Fannie Names Former BofA Exec as New Chief
http://goo.gl/mYSX9
Timothy J. Mayopoulos, who was a general counsel at Bank of America during the financial crisis, has been named the next chief executive of mortgage giant Fannie Mae.
Mayopoulos, a lawyer, joined Fannie Mae as its general counsel in 2009 after leaving Bank of America.
He will take over June 18 for Chief Executive Michael Williams, who announced in January he would step down from Fannie once a new chief executive had been found. Mayopoulos will be Fannie’s third CEO since the government took over the mortgage giant.
“I am excited, but I’m not naïve,” Mayopoulos told The New York Times about his new role. “I know this is a very difficult and challenging job.”
Mayopoulos told the Associated Press that Fannie will continue to focus on helping distressed home owners and reducing losses on its loans. Fannie Mae last month posted its first profit since the government took conservatorship of it in 2008.
Among the decisions Mayopoulos faces in his new role is whether Fannie will permit principal write-offs on underwater home owners’ mortgages that it owns. Many members of Congress have supported the idea, while Fannie’s regulator has opposed it.
“I’ve been involved in examining that issue,” he told The New York Times. “We have the tools we need to assist home owners with troubled mortgages. I don’t believe we need principal forgiveness as a tool. We are already effective with the tools we have.”
Source: “Fannie Mae Names Its Top Lawyer as Chief,” The New York Times (June 5, 2012) and “Fannie Mae Names General Counsel Mayopoulos as New CEO,” The Associated Press (June 5, 2012)
Friday, June 8, 2012
Is the Housing Market Recovery Splitting in Two?
http://goo.gl/iYFNN
A new article at CNBC.com suggests that the real estate market is splitting in two, with the high-end segment soaring and the rest of the market continuing to struggle as it inches toward recovery mode.
“It’s become a tale of two markets,” Michael Simonsen, CEO of Altos Research, told CNBC.com. “At the high end, well-financed people have taken advantage of cheap money. And demand is up, inventory is down, and prices are responding.”
The article says that wealthy buyers tend to have good credit and are taking advantage of record low mortgage rates.
As such, in housing markets with median home prices of $1 million or more, home prices have jumped more than 10 percent year-over-year, according to Altos Research. Inventory is also down by 10 percent. What’s more, areas with a median home price of $10 million or more, home prices have risen 13 percent or more, according to Altos.
So how about the other “side” of the market? Unemployment and tightened lending conditions that have caused some buyers to struggle to obtain financing continues to slow the housing recovery, housing experts note.
Source: “Tale of Two Markets: No Downturn in Megahome Sales,” CNBC.com (June 5, 2012)
http://goo.gl/iYFNN
A new article at CNBC.com suggests that the real estate market is splitting in two, with the high-end segment soaring and the rest of the market continuing to struggle as it inches toward recovery mode.
“It’s become a tale of two markets,” Michael Simonsen, CEO of Altos Research, told CNBC.com. “At the high end, well-financed people have taken advantage of cheap money. And demand is up, inventory is down, and prices are responding.”
The article says that wealthy buyers tend to have good credit and are taking advantage of record low mortgage rates.
As such, in housing markets with median home prices of $1 million or more, home prices have jumped more than 10 percent year-over-year, according to Altos Research. Inventory is also down by 10 percent. What’s more, areas with a median home price of $10 million or more, home prices have risen 13 percent or more, according to Altos.
So how about the other “side” of the market? Unemployment and tightened lending conditions that have caused some buyers to struggle to obtain financing continues to slow the housing recovery, housing experts note.
Source: “Tale of Two Markets: No Downturn in Megahome Sales,” CNBC.com (June 5, 2012)
Higher the Walkability, Higher the Home Value
http://goo.gl/svWPv
A new study by the Brookings Institution found that the walkability of urban areas has a direct impact on real estate values and rents.
Using Washington, D.C., as a test case, the report identified five levels or steps in walkability. For every step up the walkability ladder, the price per square foot jumps more than $300 on average for apartment rents, versus $82 for house values, $9 for annual office rents, and $7 for retail rents. Moreover, with each step up the ladder, the average household income climbs $10,000.
Brookings senior fellow Christopher Leinberger says both city centers and suburbs are seeing an increase in demand for walkable space, noting that over half of walkable places in the Washington, D.C., area are in the suburbs. He says, "This trend is about both the revitalization of center cities and the urbanization of the suburbs." He adds that encouraging construction of more walkable places is a long-term solution to the affordability challenge, noting that it is cheaper on a usable square foot basis to build walkable urban infrastructure than drivable suburban infrastructure.
Source: "Now Coveted: A Walkable, Convenient Place" New York Times (05/25/12)
http://goo.gl/svWPv
A new study by the Brookings Institution found that the walkability of urban areas has a direct impact on real estate values and rents.
Using Washington, D.C., as a test case, the report identified five levels or steps in walkability. For every step up the walkability ladder, the price per square foot jumps more than $300 on average for apartment rents, versus $82 for house values, $9 for annual office rents, and $7 for retail rents. Moreover, with each step up the ladder, the average household income climbs $10,000.
Brookings senior fellow Christopher Leinberger says both city centers and suburbs are seeing an increase in demand for walkable space, noting that over half of walkable places in the Washington, D.C., area are in the suburbs. He says, "This trend is about both the revitalization of center cities and the urbanization of the suburbs." He adds that encouraging construction of more walkable places is a long-term solution to the affordability challenge, noting that it is cheaper on a usable square foot basis to build walkable urban infrastructure than drivable suburban infrastructure.
Source: "Now Coveted: A Walkable, Convenient Place" New York Times (05/25/12)
Millions of LinkedIn Passwords Leaked
http://goo.gl/BD7HT
A hacker has reportedly leaked nearly 6.5 million LinkedIn passwords.
LinkedIn on Wednesday issued an apology to its members for the security breach.
While the passwords are encrypted, security officials warn that hackers will likely be working to decrypt the stolen passwords, and account users would be smart to change their passwords as soon as possible.
LinkedIn issued a statement saying that any LinkedIn members with an account associated with one of the compromised passwords will receive an e-mail from LinkedIn with instructions on how to reset their password. Members with affected accounts will find that their compromised password will no longer work when they try to log-in.
“It is worth noting that the affected members who update their passwords and members whose passwords have not been compromised benefit from the enhanced security we just recently put in place, which includes hashing and salting of our current password databases,” LinkedIn officials said in a statement on its blog.
LinkedIn also offers tips on its site for how to update your password and how to improve the security on your account.
The security breach follows on the heels of a newly released report that says LinkedIn’s iPhone app is also collecting information from users’ Calendar app entries (including e-mail addresses of people you meet with, meeting subject, location, etc.) and transmitting it back to the company’s servers — often without the users’ knowledge. The company assures LinkedIn members that the information is encrypted and isn’t being shared. LinkedIn IOS app users can turn off the ability to “Add Calendar” in the Settings screen, the company said.
Source: LinkedIn Blog and “Millions of LinkedIn Passwords Reportedly Leaked Online,” CNET (June 6, 2012)
http://goo.gl/BD7HT
A hacker has reportedly leaked nearly 6.5 million LinkedIn passwords.
LinkedIn on Wednesday issued an apology to its members for the security breach.
While the passwords are encrypted, security officials warn that hackers will likely be working to decrypt the stolen passwords, and account users would be smart to change their passwords as soon as possible.
LinkedIn issued a statement saying that any LinkedIn members with an account associated with one of the compromised passwords will receive an e-mail from LinkedIn with instructions on how to reset their password. Members with affected accounts will find that their compromised password will no longer work when they try to log-in.
“It is worth noting that the affected members who update their passwords and members whose passwords have not been compromised benefit from the enhanced security we just recently put in place, which includes hashing and salting of our current password databases,” LinkedIn officials said in a statement on its blog.
LinkedIn also offers tips on its site for how to update your password and how to improve the security on your account.
The security breach follows on the heels of a newly released report that says LinkedIn’s iPhone app is also collecting information from users’ Calendar app entries (including e-mail addresses of people you meet with, meeting subject, location, etc.) and transmitting it back to the company’s servers — often without the users’ knowledge. The company assures LinkedIn members that the information is encrypted and isn’t being shared. LinkedIn IOS app users can turn off the ability to “Add Calendar” in the Settings screen, the company said.
Source: LinkedIn Blog and “Millions of LinkedIn Passwords Reportedly Leaked Online,” CNET (June 6, 2012)
Once-Battered Market Now Price-Gain Leader
http://goo.gl/MMiIW
The Phoenix housing market, which was flooded with foreclosures and underwater home owners and saw home values dip greatly during the housing crisis, is coming back strong. Home values in metro Phoenix and the rest of the state of Arizona are posting the fastest growth rates in the nation, according to CoreLogic home value data, which includes foreclosures and short sales.
In the Phoenix metro area, home values soared 11.3 percent year-over-year in April, marking the largest such gain out of the 10 largest U.S. metro areas. Dallas had the second-highest growth at 3.5 percent with home values year-over-year.
Meanwhile, the states with the highest year-over-year increase in home values from April are Arizona (8.8 percent increase), District of Columbia (6.4 percent), Florida (5.5 percent), Montana (5.4 percent), and Utah (5.4 percent).
Market on the Mend
Overall, recent housing reports have shown that the housing market is picking up across the country.
"Excluding distressed sales, home prices in March and April are improving at a rate not seen since late 2006 and appreciating at a faster rate than during the tax-credit boomlet in 2010," says Mark Fleming, chief economist for CoreLogic. "Nationally, the supply of homes in current inventory is down to 6.5 months, a level not seen in more than five years, in part driven by the ‘locked in’ position of so many home owners in negative equity."
Source: “CoreLogic: Phoenix Leads the Nation in Home Value Gains,” Phoenix Business Journal Online (June 5, 2012)
http://goo.gl/MMiIW
The Phoenix housing market, which was flooded with foreclosures and underwater home owners and saw home values dip greatly during the housing crisis, is coming back strong. Home values in metro Phoenix and the rest of the state of Arizona are posting the fastest growth rates in the nation, according to CoreLogic home value data, which includes foreclosures and short sales.
In the Phoenix metro area, home values soared 11.3 percent year-over-year in April, marking the largest such gain out of the 10 largest U.S. metro areas. Dallas had the second-highest growth at 3.5 percent with home values year-over-year.
Meanwhile, the states with the highest year-over-year increase in home values from April are Arizona (8.8 percent increase), District of Columbia (6.4 percent), Florida (5.5 percent), Montana (5.4 percent), and Utah (5.4 percent).
Market on the Mend
Overall, recent housing reports have shown that the housing market is picking up across the country.
"Excluding distressed sales, home prices in March and April are improving at a rate not seen since late 2006 and appreciating at a faster rate than during the tax-credit boomlet in 2010," says Mark Fleming, chief economist for CoreLogic. "Nationally, the supply of homes in current inventory is down to 6.5 months, a level not seen in more than five years, in part driven by the ‘locked in’ position of so many home owners in negative equity."
Source: “CoreLogic: Phoenix Leads the Nation in Home Value Gains,” Phoenix Business Journal Online (June 5, 2012)
Thursday, June 7, 2012
REO Price Increases Bode Well for Overall Market
http://goo.gl/sz8Vt
Recent price increases with bank-owned homes are helping to provide an overall boost to the housing market, a recent report from Clear Capital says.
Prices of REOs nationally rose 8.1 percent over year-ago levels on a median price-per-square-foot basis, according to Clear Capital’s May housing data.
“Strength in the REO-only price trends as well as some early indications of price gains spreading from low-tier sectors to the mid- and higher-priced homes is helping confirm that the country continues to make progress on its recovery,” says Alex Villacorta, director of research and analytics at Clear Capital. “We are expecting to see improvements extend over the next several months.”
Clear Capital also reported quarterly increases to overall prices, rising 0.4 percent for the quarter, the first quarterly gain posted since November 2011. The West saw the most growth in prices, rising 2.7 percent, followed by the South, with a 1.2 percent quarter-over-quarter gain, according to the report.
Source: “Improving Foreclosure Prices Drive Recovery,” RISMedia (June 6, 2012)
http://goo.gl/sz8Vt
Recent price increases with bank-owned homes are helping to provide an overall boost to the housing market, a recent report from Clear Capital says.
Prices of REOs nationally rose 8.1 percent over year-ago levels on a median price-per-square-foot basis, according to Clear Capital’s May housing data.
“Strength in the REO-only price trends as well as some early indications of price gains spreading from low-tier sectors to the mid- and higher-priced homes is helping confirm that the country continues to make progress on its recovery,” says Alex Villacorta, director of research and analytics at Clear Capital. “We are expecting to see improvements extend over the next several months.”
Clear Capital also reported quarterly increases to overall prices, rising 0.4 percent for the quarter, the first quarterly gain posted since November 2011. The West saw the most growth in prices, rising 2.7 percent, followed by the South, with a 1.2 percent quarter-over-quarter gain, according to the report.
Source: “Improving Foreclosure Prices Drive Recovery,” RISMedia (June 6, 2012)
Obama’s May Housing Scorecard: Market Stabilizing
http://goo.gl/MJsfY
The latest Housing Scorecard from the Obama administration showed real estate stabilizing in every region of the country, but it still has a long way to go in the road toward full recovery.
Existing-home sales increased 2.4 percent in April, according to the Obama administration’s Housing Scorecard for May. Sales also continued to outpace inventory levels. The inventory of homes for sale decreased to 5.1 month supply in April from 5.2 months in March. Also, according to the report, the inventory of newly constructed homes rose for the first time since April 2007.
HUD Acting Assistant Secretary Erika Poethig also notes that more borrowers are taking advantage of the government’s refinance programs to lower their mortgage payments, and adds foreclosure starts are declining.
“But with so many households still struggling to make ends meet it's clear that we have more work ahead," Poethig says.
Underwater mortgages continue to threaten the market recovery, the report notes. The number of borrowers who owe more than their home’s current value rose to more than 11 million. Seriously delinquent subprime mortgages also are on the rise.
To read the full report, visit www.hud.gov/scorecard.
Source: U.S. Department of the Treasury
http://goo.gl/MJsfY
The latest Housing Scorecard from the Obama administration showed real estate stabilizing in every region of the country, but it still has a long way to go in the road toward full recovery.
Existing-home sales increased 2.4 percent in April, according to the Obama administration’s Housing Scorecard for May. Sales also continued to outpace inventory levels. The inventory of homes for sale decreased to 5.1 month supply in April from 5.2 months in March. Also, according to the report, the inventory of newly constructed homes rose for the first time since April 2007.
HUD Acting Assistant Secretary Erika Poethig also notes that more borrowers are taking advantage of the government’s refinance programs to lower their mortgage payments, and adds foreclosure starts are declining.
“But with so many households still struggling to make ends meet it's clear that we have more work ahead," Poethig says.
Underwater mortgages continue to threaten the market recovery, the report notes. The number of borrowers who owe more than their home’s current value rose to more than 11 million. Seriously delinquent subprime mortgages also are on the rise.
To read the full report, visit www.hud.gov/scorecard.
Source: U.S. Department of the Treasury
More Borrowers See Mortgage Payoff Possible
http://goo.gl/7Rbku
More borrowers are shortening their mortgage terms, and are considering paying off their mortgage a possible feat. Record low interest rates has allowed more borrowers to refinance their loans from 30 years to 15- or 20-year terms.
A recent Freddie Mac report shows that 31 percent of recent refinancers shortened their loan terms, which is the second highest level since 2002.
“Historically low rates and an average three-quarters of a percentage point difference between 30- and 15-year mortgage fixed-rate mortgages are important drivers for moving to a shorter term,” Frank Nothaft, Freddie Mac’s chief economist, told The New York Times.
Fifteen-year fixed-rate mortgages reached a new record low last week, averaging 2.97 percent, according to Freddie Mac’s weekly mortgage market survey. The 30-year fixed-rate mortgage also reached a new record low last week, averaging 3.75 percent.
“People are taking control of their own equity — they’re paying it down quickly,” says Michael McHugh, president of the Empire State Mortgage Bankers Association.
Source: “Shortening Loan Terms,” The New York Times (June 1, 2012)
http://goo.gl/7Rbku
More borrowers are shortening their mortgage terms, and are considering paying off their mortgage a possible feat. Record low interest rates has allowed more borrowers to refinance their loans from 30 years to 15- or 20-year terms.
A recent Freddie Mac report shows that 31 percent of recent refinancers shortened their loan terms, which is the second highest level since 2002.
“Historically low rates and an average three-quarters of a percentage point difference between 30- and 15-year mortgage fixed-rate mortgages are important drivers for moving to a shorter term,” Frank Nothaft, Freddie Mac’s chief economist, told The New York Times.
Fifteen-year fixed-rate mortgages reached a new record low last week, averaging 2.97 percent, according to Freddie Mac’s weekly mortgage market survey. The 30-year fixed-rate mortgage also reached a new record low last week, averaging 3.75 percent.
“People are taking control of their own equity — they’re paying it down quickly,” says Michael McHugh, president of the Empire State Mortgage Bankers Association.
Source: “Shortening Loan Terms,” The New York Times (June 1, 2012)
10 States With the Most Foreclosure Sales
http://goo.gl/nfOSv
Foreclosure sales are making up a bigger bulk of sales. In the first quarter of this year, sales of homes in some stage of foreclosure accounted for 26 percent of all residential sales, which is up from 22 percent in the fourth quarter of last year, according to RealtyTrac’s latest foreclosure report.
But in some housing markets, foreclosures are making up an even bigger bulk of sales. For example, in Nevada, foreclosure sales made up 56 percent of all residential sales in the first quarter—the highest percentage in the country when compared to any other state.
According to RealtyTrac’s first quarter report, the following are the 10 states with the highest percentage of foreclosure sales.
Nevada: Foreclosure sales accounted for 56% of all residential sales
California: 47% of all residential sales
Georgia: 46% of all residential sales
Arizona: 40% of all residential sales
Michigan: 39% of all residential sales
Illinois: 31% of all residential sales
Colorado: 30% of all residential sales
Wisconsin: 28% of all residential sales
Oregon: 27% of all residential sales
Minnesota: 27% of all residential sales
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
http://goo.gl/nfOSv
Foreclosure sales are making up a bigger bulk of sales. In the first quarter of this year, sales of homes in some stage of foreclosure accounted for 26 percent of all residential sales, which is up from 22 percent in the fourth quarter of last year, according to RealtyTrac’s latest foreclosure report.
