Real Estate Market
March pending home sales rise, market recovering
POSITIVE ARTICLE!!!
March pending home sales rise, market recovering
WASHINGTON (April 26, 2012) – Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February, and it’s 12.8 percent above March 2011 when it was 89.9. The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3.
“First quarter sales closings were the highest first quarter sales in five years,” says Lawrence Yun, NAR chief economist. “The latest contract signing activity suggests the second quarter will be equally good. The housing market has clearly turned the corner. Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses.”
The PHSI in the Northeast slipped 0.8 percent to 78.2 in March but is 21.1 percent above March 2011. In the Midwest, the index declined 0.9 percent to 93.3 but is 16.9 percent higher than a year ago.
Pending home sales in the South rose 5.9 percent to an index of 114.1 in March and are 10.6 percent above March 2011. In the West, the index increased 8.7 percent in March to 108.0 and is 9.0 percent above a year ago.
© 2012 Florida Realtors®
Why $10k ABOVE list price wasn’t enough for a Foreclosure
One of my customers recently offered almost $10k ABOVE list price on a foreclosure, and they didn’t get it because they were out offered!
This article sheds some light on what many Buyer’s are starting to experience in this Buyer’s Market …
Low-ball offers don’t work anymore
WASHINGTON – April 23, 2012 – When the number of home sellers grossly outpaces the number of buyers, no offer can be ignored, even if it’s 25 percent or more off the asking price. But in today’s rebounding market, those low-ball offers don’t often work. Many times, the potential buyer finds that they don’t get a counter-offer. And, in many cases, another more realistic buyer gets the home.
A low-ball offer – generally 25 or more off the asking price – allows buyers to see if they can land a great deal, even if they’re willing to pay more. In a survey last year conducted by the National Association of Realtors® (NAR), one in 10 respondents cited low-ball offers as a concern. According to real estate columnist Kenneth Harney, a NAR survey conducted in March and not yet released found that almost no one complained about low offers.
When the number of listings outpaced the number of buyers, many potential homeowners submitted a shockingly low offer on the theory that they had nothing to lose. If the seller balked, most would still counter with something below their asking price. Today, however, offers close to the asking price – or even beating it – will probably come in fairly quickly from someone else if a home is priced correctly in the first place.
Even buyers who still want to low-ball an offer on a home many times switch tactics after they lose a property or two to a more aggressive buyer.
Florida Realtor Marnie Matarese works with J Wood Realty in Sarasota. She told Harney that fewer buyers want to low-ball an offer in her area, but they still come in – mainly from out-of-state or out-of-the-country people who have read about the state’s foreclosures and short sales. That news, however, is old – it has not kept up with reality in many areas.
Matarese says some people still insist on making a low-ball offer, but that she doesn’t mind. “You can’t blame a buyer for trying to get a good deal,” she says.
In some cases, a seller isn’t offended by a low-ball offer, but their counter-offer shaves only a little bit off their original asking price. An Olympia, Wash., real estate agent had a $150,000 offer for a $250,000 listing, according to Harney. But after the dust settled and the seller shook off his irritation, he and the buyer agreed to $230,000.
Harney closed his column with this advice: “Rolling low-balls at sellers may have been an effective approach between 2008 and early 2011. But in 2012’s environment – at least in rebounding markets – it could be counterproductive if you truly want to buy.”
Source: Ken Harney. Distributed by Washington Post Writers Group.
© 2012 Florida Realtors®
Investors eye REOs as a ‘gold rush’
Source: “Tapping into the Next ‘Gold Rush,’” National Mortgage News (April 10, 2012)
NEW YORK – April 16, 2012 – Investors are pouncing on foreclosure bargains and then turning the properties into moneymaking rentals, which has some drawing comparisons to a “Gold Rush” of sorts.
Diane Gozza, the executive vice president of Integrated Mortgage Solutions in Houston, recently wrote in an article for National Mortgage News that investors are eyeing the properties similar to how those risk-takers did back in the 1848 California “Gold Rush,” who also had dreams of striking it rich.
In recent months, investors have been buying up investment properties in bulk at rock-bottom prices.
They have plenty to choose from: The government-sponsored enterprises (GSE), which includes Fannie Mae and Freddie Mac, own more than 200,000 single-family foreclosed homes, and banks own about 600,000 more. To help accelerate the “rush,” the Federal Housing Finance Administration recently launched a pilot foreclosure-to-rental program, offering investors the chance to bid on 2,500 foreclosure properties owned by Fannie.
But some housing experts, including the National Association of Realtors® (NAR), have argued that such REO-rental programs aren’t needed because investors are already flooding the market to buy up foreclosures, making a government intervention unnecessary. (Read “NAR: REO Rental Programs Largely Unnecessary.”
“Taking into account the enormous stockpile of REO properties currently held by the GSEs, the auction and bulk investment in REO to rental properties may indeed be the next gold rush,” Gozza writes. “Much in the spirit of the 1848 gold rush, there will be risks and tough lessons learned. But this private-sector initiative has the potential to be the catalyst for a housing market recovery.”
