Are we really poised for a recovery in the housing market? The latest encouraging words from the U.S. Conference Board’s Demand Institute Division are that we are heading for a rapidly accelerating rental market which will lead to a housing recovery.

While the American dream of homeownership is still an unending quest, the size of home that people are buying will be smaller and many will rent for a good while before they can afford that dream home.

According to the report, there are indications from industry data that the market is “bottoming out” but the great shift in real estate is the push toward the rental market which is helping fuel the recovery.

The Shifting Nature of U.S. Housing Demand report says that those who lost homes to foreclosure, those who don’t have a downpayment saved, and immigrants are propelling the rental market to soar.

But according to the report, it will be a “two-stage recovery”. The report stated, “Seasonally adjusted, average house prices will increase by up to 1 percent in the second half of 2012, rising to an annual rate of increase of 2.5 percent by 2014.” It continues, in the following three years (2015-2017) there will be a “rise by 3 to 3.5 percent a year on average”.

The second stage is the rental market acceleration. The report indicates the demand will be from those who want to purchase rental properties to capitalize on the accelerating rental market. It states that, “More than 50 percent of those planning to move in the next two years say they intend to rent”.

With that news comes, of course, the multi-unit properties. This is a big area for developers and the data, this year, already shows it’s a growing market. “The only segment of the home building sector now showing clear signs of recovery is multifamily housing,” according to the report.

The big draw for many of these rental properties is close proximity to shops, retail, restaurants, work, schools, and mass transportation. This is because some renters prefer to own fewer cars and therefore like the idea of being able to get around via walking and mass transit. It saves on the monthly car and parking expenses.

Developers are taking note of this and many are attempting to build work, play, live developments, even in suburban communities. However, these projects aren’t all being met with welcome arms. Some residents are fighting these types of planned developments claiming there will be too much traffic congestion, not enough parking and too much high density for the area.

But the indications are clear that those who are renting and, even homeowners, are desiring to spend less time in traffic. More time in community-oriented spaces that are easy to get to and conveniently located near their residences. Much of this is driven by the rising cost of gasoline and long delays in traffic.

So while bottoming out may be on the horizon, the report points out that the recovery is not likely to be “uniform”. Some areas may see increases in prices from 3 percent plus, a year on average from 2015 to 2017 and other regions as much as 5 percent plus by the year 2015. However, the report states that “prices could remain flat or even continue to fall over the next three years” elsewhere.

It seems it will all come back to the age-old adages: location, location, location and time will tell.

A few weeks back, we talked all about (and I mean all about!) statements sellers should avoid making while they’re engaged in what I like to call ‘verbal staging:’ drafting the listing description and marketing materials that create prospective buyers’ expectations about your home.

Though the subject started a rollicking conversation, many of you posed the sensible follow-up question:

Okay – then what should sellers say??

As you might have guessed, I have some thoughts on that matter, too! Here are 5 ‘verbal staging’ statements sellers should at least seriously consider making, when they’re working with their agent to market their home for sale:

1. Do Tell: Anything in or around your home that is ‘new’ (or nearly so). To a buyer, seeing features, amenities and appliances described as new-ish creates several connotations beyond the dictionary meaning of the word:
•‘New’ implies modern: in look and functionality. New appliances, furnaces, and finishes like paint and flooring simply have efficiencies, functions and an aesthetic style that older ones don’t.
•‘New’ implies clean: the suggestion is that even the most germaphobic buyer won’t have to fumigate the place with various disinfectant sprays to expunge decades’ worth of cooties (imaginary or otherwise).
•‘New’ implies less work for your home’s eventual buyers – especially if what’s new is a necessity that home buyers often have to buy before they can move in or a cosmetic item that home buyers often like to replace (i.e., carpet, paint, fridge, etc.).
That said, you should actually avoid using the word ‘new’ – unless something has been installed since you’ve moved out, and has truly never been lived in or with. Better to specify ‘recently remodeled,’ ‘installed this year,’ or ‘updated in 2011,’ to avoid legal problems later.

Think broadly when you’re thinking about how to apply this advice – work with your agent to determine whether to call out anything that’s new-ish about your home, whether that be appliances, a recent kitchen remodel, paint or landscaping. For that matter, look beyond your home with this point, to anything new in the neighborhood that might be relevant to buyers-to-be, like a new school, park, subway station, shopping strip or Farmer’s Market.

