by KERRI PANCHUK
Fixed-mortgage rates held steady this past week as mixed economic reports surfaced showing signs of improvement in the housing market, Freddie Mac said in its Primary Mortgage Market Survey.
The 30-year, fixed-rate mortgage inched up to 4.51% from 4.5% last week.
For the past month, the interest rate for a traditional mortgage has stayed mostly unchanged, and it remains below the year-ago average of 4.58%.
"Interest rates on 30-year fixed, mortgages hovered around 4.5% for the fourth-consecutive week following mixed reports on the strength of the economy," said Frank Nothaft, chief economist and vice president for Freddie Mac.
The 15-year, fixed rate averaged 3.69% this past week, unchanged from a week earlier and down from 4.04% last year.
The five-year, Treasury-indexed hybrid, adjustable-rate mortgage hit 3.22% this past week, down from 3.25% a week earlier and 3.79% a year ago. In addition, the one-year Treasury-indexed ARM averaged 2.97%, down from 2.99% a week ago and 3.80% a year earlier.
Nothaft said most rates remained steady as varying economic reports surfaced about the state of the economy.
"First-quarter economic growth was revised up in the final estimate, but growth in consumer spending stagnated in May while April's figure was revised downward," he said.
“Meanwhile, there were some signs of improvement in the housing market. In April, the S&P/Case- Shiller 20-city composite home price index rose 0.7%, representing the first monthly increase since July 2010. However, much of the improvement reflected the seasonal increase in homebuying over the spring-summer period. Pending existing home sales rebounded in May, exhibiting the largest monthly increase since November."
Bankrate.com said its data show the 30-year, fixed-mortgage rate rose to 4.71% last week from 4.66% ,while the 15-year FRM increased to 3.86% from 3.83% and the jumbo 30-year FRM fell to 5.21%.
"Mortgage rates rebounded as strong stock market performance and growing anxiety about lack of progress on increasing the debt limit weighed on bonds," Bankrate said in its weekly report. "Mortgage rates are closely related to yields on long-term government bonds. With money being siphoned away from bonds, mortgage rates increased for just the second time in the past 12 weeks."
URL to original article: http://www.housingwire.com/2011/06/30/mortgage-rates-hold-steady-amid-economic-uncertainty
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 30, 2011
Jobless claims inched lower last week, remain elevated
by JASON PHILYAW
Initial jobless claims fell slightly last week, yet still topped most analyst estimates and remained higher than 400,000 for the 12th straight week.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended June 25 dropped to 428,000 from an unrevised 429,000 the previous week.
Analysts surveyed by Econoday expected 420,000 new jobless claims last week with a range of estimates between 410,000 and 430,000. Most economists believe weekly claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
Weekly jobless claims fell to about 383,000 in February and stayed low for most of the next two months, but soared to about 474,000 in late April and have stayed high since.
The four-week moving average, which is considered a less volatile indicator than weekly claims, inched up to 426,750 last week from 426,250. The seasonally adjusted insured unemployment rate for the week ended June 18 fell to 2.9% from a revised 3% the prior week, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended June 11 fell to 7.51 million from 7.54 million the prior week.
URL to original article: http://www.housingwire.com/2011/06/30/jobless-claims-inched-lower-last-week-remain-elevated
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims fell slightly last week, yet still topped most analyst estimates and remained higher than 400,000 for the 12th straight week.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended June 25 dropped to 428,000 from an unrevised 429,000 the previous week.
Analysts surveyed by Econoday expected 420,000 new jobless claims last week with a range of estimates between 410,000 and 430,000. Most economists believe weekly claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
Weekly jobless claims fell to about 383,000 in February and stayed low for most of the next two months, but soared to about 474,000 in late April and have stayed high since.
The four-week moving average, which is considered a less volatile indicator than weekly claims, inched up to 426,750 last week from 426,250. The seasonally adjusted insured unemployment rate for the week ended June 18 fell to 2.9% from a revised 3% the prior week, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended June 11 fell to 7.51 million from 7.54 million the prior week.
URL to original article: http://www.housingwire.com/2011/06/30/jobless-claims-inched-lower-last-week-remain-elevated
For further information on Fresno Real Estate check: http://www.londonproperties.com
In Three Key Markets, REOs Mask Gains in Home Prices
BIG BUILDER
REO warp: in private home sale transactions prices head upward in markets
Big Builder's Bill Gloede is a good-natured contrarian, be it in ideology, economics, society, or what goes into his pipe. Here, pointing up the absurdity and unhelpfulness of attributing outsized degrees of relevance and importance to the monthly trend analysis of Professors Karl Case and Robert Shiller, Gloede notes that in real, in the-trenches ways, house prices are heading upwards based on transactions in key markets. Gloede writes, "an analysis of data from Real Estate Economics for April for three markets, compared with the S&P/Case-Shiller Home Price Indices for April, shows that sales of bank-owned foreclosures are skewing home price data downward, in some cases wildly. The persistent reporting of continuing declines in home prices is thus misleading if not altogether factually inaccurate."
Back in May, in his company's second quarter earnings release, Toll Brothers Executive Chairman Robert I. Toll chose to include this statement: "We question the recent media headlines announcing that home prices continue to fall. Many studies quoted in the media combine distressed sales data, including foreclosures and short sales, with new and/or non-distressed existing home sales data. We believe that averaging distressed and non-distressed sales data provides a misleading picture to the public regarding home price direction."
Bob Toll was right.
Based on an analysis of data from Real Estate Economics for April for three markets, compared with the S&P/Case-Shiller Home Price Indices for April, shows that sales of bank-owned foreclosures are skewing home price data downward, in some cases wildly. The persistent reporting of continuing declines in home prices is thus misleading if not altogether factually inaccurate.
Based on our analysis, it is the prices of bank-owned foreclosed properties, which are often in poor condition and in less-than-desirable neighborhoods, that is driving the purported decline in home prices. Prices for private sale homes, which include short-sales, in the three markets we examined, are actually moving up.
After Toll's statement, a loyal and much-appreciated reader from a big builder in Texas put WS&M onto REE by sending an REE price report for the Austin market. Bingo. There they were, prices broken down in a way in which bank-owned foreclosure sales could be isolated and removed. We contacted REE and found Sandy Rivera, who offered to run reports for WS&M that might prove that what Toll said was correct. She put us in touch with John Mulville, senior vp of the consulting group at REE.
REE, which uses actual government records compiled by county recorders and gathered by DataQuick, does most of its work in the West and thus does not have data that matches all the Case-Shiller major markets. So we chose three markets in order to do a comparison.
The first was Las Vegas as it is both a Case-Shiller market and pretty much the national capital of foreclosures. The second was Dallas, which we chose because it has remained more stable than most markets during the economic and housing downturns. The third was Seattle, which fared well early in the housing slump but began feeling more pressure as it wore on.
In Las Vegas, Case-Shiller for April had prices down 0.7% from March and 6.2% from April 2010. In Vegas, more than half the transactions in April involved foreclosures. Of a total 8,061 sales during the month, 2,529 were from owner to owner, including short sales, 368 were from builder to owner, 2,459 were from owner to bank via foreclosure and 2,705 were from bank to new owner (REOs). The vast majority, as in the other markets, were single-family homes.
The overall average price for all transactions was flat with March and down 9.9% to $162,010 year-over-year. The average price in the owner-to-owner category rose 4.6% from March to $175,926. The average price of REOs dropped 2.7% to $128,585. The average price for a new home, meantime, rose from $195,585 in March to $206,941 in April (square footage was up marginally).
Compared with last April, the average owner-to-owner price fell 2.4% from $180,236 last year to $175,926 this year. The average new-home price, however, plummeted 21.4% to $206,941 even as square footage rose to 2,156 from 1,834. A look into the cost per square foot, however, shows that it dropped from $242.51 in April 2010 to $92.87 this April, indicating a significant product-mix shift from luxury to entry-level.
REOs, meantime, saw the average price drop 8.2% to $128,585.
Even though the new-home price took the biggest dip, with 368 sales versus 2,705 sales of REOs, the impact of the REOs on the average price is clear.
Dallas is a different story with the same ending. According to Case-Shiller, prices were up 0.5% from March to April but down 4% from April last year.
According to REE, of 4,140 sales in April, 2,416 were owner to owner, 322 were builder to owner, 696 were owner to bank (foreclosure) and 706 were bank to owner (REOs). The average price of all transactions fell 2.3% from $215,131 in March to $210,679 in April but were up 3.4% from April last year.
Prices for owner-to-owner transactions increased 5.4% to $238,371. New home sales prices slid 16.6%, but square footage also declined, from 2,618 in March to 2,373 in April. REO prices were relatively flat, going to $182,384 in March to $183,739 in April.
Year-over-year, the owner-to-owner average sale price rose from $210,182 in April 2010 to $238,371 this April, the new-home average price slid from $251,139 to $237,875 but, again, square footage was down from 2,664 to 2,373, and the REO average price fell from $187,902 to $183,739.
Not quite as dramatic as Las Vegas, but the impact of REOs on price data is clear.
In Seattle, Case-Shiller reported a 1.6% rise in home prices from March to April. The REE data showed a total of 3,523 homes were sold in April, 1,833 from owner-to-owner, 266 from builder to owner, 698 from owner to bank via foreclosure and 726 from banks to new owners. Overall, there was a 1.5% increase in average home price, according to REE.
However, the average price for owner-to-owner sales, which includes short sales, rose 4.25% to $426,868. Bank REO sales, on the other hand, dropped 4.1% to $238,988.
On an annual basis in Seattle, Case Shiller reported a 6.9% drop in home prices from April, 2010. REE put the year-over-year decline at 5.4%. But the average owner-to-owner sale price increased to $426,868 from $401,466 a year earlier. The average REO price, meantime, fell to $238,988 from $276,153.
Again, the REO sales are skewing marketwise price data data downward.
The average price of a new home in Seattle dropped in April to $407,984 from $412,637 in March but was up substantially from $386,853 a year earlier. Part of the month-to-month decline can be attributed to a drop in average square footage from 1,955 in March to 1,604 in April.
WS&M believes this pattern would continue across most if not all markets with perhaps the exception of Washington D.C., where nearly two decades of government expansion and increased spending have allowed the region to escape the brunt of the housing downturn.
Case-Shiller is not to be faulted. It was not designed for a market in which foreclosures are so prevalent.
Fact is, the housing market is now very likely healing itself, without government intervention -- and without housing "policy experts" having been able to influence that intervention. Mulville thinks the market is doing just that, at least in the markets on which he focuses.
"There are parts of the West where we would have thought the 4th quarter of 2010 was our trough," he told WS&M. He does expect more foreclosures in the rest of this year and in 2012 as banks work through their inventory. He noted, however, that "Foreclosures and short sales have not been able to meet the demand from prospective owner-occupants."
That is a nice way of saying that many if not most qualified home buyers do not want to live in neighborhoods where foreclosures are concentrated. Therefore, those homes do not -- and will not -- compete with the rest of the market. This explains the historically high percentage of investors among buyers in most markets, a new generation of would-be slumlords.
"2013, hopefully, has a new look on it," said Mulville. Still, he added, "If you're in a decent employment market, you are very close to or at the bottom."
URL to original article: http://www.bigbuilderonline.com/post.asp?BlogId=gloedesblog&postid=638321§ionID=392&cid=NWBD110630002
For further information on Fresno Real Estate check: http://www.londonproperties.com
REO warp: in private home sale transactions prices head upward in markets
Big Builder's Bill Gloede is a good-natured contrarian, be it in ideology, economics, society, or what goes into his pipe. Here, pointing up the absurdity and unhelpfulness of attributing outsized degrees of relevance and importance to the monthly trend analysis of Professors Karl Case and Robert Shiller, Gloede notes that in real, in the-trenches ways, house prices are heading upwards based on transactions in key markets. Gloede writes, "an analysis of data from Real Estate Economics for April for three markets, compared with the S&P/Case-Shiller Home Price Indices for April, shows that sales of bank-owned foreclosures are skewing home price data downward, in some cases wildly. The persistent reporting of continuing declines in home prices is thus misleading if not altogether factually inaccurate."
Back in May, in his company's second quarter earnings release, Toll Brothers Executive Chairman Robert I. Toll chose to include this statement: "We question the recent media headlines announcing that home prices continue to fall. Many studies quoted in the media combine distressed sales data, including foreclosures and short sales, with new and/or non-distressed existing home sales data. We believe that averaging distressed and non-distressed sales data provides a misleading picture to the public regarding home price direction."
Bob Toll was right.
Based on an analysis of data from Real Estate Economics for April for three markets, compared with the S&P/Case-Shiller Home Price Indices for April, shows that sales of bank-owned foreclosures are skewing home price data downward, in some cases wildly. The persistent reporting of continuing declines in home prices is thus misleading if not altogether factually inaccurate.
Based on our analysis, it is the prices of bank-owned foreclosed properties, which are often in poor condition and in less-than-desirable neighborhoods, that is driving the purported decline in home prices. Prices for private sale homes, which include short-sales, in the three markets we examined, are actually moving up.
After Toll's statement, a loyal and much-appreciated reader from a big builder in Texas put WS&M onto REE by sending an REE price report for the Austin market. Bingo. There they were, prices broken down in a way in which bank-owned foreclosure sales could be isolated and removed. We contacted REE and found Sandy Rivera, who offered to run reports for WS&M that might prove that what Toll said was correct. She put us in touch with John Mulville, senior vp of the consulting group at REE.
REE, which uses actual government records compiled by county recorders and gathered by DataQuick, does most of its work in the West and thus does not have data that matches all the Case-Shiller major markets. So we chose three markets in order to do a comparison.
The first was Las Vegas as it is both a Case-Shiller market and pretty much the national capital of foreclosures. The second was Dallas, which we chose because it has remained more stable than most markets during the economic and housing downturns. The third was Seattle, which fared well early in the housing slump but began feeling more pressure as it wore on.
In Las Vegas, Case-Shiller for April had prices down 0.7% from March and 6.2% from April 2010. In Vegas, more than half the transactions in April involved foreclosures. Of a total 8,061 sales during the month, 2,529 were from owner to owner, including short sales, 368 were from builder to owner, 2,459 were from owner to bank via foreclosure and 2,705 were from bank to new owner (REOs). The vast majority, as in the other markets, were single-family homes.
The overall average price for all transactions was flat with March and down 9.9% to $162,010 year-over-year. The average price in the owner-to-owner category rose 4.6% from March to $175,926. The average price of REOs dropped 2.7% to $128,585. The average price for a new home, meantime, rose from $195,585 in March to $206,941 in April (square footage was up marginally).
Compared with last April, the average owner-to-owner price fell 2.4% from $180,236 last year to $175,926 this year. The average new-home price, however, plummeted 21.4% to $206,941 even as square footage rose to 2,156 from 1,834. A look into the cost per square foot, however, shows that it dropped from $242.51 in April 2010 to $92.87 this April, indicating a significant product-mix shift from luxury to entry-level.
REOs, meantime, saw the average price drop 8.2% to $128,585.
Even though the new-home price took the biggest dip, with 368 sales versus 2,705 sales of REOs, the impact of the REOs on the average price is clear.
Dallas is a different story with the same ending. According to Case-Shiller, prices were up 0.5% from March to April but down 4% from April last year.
According to REE, of 4,140 sales in April, 2,416 were owner to owner, 322 were builder to owner, 696 were owner to bank (foreclosure) and 706 were bank to owner (REOs). The average price of all transactions fell 2.3% from $215,131 in March to $210,679 in April but were up 3.4% from April last year.
Prices for owner-to-owner transactions increased 5.4% to $238,371. New home sales prices slid 16.6%, but square footage also declined, from 2,618 in March to 2,373 in April. REO prices were relatively flat, going to $182,384 in March to $183,739 in April.
Year-over-year, the owner-to-owner average sale price rose from $210,182 in April 2010 to $238,371 this April, the new-home average price slid from $251,139 to $237,875 but, again, square footage was down from 2,664 to 2,373, and the REO average price fell from $187,902 to $183,739.
Not quite as dramatic as Las Vegas, but the impact of REOs on price data is clear.
In Seattle, Case-Shiller reported a 1.6% rise in home prices from March to April. The REE data showed a total of 3,523 homes were sold in April, 1,833 from owner-to-owner, 266 from builder to owner, 698 from owner to bank via foreclosure and 726 from banks to new owners. Overall, there was a 1.5% increase in average home price, according to REE.
However, the average price for owner-to-owner sales, which includes short sales, rose 4.25% to $426,868. Bank REO sales, on the other hand, dropped 4.1% to $238,988.
