Friday, April 27, 2007
by Jason Bowman
Top 10 Foreclosure Markets
Foreclosure continues to be a serious concern for many U.S. home owners. Indeed, according to a recent survey from Yahoo Real Estate and Harris Interactive, 22 percent of home owners are at least somewhat concerned about the possibility of foreclosure due to their inability to meet monthly mortgage payments.
But Americans remain bullish on real estate. In fact, 37 percent of all U.S. adults would be at least somewhat interested in buying a house in foreclosure.
Here is a list of the 10 metro area markets where mortgage delinquency rates increased the most between the fourth quarter of 2005 and the first quarter of 2007, according to Equifax and Moody's Economy.com. The following list also includes the percentage increase in foreclosures for each area during that time period.
- Modesto, Calif.: 3.9 percent
- Stockton, Calif.: 3 percent
- Merced, Calif.: 2.8 percent
- Port St. Lucie-Fort Pierce, Fla.: 2.7 percent
- Miami-Miami Beach-Kendall, Fla. Metropolitan Division: 2.5 percent
- Riverside-San Bernardino-Ontario, Calif.: 2.5 percent
- Vallejo-Fairfield, Calif.: 2.4 percent
- Las Vegas-Paradise, Nev.: 2.3 percent
- Atlantic City, N.J.: 2.2 percent
- Cape Coral-Fort Myers, Fla.: 2.2 percent
Source: Dow Jones Business News, Ruth Mantell (04/23/07)
Friday, April 27, 2007
by Jason Bowman
Weather Curtails March Existing-Home Sales
Winter weather reduced home shopping in February, slowing March sales. The pace of sales was likely further dampened by a decrease in subprime lending, according to the NATIONAL ASSOCIATION OF REALTORS®.
After rising for three consecutive months, total existing-home sales — including single-family, townhomes, condominiums and co-ops — fell 8.4 percent to a seasonally adjusted annual rate of 6.12 million units in March. That compares to a pace of 6.68 million in February, and is 11.3 percent below the 6.90 million-unit level in March 2006.
“For the last couple months we’ve been expecting a weather ‘hit’ on home sales,” says David Lereah, NAR’s chief economist. “But looking at overall activity in the first quarter we see that existing home sales averaged 6.41 million — a figure that is moderately higher than the sales pace during the second half of 2006.”
Lereah says the market may also be experiencing some of losses as a result of the subprime fallout. “However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers,” Lereah says. “It’s too early to measure a significant impact from tighter lending standards, which should moderately dampen activity, but we’re still looking for existing-home sales to gradually improve during the last half of 2007.”
A Closer Look at the Numbers
The national median existing-home price for all housing types was $217,000 in March, which is 0.3 percent below March 2006 when the median was $217,600. The median is a typical market price where half of the homes sold for more and half sold for less.
However, the percentage change in recent months has been distorted by a geographic shift in the composition of sales from high-cost markets to moderately priced areas, in contrast with the sales distribution a year earlier, according to NAR.
Here’s what happened regionally with existing-home sales:
- South: existing-home sales declined 6.2 percent to an annual sales rate of 2.41 million in March, and 9.7 percent below March 2006. The median price in the South was $180,700, up 0.4 percent from a year ago.
- Northeast: existing-home sales fell 8.2 percent to a level of 1.12 million in March; 5.1 percent lower than a year earlier. The median existing-home price in the Northeast was $268,600, which is 0.7 percent lower than March 2006.
- West: existing-home sales fell 9.1 percent in March to an annual pace of 1.20 million, which is 16.7 percent lower than March 2006. The median price in the West was $330,600, down 2.9 percent from a year ago.
- Midwest: existing-home sales dropped 10.9 percent in March to a level of 1.39 million, and is 13.7 percent lower than a year ago. The median price in the Midwest was $160,400, down 0.2 percent from March 2006.
Single-family home sales dropped 9.5 percent to a seasonally adjusted annual rate of 5.32 million in March from 5.88 million in February, and are 11.9 percent lower than the 6.04 million-unit level in March 2006. The median existing single-family home price was $215,300 in March, down 0.9 percent from a year earlier.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 800,000 units in March, the same as in February, and are 6.7 percent below the 857,000-unit level in March 2006. The median existing condo price was $228,200 in March, up 3.2 percent from a year ago.
A Buyers Market
NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., says market conditions are clearly favoring buyers. “It’s a good time to buy, in part because home buyers are not pressured to make quick decisions,” Combs says. “We’re in a window of low interest rates with a plentiful supply of homes on the market and flat prices in most areas. First-time buyers now have more power to negotiate with sellers for help on down payment or closing costs.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.16 percent in March, down from 6.29 percent in February; the rate was 6.32 percent in March 2006.
Total housing inventory levels fell 1.6 percent at the end of March to 3.75 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace, up from a 6.8-month supply in February.
