by JUSTIN T. HILLEY
The double-dip in home prices that began two years ago continued through the third quarter of 2011, according to the Fiserv (FISV: 62.61 -0.70%) Case-Shiller Indexes released Monday. However, there are signs of a recovery for 2013.
The indexes projects average U.S. home prices will drop another 1% in 2012, and that increased home sales and improved economic conditions should contribute to a 3.8% increase in 2013.
Nationally, the indexes show home prices fell in 337 of the 380 metro areas tracked in the third quarter from the prior quarter and year-earlier period. The average price of a U.S. home fell to a new post-bubble low, declining 3.9% from a year ago. Average home prices are now 33% below the 2006 peak, with broad weakness across the U.S.
David Stiff, chief economist at Fiserv, pointed to encouraging trends in the U.S. housing market.
"While prices continued to fall in most markets, sales activity picked up at the end of 2011, setting the foundation for price stabilization in 2012," Stiff said. "We stand by our projection that average U.S. home prices will move sideways in 2012. But we do anticipate that increasing sales activity will begin to drive small increases in prices in as many as half of U.S. metro areas."
Stiff said some larger metro areas that escaped the worst of the home price bubble, such as Houston, Fort Worth, Texas, and Salt Lake City should expect increases of 1% to 3%. Many smaller metro areas, such as Boise, Id., and Albuquerque, N.M. are forecast to see increases of 4% to 6%.
However, the recovery in such markets is not expected to be broad enough to move the national average this year. Fiserv Case-Shiller projects that average U.S. prices will decline another 2.7% by the third quarter of 2012, compared to the year-ago period, before rising 3.8% by the third quarter of 2013.
Stiff recognized the bounce-back in consumer confidence and auto sales after stalling in the summer, indicating an increasing willingness of consumers to purchase big-ticket items.
"If the job market continues to improve, then the rebound in consumer confidence will be sustained this year and more households will be willing to purchase the biggest ticket item, a house," he said.
On Tuesday, the S&P/Case-Shiller home price indexes for November are released and The Conference Board releases the consumer confidence index for January.
URL to original article: http://www.housingwire.com/2012/01/30/home-prices-to-fall-1-in-2012-rebound-in-2013-fiserv-case-shiller
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, January 30, 2012
Friday, January 27, 2012
New originations drop 30%, loan delinquencies decline
by KERRI PANCHUK
Low interest rates are spurring some activity in the mortgage market, but opportunities for borrowers with low credit scores are limited, according to the latest Mortgage Monitor Report from LPS Applied Analytics.
New loan originations, overall, fell 30% year-over-year in November, with LPS reporting 537,720 originations in November, compared to 724,364 in December 2010. The report did not include new origination amounts for December 2011.
Vintage originations for the years 2010 and 2011 show a heightened focus on loan quality. Only six percent of 2011 originations, not backed by the Federal Housing Administration, had credit scores lower than 660 and a loan-to-value ratio greater than 80, LPS noted.
Meanwhile, FHA loan production accounted for 22% of all the originations made through the first eleven months of the year.
Delinquencies in December were down 25% compared to the peak reached in January 2010. The delinquency rate stood at 8.15% in December, down 7.7% from a year earlier, while the seriously delinquent rate on loans more than 90 past due hit 7.67%, down 5.9% from last year.
LPS said there's still a lag in getting foreclosures through the default pipeline with 50% of loans in foreclosure within judicial states not having made a payment in two years, compared to 28% in non-judicial states.
URL to original article: http://www.housingwire.com/2012/01/27/new-originations-drop-30-loan-delinquencies-decline
For further information on Fresno Real Estate check: http://www.londonproperties.com
Sharp divide exists between Dems, Repubs on gov't help in foreclosures
by KERRY CURRY
URL to the original article: http://www.housingwire.com/2012/01/26/sharp-divide-exists-between-dems-repubs-on-govt-help-in-foreclosures
For further information on Fresno Real Estate check: http://www.londonproperties.com
The majority of Americans, 58%, want government action to prevent foreclosures, whereas 34% prefer the housing market resolve its problems on its own, according to a new Gallup poll that shows a sharp divide between Democrats and Republicans on the issue.