But in some housing markets, foreclosures are making up an even bigger bulk of sales. For example, in Nevada, foreclosure sales made up 56 percent of all residential sales in the first quarter—the highest percentage in the country when compared to any other state.
According to RealtyTrac’s first quarter report, the following are the 10 states with the highest percentage of foreclosure sales.
Nevada: Foreclosure sales accounted for 56% of all residential sales
California: 47% of all residential sales
Georgia: 46% of all residential sales
Arizona: 40% of all residential sales
Michigan: 39% of all residential sales
Illinois: 31% of all residential sales
Colorado: 30% of all residential sales
Wisconsin: 28% of all residential sales
Oregon: 27% of all residential sales
Minnesota: 27% of all residential sales
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Low Appraisals Continue to Thwart Deals
http://goo.gl/KDZ8R
Home appraisals coming in for lower than the agreed upon selling price of a home is making it difficult for some home buyers to take advantage of the market.
About one-third of real estate professionals say low appraisals have caused a transaction to fall through, be delayed, or have to be re-negotiated, according to National Association of REALTORS® housing data from April.
The main culprit for the disconnect? Many housing experts blame it on appraisers continued use of distressed sales as comparables when conducting valuations.
The low appraisals have caused many borrowers to stay "in a holding pattern for extended periods" because it's difficult to find comparable sales to support the appraisal value, Terry Moore, global managing director of Accenture Credit Services, told The Wall Street Journal.
Ron Phipps, NAR's immediate past-president and real estate broker in Warwick, R.I., told The Wall Street Journal that about half of his home sales have had appraisal problems.
To help counter low appraisals, appraisers say it’s perfectly acceptable for borrowers to point out home improvements to an appraiser during the inspection process and to provide comparable sales to justify what they think the valuation should be.
In cases of seemingly lowball appraisals, borrowers can also request an appraisal review from their lender. Some lenders may even grant a request for a second appraisal to be completed if the first one can be shown to be inaccurate based on comparable sales.
Source: “Fighting Back Against Lowball Home Appraisals,” The Wall Street Journal (June 1, 2012)
http://goo.gl/KDZ8R
Home appraisals coming in for lower than the agreed upon selling price of a home is making it difficult for some home buyers to take advantage of the market.
About one-third of real estate professionals say low appraisals have caused a transaction to fall through, be delayed, or have to be re-negotiated, according to National Association of REALTORS® housing data from April.
The main culprit for the disconnect? Many housing experts blame it on appraisers continued use of distressed sales as comparables when conducting valuations.
The low appraisals have caused many borrowers to stay "in a holding pattern for extended periods" because it's difficult to find comparable sales to support the appraisal value, Terry Moore, global managing director of Accenture Credit Services, told The Wall Street Journal.
Ron Phipps, NAR's immediate past-president and real estate broker in Warwick, R.I., told The Wall Street Journal that about half of his home sales have had appraisal problems.
To help counter low appraisals, appraisers say it’s perfectly acceptable for borrowers to point out home improvements to an appraiser during the inspection process and to provide comparable sales to justify what they think the valuation should be.
In cases of seemingly lowball appraisals, borrowers can also request an appraisal review from their lender. Some lenders may even grant a request for a second appraisal to be completed if the first one can be shown to be inaccurate based on comparable sales.
Source: “Fighting Back Against Lowball Home Appraisals,” The Wall Street Journal (June 1, 2012)
Probe Widens Into Mortgage Lenders
http://goo.gl/RtZHs
U.S. attorneys are increasing their scrutiny of FHA lenders, having recouped $1 billion in losses for the agency from Bank of America, Deutsche Bank, Citigroup, and Flagstar, and issued subpoenas for information from others.
The probes indicate that Washington does not want taxpayers to cover FHA losses and could prompt lenders to use more caution when making FHA-insured loans.
Source: "Probe Widens Into Mortgage Lenders," The Wall Street Journal (06/07/12)
http://goo.gl/RtZHs
U.S. attorneys are increasing their scrutiny of FHA lenders, having recouped $1 billion in losses for the agency from Bank of America, Deutsche Bank, Citigroup, and Flagstar, and issued subpoenas for information from others.
The probes indicate that Washington does not want taxpayers to cover FHA losses and could prompt lenders to use more caution when making FHA-insured loans.
Source: "Probe Widens Into Mortgage Lenders," The Wall Street Journal (06/07/12)
Is Housing Slowly Turning to a Seller's Market?
http://goo.gl/LI7Yt
It’s been mostly a “buyer’s market” in the majority of housing markets for the past few years, but more Americans are seeing home buyers’ power in home sales and negotiations soon slipping away.
More Americans are reporting increased optimism when it comes to selling a home as prices take a gradual turn upward, according to a recent survey.
About 28 percent of Americans say it’s a good time to sell now, inching up from 13 percent last quarter, according to a survey by Redfin of more than 1,200 potential buyers in 18 metro areas.
Nearly 60 percent of the survey’s respondents say they think prices will rise this year, up from 34 percent last year.
Seventy-one percent of the respondents surveyed also said they are seeing more bidding wars and multiple bids on homes today, too.
Home buyers are increasingly being lured back to the housing market, according to several recent surveys. Many buyers say record-low interest rates and increased housing affordability has made buying more attractive. However, according to the Redfin survey, buyers also say the drop in inventory of homes for-sale is one reason to hold off on buying nowadays.
Source: “Redfin: Homebuyers Think the Market is Beginning to Favor Sellers,” HousingWire (June 4, 2012)
http://goo.gl/LI7Yt
It’s been mostly a “buyer’s market” in the majority of housing markets for the past few years, but more Americans are seeing home buyers’ power in home sales and negotiations soon slipping away.
More Americans are reporting increased optimism when it comes to selling a home as prices take a gradual turn upward, according to a recent survey.
About 28 percent of Americans say it’s a good time to sell now, inching up from 13 percent last quarter, according to a survey by Redfin of more than 1,200 potential buyers in 18 metro areas.
Nearly 60 percent of the survey’s respondents say they think prices will rise this year, up from 34 percent last year.
Seventy-one percent of the respondents surveyed also said they are seeing more bidding wars and multiple bids on homes today, too.
Home buyers are increasingly being lured back to the housing market, according to several recent surveys. Many buyers say record-low interest rates and increased housing affordability has made buying more attractive. However, according to the Redfin survey, buyers also say the drop in inventory of homes for-sale is one reason to hold off on buying nowadays.
Source: “Redfin: Homebuyers Think the Market is Beginning to Favor Sellers,” HousingWire (June 4, 2012)
Hispanics to Make Up Half of New Buyers by 2020
http://goo.gl/hzdlC
Some housing experts say a “mega-boom in home ownership” is brewing as Hispanic Americans look to join in home ownership. Indeed, Movoto, a real estate brokerage in San Mateo, Calif., predicts Hispanics will make up half of new home buyers nationwide by 2020.
The growth in that time frame is expected to be big, considering that currently 75 percent of first-time home buyers are white and only 11 percent are Hispanic.
But observers say that with Hispanics’ birth rates and purchasing power drastically increasing, Hispanics are expected to be a powerful force in real estate in the coming years.
More than half of all infants born in the United States last year were minorities or multiracial, according to U.S. Census data. Hispanics account for 8.9 births for every death, while whites have 1.1 births for every death. The Hispanic population in the United States has more than tripled between 1980 and 2010, according to the National Association of Hispanic Real Estate Professionals’ data.
“In general, Hispanics hold fast to the American dream,” states a recent article at Forbes. “According to national housing surveys, despite worries over jobs and the economy, they are more eager to become home owners for both emotional and financial reasons.”
Source: "American Dream: Hispanic Home Buyers on the Rise," Forbes (May 31, 2012)
http://goo.gl/hzdlC
Some housing experts say a “mega-boom in home ownership” is brewing as Hispanic Americans look to join in home ownership. Indeed, Movoto, a real estate brokerage in San Mateo, Calif., predicts Hispanics will make up half of new home buyers nationwide by 2020.
The growth in that time frame is expected to be big, considering that currently 75 percent of first-time home buyers are white and only 11 percent are Hispanic.
But observers say that with Hispanics’ birth rates and purchasing power drastically increasing, Hispanics are expected to be a powerful force in real estate in the coming years.
More than half of all infants born in the United States last year were minorities or multiracial, according to U.S. Census data. Hispanics account for 8.9 births for every death, while whites have 1.1 births for every death. The Hispanic population in the United States has more than tripled between 1980 and 2010, according to the National Association of Hispanic Real Estate Professionals’ data.
“In general, Hispanics hold fast to the American dream,” states a recent article at Forbes. “According to national housing surveys, despite worries over jobs and the economy, they are more eager to become home owners for both emotional and financial reasons.”
Source: "American Dream: Hispanic Home Buyers on the Rise," Forbes (May 31, 2012)
Commercial Insiders Foresee Growth in Second Half of 2012
http://goo.gl/djyVN
ith corporate profits increasing, commercial real estate brokers, developers, architects, and other industry insiders believe their fortunes will take a turn for the better during the latter half of this year, reports the Urban Land Institute.
According to the think tank's poll, market participants expect rising values for all segments. Apartments are expected to lead the charge, while the positive signs in U.S.- based manufacturing are expected to boost warehouse distribution centers. Though hotels placed third, the sector had the biggest gain overall in the annual survey as corporate and individual travel grew.
The growth in commercial property values is projected to be greatest in Boston and San Francisco. Buyer interest is especially intense in industrial properties where job gains, demand from renters and rising rents are expected, such as in Austin, Texas, and Silicon Valley.
However, the forecast is gloomy for the nation's capital, where survey participants worry federal budget cuts could curb demand for offices and other real estate.
Source: "Commercial Property Professionals Expect Values to Climb," Los Angeles Times (June 3, 2010)
http://goo.gl/djyVN
ith corporate profits increasing, commercial real estate brokers, developers, architects, and other industry insiders believe their fortunes will take a turn for the better during the latter half of this year, reports the Urban Land Institute.
According to the think tank's poll, market participants expect rising values for all segments. Apartments are expected to lead the charge, while the positive signs in U.S.- based manufacturing are expected to boost warehouse distribution centers. Though hotels placed third, the sector had the biggest gain overall in the annual survey as corporate and individual travel grew.
The growth in commercial property values is projected to be greatest in Boston and San Francisco. Buyer interest is especially intense in industrial properties where job gains, demand from renters and rising rents are expected, such as in Austin, Texas, and Silicon Valley.
However, the forecast is gloomy for the nation's capital, where survey participants worry federal budget cuts could curb demand for offices and other real estate.
Source: "Commercial Property Professionals Expect Values to Climb," Los Angeles Times (June 3, 2010)
Vacation Home Buyers Stay Close to Home
http://goo.gl/ISjst
More buyers are being lured to the idea of purchasing a second home thanks to bargain prices in many areas. But with the rising costs of travel and more cost-conscience buying habits, many of these buyers are bypassing typical vacation hot-spots and resorts and choosing to buy a vacation home closer to their primary residence.
The median distance between the buyer’s primary residence and vacation home shrank 19 percent from 2010 to 2011. The median distance in the most current survey is 305 miles, according to National Association of REALTORS®’ housing data.
“The shift in buying habits partly reflects the changing portrait of the typical vacation-home buyer,” reports The Wall Street Journal. “In the recent past, the vacation-home market was led by families looking for places with attractions for children as well as adults. But a growing number of buyers are older and seeking vacation homes that transition into retirement homes.”
Furthermore, vacation home buyers are purchasing second homes with the idea to rent them out to help offset costs, which has also made staying close to their second home appealing.
"People want to stay within driving distance because they're more able to maintain the homes, they have better networks in place, and friends and family nearby to use and sustain the homes," Jon Gray, vice president of HomeAway.com, told The Wall Street Journal.
http://goo.gl/ISjst
More buyers are being lured to the idea of purchasing a second home thanks to bargain prices in many areas. But with the rising costs of travel and more cost-conscience buying habits, many of these buyers are bypassing typical vacation hot-spots and resorts and choosing to buy a vacation home closer to their primary residence.
The median distance between the buyer’s primary residence and vacation home shrank 19 percent from 2010 to 2011. The median distance in the most current survey is 305 miles, according to National Association of REALTORS®’ housing data.
“The shift in buying habits partly reflects the changing portrait of the typical vacation-home buyer,” reports The Wall Street Journal. “In the recent past, the vacation-home market was led by families looking for places with attractions for children as well as adults. But a growing number of buyers are older and seeking vacation homes that transition into retirement homes.”
Furthermore, vacation home buyers are purchasing second homes with the idea to rent them out to help offset costs, which has also made staying close to their second home appealing.
"People want to stay within driving distance because they're more able to maintain the homes, they have better networks in place, and friends and family nearby to use and sustain the homes," Jon Gray, vice president of HomeAway.com, told The Wall Street Journal.
Gulf Between Good Faith Estimate and Actual Closing Costs Troublesome
http://goo.gl/WZx4N
A home buyer gets ready for settlement day only to discover right before the “Big Day” that they are going to have to bring a lot more cash to close the deal than they originally thought. The surprise can sometimes threaten to derail a deal.
Lenders are required to provide buyers a good faith estimate of closing costs within three days of receiving borrowers’ mortgage applications. But these good faith estimates reportedly are sometimes underestimating—or even greatly over-estimating—the true costs of settlement.
The Consumer Financial Protection Bureau is working on revamping the good faith estimates and the HUD-1 settlement sheet, which is given to borrowers prior to closing listing the costs. The revamp is expected to provide more clarity to borrowers on closing costs and also make it easier for borrowers to shop around for their mortgage.
Title professionals report that a lot of the times the estimates provided to borrowers on the good faith estimates over-estimate the true cost of the loan.
“Lenders' estimates for services rendered by third parties such as appraisers and surveyors are supposed to be within 10 percent of the final figures,” The Chicago Tribune reports. “If the charges listed on the HUD-1 exceed the tolerance, lenders are required to eat the difference.”
As such, many title agents report in a recent survey that some lenders “pad” their initial estimates so they ensure they come within that 10 percent limit at closing.
“Overquoting” violates the law, says Michelle Korsmo, American Land Title's chief executive. Korsmo says that even if borrowers aren’t charged for items like document preparation and warehouse fees, lenders who provide inaccurate information on good faith estimates make it difficult for home buyers to shop around for the best closing services.
Also complicating the picture, title agents report in a survey that often times borrowers are receiving more than just one good faith estimate. Sometimes borrowers are receiving two or even up to seven estimates of their potential closing costs.
Source: “Beware of Bad 'Good Faith' Closing Estimates,” The Chicago Tribune (June 1, 2012)
http://goo.gl/WZx4N
A home buyer gets ready for settlement day only to discover right before the “Big Day” that they are going to have to bring a lot more cash to close the deal than they originally thought. The surprise can sometimes threaten to derail a deal.
Lenders are required to provide buyers a good faith estimate of closing costs within three days of receiving borrowers’ mortgage applications. But these good faith estimates reportedly are sometimes underestimating—or even greatly over-estimating—the true costs of settlement.
The Consumer Financial Protection Bureau is working on revamping the good faith estimates and the HUD-1 settlement sheet, which is given to borrowers prior to closing listing the costs. The revamp is expected to provide more clarity to borrowers on closing costs and also make it easier for borrowers to shop around for their mortgage.
Title professionals report that a lot of the times the estimates provided to borrowers on the good faith estimates over-estimate the true cost of the loan.
“Lenders' estimates for services rendered by third parties such as appraisers and surveyors are supposed to be within 10 percent of the final figures,” The Chicago Tribune reports. “If the charges listed on the HUD-1 exceed the tolerance, lenders are required to eat the difference.”
As such, many title agents report in a recent survey that some lenders “pad” their initial estimates so they ensure they come within that 10 percent limit at closing.
“Overquoting” violates the law, says Michelle Korsmo, American Land Title's chief executive. Korsmo says that even if borrowers aren’t charged for items like document preparation and warehouse fees, lenders who provide inaccurate information on good faith estimates make it difficult for home buyers to shop around for the best closing services.
Also complicating the picture, title agents report in a survey that often times borrowers are receiving more than just one good faith estimate. Sometimes borrowers are receiving two or even up to seven estimates of their potential closing costs.
Source: “Beware of Bad 'Good Faith' Closing Estimates,” The Chicago Tribune (June 1, 2012)
Friday, June 1, 2012
Congress Passes 60-Day Flood Insurance Extension
http://goo.gl/7O8lc
Congress passed and sent to President Obama a 60-day extension of the National Flood Insurance Program (NFIP) yesterday, which was set to expire today. The legislation gives lawmakers breathing room to look at a long-term extension and reform of the program, which NAR strongly supports.
The program, which provides federal backing of flood insurance for some 5.6 million home owners in 21,000 communities around the country, has been subject to more than a dozen short-term reauthorizations similar to yesterday’s in the last four years. Since 2008, the program has lapsed twice, with one such lapse lasting almost two months in 2010. NAR estimates that some 1,300 transactions a day were stalled during that lapse, creating enormous economic dislocations for the communities in which the properties were located. NAR has estimated that 8 million homes, or about 10 percent of all homes in the country, are located in either the 100-year flood plain or other types of flood hazard areas.
In testimony before the Senate Banking Committee earlier this month, NAR President Moe Veissi asked lawmakers to turn to long-term extension of the program as soon as possible. “All stopgap extensions do is maintain an uncertain status quo while shut downs risk homes, businesses, communities, and the U.S. economy,” he told the committee. NAR is urging lawmakers to reauthorize the program for five years and make reforms to increase the program’s efficiency.
Among those reforms are changes to the appeals process for areas designated as flood hazards areas, streamlining and improving the review process for flood mapping, and making the pricing structure more accurate.
More on flood insurance, NAR’s position, and President Veissi’s testimony is at REALTOR Magazine’s Speaking of Real Estate blog.
