From Realtor Magazine Online, Daily Real Estate News August 31, 2009
Selling a home and helping the buyer finance may be a good option to getting a house sold, experts say. Yet it is imperative that the seller thoroughly investigate the buyer’s finances before agreeing to the deal.
Here are some important initial steps to take:
* Investigate the buyer by asking him to fill out a Uniform Residential Loan Application.
* Get bankruptcy details by checking out the case through Public Assess to Court Electronic Records (PACER), a service of the U.S. Judiciary.
* Pull the buyer’s credit report and eviction and criminal history via the American Apartment Owners Association Web site.
* Insist on 20 percent down or offer a contract for deed, which only confers full ownership rights after the home is paid off.
* Consider offering a lease-option with part of the payment going toward the purchase price, which gives the buyer time to repair his credit before seeking conventional financing.
Source: The Wall Street Journal, June Fletcher (08/28/2009)
Monday, August 31, 2009
Friday, August 28, 2009
Mortgage Rates Still Near Record Lows
From Realtor Magazine Online, Daily Real Estate News August 28, 2009
Long-term mortgage rates remain near record lows, despite rising slightly this week. Freddie Mac reported that average interest on a 30-year fixed loan was 5.14 percent, up from 5.12 percent a week ago.
Rates for 15-year home loans, meanwhile, rose to 4.58 percent from 4.56 percent last week.
Source: Pittsburgh Post-Gazette (08/28/09)
Long-term mortgage rates remain near record lows, despite rising slightly this week. Freddie Mac reported that average interest on a 30-year fixed loan was 5.14 percent, up from 5.12 percent a week ago.
Rates for 15-year home loans, meanwhile, rose to 4.58 percent from 4.56 percent last week.
Source: Pittsburgh Post-Gazette (08/28/09)
Option ARMs Put Recovery at Risk
From Realtor Magazine Online, Daily Real Estate News August 28, 2009
Option ARMs, which accounted for $750 billion in mortgages issued between 2004 and 2007, according to Inside Mortgage Finance, are at serious risk with at least 50 percent already in default.
Resets on option ARMS have doubled the payments for many holders.
“Everyone’s been focused on subprime, but we’re more concerned about this,” says Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
Lenders have stopped offering option ARMS, but there are about 600,000 held by borrowers, three-quarters of whom are paying interest only. When the cap is reached – for most after they have held the loan for five years – they’ll face drastic increases.
Barclays Capital estimates that banks will lose $112 billion on option ARMs. Some banks are aggressively refinancing these loans, Barclays says.
Source: The New York Times, John Leland (08/26/2009)
Option ARMs, which accounted for $750 billion in mortgages issued between 2004 and 2007, according to Inside Mortgage Finance, are at serious risk with at least 50 percent already in default.
Resets on option ARMS have doubled the payments for many holders.
“Everyone’s been focused on subprime, but we’re more concerned about this,” says Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
Lenders have stopped offering option ARMS, but there are about 600,000 held by borrowers, three-quarters of whom are paying interest only. When the cap is reached – for most after they have held the loan for five years – they’ll face drastic increases.
Barclays Capital estimates that banks will lose $112 billion on option ARMs. Some banks are aggressively refinancing these loans, Barclays says.
Source: The New York Times, John Leland (08/26/2009)
Thursday, August 27, 2009
Survey: People Moving for Happier Reasons
From Realtor Magazine Online, Daily Real Estate News August 27, 2009
People have gone back to moving in hopes it will improve their lives rather than moving to escape foreclosure or other aspects of the economic crisis, according to a survey of recent movers released this month by Relocation.com.
In the June survey, nearly 42 percent said they were in the process of buying a home or planning to buy one. Poll participants said their reason for moving was:
* To live in a bigger or better home (26 percent).
* To live in a better neighborhood or area (24 percent).
* To be closer to family or friends (12 percent).
* To live in an area with a lower cost of living (9 percent).
* To accommodate a change in marital status (6 percent).
Moving because of school, job loss, retirement, or foreclosure each generated 3 percent or less.
Responses to this survey are substantially different from the responses to a similar survey in March, when 41 percent said the recession was, at least partially, driving their move.