On an annual basis in Seattle, Case Shiller reported a 6.9% drop in home prices from April, 2010. REE put the year-over-year decline at 5.4%. But the average owner-to-owner sale price increased to $426,868 from $401,466 a year earlier. The average REO price, meantime, fell to $238,988 from $276,153.
Again, the REO sales are skewing marketwise price data data downward.
The average price of a new home in Seattle dropped in April to $407,984 from $412,637 in March but was up substantially from $386,853 a year earlier. Part of the month-to-month decline can be attributed to a drop in average square footage from 1,955 in March to 1,604 in April.
WS&M believes this pattern would continue across most if not all markets with perhaps the exception of Washington D.C., where nearly two decades of government expansion and increased spending have allowed the region to escape the brunt of the housing downturn.
Case-Shiller is not to be faulted. It was not designed for a market in which foreclosures are so prevalent.
Fact is, the housing market is now very likely healing itself, without government intervention -- and without housing "policy experts" having been able to influence that intervention. Mulville thinks the market is doing just that, at least in the markets on which he focuses.
"There are parts of the West where we would have thought the 4th quarter of 2010 was our trough," he told WS&M. He does expect more foreclosures in the rest of this year and in 2012 as banks work through their inventory. He noted, however, that "Foreclosures and short sales have not been able to meet the demand from prospective owner-occupants."
That is a nice way of saying that many if not most qualified home buyers do not want to live in neighborhoods where foreclosures are concentrated. Therefore, those homes do not -- and will not -- compete with the rest of the market. This explains the historically high percentage of investors among buyers in most markets, a new generation of would-be slumlords.
"2013, hopefully, has a new look on it," said Mulville. Still, he added, "If you're in a decent employment market, you are very close to or at the bottom."
URL to original article: http://www.bigbuilderonline.com/post.asp?BlogId=gloedesblog&postid=638321§ionID=392&cid=NWBD110630002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 29, 2011
Early-stage mortgage delinquencies drop to 3-year low
by JON PRIOR
The amount of mortgages in the earliest stage of delinquency at the end of March dropped to the lowest level since the first quarter of 2008, federal banking regulators said.
The Office of the Comptroller of the Currency and the Office of Thrift Supervision studied delinquency levels on 63% of all mortgages outstanding in the U.S. in the first quarter — roughly 32.7 million loans held by select banks.
The percentage of mortgages between 30- and 59-days delinquent dropped 16% from the previous quarter and 5.8% from one year ago.
The percentage of loans current and performing reached 88.6% in the first quarter, up a full percentage point from the end of 2010 and up 150 basis points from the first quarter of last year. It's also the highest level since the second quarter of 2009.
Seriously delinquent mortgages declined for the fifth straight quarter, a 9.4% drop from the previous quarter and down 25% from last year.
However, the foreclosure pipeline continued to balloon. More than 1.3 million mortgages are somewhere in the foreclosure process, according to the report, up 7.9% from a year ago and relatively flat with the previous quarter.
Banks repossessed or completed short sales on more than 171,000 homes in the first quarter, up 17.4% from the previous quarter but still down 17.5% from one year ago as servicers work to restart the process. Major servicers and lenders froze the foreclosure process at the end of last year to correct improperly handled documentation.
Still, servicers implemented nearly three times as many workout plans as they completed foreclosures. More than 557,000 modifications, trial-period plans or restructured payment plans started in the first quarter. While these home-retention actions increased 17.4% from the previous quarter, the total dropped 10.5% from one year ago.
"The large inventory of seriously delinquent mortgages and foreclosures in process continued to work its way through the loss mitigation process — either through home-retention actions such as modification or through foreclosure when alternatives were not possible," the OCC said.
URL to original article: http://www.housingwire.com/2011/06/29/early-stage-mortgage-delinquencies-drop-to-3-year-low
For further information on Fresno Real Estate check: http://www.londonproperties.com
The amount of mortgages in the earliest stage of delinquency at the end of March dropped to the lowest level since the first quarter of 2008, federal banking regulators said.
The Office of the Comptroller of the Currency and the Office of Thrift Supervision studied delinquency levels on 63% of all mortgages outstanding in the U.S. in the first quarter — roughly 32.7 million loans held by select banks.
The percentage of mortgages between 30- and 59-days delinquent dropped 16% from the previous quarter and 5.8% from one year ago.
The percentage of loans current and performing reached 88.6% in the first quarter, up a full percentage point from the end of 2010 and up 150 basis points from the first quarter of last year. It's also the highest level since the second quarter of 2009.
Seriously delinquent mortgages declined for the fifth straight quarter, a 9.4% drop from the previous quarter and down 25% from last year.
However, the foreclosure pipeline continued to balloon. More than 1.3 million mortgages are somewhere in the foreclosure process, according to the report, up 7.9% from a year ago and relatively flat with the previous quarter.
Banks repossessed or completed short sales on more than 171,000 homes in the first quarter, up 17.4% from the previous quarter but still down 17.5% from one year ago as servicers work to restart the process. Major servicers and lenders froze the foreclosure process at the end of last year to correct improperly handled documentation.
Still, servicers implemented nearly three times as many workout plans as they completed foreclosures. More than 557,000 modifications, trial-period plans or restructured payment plans started in the first quarter. While these home-retention actions increased 17.4% from the previous quarter, the total dropped 10.5% from one year ago.
"The large inventory of seriously delinquent mortgages and foreclosures in process continued to work its way through the loss mitigation process — either through home-retention actions such as modification or through foreclosure when alternatives were not possible," the OCC said.
URL to original article: http://www.housingwire.com/2011/06/29/early-stage-mortgage-delinquencies-drop-to-3-year-low
For further information on Fresno Real Estate check: http://www.londonproperties.com
Delinquent mortgages, foreclosures outnumber distressed sales 50:1
by JASON PHILYAW
The number of properties delinquent 90 or more days or in foreclosure outnumber foreclosure sales 50 to 1, according to the Lender Processing Services' (LPS: 20.90 +1.85%) mortgage monitor report for May.
The mortgage and real estate technology firm said the total delinquency rate for U.S. mortgage was 7.96% in May, down just 0.1% from April and 18.3% lower than a year earlier.
LPS said foreclosure sales slowed considerably on the East Coast last month, with declines of 96% in Washington, 80% in Maryland, 79% in New York and 75% in New Jersey.
"In fact, there are still significantly fewer foreclosure sales than there were before foreclosure moratoria were put into place, and foreclosure sales are declining," LPS said.
Last fall, the nation's largest mortgage lenders suspended the foreclosure process across the country in the wake of the robo-signing fiasco.
More than one-third of home loan borrowers in foreclosure haven't made a payment in more than two years, according to LPS.
The company said the number of new problem loans — mortgages that were current six moths ago and are now more than 60-days delinquent — in May slowed and are less than half peak levels of 2009. Still, LPS said delinquencies are almost double historical norms and foreclosures are eight times higher.
"Negative equity also remains a concern, with nearly 30% of current loans in a negative equity position," according to LPS. "The equity impact on new seriously delinquent loans is significant, with loans significantly underwater defaulting up to 10 times as much as loans with equity."
URL to original article: http://www.housingwire.com/2011/06/29/seriously-delinquent-mortgages-foreclosures-outnumber-distressed-sales-501
For further information on Fresno Real Estate check: http://www.londonproperties.com
The number of properties delinquent 90 or more days or in foreclosure outnumber foreclosure sales 50 to 1, according to the Lender Processing Services' (LPS: 20.90 +1.85%) mortgage monitor report for May.
The mortgage and real estate technology firm said the total delinquency rate for U.S. mortgage was 7.96% in May, down just 0.1% from April and 18.3% lower than a year earlier.
LPS said foreclosure sales slowed considerably on the East Coast last month, with declines of 96% in Washington, 80% in Maryland, 79% in New York and 75% in New Jersey.
"In fact, there are still significantly fewer foreclosure sales than there were before foreclosure moratoria were put into place, and foreclosure sales are declining," LPS said.
Last fall, the nation's largest mortgage lenders suspended the foreclosure process across the country in the wake of the robo-signing fiasco.
More than one-third of home loan borrowers in foreclosure haven't made a payment in more than two years, according to LPS.
The company said the number of new problem loans — mortgages that were current six moths ago and are now more than 60-days delinquent — in May slowed and are less than half peak levels of 2009. Still, LPS said delinquencies are almost double historical norms and foreclosures are eight times higher.
"Negative equity also remains a concern, with nearly 30% of current loans in a negative equity position," according to LPS. "The equity impact on new seriously delinquent loans is significant, with loans significantly underwater defaulting up to 10 times as much as loans with equity."
URL to original article: http://www.housingwire.com/2011/06/29/seriously-delinquent-mortgages-foreclosures-outnumber-distressed-sales-501
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, June 28, 2011
Uneven fall of house prices could tumble another 3%
by JON PRIOR
URL to original article: http://www.housingwire.com/2011/06/27/uneven-fall-of-house-prices-could-tumble-another-3
For further information on Fresno Real Estate check: http://www.londonproperties.com
Analysts at both Bank of America Merrill Lynch and Capital Economics forecast another 3% fall for house prices before they reach a bottom at the end of the year.
While homes on the lower-tier price range will get there faster and at a much harder fall, a housing recovery is in sight, analysts said.
Tiers are based on the Standard & Poor's/Case-Shiller index and are determined by the prices of the homes sold that month. The price splits occur where an equal number of homes can be placed in each tier.
From January 2000 to the peak in 2007, prices in the lower tier increased 150%, according to Capital Economics. These lower-priced homes accelerated faster than the 120% gain for middle-tier house prices and the 95% increase in the most expensive neighborhoods.
But since that peak, house prices in the least expensive areas dropped 45% and are still falling faster than anywhere else.
Paul Dales, senior U.S. economist for Capital Economics, said there are no signs credit criteria for first-time homebuyers is loosening and the foreclosure rate on subprime loans, 14.7%, far outpaces the 3.5% foreclosure rate on prime loans.
"The much faster rises in the low tier were largely due to the increased availability of sub-prime loans, the reduction in down payment requirements and the introduction of teaser mortgages attracting more first-buyer buyers, who are more active at the low end," Dales said.
BofAML analysts said house prices will move slightly higher in the months ahead because of the more heated home-buying season. Anthony Sanders, real estate finance professor at George Mason University, predicted the S&P/Case-Shiller report due Tuesday will only show another decline.
Still, BofAML analysts said prices should head down again to a bottom in late 2011 or early 2012, 3% below the level in the first quarter of this year.
Dales added that 3% fall will be hardest felt at the low end of the market.
The one-year growth rate for home price indices, or the HPA, is a different story, according to BofAML analysts. They believe the HPA, or the rate at which home prices are growing or falling, bottomed in March, will stay in negative territory until the end of 2012 and then begin "a long and sustained period in positive territory."
As the HPA rose steadily in the early 2000s through 2005 the difference between the asking price and selling price on the lower-rated subprime mortgage-backed securities tightened. But when the HPA turned down, prices collapsed and eventually reached the triple-A rated ABX market for these structured products.
"Given our belief that HPA has bottomed, we believe that this represents the bottom for ABX prices in this double dip," BofAML analysts said. "Given the widespread bearishness on home prices, this upbeat view on HPA, and by extension home prices, generated numerous conversations and discussions over the past week: disbelief of a nascent housing recovery remains highly elevated."
URL to original article: http://www.housingwire.com/2011/06/27/uneven-fall-of-house-prices-could-tumble-another-3
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, June 27, 2011
Landlords see income gains on rental properties
by KERRI PANCHUK
Americans who rented out properties gained $3.3 billion in total income from that endeavor during the month of May, up from $2.9 billion in April, according to the U.S. Bureau of Economic Analysis.
The BEA's latest report suggests predictions of a more rental-focused housing market are coming true.
Earlier this year, John Burns Real Estate Consulting sounded the horn on the rental trend, saying he believes demand in top markets is going to grow dramatically, with some cities experiencing 25% growth over the course of the next three years. Burns said the likely renters are young adults who are living at home or with a friend to save money. When they're ready to move on, he estimates there will be about 3.4 million units of pent-up demand for rental housing. A recent survey by credit bureau Transunion concluded that 47% of all property managers reported an increase in renters moving to apartments after experiencing a foreclosure.
The same BEA report said personal income in May increased $36.2 billion, or 0.3%, from April.
Meanwhile, wages and salaries increased $14.1 billion last month, but at a slower clip when considering disbursements in the same category grew $26.4 billion a month earlier.
URL to original article: http://www.blogger.com/post-create.g?blogID=8939919290805312864
For further information on Fresno Real Estate check: http://www.londonproperties.com
Americans who rented out properties gained $3.3 billion in total income from that endeavor during the month of May, up from $2.9 billion in April, according to the U.S. Bureau of Economic Analysis.
The BEA's latest report suggests predictions of a more rental-focused housing market are coming true.
Earlier this year, John Burns Real Estate Consulting sounded the horn on the rental trend, saying he believes demand in top markets is going to grow dramatically, with some cities experiencing 25% growth over the course of the next three years. Burns said the likely renters are young adults who are living at home or with a friend to save money. When they're ready to move on, he estimates there will be about 3.4 million units of pent-up demand for rental housing. A recent survey by credit bureau Transunion concluded that 47% of all property managers reported an increase in renters moving to apartments after experiencing a foreclosure.
The same BEA report said personal income in May increased $36.2 billion, or 0.3%, from April.
Meanwhile, wages and salaries increased $14.1 billion last month, but at a slower clip when considering disbursements in the same category grew $26.4 billion a month earlier.
URL to original article: http://www.blogger.com/post-create.g?blogID=8939919290805312864
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 24, 2011
More consumers forced to rent due to foreclosure: TransUnion
by CHRISTINE RICCIARDI
The ranks of apartment dwellers have grown as homebuyers lose homes to foreclosure, according to property managers.
TransUnion surveyed more than 1,100 property managers across the country in early June to identify trends in the rental space. The credit reporting agency polled about 1,000 small property managers with 200 units or less and 167 large property managers with more than 200 units.
According to the survey, 47% of all property managers reported an increase in rental applicants moving into apartments from foreclosed properties. Sequentially, more than two-third of managers said it is not difficult to find residents in today's economy even with increases in rent.
"Finding reliable tenants at an optimal price point is paramount for this industry," said Mike Mauseth, vice president in TransUnion's rental screening business unit. "Both segments saw success with rental increases last year."
About 64% of large property managers said rental prices on their units increased from last year, as did 36% of small property managers. Still, 57% of large property managers have no difficulty finding applicants, alongside 69% of small property managers.
Finding qualified renters, however, is another issue. When asked to compare conditions to a year ago, 27% of managers with more than 200 properties said it was more difficult to find qualified renters, while only 18% of small property managers held this same opinion.
"A reliable tenant ensures property managers are both solvent and profitable," commented Mauseth. "Conversely an unreliable tenant can cost property managers thousands of dollars in lost rent and property damages."
Some 87% of managers reportedly run credit checks on prospective tenants and 76% of managers run a criminal background check, according to TransUnion. More than 89% of all survey respondents had vacancy rates of 10% or less.
URL to original article: http://www.housingwire.com/2011/06/24/more-consumers-forced-to-rent-due-to-foreclosure-transunion
For further information on Fresno Real Estate check: http://www.londonproperties.com
The ranks of apartment dwellers have grown as homebuyers lose homes to foreclosure, according to property managers.
TransUnion surveyed more than 1,100 property managers across the country in early June to identify trends in the rental space. The credit reporting agency polled about 1,000 small property managers with 200 units or less and 167 large property managers with more than 200 units.
According to the survey, 47% of all property managers reported an increase in rental applicants moving into apartments from foreclosed properties. Sequentially, more than two-third of managers said it is not difficult to find residents in today's economy even with increases in rent.
"Finding reliable tenants at an optimal price point is paramount for this industry," said Mike Mauseth, vice president in TransUnion's rental screening business unit. "Both segments saw success with rental increases last year."
About 64% of large property managers said rental prices on their units increased from last year, as did 36% of small property managers. Still, 57% of large property managers have no difficulty finding applicants, alongside 69% of small property managers.
Finding qualified renters, however, is another issue. When asked to compare conditions to a year ago, 27% of managers with more than 200 properties said it was more difficult to find qualified renters, while only 18% of small property managers held this same opinion.
"A reliable tenant ensures property managers are both solvent and profitable," commented Mauseth. "Conversely an unreliable tenant can cost property managers thousands of dollars in lost rent and property damages."
Some 87% of managers reportedly run credit checks on prospective tenants and 76% of managers run a criminal background check, according to TransUnion. More than 89% of all survey respondents had vacancy rates of 10% or less.
