Monthly Archives: September 2012

Canadians, Chinese and Mexicans Target U.S. Real Estate

Canadians, Chinese, and Mexicans are flocking to U.S. real estate in droves. They’re looking for bargains on vacation homes.

Foreign purchases of homes in the U.S. have surged 24 percent since 2011, according to the National Association of REALTORS®. 

“Foreigners purchase for a variety of reasons: trophy homes, desire to put money in the U.S. for safety, desire to have a place to visit for vacation, desire for a rental unit,” Jed Smith, an NAR economist, told NBC News. “These factors … tend to dampen the effects of changes in total overall cost."

From March 2011 to March of this year, Canadians were found to be the leaders when it comes to snagging up U.S. real estate. They make up 24 percent of foreign sales in the U.S. The areas they mostly target? Miami, Fort Lauderdale, and Orlando, according to Realtor.com.

Chinese make up about 11 percent of international transactions in the U.S., and mostly target areas in Los Angeles and San Francisco. 

Meanwhile, U.K. consumers may be driven to come to the U.S. for supersized properties. U.K. consumers have been found to be more drawn to McMansions and larger U.S. homes — targeting median size properties of 2,342 square feet compared to Americans who tend to target median 1,854 square feet, according to Trulia.

“The rest of the world might make fun of Americans for our big portions, big homes, but it turns out that most foreigners look at bigger homes than what most Americans look at,” Jed Kolko, Trulia chief economist, wrote in a blog last week.

Source: “Foreign Residential Invasion: Why the NEw Neighbors May Not Speak Your Language,” NBC News (Sept. 27, 2012)

 

A Good Week for Housing

The housing recovery showed signs of strengthening this week, as two new reports showed home sales and prices on the upswing. 

Existing-home sales have soared nearly 8 percent from a year ago, the National Association of REALTORS® reported this week. Meanwhile, the new-home market also is showing signs of recovery, with starts rising 29.1 percent over year-ago levels, according to the Census Bureau. 

What’s more, home builders are getting more confident about the market with recent sales, future sales, and buyer traffic. Homebuilder confidence reached its highest level since the housing-boom time of June 2006, according to this month’s index of homebuilder sentiment. 

Also this week, fixed-rate mortgages this week were at all-time record lows or near it, helping to keep home buyer affordability high, Freddie Mac reported in its weekly mortgage market survey. 

With a drop in inventory of for-sale homes nationwide, many markets are also seeing an increase in home prices. The median home price is $187,400, a 9.5 percent increase over year-ago levels. Also, “that marked the sixth consecutive month of price increases, the first time that has happened since May 2006, near the very peak of the housing price boom,” CNNMoney reports. 

“We have a real housing recovery taking root, and that has positive implications for the broader economy,” Sal Guatieri, senior economist at BMO Capital Markets, told the Associated Press. “If home prices continue to rise, so, too, will household wealth and consumer confidence.”

Source: “Housing Recovery Blossoms,” CNNMoney (Sept. 19, 2012) and “Housing Recovery Stirs in August,” Associated Press (Sept. 19, 2012)

 

Real Estate news

Federal Reserve stimulus program aims to fire up housing market

By Don Lee and Jim Puzzanghera, Los Angeles Times

 

Story | September 13, 2012 | 6:42 PM

…housing market, but not by much. "Don't expect to see a sudden turnaround…payment, and lower mortgage rates don't directly help that, Green said…solve this problem by ourselves." don.lee@latimes.com jim.puzzanghera…

 

Southland housing market sees rising prices, sales

By Alejandro Lazo

Southern California's median home price rises to a four-year high in August and sales hit their highest level for the month in six years.

Breaking News Alert The New York Times Thursday, September 13, 2012 — 12:42 PM EDT

Fed Sets Open-Ended Asset Purchases to Spur Growth; Extends Low Rates Into 2015

 

The Federal Reserve opened a new chapter Thursday in its efforts to accelerate the economic recovery, saying that it would expand its holdings of mortgage-backed securities, and potentially undertake other new policies, until unemployment drops sufficiently or inflation rises too fast. The Fed said that it will add $23 billion of mortgage bonds to its portfolio by the end of September and then announce its plans for October as part of a new process that aims to prioritize the Fed’s economic objectives.

