Daily Real Estate News, December 20, 2010
Economists are surprisingly positive about the impact of rising interest rates on home sales.
The consensus is that while rates are up from where they were, they are still at historically low levels and rock bottom rates are only a part of what encourages people to buy homes. More important factors could be jobs and other financial issues, which appear to be improving.
“Since the recent rate increases have essentially just undone the declines from earlier months, it is hard to see why sales should drop significantly further from current levels,” wrote Goldman Sachs economist Ed McKelvey in a research note published Thursday evening.
Source: The Wall Street Journal, Nick Timiraos (12/17/2010)
Monday, December 20, 2010
Commercial Real Estate on the Mend
Daily Real Estate News, December 20, 2010
Despite predictions of Armageddon in the commercial real estate industry, the segment remains a moneymaker.
Commercial Mortgage Backed Securities (CMBS) were among the top-performing assets classes this year. "A year or two ago these were priced for the second Depression and then some," said Arne Espe, vice president of fixed income research at USAA Investment Management in San Antonio. "We haven't seen the huge defaults a lot of people were expecting."
Analysts counsel patience. "If you can give it some time, employment will bounce back and then commercial real estate will start rising," said Greg Michaud, who heads real estate finance at ING Investment Management.
Source: Fortune.com, Colin Barr (12/20/2010)
Despite predictions of Armageddon in the commercial real estate industry, the segment remains a moneymaker.
Commercial Mortgage Backed Securities (CMBS) were among the top-performing assets classes this year. "A year or two ago these were priced for the second Depression and then some," said Arne Espe, vice president of fixed income research at USAA Investment Management in San Antonio. "We haven't seen the huge defaults a lot of people were expecting."
Analysts counsel patience. "If you can give it some time, employment will bounce back and then commercial real estate will start rising," said Greg Michaud, who heads real estate finance at ING Investment Management.
Source: Fortune.com, Colin Barr (12/20/2010)
Friday, December 17, 2010
Job Market Keeping Real Estate Down
Daily Real Estate News, December 17, 2010
The University of San Diego's 11th annual residential real estate conference this week was focused on jobs and how unemployment is preventing people from buying homes.
Leslie Appleton-Young, chief economist at the California Association of REALTORS®, said, "Jobs are really the key. That's where the focus needs to be."
University of San Diego economist Alan Gin said companies of all sorts, including those in the real estate industry, are poised to expand. “They’re waiting for signs that the economy is firming before jumping in,” he said.
Source: The San Diego Union-Tribune (12/15/2010)
The University of San Diego's 11th annual residential real estate conference this week was focused on jobs and how unemployment is preventing people from buying homes.
Leslie Appleton-Young, chief economist at the California Association of REALTORS®, said, "Jobs are really the key. That's where the focus needs to be."
University of San Diego economist Alan Gin said companies of all sorts, including those in the real estate industry, are poised to expand. “They’re waiting for signs that the economy is firming before jumping in,” he said.
Source: The San Diego Union-Tribune (12/15/2010)
10 States Losing the Most Residents
Daily Real Estate News, December 17, 2010
Using data from Moody’s Economy.com, Forbes identified the top-10 states where more residents are leaving than arriving.
The factors that encourage outbound migration from these states are mostly economic — high employment and high cost of living — although both Louisiana and Mississippi have been affected by natural disasters.
The 10 states that have said goodbye to the most residents are:
1. New York
2. Illinois
3. Ohio
4. Nebraska
5. Kansas
6. Iowa
7. Louisiana
8. North Dakota
9. South Dakota
10. Mississippi
Source: Forbes, Jenna Goudreau (12/08/2010)
Using data from Moody’s Economy.com, Forbes identified the top-10 states where more residents are leaving than arriving.
The factors that encourage outbound migration from these states are mostly economic — high employment and high cost of living — although both Louisiana and Mississippi have been affected by natural disasters.
The 10 states that have said goodbye to the most residents are:
1. New York
2. Illinois
3. Ohio
4. Nebraska
5. Kansas
6. Iowa
7. Louisiana
8. North Dakota
9. South Dakota
10. Mississippi
Source: Forbes, Jenna Goudreau (12/08/2010)
Rise in Yields Pushes Up Rates
Daily Real Estate News, December 17, 2010
A sudden and unexpectedly quick bounce in Treasury yields has jolted the financial markets — including mortgage rates, which have risen rapidly in response.
Freddie Mac puts 30-year home loan interest at an average of 4.83 percent for the week ended Dec. 16, up from a record bottom of 4.17 percent a month ago.
Although the rate is still favorable by historical norms, any jump in borrowing costs is certain to pinch housing demand, prevent refinancing, and motivate sellers to reduce asking prices.
Source: The Wall Street Journal, Nick Timiraos and Mark Gongloff (12/17/10)
A sudden and unexpectedly quick bounce in Treasury yields has jolted the financial markets — including mortgage rates, which have risen rapidly in response.
Freddie Mac puts 30-year home loan interest at an average of 4.83 percent for the week ended Dec. 16, up from a record bottom of 4.17 percent a month ago.
Although the rate is still favorable by historical norms, any jump in borrowing costs is certain to pinch housing demand, prevent refinancing, and motivate sellers to reduce asking prices.
Source: The Wall Street Journal, Nick Timiraos and Mark Gongloff (12/17/10)
Wednesday, December 15, 2010
Fed Leaves "Rates" Unchanged (as expected)
from Mortgage Market Guide
As anticipated, the Fed Announcement yesterday didn't contain any surprises. The Fed Funds Rate was left unchanged - and we don't see that changing until early 2012. Additionally, the language in the Policy Statement was virtually identical to the one following the prior meeting. So what happened? Why did Bonds, which went into the Meeting down sharply, plummet further on the announcement?
Here's the story.
Although they are stating that inflation is not a present concern, which is good news for Bonds their continued pledge of economic support prompted Stocks to move higher in response. In fact, the Dow reached levels not seen since Lehman collapsed over two years ago and this all came at great expense to Bonds.
Negative economic news serves to help Bond prices improve and rates decline, including home loan rates and this is all helpful to have when the economy is struggling, as buyers of all products - including homes - need the extra incentive of a low interest rate to be encouraged to buy. But now, the sharply higher expectations for future economic growth has caused rates to climb - particularly including home loan rates, as you well know - and all at a time when the housing market recovery is still on somewhat wobbly legs. This is one of the negative unintended consequences of QE2.
In this morning's news, the Empire State Manufacturing Index was reported at 10.57, far above expectations of 3.0. This was a very nice manufacturing reading, and a whole lot better than what economists were expecting. While this is just one report - it again underscores that the economy is on the mend. The Bond market reacted negatively to this release.
The inflation measuring Consumer Price Index was tame on a month over month basis, showing a climb of 0.1%. With volatile food and energy prices removed, the Core CPI also rose 0.1% for it's first gain since July. The year-over-year headline CPI rose 1.1% - still below the Fed's target - but it is worth noting that this is the fifth consecutive month of increases in the headline CPI number. For now - deflation fears have left the building, and the Fed appears to be on track with their goal of stimulating a bit more inflation.
Where will rates go from here?
In the short-run, the Bond is attempting to hold at support at $98.03 - and only time will tell if that floor will hold. But there is an extremely negative sentiment towards Bonds right now. Look no further than the major outflows being seen from Bond mutual funds. The amount of money leaving the Bond market over the past two months is the most in a few years and what this means is that investors are not only not adding to their Bond positions but they are also selling off current holdings. This is another reason why the selloff in Bonds has been so significant over the past several weeks.
As anticipated, the Fed Announcement yesterday didn't contain any surprises. The Fed Funds Rate was left unchanged - and we don't see that changing until early 2012. Additionally, the language in the Policy Statement was virtually identical to the one following the prior meeting. So what happened? Why did Bonds, which went into the Meeting down sharply, plummet further on the announcement?
Here's the story.
Although they are stating that inflation is not a present concern, which is good news for Bonds their continued pledge of economic support prompted Stocks to move higher in response. In fact, the Dow reached levels not seen since Lehman collapsed over two years ago and this all came at great expense to Bonds.
Negative economic news serves to help Bond prices improve and rates decline, including home loan rates and this is all helpful to have when the economy is struggling, as buyers of all products - including homes - need the extra incentive of a low interest rate to be encouraged to buy. But now, the sharply higher expectations for future economic growth has caused rates to climb - particularly including home loan rates, as you well know - and all at a time when the housing market recovery is still on somewhat wobbly legs. This is one of the negative unintended consequences of QE2.
In this morning's news, the Empire State Manufacturing Index was reported at 10.57, far above expectations of 3.0. This was a very nice manufacturing reading, and a whole lot better than what economists were expecting. While this is just one report - it again underscores that the economy is on the mend. The Bond market reacted negatively to this release.
The inflation measuring Consumer Price Index was tame on a month over month basis, showing a climb of 0.1%. With volatile food and energy prices removed, the Core CPI also rose 0.1% for it's first gain since July. The year-over-year headline CPI rose 1.1% - still below the Fed's target - but it is worth noting that this is the fifth consecutive month of increases in the headline CPI number. For now - deflation fears have left the building, and the Fed appears to be on track with their goal of stimulating a bit more inflation.
Where will rates go from here?
In the short-run, the Bond is attempting to hold at support at $98.03 - and only time will tell if that floor will hold. But there is an extremely negative sentiment towards Bonds right now. Look no further than the major outflows being seen from Bond mutual funds. The amount of money leaving the Bond market over the past two months is the most in a few years and what this means is that investors are not only not adding to their Bond positions but they are also selling off current holdings. This is another reason why the selloff in Bonds has been so significant over the past several weeks.
Tuesday, December 14, 2010
Number of Underwater Mortgages Declines
Daily Real Estate News, December 14, 2010
The number of people with underwater mortgages has fallen to 10.8 million, representing 22.5 percent of Americans with a mortgage at the end of September, down from 11.3 million at the beginning of 2010, according to CoreLogic, a real estate research firm.
If home prices decline again, as some analysts believe they will, the number of underwater mortgages will climb again.
"It's a giant anchor that's holding back the economy," says Sam Khater, senior economist at CoreLogic. "Until that negative equity recedes, the housing market is not going to recover. It's as simple as that."
Source: The Wall Street Journal, Nick Timiraos and S. Mitra Kalita (12/14/2010)
The number of people with underwater mortgages has fallen to 10.8 million, representing 22.5 percent of Americans with a mortgage at the end of September, down from 11.3 million at the beginning of 2010, according to CoreLogic, a real estate research firm.
If home prices decline again, as some analysts believe they will, the number of underwater mortgages will climb again.
"It's a giant anchor that's holding back the economy," says Sam Khater, senior economist at CoreLogic. "Until that negative equity recedes, the housing market is not going to recover. It's as simple as that."
Source: The Wall Street Journal, Nick Timiraos and S. Mitra Kalita (12/14/2010)
No Correlation between Fed Funds Rate & 30 Year Fixed Rates
The FOMC in Layman Terms
The Federal Open Market Committee is a government group that makes monetary policy. It's job is akin to the gas-and-brake pedals on a car -- speed up or slow down the vehicle that is the U.S. economy. The FOMC has 12 members and is headed by Chairman Ben Bernanke. 8 times annually, the Fed gets together to discuss a host of economic issues and, when the meeting is done, the members vote on whether to raise, lower, or leave unchanged an interest rate called the Fed Funds Rate. The Fed Funds Rate is the prescribed interest rate at which banks lend money to each other overnight. Simplified, when the Fed Funds Rate is high, banks end up paying a lot of money in interest payments and are less inclined to borrow from one another, thereby slowing down the economy. When the Fed Funds Rate is low, borrowing is cheap, and the economy is spurred forward. Because the Fed Funds Rate is directly related to Prime Rate, the basis of business and consumer borrowing, the FOMC's vote carries huge implications for the economy as a whole.
The FOMC Does NOT Vote on Mortgage Rates
The FOMC usually meets on a Tuesday and adjourns at 2:15 PM ET. This week, thee group is expected to leave the Fed Funds Rate unchanged within its current range of 0.000-0.250 percent. This is the lowest Fed Funds Rate is history and the Fed has said that the Fed Funds Rate will stay near zero for "an extended period". However, by 2:30 PM, news stories will surface about how the Fed voted to "leave rates unchanged", or "raised rates" today.
The proper verbiage from the press would be "the Fed voted to leave the Fed Funds Rate unchanged today", but they'll just say "rates". This is a big deal only because most Americans think that the Federal Reserve controls daily mortgage rates. It doesn't. But because of this misconception, when Americans read about the FOMC and "rates", they just assume the story is about mortgage rates. It's not. The FOMC doesn't control mortgage rates.
The Fed Funds Rate is untied from mortgage rates because the Fed Funds Rate is an short-term "overnight" rate while the 30-year fixed rate is a long-term rate. Borrowing money is much different over 8 hours as compared to 263,000 hours.
Despite the near-universal belief that the Fed Funds Rate will not be changed, there's always the chance that the Fed says something "good" for the economy, causing mortgage rates to spike. It's happened in the past and it could happen again. So, if you're shopping for a mortgage, talk to your loan officer in advance of the Fed's 2:15 P.M. ET announcement on a Tuesday because from here on out, inflation will result in rising mortgage rates and you should want to "lock-in" the most favorable rate BEFORE they rise, again.
The Federal Open Market Committee is a government group that makes monetary policy. It's job is akin to the gas-and-brake pedals on a car -- speed up or slow down the vehicle that is the U.S. economy. The FOMC has 12 members and is headed by Chairman Ben Bernanke. 8 times annually, the Fed gets together to discuss a host of economic issues and, when the meeting is done, the members vote on whether to raise, lower, or leave unchanged an interest rate called the Fed Funds Rate. The Fed Funds Rate is the prescribed interest rate at which banks lend money to each other overnight. Simplified, when the Fed Funds Rate is high, banks end up paying a lot of money in interest payments and are less inclined to borrow from one another, thereby slowing down the economy. When the Fed Funds Rate is low, borrowing is cheap, and the economy is spurred forward. Because the Fed Funds Rate is directly related to Prime Rate, the basis of business and consumer borrowing, the FOMC's vote carries huge implications for the economy as a whole.
The FOMC Does NOT Vote on Mortgage Rates
The FOMC usually meets on a Tuesday and adjourns at 2:15 PM ET. This week, thee group is expected to leave the Fed Funds Rate unchanged within its current range of 0.000-0.250 percent. This is the lowest Fed Funds Rate is history and the Fed has said that the Fed Funds Rate will stay near zero for "an extended period". However, by 2:30 PM, news stories will surface about how the Fed voted to "leave rates unchanged", or "raised rates" today.
The proper verbiage from the press would be "the Fed voted to leave the Fed Funds Rate unchanged today", but they'll just say "rates". This is a big deal only because most Americans think that the Federal Reserve controls daily mortgage rates. It doesn't. But because of this misconception, when Americans read about the FOMC and "rates", they just assume the story is about mortgage rates. It's not. The FOMC doesn't control mortgage rates.
The Fed Funds Rate is untied from mortgage rates because the Fed Funds Rate is an short-term "overnight" rate while the 30-year fixed rate is a long-term rate. Borrowing money is much different over 8 hours as compared to 263,000 hours.
Despite the near-universal belief that the Fed Funds Rate will not be changed, there's always the chance that the Fed says something "good" for the economy, causing mortgage rates to spike. It's happened in the past and it could happen again. So, if you're shopping for a mortgage, talk to your loan officer in advance of the Fed's 2:15 P.M. ET announcement on a Tuesday because from here on out, inflation will result in rising mortgage rates and you should want to "lock-in" the most favorable rate BEFORE they rise, again.
Monday, December 13, 2010
Sellers: Price to Your Market
Daily Real Estate News, December 13, 2010
In this tough market, price reductions are more acceptable than they used to be, real estate broker and author Dian Hymer says.
Certainly, they are more common because sellers have more difficulty setting reasonable prices, especially when prices change frequently.
With buyers ignoring properties they believe are overpriced, it is especially important for sellers to quickly correct noncompetitive pricing, according to Hymer.
Sellers should be prepared to lower their price more than once if they are out of sync with the market. The best measure is the sale prices of comparably priced properties that closed after the house was put on the market.
Source: Inman News, Dian Hymer (12/07/2010)
In this tough market, price reductions are more acceptable than they used to be, real estate broker and author Dian Hymer says.