The Gallup poll shows 76% of Democrats and 61% of independents favor government action while only 31% of Republicans favor federal intervention.
Americans who make more than $90,000 per year were less likely to want government intervention to prevent foreclosures, but 52% of that group still favored some action, while 62% of those making less than $90,000 favored some federal action to stem foreclosures.
In the survey, 51% expressed worry about home values. The number was higher (57%) among only current homeowners.
Only 66% of Americans in the survey said they own their primary residence, down from 73% in 2006 and 2007 surveys, Gallup said. (Click on chart to expand.)
Results for the poll were based on telephone interviews conducted Jan. 5-8 and Jan. 14-15 with a random sample of 1,000 adults, aged 18 and older, living in the continental U.S. Samples were weighted by gender, age, race and other factors. They were selected using random-digit-dial sampling. The margin of error is plus or minus 4 percentage points.
URL to the original article: http://www.housingwire.com/2012/01/26/sharp-divide-exists-between-dems-repubs-on-govt-help-in-foreclosures
For further information on Fresno Real Estate check: http://www.londonproperties.com
Reports Say That Housing Will "Turn Corner" in 2012
Source: Real Trends Update #1369
Many housing market forecasters have said that 2012 will be the year that housing turns the corner. For those who closely follow housing there is abundant evidence that housing has already turned the corner. Unit sales were up in December for the sixth consecutive month, without any new Federal government assistance (other than record low rates) and according to NAR pending home sales were up 11 months in a row, even though December's numbers appear to have drifted down somewhat.
Prices are still soft in the great majority of markets. However, when one looks at the data more closely there are several regions of the country where segments of the market are seeing price increases. There are segments of markets where inventory is at record lows and where historical precedent indicates prices will begin to rise shortly due to the shortage of inventory.
Each of these factors should bolster housing in 2012. One other factor not accounted for will be the interest of institutional funds in single family "buy-rent-hold" investment pools. Further positive news could come from the GSE attempts to structure bulk sales to investors of their foreclosed inventories.
For further information on Fresno Real Estate check: http://www.londonproperties.com
Many housing market forecasters have said that 2012 will be the year that housing turns the corner. For those who closely follow housing there is abundant evidence that housing has already turned the corner. Unit sales were up in December for the sixth consecutive month, without any new Federal government assistance (other than record low rates) and according to NAR pending home sales were up 11 months in a row, even though December's numbers appear to have drifted down somewhat.
Prices are still soft in the great majority of markets. However, when one looks at the data more closely there are several regions of the country where segments of the market are seeing price increases. There are segments of markets where inventory is at record lows and where historical precedent indicates prices will begin to rise shortly due to the shortage of inventory.
Each of these factors should bolster housing in 2012. One other factor not accounted for will be the interest of institutional funds in single family "buy-rent-hold" investment pools. Further positive news could come from the GSE attempts to structure bulk sales to investors of their foreclosed inventories.
For further information on Fresno Real Estate check: http://www.londonproperties.com
A Reprieve for Unemployed Borrowers
Source: The New York Times
By VICKIE ELMER
FANNIE MAE and Freddie Mac’s recent extension of forbearance programs will give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.
In a forbearance program, a lender agrees not to foreclose on a property and gives a borrower several months’ grace from or reduction in monthly mortgage payments. The programs work best for temporary setbacks, like job loss, health problems or natural disasters.
Along with the reprieve come drawbacks — most significantly a larger total debt from the smaller payments. “Your unpaid balance keeps getting higher and higher and higher,” said Jennifer Murphy, the director of lender-servicer relations for the nonprofit Center for New York City Neighborhoods.
The new temporary mortgage payment is often set to 31 percent of your household income; in some cases lenders agree to accept no payments. Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring its approval as well as the lender’s.