URL to original article: http://www.housingwire.com/2011/06/24/more-consumers-forced-to-rent-due-to-foreclosure-transunion
For further information on Fresno Real Estate check: http://www.londonproperties.com
Overall strategic default on the decline
by CHRISTINE RICCIARDI
URL to original article: http://www.housingwire.com/2011/06/23/strategic-default-declining-but-not-on-jumbo-mortgages
For further information on Fresno Real Estate check: http://www.londonproperties.com
Recent data shows the percentage of strategic defaults is on the decline, but still account for nearly one-fifth of serious mortgage delinquencies. Furthermore, the share of strategic defaulters in the jumbo mortgage space is actually growing.
A study from credit reporting agency Experian and consulting firm Oliver Wyman showed 17% of all 60-plus day mortgage defaults in the second quarter of 2010 were due to strategic default. While this is down from a peak of 20% in the second quarter of 2008, it is more than double the number of strategic defaults in 2006.
During boom times in the first half of the last decade, only 4% of defaults were strategic, according to the report.
Strategic default applies to borrowers who can afford their monthly mortgage payment, yet opt not to pay it. Once the financial crisis hit in 2007, many home values depleted and left borrowers underwater, meaning their home was worth less than they originally paid for it. According to Experian strategic default is a "problem that won’t really vanish until home prices climb and stay there," according to a statement from the company.
Strategic defaults usually occur on homes that are more expensive with borrowers who make a higher annual income, as they are more financially savvy and can take a small hit to their credit score. According to Experian, 33% of delinquent mortgages in the second quarter of 2010 were on homes more than $1 million. In contrast, just 6% of homes originally priced at $50,000 were attributable to strategic default.
In the second quarter of 2010, 30% of strategic default borrowers earned more than $150,000 a year. Just 9% earned less than $40,000, according to Experian.
Another characteristic of strategic defaulters is the ability to stay current on all other debt obligations including credit cards, auto loans and any other revolving debt. This includes new mortgages. Experian found that 47% of strategic borrowers in the second quarter of 2010 opened a first mortgage on another property in the six months prior to their default.
Experian said strategic default will continue to plague the market until home prices rise.
"These percentages aren’t likely to decline much unless residential housing prices increase and remain at higher levels," said the report. "Homeowners have to see for themselves that their neighbors' houses are selling for higher prices."
URL to original article: http://www.housingwire.com/2011/06/23/strategic-default-declining-but-not-on-jumbo-mortgages
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 23, 2011
Home prices, sales still stagnant in April: RadarLogic
by CHRISTINE RICCIARDI
URL to original article: http://www.housingwire.com/2011/06/23/home-prices-sales-still-stagnant-in-april-radarlogic
For further information on Fresno Real Estate check: http://www.londonproperties.com
Prospects in the housing market remain glum as the weaker then expected spring buying season pushes prices and transaction counts down.
In April, home prices deteriorated 5.1% compared the same month of 2010 when the first-time homebuyer tax credit was in place, according to RadarLogic's RPX Housing Market Report released Thursday. RadarLogic reported price declines in all 25 metropolitan statistical areas that it tracks, with Boston experiencing the largest drop of 21.8% compared to April 2010.
The data tracking firm did note that prices increased 2% between March and April, a "large gain" compared to years past. And most of the major MSAs under RadarLogic's watch reported price gains on a monthly basis. However, the good news is short lived, as the year-to-date change in home price was negative for only the third time in the last 10 years.
"The decline in the composite price from January to March was so large that the large seasonal bounce in April was not enough to bring the year-to-date change into positive territory," RadarLogic said.
The changes in the RPX composite price index were consistent with the data released by the Federal Housing Finance Agency Wednesday, which found a scant 0.8% increase in home price between March and April.
April home sales trended in a similar fashion, falling 9.2% compared to one year prior. Transaction data is slightly skewed, as the 2010 tax credit artificially inflated home sales prior to its expiration in June 2010.
On a monthly basis, home sales increased 11.6% in the 25 MSA tracked by RadarLogic. This is the largest percentage increase for the month of April in the last 10 years, RadarLogic said.
Sales were driven by an increasing number of distressed property sales, which is also dragging down home prices. Foreclosed properties accounted for 30% of all sales in April, according to RadarLogic, down from 33% in March. The average price for a distressed property was 39% lower than a nondistressed property in April.
"Our outlook for housing prices is negative as the major headwinds facing the nation's housing markets — widespread negative equity, a backlogged foreclosure pipeline and persistent oversupply — have not abated," RadarLogic said. "There is simply too much supply to be absorbed by the tenuous, at best, demand."
URL to original article: http://www.housingwire.com/2011/06/23/home-prices-sales-still-stagnant-in-april-radarlogic
For further information on Fresno Real Estate check: http://www.londonproperties.com
American home equity cut by one-third
by JACOB GAFFNEY
The head of global securitized products research at Citi Global Markets said that home equity held by American households is down from 60% to 39%.
Mary Kane, speaking at an American Securitization Forum session about consumer trends and the state of the housing market, said residential mortgage comprised the largest proportion of debt held by families.
The massive decline in home prices in the last few years is hitting those household investments hard, especially if families don't invest in other ways, such as with stocks and bonds. If families are not in the stock market, then recent rallies in those markets aren't helping them.
In regards to falling home equity, Kane said it is important to keep perspective on the statistic.
"When looking at this number, it's a very bifurcated number," Kane said. "One-third of homeowners don't have a mortgage, and another 20% are underwater."
An estimated 14 million homeowners have negative equity, according to the ASF.
Kane added that total U.S. debt is on a 10-year climb. The debt held by U.S. households in the fourth quarter of 2010 was 77% greater than in 4Q 2000, when including the effect of taxpayer exposure to the federal deficit.
"I think it's extremely important that lenders and families take responsibility for taking on debt responsibly," Kane said, in an appeal to lenders to take a more proactive view of mortgages.
"I don't feel that any regulatory proposals deal with underwriting or help families make responsible debt decisions," she added.
URL to original article: http://www.housingwire.com/2011/06/22/american-home-equity-cut-by-one-third
For further information on Fresno Real Estate check: http://www.londonproperties.com
The head of global securitized products research at Citi Global Markets said that home equity held by American households is down from 60% to 39%.
Mary Kane, speaking at an American Securitization Forum session about consumer trends and the state of the housing market, said residential mortgage comprised the largest proportion of debt held by families.
The massive decline in home prices in the last few years is hitting those household investments hard, especially if families don't invest in other ways, such as with stocks and bonds. If families are not in the stock market, then recent rallies in those markets aren't helping them.
In regards to falling home equity, Kane said it is important to keep perspective on the statistic.
"When looking at this number, it's a very bifurcated number," Kane said. "One-third of homeowners don't have a mortgage, and another 20% are underwater."
An estimated 14 million homeowners have negative equity, according to the ASF.
Kane added that total U.S. debt is on a 10-year climb. The debt held by U.S. households in the fourth quarter of 2010 was 77% greater than in 4Q 2000, when including the effect of taxpayer exposure to the federal deficit.
"I think it's extremely important that lenders and families take responsibility for taking on debt responsibly," Kane said, in an appeal to lenders to take a more proactive view of mortgages.
"I don't feel that any regulatory proposals deal with underwriting or help families make responsible debt decisions," she added.
URL to original article: http://www.housingwire.com/2011/06/22/american-home-equity-cut-by-one-third
For further information on Fresno Real Estate check: http://www.londonproperties.com
US home prices show positive results in April: FNC
by MATTHEW TORRES
Home prices in the U.S. rose 0.5% in the month of April, according to the FNC Residential Price Index.
The index increased for the first time since the withdrawal of the homebuyer tax credit in April 2010, despite nation's economic malaise. Prices in April shrugged off downward pressure from a continued high number of foreclosures.
The FNC 10-MSA composite showed a 0.4% increase from March. The 30-MSA increased 0.6% in April. Home prices nationwide remained 6.4% lower than one year ago.
These results are contrary to what others may believe are continued price deteriorations, FNC analysts said. Listing activities increased more than 65% with the arrival of the summer home-buying season. The difference between the initial listing price and the final sales price dropped 4% in the first quarter of 2011 from a 6.7% difference at the end of 2010.
The amount of time these distressed properties spent on the market dropped to 2.5 months in April from four months in October 2010.
Home prices in 17 markets went up at an average rate of 2.5%.
"Despite downward price pressure from high volumes of foreclosure sales, home prices continue to gain traction in April after remaining relatively unchanged in March," FNC said.
URL to original article: http://www.housingwire.com/2011/06/22/us-home-prices-show-positive-results-in-april-fnc
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices in the U.S. rose 0.5% in the month of April, according to the FNC Residential Price Index.
The index increased for the first time since the withdrawal of the homebuyer tax credit in April 2010, despite nation's economic malaise. Prices in April shrugged off downward pressure from a continued high number of foreclosures.
The FNC 10-MSA composite showed a 0.4% increase from March. The 30-MSA increased 0.6% in April. Home prices nationwide remained 6.4% lower than one year ago.
These results are contrary to what others may believe are continued price deteriorations, FNC analysts said. Listing activities increased more than 65% with the arrival of the summer home-buying season. The difference between the initial listing price and the final sales price dropped 4% in the first quarter of 2011 from a 6.7% difference at the end of 2010.
The amount of time these distressed properties spent on the market dropped to 2.5 months in April from four months in October 2010.
Home prices in 17 markets went up at an average rate of 2.5%.
"Despite downward price pressure from high volumes of foreclosure sales, home prices continue to gain traction in April after remaining relatively unchanged in March," FNC said.
URL to original article: http://www.housingwire.com/2011/06/22/us-home-prices-show-positive-results-in-april-fnc
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 22, 2011
Bernanke says home price stabilization necessary to woo buyers
by KERRI PANCHUK
Federal Reserve Chairman Ben Bernanke said home price stabilization and a faster foreclosure process are needed to restore confidence in housing, unleashing a recovery in the sector.
He also said the central bank expects the unemployment rate to slip to 8.6% by the latter part of 2011 and decrease to 7.5% by 2013.
High unemployment continues to weigh down the economy and remains a significant contributor to the stalled housing recovery, Bernanke said Wednesday in the Fed's second press conference following a committee meeting.
Despite projecting the economic recovery will pick up in coming quarters, Bernanke told reporters the economy is expected to grow at a slower pace than the Fed originally projected.
He is advocating for congressional budget cuts that will occur over a longer, 10-year period as opposed to rapid budget reductions currently in play that could derail attempts to achieve maximum employment growth before a full recovery is reached.
Bernanke, who continues to balance inflationary concerns against unemployment gains, said the inflation rate, which picked up in recent months, is expected to eventually fall back to a level of 2% or lower by 2012.
He told reporters the Fed has not taken any action as far as additional asset purchases, but said that would be a committee decision at a later date.
When asked about the risk Greece poses to the overall financial system, Bernanke said the banks that U.S. regulators oversee are not significantly exposed to the European countries facing debt crises. While he did note a direct tie to other European countries, Bernanke said, "We have asked the banks to do a stress test, looking at their positions and hedges and the effect on their capital if Greece defaults, and the answer is the effects would be very small."
URL to original article: http://www.housingwire.com/2011/06/22/bernanke-says-home-price-stabilization-necessary-to-woo-buyers
For further information on Fresno Real Estate check: http://www.londonproperties.com
Federal Reserve Chairman Ben Bernanke said home price stabilization and a faster foreclosure process are needed to restore confidence in housing, unleashing a recovery in the sector.
He also said the central bank expects the unemployment rate to slip to 8.6% by the latter part of 2011 and decrease to 7.5% by 2013.
High unemployment continues to weigh down the economy and remains a significant contributor to the stalled housing recovery, Bernanke said Wednesday in the Fed's second press conference following a committee meeting.
Despite projecting the economic recovery will pick up in coming quarters, Bernanke told reporters the economy is expected to grow at a slower pace than the Fed originally projected.
He is advocating for congressional budget cuts that will occur over a longer, 10-year period as opposed to rapid budget reductions currently in play that could derail attempts to achieve maximum employment growth before a full recovery is reached.
Bernanke, who continues to balance inflationary concerns against unemployment gains, said the inflation rate, which picked up in recent months, is expected to eventually fall back to a level of 2% or lower by 2012.
He told reporters the Fed has not taken any action as far as additional asset purchases, but said that would be a committee decision at a later date.
When asked about the risk Greece poses to the overall financial system, Bernanke said the banks that U.S. regulators oversee are not significantly exposed to the European countries facing debt crises. While he did note a direct tie to other European countries, Bernanke said, "We have asked the banks to do a stress test, looking at their positions and hedges and the effect on their capital if Greece defaults, and the answer is the effects would be very small."
URL to original article: http://www.housingwire.com/2011/06/22/bernanke-says-home-price-stabilization-necessary-to-woo-buyers
For further information on Fresno Real Estate check: http://www.londonproperties.com
May mortgage delinquencies down substantially compared to 2010: LPS
by CHRISTINE RICCIARDI
U.S. mortgage delinquencies are faring much better compared to one year ago, according to Lender Processing Services' "First Look" report released Tuesday.
The report provides month-end mortgage performance statistics from LPS' loan-level database of nearly 40 million mortgages. The Jacksonville, Fla.-based firm will release more detailed reporting in its upcoming "Mortgage Monitor" report, which comes out at the end of this month.
According to the report, 7.96% of U.S. home loans were 30 days past due but not in foreclosure in May, down a staggering 18.3% compared to the same month in 2010. This figure is down a slight 0.1% from April. LPS estimates there are 4.2 million mortgages in delinquency status, with 1.9 million seriously delinquent, meaning 90-plus days past payment.
Foreclosure pre-sale inventory, on the other hand, continued to stay above last year's averages. Inventory was up 4.11% last month compared to the year ago period, totaling 2.2 million homes.
Florida posted the highest percentage of noncurrent loans statewide in May, followed by Nevada, Mississippi, New Jersey and Illinois. The states with the least percentage were, in descending order, Montana, Wyoming, Alaska, South Dakota and North Dakota.
In other recent news, LPS recently lowered its second quarter earnings estimate by 31% based on the sluggish mortgage market.
URL to original article: http://www.housingwire.com/2011/06/21/may-mortgage-delinquencies-down-substantially-compared-to-2010-lps
For further information on Fresno Real Estate check: http://www.londonproperties.com
U.S. mortgage delinquencies are faring much better compared to one year ago, according to Lender Processing Services' "First Look" report released Tuesday.
The report provides month-end mortgage performance statistics from LPS' loan-level database of nearly 40 million mortgages. The Jacksonville, Fla.-based firm will release more detailed reporting in its upcoming "Mortgage Monitor" report, which comes out at the end of this month.
According to the report, 7.96% of U.S. home loans were 30 days past due but not in foreclosure in May, down a staggering 18.3% compared to the same month in 2010. This figure is down a slight 0.1% from April. LPS estimates there are 4.2 million mortgages in delinquency status, with 1.9 million seriously delinquent, meaning 90-plus days past payment.
Foreclosure pre-sale inventory, on the other hand, continued to stay above last year's averages. Inventory was up 4.11% last month compared to the year ago period, totaling 2.2 million homes.
Florida posted the highest percentage of noncurrent loans statewide in May, followed by Nevada, Mississippi, New Jersey and Illinois. The states with the least percentage were, in descending order, Montana, Wyoming, Alaska, South Dakota and North Dakota.
In other recent news, LPS recently lowered its second quarter earnings estimate by 31% based on the sluggish mortgage market.
URL to original article: http://www.housingwire.com/2011/06/21/may-mortgage-delinquencies-down-substantially-compared-to-2010-lps
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications drop 5.9% as interest rates rise
by KERRI PANCHUK
After experiencing a 13% surge in mortgage applications, the mortgage market lost steam last week with applications dropping 5.9% for the week ending June 17.
While homeowners rushed to refinance earlier in the month, that trend reversed itself, with the refinance index and purchase index falling 7.2% and 2.8%, respectively, the Mortgage Bankers Association said Wednesday.
In addition, the four-week moving averages for the market index and the refinance index are up 0.4% and 0.8%, respectively, while the seasonally adjusted purchase index is down 0.7%.
Refinancing activity cooled as the refinance share of mortgage activity fell to 69.2% of total applications from 70% the previous week. In addition, the adjustable-rate mortgage share of activity fell to 5.9% from 6.1% the prior week.
Meanwhile, the average interest rate on the 30-year, fixed-rate mortgage grew to 4.57%, up from 4.51% a week earlier. The 15-year fixed-rate mortgage also rose to 3.70%, up from 3.67% a week earlier.