Certainly, they are more common because sellers have more difficulty setting reasonable prices, especially when prices change frequently.
With buyers ignoring properties they believe are overpriced, it is especially important for sellers to quickly correct noncompetitive pricing, according to Hymer.
Sellers should be prepared to lower their price more than once if they are out of sync with the market. The best measure is the sale prices of comparably priced properties that closed after the house was put on the market.
Source: Inman News, Dian Hymer (12/07/2010)
Condos Face FHA Deadlines
Daily Real Estate News, December 13, 2010
An estimated 2,200 condominium projects nationwide last week lost their eligibility for Federal Housing Administration-guaranteed sales and refinancing.
Unless condo officials take action, another 23,000 residential condos with housing units numbering in the tens of thousands will lose their eligibility by spring. That means that buyers of units in these buildings won’t be eligible for FHA financing.
This situation was the result of an effort by the FHA to guarantee that condos and their underlying home owners associations have adequate budgets, legal documents, and other things that lead to financial stability.
In 2009, the FHA spelled out tough standards that required that condo projects approved for FHA financial before 2007 have their approvals renewed by Dec. 7, 2010. About 25,000 projects missed the cutoff. Because there were so many, the FHA extended the deadline, setting new deadlines through out 2011. The only losers were the 2,200 projects that had the oldest approvals.
The FHA urges all condominium owners to get in touch with their associations and push them to meet the revised deadlines.
For more information, or to check the status of a condo project, visit (select by state): https://entp.hud.gov/idapp/html/condlook.cfm.
Source: Charlotte Observer, Kenneth R. Harney (12/11/2010)
An estimated 2,200 condominium projects nationwide last week lost their eligibility for Federal Housing Administration-guaranteed sales and refinancing.
Unless condo officials take action, another 23,000 residential condos with housing units numbering in the tens of thousands will lose their eligibility by spring. That means that buyers of units in these buildings won’t be eligible for FHA financing.
This situation was the result of an effort by the FHA to guarantee that condos and their underlying home owners associations have adequate budgets, legal documents, and other things that lead to financial stability.
In 2009, the FHA spelled out tough standards that required that condo projects approved for FHA financial before 2007 have their approvals renewed by Dec. 7, 2010. About 25,000 projects missed the cutoff. Because there were so many, the FHA extended the deadline, setting new deadlines through out 2011. The only losers were the 2,200 projects that had the oldest approvals.
The FHA urges all condominium owners to get in touch with their associations and push them to meet the revised deadlines.
For more information, or to check the status of a condo project, visit (select by state): https://entp.hud.gov/idapp/html/condlook.cfm.
Source: Charlotte Observer, Kenneth R. Harney (12/11/2010)
Rising Rates Could Get Buyers Moving
Daily Real Estate News, December 13, 2010
Ironically, it could be rising interest rates that finally push home buyers off the fence and into the market.
While Congress is debating the tax-cut compromise, the financial markets have interpreted the proposal as a development that will likely push mortgage interest rates higher than they have been for months.
Analysts are predicting that buyers will move quickly when it looks like rates are going up and are unlikely to come down. "Once people see this might actually be the bottom, they’ll go for it," says Paul Dales of Capital Economics.
The average rate for a 30-year fixed loan increased to 4.61 percent in the week ended Thursday, Dec. 9, from 4.46 percent the previous week. The average 15-year rate rose to 3.96 percent from 3.81 percent.
Source: Fortune, Nin-Hai Tseng (12/10/2010)
Ironically, it could be rising interest rates that finally push home buyers off the fence and into the market.
While Congress is debating the tax-cut compromise, the financial markets have interpreted the proposal as a development that will likely push mortgage interest rates higher than they have been for months.
Analysts are predicting that buyers will move quickly when it looks like rates are going up and are unlikely to come down. "Once people see this might actually be the bottom, they’ll go for it," says Paul Dales of Capital Economics.
The average rate for a 30-year fixed loan increased to 4.61 percent in the week ended Thursday, Dec. 9, from 4.46 percent the previous week. The average 15-year rate rose to 3.96 percent from 3.81 percent.
Source: Fortune, Nin-Hai Tseng (12/10/2010)
Wednesday, December 8, 2010
Purchase Applications Rose for Third Week
Daily Real Estate News, December 8, 2010
Applications for mortgages to purchase homes rose 1.8 percent last week compared to the previous week on a seasonally adjusted basis. On an unadjusted basis, purchase applications rose 21.3 percent compared to the previous week, which included Thanksgiving. Applications were up 12 percent compared to the same week a year ago.
This is the third week that applications to purchase homes have increased, reaching the highest level since early May.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.66 percent from 4.56 percent, while 15-year fixed-rate mortgages increased to 3.98 percent from 3.91 percent.
Source: Mortgage Bankers Association (12/08/2010)
Applications for mortgages to purchase homes rose 1.8 percent last week compared to the previous week on a seasonally adjusted basis. On an unadjusted basis, purchase applications rose 21.3 percent compared to the previous week, which included Thanksgiving. Applications were up 12 percent compared to the same week a year ago.
This is the third week that applications to purchase homes have increased, reaching the highest level since early May.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.66 percent from 4.56 percent, while 15-year fixed-rate mortgages increased to 3.98 percent from 3.91 percent.
Source: Mortgage Bankers Association (12/08/2010)
Monday, December 6, 2010
U.S. Orders End to Dual-Track Process
Daily Real Estate News, December 6, 2010
Acting Comptroller of the Currency John Walsh last week told banks to stop foreclosure proceedings if the borrower is starting or in the midst of a loan-modification program.
This dual-track system has hastened foreclosure for many borrowers who were caught between instructions to pay lower payments during a loan-modification trial period and punishing fines for failure to pay the full amount if the loan mod failed.
One regulator disagreed with the change, saying that lenders needed to be able to press forward with foreclosures, especially when borrowers clearly weren’t going to meet loan-modification standards.
Source: Associated Press, Alan Zibel (12/01/2010)
Acting Comptroller of the Currency John Walsh last week told banks to stop foreclosure proceedings if the borrower is starting or in the midst of a loan-modification program.
This dual-track system has hastened foreclosure for many borrowers who were caught between instructions to pay lower payments during a loan-modification trial period and punishing fines for failure to pay the full amount if the loan mod failed.
One regulator disagreed with the change, saying that lenders needed to be able to press forward with foreclosures, especially when borrowers clearly weren’t going to meet loan-modification standards.
Source: Associated Press, Alan Zibel (12/01/2010)
Friday, December 3, 2010
Mortgage Rates Continue Upward Climb
Daily Real Estate News, December 3, 2010
Freddie Mac reported that fixed-rate mortgages rose for a third consecutive week during the period ended Dec. 2.
· Interest on 30-year loans inched up to 4.46 percent from 4.4 percent.
· Rates on 15-year mortgages averaged 3.81 percent, an increase from 3.77 percent a week ago.
Adjustable-rate mortgages were slightly higher as well:
· One-year ARM rose up to 3.25 percent from 3.23 percent
· Five-year ARM moved up to 3.49 percent compared to 3.45 percent.
Source: Inman News (12/03/10)
Freddie Mac reported that fixed-rate mortgages rose for a third consecutive week during the period ended Dec. 2.
· Interest on 30-year loans inched up to 4.46 percent from 4.4 percent.
· Rates on 15-year mortgages averaged 3.81 percent, an increase from 3.77 percent a week ago.
Adjustable-rate mortgages were slightly higher as well:
· One-year ARM rose up to 3.25 percent from 3.23 percent
· Five-year ARM moved up to 3.49 percent compared to 3.45 percent.
Source: Inman News (12/03/10)
Wednesday, November 24, 2010
Deep in Debt? Focus on Repayment, Not Credit Scores
Fox Business, Nov 24, 2010
Dear __,
I am a full-time student and full-time worker living on my own. I am only 24, but I have about $13,000 in credit card debt. I make the minimum payments -- and more, if possible -- but I don't really make enough money to pay a lot. I have recently gotten my credit score checked, and it is 870. So my questions are: Why do I keep getting denied a consolidated credit card? And with my credit score being what it is, does that give me a better chance of maybe getting a loan to pay off my debt? -- Anonymous
Dear Anonymous,
That 870 number you're quoting is rather mysterious. You see, the range of a FICO score -- by far the credit score lenders use most in lending decisions -- is between 300 and 850, with higher numbers indicating less risk to a lender. My guess is that you are not looking at FICO, but instead a different credit assessing model. There are plenty of others, such as VantageScore (which tops out at 900) and others that banks themselves develop.
I believe your actual FICO score is lower than you think. This is not to say you haven't been a good credit customer in some ways. It appears you've been making larger-than-required payments steadily. This is fabulous because you've satisfied the most heavily weighted section of the FICO score -- payment history. That slice makes up 35 percent of the credit scoring pie. The next most important factor, though, is outstanding debt. That's 30 percent of the equation. If you're maxed out, your score will decline. So unless you have very high limits, your balance is, well, out of balance.
While it's smart to keep excellent scores, I'd like you just to concentrate on repaying the debt right now. By reducing that obligation, your score -- no matter which mathematical model is used -- is bound to increase. Also, stop applying for consolidation loans or lines of credit. Such inquiries comprise only 10 percent of a FICO score, but an abundance of them will have a negative effect.
So that more of your payment goes to the principal rather than finance charges, you'll want to have the lowest interest rate possible. Appeal to your current credit card companies and request they lower your rates. Since you've demonstrated responsibility, they may give you a break with just a phone call.
Another option: Check out a credit counseling agency. These nonprofit organizations will help you develop a budget to free up the maximum amount of cash that you can apply to the debt. They'll also discuss their debt management plan (DMP). With these arrangements, you pay them once a month and they distribute the funds to your creditors. The advantage is their prenegotiated interest rate reductions. Some creditors even waive all finance charges while you're on the plan. DMPs are set up for a payoff time frame of three to five years, but you are encouraged to pay it off faster, if you can.
There is much confusion about how DMPs affect credit reports and credit scores. To clear it up, know that a notation of participation may show up on a report, but a DMP has no impact whatsoever on a score. It's simply not a factor. That said, someone who views your report and notices that you're using a service may formulate an opinion -- which can be negative or positive.
Does this mean credit counseling is your best bet? No! You can create your own DMP. Here's how:
* Figure out what you can pay each month and never send less than that amount.
* Prioritize accounts by APR. Send more to the one with the highest rate, then work your way down.
* Send extra cash whenever possible.
* Don't charge another penny during your plan.
Use a credit card debt payoff calculator to see how much you can pay and how long it will take to become debt free. Some sample numbers: If you paid $643 each month and your average APR is 17 percent, it would take two years.
Finally, consider how you got so over your head in the first place. It's all well and good to pay the debt down, but chances are it will creep up again if you don't solve underlying spending issues.
For more helpful tips and valuable information, try CreditCards.com.
Dear __,
I am a full-time student and full-time worker living on my own. I am only 24, but I have about $13,000 in credit card debt. I make the minimum payments -- and more, if possible -- but I don't really make enough money to pay a lot. I have recently gotten my credit score checked, and it is 870. So my questions are: Why do I keep getting denied a consolidated credit card? And with my credit score being what it is, does that give me a better chance of maybe getting a loan to pay off my debt? -- Anonymous
Dear Anonymous,
That 870 number you're quoting is rather mysterious. You see, the range of a FICO score -- by far the credit score lenders use most in lending decisions -- is between 300 and 850, with higher numbers indicating less risk to a lender. My guess is that you are not looking at FICO, but instead a different credit assessing model. There are plenty of others, such as VantageScore (which tops out at 900) and others that banks themselves develop.
I believe your actual FICO score is lower than you think. This is not to say you haven't been a good credit customer in some ways. It appears you've been making larger-than-required payments steadily. This is fabulous because you've satisfied the most heavily weighted section of the FICO score -- payment history. That slice makes up 35 percent of the credit scoring pie. The next most important factor, though, is outstanding debt. That's 30 percent of the equation. If you're maxed out, your score will decline. So unless you have very high limits, your balance is, well, out of balance.
While it's smart to keep excellent scores, I'd like you just to concentrate on repaying the debt right now. By reducing that obligation, your score -- no matter which mathematical model is used -- is bound to increase. Also, stop applying for consolidation loans or lines of credit. Such inquiries comprise only 10 percent of a FICO score, but an abundance of them will have a negative effect.
So that more of your payment goes to the principal rather than finance charges, you'll want to have the lowest interest rate possible. Appeal to your current credit card companies and request they lower your rates. Since you've demonstrated responsibility, they may give you a break with just a phone call.
Another option: Check out a credit counseling agency. These nonprofit organizations will help you develop a budget to free up the maximum amount of cash that you can apply to the debt. They'll also discuss their debt management plan (DMP). With these arrangements, you pay them once a month and they distribute the funds to your creditors. The advantage is their prenegotiated interest rate reductions. Some creditors even waive all finance charges while you're on the plan. DMPs are set up for a payoff time frame of three to five years, but you are encouraged to pay it off faster, if you can.
There is much confusion about how DMPs affect credit reports and credit scores. To clear it up, know that a notation of participation may show up on a report, but a DMP has no impact whatsoever on a score. It's simply not a factor. That said, someone who views your report and notices that you're using a service may formulate an opinion -- which can be negative or positive.
Does this mean credit counseling is your best bet? No! You can create your own DMP. Here's how:
* Figure out what you can pay each month and never send less than that amount.
* Prioritize accounts by APR. Send more to the one with the highest rate, then work your way down.
* Send extra cash whenever possible.
* Don't charge another penny during your plan.
Use a credit card debt payoff calculator to see how much you can pay and how long it will take to become debt free. Some sample numbers: If you paid $643 each month and your average APR is 17 percent, it would take two years.
Finally, consider how you got so over your head in the first place. It's all well and good to pay the debt down, but chances are it will creep up again if you don't solve underlying spending issues.
For more helpful tips and valuable information, try CreditCards.com.
Thursday, November 18, 2010
The Long Process of Foreclosure Gets Longer
Daily Real Estate News, November 18, 2010
The foreclosure process is getting longer and longer. According to statistics from LPS Applied Analytics:
· Delinquent loans in five judicial-process states spend more than 500 days in the foreclosure pipeline with the average time in process at 358 days, a week short of a full year.
· In the case of loans where the borrower is delinquent for 90 days or more, on average no payments have been made for 16 months.
· States that take the longest time to process delinquent loans are Florida and New York among the judicial process states, and Maryland, California, Virginia, Nevada, Massachusetts, Rhode Island, and Arizona, among the non-judicial states.
Source: Bankrate.com, Marcie Geffner (11/17/2010)
The foreclosure process is getting longer and longer. According to statistics from LPS Applied Analytics:
· Delinquent loans in five judicial-process states spend more than 500 days in the foreclosure pipeline with the average time in process at 358 days, a week short of a full year.
· In the case of loans where the borrower is delinquent for 90 days or more, on average no payments have been made for 16 months.
· States that take the longest time to process delinquent loans are Florida and New York among the judicial process states, and Maryland, California, Virginia, Nevada, Massachusetts, Rhode Island, and Arizona, among the non-judicial states.
Source: Bankrate.com, Marcie Geffner (11/17/2010)
Credit Score Requirements Stifling Borrowers
Daily Real Estate News, November 18, 2010
Despite record-low interest rates, an increasing number of Americans can’t afford to buy a house.
The nation’s two largest mortgage lenders, Wells Fargo & Co. and Bank of America Corp., have raised the minimum required credit score on FHA-insured loans to 640 from 620.
Requiring a 640 credit score excludes about 15 percent of FHA borrowers, FHA commissioner David Stevens said.
Such a high limit will further delay a recovery in the real estate market, says Ron Phipps, president of the National Association of REALTORS®.
Source: Bloomberg, Jody Shenn and John Gittelsohn (11/17/2010)
Despite record-low interest rates, an increasing number of Americans can’t afford to buy a house.
The nation’s two largest mortgage lenders, Wells Fargo & Co. and Bank of America Corp., have raised the minimum required credit score on FHA-insured loans to 640 from 620.
Requiring a 640 credit score excludes about 15 percent of FHA borrowers, FHA commissioner David Stevens said.