2. Do Tell: Your home’s dominant features. Ask yourself: what’s the very best thing about this place? Then ask again until you have maybe a handful of items. That handful of things may contain great fodder for your home’s marketing materials.

If you have to choose, prioritize features that (a) visitors to your home often comment on, and/or (b) that you have immensely enjoyed while living in the place. And think outside the box: consider things like the light, the floor plan flow, the amazing block parties, the Zen you achieve sitting in your garden, the smells and sounds and the nearby attractions you haunt. (Did I already mention the neighborhood Farmer’s Market?)

3. Do Tell: Anything that’s exceptional about your home – the things that differentiate your home from the competition. Is your home larger or does it have more bedrooms than the average home in your neck of the woods? Is your lot bigger or more private? Is your home a ‘regular’ sale in a sea of short sales, or the lowest priced listing in your super-chic subdivision? Does it have panoramic water views in an area where most homes overlook a canyon? No rear neighbors where most properties are surrounded?

I’m not suggesting that if you live in an Agrestic-style tract of cookie-cutter homes, that you stretch to find something – anything! – you can say about how your home is different. But you’d be amazed at how many home listings fail to point out the differentiators buyers really do care about.

Don’t let your home’s listing be one of those. To avoid that dire fate, it might be helpful to take notes when you ask prospective listing agents for their first impressions of your home as compared to others in the area. Another strategy is to revisit your listing description after your agent has collected the feedback of Open House hunters. What you’re looking for is not something to exaggerate into a stunning selling point; rather, the goal is to find something that’s unique about your home relative to other nearby or competitive properties.

4. Do Tell: The features your home has that you know buyers crave. If your home has uniquely compelling features compared with its competition, then say so. But even if your home’s features are not so unique, if it has some nuts-and-bolts features that give it wide desirability for a large segment of buyers in your area, it behooves you to express and emphasize them.

If people buy homes in your area because of its great school district and family-friendly activities, then mention the big, level backyard; the play structure and the fenced/covered pool. If your target buyers are looking for chic, car-free, urban living, talk about the Whole Foods Market and the gym on the ground floor of your building and the multiple public transport options within spitting distance.

Here’s where it’s good to mention any such features your home has that you know buyers in your area tend to look for that may be pleasantly surprising to those who just see your home onliner. This may include the actual size of very large rooms, the fact that you have a living room and a den, or all the amazing built-ins and customizations you’ve had professionally installed in your kitchen, closets, office, workshop, craft room or garage.

5. Do Tell: Incentives, extras and details that make the transaction easier or more favorable than a buyer would expect. If you or anyone else is providing any sort of bonus or incentive that promises to make the transaction even a small amount less expensive, smoother, easier or faster than the norm in your area, call it out!

This may include:
•HOA or closing cost credits paid by you (or your bank or relocation company)
•Personal property you’re willing to leave behind (i.e., furniture, electronics, yard equipment)
•Your willingness to finance part or all of the sale price
•The fact that your listing is not a short sale or foreclosure – or anything else of this sort.
Because you’re probably not nearly as well versed in what area buyers expect from a transaction as your agent is, this is one particular area in which you should look to your agent for strategic counsel.

Insider Secret: Keep in mind that prospective buyers may only see a few lines of your home’s description online, and may not be able to see everything that would go on a flyer, or even the detailed or agent-only remarks that local agents can see on MLS listings. So after you talk with your agent about which of these ‘verbal staging’ points to include, it’s important to actually view your home’s online listings to ensure that buyers can actually see the important points.

Agents: Besides the basics (beds, baths, square feet and the like), what home descriptors fall into your bucket of things you must include in a listing description or property flyer?

When you’re rich, you can cruise through life at a luxurious speed filled with fancy cars, designer clothes and caviar. But beneath the surface, becoming wealthy and staying wealthy involves hard work, an appetite for risk and a certain mindset that’s not always obvious. Here are some of the secret habits of wealthy people.

1. Bank on Your Street Smarts
“Making money has little to do with logic,” says real estate mogul, author and television star Barbara Corcoran. “It has more to do with trusting your gut.”

