Monthly Archives: November 2011

Do You Know Who is the Largest Segment of Buyers?

Daily Real Estate News | Tuesday, November 29, 2011

Hispanic households account for more than half of the nation’s home owners, HousingWire reports. 

During the third-quarter, a total of 545,000 new household units were formed—53 percent of which were Hispanic households and the remaining 47 percent making up other minority groups and whites. 

From the second quarter to third quarter, the number of Hispanic households grew from 6.21 to 6.49 million alone, according to Census Bureau data. 

What’s more, Hispanic’s purchasing power in home ownership has more than doubled from 2000 to 2010, according to the National Association of Hispanic Real Estate Professionals. 

"Hispanics are now helping struggling local economies across our nation through population growth and purchase power,” NAHREP President Carmen Mercado told HousingWire. “We believe these same dynamics will be a driving force in the resurgence of the housing market in the near term.”

Indeed, 57 percent of Hispanics in a housing survey say they consider owning a home a symbol of success, compared to 33 percent of all Americans, according to a Fannie Mae 2010 third quarter survey.

Strong Temptations for Home Buying

The monthly cost of owning a home is more affordable now than in the past 15 years, and is less expensive than renting in numerous cities, according to The Wall Street Journal’s third-quarter survey.

Low home prices mixed with low mortgage rates—hovering at 4 percent or even lower—are creating an appealing buyer’s market, analysts say. For example, buyers today have a 77 percent increase in their borrowing power compared to 1991, Dan Green, a loan officer with Waterstone Mortgage in Cincinnati, told The Wall Street Journal. To illustrate: He says that in 1991 a $1,700 mortgage payment allowed a borrower to take out a $200,000 mortgage, whereas today the home owner taking advantage of current low rates can get a $350,000 loan for that mortgage payment amount. 

In the 28 cities that The Wall Street Journal tracked, it found monthly mortgage payments on the median-priced home—including taxes and insurance—to be lower than the average rent levels in 12 of the metro areas. 

Atlanta was found to be the city where owning was more favorable to renting by the most. For example, the monthly rent on the median-priced home there was $539 during the third quarter (with a 20 percent down payment) compared to the average asking rent which averaged $840, according to data provided by Marcus & Millichap.

Nationwide, apartment rents are expected to rise by about 4 percent this year, which may make the owning vs. renting picture tilt even higher, according to some analysts. 

Despite the appealing housing picture for home buyers, some buyers continue to stay on the sidelines, unable to sell their current home, qualify for mortgages due to the tightening of credit, or keep a steady job, housing expert say. 

Source: “Stronger Lure for Prospective Home Buyers,” The Wall Street Journal (Nov. 26, 2011)

Housing to gradually improve in 2012, NAR economist says

Gradual improvement in the housing market is expected next year, with existing-home sales edging up 4% to 5% and new home sales getting an even bigger boost off this year's record lows, the chief economist of the nation's largest real estate group said Friday.

"Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently," Lawrence Yun, chief economist of the National Association of Realtors, said. "Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely."

Yun, who made his comments during the annual NAR conference for real estate agents under way in Anaheim, Calif., projected gross domestic product growth of 1.8% for 2011, rising to 2.2% in 2012 with the unemployment rate declining to 8.7% by the second half of 2012.

Mortgage interest rates, he predicted, would gradually rise from record 2011 lows to 4.5% by the middle of 2012.

"Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities."

Existing-home sales are forecast to edge up about 1% this year. Based on NAR’s current projection model, existing-home sales would total 4.96 million in 2011. NAR is revising downward existing-home sales totals in recent years although it expects little change to previously reported comparisons based on percentage change.

New-home sales for 2011 are projected at 302,000 this year, a record low, with expectations that they will rise about 23% to 372,000 in 2012.

Housing starts are forecast to rise about 8% to 630,000 from 583,000 in 2011.

With falling inventory, the median home price should rise in 2012, he said.  "Home prices have yet to show a definitive stabilization pattern in most areas. Still, given an over-correction in prices, there likely will be moderate appreciation in 2012," Yun said.

Richard Peach, senior vice president at the Federal Reserve Board of New York, said the economy continues to disappoint. "Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level."

He promoted moving foreclosures by giving incentives to military servicemembers.

"My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a down payment on a foreclosed home in the Fannie or Freddie portfolio," he said.  This would help to absorb the inventory and stabilize the housing market.