Such a high limit will further delay a recovery in the real estate market, says Ron Phipps, president of the National Association of REALTORS®.
Source: Bloomberg, Jody Shenn and John Gittelsohn (11/17/2010)
Friday, November 12, 2010
Mortgage Rates Continue Record Slide
Daily Real Estate News, November 12, 2010
Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier, and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971.
The impact of the favorable borrowing costs is being muted somewhat, however, by a high rate of joblessness, foreclosures, and tight credit.
Source: Boston Globe (11/12/10)
Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier, and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971.
The impact of the favorable borrowing costs is being muted somewhat, however, by a high rate of joblessness, foreclosures, and tight credit.
Source: Boston Globe (11/12/10)
Jumbo Loans Come Out of Hiding
Daily Real Estate News, November 12, 2010
Jumbo mortgages are more readily available than they have been for the last two years. Both small and regional banks are beginning to offer them again.
In the second quarter of this year, jumbo lending rose 30 percent compared to the first quarter, according to Inside Mortgage Finance Publication, which provides industry data.
J.P. Morgan Chase home lending unit has increased jumbo lending by 146 percent in the first six months of this year. Wells Fargo’s jumbo lending is up 47.5 percent in the same time period.
Securing these loans continues to be difficult. Borrowers need excellent credit scores, verification of income and a down payment of somewhere between 20 percent and 40 percent. Some borrowers report that approval time can be faster at smaller banks.
Source: The Wall Street Journal, M.P. McQueen (11/06/2010)
Jumbo mortgages are more readily available than they have been for the last two years. Both small and regional banks are beginning to offer them again.
In the second quarter of this year, jumbo lending rose 30 percent compared to the first quarter, according to Inside Mortgage Finance Publication, which provides industry data.
J.P. Morgan Chase home lending unit has increased jumbo lending by 146 percent in the first six months of this year. Wells Fargo’s jumbo lending is up 47.5 percent in the same time period.
Securing these loans continues to be difficult. Borrowers need excellent credit scores, verification of income and a down payment of somewhere between 20 percent and 40 percent. Some borrowers report that approval time can be faster at smaller banks.
Source: The Wall Street Journal, M.P. McQueen (11/06/2010)
Friday, October 29, 2010
Mortgage Rates Inch Up Again
Daily Real Estate News, October 29, 2010
The 30-year fixed mortgage rate rose slightly to 4.23 percent this week compared to 4.21 percent a week ago, Freddie Mac reports.
Interest on 15-year fixed loans also rose, moving to 3.66 percent from 3.64 percent, while the five-year adjustable-rate mortgage fell to 3.41 percent from 3.45 percent and the one-year ARM remained unchanged at 3.30 percent.
Freddie Mac chief economist Frank Nothaft attributed the flat rates to mixed economic data released this week.
Source: Risk Center, Eileen Fitzpatrick (10/29/10)
The 30-year fixed mortgage rate rose slightly to 4.23 percent this week compared to 4.21 percent a week ago, Freddie Mac reports.
Interest on 15-year fixed loans also rose, moving to 3.66 percent from 3.64 percent, while the five-year adjustable-rate mortgage fell to 3.41 percent from 3.45 percent and the one-year ARM remained unchanged at 3.30 percent.
Freddie Mac chief economist Frank Nothaft attributed the flat rates to mixed economic data released this week.
Source: Risk Center, Eileen Fitzpatrick (10/29/10)
Thursday, October 28, 2010
Existing Home Sales on the Rise
Existing home sales climbed for the second month in a row in September, fueling some hope that a housing recovery is underway.
The median price of an existing, single-family detached home sold in California during September was $309,900, down 2.7 percent from August’s $318,660 median price, but up 4.5 percent from the $296,610 median price recorded for the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) September sales and price report. September also marked 11 consecutive months of year-over-year price gains.
C.A.R.’s report also showed that, contrary to the national picture, the housing supply in California has been below normal throughout 2010.
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes remained relatively unchanged in September at 6.2 months but was up from the 4.5 months recorded in September 2009. The index was 6.1 months in August. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
The median price of an existing, single-family detached home sold in California during September was $309,900, down 2.7 percent from August’s $318,660 median price, but up 4.5 percent from the $296,610 median price recorded for the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) September sales and price report. September also marked 11 consecutive months of year-over-year price gains.
C.A.R.’s report also showed that, contrary to the national picture, the housing supply in California has been below normal throughout 2010.
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes remained relatively unchanged in September at 6.2 months but was up from the 4.5 months recorded in September 2009. The index was 6.1 months in August. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Orange County Detached Home Prices Move Above $500,000
The median price of an existing Orange County home moved back above the $500,000 mark in September, while the pace of sales here remained sluggish, the California Association of Realtors said Friday.
The median price for an existing stand-alone OC home sold in September was $510,530, a nearly $11,000 or 2.2% increase from August, and a 2.8% increase from the prices homes here were selling at a year earlier.
The area’s median sales price now is up about 21% from the recent bottom of the market, seen in January 2009, according to the association’s figures.
Prices here are still off more than 31% from the peak of the market, when the median sales price for an OC home topped $747,000 in April 2007.
The number of OC home sales in September was up 1.6% from a month earlier, the Realtor association said.
Sales were down 10.4% from a year earlier.
The median sales price of an existing home in California was $309,900 in September, a 2.7% decrease from August and a 4.5% increase from a year ago, according to the association.
Sales in California were up about 3.8% from August’s levels, but were off nearly 12% from a year earlier. The inventory of homes priced under $500,000 remains “lean,” according to the association.
The association excludes condominiums from its figures.
Including condos, the median price of an OC home sold in September was $445,000, a jump of more than $16,000 or 3.7% from a year earlier, according to a report earlier this week from San Diego-based MDA DataQuick, a unit of Canada’s MacDonald, Dettwiler and Associates.
The median price for an existing stand-alone OC home sold in September was $510,530, a nearly $11,000 or 2.2% increase from August, and a 2.8% increase from the prices homes here were selling at a year earlier.
The area’s median sales price now is up about 21% from the recent bottom of the market, seen in January 2009, according to the association’s figures.
Prices here are still off more than 31% from the peak of the market, when the median sales price for an OC home topped $747,000 in April 2007.
The number of OC home sales in September was up 1.6% from a month earlier, the Realtor association said.
Sales were down 10.4% from a year earlier.
The median sales price of an existing home in California was $309,900 in September, a 2.7% decrease from August and a 4.5% increase from a year ago, according to the association.
Sales in California were up about 3.8% from August’s levels, but were off nearly 12% from a year earlier. The inventory of homes priced under $500,000 remains “lean,” according to the association.
The association excludes condominiums from its figures.
Including condos, the median price of an OC home sold in September was $445,000, a jump of more than $16,000 or 3.7% from a year earlier, according to a report earlier this week from San Diego-based MDA DataQuick, a unit of Canada’s MacDonald, Dettwiler and Associates.
The Price of a “No-Cost” Loan
Some home buyers who may be concerned about paying high closing costs might be tempted by a “zero-cost” or “no-cost” loan option, which requires no cash outlay, but typically adds a half percentage point to the rate. However, some financial consultants say these loans tend to be most beneficial to buyers planning to have the loan for less than five years.
MAKING SENSE OF THE STORY FOR CONSUMERS
One of the primary differences between a no-cost loan and similar loans is that no-cost loans do not tack on closing costs to the balance, but instead increase the rate.
With no-cost loans, third-party fees including the appraisal, credit report, title insurance, recording, and the use of a mortgage broker are paid by the lender. The fees, including the amount the broker is being paid, are disclosed on the closing statement.
Home buyers who bypass a broker and work directly with a lender may encounter less transparency, as loan officers are not required to disclose the amount the bank is making on the loan.
Borrowers weighing their loan options are advised to use a mortgage amortization calculator to compare the costs for a conventional loan compared with a no-cost loan. The Federal Reserve provides an amortization calculator on its Web site at http://www.federalreserve.gov/.
MAKING SENSE OF THE STORY FOR CONSUMERS
One of the primary differences between a no-cost loan and similar loans is that no-cost loans do not tack on closing costs to the balance, but instead increase the rate.
With no-cost loans, third-party fees including the appraisal, credit report, title insurance, recording, and the use of a mortgage broker are paid by the lender. The fees, including the amount the broker is being paid, are disclosed on the closing statement.
Home buyers who bypass a broker and work directly with a lender may encounter less transparency, as loan officers are not required to disclose the amount the bank is making on the loan.
Borrowers weighing their loan options are advised to use a mortgage amortization calculator to compare the costs for a conventional loan compared with a no-cost loan. The Federal Reserve provides an amortization calculator on its Web site at http://www.federalreserve.gov/.
Mortgage Bankers Predict Rising Rates in 2011
Daily Real Estate News, October 28, 2010
Barring any big announcement from the Federal Reserve, rates on 30-year fixed–rate mortgages will climb to 5.1 percent by the end of 2011, the Mortgage Bankers Association predicts.
Jay Brinkmann, chief economist of the MBA, said he expects applications for mortgages to purchase homes to stay about the same as they were in 2009, higher than 2010, but refinances should drop.
Total mortgage volume is expected to be nearly $1 trillion in 2011, down from an anticipated $1.4 trillion this year and nearly $2 trillion in 2009.
Source: The Wall Street Journal, Amy Hoak (10/28/2010)
Barring any big announcement from the Federal Reserve, rates on 30-year fixed–rate mortgages will climb to 5.1 percent by the end of 2011, the Mortgage Bankers Association predicts.
Jay Brinkmann, chief economist of the MBA, said he expects applications for mortgages to purchase homes to stay about the same as they were in 2009, higher than 2010, but refinances should drop.
Total mortgage volume is expected to be nearly $1 trillion in 2011, down from an anticipated $1.4 trillion this year and nearly $2 trillion in 2009.
Source: The Wall Street Journal, Amy Hoak (10/28/2010)
New Credit Score Tailored for Lenders
Daily Real Estate News, October 28, 2010
The three major U.S. credit reporting agencies are offering a new FICO score for prescreening, originating, and servicing home loans that better predicts the likelihood of default.
The FICO 8 Mortgage Score from Fair Isaac Corp. uses the same 300-850 scoring range but more effectively flags accounts 90 days or more past due, which corrals more risky borrowers into the lower levels.
The new product also includes additional codes that help lenders understand and explain the ratings to applicants.
Source: Inman News (10/28/10)
The three major U.S. credit reporting agencies are offering a new FICO score for prescreening, originating, and servicing home loans that better predicts the likelihood of default.
The FICO 8 Mortgage Score from Fair Isaac Corp. uses the same 300-850 scoring range but more effectively flags accounts 90 days or more past due, which corrals more risky borrowers into the lower levels.
The new product also includes additional codes that help lenders understand and explain the ratings to applicants.
Source: Inman News (10/28/10)
Wednesday, October 20, 2010
Why Big Banks Won't Give HAMP Modifications
Lawyers for homeowners who have been denied mortgage modifications under the Obama administration's Home Affordable Modification Program make a straightforward argument when they sue banks. As a class-action suit in Massachusetts puts it, "when a large financial institution promises to modify an eligible loan to prevent foreclosure, homeowners who live up to their end of the bargain expect that promise to be kept. This is especially true when the financial institution is acting under the aegis of a federal program specifically targeted at preventing foreclosure."
Under HAMP, a program funded with $50 billion from the Wall Street bailout, eligible homeowners at risk of falling behind on their mortgages can ask their mortgage servicers for a modification that reduces monthly payments to 31 percent of their monthly income. If they make their monthly payments during a "Trial Period Plan" that's supposed to last for three or four months, then the modification is supposed to be made "permanent" for five years. Most trial periods drag on for longer than three months, however, and more homeowners have been bounced from the program than have been granted permanent mods.
The banks' broadest legal counterargument against unhappy HAMPers' lawsuits has been that homeowners can't sue to enforce the Servicer Participation Agreements between mortgage servicers and the Treasury Department, which administers HAMP. It's an argument to which judges have been receptive. But servicers are now also responding to legal arguments that they've acted in bad faith. When homeowners argue that they should be granted permanent modifications because they've successfully made their trial payments, banks say homeowners actually don't know what they're talking about.
In motions to dismiss suits seeking class-action status in Massachusetts and Arizona, for instance, JPMorgan Chase and Bank of America first point out that the Treasury Department has made a lot of changes to HAMP, which Bank of America calls "a constantly evolving new federal program" with near-monthly supplemental directives from the government.
The most important change to the program has been the Treasury Department's late-January requirement that as of June 2010, borrowers would be required to provide documentation before being put in a trial plan. Before June, servicers could put borrowers into trial plans with a mere phone conversation.
Even before Treasury required it, servicers typically asked borrowers to provide some solid documentation. For instance, Troy Taliancich of New Orleans was put in a HAMP trial after a phone call in January. He submitted tax forms and pay stubs -- the very material required by the supplemental directive. But even though he'd already sent that stuff, the bank told him he'd have to start over anyway because of the new guideline. "We changed the procedure and you are one of the homeowners that fell into the middle of when the process changed," he was told.
"Not all mortgage loans are eligible for HAMP, and a participating servicer is not required to modify every HAMP-eligible loan," Bank of America's lawyers argued in August in response to a lawsuit in Arizona. "If borrower eligibility is satisfied, the servicer is obligated to consider the borrower for a HAMP modifiation, assuming it is not precluded from doing so by its other contractual arrangements or investor requirements."
Chase's lawyers argue that borrowers should know that even if they qualify for a Chase Trial Period Plan under the most recent guidelines, there's still a trap door: "The cover letter accompanying the TPPs also makes it clear that the borrower may not ultimately qualify for a permanent modification: 'We have enclosed a customized Home Affordable Modification Trial Period Plan ('Trial Period Plan'). If you qualify under the federal government's Home Affordable Modification program and comply with the terms of the Trial Period Plan, we will modify your mortgage loan.'" (Emphasis in original.)
A federal judicial panel recently consolidated several class-action HAMP lawsuits against Bank of America (including the one from Arizona) and the class-action against Chase in Massachusetts will have a hearing in November.
Chris Peterson, a law professor at the University of Utah law, said the recent revelations about bogus documentation that led both Bank of America and Chase to briefly halt foreclosures could give homeowners an advantage in their HAMP lawsuits.
"If there are fraudulent affidavits being filed, it gives the whole situation the patina of bad faith that makes their arguments more plausible," he said. "It's hard not to feel sympathy for the homeowners' argument. Their efforts to get their mortgages modified reflective of a reasonable interest rate and principal amount feels like some sort of a bizarre Kafka parable."
Under HAMP, a program funded with $50 billion from the Wall Street bailout, eligible homeowners at risk of falling behind on their mortgages can ask their mortgage servicers for a modification that reduces monthly payments to 31 percent of their monthly income. If they make their monthly payments during a "Trial Period Plan" that's supposed to last for three or four months, then the modification is supposed to be made "permanent" for five years. Most trial periods drag on for longer than three months, however, and more homeowners have been bounced from the program than have been granted permanent mods.
The banks' broadest legal counterargument against unhappy HAMPers' lawsuits has been that homeowners can't sue to enforce the Servicer Participation Agreements between mortgage servicers and the Treasury Department, which administers HAMP. It's an argument to which judges have been receptive. But servicers are now also responding to legal arguments that they've acted in bad faith. When homeowners argue that they should be granted permanent modifications because they've successfully made their trial payments, banks say homeowners actually don't know what they're talking about.
In motions to dismiss suits seeking class-action status in Massachusetts and Arizona, for instance, JPMorgan Chase and Bank of America first point out that the Treasury Department has made a lot of changes to HAMP, which Bank of America calls "a constantly evolving new federal program" with near-monthly supplemental directives from the government.
The most important change to the program has been the Treasury Department's late-January requirement that as of June 2010, borrowers would be required to provide documentation before being put in a trial plan. Before June, servicers could put borrowers into trial plans with a mere phone conversation.
Even before Treasury required it, servicers typically asked borrowers to provide some solid documentation. For instance, Troy Taliancich of New Orleans was put in a HAMP trial after a phone call in January. He submitted tax forms and pay stubs -- the very material required by the supplemental directive. But even though he'd already sent that stuff, the bank told him he'd have to start over anyway because of the new guideline. "We changed the procedure and you are one of the homeowners that fell into the middle of when the process changed," he was told.