But even with the program in place, your lender could still report a mortgage as delinquent, which would adversely affect your credit, so ask about its policy, said Martha Cedeno-Ross, a foreclosure assistance counselor with Neighborhood Housing Services of Waterbury, Conn. Because some agreements may add onerous terms and conditions, homeowners should also consult with a real estate lawyer, or a housing counselor certified by the Department of Housing and Urban Development.
Some 26,801 homeowners completed Fannie Mae loan forbearance and repayment plans in the first nine months of 2011, up 13 percent from the same period in 2010. By comparison, the total for all of 2008 was 7,892, according to Fannie Mae’s financial filings with the Securities and Exchange Commission.
To qualify, borrowers must be unemployed, which means not working at all, though a co-borrower could still be employed, said Brad German, a Freddie Mac spokesman.
To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.
You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — and Knowyouroptions.com.
Be sure to plan an “end strategy” well before the forbearance agreement runs out.
“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.
Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.
Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.
URL to original article: http://www.nytimes.com/2012/01/22/realestate/mortgages-a-reprieve-for-unemployed-borrowers.html?_r=2&ref=realestate
For further information on Fresno Real Estate check: http://www.londonproperties.com
By VICKIE ELMER
FANNIE MAE and Freddie Mac’s recent extension of forbearance programs will give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.
In a forbearance program, a lender agrees not to foreclose on a property and gives a borrower several months’ grace from or reduction in monthly mortgage payments. The programs work best for temporary setbacks, like job loss, health problems or natural disasters.
Along with the reprieve come drawbacks — most significantly a larger total debt from the smaller payments. “Your unpaid balance keeps getting higher and higher and higher,” said Jennifer Murphy, the director of lender-servicer relations for the nonprofit Center for New York City Neighborhoods.
The new temporary mortgage payment is often set to 31 percent of your household income; in some cases lenders agree to accept no payments. Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring its approval as well as the lender’s.
But even with the program in place, your lender could still report a mortgage as delinquent, which would adversely affect your credit, so ask about its policy, said Martha Cedeno-Ross, a foreclosure assistance counselor with Neighborhood Housing Services of Waterbury, Conn. Because some agreements may add onerous terms and conditions, homeowners should also consult with a real estate lawyer, or a housing counselor certified by the Department of Housing and Urban Development.
Some 26,801 homeowners completed Fannie Mae loan forbearance and repayment plans in the first nine months of 2011, up 13 percent from the same period in 2010. By comparison, the total for all of 2008 was 7,892, according to Fannie Mae’s financial filings with the Securities and Exchange Commission.
To qualify, borrowers must be unemployed, which means not working at all, though a co-borrower could still be employed, said Brad German, a Freddie Mac spokesman.
To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.
You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — and Knowyouroptions.com.
Be sure to plan an “end strategy” well before the forbearance agreement runs out.
“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.
Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.
Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.
URL to original article: http://www.nytimes.com/2012/01/22/realestate/mortgages-a-reprieve-for-unemployed-borrowers.html?_r=2&ref=realestate
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, January 26, 2012
The American Dream of retirement is endangered
Source: MarketWatch
BOSTON (MarketWatch) — President Barack Obama, in his State of the Union speech, didn’t really touch on the subject near and dear to the hearts of millions of Americans — the State of Retirement in the U.S.
No doubt he had other pressing matters to address. So allow us the pleasure of issuing — thanks in large part to many experts on the topic — our State of Retirement column.
In short: Things are bad and, in the absence of action or in the presence of ill-advised action, could get much worse.
“I think the state of retirement in America is endangered as the ‘Great Recession’ has taken a toll on the financial status of many and as retirement savings were not adequate for many prior to the ‘Great Recession,’” said Matthew Greenwald, the president of Matthew Greenwald & Associates, a leading retirement research firm. “There are several things that need to be fixed, including addressing Social Security and helping people feel confident in the viability of the system, more effective defined-contribution plans that do a better job of encouraging participants to defer more of their income and more effective advice to retirees that helps them use their financial assets most effectively when they retire.”
Others are in the same camp. “There are many challenges,” said Anna Rappaport, the president of Anna Rappaport Consulting and chair of the Society of Actuary’s Committee on Post-Retirement Needs and Risks. But Rappaport also said there’s a lot of opportunity to fix those challenges.
