl&Ruhl offers services in relocation, new home sales, farm sales, property management, senior services, and mortgage services through 1862 Mortgage.  For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com

 Ruhl&Ruhl received this distinction based on their agent’s ability to price properties within 5% of their ultimate selling price year over year. In addition to meeting pricing targets, this award is also based on service evaluations from Primacy’s corporate clients and transferees, as well as communication between Ruhl&Ruhl’s Relocation Department and Primacy Relocation.

Primacy Relocation is a full-service relocation provider, addressing both U.S. based and global needs for companies around the world. Primacy is online at www.Primacy.com.

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a firsttime homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phaseout range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible firsttime homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

You know the house — the nice brick one you drive past every day. The Smith family lives there, and it’s been on the market for months without a buyer.

Yet, there’s the Jones’ house, same model, just around the corner. That yard sign hasn’t been up for more than a few weeks and it already says “under contract.” What do they know that the Smiths don’t?

Real estate is never an exact science, especially in today’s market. But the reality is that sellers who are prepared and ready to sell their home are more likely to accomplish their goals than sellers who don’t make the same commitment to the process.

Here are a few “secrets” that I like to share with my sellers. Whether you’re thinking of selling or buying, I think you’ll agree that these tips can make a big difference.

Professional Staging. Good staging suggests how buyers can make the most out of the home’s area and spaces, and allows them to envision how they can live a clutter-free, ultra-chic lifestyle — even with a family of small children.

Well-maintained landscaping and outdoor living spaces. Everyone wants to view their home as a relaxing retreat. Indulge their fantasy with a lush lawn.

Everything neat as a pin. Minor flaws draw attention away from the finer features of a nice home. Patch, paint, tighten and repair everything before listing your home for sale.

Low price compared to others. If your home is priced lower than others of similar size and quality, you automatically become the buyer’s choice.

Accessible for showing. The more difficult for an agent to show your home, the fewer buyers they will bring. Make your home available on short notice to attract maximum attention.

Great photos on the Web. When your home is entered into the Multiple Listing Service (MLS), it is immediately exposed to thousands of agents and their clients. First impressions make a huge difference! Make sure your home is the “shiny red apple” with professional photos, in “show ready” condition from Day One.

Article Courtsey Of: Allen Tate Realtors

Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010.

The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today.

More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.

Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.

NAR’s Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.

Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.

Listen to NAR President Charles McMillan’s podcast announcement.

NAR economists estimate that approximately 2 million people will take advantage of the tax credit this year.

Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)

Congress Passes Homebuyer Tax Credit

The House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow.

The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close.  First-time buyers who are in process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit.  A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years.  The legislation limits eligibility for the existing homeowner credit  to homes worth $800,000 or less.

How to Select the Best Real Estate Agent for YOU.

Once you have decided to list or buy a home, the next step is to find a real estate agent. The process of choosing a real estate agent can be overwhelming and confusing, but read over the following tips and you’ll be ahead of the game!!

Have Choices – Word of mouth and personal references can be an easy and efficient way in finding out who is a good agent in the area, but this may not always be the best way to choose an agent. Just because your neighbor’s house sold in 1 day, doesn’t necessarily mean that agent is right for you. Meeting different agents and conducting interviews is a great way to decide which agent would best suit your needs!

Interviewing Agents –  When making an investment as important as a home purchase, you should get more than one opinion. Interviewing potential agents can be a great way for you to figure out who would work best with you in buying or selling a home. Agents should want the chance to show you how they would work for you and what they would do to buy or sell a home. Don’t be afraid to ask agents how well they know the area and the markets of that area. An agent who is more knowledgeable on the area will be able to market your home better to prospective buyers.

Choosing an Agent – After interviewing several agents, it is time to make a decision on which agent you would like to list or help you purchase a home. Choose an agent that you feel comfortable with, you need to be able to communicate with them exactly what you want and need. This doesn’t necessarily mean your agent has to be your best friend, just someone that you respect and can speak with easily. Also, choose an agent who you feel will give you the upmost attention and works with your schedule, being able to reach an agent is very important when trying to sell or purchase a home.