By Rob Freedman, REALTOR® Magazine
http://goo.gl/7O8lc
Congress passed and sent to President Obama a 60-day extension of the National Flood Insurance Program (NFIP) yesterday, which was set to expire today. The legislation gives lawmakers breathing room to look at a long-term extension and reform of the program, which NAR strongly supports.
The program, which provides federal backing of flood insurance for some 5.6 million home owners in 21,000 communities around the country, has been subject to more than a dozen short-term reauthorizations similar to yesterday’s in the last four years. Since 2008, the program has lapsed twice, with one such lapse lasting almost two months in 2010. NAR estimates that some 1,300 transactions a day were stalled during that lapse, creating enormous economic dislocations for the communities in which the properties were located. NAR has estimated that 8 million homes, or about 10 percent of all homes in the country, are located in either the 100-year flood plain or other types of flood hazard areas.
In testimony before the Senate Banking Committee earlier this month, NAR President Moe Veissi asked lawmakers to turn to long-term extension of the program as soon as possible. “All stopgap extensions do is maintain an uncertain status quo while shut downs risk homes, businesses, communities, and the U.S. economy,” he told the committee. NAR is urging lawmakers to reauthorize the program for five years and make reforms to increase the program’s efficiency.
Among those reforms are changes to the appeals process for areas designated as flood hazards areas, streamlining and improving the review process for flood mapping, and making the pricing structure more accurate.
More on flood insurance, NAR’s position, and President Veissi’s testimony is at REALTOR Magazine’s Speaking of Real Estate blog.
By Rob Freedman, REALTOR® Magazine
Luxury Homes Fetching Multiple Bids
http://goo.gl/ySKtu
The housing recovery may be taking hold faster in luxury real estate. Several parts of the country are reporting bidding wars in wealthy pockets as buyers look to snag rising home prices and investors search for bargains.
Property sales of $1 million and higher soared 7.2 percent in March compared to a year earlier, according to National Association of REALTORS®’ data.
Paul Bishop, NAR’s vice president of research, told Bloomberg News that as the financial markets improve, demand for high-end homes is rising in the northeastern United States, such as in Boston and New York. Demand is also rising along the California coast and portions of the southern United States.
"There's an added degree of confidence in the future and that prices are likely going to go up," says Joyce Rey, with Coldwell Banker Previews International in Beverly Hills. "There is a definite change in consumer attitude."
Investors, looking to make a profit, are making purchases on high-end homes in many areas of the country in record numbers, with many of these speculative investors making cash-only deals.
Still, many real estate professionals report the high-end bracket could be doing even better if the inventory of homes listed for sale wasn’t so tight.
"We could have twice as many sales if we had more inventory," Syd Leibovitch, president of Rodeo Realty in Beverly Hills, told Bloomberg News.
Source: “Luxury Homes are Selling for More than the Asking Prices in Many Parts of the Country,” Bloomberg News (May 27, 2012)
http://goo.gl/ySKtu
The housing recovery may be taking hold faster in luxury real estate. Several parts of the country are reporting bidding wars in wealthy pockets as buyers look to snag rising home prices and investors search for bargains.
Property sales of $1 million and higher soared 7.2 percent in March compared to a year earlier, according to National Association of REALTORS®’ data.
Paul Bishop, NAR’s vice president of research, told Bloomberg News that as the financial markets improve, demand for high-end homes is rising in the northeastern United States, such as in Boston and New York. Demand is also rising along the California coast and portions of the southern United States.
"There's an added degree of confidence in the future and that prices are likely going to go up," says Joyce Rey, with Coldwell Banker Previews International in Beverly Hills. "There is a definite change in consumer attitude."
Investors, looking to make a profit, are making purchases on high-end homes in many areas of the country in record numbers, with many of these speculative investors making cash-only deals.
Still, many real estate professionals report the high-end bracket could be doing even better if the inventory of homes listed for sale wasn’t so tight.
"We could have twice as many sales if we had more inventory," Syd Leibovitch, president of Rodeo Realty in Beverly Hills, told Bloomberg News.
Source: “Luxury Homes are Selling for More than the Asking Prices in Many Parts of the Country,” Bloomberg News (May 27, 2012)
REO Stigma Fades for Home Buyers, Survey Shows
http://goo.gl/Y6Sz0
The number of home buyers who say they are interested in purchasing a foreclosure has nearly tripled in the last two-and-a-half years, according to a new survey by Realtor.com. What’s more, 92 percent of those buyers say they would use the foreclosures as their primary residence rather than using them as investments.
"We see a combination of factors coming into play explaining the unexpected interest in foreclosures," says Steve Berkowitz, chief executive officer of Realtor.com. "Reductions in supply, expectations that home prices will rise, and changing attitudes toward foreclosures are contributing to the increased demand, especially among owner-occupants. As lenders begin processing their distressed inventories and releasing them for sale at the local level, we look to them to move carefully and monitor conditions so recently gained home values aren't diminished."
Nearly 65 percent of buyers say they’re likely to buy a foreclosure today compared to 25 percent who said that in October 2009, according to the Realtor.com survey.
Many of these potential buyers say they expect a 10 percent to 30 percent discount when buying a foreclosed property, according to the survey.
They also see greater potential for appreciation with a foreclosure purchase. Fifty-six percent of the possible foreclosure buyers surveyed said they expect their foreclosure purchase to appreciate about 10 percent within the next five years—or about 2 percent a year, according to the Realtor.com survey.
"Foreclosures can present a new opportunity for buyers to become home owners, especially considering the discounted purchase prices and lower down payment requirements,” says Errol Samuelson, Realtor.com’s president. “This is especially true for owner-occupants interested in improving the property, and holding to it long enough to realize appreciation that can be carried over to future home purchases.”
Source: Realtor.com
http://goo.gl/Y6Sz0
The number of home buyers who say they are interested in purchasing a foreclosure has nearly tripled in the last two-and-a-half years, according to a new survey by Realtor.com. What’s more, 92 percent of those buyers say they would use the foreclosures as their primary residence rather than using them as investments.
"We see a combination of factors coming into play explaining the unexpected interest in foreclosures," says Steve Berkowitz, chief executive officer of Realtor.com. "Reductions in supply, expectations that home prices will rise, and changing attitudes toward foreclosures are contributing to the increased demand, especially among owner-occupants. As lenders begin processing their distressed inventories and releasing them for sale at the local level, we look to them to move carefully and monitor conditions so recently gained home values aren't diminished."
Nearly 65 percent of buyers say they’re likely to buy a foreclosure today compared to 25 percent who said that in October 2009, according to the Realtor.com survey.
Many of these potential buyers say they expect a 10 percent to 30 percent discount when buying a foreclosed property, according to the survey.
They also see greater potential for appreciation with a foreclosure purchase. Fifty-six percent of the possible foreclosure buyers surveyed said they expect their foreclosure purchase to appreciate about 10 percent within the next five years—or about 2 percent a year, according to the Realtor.com survey.
"Foreclosures can present a new opportunity for buyers to become home owners, especially considering the discounted purchase prices and lower down payment requirements,” says Errol Samuelson, Realtor.com’s president. “This is especially true for owner-occupants interested in improving the property, and holding to it long enough to realize appreciation that can be carried over to future home purchases.”
Source: Realtor.com
Celebrities Lose Their Star Power With Housing
http://goo.gl/VbyHR
Celebrities are increasingly finding that having a famous name doesn’t always help them sell real estate, even though those famous names may help them move movie or music tickets, perfumes, or other products.
Several celebrities who have tried to sell their homes recently have had to reduce their asking prices or have found their big-priced homes linger on the market waiting for a buyer.
In the last year, for example, actors like Goldie Hawn and Kurt Russell have had to reduce the asking price for their $11.2 million Malibu beach home by $3.5 million. Ozzy and Sharon Osbourne sold their Malibu home for 21 percent less than their original asking price at $7.9 million. Actress Meg Ryan has relisted her Bel Air mansion at $11.4 million, a 42 percent price reduction since she first listed it in 2008.
"In the art world, there is this notion of provenance — that who owns something can detract or add to the value," says Elizabeth Currid-Halkett, author of Starstruck: The Business of Celebrity. "But it does not seem to translate to celebrity homes."
However, celebrities do tend to draw extra attention for their for-sale homes. But real estate pros say that celebrities just shouldn’t equate that with a “sold” sign or a boost in sales price.
“The value of a house has more to do with the individual stamp the person puts on the property, real estate experts say, than a famous autograph on the sales contract,” according to a recent Los Angeles Times article.
Source: “Celebrity Sellers Have Little Effect on Home Prices," Los Angeles Times (May 19, 2012)
http://goo.gl/VbyHR
Celebrities are increasingly finding that having a famous name doesn’t always help them sell real estate, even though those famous names may help them move movie or music tickets, perfumes, or other products.
Several celebrities who have tried to sell their homes recently have had to reduce their asking prices or have found their big-priced homes linger on the market waiting for a buyer.
In the last year, for example, actors like Goldie Hawn and Kurt Russell have had to reduce the asking price for their $11.2 million Malibu beach home by $3.5 million. Ozzy and Sharon Osbourne sold their Malibu home for 21 percent less than their original asking price at $7.9 million. Actress Meg Ryan has relisted her Bel Air mansion at $11.4 million, a 42 percent price reduction since she first listed it in 2008.
"In the art world, there is this notion of provenance — that who owns something can detract or add to the value," says Elizabeth Currid-Halkett, author of Starstruck: The Business of Celebrity. "But it does not seem to translate to celebrity homes."
However, celebrities do tend to draw extra attention for their for-sale homes. But real estate pros say that celebrities just shouldn’t equate that with a “sold” sign or a boost in sales price.
“The value of a house has more to do with the individual stamp the person puts on the property, real estate experts say, than a famous autograph on the sales contract,” according to a recent Los Angeles Times article.
Source: “Celebrity Sellers Have Little Effect on Home Prices," Los Angeles Times (May 19, 2012)
Retirees Struggle to Qualify for Mortgages
http://goo.gl/3lDMp
Retirees’ decreased monthly incomes may make it more difficult for them to meet the stricter underwriting standards that lenders have in place in order to qualify for a mortgage, according to an article in The Washington Post.
Whether refinancing their current mortgage or applying for a new loan to purchase a home for the golden years, more retirees are saying they are increasingly facing roadblocks when it comes to applying for a mortgage.
One 68-year-old home owner, with a net worth in the seven-figure range and an 826 credit score, said he was looking to refinance into today’s record low interest rates and that he was shocked when he was not approved to refinance his mortgage. He told The Washington Post that it was the first time he was rejected in 45 years of home ownership and after having eight different home loans through the years.
The reason more retirees are being turned down: Insufficient income.
If retirees are rejected by lenders for a loan, financial experts say: Don’t lose hope. They say that some loan officers aren’t aware of the various techniques for qualifying retirees who are “asset-rich but income-deficient,” according to The Washington Post.
Even retirees whose income is lower during retirement should still be able to refinance or obtain a new mortgage as long as they have sufficient retirement assets, such as through their IRA or other retirement accounts, experts say. “You just need to shop around and deal with experienced loan officers who know the ropes and are willing to work with you for your business,” The Washington Post notes.
Source: “Mortgage Rules Prove too Strict for Some Retirees,” The Washington Post (May 24, 2012)
http://goo.gl/3lDMp
Retirees’ decreased monthly incomes may make it more difficult for them to meet the stricter underwriting standards that lenders have in place in order to qualify for a mortgage, according to an article in The Washington Post.
Whether refinancing their current mortgage or applying for a new loan to purchase a home for the golden years, more retirees are saying they are increasingly facing roadblocks when it comes to applying for a mortgage.
One 68-year-old home owner, with a net worth in the seven-figure range and an 826 credit score, said he was looking to refinance into today’s record low interest rates and that he was shocked when he was not approved to refinance his mortgage. He told The Washington Post that it was the first time he was rejected in 45 years of home ownership and after having eight different home loans through the years.
The reason more retirees are being turned down: Insufficient income.
If retirees are rejected by lenders for a loan, financial experts say: Don’t lose hope. They say that some loan officers aren’t aware of the various techniques for qualifying retirees who are “asset-rich but income-deficient,” according to The Washington Post.
Even retirees whose income is lower during retirement should still be able to refinance or obtain a new mortgage as long as they have sufficient retirement assets, such as through their IRA or other retirement accounts, experts say. “You just need to shop around and deal with experienced loan officers who know the ropes and are willing to work with you for your business,” The Washington Post notes.
Source: “Mortgage Rules Prove too Strict for Some Retirees,” The Washington Post (May 24, 2012)
Pending Home Sales Decline in April but Up Strongly From a Year Ago
http://goo.gl/DFpJ2
Pending home sales retrenched in April following three consecutive monthly gains, but are notably higher than a year ago, according to the National Association of REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was 83.5. The data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, said a one-month setback in light of many months of gains does not change the fundamentally improving housing market conditions. “Home contract activity has been above year-ago levels now for 12 consecutive months. The housing recovery momentum continues,” he said.
Yun notes home sales are staying well above the levels seen from 2008 through 2011. “Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007,” he said. “All of the major housing market indicators are expected to trend gradually up, but a new federal budget must be passed before the end of the year for the economy to continue to move forward.”
The PHSI in the Northeast rose 0.9 percent to 78.9 in April and is 19.9 percent higher than April 2011. In the Midwest the index slipped 0.3 percent to 93.0 but is 23.0 percent above a year ago. Pending home sales in the South fell 6.8 percent to an index of 105.7 in April but are 13.3 percent higher than April 2011. In the West the index dropped 12.0 percent in April to 94.9 but is 5.1 percent above a year ago.
The housing forecast has been upgraded, with existing-home sales expected to reach 4.66 million this year, compared with 4.26 million in 2011. The outlook for 2013 is now 4.92 million, but could vary significantly depending on two scenarios.
If lending returns to normal, the 2013 outlook for existing-home sales would measurably improve to 5.3 million. However, a fiscal cliff scenario of higher taxes and sharp spending cuts beginning in early 2013, which is an unlikely event but still worth noting, would lower the sales projection to 4.5 million.
Because of measurably lower inventory supplies, the forecast for home prices has been upwardly revised with the median existing-home price projected to rise 2 to 3 percent this year and 4 to 5 percent in 2013, with wide local market variations. Miami and Phoenix will easily achieve double-digit price growth by year end.
Yun said the price gains will measurably reduce the number of underwater homeowners. “For example, a 5 percent national price gain means the number of underwater home owners would fall to about 9 million from current estimates of around 11 million. A 10 percent gain, say over the next two years, would reduce the underwater status to about 7 million households out of 75 million owner-occupied homes,” he said.
About 25 million homes are owned free and clear without a mortgage.
Though the proportion of distressed properties is still high, the numbers have been falling over the past two years. “The diminishing share of distressed properties is another reason for higher home prices in upcoming months,” Yun added.
Source: National Association of REALTORS®
http://goo.gl/DFpJ2
Pending home sales retrenched in April following three consecutive monthly gains, but are notably higher than a year ago, according to the National Association of REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was 83.5. The data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, said a one-month setback in light of many months of gains does not change the fundamentally improving housing market conditions. “Home contract activity has been above year-ago levels now for 12 consecutive months. The housing recovery momentum continues,” he said.
Yun notes home sales are staying well above the levels seen from 2008 through 2011. “Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007,” he said. “All of the major housing market indicators are expected to trend gradually up, but a new federal budget must be passed before the end of the year for the economy to continue to move forward.”
The PHSI in the Northeast rose 0.9 percent to 78.9 in April and is 19.9 percent higher than April 2011. In the Midwest the index slipped 0.3 percent to 93.0 but is 23.0 percent above a year ago. Pending home sales in the South fell 6.8 percent to an index of 105.7 in April but are 13.3 percent higher than April 2011. In the West the index dropped 12.0 percent in April to 94.9 but is 5.1 percent above a year ago.
The housing forecast has been upgraded, with existing-home sales expected to reach 4.66 million this year, compared with 4.26 million in 2011. The outlook for 2013 is now 4.92 million, but could vary significantly depending on two scenarios.
If lending returns to normal, the 2013 outlook for existing-home sales would measurably improve to 5.3 million. However, a fiscal cliff scenario of higher taxes and sharp spending cuts beginning in early 2013, which is an unlikely event but still worth noting, would lower the sales projection to 4.5 million.
Because of measurably lower inventory supplies, the forecast for home prices has been upwardly revised with the median existing-home price projected to rise 2 to 3 percent this year and 4 to 5 percent in 2013, with wide local market variations. Miami and Phoenix will easily achieve double-digit price growth by year end.
Yun said the price gains will measurably reduce the number of underwater homeowners. “For example, a 5 percent national price gain means the number of underwater home owners would fall to about 9 million from current estimates of around 11 million. A 10 percent gain, say over the next two years, would reduce the underwater status to about 7 million households out of 75 million owner-occupied homes,” he said.
About 25 million homes are owned free and clear without a mortgage.
Though the proportion of distressed properties is still high, the numbers have been falling over the past two years. “The diminishing share of distressed properties is another reason for higher home prices in upcoming months,” Yun added.
Source: National Association of REALTORS®
Thursday, May 31, 2012
The 'Walmart Effect' on Home Prices?
http://goo.gl/lu7ev
When a Walmart comes to town, critics have long argued that the big-box discount retailer has the potential to lower nearby home values. Researchers decided to test that theory to see if there really is a “Walmart Effect” when it comes to home values.
What they found: Nearby Walmart stores can actually drive up home prices.
Economists Devin Pope at University of Chicago and Jaren Pope at Brigham Young University analyzed more than 600,000 real estate transactions near 159 newly opened Walmart stores between 2001 and 2006 in their study.
The researchers found that home owners located within a half mile of a new Walmart store saw their home prices increase anywhere from 2 percent to 3 percent, or an average of $7,000, in two-and-a-half years after a new Walmart store opened. Home owners located a half mile to one mile away also saw a boost, with home prices rising 1 percent to 2 percent or about $4,000.
"It was not until after the announcement and during the building process that we see homes close to the Walmart start to increase in value relative to homes that are slightly further away," the researchers say. "This suggests that it was the building of the Walmart itself that caused the change in housing values that we find, and that our results are not simply explained by Walmart building in areas that are experiencing housing price increases."