Here’s a look at the challenges and some ways to respond.
Social Security
The combined Social Security trust funds will be exhausted in 2036 and at that point there will only be enough income coming in to pay for 77% of scheduled benefits.
Read the trustees’ report here.
Now 24 years might seem like plenty of time to fix that problem but there doesn’t seem to be the political will to do so. Elected officials are seemingly afraid to tackle the issue; they would rather a greater fool put their bid to be re-elected at risk than address an issue that will affect some 78.1 million Americans a generation from now, which we should note is twice the number of Americans age 65 and older today.
But the truth of the matter is that it’s time that President Obama (or someone) take a page from President Ronald Reagan’s book when, in 1981, he established a commission led by Alan Greenspan to reform Social Security.
Some two years later, as a result of that commission’s work, amendments to Social Security included a provision for raising the full retirement age from age 65 to 67, phased in over time. At the time, the Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age.
Given the current and predicted future state of Social Security, it’s time to once again raise the full retirement age, according to Bob Reynolds, the president and CEO of Putnam Investments. This time, Reynolds suggests, we might peg the full retirement age to life expectancy so as to adjust for improvements in the health of older people and increases in average life expectancy.
In 1940, for instance, the average 65-year-old male in the U.S. had a life expectancy of 77.7. In 1990, it was 80.3. And by 2006, it was 81.6. “You have to adjust for that,” Reynolds said. “It’s just too costly.”
FYI: Using 1940 as the benchmark ratio, the full retirement age could be raised, by my calculations, to 70¾.
Of course, you would phase the increase in over a period of time so that people have time to prepare for it, Reynolds said. And you might leave the full retirement age for people over age 55 as is, while adjusting it upward for those under age 55.
Reynolds also favors increasing the amount of earnings subject to taxation for a given year. For 2012, the annual limit, the contribution and benefit base for Social Security, is $110,100. He suggests that the contribution and benefit base be increased to “somewhere around” $150,000. “That would provide the base for a stable system long term,” Reynolds said. He noted, for instance, that there’s no limit on the amount one’s taxed to pay for Medicare.
What’s more, Reynolds is in favor of examining a needs-based system that would reduce one’s Social Security benefit based on one’s income or assets. “It’s something that should be looked at,” he said.
Others also see the need to shore up Social Security. For instance, Cynthia Egan, president of T. Rowe Price Retirement Plan Services, said: “Lower income earners, those who are not covered by a defined contribution plan, as well as ‘weak savers’ are going to be highly reliant on Social Security. It is what it is. So we must ensure the stability and reliability of the Social Security program for the future.”
Contribution rates
On average, workers — at least those who have such a plan — contribute about 7% of their compensation into their 401(k) plan and that, many experts say, is too low. According to Reynolds, one would need to save at least 10% to replace, when combined with Social Security benefits, 80% of one’s final pay in retirement. Others say contribution rates have to be even higher the longer one waits to save and the less one has socked away.
Maybe the time has come to put in place plans that would automatically escalate the amount one contributes to a 401(k) to a minimum of 10%, not just the 3% which is the norm. Others agreed. “People need to save more — and we need to figure out how to make that happen,” Rappaport said.
To be fair, not all experts are worried about contribution rates or the shortcomings of 401(k) plans.
For instance, Kevin Crain, head of Institutional Retirement & Benefit Services for Bank of America Merrill Lynch, offered the following: “We believe that privately sponsored corporate retirement systems are structured to be successful, and can be even more successful with employer’s continued focus on enhancements to their financial benefit plans and services. More specifically, within 401(k)s, we continue to see significant increases in employee engagement and utilization of these plans through such tools as auto enrollment and advice services.”
And Linda Wolohan, a spokeswoman for the Vanguard Group, said: “The U.S. retirement system, while rocked like any investment-based program during the severe market downturn of a few years ago, has shown great resilience.”