URL to original article: http://www.housingwire.com/2011/06/22/mortgage-application-filings-drop-5-9-as-interest-rates-rise
For further information on Fresno Real Estate check: http://www.londonproperties.com
After experiencing a 13% surge in mortgage applications, the mortgage market lost steam last week with applications dropping 5.9% for the week ending June 17.
While homeowners rushed to refinance earlier in the month, that trend reversed itself, with the refinance index and purchase index falling 7.2% and 2.8%, respectively, the Mortgage Bankers Association said Wednesday.
In addition, the four-week moving averages for the market index and the refinance index are up 0.4% and 0.8%, respectively, while the seasonally adjusted purchase index is down 0.7%.
Refinancing activity cooled as the refinance share of mortgage activity fell to 69.2% of total applications from 70% the previous week. In addition, the adjustable-rate mortgage share of activity fell to 5.9% from 6.1% the prior week.
Meanwhile, the average interest rate on the 30-year, fixed-rate mortgage grew to 4.57%, up from 4.51% a week earlier. The 15-year fixed-rate mortgage also rose to 3.70%, up from 3.67% a week earlier.
URL to original article: http://www.housingwire.com/2011/06/22/mortgage-application-filings-drop-5-9-as-interest-rates-rise
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, June 21, 2011
Failure to boost debt ceiling could tank housing: CAP expert says
by CHRISTINE RICCIARDI
The federal government's Aug. 2 deadline to approve a new debt ceiling is rapidly approaching, and if regulators can't agree on something, the housing market could tank when key but "nonessential" government services are frozen, a financial markets expert said.
David Min, associate director for financial markets policy at the Center for American Progress, said in a commentary Tuesday that failure to increase the country's debt ceiling would cause regulators to freeze what they believe are "nonessential services." Min said many of these nonessential services include housing programs under the Federal Housing Administration, the Internal Revenue Service and the Social Security Administration.
"In the post-crisis world, private mortgage financing is but nonexistent, leaving the government to fill the vacuum," Min wrote. "Consequently, FHA today is a key source of mortgages, particularly for first-time homebuyers and other demographic groups who are critical for restoring some equilibrium to our still-ailing housing markets."
All year, Republicans pushed to cut federal spending by way of housing programs. In February, the House Financial Services Committee proposed cutting 12 different housing programs, including the Neighborhood Stabilization Program and the NeighborWorks America, from the federal budget.
In March, the House of Representatives voted 252-170 to terminate the Home Affordable Modification Program, or HAMP, two years early, based on underwhelming results.
In April, Republicans and Democrats compromised on a 2011 budget agreement that slashed $88 million in funding for nonprofit counseling groups approved by the Department of Housing and Urban Development.
Min calls these services critical in helping lower- to moderate-income families attain a home.
"Any extended suspension of FHA lending activities due to a freeze on nonessential government services would cause the housing markets to lock up and prices to potentially free fall, particularly at the lower end of the market where younger, lower-income, and first-time homebuyers are critical," Min said.
Freezing Social Security operations would inhibit lenders from verifying a borrower's identification, thereby slowing down the mortgage approval process even more, Min said. He added that freezing operations at the IRS would further freeze the housing market, as borrowers applying for a mortgage would be unable to receive any tax information to submit with the application.
URL to original article: http://www.housingwire.com/2011/06/21/failure-to-boost-debt-ceiling-could-tank-housing-cap-expert-says
For further information on Fresno Real Estate check: http://www.londonproperties.com
The federal government's Aug. 2 deadline to approve a new debt ceiling is rapidly approaching, and if regulators can't agree on something, the housing market could tank when key but "nonessential" government services are frozen, a financial markets expert said.
David Min, associate director for financial markets policy at the Center for American Progress, said in a commentary Tuesday that failure to increase the country's debt ceiling would cause regulators to freeze what they believe are "nonessential services." Min said many of these nonessential services include housing programs under the Federal Housing Administration, the Internal Revenue Service and the Social Security Administration.
"In the post-crisis world, private mortgage financing is but nonexistent, leaving the government to fill the vacuum," Min wrote. "Consequently, FHA today is a key source of mortgages, particularly for first-time homebuyers and other demographic groups who are critical for restoring some equilibrium to our still-ailing housing markets."
All year, Republicans pushed to cut federal spending by way of housing programs. In February, the House Financial Services Committee proposed cutting 12 different housing programs, including the Neighborhood Stabilization Program and the NeighborWorks America, from the federal budget.
In March, the House of Representatives voted 252-170 to terminate the Home Affordable Modification Program, or HAMP, two years early, based on underwhelming results.
In April, Republicans and Democrats compromised on a 2011 budget agreement that slashed $88 million in funding for nonprofit counseling groups approved by the Department of Housing and Urban Development.
Min calls these services critical in helping lower- to moderate-income families attain a home.
"Any extended suspension of FHA lending activities due to a freeze on nonessential government services would cause the housing markets to lock up and prices to potentially free fall, particularly at the lower end of the market where younger, lower-income, and first-time homebuyers are critical," Min said.
Freezing Social Security operations would inhibit lenders from verifying a borrower's identification, thereby slowing down the mortgage approval process even more, Min said. He added that freezing operations at the IRS would further freeze the housing market, as borrowers applying for a mortgage would be unable to receive any tax information to submit with the application.
URL to original article: http://www.housingwire.com/2011/06/21/failure-to-boost-debt-ceiling-could-tank-housing-cap-expert-says
For further information on Fresno Real Estate check: http://www.londonproperties.com
How to tell if your housing market has hit bottom
By DAVID CROOK
At first glance, you're not likely to see a lot of similarities between stately Cambridge, Mass., and sprawling Denton, Texas.
Cambridge (population about 105,000) was already more than 200 years old when Denton (120,000) was founded in 1857. From the center of Cambridge, it's an easy stroll across the Charles River into Boston. Denton, in contrast, sits where Interstate Highway 35 divides—to the west, it's 41 miles to Fort Worth; to the east, 39 miles to Dallas.
But both are college towns. Cambridge is well known as the home of Harvard University and the Massachusetts Institute of Technology. Denton has North Texas State University and Texas Woman's University.
They have something else in common, too. Both have pretty much recovered from the five-year-and-counting housing recession. And both provide invaluable clues for those looking to decipher whether their own markets have seen the worst of the crisis.
According to a statistical analysis performed for The Wall Street Journal by the online real-estate information and search firm Zillow, home values in a handful of communities are where they were just before the most frenzied days of the real-estate bubble. Focusing on communities with sufficient sales activity to produce statistically valid value estimates, Zillow spotted 25 places that are within single-digit percentage points of their home-value peaks. (Zillow found no communities where values have surpassed their high-water marks.) Not bad considering that home values in some major metropolitan areas are at half their bubble-era peaks.
As a result, spotting the factors that have helped those communities get by may allow all homeowners to better gauge what's going on where they live—and what the future may hold for their home's value.
Some words of caution.
First: Don't look at these as housing-market "winners," and don't go looking for new places where you can score a killing. That's the thinking that got much of the country in trouble in the first place. Housing isn't an investment like stocks or bonds and shouldn't be approached that way.
Second: Although many of the areas have certain traits in common, most are just nice places to live, places where anyone might want to work and raise a family. Each is special in its own right.
Finally, the biggest reason that most are surviving the downturn is because they never experienced the huge price runups that Florida, Nevada or California did in the first place.
In Denton, Zillow estimates values are down 7.4% from their peak, while values are down about 8.6% in Cambridge. That's about where prices stood in 2004 in both towns. In contrast, the latest Case-Shiller Home Price Index indicates national prices are at 2002 levels.
So what should you look for if you are thinking of selling your home or buying a new one? What does a healthy real-estate market look like today?
Here are three big factors to look for. If your community shares any of these traits, you may already be on the rebound.
Employment
It's the oldest joke in real estate, but with a new punch line:
Q: What are the three most important things to consider when buying a house?
A: Jobs. Jobs. Jobs.
Clearly, the No. 1 factor in determining whether a community has passed through the worst of the housing debacle is its current state of employment. There has always been a connection between the local jobs picture and the local real-estate market, but it's even greater today.
The official U.S. unemployment rate was still a very high 9.2% as the prime home-shopping season began in March. Denton County's unemployment rate was 7.4% in March—way up from before the financial crisis but lower than the rate for all of Texas and nearly two points below the national rate. Unemployment in Cambridge's Middlesex County is 2½ percentage points below the U.S. average.
Indeed, many of the communities that turned up in the Zillow analysis have big recession-insulated employers like Cambridge's and Denton's universities.
Look at North Carolina, where three communities appear on the Zillow list. Although North Carolina's unemployment rate is higher than the national average, all three communities are lower than the state rate. Jacksonville, where values are just 0.1% below their peak, is the home of the Marine Corps' Camp Lejeune and New River Air Station. Fayetteville has the Army's Fort Bragg and Pope Air Force Base. And Durham is one of the vertices of the Research Triangle conglomeration of universities, state and federal government offices, and government, nonprofit and corporate research facilities.
Rents
Local rents are very strong indicators of real-estate values. Home prices in most communities that have best weathered the downturn tend toward the low-rent end. That is, they have lower price-to-rent multiples, and house hunters will often find it cheaper to buy properties than to rent them.
Look at a typical "rent vs. buy" calculator available on many real-estate or personal-finance websites. Most calculators figure that if prices are more than 15 times annual rents, then a market favors renters; under 15 times, buyers.
Earlier this month, there was a $525-a-month rental two-bedroom, one bath house in Conway, Ark., near the state capital, Little Rock, where home values are down just 5.1% from their peak. But asking prices for comparable houses in the same neighborhood are in the high $60,000s—so, using the typical rent-vs.-buy formula, prices are about 11 times rent, a bargain.
That's the same price-to-rent multiple as in college town Champaign, Ill., where a three-bedroom, one-bath house was on the rental market for $850 a month. Albany, N.Y., another state capital, also falls within the affordability range. You can buy a four-bedroom, 1½-bath house for around $200,000, only about eight times the annual rent.
Caveat: Beware the outliers. Extremely low price-to-rent multiples can be warning flags for seriously depressed markets that are glutted with unsold properties. Trulia, another real-estate information site, regularly publishes a rent-to-buy analysis of large metropolitan areas, and the most "affordable" markets are a Where's Where of the real-estate bust: Las Vegas (prices 6 times rents), Phoenix (7), Miami (8). At the opposite end, Trulia's survey says the "least affordable" market is New York City (39), where home values are down just 9.1% from their peak.
Foreclosures
Healthier communities have fewer foreclosed properties pulling down values of other homes.
Just as jobs fuel the local housing engine, foreclosures put on the brakes. Even in good times, one foreclosed property in a neighborhood can bring down the values of every other house around it. And, in bad times, entire metropolitan areas can be swamped by abandoned, foreclosed houses.
In 2010, the worst year so far, about 2.23% of all the homes received a foreclosure filing, according to RealtyTrac, an Irvine, Calif., firm that monitors foreclosed properties. In Las Vegas, the poster child of the Sun Belt's real-estate bust, the foreclosure rate was 12%, more than 80% of homes are worth less than their mortgages and values are down more than 50% from their peak.
And what was the foreclosure rate in Utica, the buckle of upstate New York's merciless Snow Belt? Barely a flurry, just 0.04%. And home values are down just 4.2%, helped along by a growing population.
For home owners, the snow looks a lot more inviting than it used to.
URL to origial article: http://www.housingwire.com/2011/06/20/how-to-tell-if-your-housing-market-has-hit-bottom
For further information on Fresno Real Estate check: http://www.londonproperties.com
At first glance, you're not likely to see a lot of similarities between stately Cambridge, Mass., and sprawling Denton, Texas.
Cambridge (population about 105,000) was already more than 200 years old when Denton (120,000) was founded in 1857. From the center of Cambridge, it's an easy stroll across the Charles River into Boston. Denton, in contrast, sits where Interstate Highway 35 divides—to the west, it's 41 miles to Fort Worth; to the east, 39 miles to Dallas.
But both are college towns. Cambridge is well known as the home of Harvard University and the Massachusetts Institute of Technology. Denton has North Texas State University and Texas Woman's University.
They have something else in common, too. Both have pretty much recovered from the five-year-and-counting housing recession. And both provide invaluable clues for those looking to decipher whether their own markets have seen the worst of the crisis.
According to a statistical analysis performed for The Wall Street Journal by the online real-estate information and search firm Zillow, home values in a handful of communities are where they were just before the most frenzied days of the real-estate bubble. Focusing on communities with sufficient sales activity to produce statistically valid value estimates, Zillow spotted 25 places that are within single-digit percentage points of their home-value peaks. (Zillow found no communities where values have surpassed their high-water marks.) Not bad considering that home values in some major metropolitan areas are at half their bubble-era peaks.
As a result, spotting the factors that have helped those communities get by may allow all homeowners to better gauge what's going on where they live—and what the future may hold for their home's value.
Some words of caution.
First: Don't look at these as housing-market "winners," and don't go looking for new places where you can score a killing. That's the thinking that got much of the country in trouble in the first place. Housing isn't an investment like stocks or bonds and shouldn't be approached that way.
Second: Although many of the areas have certain traits in common, most are just nice places to live, places where anyone might want to work and raise a family. Each is special in its own right.
Finally, the biggest reason that most are surviving the downturn is because they never experienced the huge price runups that Florida, Nevada or California did in the first place.
In Denton, Zillow estimates values are down 7.4% from their peak, while values are down about 8.6% in Cambridge. That's about where prices stood in 2004 in both towns. In contrast, the latest Case-Shiller Home Price Index indicates national prices are at 2002 levels.
So what should you look for if you are thinking of selling your home or buying a new one? What does a healthy real-estate market look like today?
Here are three big factors to look for. If your community shares any of these traits, you may already be on the rebound.
Employment
It's the oldest joke in real estate, but with a new punch line:
Q: What are the three most important things to consider when buying a house?
A: Jobs. Jobs. Jobs.
Clearly, the No. 1 factor in determining whether a community has passed through the worst of the housing debacle is its current state of employment. There has always been a connection between the local jobs picture and the local real-estate market, but it's even greater today.
The official U.S. unemployment rate was still a very high 9.2% as the prime home-shopping season began in March. Denton County's unemployment rate was 7.4% in March—way up from before the financial crisis but lower than the rate for all of Texas and nearly two points below the national rate. Unemployment in Cambridge's Middlesex County is 2½ percentage points below the U.S. average.
Indeed, many of the communities that turned up in the Zillow analysis have big recession-insulated employers like Cambridge's and Denton's universities.
Look at North Carolina, where three communities appear on the Zillow list. Although North Carolina's unemployment rate is higher than the national average, all three communities are lower than the state rate. Jacksonville, where values are just 0.1% below their peak, is the home of the Marine Corps' Camp Lejeune and New River Air Station. Fayetteville has the Army's Fort Bragg and Pope Air Force Base. And Durham is one of the vertices of the Research Triangle conglomeration of universities, state and federal government offices, and government, nonprofit and corporate research facilities.
Rents
Local rents are very strong indicators of real-estate values. Home prices in most communities that have best weathered the downturn tend toward the low-rent end. That is, they have lower price-to-rent multiples, and house hunters will often find it cheaper to buy properties than to rent them.
Look at a typical "rent vs. buy" calculator available on many real-estate or personal-finance websites. Most calculators figure that if prices are more than 15 times annual rents, then a market favors renters; under 15 times, buyers.
Earlier this month, there was a $525-a-month rental two-bedroom, one bath house in Conway, Ark., near the state capital, Little Rock, where home values are down just 5.1% from their peak. But asking prices for comparable houses in the same neighborhood are in the high $60,000s—so, using the typical rent-vs.-buy formula, prices are about 11 times rent, a bargain.
That's the same price-to-rent multiple as in college town Champaign, Ill., where a three-bedroom, one-bath house was on the rental market for $850 a month. Albany, N.Y., another state capital, also falls within the affordability range. You can buy a four-bedroom, 1½-bath house for around $200,000, only about eight times the annual rent.
Caveat: Beware the outliers. Extremely low price-to-rent multiples can be warning flags for seriously depressed markets that are glutted with unsold properties. Trulia, another real-estate information site, regularly publishes a rent-to-buy analysis of large metropolitan areas, and the most "affordable" markets are a Where's Where of the real-estate bust: Las Vegas (prices 6 times rents), Phoenix (7), Miami (8). At the opposite end, Trulia's survey says the "least affordable" market is New York City (39), where home values are down just 9.1% from their peak.
Foreclosures
Healthier communities have fewer foreclosed properties pulling down values of other homes.
Just as jobs fuel the local housing engine, foreclosures put on the brakes. Even in good times, one foreclosed property in a neighborhood can bring down the values of every other house around it. And, in bad times, entire metropolitan areas can be swamped by abandoned, foreclosed houses.