In an interview at her Upper East Side Manhattan office, Corcoran reflected on her struggling days in the classroom. “Often I think a prerequisite of making a ton of money is not being smart in school. The cutup in the classroom is often the guy with the big idea who makes a truckload of money.” Despite scoring Ds in high school and college, Corcoran utilized her street smarts and ability to connect with and judge those around her to ultimately grow and sell her Manhattan firm for $66 million in 2001. Today, she is the resident real estate contributor to NBC’s Today show and the sole female investor on ABC’s reality hit Shark Tank, now in its third season.

“You know what’s great about being a dunce in school? You have six-hour days to sit around and think of all kinds of things,” she says. “You get practice at imagination.”

In fact, according to Thomas Stanley’s book The Millionaire Mind, when asked how their high school teachers would have evaluated them, only 11 percent of millionaires said “most intellectually gifted” and just 10 percent said “highest grade point average.”

2. Identify and Act on Opportunities
When author Ryan D’Agostino was researching his book Rich Like Them, he knocked on nearly 500 doors to the biggest houses in America’s richest neighborhoods, asking the owners inside: what’s your secret? For one, he discovered, the millionaire mind never stops stirring.

“I spoke with a lot of rich people and one habit that I heard more than once was always keep your eye open for that million dollar idea,” says D’Agostino. “I met a travel agent who was once helicopter skiing in western Canada. He wondered what happens to all the helicopters and lodges in the off-season, and it turned out no one was using them. So he set up this whole luxury travel side business where he would take people out in the summer, fly them up to look at glaciers and mountaintops. He made a ton of money doing it.”

Of course, it’s enough to simply have an idea, D’Agostino continues. “The difference was, he acted on it.”

3. Enjoy Your Money
While saving is a key characteristic of some wealthy Americans as they build and grow their riches, D’Agostino says many millionaires he interviewed had a sort of 50/50 rule when it came to managing windfalls of money. “I met this really interesting guy in Scottsdale, Arizona who ran a successful construction company and he told me that whenever he came into any money he didn’t know he was going to have, even if it was just a few hundred dollars, he would put half away and spend the rest on something fun like a vacation for his kids or something nice for his wife,” he says. “He’d say, ‘what’s the point of obsessing over money all the time and saving and scrimping if you don’t get to enjoy it and spend it?’ That was maybe my favorite tip of all.”

4. Prioritize Retirement Savings
While paying for their kids to college is considered important for many wealthy Americans, it’s not their top financial priority, noticed D’Agostino. Instead, it’s having enough for retirement. “Person after person told me, ‘retirement first, education second,’” he said. “There’s no such thing as a loan you can take out for retirement, but it is okay to borrow money to pay for college.”

5. Eliminate Self-Doubt
For Corcoran, despite starting out as a woman in a man’s world and feeling intimidated at times, she attributes her success to the core belief that she’s worth it. “The big enemy out there is not the crowd you compete with or what they’re telling you, but your own self-talk. I had to learn to defeat my own self-talk inside that said, ‘you don’t have the right…don’t try it.’” Instead, she learned to say to herself, “I have the right to be there,” and the money followed.

The nation has fewer homes for sale, and that’s helping prices in markets where low supplies are meeting strong demand.

The U.S. had 2.37 million existing homes for sale at the end of March. That was down 22% from a year ago and 41% from the peak in mid-2007, the National Association of Realtors reported Wednesday.

First-quarter home sales, meanwhile, were up 5.3% from a year ago.

The combination of improving sales — coming off one of the worst years ever for home sales — and declining inventories is helping prices.

NAR says median existing single-family home prices rose in 74 of 146 U.S. markets in the first quarter, while they fell in 72 areas. In last year’s fourth quarter, 29 markets showed gains from a year earlier.

“Given the steadily dwindling supply of inventory and notably higher listing prices … prices are expected to show further improvements,” says Lawrence Yun, NAR chief economist.

At current levels, the housing inventory is at a more “normal” level, says CoreLogic economist Sam Khater. If home prices aren’t already at the bottom, “We’re not far away,” he says.

Home price data from CoreLogic and Zillow both show prices up slightly in March from February. Meanwhile, Fiserv Case-Shiller predicts home prices will stabilize this summer and post a 0.8% drop for the year.

As prices rise, after six years of declines, sellers who have kept homes off the market will increasingly put them on, says Jed Kolko, Trulia economist.

“But buyers will come out, too,” says Stan Humphries, Zillow economist.