For instance, she noted that retirement wealth for the typical 401(k) plan participant grew over the past five years even in the face of the substantial market and economic shocks. What’s more, she said, while account balances have sometimes been cited as too low to be helpful in retirement, it’s important to note that the typical participant is a 46-year-old male who is saving 8.8%, with 20 to 25 more years to work and grow his account. “His retirement plan assets will be complemented by Social Security benefits and other savings, perhaps assets in other employer plans or a spouse’s plan, or personal savings,” she said. “Even though we always encourage people to save more — ideally at least 12% to 15% of their income — the reality is that more participants than you think may be on target for retirement.”
Coverage
Another issue plaguing the U.S. today is this: Just half of the 150 million or so working Americans have an employer-sponsored retirement plan at work. And the 75 million workers who don’t have a retirement plan at work aren’t saving anything at all for their golden years. But studies suggest that those workers might save if they did have a plan at work. So, Reynolds is in favor of creating what’s been called a universal, or automatic, IRA.
According to the Heritage Foundation, universal or automatic IRAs would provide a relatively simple, cost-effective way to increase retirement security for the millions of workers without plan coverage. The universal or automatic IRA, said the Heritage Foundation, is a way that employees of smaller businesses can choose to save for retirement by allowing their employers regularly transfer an amount from their paycheck to an IRA.
Read the Heritage Foundations report on automatic IRAs here.
For her part, Egan said there’s no need for another retirement plan, just incentives. “Small employers should be offered incentives to provide coverage,” she said. “We don’t need another vehicle. There are many, many providers who support small- and micro-plan services. We simply need to incent the smaller employer to make it happen and keep it simple for them.”
By the way, one big risk looming is the possibility that those folks who did the right thing and saved for retirement might end up paying in one way or another for those who didn’t.
Literacy and confidence
Sometime in March, the Employee Benefit Research Institute will release the 22nd annual Retirement Confidence Survey and it likely will show that only a few Americans are very confident about having enough money for retirement. In 2011, just 13% were very confident.
Reynolds suggests that there’s a correlation between financial literacy and confidence. To solve the confidence problem, we must solve the literacy problem. According to Reynolds, it’s time to provide the education and tools required to help people understand how much to save and how to invest, how much they will need to accumulate for retirement, and how to make their money last a lifetime once in retirement. Knowledge will lead to action, and action will lead to confidence.
Others agree. “Financial literacy and awareness are key components in helping Americans prepare for retirement,” said Suzanna de Baca, the vice president of wealth strategies at Ameriprise Financial. “Any American looking ahead to retirement can benefit from a written financial plan that will help them define their retirement goals and objectives, and guide them in creating a realistic plan to create a more confident financial future.”
Rachel McTague, a spokeswoman for the Investment Company Institute (ICI), also said education is needed. “ICI research finds that the system of saving for retirement in 401(k) plans and IRAs is a success, based on such survey data and modeling of potential savings over a full career with 401(k) plans,” she said. “Nonetheless, we believe there is room for improvement. Among other priorities, we support efforts to provide retirement savers with information and tools to help them use the system to accumulate assets and understand and navigate the distribution phase as well.”
Read the ICI research at this website.
In the absence of such education and planning, however, there are those who say policies that force people to save on their own for retirement hurt more than help. “Too much responsibility has been shifted to individuals, and they are not well prepared to handle them,” said Rappaport. “Financial literacy creates major challenges and we need systems that work without people having initiative.”
Outliving one’s assets
Right now, there’s much ado about outliving one’s assets. Experts are worried that average Americans don’t understand longevity risk and might draw down their assets too quickly during retirement. According to experts, many Americans should consider adding investments that insure against the risk of outliving one’s assets. But that’s unlikely to happen anytime soon. Most Americans are distrustful of such products. Nonetheless, it’s worth adding this opinion to the mix.