 At Ruhl&Ruhl we have 10 offices and over 250 agents available to make purchasing or selling a home as easy as possible. Please feel free to browse each offices’ agent roster to help select an agent. If you would like one on one help in choosing the agent that is right for you, please contact Customer Service at 888.441.1776.

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Region’s Housing Market Turned the Corner in Third Quarter

According to economists surveyed by the National Association for Business Economics, the recession, which began in December 2007, has ended. Further, they noted the housing recovery “will gather momentum” and 2010 will be the first year since 2005 that the housing sector will contribute to overall growth. After flattening out this year, house prices, they said, will see a “modest gain of 2% in 2010.”

Third quarter marked the turnaround point for housing sales in our markets. At Ruhl&Ruhl, for example, we sold and closed on 8.4% more properties during the third quarter of 2009 than during the third quarter of 2008, comparing 1187 sales this year to 1095 sales last year. Pending sales written in September of 2009 and not yet closed were up 23% over September of last year and sales written during the first three weeks of October were up 55%. So fourth quarter sales closed will be well ahead of fourth quarter 2008 as well.

The 2009 Regional Real Estate Results chart on page 2 shows that year to date the number of properties sold is still down from last year, ranging from 3% down in the Iowa City area to 17% down in the Maquoketa/Preston/Bellevue markets. This reflects the devastating first quarter results. In most markets, year to date sales volume is also down more than the number of properties sold. This is because more lower-priced homes have been selling due to the first-time homebuyer tax credit. This change in the mix of deals to more lower-priced sales and fewer higher-priced sales has also resulted in lower average sales prices in most of our markets. The good news is – now that first-time buyers have purchased entry level homes, sellers of those homes can buy new, more expensive homes, and we will see increasing average sales prices.

Home prices in our region continue to be stable, as show in the Federal Housing Finance Agency chart on page attached. Ranked by price appreciation, all of our regional markets are in the top 25% of 294 Metropolitan Statistical Areas nationally.

This continues to be a great time to buy a home in our markets. Interest rates are still near record lows – in the range of 5.000%-5.250% for 30-year conventional and FHA mortgages and 4.375%-4.625% for 15-year mortgages. All sellers are advised to get pre-approved for a mortgage before listing their homes for sale if they are planning to purchase a new home. Because of the tightened credit requirements, some sellers have sold their homes only to find they no longer qualify for a mortgage to purchase a new home. While mortgages monies are still readily available in our region to buyers with good credit, nationally nearly one-third of all borrowers who applied for a loan last year were turned down, according to the Federal Reserve. Call 1862 Mortgage to get preapproved at 563-441-1862.

Today, Ruhl&Ruhl REALTORS, the residential company, has 250 sales associates, 60 employees and ten residential offices serving eastern Iowa and western Illinois, along with its corporate office in Davenport, Iowa. The company annually sells approximately 3,400 homes in the areas it serves, including offices in Davenport, Bettendorf, Clinton, Dubuque, Bellevue, Muscatine, Coralville, DeWitt, and Maquoketa, Iowa and in Moline, Illinois. In addition to residential sales, Ruhl&Ruhl offers services in relocation, new home sales, farm sales, senior services, property management, and mortgage services through 1862 Mortgage.  For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com.

The HARD Facts About our Soft
New Construction Market

As much as we in the Midwest like to think we are insulated from the tremendous swings in the market often experienced by the coasts and some larger markets, the truth is – this time we are in it too! 

