RenoAmerica.com Blog

Gettin Your Moneys Worth !!!!!!

2008-10-16T11:05:00.000-07:00

Daily Real Estate News October 15, 2008

Cities Where Your Dollar Goes Furthest Money goes further some places in the United States than it does in others.Housing, in particular, has remained most affordable in the South and the Midwest. That’s because of less stringent building, an abundance of land and growing populations in the South, says Daniel McCue, a research analyst at Harvard’s Joint Center for Housing Studies.To determine the cities that offer the best quality of life for the least amount of money, Forbes magazine calculated the ratios between a city’s median home price and its median household income. It also factored in projected job growth. And it compared median income to Moody’s Economy.com’s cost of living index.Here are the 10 cities that it found to offer the best value, and the cities that it believes offers the worst value.Cities Where Residents Get the Most for Their Money
Austin, Texas
San Antonio, Texas
Indianapolis, Ind.
Houston, Texas
Charlotte, N.C.
Columbus, Ohio
Dallas
Minneapolis/St. Paul
Denver
Portland, Ore.Cities Where Residents Get the Least for Their Money
Los Angeles
Providence, R.I.
New Orleans
Philadelphia
Cleveland
New York
Milwaukee, Wisc.
St. Louis, Mo.
Washington, D.C.
Sacramento, Calif.Source: Forbes, Abha Bhattarai (10/10/2008)

Home Getting Smaller Again ?

2008-10-13T16:26:00.000-07:00

Homes Sizes Shrink to Lure Buyers.

Home builders are reducing the size and options available to appeal to buyers with less money to spend and who are facing a harder time getting financing.Los Angeles-based KB Homes had shrunk its homes from 3,400 square feet, selling for $450,000, to 2,400 square feet selling for $300,000 to appeal to buyers. Now, it's shrinking its homes yet again--1,230 square feet priced at about $200,000Other builders, including Warmington Homes and John Laing Homes, have taken similar approaches.“We're getting back to more the way things were historically, kind of undoing the excesses, not just from a price perspective but home size and (fewer amenities)," says Nishu Sood, a Deutsche Bank analyst.The new KB Homes aren’t just smaller, they are more efficiently designed, says Steve Ruffner, president of KB Home's Southern California Coastal Division. "You could have a three-bedroom, 2,500 square-foot single-story home and all you had was wide hallways and bigger rooms. It wasn't really giving [buyers] the utility," Ruffner says.Source: The Associated Press, Alex Veiga (10/10/08)

What Are They Thinking !

2008-09-30T14:35:00.000-07:00

Daily Real Estate News September 29, 2008House Rejects Financial Rescue !

Plan After a weekend of intense negotiations, the White House and Congress agreed Sunday on a plan for the biggest banking rescue in U.S. history. But the bailout plan was in doubt Monday after it fell short of the 218 it needed to pass the House of Representatives. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against, according to a news update from CNNMoney.com. In a statement issued Monday afternoon, the NATIONAL ASSOCIATION OF REALTORS® expressed disappointment that the bill didn't pass, saying the legislation "is critical to stopping the economic turmoil that millions of Americans are facing." "Across the country, REALTORS® see and feel the loss of confidence experienced by both buyers and sellers in the real estate market and they know firsthand that buyers are finding it harder to get mortgages," NAR President Dick Gaylord said. "This legislation, if implemented, would quickly restore liquidity to the mortgage market, which would stabilize the housing market and protect homeowners." The bill, which also would require approval from the Senate, would have allowed the government to buy as much as $700 billion in distressed financial assets from banks, freeing up the credit market so that loans will become more available. Struggling home owners also would get some reprieve, as the bill calls for the Treasury Department and other government agencies to modify home loans when possible to avoid foreclosures."I am confident this legislation gives us the flexibility to unclog our financial markets and increase the ability of our financial institutions to deliver the credit that will help create jobs," Treasury Secretary Henry Paulson said in a statement Sunday. He said the bill would provide the necessary tools to deploy up to $700 billion to address the urgent needs of the U.S. financial system—whether by purchasing troubled assets, insuring troubled assets, or averting the disorderly failure of large financial institutions. In a measure to protect taxpayers, the bill states that if the government has a net loss after five years, the president will have to submit a legislative proposal to seek reimbursement from the financial institutions that participated.The House of Representatives voted on the bill Monday, and the Senate is expected to consider it later in the week, possibly as early as Wednesday. "Quick, effective and bipartisan action sends a signal to investors large and small, here and abroad, that we are committed to taking the necessary actions to protect our financial system and our economy," Paulson said. In other news Monday, federal regulators said they had brokered a deal for Wachovia, the fourth largest bank in the U.S., to sell its banking assets to Citigroup. Shares in Wachovia crashed on Friday amid concerns over its exposure to subprime mortgage debt.Source: NAR, The Wall Street Journal, CNN.com, U.S. Department of the Treasury

Sales Picking up in Some Areas

2008-08-14T12:28:00.000-07:00

Home Buyers Acting On Lower Prices
Existing-home sales rose from the first quarter in 13 states, largely from buyers responding to discounted home prices, according to the latest quarterly survey by the NATIONAL ASSOCIATION OF REALTORS®. Nearly one-quarter of metropolitan areas showed rising home prices in the second quarter from a year ago, with greatly mixed conditions continuing around the country.In the second quarter, 35 out of 150 metropolitan statistical areas 1 showed gains in median existing single-family home prices from the second quarter of last year, while 115 had price declines. NAR’s track of metro area home prices dates back to 1979.NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said foreclosures are distorting the price data. “In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values,” Gaylord said. “Many buyers with long-term expectations are getting exceptional value in the current market. Once the inventory is drawn down, price pressure will return because the costs of construction are rising – today’s buyers are very well positioned to build wealth over time.”A separate recent study by the National Bureau of Economic Research, “Housing Supply and Housing Bubbles,” shows construction costs in 2007 were higher than home prices in 33 out of 79 metro areas studied.Because foreclosures and short sales are accounting for about one-third of transactions, there is a downward pull to the national median price. In the second quarter, the median existing single-family home price was $206,500, down 7.6 percent from the second quarter of 2007 when it was $223,500. The median price is where half of the homes sold for more and half sold for less.Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate2 of 4.91 million units in the second quarter, down 0.8 percent from 4.95 million units in the first quarter, and were 16.3 percent below a 5.87 million-unit pace in the second quarter of 2007.According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 6.09 percent in the second quarter from 5.88 percent in the first quarter; the rate was 6.37 percent in the second quarter of 2007. Lawrence Yun, NAR chief economist, said a clear cause-and-effect response has developed in the housing market. “The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops,” Yun said. Compared with the first quarter, existing-home sales increased 25.8 percent in California, 25.0 percent in Nevada, 20.5 percent in Arizona and 10.1 percent in Florida. “Buyers in these areas are responding to deeply discounted home prices.” The largest sales gain during the second quarter was in Idaho, up 51.7 percent; Virginia sales rose 10.5 percent.The steepest declines in single-family home prices in the second quarter were in the Sacramento-Arden-Arcade-Roseville area of California, where the median price of $229,500 dropped 35.6 percent from a year ago, followed by Cape Coral-Fort Myers, Fla., at $178,100, down 33.1 percent from the second quarter of 2007, and Riverside-San Bernardino-Ontario, Calif., where it dropped 32.7 percent to $265,200. “Each of these areas has seen a strong buyer response in recent months to the big cuts in home prices,” Yun said.Sharp price declines, in excess of 20 percent, also were reported in the Los Angeles-Long Beach-Santa Ana area; the Anaheim-Santa Ana-Irvine, Calif., area; Las Vegas-Paradise; and Phoenix-Mesa-Scottsdale.“Areas with affordable housing and healthy local economies continue to see price growth,” Yun said. In the second quarter, the largest single-family home price increase was in the Yakima, Wash., area, where the median price of $162,300 rose 8.9 percent from a year ago. Next was the Binghamton, N.Y., area, at $120,900, up 8.7 percent from the second quarter of 2007, followed by the Amarillo, Texas, area, where the second-quarter median price increased 7.2 percent to $124,600. Yun said home price conditions reflect comparisons from 12 months ago. “Prices having fallen sharply and quickly in very distressed markets, but most or all of the price declines may have already occurred in these areas since buyers have now returned to those markets,” he said. “Furthermore, the momentum of buying is likely to continue in light of the housing stimulus package that was recently enacted. About 2.5 million first-time buyers are expected to take advantage of the $7,500 tax credit between now and the middle of next year.”Median second-quarter metro area single-family home prices ranged from a very affordable $71,700 in the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, to nearly 11 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $755,000. The second most expensive area was San Francisco-Oakland-Fremont, at $684,900, followed by Honolulu at $636,000. Other affordable markets include Elmira, N.Y., at $76,400, and the Saginaw-Saginaw Township North area of Michigan with a second-quarter median price of $80,300. In the condo sector, metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $220,000 in the second quarter, down 3.0 percent from $226,900 in the second quarter of 2007. Seventeen metros showed annual increases in the median condo price and 37 areas had price declines.The strongest condo price increases were in the Syracuse, N.Y., area, where the second quarter price of $144,900 rose 17.8 percent from a year earlier, followed by the New Orleans-Metairie-Kenner area of Louisiana, at $192,100, up 15.9 percent, and the Houston-Baytown-Sugar Land area of Texas, where the median condo price of $141,100 rose 9.9 percent from the second quarter of 2007. Areas where condo prices declined mirrored the pattern seen with single-family homes.Metro area median existing-condo prices in the second quarter ranged from $107,500 in the Wichita, Kan., area to $523,500 in the San Francisco-Oakland-Fremont area. The second most expensive condo market reported was Honolulu at $330,000, followed by Los Angeles-Long Beach-Santa Ana at $327,800. Other affordable condo markets include Greensboro-High Point, N.C., at $109,600 in the second quarter, and the Indianapolis area at $113,500. Regionally, the median existing single-family home price in the Northeast fell 9.6 percent to $269,000 in the second quarter from the same period in 2007. After Binghamton, the strongest price increase in the Northeast was in Elmira, N.Y., up 6.6 percent from the second quarter of 2007, followed by Buffalo-Niagara Falls, N.Y., with a median price of $108,200, up 4.7 percent. The median existing single-family home price in the Midwest declined 0.9 percent to $161,500 in the second quarter from the same period in 2007. The strongest metro price increases in the Midwest were in the Decatur, Ill., area, where the median price of $94,200 was 6.0 percent higher than a year ago, and Des Moines, Iowa, at $156,600, also up 6.0 percent, followed by Peoria, Ill., at $124,800, up 3.7 percent from the second quarter of 2007. In the South, the median existing single-family home price was $177,000 in the second quarter, down 4.1 percent from a year earlier. After Amarillo, the strongest price increase in the South was in the Charleston, W.V., area, at $136,600, up 7.1 percent from a year ago, followed by Corpus Christi, Texas, with a 6.2 percent gain to $144,400, and Greenville, S.C., at $160,300, up 5.1 percent.In the West, the median existing single-family home price was $290,600 in the second quarter, which is 17.4 percent below a year ago. After Yakima, the strongest metro price increase in the West was in the Salt Lake City area, at $234,200, up 0.5 percent from a year ago; all other metro areas reported for the West were down from the second quarter of 2007.Source: NARBrowse all of today's news