"Not all mortgage loans are eligible for HAMP, and a participating servicer is not required to modify every HAMP-eligible loan," Bank of America's lawyers argued in August in response to a lawsuit in Arizona. "If borrower eligibility is satisfied, the servicer is obligated to consider the borrower for a HAMP modifiation, assuming it is not precluded from doing so by its other contractual arrangements or investor requirements."
Chase's lawyers argue that borrowers should know that even if they qualify for a Chase Trial Period Plan under the most recent guidelines, there's still a trap door: "The cover letter accompanying the TPPs also makes it clear that the borrower may not ultimately qualify for a permanent modification: 'We have enclosed a customized Home Affordable Modification Trial Period Plan ('Trial Period Plan'). If you qualify under the federal government's Home Affordable Modification program and comply with the terms of the Trial Period Plan, we will modify your mortgage loan.'" (Emphasis in original.)
A federal judicial panel recently consolidated several class-action HAMP lawsuits against Bank of America (including the one from Arizona) and the class-action against Chase in Massachusetts will have a hearing in November.
Chris Peterson, a law professor at the University of Utah law, said the recent revelations about bogus documentation that led both Bank of America and Chase to briefly halt foreclosures could give homeowners an advantage in their HAMP lawsuits.
"If there are fraudulent affidavits being filed, it gives the whole situation the patina of bad faith that makes their arguments more plausible," he said. "It's hard not to feel sympathy for the homeowners' argument. Their efforts to get their mortgages modified reflective of a reasonable interest rate and principal amount feels like some sort of a bizarre Kafka parable."
Saturday, October 16, 2010
All Bets are Off.
If the current foreclosure problems block the government and industry from getting the many real estate sectors back in shape -- and even worse, if they provoke a new crisis of confidence -- all bets on the wider economic recovery are off.
Some members of Congress have called for a moratorium on foreclosures until the issue is settled, but that seems unlikely to happen because the government and the banks have based their hope of reviving the housing market and the related financial mess on saving the homes that can be saved while cleansing lost mortgages from the market. The government has already fallen far short of its goals to help modify troubled mortgage loans that might be salvageable.
The Obama administration this month vetoed a bill that would have helped banks accelerate the foreclosure process, but officials fear a moratorium would prevent valid foreclosures from going forward.
Some members of Congress have called for a moratorium on foreclosures until the issue is settled, but that seems unlikely to happen because the government and the banks have based their hope of reviving the housing market and the related financial mess on saving the homes that can be saved while cleansing lost mortgages from the market. The government has already fallen far short of its goals to help modify troubled mortgage loans that might be salvageable.
The Obama administration this month vetoed a bill that would have helped banks accelerate the foreclosure process, but officials fear a moratorium would prevent valid foreclosures from going forward.
Friday, October 15, 2010
30-Year Mortgage Rates Plumb New Depths
Daily Real Estate News, October 15, 2010
Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.
At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.
Source: The Wall Street Journal, Nathan Becker (10/15/10)
Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.
At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.
Source: The Wall Street Journal, Nathan Becker (10/15/10)
Thursday, October 14, 2010
California to join multistate inquiry of foreclosures by banks
From The L.A. Times
California to join multistate inquiry of foreclosures by banks
In late September and early October several major lending institutions began voluntarily halting foreclosures in select states while they reviewed their foreclosure processes. This action is in response to findings that questioned whether some lenders/servicers were following the correct procedures to foreclose on a property.
MAKING SENSE OF THE STORY FOR CONSUMERS
To date, Bank of America is the only lender that has extended its foreclosure moratorium to California, where the vast majority of foreclosures are conducted without a court order.
Non-judicial foreclosures in California, however, do have legal requirements that lenders must follow. For example, California law requires that lenders for certain mortgage loans made between Jan. 1, 2003, and Dec. 31, 2007, attempt to make contact with borrowers to discuss options for avoiding foreclosure at least 30 days before filing a notice of default. Lenders also must sign a declaration in the notice of default stating that they tried to contact the borrower, made contact with the borrower, or fall within an exception (such as a bankruptcy filing).
This halting of foreclosures is a voluntary action taken on the part of these lenders/servicers and has not been mandated by either the states or the federal government. The participating lenders and servicers believe their internal review processes should take anywhere from a few weeks to 30 days to complete.
It is important to note that Bank of America is temporarily suspending foreclosure sales, but not necessarily halting its actions during other stages of the foreclosure process.
California to join multistate inquiry of foreclosures by banks
In late September and early October several major lending institutions began voluntarily halting foreclosures in select states while they reviewed their foreclosure processes. This action is in response to findings that questioned whether some lenders/servicers were following the correct procedures to foreclose on a property.
MAKING SENSE OF THE STORY FOR CONSUMERS
To date, Bank of America is the only lender that has extended its foreclosure moratorium to California, where the vast majority of foreclosures are conducted without a court order.
Non-judicial foreclosures in California, however, do have legal requirements that lenders must follow. For example, California law requires that lenders for certain mortgage loans made between Jan. 1, 2003, and Dec. 31, 2007, attempt to make contact with borrowers to discuss options for avoiding foreclosure at least 30 days before filing a notice of default. Lenders also must sign a declaration in the notice of default stating that they tried to contact the borrower, made contact with the borrower, or fall within an exception (such as a bankruptcy filing).
This halting of foreclosures is a voluntary action taken on the part of these lenders/servicers and has not been mandated by either the states or the federal government. The participating lenders and servicers believe their internal review processes should take anywhere from a few weeks to 30 days to complete.
It is important to note that Bank of America is temporarily suspending foreclosure sales, but not necessarily halting its actions during other stages of the foreclosure process.
Thursday, September 23, 2010
Applications for Loans Fall
Daily Real Estate News, September 23, 2010
Applications to purchase homes declined 3.3 percent last week on a seasonally adjusted basis compared to the previous week, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the purchase index increased 18.9 percent compared to the previous week, which included Labor Day, but was 38 percent lower than the same week a year ago.
Mortgage rates declined slightly compared to the previous week:
· 30-year fixed-rate mortgages decreased to 4.44 percent from 4.47 percent;
· 15-year fixed-rate mortgages decreased to 3.88 percent from 3.96 percent;
· 1-year ARMs increased to 6.96 percent from 6.89 percent.
Source: Mortgage Bankers Association (09/22/2010)
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Applications to purchase homes declined 3.3 percent last week on a seasonally adjusted basis compared to the previous week, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the purchase index increased 18.9 percent compared to the previous week, which included Labor Day, but was 38 percent lower than the same week a year ago.
Mortgage rates declined slightly compared to the previous week:
· 30-year fixed-rate mortgages decreased to 4.44 percent from 4.47 percent;
· 15-year fixed-rate mortgages decreased to 3.88 percent from 3.96 percent;
· 1-year ARMs increased to 6.96 percent from 6.89 percent.
Source: Mortgage Bankers Association (09/22/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
Higher Conforming Loan Limits Due to Expire
Daily Real Estate News, September 23, 2010
Unless Congress intervenes, the maximum amount the Federal Housing Administration as well as loans backed by Fannie Mae and Freddie Mac can back will return to $417,000 in most areas and $625,500 in a high-cost areas.
Over the last two years, the government raised the limits in some high-cost areas to $729,750.
If Congress doesn’t extend higher limits, home prices would "drop precipitously" because it would be "impossible to finance homes in most parts of Los Angeles and certain other major cities," said Rep. Brad Sherman, a California Democrat and member of the House Financial Services Committee,
But many economists support the end to higher limits. "We need to think how we are going to exit from a Fannie-and-Freddie world, and this is a very small step toward that exit," said Richard K. Green, director of the University of Southern California's Lusk Center for Real Estate. "Dialing it back to $625,500 is a perfectly reasonable thing to do."
Source: The Wall Street Journal, Nick Timiraos (09/23/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
Unless Congress intervenes, the maximum amount the Federal Housing Administration as well as loans backed by Fannie Mae and Freddie Mac can back will return to $417,000 in most areas and $625,500 in a high-cost areas.
Over the last two years, the government raised the limits in some high-cost areas to $729,750.
If Congress doesn’t extend higher limits, home prices would "drop precipitously" because it would be "impossible to finance homes in most parts of Los Angeles and certain other major cities," said Rep. Brad Sherman, a California Democrat and member of the House Financial Services Committee,
But many economists support the end to higher limits. "We need to think how we are going to exit from a Fannie-and-Freddie world, and this is a very small step toward that exit," said Richard K. Green, director of the University of Southern California's Lusk Center for Real Estate. "Dialing it back to $625,500 is a perfectly reasonable thing to do."
Source: The Wall Street Journal, Nick Timiraos (09/23/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
GOP Hopes to End Support for Fannie and Freddie
Daily Real Estate News, September 23, 2010
The House Republicans said Wednesday that they hope to include on the party’s policy platform a plank that will end government support for mortgage guarantee agencies Fannie Mae and Freddie Mac.
The Republicans also would end the Troubled Asset Relief Program, the program created at the peak of the crisis to deal with the financial meltdown.
Unless the Republicans succeed in retaking the House, they're unlikely to achieve success in these goals, observers say.
Source: the Wall Street Journal, Corey Boles (09/22/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
The House Republicans said Wednesday that they hope to include on the party’s policy platform a plank that will end government support for mortgage guarantee agencies Fannie Mae and Freddie Mac.
The Republicans also would end the Troubled Asset Relief Program, the program created at the peak of the crisis to deal with the financial meltdown.
Unless the Republicans succeed in retaking the House, they're unlikely to achieve success in these goals, observers say.
Source: the Wall Street Journal, Corey Boles (09/22/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
Wednesday, September 22, 2010
Federal Reserve Leaves Rates Alone
Daily Real Estate News, September 22, 2010
The Federal Reserve issued a statement on Tuesday saying that it will hold off on further efforts to stimulate the economy and keep the federal funds rate at or near zero, but signaled that it was ready to step in with further action if necessary.
The Open Market Committee said in a release,“The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”
The Fed apparently debated resuming securities purchases aimed at driving long-term interest rates even lower. Those who were opposed said it is likely this approach won’t work.
Source: Bloomberg, Craig Torres (09/21/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
The Federal Reserve issued a statement on Tuesday saying that it will hold off on further efforts to stimulate the economy and keep the federal funds rate at or near zero, but signaled that it was ready to step in with further action if necessary.
The Open Market Committee said in a release,“The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”
The Fed apparently debated resuming securities purchases aimed at driving long-term interest rates even lower. Those who were opposed said it is likely this approach won’t work.
Source: Bloomberg, Craig Torres (09/21/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
GSEs Eye Standards Shift for Appraisals
Daily Real Estate News, September 22, 2010
Recently enacted Wall St. reforms require the Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, to come up with appraisal standards to replace the Home Valuation Code of Conduct by Oct. 21.
The law retains the basic intent of HVCC, which is for lenders to keep an arm's length distance between them and the appraiser, and it continues to allow appraisal decisions to be left in the hands of appraisal management companies, if lenders so choose.
But it attempts to prevent abuses by, among other things, blocking AMCs from negotiating fees with appraisers. Lenders and AMCs must pay appraisers at the market rate.
Source: American Banker, Brian Collins (09/22/10).
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, www.invest-in-california-property.com)
Recently enacted Wall St. reforms require the Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, to come up with appraisal standards to replace the Home Valuation Code of Conduct by Oct. 21.
The law retains the basic intent of HVCC, which is for lenders to keep an arm's length distance between them and the appraiser, and it continues to allow appraisal decisions to be left in the hands of appraisal management companies, if lenders so choose.
But it attempts to prevent abuses by, among other things, blocking AMCs from negotiating fees with appraisers. Lenders and AMCs must pay appraisers at the market rate.
Source: American Banker, Brian Collins (09/22/10).
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, www.invest-in-california-property.com)
Owners, Practitioners Think Prices Will Fall
Daily Real Estate News, September 22, 2010
About 48 percent of real estate professionals and 33 percent of homeowners believe home prices will decline over the next six months, according to a survey by HomeGain.
Only 10 percent of real estate professionals and 18 percent of homeowners believe home prices will increase in the next six months.
Sellers continue to doubt the accuracy of prices recommended by practitioners, with 79 percent believing that their homes are worth more than professional appraisals.
On the other side of the fence, 69 percent of practitioners say that their home-buying clients think homes for sale are overpriced.
Source: Real Estate Economy Watch, Steve Cook (09/21/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (http://www.homejames-usa.com/, http://www.homejames-california.com/, http://www.homejames-sandiego.com/, http://www.homejames-lajolla.com/, http://www.homejames-ranchosantafe.com/, http://www.homejames-orangecounty.com/, http://www.invest-in-california-property.com/)
About 48 percent of real estate professionals and 33 percent of homeowners believe home prices will decline over the next six months, according to a survey by HomeGain.
Only 10 percent of real estate professionals and 18 percent of homeowners believe home prices will increase in the next six months.
Sellers continue to doubt the accuracy of prices recommended by practitioners, with 79 percent believing that their homes are worth more than professional appraisals.
On the other side of the fence, 69 percent of practitioners say that their home-buying clients think homes for sale are overpriced.
Source: Real Estate Economy Watch, Steve Cook (09/21/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (http://www.homejames-usa.com/, http://www.homejames-california.com/, http://www.homejames-sandiego.com/, http://www.homejames-lajolla.com/, http://www.homejames-ranchosantafe.com/, http://www.homejames-orangecounty.com/, http://www.invest-in-california-property.com/)
Friday, September 10, 2010
30-Year Mortgage Rates Rise
Daily Real Estate News, September 10, 2010
Average interest on 30-year fixed mortgages rose for the first time since June, lifting to 4.35 percent this week from 4.32 percent last week and 5.07 percent a year ago, reports Freddie Mac. Rates for 15-year fixed loans held at 3.83 percent, the record low set last week.
Also, the five-year adjustable-rate mortgage averaged 3.56 percent, compared to 3.54 percent last week and 4.51 percent a year ago; and the one-year ARM fell to 3.46 percent from 3.5 percent last week and 4.64 percent a year ago.
Source: The Wall Street Journal, Amy Hoak (09/10/10)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (http://www.homejames-usa.com/, http://www.homejames-california.com/, http://www.homejames-sandiego.com/, http://www.homejames-lajolla.com/, http://www.homejames-ranchosantafe.com/, http://www.homejames-orangecounty.com/, http://www.invest-in-california-property.com/)
Average interest on 30-year fixed mortgages rose for the first time since June, lifting to 4.35 percent this week from 4.32 percent last week and 5.07 percent a year ago, reports Freddie Mac. Rates for 15-year fixed loans held at 3.83 percent, the record low set last week.
Also, the five-year adjustable-rate mortgage averaged 3.56 percent, compared to 3.54 percent last week and 4.51 percent a year ago; and the one-year ARM fell to 3.46 percent from 3.5 percent last week and 4.64 percent a year ago.
Source: The Wall Street Journal, Amy Hoak (09/10/10)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (http://www.homejames-usa.com/, http://www.homejames-california.com/, http://www.homejames-sandiego.com/, http://www.homejames-lajolla.com/, http://www.homejames-ranchosantafe.com/, http://www.homejames-orangecounty.com/, http://www.invest-in-california-property.com/)
Wednesday, September 8, 2010
California Movers Are Nation's Busiest
Daily Real Estate News, September 8, 2010
SiteSelection.com, a publication for corporate real estate and economic development, reports that more people are moving into and out of California than any other state.
In the Golden State, the number of outbound moves by the 700 or so moving companies in the movers.com network rose 10.3 percent, while incomers increased 9.4 percent.
In terms of population changes, SiteSelection states that New York lost 33 percent more people than it gained. Texas, meanwhile, gained 50 percent more people than moved out.
Source: Orange County Register, Jan Norman (09/05/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, www.invest-in-california-property.com)
SiteSelection.com, a publication for corporate real estate and economic development, reports that more people are moving into and out of California than any other state.
In the Golden State, the number of outbound moves by the 700 or so moving companies in the movers.com network rose 10.3 percent, while incomers increased 9.4 percent.
In terms of population changes, SiteSelection states that New York lost 33 percent more people than it gained. Texas, meanwhile, gained 50 percent more people than moved out.