The broad trend is for home sales to be 5% to 10% above last year, he says.

Some markets are already seeing tight supplies, leading to price gains.

In Phoenix, the supply of homes for sale in March was down 64% from a year earlier, says Michael Orr, real estate expert at Arizona State University.

Home inventories in Phoenix peaked in late 2010 and began to fall. Now, prices for homes under $500,000 are rising and “there’s no sign of it stopping, because supplies are so tight,” Orr says.

Yun says NAR has noticed “broad shortages of lower-priced homes,” most notably in Phoenix; suburban Washington, D.C.; Orange County, Calif.; Naples, Fla.; Seattle; and North Dakota.

Foreclosures may rise following the recent $25 billion foreclosure settlement between mortgage servicers and federal and state officials. But the number of foreclosed homes for sale isn’t likely to swamp markets due to increased efforts to modify home loans or allow short sales, Khater says.

WASHINGTON – Home builder confidence rose to the highest level in five years in May, a hopeful sign that modest improvement in the housing market could be ahead.

The National Association of Home Builders/Wells Fargo builder sentiment index rose to 29 in May. That’s the highest reading since May 2007 and up from a downwardly revised reading of 24 in April.

The index rose six straight months before falling in April.

Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached that level since April 2006, peak of the housing boom.

Homebuilders reported improved sales and higher traffic from prospective buyers. A gauge measuring confidence in sales the next six months also rose, to 34 from 31.

The improved outlook follows other recent signs that the depressed housing market is slowly improving.

In March, builders requested the highest number of permits to build new homes and apartments in 3½ years. And the number of people who signed contracts to buy homes rose in March to the highest level in nearly two years.

Mortgage rates are at record lows and hiring has picked up, making it easier for more Americans to buy homes. Still, many would-be buyers are having difficulty qualifying for home loans or can’t afford larger down payments required by banks.

Townhouses and single-family homes are sprouting on old industrial sites in the heart of Southern California cities. In Florida, developers are coveting foreclosed golf courses in urban centers to put up new subdivisions. Builders in Texas are going after available land even near landfills for residential and retail development.

Why are the giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs, doing an about-face? Why are they suddenly building smaller neighborhoods in and close to cities on land more likely to be near a train station than a pig farm?

A housing industry slowly shaking off the worst economic conditions in decades is rethinking what type of housing to build and where to build it. It’s a response to a new wave of home buyers who have no desire to live in traditional subdivisions far from urban amenities.

The nation’s development patterns may be at a historic juncture as builders begin to reverse 60-year-old trends. They’re shifting from giant communities on wide-open “greenfields” to compact “infill” housing in already-developed urban settings.

The market slowdown has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.

Young Millennials and older Baby Boomers are rejecting traditional suburban lifestyles in favor of urban living and shorter commutes. Many want to live near city centers so they can walk to work, shops and restaurants or take public transportation. They also prefer smaller homes because they’re single or have no kids and don’t want to spend their free time maintaining their homes.

“It’s the kids (ages 18 to 32), the empty nesters (Baby Boomers with no kids at home),” says Chris Leinberger, president of Smart Growth America’s LOCUS (Latin for “place”), a national coalition of real estate developers and investors who support urban developments that encourage walking over driving. “These two generations combined are more than half of the American population.”

The housing bust of the last five years hit hardest in subdivisions in remote suburbs, drying up financing for such development. At the same time, gas prices soared and so did environmental consciousness, giving consumers pause about living in distant suburbs away from services, jobs and entertainment.

California couple Maurice Turner and his wife, Preet Bassi, used to rent in the center of Anaheim. When they decided to buy, they found their choices limited at first.

“The majority of homes were single-family homes in the suburbs or older homes and multi-story condos in the city,” says Turner, administrative manager in a nearby city.

The 30-something professionals did not want to leave city neighborhoods and settle in a suburban subdivision. And they didn’t want to live in a multi-story condo building.

That was about the time Brookfield Homes, a leading developer of huge suburban subdivisions, began Colony Park — more than 500 single-family homes, townhouses and condominiums in Anaheim’s Historic District on a site that once housed industrial warehouses. Many of the townhomes are across the street from restaurants, entertainment and other urban attractions.

Turner and Bassi now live in a three-story, 1,700-square-foot townhouse where they and their neighbors make “a conscious effort to spend less time in your car commuting and spend more time in your neighborhood with friends, neighbors, family,” Turner says. “The urban environment was a big key to staying.”