Country Wide Spending More $$$$$

2008-08-12T11:25:00.001-07:00

Countrywide Spends Big Bucks on Lobbying

Countrywide Financial Corp., the nation’s largest mortgage lender and also the most troubled, spent $457,000 in the second quarter to lobby the federal government.Countrywide lobbied on foreclosure prevention, regulation of mortgage finance companies Fannie Mae and Freddie Mac, an effort to let bankruptcy judges alter the terms of mortgages and regulation of mortgage brokers, according to a July 21 filing with the U.S. House clerk's office.Countrywide, which also lobbied the Treasury Department and the Office of Thrift Supervision, spent $249,000 lobbying in the first quarter and $1.3 million lobbying last year.Source: The Associated Press (08/11/08)

Illusion or the real deal ?

2008-08-11T14:25:00.000-07:00

Falling Foreclosure Rates Could be an Illusion
Research firm RealtyTrac Inc. is expected to announce lower or flat foreclosure numbers this week.While that appears to be good news, some experts are saying that the situation isn’t really improving. Instead, new state laws that require lenders to delay filing foreclosures to give home owners time to work things out are masking the problem.Critics say the new laws are only delaying the inevitable and could signal a false bottom in the housing market."It's all smoke and mirrors," says Vincent Valvo, group publisher at the Warren Group. "People are going to trumpet this and say foreclosures are going down. But three months from now it will surge right back up."Supporters of the new laws in states like California and Massachusetts say the plans lead to more dialogue and increase the likelihood things can be worked out.Source: The Wall Street Journal (08/11/08)

Could this be the first sign of a turn around ?

2008-08-07T13:55:00.000-07:00

BIG Gain in Pending Home Sales Index!

Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4. Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. “The vacillation of data from one month to the next indicates a housing market in transition,” he said. “The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”The PHSI in the South jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007. In the West, the index rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago. The index in the Northeast increased 3.4 percent to 79.6 but is 15.4 percent below June 2007. In the Midwest, the index rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved. The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the housing stimulus package will provide long-term relief. “Provisions to stem foreclosures are helpful, but a greater lift to the economy should come from higher mortgage limits, enhancements to the FHA loan program and the first-time home buyer tax credit,” he said. “These are excellent tools that will help buyers get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,” Gaylord said. With roughly 2.5 million first-time home buyers taking advantage of the temporary tax credit, existing-home sales are likely to rise 7.0 percent to 5.51 million in 2009 from a expected total of 5.15 million this year.Yun said home prices did not fall as much as anticipated in the second quarter. “Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices,” he said. “In addition, rising commodity prices and higher construction costs have resulted in a very unusual market today with existing-home prices being less than replacement building costs in some areas. Home prices are projected to increase 3 to 6 percent in 2009.”“Builders need to further cut production to help trim inventory. However, new-home sales are expected to bottom around the second quarter of next year with slight gains in the second half of 2009,” Yun said. New-home sales are forecast to drop 8.8 percent to 464,000 in 2009 from 509,000 this year. Housing starts, including multifamily units, should fall 8.8 percent next year to 795,000 from 960,000 in 2008.The 30-year fixed-rate mortgage, which also has been vacillating, is likely to trend up to 6.5 percent by the end of 2008, and then hold at that level for most of next year. NAR’s housing affordability index is forecast to remain favorable this year, averaging 13 percentage points higher than in 2007. Growth in the U.S. gross domestic product (GDP) is expected to be 1.7 percent this year and 1.5 percent in 2009. The unemployment rate is projected to average 5.5 percent in 2008 and 6.0 percent next year. Inflation, as measured by the Consumer Price Index, is seen at 4.1 percent in 2008 and 2.6 percent next year. Inflation-adjusted disposable personal income is estimated to grow 1.7 percent this year and 1.1 percent in 2009.Source: NAR

Mortgage Applications Climb

2008-08-06T13:40:00.000-07:00

After Hitting a Low, Mortgage Applications Climb.

Mortgage applications rose slightly on an adjusted basis last week, up 2.8 percent to 432.6 from 420.8 the previous week, according to the Mortgage Bankers Association weekly survey.Total mortgage applications had slumped a week ago to their lowest level since December 2000. On an unadjusted basis, the index increased 2.4 percent compared with the previous week and was down 33.7 percent compared with the same week a year ago.Refinances increased 4.4 percent, while purchases rose 1.8 percent. Mortgage rates were down slightly:
30-year fixed-rate mortgages decreased to 6.41 percent from 6.46 percent;
15-year fixed-rate mortgages increased to 6.02 percent from 5.98 percent;
1-year ARMs decreased to 7.17 percent from 7.25 percent.Source: Mortgage Bankers Association (08/06/08)

Great News for the Housing Market !

2008-07-30T11:15:00.000-07:00

President Signs Housing Rescue Bill President George W. Bush signed into law a bipartisan housing stimulus bill Wednesday that is expected to bring greater stability to housing markets nationwide. The bill, strongly supported by the NATIONAL ASSOCIATION OF REALTORS®, will help some 400,000 home owners refinance into affordable, government backed loans and offer a temporary first-time home buyer tax credit, which is expected to serve as an attractive incentive to buyers and help reduce high inventories of unsold homes.
The temporary first-time home buyer tax credit would offer $7,500 for the purchase of any home and an be used for purchases between April 9, 2008, and July 1, 2009.
The bill — H.R. 3221, the Housing and Economic Recovery Act of 2008 — also includes reform of Fannie Mae and Freddie Mac, FHA modernization, and permanent increases in conforming and FHA loan limits. "These are all designed to help the housing and mortgage industries and boost the U.S. economy," NAR President Dick Gaylord said in a statement. “NAR has been a leading advocate for many of these changes long before the current housing and economic downturn. We are pleased that the president and Congress worked together to enact meaningful legislation that protects and enables families in this country to continue to strive for and enjoy the dream of homeownership.”Source: NAR, Associated Press (7/30/08)

One More Down for the Count

2008-07-29T15:00:00.000-07:00

'Extreme Makeover' House Faces Foreclosure

Three years after a Lake City, Ga, home was featured on "Extreme Makeover," the home is in foreclosure and about to be auctioned.The Harper Family used the renovated property as collateral to get a $450,000 loan. Now they are unable to pay the bills and the property will be auctioned on the steps of the Clayton County Courthouse on Aug. 5.ABC-TV said in a statement that it advises each family to consult a financial planner after they get their new home."Ultimately, financial matters are personal, and we work to respect the privacy of the families," the network said.Source: The Associated Press (07/28/08)

