In Pursuit of the All-Cash Transaction

Source: Big Builder

I've been thinking more about my blog post from last week on the continued tightness in the mortgage markets and how those constraints have been driving a steady increase in all-cash purchases of homes since 2007. In fact, in February and March 2011, those transactions, as a percentage of all known closings, hit a six-plus year high of 43%, according to data from Hanley Wood Market Intelligence (HWMI).

With cash closings skyrocketing, I was curious to find out whether cash transactions were concentrated in any way. So, I asked my HWMI colleague, executive director of research Jonathan Smoke, to take a look at the data for me. So, he took this ...

... and broke it down by both housing type--REO, regular resale, and new-home sales--and price point to get this:

Across all three housing segments, the trend is similar: The more expensive the home, the more likely buyers have been to use cash to make the purchase. However, the major exception to the rule is at the other end of the spectrum, where extremely high percentages of all purchases of homes for under $100,000 were cash transactions.

But I want to focus on the new-home piece of this data puzzle for a second.

The fear these days, especially as the industry bids adieu to the higher loan limits for mortgages backed by Fannie Mae and Freddie Mac, as well as those insured by the FHA, is that continuing mortgage constraints will strangle what demand is in the housing market. And post federal home buyer tax credit, that demand has clearly been in the move-up tranche of the new-home market. The reasons are fairly simple. Move-up buyers tend to be more established, so they often have bigger incomes, better credit scores, fewer debts, and can access financing more easily. They also typically have more savings. But is the typical move-up buyer using that cash to make a bigger down payment or is she choosing to bypass financing all together and buying the property outright?

According to HWMI data, 18% of new-home sales were all-cash transactions, compared with 30% or regular resales and 49% of REO sales. I'm not sure if that's surprisingly low or surprisingly high to most builders.

Volumes are definitely low enough right now that having just shy of 1 in 5 sales as cash sales seems like a lot. However, it's definitely at the higher price points--$600,000 and up--where cash becomes a much bigger deal. And then there's clearly an inflection point around the $900,000 mark, where the percentage of all cash transactions for new homes starts to eclipse the rate of such for both regular resales and REO sales.

But how much of the new-home market, or even the move-up piece of that market, is really happening at those price points? Outside select luxury builders or those with a geographic concentration in hyper-expensive areas like coastal California or metro New York, for example--do many traditional production builders really consider those ranges their sweet spot anymore? Given how much prices have reset over the past few years, in some areas it would seem that $450,000 is the new $600,000.

While the new-home market is definitely seeing a shift toward more cash transactions, Smoke said it's important to remember it's still small relative to REO and even regular resales. But it is clearly indicative of financing constraints, he said, especially considering that (1) there's been a decline in the total percent financed and (2) big builder mortgage companies are gaining market share against traditional mortgage lenders.

"The big builders with captive mortgage companies have a clear advantage, assuming that these captives can get the necessary funding or package and resell the mortgages," he said.

So, the bottom line: In a world of cash transactions, financing is still king.

URL to original article: http://www.bigbuilderonline.com/post.asp?BlogId=yaussisblog&postid=662956§ionID=1939&cid=BP:093011:FULL

For further information on Fresno Real Estate check: http://www.londonproperties.com

Source: C.A.R.

LOS ANGELES (Sept. 22) – California pending home sales climbed in August from both the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. The year-to-year increase was the highest level since July 2009.

Pending home sales:
Pending home sales in California rose 7 percent from July, according to C.A.R.’s Pending Home Sales Index (PHSI)*. The index was 125.3 in August, up from July’s index of 117.1, based on contracts signed in August. The index was up 12.6 percent from August 2010. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Distressed housing market data:

The total share of all distressed property types sold statewide inched up to 43.7 percent in August from July’s 42.9 percent. The share of distressed sales was lower from a year prior, when distressed sales totaled 44.5 percent of all home sales.
Of the distressed properties sold statewide, 18.9 percent were short sales compared to July’s 17.5 percent share and last August’s share of 19.3 percent.
The share of REO (real estate-owned) sales was down from both July and a year ago. REOs made up 24.4 percent of sales in August, down from 25.2 percent in July and 24.7 percent in August 2010.
Non-distressed sales made up the remaining share of home sales in August at 56.3 percent, down from 57.1 percent in July and 55.5 percent in August 2010.
Multimedia:
• View a chart of pending sales compared with closed sales.

Share of Distressed Sales to Total Sales
(Single-family)

Type of Sale Aug. 2010 Jul-11 Aug. 2011
REOs 24.70% 25.20% 24.40%
Short Sales 19.30% 17.50% 18.90%
Other Distressed Sales 0.40% 0.30% 0.40%
(Not Specified)
Total Distressed Sales 44.50% 42.90% 43.70%

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)


County Aug. 2010 Jul-11 Aug. 2011
Amador 34% 55% 59%
Butte 29% 43% 42%
Humboldt 20% 27% 31%
Kern 63% 62% 60%
Lake 74% 73% 64%
Los Angeles 46% 42% 44%
Madera 62% 86% 73%
Marin 29% 25% 27%
Mendocino 52% 61% 48%
Merced 53% 71% 59%
Monterey 59% 61% 62%
Napa 39% 51% 48%
Orange 31% 32% 33%
Riverside 68% 62% 62%
Sacramento 63% 60% 62%
San Benito 60% 65% 67%
San Bernardino 68% 65% 64%
San Diego 27% 26% 27%
San Luis Obispo 41% 42% 45%
San Mateo 27% 23% 25%
Santa Clara 31% 28% 31%
Santa Cruz 34% 40% 35%
Solano 67% 70% 71%
Sonoma 41% 46% 43%
Tehama 80% 72% 56%
CALIFORNIA 44% 43% 44%



*Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually becomes closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

URL to original article: http://www.car.org/newsstand/newsreleases/2011newsreleases/augustpending/

For further information on Fresno Real Estate check: http://www.londonproperties.com

Time-to-buy signals pick up strength

Source: Bloomberg

Cynthia and Gerald Matthews left a booming property market in Ottawa, the Canadian capital, to buy a home in Bloomington, Indiana, where real estate prices are beginning to recover from a five-year slump.

“It was much cheaper than we thought it would be,” said Cynthia Matthews, who got a 5 percent discount off the $196,999 asking price of the three-bedroom, brick neo-Colonial style house, and a mortgage rate close to 4 percent. “To say it’s a buyer’s market would be an understatement.”

People like the Matthewses who are able to survive the scrutiny of mortgage lenders are getting the best deals of the five-year U.S. housing bust, and perhaps the best deals of a generation, after a 31 percent decline in home prices since 2006. It’s the bright side of an otherwise bleak real estate market: Good houses at cheap prices are plentiful, while loan rates are hovering at record lows.

“It’s hard to see the possibility of losing on a home purchase right now, with these mortgage rates,” said Dean Baker, an economist who in 2005 predicted a decline in the government’s home-price index that now is within two percentage points of his forecast. “Prices may go lower, but not by much. Even if they do, you’re still getting a good deal.”

The lowest mortgage rates on record, coupled with a new Federal Reserve program to reduce them further, are turning housing bears like Baker into optimists. Loan payments on a home financed at last week’s 4.09 percent average 30-year U.S. rate would be lower than the bill for a property purchased next year after a 3.5 percent price decline and a half-percentage-point rate increase, a scenario forecast by the Mortgage Bankers Association for mid-2012.

$18,000 Difference
Buying a $300,000 home at current rates means a monthly mortgage bill of about $1,158, assuming a 20 percent down payment. Delaying a purchase until next year would put the tab higher, at $1,186, based on the MBA forecast for prices and rates. That amounts to an $18,000 difference over a 30-year mortgage for those who wait.

Regardless of the rate, most Americans seeking to buy a house need to qualify for a loan. Mortgage applications for home purchases rose 2.6 percent last week, the fifth consecutive gain, the MBA reported today. Fannie Mae and Freddie Mac, which securitize about two-thirds of new U.S. mortgages, have enacted the strictest qualification standards in more than a decade as they try to improve the credit quality of their portfolios.

Lender Scrutiny
That makes the mortgage process a grueling experience for borrowers like Christine Trendell. She bought a house two months ago in Canton, Massachusetts, a suburb of Boston, where real estate prices fell 25 percent through early this year before gaining 10 percent in the recent quarter, according to the National Association of Realtors.

The wood-shingled house, built in 1920, has an old- fashioned screened-in front porch furnished with rocking chairs. The entrance hall is dominated by a wide oak staircase, and the hardwood floors, newly refinished, gleam in the sun.

Trendell and her husband, Ben, had to submit a pile of bank statements, retirement-fund tallies, and years of tax returns that stacked to almost two inches high, she said. The lender required them to fax their paystubs repeatedly near the end, she said, to make sure they hadn’t lost their jobs before the closing date. They were able to get the mortgage because they have pristine credit records, she said.

Didn’t Know
“The low rates made it affordable to buy the house, but we didn’t know if we were going to be able to get a loan,” said Trendell, standing in her driveway earlier this week after walking two of her three children to a nearby elementary school. “Rates don’t matter if you can’t get a mortgage,” she said as her youngest child, a 3-year-old daughter, wheeled a doll-size baby carriage in circles around her.

