October 23, 2012

Housing Affordability Remains an Issue in Many US Markets

Author: admin - Categories: National Housing Report

The New York Times posted an article yesterday discussing how the U.S. housing sector in performing in regional real estate markets. The Times points out that although home prices have fallen since the housing crisis, many families are struggling with the inability to afford to buy a home in many major cities. Even with the lowest mortgage rates ever recorded, many renters simply can’t afford to make the transition to become a homeowner. Many lenders are enjoying a huge surge in applications as a result of falling interest rates. If you own a home and have a rate above 4%, take a minute and compare mortgage refinance loans now.

Despite lower prices, a median-income household can afford a median-priced home in just 14 of the country’s 25 largest metropolitan areas due to rising expenses and stagnant wages, research from Interest.com finds. The home affordability study finds that Detroit, Atlanta and Minneapolis are the most affordable markets, and San Diego, New York and San Francisco are the least affordable. “Even after years of decreasing house prices and record low rates for affordable home loan programs, median-income households are unable to afford a median-priced home in nearly half of the metropolitan areas that we looked at,” explained Mike Sante, the site’s managing editor, in a statement.

The least affordable city was San Francisco, where the median income falls 33% short of the income needed to buy a median-priced home.

The most-affordable and least-affordable markets and their paycheck power ratings are:

1. Detroit (+45.32%)

2. Atlanta (+40%)

3. Minneapolis (+32.2%)

4. Phoenix (+23.67%)

5. St. Louis (+23.49%)

Least Affordable Metropolitan Areas

21. Los Angeles (-12.52%)

22. Miami (-12.59%)

23. San Diego (-25.9%)

24. New York (-29.71%)

25. San Francisco (-32.76%)

Read the entire NY Times article.

March 2, 2011

California Home Foreclosures Fall 31%

Author: admin - Categories: California Hotel Foreclosures, California Real Estate News

According to figures released today by DataQuick, the number of California homes seized by lenders fell 30.6% in 4th quarter of 2010. Over all, home loan lenders foreclosed on 35,431 homes between October 1st and December 31st.  This was down from over 51,000 in the 4th quarter of 2009.

In addition, DataQuick reported:

  • Default notices issued to homeowners who have missed at least 3 loan payments dropped 17.5% in the 4th quarter of 2010 to 69,799 notices compared to the 4th quarter 2009 when mortgage lenders issued 84,568 default notices.
  • Last quarter’s number of defaults was the lowest in more than three years, the result of shifting market conditions and changing policies on servicing home loans.
  • Least amount of  loan defaults issued by mortgage lenders since the 2nd quarter of 2007, when there were less than 54,000 defaults.
  • A high percentage of loan defaults were originated between 2005 to 2007.
  • Loan modification applications feel 24% in the 4th quarter.

The lenders issuing the most loan default notices in California: Bank of America (16,199) and Wells Fargo (10,287)

DataQuick President John Walsh said: “We don’t know how much of the decline is due to less household financial distress, and how much is due to shifts in lender and servicer foreclosure policies. The level of default activity would certainly be higher if it weren’t for alternative strategies such as short sales, or even lengthening grace periods. The institutions that hold these loans in their portfolios will do whatever it takes to lessen their losses, including waiting.”

February 10, 2011

US Home Sales Rise in 2010

Author: admin - Categories: National Housing Report, Real Estate News

Real estate sales are mixed nationally for the 4th quarter of 2010. The reality is that short-sales and foreclosures continue to pull the average home prices lower. Home foreclosures and tighter FHA loan requirements have not helped bolster property values. We suggest compare rates and terms with house lenders that have a reputation for affordable financing.

Lawrence Yun, NAR’s chief economist, said in a statement that he was encouraged by the quarterly rise in sales. “Home sales … are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they’ve been selling well and housing supplies have trended down,” Yun stated. “A recovery to normalcy requires steady trimming of the inventories.” Yun projected about 150,000 to 200,000 jobs will be added to the economy this year from an expected 300,000 additional home sales in 2011, the report said. “An improving housing market and job growth will go hand in hand. The housing recovery will mean faster job growth,” Yun added.