2008-07-28T17:51:00.000-07:00

Daily Real Estate News July 28, 2008

Senate Passes Housing Rescue Bill The U.S. Senate on Saturday passed a bill that would stem foreclosures by allowing some 400,000 home owners refinance into affordable, government-backed loans. The bill, strongly supported by the NATIONAL ASSOCIATION OF REALTORS®, passed by a margin of 72-13. The House of Representatives approved the bill on Wednesday in a 272-15 vote. "This bill must get to the president quickly, and we urge him to act immediately to sign it into law," NAR President Dick Gaylord said in a statement last week. NAR says the bill will help bring stability to the housing market and put a dent in the rising rate of foreclosures. The program will be run by the Federal Housing Administration, and will insure up to $300 billion in refinanced 30-year, fixed-rate loans. The mortgages can't be for more than 90 percent of a home's newly appraised value. For mortgages that exceed the value of the home, the lender would have to voluntarily write down the principal to the qualifying level. If the home goes up in value, the borrower must share newly created equity with the FHA.Experts say the success of the program depends on how receptive banks are to writing down a portion of the loan. If passed into law, the program will begin Oct. 1 and end Sept. 30, 2011. Borrowers won't be able to qualify if they have intentionally defaulted on their loans or if they had a debt-to-income ratio of less than 31 percent as of March 1.Source: Associated Press, The Wall Street Journal, NAR

Ten Cities With Highest Inflation

2008-07-23T12:10:00.001-07:00

Forbes magazine looked at inflation in the 40 largest metro areas in the U.S. to see where prices were rising fastest.The numbers were supplied by the Bureau of Labor Statistics and Moody’s Economy.com and reflected changes between January and June 2008.Resetting mortgages, rising food prices and runaway fuel costs are the biggest sources of the pain.Here are the top 10 cities with the highest annual inflation rates.
Seattle, 5.82 percent
Dallas, 5.82 percent
Washington, D.C., 5.74 percent
Miami, 5.71 percent
Portland, Ore., 5.68 percent
San Jose, Calif., 5.61 percent
Milwaukee, Wisc., 5.61 percent
Tampa, 5.60 percent
Phoenix, 5.44 percent
Los Angeles, 5.41 percentSource: Forbes, Matt Woolsey (07/18/2008)

Top 10 Cities to Buy a Home

2008-07-15T11:43:00.000-07:00

Top 10 Cities to Buy a Home

Financially, at least, the best places to buy houses are those where buying costs less than renting, tax incentives are attractive, and there’s an opportunity to build equity.Forbes magazine surveyed the 40 largest metropolitan area housing metrics looking for cities where home prices have appreciated over the last two years. It also measured vacancy rates. And it gave extra points to cities where rents are significantly higher than a buyer would pay for the same home.Texas dominated the magazine’s list because of its healthy job market and growing tax revenues.Here are the 10 cities that topped Forbes’ best-places-to-buy list:
Houston
Austin, Texas
St. Louis
Philadelphia
San Antonio, Texas
Dallas
Charlotte, N.C.
San Francisco
Jacksonville, Fla.
Atlanta

Good news, perhaps ?

2008-07-11T08:26:00.000-07:00

Foreclosures declined 3 percent from May to June but were still up 50 percent compared with June of 2007, according to RealtyTrac Inc., which monitors the foreclosure process.One in every 501 U.S. households received a foreclosure filing last month.Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates.In today's market, about 50 to 60 percent of borrowers nationally who receive foreclosure filings are now likely to lose their homes, said Rick Sharga, RealtyTrac's vice president of marketing, compared with a typical rate of about 40 percent
.Source: The Associated Press, Alan Zibel (07/10/2007)

Sales Update from NAR !

2008-07-08T10:32:00.000-07:00

Daily Real Estate News July 8, 2008
Sales to Vary in Narrow Band, Then Rise Modest
near-term movement is expected in existing-home sales, with a recovery in sales seen during the second half of the year, according to the latest forecast by NAR. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below May 2007 when it stood at 98.5. Lawrence Yun, NAR chief economist, said some pullback after a sharp increase in the previous month was expected. “The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy,” he said.The PHSI in the West slipped 1.3 percent to 97.5 in May but is 2.0 percent higher than May 2007. In the Northeast, the index declined 2.9 percent to 77.0 in May and is 16.4 percent below a year ago. The index in the Midwest fell 6.0 percent to 78.6 and is 13.8 percent below May 2007. In the South, the index dropped 7.1 percent in May to 84.5 and is 22.1 percent below a year ago.Yun said location has never mattered more than in the current market. “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”Double-digit pending sales gains in May from a year ago were noted in Colorado Springs, Colo.; Sacramento, Calif.; and Spartanburg, S.C.NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the current market offers immediate benefits and long-term value for many buyers. “Home buyers are getting a great deal right now,” he said. “Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009.” Based on current indicators, the 30-year fixed-rate mortgage is forecast to rise gradually to 6.5 percent by the end of this year, and then hold at that level for most of 2009. NAR’s housing affordability index is improving this year and is likely to rise 15 percentage points to 127.0 for all of 2008. Existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million, and then increase 5.0 percent next year to 5.58 million.“The speed at which home prices has declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market,” Yun said. “Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets.”The aggregate median existing-home price is projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100.New-home sales are likely to fall 32.3 percent to 525,000 in 2008 and decline another 3.4 percent next year to 507,000. “In light of high inventory conditions, rising commodity prices and construction costs will curtail new home construction deep into 2009,” Yun said. Housing starts, including multifamily units, will probably fall 28.7 percent to 966,000 this year, and then drop another 9.0 percent in 2009 to 879,000. The median new-home price is expected to decline 3.2 percent to $239,300 this year, and then rise 5.3 percent in 2009 to $251,900.Growth in the U.S. gross domestic product (GDP) is seen at 1.6 percent in 2008 and 1.4 percent next year. The unemployment rate should average 5.4 percent this year and 5.8 percent in 2009. Inflation, as measured by the Consumer Price Index, is forecast at 3.7 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.5 percent in both 2008 and 2009.Source: NAR

Speedy Sales Still Possible But The Main Engine Is Price !

2008-07-07T10:55:00.001-07:00

Selling a Home in a Hurry Still Possible

While most homes are staying parked on the for-sale market for a longer time these days, occasionally a residential property turns over in 24 to 48 hours. Such transactions elevate the mood of the professional real estate community and its clients, while offering a snapshot of ideal conditions that contributed to the near-immediate sale and that could possibly help move other listings faster, as well. According to real estate professionals, the key components of a quick turnaround on a home for sale include realistic pricing, a polished and well-staged appearance, the right location, and the interest of a prospective buyer who is compatible with the property. "It's definitely a down market, but the special houses sell fast," says developer Kostas Macos who waited patiently for the owners of a Rittenhouse Square home in Philadelphia to trade up, then seized the opportunity to buy it for himself. "There will always be properties [that] sell, even in a depressed market," observes Prudential Fox & Roach's Mary Genovese Colvin. "In most situations, a 24-to-48-hour sale is a special property. But many times, people in an area have an eye on a particular house."

Bargain Hunters Having a Field Day

2008-07-07T08:06:00.000-07:00

Daily Real Estate News July 3, 2008
Bargain Hunters Have Field Day With REOs
Banks that are flooded with foreclosures are dumping them onto the market and bargain hunters are having a field day, and some observers are saying prices won’t go any lower.Mark Partipilo, a Las Vegas real estate investor, isn’t alone in concluding: "In this market, there are so many REOs that the banks are getting their clocks cleaned. This might not be the bottom, but waiting six months might be too late."Banks might be reluctant to sell cheap, but most are agreeing. "Banks that are not in Disneyland recognize that these sales are the reality today," says Denny Grimes, a practitioner and owner of Danny Grimes Co. in Ft. Myers, Florida."Markets where a large share of homes are heavily discounted because of REO sales, they may be seeing a bottom," says Cynthia Kroll, an economist and real estate market scholar at the University of California, Berkeley.Source: Reuters News, Patrick Rucker (07/02/2008)

Moving to Number One

2008-07-01T09:28:00.000-07:00

I just wanted to give my fellow bloggers, clients and friends an update here. I am now with Dickson Realty on Vista Blvd in Sparks. Dickson realty is by far, the dominant real estate company in Northern Nevada. Nearly 25% of all sales, both buying and selling go through a Dickson office. Dickson Realty has 11 offices and nearly 400 agents (and growing) I can network with to help you find the right home, or sell your current property. This is a very positive move for me, as I can now provide the highest level of services with unparalleled support from company owners, management and staff. Feel free to call me anytime with any of your real estate needs or wants!

Jeff Stake, Realtor, ABR

Dickson Realty

4870 Vista Blvd

Sparks, Nevada

(775)233.2689

No Replacement for a Realtors Market Analysis

2008-06-24T11:02:00.000-07:00

Daily Real Estate News June 24, 2008

Home-Value Web Sites Miss the Mark Online home-value sites offer some useful tools, but their estimates are often wrong."The percentage of error on these estimates is still very large," says Delores Conway, director of the Casden Forecast at the University of Southern California Lusk Center for Real Estate. If there are not many comparable sales in one area, for example, she says, "the estimates will have huge errors in them."Zillow.com and Cyberhomes.com rely on computer-generated automated models to estimate values. The models help compensate for the fact that many neighborhoods don’t have enough sales to generate accurate values based on experience. But these computer models don’t reflect home condition, improvements and may not even accurately convey property descriptions.Marty Frame, general manager of Cyberhomes.com, says the data on the site is best used as a way to form an overall impression of a neighborhood."Our goal is to provide you all this information and let you cherry-pick the things that are most interesting to you," Frame says. "You're going to look at an estimate and say, "that makes sense' or 'that doesn't make any sense."'Source: The Associated Press (06/23/2008)

Good News on the Horizon ???

