September 3, 2010
“Hi, I’m from the federal government and I’m here to help!”
Federal Reserve officials attending a Fed conference reviewed the housing crisis and called for more programs to address broader issues.
Don’t you just hate the word “issues?” Why don’t they call it what it really is – a problem.
Eric Rosengren, president of the Fed’s Bank of Boston, said he is in favor of a more “holistic” approach.
“My own view is that too little focus has been on community problems because the focus has been more targeted to housing and foreclosures,” Rosengren said. “Rather than treating the symptom — the high REO problem — we need to better understand how to resolve the more general problems in communities that lead to higher concentrations of REOs and exacerbate the effects of high REOs.”
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, told attendees of the conference that the Fed feels a “great sense of urgency” to get housing back on its feet.
“A healthy housing sector is critical both to the overall economy and to a sustainable economic recovery,” Pianalto said.
Source: Reuters News (09/02/2010)
August 27, 2010
Home construction and property sales have led the U.S. out of seven recessions since 1960.
Don’t plan on that happening this time. In fact, the recent home sale figures have many economists wondering if a double dip in housing may trigger a double dip recession.
So even though it is different this time, the answer is real simple.
Consumers and businesses are sitting on their hands.
We need to create jobs. That will increase consumer confidence. That will get people to unclench their wallets and buy cars and houses. That will create a ripple effect for more goods and services. That will rebuild the economy.
So simple a child can figure it out.
Choose wisely in November. Your country depends on it.
August 16, 2010
Seems that there is a new scam regarding housing. Here is how it goes:
You have a good job.
You bought a house for $500K three years ago with almost nothing or nothing down.
You live in an area where housing prices have dropped 50% (there are many).
So you buy another house about the same size as the one you have, because you have good credit.
You tell the bank you are going to rent it out.
They make the loan.
You move in and stop paying on the old house.
The bank repossesses the first house.
Your credit goes into the tank, but you do not care because:
You now have a house the same size as the first one.
You have a payment 1/2 or less than the old payment.
The bank eats the loss and you have scammed the system.
Think this is not real… it is happening in several areas of the country.
And you, the taxpayer, will eventually foot the bill.
This is so wrong on so many levels.
August 12, 2010
Testifying before a House panel last week, Jim Helsel, treasurer of the National Association of REALTORS® and commercial real estate specialist, told members that a strong commercial real estate sector is vital to millions of U.S. jobs and helps keep the national economy afloat.
“Lack of available credit remains a significant challenge for our industry right now,” he said. Helsel commended the panel for passage in June of H.R. 5297, “The Small Business Lending Fund Act of 2010,” which ensures community banks have both the incentive and capacity to increase total loans to small businesses. Raising the SBA loan limits and allowing SBA 504 loans to be used to refinance performing property can help ease the liquidity crisis in the commercial sector, he said.
Another avenue, credit unions, could increase available credit to small businesses, Helsel said. NAR strongly supports legislation, H.R. 3380 introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.), which would raise the credit union member business lending cap from 12.25 percent to 25 percent of total assets. Currently, small regional and community banks account for almost half of the small business loans issued in the U.S.
Helsel also said that NAR supports the Senate’s efforts to include more generous depreciation allowances for commercial properties in the Senate bill. “Accelerated depreciation would incentivize new equity investment to commercial real estate, reducing debt-to-income ratios and strengthening income-producing properties,” he said.
August 2, 2010
MIT-Harvard Study: Foreclosure drops house value by 27%
Monday, July 26th, 2010, 2:58 pm
A foreclosure reduces the value of a house by 27%, on average, and accounts for a much steeper price drop than other forced sales, according to a study by a Massachusetts Institute of Technology (MIT) economist and two Harvard University researchers.
In comparison, when a house is sold after the death of an owner, the price drops 5% to 7% on average. When an owner declares bankruptcy, the value sinks 3%, according to the report.
The research, “Forced Sales and House Prices,” has been accepted for publication in the American Economic Review.
In the study, MIT economist Parag Pathak and Harvard researchers John Y. Campbell and Stefano Giglio examined 1.8m home sales in Massachusetts from 1987 through March 2009.
Sellers trying to sell their non-distressed, occupied properties in a neighborhood that has a foreclosed home on the market will take a price hit, according to the report. The researchers estimated the value of a home drops by 1%, on average, if it is within roughly 250 feet of a foreclosed home. MIT said the paper represents the first time economists have been able to clearly quantify how much nearby foreclosures affects prices of inhabited homes.
July 19, 2010
Home owners still love their houses despite declining home prices. And 90 percent of Americans don’t regret buying their current home, according to a survey for Bankrate.com.
Among the 9 percent who do regret the purchase, most say they are unhappy that they can’t sell their home and move elsewhere or they can’t afford their monthly mortgage.
Some 79 percent of those polled say they have a fixed-rate mortgage on their homes. Among those making over $75,000 per year, 90 percent say they have a fixed rate mortgage.
Source: Bankrate.com (07/12/2010)
On the other hand, the very next day we get this from Corelogic.
Home Prices Continue Gains Over 2009
U.S. home prices, including distressed sales, increased by 2.9 percent compared to the same month last year, according to CoreLogic in its monthly index.
May was the fourth straight month prices showed a year-over-year increase.