Virginia was the only state to see a quarterly drop in sales, down 5.4%, and Virginia mortgage rates also fell to record lows. Home sales in Washington, D.C., remained unchanged from the third quarter. Compared to fourth-quarter 2009, however, only Idaho saw a yearly rise in sales: up 7.3 %. Some foreclosure-ridden states — Florida, Arizona, Nevada and California home sales saw the smallest drops in sales during that time. Distressed sales made up 34% of all sales in the fourth quarter, up only slightly from 32 % in the fourth quarter of 2009.

The Midwest experienced the biggest estimated overall drop in sales in 2010 compared to 2009: 7.5%, to a rate of 1.08 million. The Northeast saw a drop of 4.8%, to 817,000. The West saw a decline of 4.7%, to 1.15 million. The South saw the smallest decrease, down 2.8%, to 1.86 million.

10 states to see biggest decreases in sales from 2009 to 2010:

State 2009 sales rate 2010 sales rate

% change

South Dakota 17.4 14.2

-18.4%

Minnesota 107.4 89.7

-16.5%

Delaware 12.6 10.9

-13.5%

Oklahoma 83.5 72.3

-13.4%

Rhode Island 15.4 13.6

-11.7%

Missouri 105.9 94.6

-10.7%

Michigan 167.1 149.6

-10.5%

Pennsylvania 176.5 160.3

-9.2%

Utah 31.1 28.5

-8.4%

Kansas 56.5 51.8

-8.3%

January 27, 2011

Google Eliminates Real Estate Listings

Author: admin - Categories: Real Estate Marketing

The search engine icon, Google announced that they will no longer support real estate listings uploaded to its classifed listings site on Google Maps, the company announced today.  Clearly Google sees the value in other real estate and mortgage lead generation companies and that had to play a role in their decision to pull back their real estate listings.

Consumers will no longer be able to find for-sale, foreclosure, or rental properties through the search function on Google Maps, and real estate professionals will no longer be able to upload their listings to Google Base, the company’s classifieds site, which is being replaced by Google Shopping APIs and will not support real estate listings. “In part due to low usage, the proliferation of excellent property-search tools on real estate websites, and the infrastructure challenge posed by the impending retirement of the Google Base API, we’ve decided to discontinue the real estate feature within Google Maps on February 10, 2011,” the company said in a blog post.

Home seekers can still use “Google search results to find helpful real estate information and websites” as well as view local businesses, directions and transit times through Google Maps and explore neighborhoods through Google Street View, the company added.

January 24, 2011

Housing for All Americans

Author: admin - Categories: Department of Housing and Urban Development, Published Real Estate Articles

The U.S. Secretary of Housing and Urban Development wrote an important article that affects real estate and all types of borrowers.  Whether you need a home loan for your first house or a mortgage refinancing loan, HUD continues to offer superior home financing solutions. HUD has the enormous responsibility of overseeing the Federal Housing Administration. The FHA is a government entity that insures home mortgages in the United States. The default rates have risen on government insured loans, but the positive impact that the FHA has had on the housing recovery in undeniable.

Here is the article posted by the U.S. Secretary of Housing and Urban Development: Martin Luther King, Jr. famously said that “the arc of the moral universe is long, but it bends towards justice.” Last month, we were reminded of Dr. King’s insight once again, as President Obama signed legislation repealing “Don’t ask, don’t tell” into law. It was a moment, the President noted, “more than two centuries in the making.” I’m proud that the Department of Housing and Urban Development (HUD) is part of that commitment, as we work to make exclusivity and diversity cornerstones of America’s housing policy.