Source: Relocation.com (08/06/2009)
People have gone back to moving in hopes it will improve their lives rather than moving to escape foreclosure or other aspects of the economic crisis, according to a survey of recent movers released this month by Relocation.com.
In the June survey, nearly 42 percent said they were in the process of buying a home or planning to buy one. Poll participants said their reason for moving was:
* To live in a bigger or better home (26 percent).
* To live in a better neighborhood or area (24 percent).
* To be closer to family or friends (12 percent).
* To live in an area with a lower cost of living (9 percent).
* To accommodate a change in marital status (6 percent).
Moving because of school, job loss, retirement, or foreclosure each generated 3 percent or less.
Responses to this survey are substantially different from the responses to a similar survey in March, when 41 percent said the recession was, at least partially, driving their move.
Source: Relocation.com (08/06/2009)
Now's the Time to Buy in Real Estate
From Realtor Magazine Online, Daily Real Estate News August 27, 2009
Investors are returning as the real estate market recovers.
BusinessWeek’s real estate guru Marc Roth points out these opportunities, which he says make sense if investors are willing to look over the property carefully and ask tough questions.
Options they should consider include:
* Buying a single-family house. This could be a first home or a dream home or a home to rent out.
* Buying a multi-family investment property.
* Snapping up a vacation property. There are deep discounts to be found in high-end resort areas.
* Investing in a Real Estate Investment Trust. REITs were hit hard in the downturn, but many are on their way back.
Source: BusinessWeek, Marc Roth (08/26/2009)
Investors are returning as the real estate market recovers.
BusinessWeek’s real estate guru Marc Roth points out these opportunities, which he says make sense if investors are willing to look over the property carefully and ask tough questions.
Options they should consider include:
* Buying a single-family house. This could be a first home or a dream home or a home to rent out.
* Buying a multi-family investment property.
* Snapping up a vacation property. There are deep discounts to be found in high-end resort areas.
* Investing in a Real Estate Investment Trust. REITs were hit hard in the downturn, but many are on their way back.
Source: BusinessWeek, Marc Roth (08/26/2009)
Wednesday, August 26, 2009
Real Estate Pros See Prices Stabilizing
From Realtor Magazine Online, Daily Real Estate News August 26, 2009
Real estate professionals say that real estate prices will remain the same for the next six months, according to HomeGain’s quarterly survey of professional opinions.
More than 69 percent of the 1,100 practitioners surveyed by the real estate information service said they were convinced that home prices have hit bottom, down from 71 percent who held that opinion in the second quarter survey.
The survey also shows home sellers and buyers don’t see home values in the same way, a troublesome disconnect for many practitioners.
* 81 percent said the values of their clients’ homes have decreased in the last year.
* 75 percent said their clients believe their homes are worth more than the listing prices they recommended.
* 85 percent said their buyer clients were still convinced that homes for sale are overpriced.
* 71 percent said they persuaded their clients to list a property at less than what the sellers initially believed the property to be worth.
Source: HomeGain Real Estate Blog (08/20/2009)
Real estate professionals say that real estate prices will remain the same for the next six months, according to HomeGain’s quarterly survey of professional opinions.
More than 69 percent of the 1,100 practitioners surveyed by the real estate information service said they were convinced that home prices have hit bottom, down from 71 percent who held that opinion in the second quarter survey.
The survey also shows home sellers and buyers don’t see home values in the same way, a troublesome disconnect for many practitioners.
* 81 percent said the values of their clients’ homes have decreased in the last year.
* 75 percent said their clients believe their homes are worth more than the listing prices they recommended.
* 85 percent said their buyer clients were still convinced that homes for sale are overpriced.
* 71 percent said they persuaded their clients to list a property at less than what the sellers initially believed the property to be worth.
Source: HomeGain Real Estate Blog (08/20/2009)
Loan Volume Rises Again, Driven by Refinances
From Realtor Magazine Online, Daily Real Estate News August 26, 2009
Loan application volume rose again last week, increasing 7.5 percent on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reported.