In 2010, the worst year so far, about 2.23% of all the homes received a foreclosure filing, according to RealtyTrac, an Irvine, Calif., firm that monitors foreclosed properties. In Las Vegas, the poster child of the Sun Belt's real-estate bust, the foreclosure rate was 12%, more than 80% of homes are worth less than their mortgages and values are down more than 50% from their peak.
And what was the foreclosure rate in Utica, the buckle of upstate New York's merciless Snow Belt? Barely a flurry, just 0.04%. And home values are down just 4.2%, helped along by a growing population.
For home owners, the snow looks a lot more inviting than it used to.
URL to origial article: http://www.housingwire.com/2011/06/20/how-to-tell-if-your-housing-market-has-hit-bottom
For further information on Fresno Real Estate check: http://www.londonproperties.com
Welcome New Family Members
London Properties wants to welcome to our wonderful family the following agents.
We are pleased to announce the arrival of Harold Zapata, formerly with Coldwell Banker. He is the new manager in our Hanford office.
We are also pleased to annouce the following agents; Harpreet Bali, Pradeep Bali, Teresa Viramontes and Rama Dawar formerly with Cal Coast & Country Homes. They will be working out of our Fresno main office.
Welcome and go get'em! If you or anyone you know wants to get your real estate license go to www.tiore.com for more information.
We are pleased to announce the arrival of Harold Zapata, formerly with Coldwell Banker. He is the new manager in our Hanford office.
We are also pleased to annouce the following agents; Harpreet Bali, Pradeep Bali, Teresa Viramontes and Rama Dawar formerly with Cal Coast & Country Homes. They will be working out of our Fresno main office.
Welcome and go get'em! If you or anyone you know wants to get your real estate license go to www.tiore.com for more information.
Monday, June 20, 2011
House price volatility expected until 2014
by JON PRIOR
A lack of demand may keep house prices from a consistent rise until 2014, according to analysts at Capital Economics.
Home prices double-dipped in the first quarter, according to the Standard & Poor's/Case-Shiller index. While other indices measured some improvement since, analytics firm Altos Research forecasted an up-and-down market for some time. In the near term, Capital Economics said foreclosure sales should keep house prices down 3% in 2011, resulting in another 5% for the year as a whole.
Easing the flow of foreclosures on the market may stabilize prices to 35% below the peak in 2006.
"But while prices tend to rise rapidly in the years after downturns, this time a chronic lack of demand means that they will probably be unchanged in both 2012 and 2013," Capital Economics said.
The analysts said if house prices continue to fall, more borrowers could fall underwater on their mortgage — meaning they owe more on the loan than the home is worth. According to CoreLogic (CLGX: 16.68 -0.12%), there were 11.1 million properties in negative equity as of the end of last year.
"The danger is that the further fall in prices this year will send more homeowners into negative equity, which then leads to more defaults and more forced foreclosed sales," the note from Capital Economics said. "In such a scenario, prices would fall next year too, before possibly stabilizing in 2013."
Economist Robert Shiller, who worked to develop the S&P/Case-Shiller index, recently said there is room for another 10% to 25% drop in home prices.
Capital Economics said for the next five years, the rental market will be the best performing market in U.S. housing. Investors in this area could expect a rental yield of 5.5% this year and up to 6% by 2014. For the mortgage market, however, too much uncertainty remains.
"A meaningful recovery in house prices and owner-occupied demand cannot occur while first-time and repeat buyers are sidelined by rising down payment requirements and widespread negative equity," analysts said.
URL to original article: http://www.housingwire.com/2011/06/20/house-price-volatility-expected-until-2014
For further information on Fresno Real Estate check: http://www.londonproperties.com
A lack of demand may keep house prices from a consistent rise until 2014, according to analysts at Capital Economics.
Home prices double-dipped in the first quarter, according to the Standard & Poor's/Case-Shiller index. While other indices measured some improvement since, analytics firm Altos Research forecasted an up-and-down market for some time. In the near term, Capital Economics said foreclosure sales should keep house prices down 3% in 2011, resulting in another 5% for the year as a whole.
Easing the flow of foreclosures on the market may stabilize prices to 35% below the peak in 2006.
"But while prices tend to rise rapidly in the years after downturns, this time a chronic lack of demand means that they will probably be unchanged in both 2012 and 2013," Capital Economics said.
The analysts said if house prices continue to fall, more borrowers could fall underwater on their mortgage — meaning they owe more on the loan than the home is worth. According to CoreLogic (CLGX: 16.68 -0.12%), there were 11.1 million properties in negative equity as of the end of last year.
"The danger is that the further fall in prices this year will send more homeowners into negative equity, which then leads to more defaults and more forced foreclosed sales," the note from Capital Economics said. "In such a scenario, prices would fall next year too, before possibly stabilizing in 2013."
Economist Robert Shiller, who worked to develop the S&P/Case-Shiller index, recently said there is room for another 10% to 25% drop in home prices.
Capital Economics said for the next five years, the rental market will be the best performing market in U.S. housing. Investors in this area could expect a rental yield of 5.5% this year and up to 6% by 2014. For the mortgage market, however, too much uncertainty remains.
"A meaningful recovery in house prices and owner-occupied demand cannot occur while first-time and repeat buyers are sidelined by rising down payment requirements and widespread negative equity," analysts said.
URL to original article: http://www.housingwire.com/2011/06/20/house-price-volatility-expected-until-2014
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 17, 2011
Households glum as misery index hits 1983 levels
by JASON PHILYAW
Today's economy isn't as depressing as that of the 1930s, but it is as bad as 1983.
The Misery Index, which adds the unemployment rate and level of inflation, rose for the fourth-straight in May to 12.7 and is now at the highest level in 28 years. Economist Arthur Okun launched the index in the '70s in an attempt to gauge economic hardship.
Unemployment inched up to 9.1% in May, while annual rate of inflation rose to 3.6% as prices climbed across the board, in addition to elevated costs for energy and food. The number of initial jobless claims remained higher than 400,000 for about two months.
Earlier Friday, the preliminary reading for the monthly Thomson Reuters/University of Michigan consumer sentiment index dropped to 71.8 from 74.3 in May. Dire jobs reports, falling home prices and the ongoing economic uncertainty over the state of housing continue to weigh on consumer spending.
Analysts weren't too surprised by the drop, as gasoline prices flirted with $4 a gallon in mid-May before leveling off somewhat around $3.70. Paul Dales, senior U.S. economist at Capital Economics, said the index need to run higher than 86 to indicate economic recovery is underway.
"But now sentiment is being dented by the 8% drop in equity prices, the further fall in house prices, the weakening in the labor market, and general fears about the health of the overall economy," he said. "The recent severe flooding and tornadoes probably didn't help either."
"Households have good reason to be glum," Dales said, as the misery index hits levels last seen during Ronald Regan's first term as president. The index peaked near the end of President Carter's term, reaching 21.98 in June 1980.
URL to original article: http://www.housingwire.com/2011/06/17/households-glum-as-misery-index-hits-1983-levels
For further information on Fresno Real Estate check: http://www.londonproperties.com
Today's economy isn't as depressing as that of the 1930s, but it is as bad as 1983.
The Misery Index, which adds the unemployment rate and level of inflation, rose for the fourth-straight in May to 12.7 and is now at the highest level in 28 years. Economist Arthur Okun launched the index in the '70s in an attempt to gauge economic hardship.
Unemployment inched up to 9.1% in May, while annual rate of inflation rose to 3.6% as prices climbed across the board, in addition to elevated costs for energy and food. The number of initial jobless claims remained higher than 400,000 for about two months.
Earlier Friday, the preliminary reading for the monthly Thomson Reuters/University of Michigan consumer sentiment index dropped to 71.8 from 74.3 in May. Dire jobs reports, falling home prices and the ongoing economic uncertainty over the state of housing continue to weigh on consumer spending.
Analysts weren't too surprised by the drop, as gasoline prices flirted with $4 a gallon in mid-May before leveling off somewhat around $3.70. Paul Dales, senior U.S. economist at Capital Economics, said the index need to run higher than 86 to indicate economic recovery is underway.
"But now sentiment is being dented by the 8% drop in equity prices, the further fall in house prices, the weakening in the labor market, and general fears about the health of the overall economy," he said. "The recent severe flooding and tornadoes probably didn't help either."
"Households have good reason to be glum," Dales said, as the misery index hits levels last seen during Ronald Regan's first term as president. The index peaked near the end of President Carter's term, reaching 21.98 in June 1980.
URL to original article: http://www.housingwire.com/2011/06/17/households-glum-as-misery-index-hits-1983-levels
For further information on Fresno Real Estate check: http://www.londonproperties.com
NAR May home prices drop as sellers fear a double dip
by CHRISTINE RICCIARDI
The median home listing price in May dipped 1.6% compared to April, down to $188,900, according to one real estate listing website.
According to the official website for the National Association of Realtors, May's median price was about 2.1% below a year earlier when government tax incentives were still driving consumer demand. The drop in price could be attributable to seller uncertainty of a double-dip in home prices.
"The modest pull-back that occurred in May 2011 could signal seller concerns over widespread reports of a 'double-dip' in the housing market based on sales results for the first quarter of 2011," according to the website Realtor.com. "However, unless there is further retrenchment, the results for the past three months could be viewed as a positive indicator of future home pricing trends."
Median listing prices fell in 126 out of 146 markets covered by Realtor.com. Twenty-three markets experienced a more than 5% decline in home price, 14 of which were in Florida. Chattanooga, Tenn. witnessed the largest price drop, down 17.8% between April and May to a median $145,000. That price is down 16.9% compared to May 2010.
As prices fell, sale inventory grew. Realtor.com reported a 3.5% growth in inventory to a total 2.3 million listed properties in May. That figure is down 14.3% compared to one year earlier, however.
The average number of days a home spent on the market decreased to 92 days in May from April. The age of market inventory has been gradually decreasing since the beginning of 2011 and is now roughly equal to the age seen last summer.
URL to original article: http://www.housingwire.com/2011/06/16/nar-may-home-prices-drop-as-sellers-fear-a-double-dip
For further information on Fresno Real Estate check: http://www.londonproperties.com
The median home listing price in May dipped 1.6% compared to April, down to $188,900, according to one real estate listing website.
According to the official website for the National Association of Realtors, May's median price was about 2.1% below a year earlier when government tax incentives were still driving consumer demand. The drop in price could be attributable to seller uncertainty of a double-dip in home prices.
"The modest pull-back that occurred in May 2011 could signal seller concerns over widespread reports of a 'double-dip' in the housing market based on sales results for the first quarter of 2011," according to the website Realtor.com. "However, unless there is further retrenchment, the results for the past three months could be viewed as a positive indicator of future home pricing trends."
Median listing prices fell in 126 out of 146 markets covered by Realtor.com. Twenty-three markets experienced a more than 5% decline in home price, 14 of which were in Florida. Chattanooga, Tenn. witnessed the largest price drop, down 17.8% between April and May to a median $145,000. That price is down 16.9% compared to May 2010.
As prices fell, sale inventory grew. Realtor.com reported a 3.5% growth in inventory to a total 2.3 million listed properties in May. That figure is down 14.3% compared to one year earlier, however.
The average number of days a home spent on the market decreased to 92 days in May from April. The age of market inventory has been gradually decreasing since the beginning of 2011 and is now roughly equal to the age seen last summer.
URL to original article: http://www.housingwire.com/2011/06/16/nar-may-home-prices-drop-as-sellers-fear-a-double-dip
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 16, 2011
Fixed mortgage rates flat despite inflationary fears
by KERRI PANCHUK
Fixed-mortgage rates remained resilient this past week, staying stable after hitting six-month lows.
Interest on the average 30-year fixed-rate mortgage inched up to 4.5%, staving off fears it would plunge in the midst of inflation reports, Freddie Mac said in its Primary Mortgage Market Survey.
Overall, the 30-year FRM remained virtually unchanged, growing slightly from 4.49% last week to 4.5% for the week ending June 16. Meanwhile, the 15-year FRM remained virtually unchanged at 3.67%, compared to 3.68% last week and 4.2% a year earlier.
Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage and the 1-year Treasury indexed ARM averaged 3.27% and 2.97%, respectively.
"Mortgage rates were little changed this week as financial market participants shrugged off the recent inflation reports," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The core producer price index rose just 0.2% in May while the core consumer price index increased 0.3%, both near the market consensus forecast."
URL to original article: http://www.blogger.com/post-create.g?blogID=8939919290805312864
For further information on Fresno Real Estate check: http://www.londonproperties.com
Fixed-mortgage rates remained resilient this past week, staying stable after hitting six-month lows.
Interest on the average 30-year fixed-rate mortgage inched up to 4.5%, staving off fears it would plunge in the midst of inflation reports, Freddie Mac said in its Primary Mortgage Market Survey.
Overall, the 30-year FRM remained virtually unchanged, growing slightly from 4.49% last week to 4.5% for the week ending June 16. Meanwhile, the 15-year FRM remained virtually unchanged at 3.67%, compared to 3.68% last week and 4.2% a year earlier.
Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage and the 1-year Treasury indexed ARM averaged 3.27% and 2.97%, respectively.
"Mortgage rates were little changed this week as financial market participants shrugged off the recent inflation reports," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The core producer price index rose just 0.2% in May while the core consumer price index increased 0.3%, both near the market consensus forecast."
URL to original article: http://www.blogger.com/post-create.g?blogID=8939919290805312864
For further information on Fresno Real Estate check: http://www.londonproperties.com
This housing crisis is not the Great Depression
by JACOB GAFFNEY
The latest housing report from Capital Economics garnered a lot of attention this week for comparing the last few years to the 1930s.
The subject line of one email HousingWire received Tuesday from the Toronto-based firm read: "US Housing Market Monthly – Worse than the Great Depression."
Coverage on CNBC, later aggregated by the Drudge Report, stated "the housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression."
The economist who wrote the note, Paul Dales, said the level of press coverage surprised him. He said the actual eight-page, 24-chart report focused little on the generational comparison, which happened unintentionally, despite taking prominence in the email subject line.
"During the course of my research, I realized that the fall in house prices has been larger and quicker than during the Great Depression," he said. Dales added that the comparison is not a a publicity stunt nor does he believe his research can be extended beyond commentary on housing price volatility.
"Granted data around the Great Depression are sketchy, but in no way am I comparing the macroeconomic conditions of that time to the current recovery," he said. "I don't think unemployment will reach 25%, for example, or that another recession is guaranteed."
According to Capital Economics analysis of the recent Standard & Poor's/Case-Shiller index, housing prices recently fell by 33%, eclipsing the 31% fall in the late 1920s and early 1930s.
Dales believes prices are likely to fall another 3% this year, resulting in a 5% drop for 2011.
Robert Shiller also provided the possibility a doomsday pricing decline of another 10% to 25% fall.
But this is for house prices, and not the housing market as a whole. It is not to say that things are rosy in other aspects of housing, home affordability is reaching new highs, but access to credit remains constricted. For every foreclosure currently on the market, RealtyTrac estimates, there are another three in the pipeline.
It was a different situation, particularly in regard to foreclosures, in the early 1930s.
About half of all mortgage debt was in default during the Great Depression, according to HousingWire research. By 1932, national unemployment reached 25% according to the Kansas Department of Labor.
The Federal Deposit Insurance Corp. estimates about 9,000 banks suspended operations back in the '30s, resulting in losses to depositors of about $1.3 billion. Annual mortgage lending fell 80% and new residential construction dropped by 80% as well.
What's more the types of mortgages common in the Great Depression were phased out, potentially because of the relative ease in which lenders could foreclose.
According to a research report last year from PMI, in the period before the establishment of the Federal Housing Administration, the Federal National Mortgage Association (the government agency that was the precursor to Fannie Mae), and other government housing agencies, virtually all mortgages were shorter-term (less than 10 years), balloon loans that were callable at any time by the lender.
"With depository institutions needing liquidity during the Great Depression, many loans were called — and with prices having fallen sharply, unemployment having skyrocketed, or both, many homeowners could not pay back the principal amounts of their loans or refinance," the PMI note states. "Therefore, many lost their homes even though they could continue to make their payments."
This scenario does not exist today.
Mark Fleming, chief economist at CoreLogic (CLGX: 16.82 +0.36%), said accurate housing price record keeping did not start until the 1970s, and he supports Dales assertion that Great Depression comparisons are speculative.
"Based on the work of Robert Shiller, in real terms, prices fell prior to the Great Depression between 1916 and 1920 and were relatively stable during the Great Depression," Fleming said. "In more broad economic terms, some have estimated the unemployment rate to have been as high as 25% during the Depression, which is significantly higher than in this or any other recent recessionary period."
