Beginning January 1, 2008 in Illinois buyers and sellers should be aware of the new Illinois Radon Awareness Act which applies to sales transactions for residential real estate. The law states that sellers must supply the buyer with two documents before the buyer will become bound on the contract to purchase the property. The first document is a pamphlet entitled “Radon Testing Guidelines for Real Estate Transactions”. The second document is a form that the seller will have to execute entitled “Disclosure of Information on Radon Hazards”.
Radon gas is a odorless, colorless radioactive gas that is produced by naturally occurring uranium in the soil. The gas raises from the ground into the air and into homes. Radon is the leading cause of lung cancer among non-smokers and about 1 out of 15 homes in the U.S. are estimated to have levels exceeding national safety standards. Although sellers are not required to test for radon or to reduce levels if they exceed national safety standards, buyers should be aware of this law and negotiate reasonable terms when purchasing residential real estate.
In addition to the new Illinois Radon Awareness Act, sellers have been responsible since 1996 for providing a Lead Paint Disclosure to the buyer. One thing that is not mandatory for the seller to provide is the home inspection report, but it is highly recommended. Home purchases are substantial investments and should not be taken lightly. Every buyer should receive the disclosures listed above and require a home inspection prior to purchasing a potential property. Not every buyer feels that a home inspection is necessary, but the minimal cost of a home inspection is well worth knowing the quality of the home and being able to enjoy it for many years to come.
Eric P. Egeland
RE/MAX ADVANCED
847.337.7090
HomesInBG.com
Thursday, February 28, 2008
Monday, February 25, 2008
Weekly Mortgage Recap
The interest-rate party was fun while it lasted, but it appears to be over – at least for awhile. Depending who you ask and when you asked him, the 30-year fixed-rate prime conforming mortgage spiked as much as 41 basis points (according to Bankrate), or as little as 32 basis points (according to Freddie Mac). Either way, the 30-year benchmark is well above levels this time last week, and even this time last year, exceeding 6.4% in some markets.
The punchbowl was swiftly removed because of a rising threat of inflation. The Labor Department reported that consumer prices jumped 0.4% in January and are up 4.3% in the past 12 months, nearing a 16-year high. Even stripping out sharply rising food and energy costs, prices rose 0.3%.
The same day inflation reared its ugly head, the Federal Reserve disclosed that it reduced its forecast for economic growth this year to between 1.3% to 2%, half a percentage point below the level of its previous forecast offered in October. Fed officials blamed the decelerating outlook on slumping housing prices, tighter lending standards and higher oil prices.
Somewhat remarkably, housing eschewed its familiar role as red-headed economic stepchild. For the second straight month, homebuilder confidence rose, according to the National Association of Home Builders and Wells Fargo index of builder sentiment. The index increased to 20 in February, up from 19 in January. Disaggregating the index, sentiment increased to 24 in the Northeast, 15 in the West, 24 in the South and remained at 16 in the Midwest.
Perhaps the increased confidence resulted from an unexpected increase in new home sales, which inched ahead 0.8% to an annual rate of 1.01 million homes in January, and the fact that traffic in model homes picked up in January, according to the NAHB.
Eric P. Egeland
RE/MAX ADVANCED
847.337.7090
HomesInBG.com
Sunday, February 17, 2008
Weekly Economic Recap
Scheduled economic news was scarce last week; actual economic news was another matter. Not surprisingly, the mortgage and housing markets garnered most of the headlines on what was reported.
To state the obvious, the economy's fate still hangs on the value of home prices. On that front, the news was discouraging. According to Zillow.com, a real estate data service, 39% of people who purchased a home two years ago owe more than they own. Adding insult to injury, Fannie Mae reported that it expects home prices will decline 4.5% this year and 2.6% in 2009.
Fortunately, more help is on the way. Congress passed an economic stimulus plan that raised the maximum loan sizes for some conforming and Federal Housing Administration-insured mortgages. The new conforming limit will vary by metropolitan area. In some places it will remain $417,000; in pricier areas, like San Francisco, it will rise to $729,750. Most of the country though will fall between these bookends.
Project Lifeline, a federal government and mortgage-servicer sponsored program for people on the verge of losing their homes, offers additional hope. Project Lifeline is unique in that unlike previous government programs, the benefits won't be confined to borrowers with adjustable rate mortgages. On the other hand, it will exclude anyone who is currently bankrupt, who hasn't missed more than three months of payments, or who is less than 30 days away from foreclosure. It will also exclude vacant or investment properties.