Source: Orange County Register, Jan Norman (09/05/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, www.invest-in-california-property.com)
Inventories Climb in ZipRealty's 26 Markets
Daily Real Estate News, September 8, 2010
Housing inventories rose an average 0.4 percent in August, the eighth-straight month they have increased in the major 26 metropolitan areas served by ZipRealty Inc.
Compared to August of 2009, inventories are up an average of 10.6 percent, ZipRealty reports. Western markets’ inventories rose the most year-over-year with increases of 59 percent in San Diego, 43 percent in Orange County, Calif., and 25 percent in Los Angeles.
Inventories fell year-over-year in Miami by 8.6 percent, in Chicago by 2.2 percent, and in Orlando, Fla., by 2.2 percent.
Pat Lashinsky, CEO of ZipRealty, attributes the declines to sellers taking their homes off the market. “Sellers have realized, ‘I just can’t get the price I want. Instead, I’m going to stay here,’” Lashinsky says.
Source: The Wall Street Journal, Nick Timiraos (09/07/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
Housing inventories rose an average 0.4 percent in August, the eighth-straight month they have increased in the major 26 metropolitan areas served by ZipRealty Inc.
Compared to August of 2009, inventories are up an average of 10.6 percent, ZipRealty reports. Western markets’ inventories rose the most year-over-year with increases of 59 percent in San Diego, 43 percent in Orange County, Calif., and 25 percent in Los Angeles.
Inventories fell year-over-year in Miami by 8.6 percent, in Chicago by 2.2 percent, and in Orlando, Fla., by 2.2 percent.
Pat Lashinsky, CEO of ZipRealty, attributes the declines to sellers taking their homes off the market. “Sellers have realized, ‘I just can’t get the price I want. Instead, I’m going to stay here,’” Lashinsky says.
Source: The Wall Street Journal, Nick Timiraos (09/07/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
Home Purchase Applications Rise 6.3%
Daily Real Estate News, September 8, 2010
Applications to purchase homes increased 6.3 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, purchases rose 4 percent compared to the previous week, but were down 38.8 percent from the same week a year ago.The Refinance Index decreased 3.1 percent from the previous week.
“Purchase applications increased last week, reaching the highest level since the end of May. However, purchase activity remains well below levels seen prior to the expiration of the homebuyer tax credit, and is almost 40 percent below the level recorded one year ago,” said Michael Fratantoni, MBA’s vice president of research and economics.
Mortgage rates rose slightly last week:
* 30-year fixed-rate mortgages increased to 4.5 percent from 4.43 percent.
* 15-year fixed-rate mortgages increased to 4 percent from 3.88 percent.
*1-year ARMs increased to 7 percent from 6.95 percent.
Source: Mortgage Bankers Association (09/08/2010)
Home, James! ® Ocean View Beach Homes & Condos - San Diego & Orange County - Newport Beach, Corona del Mar, Newport Coast, Laguna Beach, Laguna Niguel, Monarch Beach-Dana Point, Coto de Caza, San Juan Capistrano, San Clemente, Oceanside, Bonsall, Fallbrook, Temecula, Pala, Pauma Valley, Valley Center, Carlsbad, Encinitas, Cardiff, Solana Beach, Rancho Santa Fe, Carmel Valley, Del Mar, La Jolla, Pacific Beach, Point Loma, Downtown San Diego and Coronado Island. If you are seeking a traditional sale, or information about short sales or REO-foreclosures, or for anything "real estate" along the entire California Riviera from Orange County to the Mexican Border just say, "Home, James!®". (www.homejames-usa.com, www.homejames-california.com, www.homejames-sandiego.com, www.homejames-lajolla.com, www.homejames-ranchosantafe.com, www.homejames-orangecounty.com, http://www.invest-in-california-property.com/)
Applications to purchase homes increased 6.3 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, purchases rose 4 percent compared to the previous week, but were down 38.8 percent from the same week a year ago.The Refinance Index decreased 3.1 percent from the previous week.
“Purchase applications increased last week, reaching the highest level since the end of May. However, purchase activity remains well below levels seen prior to the expiration of the homebuyer tax credit, and is almost 40 percent below the level recorded one year ago,” said Michael Fratantoni, MBA’s vice president of research and economics.
Mortgage rates rose slightly last week:
* 30-year fixed-rate mortgages increased to 4.5 percent from 4.43 percent.
* 15-year fixed-rate mortgages increased to 4 percent from 3.88 percent.
*1-year ARMs increased to 7 percent from 6.95 percent.
Source: Mortgage Bankers Association (09/08/2010)
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Friday, August 27, 2010
Mortgage Rates Continue to Fall
Daily Real Estate News, August 27, 2010
Average interest on long-term mortgages slid to a record low for the eighth time in nine weeks and could dip more. Freddie Mac reports that 30-year fixed loans averaged 4.36 percent this week, down from 4.42 percent a week ago; the 15-year fixed rate fell to a new low of 3.86 percent from 3.90 percent; and adjustable-rate mortgages were also below 4 percent.
The Mortgage Bankers Association's Michael Fratantoni said the group expects that rates "will begin to rise as the economic situation improves along with jobs."
Source: Pittsburgh Tribune-Review, Sam Spatter (08/27/10)
Average interest on long-term mortgages slid to a record low for the eighth time in nine weeks and could dip more. Freddie Mac reports that 30-year fixed loans averaged 4.36 percent this week, down from 4.42 percent a week ago; the 15-year fixed rate fell to a new low of 3.86 percent from 3.90 percent; and adjustable-rate mortgages were also below 4 percent.
The Mortgage Bankers Association's Michael Fratantoni said the group expects that rates "will begin to rise as the economic situation improves along with jobs."
Source: Pittsburgh Tribune-Review, Sam Spatter (08/27/10)
Tuesday, August 24, 2010
Buying Is a Good Investment, If You Choose Right
Daily Real Estate News, August 24, 2010
Pessimists are implying that the housing market will never get any better and housing will always be a lousy investment.
Are they right? Of course not, say experts at the Motley Fool finance Web site. In fact, the Fools predict that pretty soon housing will be a great investment because prices will have fallen to the point where homes are cheap.
Then as now, the Fools say the key to buying a home that is a good deal will be:
• Location
• Don’t overpay
• Buy what you can afford
If the price goes up, great, the Fools say. If not, buyers will be OK because they have picked a great place to live.
Source: The Motley Fool (08/23/2010)
Pessimists are implying that the housing market will never get any better and housing will always be a lousy investment.
Are they right? Of course not, say experts at the Motley Fool finance Web site. In fact, the Fools predict that pretty soon housing will be a great investment because prices will have fallen to the point where homes are cheap.
Then as now, the Fools say the key to buying a home that is a good deal will be:
• Location
• Don’t overpay
• Buy what you can afford
If the price goes up, great, the Fools say. If not, buyers will be OK because they have picked a great place to live.
Source: The Motley Fool (08/23/2010)
Sunday, August 22, 2010
How Slow Is Your Short Sale Lender?
HousingWire magazine reports:
The Quickest: GMAC with an average of 6 months to approve.
The next Fastest: CitiMorrgage with an average of 7.5 months to approve.
The next-next Fastest: Wells Fargo with an average of 8 months to approve.
LAST PLACE (SLOWEST) goes to Countywide (Bank of America) with an average of 13 months to approve.
The Quickest: GMAC with an average of 6 months to approve.
The next Fastest: CitiMorrgage with an average of 7.5 months to approve.
The next-next Fastest: Wells Fargo with an average of 8 months to approve.
LAST PLACE (SLOWEST) goes to Countywide (Bank of America) with an average of 13 months to approve.
Friday, August 20, 2010
20 Metros That Could See Price Declines
Daily Real Estate News, August 20, 2010
Some 198 of the 384 markets tracked by PMI Mortgage Insurance Co. in the first quarter of this year continue to face significant risk of further price declines, the company reported Thursday.
Among the 50 most populous metros, the risk of further declines was 70 percent. These areas typically also were faced with higher unemployment and foreclosure rates, as well as excess housing supply and more volatile home prices.
The 20 riskiest markets, along with the probability of further price declines in the next two years as identified by PMI were:
1. Miami-Miami Beach-Kendall, Fla. (99.9 percent)
2. Las Vegas-Paradise, Nev. (99.9)
3. Ft. Lauderdale-Pompano-Deerfield, Fla. (99.9)
4. Riverside-San Bernardino-Ontario, Calif. (99.9)
5. Tampa-St. Petersburg-Clearwater, Fla. (99.9)
6. Orlando-Kissimmee-Sanford, Fla. (99.9)
7. Jacksonville, Fla. (99.9)
8. Los Angeles-Long Beach-Glendale, Calif. (99.9)
9. Santa Ana-Anaheim-Irvine, Calif. (99.7)
10. Phoenix-Mesa-Glendale, Ariz. (99.4)
11. San Diego-Carlsbad-San Marcos, Calif. (98.8)
12. Detroit-Livonia-Dearborn, Mich. (98.7)
13. Sacramento-Arden-Rovesville, Calif. (98)
14. Newark-Union, N.J.-Penn. (94.7)
15. Edison-New Brunswick, N.J. (94.7)
16. Providence-New Bedford-Fall River, R.I.-Mass. (93.6)
17. Oakland-Fremont-Hayward, Calif. (91.9)
18. Nassau-Suffolk, N.Y. (91.5)
19. New York-White Plains-Wayne N.Y.-N.J. (90.4)
20. San Jose-Sunnyvale-Santa Clara, Calif. (90)
Source: Inman News (08/19/2010)
Some 198 of the 384 markets tracked by PMI Mortgage Insurance Co. in the first quarter of this year continue to face significant risk of further price declines, the company reported Thursday.
Among the 50 most populous metros, the risk of further declines was 70 percent. These areas typically also were faced with higher unemployment and foreclosure rates, as well as excess housing supply and more volatile home prices.
The 20 riskiest markets, along with the probability of further price declines in the next two years as identified by PMI were:
1. Miami-Miami Beach-Kendall, Fla. (99.9 percent)
2. Las Vegas-Paradise, Nev. (99.9)
3. Ft. Lauderdale-Pompano-Deerfield, Fla. (99.9)
4. Riverside-San Bernardino-Ontario, Calif. (99.9)
5. Tampa-St. Petersburg-Clearwater, Fla. (99.9)
6. Orlando-Kissimmee-Sanford, Fla. (99.9)
7. Jacksonville, Fla. (99.9)
8. Los Angeles-Long Beach-Glendale, Calif. (99.9)
9. Santa Ana-Anaheim-Irvine, Calif. (99.7)
10. Phoenix-Mesa-Glendale, Ariz. (99.4)
11. San Diego-Carlsbad-San Marcos, Calif. (98.8)
12. Detroit-Livonia-Dearborn, Mich. (98.7)
13. Sacramento-Arden-Rovesville, Calif. (98)
14. Newark-Union, N.J.-Penn. (94.7)
15. Edison-New Brunswick, N.J. (94.7)
16. Providence-New Bedford-Fall River, R.I.-Mass. (93.6)
17. Oakland-Fremont-Hayward, Calif. (91.9)
18. Nassau-Suffolk, N.Y. (91.5)
19. New York-White Plains-Wayne N.Y.-N.J. (90.4)
20. San Jose-Sunnyvale-Santa Clara, Calif. (90)
Source: Inman News (08/19/2010)
Mortgage Rates Drop to New Lows
Daily Real Estate News, August 20, 2010
Fixed mortgage rates have maintained recent lows or set new ones for more than two months now, sinking to 4.42 percent on 30-year loans for the week ended Aug. 19. The rate is down from 4.44 percent last week and is the lowest ever recorded since Freddie Mac launched its survey almost 40 years ago.
The fixed 15-year average also hit a new low, at 3.9 percent; while five- and one-year adjustable-rate mortgages remained flat at 3.56 percent and 3.53 percent, respectively.
Source: The Wall Street Journal, Amy Hoak (08/20/10)
Fixed mortgage rates have maintained recent lows or set new ones for more than two months now, sinking to 4.42 percent on 30-year loans for the week ended Aug. 19. The rate is down from 4.44 percent last week and is the lowest ever recorded since Freddie Mac launched its survey almost 40 years ago.
The fixed 15-year average also hit a new low, at 3.9 percent; while five- and one-year adjustable-rate mortgages remained flat at 3.56 percent and 3.53 percent, respectively.
Source: The Wall Street Journal, Amy Hoak (08/20/10)
5 Most Affordable Housing Markets
Daily Real Estate News, August 20, 2010
The most affordable city in the United States is Syracuse, N.Y., according to the latest Housing Affordability Index from the National Association of Home Builders and Wells Fargo.
The index considers a home affordable if a family would have to pay no more than 28 percent of take-home pay for housing expenses.
Here are the five areas where housing exceeds this benchmark and the median property prices:
• Syracuse, N.Y., $88,000
• Indianapolis, $113,000
• Detroit, $85,000
• Youngstown, Ohio, $74,000
• Buffalo, N.Y., $112,000
Source: CNNMoney.com, Les Christie (08/20/2010)
The most affordable city in the United States is Syracuse, N.Y., according to the latest Housing Affordability Index from the National Association of Home Builders and Wells Fargo.
The index considers a home affordable if a family would have to pay no more than 28 percent of take-home pay for housing expenses.
Here are the five areas where housing exceeds this benchmark and the median property prices:
• Syracuse, N.Y., $88,000
• Indianapolis, $113,000
• Detroit, $85,000
• Youngstown, Ohio, $74,000
• Buffalo, N.Y., $112,000
Source: CNNMoney.com, Les Christie (08/20/2010)
Thursday, August 19, 2010
Three Reasons to Buy a Home Now
Daily Real Estate News, August 19, 2010
Stocks are up 50 percent from the March 2009 bottom. Some commodities have risen dramatically. The only asset class left in the cellar is real estate, says Michael Murphy, editor of the New World Investor stock newsletter.
As a result, Murphy is advising investors to buy now for these three reasons:
• Desperate sellers: Both home owners and lenders are eager to unload a flood of foreclosed and underwater properties. Buyers with the patience to push through these complex deals can save a bundle.
• Little competition. Because most people don’t have what it takes to negotiate their way through short sales and REOs, patient investors are winners.
• Low rates. Mortgage rates are at their lowest level in 40 years. If you believe inflation is inevitable, lock in now.
Source: MarketWatch, Michael Murphy (08/19/2010)
Stocks are up 50 percent from the March 2009 bottom. Some commodities have risen dramatically. The only asset class left in the cellar is real estate, says Michael Murphy, editor of the New World Investor stock newsletter.
As a result, Murphy is advising investors to buy now for these three reasons:
• Desperate sellers: Both home owners and lenders are eager to unload a flood of foreclosed and underwater properties. Buyers with the patience to push through these complex deals can save a bundle.
• Little competition. Because most people don’t have what it takes to negotiate their way through short sales and REOs, patient investors are winners.
• Low rates. Mortgage rates are at their lowest level in 40 years. If you believe inflation is inevitable, lock in now.
Source: MarketWatch, Michael Murphy (08/19/2010)
Wednesday, August 4, 2010
10 Steps to Win Over Sellers
Daily Real Estate News, August 4, 2010
Helping eager buyers get the home of their dreams isn’t so easy in this unsettled market. Here are 10 tips for making sure sellers won’t turn up their nose at an offer:
1. Make sure the buyers are pre-approved for a mortgage (not to be confused with being pre-qualified) so they can close in about 10 days.
2. Study the buyer. Have they made an offer on another home or are they working against any other kind of deadline?
3. Make a clean offer – no requests for help with closing costs or other contingencies.
4. Include an automatic escalation clause – say $500 over the highest competing bid. (Insist that seller show the offers in writing.)
5. Sweeten the offer with a bonus if the deal gets done quickly.
6. Offer 10 percent of the purchase price in earnest money.
7. Waive the appraisal. The buyer will have to be willing to pay any difference between the selling price and what the bank is willing to lend.
8. Consider waiving the inspection.
9. Offer the full list price, preferably in cash.
10. Write a love letter to sellers, telling them all the things your client loves about their home.
Source: MSN Real Estate, Marilyn Lewis (08/03/2010)
Helping eager buyers get the home of their dreams isn’t so easy in this unsettled market. Here are 10 tips for making sure sellers won’t turn up their nose at an offer:
1. Make sure the buyers are pre-approved for a mortgage (not to be confused with being pre-qualified) so they can close in about 10 days.