"By that economic benchmark, this recession is not comparable to the Great Depression," Fleming said.
URL to original article: http://www.housingwire.com/2011/06/16/this-housing-crisis-is-not-the-great-depression
For further information on Fresno Real Estate check: http://www.londonproperties.com
The latest housing report from Capital Economics garnered a lot of attention this week for comparing the last few years to the 1930s.
The subject line of one email HousingWire received Tuesday from the Toronto-based firm read: "US Housing Market Monthly – Worse than the Great Depression."
Coverage on CNBC, later aggregated by the Drudge Report, stated "the housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression."
The economist who wrote the note, Paul Dales, said the level of press coverage surprised him. He said the actual eight-page, 24-chart report focused little on the generational comparison, which happened unintentionally, despite taking prominence in the email subject line.
"During the course of my research, I realized that the fall in house prices has been larger and quicker than during the Great Depression," he said. Dales added that the comparison is not a a publicity stunt nor does he believe his research can be extended beyond commentary on housing price volatility.
"Granted data around the Great Depression are sketchy, but in no way am I comparing the macroeconomic conditions of that time to the current recovery," he said. "I don't think unemployment will reach 25%, for example, or that another recession is guaranteed."
According to Capital Economics analysis of the recent Standard & Poor's/Case-Shiller index, housing prices recently fell by 33%, eclipsing the 31% fall in the late 1920s and early 1930s.
Dales believes prices are likely to fall another 3% this year, resulting in a 5% drop for 2011.
Robert Shiller also provided the possibility a doomsday pricing decline of another 10% to 25% fall.
But this is for house prices, and not the housing market as a whole. It is not to say that things are rosy in other aspects of housing, home affordability is reaching new highs, but access to credit remains constricted. For every foreclosure currently on the market, RealtyTrac estimates, there are another three in the pipeline.
It was a different situation, particularly in regard to foreclosures, in the early 1930s.
About half of all mortgage debt was in default during the Great Depression, according to HousingWire research. By 1932, national unemployment reached 25% according to the Kansas Department of Labor.
The Federal Deposit Insurance Corp. estimates about 9,000 banks suspended operations back in the '30s, resulting in losses to depositors of about $1.3 billion. Annual mortgage lending fell 80% and new residential construction dropped by 80% as well.
What's more the types of mortgages common in the Great Depression were phased out, potentially because of the relative ease in which lenders could foreclose.
According to a research report last year from PMI, in the period before the establishment of the Federal Housing Administration, the Federal National Mortgage Association (the government agency that was the precursor to Fannie Mae), and other government housing agencies, virtually all mortgages were shorter-term (less than 10 years), balloon loans that were callable at any time by the lender.
"With depository institutions needing liquidity during the Great Depression, many loans were called — and with prices having fallen sharply, unemployment having skyrocketed, or both, many homeowners could not pay back the principal amounts of their loans or refinance," the PMI note states. "Therefore, many lost their homes even though they could continue to make their payments."
This scenario does not exist today.
Mark Fleming, chief economist at CoreLogic (CLGX: 16.82 +0.36%), said accurate housing price record keeping did not start until the 1970s, and he supports Dales assertion that Great Depression comparisons are speculative.
"Based on the work of Robert Shiller, in real terms, prices fell prior to the Great Depression between 1916 and 1920 and were relatively stable during the Great Depression," Fleming said. "In more broad economic terms, some have estimated the unemployment rate to have been as high as 25% during the Depression, which is significantly higher than in this or any other recent recessionary period."
"By that economic benchmark, this recession is not comparable to the Great Depression," Fleming said.
URL to original article: http://www.housingwire.com/2011/06/16/this-housing-crisis-is-not-the-great-depression
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 15, 2011
April home remodels hit record high
by JON PRIOR
Home remodeling activity increased 15% in April from one year earlier to the highest level recorded for this critical month, according to data provider BuildFax.
BuildFax maintains a database of building permit information. It recently partnered with Equifax (EFX: 34.46 -1.71%) to combine property history with consumer history for clients. The company also creates a remodeling index using its database. The yearly gain in the index for April marks a year and a half of consecutive gains, a nice surprise for an economy thought to be slumping again.
"April traditionally sets a baseline for the rest of the year in residential remodeling activity, and April 2011 is the best we’ve seen since the beginning of the index in April 2004," said Joe Emison, vice president of research and development at BuildFax.
Servicers are adopting a new philosophy when managing the sale of previously foreclosed property, and have become more open to making repairs from installing new carpeting or even a new roof.
But Emison said most of the activity came from consumers and homeowners.
"Very little of the recent increases in residential remodeling are with resale in mind," Emison. "There is always some of that work going on, but it just doesn't make financial sense – generally speaking, today, you lose money if you spend on permitted improvements to try and increase the resale value."
Remodeling increased the most in the West, up 18% from a year earlier. But activity dropped 19% in the Midwest, the only region to experience a yearly or monthly drop in April.
Yearly gains totaled 11% in the South and 5% in the Northeast.
"Given the relatively pessimistic economic news that we heard about April, including a slowing recovery, this is a nice surprise for the industry," Emison said.
URL to original article: http://www.housingwire.com/2011/06/15/april-home-remodels-hit-record-high
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home remodeling activity increased 15% in April from one year earlier to the highest level recorded for this critical month, according to data provider BuildFax.
BuildFax maintains a database of building permit information. It recently partnered with Equifax (EFX: 34.46 -1.71%) to combine property history with consumer history for clients. The company also creates a remodeling index using its database. The yearly gain in the index for April marks a year and a half of consecutive gains, a nice surprise for an economy thought to be slumping again.
"April traditionally sets a baseline for the rest of the year in residential remodeling activity, and April 2011 is the best we’ve seen since the beginning of the index in April 2004," said Joe Emison, vice president of research and development at BuildFax.
Servicers are adopting a new philosophy when managing the sale of previously foreclosed property, and have become more open to making repairs from installing new carpeting or even a new roof.
But Emison said most of the activity came from consumers and homeowners.
"Very little of the recent increases in residential remodeling are with resale in mind," Emison. "There is always some of that work going on, but it just doesn't make financial sense – generally speaking, today, you lose money if you spend on permitted improvements to try and increase the resale value."
Remodeling increased the most in the West, up 18% from a year earlier. But activity dropped 19% in the Midwest, the only region to experience a yearly or monthly drop in April.
Yearly gains totaled 11% in the South and 5% in the Northeast.
"Given the relatively pessimistic economic news that we heard about April, including a slowing recovery, this is a nice surprise for the industry," Emison said.
URL to original article: http://www.housingwire.com/2011/06/15/april-home-remodels-hit-record-high
For further information on Fresno Real Estate check: http://www.londonproperties.com
11 graphs that explain housing's crisis
Source: The Atlantic
As more would-be homeowners look to rent, apartment prices are feeding inflation while home prices continue to fall. Here's what that means.
As more would-be homeowners look to rent, apartment prices are feeding inflation while home prices continue to fall. Here's what that means.
What's holding back the housing market? In a word, debt. Families who would be moving into new homes are nervous about taking on new debt, and families moving out of homes are walking away from debt they can't shoulder. But the housing crisis is moving into a second stage that threatens to have an even broader impact on people who never thought about owning a home. The homeownership crisis is driving up the price of renting. Here's how (after the gallery of charts, scroll below for fuller explanation):
Between 2007 and 2010, the growth in homeownership collapsed by 50%. Immigration also fell dramatically, reducing demand for new homes. Meanwhile, the jobs crisis forced many 20-somethings who might be looking for their first homes to move back in with their parents. While families consolidated over the last two years, and parents bore a larger burden of their older children's expenses, typical incomes went flat while gasoline costs went vertical, nearly doubling since the nadir of the recession. Utilities have become a major problem, especially for low-income homeowners, who faced the worst of the housing crisis in the first place.
As the housing scene deteriorated, more Americans sought to rent. On a family by family basis, this made economic sense. But on a national scale, the two-year explosion in rent demand put a huge strain on supply in major metro areas. Rental vacancies fell, and rental prices rose. Rents account for 40 percent of the core inflation. Where rents go, consumer costs often follow.
Is this good or bad news for the economy? Like everything else, it's probably a bit of both. On the dark side, inflation in the rental market could feed core inflation in the economy. On the bright side, if short rental supply leads to more construction, that's a good thing. And if rising prices compel employers to pass along the revenue in the form of higher wages, we could finally get some froth in the economy.
URL to original article: http://www.builderonline.com/builder-pulse/11-graphs-that-explain-housing-s-crisis.aspx?cid=NWBD110615002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications rise on refinancing activity
by KERRI PANCHUK
Borrowers attempting to refinance at record low interest rates rushed the market after the Memorial Holiday weekend, prompting mortgage applications to jump 13% for the week ending June 10, the Mortgage Bankers Association said Wednesday.
Interest rates that wooed borrowers include 4.51% for a 30-year, fixed-rate mortgage, which is down slightly from 4.54% a week earlier, and the 15-year FRM, which remained unchanged at 3.67%.
The trade group noted substantial increases in both its refinance and purchase indices.
The refinance index rose 16.5% last week from the previous week, while the seasonally adjusted purchase index jumped 4.5%.
"Mortgage rates have declined for eight of the past nine weeks," MBA Vice President of Research and Economics said Michael Fratantoni said. "Coming off of the Memorial Day holiday, refinance application volume increased significantly, as borrowers jumped to lock in the lowest mortgage rates since last November. The volume of refinance applications still remains 28% below levels seen at that time, as borrowers with an incentive to refinance remain constrained from doing so by lack of equity in their homes."
The four-week moving average for the seasonally adjusted market index rose 2.4% with the purchase index up 0.3%. The refinance index increased 3.1% and the refinancings accounted for 70% of all applications, up from 67.3% a week earlier.
URL to original article: http://www.housingwire.com/2011/06/15/mortgage-applications-rise-on-refinancing-activity
For further information on Fresno Real Estate check: http://www.londonproperties.com
Borrowers attempting to refinance at record low interest rates rushed the market after the Memorial Holiday weekend, prompting mortgage applications to jump 13% for the week ending June 10, the Mortgage Bankers Association said Wednesday.
Interest rates that wooed borrowers include 4.51% for a 30-year, fixed-rate mortgage, which is down slightly from 4.54% a week earlier, and the 15-year FRM, which remained unchanged at 3.67%.
The trade group noted substantial increases in both its refinance and purchase indices.
The refinance index rose 16.5% last week from the previous week, while the seasonally adjusted purchase index jumped 4.5%.
"Mortgage rates have declined for eight of the past nine weeks," MBA Vice President of Research and Economics said Michael Fratantoni said. "Coming off of the Memorial Day holiday, refinance application volume increased significantly, as borrowers jumped to lock in the lowest mortgage rates since last November. The volume of refinance applications still remains 28% below levels seen at that time, as borrowers with an incentive to refinance remain constrained from doing so by lack of equity in their homes."
The four-week moving average for the seasonally adjusted market index rose 2.4% with the purchase index up 0.3%. The refinance index increased 3.1% and the refinancings accounted for 70% of all applications, up from 67.3% a week earlier.
URL to original article: http://www.housingwire.com/2011/06/15/mortgage-applications-rise-on-refinancing-activity
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, June 14, 2011
Too many home price indices muddle market data
by JASON PHILYAW
The plethora of home price indices muddle the market data, and prices remain in decline in most parts of the country with faster depreciation in some metropolitan areas, according to one Toronto-based research firm.
Analysts at Capital Economics rely on two closely watched home prices indices when making their market projections.
"For anyone bamboozled by the abundance of house price indices, which can sometimes provide starkly different messages, we consider the Case-Shiller and CoreLogic indices to be the most useful and reliable," analysts at Capital Economics said. "As it stands now, most of the evidence suggests that house prices are still falling, and in some cases at an accelerating rate."
Earlier this month, CoreLogic said home price rose less than 1% in May from the prior month, yet remain considerably lower than a year ago. May's slight increase was the first gain since the expiration of the federal homebuyer tax credit in the spring of 2010.
The most-recent Standard & Poor's/Case-Shiller home price index showed prices fell to the lowest level in nine years during the first quarter. The index fell 4.2% in the first three months of 2011 after declining 3.6% in the fourth quarter. Analysts said the first-quarter index decreased 5.1% from a year earlier.
URL to original article: http://www.housingwire.com/2011/06/13/too-many-home-price-indices-muddle-market-data
For further information on Fresno Real Estate check: http://www.londonproperties.com
The plethora of home price indices muddle the market data, and prices remain in decline in most parts of the country with faster depreciation in some metropolitan areas, according to one Toronto-based research firm.
Analysts at Capital Economics rely on two closely watched home prices indices when making their market projections.
"For anyone bamboozled by the abundance of house price indices, which can sometimes provide starkly different messages, we consider the Case-Shiller and CoreLogic indices to be the most useful and reliable," analysts at Capital Economics said. "As it stands now, most of the evidence suggests that house prices are still falling, and in some cases at an accelerating rate."
Earlier this month, CoreLogic said home price rose less than 1% in May from the prior month, yet remain considerably lower than a year ago. May's slight increase was the first gain since the expiration of the federal homebuyer tax credit in the spring of 2010.
The most-recent Standard & Poor's/Case-Shiller home price index showed prices fell to the lowest level in nine years during the first quarter. The index fell 4.2% in the first three months of 2011 after declining 3.6% in the fourth quarter. Analysts said the first-quarter index decreased 5.1% from a year earlier.
URL to original article: http://www.housingwire.com/2011/06/13/too-many-home-price-indices-muddle-market-data
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, June 13, 2011
Homelessness Cannot Hinder The American Dream: Christopher Gardner
by CHRISTINE RICCIARDI
An estimated 12% of all homeless people have a job and go to work everyday, according to REO Expo's keynote speaker Christopher Gardner, who spoke Monday morning.
"I'm not talking about the guys with cups," Gardner said. "I'm talking about the people who went to school, worked hard, played by the rules and then life happened."
Gardner would know, he admitted. He was one of them for more than a year. Gardner said he was part of a new class that's forming and is becoming especially prominent in light of the financial crisis — the white-collar homeless population.
Gardner, whose personal story was the inspiration for the book and movie "Pursuit of Happyness," grew up believing one day he would be Miles Davis. His mother told him he could be or do anything and anyone he wanted to be or do. That would be the underlying theme throughout Gardner's entire life.
After nine years of playing trumpet, reality set in, and Gardner eventually started his career in San Francisco as an apprentice of clinical scientific research. As fairytale would have it, Gardner fell in love, got married and had a baby boy. Gardner grew up without a father, and was often reminded of that when his stepfather would hold a shotgun to his shoulder and tell him so.
"Becoming a parent was one of the most precious instances of my life," Gardner reflected.
After Christopher Jr. came into the picture, Gardner jumped career paths into sales, as his wife was a dentist who couldn't practice because she did not pass her boards. Making $25,000 a year as a sales rep was fine, but Gardner wanted to be a big dog and provide for his family. One day he ran into a "sharp" man in a brilliantly red Ferrari.
"I asked him two questions: What do you do? And how do you do it?" Gardener said.
The man was a stock broker, and so life happened — Gardner changed his plan to work on Wall Street. Everywhere he went Gardner said he heard the same word over and over: no. By this time most firms were requiring a degree in business to even be considered for hire. Gardner never went to college, but he pressed on.
Gardner's search for a financial job earned him a hefty amount of parking tickets, which cost him 10 days in jail and almost the chance of a lifetime. Gardner's big-break interview was scheduled for the day before he was set to leave prison. He got that changed and still managed to nail the interview wearing bell-bottom jeans and a red Members Only jacket.
After Gardner got out of prison, however, his wife was gone with the child, and Gardner carried on everyday on the trading floor in San Francisco, cold calling up to 200 people a day. And then life happened.
A few months into the job, Gardner's now ex-wife showed up to his boarding room complex with Chris Jr. The complex did not allow children and so the father and son duo became homeless.
Gardner showed actor Will Smith around the places he and his son dwelled for the year-plus they were homeless — down in the subway system, a series of hotels and the first hotel for the homeless in America in the Tenderloin ghetto of San Francisco.
"Will said to me in the subway station that a lot of the people looked dressed like they were headed somewhere," Gardner recounted. "I told him they were all dressed for work in the morning."
One year, a few train station bathrooms, hundreds of missed meals and several thousand cold calls later, Gardner was approached by a man. Gardner had seen this man coming to visit the pretty blonde broker stationed next to him everyday since he began work on the trading floor. This man happened to be a general partner with Bear Stearns and eventually hired Gardner as a broker. And so life happened.
"I had never been asked my salary requirement before," Gardner said. He was now making $5,000 a month and 50% commission on every deal.