Eric P. Egeland
RE/MAX ADVANCED
847.337.7090
HomesInBG.com
To state the obvious, the economy's fate still hangs on the value of home prices. On that front, the news was discouraging. According to Zillow.com, a real estate data service, 39% of people who purchased a home two years ago owe more than they own. Adding insult to injury, Fannie Mae reported that it expects home prices will decline 4.5% this year and 2.6% in 2009.
Fortunately, more help is on the way. Congress passed an economic stimulus plan that raised the maximum loan sizes for some conforming and Federal Housing Administration-insured mortgages. The new conforming limit will vary by metropolitan area. In some places it will remain $417,000; in pricier areas, like San Francisco, it will rise to $729,750. Most of the country though will fall between these bookends.
Project Lifeline, a federal government and mortgage-servicer sponsored program for people on the verge of losing their homes, offers additional hope. Project Lifeline is unique in that unlike previous government programs, the benefits won't be confined to borrowers with adjustable rate mortgages. On the other hand, it will exclude anyone who is currently bankrupt, who hasn't missed more than three months of payments, or who is less than 30 days away from foreclosure. It will also exclude vacant or investment properties.
Eric P. Egeland
RE/MAX ADVANCED
847.337.7090
HomesInBG.com
Monday, February 11, 2008
US weekly Recap
For all the chatter about impending economic doom, it's amazing how the economy keeps plugging along. To wit, the Commerce Department reported that orders for manufactured goods rose 2.3% in December, following a revised 1.7% increase in November. The report is evidence that the putative economic slowdown has yet to hit America's producers of durable products.
All of America's producers – durable and otherwise – are producing what they produce more efficiently, as well. Worker productivity grew at a 1.8% annual rate in the final quarter of 2007, a faster-than-expected pace, which suggests productivity remains healthy and labor costs remain tame.
The productivity report provides the Federal Reserve with more wiggle room to continue lowering interest rates, if needed. And the Fed just might need to. The NAR's pending sales index posted at 84.9% in December, 24.2% below the 113.3 posted in December 2006. The NAR projects existing-home sales at 5.38 million this year and 5.60 million in 2009, with existing-home prices falling 1.2% to a median of $216,300 for all of 2008 before climbing 3.2% to $223,200 in 2009.
NAR chief economist Lawrence Yun predicts sales activity will remain soft through the first half of the year, but he hedges his prognostication by saying that the market could improve more quickly if the higher conforming loan limits are implemented sooner.
Eric P. Egeland
RE/MAX Advanced (Deerfield)
HomesInBG.com
847-337-7090
All of America's producers – durable and otherwise – are producing what they produce more efficiently, as well. Worker productivity grew at a 1.8% annual rate in the final quarter of 2007, a faster-than-expected pace, which suggests productivity remains healthy and labor costs remain tame.
The productivity report provides the Federal Reserve with more wiggle room to continue lowering interest rates, if needed. And the Fed just might need to. The NAR's pending sales index posted at 84.9% in December, 24.2% below the 113.3 posted in December 2006. The NAR projects existing-home sales at 5.38 million this year and 5.60 million in 2009, with existing-home prices falling 1.2% to a median of $216,300 for all of 2008 before climbing 3.2% to $223,200 in 2009.
NAR chief economist Lawrence Yun predicts sales activity will remain soft through the first half of the year, but he hedges his prognostication by saying that the market could improve more quickly if the higher conforming loan limits are implemented sooner.
Eric P. Egeland
RE/MAX Advanced (Deerfield)
HomesInBG.com
847-337-7090
Monday, February 4, 2008
US Recap
The action came fast and furious last week, which was to be expected given the surfeit of news and data. Leading the charge was the Federal Reserve, which did what most pundits expected by lowering the fed funds rate another 50 basis points to 3.0%.
Fear of recession is the primary reason the Fed has been slashing the fed funds rate over the past two weeks, and the fear is well-grounded: Gross domestic product grew at a 0.6% annual rate in the fourth quarter of 2007, a palpable slowdown from the 4.9% pace in the previous quarter. The slowdown provided the Fed with the fodder for its aggressive response, which had been criticized by some observers as an overreaction to volatile markets.
Additional support for aggressive action was supplied by Friday's employment report, which showed that non-farm payrolls fell 17,000 in January, the first drop since August 2003. Gains in health care, retail trade and leisure were offset by declines in manufacturing, construction and financial services.
Of course declines in manufacturing, construction and financial services are tied to declines in new-home sales, which decreased 4.7% to an annual pace of 604,000 in December, the fewest since February 1995, and followed a 634,000 rate the prior month. For the year, sales dropped 26%, the most since records began in 1963, while the median price of a new home fell to $219,200 in December from $244,700 a year earlier.
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