Write to Kerry Curry.

Follow her on Twitter @communicatorKLC.

Last night Congress restored the loan limits for the Federal Housing Administration (FHA) for two years.

WE DID IT!

Last night Congress restored the loan limits for the Federal Housing Administration (FHA) for two years.

As you know, in late September the FHA, Fannie Mae; and Freddie Mac loan limits were reduced in 42 states pricing potential home buyers out of the American Dream of home ownership and holding back the housing recovery.

National Association of Realtors immediately went to work with the goal to get the loan limits restored in Congress. For weeks that goal seemed unlikely.

Us, and countless other REALTORS®  worked to educate Congress that well-qualified buyers didn’t need yet another hurdle to access affordable mortgage financing.

They finally listened. Because we were persistent. And because we were right.

The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000. The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets, the floor will remain at $271,050. However, Congress chose not to apply the loan limits restoration to Fannie Mae and Freddie Mac. Fannie-and-Freddie-backed mortgages will remain at 115 percent of local area median home prices up to $625,500.

The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011. NAR will continue to press Congress to use the additional time to complete their work on a five-year reauthorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country.

I know that when we work together we can accomplish anything we set our minds to in order to preserve, protect and defend the American Dream of Home Ownership.

I am continually reminded that “REALTORS® are the Heart of the Deal.”

With much appreciation,

Moe Veissi Signature

Moe Veissi
2012 President
NATIONAL ASSOCIATION OF REALTORS®

Housing Picture Expected to Brighten in 2012

Daily Real Estate News | Thursday, November 17, 2011

Better times are ahead for the real estate market in the new year, according to several forecasts and recent surveys.

Fiserv, a financial information services firm, predicts that 95 percent of the 384 metro areas it tracks will see prices rise in 2012.

Many surveys and economists are forecasting a very modest increase for the housing market in the new year, but after several years of dropping prices and rising foreclosures, even the slightest increase would signal a glimmer of hope for the market. In a survey by MacroMarkets of 100 economists and real estate professionals, respondents reported home values will likely rise slightly at 0.25 percent in the new year.

The real estate market still faces a large backlog of foreclosures that it must work through in many markets. As such, price gains through 2015 will likely just be around 1.1 percent, according to the survey. However, this is a reversal after a forecast of 2.8 percent decline in median home values for this year.

Foreclosures continue to weigh on many markets and are preventing home values from stabilizing, economists say.

“The water is very deep in the living room, but it’s no longer getting deeper and is starting to recede,” says Mark Fleming, CoreLogic’s chief economist.

Low interest rates on mortgages mixed with more affordable housing for families in the median income range are expected help the market in its rebound in 2012, economists say.

Source: “A Smaller House Will Make a Big Difference,” Money Magazine (Nov. 14, 2011)

Daylight Savings Time Ends This Sunday

Set all clocks back an hour on Saturday night when you retire.

and… dont forget to call me for all your Real Estate needs.

Sincerely.

Ady Simion

 

Short Sales Offer Significant Discounts in Several Major Cities

Short sales are growing throughout the nation as distressed homeowners and servicers continue to seek alternatives to foreclosure and home buyers increasingly opt for the significant discounts that come with short sales.

With 9,145 completed short sales, the Los Angeles area had more short sale transactions than any other metropolitan statistical area (MSA) in the second quarter of this year, according to a recent blog post from RealtyTrac.

These short sales came with an average discount of 32 percent and at an average price of $350,237.

Phoenix ranked second in number of short sales for the second quarter with 8,434 short sales, which came with

an average discount of 27 percent and an average price of $133,793.

According to the RealtyTrac blog post, the metros with the highest numbers of short sales in the second quarter were:

1. Los Angeles
2. Phoenix
3. Cape Coral – Fort Myers, Florida
4. Oxnard – Thousand Oaks – Ventura, California
5. Reno – Sparks, Nevada
6. San Francisco
7. San Jose
8. Portland
9. Atlanta
10. Milwaukee

Short sale savings averaged more than 30 percent in Cape Coral – Fort Myers, Florida; San Francisco; San Jose; and Milwaukee.

Reno – Sparks, Nevada, experienced a 50 percent rise in short sales from the first quarter to the second quarter of the year, while San Francisco saw a 47 percent rise in short sales.

Atlanta and Milwaukee also saw significant increases in short sales over the quarter – 21 perc