2008-06-09T10:43:00.000-07:00

Pending Sales Up 6.3% in April

A modest gain in the level of home sales is possible over the next couple months, and an improvement is forecast for the second half of this year as more buyers are able to access affordable mortgages, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.3 percent to 88.2 from a reading of 83.0 in March. It’s the highest index since last October, but remains 13.1 percent lower than April 2007, when it stood at 101.5. Lawrence Yun, NAR chief economist, says pending sales contracts have picked up notably in areas undergoing significant price drops. “Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it’s unclear if they are investors or owner-occupants,” he says. “Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts.”The Pending Home Sales Index in the West rose 8.3 percent to 98.8 in April from March, and is up 4.0 percent from April 2007. In the Midwest, the index jumped 13.0 percent to 83.7 in April but remains 13.1 percent below a year ago. The index in the South increased 4.6 percent to 88.8 but is 22.5 percent below April 2007. In the Northeast, the index declined 1.9 percent in April to 79.3 and is 12.2 percent below a year ago.Here are some other market predictions from Yun and NAR:
Affordability getting better. NAR’s housing affordability index has been trending up this year and is projected to rise 15 percentage points to 128.0 for all of 2008. “It appears that more buyers are realizing they can take advantage of a favorable combination of mortgage interest rates, home prices and family income,” says NAR President Richard F. Gaylord. “Overall affordability conditions are the best we’ve seen since the middle of the housing boom in 2004, but with far more choices and much less pressure than buyers experienced four years ago to make an investment in their future. Recent declines in mortgage rates on conforming jumbo loans and a return to sound but not overly stringent underwriting standards will permit more people to qualify for a loan.”
Mortgage rates to go up. “Although mortgage interest rates will remain historically favorable, they will start to steadily inch up,” Yun said. The 30-year fixed-rate mortgage should rise gradually to 6.3 percent by the end of this year, and then hold at that level for most of 2009.
Demand for homes only rising. Yun said the underlying fundamentals point to a pent-up demand. “Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs,” he said. “The housing market has been underperforming by historical standards, partly because buyers were hampered by mortgage availability issues, but that’s improved and an upturn is more likely. On the other hand, it’s unclear what role consumer confidence will play in the coming months.”
EHS to see healthy gains in ’09. Existing-home sales should increase from an annual pace of 5.05 million in the second quarter to 5.83 million in the fourth quarter. For all of this year, existing-home sales are expected to total 5.40 million, and then rise 6.3 percent to 5.74 million in 2009. “Sales gains will be greatest in areas that underwent sharp price declines,” Yun said.
Prices to stabilize in second half of this year. After unprecedented home price declines in the first half of the year, many markets can anticipate stabilizing price trends in the second half. The aggregate median existing-home price is likely to decline 8.4 percent in the first half of this year, and then begin to stabilize in the second half before rising 4.4 percent next year to $213,900. “Policymakers need to be attentive to the fact that many homeowners have seen a reduction in housing equity, or are in an ‘underwater’ situation. More needs to be done on the policy front to alleviate hardships and bring fence-sitters back into the marketplace,” Yun says.
New-home sales slow to recover. New-home sales will probably fall 31.7 percent to 529,000 in 2008 before rising 12.5 percent to 595,000 next year. Housing starts, including multifamily units, are projected to drop 27.2 percent to 987,000 this year, and then slip 0.6 percent to 980,000 in 2009. “Rising construction costs will provide less room for price cuts on new homes,” Yun said. The median new-home price is forecast to decline 3.1 percent to $239,500 in 2008, and then rise 5.4 percent next year to $252,400.
A better economic picture. Yun sees an improving economy. Growth in the U.S. gross domestic product (GDP) should be 1.7 percent in 2008 and 2.0 percent next year. The unemployment rate is estimated to average 5.3 percent this year and 5.6 percent in 2009.
Inflation growing. Inflation, as measured by the Consumer Price Index, is expected to be 3.6 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income should grow 1.4 percent in 2008 and 2.5 percent next year.Existing-home sales for May will be released June 26; the next forecast and Pending Home Sales Index will be released July

Presidential Housing Reform Plan

2008-06-06T08:45:00.000-07:00

Daily Real Estate News June 5, 2008

Where McCain, Obama Stand on Housing As the race for the presidency shapes up as a contest between Sen. John McCain, the presumptive Republican nominee, and Sen. Barack Obama, who will claim the Democratic nomination, here are their initial positions on housing and related economic issues.McCain:1. Proposes to spend up to $10 billion to allow some home owners to trade high-interest, adjustable-rate mortgages for fixed-rate loans.2. Proposes a suspension of the 18.4-cent federal gas tax and 24.4-cent diesel tax during the summer.3. Supports a middle-class tax cut by doubling the personal tax exemption for dependents to $7,000.4. Calls for a simpler tax system with two tax rates and a generous standard deduction.5. Supports making permanent the 2001 and 2003 income tax cuts and proposes cutting the corporate tax rate to 25 percent from 35 percent and allowing businesses to immediately write off capital expenses.6. Maintains that government assistance to the banking system should focus on preventing systemic risk that would endanger the financial system and the economy.Obama:1. Calls for greater government regulation of the U.S. financial system and proposes a new $30 billion economic stimulus plan to help home owners, including a $10 billion foreclosure prevention fund to help people keep their homes and $10 billion in relief for state and local governments hit hardest by the housing crisis.2. Outlines six "core principles for reform" that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies.3. Wants to repeal a provision in the bankruptcy law so ordinary families can modify terms of home mortgages.4. Proposes a 10 percent mortgage tax credit for middle-class Americans.Source: Reuters News (06/04/08)Browse all of today's news
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2008-06-02T11:44:00.000-07:00

Daily Real Estate News June 2, 2008
Bank-Owned Homes Continue to Surge The number of foreclosed home owned by lenders is rising, even though banks are increasingly willing to do what it takes to sell properties.Lenders and investors in mortgages owned about 660,000 foreclosed homes in April, up from 493,000 in January and 231,000 in January 2007, according to First American CoreLogic, a research firm. That’s one in seven previously owned homes currently for sale nationwide.Some lenders are cutting prices as often as every 20 days on homes that aren't selling, says David McCarthy, chief executive officer of Integrated Asset Services LLC, a Denver-based company that helps banks value and sell REO homes.

Big Buck Homes

2008-05-30T09:36:00.001-07:00

Daily Real Estate News May 30, 2008
Priciest Homes on the Market
After trying to sell his Palm Beach home, Maison de L’Amitie, for two years at $125 million in March, Donald Trump knocked $25 million off the price.It was the largest discount ever for a single residence not involved in a bankruptcy proceedings.As Trump’s experience proves, even the most expensive homes aren’t immune to the current economy, but overall, "Inventory is relatively tight for trophy-type properties," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firmMiller says the inventory of Manhattan homes priced at $8 million and up has declined by 35 percent over the last year. "If we were having this conversation six to nine months ago, we'd say it was Wall Street bonuses," he says, "but the weak dollar has certainly played a role," by attracting foreign buyers.In addition, sellers like Trump are increasingly flexible. "The resistance has lessened,” says Nelson Gonzalez, a broker at Esslinger-Wooten-Maxwell in Miami Beach. “Smarter sellers are dropping their prices, and buyers are coming up a little bit more to make deals."Here are the top-nine priciest homes on the market now:
$125 million, Fleur de Lys Beverly Hills, Calif.
$125 million, Dunnellen Hall, Greenwich, Conn.
$100 million, Tranquility, Lake Tahoe, Nev.
$100 million, Maison de L'Amitié, Palm Beach, Fla.
$95 million, Hillandale, Stamford, Conn.
$88 million, BootJack Ranch, Pagosa Springs, Colo.
$85 million, Bel Air, Calif.
$80 million, Southampton, N.Y.
$75 million, The Portabello Estate, Corona del Mar, Calif.

I can't believe they didn't tell me I was behind on my payments!

2008-05-29T08:42:00.000-07:00

Daily Real Estate News May 27, 2008

U.S. Rep Loses Home to Foreclosure
Even U.S. lawmakers aren't immune to the foreclosure crisis. Congresswoman Laura Richardson, a California Democrat, said Friday that her home was foreclosed and auctioned off without her knowledge, despite having reached an agreement with her lender Washington Mutual.Richardson fell behind in her mortgage payments because she used her money to win the House seat left vacant by the death of Rep. Juanita Millender-McDonald.Richardson bought the 1,600-square-foot home in Sacramento's desirable Curtis Park neighborhood for $535,500 in January 2007. It was sold at auction earlier this month to a Sacramento mortgage lender who paid $388,000, according to the Sacramento County Recorder's Office.A default notice sent to Richardson in March put her unpaid balance at $578,384. WaMu reused to discuss the case.Richardson voted in favor of a mortgage debt forgiveness bill, which subsequently became law. She was absent earlier this month for votes on a foreclosure prevention bill, because of her father's funeral.Source: The Associated Press, Erica Werner (05/24/08)

Light at the end of the tunnel ?