— REALTOR® Magazine Online
Tuesday, April 17, 2007
by Jason Bowman
GSEs Offer Aid to Subprime Borrowers
Fannie Mae and Freddie Mac plan to offer new products to help subprime borrowers sidestep foreclosure, and they are expected to provide details of these alternatives to the House Financial Services Committee today.
Fannie Mae is scaling back its credit requirements so that subprime borrowers do not have to pay off other debts and boost their credit scores before becoming eligible for fixed-rate refinancing. Additionally, the government-sponsored enterprise will announce plans to purchase 40-year mortgages.
Meanwhile, Freddie Mac will unveil plans for 30- and 40-year subprime mortgages that carry fixed rates for an extended time.
Source: The Wall Street Journal, Damian Paletta (04/17/07)
Friday, April 13, 2007
by Jason Bowman
Daily Real Estate News | April 13, 2007Foreclosures Reshape Neighborhoods
Neighborhoods riddled with foreclosures quickly develop other kinds of problems.
In fact, one foreclosure will shave up to 1.5 percent off the value of the other homes on the same block, according to research by Dan Immergluck, associate professor of city and regional planning at Georgia Institute of Technology.
Other costs are harder to measure, but municipal governments, police departments, and neighbors observe that empty homes give rise to an increase in thefts and may encourage drug dealers and even violent criminals to take advantage of the situation.
As homes fall into foreclosure, a neighborhood frequently turns more transient, analysts say. Investors often buy homes in foreclosure and rent them out if they can't sell them.
"You end up with a very fragmented community," says home owner Ann Fulman of Atlanta. "When investors buy them and turn them into rental property … folks come in [who] don't have the means to keep up the place."
In the Atlanta suburbs of Gwinnett County, the police department recently created a Quality of Life unit to address problems often associated with foreclosures. Working with other government agencies, the unit targets such issues as building-code enforcement, vagrancy, and graffiti.
Source: USA Today, Noelle Knox (04/13/07)
Thursday, April 12, 2007
by Jason Bowman
Daily Real Estate News | April 9, 2007Retirement Savings Should Go Beyond Real Estate
Plan on retiring with all the equity from your home? Think again. While the benefits of homeownership are undeniable, residential real estate is no replacement for retirement savings through vehicles such as a 401(k) plan or an IRA, says Fidelity Research Institute.
Fidelity Research Institute studied inflation-adjusted returns on a dollar invested in residential real estate from 1963 to 2005 and discovered that on average returns on low-risk Treasury securities beat housing over the same period. Stocks performed even better, averaging a return of 5.95 percent versus 1.35 percent for residential real estate. Even in the Northeast and the West Coast, where the growth in real estate values has been the highest, stocks and bonds still earned more money per dollar than real estate.
This suggests that buying less house and more stocks might serve a home owner’s long-term financial interests better than overextending himself to buy a bigger house than he can afford.
Nevertheless, there are many good reasons to own a home. Fidelity’s researchers don’t deny the advantages of homeownership and the magnitude of home equity, citing a 2005 Harvard University study that concluded more than 80 percent of Americans over age 65 own homes worth $3.95 trillion, nearly a third of seniors’ wealth.
People who own their homes have net worths substantially higher than renters — no matter what their age, income level or race — and home equity can create supplemental income for retirees, the study states.
Source: The Washington Post, Martha M. Hamilton (04/08/2007)
Wednesday, April 11, 2007
by Jason Bowman
Daily Real Estate News | April 11, 2007Americans Optimistic About Home Values
Americans are convinced that in their own neighborhood home values are going to hold steady or increase in the next six months, according to a Los Angeles Times/Bloomberg poll.
About 30 percent said they thought home prices would rise; 16 percent said home prices would decrease; and the remainder said prices will hold steady.
“Housing is always a good investment,” said San Diego carpenter Scott Richard Wallace. “I don’t see it ever losing.”
Many of those responding to the poll, however, were not sympathetic toward people who took on loans they later couldn’t pay. About 28 percent said people should have known better. Lenders received the blame 39 percent of the time; and government regulators were deemed responsible by 20 percent of those polled.
Source: The Los Angeles Times, David Streitfeld (04/10/07)
Tuesday, April 10, 2007
by Jason Bowman
Home Sales Level Off
Home sales are expected to hold fairly steady in the months ahead, according to the latest reading by the NATIONAL ASSOCIATION OF REALTORS® on pending home sales.
The Pending Home Sales Index, based on contracts signed in September, slipped 1.1 percent to a level of 109.1, following a 4.7 percent gain in August. But the index remains 13.6 percent below September 2005.
David Lereah, NAR’s chief economist, says the index shows home sales will not be moving much in one direction or another. “The present level of home sales is relatively high in historic terms, and we can expect generally minor movements around this level,” Lereah says. “We don’t expect to see any changes of note until early next year when we’re likely to see a modest lift to home sales.”
The market is currently a little lower than expected as buyers try to time their entry, he adds. “In the meantime, there’s some build up in demand that will move when consumers realize that conditions are optimal for them,” Lereah says.