Growth patterns shift

Developers are listening because the market has spoken loud and clear.

Latest Census data show that population growth in fringe counties nearly stopped in the 12 months that ended July 1, 2011, and urban counties at the center of metro areas grew faster than the nation as a whole, a USA TODAY analysis found.

Central metro counties accounted for 94% of U.S. growth, compared with 85% just before the recession and housing bust.

A recent Case Western Reserve University study found that Cleveland’s inner city is growing faster than its suburbs for the first time.

In January 2000, the highest price per square foot in the Washington, D.C., metro area was in the leafy suburb of Great Falls, Va., according to Zillow, a real estate research firm. Ten years later, townhouses in the hip and urban Dupont Circle neighborhood of Washington were worth 70% more per square foot than property in Great Falls.

“These are the market signals we’re getting throughout the country,” Leinberger says. “The drivable suburban fringe is where the housing market collapsed — 80% of the collapsed market was there. It’s a classic case of the real estate industry overproducing.”

Most major builders have created “urban” divisions in the past five years to scout for available land in already-developed parts of cities and closer suburbs — even if it means former industrial and commercial sites or land that may require environmental cleanup.

This shift doesn’t mean the end of sprawling suburban subdivisions in onetime cow pastures and corn fields, but it does signal a notable change that could alter the housing landscape for years to come.

“There has been a huge shift, particularly in the last 10 years,” says Marie York, president of real estate consulting York Solutions in Palm Beach County, Fla., and a board member of the American Planning Association. “There’s an emphasis on walkability, an emphasis on health, an emphasis on commuting by bicycle … a shift away from blatant consumerism and the McMansion model.”

The shift is not temporary, says Gregory Vilkin, managing principal and president of MacFarlane Partners, a San Francisco-based real estate investment company building 170 units on the site of former parking lots and auto repair shops in South Lake Union, a new urban project in Seattle.

Vilkin headed one of the nation’s largest urban redevelopments while at the helm of Forest City Enterprises’ residential real estate division: Stapleton, a cluster of neighborhoods built on 7.5 square miles on the site of the old Stapleton International Airport in Denver. Developers built 11 units per acre compared with four per acre in traditional suburban subdivisions.

“I reject the premise that (the shift) is just because of the recession,” Vilkin says. “It’s no longer the American dream to own a plot of land with a house on it and two cars in the driveway.”

Adds Leinberger: “This is a structural change, not a cyclical downturn.”

Moving toward the center

Whether it’s temporary or a seminal moment in the nation’s development history, the housing bust and recession have prompted developers to set their sights inward. When property values drop, so does investment. And because values dropped the most on the outer edges of metro areas, developers are paying attention to sites they never considered before.

“It makes you not look at these large properties on the edge of the Earth anymore,” says Denise Gammon, president of the communities division of Florida-based Kitson & Partners. “There’s a dramatic shift going on.”

Gammon also worked on Stapleton, and Kitson hired her to develop their infill business. In Tampa, the company is building Bay Pines, which will have multi-family housing, hotel, grocery store and shops on 60 acres that once was the site of a mobile home park.

“It’s an area of Tampa that hasn’t seen new housing in 25 years,” she says. “The conventional model is obsolete. People are looking for something different.”

In California, KB Home built Primera Terra at Playa Vista, near Marina Del Rey, on the site of an old Hughes Aircraft site. The condos highlight energy efficiency, proximity to shops, parks and schools, and prices under $600,000 (no garages).

“It has drawn an incredible number of people,” says Steve Ruffner, president of KB Home Southern California. “People are very interested in technology in a home that’s not only good for the environment but saves them ownership costs —Energy Star, solar.”

Executives of Dallas-based Huffines Communities sensed a revolution was afoot after attending a builders’ show in Orlando in 2005 when they realized that investors were the dominant buyers of suburban housing — not consumers.

The company had nine so-called “master-planned communities” in the works that would go up on undeveloped land in outer suburbia.

“We sold six and kept three,” says Robert Kembel, Huffines president. The company redeployed its capital to redeveloping sites in cities. “If people prefer to live closer to the jobs center, the pricing you can command is higher and there’s less competition,” Kembel says.