On an unadjusted basis, the index increased 6.3 percent and was up 34.1 percent compared with the same week a year ago. This is the fourth consecutive week mortgage application volume has risen.
The increase was driven by refinances, with the refinance index increasing 12.7 percent from the previous week. The purchase index rose 1 percent with nearly all the increase coming from applications for government loans.
Mortgage rates rose slightly but the increase didn’t seem to deter applicants:
* 30-year fixed-rate mortgages increased to 5.24 percent from 5.15 percent.
* 15-year fixed-rate mortgages increased to 4.58 percent from 4.52 percent.
* 1-year ARMs increased to 6.74 percent from 6.66 percent.
Source: Mortgage Bankers Association (08/26/2009)
Loan application volume rose again last week, increasing 7.5 percent on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reported.
On an unadjusted basis, the index increased 6.3 percent and was up 34.1 percent compared with the same week a year ago. This is the fourth consecutive week mortgage application volume has risen.
The increase was driven by refinances, with the refinance index increasing 12.7 percent from the previous week. The purchase index rose 1 percent with nearly all the increase coming from applications for government loans.
Mortgage rates rose slightly but the increase didn’t seem to deter applicants:
* 30-year fixed-rate mortgages increased to 5.24 percent from 5.15 percent.
* 15-year fixed-rate mortgages increased to 4.58 percent from 4.52 percent.
* 1-year ARMs increased to 6.74 percent from 6.66 percent.
Source: Mortgage Bankers Association (08/26/2009)
New Home Sales Surge 9.6% in July
From Realtor Magazine Online, Daily Real Estate News August 26, 2009
New U.S. home sales surged 9.6 percent in July, rising for the fourth straight monthand beating expectations as the housing market shows continuing signs of rebounding from its historic downturn.
The Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revisedJune rate of 395,000. Sales are now up 32 percent from the bottom in January, but off 69 percent from the frenzied peak four years ago.
Last month's sales pace was the strongest since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 390,000 units. The last time sales rose so dramatically was in February 2005.
The median sales price of $210,100, however, was still down 11.5 percent from $237,300 compared to the same time a year ago.
There were 271,000 new homes for sale at the end of July, down more than 3 percent from May. At the current salespace, that represents 7.5 months of supply, the lowest since April 2007. The decline means builders have scaled back on construction to the point where supply and demand are coming into balance.
Source: Associated Press, Alan Zibel (08/26/09)
New U.S. home sales surged 9.6 percent in July, rising for the fourth straight monthand beating expectations as the housing market shows continuing signs of rebounding from its historic downturn.
The Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revisedJune rate of 395,000. Sales are now up 32 percent from the bottom in January, but off 69 percent from the frenzied peak four years ago.
Last month's sales pace was the strongest since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 390,000 units. The last time sales rose so dramatically was in February 2005.
The median sales price of $210,100, however, was still down 11.5 percent from $237,300 compared to the same time a year ago.
There were 271,000 new homes for sale at the end of July, down more than 3 percent from May. At the current salespace, that represents 7.5 months of supply, the lowest since April 2007. The decline means builders have scaled back on construction to the point where supply and demand are coming into balance.
Source: Associated Press, Alan Zibel (08/26/09)
Friday, August 21, 2009
Strong Gain in Existing-Home Sales
From Realtor Magazine Online, Daily Real Estate News August 21, 2009
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of REALTORS®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June. Sales are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Largest Gain in a Decade
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June. The rate was 6.43 percent in July 2008.
"First-Time Buyer Tax Credit is Working"
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillan said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.
“Realtors are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”
Inventory Up, Prices Down
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.
Single-Family Homes and Condos
Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9 percent from July 2008.
By Region:
* The Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.
* Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.
* In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.
* Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.
Source: NAR
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of REALTORS®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June. Sales are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Largest Gain in a Decade
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June. The rate was 6.43 percent in July 2008.
"First-Time Buyer Tax Credit is Working"
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillan said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.
“Realtors are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”
Inventory Up, Prices Down
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.
Single-Family Homes and Condos
Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9 percent from July 2008.
By Region:
* The Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.
* Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.
* In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.
* Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.
Source: NAR
What Has the Housing Crash Cost Americans?
