Bank of America Agrees to Acquire Countrywide Financial

Bank of America agreed on Friday to purchase Countrywide Financial, the leading mortgage lender in the US, for $4.1 billion in stock. This follows a $2 billion investment by Bank of America in August 2007 which was intended to ease pressures on Countrywide from mounting foreclosures and delinquencies. The deal, already approved by both boards, is now in the hands of regulators who will determine if the acquisition violates any antitrust laws.

The buyout answers the big question about who will assume responsibility for collecting payments and servicing the more than 9 million U.S home loans serviced by Countrywide Financial. BOA is no stranger to the mortgage industry. In the first 9 months of 2007, the lender was the top mortgage originator whose focus has been to increase share of mortgages to borrowers who have solid credit as opposed to the subprime loans currently being scrutinized as part of the mortgage industry meltdown.

The merger will take approximately 2 years to complete, but in the meantime BOA will continue to operate Countrywide operations under the Countrywide Financial brand name.

The jury is still out on whether or not this deal will make a dent in the problems caused by the subprime lending practices at Countrywide, but it seems to be a step in the right direction. We'll have to keep an eye on Bank of America in the coming months to see whether or not there will be a significant ease in the mortgage crisis as a result of the merger.

The Parrish Family is Growing

It's been awhile since I've posted on my blog--something I swore to myself I wouldn't allow to happen. It's been a very busy fall for me. And in addition to working a lot, I've been trying to stay in touch with my growing family back in N.C.

On October 3, 2007, we welcomed my 1st nephew, Noah James, into the world. He's the first child for my twin sister and my first nephew. He was about 8 pounds and 21 inches long and he, mom, dad, and grandparents are all doing well!

Fed Lowers Federal Funds Rate

On Wednesday last week, the Fed lowered the federal funds rate by a quarter point which prompted several commercial banks to lower their prime lending rate--the rate charged on credit card, home equity lines, and other types of loans--to 7.5%.

The prime lending rate typically has implications for rates on first mortgages and refinancing rates. A decline in one usually signals a decline in the other. We will have to watch mortgage rates closely over the next several months to see if banks reduce those rates as well.

Based on statements made by the Fed, this will likely be the last reduction in the federal funds rate for this year.

A New Way to Look at Golf

About a year ago, my best friend of 14 years was diagnosed with Non-Hodgkin's Lymphoma and the prognosis didn't look good. Thankfully, he pulled through. In the last year, I've become more involved with the Leukemia & Lymphoma Society and I've met some pretty interesting people--survivors, like my best friend. So headlines like the one about Miles Levin, an 18-year old who has had to grow up fast over the last 2 years and who died this past Sunday, always grab my attention. I was reading his blog online and stumbled across this entry. I really touched me. I know this has nothing to do with real estate, but it is a poignant message and I felt compelled to share it.


From the blog of Miles Levin, aged 18.

I went to the driving range the other day and I was thinking...

I was thinking how you start out with a big bucket full of golf balls, and you just start hitting away carelessly. You have dozens of them, each individual ball means nothing so you just hit, hit, hit. One ball gone is practically inconsequential when subtracted from your bottomless bucket. There are no practice swings or technique re-evaluations after a bad shot, because so many more tries remain. Yet eventually you start to have to reach down towards the bottom of the bucket to scavenge for another shot and you realize that tries are running out. Now with just a handful left, each swing becomes more meaningful. The right technique becomes more crucial, so between each shot you take a couple practice swings and a few deep breaths. There is a very strong need to end on a good note, even if every preceeding shot was horrible, getting it right at the end means a lot. You know as you tee up your last ball, "This is my final shot, I want to crush this with perfection; I must make this count." Limited quantities or limited time brings a new, precious value and signficance to anything you do. Live every day shooting as if its your last shot, I know I have to.

2nd Quarter Sales Statistics

The National Association of Realtors today announced sales and pricing statistics for the 2nd quarter of 2007. Home prices improved in many metro areas, but sales continue to lag compared to 2006. Overall pricing acrouss the country remains flat, but are beginning to creep up after bottoming out in 2006. The median home price for existing single family homes was $223,800 down 1.5% from $227,100 from the same period last year.

Home sales continue to lag, with single family home sales falling 11% from the same period last year on a national level. Comparatively, existing home sales in the Northeast fell 6.8% over Q2 sales in 2006, an improvement on the trend at a national level. Also encouraging is the 0.7% increase in median home prices for existing single family homes to $298,000 versus Q2 in 2006.