2008-05-27T11:19:00.000-07:00

Daily Real Estate News May 27, 2008Home Sales Rise in Hard-Hit

Areas Although nationally, home sales are still on the soft side, new data shows an uptick in several of the areas — including Fort Myers, Fla.; Las Vegas; Sacramento, Calif.; and inner-city Detroit — hit hardest by foreclosures and falling prices. Americans generally remain wary of further declines in residential prices, but the data from these areas suggest buyers are finding the bargains too enticing to pass up. Thomas Lawler, a Virginia-based housing economist, says home sellers "have moved into the acceptance mode" and are pricing properties more realistically. DataQuick Information Systems calculates that sales of single-family homes in California's Sacramento County totaled 1,669 last month, a 41-percent jump from a year earlier as the median sales price fell 34 percent to $226,250. Meanwhile, the Greater Las Vegas Association of REALTORS® reports that properties being sold by lenders account for more than 50 percent of recent sales. Source: Wall Street Journal, James R. Hagerty (05/27/08)

2008-05-23T13:01:00.000-07:00

Existing-Home Sales Dip 1% in April Existing-home sales slowed in April, partly because tight lending guidelines hampered home buyers. But there are some things to be happy about: A greater number of market areas are showing sales gains from a year ago, and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the NATIONAL ASSOCIATION OF REALTORS®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 1.0 percent to a seasonally adjusted annual rate of 4.89 million units in April from an upwardly revised pace of 4.94 million in March, and are 17.5 percent below the 5.93 million-unit level in April 2007. More Favorable Mortgage Options Will HelpWith less-restrictive mortgage options opening up for buyers, “we could see an upturn in home sales this summer,” says NAR President Richard F. Gaylord. Last week, Freddie Mac and Fannie Mae announced that they were eliminating their “declining market” policies, effective June 1. NAR and others believed the policy was bad for the housing market because it discouraged consumers from buying homes in areas hardest-hit by foreclosures.“This means consumers across the country will have access to safe, affordable financing with down payments of only 5 percent on most mortgages, with 100 percent financing available on some loan products.” Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to home buyers. “I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” he said. “Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.”National Prices, Inventory LevelsNationally, the median existing-home price for all housing types was $202,300 in April, which is 8.0 percent below a year ago when the median was $219,900. Because the slowdown in sales from a year ago is greatest in high-cost areas, there is a downward distortion to the national median with relatively more sales in low- and moderate-priced markets.
Total housing inventory at the end of April rose 10.5 percent to 4.55 million existing homes available for sale, which represents an 11.2-month supply at the current sales pace, up from a 10.0-month supply in March.
Mortgage rates declined, according to Freddie Mac. The national average commitment rate for a 30-year, conventional, fixed-rate mortgage slipped to 5.92 percent in April from 5.97 percent in March; the rate was 6.18 percent in April 2007.
Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in April from 4.36 million in March, and are 16.1 percent below the 5.17 million-unit level recorded one year ago. The median existing single-family home price was $200,700 in April, down 8.5 percent from April 2007.
Existing condominium and co-op sales fell 5.2 percent to a seasonally adjusted annual rate of 550,000 units in April from 580,000 in March, and are 27.9 percent below the 763,000-unit pace in April 2007. The median existing condo price was $214,900 in April, which is 3.7 percent below a year ago. Regional Sales Volume, PricesThe unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. “On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results,” Yun said.
In the West, existing-home sales rose 6.4 percent in April to a level of 1.00 million but are 15.3 percent below a year ago. The median price in the West was $285,700, which is 16.7 percent lower than April 2007.
In the South, existing-home sales were unchanged from March at an annual rate of 1.92 million in April, but are 18.6 percent below April 2007. The median price in the South was $170,800, down 5.1 percent from a year ago.
In the Northeast, existing-home sales fell 4.4 percent to an annual pace of 870,000 in April, and are 14.7 percent below a year ago. The median price in the Northeast was $262,000, which is 7.7 percent below April 2007.
In the Midwest, existing-home sales were at an annual rate of 1.10 million in April, which is 6.0 below March and 19.7 percent lower than April 2007. The median price in the Midwest was $159,100, down 2.9 percent from April 2007.— NARBrowse all of today's news
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no more declining market stuff

2008-05-16T12:43:00.000-07:00

Daily Real Estate News May 16, 2008

Fannie Mae Scraps Declining Markets Policy Fannie Mae will no longer require borrowers to put up an extra 5 percent down payment when purchasing homes in areas deemed "declining markets," the country’s largest secondary mortgage market company said Friday. Fannie Mae had been hearing concerns from REALTORS® and others for months that its declining-markets policy was bad for the housing market because it discouraged consumers from buying homes in markets hardest-hit by foreclosures. "It stigmatized communities with lower sales and prices," said Dick Gaylord, president of the NATIONAL ASSOCIATION OF REALTORS®. NAR met several times this spring with Fannie Mae officials and sent letters reflecting members' unease with the policy. “We heard the concerns of NAR and we reviewed and determined that changes in our policy were needed,” Gwen MuseEvans, Fannie Mae vice president for credit policy and controls, said in a statement Friday. Fannie Mae's announcement comes as more than 8,000 REALTORS® are gathered in Washington, D.C., where Fannie Mae is headquartered, for NAR's 2008 Midyear Legislative Meetings & Trade Expo. Under the policy change, borrowers can get loans up to 95 percent loan-to-value, even in markets in which prices have been falling. Prior to the change, borrowers could only get loans up to 90 percent to give lenders a 5-percentage-point cushion to protect against possible price declines in the future. “This new down payment policy reinforces our goal to support successful home-owning,” says Marianne Sullivan, Fannie Mae's senior vice president of credit policy and risk management for single-family homes.The new policy takes effect June 1.

Greed Overcomes Integrity and Now We Have Mess

2008-05-08T12:27:00.000-07:00

Daily Real Estate News May 8, 2008

Senate Hearing Puts Blame on Lenders Witnesses testifying before the Senate Subcommittee on Administrative Oversight and the Courts battered mortgage lenders Tuesday during an investigation in foreclosure and bankruptcy."While bankruptcy is supposed to offer families one last chance to save their homes from foreclosure, the reality is that bankruptcy gives mortgage servicers new opportunities to engage in abusive practices," testified Katherine Porter, a University of Iowa law professor who has analyzed the system.Sen. Charles Schumer (D-N.Y.), the subcommittee chairman, focused his criticism on Countrywide Financial, accusing the company of being "at the top of the list" of firms responsible for the national mortgage crisis.Steve Bailey, Countrywide's chief executive for loan administration, said the company plans to hire an independent auditor to select random samples of loans in bankruptcy to review the accuracy of the company's accounting for payments by borrowers. If the company made mistakes that hurt borrowers, it will compensate them, he said.Source: USA Today, Kevin McCoy (05/07/08)

NAR Steps Up Again !

2008-05-06T09:20:00.000-07:00

Daily Real Estate News May 6, 2008

NAR Joins in Call to Stabilize Markets The NATIONAL ASSOCIATION OF REALTORS®, in a letter to members of the U.S. House of Representatives, urged Congress to make the FHA and conforming loan limit increases permanent as part of the 2008 Housing Stimulus bill, which is expected to be marked up this week.Yesterday, Reps. Jerry McNerney, D-Calif., and Gary Miller, R-Calif., introduced H.R. 5958, the Homeowner Opportunity Act, making permanent the increase to FHA and conforming loan limits for high-cost areas. The bill will be considered as an amendment to the larger housing stimulus bill. “By making the loan limit increases to FHA, Fannie Mae and Freddie Mac permanent the mortgage market will achieve an immediate increase in liquidity,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “This increased liquidity should help drive down mortgage costs and create stability in the mortgage market.“As the leading advocate for homeownership, NAR applauds the bipartisan efforts by Congressmen McNerney and Miller in sponsoring this amendment. That can also help veterans, teachers, nurses, police officers and other working families to achieve the dream of homeownership by offering a safe and affordable alternative to risky subprime loans,” Gaylord said.NAR urges members of Congress to support the McNerney-Miller amendment. Higher loan limits are critical to ensure that homeowners and those who aspire to own a home are given the same safe alternatives for mortgages regardless of where they live. “It is simply a matter of equity for American families who live in high-cost communities,” according to Gaylord.Source: NAR

Greenspan Speaks

2008-05-05T11:13:00.000-07:00

Daily Real Estate News May 5, 2008

Greenspan: This Recession Is Mild Speaking during a television interview, former Federal Reserve chairman Alan Greenspan declared that the country has slipped into a mild recession that is not likely to improve until residential property prices begin to stabilize and the pressure on financial institutions to write off mortgage-related losses eases up. "We're in a recession," the economist said. "But this is an awfully pale recession at the moment. The declines in employment have not been as big as you'd expect to see." Still, Greenspan was firm in his belief that the economy would not see a turnaround anytime soon and would likely be stagnant for the remainder of 2008.

Fed Cuts Rate Again !