Shaun DonovanIndeed, from conducting the first-ever national study of LGBT housing discrimination to instructing our staff to be vigilant about whether any LGBT-based housing discrimination complaints can be pursued through the Fair Housing Act, we’ve worked to ensure our core housing programs are open to all. That’s why we recently announced a new rule ensuring LGBT individuals and couples can benefit from HUD programs.  Read the original article by Shaun Donovan.

January 21, 2011

Best and Worst Cities in 2011 for Home Values

Author: admin - Categories: California Real Estate News, Florida Real Estate News, Published Real Estate Articles

Poor Florida. The state that is home to Disney World, key lime pie and the Daytona 500 hasn’t had much to crow about when it comes to real estate in recent years. Sorry to break it to Sunshine Staters, but they shouldn’t be expecting a rebound anytime soon either. That’s according to Local Market Monitor (LMM), a Cary, N.C.-based real estate research firm that crunched the numbers for our list of the best and worst cities for home values in 2011. One list includes the 10 cities where home values are expected to rise the most in 2011, and the other the 10 cities where they are expected to fall the most.

Since interest rates have fallen dramatically this year, many homeowners have been able to lower their housing expenses by refinancing in to a loan with a better rate. According to a recent survey of refinance lenders, “Over 50% of applicants surveyed said that they saved over $1,000 a year from finding a more affordable home loan.”

LMM tracks 315 American real estate markets, assessing values and applying Investment Suitability ratings based on multiple factors. For the Forbes lists, LMM President Ingo Winzer and his researchers started with a U.S. Census-defined list of Metropolitan Statistical Areas with populations of 500,000 residents or more. They then analyzed key economic factors that directly affect housing markets: unemployment and job growth rates, as reported by the Bureau of Labor Statistics. LMM tracks real estate markets’ valuations based on the theory that markets go through cycles.  “We see a predictable pathway that home prices follow,” explains Winzer. “If you know where in the cycle a market is, you can make some predictions about where it will go in the next one, two, three years.”

Assessing the progression of those market cycles means comparing average “actual” home prices to equilibrium home prices–meaning where prices should be in the absence of market distortions that result from speculation and mismatches between population growth and new home construction. Another tool is peak-to-trough analyses, which factors in the number of single-family and multi-family housing permits active in each city, as recorded by the U.S. Census Bureau. The result is a Top 10 list made up of cities boasting an outlook for job growth and rebounding economies in 2011. Not surprisingly then, Washington D.C. (No. 7), and its nearby hubs make this list, thanks to a steady supply of government jobs.

Southern California HomesSouthern California touts the most metros on the Top 10 list. San Jose (No. 1), Santa Ana (No. 2) and San Diego (No. 5) offer housing markets where property prices are expected to rise steadily over the next three years. Los Angeles didn’t crack the top 10, but this sprawling metropolis does offer the prospect of appreciation, despite a building boom and bust that was similar to Florida’s. “The big difference between Florida and Southern California … is people are moving into Southern California, but they’re not moving to Florida,” asserts Winzer. “It was speculative retirement and vacation condos–things that were bought by people not living there and now not moving there, wanting to sell their empty condos because they can’t rent them out.”  It did not hurt that rates on California mortgages fell to 4% on fixed 30-year loans.

Unfortunately for these snowbirds, seven Florida cities land on the Bottom 10 list. Deltona-Daytona Beach, Lakeland and Orlando take the top three spots. Expect further home price drops in all of these markets over the next two years, leveling out by 2014.  A lack of jobs–the construction industry had a huge job market presence here–coupled with a deluge of homes on the market, both from owners and banks, means these markets will take a long time to recover.

Many Western states are in the same bind as Florida, thanks to building boom and busts centered around retirement and vacation home speculation. Arizona metros like Tucson (No.8) and Nevada’s Las Vegas (No.5) likely have a few years to go before prices stop dropping.

Yahoo! Buzz”In general they’re attractive markets for retirement, and eventually they’ll recover … but over the next five years or so they’re going to have a tough time filling all the empty pieces of real estate built there,” says the LMM president.