Critics, however, are quick to note that the study doesn’t take into account the effect on home prices with a new Walmart in rural areas. Also, some previous studies have shown that Walmart’s low prices can increase the number of nearby poverty-level households.
Source: “When Walmart Comes to Town, Home Prices Go ...” CNNMoney (May 30, 2012)
http://goo.gl/lu7ev
When a Walmart comes to town, critics have long argued that the big-box discount retailer has the potential to lower nearby home values. Researchers decided to test that theory to see if there really is a “Walmart Effect” when it comes to home values.
What they found: Nearby Walmart stores can actually drive up home prices.
Economists Devin Pope at University of Chicago and Jaren Pope at Brigham Young University analyzed more than 600,000 real estate transactions near 159 newly opened Walmart stores between 2001 and 2006 in their study.
The researchers found that home owners located within a half mile of a new Walmart store saw their home prices increase anywhere from 2 percent to 3 percent, or an average of $7,000, in two-and-a-half years after a new Walmart store opened. Home owners located a half mile to one mile away also saw a boost, with home prices rising 1 percent to 2 percent or about $4,000.
"It was not until after the announcement and during the building process that we see homes close to the Walmart start to increase in value relative to homes that are slightly further away," the researchers say. "This suggests that it was the building of the Walmart itself that caused the change in housing values that we find, and that our results are not simply explained by Walmart building in areas that are experiencing housing price increases."
Critics, however, are quick to note that the study doesn’t take into account the effect on home prices with a new Walmart in rural areas. Also, some previous studies have shown that Walmart’s low prices can increase the number of nearby poverty-level households.
Source: “When Walmart Comes to Town, Home Prices Go ...” CNNMoney (May 30, 2012)
Distressed Homes Make Up a Quarter of Home Sales
http://goo.gl/92irm
About one in four home sales during the first quarter of this year was in some form of foreclosure, according to RealtyTrac. A growing number of those distressed sales were also from short sales, the newly released report shows.
Distressed properties—either bank-owned, in default, or scheduled for auction—accounted for 26 percent of all residential sales during the first three months of this year, which is up 8 percent from the previous quarter, according to RealtyTrac.
Short sales made up a bigger bulk of that number—12 percent of all home sales—and reached a three-year high during the first quarter of this year. The percentage of short sales rose 25 percent compared to a year earlier.
Short sales in the first quarter sold for an average price of $175,461 (which is the lowest average ever recorded by RealtyTrac since 2005). Meanwhile, foreclosures in the first quarter sold for an average of $161,214, which is 27 percent below the average price of a non-foreclosure, according to RealtyTrac.
"Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions," says Brandon Moore, chief executive of RealtyTrac.
Source: “Foreclosures Made up 26% of U.S. Home Sales in First Quarter,” CNNMoney (May 31, 2012)
http://goo.gl/92irm
About one in four home sales during the first quarter of this year was in some form of foreclosure, according to RealtyTrac. A growing number of those distressed sales were also from short sales, the newly released report shows.
Distressed properties—either bank-owned, in default, or scheduled for auction—accounted for 26 percent of all residential sales during the first three months of this year, which is up 8 percent from the previous quarter, according to RealtyTrac.
Short sales made up a bigger bulk of that number—12 percent of all home sales—and reached a three-year high during the first quarter of this year. The percentage of short sales rose 25 percent compared to a year earlier.
Short sales in the first quarter sold for an average price of $175,461 (which is the lowest average ever recorded by RealtyTrac since 2005). Meanwhile, foreclosures in the first quarter sold for an average of $161,214, which is 27 percent below the average price of a non-foreclosure, according to RealtyTrac.
"Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions," says Brandon Moore, chief executive of RealtyTrac.
Source: “Foreclosures Made up 26% of U.S. Home Sales in First Quarter,” CNNMoney (May 31, 2012)
Consumer Confidence Reaches Highest Level in 4 Years
http://goo.gl/Hl3Yk
Americans are more positive about the direction of the economy, as consumer confidence reached its highest level since October 2007, according to a Thomson Reuters/University of Michigan index on consumer sentiment.
Americans are more positive about the job market and salary increases, and may be more willing to spend, the index showed. Half of the consumers in the index said the economy had improved in the last year. And more consumers reported plans to buy cars and household durables.
Higher-income Americans are more optimistic about salary increases than lower-income Americans, according to the index. Americans with incomes greater than $75,000 predicted more salary increases with an average 2 percent boost in income by next year. However, Americans who make less than $75,000 only anticipate a 0.3 percent increase in salaries.
“You’ve got a variety of forces working on consumer sentiment at this point. You’ve got obviously concerns about Europe, the economy in general, lower stock prices — all those are a negative,” Scott J. Brown, chief economist at Raymond James in St. Petersburg, Fla., told Reuters News. “But lower gasoline prices are a plus, so I think that’s probably part of the factor that you’ll see an increase in purchasing power if gasoline prices continue to move down.”
Source: “May Consumer Sentiment Highest in More Than 4 Years,” Reuters (May 25, 2012)
http://goo.gl/Hl3Yk
Americans are more positive about the direction of the economy, as consumer confidence reached its highest level since October 2007, according to a Thomson Reuters/University of Michigan index on consumer sentiment.
Americans are more positive about the job market and salary increases, and may be more willing to spend, the index showed. Half of the consumers in the index said the economy had improved in the last year. And more consumers reported plans to buy cars and household durables.
Higher-income Americans are more optimistic about salary increases than lower-income Americans, according to the index. Americans with incomes greater than $75,000 predicted more salary increases with an average 2 percent boost in income by next year. However, Americans who make less than $75,000 only anticipate a 0.3 percent increase in salaries.
“You’ve got a variety of forces working on consumer sentiment at this point. You’ve got obviously concerns about Europe, the economy in general, lower stock prices — all those are a negative,” Scott J. Brown, chief economist at Raymond James in St. Petersburg, Fla., told Reuters News. “But lower gasoline prices are a plus, so I think that’s probably part of the factor that you’ll see an increase in purchasing power if gasoline prices continue to move down.”
Source: “May Consumer Sentiment Highest in More Than 4 Years,” Reuters (May 25, 2012)
Is Home Ownership Still the American Dream?
http://goo.gl/FpUZp
In the aftermath of the housing crisis, some analysts are questioning whether the public still considers home ownership to be part of the American dream.
But the home ownership dream is still alive, according to several recent surveys. For example, a recently released survey by Woodrow Wilson Center found that the majority of Americans rated the importance of home ownership on a personal level at 10 out of 10.
“I think for many people, [housing] is a fundamental piece of the American dream, the ability to even think about owning one’s own home,” says Michael Martin, a host with NPR. “And for most people [it’s] not owning only one home [but] owning a better home.”
NPR has kicked off a series on home ownership and the American dream, and in its recently first segment that aired in the series experts talked about whether the dream of home ownership is still a dream.
The foreclosure crisis and plummeting home prices has shaken some people’s perceptions of the dream of home ownership, the hosts acknowledged. Many young professionals are now putting home ownership on hold and opting to rent as they get their finances in shape.
But “it's not giving up on home ownership as much as it's moving towards more of the way Germans think about home ownership, which is that a house is something you aspire to get eventually,” NPR's senior business editor, Marilyn Geewax, said on the NPR show. “It's sort of the reward you get after you've established yourself in your career. You don't start by buying a house and work your way up. You work your way up and then buy a house.”
Geewax went on to explain the shift in the perception of home ownership: “In 2001, if you bought a house, it didn't matter what phase [of] life you were in. If you held onto it until 2005, you could flip it and make a profit. Today, home ownership is really returning more to that idea that a house is someplace where you settle down. You're looking for a stable neighborhood. You look at a house as a way to shelter your loved ones, your possessions, and your money. It's a pretty good place to sink your money. Instead of paying rent every month, you put it into the house and you can build equity over time. So if you look at it as shelter and a slow growing, long term investment, financial planners will tell you that owning a house can still make a lot of sense.”
A recently released Coldwell Banker survey also revealed a shift in Americans’ perceptions of home ownership, from a financial perspective to a more emotional one.
“Instead of taking things for granted, people are protective of their jobs, homes, and futures,” says Robi Ludwig, a psychologist in New York who was involved in the study. “And now that we’re picking up the pieces [after the financial crisis], we’re seeing a psychological shift. Instead of looking at homes through the eyes of an economist, we’re realizing that a home doesn’t solely equate to financial return or measure only to a mortgage amount. Instead the home is the emotional center of our lives, and it remains a critical component of who we are.”
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
http://goo.gl/FpUZp
In the aftermath of the housing crisis, some analysts are questioning whether the public still considers home ownership to be part of the American dream.
But the home ownership dream is still alive, according to several recent surveys. For example, a recently released survey by Woodrow Wilson Center found that the majority of Americans rated the importance of home ownership on a personal level at 10 out of 10.
“I think for many people, [housing] is a fundamental piece of the American dream, the ability to even think about owning one’s own home,” says Michael Martin, a host with NPR. “And for most people [it’s] not owning only one home [but] owning a better home.”
NPR has kicked off a series on home ownership and the American dream, and in its recently first segment that aired in the series experts talked about whether the dream of home ownership is still a dream.
The foreclosure crisis and plummeting home prices has shaken some people’s perceptions of the dream of home ownership, the hosts acknowledged. Many young professionals are now putting home ownership on hold and opting to rent as they get their finances in shape.
But “it's not giving up on home ownership as much as it's moving towards more of the way Germans think about home ownership, which is that a house is something you aspire to get eventually,” NPR's senior business editor, Marilyn Geewax, said on the NPR show. “It's sort of the reward you get after you've established yourself in your career. You don't start by buying a house and work your way up. You work your way up and then buy a house.”
Geewax went on to explain the shift in the perception of home ownership: “In 2001, if you bought a house, it didn't matter what phase [of] life you were in. If you held onto it until 2005, you could flip it and make a profit. Today, home ownership is really returning more to that idea that a house is someplace where you settle down. You're looking for a stable neighborhood. You look at a house as a way to shelter your loved ones, your possessions, and your money. It's a pretty good place to sink your money. Instead of paying rent every month, you put it into the house and you can build equity over time. So if you look at it as shelter and a slow growing, long term investment, financial planners will tell you that owning a house can still make a lot of sense.”
A recently released Coldwell Banker survey also revealed a shift in Americans’ perceptions of home ownership, from a financial perspective to a more emotional one.
“Instead of taking things for granted, people are protective of their jobs, homes, and futures,” says Robi Ludwig, a psychologist in New York who was involved in the study. “And now that we’re picking up the pieces [after the financial crisis], we’re seeing a psychological shift. Instead of looking at homes through the eyes of an economist, we’re realizing that a home doesn’t solely equate to financial return or measure only to a mortgage amount. Instead the home is the emotional center of our lives, and it remains a critical component of who we are.”
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Americans’ Perspective on Home Ownership Shifts
http://goo.gl/ZPlXy
Home ownership is getting more emotional than it used to be. A new survey by Coldwell Banker Real Estate finds that Americans are increasingly saying that the real value of home ownership is emotional, not financial. That marks a stark contrast from Americans’ perspectives on home ownership during the housing boom, in which they mostly viewed it as a financial venture.
“Instead of taking things for granted, people are protective of their jobs, homes, and futures,” says Robi Ludwig, a psychologist in New York who was involved in the study. “And now that we’re picking up the pieces [after the financial crisis], we’re seeing a psychological shift. Instead of looking at homes through the eyes of an economist, we’re realizing that a home doesn’t solely equate to financial return or measure only to a mortgage amount. Instead the home is the emotional center of our lives, and it remains a critical component of who we are.”
The more emotional ties to home ownership are causing Americans to get more practical in their home buying, the survey finds. Eighty-six percent of those surveyed say that people should no longer stretch themselves financially just to get a bigger house.
“Americans now recognize that they don’t need the biggest, most ornate home on the block,” Ludwig says. “Rather, they can and should live within their means.”
Buyers today are more swayed by a home that they can easily afford and that reflects their personalities. Seventy-one percent of Americans surveyed said that a home is an expression of their identity.
“Our homes help to define who we are, partly because we have to ask ourselves a lot of really honest questions, including what we want in life and why,” Ludwig says. She says that a home serves as an expression of peoples’ personalities, down to the wall colors they choose and the family photos they display.
“It’s only been in the last few years that the conversation has shifted almost entirely to the financial aspect of home ownership,” says Jim Gillespie, CEO of Coldwell Banker Real Estate. Gillespie adds that a more emotional perspective on home ownership will make owning a house a more central of the American Dream once again and will aid in the housing recovery.
The Coldwell Banker survey also found that 78 percent of owners say owning a home is one of their greatest life achievements. What’s more, 83 percent of renters say they plan to own a home one day.
Source: Coldwell Banker and “The American Dream Gets Another Facelift,” Time Magazine (May 15, 2012)
http://goo.gl/ZPlXy
Home ownership is getting more emotional than it used to be. A new survey by Coldwell Banker Real Estate finds that Americans are increasingly saying that the real value of home ownership is emotional, not financial. That marks a stark contrast from Americans’ perspectives on home ownership during the housing boom, in which they mostly viewed it as a financial venture.
“Instead of taking things for granted, people are protective of their jobs, homes, and futures,” says Robi Ludwig, a psychologist in New York who was involved in the study. “And now that we’re picking up the pieces [after the financial crisis], we’re seeing a psychological shift. Instead of looking at homes through the eyes of an economist, we’re realizing that a home doesn’t solely equate to financial return or measure only to a mortgage amount. Instead the home is the emotional center of our lives, and it remains a critical component of who we are.”
The more emotional ties to home ownership are causing Americans to get more practical in their home buying, the survey finds. Eighty-six percent of those surveyed say that people should no longer stretch themselves financially just to get a bigger house.
“Americans now recognize that they don’t need the biggest, most ornate home on the block,” Ludwig says. “Rather, they can and should live within their means.”
Buyers today are more swayed by a home that they can easily afford and that reflects their personalities. Seventy-one percent of Americans surveyed said that a home is an expression of their identity.
“Our homes help to define who we are, partly because we have to ask ourselves a lot of really honest questions, including what we want in life and why,” Ludwig says. She says that a home serves as an expression of peoples’ personalities, down to the wall colors they choose and the family photos they display.
“It’s only been in the last few years that the conversation has shifted almost entirely to the financial aspect of home ownership,” says Jim Gillespie, CEO of Coldwell Banker Real Estate. Gillespie adds that a more emotional perspective on home ownership will make owning a house a more central of the American Dream once again and will aid in the housing recovery.
The Coldwell Banker survey also found that 78 percent of owners say owning a home is one of their greatest life achievements. What’s more, 83 percent of renters say they plan to own a home one day.
Source: Coldwell Banker and “The American Dream Gets Another Facelift,” Time Magazine (May 15, 2012)
10 Metros Where List Prices Are Rising the Most
http://goo.gl/943Jk
Prices of for-sale homes are on the rise in several metro areas. According to Realtor.com, which tracks 146 metro markets, the following areas have seen their median list prices increase the most from March to April:
1. Minneapolis-St. Paul, Minn.-Wis.
Monthly median list price increase: 7.90 percent
Median list price: $199,500
2. Santa Barbara-Santa Maria-Lompoc, Calif.
Monthly median list price increase: 7.07 percent
Median list price: $545,000
3. Detroit
Monthly median list price increase: 4.66 percent
Median list price: $89,900
4. San Francisco
Monthly median list price increase: 4.62 percent
Median list price: $679,000
5. Seattle-Bellevue-Everett, Wash.
Monthly median list price increase: 4.46 percent
Median list price: $328,950
6. Boise City, Idaho
Monthly median list price increase: 4.40 percent
Median list price: $162,374
7. Trenton, N.J.
Monthly median list price increase: 4.26 percent
Median list price: $259,450
8. Boulder-Longmont, Colo.
Monthly median list price increase: 4.20 percent
Median list price: $375,000
9. Orange County, Calif.
Monthly median list price increase: 4.19 percent
Median list price: $448,000
10. Colorado Springs, Colo.
Monthly median list price increase: 4.09 percent
Median list price: $229,000
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
http://goo.gl/943Jk
Prices of for-sale homes are on the rise in several metro areas. According to Realtor.com, which tracks 146 metro markets, the following areas have seen their median list prices increase the most from March to April:
1. Minneapolis-St. Paul, Minn.-Wis.
Monthly median list price increase: 7.90 percent
Median list price: $199,500
2. Santa Barbara-Santa Maria-Lompoc, Calif.
Monthly median list price increase: 7.07 percent
Median list price: $545,000
3. Detroit
Monthly median list price increase: 4.66 percent
Median list price: $89,900
4. San Francisco
Monthly median list price increase: 4.62 percent
Median list price: $679,000
5. Seattle-Bellevue-Everett, Wash.
Monthly median list price increase: 4.46 percent
Median list price: $328,950
6. Boise City, Idaho
Monthly median list price increase: 4.40 percent
Median list price: $162,374
7. Trenton, N.J.
Monthly median list price increase: 4.26 percent
Median list price: $259,450
8. Boulder-Longmont, Colo.
Monthly median list price increase: 4.20 percent
Median list price: $375,000
9. Orange County, Calif.
Monthly median list price increase: 4.19 percent
Median list price: $448,000
10. Colorado Springs, Colo.
Monthly median list price increase: 4.09 percent
Median list price: $229,000
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Short-Sale Process Expected to Speed Up in June
http://goo.gl/1iW1d
The short-sale process is expected to get shorter starting June 15. New guidelines issued under the Federal Housing Finance Agency will require Fannie Mae and Freddie Mac to give home buyers of short sales notice of their final decision within 60 days. The new guidelines also will require the mortgage giants to respond to initial short-sale requests within 30 days of receiving an offer from a potential buyer.
The speedier process is expected to be a boost to the housing market, Michael McHugh, president of the Empire State Mortgage Bankers Association, told the New York Times. Home buyers and sellers often have to wait months before they receive a decision from a lender on an offer for a short sale. Some deals fall apart just from the long wait alone.
Short sales have been increasing in recent months, as many lenders find them more appealing than foreclosures, which can be much more costly and take longer to remove from their books.
Short sales now outpace foreclosure sales in many parts of the country. Short sales represent more than 14 percent of existing-home sales, according to CoreLogic housing data from March, the most recent month available.