Buyers are still cautious about taking advantage of deals. Sales of previously owned homes were down 31 percent in August from their 2005 peak, the National Association of Realtors reported last week. Neither Baker, co-director of the Center for Economic & Policy Research, nor Karl Case, co-founder of the Case-Shiller home price index, expect property bargains to be a cure-all for the worst housing collapse on record.

“Houses are cheap right now, but a lot of people are too scared to buy, no matter what kind of deal they get,” Case said from his home in Wellesley, Massachusetts. “We’re bumping along the bottom with prices, but I don’t think we’re at a bottom in terms of confidence.”

The Case-Shiller index of prices in 20 U.S. cities fell 4.1 percent in July from a year earlier, the group reported yesterday. Values were little changed from the previous month after adjusting for seasonal variations.

Operation Twist
Buyers passing up bargains are confounding attempts by Fed Chairman Ben S. Bernanke to boost the broader economy and stimulate housing demand. Policy makers said last week they will commence a third bond-buying program aimed at lowering home-loan rates. This effort, known as Operation Twist, will replace some shorter-term securities in the central bank’s $1.6 trillion portfolio with longer-term Treasuries.

The goal is to twist the so-called yield curve so longer- term bonds such as 10-year Treasuries, used as a benchmark by investors in mortgage-backed securities, have lower interest rates. The Fed used the same maturity-exchange program during the early 1960s in a joint operation with the Treasury Department shortly after John F. Kennedy became president.

Rate Spread
No matter how much policy makers try to manipulate bond yields, investors in mortgage-backed securities may not cooperate, keeping home-loan rates higher than they should be, according to Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago.

“Rates have not come down in lockstep with Treasuries,” Swonk said. “We’re not getting all of the pass-through.”

The difference, or spread, between the average 30-year fixed mortgage rate and the benchmark 10-year Treasury yield widened to 2.26 percentage points last week, the biggest gap since 2009, according to data compiled by Bloomberg. If the spread matched the gap of 1.17 percentage points in February, the 2011 low, home-loan rates now would be close to 3 percent.

Mortgage-bond investors may be demanding higher risk compensation as the economy slows, Swonk said. Or, they may be hedging their exposure to so-called prepayments on speculation the government might embark on a new mortgage refinance program.

Moving Near Son
The Matthewses didn’t wait to see if rates would go lower. They moved to Bloomington to be near Indiana University, where their teenage son will attend a pre-college program at the Jacobs School of Music. The couple paid $187,500 for their home in August, according to real estate records.

The median house price in Bloomington fell to $149,000 at the beginning of this year, 13 percent below a 2005 high, before gaining 4.8 percent in the second quarter, according to the Realtors group.

The Matthewses looked at dozens of properties before settling on their 12-year-old house with hardwood floors, a fireplace in the living room, and a room over the garage they’ve turned into a den. Their front door, painted red, is framed with white columns, giving the two-story home an elegant look.

Yacov Sinai, in Santa Monica, California, didn’t want to wait, either. He got a four-bedroom one-story house in the tony Regent Square neighborhood for $1.87 million last month. Prices in the oceanfront city 20 miles west of Los Angeles may fall another 4 percent to 8 percent, he estimated. Waiting, though, would mean he would have to deal with competition, Sinai said.

“Next year, when you make an offer on a property, there’ll be another 10 people behind you waiting to get in the door,” said Sinai. His new house has four bedrooms, a double garage, and a half-circle driveway.

Writing an Essay
About five years ago, before prices in the Los Angeles metropolitan area tumbled 38 percent, as measured by a Case- Shiller index, Sinai made an offer on a different property in Santa Monica that had several competing bids. The seller required an essay from all potential buyers saying why they should be allowed to purchase it, he said.

“It was ludicrous,” said Sinai, who lost the writing contest, and the house. In his recent purchase, he negotiated a 12 percent discount off the listing price -- a $267,000 savings -- and he was the only one bidding.

Sinai said he isn’t worried about the economy, but a lot of potential buyers are. In the first three months of the year, gross domestic product grew at the slowest pace since the end of the recession in mid-2009. The slowdown sapped consumer confidence that already was waning.

Doom and Gloom
“You’ve really got to turn off the doom and gloom to buy a house right now, or you’re going to worry about a recession, or about your job,” said Todd Garrett, a nurse who has a home under contract in Omaha, Nebraska, that he plans to buy next month. “I just made sure the house had good bones.”

He’s paying $104,900 for the ranch-style house, in a neighborhood where similar properties have sold for as much as $120,000, Garrett said. His price is close to the $102,000 the three-bedroom house went for nine years ago, according to real estate records.

The Conference Board’s Consumer Confidence Index during the last two months has been the lowest since early 2009. The share of people in September who said jobs are hard to find rose to the highest level since 1983, and the gauge of current business conditions fell for the fifth straight month, according to the New York-based research firm’s report yesterday.

Little to Gain
“Even if there is another recession, people who can qualify for a mortgage won’t gain anything by playing the waiting game,” said Nariman Behravesh, chief economist at Englewood, Colorado-based IHS Inc., who predicts another 5 percent national decline before prices hit bottom next year. “They may get lucky with the price, but they probably won’t be getting these low mortgage rates.”

While the economy is the largest drag on the housing market, the freeze in mortgage credit has been second, Behravesh said. However, there are some signs of a thaw, he said. The share of banks reporting tightened standards for prime mortgages in the third quarter dropped 1.9 percent, the first decline in a year, according to the Fed’s Senior Loan Officer Survey.

People who find the right deal and pass muster with lenders shouldn’t try to time the bottom of the market, said Baker, the formerly pessimistic economist.

“It’s like buying a stock -- if you think it’s a good stock, and it’s at a good price, then you buy it,” Baker said last week. “That’s not to say prices won’t go lower, but these mortgage rates could go higher if people wait a year.”

URL to original article: http://www.builderonline.com/builder-pulse/time-to-buy-signals-pick-up-strength.aspx?cid=BP:092911:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Is America divided into 'haves' and 'have-nots'? You say 'yes,' I say 'no'

Source: Pew Research

Despite an extended economic downturn, the public's impression of whether the nation is economically divided remains relatively stable. While 45% say American society is divided between "haves" and "have-nots," 52% say it is incorrect to think of the country this way. This is comparable to the balance of opinion a year ago.

The percentage of Americans who see society as divided between haves and have-nots declined shortly after Barack Obama took office, but has rebounded since. In April 2009, just 35% said the nation was divided economically, down from 44% in October 2008. The number saying the nation is economically divided increased to 42% a year later and has changed little since then (45% currently).

The latest survey by the Pew Research Center for the People & the Press and The Washington Post, conducted Sept. 22-25 among 1,000 adults, finds that 48% say that, if forced to choose, they are among the haves, while 34% say they are among the have-nots. This balance of opinion has changed little over the past six years. Over the longer term, however, the number seeing themselves in the have-nots has risen substantially. In 1988, half as many described themselves this way (17%) as is the case today (34%).

Read the full report for more details on the views of Republicans, Democrats and independents about this question and the views of Americans about who does more -- the Obama administration or congressional Republicans -- for the 'haves' or have-nots.'

URL to original article: http://www.builderonline.com/builder-pulse/is-america-divided-into--haves--and--have-nots---you-say--yes---i-say--no-.aspx?cid=BP:092911:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Hells Angels accused of mortgage fraud

Source: San Francisco Chronicle


SAN FRANCISCO -- A Bay Area mortgage broker has been charged with conspiring to arrange more than $10 million in fraudulent home loans for clients who included two leaders of the Hells Angels, federal prosecutors said Tuesday.

A newly unsealed federal grand jury indictment accuses the motorcycle club leaders, the mortgage broker and five other defendants of taking part in a scheme to defraud banks by falsifying loan applications for real estate in San Francisco and several North Bay communities in 2006 and 2007.

The applications misrepresented the borrowers' incomes, bank balances and employment histories and falsely stated that they would live at the properties, some of which were later used for marijuana growing, the indictment said.

Seven defendants have pleaded not guilty. The eighth, Jerry Mays, 63, of San Pablo, an accountant and tax preparer, has not been apprehended, prosecutors said.

Among those charged was Jacob Moynihan, 30, of San Francisco, who owned a company called Xanadu Global Investments and also worked at several San Francisco mortgage brokerage firms, prosecutors said.

The indictment said Moynihan and his clients submitted fraudulent applications for loans, some for more than $1 million, to buy property in Santa Rosa, Petaluma and Healdsburg. The clients included two local Hells Angels leaders, Raymond Foakes, 48, of Rohnert Park and Josh Leo Johnson, 35, of Santa Rosa, prosecutors said.

Foakes is a former president of the Sonoma County Hells Angels and recently served a prison sentence for a 2002 brawl with a rival motorcycle gang at a casino in southern Nevada in which three people died. Prosecutors are seeking to keep him in jail until a trial on the mortgage charges.