What does all of this news mean for you, the homeowner? If you are living in a market that’s still depreciating in value and intend to stay in that market, don’t panic and sell your home. Wait it out instead.  However, if you live in one of these depreciating markets and already plan on scramming in the next few years, do it now–it’s probably going to get worse before it gets better. Just don’t plan on your property selling quickly, since these markets are suffering from an abundance of inventory. If you’ve had hopes of setting up new digs in one of these rebounding markets, do it now. Prices are only going to go up.  The article was written by Morgan Brennan for Forbes.

California Home Sales Up Again

Author: admin - Categories: California Financing, California Real Estate News

Home sales have been increasing but have the average price for a house in California has declined. Clearly the foreclosures have flooded the market. Just a few years ago, many home buyers would get a 1st and 2nd mortgage to avoid having to pay mortgage insurance. These “80-20″ loans were discontinued because so many of the loans defaulted. This is an example of a “high risk” financing program that had a negative impact on the housing crisis.

Once again real estate news remains mixed for California, as home sales rise, but so do new home loan defaults. California home sales rose in December to their highest level since May, according to a report Friday from the California Association of Realtors as the inventory of unsold homes dwindled. December’s sales were up 5.9% from November’s revised figure of 491,590 but were down 6.8% from the revised 558,840 of December 2009. The unsold inventory index for existing, single-family detached homes was 5 months in December, down from 6.2 months in November but up from 3.8 months in December 2009. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

California Home for SaleStatewide, the 10 cities with the highest median home prices in California during December were: Beverly Hills, $2.18 million; Los Altos, $1.30 million; Calabasas, $1.17 million; Laguna Beach, $1.10 million; Manhattan Beach, $1.8 million; Newport Beach, $1 million; Santa Monica, $921,000; Cupertino, $904,500; Rancho Palos Verdes, $849,000; Los Gatos, $840,000.Statewide, the cities with the greatest median home price increases in December compared with the same period a year ago were: Beverly Hills, 54.3 %; Calabasas, 39.1 %; Poway, 25.5 %; Ridgecrest, 23.3 %; San Juan Capistrano, 19.2 %; Compton, 17.5 %; Laguna Hills, 15.7 %; Santa Cruz, 14.1 %; Gilroy, 14.1 %; La Habra, 13.2 %.

Read more: California home sales hit 7-month high in December | Silicon Valley / San Jose Business Journal

August 24, 2010

NAR Publishes Existing Home Sales Report for July 2010

Author: admin - Categories: California Real Estate News, National Housing Report, New Home Starts

California HomesThe National Association of Realtors today released Existing Home Sales data for July 2010. Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of Realtors®. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 % to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 % below the 5.14 million-unit level in July 2009.

Single-family home sales dropped 27.1 % to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 % below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. Existing condominium and co-op sales fell 28.1 % to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0 % below the 605,000-unit level in July 2009. Single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

Northeast: -29.5 % to an annual pace of 620,000 in July and are 30.3 % lower than a year ago. The median price in the Northeast was $263,800, up 4.8 % from July 2009.
Midwest: -35.0 % in July to a level of 800,000 and are 33.3 % below July 2009. The median price in the Midwest was $151,600, down 2.8 % from a year ago.
South: -22.6 % to an annual pace of 1.54 million in July and are 19.8 % below a year ago. The median price in the South was $156,300, down 3.3 % from July 2009.
West: -25.0 % to an annual level of 870,000 in July and are 23.0 % below a year ago. The median price in the West was $224,800, up 3.3 % from July 2009.

California continues to post poor results for the housing sector. Once again California short sales and foreclosure figures rose. Ladera Ranch short sales and REO’s continued to spark interest in South Orange County housing.