2. Study the buyer. Have they made an offer on another home or are they working against any other kind of deadline?
3. Make a clean offer – no requests for help with closing costs or other contingencies.
4. Include an automatic escalation clause – say $500 over the highest competing bid. (Insist that seller show the offers in writing.)
5. Sweeten the offer with a bonus if the deal gets done quickly.
6. Offer 10 percent of the purchase price in earnest money.
7. Waive the appraisal. The buyer will have to be willing to pay any difference between the selling price and what the bank is willing to lend.
8. Consider waiving the inspection.
9. Offer the full list price, preferably in cash.
10. Write a love letter to sellers, telling them all the things your client loves about their home.
Source: MSN Real Estate, Marilyn Lewis (08/03/2010)
Home Purchase Applications Rise
Daily Real Estate News, August 4, 2010
Applications to purchase homes rose 1.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.
The unadjusted purchase index also rose 1.5 percent, and it was up 7.1 percent compared to four weeks ago. Compared to the same week a year ago, it was down 33.7 percent. For the third straight week, government-backed loans, especially Federal Housing Administration loans, drove the increase, with government loan volume rising 3.4 percent compared to last week.
Mortgage rates were remarkably low:
* 30-year fixed-rate mortgages decreased to 4.60 percent from 4.69 percent.
* 15-year fixed-rate mortgages decreased to 4.03 percent from 4.12 percent.
* 1-year ARMs decreased to 7.10 percent from 7.15 percent.
Source: Mortgage Bankers Association (08/04/2010)
Applications to purchase homes rose 1.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.
The unadjusted purchase index also rose 1.5 percent, and it was up 7.1 percent compared to four weeks ago. Compared to the same week a year ago, it was down 33.7 percent. For the third straight week, government-backed loans, especially Federal Housing Administration loans, drove the increase, with government loan volume rising 3.4 percent compared to last week.
Mortgage rates were remarkably low:
* 30-year fixed-rate mortgages decreased to 4.60 percent from 4.69 percent.
* 15-year fixed-rate mortgages decreased to 4.03 percent from 4.12 percent.
* 1-year ARMs decreased to 7.10 percent from 7.15 percent.
Source: Mortgage Bankers Association (08/04/2010)
REIT Funds Are Flying High
Daily Real Estate News, August 4, 2010
Analysts report that the surprising outperformance of exchange-traded funds that track real estate stocks since the first of the year suggests improvement in the economy and the battered commercial-property sector.
In their second-quarter earnings outlook, analysts at Keefe, Bruyette & Woods write that REITs have outperformed the broader market "in anticipation of upcoming growth opportunities, internally, through improving fundamentals, and externally via acquisitions." The hottest REIT stocks so far in 2010 have been apartment sector ones, specifically Apartment Investment and Management Co. and Equity Residential Properties Trust.
Both companies posted quarterly earnings a week ago and the stocks have gained more than 30 percent since Jan. 1. A solid quarterly report from Equity Residential coupled with improving market conditions "should have a positive impact on the overall apartment sector," reports Stifel Nicolaus analyst Rod Petrik. "The company appears well positioned to take advantage of positive market trends in the apartment industry."
Source: MarketWatch, John Spence (08/01/10)
Analysts report that the surprising outperformance of exchange-traded funds that track real estate stocks since the first of the year suggests improvement in the economy and the battered commercial-property sector.
In their second-quarter earnings outlook, analysts at Keefe, Bruyette & Woods write that REITs have outperformed the broader market "in anticipation of upcoming growth opportunities, internally, through improving fundamentals, and externally via acquisitions." The hottest REIT stocks so far in 2010 have been apartment sector ones, specifically Apartment Investment and Management Co. and Equity Residential Properties Trust.
Both companies posted quarterly earnings a week ago and the stocks have gained more than 30 percent since Jan. 1. A solid quarterly report from Equity Residential coupled with improving market conditions "should have a positive impact on the overall apartment sector," reports Stifel Nicolaus analyst Rod Petrik. "The company appears well positioned to take advantage of positive market trends in the apartment industry."
Source: MarketWatch, John Spence (08/01/10)
Tuesday, August 3, 2010
Five Surprising Reasons to Buy a Home Now
Daily Real Estate News, August 3, 2010
Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they can absorb a few ups and downs as the still-recovering housing market gains traction.
Houses are in move-in condition. Home owners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. As these houses enter the market, they are in marked contrast to tattered foreclosures.
Terrific houses are coming on the market. Foreclosures are finally starting to clear the system, and they are being replaced by some very attractive properties.
Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market.
Plenty of programs. Many programs that encourage middle-class families to buy homes continue to exist, despite market downturns. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.
Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they can absorb a few ups and downs as the still-recovering housing market gains traction.
Houses are in move-in condition. Home owners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. As these houses enter the market, they are in marked contrast to tattered foreclosures.
Terrific houses are coming on the market. Foreclosures are finally starting to clear the system, and they are being replaced by some very attractive properties.
Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market.
Plenty of programs. Many programs that encourage middle-class families to buy homes continue to exist, despite market downturns. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.
Monday, August 2, 2010
Luxury Rental Owners Turn to Section 8
Daily Real Estate News, August 2, 2010
Some landlords who own high-end properties in cities where prices fell dramatically are renting them to Section 8, low-income tenants.
On the Web site GoSection8.com, the largest rental listing service for Section 8 housing program tenants, landlords woo tenants with descriptions of swimming pools, great rooms and luxury master baths. "More and more, I'm seeing tenants turn down places," says Arman Davtyan, who owns seven Section 8 properties.
The reason owners of high-end properties are seeking Section 8 tenants is financial. The government guarantees at least partial payment — enough for a landlord to make a tidy profit.
For instance, Davtyan purchased a four-bedroom home in North Las Vegas last year for $60,000 cash. He charges the government $1,436 in rent, giving him an annual profit of $15,000 per year after insurance and property taxes, he calculates.
"It's the most lucrative way to go right now," he says. "Nowhere else does your money make that kind of return."
Source: The Wall Street Journal (08/02/2010)
Some landlords who own high-end properties in cities where prices fell dramatically are renting them to Section 8, low-income tenants.
On the Web site GoSection8.com, the largest rental listing service for Section 8 housing program tenants, landlords woo tenants with descriptions of swimming pools, great rooms and luxury master baths. "More and more, I'm seeing tenants turn down places," says Arman Davtyan, who owns seven Section 8 properties.
The reason owners of high-end properties are seeking Section 8 tenants is financial. The government guarantees at least partial payment — enough for a landlord to make a tidy profit.
For instance, Davtyan purchased a four-bedroom home in North Las Vegas last year for $60,000 cash. He charges the government $1,436 in rent, giving him an annual profit of $15,000 per year after insurance and property taxes, he calculates.
"It's the most lucrative way to go right now," he says. "Nowhere else does your money make that kind of return."
Source: The Wall Street Journal (08/02/2010)
Home Price Drop May Trigger Second Recession
Daily Real Estate News, August 2, 2010
Economic recovery could be choked by a drop in home prices, according to former Federal Reserve head Alan Greenspan.
On the Aug.1 edition of NBC's "Meet the Press," the economist warned that falling residential values could send the country into a double-dip recession. His successor at the Fed, Ben Bernanke, told Congress last week that the economy remains "unusually uncertain" and that the central bank was prepared to act if the economy loses momentum.
Source: National Mortgage Professional, Andrew T. Berman (08/02/10)
Economic recovery could be choked by a drop in home prices, according to former Federal Reserve head Alan Greenspan.
On the Aug.1 edition of NBC's "Meet the Press," the economist warned that falling residential values could send the country into a double-dip recession. His successor at the Fed, Ben Bernanke, told Congress last week that the economy remains "unusually uncertain" and that the central bank was prepared to act if the economy loses momentum.
Source: National Mortgage Professional, Andrew T. Berman (08/02/10)
Ex-Treasury Head: Dismantle Fannie and Freddie
Daily Real Estate News, August 2, 2010
In an op-ed in Friday’s Washington Post, former Treasury Secretary Hank Paulson called for a reduction in government support for homeownership.
His proposals included dismantling and replacing Fannie Mae and Freddie Mac and shrinking the Federal Housing Administration to limit it to serving low-income buyers of low-priced homes.
“The price the government charges this new private-sector entity for its credit guarantee must be high enough to leave room for a robust private-sector mortgage market that serves taxpayers and home owners equally,” Paulson wrote.
Source: Washington Post, Hank Paulson (07/30/2010)
In an op-ed in Friday’s Washington Post, former Treasury Secretary Hank Paulson called for a reduction in government support for homeownership.
His proposals included dismantling and replacing Fannie Mae and Freddie Mac and shrinking the Federal Housing Administration to limit it to serving low-income buyers of low-priced homes.
“The price the government charges this new private-sector entity for its credit guarantee must be high enough to leave room for a robust private-sector mortgage market that serves taxpayers and home owners equally,” Paulson wrote.
Source: Washington Post, Hank Paulson (07/30/2010)
'Strategic Defaults' Can Damage Credit for Years
Daily Real Estate News, August 2, 2010
Home owners who choose to default on their mortgage even though they can afford the monthly payments can expect to take a significant hit to their creditworthiness, some credit rating firms say.
A record of the default — initially as much as 200 points — stays on a credit report for seven years. This will have an impact on the defaulter’s ability to get credit of all kinds and potentially his or her ability to buy insurance and even get a job.
The debt that foreclosure erases may be considered income, and Uncle Sam may want to collect taxes.
"It's by no means a move to be undertaken lightly," says Maxine Sweet, vice president of public education for Experian.
Source: ARA Content (07/30/2010)
Home owners who choose to default on their mortgage even though they can afford the monthly payments can expect to take a significant hit to their creditworthiness, some credit rating firms say.
A record of the default — initially as much as 200 points — stays on a credit report for seven years. This will have an impact on the defaulter’s ability to get credit of all kinds and potentially his or her ability to buy insurance and even get a job.
The debt that foreclosure erases may be considered income, and Uncle Sam may want to collect taxes.
"It's by no means a move to be undertaken lightly," says Maxine Sweet, vice president of public education for Experian.
Source: ARA Content (07/30/2010)
Wednesday, July 28, 2010
Homeownership Falls to Lowest Level Since 1999
Daily Real Estate News, July 28, 2010
The homeownership rate fell to 66.9 percent in the second quarter, down from 67.1 percent in the first quarter, according to the U.S. Census Bureau. This was the lowest level since 1999.
The homeownership rate reached a record high of 69.2 percent in the second and fourth quarters of 2004.
Rising foreclosures are driving the decline. A record 4.6 percent of U.S. mortgages were in foreclosure in the first three months of 2010, the Mortgage Bankers Association reported in May.
Source: Bloomberg, Kathleen M. Howley (07/27/2010)
The homeownership rate fell to 66.9 percent in the second quarter, down from 67.1 percent in the first quarter, according to the U.S. Census Bureau. This was the lowest level since 1999.
The homeownership rate reached a record high of 69.2 percent in the second and fourth quarters of 2004.
Rising foreclosures are driving the decline. A record 4.6 percent of U.S. mortgages were in foreclosure in the first three months of 2010, the Mortgage Bankers Association reported in May.
Source: Bloomberg, Kathleen M. Howley (07/27/2010)
More Buyers Pleased With Real Estate Firms
Daily Real Estate News, July 28, 2010
Satisfaction with national real estate companies among home buyers has improved while satisfaction among home sellers has declined in the last year, according to the J.D. Power and Associates 2010 Home Buyer/Seller Study, released Thursday.
J.D. Powers collected 3,000 evaluations from 2,817 respondents who bought or sold a home between March 2009 and April 2010. Overall satisfaction with the buying experience is determined by rating satisfaction with the practitioner, the office they represent, and a variety of additional services. Four factors are examined for the home-selling experience: the quality of the practitioner’s performance, marketing, the office they represent, and other services.
"Among both home buyers and home sellers, the importance of [practitioners] and salespersons has increased substantially in 2010, compared with 2009," said Jim Howland, senior director of the real estate and construction practice at J.D. Power, in a statement.
"Buyers are increasingly relying upon negotiating skills of [practitioners] and seem to be satisfied with the purchase prices they are obtaining. Despite the fact that sales practitioners appear to be doing a good job of negotiating and marketing on behalf of home sellers, the tough economic conditions are negatively impacting their overall satisfaction with real estate companies," Howland added.
On a 1,000-point scale here are the scores in the home buyer segment:
1. Keller Williams, 817
2. Prudential, 811
3. Coldwell Banker, 805
4. Home-Buyer Segment Average, 803
5. RE/MAX, 801
6. Century 21, 798
7. ERA, 785
8. GMAC/Real Living, 765
Satisfaction ratings on a 1,000-point scale from home sellers:
1. Prudential, 760
2. Keller Williams, 751
3. RE/MAX, 744
4. Coldwell Banker, 743
5. Home-Seller Segment Average, 742
6. Century 21, 727
Source: J.D. Power and Associates (07/28/2010)
Satisfaction with national real estate companies among home buyers has improved while satisfaction among home sellers has declined in the last year, according to the J.D. Power and Associates 2010 Home Buyer/Seller Study, released Thursday.
J.D. Powers collected 3,000 evaluations from 2,817 respondents who bought or sold a home between March 2009 and April 2010. Overall satisfaction with the buying experience is determined by rating satisfaction with the practitioner, the office they represent, and a variety of additional services. Four factors are examined for the home-selling experience: the quality of the practitioner’s performance, marketing, the office they represent, and other services.
"Among both home buyers and home sellers, the importance of [practitioners] and salespersons has increased substantially in 2010, compared with 2009," said Jim Howland, senior director of the real estate and construction practice at J.D. Power, in a statement.
"Buyers are increasingly relying upon negotiating skills of [practitioners] and seem to be satisfied with the purchase prices they are obtaining. Despite the fact that sales practitioners appear to be doing a good job of negotiating and marketing on behalf of home sellers, the tough economic conditions are negatively impacting their overall satisfaction with real estate companies," Howland added.
On a 1,000-point scale here are the scores in the home buyer segment:
1. Keller Williams, 817
2. Prudential, 811
3. Coldwell Banker, 805
4. Home-Buyer Segment Average, 803
5. RE/MAX, 801
6. Century 21, 798
7. ERA, 785
8. GMAC/Real Living, 765
Satisfaction ratings on a 1,000-point scale from home sellers:
1. Prudential, 760
2. Keller Williams, 751
3. RE/MAX, 744
4. Coldwell Banker, 743
5. Home-Seller Segment Average, 742
6. Century 21, 727
Source: J.D. Power and Associates (07/28/2010)
Tuesday, July 6, 2010
Six Months to Go Until the Largest Tax Hike in History
Six Months to Go Until the Largest Tax Hikes in History
In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.
In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.
Friday, July 2, 2010
Many HAMP Modifications May Fail
Daily Real Estate News, July 2, 2010
Fitch Ratings Ltd. forecasts that borrowers whose loans are modified under the federal Home Affordable Modification Program, or HAMP, are 65 percent to 75 percent likely to re-default within a year.
Fitch says the failure rate is high because borrowers have too much other debt, including car loans, credit cards, and other obligations.
Officials defend the program, saying that if HAMP saves the homes of one-third of the borrowers, it is a success.
Source: The Wall Street Journal, James R. Hagerty (06/16/2010)
Fitch Ratings Ltd. forecasts that borrowers whose loans are modified under the federal Home Affordable Modification Program, or HAMP, are 65 percent to 75 percent likely to re-default within a year.
Fitch says the failure rate is high because borrowers have too much other debt, including car loans, credit cards, and other obligations.
Officials defend the program, saying that if HAMP saves the homes of one-third of the borrowers, it is a success.
Source: The Wall Street Journal, James R. Hagerty (06/16/2010)
Mortgage Bonds Boom Drives Rates Down
Daily Real Estate News, July 2, 2010
Residential mortgage bonds backed by the U.S. government have become a safe haven for investors again, helping to drive mortgage rates to record lows.
The average interest on 30-year fixed loans fell this week to 4.58 percent, down from 4.69 percent a week ago, reports Freddie Mac.
Relatively few home owners are refinancing at the bargain rates, however, in large part because many eligible borrowers did so when rates were almost as low last year.
Source: The Wall Street Journal, Mark Gongloff (07/02/10)
Residential mortgage bonds backed by the U.S. government have become a safe haven for investors again, helping to drive mortgage rates to record lows.