As a Realtor, my primary objective is to educate clients that buying a home is still a solid investment. Individual circumstances dictate whether now is the right time to buy for you; the mortgage crisis being what it is and the tightening of lending to even those with exceptional credit. Pat V. Combs, the President of the National Association of Realtors echoes this. According to her, homes continue to be a good investment particularly since most home owners stay in their home an average of 6 years. This can be compared to long term stock market investors weathering the ups and downs of the market on a micro level. In fact, according to Combs, "a typical owner who bought six years ago is seeing a 45 percent increase in the value of their home."

If you have questions about these statistics, or if you want to know if now is the time to buy for you, then drop me a line or give me a call.

Real Estate - Real Solutions

Last week, The CBS Evening News with Katie Couric had a special report called Real Estate Real Solutions. I thought the segments were good because they gave buyers and sellers insight to the market, steps sellers can take to improve their chances for an offer, and even tips for people who want to try to go it alone without an agent. Keep in mind this was the national market in general with some spotlights on local markets in other states; all markets are local so be careful making assumptions in your town and even your neighborhood!

A note to those sellers who want to go it "alone." If you want to try this just to save money paying a commission, then let me tell you about 2 services you can still get from a REALTOR for a reduced commission.

ENTRY ONLY LISTING. This is a listing in which a REALTOR will provide the seller with very minimal services such as advertising the home on the MLS and providing forms to the seller. All negotiations, showings, open houses, and any additional advertising (and the costs associated with them) are the sole responsibility of the seller.

LIMITED SERVICE LISTING. This is a listing for which a REALTOR will perform at least one of the following (but not all):

1. Present offers to purchase diretly to the seller


2. Advise the seller on the merits of an offer


3. Advise the seller in developing, communicating, or presenting counteroffers


4. Participate on the seller's behalf in negotations leading to the sale of the listing property

Both of these options can help you "go it alone" without leaving you in the dark. I encourage anyone considering this to speak to an agent first to hear first hand exactly what he or she can and will do for you to sell your home.

I also encourage anyone looking to buy or sell a home to check out Real Estate - Real Solutions on The CBS Evening News website.

1st Half Sales Results

I thought I would share some sales statistics for RI for the 1st half of 2007. I'm often asked what the average price of a home is in a given area of RI, how long a property has been on the market, etc. And I've been keeping everyone apprised of the "doom and gloom" reported in the media--another pressure on home sales in my opinion.

Well here are some numbers for you to consider.

In the 1st half of 2007, 5,133 homes and condos were sold with an average selling price of just over $335,000. We have to be careful when considering the average selling price of an entire state, especially in a place as small as RI where multimillion dollar homes are never more than a 20-30 minute drive from the most depressed areas of the state.

Consider this. In Providence, the average list price (the "asking price" when the house first goes on the market) was $215,814 in the 1st half of '07 and the average selling price was $207,322. On the EAST SIDE of Providence, however, the average list price was $601,944 with an average selling price of $548,933.

A licensed REALTOR can look at the condition of your home, your individual neighborhood, and the larger municipal area in which you live to help correctly price your home for TODAY'S market. A friend of mine recently asked me about a website, increasing in popularity, that enables you to see active and sold listings on the market with great map capabilities, etc. I visited this site (I am not going to put its name here.) a few days ago and found that the "recent" sales data on many of the houses I checked were from 2005--the TOP of the market 2 years ago.

Pricing your home correctly is probably one of the most important factors in determining how long your home will take to sell. Other things to consider: Make your house stand out among the competition. Repair any defects; de-clutter your home; keep your house clean for any last minute appointments that pop up (not just at open house time); keep your yard tidy.

The following table shows # of Days on Market (DOM) of the 5,133 homes that were sold in the 1st half of the year. Nearly 1/2 sold within 2 months and the majority sold in less than 120 days.

0 - 30 Days....................1,401
31 - 60 Days................... 936 (2,377)
61 - 90 Days................... 702 (3,039)
91 - 120 Days.................. 565 (3,604)
121+ Days......................1,529 (5,133)

If you're thinking about selling your home, then give me a call or send me an e-mail. I'll be happy to look at homes that have sold in your neighborhood in the last 2, 4, or 6 months to get a more accurate picture of the real estate market where you live.