The Fed also said, in a statement following a meeting of its policy-making committee, that it now expects to hold short-term interest rates near zero until at least mid-2015, extending the forecast it made in January by about half a year.

 

Read More:

http://www.nytimes.com/2012/09/14/business/economy/fed-announces-new-round-of-bond-buying-to-spur-growth.html?emc=na

Federal Reserve announces new stimulus action Los Angeles Times | September 13, 2012 | 9:39 AM

The Federal Reserve today announced another round of stimulus action to boost the faltering economic recovery. The Fed said it would buy $40 billion worth of mortgage-backed securities a month for an undetermined period to reduce longer-term interest rates. The Fed also said it expected to keep short-term interest rates near zero until mid-2015.

For the latest information go to www.latimes.com.

Credit union mortgage lending doubles in California

Credit union mortgage lending doubles in California
By Jon Prior

• September 4, 2012 • 1:38pm

California credit unions took advantage of the Home Affordable Refinance Program and originated twice as many home loans in second quarter than the previous three months.

These smaller lenders wrote a collective $9.6 billion in mortgages, up from $4.6 billion at the beginning of the year. Like larger banks, credit unions were able to pick up some business from an expanded HARP, which allowed more underwater borrowers to refinance their Fannie Mae and Freddie Mac loans.

Many of the largest banks tied off new HARP to just the loans they service, and some borrowers exhausted with poorly managed government programs in the past even bypassed the largest banks for their more approachable credit unions.

"Credit unions are the good guys in all of the problems in housing. That was a big part of the inflow. The larger banks are just too big and bureaucratic," said Diana Dykstra, CEO of the California and Nevada Credit Union Leagues.

Dykstra said she noticed more baby boomers were taking advantage of the low rates in order shorten their terms through a refinance. Many, she said, planned to pay off their mortgage before retirement.

Much of the refinancing business went to places hardest hit by the housing downturn. In the Riverside, Calif. metro area, more than 44% of the borrowers owe more on their mortgage than their house is worth, according to CoreLogic ($24.87 0.27%). But credit unions originated nearly $9 million in home loans there in the last three months.

Chris Collver, senior regulatory analyst for CANV, said the trend will continue as large firms grow more conservative or exit the more exotic mortgage business entirely.

Credit unions took up about 2% of the space in 2005. That grew to 6.7% of the home credit market in 2011, according to Collver.

"The big banks can't engage in those any more," Collver said.

jprior@housingwire.com

July home prices increase 3.8%

July home prices increase 3.8%
By Kerri Ann Panchuk

• September 4, 2012 • 8:19am

Home prices in July rose 3.8% over last year, making it the largest annual gain in six years, CoreLogic ($24.75 0.15%) said in its latest Home Price Index Tuesday.

The Santa Ana, Calif.-based mortgage research and analytics firm noted that home prices, including distressed sales, edged up 1.3% from June, making it the fifth consecutive month-over-month increase in home prices nationally.

When excluding distressed home sales, which are known to skew price levels, home prices grew 4.3% over last year in July and 1.7% over June, suggesting a value recovery is taking hold.

CoreLogic's pending home price index suggests that August prices, including distressed sales, will rise at least 4.6% year-over-year this month.

When excluding the influence of distressed sales, CoreLogic believes August home prices will rise 6% over last year and 1.3% over July.

 

"The housing market continues its positive trajectory with significant price gains in July and our expectation of a further increase in August," said Mark Fleming, chief economist for CoreLogic.

The five states with the highest price appreciation, including distressed sales, were Arizona (with prices rising 16.6%); Idaho (prices up 10%); Utah (values up 9.3%); South Dakota (prices up 8.3%); and Colorado (prices up 7.3%).

The states with the most price depreciation, including distressed sales, were Delaware (-4.8%); Alabama (-4.6%); Rhode Island (-2.2%); Connecticut (-1.7%); and Illinois (-1.7%).

kpanchuk@housingwire.com