“Home price appreciation stabilized as home buyer tax credit-driven sales peaked in late spring,” says Mark Fleming, chief economist for CoreLogic. “But given that the labor market and income growth remain tepid, we expect prices to moderate and possibly decline the rest of the year.”
Source: CoreLogic (07/13/2010)
June 30, 2010
Denver-area home prices rose an average of 4.4 percent in April from April 2009, marking the sixth consecutive month of year-over-year gains, shows the closely watched S&P Case-Shiller Home Price Indices released this week.
The 4.4 percent gain was the largest since the trend began in November 2009, when prices were up 0.5% from November 2008. Each month, the percentage gain has grown.
The Denver market, as the nation as a whole, was helped in April as buyers and brokers scrambled to put homes under contract by April 30 to quality for a federal tax credit worth as much as $8,000.
It will be interesting to see if this trend continues as we yank the government support props from underneath the housing market.
The May figures could be disappointing.
|
Metropolitan Area
|
Change from
January 2000
|
Change from
March to April
|
1-Year Change
|
|
Minneapolis
|
18.89%
|
1.8%
|
9.5%
|
|
Los Angeles
|
71.78%
|
0.7%
|
7.8%
|
|
Washington, D.C.
|
79.49%
|
2.4%
|
7.3%
|
|
Cleveland
|
4.77%
|
1.4%
|
6.8%
|
|
Phoenix
|
10.05%
|
0.5%
|
5.4%
|
|
Boston
|
53.56%
|
1.4%
|
4.9%
|
|
Composite-10
|
57.37%
|
0.7%
|
4.6%
|
|
DENVER
|
27.5%
|
1.7%
|
4.0%
|
|
Composite-20
|
44.56%
|
0.8%
|
3.8%
|
|
Dallas
|
18.14%
|
2.0%
|
3.3%
|
|
San Francisco
|
38.77%
|
2.2%
|
18.0%
|
|
San Diego
|
61.39%
|
0.7%
|
11.7%
|
|
Atlanta
|
5.64%
|
1.8%
|
0.2%
|
|
Las Vegas
|
2.82%
|
0.2%
|
-8.5%
|
|
Detroit
|
-32.19%
|
0.2%
|
-3.0%
|
|
Seattle
|
44.15%
|
1.0%
|
-2.8%
|
|
Tampa
|
37.09%
|
-0.5%
|
-2.4%
|
|
Charlotte
|
16.05%
|
1.1%
|
-2.2%
|
|
Chicago
|
20.43%
|
0.6%
|
-1.6%
|
|
New York
|
68.95%
|
-0.3%
|
-1.0%
|
|
Miami
|
45.04%
|
-0.8%
|
-0.5%
|
|
Portland
|
46.25%
|
1.8%
|
-0.4%
|
June 21, 2010
Last Monday the Treasury and the Department of Housing and Urban Development released a new monthly “housing scorecard” in a feeble attempt to show that the administration is helping the housing market.
I suppose that, technically (and politically) some of the statistics released could be interpreted as a sign of stabilization. But what many Realtors fear is that it is only a temporary fix brought about by tax credits, very low interest rates and other forms of government intervention.
“Today’s housing market is in significantly better shape than anyone expected 18 months ago,” HUD Secretary Shaun Donovan told reporters. Despite alarming forecasts back then, he said, “the world didn’t end.”
For many who have lost their homes, or are upside down, the world did end. Maybe they just didn’t get the memo. This reminds me of last month’s job report where Barry boasted that he had created 447,000 jobs. Then we find out that 411,000 of those were temporary jobs for census workers. And that many of those workers had been hired and laid off numerous times to puff up the job creation numbers.
Mr. Donovan finished his press release by stating “Obviously, we are not out of the woods. Our housing market remains fragile, and we still may see further declines.”
Yep, that sounds like the housing market has recovered to me!
June 11, 2010
There has been discussion over the past 2 years about buy-side Realtors really deserving half of the commission paid by the seller if buyers are doing most of their research online.
It’s true that vetting properties to get at a manageable number of properties that meet the buyer’s criteria is often done by the buyer.
However, Realtors still provide several services to buyers – like local market knowledge, negotiations and expertise with contracts and ancillary contacts that justify their commissions.
A company called VHT is testing a search-engine optimization platform that will allow a potential buyer to type a few key search terms - 3 bedrooms, big yard, etc. The results that pop up will link to local real estate brokerages instead of aggregator site like Trulia or Zillow. The software also returns local results when an exact address is typed in.
This could help facilitate a search – most people have come to realize how marginal Trulia and Zillow are.
I think a better question than “Will Technology Hurt Buy-Side Realtors,” would be - will “Technology Help Listing Realtors” and how do you know which Realtors are best using the latest technology?
June 4, 2010
An increasing number of home owners in foreclosure continue to live in their homes, mostly ignoring the foreclosure action and refusing to pay anything.
The average borrower in foreclosure is unlikely to be evicted for 438 days, says LPS Applied Analytics. LPS says more than 650,000 households haven’t paid their mortgage in 18 months, and in the case of 19 percent of those households, the lender hasn’t made any effort to repossess the property.
In some states like California and Texas, lenders can foreclose without a say-so from the courts. In those states, the action is likely to be quick. But in 19 states, including Florida and New York, the court must approve the foreclosure and resulting eviction and the process is slow.
Source: The New York Times (05/31/2010)