Huffines is developing Viridian, 5,000 units on a 2,300-acre site in a flood plain near a landfill in Arlington, Texas. The project required lengthy and costly cleanup and wetlands restoration measures.

“Developers who have the patience to go to the city or county and negotiate public-private partnerships to help mitigate huge costs, those are the guys who win,” Kembel says.

No time for big yards

Suburbia is changing, too.

Established suburbs such as Virginia’s Fairfax County, outside Washington, D.C., are building town centers that combine residential and retail on greenfields. Rapid transit lines are expanding through Tysons Corner, site of two shopping malls and headquarters of major corporations. Plans are for dense, high-rise development.

Even traditional communities built on greenfields are transforming. In Southern California’s Inland Empire, an area where housing prices are lower and appeal to first-time buyers, Brookfield is building Edenglen in Ontario. The homes are built on smaller lots — 4,500 square feet instead of the more conventional 7,200 square feet — and priced from $200,000 to $300,000.

“We’ve seen a lot of single females, single males, couples without kids,” says Carina Hathaway, vice president of marketing. “They don’t really have time to maintain huge yards.”

But Kembel predicts infill development is the wave of the future. Military bases that have shuttered offer huge opportunities, and so do old subdivisions built when sprawling suburbia was born in the 1950s and 1960s, he says.

“For the first time in history, Americans have stopped pushing development to the edge,” says Robert Lang, professor of urban affairs at the University of Nevada-Las Vegas and author of Megapolitan America. “The shift is from the old crabgrass frontier to the new Main Street.”

Spring offers up a wide array of natural beauty. Green lawns, budding roses, and fragrant blossoms treat the eye and nose at every turn. This particular Spring, however, has a leg up on previous years.

Interest rates are still near historic lows, hovering well below 4.0 percent for the 30-year fixed rate mortgage. This translates to favorable terms for eager buyers.

Jobs have begun to return in sectors all across the economy, which equals into a larger pool of eligible and willing buyers. Finally, as home prices have stabilized more homes are now within reach of more buyers. Affordability rates are at generational highs.

Are you a seller who will be looking to buy? Today’s market conditions make for a great time to buy and move up (if you have equity built in your home). Let Springtime showcase your home in the most natural light and “spring” a buyer into action.

Need a reason for selling this season? Consider nature’s paintbrush. Curb appeal is your home’s first impression. Many designers create this by painting the front door or a home or adding a punch of color with , but Spring means that your punches of color need not end at the front step.

Add flower beds around your mailbox, trees, and some to line your walkways. Prune back trees and shrubs to give a neat and orderly appearance.

Finally, take a good, hard look at the exterior of your home. Spring is a good time to break out the paint and give your home a few touch ups. Clean out gutters and clean up any trash.

Next, consider the beautiful weather. Who wants to look at houses during ice and snow? Okay, so there are plenty of buyers who brave those elements, but having an open house or showing during beautiful Spring weather is always a plus. Instead of too hot or too cold your guests will be just right.

Finally, most families prefer to pack up kids when school is taking a break. That means they want to move during the Summer months. What does this mean for sellers? It means families are looking to buy in the Spring. This gives them plenty of time to look at homes and then go to closing, which can take from a few weeks to over a month.

Springtime is full of new growth opportunities. So, stop and smell the roses … and list that home for sale!

Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized.

The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains.

The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.

“The housing market is still depressed but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview today. “We’re on the mend but it’s still something that will take two or three years before we’re back to normal.”

The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.

The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan; 16.9 percent in Palm Bay, Florida; and 16.6 percent in Erie, Pennsylvania.

Biggest Declines
Kingston, New York, had the biggest decline, with the median selling price tumbling 22 percent in the quarter. It was followed by Stamford, Connecticut, with an 18 percent decline; Mobile, Alabama, at 14.7 percent; and Atlanta at 12 percent.

The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier.

Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist.

‘Broad Shortages’
“We have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges,” Yun said in the report. “This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”

Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.

Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington- based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.

It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data.

The agency’s latest estimate came in one month shy of the liquidation timeline determined in the fourth quarter of 2011.

While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets, which prevented any significant reduction in S&P’s months-to-clear estimate, the agency explained in its report.

Regional variations in how quickly servicers can clear the backlog of nonperforming loans are primarily due to differences in foreclosure procedures, judicial vs. non-judicial.