Gardner remembers his first home, a little house in the shanty streets of San Francisco with a rosebush out front — the first and only rosebush he had ever seen in the ghetto. Gardner and his son slept on the floor that night, but it was sweeter than any floor in the past. The next morning the two skipped to the train station void of the bags and suitcases they carried for more than a year.
From rags to riches, Chris Gardner is the poster child of the American Dream. He founded and now owns a broker-dealer firm in his hometown of Chicago called Gardner Rich. He made a multimillion-dollar movie deal and his story was published in a book that was translated into 37 languages. But those accomplishments are hardly his greatest prides.
"The most important thing I've done in my life is broken the cycle of men who have never been there for their kids," Gardner attested, as he thought back on a conversation he had with author Maya Angelou. "She said, this story isn't about you. It's for all the fathers who had to be mothers, all the mothers who had to be fathers and anyone who has ever had a dream."
URL to original article: http://www.housingwire.com/2011/06/13/homelessness-cannot-hinder-the-american-dream-christopher-gardner
For further information on Fresno Real Estate check: http://www.londonproperties.com
An estimated 12% of all homeless people have a job and go to work everyday, according to REO Expo's keynote speaker Christopher Gardner, who spoke Monday morning.
"I'm not talking about the guys with cups," Gardner said. "I'm talking about the people who went to school, worked hard, played by the rules and then life happened."
Gardner would know, he admitted. He was one of them for more than a year. Gardner said he was part of a new class that's forming and is becoming especially prominent in light of the financial crisis — the white-collar homeless population.
Gardner, whose personal story was the inspiration for the book and movie "Pursuit of Happyness," grew up believing one day he would be Miles Davis. His mother told him he could be or do anything and anyone he wanted to be or do. That would be the underlying theme throughout Gardner's entire life.
After nine years of playing trumpet, reality set in, and Gardner eventually started his career in San Francisco as an apprentice of clinical scientific research. As fairytale would have it, Gardner fell in love, got married and had a baby boy. Gardner grew up without a father, and was often reminded of that when his stepfather would hold a shotgun to his shoulder and tell him so.
"Becoming a parent was one of the most precious instances of my life," Gardner reflected.
After Christopher Jr. came into the picture, Gardner jumped career paths into sales, as his wife was a dentist who couldn't practice because she did not pass her boards. Making $25,000 a year as a sales rep was fine, but Gardner wanted to be a big dog and provide for his family. One day he ran into a "sharp" man in a brilliantly red Ferrari.
"I asked him two questions: What do you do? And how do you do it?" Gardener said.
The man was a stock broker, and so life happened — Gardner changed his plan to work on Wall Street. Everywhere he went Gardner said he heard the same word over and over: no. By this time most firms were requiring a degree in business to even be considered for hire. Gardner never went to college, but he pressed on.
Gardner's search for a financial job earned him a hefty amount of parking tickets, which cost him 10 days in jail and almost the chance of a lifetime. Gardner's big-break interview was scheduled for the day before he was set to leave prison. He got that changed and still managed to nail the interview wearing bell-bottom jeans and a red Members Only jacket.
After Gardner got out of prison, however, his wife was gone with the child, and Gardner carried on everyday on the trading floor in San Francisco, cold calling up to 200 people a day. And then life happened.
A few months into the job, Gardner's now ex-wife showed up to his boarding room complex with Chris Jr. The complex did not allow children and so the father and son duo became homeless.
Gardner showed actor Will Smith around the places he and his son dwelled for the year-plus they were homeless — down in the subway system, a series of hotels and the first hotel for the homeless in America in the Tenderloin ghetto of San Francisco.
"Will said to me in the subway station that a lot of the people looked dressed like they were headed somewhere," Gardner recounted. "I told him they were all dressed for work in the morning."
One year, a few train station bathrooms, hundreds of missed meals and several thousand cold calls later, Gardner was approached by a man. Gardner had seen this man coming to visit the pretty blonde broker stationed next to him everyday since he began work on the trading floor. This man happened to be a general partner with Bear Stearns and eventually hired Gardner as a broker. And so life happened.
"I had never been asked my salary requirement before," Gardner said. He was now making $5,000 a month and 50% commission on every deal.
Gardner remembers his first home, a little house in the shanty streets of San Francisco with a rosebush out front — the first and only rosebush he had ever seen in the ghetto. Gardner and his son slept on the floor that night, but it was sweeter than any floor in the past. The next morning the two skipped to the train station void of the bags and suitcases they carried for more than a year.
From rags to riches, Chris Gardner is the poster child of the American Dream. He founded and now owns a broker-dealer firm in his hometown of Chicago called Gardner Rich. He made a multimillion-dollar movie deal and his story was published in a book that was translated into 37 languages. But those accomplishments are hardly his greatest prides.
"The most important thing I've done in my life is broken the cycle of men who have never been there for their kids," Gardner attested, as he thought back on a conversation he had with author Maya Angelou. "She said, this story isn't about you. It's for all the fathers who had to be mothers, all the mothers who had to be fathers and anyone who has ever had a dream."
URL to original article: http://www.housingwire.com/2011/06/13/homelessness-cannot-hinder-the-american-dream-christopher-gardner
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 9, 2011
Mortgage interest rates continue falling
by JASON PHILYAW
Mortgage interest have decreased for two months now and last week's decline is attributed to weaker-than-expected jobs growth, according to Freddie Mac.
The government-sponsored enterprise said its primary mortgage market survey showed the average rate for a 30-year, fixed-rate mortgage declined to 4.49% for the week ending Thursday from 4.56% a week earlier. The average rate for a 15-year, fixed-rate mortgage decreased to 3.68% from 3.75% the prior week, according to the Freddie Mac survey.
"The housing market continues to be fragile across the nation," Freddie Mac chief economist Frank Nothaft said. "Long-term Treasury yields moved lower following a weak jobs report and mortgage rates followed suit."
Nothaft said nonfarm payroll data from last week showed the economy added the fewest jobs in eight months in May, as factories cut payrolls for the first time since late 2010. He also attributed lower rates to recent data from the Federal Reserve that showed home prices and sales remain muted.
Mortgage interest rates are considerably lower than the year ago, when the 30-year averaged 4.72% and the average 15-year, fixed-rate mortgage was 4.17%. In March, Nothaft said he expects rates on a 30-year, fixed-rate mortgage to remain below 5% throughout 2011, as the economic recovery accelerates.
Bankrate.com reported its monthly survey showed interest rates for a traditional mortgage fell to a seven-month low of 4.65% last week down from 4.69% the prior week and 4.88% a year earlier. The firm said rates for a 15-year, fixed mortgage declined to 3.79% from 3.88%.
Last fall, interest rates for the traditional 30-year mortgage dipped to as low as 4.07%, according to real estate research firm Zillow. Freddie Mac reported 30-year, fixed rates hit 4.17% in early November.
Freddie Mac said the average five-year, adjustable-rate mortgage decreased to 3.28% this week from 3.41% a week earlier and is down from 3.92% a year ago. The average rate for a one-year, ARM fell to 2.95% from 3.13% a week ago. The rate is down from 3.91% at this time last year.
URL to original article: http://www.housingwire.com/2011/06/09/mortgage-interest-rates-continue-falling
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage interest have decreased for two months now and last week's decline is attributed to weaker-than-expected jobs growth, according to Freddie Mac.
The government-sponsored enterprise said its primary mortgage market survey showed the average rate for a 30-year, fixed-rate mortgage declined to 4.49% for the week ending Thursday from 4.56% a week earlier. The average rate for a 15-year, fixed-rate mortgage decreased to 3.68% from 3.75% the prior week, according to the Freddie Mac survey.
"The housing market continues to be fragile across the nation," Freddie Mac chief economist Frank Nothaft said. "Long-term Treasury yields moved lower following a weak jobs report and mortgage rates followed suit."
Nothaft said nonfarm payroll data from last week showed the economy added the fewest jobs in eight months in May, as factories cut payrolls for the first time since late 2010. He also attributed lower rates to recent data from the Federal Reserve that showed home prices and sales remain muted.
Mortgage interest rates are considerably lower than the year ago, when the 30-year averaged 4.72% and the average 15-year, fixed-rate mortgage was 4.17%. In March, Nothaft said he expects rates on a 30-year, fixed-rate mortgage to remain below 5% throughout 2011, as the economic recovery accelerates.
Bankrate.com reported its monthly survey showed interest rates for a traditional mortgage fell to a seven-month low of 4.65% last week down from 4.69% the prior week and 4.88% a year earlier. The firm said rates for a 15-year, fixed mortgage declined to 3.79% from 3.88%.
Last fall, interest rates for the traditional 30-year mortgage dipped to as low as 4.07%, according to real estate research firm Zillow. Freddie Mac reported 30-year, fixed rates hit 4.17% in early November.
Freddie Mac said the average five-year, adjustable-rate mortgage decreased to 3.28% this week from 3.41% a week earlier and is down from 3.92% a year ago. The average rate for a one-year, ARM fell to 2.95% from 3.13% a week ago. The rate is down from 3.91% at this time last year.
URL to original article: http://www.housingwire.com/2011/06/09/mortgage-interest-rates-continue-falling
For further information on Fresno Real Estate check: http://www.londonproperties.com
Jobless claims inched higher last week, remain elevated
by JASON PHILYAW
Initial jobless claims inched higher last week and have remained well above 400,000 since early April.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended June 4 rose to 427,000 from 426,000 the previous week, which was revised upward by 4,000 claims. Most economists believe weekly claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
Analysts surveyed by Econoday expected 418,000 new jobless claims last week with a range of estimates between 415,000 and 420,000. A Briefing.com survey projected new claims of 430,000 for last week.
The four-week moving average, which is a less volatile indicator than weekly claims, declined by 2,750 claims to 424,000 from a slightly revised 426,750 for the prior week. The seasonally adjusted insured unemployment rate for the week ended May 28 dipped to 2.9%, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended May 21 fell to about 7.6 million from 7.68 million the prior week.
URL to original article: http://www.housingwire.com/2011/06/09/jobless-claims-inched-higher-last-week-remain-elevated
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims inched higher last week and have remained well above 400,000 since early April.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended June 4 rose to 427,000 from 426,000 the previous week, which was revised upward by 4,000 claims. Most economists believe weekly claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
Analysts surveyed by Econoday expected 418,000 new jobless claims last week with a range of estimates between 415,000 and 420,000. A Briefing.com survey projected new claims of 430,000 for last week.
The four-week moving average, which is a less volatile indicator than weekly claims, declined by 2,750 claims to 424,000 from a slightly revised 426,750 for the prior week. The seasonally adjusted insured unemployment rate for the week ended May 28 dipped to 2.9%, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended May 21 fell to about 7.6 million from 7.68 million the prior week.
URL to original article: http://www.housingwire.com/2011/06/09/jobless-claims-inched-higher-last-week-remain-elevated
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 8, 2011
Supply's chain of pain, where underwater is overwhelming
Source: Calculated Risk
The importance of the ties between negative equity rates and magnitudes and trends in house prices is huge. Assumptions that house prices have hit or neared bottom and begun to stabilize are based on beliefs that negative equity will not translate into more than actuarial tables of default and eventual foreclosure. But this is uncharted territory, and the count of strategic defaults has just begun. Pessimistic analysts draw dire conclusions about how people who are underwater will default in droves and increase the glut of excess supply in the market. Less pessimistic ones believe that jobs, income stabilization, and even a slowly improving broader economy will re-commit many borderline home-borrowers to their tenuous hold on the American Dream. Calculated Risk's Bill McBride writes that the " graph shows the break down of negative equity by state. Note: Data not available for Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia and Wyoming. 'Nevada had the highest negative equity percentage with 63 percent of all mortgaged properties underwater, followed by Arizona (50 percent), Florida (46 percent), Michigan (36 percent) and California (31 percent). ... Las Vegas led the nation with a 66 percent negative equity share, followed by Stockton (56 percent), Phoenix (55 percent), Modesto (55 percent) and Reno (54 percent).'"
URL to original article: http://www.builderonline.com/builder-pulse/supplys-chain-of-pain-where-underwater-is-overwhelming.aspx?cid=NWBD110608002
For further information on Fresno Real Estate check: http://www.londonproperties.com
The importance of the ties between negative equity rates and magnitudes and trends in house prices is huge. Assumptions that house prices have hit or neared bottom and begun to stabilize are based on beliefs that negative equity will not translate into more than actuarial tables of default and eventual foreclosure. But this is uncharted territory, and the count of strategic defaults has just begun. Pessimistic analysts draw dire conclusions about how people who are underwater will default in droves and increase the glut of excess supply in the market. Less pessimistic ones believe that jobs, income stabilization, and even a slowly improving broader economy will re-commit many borderline home-borrowers to their tenuous hold on the American Dream. Calculated Risk's Bill McBride writes that the " graph shows the break down of negative equity by state. Note: Data not available for Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia and Wyoming. 'Nevada had the highest negative equity percentage with 63 percent of all mortgaged properties underwater, followed by Arizona (50 percent), Florida (46 percent), Michigan (36 percent) and California (31 percent). ... Las Vegas led the nation with a 66 percent negative equity share, followed by Stockton (56 percent), Phoenix (55 percent), Modesto (55 percent) and Reno (54 percent).'"
URL to original article: http://www.builderonline.com/builder-pulse/supplys-chain-of-pain-where-underwater-is-overwhelming.aspx?cid=NWBD110608002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, June 7, 2011
40% of underwater borrowers hold home equity loans
by KERRI PANCHUK
Homeowners who took out home equity loans for additional financing represent 40% of all borrowers who are now underwater, owing more on their homes than they are worth, data firm CoreLogic said Tuesday.
The data analytics firm said 10.9 million, or 22.7%, of all residential properties were underwater in the first quarter, down from 11.1 million in the fourth quarter.
About 2.4 million borrowers hold less than 5% equity, meaning they are near-negative equity on their properties, placing them at higher risk.
"Together, negative equity and near-negative equity mortgages accounted for 27.7% of all residential properties with a mortgage nationwide," CoreLogic said. In the fourth quarter, these two categories stood at 27.9%."
Housing analysts have long argued for more attention to be paid to pending defaults in the second lien industry.
Nationwide, Nevada had the highest percentage of underwater properties, with 63% of all mortgages valued higher than the properties are worth. Arizona and Florida followed with negative equity rates of 50% and 46%, respectively.
The average negative equity borrower has a home mortgage that is upside down by $65,000. New York borrowers are facing the greatest losses, with the average home upside down by $129,000. Massachusetts and Connecticut homeowners are underwater by about $120,000 and $111,000 on average.
URL to original article: http://www.housingwire.com/2011/06/07/40-of-underwater-borrowers-hold-home-equity-loans
For further information on Fresno Real Estate check: http://www.londonproperties.com
Homeowners who took out home equity loans for additional financing represent 40% of all borrowers who are now underwater, owing more on their homes than they are worth, data firm CoreLogic said Tuesday.
The data analytics firm said 10.9 million, or 22.7%, of all residential properties were underwater in the first quarter, down from 11.1 million in the fourth quarter.
About 2.4 million borrowers hold less than 5% equity, meaning they are near-negative equity on their properties, placing them at higher risk.
"Together, negative equity and near-negative equity mortgages accounted for 27.7% of all residential properties with a mortgage nationwide," CoreLogic said. In the fourth quarter, these two categories stood at 27.9%."
Housing analysts have long argued for more attention to be paid to pending defaults in the second lien industry.
Nationwide, Nevada had the highest percentage of underwater properties, with 63% of all mortgages valued higher than the properties are worth. Arizona and Florida followed with negative equity rates of 50% and 46%, respectively.
The average negative equity borrower has a home mortgage that is upside down by $65,000. New York borrowers are facing the greatest losses, with the average home upside down by $129,000. Massachusetts and Connecticut homeowners are underwater by about $120,000 and $111,000 on average.
URL to original article: http://www.housingwire.com/2011/06/07/40-of-underwater-borrowers-hold-home-equity-loans
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, June 6, 2011
Massachusetts man gets a $0 foreclosure notice
Source: WWLP
The housing crisis ended with many homes in foreclosure, which is why it was no joke when a man from Northampton got a letter stating his home would be seized if he didn't pay up zero dollars and zero cents!
Not wanting to lose his house, he called the 22News I-team and finally got some answers.
Following the mortgage meltdown, struggling homeowners dread getting that nasty letter in the mail announcing your home is listed under foreclosure.
That happened to Mark, only his letter caught him off guard.
"It says, you owe us zero dollars, zero cents. I going to write a check to them for zero dollars and have it clear? I couldn't help but laugh," he said.
Only, this was no laughing matter.