2008-05-01T09:53:00.000-07:00

Daily Real Estate News May 1, 2008

Fed Cuts Rates One-Quarter Point The Federal Reserve cut interest rates Wednesday 25 basis points to 2 percent. It’s the lowest point in four years. The Fed was divided 8-2 on the cut. A statement from the majority of Fed members said: "The substantial easing of monetary policy to date ... should help to promote moderate growth over time and to mitigate risks to economic activity."Observers believes this means that the Fed is unlikely to make any more cuts – at least through the end of this year. "The Fed didn't completely shut the door on rate cuts, but they closed it part way," said Mark Zandi, chief economist at Moody's Economy.com. "I think the overall message was they've done a lot already to help the economy and think this will be enough. But they stand ready to do more if that is needed."Source: The Associated Press, Jeannine Aversa (04/30/2008)

Bail Outs ******

2008-04-09T17:03:00.000-07:00

'Bailouts' Always Spark Controversy
The controversy surrounding the U.S. government’s potential role in "fixing" the current housing crisis makes historians examine Washington’s role in economic crises of the past."In both the United States and Britain, policymakers have long sought to distinguish between the so-called deserving and undeserving," says Harvard University economic historian David A. Moss, author of When All Else Fails: Government as the Ultimate Risk Manager.But in practice, he adds, "it's often difficult to distinguish reliably between the two. By pushing too hard on this distinction, policymakers run the risk of punishing everyone, rather than just the supposed bad apples. As James Madison once observed in another context, 'Some degree of abuse is inseparable from the proper use of every thing.' "

2008-04-08T09:42:00.000-07:00

NAR: Existing-Home Sales to Level Off Little change is expected in existing-home sales over the next few months, before improving notably during the second half of the year, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.Lawrence Yun, NAR chief economist, says the market will come into clearer focus this summer. “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” he says. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, slipped 1.9 percent to 84.6, from an upwardly revised reading of 86.2 in January. The index was 21.4 percent lower than the February 2007 index of 107.6. “The slip in pending home sales implies we’re not out of the woods yet, though an era of successive deep sales declines appears to be over,” Yun says.By the RegionHere’s what the index reveals across the nation with existing-home sales:
Northeast: rose 3.2 percent in February to 71.8 but remains 25.4 percent below a year ago.
Midwest: declined 3.7 percent to 82.7 and is 17.4 percent lower than February 2007.
South: fell 5.5 percent in February to 85 and is 30.3 percent below a year ago.
West: dropped 9.8 percent in February to 84.6 and is 17.1 percent below February 2007.Home Sales ForecastExisting-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter. With relatively weak activity in the first part of the year, existing-home sales for all of 2008 is forecast at 5.39 million, increasing 6.6 percent to 5.74 million in 2009. “Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” Yun says.The aggregate existing-home price will probably ease by 1.4 percent to a median of $215,800 for all of 2008 before rising 3.7 percent to $223,800 next year. Yun says that there will continue to be wide variations in regional housing market conditions. “Some parts of the country that can expect improvement include the Northeastern region and the oil-patch states of Texas, Oklahoma, Louisiana, and Arkansas,” he says. With lower interest rates and flat home prices in many areas, NAR’s housing affordability index is forecast to rise 14 percentage points to 127 in 2008.New-home sales are projected to fall 25.7 percent to 576,000 in 2008 before rising 4.6 percent to 602,000 next year. Housing starts, including multifamily units, are estimated to drop 26.3 percent to 999,000 this year, and slip another 0.5 percent to 994,000 in 2009. The median new-home price will probably fall 3.6 percent to $238,400 in 2008, and then rise 4 percent next year to $247,800.Other predictions on factors that can impact the housing market:
Mortgage rates: 30-year fixed-rate mortgages, which has fluctuated recently, should average 5.8 percent in the second and third quarters, but trend up to an average of 6.3 percent in 2009.
Growth in the U.S. gross domestic product: expected to be 1.4 percent in 2008 and 2.4 percent next year.
Unemployment rate: forecast to average 5.4 percent this year and 5.6 percent in 2009.
Inflation: (as measured by the Consumer Price Index) is projected at 3.4 percent in 2008 and 2.2 percent next year. Inflation-adjusted disposable personal income is likely to grow 1.2 percent this year and 3.0 percent in 2009.“The economy will not grow in first half of the year,” Yun says. “However, the combination of recent fiscal stimulus enactment and the lagged impact of monetary policy will help jump start the economy in the second half.” —REALTOR® magazine online
For more economic news and research reports, visit NAR's Research division at REALTOR.org.

Home Price Lawsuit...Typical Finger Pointing

2008-04-03T10:22:00.000-07:00

Couple Sue Associate Over Home Price
Vernon and Marty Ummel, who purchased a $1.2 million home in Carlsbad, Calif., three years ago, will go before a California Superior Court this week to argue that their real estate practitioner Michael Little of RE/MAX Associates, defrauded them. They say he failed to inform them that similar houses on the same block were selling for more than $100,000 less than the Ummels paid.Court papers indicate that the couple had available to them more than 40 comparable sales and that an appraisal priced the home at $1.2 million. Originally included as defendants in the Ummel suit were John Contento, who handled the appraisal for the loan, and Horizon Pacific Financial, the broker for the Ummels' loan. Earlier this year, Contento and Horizon Pacific Financial settled with the Ummels for $10,000 each. Neither was available to comment.George Lefcoe, a professor of real estate law at the University of Southern California, said he doubted this would be a groundbreaking suit. "The real estate [practitioner] has an obligation in good faith to tell the buyers what he knows about pricing information and that there were houses selling for less than what the buyer was prepared to buy. And the buyers have an obligation to wake up and smell the roses before they buy and get as much information as they can,” he said.Source: The San Diego Union-Tribune, Lori Weisberg (03/31/2008)

Tax Credit, Loan Hikes in Senate Plan

2008-04-03T10:19:00.000-07:00

Tax Credit, Loan Hikes in Senate Plan
The Senate late Wednesday night announced that it had reached a bipartisan compromise on a plan to aid families facing foreclosure.The lawmakers have been at a stalemate, unable to reach agreement on key provisions that have already been approved by the House.The Senate didn’t approve a provision that would allow bankruptcy judges to reduce mortgage debt.The compromise includes:Foreclosure aid. A $4 billion package to aid communities hard hit by foreclosures and mortgage delinquencies. Local governments could use the funds to buy and rehabilitate foreclosed homes at a discount.Government-backed mortgages. Increased loan limits for FHA- guaranteed mortgages.Financial counseling. About $100 million in new funding for housing counseling for troubled families.Tax credit. A $7,000 tax credit, over two years, for buyers of foreclosed homes or properties on which foreclosure action has been filed.Business tax relief. Authority for home builders and other firms that are losing money to reclaim taxes paid up to four years ago vs. two years now.The Mortgage Bankers Association applauded the plan, saying it would "keep at-risk borrowers in their homes."Source: USA Today, Sue Kirchhoff and Kevin McCoy (04/03/2008)

Credit Standards Raised

2008-04-02T10:34:00.000-07:00

Daily Real Estate News April 2, 2008
Fannie Mae Raises Credit StandardsFannie Mae has tightened standards for the home mortgages it guarantees or buys.The government-sponsored provider of home loan funding told lenders Monday it will require a minimum credit score of 580 for most loans it buys on an individual basis. Credit scores range from 300 to 850. In the past, Fannie had no minimum score.Fannie also told lenders it will increase the period needed for borrowers to re-establish credit history after a foreclosure from four years to five. Fannie said it would allow shorter recovery periods for borrowers with "documented extenuating circumstances" that caused the foreclosure.In a separate memorandum, Fannie, told loan services last week that it could extend forbearance periods on delinquent borrowers to as long as six months to allow borrowers time to find an alternative to foreclosure.

Don't Forget ! PMI is Deductable

2008-03-27T10:24:00.000-07:00

Don't Forget: PMI is Deductible

As April 15 tax day approaches, here is a reminder for home buyers with mortgage insurance.Home owners with adjusted gross incomes of $100,000 or less can deduct the full cost of their government or private mortgage insurance premiums on their 2007 federal returns.Families with incomes between $100,000 and $109,000 are eligible for a reduced deduction.This is a new tax break that Congress has approved through 2010. "On average, this year's tax break could be worth $350 per taxpayer — an annual deduction that qualified home owners can take each year through 2010," says Kevin Schneider, president of the Mortgage Insurance Companies of America (MICA).

2008-03-26T10:37:00.000-07:00

Daily Real Estate News March 26, 2008

More Consumers Ponder Home PurchaseThe number of consumers who say they plan to buy a home in the next six months rose slightly this month to 3.3 percent from 2.9 percent, despite an overall drop in consumer confidence. According to a survey by the Conference Board, a private research group, consumer confidence fell 11.9 points to 64.5, marking a downturn in sentiment to levels usually seen only during recessions. Consumer expectations about the future plunged to their lowest point since 1973, when a recession was followed by painful inflation.Consumers expect inflation to reach 6.1 percent in the next year, the highest rate since the aftermath of Hurricane Katrina in 2005, when gasoline prices surged. "We've been seeing a gradual trend upward since the end of last year, and it's following in line with oil, gas and food prices," said Lynn Franco, who oversees the Conference Board survey. Source: The Wall Street Journal, Sudeep Reddy (03/26/2008)Browse all of today's news

2008-03-25T10:21:00.001-07:00

Daily Real Estate News March 25, 2008
More Banks Consider Short SalesAfter about a year of dealing slowly and reluctantly with short sale offers, many banks are reconsidering, looking for solutions that will allow them to recoup debt in foreclosure situations.Observers say that if the trend continues, it will reduce or eliminate the need for taxpayer bailouts.The National Short Sale Center, which helps short buyers negotiate with banks, says three-quarters of its short offers are approved now, up from maybe half six months ago. "Before, people on the phone at banks didn't even have the authority to negotiate. Now they're calling us with numbers," says Pam B. Canada of nonprofit NeighborWorks in Sacramento, Calif.To be sure, many agents and counselors think banks still have their heads in the sand. "They're out to get the last dime, even when people don't have a dime," says real estate practitioner Heidi Mueller in San Francisco as she heads to an auction sale on the courthouse steps.