A parallel NAR practitioner survey shows first-time buyers purchased 38 % of homes in July, down from 43 % in June. Investors accounted for 19 % of sales in July, up from 13 % in June; The balance were to repeat buyers. All-cash sales rose to 30 % in July from 24 % in June. Distressed home sales are unchanged from June, accounting for 32 % of transactions in July; They were 31 % in July 2009. The national median existing-home price for all housing types was $182,600 in July, up 0.7 % from a year ago. The median existing single-family home price was $183,400 in July, which is 0.9 % above a year ago. The median existing condo price was $176,800 in July, down 1.7 % from a year ago.

Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago. Raw unsold inventory is still 12.9 % below the record of 4.58 million in July 2008. Total housing inventory at the end of July increased 2.5 % to 3.98 million existing homes available for sale. This represents a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June. This is a record amount in terms of months of supply (determined by pace of home sales).

Lawrence Yun, NAR chief economist says: “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs. “Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years” “Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

HOUSING IS STAGNANT and will likely remain stagnant until mid-term elections pass and housing finance reform takes shape. With home inventory on the rise, the shadow inventory discussion should get more attention from the media now. Perhaps the Administration’s true intentions with HAMP were to slow up the foreclosure process and spread out the disposition of REO over a longer period.

February 18, 2010

Housing Starts Rise 2.8%

Author: admin - Categories: Home Construction, Home Financing News, Housing Spotlight, New Home Starts, Real Estate News

Amid a trickle of economic reports like improved retail sales and declining credit card delinquency rates, most Wall Street analysts braced themselves for mixed real estate news, but the new home construction data released was welcomed. The AP announced Wednesday’s latest figures on the housing market and the good news spread quickly online.
According to the Department of Commerce, housing starts were up 2.8% in January to a seasonally adjusted 591,000 units, reversing a weather-related dip in December. The 21.1% year-over-year gain was the best monthly increase since April 2004.

Building permit applications dropped by 4.9% after two months of strong increases, but Burt White, chief investment officer for LPL Financial, said the disparity between the figures is likely a weather-related anomaly. Despite the volatility in housing data, the improvement points to a stronger economic backdrop. “It’s a good indication that Americans are beginning to reinvest again,” said White. “The biggest investment people make is in their homes.”

According to national FHA lenders, real estate financing continues to be supported by government loan programs like FHA, VA and Home Path, to name a few. Current mortgage interest rates remain at record levels with 30-year fixed rate mortgages still available below 5%. While the consumer won’t be at the fore of this recovery, housing starts did hit their highest level in six months–an indication that consumers are becoming more confident and comfortable with spending.

February 9, 2010

Why Buy a Home Instead of Renting?

Author: admin - Categories: Buying a New Home, Home Ownership, Home Vs Rent

Twenty years after “the American dream” was first coined, home ownership is still a meaningful goal for a large number of individuals and families.  As the years go by, you can build ownership interest, also known as home equity, which you may be able to borrow against for cash out or debt consolidation if you choose. In contrast to renters, most homeowners receive significant tax breaks, because interest paid on a mortgage loans is tax deductible in most cases. You will want to consult your tax adviser regarding deductibility of mortgage interest. And of course, most homeowners would tell you there is personal gratification of having a house you know is yours to share and enjoy with friends and family.

Owning a Home Can be More Cost Effective than Renting

Renting certainly has some advantages over owning. With FHA home loan financing is easier than you think.  FHA mortgage companies are more flexible with underwriting guidelines and credit and you only need 3 to 5% for a down-payment.  Many Americans assume that renting is less expensive than owning. A monthly mortgage payment may be lower than the monthly rent on a much smaller property.

Every month, the payment you make on your mortgage typically adds to the equity you have in your home and makes your home asset a more valuable part of your portfolio. Money paid for rent simply evaporates each month. Plus, research has shown that in the past real estate has proven to deliver a highly reliable increase in value compared to other types of investing. If you are renting, those returns are going into your landlord’s pocket, not yours.  When you add in the federal tax deductions for mortgage interest and real estate taxes, home ownership becomes an even more attractive idea.  Of course you should always consult your tax advisor for details.