As of first-quarter 2012, S&P says its months-to-clear estimate in judicial states was almost 2.5x as long as non-judicial states.

S&P includes in the shadow inventory all outstanding properties on which the mortgage payments are 90 or more days delinquent, properties in foreclosure, and properties that are REO. The agency also includes 70 percent of the loans that became current, or “cured,” from 90-day delinquency within the past 12 months because S&P says these loans are more likely to re-default.

S&P’s calculation of the months to clear the shadow inventory is the ratio of the total volume of distressed loans to the six-month moving average of liquidations. Although S&P’s analysis of the shadow inventory uses only non-agency loan data, the agency’s analysts believe the months-to-clear is similarly high for the market as a whole.

The volume of these distressed U.S. non-agency residential mortgages—which excludes loans from government sponsored entities, such as Fannie Mae and Freddie Mac—remained extremely high at $354 billion in the first quarter, according to S&P. The agency does note, however, that the industry’s distress volume has declined in each quarter since mid-2010.

To put the shadows into perspective, S&P says this latest number, which is based on the original balances of the loans, represents slightly less than one-third of the outstanding non-agency residential mortgage-backed securities (RMBS) market in the United States.

The New York City metropolitan statistical area (MSA) has the highest months-to-clear in the nation, at 202 months.

S&P also reported that the U.S. monthly first default rate fell to 0.67 percent in March 2012, the lowest level since May 2007. The first default rate is the percentage of loans that became 90-plus-days delinquent in that month for the first time, as a percent of all loans that have never before been at least 90 days or more past due.

This means that properties are entering the shadow inventory at a slower rate. S&P says with this improvement, the speed at which servicers can liquidate or cure nonperforming loans will determine the size of the shadow inventory going forward.

Default rates have been falling since first-quarter 2009 and the average national liquidation rate has stabilized, according to S&P—both factors that bode well for getting a handle on the magnitude of the industry’s shadow inventory and its inevitable impact.

Deciding to list your home for sale is a momentous time. It means you will be moving on to a new stage of life, no matter if you’re moving up or sizing down. Take a moment to look over these tips for what every seller should do before they put their home on the market.

•Organize Your Paperwork: Every homeowner should have a detailed list of all past repairs, updates, and upgrades they’ve made. This will help your agent know what should be mentioned on the MLS. Did you put on a new roof in 2010 or a install a new water heater in 2009? These are great selling features because they mean less work in the future for the prospective buyer.
Also included in this list should be any home warranty information. These warranties will most likely transfer with title of the home.

•Get Ready to Declutter: Even before you’ve officially listed your home for sale, you should start getting rid of things you don’t need. Starting now will mean a more thorough and less rushed job of clearing things out.
Start with one closet and work your way through the entire home. Sort items to toss, keep, sell, and donate.

Having a yard sale is a wonderful way of making a little extra pocket change while reducing the amount of things you’ll have in your home during showings and that you’ll need to pack up and move. It’s a win-win!

•Clean, Clean, and Clean Some More: Dirty homes are a real buyer turnoff. Now is a great time wash down walls, spruce up paint, and give your entire home a thorough cleaning. Do your carpets need refreshing? Consider renting a carpet shampoo machine or hiring a professional carpet cleaning company to come in and revamp your carpets.
Chances are buyers will ask for this anyway come closing time. You’ll beat them to the punch and have a shiny, sparkling home to show for it.

•Get an Inspection: Did you think inspections were only for buyers? Having a pre-sale inspection can mean identifying problem areas. Perhaps you’re unaware that your foundation needs repaired. This will severely affect your listing price. It’s best to be prepared and realistic in today’s market.

•Make Repairs or Get Estimates: Your inspection will likely leave you with a list of repairs, large and small, that need made. Keep in mind that prospective buyers will also get an inspection of your home and will find these same issues. Head them off at the pass and do some fixing up. You may wish to go ahead with large repairs. If not, be sure to at least get estimates so you are fully prepared for negotiations (you’ll know what the real cost should be) or so you can provide the estimates for buyers.

•Start Staging: Staging is like prepping your home for its first date. You want to have it clean and well-dressed. This means amping up curb appeal with neat landscaping, fresh paint, and flowers. It means rearranging furniture and removing clutter.
Congratulations on deciding to list your home for sale. Be proactive about making a good first step by following these tried and true tips.