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®
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