“Striking the right balance between growth and income to keep from outliving one’s retirement savings is an even more daunting task than it was before the current period of market volatility and low interest rates,” said Chris Winans, a spokesman for AXA Equitable. “The problem is that 401(k)s and plain-vanilla savings accounts without downside protection are exposed to the vagaries of the market. You wouldn’t think of not spending whatever it costs to insure from losing your house in a fire. Why wouldn’t you want protection on a portion of your retirement nest egg, too? Our challenge is to help people understand this value for themselves and their families. You hope your savings appreciate and nothing bad happens, but a lifetime income guarantee reduces some of the risk. That’s worth something.”
Tax breaks and retirement
Efforts to eliminate the so-called tax breaks Americans get for saving money in a 401(k) or other plan where they can save on a pre-tax basis could affect adversely the state of retirement in the U.S.
According to Reynolds, 401(k) plans and the like are not tax breaks. Rather they are tax-deferred plans. At some point in the future, Americans will pay ordinary income taxes on the money distributed from those plans. Efforts to eliminate or reduce incentives to save might backfire and reduce further the poor state of retirement in the U.S., not improve it.
Egan is of the same opinion. “Tax incentives must be preserved for retirement savings,” she said. “Our defined contribution system reflects ‘the American way.’ There’s a balance among government endorsement and oversight, corporate and plan sponsor fiduciary responsibility, individual responsibility, and free market competition among service providers.”
The good news — sort of
“As more and more baby boomers retire, the discussion on retirement, on retirement income, will become a national topic,” said Reynolds. “And I think it will spark the interest of retirement to all age groups.”
Let’s hope that’s the case because the problem is real. “America is facing an unprecedented retirement challenge as the U.S. population undergoes a radical demographic shift,” said Michael Falcon, head of retirement at J.P. Morgan Asset Management. “Twenty percent of the population will be over 65 years old by 2020 and, despite impressive aggregate asset growth, many Americans are still significantly short of the savings they will need for a dignified retirement and are unprepared for the complex financial choices they will need to make.”
URL to original article: http://www.builderonline.com/builder-pulse/the-american-dream-of-retirement-is-endangered.aspx?cid=BP:012612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
BOSTON (MarketWatch) — President Barack Obama, in his State of the Union speech, didn’t really touch on the subject near and dear to the hearts of millions of Americans — the State of Retirement in the U.S.
No doubt he had other pressing matters to address. So allow us the pleasure of issuing — thanks in large part to many experts on the topic — our State of Retirement column.
In short: Things are bad and, in the absence of action or in the presence of ill-advised action, could get much worse.
“I think the state of retirement in America is endangered as the ‘Great Recession’ has taken a toll on the financial status of many and as retirement savings were not adequate for many prior to the ‘Great Recession,’” said Matthew Greenwald, the president of Matthew Greenwald & Associates, a leading retirement research firm. “There are several things that need to be fixed, including addressing Social Security and helping people feel confident in the viability of the system, more effective defined-contribution plans that do a better job of encouraging participants to defer more of their income and more effective advice to retirees that helps them use their financial assets most effectively when they retire.”
Others are in the same camp. “There are many challenges,” said Anna Rappaport, the president of Anna Rappaport Consulting and chair of the Society of Actuary’s Committee on Post-Retirement Needs and Risks. But Rappaport also said there’s a lot of opportunity to fix those challenges.
Here’s a look at the challenges and some ways to respond.
Social Security
The combined Social Security trust funds will be exhausted in 2036 and at that point there will only be enough income coming in to pay for 77% of scheduled benefits.
Read the trustees’ report here.
Now 24 years might seem like plenty of time to fix that problem but there doesn’t seem to be the political will to do so. Elected officials are seemingly afraid to tackle the issue; they would rather a greater fool put their bid to be re-elected at risk than address an issue that will affect some 78.1 million Americans a generation from now, which we should note is twice the number of Americans age 65 and older today.
But the truth of the matter is that it’s time that President Obama (or someone) take a page from President Ronald Reagan’s book when, in 1981, he established a commission led by Alan Greenspan to reform Social Security.
Some two years later, as a result of that commission’s work, amendments to Social Security included a provision for raising the full retirement age from age 65 to 67, phased in over time. At the time, the Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age.