His lawyer, Anthony Brass, said Foakes actually made mortgage payments on the Petaluma home that is the subject of the charges against him. Brass said he didn't know whether Foakes' loan application was accurate, but said overstating one's income when seeking a home loan "was common practice at that time."

The other defendants are Moynihan's father, Gerald Moynihan, 51, of Santa Rosa; Desiree Maclean, 25, of Rohnert Park; John Greco, 38, of Rohnert Park; and Justin Batemon, 34, of Hayward.

URL to original article: http://www.housingwire.com/2011/09/28/hells-angels-accused-of-mortgage-fraud

For further information on Fresno Real Estate check: http://www.londonproperties.com

In price-to-rent ratios, we've gone back to the future, to Sept. 2000

Source: Calculated Risk

An update: Case-Shiller, CoreLogic and others report nominal house prices. However it is also useful to look at house prices in real terms (adjusted for inflation), as a price-to-rent ratio, and also price-to-income (not shown here).



Below are three graphs showing nominal prices (as reported), real prices and a price-to-rent ratio. Real prices are back to 1999/2000 levels, and the price-to-rent ratio is also back to 2000 levels.



Nominal House Prices



Click on graph for larger image in graph gallery.



The first graph shows the quarterly Case-Shiller National Index SA (through Q2 2011), and the monthly Case-Shiller Composite 20 SA (through July) and CoreLogic House Price Indexes (through July) in nominal terms (as reported).



In nominal terms, the Case-Shiller National index is back to Q4 2002 levels, the Case-Shiller Composite 20 Index (SA) is back to June 2003 levels, and the CoreLogic index is back to July 2003.



Real House Prices



The second graph shows the same three indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.



In real terms, the National index is back to Q3 1999 levels, the Composite 20 index is back to August 2000, and the CoreLogic index back to July 2000.



In real terms, all appreciation in the last decade is gone.



Price-to-Rent



In October 2004, Fed economist John Krainer and researcher Chishen Wei wrote a Fed letter on price to rent ratios: House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.



Here is a similar graph using the Case-Shiller Composite 20 and CoreLogic House Price Index.



This graph shows the price to rent ratio (January 1998 = 1.0).



On a price-to-rent basis, the Composite 20 index is back to September 2000 levels, and the CoreLogic index is back to July 2000.


URL to original article:

An update: http://www.builderonline.com/builder-pulse/in-price-to-rent-ratios--we-ve-gone-back-to-the-future--to-sept--2000.aspx?cid=BP:092811:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Need More Space? 30,000-Square-Foot Home for Sale in Miami

By:Nigel F. Maynard

After years of increases, the average American home is coming down in size, from a peak of 2,268 square feet in 2006 to 2,100 in 2009. And NAHB says the downward trend is likely to last significantly into the future.

The truth, however, is that as long as there are wealthy individuals there will always be a market for large luxury homes—such as the Indian Creek Residence, a 30,000-square-foot home situated on a small island between mainland Miami and North Miami Beach.

Designed by Rene Gonzalez Architect for developers Felix Cohen and Shlomi Alexander, the sprawling home was conceived as a series of pavilions connected by outdoor spaces, lush gardens, courtyards, water elements, and shaded pathways.

The firm designed the spec home to take advantage of the Miami weather, so large sliding glass doors, sliding wooden louvers, and plenty of glass capture, filter, and reflect the surrounding water and the tropical sun.

“Stone walls create a sense of permanence, luxury, and timeless modernity,” the architecture firm says. “As these walls direct you through the project, they dissolve gently into the ever-present gardens. As a result of this layering of materials, both porous and opaque, the light is controlled by the architecture, thereby delivering orchestrated compositions of vivid light and shadow patterns.”

Sited on almost two acres, the home consists of 10 bedrooms, 14 bathrooms, and four half baths. It also includes ample outdoor spaces, including a 1,475-square-foot “green wall” that is planted with more than 17,000 tropical salt-tolerant plants in six wall sections.

The developers say this is the most expensive home in Miami’s history. As such, it includes five kitchens (including an entertainment kitchen and a catering kitchen), a rooftop lawn, an elevator, a 100-foot resort pool, a garage that can hold seven limos, and a private pier.

The home is currently listed for $60 million with The Jills real estate agency.

URL to original article: http://www.builderonline.com/design/need-more-space-30000-square-foot-home-for-sale-in-miami.aspx?cid=BP:092811:FULL

For further information on Fresno Real Estate check: http://www.londonproperties.com

Mortgage applications rise 9.3%

by KERRI PANCHUK

Mortgage applications rose 9.3% this past week as borrowers refinanced their home loans at exceptionally low interest rates.

The Mortgage Bankers Association said refinancing apps grew dramatically, with the refi index jumping 11.2%, after the Fed announced it would move its portfolio towards longer-term Treasury securities.

Meanwhile, the purchase index grew 2.6%, suggesting an increase in new home applications at the lower interest rates.

"With lower rates, refinance application volume increased to its highest level since August 19, 2011," said Mike Fratantoni, the MBA's vice president of research and economics. "Purchase application volume also increased. However, the increase was in conventional purchase applications, which were up by 4.9 percent. Purchase applications for government loans fell by 0.6 percent over the week, likely influenced by the pending decline in FHA loan limits."

The refinancing share of mortgage activity grew to 79.7% of all applications, up from 78.3% the previous week.

The average interest rate for 30-year fixed rate mortgages with conforming loan balances of $417,500 or less fell to 4.25% from 4.29% this past week. Meanwhile, the average contract interest rate for 30-year, fixed-rate mortgages with jumbo loan balances fell to 4.51% from 4.55%.

In addition, the interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 4.05 percent from 4.07 percent.

The 15-year, FRM increased to 3.47% from 3.46%, while the average contract interest rate for 5/1 ARMs fell to 2.95% fro 2.96%.

URL to original article: http://www.housingwire.com/2011/09/28/mortgage-applications-rise-9-3

For further information on Fresno Real Estate check: http://www.londonproperties.com

Rate Drop Spurs Home Refinancing

By NICK TIMIRAOS
The 30-year fixed-rate mortgage dipped below 4%, possibly triggering a refinancing boom for many of the same borrowers who already have taken advantage of rock-bottom interest rates.

According to a survey by Credit Suisse on Thursday, lenders were offering an average rate of 3.91% on 30-year fixed-rate mortgages to borrowers who paid "points," or fees, worth 1% of the loan balance.

Wells Fargo & Co. advertised on its website Friday afternoon a 3.875% rate on a 30-year fixed-rate mortgage, with fees of 1% on the loan.

Lou Barnes, a mortgage banker in Boulder, Colo., refinanced four borrowers on Thursday into 30-year fixed-rate mortgages at 3.875%. "At this point, the only people being helped are those who need it the least," he said.

For the home-sales market, low rates will help make homes more affordable, but may not boost home buying if consumers are worried about the economy.

"Today, the buyers' concern is the falling value of homes," said Mr. Barnes. "I've had potential buyers say: 'I don't care if rates are zero if prices are going to fall again.' "

Mortgages rates fell this past week after the Federal Reserve announced Wednesday that it would begin plowing payments from its portfolio of $885 billion in government-backed mortgage bonds back into mortgages. That caused a rally in the mortgage market because the Fed's move eliminates the risk that the central bank would be forced to sell its mortgage holdings as refinancing increases.

Mortgages rarely have been this cheap. A 1961 study by the National Bureau of Economic Research shows that loans made to World War II veterans in the late 1940s were available with 4% rates.

More than 60% of borrowers with a 30-year fixed-rate mortgage could reduce their mortgage rate by one percentage point, up from 42% at the beginning of August, according to Credit Suisse.

But some borrowers haven't been able to refinance rates because they can't qualify under loan standards that are much tighter than at the time of their first loan. Other borrowers don't have enough equity in their home to refinance.

Before the housing crisis, refinancing tended to jump when borrowers were able to lower their rate by 0.5 percentage point. Since 2009, mortgage applications have taken longer to process, while riskier borrowers have faced higher refinancing costs. As a result, borrowers typically now refinance when rates are 1.5 percentage points below their current rate, according to Bank of America mortgage analysts.

Donald Fraser, a 56-year old pathology assistant who shaved a full percentage point off the 4.875% mortgage he got last year, said he plans to stash most of the $2,700 a year in savings into retirement. "I don't think we'll ever see these rates in my lifetime or yours," he said.

It isn't clear how much these lower rates will help the economy, in part because a weakening economy is fueling the decline.

"We felt lucky. At the same time, we're lucky at the expense of a suffering market," said Richard Klompus, who refinanced his Glastonbury, Conn., home with a 4%, 30-year fixed-rate mortgage.

Mr. Klompus, 49, had a hybrid adjustable-rate mortgage that carries a 4.5% rate for the first five years before moving to a variable rate. He paid tens of thousands of dollars to pay down his loan balance to $417,000, the maximum size for loans eligible for purchase by mortgage companies Fannie Mae and Freddie Mac.