McHugh says that a faster short-sale process may be particularly helpful in speeding the recovery in judicial states, where foreclosures must go through the courts before they are approved. For example, in New York, judicial foreclosures can take a year or longer to be approved. Now short sales may be viewed by defaulting home owners as more of an option in avoiding foreclosure.
“There should be a significant improvement in the turnaround,” McHugh said regarding housing markets with judicial foreclosure processes.
Source: “Speeding Up Short Sales,” The New York Times (May 24, 2012)
http://goo.gl/1iW1d
The short-sale process is expected to get shorter starting June 15. New guidelines issued under the Federal Housing Finance Agency will require Fannie Mae and Freddie Mac to give home buyers of short sales notice of their final decision within 60 days. The new guidelines also will require the mortgage giants to respond to initial short-sale requests within 30 days of receiving an offer from a potential buyer.
The speedier process is expected to be a boost to the housing market, Michael McHugh, president of the Empire State Mortgage Bankers Association, told the New York Times. Home buyers and sellers often have to wait months before they receive a decision from a lender on an offer for a short sale. Some deals fall apart just from the long wait alone.
Short sales have been increasing in recent months, as many lenders find them more appealing than foreclosures, which can be much more costly and take longer to remove from their books.
Short sales now outpace foreclosure sales in many parts of the country. Short sales represent more than 14 percent of existing-home sales, according to CoreLogic housing data from March, the most recent month available.
McHugh says that a faster short-sale process may be particularly helpful in speeding the recovery in judicial states, where foreclosures must go through the courts before they are approved. For example, in New York, judicial foreclosures can take a year or longer to be approved. Now short sales may be viewed by defaulting home owners as more of an option in avoiding foreclosure.
“There should be a significant improvement in the turnaround,” McHugh said regarding housing markets with judicial foreclosure processes.
Source: “Speeding Up Short Sales,” The New York Times (May 24, 2012)
Sunday, May 27, 2012
Top 15 Hot-Spots for Recent College Grads
http://goo.gl/LYcHU
College grads say that relocating for more employment opportunities is their main motivation for moving this year, according to a recent Apartments.com survey.
So where are the best places for them to relocate to? Apartments.com and CareerBuilder for the fifth year in a row have compiled a list ranking the top 15 best cities for recent college graduates, identifying the places that offer some of the best opportunities for employment and quality of life for young professionals.
The top 15 cities for recent college graduates for 2012 are:
1. Washington, D.C.
One-bedroom average rent: $1,696
2. New York
One-bedroom average rent: $1,789
3. Boston
One-bedroom average rent: $1,814
4. Minneapolis
One-bedroom average rent: $974
5. Dallas
One-bedroom average rent: $912
6. Atlanta
One-bedroom average rent: $855
7. Chicago
One-bedroom average rent: $1,224
8. Houston
One-bedroom average rent: $910
9. Philadelphia
One-bedroom average rent: $1,070
10. Baltimore
One-bedroom average rent: $1,235
11. Denver
One-bedroom average rent: $1,089
12. Salt Lake City
One-bedroom average rent: $772
13. San Francisco
One-bedroom average rent: $1,653
14. Seattle
One-bedroom average rent: $1,199
15. Oklahoma City, Okla.
One-bedroom average rent: $676
Source: “Top 15 Best Cities for Recent College Graduates,” RISMedia (May 24, 2012)
http://goo.gl/LYcHU
College grads say that relocating for more employment opportunities is their main motivation for moving this year, according to a recent Apartments.com survey.
So where are the best places for them to relocate to? Apartments.com and CareerBuilder for the fifth year in a row have compiled a list ranking the top 15 best cities for recent college graduates, identifying the places that offer some of the best opportunities for employment and quality of life for young professionals.
The top 15 cities for recent college graduates for 2012 are:
1. Washington, D.C.
One-bedroom average rent: $1,696
2. New York
One-bedroom average rent: $1,789
3. Boston
One-bedroom average rent: $1,814
4. Minneapolis
One-bedroom average rent: $974
5. Dallas
One-bedroom average rent: $912
6. Atlanta
One-bedroom average rent: $855
7. Chicago
One-bedroom average rent: $1,224
8. Houston
One-bedroom average rent: $910
9. Philadelphia
One-bedroom average rent: $1,070
10. Baltimore
One-bedroom average rent: $1,235
11. Denver
One-bedroom average rent: $1,089
12. Salt Lake City
One-bedroom average rent: $772
13. San Francisco
One-bedroom average rent: $1,653
14. Seattle
One-bedroom average rent: $1,199
15. Oklahoma City, Okla.
One-bedroom average rent: $676
Source: “Top 15 Best Cities for Recent College Graduates,” RISMedia (May 24, 2012)
Bigger is No Longer Better in Housing, Study Says
http://goo.gl/5LLw9
Aspiring home owners are thinking small with their purchase, a trend that is expected to grow in the coming years, according to a new report — "The Shifting Nature of U.S. Housing Demand" — by the Demand Institute, a division of the U.S. Conference Board.
“Many [buyers] will scale back their housing aspirations,” according to the report. The report projects that the average size of a new home will go from 2,500 square feet during the housing boom to 2,150 square feet by 2015. That is about the same size of homes in the mid-1990s before the McMansion trend took hold.
The report suggests that other businesses may see a benefit from this expected decrease in square footage in homes, too.
For example, the report suggests that home owners likely will turn to commercial storage spaces more instead of having big basements or attics to store their treasures. Also, more home owners may opt for a gym membership over devoting square footage in their home to a workout room. Also, as kitchens get smaller and have fewer cupboards, home owners may have to make more frequent trips to the grocery store, which could be a perk for the retail industry.
Source: “Housing’s Future: Renting and Downsizing,” The Wall Street Journal (May 15, 2012)
http://goo.gl/5LLw9
Aspiring home owners are thinking small with their purchase, a trend that is expected to grow in the coming years, according to a new report — "The Shifting Nature of U.S. Housing Demand" — by the Demand Institute, a division of the U.S. Conference Board.
“Many [buyers] will scale back their housing aspirations,” according to the report. The report projects that the average size of a new home will go from 2,500 square feet during the housing boom to 2,150 square feet by 2015. That is about the same size of homes in the mid-1990s before the McMansion trend took hold.
The report suggests that other businesses may see a benefit from this expected decrease in square footage in homes, too.
For example, the report suggests that home owners likely will turn to commercial storage spaces more instead of having big basements or attics to store their treasures. Also, more home owners may opt for a gym membership over devoting square footage in their home to a workout room. Also, as kitchens get smaller and have fewer cupboards, home owners may have to make more frequent trips to the grocery store, which could be a perk for the retail industry.
Source: “Housing’s Future: Renting and Downsizing,” The Wall Street Journal (May 15, 2012)
Commercial Real Estate Improves, Multifamily Strong
http://goo.gl/2sf36
Shaking off a prolonged impact from the recession, fundamentals are gradually improving in all of the major commercial real estate sectors, according to the National Association of REALTORS® quarterly commercial real estate forecast. The apartment rental sector has fully recovered and is growing.
The findings also are confirmed in NAR’s recent quarterly Commercial Real Estate Market Survey, which collects data from members about market activity.
Lawrence Yun, NAR chief economist, said new jobs are the key. “Ongoing job creation, which is at a higher level this year, is fueling an underlying demand for commercial real estate space, assisted by a steady increase in consumer spending,” he said. “The pattern shows gradually declining commercial vacancy rates, with consequential but generally modest rent growth.”
Yun expects the economy to add 2 to 2.5 million jobs both this year and in 2013, on the heels of 1.7 million new jobs in 2011, assuming a new federal budget is passed before the end of the year. “Although we need even stronger job growth, by far the greatest impact of job creation is in multifamily housing, where newly formed households striking out on their own have increased demand for apartment rentals – this is the sector with the lowest vacancy rates and strongest rent growth, which is attracting many investors.”
Rising apartment rents also are having a positive impact on home sales because many long-time renters now view homeownership as a better long-term option, Yun noted.
A large problem remains for purchases of commercial property priced under $2.5 million. “Our recent commercial lending survey shows that there is very little capital available for small business, which is significantly impacting commercial real estate transactions, although funding is less restrictive for bigger properties.”
NAR’s latest Commercial Real Estate Outlook offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc., a source of commercial real estate performance information.
Office Markets
Vacancy rates in the office sector are projected to fall from 16.3 percent in the second quarter of this year to 16.0 percent in the second quarter of 2013.
The markets with the lowest office vacancy rates:
Washington, D.C.: 9.3% vacancy rate
New York City: 10%
New Orleans: 12.6%
Office rents should increase 2.0 percent this year and 2.5 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 24.7 million square feet in 2012 and 48.0 million next year.
Industrial Markets
Industrial vacancy rates are likely to decline from 11.0 percent in the current quarter to 10.7 percent in the second quarter of 2013.
The areas with the lowest industrial vacancy rates:
Orange County, Calif.: 4.7% vacancy rate
Los Angeles: 5%
Miami: 7.2%
Annual industrial rent is expected to rise 1.6 percent in 2012 and 2.4 percent next year. Net absorption of industrial space nationally is seen at 44.1 million square feet this year and 62.4 million in 2013.
Retail Markets
Retail vacancy rates are forecast to decline from 11.3 percent in the second quarter to 10.7 percent in the second quarter of 2013.
Presently, markets with the lowest retail vacancy rates:
San Francisco: 3.7% vacancy rate
Fairfield County, Conn.: 4%
Long Island, N.Y.: 5%
Average retail rent should rise 0.8 percent this year and 1.3 percent in 2013. Net absorption of retail space is projected at 8.0 million square feet this year and 21.9 million in 2013.
Multifamily Markets
The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.5 percent in the second quarter to 4.3 percent in the second quarter of 2013; apartment vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates:
New York City: 2.1%
Portland, Ore.: 2.3%
Minneapolis: 2.4%
After rising 2.2 percent last year, average apartment rent is expected to increase 4.0 percent in 2012 and another 4.1 percent next year. “Such a rent increase will raise the core consumer inflation rate. The Federal Reserve, in turn, may be forced to raise interest rates, possibly as early as late 2013.”
Multifamily net absorption is forecast at 215,900 units this year and 230,300 in 2013.
The Commercial Real Estate Outlookis published by the NAR Research Division for the commercial community. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, REALTORS® Land Institute, Society of Industrial and Office REALTORS®, and Counselors of Real Estate. Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.
Source: NAR
http://goo.gl/2sf36
Shaking off a prolonged impact from the recession, fundamentals are gradually improving in all of the major commercial real estate sectors, according to the National Association of REALTORS® quarterly commercial real estate forecast. The apartment rental sector has fully recovered and is growing.
The findings also are confirmed in NAR’s recent quarterly Commercial Real Estate Market Survey, which collects data from members about market activity.
Lawrence Yun, NAR chief economist, said new jobs are the key. “Ongoing job creation, which is at a higher level this year, is fueling an underlying demand for commercial real estate space, assisted by a steady increase in consumer spending,” he said. “The pattern shows gradually declining commercial vacancy rates, with consequential but generally modest rent growth.”
Yun expects the economy to add 2 to 2.5 million jobs both this year and in 2013, on the heels of 1.7 million new jobs in 2011, assuming a new federal budget is passed before the end of the year. “Although we need even stronger job growth, by far the greatest impact of job creation is in multifamily housing, where newly formed households striking out on their own have increased demand for apartment rentals – this is the sector with the lowest vacancy rates and strongest rent growth, which is attracting many investors.”
Rising apartment rents also are having a positive impact on home sales because many long-time renters now view homeownership as a better long-term option, Yun noted.
A large problem remains for purchases of commercial property priced under $2.5 million. “Our recent commercial lending survey shows that there is very little capital available for small business, which is significantly impacting commercial real estate transactions, although funding is less restrictive for bigger properties.”
NAR’s latest Commercial Real Estate Outlook offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc., a source of commercial real estate performance information.
Office Markets
Vacancy rates in the office sector are projected to fall from 16.3 percent in the second quarter of this year to 16.0 percent in the second quarter of 2013.
The markets with the lowest office vacancy rates:
Washington, D.C.: 9.3% vacancy rate
New York City: 10%
New Orleans: 12.6%
Office rents should increase 2.0 percent this year and 2.5 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 24.7 million square feet in 2012 and 48.0 million next year.
Industrial Markets
Industrial vacancy rates are likely to decline from 11.0 percent in the current quarter to 10.7 percent in the second quarter of 2013.
The areas with the lowest industrial vacancy rates:
Orange County, Calif.: 4.7% vacancy rate
Los Angeles: 5%
Miami: 7.2%
Annual industrial rent is expected to rise 1.6 percent in 2012 and 2.4 percent next year. Net absorption of industrial space nationally is seen at 44.1 million square feet this year and 62.4 million in 2013.
Retail Markets
Retail vacancy rates are forecast to decline from 11.3 percent in the second quarter to 10.7 percent in the second quarter of 2013.
Presently, markets with the lowest retail vacancy rates:
San Francisco: 3.7% vacancy rate
Fairfield County, Conn.: 4%
Long Island, N.Y.: 5%
Average retail rent should rise 0.8 percent this year and 1.3 percent in 2013. Net absorption of retail space is projected at 8.0 million square feet this year and 21.9 million in 2013.
Multifamily Markets
The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.5 percent in the second quarter to 4.3 percent in the second quarter of 2013; apartment vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates:
New York City: 2.1%
Portland, Ore.: 2.3%
Minneapolis: 2.4%
After rising 2.2 percent last year, average apartment rent is expected to increase 4.0 percent in 2012 and another 4.1 percent next year. “Such a rent increase will raise the core consumer inflation rate. The Federal Reserve, in turn, may be forced to raise interest rates, possibly as early as late 2013.”
Multifamily net absorption is forecast at 215,900 units this year and 230,300 in 2013.
The Commercial Real Estate Outlookis published by the NAR Research Division for the commercial community. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, REALTORS® Land Institute, Society of Industrial and Office REALTORS®, and Counselors of Real Estate. Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.
Source: NAR
Home Owners Try to Curb Rising Insurance Costs
http://goo.gl/nfZq7
Home owners' insurance premiums have been on the rise lately with many home owners seeing double-digit hikes and a rise in average annual premiums now over $1,000. Real estate professionals can help show their clients how they may be able to curb their home owners' insurance costs.
A recent article at Money Magazine offers some of the following tips:
Shop around. “If your rates rose 5 percent or more [in the last year], make sure to call the company for an explanation,” the Money Magazine article notes. “Knowing whether the increase resulted from changes in your risk profile or from broad-based increases in the marketplace will help you negotiate and comparison-shop -- which you should do at every renewal or at least every couple of years.”
Look for discounts. For example, bundling your home and auto insurance with the same insurance company could possibly save you up to 15 percent. Insurers often will also give you a discount if you install a security system to your home, storm shutters, or a new roof too.
Evaluate the deductible. Most experts will advise home owners to go for the highest deductible they can afford in order to lower their premiums. But be sure to note that “many insurers are retooling deductibles from set dollar amounts to percentages, which can often represent a substantial change,” Money Magazine notes.
Base your coverage on the right number. Base your coverage level on home owners' insurance on the recent per-square-foot replacement costs in your area, not on the home’s appraised value, notes Kevin McCarty, president of the National Association of Insurance Commissioners. To obtain that information, check out your local home builders association.
Source: “Save Big on Homeowners Insurance,” Money Magazine (May 24, 2012)
http://goo.gl/nfZq7
Home owners' insurance premiums have been on the rise lately with many home owners seeing double-digit hikes and a rise in average annual premiums now over $1,000. Real estate professionals can help show their clients how they may be able to curb their home owners' insurance costs.
A recent article at Money Magazine offers some of the following tips:
Shop around. “If your rates rose 5 percent or more [in the last year], make sure to call the company for an explanation,” the Money Magazine article notes. “Knowing whether the increase resulted from changes in your risk profile or from broad-based increases in the marketplace will help you negotiate and comparison-shop -- which you should do at every renewal or at least every couple of years.”
Look for discounts. For example, bundling your home and auto insurance with the same insurance company could possibly save you up to 15 percent. Insurers often will also give you a discount if you install a security system to your home, storm shutters, or a new roof too.
Evaluate the deductible. Most experts will advise home owners to go for the highest deductible they can afford in order to lower their premiums. But be sure to note that “many insurers are retooling deductibles from set dollar amounts to percentages, which can often represent a substantial change,” Money Magazine notes.
Base your coverage on the right number. Base your coverage level on home owners' insurance on the recent per-square-foot replacement costs in your area, not on the home’s appraised value, notes Kevin McCarty, president of the National Association of Insurance Commissioners. To obtain that information, check out your local home builders association.
Source: “Save Big on Homeowners Insurance,” Money Magazine (May 24, 2012)
Fourth Week in Row, 30-Year Rates Reach Records
http://goo.gl/ikV1A
Home buying got even more affordable this week as mortgage rates continue to ride low, breaking records, and increase home buyer affordability.
For the fourth consecutive week, 30-year fixed-rate mortgages, the most popular choice of borrowers, reached a new all-time low while 15-year fixed-rate mortgages held steady at its all-time low set last week, according to Freddie Mac’s weekly mortgage market survey.
"Mortgage rates were virtually unchanged this week with fixed-rate loans remaining at record lows and helping to drive home buyer affordability,” Frank Nothaft, Freddie Mac’s chief economist.
Indeed, housing affordability reached an all-time record high in the first quarter, according to the National Association of REALTORS®’ Housing Affordability Index.
Here’s a closer look at how mortgage rates fared for the week ending May 24, according to Freddie Mac:
30-year fixed-rate mortgages: averaged a new record of 3.78 percent, with an average 0.8 point, dropping from last week’s previous record low of 3.79 percent. A year ago at this time, 30-year rates averaged 4.60 percent.
15-year fixed-rate mortgages: averaged 3.04 percent, with an average 0.7 point, holding steady at the record low it set last week. Last year at this time, 15-year rates averaged 3.78 percent.
5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.6 point, also unchanged from last week’s average. Last year at this time, 5-year ARMs averaged 3.41 percent.
1-year ARMs: averaged 2.75 percent, with an average 0.4 point, dropping from last week’s 2.78 percent average. A year ago, 1-year ARMs averaged 3.11 percent.