The letter clearly stated if they didn't get his money, or lack thereof, by February 4th, his lender could seize his home.
To make matters worse, his credit score was downgraded and getting in touch with someone at the bank to help him was no easy task.
That's when he called the 22News I-team.
We started making our own calls and e-mailing Bank of America to try to find out why this was happening to Mark and how others can prevent it.
After Bank of America got wind of our story, they finally got in touch with Mark to settle the playing field.
"Three phone calls in 24 hours is more than I received from them in 3 weeks," he said.
The bank explained to us in a statement that it was an electronic error on their end. Basically, he was submitting his payments and they were applying it to the wrong section of his account.
Mark's still living comfortably in his home and was given a $150 check and gift certificate for his troubles and a promise from the bank, his credit score will be fixed.
URL to original article: http://www.housingwire.com/2011/06/06/mass-man-gets-a-0-foreclosure-notice
For further information on Fresno Real Estate check: http://www.londonproperties.com
The housing crisis ended with many homes in foreclosure, which is why it was no joke when a man from Northampton got a letter stating his home would be seized if he didn't pay up zero dollars and zero cents!
Not wanting to lose his house, he called the 22News I-team and finally got some answers.
Following the mortgage meltdown, struggling homeowners dread getting that nasty letter in the mail announcing your home is listed under foreclosure.
That happened to Mark, only his letter caught him off guard.
"It says, you owe us zero dollars, zero cents. I going to write a check to them for zero dollars and have it clear? I couldn't help but laugh," he said.
Only, this was no laughing matter.
The letter clearly stated if they didn't get his money, or lack thereof, by February 4th, his lender could seize his home.
To make matters worse, his credit score was downgraded and getting in touch with someone at the bank to help him was no easy task.
That's when he called the 22News I-team.
We started making our own calls and e-mailing Bank of America to try to find out why this was happening to Mark and how others can prevent it.
After Bank of America got wind of our story, they finally got in touch with Mark to settle the playing field.
"Three phone calls in 24 hours is more than I received from them in 3 weeks," he said.
The bank explained to us in a statement that it was an electronic error on their end. Basically, he was submitting his payments and they were applying it to the wrong section of his account.
Mark's still living comfortably in his home and was given a $150 check and gift certificate for his troubles and a promise from the bank, his credit score will be fixed.
URL to original article: http://www.housingwire.com/2011/06/06/mass-man-gets-a-0-foreclosure-notice
For further information on Fresno Real Estate check: http://www.londonproperties.com
2011's Ultimate Showdown: Rent vs. Buy
By: Sarah Yaussi
By most accounts, it's a terrible time to be in for-sale housing. There are pricing pressures and credit constraints and little urgency among buyers. It's a lethal combination, one that kills sales volumes. New-home sales are down 23% from last year, the year that most in the industry had hoped was the bottom of the downturn.
But while the single-family sector is sucking wind, the same can't necessarily be said about the multifamily sector. It's been a bit of a two-steps-forward, one-step-back kind of run for multifamily recently, but despite the fits and starts, it's undeniable that nearly every bright spot in recent housing trends is being fueled by the apartment market.
As policy and economics continue to hobble for-sale housing, it's clear that the multifamily sector is happy to pick up the slack. Foreclosures and falling homeownership rates suggest greater apartment demand and upward pressure on rents. In fact, my colleagues at Big Builder's sister publication Multifamily Executive say many multifamily market veterans are banking that 2011 will be the greatest period of rental revenue growth in history. According to M/PF Research estimates, the rental market should see a 5.9% increase in revenues in the year ahead, based on a 5.1% jump in rents and a 0.8 percentage point increase in occupancies.
To be sure, we in the single-family, for-sale sector can all be jealous of multifamily growth. It's been four years and counting since our piece of housing has seen anything resembling increases in demand, pricing, or revenue. But is this surge in multifamily really a sustainable trend?
Of course there is always going to be some portion of the populous that is content being a renter. They don't have the need or the desire to own their own homes. That's all well and good; to each, his own. But I remain unconvinced that homeownership has gotten such a bad rap that the majority of renters now wish to remain renters indefinitely. I'm guessing that for many, renting is just fine--for now. It's less maintenance and responsibility; it saves them some money on a monthly basis; and it's a good solution while they wait out economic uncertainty.
But I still struggle to see people wanting to raise families in apartments, if they have the economic means--a job, good credit, low debt, and down payment savings--to buy homes. Particularly when low interest rates and 3% down on government-backed financing are making rising rents in some areas look ridiculous against the monthly cost of homeownership.
Take for example, Major Ray Faunt and his wife, Kara. For the past two years, they've rented a three-bedroom townhome at the Avalon at Arlington Square community in an inner-ring suburb of Washington, D.C. When they first moved in, the rent was around $2,200. Roughly six months ago, the property managers notified them that the new going rate on their unit was roughly $3,200, which averaged out to about a $500 increase in rent every year they had lived there. When faced with the reality of paying 45% more in rent than when they first moved in two short years ago, the Faunts knew that it was time to buy.
"I'll be damned if I pay that type of money and not own the thing," Mr. Faunt said.
And with a nearly 2-year-old son toddling around and twins on the way, the Faunts said they also felt that, for $3,000 a month, they'd be better off in a detached single-family home with more space for their growing brood versus an attached townhome with no yard.
Even more encouraging for our new-home slice of the sector is that after looking at a number of existing homes in the area, even going to contract on one but then backing out after an inspection revealed some hidden problems with the home, the Faunts recently put earnest money down on an M/I Homes' inventory home under construction at the Reserve at Port Potomac community in Woodbridge, Va.
The community is farther out in the suburbs, past the beltway loop, but for roughly what they were going to have to pay monthly to stay in their cramped townhome, they are getting a four-bedroom home with a finished basement with a rec room area and upgraded features in key areas like the kitchen. Not to mention the warranty and the improved energy efficiency.
"It's farther out, but we're at least getting a nice house with space. I'm willing to hazard the 45-minute drive in the afternoon to have that," Mr. Faunt said.
While the Faunts' rent situation may be on the extreme end of the spectrum--according to Delta Associates, average rents in Class A and B rents in the D.C. metro area grew by 7.8% from 1Q2010 to 1Q2011--I still think it shows that there is indeed a limit to rental demand. There are areas where rent increases are not only outpacing earnings increases but eclipsing monthly mortgage payments for similar homes.
While I don't want to come off anti-multifamily, it's hard for me to see multifamily's recent boom as reflective of a fundamental change to the American Dream; it feels to me to be a bit more of a knee-jerk reaction to some scary economic trends. Because in areas where rent increases stop renting from making economical sense, especially when other life factors come into play such as marriage or children, I believe renters who have the means to buy homes will buy. So, maybe there's an opportunity in some markets for single-family to swap share with multifamily once more.
URL to original article: http://www.bigbuilderonline.com/post.asp?BlogId=yaussisblog&postid=630211§ionID=1939&cid=NWBD110606002
For further information on Fresno Real Estate check: http://www.londonproperties.com
By most accounts, it's a terrible time to be in for-sale housing. There are pricing pressures and credit constraints and little urgency among buyers. It's a lethal combination, one that kills sales volumes. New-home sales are down 23% from last year, the year that most in the industry had hoped was the bottom of the downturn.
But while the single-family sector is sucking wind, the same can't necessarily be said about the multifamily sector. It's been a bit of a two-steps-forward, one-step-back kind of run for multifamily recently, but despite the fits and starts, it's undeniable that nearly every bright spot in recent housing trends is being fueled by the apartment market.
As policy and economics continue to hobble for-sale housing, it's clear that the multifamily sector is happy to pick up the slack. Foreclosures and falling homeownership rates suggest greater apartment demand and upward pressure on rents. In fact, my colleagues at Big Builder's sister publication Multifamily Executive say many multifamily market veterans are banking that 2011 will be the greatest period of rental revenue growth in history. According to M/PF Research estimates, the rental market should see a 5.9% increase in revenues in the year ahead, based on a 5.1% jump in rents and a 0.8 percentage point increase in occupancies.
To be sure, we in the single-family, for-sale sector can all be jealous of multifamily growth. It's been four years and counting since our piece of housing has seen anything resembling increases in demand, pricing, or revenue. But is this surge in multifamily really a sustainable trend?
Of course there is always going to be some portion of the populous that is content being a renter. They don't have the need or the desire to own their own homes. That's all well and good; to each, his own. But I remain unconvinced that homeownership has gotten such a bad rap that the majority of renters now wish to remain renters indefinitely. I'm guessing that for many, renting is just fine--for now. It's less maintenance and responsibility; it saves them some money on a monthly basis; and it's a good solution while they wait out economic uncertainty.
But I still struggle to see people wanting to raise families in apartments, if they have the economic means--a job, good credit, low debt, and down payment savings--to buy homes. Particularly when low interest rates and 3% down on government-backed financing are making rising rents in some areas look ridiculous against the monthly cost of homeownership.
Take for example, Major Ray Faunt and his wife, Kara. For the past two years, they've rented a three-bedroom townhome at the Avalon at Arlington Square community in an inner-ring suburb of Washington, D.C. When they first moved in, the rent was around $2,200. Roughly six months ago, the property managers notified them that the new going rate on their unit was roughly $3,200, which averaged out to about a $500 increase in rent every year they had lived there. When faced with the reality of paying 45% more in rent than when they first moved in two short years ago, the Faunts knew that it was time to buy.
"I'll be damned if I pay that type of money and not own the thing," Mr. Faunt said.
And with a nearly 2-year-old son toddling around and twins on the way, the Faunts said they also felt that, for $3,000 a month, they'd be better off in a detached single-family home with more space for their growing brood versus an attached townhome with no yard.
Even more encouraging for our new-home slice of the sector is that after looking at a number of existing homes in the area, even going to contract on one but then backing out after an inspection revealed some hidden problems with the home, the Faunts recently put earnest money down on an M/I Homes' inventory home under construction at the Reserve at Port Potomac community in Woodbridge, Va.
The community is farther out in the suburbs, past the beltway loop, but for roughly what they were going to have to pay monthly to stay in their cramped townhome, they are getting a four-bedroom home with a finished basement with a rec room area and upgraded features in key areas like the kitchen. Not to mention the warranty and the improved energy efficiency.
"It's farther out, but we're at least getting a nice house with space. I'm willing to hazard the 45-minute drive in the afternoon to have that," Mr. Faunt said.
While the Faunts' rent situation may be on the extreme end of the spectrum--according to Delta Associates, average rents in Class A and B rents in the D.C. metro area grew by 7.8% from 1Q2010 to 1Q2011--I still think it shows that there is indeed a limit to rental demand. There are areas where rent increases are not only outpacing earnings increases but eclipsing monthly mortgage payments for similar homes.
While I don't want to come off anti-multifamily, it's hard for me to see multifamily's recent boom as reflective of a fundamental change to the American Dream; it feels to me to be a bit more of a knee-jerk reaction to some scary economic trends. Because in areas where rent increases stop renting from making economical sense, especially when other life factors come into play such as marriage or children, I believe renters who have the means to buy homes will buy. So, maybe there's an opportunity in some markets for single-family to swap share with multifamily once more.
URL to original article: http://www.bigbuilderonline.com/post.asp?BlogId=yaussisblog&postid=630211§ionID=1939&cid=NWBD110606002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 3, 2011
Research firm predicts California home price appreciation by 2014
by CHRISTINE RICCIARDI
California witnessed some of the steepest home price depreciation at the height of housing crisis causing 33% of all mortgages to be underwater by mid-2010. But one research firm sees that changing and expects prices to increase substantially by 2014 as the job market improves and the market recovers.
The average home price in the San Diego-Carlsbad-San Marcos metropolitan statistical area in the first quarter was about $324,200, according Local Market Monitor's latest report, while the average home price in San Francisco was $623,200 and the average home price in Los Angeles-Long Beach-Glendale was $352,200. These home prices are down 1%, up 7%, and up 15%, respectively, from each metro's equilibrium price.
The equilibrium price is a unique measurement developed by Local Market Monitor that determines what home prices should be if outside factors, such as too much construction or an above average amount of speculation, had no impact. Any market with an average price more than a 15% difference from the equilibrium is considered risky.
According to Carolyn Beggs, chief operating officer of Local Market Monitor, several improving indicators in California will boost price between 4% and 5% by 2014 — the same amount of appreciation at top markets in North Dakota and South Dakota. Most notably, however, is job growth. Over the last 12 months, job growth trended positively in most major California markets, the Local Market Monitor report found.
Jobs grew at a rate of 2.5% in the Santa Cruz-Watsonville, Calif. metropolitan area, followed by Santa Rosa-Petaluma, Calif. at 1.6%, San Jose-Sunnyvale-Santa Clara, Calif. at 1.5% and the San Diego-Calrsbad-San Marcos, Calif. MSA at 1.1%. In the Los Angeles MSA, jobs grew a moderate 0.6%, as did San Luis Obispo-Paso Robles, Calif. (up 0.7%).
"California metros look like they'll have better job growth then say somewhere like Washington D.C.," Beggs commented, adding that population growth too will contribute to price appreciation in the Golden State. "Generally speaking, if there's a large inflow of people it increases demand, which will stabilize home prices."
Technology firm RadarLogic slightly disagrees. While many experts are saying the economy needs job gains to bolster housing, the New York-based company thinks this theory is somewhat backwards. A large number of jobs were created by the housing market, for example, construction jobs. Many of those jobs disappeared when the market crashed.
"So rather than strong job growth driving a robust recovery in the housing market, we expect to see slow absorption of excess housing supply and a slow stabilization in housing values eventually spur housing construction and consumer confidence, and in turn drive a recovery in jobs," RadarLogic said in commentary.
Still Beggs claims California is no Nevada or Arizona and prices are posed to recover ground in the next three years.
"We see price correction taking place," Beggs said. "The markets are of much lower risk compared to the last five years."
URL to original article: http://www.housingwire.com/2011/06/03/research-firm-predicts-california-home-price-appreciation-by-2014
For further information on Fresno Real Estate check: http://www.londonproperties.com
California witnessed some of the steepest home price depreciation at the height of housing crisis causing 33% of all mortgages to be underwater by mid-2010. But one research firm sees that changing and expects prices to increase substantially by 2014 as the job market improves and the market recovers.
The average home price in the San Diego-Carlsbad-San Marcos metropolitan statistical area in the first quarter was about $324,200, according Local Market Monitor's latest report, while the average home price in San Francisco was $623,200 and the average home price in Los Angeles-Long Beach-Glendale was $352,200. These home prices are down 1%, up 7%, and up 15%, respectively, from each metro's equilibrium price.
The equilibrium price is a unique measurement developed by Local Market Monitor that determines what home prices should be if outside factors, such as too much construction or an above average amount of speculation, had no impact. Any market with an average price more than a 15% difference from the equilibrium is considered risky.
According to Carolyn Beggs, chief operating officer of Local Market Monitor, several improving indicators in California will boost price between 4% and 5% by 2014 — the same amount of appreciation at top markets in North Dakota and South Dakota. Most notably, however, is job growth. Over the last 12 months, job growth trended positively in most major California markets, the Local Market Monitor report found.
Jobs grew at a rate of 2.5% in the Santa Cruz-Watsonville, Calif. metropolitan area, followed by Santa Rosa-Petaluma, Calif. at 1.6%, San Jose-Sunnyvale-Santa Clara, Calif. at 1.5% and the San Diego-Calrsbad-San Marcos, Calif. MSA at 1.1%. In the Los Angeles MSA, jobs grew a moderate 0.6%, as did San Luis Obispo-Paso Robles, Calif. (up 0.7%).
"California metros look like they'll have better job growth then say somewhere like Washington D.C.," Beggs commented, adding that population growth too will contribute to price appreciation in the Golden State. "Generally speaking, if there's a large inflow of people it increases demand, which will stabilize home prices."
Technology firm RadarLogic slightly disagrees. While many experts are saying the economy needs job gains to bolster housing, the New York-based company thinks this theory is somewhat backwards. A large number of jobs were created by the housing market, for example, construction jobs. Many of those jobs disappeared when the market crashed.
"So rather than strong job growth driving a robust recovery in the housing market, we expect to see slow absorption of excess housing supply and a slow stabilization in housing values eventually spur housing construction and consumer confidence, and in turn drive a recovery in jobs," RadarLogic said in commentary.
Still Beggs claims California is no Nevada or Arizona and prices are posed to recover ground in the next three years.
"We see price correction taking place," Beggs said. "The markets are of much lower risk compared to the last five years."
URL to original article: http://www.housingwire.com/2011/06/03/research-firm-predicts-california-home-price-appreciation-by-2014
For further information on Fresno Real Estate check: http://www.londonproperties.com
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