To encourage refinancing, Obama administration officials and U.S. regulators are in talks with lenders about ways to revamp an existing White House refinancing initiative designed to help borrowers with little or no equity. The program is open to borrowers whose loans are backed by Fannie and Freddie, which guarantee about half of all outstanding home loans.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, is weighing a series of changes to the program, which has been snarled by a series of technical hurdles. Just 838,000 borrowers have refinanced, short of the hoped-for four million to five million. Just 63,000 of those borrowers have loans worth more than 105% of their home value.

"It hasn't worked, to be honest," said James Parrott, a top White House housing adviser, in a speech to industry executives this week. He said the housing market is at a "critical juncture" and policy decisions over the next six months could determine whether the economic headwinds are "going to be a blip or a broader struggle."

A separate question is whether banks will be able to handle the volume of mortgage applications.

Banks recently have laid off mortgage employees in anticipation of lower loan volumes, while shifting others to the backlog of delinquent loans. The reduced ability to handle loan volumes means that banks have charged higher rates relative to their borrowing costs, muting the decline in rates.

URL to original article: http://online.wsj.com/article/SB10001424053111904563904576589182943679612.html?mod=WSJ_RealEstate_LeftTopNews

For further information on Fresno Real Estate check: http://www.londonproperties.com

Pending home sales get comp traction in California

Source: Orange County (Calif.) Register

A new trend might be in the making, a Realtor pending home sales index shows.

For the past four consecutive months, the number of housing deals inked by buyers and sellers has gone up across the state from year-ago levels.

Before we get too excided, though, it’s important to recall that pending sales — new, but not-completed home sales — are rising from dismally low numbers a year ago that followed the end of federal homebuying tax credits.

According to the latest CAR report:

Pending deals — or the signing of a purchase agreement — increased 12.6% in August from the year before.
Pending deals also were up 7% from July levels.
The index rose to its second-highest level since April 2010.
August’s index level was the third-highest in the past 22 months.
By comparison, Orange County pending deals increased 10.6% in August from year-ago levels to 3,049 contracts signed, according to a separate report by broker Steve Thomas.
Last month’s pending deals in O.C. were up 0.2% from July levels.
Not all of those purchases are likely to end in a closed sale since many deals fall apart during the escrow period. But pending deals are indications of future closed sales down the road.


URL to original article: http://www.builderonline.com/builder-pulse/pending-home-sales-get-comp-traction-in-california.aspx?cid=BP:092711:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Shadow inventory declines to five-month supply: CoreLogic

by KERRY CURRY

The nation's residential shadow inventory as of July declined slightly to 1.6 million units, representing a supply of five months, according to a report from CoreLogic (CLGX: 11.38 -1.73%).

That's down from 1.9 million units, a supply of six months, from a year ago, and follows a decline from April when shadow inventory stood at 1.7 million units.

"The steady improvement in the shadow inventory is a positive development for the housing market," said Mark Fleming, chief economist for CoreLogic. "However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time."

CoreLogic said the decline is driven by a pace of new delinquencies that is slower than the pace of the disposition of distressed assets.

The company estimates the current stock of properties in the shadow inventory, or pending supply, by calculating the number of distressed properties not listed on multiple listing services that are more than 90-days deliquent, in foreclosure and real estate owned by lenders.

Of the 1.6 million properties currently in the shadow inventory, 770,000 units are seriously delinquent (2.2-months’ supply), 430,000 are in some stage of foreclosure (1.2-months’ supply) and 390,000 are already in REO (1.1-months’ supply).

The inventory is 22% lower than the peak in of 2 million units, or 8.4-months of supply, in January 2010. The total shadow and visible inventory was 5.4 million units in July, down from 6.1 million units a year ago.

The aggregate current mortgage debt outstanding of the shadow inventory was $336 billion in July, down 18% from a year ago.

URL to original article: http://www.housingwire.com/2011/09/27/shadow-inventory-declines-to-five-month-supply-corelogic

For further information on Fresno Real Estate check: http://www.londonproperties.com

Survey shows first-time homebuyers growing weary of short sales

by KERRI PANCHUK

First-time homebuyers are growing tired of short sales, which take nearly 17 weeks to complete, according to the latest Campbell/Inside Mortgage Finance housing survey.

While first-time homebuyers acquired 54.1% of all short-sales in November 2009, the segment's share of acquisition activity fell to 39.7% in August with many buyers losing interest due to several factors slowing down the process, the Campbell/Inside Mortgage Finance survey showed. The August figure represented a "three-month slide and was the lowest level for first-time homebuyers ever recorded in the survey" of 2,500real estate agents.

The short-sale process is often delayed due to paperwork issues, challenges coordinating with multiple investors, slow appraisals and understaffing at mortgage servicing outlets, according to the survey.

Short sales do maintain some allure for first-time borrowers because the generally sell at prices 27% lower than non-distressed properties, the report said.

California remains a hot spot for short sale activity, with these transactions representing 31% of all home purchases in the Golden State in August.

In many cases, first-time buyers are making multiple offers on short sales to try and expedite the process, according to the Campbell/Inside Mortgage Finance survey.

URL to original article: http://www.housingwire.com/2011/09/26/survey-shows-first-time-homebuyers-growing-weary-of-short-sales

For further information on Fresno Real Estate check: http://www.londonproperties.com

Rate Drop Spurs Home Refinancing

If you've been on the fence, now is the time to jump before you miss the opportunity in our real estate market. Do you have a different opinion?

http://online.wsj.com/article/SB10001424053111904563904576589182943679612.html

Economist Zandi Changes His Tune, But Keeps it Somewhat Positive

Picture the lone economist, the housing expert, on a stage. It's just him--looking fit, if a bit war-weary, we might add--him, the microphone, a big screen up behind him for his slides, and an audience out there in a darkened ballroom in front of him.

The economist has predicted things would be better by now, and could be expected to be better still just around the corner. He'd cited fundamentals, technicals, incidentals, etc., as to how and why housing would begin its recovery in late 2011 and grow markedly more positive in the year ahead.

Now, though, or yesterday rather, it's just him, and he's deciding to junk his slides altogether and ask his audience directly, "What do you want me to talk about? What question do you want me to answer?"

Silence.

His audience, you see, is a bunch of people from around the country who live in communities and work in marketing and sales support at companies and run households that hardly need an economist to tell them what they know, because they're eating, sleeping, and breathing it. They're living it.

Things have gotten bad. Really bad. Again.

And so what the economist--Moody's Mark Zandi--does is to scrap the slides with the fevers and the bar charts and the visualized data of decline in the fundamentals, the incidentals, and the technicals, and he says, "Let's just talk a bit, why don't we?"

As if to say, "And then it won't be too long before everyone can repair to the bar to sort this all out."

Honestly, what was Mark Zandi to say, just 16 hours before Wall Street would open to what would be a 400-point decline in the Dow and 3%-plus losses in the S&P 500 and NASDAQ?

He said, "The economy is struggling to avoid a double-dip recession," and he put the odds of the economy failing in that struggle at about 40% to 45%.

The reasons for his gloomier-than-then outlook are pretty easy to put one's finger on. Energy prices soared thanks to political risk in the Middle East and North Africa; manufacturing globally stalled out after the Japanese earthquake and tsunami; and companies in the United States stopped hiring, helping to add the 150,000 new jobs a month it takes to keep the economy on a positive track as far as jobs.

Policy--or faulty policy--got the economy into much of the mess it's in right now, believes Zandi, but he also believes that it must be policy--decisive, immediate, and forceful--that goes into play to help the economy in its "struggle" to avoid a double-dip.

Without the benefit of PowerPoint slides to turn to as talking points, Zandi outlined three points of policy that would be necessary to go into effect if the economy has a fighting chance to avoid going into negative territory.

One of them occurred as he spoke, as the Federal Reserve said it would continue an accommodative monetary mode by purchasing $400 billion in long-term Treasurys, a move that would keep borrowing costs low for an even longer period. Zandi believes that when the Fed Open Market Committee meets again in November, there may be even more arrows in the quiver that would amount to even further increasing the size of the Fed balance sheet.

Second policy measure has to do with the Super Committee follow-up and traction on a bipartisan deal toward a fiscally sustainable deficit reduction on the order of $4 trillion over an allotted number of years, with the first $900 million reduction by the November deadline. Zandi believes the political climate suggests this has a "fighting chance" of gaining bipartisan support, but there's plenty of political vitriol that could paralyze the process.

Policy step three, manifest in the president's proposed Jobs Act, is that Congress must bless relief from at least some of the near-term fiscal restraints on the economy--if all the sundowns and triggers play out as currently planned to restrict spending, it would be tantamount to shaving as much as 1.7% from Gross Domestic Product.

Zandi points to a number of pieces of taxation and regulation policy that it will take an act of Congress to change and says that at least some of these proposals need to make headway toward the president's desk to be signed into law.

The good news, Zandi said, promising that he had some "uplifting" to do after depressing his audience yesterday, is that in all ways, after the next nine to 12 months, the economy should make a robust play at recovery. Insofar as governments, corporations, and households have made strides at fixing their balance sheets and reducing debt, the fundamentals are in place for a comeback.