Source: Freddie Mac
http://goo.gl/ikV1A
Home buying got even more affordable this week as mortgage rates continue to ride low, breaking records, and increase home buyer affordability.
For the fourth consecutive week, 30-year fixed-rate mortgages, the most popular choice of borrowers, reached a new all-time low while 15-year fixed-rate mortgages held steady at its all-time low set last week, according to Freddie Mac’s weekly mortgage market survey.
"Mortgage rates were virtually unchanged this week with fixed-rate loans remaining at record lows and helping to drive home buyer affordability,” Frank Nothaft, Freddie Mac’s chief economist.
Indeed, housing affordability reached an all-time record high in the first quarter, according to the National Association of REALTORS®’ Housing Affordability Index.
Here’s a closer look at how mortgage rates fared for the week ending May 24, according to Freddie Mac:
30-year fixed-rate mortgages: averaged a new record of 3.78 percent, with an average 0.8 point, dropping from last week’s previous record low of 3.79 percent. A year ago at this time, 30-year rates averaged 4.60 percent.
15-year fixed-rate mortgages: averaged 3.04 percent, with an average 0.7 point, holding steady at the record low it set last week. Last year at this time, 15-year rates averaged 3.78 percent.
5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.6 point, also unchanged from last week’s average. Last year at this time, 5-year ARMs averaged 3.41 percent.
1-year ARMs: averaged 2.75 percent, with an average 0.4 point, dropping from last week’s 2.78 percent average. A year ago, 1-year ARMs averaged 3.11 percent.
Source: Freddie Mac
Saturday, May 26, 2012
5 Worst Mobile Behavior Offenses
http://goo.gl/EoA9c
Mobile manners are getting worse, according to 81 percent of 2,000 Americans recently surveyed by Intel. Ninety-two percent of those surveyed said they wish the public would get more respectful with their mobile etiquette.
Could you be one of the offenders?
Forbes.com recently profiled some of the worst mobile manner offenses. Some of the offenses include:
1. Spending too much facetime with your phone, instead of with people. “Social network in the room — not on your device,” Anna Post, an etiquette expert, noted in the article.
2. Having your smartphone on the table. You don’t want to just clear your elbows from the table but etiquette experts also say it’s rude to have your phone on a dinner table or desk when with a client. It can be distracting to others, the article notes.
3. Keep it down. Loud talking on a mobile device is a commonly cited pet peeve when it comes to mobile behavior. “It doesn’t matter if you don’t care who overhears your conversations with the doctor, it’s that no one else wants to hear your personal calls,” Post says. Try to keep the personal calls more personal and out of earshot from others.
4. No good vibrations from phones. A lot of people try to silence their phones by putting it on vibration mode, but etiquette experts say that can sometimes be more distracting than a ring if a phone is constantly vibrating on a table. Instead, always keep your device on silent mode when with clients or at meetings.
5. Watch when you sneak in social networking. One common complaint is those who sneak in social networking time during meetings or in encounters with others. Save it for later. Human Resource managers refer to it as “social notworking” when doing it in meetings.
Find out more mobile manner mistakes at Forbes.com.
Source: "Digital Over-Sharing, Constant Complaining And Other Top Mobile Etiquette Mistakes,” Forbes.com (May 23, 2012)
http://goo.gl/EoA9c
Mobile manners are getting worse, according to 81 percent of 2,000 Americans recently surveyed by Intel. Ninety-two percent of those surveyed said they wish the public would get more respectful with their mobile etiquette.
Could you be one of the offenders?
Forbes.com recently profiled some of the worst mobile manner offenses. Some of the offenses include:
1. Spending too much facetime with your phone, instead of with people. “Social network in the room — not on your device,” Anna Post, an etiquette expert, noted in the article.
2. Having your smartphone on the table. You don’t want to just clear your elbows from the table but etiquette experts also say it’s rude to have your phone on a dinner table or desk when with a client. It can be distracting to others, the article notes.
3. Keep it down. Loud talking on a mobile device is a commonly cited pet peeve when it comes to mobile behavior. “It doesn’t matter if you don’t care who overhears your conversations with the doctor, it’s that no one else wants to hear your personal calls,” Post says. Try to keep the personal calls more personal and out of earshot from others.
4. No good vibrations from phones. A lot of people try to silence their phones by putting it on vibration mode, but etiquette experts say that can sometimes be more distracting than a ring if a phone is constantly vibrating on a table. Instead, always keep your device on silent mode when with clients or at meetings.
5. Watch when you sneak in social networking. One common complaint is those who sneak in social networking time during meetings or in encounters with others. Save it for later. Human Resource managers refer to it as “social notworking” when doing it in meetings.
Find out more mobile manner mistakes at Forbes.com.
Source: "Digital Over-Sharing, Constant Complaining And Other Top Mobile Etiquette Mistakes,” Forbes.com (May 23, 2012)
Mortgage Applications Rise Again on Low Rates
http://goo.gl/rh3ev
Record low interest rates continue to pump up mortgage volume, as more borrowers try to take advantage.
Mortgage applications increased 3.8 percent for the week ending May 18, the Mortgage Bankers Association reports. A boost in more home owners refinancing their mortgages was attributed to the rise last week.
Refinance application activity increased 5.6 percent, reaching a nearly four-month high. Meanwhile, applications for home purchases dropped 3 percent in the week, the Mortgage Bankers Association reports.
"Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market,” says Michael Fratantoni, MBA's vice president of research and economics. “As a result, applications for refinance loans have increased for the third straight week and are at the highest level since February of this year."
Source: “Record low rates spur mortgage application filings,” HousingWire (May 23, 2012)
http://goo.gl/rh3ev
Record low interest rates continue to pump up mortgage volume, as more borrowers try to take advantage.
Mortgage applications increased 3.8 percent for the week ending May 18, the Mortgage Bankers Association reports. A boost in more home owners refinancing their mortgages was attributed to the rise last week.
Refinance application activity increased 5.6 percent, reaching a nearly four-month high. Meanwhile, applications for home purchases dropped 3 percent in the week, the Mortgage Bankers Association reports.
"Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market,” says Michael Fratantoni, MBA's vice president of research and economics. “As a result, applications for refinance loans have increased for the third straight week and are at the highest level since February of this year."
Source: “Record low rates spur mortgage application filings,” HousingWire (May 23, 2012)
New-Home Sales Inch Up, Optimism Builds
http://goo.gl/TfuU4
Sales of new single-family homes in April continued to inch up, increasing optimism in the building industry that a recovery is finally taking hold.
New-home sales rose 3.3 percent in April and were up 9.9 percent year-over-year, according to new Commerce Department housing data released Wednesday.
The increase in April sales activity is in line with other important housing measures that have shown continued, gradual improvement from the first quarter as more consumers look to take advantage of today's low interest rates and affordable home prices," says Barry Rutenberg, chairman of the National Association of Home Builders. "In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes."
New-home sales rose the most in the Midwest, by 28.2 percent in April, and by 27.5 percent in the West. The Northeast saw new-home sales rise by 7.7 percent in April, while the South posted a 10.6 percent decline last month.
The inventory of new-homes remains historically low at a 5.1-month supply at the current sales pace. But housing experts say the record low inventories may prove an eventual boost for future housing prices.
Home prices for new-homes are up nearly 5 percent compared to a year earlier, with the median price at $235,700 from April, the Commerce Department reported.
In another optimistic sign at recovery for the housing market: The National Association of REALTORS® reported Tuesday that sales of existing homes also increased in April, rising 3.4 percent in April compared to March and increasing 10 percent year-over-year.
Source: National Association of Home Builders and “New-Home Sales Amplify Optimism About Housing,” The Wall Street Journal (May 23, 2012)
http://goo.gl/TfuU4
Sales of new single-family homes in April continued to inch up, increasing optimism in the building industry that a recovery is finally taking hold.
New-home sales rose 3.3 percent in April and were up 9.9 percent year-over-year, according to new Commerce Department housing data released Wednesday.
The increase in April sales activity is in line with other important housing measures that have shown continued, gradual improvement from the first quarter as more consumers look to take advantage of today's low interest rates and affordable home prices," says Barry Rutenberg, chairman of the National Association of Home Builders. "In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes."
New-home sales rose the most in the Midwest, by 28.2 percent in April, and by 27.5 percent in the West. The Northeast saw new-home sales rise by 7.7 percent in April, while the South posted a 10.6 percent decline last month.
The inventory of new-homes remains historically low at a 5.1-month supply at the current sales pace. But housing experts say the record low inventories may prove an eventual boost for future housing prices.
Home prices for new-homes are up nearly 5 percent compared to a year earlier, with the median price at $235,700 from April, the Commerce Department reported.
In another optimistic sign at recovery for the housing market: The National Association of REALTORS® reported Tuesday that sales of existing homes also increased in April, rising 3.4 percent in April compared to March and increasing 10 percent year-over-year.
Source: National Association of Home Builders and “New-Home Sales Amplify Optimism About Housing,” The Wall Street Journal (May 23, 2012)
Home Prices Begin to Bounce Back
http://goo.gl/sePUy
The Federal Housing Finance Agency reported that nationwide home prices posted their first gain in the first quarter since 2007. While the gain was modest at 0.6 percent, housing experts note it’s still another sign that the housing market is gaining momentum.
FHFA’s housing price index is calculated using home sales price information based off Freddie Mac and Fannie Mae-backed mortgages.
FHFA’s seasonally adjusted monthly index rose 1.8 percent in March over February, which is the largest monthly increase in at least 20 years. Year-over-year, home prices increased 2.7 percent, FHFA reports.
"Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices," says Andrew Leventis, FHFA’s principal economist.
Price increases were the highest in Hawaii with a 10.3 percent increase, and in Washington, D.C., which saw a 9.8 percent gain, according to FHFA.
Still, Number of Underwater Home Owners Remain High
Despite recent improvements in home prices, the percentage of underwater borrowers has shown little improvement in the last year. More than 30 percent of home owners in the first quarter remained underwater on their mortgage, owing more on their home than it’s currently worth, according to a new Zillow housing report.
A year ago, 32.4 percent of all borrowers had negative equity on their loan compared to 31.4 percent during the most recent quarter, Zillow reports.
Yet, Zillow notes that nine out of 10 underwater borrowers are current on their mortgage payments.
"[It's] important to note that negative equity remains only a paper loss for the vast majority of underwater home owners," says Stan Humphries, Zillow's chief economist. "As home values slowly increase and these home owners continue to pay down their principal, they will surface again."
The highest share of underwater home owners continues to be in Las Vegas, where 71 percent of home owners are underwater, followed by Phoenix (at 55.5 percent) and Atlanta (at 55.2 percent), according to the Zillow housing report.
Source: “U.S. Housing Prices Rise,” UPI (May 23, 2012); “Home Prices Rose Most in Two Decades in March, FHFA Says,” Bloomberg News (May 23, 2012) and “More than 30% of Mortgage Borrowers Still Underwater,” CNNMoney (May 24, 2012)
http://goo.gl/sePUy
The Federal Housing Finance Agency reported that nationwide home prices posted their first gain in the first quarter since 2007. While the gain was modest at 0.6 percent, housing experts note it’s still another sign that the housing market is gaining momentum.
FHFA’s housing price index is calculated using home sales price information based off Freddie Mac and Fannie Mae-backed mortgages.
FHFA’s seasonally adjusted monthly index rose 1.8 percent in March over February, which is the largest monthly increase in at least 20 years. Year-over-year, home prices increased 2.7 percent, FHFA reports.
"Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices," says Andrew Leventis, FHFA’s principal economist.
Price increases were the highest in Hawaii with a 10.3 percent increase, and in Washington, D.C., which saw a 9.8 percent gain, according to FHFA.
Still, Number of Underwater Home Owners Remain High
Despite recent improvements in home prices, the percentage of underwater borrowers has shown little improvement in the last year. More than 30 percent of home owners in the first quarter remained underwater on their mortgage, owing more on their home than it’s currently worth, according to a new Zillow housing report.
A year ago, 32.4 percent of all borrowers had negative equity on their loan compared to 31.4 percent during the most recent quarter, Zillow reports.
Yet, Zillow notes that nine out of 10 underwater borrowers are current on their mortgage payments.
"[It's] important to note that negative equity remains only a paper loss for the vast majority of underwater home owners," says Stan Humphries, Zillow's chief economist. "As home values slowly increase and these home owners continue to pay down their principal, they will surface again."
The highest share of underwater home owners continues to be in Las Vegas, where 71 percent of home owners are underwater, followed by Phoenix (at 55.5 percent) and Atlanta (at 55.2 percent), according to the Zillow housing report.
Source: “U.S. Housing Prices Rise,” UPI (May 23, 2012); “Home Prices Rose Most in Two Decades in March, FHFA Says,” Bloomberg News (May 23, 2012) and “More than 30% of Mortgage Borrowers Still Underwater,” CNNMoney (May 24, 2012)
Market Stabilizing? Home Inventories Fall by Nearly 20%
http://goo.gl/3vLQg
Home inventories of for-sale listings continue to fall, which may help raise overall housing prices as demand picks up.
Inventory of for-sale single-family homes, condos, townhouses, and co-ops dropped by 18.85 percent in April compared to a year ago, according to housing data of 146 metro markets tracked by REALTOR.com.
“These key indicators continue to suggest the housing market may be at a turning point and headed towards a broad-based recovery,” REALTOR.com notes in a release on its April housing data. “Lower inventories, combined with faster moving markets and relatively stable median listing prices are indicative of the kind of balanced housing market that has not been seen in many years.”
On a national basis, the median age of inventory dropped nearly 12 percent year-over-year. The median age of inventory dropped by the highest percentages in the following metro areas:
1. Oakland, Calif.
Median age of inventory: 20
Year-over-year drop: 54.54%
2. Miami
Median age of inventory: 41.08%
Year-over-year drop: 76
3. Fort Lauderdale, Fla.
Median age of inventory: 36.19%
Year-over-year drop: 67
4. Seattle-Bellevue-Everett, Wash.
Median age of inventory: 34.28%
Year-over-year drop: 46
5. Pensacola, Fla.
Median age of inventory: 33.33%
Year-over-year drop: 106
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
http://goo.gl/3vLQg
Home inventories of for-sale listings continue to fall, which may help raise overall housing prices as demand picks up.
Inventory of for-sale single-family homes, condos, townhouses, and co-ops dropped by 18.85 percent in April compared to a year ago, according to housing data of 146 metro markets tracked by REALTOR.com.
“These key indicators continue to suggest the housing market may be at a turning point and headed towards a broad-based recovery,” REALTOR.com notes in a release on its April housing data. “Lower inventories, combined with faster moving markets and relatively stable median listing prices are indicative of the kind of balanced housing market that has not been seen in many years.”
On a national basis, the median age of inventory dropped nearly 12 percent year-over-year. The median age of inventory dropped by the highest percentages in the following metro areas:
1. Oakland, Calif.
Median age of inventory: 20
Year-over-year drop: 54.54%
2. Miami
Median age of inventory: 41.08%
Year-over-year drop: 76
3. Fort Lauderdale, Fla.
Median age of inventory: 36.19%
Year-over-year drop: 67
4. Seattle-Bellevue-Everett, Wash.
Median age of inventory: 34.28%
Year-over-year drop: 46
5. Pensacola, Fla.
Median age of inventory: 33.33%
Year-over-year drop: 106
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Friday, May 25, 2012
Foreclosed Home Owners Find a Way to Buy Again
http://ow.ly/b8kCI
Once-foreclosed home owners are slowly making a comeback in the housing market as some lenders give them a second chance at home ownership.
After defaulting on their home loans or doing a short sale on their previous homes in recent years, some home owners have found a way to buy again, Reuters News reports.
The Federal Housing Agency is the main way paving a comeback for these former home owners to buy again, according to Reuters’ interviews with lenders and real estate professionals. FHA loans can be an option for some who defaulted on their mortgage or did a short sale. FHA borrowers usually need a credit score of at least 620 and a 3.5 percent down payment, which are lower requirements than most conventional mortgages.
"These are not mainstream programs geared for mainstream borrowers," Greg McBride, senior financial analyst at Bankrate.com, told Reuters about former home owners using FHA-backed loans to get back into home ownership.
Still, home owners with mortgage defaults on their records often find its a long way to crawl back into the housing market. They must make big strides in boosting their credit scores after a foreclosure, short sale, or bankruptcy.
"Most of the loans that are getting done are for people who have really rebuilt their credit," rank Donnelly, president of the Mortgage Bankers Association of Metropolitan Washington, D.C., told Reuters. "They have to prove (to the lender that) it was something like a job loss that caused this and not chronic delinquency."
Lenders will take into consideration why the person lost their home previously, and they’re much more likely to try again on a borrower who lost their home due to a job loss than a borrower who walked away on their prior home even though they could still afford the mortgage payments.
Source: “Back from Foreclosure to Homeownership,” Reuters News (May 16, 2012)
http://ow.ly/b8kCI
Once-foreclosed home owners are slowly making a comeback in the housing market as some lenders give them a second chance at home ownership.
After defaulting on their home loans or doing a short sale on their previous homes in recent years, some home owners have found a way to buy again, Reuters News reports.
The Federal Housing Agency is the main way paving a comeback for these former home owners to buy again, according to Reuters’ interviews with lenders and real estate professionals. FHA loans can be an option for some who defaulted on their mortgage or did a short sale. FHA borrowers usually need a credit score of at least 620 and a 3.5 percent down payment, which are lower requirements than most conventional mortgages.
"These are not mainstream programs geared for mainstream borrowers," Greg McBride, senior financial analyst at Bankrate.com, told Reuters about former home owners using FHA-backed loans to get back into home ownership.
Still, home owners with mortgage defaults on their records often find its a long way to crawl back into the housing market. They must make big strides in boosting their credit scores after a foreclosure, short sale, or bankruptcy.
"Most of the loans that are getting done are for people who have really rebuilt their credit," rank Donnelly, president of the Mortgage Bankers Association of Metropolitan Washington, D.C., told Reuters. "They have to prove (to the lender that) it was something like a job loss that caused this and not chronic delinquency."
Lenders will take into consideration why the person lost their home previously, and they’re much more likely to try again on a borrower who lost their home due to a job loss than a borrower who walked away on their prior home even though they could still afford the mortgage payments.
