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)
Friday, August 27, 2010
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)
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