From Realtor Magazine Online, Daily Real Estate News August 21, 2009
How much real wealth have Americans lost so far in the real estate crash?
The Federal Reserve estimates that the total market value of U.S. homes fell 18 percent from $21.9 trillion to $17.9 trillion or about $13,000 per person from the end of 2006 through March 31, 2009.
The Fed also estimates that homeowner’s equity has declined 40 percent from the peak and now accounts for just 41.4 percent of real estate values. By comparison, after the last slump in the 1990s, home equity levels remained in the high 50s.
This collapse in equity makes it difficult for potential buyers to sell their homes and trade up, which many experts say will weigh heavily on the housing recovery.
Source: The Wall Street Journal, Brett Arends (08/20/2009)
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How much real wealth have Americans lost so far in the real estate crash?
The Federal Reserve estimates that the total market value of U.S. homes fell 18 percent from $21.9 trillion to $17.9 trillion or about $13,000 per person from the end of 2006 through March 31, 2009.
The Fed also estimates that homeowner’s equity has declined 40 percent from the peak and now accounts for just 41.4 percent of real estate values. By comparison, after the last slump in the 1990s, home equity levels remained in the high 50s.
This collapse in equity makes it difficult for potential buyers to sell their homes and trade up, which many experts say will weigh heavily on the housing recovery.
Source: The Wall Street Journal, Brett Arends (08/20/2009)
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Tuesday, August 11, 2009
Why the Foreclosure Plan Isn't Working
From Realtor Magazine Online, Daily Real Estate News August 11, 2009
Why can’t mortgage servicers process more than 9 percent of the applications of borrowers eligible for a government retooling of their loans?
Here are five reasons spelled out:
1. Fax machines. Most loan servicers require that applications be faxed. "It's archaic. Given all the problems we've had with lost faxes, it seems unreasonable to use a fax system,” said Michael van Zalingen, director of homeownership services for Neighborhood Housing Services of Chicago.
2. Too many forms. Each servicers has its own form, as does Freddie Mac and Fannie Mae.
Outdated info. By the time the multiple forms get through the fax machine, the info is outdated and applicants have to start all over.
3. Green personnel. Servicers are hiring and training staff by the thousands and most of them haven’t been on the job long enough to understand the process.
4. Too complicated to comprehend. Some eligible borrowers are receiving loan modification offers without even applying, but the paperwork is such gobbledygook that they mistake it for trash and throw the offers away.
Source: CNNMoney, Tami Lubby (08/11/2009)
Why can’t mortgage servicers process more than 9 percent of the applications of borrowers eligible for a government retooling of their loans?
Here are five reasons spelled out:
1. Fax machines. Most loan servicers require that applications be faxed. "It's archaic. Given all the problems we've had with lost faxes, it seems unreasonable to use a fax system,” said Michael van Zalingen, director of homeownership services for Neighborhood Housing Services of Chicago.
2. Too many forms. Each servicers has its own form, as does Freddie Mac and Fannie Mae.
Outdated info. By the time the multiple forms get through the fax machine, the info is outdated and applicants have to start all over.
3. Green personnel. Servicers are hiring and training staff by the thousands and most of them haven’t been on the job long enough to understand the process.
4. Too complicated to comprehend. Some eligible borrowers are receiving loan modification offers without even applying, but the paperwork is such gobbledygook that they mistake it for trash and throw the offers away.
Source: CNNMoney, Tami Lubby (08/11/2009)
Friday, August 7, 2009
Foreclosure Bargains Are Disappearing
From Realtor Magazine Online, Daily Real Estate News August 7, 2009
Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.
"For every listing that comes out, we have 10 buyers," says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif.
Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.
"We had a lot of inventory last summer. Now we're down to 1,500 listings — from more than 5,000," Dias says.
In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.
Even in the hard-hit Detroit area, bargains are disappearing.
"For a good house that's not too beat up, in a good neighborhood, there's no lack of buyers in this market," says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. "There are a lot fewer of these properties than a year ago, and the super buys get multiple offers."
Source: CNNMoney.com, Les Christie (08/06/2009)
Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.