Source: “Back from Foreclosure to Homeownership,” Reuters News (May 16, 2012)
Sellers More Willing to Work on Buyer Appeal
http://ow.ly/b8kxx
Home sellers are more willing to make changes to their home to make it more competitive in the market and more attractive to potential buyers, according to a new survey by Coldwell Banker Real Estate of 700 of its agents nationwide.
So what are sellers willing to do to better their home’s presentation? The survey found:
94 percent of the agents surveyed said their sellers are removing clutter and making cosmetic updates, including minor repairs and fresh paint.
76 percent of U.S. sellers are willing to “depersonalize” their home. (60 percent of Canadian agents say their sellers are willing to depersonalize)
59 percent of say sellers are even bringing in new home decorations or furniture to help make the home more appealing.
“When marketing your home, it’s important to help buyers imagine themselves living in the property. De-cluttering and de-personalizing is crucial to this process,” says Susanita de Diego, Coldwell Banker Canadian Consumer Specialist. Homes are competing for buyers so homes “presented with a minimum of clutter and distracting personal items ... will appeal to buyers and improve their chances of a successful sale.”
The survey also found that American sellers are more willing to get competitive on price too. Fifty-one percent of the agents surveyed said they’ve found their home sellers more willing to price their homes competitively than compared to last year.
What Buyers Want
The survey also revealed what is guiding home buyers in their home search. Thirty-three percent of the real estate agents surveyed say that new or updated kitchens are the most important home feature for home buyers. Meanwhile, 14 percent say an open floor plan and 12 percent say a new or updated bathroom are the most important home buyer features today.
The survey found that only 1 percent of the real estate agents say that their buyers rate entertainment rooms or finished basements as the most important home feature.
The most common motivation getting buyers moving: A new baby or growing family, according to the survey. Other lifestyle factors like getting married, a divorce, or retiring also are big motivators for wanting to find a new home.
Source: Coldwell Banker Real Estate
http://ow.ly/b8kxx
Home sellers are more willing to make changes to their home to make it more competitive in the market and more attractive to potential buyers, according to a new survey by Coldwell Banker Real Estate of 700 of its agents nationwide.
So what are sellers willing to do to better their home’s presentation? The survey found:
94 percent of the agents surveyed said their sellers are removing clutter and making cosmetic updates, including minor repairs and fresh paint.
76 percent of U.S. sellers are willing to “depersonalize” their home. (60 percent of Canadian agents say their sellers are willing to depersonalize)
59 percent of say sellers are even bringing in new home decorations or furniture to help make the home more appealing.
“When marketing your home, it’s important to help buyers imagine themselves living in the property. De-cluttering and de-personalizing is crucial to this process,” says Susanita de Diego, Coldwell Banker Canadian Consumer Specialist. Homes are competing for buyers so homes “presented with a minimum of clutter and distracting personal items ... will appeal to buyers and improve their chances of a successful sale.”
The survey also found that American sellers are more willing to get competitive on price too. Fifty-one percent of the agents surveyed said they’ve found their home sellers more willing to price their homes competitively than compared to last year.
What Buyers Want
The survey also revealed what is guiding home buyers in their home search. Thirty-three percent of the real estate agents surveyed say that new or updated kitchens are the most important home feature for home buyers. Meanwhile, 14 percent say an open floor plan and 12 percent say a new or updated bathroom are the most important home buyer features today.
The survey found that only 1 percent of the real estate agents say that their buyers rate entertainment rooms or finished basements as the most important home feature.
The most common motivation getting buyers moving: A new baby or growing family, according to the survey. Other lifestyle factors like getting married, a divorce, or retiring also are big motivators for wanting to find a new home.
Source: Coldwell Banker Real Estate
What May Delay Some Housing Markets' Recovery
http://ow.ly/b8kdd
he difference in how states handle foreclosures may determine how quickly their housing markets make a full recovery, according to a new report by Capital Economics.
States with nonjudicial foreclosure markets — where foreclosures can be approved outside the court system — are seeing housing prices stabilize faster than states that require foreclosures to go through the court system, according to Capital Economics. The report notes that judicial foreclosure states tend to see houses linger on the market longer, which ultimately can cause prices to drop.
"We think that differences in foreclosure procedures will continue to affect state-level house price trends, with nonjudicial states outperforming," Paul Diggle, property economist with Capital Economics. "After all, as foreclosure pipelines are brought down to healthier levels in nonjudicial, high burn-through states, supply conditions can more rapidly tighten to the point that they support price growth."
The Federal Housing Finance Agency index recently showed that housing prices were down 2.3 percent year-over-year in the fourth quarter of 2011 and dropped 0.3 percent in the fourth quarter compared to the previous quarter in states with judicial procedures for foreclosures. In states with nonjudicial foreclosure procedures, however, home prices increased 0.3 percent quarter-over-quarter and dropped only 1.6 percent year-over-year.
Economists have predicted a surge in foreclosures is coming in the next few months from the $25 billion robo-signing mortgage settlement. The foreclosure wave will pose a “much greater threat to the house price outlook in judicial states, where the foreclosure backlog is that much larger,” Diggle told HousingWire.
Source: “Housing Markets Recover Faster in Nonjudicial Foreclosure States, Report Says,” HousingWire (May 18, 2012)
http://ow.ly/b8kdd
he difference in how states handle foreclosures may determine how quickly their housing markets make a full recovery, according to a new report by Capital Economics.
States with nonjudicial foreclosure markets — where foreclosures can be approved outside the court system — are seeing housing prices stabilize faster than states that require foreclosures to go through the court system, according to Capital Economics. The report notes that judicial foreclosure states tend to see houses linger on the market longer, which ultimately can cause prices to drop.
"We think that differences in foreclosure procedures will continue to affect state-level house price trends, with nonjudicial states outperforming," Paul Diggle, property economist with Capital Economics. "After all, as foreclosure pipelines are brought down to healthier levels in nonjudicial, high burn-through states, supply conditions can more rapidly tighten to the point that they support price growth."
The Federal Housing Finance Agency index recently showed that housing prices were down 2.3 percent year-over-year in the fourth quarter of 2011 and dropped 0.3 percent in the fourth quarter compared to the previous quarter in states with judicial procedures for foreclosures. In states with nonjudicial foreclosure procedures, however, home prices increased 0.3 percent quarter-over-quarter and dropped only 1.6 percent year-over-year.
Economists have predicted a surge in foreclosures is coming in the next few months from the $25 billion robo-signing mortgage settlement. The foreclosure wave will pose a “much greater threat to the house price outlook in judicial states, where the foreclosure backlog is that much larger,” Diggle told HousingWire.
Source: “Housing Markets Recover Faster in Nonjudicial Foreclosure States, Report Says,” HousingWire (May 18, 2012)
5 Places Where Prices Are Expected to Rise Most
http://ow.ly/b8k2y
Housing markets that have seen some of the biggest drop in home prices since the housing peak are now poised for recovery in the next two years, according to a new report by Fiserv. The bargains in these cities are attracting buyer attention and expected to drive up home prices in the coming year.
Fiserv forecasts that the following five cities will see some of the biggest growths in home prices by the end of 2013:
1. Madera, Calif.
Median home price: $125,000
2013 forecast for home prices: 21.5% increase
2. Medford, Ore.
Median home price: $144,000
2013 forecast for home prices: 20.1% increase
3. Yuma, Ariz.
Median home price: $105,000
2013 forecast for home prices: 16.7% increase
4. Corvallis, Ore.
Median home price: $224,000
2013 forecast for home prices: 13.2% increase
5. Eugene, Ore.
Median home price: $166,000
2013 forecast for home prices: 12.4% increase
Find out what other cities made Fiserv’s rebounding home price list.
Source: “Where Home Prices Are Rising Fastest,” CNNMoney (May 2012)
http://ow.ly/b8k2y
Housing markets that have seen some of the biggest drop in home prices since the housing peak are now poised for recovery in the next two years, according to a new report by Fiserv. The bargains in these cities are attracting buyer attention and expected to drive up home prices in the coming year.
Fiserv forecasts that the following five cities will see some of the biggest growths in home prices by the end of 2013:
1. Madera, Calif.
Median home price: $125,000
2013 forecast for home prices: 21.5% increase
2. Medford, Ore.
Median home price: $144,000
2013 forecast for home prices: 20.1% increase
3. Yuma, Ariz.
Median home price: $105,000
2013 forecast for home prices: 16.7% increase
4. Corvallis, Ore.
Median home price: $224,000
2013 forecast for home prices: 13.2% increase
5. Eugene, Ore.
Median home price: $166,000
2013 forecast for home prices: 12.4% increase
Find out what other cities made Fiserv’s rebounding home price list.
Source: “Where Home Prices Are Rising Fastest,” CNNMoney (May 2012)
Sunday, May 20, 2012
Commercial Real Estate Follows Economy Into Recovery
http://ow.ly/b1Lom
In his remarks yesterday at the Commercial Business Trends Forum during the Midyear Legislative Meetings & Trade Expo in Washington, D.C., NAR Chief Economist Lawrence Yun sounded a cautiously optimistic note regarding the state of the commercial real estate market.
That’s because the commercial sector is so closely tied to the overall economy, which has been looking up over the past year in many respects. Specifically, the stock market has regained nearly all the losses it took in late 2008 and early 2009, Yun said. Also, corporations are sitting on large cash reserves, and are now looking for ways to invest that productively.
"The commercial market follows the broader economy with a lag time of 12 to 24 months," he explained. "Statistically, we're out of the recession. The economy's been improving since late 2009, almost three years of uninterrupted growth. Now, consumers are opening up their wallets and beginning to spend more."
Commercial real estate should pick up even more as businesses continue to grow and hire, Yun said. However, a few significant challenges remain. The possibility of a default by Greece, as well as the states of Illinois and California, looms over the financial markets. Additionally, while the jobs picture has improved somewhat, the unemployment rate will remain high for the foreseeable future.
Within commercial real estate, financing also remains a problem. Last year was a tough one to obtain commercial mortgages, and so far 2012 has been too, particularly for smaller-scale companies, Yun said. "Bigger players have gotten bigger, smaller players have gotten shut out," he explained.
In his rundown of commercial subsectors, Yun said multifamily and office are bright spots, with rising leasing costs and falling vacancies, and New York and Washington, D.C. are the strongest markets, respectively, for those categories. Industrial and retail are improving as well, but the turnaround in those areas has been slower.
— Brian Summerfield, REALTOR® Magazine
http://ow.ly/b1Lom
In his remarks yesterday at the Commercial Business Trends Forum during the Midyear Legislative Meetings & Trade Expo in Washington, D.C., NAR Chief Economist Lawrence Yun sounded a cautiously optimistic note regarding the state of the commercial real estate market.
That’s because the commercial sector is so closely tied to the overall economy, which has been looking up over the past year in many respects. Specifically, the stock market has regained nearly all the losses it took in late 2008 and early 2009, Yun said. Also, corporations are sitting on large cash reserves, and are now looking for ways to invest that productively.
"The commercial market follows the broader economy with a lag time of 12 to 24 months," he explained. "Statistically, we're out of the recession. The economy's been improving since late 2009, almost three years of uninterrupted growth. Now, consumers are opening up their wallets and beginning to spend more."
Commercial real estate should pick up even more as businesses continue to grow and hire, Yun said. However, a few significant challenges remain. The possibility of a default by Greece, as well as the states of Illinois and California, looms over the financial markets. Additionally, while the jobs picture has improved somewhat, the unemployment rate will remain high for the foreseeable future.
Within commercial real estate, financing also remains a problem. Last year was a tough one to obtain commercial mortgages, and so far 2012 has been too, particularly for smaller-scale companies, Yun said. "Bigger players have gotten bigger, smaller players have gotten shut out," he explained.
In his rundown of commercial subsectors, Yun said multifamily and office are bright spots, with rising leasing costs and falling vacancies, and New York and Washington, D.C. are the strongest markets, respectively, for those categories. Industrial and retail are improving as well, but the turnaround in those areas has been slower.
— Brian Summerfield, REALTOR® Magazine
REALTORS® Dubbed ‘Conscience of the Industry’
http://ow.ly/b1LgT
Steps to nowhere are scattered throughout the Lower Ninth Ward of New Orleans — steps that once led to homes. But since the catastrophe of Hurricane Katrina, little rebuilding has been accomplished, says James Perry, director of the Greater New Orleans Fair Housing Center, which he greatly attributes to both systemic and individual cases of housing discrimination.
In his Equal Opportunity-Cultural Diversity Forum presentation Tuesday at the NAR Midyear Legislative Meetings & Trade Expo in Washington, D.C., Perry discussed examples of actions and policies that disenfranchised African-American citizens who lived in the most devastated areas of New Orleans.
In one such case, private individuals in nearby communities and states posted online housing ads inviting “white only” displaced residents of New Orleans to share private homes or rent rooms — blatantly disregarding the Fair Housing Act.
And an ordinance established by the neighboring St. Bernard Parish prohibited property owners in the predominantly white community from renting single-family homes to anyone other than blood relatives. The parish later required property owners to obtain a permit to rent, the granting of which was at the discretion of the parish, as well as placed zoning limits on multifamily housing and, most recently, a moratorium on the construction of new apartments.
Litigation accusing St. Bernard Parish of Fair Housing violations has been ongoing for more than six years.
John Trasvina, HUD’s assistant secretary for Fair Housing and Equal Opportunity and another presenter at the forum, has intimate involvement in the case, having filed a housing discrimination complaint against the parish as well.
In 2005, Hurricane Katrina changed everything for the residents of New Orleans. But if there is a beacon of hope, it’s that housing inequalities, accessibility obstacles, and systemic flaws are starting to be recognized, Perry says.
Last year, HUD charged more Fair Housing cases than ever before. But Trasvina says the agency is working to tackle discrimination issues by addressing systemic problems rather than always taking them on a case-by-case basis.
HUD is working more closely with counties and municipalities to provide data and analysis in order to isolate housing obstacles and outline ways jurisdictions can use HUD funds to break down barriers.
Trasvina called on REALTORS® to increase community participation, and serve as a housing advocate and resource. “NAR has become the conscience of the industry and a true partner,” he said.
“REALTORS® are the most important asset, friend, and partner in the fair housing movement,” Perry added
— Erica Christoffer, REALTOR® Magazine
http://ow.ly/b1LgT
Steps to nowhere are scattered throughout the Lower Ninth Ward of New Orleans — steps that once led to homes. But since the catastrophe of Hurricane Katrina, little rebuilding has been accomplished, says James Perry, director of the Greater New Orleans Fair Housing Center, which he greatly attributes to both systemic and individual cases of housing discrimination.
In his Equal Opportunity-Cultural Diversity Forum presentation Tuesday at the NAR Midyear Legislative Meetings & Trade Expo in Washington, D.C., Perry discussed examples of actions and policies that disenfranchised African-American citizens who lived in the most devastated areas of New Orleans.
In one such case, private individuals in nearby communities and states posted online housing ads inviting “white only” displaced residents of New Orleans to share private homes or rent rooms — blatantly disregarding the Fair Housing Act.
And an ordinance established by the neighboring St. Bernard Parish prohibited property owners in the predominantly white community from renting single-family homes to anyone other than blood relatives. The parish later required property owners to obtain a permit to rent, the granting of which was at the discretion of the parish, as well as placed zoning limits on multifamily housing and, most recently, a moratorium on the construction of new apartments.
Litigation accusing St. Bernard Parish of Fair Housing violations has been ongoing for more than six years.
John Trasvina, HUD’s assistant secretary for Fair Housing and Equal Opportunity and another presenter at the forum, has intimate involvement in the case, having filed a housing discrimination complaint against the parish as well.
In 2005, Hurricane Katrina changed everything for the residents of New Orleans. But if there is a beacon of hope, it’s that housing inequalities, accessibility obstacles, and systemic flaws are starting to be recognized, Perry says.
Last year, HUD charged more Fair Housing cases than ever before. But Trasvina says the agency is working to tackle discrimination issues by addressing systemic problems rather than always taking them on a case-by-case basis.
HUD is working more closely with counties and municipalities to provide data and analysis in order to isolate housing obstacles and outline ways jurisdictions can use HUD funds to break down barriers.
Trasvina called on REALTORS® to increase community participation, and serve as a housing advocate and resource. “NAR has become the conscience of the industry and a true partner,” he said.
“REALTORS® are the most important asset, friend, and partner in the fair housing movement,” Perry added
— Erica Christoffer, REALTOR® Magazine
Mortgage Rates Sink to New Records Once Again
http://ow.ly/b1LwO
For the third-straight week, fixed-rate mortgages reached new record lows, pushing home affordability even higher for those who can qualify.
"The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week,” Frank Nothaft, Freddie Mac’s chief economist, said in explaining why mortgage rates continue to inch down.
Here’s a closer look at how rates fared for the week ending May 17, according to Freddie Mac’s weekly mortgage market survey:
30-year fixed-rate mortgages: averaged a new record low of 3.79 percent this week, with an average 0.7 point, down from last week’s previous record of 3.83 percent. Thirty-year mortgage rates have been below 4 percent since December. A year ago at this time, 30-year fixed-rate mortgages averaged 4.61 percent.
15-year fixed-rate mortgages: also dipped to new record lows this week, averaging 3.04 percent, with an average 0.7 point, dropping from last week’s previous record of 3.05 percent. Last year at this time, 15-year fixed-rate mortgages averaged 3.80 percent.
5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.6 point, rising slightly from last week’s 2.81 percent average. Last year at this time, 5-year ARMs averaged 3.48 percent.
1-year ARMs: averaged 2.78 percent, with an average 0.5 point, also up slightly from last week’s 2.73 percent average. A year ago at this time, 1-year ARMs averaged 3.15 percent.
Source: Freddie Mac
http://ow.ly/b1LwO
For the third-straight week, fixed-rate mortgages reached new record lows, pushing home affordability even higher for those who can qualify.
"The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week,” Frank Nothaft, Freddie Mac’s chief economist, said in explaining why mortgage rates continue to inch down.