Meanwhile, we've heard tell that a home building company and building products manufacturer investor forum in Dallas produced another whole level of depression that hasn't been quite so palpable since late 2008 or early 2009.

An industry sector that had been so bold as to suggest that it had freed itself of industry cycles that had driven it to boom and bust through so many years has been on its knees, praying for the return of just such a cycle to lift its players from misery.

It's little wonder Zandi threw out his PowerPoint; the slides become artifacts the minute one presses Save as the Vix goes off the charts.

URL to original article: http://www.bigbuilderonline.com/post.asp?BlogId=mcmanusblog&postid=661084§ionID=391&cid=BP:092311:FULL

For further information on Fresno Real Estate check: http://www.londonproperties.com

C.A.R. releases its California Housing Market Forecast for 2012

Source: C.A.R

SAN JOSE (Sept. 20) – California home sales and median price are predicted to improve only slightly in 2012, as the continuation of the tepid economic recovery, uncertainty about the future, and funding challenges for residential mortgages are expected to keep the market moving sideways, with little foreseeable momentum in either direction, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2012 California Housing Market Forecast” released today.

The forecast for California home sales next year is for a slight 1 percent increase to 496,200 units, following essentially flat sales of 491,100 homes this year compared to the 491,500 homes sold in 2010.

“Despite the run of unforeseen global events in the first half of this year that slowed the overall economy, 2011 home sales are projected to essentially remain unchanged from last year,” said C.A.R. President Beth L. Peerce. “Looking ahead, the fundamentals of the housing market – such as low mortgage rates, high housing affordability, and favorable home prices – are expected to continue, but at this point, a strong housing recovery will depend on consumer confidence, job creation, and the availability and cost of home loans.

“Discretionary sellers will play a larger role in next year’s housing market,” said Peerce. “Those who held off selling in 2011 may list their homes in 2012, thereby improving the mix of homes for sale compared with the last few years. Additionally, distressed sales will remain an important segment of the overall market as lenders continue to work through the foreclosure process.”

The California median home price will increase 1.7 percent in 2012 to $296,000 in 2012, according to the forecast. Following a double-digit increase in the median price in 2010, the median home price will decrease a projected 4 percent in 2011 to $291,000.

“2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain in the forefront for all market participants,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.

“The most likely scenario is for the modest recovery to continue, and this should push sales up slightly next year by 1 percent and maintain levels that are significantly higher than those recorded during the depths of the housing downturn.

“The wild cards for 2012 are many, including federal, fiscal, monetary, and housing policies; the contentious political climate during an election year; and the strength of the U.S. economic recovery,” said Appleton-Young.

Appleton-Young will present an expanded forecast Wednesday afternoon during CALIFORNIA REALTOR® EXPO 2011 (http://expo.car.org/), running from Sept. 20-22 at the San Jose McEnery Convention Center in San Jose, Calif. The trade show attracts nearly 6,500 attendees and is the largest state real estate trade show in the nation.

Don’t miss “Why Lenders Can’t Lend: The Economic Perspective” during CALIFORNIA REALTOR® EXPO 2011. C.A.R. Vice President and Chief Economist Leslie Appleton-Young will moderate a panel of renowned economists as they delve into the front- and-center issue facing the market and REALTORS® next year. The panel is scheduled to be held Thursday, Sept. 22, from 2 p.m. – 3:30 p.m. at the San Jose Convention Center.

URL to original article: http://www.car.org/newsstand/newsreleases/2011newsreleases/2012forecast/

For further information on Fresno Real Estate check: http://www.londonproperties.com

Americans still say they see ownership in Home's future

Source: The Atlantic

After a painful pop, the ugly aftermath of the housing bubble has been felt across the U.S. Despite the problems it caused, however, it didn't do much to reduce Americans' desire to own a home. A new survey conducted by Harris Interactive on behalf of online real estate resource Trulia shows that 70% of Americans still view home ownership as a part of the American Dream. The percentage is unchanged from January. But the Americans' specific preferences for home ownership are shifting.

Leaving the Suburban McMansions Behind for Modest, Urban Homes

One of the most significant findings was that Americans are no longer interested in giant houses. The survey shows that, even compared to last year's survey results, the ideal home is shrinking. The portion who preferred a home bigger than 3,200 square feet declined by one-third. Meanwhile, 32% of respondents said that their ideal-sized home was 1,401 to 2,000 square feet. That's the biggest portion of respondents of any of the survey's five size categories and is up from 28% a year earlier.

Cities are also becoming more attractive to Americans. The survey found that short commutes are a very high priority among Millennials, as 57% wanted to live near urban centers. That might not be surprising, but this is: Baby Boomers share the sentiment. A majority of respondents in this generational category said that they intend to buy another home, which would ideally be nearer to more restaurants and shops. Suburban life may be fading.

The implications here are clear: future home building will likely look pretty different from what it looked like during the bubble. Instead of suburban McMansions, we'll see more smaller homes and condos being built in cities to accommodate this growing demand.

Ownership Still a Goal

The survey also revealed a great deal of pent-up demand. It found that 80% of current home owners intend to buy another home in the future and 59% of renters plan to one day own a home. On a generational basis, the desire to own a home appeared to be somewhat proportional to age. Younger age groups were a little less interested in homeownership, while older age groups strongly felt strongly about the value of owning a home.

So if so many people want to buy a home, what's stopping them? The common reason you see cited these days is falling home values. But according to the survey, this factor is a relatively minor part of the story: just 13% of respondents named declining home values as an obstacle to home ownership.

The biggest problem was saving for a down payment. Of those polled, 51% said that this was a major obstacle. This provides some room for policy to enter the equation. One option could be for underwriting to allow lower down payments, but that strategy was shown to do more harm than good during the housing bubble. A better alternative could be tax-free or subsidized savings plans to help Americans to put more money aside for a down payment.

Ultimately, the survey should provide some reason for real estate professionals to exhale. The current slump is just that -- a slump. Eventually, home sales will rebound and so will building. The problem, of course, is that no one is quite sure how long it will take for the market to eventually find its footing.

URL to original article: http://www.theatlantic.com/business/archive/2011/09/the-future-of-home-urban-and-smaller-but-still-owned/24539/

For further information on Fresno Real Estate check: http://www.londonproperties.com

Remodeling Activity Reaches Record Levels According to BuildFax Remodeling Index for July

Source: Buisness Wire

AUSTIN, Texas--(BUSINESS WIRE)--With millions of Americans either unable to secure a mortgage or having to remain in their current home because they cannot sell the property, remodeling activity continues to soar. Today, BuildFax unveiled its BuildFax Remodeling Index (BFRI) for July 2011 and it shows that remodeling activity reached a record high during the month. The data also indicates that as consumers are putting more discretionary income into their homes, there are now a record number of under-insured properties from coast to coast.

The latest BFRI shows that July 2011 became the month with the highest level of remodeling activity since the Index was introduced in 2004. During these historically difficult economic times there has been an upswing in the sales of building materials and the number of renovations greater than $10,000. These factors, and that fact that many consumers have not increased the insurance on their homes to account for the remodeling, puts many homes at risk as they are not carrying the proper level of insurance for the new, true value of their homes.

“As millions of Americans believe that they will not be able to secure a new home due to a variety of factors including tight credit, limited buyers and challenging job prospects, they are more and more turning to renovating and remodeling their current properties, sending remodeling activity to record levels,” said Joe Emison, Vice President of Research and Development at BuildFax. “However, this remodeling boom is leaving many of these properties under-insured, as the value of these renovations are often not being captured by the homeowners’ insurance companies.”

Today’s report reveals continued month-over-month gains for most regions of the country, with data demonstrating that consumers are continuing to invest in remodeling, even as fears grow of a double-dip recession and unemployment remains above 9 percent.

July Signifies 21 Consecutive Months of Industry Growth

The latest BFRI, detailing remodeling activity from July 2011, indicates that residential remodeling activity registered the 21st-straight month of year-over-year gains, demonstrating that many Americans are continuing to remodel their current homes, rather than purchasing new homes.

The BFRI is the only source directly reporting residential remodeling activity across the nation with monthly information derived through related building permit activity filed with local building departments across the country. This monthly report provides month-over-month and year-over-year comparisons on trends in remodeling activity for the entire United States, as well as for the four major regions of the country: Northeast, South, Midwest, and West.

Half of the Country See Month-over-Month Gains

The July 2011 index rose 24% percent year-over-year—and for the 21st straight month—in July to 130.4, the highest number ever in the index to date.

In July, the West (3.4 points; 3%) and Midwest (4.9 points; 5%) had month-over-month gains, while the South (3.3 points; 3%) and Northeast (2.7 points; 3.4%) saw a decline. On a positive note, the Northeast was up half a point (.7%) from July of 2010, as was the West (26.4 points; 26%), South (6.2 points; 7%), and Midwest (5.6 points; 5.6%).

Historic index values (going back to early 2004) are available for purchase from http://index.buildfax.com/.