Developers and builders in our region continue to suffer through a drought when it comes to financing being available for anything from a single spec home to any kind of new development.  Loans that are already on the books are being scrutinized very closely, with new appraisals and cash calls becoming very common among builders and developers of all sizes and capabilities.   This has resulted in a situation where shrinking new home sales becomes a “self-fulfilling prophesy” as spec inventories dwindle and cannot be replaced and pre-sold opportunities are missed because of tightened lending practices for both consumers and builders. Add in the rapidly increasing mandates on the part of federal, state and local governments regarding everything from erosion control to attempting to mandate interior sprinkler systems, and it is easy to see why homebuilders of all sizes might be questioning their career choice.

In the region served by Ruhl&Ruhl Realtors, while the year-to-date sales of all new residences is down from the same period in’08, there are some signs of stability and a few bright spots.  The three largest new construction markets within our region are the Quad Cities, the Iowa City area and Dubuque.  Of the three, Dubuque has shown the most stability, as unit sales recorded are exactly equal to the same nine month period in ’08.  Overall, Quad City market unit sales have dropped 23% in the same period and the Iowa City market is off by 26%. 

Hardest hit in all of these markets is the sale of free-standing houses. The three major markets combined have suffered a 48% reduction in sales so far this year, as compared to the same period in ’08.  But, sales of condos, townhomes and zero lot line residences are up 13% across these same markets.  The net result is still a loss of 26% in unit sales for these three markets but a 56% increase in market share for condos, townhomes and zero lot line homes. 

An additional underlying factor is the fact that a relatively high percentage of the condo sales increase is in a price range of $150K and less, meaning that fewer dollars were spent and there was less “ripple effect” in our various communities’ economies.  Overall, the decrease in dollar volume sales is far greater that the drop in unit sales.  A perfect example of this phenomenon is the North Liberty market.  Through the first nine months of 2008, North Liberty had recorded 140 house sales and 143 condo sales – a very balanced market.  For the same period this year, they have 55 house sales (-61%) and 183 condo sales (+28%) for a net loss of unit sales of 16%.  North Liberty’s experience is very typical in our region.

As mentioned earlier, widespread unavailability of financing for builders and the changing sales statistics are having an impact on the new construction inventory in the region.  At the end of 2008, free-standing houses represented 65% of all new construction sales and 46% of inventory in our region.  At the end of the 3^rd quarter in 2009, they represented 45.4% of year-to-date sales and 49% of new construction inventory.  And, as condo, townhome and zero lot line homes sales have increased from 35%to 55% of sales, their inventory levels have fallen from 54% to 51% of the market, leaving an overall market inventory that is 14% smaller than at the end of ’08, but more balanced with current sales activity.  

Unrelated to sales statistics, another continuing trend we have observed is the shrinking of new homes in terms of square footage, in exchange for more versatile and open floor plans with increased emphasis on upscale finishes and amenities. As “space for the sake of space” becomes less universally attractive and more expensive to maintain, “Thinking Big” refers more to the QUALITY of our ideas and designs – not the SIZE of our carbon footprint.

Not all the FACTS are negative.  Despite what you read or hear – If you are thinking about buying or building a new home, NOW is probably the perfect time to move forward.   We still have LOW interest rates, beautiful building sites, experienced and innovative builders and a wealth of emerging technological developments and new products available, making this a great time to move forward.  And here is a KEY FACT to remember……………………………………..

IT WILL NEVER GET LESS EXPENSIVE TO BUILD YOUR DREAM THAN IT IS TODAY!!!

Ruhl&Ruhl REALTORS, the residential company, has 250 sales associates, 60 employees and ten residential offices serving eastern Iowa and western Illinois, along with its corporate office in Davenport, Iowa. The company annually sells approximately 3,400 homes in the areas it serves, including offices in Davenport, Bettendorf, Clinton, Dubuque, Bellevue, Muscatine, Coralville, DeWitt, and Maquoketa, Iowa and in Moline, Illinois. In addition to residential sales, Ruhl&Ruhl offers services in relocation, property management, new home sales, farm sales, senior services, and mortgage services through 1862 Mortgage.  For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com.