"For every listing that comes out, we have 10 buyers," says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif.
Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.
"We had a lot of inventory last summer. Now we're down to 1,500 listings — from more than 5,000," Dias says.
In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.
Even in the hard-hit Detroit area, bargains are disappearing.
"For a good house that's not too beat up, in a good neighborhood, there's no lack of buyers in this market," says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. "There are a lot fewer of these properties than a year ago, and the super buys get multiple offers."
Source: CNNMoney.com, Les Christie (08/06/2009)
Thursday, August 6, 2009
Census Trend: Fewer Owners, More Renters
From Realtor Magazine Online, Daily Real Estate News August 6, 2009
Homeownership rates are declining and will likely continue to fall through 2020, predicts a University of Utah analysis.
"[Homeownership] will fall steadily by about half a point per year," says Arthur C. Nelson, director of the university's Metropolitan Research Center. "We'll have far more renters in the future."
Homeownership peaked at nearly 70 percent in 2004 and 2005. By the second quarter of this year, it had declined to 67.4, according to the U.S. Census Bureau.
"We're returning more to what was normal in the 1960s," says Dowell Myers, housing demographer at the University of Southern California. "People didn't buy homes then as an investment. They bought them to raise families."
Source: USA Today, Haya El Nasser (08/06/2009)
Homeownership rates are declining and will likely continue to fall through 2020, predicts a University of Utah analysis.
"[Homeownership] will fall steadily by about half a point per year," says Arthur C. Nelson, director of the university's Metropolitan Research Center. "We'll have far more renters in the future."
Homeownership peaked at nearly 70 percent in 2004 and 2005. By the second quarter of this year, it had declined to 67.4, according to the U.S. Census Bureau.
"We're returning more to what was normal in the 1960s," says Dowell Myers, housing demographer at the University of Southern California. "People didn't buy homes then as an investment. They bought them to raise families."
Source: USA Today, Haya El Nasser (08/06/2009)
Inventories in Key Cities Shrinking, Broker Says
From Realtor Magazine Online, Daily Real Estate News August 6, 2009
ZipRealty reports that inventories declined 2.5 percent in July compared to June in the 28 metropolitan areas it covers. Compared to July 2008, inventories declined 27 percent.
Zip’s data includes properties listed on the multiple-listing services where the firm operates. It doesn’t include New York City, where appraisal firm Miller Samuel Inc. says inventory was down 7.8 percent compared with June, but up 6.9 percent from July 2008.
Research firm Zelman & Associates points out that on average in the last 25 years, inventories in July have declined 1 percent from June.
Source: The Wall Street Journal, James R. Hagerty (08/04/2009)
ZipRealty reports that inventories declined 2.5 percent in July compared to June in the 28 metropolitan areas it covers. Compared to July 2008, inventories declined 27 percent.
Zip’s data includes properties listed on the multiple-listing services where the firm operates. It doesn’t include New York City, where appraisal firm Miller Samuel Inc. says inventory was down 7.8 percent compared with June, but up 6.9 percent from July 2008.
Research firm Zelman & Associates points out that on average in the last 25 years, inventories in July have declined 1 percent from June.
Source: The Wall Street Journal, James R. Hagerty (08/04/2009)
IRS Cracking Down on False Tax Credit Claims
From Realtor Magazine Online, Daily Real Estate News August 6, 2009
The IRS is cracking down on people who don’t qualify for the first-time homebuyer tax credit but try to claim it anyway.
The IRS says it is investigating 24 cases of people who falsely claimed the first-time homebuyer credit on their federal income tax returns. Getting caught making a false claim carries a penalty of up to three years in jail and a fine of as much as $250,000.
The First-Time Homebuyer Credit, enacted in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser must be someone who has not owned a primary residence in the previous three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse.
The home purchase must close before Dec. 1, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.
[Editor's note: Learn about tax credit rules and get other tax credit help at a resource page at REALTOR® Magazine Online.]
Source: The Internal Revenue Service (07/29/2009) and The Boston Globe, Chris Reidy (08/03/2009)
The IRS is cracking down on people who don’t qualify for the first-time homebuyer tax credit but try to claim it anyway.