Source: “Tapping into the Next ‘Gold Rush,’” National Mortgage News (April 10, 2012)
© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688
Bill could help short sale sellers in 2013
WASHINGTON – April 2, 2012 – Under U.S. law, a homeowner with an underwater mortgage who goes through a short sale has part of his or her debt forgiven by a bank. The amount forgiven is legally considered income, as if the lender gave the owner a monetary gift by saying, “You no longer have to pay this.”
As a gift, that money is income and taxable by the IRS when the homeowner fills out his yearly income taxes. However, a temporary law effective through Dec. 31, 2012, nixes that amount as homeowner income, making the debt forgiveness tax-free. A short sale in 2012, then, allows a homeowner to walk away free of debt.
As it stands now, that rule expires next year, and underwater homeowners who go through a short sale could be taxed on the amount forgiven.
However, a bipartisan bill introduced late last week by U.S. Senators Debbie Stabenow (D-MI) and Dean Heller (R-NV) – the Mortgage Relief Act – would extend that rule past Dec. 31 if approved by both the House and Senate and signed by President Obama. Senators Robert Menendez (D-NJ), Sherrod Brown (D-OH) and Jeff Merkley (D-OR) cosponsored the legislation.
“It is bad enough that so many families are faced with mortgages that now exceed the value of their home,” says Stabenow. “But to add insult to injury, without this bill, the IRS would once again require these families to pay hundreds or thousands of dollars in additional income tax when they sell or refinance their home. That’s just wrong.”
Stabenow championed the original Mortgage Relief Act of 2007 designed to fix the problem that now expires at the end of 2012. Stabenow and Heller’s new bill will extend this tax protection for underwater homeowners through 2015.
Approximately, 20 to 25 percent of American homeowners are currently underwater on their mortgages.
© 2012 Florida Realtors®
HAFA Short Sale Update -from CDPE.com
Major news in the short sale and housing industry! On Friday, March 9, the Obama Administration announced updates to the Home Affordable Foreclosure Alternative (HAFA) program. Created in 2009, HAFA is a government-sponsored initiative assisting all Home Affordable Modification Program (HAMP) eligible homeowners in avoiding foreclosure through short sales and deed-in-lieus.
The HAFA updates will go into effect on June 1, 2012, and will allow more distressed homeowners to seek assistance. Most importantly, the deadline for submitting for HAFA eligibility will be extended a full year, from December 31, 2012, to December 31, 2013.
Other major changes from March’s updates to the HAFA program include:
- The removal of occupancy requirements. Previously, HAFA required homeowners to have lived in the property within the last 12 months.
- $3,000 relocation incentives will be limited to properties occupied by an owner or tenant at the time of the short sale.
- Mortgage payments will be allowed to exceed 31% of the homeowner’s gross monthly income. This update will allow a homeowner to stay current on her mortgage and still qualify, minimizing the overall impact to her credit.
- Secondary lienholders may receive up to a maximum of $8,500, up from $6,000 previously.
- And one of the most dramatic changes: The Credit Bureau Reporting will be Account Status Code 13 (paid or closed account/zero balance) or 65 (account paid in full/a foreclosure was started), as applicable.
With these updates, a homeowner can be current on their mortgage, qualify for HAFA, continue to make their payments, and execute a short sale with minimum impact on their credit!
Builder mag: 8 Healthiest Housing Markets
Builder mag: 8 Healthiest Housing Markets
JACKSONVILLE, Fla. – Nov. 8, 2011 – The construction industry thinks two Fla. metropolitan areas – Jacksonville and South Florida – are poised for a rebound, according to an analysis by Builder Magazine.
To find the cities with the greatest potential for growth, Builder Magazine as Hanley Wood Market Intelligence to consider local factors, such as major universities, military bases, and the strength of businesses in the private sector. The study also considered Economy.com’s housing projections, expected price appreciation, and estimated employment and income growth.
Under those criteria, two Florida cities made the top eight nationwide. Jacksonville came in at No. 4, and South Florida (Miami-Fort Lauderdale-Pompano Beach) ranked No. 5.
In Jacksonville, surveyors expect the number of building permits to almost double between 2011 and 2012, rising from 2,284 to a forecast of 4,363. The number of jobs will grow, the financial businesses will grow, and a military base will continue to call Jacksonville home. The builders believe housing prices will rise 5 percent in 2012.
In South Florida, surveyors believe building permits will skyrocket 178 percent: from 2,708 in 2011 to 7,522 in 2012. Unemployment will, according to forecasts, stop declining and rise 2.7 percent next year. Builders say the rosy picture is driven in large part by two big projects that will add over 10,000 jobs: the CitiCentre and Resorts World Miami.