Given the current and predicted future state of Social Security, it’s time to once again raise the full retirement age, according to Bob Reynolds, the president and CEO of Putnam Investments. This time, Reynolds suggests, we might peg the full retirement age to life expectancy so as to adjust for improvements in the health of older people and increases in average life expectancy.
In 1940, for instance, the average 65-year-old male in the U.S. had a life expectancy of 77.7. In 1990, it was 80.3. And by 2006, it was 81.6. “You have to adjust for that,” Reynolds said. “It’s just too costly.”
FYI: Using 1940 as the benchmark ratio, the full retirement age could be raised, by my calculations, to 70¾.
Of course, you would phase the increase in over a period of time so that people have time to prepare for it, Reynolds said. And you might leave the full retirement age for people over age 55 as is, while adjusting it upward for those under age 55.
Reynolds also favors increasing the amount of earnings subject to taxation for a given year. For 2012, the annual limit, the contribution and benefit base for Social Security, is $110,100. He suggests that the contribution and benefit base be increased to “somewhere around” $150,000. “That would provide the base for a stable system long term,” Reynolds said. He noted, for instance, that there’s no limit on the amount one’s taxed to pay for Medicare.
What’s more, Reynolds is in favor of examining a needs-based system that would reduce one’s Social Security benefit based on one’s income or assets. “It’s something that should be looked at,” he said.
Others also see the need to shore up Social Security. For instance, Cynthia Egan, president of T. Rowe Price Retirement Plan Services, said: “Lower income earners, those who are not covered by a defined contribution plan, as well as ‘weak savers’ are going to be highly reliant on Social Security. It is what it is. So we must ensure the stability and reliability of the Social Security program for the future.”
Contribution rates
On average, workers — at least those who have such a plan — contribute about 7% of their compensation into their 401(k) plan and that, many experts say, is too low. According to Reynolds, one would need to save at least 10% to replace, when combined with Social Security benefits, 80% of one’s final pay in retirement. Others say contribution rates have to be even higher the longer one waits to save and the less one has socked away.
Maybe the time has come to put in place plans that would automatically escalate the amount one contributes to a 401(k) to a minimum of 10%, not just the 3% which is the norm. Others agreed. “People need to save more — and we need to figure out how to make that happen,” Rappaport said.
To be fair, not all experts are worried about contribution rates or the shortcomings of 401(k) plans.
For instance, Kevin Crain, head of Institutional Retirement & Benefit Services for Bank of America Merrill Lynch, offered the following: “We believe that privately sponsored corporate retirement systems are structured to be successful, and can be even more successful with employer’s continued focus on enhancements to their financial benefit plans and services. More specifically, within 401(k)s, we continue to see significant increases in employee engagement and utilization of these plans through such tools as auto enrollment and advice services.”
And Linda Wolohan, a spokeswoman for the Vanguard Group, said: “The U.S. retirement system, while rocked like any investment-based program during the severe market downturn of a few years ago, has shown great resilience.”
For instance, she noted that retirement wealth for the typical 401(k) plan participant grew over the past five years even in the face of the substantial market and economic shocks. What’s more, she said, while account balances have sometimes been cited as too low to be helpful in retirement, it’s important to note that the typical participant is a 46-year-old male who is saving 8.8%, with 20 to 25 more years to work and grow his account. “His retirement plan assets will be complemented by Social Security benefits and other savings, perhaps assets in other employer plans or a spouse’s plan, or personal savings,” she said. “Even though we always encourage people to save more — ideally at least 12% to 15% of their income — the reality is that more participants than you think may be on target for retirement.”
Coverage
Another issue plaguing the U.S. today is this: Just half of the 150 million or so working Americans have an employer-sponsored retirement plan at work. And the 75 million workers who don’t have a retirement plan at work aren’t saving anything at all for their golden years. But studies suggest that those workers might save if they did have a plan at work. So, Reynolds is in favor of creating what’s been called a universal, or automatic, IRA.
According to the Heritage Foundation, universal or automatic IRAs would provide a relatively simple, cost-effective way to increase retirement security for the millions of workers without plan coverage. The universal or automatic IRA, said the Heritage Foundation, is a way that employees of smaller businesses can choose to save for retirement by allowing their employers regularly transfer an amount from their paycheck to an IRA.