The IRS says it is investigating 24 cases of people who falsely claimed the first-time homebuyer credit on their federal income tax returns. Getting caught making a false claim carries a penalty of up to three years in jail and a fine of as much as $250,000.
The First-Time Homebuyer Credit, enacted in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser must be someone who has not owned a primary residence in the previous three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse.
The home purchase must close before Dec. 1, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.
[Editor's note: Learn about tax credit rules and get other tax credit help at a resource page at REALTOR® Magazine Online.]
Source: The Internal Revenue Service (07/29/2009) and The Boston Globe, Chris Reidy (08/03/2009)
Wednesday, August 5, 2009
More Home Owners Underwater as Prices Fall
From Realtor Magazine Online, Daily Real Estate News August 5, 2009
A report from Equifax and Moody's Economy.com shows that falling prices have left 24 percent of owner-occupied, single-family home owners with mortgage debt greater than the values of the residences.
At the end of this year's second quarter, more than 16 million Americans were in this predicament, an increase from 10 million a year earlier.
Almost 5 percent of owner-occupied dwellings are saddled with mortgage debt worth 150 percent of the property value. Nevada, where 40 percent of owner-occupied homes are "upside-down," is the hardest-hit state, followed by Arizona and California.
Source: Wall Street Journal, Nick Timiraos (08/05/09)
A report from Equifax and Moody's Economy.com shows that falling prices have left 24 percent of owner-occupied, single-family home owners with mortgage debt greater than the values of the residences.
At the end of this year's second quarter, more than 16 million Americans were in this predicament, an increase from 10 million a year earlier.
Almost 5 percent of owner-occupied dwellings are saddled with mortgage debt worth 150 percent of the property value. Nevada, where 40 percent of owner-occupied homes are "upside-down," is the hardest-hit state, followed by Arizona and California.
Source: Wall Street Journal, Nick Timiraos (08/05/09)
Mortgage Applications Rise for the Week
From Realtor Magazine Online, Daily Real Estate News August 5, 2009
Mortgage applications rose a seasonally adjusted 4.4 percent last week compared to the week before, as rates on fixed-rate mortgages dropped, according to the Mortgage Bankers Association.
Total application volume was up 18 percent for the week that ended July 31, compared with the same week in 2008, according to the MBA's weekly survey.
Refinance applications rose an unadjusted 7.2 percent last week, compared with the week before, while refinance application volume has risen 35 percentsince its recent low at the end of June. The volume of applications for mortgages to purchase a home was up a seasonally adjusted 0.9% last week.
Refinance applications made up a 54.2% share of all applications, up from 52.6% the week before. Interest rates were generally lower:
* 30-year fixed-rate mortgages fell to 5.17 percent from 5.36 percent.
* 15-year fixed-rate mortgages fell to 4.60 percent from 4.75 percent.
* 1-year ARMs were 6.67 percent, barely changed from 6.66 percent.
Source: Mortgage Bankers Association (08/05/09)
Mortgage applications rose a seasonally adjusted 4.4 percent last week compared to the week before, as rates on fixed-rate mortgages dropped, according to the Mortgage Bankers Association.
Total application volume was up 18 percent for the week that ended July 31, compared with the same week in 2008, according to the MBA's weekly survey.
Refinance applications rose an unadjusted 7.2 percent last week, compared with the week before, while refinance application volume has risen 35 percentsince its recent low at the end of June. The volume of applications for mortgages to purchase a home was up a seasonally adjusted 0.9% last week.
Refinance applications made up a 54.2% share of all applications, up from 52.6% the week before. Interest rates were generally lower:
* 30-year fixed-rate mortgages fell to 5.17 percent from 5.36 percent.
* 15-year fixed-rate mortgages fell to 4.60 percent from 4.75 percent.
* 1-year ARMs were 6.67 percent, barely changed from 6.66 percent.
Source: Mortgage Bankers Association (08/05/09)
Tuesday, August 4, 2009
6 Real Estate Investment Basics
From Realtor Magazine Online, Daily Real Estate News August 4, 2009
Miami real estate investor Kenneth D. Rosen outlines his “Big Six” investing guidelines in his new book, Investing in Income Properties.