BuildFax in the News:

To help consumers know detailed information about the “life story” of their new home, BuildFax offers access to BuildFax Buyer’s Reports, which include relevant permit data regarding key upgrades and repairs made to the property, simply by searching for an address.

A BuildFax Buyer’s Report provides comprehensive information that allows both buyers and sellers to “see within the walls” like never before. The reports, previously only available to industry professionals, are available for $39.99 at www.BuildFax.com. BuildFax tracks building, remodeling and repair data on over 70 million homes nationwide and offers this data in these easy to read reports.

About BuildFax (www.buildfax.com):

BuildFax™, a division of BUILDERadius, is the creator of the first and only national database of historical building permit data. Co-headquartered in Austin, Texas and Asheville, North Carolina, BuildFax™ has created a proprietary property intelligence engine that contains building and permitting information from 4,000+ cities and counties throughout the country. Local building departments in each of these towns across the country inspect construction to make sure it meets quality and safety standards; as such it is an absolutely critical part of the public safety infrastructure. BuildFax™ is then able to consolidate this information into the dataset, which is a tremendous asset to professionals in the insurance, financial services, inspection, and appraisal industries, as well as buyers and sellers of property. As the best and only source of a structure’s “life story,” the BuildFax™ database continues to grow, currently covering over 72 million residential and commercial properties in the United States, with over 6 billion data points.

URL to original article: http://www.businesswire.com/news/home/20110919005555/en

For further information on Fresno Real Estate check: http://www.londonproperties.com

Comp time: Exisiting home sales jump despite rough sentiment, up 18.6% from August 2010

Source: National Association of Realtors

Existing-home sales increased in August, even with ongoing tight credit and appraisal problems, along with regional disruptions created by Hurricane Irene, according to the National Association of Realtors®. Monthly gains were seen in all regions.

Total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 7.7 percent to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July, and are 18.6 percent higher than the 4.24 million unit level in August 2010.

Lawrence Yun, NAR chief economist, said there are some positive market fundamentals. “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” he said. “Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation.”

Investors2 accounted for 22 percent of purchase activity in August, up from 18 percent in July and 21 percent in August 2010. First-time buyers purchased 32 percent of homes in August, unchanged from July; they were 31 percent in August 2010.

All-cash sales accounted for 29 percent of transactions in August, unchanged from July; they were 28 percent in August 2010; investors account for the bulk of cash purchases.

“We had some disruptions from Hurricane Irene in the closing weekend of August, when many sales normally are finalized, along the Eastern seaboard and in New England,” Yun said. “As a result, the Northeast saw the smallest sales gain in August, and some general impact is expected in September with widespread flooding from Tropical Storm Lee. Aberrations in housing data are possible over the next couple months as markets recover from disrupted closings and storm damage.”

Yun said an extremely important issue currently is the renewal and availability of the National Flood Insurance Program, scheduled to expire at the end of this month. “About one out of 10 homes in this country need flood insurance to get a mortgage, and we would see significant negative market impacts without it,” he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.27 percent in August, down from 4.55 percent in July; the rate was 4.43 percent in August 2010. Last week, Freddie Mac reported the 30-year fixed rate fell to a record low 4.09 percent.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the market is remarkably affordable for people with secure jobs, good credit and long-term plans. “All year, the relationship between home prices, mortgage interest rates and family income has been hovering at historic highs, meaning the best housing affordability conditions in a generation,” he said.

“The biggest factors keeping home sales from a healthy recovery are mortgages being denied to creditworthy buyers, and appraised valuations below the negotiated price. Buyers may be able to find more favorable credit terms with community and small regional banks, and Realtors® can often give buyers advice to help them overcome some of the financing obstacles,” Phipps said.

Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price – were reported by 18 percent of NAR members in August, up from 16 percent July and 9 percent in August 2010.

The national median existing-home price3 for all housing types was $168,300 in August, which is 5.1 percent below August 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 31 percent of sales in August, compared with 29 percent in July and 34 percent in August 2010.

Total housing inventory at the end of August fell 3.0 percent to 3.58 million existing homes available for sale, which represents an 8.5-month supply4 at the current sales pace, down from a 9.5-month supply in July.

Single-family home sales rose 8.5 percent to a seasonally adjusted annual rate of 4.47 million in August from 4.12 million in July, and are 20.2 percent above the 3.72 million pace in August 2010. The median existing single-family home price was $168,400 in August, which is 5.4 percent below a year ago.

Existing condominium and co-op sales increased 1.8 percent a seasonally adjusted annual rate of 560,000 in August from 550,000 in July, and are 8.3 percent higher than the 517,000-unit level one year ago. The median existing condo price5 was $167,500 in August, down 3.3 percent from August 2010.

Regionally, existing-home sales in the Northeast increased 2.7 percent to an annual pace of 770,000 in August and are 10.0 percent above a year ago. The median price in the Northeast was $244,100, which is 5.1 percent below August 2010.

Existing-home sales in the Midwest rose 3.8 percent in August to a level of 1.09 million and are 26.7 percent above August 2010. The median price in the Midwest was $141,700, down 3.5 percent from a year ago.

In the South, existing-home sales increased 5.4 percent to an annual pace of 1.94 million in August and are 16.9 percent higher than a year ago. The median price in the South was $151,000, which is 0.8 percent below August 2010.

Existing-home sales in the West jumped 18.3 percent to an annual pace of 1.23 million in August and are 20.6 percent higher than August 2010. The median price in the West was $189,400, down 13.0 percent from a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

URL to original article: http://www.builderonline.com/builder-pulse/comp-time--exisiting-home-sales-jump-despite-rough-sentiment--up-18-6--from-august-2010.aspx?cid=BP:092111:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Homeownership equals American Dream, period--new Trulia survey

Source: Las Vegas Review-Journal

Despite a decline in August new-home construction, long-term housing demand remains strong with 80 percent of current homeowners planning to buy again and 59 percent of renters aspiring to be owners, a real estate listing service reported Tuesday.

Home ownership remains core to the American dream, though the biggest obstacle for consumers today is saving enough for a down-payment, said Jed Kolko, chief economist for San Francisco-based real estate website Trulia.com.

Trulia's biannual survey showed 70 percent of all respondents viewed home ownership as part of achieving their personal American dream, unchanged from January. The percentage increases with age, rising to 76 percent for those 55 and older.

More than half (57 percent) of current homeowners said owning a home is among the best long-term investments they could make, putting it ahead of 401(k) and other retirement accounts (52 percent), Kolko noted.

Even among 18- to 34-year-olds, who have the lowest home ownership rate in the country, 65 percent of survey respondents said their American dream includes owning a home.

It's that youngest age group holding back demand for home ownership. They've yet to leave home or, in increasing numbers, they've moved back in with parents and family, Kolko said.

"But that demand won't go away permanently," Trulia's economist said in a conference call. "That's demand being pushed to the future."

Falling home prices and low interest rates aren't enough to overcome many of the obstacles to ownership, the survey found. Saving for a down payment is the biggest obstacle (51 percent), followed by qualifying for a mortgage (36 percent), having a poor credit history (34 percent) and unable to pay off existing debt (31 percent). Only 13 percent cited declining home values.

Las Vegas has seen median existing-home prices fall more than 60 percent from their peak, to $107,000 in August, according to Home Builders Research. And homebuilders pulled just 338 new- home permits in August, bringing the total for the year to 2,649, a 25.8 percent decrease from a year ago.

The Commerce Department says builders began work on a seasonally adjusted 571,000 homes last month, a 5 percent decline from July. That's less than half the 1.2 million that economists say is consistent with healthy housing markets.

Single-family homes, roughly two-thirds of home construction, fell 1.4 percent. Apartment building plunged 12.4 percent. Building permits, a gauge of future construction, rose 3.2 percent.

Hurricane Irene also slowed construction in the Northeast.

In Las Vegas, it could take some time for demand for new-home construction, given the excess supply and shadow inventory of homes in foreclosure, Kolko said.

"I interpreted the report today as being pretty much flat in terms of housing construction everywhere except in the Northeast, and remember it was during the time of Hurricane Irene," Kolko said. "At the national picture, new-home construction is flat, but in Las Vegas, where there was so much new construction over a short period, new-home construction will remain low for quite some time."

Kolko said he's optimistic that long-term housing demand will recover, even though today's housing prices and new- home starts tell a different story.

"But the homes that people will want in the future will look different than today's housing stock," he said. "Retiring baby boomers won't want big suburban houses. They care more about easy access to restaurants and retail and will be willing to trade down."

Trulia's survey found a shift away from McMansions and suburban living, reflecting a change in consumer spending habits. Homebuyers in today's postbubble economy have become more practical and less aspirational, Kolko said.

"It's partly due to the economic recession, but it could be part of a shift toward smaller-size homes," he said. "Baby boomers are downsizing and thinking about a smaller environmental footprint. People are looking at smaller homes in urban areas, not suburban areas. People are willing to trade down to be closer to work. Shorter commutes are especially valued by 18- to 34-year-olds."

They still like to dream big. Twenty-seven percent of properties viewed on Trulia.com were 3,200 square feet or larger, Kolko noted.