The average interest on 30-year fixed loans fell this week to 4.58 percent, down from 4.69 percent a week ago, reports Freddie Mac.
Relatively few home owners are refinancing at the bargain rates, however, in large part because many eligible borrowers did so when rates were almost as low last year.
Source: The Wall Street Journal, Mark Gongloff (07/02/10)
States Attract Retirees With Favorable Taxes
Daily Real Estate News, July 2, 2010
States are wooing retirees with tax breaks. On average, retirees pay only half the state income tax levied on working-age people, according to researchers at the University of New Hampshire and Georgia State.
Seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming — don't tax personal income at all. New Hampshire and Tennessee tax interest and dividends but not other income. Still, these states may not offer the best total deal for seniors because other states have crafted special programs that reduce taxes and fees across the board.
Considering everything, here are the states that tax experts say offer the best deals for residents older than 65:
1. Georgia
2. Pennsylvania
3. Mississippi
4. Illinois
5. Michigan
6. Kentucky
7. New York
8. South Carolina
9. Delaware
10. Louisiana
Source: Forbes, Ashlea Ebeling (06/28/2010)
States are wooing retirees with tax breaks. On average, retirees pay only half the state income tax levied on working-age people, according to researchers at the University of New Hampshire and Georgia State.
Seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming — don't tax personal income at all. New Hampshire and Tennessee tax interest and dividends but not other income. Still, these states may not offer the best total deal for seniors because other states have crafted special programs that reduce taxes and fees across the board.
Considering everything, here are the states that tax experts say offer the best deals for residents older than 65:
1. Georgia
2. Pennsylvania
3. Mississippi
4. Illinois
5. Michigan
6. Kentucky
7. New York
8. South Carolina
9. Delaware
10. Louisiana
Source: Forbes, Ashlea Ebeling (06/28/2010)
Thursday, June 24, 2010
Housing Expert: 'The Suburban Century Is Over'
From Daily Real Estate News, June 24, 2010
At a recent meeting of the Urban Land Institute of Minnesota, Senior Fellow John McIlwain said "a new normal" will be created in the housing market over the next 10 years, and he marked the end of "the suburban century."
He noted that markets offering "a vibrant 24/7 lifestyle" will see the most robust activity, "net-zero-energy" units will become the norm, and the rental market will expand as homeownership rates fall to more historic levels.
Suburban town centers will gain popularity among those wanting an urban lifestyle without living in a big city.
Over the next decade, McIlwain said four demographic groups will fuel the housing market. He said older baby boomers increasingly are moving back to the central city, while younger baby boomers are finding it more difficult to relocate for jobs because they cannot sell their suburban houses. Meanwhile, millennials are more environmentally aware and will seek urban lifestyles, and immigrants who cannot afford large suburban houses to shelter multiple generations will increase demand for rentals.
With 1.5 million housing units per year needed to accommodate the shift to normal levels of household formation, McIlwain said zoning, financing, and regulations need to be rethought to meet housing demand.
Source: minnpost.com, Brad Allen (06/21/2010)
At a recent meeting of the Urban Land Institute of Minnesota, Senior Fellow John McIlwain said "a new normal" will be created in the housing market over the next 10 years, and he marked the end of "the suburban century."
He noted that markets offering "a vibrant 24/7 lifestyle" will see the most robust activity, "net-zero-energy" units will become the norm, and the rental market will expand as homeownership rates fall to more historic levels.
Suburban town centers will gain popularity among those wanting an urban lifestyle without living in a big city.
Over the next decade, McIlwain said four demographic groups will fuel the housing market. He said older baby boomers increasingly are moving back to the central city, while younger baby boomers are finding it more difficult to relocate for jobs because they cannot sell their suburban houses. Meanwhile, millennials are more environmentally aware and will seek urban lifestyles, and immigrants who cannot afford large suburban houses to shelter multiple generations will increase demand for rentals.
With 1.5 million housing units per year needed to accommodate the shift to normal levels of household formation, McIlwain said zoning, financing, and regulations need to be rethought to meet housing demand.
Source: minnpost.com, Brad Allen (06/21/2010)
Friday, June 18, 2010
Area's Median Home Prices Rise 22.5%
The median home price in Southern California last month rose 22.5 percent from a year earlier and topped $300,000 for the first time in 20 months, as sales continued shifting from low-priced inland areas to higher-end coastal regions, a tracking firm reported Tuesday.
San Diego-based MDA DataQuick reported that last month's median of $305,000 in the six-county region was up from $249,000 in May 2009 and up 7 percent from $285,000 in April.
The May median, which marked a sixth consecutive month of year-over-year increases, was at its highest level since October 2008, DataQuick said.
"Last month's jump in the regional median sale price is the flip side of what we saw a year ago, when low-cost inland foreclosures dominated and sales in the costlier coastal towns struggled for a pulse," DataQuick President John Walsh said.
Sales last month of homes costing $500,000 or more made up 21.6 percent of all transactions in the region, up from 17.4 percent a year ago, DataQuick said.
Foreclosures, meanwhile, which typically account for the lowest-price homes, comprised 33.9 percent of resales last month, down from 49.8 percent a year ago, the firm said.
May sales surged on the coast over last year's numbers, increasing 22.1 percent in Orange County and 19.6 percent in San Diego County, while they declined inland, dropping 9.5 percent in San Bernardino County and 5.7 percent in Riverside County.
Bob Hamidi, who oversees Prudential California Realty offices in Orange and Riverside counties, said his agents also are witnessing a shift toward the higher priced areas.
By Jacob Adelman The Associated Press
San Diego-based MDA DataQuick reported that last month's median of $305,000 in the six-county region was up from $249,000 in May 2009 and up 7 percent from $285,000 in April.
The May median, which marked a sixth consecutive month of year-over-year increases, was at its highest level since October 2008, DataQuick said.
"Last month's jump in the regional median sale price is the flip side of what we saw a year ago, when low-cost inland foreclosures dominated and sales in the costlier coastal towns struggled for a pulse," DataQuick President John Walsh said.
Sales last month of homes costing $500,000 or more made up 21.6 percent of all transactions in the region, up from 17.4 percent a year ago, DataQuick said.
Foreclosures, meanwhile, which typically account for the lowest-price homes, comprised 33.9 percent of resales last month, down from 49.8 percent a year ago, the firm said.
May sales surged on the coast over last year's numbers, increasing 22.1 percent in Orange County and 19.6 percent in San Diego County, while they declined inland, dropping 9.5 percent in San Bernardino County and 5.7 percent in Riverside County.
Bob Hamidi, who oversees Prudential California Realty offices in Orange and Riverside counties, said his agents also are witnessing a shift toward the higher priced areas.
By Jacob Adelman The Associated Press
Foreclosures Drop Dramatically in San Diego County
From SignOn San Diego, Union-Tribune, June 17, 2010
Foreclosure filings and notices of default fell dramatically last month in San Diego County, but analysts did not see this as evidence of less distress in the housing market.
Default notices totaled 1,623, down 22.9 percent from April and 46.9 percent from a year ago, MDA DataQuick reported Thursday. Foreclosures numbered 1,021, down 15.8 percent from April, but up 3.7 percent year-over-year, because of a moratorium on foreclosures in place at the time.
Analysts said the declines might represent further signs that lenders are shifting from taking legal action against homeowners who can’t pay their mortgages.
“We’ve been talking for a year now how a growing amount of distress will be handled outside the formal foreclosure process,” said DataQuick analyst Andrew LePage, “mainly through short sales (homes sold for less than the mortgage balance) and to some extent loan modifications and other methods.”
He said the short-term trend has been uneven, sometimes up, sometimes down month to month.
“If you look at quarters, the general trend has been less going into the formal foreclosure process,” LePage said. “We know short-sales are up significantly, as are loan modifications, and some would argue there have not been nearly enough loan modifications, but there are more than there were a couple years back.”
Sean O’Toole, founder and CEO of ForeclosureRadar.com in Discovery Bay, said lenders seem to be timing their actions to coincide with changing economic conditions. Earlier this year, he noted, foreclosures and defaults increased as the stock market improved and home sales and prices stabilized. But in recent weeks, as those markets have faltered, distress actions have fallen back.
“I don’t believe in conspiracies, but at some point it becomes a sensible strategy to manage the books,” O’Toole said.
He and other economists doubt that short sales and loan modifications will solve most homeowners’ problems, which are exacerbated by the sluggish economy and lower home values that make refinancing all but impossible.
“We’ve got an awful lot in the pipeline and at this pace, it’s going to take years to work through this,” he said. “It’s a question of do you rip off the Band-Aid fast and have a sharp sting or rip it off really, really slowly.”
The good news is that various reports show delinquencies rising at a slower pace — an indication that distress is easing and various housing submarkets are stabilizing. The Mortgage Bankers Association put California’s first-quarter delinquencies at 10.9 percent of all homes with mortgages last month, down from 11.3 percent in the fourth quarter.
But that still leaves some 1 million homeowners in California who are not making their payments, O’Toole said.
“If you were to foreclose on those folks en masse, it would certainly create panic and fear,” he said.
There are no delinquency estimates at the local or city level.
Did you miss these?
SoCal home prices rise at fastest pace in 5 years
County home prices at highest since August 2008
Foreclosure filings and notices of default fell dramatically last month in San Diego County, but analysts did not see this as evidence of less distress in the housing market.
Default notices totaled 1,623, down 22.9 percent from April and 46.9 percent from a year ago, MDA DataQuick reported Thursday. Foreclosures numbered 1,021, down 15.8 percent from April, but up 3.7 percent year-over-year, because of a moratorium on foreclosures in place at the time.
Analysts said the declines might represent further signs that lenders are shifting from taking legal action against homeowners who can’t pay their mortgages.
“We’ve been talking for a year now how a growing amount of distress will be handled outside the formal foreclosure process,” said DataQuick analyst Andrew LePage, “mainly through short sales (homes sold for less than the mortgage balance) and to some extent loan modifications and other methods.”
He said the short-term trend has been uneven, sometimes up, sometimes down month to month.
“If you look at quarters, the general trend has been less going into the formal foreclosure process,” LePage said. “We know short-sales are up significantly, as are loan modifications, and some would argue there have not been nearly enough loan modifications, but there are more than there were a couple years back.”
Sean O’Toole, founder and CEO of ForeclosureRadar.com in Discovery Bay, said lenders seem to be timing their actions to coincide with changing economic conditions. Earlier this year, he noted, foreclosures and defaults increased as the stock market improved and home sales and prices stabilized. But in recent weeks, as those markets have faltered, distress actions have fallen back.
“I don’t believe in conspiracies, but at some point it becomes a sensible strategy to manage the books,” O’Toole said.
He and other economists doubt that short sales and loan modifications will solve most homeowners’ problems, which are exacerbated by the sluggish economy and lower home values that make refinancing all but impossible.
“We’ve got an awful lot in the pipeline and at this pace, it’s going to take years to work through this,” he said. “It’s a question of do you rip off the Band-Aid fast and have a sharp sting or rip it off really, really slowly.”
The good news is that various reports show delinquencies rising at a slower pace — an indication that distress is easing and various housing submarkets are stabilizing. The Mortgage Bankers Association put California’s first-quarter delinquencies at 10.9 percent of all homes with mortgages last month, down from 11.3 percent in the fourth quarter.
But that still leaves some 1 million homeowners in California who are not making their payments, O’Toole said.
“If you were to foreclose on those folks en masse, it would certainly create panic and fear,” he said.
There are no delinquency estimates at the local or city level.
Did you miss these?
SoCal home prices rise at fastest pace in 5 years
County home prices at highest since August 2008
Rates on 5-Year ARM Hit Record Low
From Daily Real Estate News, June 18, 2010
Interest on five-year adjustable-rate mortgages averaged 3.89 percent for the week ended June 17, the lowest level since Freddie Mac began tracking the statistic in January 2005.
One-year Treasury-indexed ARMs also fell, dipping from 3.91 percent to 3.82 percent, the lowest average in more than 10 years. Also, 30-year fixed loans settled at 4.75 percent, a slight gain from 4.72 percent last week.
Source: The Wall Street Journal, Amy Hoak (06/18/2010)
Interest on five-year adjustable-rate mortgages averaged 3.89 percent for the week ended June 17, the lowest level since Freddie Mac began tracking the statistic in January 2005.
One-year Treasury-indexed ARMs also fell, dipping from 3.91 percent to 3.82 percent, the lowest average in more than 10 years. Also, 30-year fixed loans settled at 4.75 percent, a slight gain from 4.72 percent last week.
Source: The Wall Street Journal, Amy Hoak (06/18/2010)
Home Prices in California Jump in May
From Daily Real Estate News, June 18, 2010
Median home prices in California rose to $278,000 in May, up 20.9 percent from May 2009, according to MDA DataQuick, which tracks real estate data in the state.
Low mortgage rates and the tax credits encouraged the sales of lower- and higher-priced homes, pushing up the median price, says DataQuick President John Walsh.
Walsh cautioned that there are many homes in foreclosure that haven’t been repossessed by lenders. If lenders take control of these properties and put them on the market, those sales will have a very negative effect on prices, he says.
Source: Associated Press, Jacob Adelman (06/17/2010)
Median home prices in California rose to $278,000 in May, up 20.9 percent from May 2009, according to MDA DataQuick, which tracks real estate data in the state.
Low mortgage rates and the tax credits encouraged the sales of lower- and higher-priced homes, pushing up the median price, says DataQuick President John Walsh.
Walsh cautioned that there are many homes in foreclosure that haven’t been repossessed by lenders. If lenders take control of these properties and put them on the market, those sales will have a very negative effect on prices, he says.
Source: Associated Press, Jacob Adelman (06/17/2010)
Thursday, June 17, 2010
Consumer Sentiment Strengthens in June
U.S. consumer sentiment improved in early June to its strongest level in nearly 2-1/2 years, bolstered by hopes of better job and credit conditions, a recently released survey showed.
UCLA Economist: "Sluggish CA Recovery This Year"
California’s unemployment rate, currently at 12.4 percent, will not return to single-digit levels until 2012 and the state’s inland areas will continue to be impaired by excess housing inventory and state budget cuts, according to a forecast released Tuesday by UCLA’s Anderson School of Business.
California’s economic recovery is contingent on consumer shopping behavior nationwide, as retail spending drives traffic at California’s ports and logistics centers, which are both substantial employers throughout the state, the report said. However, consumers are unlikely to increase spending until businesses begin hiring again, which many economists believe will only happen gradually over time.
The coastal areas of the state will benefit from growth in health care, education, and technology, while inland areas will be constrained by excess housing inventory and state budget cuts, impacting rural inland areas where government workers account for a significant percentage of the workforce, according to the forecast.
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) recently issued its mid-year housing market forecast. Based on C.A.R.’s forecast, the median home price in California is expected to rise 9.1 percent this year compared with last year, while sales of existing, single-family homes will decline 4.7 percent. Rates on 30-year, fixed-rate mortgages will rise to 5.3 percent compared with 5.1 percent in 2009 and 15-year mortgages will average 4.2 percent compared with 4.7 percent last year, according to the forecast.
California’s economic recovery is contingent on consumer shopping behavior nationwide, as retail spending drives traffic at California’s ports and logistics centers, which are both substantial employers throughout the state, the report said. However, consumers are unlikely to increase spending until businesses begin hiring again, which many economists believe will only happen gradually over time.
The coastal areas of the state will benefit from growth in health care, education, and technology, while inland areas will be constrained by excess housing inventory and state budget cuts, impacting rural inland areas where government workers account for a significant percentage of the workforce, according to the forecast.
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) recently issued its mid-year housing market forecast. Based on C.A.R.’s forecast, the median home price in California is expected to rise 9.1 percent this year compared with last year, while sales of existing, single-family homes will decline 4.7 percent. Rates on 30-year, fixed-rate mortgages will rise to 5.3 percent compared with 5.1 percent in 2009 and 15-year mortgages will average 4.2 percent compared with 4.7 percent last year, according to the forecast.
Fitch: Mortgage Mods Unlikely to Stick
From Daily Real Estate News, June 17, 2010
Most borrowers whose loans are modified under federal programs will likely default within a year, Fitch Ratings forecasts.