Here are his six principles in a nutshell. He says all of them need to be present to make a deal worth doing. “If one’s not there, you stop and you don’t buy,” he says.
Location.
“A” locations are in areas where there is little land left to build on and the neighborhood has a certain prestige.
No-frills design with quality construction.
He looks for three or four parking spaces per 1,000 square feet, no more than 15 percent of space devoted to common areas, and simple but visually pleasing design.
Few or no vacancies.
Buildings with lots of small offices are easier to keep full than those that rely on renting out entire floors to one tenant.
Potential for appreciation.
Older buildings with lower rents have the most upside potential. As leases expire, the new owner can raise the rent.
Available financing.
Find a financial pro to help negotiate the right provisions.
Sale price based on existing income.
Avoid buying based on projected income.
Source: Miami Herald, Matthew Haggman (08/03/2009)
Miami real estate investor Kenneth D. Rosen outlines his “Big Six” investing guidelines in his new book, Investing in Income Properties.
Here are his six principles in a nutshell. He says all of them need to be present to make a deal worth doing. “If one’s not there, you stop and you don’t buy,” he says.
Location.
“A” locations are in areas where there is little land left to build on and the neighborhood has a certain prestige.
No-frills design with quality construction.
He looks for three or four parking spaces per 1,000 square feet, no more than 15 percent of space devoted to common areas, and simple but visually pleasing design.
Few or no vacancies.
Buildings with lots of small offices are easier to keep full than those that rely on renting out entire floors to one tenant.
Potential for appreciation.
Older buildings with lower rents have the most upside potential. As leases expire, the new owner can raise the rent.
Available financing.
Find a financial pro to help negotiate the right provisions.
Sale price based on existing income.
Avoid buying based on projected income.
Source: Miami Herald, Matthew Haggman (08/03/2009)
Investor Report: Auctions a Growing Niche
From Realtor Magazine Online, Daily Real Estate News August 4, 2009
The downturn in the residential real estate market sparked an increase in private live auctions, which totaled $59 billion in 2008, according to the National Association of Auctioneers.
Auction volume should rise again this year now that the commercial real estate sector is weakening.
Sheldon Good & Co. President Alan Kravets says auctions held in a down market help property investors and lenders minimize their losses, eliminating the carrying costs that would incur if the property languished on the market for several months.
National Association of Auctioneers deputy executive director Chris Longley adds that live auctions help "to quickly establish true market values in environments where people aren't really sure what the values are."
Source: Realty Times, Ken Harney (07/31/09)
The downturn in the residential real estate market sparked an increase in private live auctions, which totaled $59 billion in 2008, according to the National Association of Auctioneers.
Auction volume should rise again this year now that the commercial real estate sector is weakening.
Sheldon Good & Co. President Alan Kravets says auctions held in a down market help property investors and lenders minimize their losses, eliminating the carrying costs that would incur if the property languished on the market for several months.
National Association of Auctioneers deputy executive director Chris Longley adds that live auctions help "to quickly establish true market values in environments where people aren't really sure what the values are."
Source: Realty Times, Ken Harney (07/31/09)
Construction Spending Rises, Defies Forecasts
From Realtor Magazine Online, Daily Real Estate News August 4, 2009
Analysts predicted a 0.5 percent drop in construction spending in June, but they were wrong.
The U.S. Commerce Department said Monday that construction spending rose by a seasonally adjusted 0.3 percent annually in June. That’s positive news, despite the fact that overall spending was still down 10.2 percent compared to a year ago.
The increase was driven by federal government spending, which rose 1.9 percent. This offset a 0.5 percent decline in commercial, nonresidential building, including shrinkage in retail and offices.
Source: The Associated Press, Christopher S. Rugaber (08/03/2009)
Analysts predicted a 0.5 percent drop in construction spending in June, but they were wrong.
The U.S. Commerce Department said Monday that construction spending rose by a seasonally adjusted 0.3 percent annually in June. That’s positive news, despite the fact that overall spending was still down 10.2 percent compared to a year ago.