2008-03-24T10:29:00.000-07:00

Daily Real Estate News March 24, 2008
Existing-Home Sales Rise in FebruarySales of existing homes increased in February and remain within a fairly stable range, according to the NATIONAL ASSOCIATION OF REALTORS®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”The national median existing-home price for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets.

Gettin Creative !

2008-03-20T10:10:00.000-07:00

Home Sellers Resort to Weird Deals Frustrated home sellers are trying an array of techniques to sell their slow-moving homes.In Colorado, J.J. Rodgers has launched an essay contest. So far, she has received more than 500 essays – accompanied by a $100 entry fee – explaining why the writer should win her four-bedroom home. Rodgers hopes to get a total of 2,000 entries or $200,000 in fees.Bob and Ricki Husick sold their suburban Pittsburgh home by offering to give back the buyer's purchase price upon their death. The Husicks also offered to throw in the couple’s retirement home in Arizona if the buyers would agree to care for the Husicks in their old age.Daniel Lasnick, a real-estate attorney in Stamford, Conn., recommends discussing deals involving quirky incentives with a real-estate lawyer. Depending on the incentive, a side agreement may be needed. Some people think the weird incentives are unlikely to have much impact. "People are offering all kinds of goofy things to get their houses sold," says Allen Butler, a practitioner in Surprise, Ariz. "But what gets a house sold really is going to be based on price and price alone."

2008-03-19T10:03:00.001-07:00

The FBI is currently investigating 17 firms involved in the mortgage lending industry, bureau officials told Reuters News in an exclusive interview. The bureau had previously acknowledged it was investigating 16 firms. Officials say the criminal probe could take years to complete. The FBI has assigned 100 agents to investigate corporate fraud aspects of the housing crisis, including subprime lending and insider trading. Another 150 are looking at related securities fraud, and 153 are looking at loan originations, says Neil Power, economic crimes unit chief of the FBI’s financial crimes section.The majority of cases are in New York and California, Powers says.The opportunities for fraud existed all along the chain from mortgage origination to the investors in mortgage-backed securities. But the problems begin in loan applications that required minimal or no documentation, the officials said."That's the start of the fraud right there," said Mike Cuff, a supervisory special agent in the economic crimes unit.Source: Reuters News, Randall Mikkelsen (03/18/2008)

2008-03-17T08:33:00.000-07:00

Daily Real Estate News March 17, 2008
Fed Slashes RatesIn an effort to boost market liquidity, the Federal Reserve lowered the discount rate to 3.25 percent from 3.5 percent and launched a new lending program through which money will be moved from securities dealers to the securitization markets. The effort — the latest attempt to stabilize prices of bonds backed by residential loans as delinquencies continue to escalate and home prices tumble — will provide financing for JPMorgan Chase & Co.'s acquisition of Bear Stearns Cos. for approximately $270 million, or about $2 per share. Meanwhile, the central bank could reduce the interest rate affecting consumers and businesses to 2 percent at its March 18 meeting, marking a decline of a full percentage point.

2008-03-15T17:37:00.000-07:00

Did someone say no money needed? Yes, no money from the buyer.

There are several non-profit programs out there that allow for some type of assistance to the buyer. Nehemiah is one of the largest non-profit organizations that allows the seller to give money for the down payment and closing costs.
This program is approved by FHA which is part of HUD. Nehemiah can basically get a consumer into their dream home with no money out of pocket. FHA states that you must have 3% of your own money into the deal. And FHA typically asks for 2.25% as your down payment, which is included in the 3% total. This means that you would need to pay an additional 3/4%. But FHA also allows you to receive a 100% gift that can be used for both your down payment and closing costs. This gift can come from either a family member and or a non-profit organization. Call me for more details about this !!!!! Jeff Stake, realtor, 233.2689

Tough Market

2008-03-14T10:22:00.000-07:00

Tough Markets Bring Fraud to Surface Mortgage

Loan origination may have fallen to its lowest level since 2002, but mortgage fraud was on the rise in 2007, according to the Tenth Periodic Mortgage Fraud Case Report, prepared by the Mortgage Asset Research Institute. Speaking at a MBA fraud conference in Chicago yesterday, Merle D. Sharick, vice president of sales for MARI, stated that Suspicious Activity Reports received by the Federal Bureau of Investigation and the Financial Crimes Enforcement Network from federally regulated banks jumped 139 percent between 2006 and 2007. The jump in fraud will spell record losses for lenders, easily topping $1 billion, says the report. As it was in 2006, the most common types of mortgage fraud were misstatement about employment and income. However, borrowers’ failure to disclose debts, liens, and judgments grew by 50 percent in the last year. Several factors contributed to the rise, says Sharick, including reduced loan volume that prompted lenders to more carefully scrutinize loans, falling home values, and an oversupply of properties, especially in markets such as Florida and Nevada where a significantly number of recent home purchasers were made by investors. (View a report and state breakdown of mortgage fraud by the Mortgage Asset Research Institute.)In efforts to staunch the fraud flood, the Mortgage Bankers are developing a national mortgage fraud database so its members can share information on mortgage scams. The association also plans to develop a national database of property values. — By Mariwyn Evans for REALTOR® magazine online

Many Borrowers Ignore Help ?

2008-03-12T08:18:00.000-07:00

Daily Real Estate News March 11, 2008

Many Borrowers Ignore Help Offers

The Hope Now Alliance, a coalition of 28 lenders and loan servicers supported by the Bush administration, has mailed more than 1 million letters since December to borrowers with subprime adjustable-rate mortgages, offering a solution. The response rate has been less than 20 percent.Why have borrowers been so reluctant to step forward?"Their collections departments have beat (delinquent home owners) over the head for months. It's no wonder borrowers won't answer the phone," says Todd Buckner, CEO of National Housing Solutions, a for-profit mediator between borrowers and lenders.Finding a solution also isn’t as easy as some politicians and lenders make it sound. For instance, the FHA has created FHASecure to help subprime borrowers refinance out of risky ARMs. Since the program was announced in fall, the FHA has received about 277,000 applications and approved fewer than half of them.And there are borrowers who aren’t willing to bend. Lender Martin Goodman, president of Residential Capital, says, “There's a sense of entitlement (among home owners) that is just unbelievable."

Now is a Great Time to Buy !

2008-03-11T08:09:00.000-07:00

Daily Real Estate News March 11, 2008 Why Now is a Smart Time to Buy

Now is a great time to buy a home, say the financial gurus at the Wall Street Journal.The Journal calls it a buyers market and offers these suggestions for first-timers getting their feet wet. While their advice is solid, it’s not revolutionary, but some potential customers might find it reassuring.Remember this is a place to live not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.
Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.
Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.
Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.
Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.

2008-03-10T08:34:00.000-07:00

Economic news drives mortgage rates down.....
This week's decline linked to turmoil in jobs, consumer confidenceBy Inman News, Thursday, March 6, 2008.

Mortgage rates fell sharply this week on softer economic news, Freddie Mac reported today.
The average rate on 30-year fixed-rate mortgages dropped 21 basis points from a week ago, dipping from 6.24 percent to 6.03 percent, and the average 15-year fixed mortgage tumbled from 5.72 percent to 5.47 percent.
Points, or fees that lenders charge for loan processing expressed as a percent of the loan, averaged 0.5 on the 30- and 15-year loans.
"Weak economic reports that indicated declines in the job market, slowing in manufacturing and low consumer confidence drove bond yields lower this week and mortgage rates followed," Frank Nothaft, Freddie Mac vice president and chief economist, said in a prepared statement. "Interest rates for 30-year fixed-rate mortgages are now at the same levels as they were two weeks ago, erasing last week's upward jump.
"Meanwhile, the housing market continues to take a toll on the rest of the economy. Residential fixed investment shaved 1.25 percentage points off economic growth in the fourth quarter of 2007. More recently, the median sales price of new homes fell 15.1 percent in January, representing the largest annual drop on record. Residential construction fell 19.7 percent over the 12 months ending January 2008, the largest decline since March 2007."
According to Freddie Mac, the average rate on five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) sank to 5.34 percent from 5.43 percent a week ago, and average rates on one-year Treasury-indexed ARMs slid from 5.11 percent to 4.94 percent. Points on the 5- and one-year loans averaged 0.5.

2008-03-07T20:07:00.000-08:00

Daily Real Estate News March 7, 2008

Low-Cost Kitchen Updates.

Sellers whose kitchens are old and outdated, but who don’t want to spend money gutting and remodeling, should consider these tips from interior designers for updating inexpensively.
Buy new lighting. Replace fixed ceiling lights with modern movable track fixtures.
Replace the hardware. Handles on today’s cabinets are large and sleek instead of small and ornate. Also, brass is out. Replacing the outmoded ones can make the whole room look more modern.
Buy a new faucet. A stylish faucet can make a big difference.
Update the backsplash. Colorful mosaic tiles are better than plain boring tile.
Buy new seating. If sellers can’t afford that, then they can certainly reupholster or replace the cushions.
Clean up the clutter. Get rid of the canister set, the breadbox, and all the appliances on the counters. Leave only one bowl of fruit and a plant on the countertops.