Trulia's survey was conducted online in August within the United States by Harris Interactive, with 2,207 adults queried, including 1,392 homeowners and 758 renters. The online surveys are not based on probability sample and therefore no estimate of theoretical sampling error can be calculated.

Respondents for the survey were selected from among those who have agreed to participate in Harris Interactive surveys.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

DREAM A LITTLE DREAM ...
Respondents who view homeownership as part of personal American Dream
All 18-34 35-44 45-54 55+
Yes 70 percent 65 percent 66 percent 74 percent 76 percent
No 21 percent 24 percent 23 percent 18 percent 20 percent
Don't know 8 percent 11 percent 11 percent 8 percent 4 percent
Source: Trulia.com, Harris Interactive

URL to original article: http://www.builderonline.com/builder-pulse/homeownership-equals-american-dream--period--new-trulia-survey.aspx?cid=BP:092111:JUMP

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Ranieri: Housing Could Sink Economy.

Source: The Wall Street Journal

RALEIGH, N.C.—The housing market’s problems aren’t going away, but policy makers and industry officials appear to be running away from them, mortgage-bond pioneer Lewis Ranieri told an audience of financial industry executives on Monday.

Mr. Ranieri, considered by many to be the godfather of the U.S. housing-finance market for his role developing the mortgage-backed security, didn’t pull any punches in an address to the North Carolina Bankers Association in Raleigh. The industry and policy makers are engaged in “self-interested bickering” over who will bear the cost of needed overhauls while the housing market is rotting, he said.

Mr. Ranieri warned that millions of bank-owned foreclosures and loans that haven’t paid mortgage payments in more than one year “are dragging the nation’s economy underwater,” he said. “Yet in truth we seem very paralyzed and slow to act.”

Failing to stimulate the housing market, he said, would be a serious mistake with grave implications for the economy and the country. “We let the word ‘5 million foreclosures’ roll off our tongues without the reality of what those words really mean,” he said. “Does anyone have any idea what the social implications are of that number of people being thrown out of their houses?”

The problem is that there isn’t a solution “which will make everyone love you and cost no money,” he added. “It would be nice, but it doesn’t exist.”

Instead, Mr. Ranieri called for a series of approaches to help deal with high volumes of both delinquent mortgages and foreclosed homes. He endorsed efforts to write down loan balances for more homeowners and to devise programs that would allow former homeowners who can’t afford even modified payments to rent their homes back from investors. He also called for more aggressive efforts to provide conservative financing to investors so that they will buy and rent out foreclosed homes, avoiding a painful downdraft in home prices.

Mr. Ranieri, who today runs a distressed debt firm and other mortgage-related enterprises, also backed new ways to allow more underwater borrowers refinance. In recent weeks, bondholders and some mortgage analysts have said that those proposals would force mortgage investors to bear heavy losses as loans pay off early, leaving investors with cash to reinvest at lower yields.

Mr. Ranieri scoffed at those concerns. As more underwater homeowners who are stretching to make payments realize they’re better off walking away, “they’re going to stop paying,” he said. To investors who are pushing for policy makers to prevent refinancing, he said, “I will do everything I can to make sure they come up losers.”

The former Salomon Brothers managing director, who was colorfully portrayed in Michael Lewis’ Liar’s Poker, warned against efforts to revive private markets for securitizing loans by increasing the cost of government-backed loans. “You will never starve the securitization market into existence, which is exactly what is going on now,” he said. (Separately, the White House and a top federal regulator on Monday called for raising fees that Fannie Mae and Freddie Mac charge for mortgages in a bid to bring back private capital).

He also criticized mortgage giants Fannie and Freddie for becoming too conservative. Many qualified borrowers, he said, are being denied loans, and he pointed to average credit scores for loans purchased by the firms that routinely exceed 750. “Why are we doing that?” he asked. Do policy makers think “if we price this thing so high, maybe the dummies in the private sector will come and do it? Nuh-uh.”

URL to original article: http://www.housingwire.com/2011/09/20/ranieri-housing-could-sink-economy

For further information on Fresno Real Estate check: http://www.londonproperties.com

Home values up for the first time in five years

Source: Tara Steele

It has been five years since home values have increased nationally, according to the Zillow Home Value Index based on median home values, which rose 0.1 percent from June to July and while this slight increase is cause for celebration, home values are still down 28.3 percent from housing’s peak in June 2006 and Zillow says values have dropped to July 2003 levels. Home prices are reportedly five percent below July 2010.

In July, one out of every 1,000 homes were lost to foreclosure which is a slight decrease from the peak of foreclosure filings in October 2010 which Zillow reports that 1.14 out of every 1,000 homes were lost to foreclosure. Foreclosures have not slowed because of improving delinquencies, rather because of banks in various stages of litigation due to the robo-signature scandal (where foreclosures notices were sent without human review) which has frozen and slowed much of the foreclosure process. Additionally, after MERS’ authority was questioned by judges as to whether or not they ever legally had the right to transfer title, the company has officially bowed out of facilitating foreclosures which has the potential to radically change foreclosure processing.

Foreclosures and losses
Zillow also reports that the current foreclosure resale rate which is comprised mostly of REOs has dropped to only 19.1 percent of all sales after the peak in June of 19.3 percent. Further, nearly one in three homes for sale had at least one price reduction in July, according to Zillow, with the median amount of price cuts currently at 6.5 percent which is on the decline. In July, 33.6 percent of homes sold for less than their previous purchase price, up from 28.2 percent in July of the previous year.

Dr. Stan Humphries, Zillow’s Chief Economist said, “As noted last month, it’s encouraging that the first half of the year has seen continued improvement in home value trends in the absence of outside stimulus. Specifically, we’ve seen decreasing monthly depreciation rates and now the first appreciation in almost six years. But the drumbeat of negative economic news received by home buyers beginning in the mid-summer period has already substantially affected consumer confidence which, in turn, will affect homebuyer demand. Signs of this impact can already be seen in the declines in both existing home sales (down 3.5% between June and July) and pending home sales (down 1.3% between June and July). Friday’s dismal job report will do little to get buyers worried about the economy off the fence either.”

URL to original article: http://agentgenius.com/real-estate-mortgage-economy/home-values-inch-upward-but-still-down-28-percent-from-peak/

For further information on Fresno Real Estate check: http://www.londonproperties.com

California foreclosures set to surge

by JON PRIOR

California default notices spiked 55% in August, and the number may keep rising in the coming months as mortgage servicers shake off the robo-signing freeze, according to RealtyTrac Senior Vice President Rick Sharga.

In August, servicers filed 28,961 default notices in California, the first stage of the foreclosure process in the state, RealtyTrac showed. Another filing tracker ForeclosureRadar found a similar boost in foreclosure starts along the West Coast and said Bank of America (BAC: 6.99 -3.32%) led all major banks with a 116% jump in August alone.

"The industry has not yet returned to normal or necessary foreclosure activity levels, but progress is certainly being made," a BofA spokesperson said.

In an interview with HousingWire, Sharga said gave some idea on where that "necessary" level might be.

"It wouldn't be a stretch to say that we might see NODs in the range of 30,000 per month in California for a few months, but it's difficult to predict that they'd get anywhere near the record levels we saw back in 2009," Sharga said.

From January 2010 through September 2010, California NODs averaged 28,000 per month. That dropped to 26,000 per month for the rest of 2010 after the robo-signing scandal broke in October, when servicers were found to be signing affidavits en masse and without a proper review of the loan files.

The slowdown continued into the early part of this year, with the NOD average dropping to 22,000 for the first seven months of 2011.

These filings peaked in March 2009 at 58,858 and averaged roughly 42,000 per month that year, the highest average since RealtyTrac began reporting the numbers, Sharga said.

A restarted foreclosure process means prices in California are set for possibly more drops, but the effect will not be seen immediately, according to Michael Simonsen, co-founder and CEO of the data analytics firm Altos Research.

"The price implications for the foreclosure spike are further down the road," Simonsen said. "August prices did indeed lose their steam from the first half of the year, but it's largely seasonal."

Analysts expect house prices nationally to double-dip in the winter ahead and finally hit bottom in the spring of next year. JPMorgan Chase (JPM: 32.49 -2.81%) analysts long said the fall could be as much as 5%.

According to the California Association of Realtors, the median home price in the state reached its highest level this year in August to $297,060, though it is still down 7.4% from the year before. Prices could face other challenges such as the expiration of the conforming loan limits in October and the ongoing deficit struggle, CAR said.

With the foreclosure timelines pushed to historic lengths, Simonsen said these properties will begin reaching an already bloated inventory during the height of the selling season of 2012.

"Look for the price impact of newly initiated foreclosures to be seen in the spring of next year, as they add to the spring inventory," Simonsen said.