Here’s a closer look at how rates fared for the week ending May 17, according to Freddie Mac’s weekly mortgage market survey:
30-year fixed-rate mortgages: averaged a new record low of 3.79 percent this week, with an average 0.7 point, down from last week’s previous record of 3.83 percent. Thirty-year mortgage rates have been below 4 percent since December. A year ago at this time, 30-year fixed-rate mortgages averaged 4.61 percent.
15-year fixed-rate mortgages: also dipped to new record lows this week, averaging 3.04 percent, with an average 0.7 point, dropping from last week’s previous record of 3.05 percent. Last year at this time, 15-year fixed-rate mortgages averaged 3.80 percent.
5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.6 point, rising slightly from last week’s 2.81 percent average. Last year at this time, 5-year ARMs averaged 3.48 percent.
1-year ARMs: averaged 2.78 percent, with an average 0.5 point, also up slightly from last week’s 2.73 percent average. A year ago at this time, 1-year ARMs averaged 3.15 percent.
Source: Freddie Mac
Thursday, May 17, 2012
Needy States Use Housing Aid Cash to Plug Budgets
http://ow.ly/aZd41
As the funds from a $25 billion nationwide settlement over foreclosure abuses are distributed to individual states, money set aside specifically to help distressed home owners is instead being rerouted into depleted state coffers.
Only 27 states have directed 100 percent of their funding into housing programs, reports Enterprise Community Partners. About 15, with California being the latest, have announced that the settlement money will be used in part or completely for other purposes, ranging from economic development to debt reduction.
U.S. Housing and Urban Development Secretary Shaun Donovan has been privately nudging state officials to use the money -- $2.5 billion total -- as it was intended. "Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live," he said.
Alan Jenkins of the Opportunity Agenda, which supports home ownership, goes so far as to suggest that redirecting the settlement funds could even have a racially discriminatory effect in some states. "If you dump all of these funds into the general coffers," he explains, "the African-American home owners are not going to benefit in any real way because they represent such a small percentage of the larger state."
Source: "Needy States Use Housing Aid Cash to Plug Budgets," The New York Times (05/16/12)
http://ow.ly/aZd41
As the funds from a $25 billion nationwide settlement over foreclosure abuses are distributed to individual states, money set aside specifically to help distressed home owners is instead being rerouted into depleted state coffers.
Only 27 states have directed 100 percent of their funding into housing programs, reports Enterprise Community Partners. About 15, with California being the latest, have announced that the settlement money will be used in part or completely for other purposes, ranging from economic development to debt reduction.
U.S. Housing and Urban Development Secretary Shaun Donovan has been privately nudging state officials to use the money -- $2.5 billion total -- as it was intended. "Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live," he said.
Alan Jenkins of the Opportunity Agenda, which supports home ownership, goes so far as to suggest that redirecting the settlement funds could even have a racially discriminatory effect in some states. "If you dump all of these funds into the general coffers," he explains, "the African-American home owners are not going to benefit in any real way because they represent such a small percentage of the larger state."
Source: "Needy States Use Housing Aid Cash to Plug Budgets," The New York Times (05/16/12)
Foreclosures Plummet to 5-Year Lows
http://ow.ly/aZcQy
For the third consecutive month, foreclosure filings dropped, sinking to their lowest level since July 2007, according to RealtyTrac’s April report on nationwide foreclosure activity.
Foreclosure activity, which includes default notices, scheduled auctions, and bank repossessions, fell 5 percent from March to April and were down 14 percent year-over-year.
"More distressed loans are being diverted into short sales rather than becoming completed foreclosures," says Brandon Moore, CEO of RealtyTrac.
The drop in foreclosure activity was mixed, however.
"Rising foreclosure activity in many state and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona, and Nevada," Moore said in a statement.
For example, in Nevada and Arizona, bank repossessions dropped about 70 percent and by more than 50 percent in California.
Meanwhile, in states like Florida, New Jersey, and Illinois, which require judicial review, foreclosure activity increased. New Jersey had the largest annual increase in foreclosure starts in April seeing a 180 percent jump.
In the 26 states that have a judicial foreclosure process, foreclosure activity was up 15 percent compared to April 2011.
Source: RealtyTrac and “Foreclosures Fall to Lowest Level Since 2007,” CNNMoney (May 17, 2012)
http://ow.ly/aZcQy
For the third consecutive month, foreclosure filings dropped, sinking to their lowest level since July 2007, according to RealtyTrac’s April report on nationwide foreclosure activity.
Foreclosure activity, which includes default notices, scheduled auctions, and bank repossessions, fell 5 percent from March to April and were down 14 percent year-over-year.
"More distressed loans are being diverted into short sales rather than becoming completed foreclosures," says Brandon Moore, CEO of RealtyTrac.
The drop in foreclosure activity was mixed, however.
"Rising foreclosure activity in many state and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona, and Nevada," Moore said in a statement.
For example, in Nevada and Arizona, bank repossessions dropped about 70 percent and by more than 50 percent in California.
Meanwhile, in states like Florida, New Jersey, and Illinois, which require judicial review, foreclosure activity increased. New Jersey had the largest annual increase in foreclosure starts in April seeing a 180 percent jump.
In the 26 states that have a judicial foreclosure process, foreclosure activity was up 15 percent compared to April 2011.
Source: RealtyTrac and “Foreclosures Fall to Lowest Level Since 2007,” CNNMoney (May 17, 2012)
Positive Signs Abound for Housing
http://ow.ly/aZcIn
The first quarter of 2012 was the best first quarter for real estate in five years, and pending contracts suggest that the second quarter of 2012 will be the best second quarter in five years, NAR Chief Economist Lawrence Yun said this morning at the Residential Economic Update during the NAR Midyear Legislative Meetings & Trade Expo.
Moreover, he said the second half of this year could be even better than the first, in part because of continued increases in rental costs and record affordability of homes. "Renters are getting squeezed, and they don't want to rent anymore," Yun explained. "This could be the year we see the release of pent-up demand."
Home prices have been skipping along the bottom for about a year now, Yun said, a trend that has drawn investors into the market. These investors have helped housing through a couple of difficult years and partly mitigated the dysfunctional mortgage market.
"Right now is the time to buy low," he said. "Investors are coming in to take advantage. Second homes started to recover nicely last year because of investors."
However, home values are poised for a rebound as more traditional buyers move back into the market, Yun said. In fact, this has already started to happen in areas such as Phoenix and Miami, which have seen year-over-year (March 2011 to March 2012) double-digit percentage increases in home prices.
As real estate improves, consumer psychology around home ownership will change, he added. Coupled with the recent — if relatively modest — job growth and stock market gains, conditions are right for a sustained housing recovery.
Future Challenges
Nonetheless, there are issues that could restrain a turnaround in housing. Mortgages are still too hard to come by, the shadow inventory — while declining — remains historically high, and price inflation is rising "above the Fed's comfort level," Yun said.
To address that last problem, the Federal Reserve will likely raise rates in 2013 and 2014. Yet Yun contends a modest rise in interest rates wouldn't necessarily be a bad thing for the housing market. That's because an increase in rates would cause financial institutions to focus their mortgage servicing departments on purchase loans instead of refis.
The biggest challenge, though, remains the murky political and regulatory environment, particularly the repeated threats from legislators and policymakers to alter or eliminate the mortgage interest deduction. Additionally, the country is racing toward a "fiscal cliff" on Jan. 1, 2013, the date by which a compromise federal budget must be approved. If this is delayed, there will be automatic government spending cuts, which would probably create a fallout effect in the financial markets.
U.S. Migration Patterns
In a presentation preceding Yun's, Fed Economist Raven Molloy went over data that showed migration within the United States had fallen across practically all demographic categories since the 1980s. This has significant implications for real estate, as a decline in the number of people moving around within the country can translate into a decline in home-purchase activity.
There were no sharp moves downward in internal migration during the recession, which suggests the trend is not connected to the housing market or macro-economic cycles, Molloy said. If this was the case, migration would likely increase in the next few years as the job market improves and household formation picks up. Instead, it could remain flat or fall as the economy recovers.
In his presentation, Yun said this trend, which doesn't have a clear source, is a problematic development.
"It’s troubling," he said. "We want to have a very dynamic society where people can move up and trade up."
— Brian Summerfield, REALTOR® Magazine
http://ow.ly/aZcIn
The first quarter of 2012 was the best first quarter for real estate in five years, and pending contracts suggest that the second quarter of 2012 will be the best second quarter in five years, NAR Chief Economist Lawrence Yun said this morning at the Residential Economic Update during the NAR Midyear Legislative Meetings & Trade Expo.
Moreover, he said the second half of this year could be even better than the first, in part because of continued increases in rental costs and record affordability of homes. "Renters are getting squeezed, and they don't want to rent anymore," Yun explained. "This could be the year we see the release of pent-up demand."
Home prices have been skipping along the bottom for about a year now, Yun said, a trend that has drawn investors into the market. These investors have helped housing through a couple of difficult years and partly mitigated the dysfunctional mortgage market.
"Right now is the time to buy low," he said. "Investors are coming in to take advantage. Second homes started to recover nicely last year because of investors."
However, home values are poised for a rebound as more traditional buyers move back into the market, Yun said. In fact, this has already started to happen in areas such as Phoenix and Miami, which have seen year-over-year (March 2011 to March 2012) double-digit percentage increases in home prices.
As real estate improves, consumer psychology around home ownership will change, he added. Coupled with the recent — if relatively modest — job growth and stock market gains, conditions are right for a sustained housing recovery.
Future Challenges
Nonetheless, there are issues that could restrain a turnaround in housing. Mortgages are still too hard to come by, the shadow inventory — while declining — remains historically high, and price inflation is rising "above the Fed's comfort level," Yun said.
To address that last problem, the Federal Reserve will likely raise rates in 2013 and 2014. Yet Yun contends a modest rise in interest rates wouldn't necessarily be a bad thing for the housing market. That's because an increase in rates would cause financial institutions to focus their mortgage servicing departments on purchase loans instead of refis.
The biggest challenge, though, remains the murky political and regulatory environment, particularly the repeated threats from legislators and policymakers to alter or eliminate the mortgage interest deduction. Additionally, the country is racing toward a "fiscal cliff" on Jan. 1, 2013, the date by which a compromise federal budget must be approved. If this is delayed, there will be automatic government spending cuts, which would probably create a fallout effect in the financial markets.
U.S. Migration Patterns
In a presentation preceding Yun's, Fed Economist Raven Molloy went over data that showed migration within the United States had fallen across practically all demographic categories since the 1980s. This has significant implications for real estate, as a decline in the number of people moving around within the country can translate into a decline in home-purchase activity.
There were no sharp moves downward in internal migration during the recession, which suggests the trend is not connected to the housing market or macro-economic cycles, Molloy said. If this was the case, migration would likely increase in the next few years as the job market improves and household formation picks up. Instead, it could remain flat or fall as the economy recovers.
In his presentation, Yun said this trend, which doesn't have a clear source, is a problematic development.
"It’s troubling," he said. "We want to have a very dynamic society where people can move up and trade up."
— Brian Summerfield, REALTOR® Magazine
Wednesday, May 16, 2012
Builders Get More Confident About Improving Market
http://ow.ly/aXnzs
"Firming home values, improving employment, and low mortgage rates" are driving greater optimism over a recovery taking shape in the new-home market, says David Crowe, chief economist for the National Association of Home Builders.
Builder confidence for the market of newly built single-family homes rose five points this month, posting its best reading since May of 2007, according to a measure of builder sentiment by NAHB/Wells Fargo. The index measures builder sentiment on sales conditions and expectations as well as buyer traffic.
"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," says Barry Rutenberg, NAHB chairman. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."
Still, housing experts warn the new-home market still has a long way to go toward normalizing, based on historical trends. Builders say consumer access to credit, inaccurate appraisals, and the rise in materials costs for new construction continue to pose major challenges to the industry.
According to May's index, the largest gains in builder confidence occurred in the Northeast, followed by Midwest and South. The West posted a two-point decline in builder sentiment for May, according to the index.
Source: National Association of Home Builders
http://ow.ly/aXnzs
"Firming home values, improving employment, and low mortgage rates" are driving greater optimism over a recovery taking shape in the new-home market, says David Crowe, chief economist for the National Association of Home Builders.
Builder confidence for the market of newly built single-family homes rose five points this month, posting its best reading since May of 2007, according to a measure of builder sentiment by NAHB/Wells Fargo. The index measures builder sentiment on sales conditions and expectations as well as buyer traffic.
"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," says Barry Rutenberg, NAHB chairman. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."
Still, housing experts warn the new-home market still has a long way to go toward normalizing, based on historical trends. Builders say consumer access to credit, inaccurate appraisals, and the rise in materials costs for new construction continue to pose major challenges to the industry.
According to May's index, the largest gains in builder confidence occurred in the Northeast, followed by Midwest and South. The West posted a two-point decline in builder sentiment for May, according to the index.
Source: National Association of Home Builders
BofA Offers Up to $30K to Owners for Short Sales
http://ow.ly/aXnsV
In an effort to curb foreclosures, Bank of America is offering some of its defaulting home owners relocation assistance of anywhere from $2,500 to as much as $30,000 if they agree to complete a short sale.
Bank of America and other banks increasingly are becoming more willing to complete short sales than in the past, seeing it as a much less expensive alternative than if a home owner falls into foreclosure. With a short sale, banks are able to get ownership of the property more quickly, which tends to allow banks to keep the homes in better condition for resale and avoid costly other fees. Also, studies have shown that short sale properties tend to sell for more than properties in foreclosure.
As such, more banks have tried out special offers to struggling home owners to get them to pursue a short sale over foreclosure. Bank of America first began piloting its short sale relocation program in Florida last year, offering up to $20,000 to home owners who agreed to complete a short sale. JPMorgan Chase piloted a program that offered some home owners up to $35,000 to complete a short sale.
Bank of America has now rolled out the program nationally. To participate, home owners must get preapproval on the sales price of the home. The sale also must close by Sept. 26, 2013.
"This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home," says Bob Hora, a Bank of America executive.
Source: “Bank of America Offering up to $30,000 for Short Sales,” CNNMoney (May 15, 2012) and Bank of America
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In an effort to curb foreclosures, Bank of America is offering some of its defaulting home owners relocation assistance of anywhere from $2,500 to as much as $30,000 if they agree to complete a short sale.
Bank of America and other banks increasingly are becoming more willing to complete short sales than in the past, seeing it as a much less expensive alternative than if a home owner falls into foreclosure. With a short sale, banks are able to get ownership of the property more quickly, which tends to allow banks to keep the homes in better condition for resale and avoid costly other fees. Also, studies have shown that short sale properties tend to sell for more than properties in foreclosure.
As such, more banks have tried out special offers to struggling home owners to get them to pursue a short sale over foreclosure. Bank of America first began piloting its short sale relocation program in Florida last year, offering up to $20,000 to home owners who agreed to complete a short sale. JPMorgan Chase piloted a program that offered some home owners up to $35,000 to complete a short sale.
Bank of America has now rolled out the program nationally. To participate, home owners must get preapproval on the sales price of the home. The sale also must close by Sept. 26, 2013.
"This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home," says Bob Hora, a Bank of America executive.
Source: “Bank of America Offering up to $30,000 for Short Sales,” CNNMoney (May 15, 2012) and Bank of America
Conservation Easements Are Often Poorly Understood
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Long-standing common-law policies against placing undue restrictions on land owners' ability to use and transfer property can lead to confusion about the proper implementation of conservation easements, explained Brian Blaesser, an attorney with Robinson and Cole in Boston, who specializes in land use issues. Blaesser discussed the pros and cons of conservation easements Tuesday at the Land Use, Property Rights, and Environmental Forum during the 2012 NAR Midyear Legislative Meetings in Washington, D.C.
Under these easements, land owners voluntarily give an environmental organization or government entity a nonpossessive interest in property for conservation purposes such as the protection of a natural habitat or preservation of a forest or farmland.
"Conservation easements don't usually involve granting physical access to a property as do other easements," Blaesser said, but rather exist for some sort of public benefit. Statutes are in place in every state recognizing conservation easements. "But they don't confer [to] the public any rights to come onto your property," which is a common misconception, he added. Nor do they take precedence over any preexisting rights.
Conservation easements typically reduce the value of a property, but they entitle the holder to federal and state tax deductions. "But the conservation easements must be perpetual, meaning they have to exist forever, for the owner to get those tax benefits," Blaesser said.
The perpetuity concept inherently raises concerns for real estate owners. "It suggests a distrust of property owners' ability to make wise decisions for the future based on current needs, values, and benefits," he said. "If a property contains a perpetual easement, it can be hard to make land available for other needs like affordable housing."
On the positive side, conservation easements generally raise the property values of land around the protected area. They also keep properties in private hands and on the tax rolls.
— Wendy Cole, REALTOR® Magazine
http://ow.ly/aXnaN
Long-standing common-law policies against placing undue restrictions on land owners' ability to use and transfer property can lead to confusion about the proper implementation of conservation easements, explained Brian Blaesser, an attorney with Robinson and Cole in Boston, who specializes in land use issues. Blaesser discussed the pros and cons of conservation easements Tuesday at the Land Use, Property Rights, and Environmental Forum during the 2012 NAR Midyear Legislative Meetings in Washington, D.C.
Under these easements, land owners voluntarily give an environmental organization or government entity a nonpossessive interest in property for conservation purposes such as the protection of a natural habitat or preservation of a forest or farmland.
"Conservation easements don't usually involve granting physical access to a property as do other easements," Blaesser said, but rather exist for some sort of public benefit. Statutes are in place in every state recognizing conservation easements. "But they don't confer [to] the public any rights to come onto your property," which is a common misconception, he added. Nor do they take precedence over any preexisting rights.
Conservation easements typically reduce the value of a property, but they entitle the holder to federal and state tax deductions. "But the conservation easements must be perpetual, meaning they have to exist forever, for the owner to get those tax benefits," Blaesser said.
The perpetuity concept inherently raises concerns for real estate owners. "It suggests a distrust of property owners' ability to make wise decisions for the future based on current needs, values, and benefits," he said. "If a property contains a perpetual easement, it can be hard to make land available for other needs like affordable housing."
On the positive side, conservation easements generally raise the property values of land around the protected area. They also keep properties in private hands and on the tax rolls.
— Wendy Cole, REALTOR® Magazine
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