2008-03-07T19:59:00.000-08:00

Tax Benefits of Owning a HomeBefore a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone.Here’s why:Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home. Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World.Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent.Home owners can itemize. That opens up opportunities to deduct a host of other items that wouldn’t be deductible if the taxpayer took the standard deduction.

Short Sale Story with Homecomings Financial

2008-02-15T22:49:00.000-08:00

Just the facts and nothing else. My clients and I placed an offer on a home that was in the short sale status and listed with a local real estate office. We placed the offer and it was accepted by the seller on 11.14.2007. Of course in a short sale, the lender has to approve everything that happend in regards to the transaction. We waited and waited and waited. We had a closing date coming up on 1.31.2008. The listing agent made numerous calls begining in the middle of January. Not once did Homecomings Financial respond. I even called because my buyers were concerned and tired of waiting. After 22 minutes on hold, somebody finaly answered. They had no answers and were not concerned in the least about helping the sale close. All they could say was " I don't know whats going on, but I will call the listing agent when I do". To top it off, the person I spoke with was rude and had an attitude when he found out I was the buyers agent. Bottom line was, on 02.11.08, we canceled the contract and the agent pulled the listing. Here you have a situation where they had the opportunuty to get one of their bad deals they should have never loaned on off the books , but could careless. Now the home is just parked there, the sign is gone and they are right back where they started. Pathetic is the best way to describle Homecomings Financial, A GMAC company. Does this mean that all their employees are rude and they handle all their transactions like, truth is, I don't know. Maybe this is standard, maybe this is an exception. You be the judge. And by the way, here's the link to ripoffreport.com, by the looks of it, there are about 75 other people who were treated poorly enough to take the time to write. http://www.ripoffreport.com/reports/0/120/ripoff0120390.htm#91853

2008-02-15T21:20:00.000-08:00

Why Key Housing Indexes don't Agree

2008-02-15T09:41:00.000-08:00

Daily Real Estate News February 15, 2008

Why Don't Key Housing Indexes Agree?
Tracking housing values is harder than tracking stocks, and for many home owners who are watching their biggest investment decline, it is more painful. The two ways to track home prices are the Office of Federal Housing Enterprise Oversight's index and the gloomier Standard & Poor's Case/Shiller index, analysts say. Both are based on a concept, developed in the 1980s by Karl Case of Wellesley College and Robert Shiller of Yale University, that looks at repeat sales of the same houses.OFHEO's index says home prices rose nationally by 1.8 percent between the third quarters of 2006 and 2007. But the S&P/Case-Shiller national index of home prices was down 4.5 percent in the same period. This discrepancy persists even though both barometers avoid distortions that occur in other widely cited measures, including avoiding fluctuations caused by the sale of high-priced homes.What causes the discrepancy? The bottom line is economists can point to some differences, but overall they don’t know what causes the gap. And as some analysts have pointed out, with any luck, by the time they figure it out, we’ll be out of this slump and won’t care any more.

Home Prices UP ? What ?

2008-02-14T09:33:00.000-08:00

Home Prices up in Half of Markets

Roughly half of metropolitan areas continued to show rising home prices in the fourth quarter of 2007, according to the latest quarterly survey by the NATIONAL ASSOCIATION OF REALTORS®.In the fourth quarter, 73 out of 150 metropolitan statistical areas show increases in median existing single-family home prices from a year earlier, including 11 areas with double-digit annual gains and another 12 metros showing increases of 6 percent or more; 77 had price declines including 16 with double-digit drops.
Lawrence Yun, NAR chief economist, said disruptions in the mortgage market have played a role. “The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges,” he said. “For buyers who need loans of more than $417,000, mortgage interest rates have been running more than a percentage point higher, and that has been having an obvious impact. Higher ratios of sales for more moderately priced homes are naturally dampening the national median price as well as the data for some of the more expensive markets.

”NAR’s track of metro area single-family home prices is the largest published series of metropolitan home prices, with data available back to 1979. The metro home price series treats all homes equally, without placing higher weights on more expensive homes as in other home price series.

The disruption in higher priced sales continues to drag down the aggregate national median existing single-family home price, which was $206,200 in the fourth quarter, down 5.8 percent from the fourth quarter of 2006 when the median price was $219,000. The national median normally is a typical market price, where half of the homes sold for more and half sold for less.NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said he is encouraged with plans to increase conventional loan limits. “Higher limits for FHA loans, which go into effect March 14, will be a big help to first-time buyers in high-cost markets. Higher limits for conventional loans purchased by Freddie Mac and Fannie Mae will take a bit longer – when they become available, high-income, creditworthy borrowers in high-cost areas will have access to affordable and safer financing, and that will help unleash pent-up demand,” he said.

“With the market in a state of flux, it’s especially important for consumers to stay abreast of widely varying and changing market conditions. We encourage them to have a traditional long-term view, which means taking the time to thoughtfully research the market. More than ever, the best resource is a REALTOR® who can put local conditions in perspective, provide advice and negotiate the transaction.

”Despite the annual decline in the fourth quarter median home price, the typical seller who purchased their home six years ago still saw a very healthy gain. The median increase in value for sellers who purchased that home in the fourth quarter of 2001 is 31.2 percent, and the median home equity accumulation is $49,000.
In the fourth quarter, the largest single-family home price increase was the Cumberland area of Maryland and West Virginia, where the median price of $116,600 rose 19.0 percent from a year ago. Next was Yakima, Wash., at $170,600, up 18.0 percent from the fourth quarter of 2006, followed by the Binghamton, N.Y., area, where the fourth quarter median price increased 14.8 percent to $110,000.

“The healthiest housing markets today generally are moderately priced and are experiencing job growth and often population growth, which in turn is supporting strong price growth,” Yun said. “Most of the weakest markets have either experienced both job and population losses, or they are experiencing corrections following a prolonged period of rapid price growth.

”Median fourth-quarter metro area single-family home prices ranged from a very affordable $72,600 in the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, to nearly 12 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $845,300. The second most expensive area was San Francisco-Oakland-Fremont, at $777,300, followed by the Anaheim-Santa Ana-Irvine area (Orange County, Calif.), at $657,400. Other affordable markets include the Saginaw-Saginaw Township North area of Michigan, with a fourth-quarter median price of $74,900, and Decatur, Ill., at $75,000.

In the condo sector, metro area condominium and cooperative prices – covering changes in 59 metro areas – show the national median existing-condo price was $221,100 in the fourth quarter, essentially unchanged from $221,200 in the fourth quarter of 2006. Thirty-three metros showed annual increases in the median condo price, including four areas with double-digit gains; 26 areas had price declines including four with double-digit drops.

The strongest condo price increases were in Bismarck, N.D., where the fourth quarter price of $125,000 rose 20.8 percent from a year earlier, followed by the New Orleans-Metairie-Kenner area of Louisiana, at $173,300, up 17.8 percent, and Knoxville, Tenn., where the median condo price of $160,800 rose 10.6 percent from the fourth quarter of 2006.

Metro area median existing-condo prices in the fourth quarter ranged from $109,900 in Wichita, Kan., to $595,700 in the San Francisco-Oakland-Fremont area. The second most expensive condo market reported was Los Angeles-Long Beach-Santa Ana, at $363,100, followed by the San Diego-Carlsbad-San Marcos area at $327,000.

Other affordable condo markets include both Indianapolis and Greensboro-High Point, N.C., at $116,700 in the fourth quarter, and the Cleveland-Elyria-Mentor area of Ohio at $120,000.
Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 4.96 million units in the fourth quarter, down 8.5 percent from 5.42 million in the third quarter, and are 20.9 percent below a 6.26 million-unit pace in the fourth quarter of 2006. “With prior reports of national home sales declines, it is not surprising to see 14 states with declines in excess of 20 percent from a year ago,” Yun noted.Source: NAR

Value Adjustments

2008-02-13T09:56:00.000-08:00

Daily Real Estate News February 13, 2008

Cities Where Values Have Fallen the Most

While resetting rates are causing some foreclosures, falling home prices are also playing a big part in the real estate malaise.Home owners who owe thousands more on their homes than they are currently worth find themselves unable to refinance and unable to sell at a price that will come close to covering what they owe on the mortgage.However, according to ZipRealty, a real estate tracking firm that aggregates multiple listing service data, the decline may be reaching bottom with inventories starting to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally, ZipRealty says.The following are the top 10 cities where prices have fallen the most in the last year, according to ZipRealty.
Sacramento, Calif.: - 18.5 percent
Las Vegas: - 17.2 percent
San Diego: - 17.1 percent
Tampa, Fla.: - 11.7 percent
Los Angeles: - 10.7 percent
Miami: - 10.6 percent
Phoenix: - 9.5 percent
Jacksonville, Fla.: - 8.7 percent
Detroit: - 7.7 percent
Atlanta: - 7.1 percent

Source: Forbes, Matt Woolsey (02/12/08)

Short Sale Definition

2008-02-11T23:47:00.000-08:00

short sale defined

A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (or foreclosure).