Regional Matters
Here’s what happened regionally across the United States:
- Midwest: the PHSI rose 2.1 percent in September to 96.4, but was 18.4 percent below September 2005.
- West: the index slipped 0.4 percent to 112.5 in September and was 15.2 percent below a year ago.
- South: the index eased 1.3 percent in September to 125 and was 9 percent below September 2005.
- Northeast: the PHSI fell 5.9 percent to 89.9 in September and was 15.9 percent lower than a year earlier.
An index of 100 is equal to the average level of contract activity during 2001 — the first year to be examined and the first of five consecutive record years for existing-home sales. A closer relationship exists between annual changes in the index and year-ago changes in sales performance than with month-to-month comparisons.
The PHSI is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within one or two months of signing.
— REALTOR® Magazine Online
For more housing market statistics and research reports, visit NAR's Research Department at REALTOR.org.
Friday, April 06, 2007
by Jason Bowman
Most Popular Home-staging Suggestions
In a slow market, it's particularly important to get a house ready to sell quickly. How do you help a client get their home in prime shape for showings?
Beverly Tracy of Beverly Tracy Home Design in Saratoga Springs, N.Y., walks through a client’s home and sticks Post-It notes on things she believes they need to do to get their home looking its best. Here are some of her most frequently made suggestions:
- Fix any visible problems that might be a red flag for potential buyers, including repainting stained walls.
- Cover damaged kitchen or bathroom floors with inexpensive peel-and-stick vinyl floor tiles — if a more expensive change seems out of the question.
- Repaint public rooms that will garner a lot of a buyer's attention, including the kitchen, dining room, and living room.
- Clean up the exterior of the house, added potted plants, repair damaged walkways, and put a fresh coat of paint on the front door.
- Rent a storage unit and get rid of about half the furniture and most of the personal items.
- When showing the property, turn on every light in the house and tune radios on each floor to the same classical music station.
- Suggest that the owners refrain from doing much cooking (baking sweets is a good idea, however) and put good-smelling soaps in all the bathrooms.
Source: Albany Times Union, Stephanie Earls (04/05/07)
Browse all of today's news
Friday, April 06, 2007
by Jason Bowman
Daily Real Estate News
| April 6, 2007
New Century Accused of Mishandling Funds
More bad news this week for New Century Financial Corp.: UBS Real Estate Securities is suing New Century, claiming the subprime lender misappropriated millions of dollars in mortgage payments. New Century, the second-largest provider of subprime home loans, filed for bankruptcy earlier this week.
UBS filed court documents with the U.S. Bankruptcy Court in the District of Delaware accusing New Century of failing to account for missing escrow payments made by borrowers. UBS also claims new Century failed to buy back home loans after borrowers defaulted, as it had agreed to do under the terms of the contract.
Source: The Associated Press, Alex Veiga (04/05/07)
Thursday, April 05, 2007
by Jason Bowman
|
Do you have an adjustable rate mortgage (ARM) and worry about how you are going to make your monthly mortgage payment once the loan enters the adjustable phase? Did you finance your home with an interest only loan? Does an unplanned life event such as a divorce or change in employment have you struggling to pay your mortgage each month?
The Opportunity Loan may be able to help you.
The Opportunity Loan is a refinance program that provides an affordable 30-year, fixed-rate financing alternative to borrowers who feel their current loan does not fit their financial circumstances.
To assist families with closing costs, Opportunity Loan also offers a 20-year, fixed-rate second mortgage option at an amount up to four percent of the appraised value of the home. The second mortgage may be used for other similar financing charges such as payoff of the first mortgage, including late fees or attorney fees. Interest rates on this option will be two percent above the rate of the first mortgage.
A minimum of four hours of HUD-approved counseling is required. Typically, this includes two hours during the initial interview, and an additional two hours of one-on-one counseling. Proof of education must be provided prior to closing. For a list of available counselors, visit www.hud.gov. OHFA also requires post-purchase counseling in the event a mortgage payment is 30 or more days late.
You may be reimbursed for out-of-pocket costs paid for appraisal, credit report or up-front hazard insurance payment with appropriate documentation.
mortgage insurance is required for loans that have a greater than 80 percent loan-to-value ratio.
- Your household income may not exceed 125 percent of the area median gross income of your county. View refinance income limits
- The household must be owner occupied. Eligible properties include single-family detached housing, condominiums or townhouses. No two to four-unit properties or manufactured homes are currently permitted.
- While we have some additional flexibility in credit requirements, everyone may not qualify. It is best to consult with a participating lender to review your entire credit profile to determine eligibility.
Only you can determine what home loan best fits your needs. A participating lender will be happy to assist you through this process. Over 185 lending institutions throughout Ohio work with OHFA. Find a lender
LOANS ARE AVAILABLE ON A FIRST-COME, FIRST-SERVED BASIS
  Loans are available on a fair and equal basis regardless of race, color, ancestry, national origin, religion, sex or physical handicap.
|
|
|
 |