There is a growing trend for home builders to build green home plans or at least implement green home design in their new home plans.  They are doing this because their is a growing demand for green homes.  So, what is a green home?  A Green Home is a home that is usually certified based on criteria set up by a third party program such as ENERGY STAR or the NAHB NATIONAL GREEN BUILDING PROGRAM.

Why would someone want a green home?  The answer to this question falls into two camps depending on what you want to save.  Some want to save the planet while others just want to save money.  During our current recessionary times I think most are focused on the latter while saving the planet is just a perk.

Currently I am marketing a green home for sale at 8604 SW 57th ST.  (embarrassing plug I know OPEN HOUSE SAT & SUN 12-5 PM).  This home is being certified by both of the aforementioned programs.  Some of the money saving features are low-E windows, Energy Star appliances, energy efficient HVAC, and energy efficient tankless hot water heaters. Some of the planet saving features are the use of indigenous materials and low VOC carpet.   It gives the best of both worlds. Save the planet and save money.  The save the planet push is important to many people and may and should endure but I think we can agree that all people are interested in saving money and that the desire to save money will definitely endure.  This is an idea that is definitely here to stay.  As an example the green home mentioned above was designed to cut utility bills by one half of what they would be on a non-green home.  At 3300 SF it is assumed the bills would be about $500.  If you save half of that you would be saving $250 a month.  The additional cost to make this home green is about $9,000 which financed in the purchase would equal about $50 a month.  So you are spending $50 a month to save $250 a month plus you are helping your environment and your health.  Not a bad deal at all. 

I believe this trend will endure and at some point will become the standard.  If you are buying a new home you should definitely consider buying a green home.  Else, you may find yourself spending money to update your home to green just to be able to sell it.

Right now the Oklahoma City real estate market is the Tale of Two Markets.

We have simultaneously a Buyer’s Market and a Seller’s Market.

How can this be you might ask?  Well let’s take a look at the dynamics.

First we have the clock ticking on the first time home buyer tax credit.  For those of you that don’t know, it is an $8,000.00 Tax Credit for first time home buyers that purchase before December 1, 2009.  There are many Buyers looking to take advantage of this who have procrastinated and will now find themselves competing for these first time home buyers houses that are typically around $100,000.  As we close in on the end of the Tax Credit this market is going to start looking like the chaos surrounding a blue light special at K-Mart.  This all adds up to a Seller’s Market for the Move Up Buyer who is selling to the first time home buyer.

The typical Move Up Buyer will be purchasing a home between $150,000 and $300,000.  In this price range you can definitely hear the crickets chirping through the silence.   What does this mean?  Deep Discounts.  Lower listing prices.  And Sellers that are willing to take offers considerably less than the already discounted listing price.  In short a Buyer’s Market.

So, if you are a Move Up Buyer, you are Selling in a Seller’s Market and Buying in a Buyer’s Market.  It doesn’t get any better than this.  And if you think you are missing out on the Tax Credit you just aren’t doing the math.  Tax Credit = Seller’s Market on First Time Home Buyer houses.  Seller’s Market=Premium Price on the Move Up Buyers Sale.  Thus a percentage of the Tax Credit is being passed through to you.

Do the math and then go find that Dream Home that is only attainable in this unique set of circumstances. 

New Down Payment Assistance money should be available at the end of this month.  It seems that there are two components of the new issue.  One will be the normal issue which gives first time home buyers the down payment needed with an FHA Loan.  The other will be for first time home buyers too, but will be an advance of the Tax Credit.

Much like the Cash for Clunkers program this money will go fast.  Once the money is gone this program will no longer be available until the next issue which will probably be next year.  First time home buyers that qualify may receive both the Down Payment Assistance and the $8,000.00 Tax Credit. 

If you are looking for the deal of the century then the time to buy would be between 8/25/2009 and the time the bond money runs out which will be about 30 days later(based on the time it took the last issue to be used up).  In order to reserve this money you must be in a contract to purchase on a specific property, which means if you are looking to take advantage of the double benefit then you should contact a Realtor and begin looking at houses immediately.

According to OHFA:

Projected opening of 08/25/09 at 10:00 am.  $32.8 million bond
       issue with 6.10% interest rate. 1st Gold and OHFA Shield/4Teachers funds with
       3.5% DPA or Oklahoma Tax Advance Credit funds will be available.

Everybody and their dog from TV and Radio is going to be advising you to go out and buy a house.  If you are smart and in the know you will hear it first here at the Oklahoma City Real Estate Blog. 

The Fed said Wednesday that it would put over a Trillion Dollars into the economy.

$300 Billion Dollars of Long Term Treasuries.

Another $750 Billion Dollars of Mortgage Backed Securities.

Purchase of Freddie and Fannie debt of up to $200 Billion Dollars.

Keep the Fed Fund Rates between 0 and .25 for a long time.

What does this all mean?  It means interest rates are going down and the Fed has got your back.