The complete list of cities in the top eight include:
1. Minneapolis-St. Paul-Bloomington Minn.-Wis.
2. Fort Collins-Loveland, Colo.
3. Salt Lake City, Utah
4. Jacksonville, Fla.
5. Miami-Fort Lauderdale-Pompano Beach, Fla.
6. Charlottesville, Va.
7. Colorado Springs, Colo.
8. Oklahoma City, Okla.Source: “Healthiest Housing Markets: Mid-2011 Update,” Builder Magazine, Boyce Thompson
Homeowners’ monthly mortgage down about 40%
WASHINGTON – Nov. 14, 2011 – Improving housing affordability mixed with low mortgage rates means that homeowners are paying a lot less for their monthly mortgage payment than they did just a few years ago. In fact, they’re paying nearly 40 percent less on their monthly mortgage payment than homeowners paid in 2006.
According to Fiserv, the monthly mortgage payment for a median-priced single-family home today is $700 – a drop of close to 40 percent from 2006, when it was $1,140.
“Housing affordability has improved dramatically because of declines in both prices and mortgage interest rates,” David Stiff, chief economist at Fiserv, said in a statement. “Nationally, purchase mortgage payments now account for only 13 percent of monthly median family income, the lowest percentage on record (since 1971), and compared to 23 percent in the first quarter of 2006.”
Source: “Monthly Mortgage Payment Almost 40% Cheaper Than 2006,” HousingWire (Nov. 9, 2011) and Fiserv
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Renters spend 5% more than homeowners
Check the facts!!!
NEW YORK – Oct. 27, 2011 –
Rising rents are forcing renters to outspend homeowners on housing costs, according to a new study.
Since 2005, homeowners’ housing expenses have climbed from 31.9 percent of their household budget to 33.2 percent. In that same time period, renters’ expenses have jumped from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing and Mortgage Trends.
In the last 26 years, homeowners have increased the amount they spend on household expenses by 12 percent while renters have increased it by 22 percent, according to the study.
Earlier this month, Capital Economics economists noted that for the first time in 30 years the median monthly mortgage payment is about the same – or less – than the median rental payment.
Yet, with the bleak job market, homeownership rates continue to fall in many parts of the country, particularly among younger generations. CoreLogic found in its report that the homeownership rate for the 25-to-34 age group dropped from 51.6 percent in 1980 to 42 percent in 2010. For the 35-to-44 age group, homeownership rates fell from 71.2 percent to 62.3 percent over that period.
Source: “Renters Outspend Owners on Housing,” RISMedia (Oct. 25, 2011) and Capital Economics
© Copyright 2011 INFORMATION, INC. Bethesda, MD
Growth picture enjoys uptick
Positive Article
WASHINGTON – Oct. 25, 2011 – Economists have significantly raised their estimates of third-quarter economic growth ahead of the government’s official report Thursday, easing near-term fears of another recession.
A consensus of economists surveyed by Bloomberg News estimates the economy grew at a still-modest 2.5 percent annual pace last quarter, up from their 1.8 percent projection less than two weeks ago. The brighter picture follows better-than-expected data on retail sales, manufacturing, jobs and business investment.
“We should take some comfort that the economy isn’t hurtling into recession,” says Capital Economics’ Paul Ashworth. Ashworth estimates third-quarter growth was 3.2 percent.
That’s not robust, but it beats the anemic expansion of less than 1 percent the first half of 2011. Amid last summer’s debt battle in Congress, the downgrade of the U.S. credit rating and financial turmoil in Europe, many analysts thought the U.S. was on the verge of another downturn.
Since Oct. 3, 10-year Treasury yields have risen nearly half a percentage point, indicating growth prospects are prompting a shift of money to higher-risk assets, says market strategist Anthony Valeri of LPL Financial.
Many experts say the third-quarter upturn was due to temporary factors, particularly the end of supply disruptions after the Japanese earthquake, and the decline in oil prices. The Commerce Department said last week that retail sales jumped 1.1 percent in September, partly because of a 3.6 percent rise in auto sales as Japanese bottlenecks eased.
Meanwhile, manufacturing grew at a 4.3 percent annualized rate in the third quarter. And business investment in equipment and software has rebounded. Both measures were buoyed by the unclogging of Japanese supply channels and lower oil prices.
Many economists say growth will slow to a sluggish 2 percent rate over the next year. Unemployment, at 9.1 percent, is high and consumer confidence is shaken.
Yet a recession appears less likely. New jobless claims have been falling since summer. “You would be seeing claims shooting up” if a downturn were imminent, says chief economist James O’Sullivan of MF Global.
Some say growth could beat estimates. Excluding autos, retail sales rose 0.6 percent last month. Consumer stock prices, often a leading job indicator, are at a record premium relative to stocks overall, says economist James Paulsen of Wells Capital Management.
But Bernard Baumohl of the Economic Outlook Group notes consumers have been borrowing more and saving less to finance their increased spending – which he says can’t continue.
© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Paul Davidson