Among those mortgages modified without backing by a federal agency, the foreclosure rate within a year is likely to be 65 percent to 75 percent.
Fitch based its predictions on the performance of loans modified in the first quarter of 2009.
Fitch Managing Director Diane Pendley says the failure rate is likely to be high because borrowers are saddled with credit-card debt, car loans, and other obligations they can’t afford.
Source: The Wall Street Journal, James R. Hagerty (06/16/2010)
Most borrowers whose loans are modified under federal programs will likely default within a year, Fitch Ratings forecasts.
Among those mortgages modified without backing by a federal agency, the foreclosure rate within a year is likely to be 65 percent to 75 percent.
Fitch based its predictions on the performance of loans modified in the first quarter of 2009.
Fitch Managing Director Diane Pendley says the failure rate is likely to be high because borrowers are saddled with credit-card debt, car loans, and other obligations they can’t afford.
Source: The Wall Street Journal, James R. Hagerty (06/16/2010)
Senate Extends Tax Credit Closing Deadline
From Daily Real Estate News, June 17, 2010
The U.S. Senate voted Wednesday to extend the home buyer tax credit closing deadline to Sept. 30, giving an estimated 180,000 buyers who met the contract deadline of April 30 extra time to close the transaction.
The extension was added to a bill to pay for jobless benefits.
The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.
The measure still must be approved by the House.
Source: Associated Press, Andrew Taylor (06/16/2010)
The U.S. Senate voted Wednesday to extend the home buyer tax credit closing deadline to Sept. 30, giving an estimated 180,000 buyers who met the contract deadline of April 30 extra time to close the transaction.
The extension was added to a bill to pay for jobless benefits.
The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.
The measure still must be approved by the House.
Source: Associated Press, Andrew Taylor (06/16/2010)
Wednesday, June 16, 2010
Foreclosure Activity Continues to Decline in May
Foreclosure filings – notices of default, scheduled auctions, and bank repossessions – declined 3 percent in May compared with April, but increased less than 1 percent compared with the same period a year ago, RealtyTrac reported. Properties receiving a notice of default declined 7 percent in May compared with April and 22 percent compared with May 2009. Foreclosure auctions decreased 4 percent in May compared with the prior month, while bank repossessions increased 1 percent during the same period, according to the report.
California accounted for more than 22 percent of the total number of properties receiving a foreclosure notice in May, an increase of 3 percent from April, but a decrease of nearly 22 percent compared with a year ago.
The top 10 cities with declining foreclosure activity on a year-over-year basis in May included: Las Vegas, nearly 18 percent; Merced, 7 percent; Modesto, nearly 28 percent; Cape Coral-Fort Myers, Fla., nearly 19 percent; Stockton, 33 percent; Riverside-San Bernardino-Ontario, 29 percent; Bakersfield, 19 percent; Reno-Sparks, Nev., 18 percent; and Phoenix, 9 percent.
California accounted for more than 22 percent of the total number of properties receiving a foreclosure notice in May, an increase of 3 percent from April, but a decrease of nearly 22 percent compared with a year ago.
The top 10 cities with declining foreclosure activity on a year-over-year basis in May included: Las Vegas, nearly 18 percent; Merced, 7 percent; Modesto, nearly 28 percent; Cape Coral-Fort Myers, Fla., nearly 19 percent; Stockton, 33 percent; Riverside-San Bernardino-Ontario, 29 percent; Bakersfield, 19 percent; Reno-Sparks, Nev., 18 percent; and Phoenix, 9 percent.
California Consumer Confidence Rises in May
The California Composite Index of Consumer Confidence increased to 82.7 in May, slightly higher than the February reading of 81.1, according to a survey conducted by the Anderson Center for Economic Research at Chapman University. May marked the third consecutive monthly increase. An index level lower than 100 reflects a higher percentage of pessimistic consumers compared with those who are optimistic. The survey was unchanged in consumer confidence at the national level during the same time period, according to a similar survey conducted by the University of Michigan.
The index measuring consumers’ spending plans declined nearly 18 points from May to February, while the indices measuring current economic conditions and future economic conditions both increased to readings of 66 and 105.1, respectively. The index measuring consumers’ planned spending on big-ticket items decreased to 71.4, the lowest reading since the first quarter of 2009.
The index measuring consumers’ spending plans declined nearly 18 points from May to February, while the indices measuring current economic conditions and future economic conditions both increased to readings of 66 and 105.1, respectively. The index measuring consumers’ planned spending on big-ticket items decreased to 71.4, the lowest reading since the first quarter of 2009.
Mortgage Applications Rise
From Daily Real Estate News, June 16, 2010
For the first time in more than a month, the number of mortgage applications to purchase homes rose last week.
On an adjusted basis, the Mortgage Bankers Association purchase index increased 7.3 percent compared to the previous week. On an unadjusted basis it was up 17.4 percent. Compared to the same week last year, applications declined 31.3 percent.
Michael Fratantoni, MBA’s vice president of research and economics, was reluctant to declare this a trend. “While it is clear that purchase applications in May dropped sharply as a result of the tax credit induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now,” he said.
Mortgage rates were up slightly last week:
* 30-year fixed-rate mortgages increased to 4.82 percent from 4.81 percent.
* 15-year fixed-rate mortgages decreased to 4.23 percent from 4.26 percent.
* 1-year ARMs increased to 7.07 percent from 6.94 percent.
Source: Mortgage Bankers Association 06/16/2010)
For the first time in more than a month, the number of mortgage applications to purchase homes rose last week.
On an adjusted basis, the Mortgage Bankers Association purchase index increased 7.3 percent compared to the previous week. On an unadjusted basis it was up 17.4 percent. Compared to the same week last year, applications declined 31.3 percent.
Michael Fratantoni, MBA’s vice president of research and economics, was reluctant to declare this a trend. “While it is clear that purchase applications in May dropped sharply as a result of the tax credit induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now,” he said.
Mortgage rates were up slightly last week:
* 30-year fixed-rate mortgages increased to 4.82 percent from 4.81 percent.
* 15-year fixed-rate mortgages decreased to 4.23 percent from 4.26 percent.
* 1-year ARMs increased to 7.07 percent from 6.94 percent.
Source: Mortgage Bankers Association 06/16/2010)
Tuesday, June 15, 2010
O.C. Home Buying in May Fastest Since '06
From Orange County Register, June 15, 2010
DataQuick’s May homebuying report shows Orange County shoppers were at their busiest since August 2006 with 3,257 residences purchases in the month, up 22 percent from a year ago.
May Resale houses, Resale condos. New homes, All homes
Sales 2,015, 942, 300, 3,257
Year’s change +13.1%, +24.3%, +136.2%, +22.1%
Price $515,000, $305,000, $645,000, $450,000
Year’s change +8.4%, +15.7%, +21.1%, +9.8%
Median selling price was $450,000, up 9.8 percent from a year ago.
DataQuick details …
* $450,000 median selling price is 30% below June 2007’s peak of $645,000.
* The most recent median is 22% above the cyclical low hit in January 2009 at $370,000 — a current bottom that was 43% below the peak.
* Single-family homes resell for 30% less than their peak pricing (June ‘07) while condos sell 35% below their peak in March 2006.
* Builder prices for new homes are 25% below their February ‘05 top.
* Single-family homes were 69% more expensive than condos in this period vs. 80% a year ago. From 1990-2008, the average house/condo gap was 57%.
In this most recent period, O.C. shoppers bought 3,257 residences — that is +22.1% vs. year-ago buying activity. (From 1997-2006, monthly sales averaged 4,304 per month.) This was best month for new homes since December 2007. Builder’s new homes sales were 9% of all residences sold in the period vs. 5% a year ago. From 1990-2008, builders did 15% of the selling.
By region …
North O.C. homebuying up 18%
South County homebuying up 46%
Beach town homebuying up 40%
Mid-County homebuying off 1%
PS: Any excitement should be tempered by a report from Altera showing a 20 percent drop in new escrows opened since the April 30 deadline for a federal tax break for buyers. That signals the recent homebuying binge is temporary.
A little context …
MARKET TRENDS
SoCal home price up 22.5% in year
Home sales, prices up in 40 O.C. ZIPs
O.C. homebuying in May fastest since ‘06
Real estate adds 900 jobs, best in 3 years
Portola Hills homes quickest to sell
Home demand off 20% without tax break
INDUSTRY NEWS
China boom lets O.C. architects hire 5
Buy a home in 1 hour
Costa Mesa condos restart sales, again
O.C. buyers grab 56% more new homes
Big builder's best-selling homes in Irvine
O.C. builder home sales up 76%
DataQuick’s May homebuying report shows Orange County shoppers were at their busiest since August 2006 with 3,257 residences purchases in the month, up 22 percent from a year ago.
May Resale houses, Resale condos. New homes, All homes
Sales 2,015, 942, 300, 3,257
Year’s change +13.1%, +24.3%, +136.2%, +22.1%
Price $515,000, $305,000, $645,000, $450,000
Year’s change +8.4%, +15.7%, +21.1%, +9.8%
Median selling price was $450,000, up 9.8 percent from a year ago.
DataQuick details …
* $450,000 median selling price is 30% below June 2007’s peak of $645,000.
* The most recent median is 22% above the cyclical low hit in January 2009 at $370,000 — a current bottom that was 43% below the peak.
* Single-family homes resell for 30% less than their peak pricing (June ‘07) while condos sell 35% below their peak in March 2006.
* Builder prices for new homes are 25% below their February ‘05 top.
* Single-family homes were 69% more expensive than condos in this period vs. 80% a year ago. From 1990-2008, the average house/condo gap was 57%.
In this most recent period, O.C. shoppers bought 3,257 residences — that is +22.1% vs. year-ago buying activity. (From 1997-2006, monthly sales averaged 4,304 per month.) This was best month for new homes since December 2007. Builder’s new homes sales were 9% of all residences sold in the period vs. 5% a year ago. From 1990-2008, builders did 15% of the selling.
By region …
North O.C. homebuying up 18%
South County homebuying up 46%
Beach town homebuying up 40%
Mid-County homebuying off 1%
PS: Any excitement should be tempered by a report from Altera showing a 20 percent drop in new escrows opened since the April 30 deadline for a federal tax break for buyers. That signals the recent homebuying binge is temporary.
A little context …
MARKET TRENDS
SoCal home price up 22.5% in year
Home sales, prices up in 40 O.C. ZIPs
O.C. homebuying in May fastest since ‘06
Real estate adds 900 jobs, best in 3 years
Portola Hills homes quickest to sell
Home demand off 20% without tax break
INDUSTRY NEWS
China boom lets O.C. architects hire 5
Buy a home in 1 hour
Costa Mesa condos restart sales, again
O.C. buyers grab 56% more new homes
Big builder's best-selling homes in Irvine
O.C. builder home sales up 76%
Orange County Beach Town Home Buying Up 40% in May
From Orange County Register, June 15, 2010
For calendar month May – DataQuick’s latest stats — the 17 ZIPs located in beach towns communities showed …568 homes sold, that is +39.9% vs. a year ago.
The median selling price of these ZIPs was $719,000 – that is +2.4% vs. a year ago.
The beach towns ZIPs comprised 18.0% of the recent home sales in Orange county vs. 15.6% a year ago.
Elsewhere, click for details …
North O.C. homebuying up 18%
South County homebuying up 46%
Mid-County homebuying off 1%
A little geographical context …
36 ZIP codes in beach towns and inland South County communities had 1,515 homes sales. That’s up 43.7% vs. a year ago.
47 ZIP codes in mid-county and inland North County communities had 1,648 homes sales. That’s up 6.6% vs. a year ago.
Thus, the share of Orange County homes sold in mid-county and inland North County neighborhoods was 52% vs. 59% a year ago.
The ZIP-by-ZIP results for beach towns communities …
Town ZIP Price Yr. chg. Sales Yr. chg.
Corona del Mar 92625 $1,660,000 +47.6% 18 +100.0%
Dana Point 92624 $542,500 +2.4% 14 +16.7%
Dana Point 92629 $562,500 -18.5% 44 +46.7%
Huntington Beach 92646 $530,000 -1.1% 71 +42.0%
Huntington Beach 92647 $514,500 +9.5% 36 +2.9%
Huntington Beach 92648 $805,000 +15.0% 42 +0.0%
Huntington Beach 92649 $560,000 +9.6% 34 +36.0%
Laguna Beach 92651 $960,000 -8.6% 43 +53.6%
Newport Beach 92660 $1,000,000 +41.8% 41 +20.6%
Newport Beach 92661 $1,610,000 -4.6% 10 +66.7%
Newport Beach 92662 $1,917,500 +0.0% 6 +0.0%
Newport Beach 92663 $775,000 +31.9% 25 +78.6%
Newport Coast 92657 $1,900,000 +38.0% 26 +136.4%
San Clemente 92672 $550,000 +0.0% 38 +18.8%
San Clemente 92673 $622,500 -2.9% 51 +70.0%
San Juan Capistrano 92675 $450,000 +57.9% 50 +66.7%
Seal Beach 90740 $719,000 -2.8% 19 +58.3%
Total O.C.
$450,000 +9.8% 3,257 +22.1%
For calendar month May – DataQuick’s latest stats — the 17 ZIPs located in beach towns communities showed …568 homes sold, that is +39.9% vs. a year ago.
The median selling price of these ZIPs was $719,000 – that is +2.4% vs. a year ago.
The beach towns ZIPs comprised 18.0% of the recent home sales in Orange county vs. 15.6% a year ago.
Elsewhere, click for details …
North O.C. homebuying up 18%
South County homebuying up 46%
Mid-County homebuying off 1%
A little geographical context …
36 ZIP codes in beach towns and inland South County communities had 1,515 homes sales. That’s up 43.7% vs. a year ago.
47 ZIP codes in mid-county and inland North County communities had 1,648 homes sales. That’s up 6.6% vs. a year ago.
Thus, the share of Orange County homes sold in mid-county and inland North County neighborhoods was 52% vs. 59% a year ago.
The ZIP-by-ZIP results for beach towns communities …
Town ZIP Price Yr. chg. Sales Yr. chg.
Corona del Mar 92625 $1,660,000 +47.6% 18 +100.0%
Dana Point 92624 $542,500 +2.4% 14 +16.7%
Dana Point 92629 $562,500 -18.5% 44 +46.7%
Huntington Beach 92646 $530,000 -1.1% 71 +42.0%
Huntington Beach 92647 $514,500 +9.5% 36 +2.9%
Huntington Beach 92648 $805,000 +15.0% 42 +0.0%
Huntington Beach 92649 $560,000 +9.6% 34 +36.0%
Laguna Beach 92651 $960,000 -8.6% 43 +53.6%
Newport Beach 92660 $1,000,000 +41.8% 41 +20.6%
Newport Beach 92661 $1,610,000 -4.6% 10 +66.7%
Newport Beach 92662 $1,917,500 +0.0% 6 +0.0%
Newport Beach 92663 $775,000 +31.9% 25 +78.6%
Newport Coast 92657 $1,900,000 +38.0% 26 +136.4%
San Clemente 92672 $550,000 +0.0% 38 +18.8%
San Clemente 92673 $622,500 -2.9% 51 +70.0%
San Juan Capistrano 92675 $450,000 +57.9% 50 +66.7%
Seal Beach 90740 $719,000 -2.8% 19 +58.3%
Total O.C.
$450,000 +9.8% 3,257 +22.1%
Green Power
Thanks to government incentives and changing public sentiment, clean energy is the most popular kid on the green movement block. The stimulus plan poured billions into renewable energy, automakers are all but predicting electric gridlock within the next few years, and everyone who's anyone in the electric power industry is investing in the "smart grid."
If the money being thrown around is any indication, that's just the tip of the slowly melting iceberg. Cleantech Group, an industry research firm, reports venture capital investment in clean technology--including solar, biofuels, batteries and the smart grid--overtook IT and biotech for the biggest piece of the VC pie. The sector swiped 27 percent of all investment dollars in the third quarter--that's $1.6 billion.
If the money being thrown around is any indication, that's just the tip of the slowly melting iceberg. Cleantech Group, an industry research firm, reports venture capital investment in clean technology--including solar, biofuels, batteries and the smart grid--overtook IT and biotech for the biggest piece of the VC pie. The sector swiped 27 percent of all investment dollars in the third quarter--that's $1.6 billion.
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