The increase was driven by federal government spending, which rose 1.9 percent. This offset a 0.5 percent decline in commercial, nonresidential building, including shrinkage in retail and offices.
Source: The Associated Press, Christopher S. Rugaber (08/03/2009)
Uptrend Continues in Pending Home Sales
From Realtor Magazine Online, Daily Real Estate News August 4, 2009
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to NAR.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.
Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said.
“Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30,” Yun said.
Here are the regional figures from the Pending Home Sales Index:
* The Northeast rose 0.4 percent to 81.2 in June and is 5.8 percent above a year ago.
* The Midwest increased 0.8 percent to 89.9 and is 11.6 percent above June 2008.
* The index in the South jumped 7.1 percent to 100.7 in June and is 8.9 percent higher than a year ago.
* In the West, the index rose 2.9 percent to 100.4 but is 0.2 percent below June 2008.
Source: NAR
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to NAR.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.
Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said.
“Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30,” Yun said.
Here are the regional figures from the Pending Home Sales Index:
* The Northeast rose 0.4 percent to 81.2 in June and is 5.8 percent above a year ago.
* The Midwest increased 0.8 percent to 89.9 and is 11.6 percent above June 2008.
* The index in the South jumped 7.1 percent to 100.7 in June and is 8.9 percent higher than a year ago.
* In the West, the index rose 2.9 percent to 100.4 but is 0.2 percent below June 2008.
Source: NAR
Monday, August 3, 2009
Higher-Priced Markets Still Feel Pain
From Realtor Magazine Online, Daily Real Estate News August 3, 2009
While low- and moderately-priced housing markets have taken off in many parts of the country, the higher-end market is still struggling. Sales are slow and more price declines are imminent, observers say.
Joshua Shapiro, chief U.S. economist at MFR Inc., points to management job losses and resetting adjustable-rate mortgages held by prime borrowers, and concludes, "You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top."
Analysts at J.P. Morgan Chase & Co. recently predicted that the higher-priced housing market won’t recover until at least 2012, and peak-to-trough declines could surpass 60 percent, compared to 40 percent for the rest of the market.
Source: The Wall Street Journal, Nick Timiraos and James R. Hagerty (08/03/2009)
While low- and moderately-priced housing markets have taken off in many parts of the country, the higher-end market is still struggling. Sales are slow and more price declines are imminent, observers say.
Joshua Shapiro, chief U.S. economist at MFR Inc., points to management job losses and resetting adjustable-rate mortgages held by prime borrowers, and concludes, "You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top."
Analysts at J.P. Morgan Chase & Co. recently predicted that the higher-priced housing market won’t recover until at least 2012, and peak-to-trough declines could surpass 60 percent, compared to 40 percent for the rest of the market.
Source: The Wall Street Journal, Nick Timiraos and James R. Hagerty (08/03/2009)
Investors Snag Distressed Miami Condos
From Realtor Magazine Online, Daily Real Estate News August 3, 2009
Investors in troubled markets like Phoenix, Las Vegas, and San Diego are watching as cash investors scoop up hundreds of condos at bargain prices from Miami developers and banks that are desperate to get the units off the books.
Unlike investors in the boom years, these buyers are well heeled and willing to be patient.
"They have the money and the knowledge and wherewithal to hold them until the market turns around," says Jennifer Drake, a real estate attorney with Becker & Poliakoff.
If this bulk-purchase strategy pays off in South Florida, expect to see it spread elsewhere, observers say.
Source: The Associated Press, Adrian Sainz (07/30/2009)
Investors in troubled markets like Phoenix, Las Vegas, and San Diego are watching as cash investors scoop up hundreds of condos at bargain prices from Miami developers and banks that are desperate to get the units off the books.
Unlike investors in the boom years, these buyers are well heeled and willing to be patient.
"They have the money and the knowledge and wherewithal to hold them until the market turns around," says Jennifer Drake, a real estate attorney with Becker & Poliakoff.
If this bulk-purchase strategy pays off in South Florida, expect to see it spread elsewhere, observers say.
Source: The Associated Press, Adrian Sainz (07/30/2009)
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