URL to original article: http://www.housingwire.com/2011/09/19/california-foreclosures-set-to-surge

For further information on Fresno Real Estate check: http://www.londonproperties.com

The U.S.'s top 25 'places to retire' ... if that's what's in the cards

Source: CNN/Money

The U.S.'s top 25 'places to retire' ... if that's what's in the cards
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CNN/Money has assembled a list of "retirement Meccas, based on their health, education, shopping, and natural amenities, as well as their affordability: The article promises each of its 25 "towns offers amenities galore for the post-work crowd -- plus a cost of living that's pretty darn sweet." Pictured: Marquette, Mich., photo by Dave LauridsenRead More ...

URL to original article: http://www.builderonline.com/builder-pulse/the-u-s--s-top-25--places-to-retire------if-that-s-what-s-in-the-cards.aspx?cid=BP:091911:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Huge Surge in Bank of America Foreclosures

By: Diana Olick
CNBC Real Estate Reporter

Bank of America is ramping up its foreclosure processing, sending out far more notices of default to borrowers in August than in previous months, well over 200 percent more month-to-month.

A notice of default is the first stage of the foreclosure process in non-judicial foreclosures states, that is, where foreclosures do not go before a judge.

The notice of default is usually sent when a borrower is 90 days or more overdue in payments, but that timeline has been extended significantly during this housing crisis, due to the so-called "robo-signing" processing scandal and the sheer volume of troubled loans.

Mortgage and housing analyst and strategist Mark Hanson alerted me to unusually high legal default filing activity, and his research points to Bank of America [BAC 7.23 -0.10 (-1.36%) ] as the primary driver. I contacted a Bank of America spokesman, who responded:

"It appears the numbers you noted to me this afternoon generally track with our own numbers for key categories. It should be noted it’s driven more in key states like California and Nevada than overall, and certainly the progress we’re seeing is limited to non-judicial states. Judicial states continue to move very slowly, with key states like New Jersey only beginning to start processing foreclosures again this month."

The foreclosure numbers are down very slightly year-over-year, but only because August 2010 was one of the highest foreclosure months on record, and of course was just before the "robo-signing" scandal was uncovered. Delays in processing have artificially lowered the foreclosure numbers over the past year, so this new surge is likely addressing loans that have been long delinquent, but unaddressed.

In other words, the foreclosure pipeline is filling again.

RealtyTrac, a widely followed foreclosure sale and data site, is also confirming a surge in overall notices of default in its August numbers, to be released later this week. They do not cite Bank of America specifically, which bought Countrywide Financial, taking on millions of troubled loans.

"We've been seeing REO [bank-owned property] sales, and processing of loans through foreclosure. This increase may simply be the lenders and servicers starting the next cycle. August traditionally is a high month for foreclosure actions, so part of the increase might be seasonal," says RealtyTrac's Rick Sharga. "Could be any number of reasons - but with 3.5 million delinquent loans, this had to happen sooner or later."

The question of course is, is this a one month catch-up purge or will it continue at high levels for a while? And if the latter, will other banks follow suit quickly? Because if other banks see Bank of America pushing more loans to foreclosure, which will inevitably means more properties heading out for sale, they may want to get in before that glut of properties pushes prices down even further.

"This proves once again that "credit" as measured by legal defaults and foreclosures is not necessarily about borrowers missing payments, rather about what the servicers chose to do about it," notes Hanson.

URL to original article: http://www.cnbc.com/id/44503938

For further information on Fresno Real Estate check: http://www.londonproperties.com

Housing Market Stabilizing with Energy Efficiency and Outdoor Spaces Still Popular

Source: CUSTOM HOME Magazine

The American Institute of Architects' (AIA) 2011 second quarter Home Design Trends survey shows stability in the residential market, but not the recovery predicted after an encouraging first quarter. High-end and custom homes are still faring best among new construction projects, while first-time home buyers remain timid. What has changed in the luxury and high-end sector is that specialty rooms and additions, as well as high-end features within a home, are mostly declining. The exception to that trend is a strong rise in home offices and an equally impressive number of requests for outdoor living. Remodeling and additions, a persistently strong segment of the residential market, continues to show moderate gains thanks to clients looking for accessible spaces, energy efficiency, and home technology upgrades.

Approximately 500 residential architecture firms across the country responded to the survey and reported on their local market trends, billings, and backlogs. The AIA's chief economist, Kermit Baker, analyzes their responses and details the findings in the full report. Baker comments that because housing prices haven't stabilized in many markets, homeowners remain hesitant to invest in specialty rooms such as hobby areas, home theaters, playrooms, guest suites, and exercise rooms. Custom features like pet stations, central audio systems, automated lighting, and built-in safes also demonstrate less interest from homeowners. However, because telecommuting and "staycations" remain popular, there are areas where residential architects and custom builders can benefit.

"Demand for home offices for telecommuting remains strong," says Baker, adding that "trends toward informal lifestyles, as well as more home-centered activities, have helped maintain interest in outdoor living areas and mudrooms." Other requests still on the rise focus on accessibility and energy efficiency. Backing up those trends, the most requested products include those promoting energy-savings and management, as well as wireless communication systems. Seventy percent of respondents saw requests for simple green upgrades such as alternative or additional insulation grow over the past three months. With regard to accessibility, the most desired items include first-floor master suites, open showers with no floor level changes, ADA-compliant faucets and door handles, and ramps or elevators.

For future market predictions, Baker looks to residential firms' billings, which are mostly stable across the country. The residential firm billings index for the second quarter was 50, which indicates neither growth nor decline. Backlogs also represent stability having maintained a fairly high average of 3.2 months. Many new construction billings fell during the second quarter, however. Respondents listed second and vacation homes, townhouses, and condos all as declining. And although the high-end residential sectors are at least maintaining their numbers, Baker believes that until the new houses aimed at first-time or trade-up buyers improves, those custom homes will be at risk.

URL to original article: http://www.customhomeonline.com/industry-news.asp?sectionID=204&articleID=1661709&cid=BP:091611:FULL

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California home sales surge in August with prices at highest point of year

by KERRY CURRY

California home sales posted an increase from both the previous month and previous year, while the median home price rose to its highest level this year, according to data from the California Association of Realtors.

Closed escrow sales of existing, single-family homes rose to a seasonally adjusted 497,390 units in August, up 8.6% from a revised 457,930 in July and up 10.2% from a year ago, according to CAR, which gets its data from more than 90 local real estate associations and multiple listing services statewide.

"August median price marked the highest since December 2010, signifying that prices may be stabilizing in some market segments, as investors and first-time buyers continue to see value and opportunity in the market,” said CAR President Beth Peerce.

The August statewide median price of an existing, single-family detached home sold in California was $297,060, up 1% from a revised $294,050 in July, but down 7.4% from the $320,860 median price for August 2010.

"While the increase in August sales is encouraging, these sales are based on closings that occurred before the debt ceiling debate in early August and subsequent heightened concern about the future direction of the economy," said CAR Vice President and Chief Economist Leslie Appleton-Young. "How these events and the impending reduction in the conforming loan limits will impact home sales and prices in the coming months remains to be seen."

The unsold inventory of existing, single-family homes was five months in August, down from five and a half months in July.

The median number of days it took to sell a single-family home was 52.7 days in August, up from 45.5 days for the same period a year ago.

URL to original article: http://www.housingwire.com/2011/09/16/california-home-sales-surge-in-august-with-prices-at-highest-point-of-year

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Government should convert REOs to rentals

by LIZ ENOCHS

The government's plan to dispose of the more than 250,000 foreclosed homes in its portfolio needs to include women and minority business owners and skew toward converting the properties to short-term rentals, according to an organization representing female real estate brokers.

"The state of real estate owned disposition in the United States requires a significant rethinking in order to restart America's housing economy," said a proposal from the National Association of Women REO Brokerages.

The document is a response to a request for information issued by the Federal Housing Finance Agency, the Treasury Department and the Department of Housing and Urban Development seeking ideas on how best to dispose of the federal REO inventory.

"With tightened credit markets, uncertainty and debate surrounding emerging qualified residential mortgage requirements, and a glut of existing and unoccupied REO, it is imperative to develop short-term REO-to-rental strategies that accommodate for the needs of future homeowners as they, and the market, rebound," according to the NAWRB proposal.

The group advocates three- to five-year REO rental strategies that keep current tenants, who may be former homeowners, in single-family REO residences "as a market-specific solution to meet increased rental demand and stall weakening home prices."

Women and minority business owners are a key driver of economic recovery and should be specifically included in the future of REO disposition, said Cade Holleman, executive director of NAWRB.

"A Neighborhood Stabilization Program-like funding mechanism is proposed in order to cover partial start-up capital necessary for small women-owned businesses to transition into a property management role, with investor, agency, and enterprise support," he said

Radar Logic Inc., a real estate data and analytics firm, also recommends an REO-to-rental strategy, suggesting the Federal Housing Administration and the government-sponsored enterprises partner with private-sector property managers to oversee the rentals while retaining ownership of the properties.

The company also said the government should "restructure seriously delinquent mortgages into a bundle of debt and equity securities that can be sold to investors or held by the government as investments."

That move will prevent foreclosures and reduce the losses that would be incurred if the REO homes were sold, said Radar Logic in its RFI response.

URL to original article: http://www.housingwire.com/2011/09/15/government-should-convert-reos-to-rentals

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