How do you take advantage of this.  Buy a house and find it quick.  The ridiculously low interest rates along with the First Time Home Buyer’s Tax Credit is going to heat up the market.  The builders have quit building.  There is over three years of pent up demand for housing and when they come flooding back in the supply will not be there.  I know there is a lot of supply but when you subtract all the busted up foreclosure that most do not want or can’t get financing for you have very few houses.  I will say it again there are very few good houses on the market for serious buyers and as the army of sideline buyers enter the game, prices on good homes are going to go up.  So in short, if you do not move quickly you will pay more for your house and you will be talking about the chance that you missed.  If you wait for the statistics to show this or you are waiting for all the reporters to tell you now is the time to buy a house you are going to miss the boat.  If you want to hear someone call a bottom to the housing market.  Here it goes. 

 This is the bottom of the housing market. 

If you buy a house now you will be rewarded.  There you  have it.

Total closed in February 2009 was 997 down ↓21.1% from the 1264 closed in February 2008.

The average price was $139,632 down ↓6.4 % from the February 2008 price of $149,107.

The median price was $123,500 down ↓1.2% from the February 2008 price of $125,000.

The average Days On Market for February 2008 was 94 down from 95 in 2008.

 Based on information provided to and compiled by MLSGateway.com, Inc. covering a period 2008 through 2009MLSGateway.com, Inc. does not guarantee or is in any way responsible for its accuracy.

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The number closed is sharply down indicating a slowing real estate market in Oklahoma City.  Often a sharp drop in the numbers sold will precede a corresponding sharp drop in prices.  Let’s hope this phenomena does not prove to be true in this case.

Total closed in January 2009 was 741 down ↓36.7 % from the 1170 closed in January 2008.

The average price was $146,837 down ↓5.9 % from the January 2008 price of $156,089.

The median price was $125,000 down ↓6.7% from the January 2008 price of $134,000.

The average Days On Market for November 2008 was 95 up from 92 in 2008.

 Based on information provided to and compiled by MLSGateway.com, Inc. covering a period 2008 through 2009MLSGateway.com, Inc. does not guarantee or is in any way responsible for its accuracy.

Find out How Much Your Home is worth Today!

Total closed in December 2008 was 971 down ↓17.0 % from the 1170 closed in December 2007.

The average price was $147,730 down ↓5.4 % from the December 2007 price of $156,089.

The median price was $127,000 down ↓5.2% from the December 2007 price of $134,000.

The average Days On Market for December 2008 was 86 down from 92 in 2007.

 Based on information provided to and compiled by MLSGateway.com, Inc. covering a period 2007 through 2008MLSGateway.com, Inc. does not guarantee or is in any way responsible for its accuracy.

Find out How Much Your Home is worth Today!

So you are looking to buy a new home and you are hearing about discount points.  Or you already know something about discount points and you think you have the answer.  Here is the mistake buyers often make is they base decisions on their past experience.  They don’t realize how fluid the mortgage market is.  The problem is more than likely their experience is take from their experience with very few real estate transactions.  What you need to understand about the real estate industry is that there are no timeless universal correct answers.  

The game of real estate changes dramatically year to year, month to month, and even week to week.  This is why you cannot rely on your own experience of the past.  You cannot rely on experience of others from their past.  You need to educate yourself the best you can with current information and find a Realtor that is honest and actively selling houses every month that can help guide you.

Discount points are pre-paid interest that change the interest rate you pay over the term of the loan.  Here is the question, “Are Discount Points a good Idea?”.  Well it depends.  First, let me tell you upfront I am writing this because Discount Points have become a much better idea in the past few months.  Why?  Well.  It is all just math.  How much is a Discount Point.  One point is equal to 1% of the loan amount, so if you have one point on $150,000.00 then you will pay $1500.00 at closing.   Take for example the following choice.  One loan has one discount point and an interest rate of 5% and the other has no discount point and a 6% interest rate which one do you want?  Well, let’s look at it.

You would calculate it this way.  First you figure out the difference.  With the loan up front you will pay $1500 at closing but your monthly payment will be $805.00(refer to chart from previous post).  With no points you will not have the $1500.00 at closing but with your interest rate at 6% your monthly mortgage payment will be $899.00(refer to chart).  So which is better?  Well it depends on how long you will be living in your new home.  With one you save $1500 but pay $94 more a month.  A simple calculation 1500/94=15.96, shows that if you are going to be there for more than 16 months you will be saving quite a bit money with the first choice of the discount point.  If you plan on moving in less than f16 months than you should choose the one with no points.

The difference a point makes in the actual interest rate will vary at different times.  In the current market the above example is about right.  You save a point on interest for every discount point.  Three years ago it was more like you save 3/8 of a point on interest for every discount point.  You can see the calculations would be very different.

This is just a very small part of understanding which is the best loan right now.  So again I would recommend that you do lot’s of homework and find a knowledgable Realtor.  Selecting the wrong loan could cost you thousands over the life of the loan.

Ask questions.  Don’t be shy.  Very few have a full understanding of all the complexities of the process.  Even the veterans we see that think they have it all down usually only have a working knowledge of the surface.

Just between you and me.  I think Lenders purposely try to make it complicated to make it easier to sell you a product that may be good for them but bad for you.  Don’t let this happen.  Knowledge is Power.