Read the Heritage Foundations report on automatic IRAs here.
For her part, Egan said there’s no need for another retirement plan, just incentives. “Small employers should be offered incentives to provide coverage,” she said. “We don’t need another vehicle. There are many, many providers who support small- and micro-plan services. We simply need to incent the smaller employer to make it happen and keep it simple for them.”
By the way, one big risk looming is the possibility that those folks who did the right thing and saved for retirement might end up paying in one way or another for those who didn’t.
Literacy and confidence
Sometime in March, the Employee Benefit Research Institute will release the 22nd annual Retirement Confidence Survey and it likely will show that only a few Americans are very confident about having enough money for retirement. In 2011, just 13% were very confident.
Reynolds suggests that there’s a correlation between financial literacy and confidence. To solve the confidence problem, we must solve the literacy problem. According to Reynolds, it’s time to provide the education and tools required to help people understand how much to save and how to invest, how much they will need to accumulate for retirement, and how to make their money last a lifetime once in retirement. Knowledge will lead to action, and action will lead to confidence.
Others agree. “Financial literacy and awareness are key components in helping Americans prepare for retirement,” said Suzanna de Baca, the vice president of wealth strategies at Ameriprise Financial. “Any American looking ahead to retirement can benefit from a written financial plan that will help them define their retirement goals and objectives, and guide them in creating a realistic plan to create a more confident financial future.”
Rachel McTague, a spokeswoman for the Investment Company Institute (ICI), also said education is needed. “ICI research finds that the system of saving for retirement in 401(k) plans and IRAs is a success, based on such survey data and modeling of potential savings over a full career with 401(k) plans,” she said. “Nonetheless, we believe there is room for improvement. Among other priorities, we support efforts to provide retirement savers with information and tools to help them use the system to accumulate assets and understand and navigate the distribution phase as well.”
Read the ICI research at this website.
In the absence of such education and planning, however, there are those who say policies that force people to save on their own for retirement hurt more than help. “Too much responsibility has been shifted to individuals, and they are not well prepared to handle them,” said Rappaport. “Financial literacy creates major challenges and we need systems that work without people having initiative.”
Outliving one’s assets
Right now, there’s much ado about outliving one’s assets. Experts are worried that average Americans don’t understand longevity risk and might draw down their assets too quickly during retirement. According to experts, many Americans should consider adding investments that insure against the risk of outliving one’s assets. But that’s unlikely to happen anytime soon. Most Americans are distrustful of such products. Nonetheless, it’s worth adding this opinion to the mix.
“Striking the right balance between growth and income to keep from outliving one’s retirement savings is an even more daunting task than it was before the current period of market volatility and low interest rates,” said Chris Winans, a spokesman for AXA Equitable. “The problem is that 401(k)s and plain-vanilla savings accounts without downside protection are exposed to the vagaries of the market. You wouldn’t think of not spending whatever it costs to insure from losing your house in a fire. Why wouldn’t you want protection on a portion of your retirement nest egg, too? Our challenge is to help people understand this value for themselves and their families. You hope your savings appreciate and nothing bad happens, but a lifetime income guarantee reduces some of the risk. That’s worth something.”
Tax breaks and retirement
Efforts to eliminate the so-called tax breaks Americans get for saving money in a 401(k) or other plan where they can save on a pre-tax basis could affect adversely the state of retirement in the U.S.
According to Reynolds, 401(k) plans and the like are not tax breaks. Rather they are tax-deferred plans. At some point in the future, Americans will pay ordinary income taxes on the money distributed from those plans. Efforts to eliminate or reduce incentives to save might backfire and reduce further the poor state of retirement in the U.S., not improve it.
Egan is of the same opinion. “Tax incentives must be preserved for retirement savings,” she said. “Our defined contribution system reflects ‘the American way.’ There’s a balance among government endorsement and oversight, corporate and plan sponsor fiduciary responsibility, individual responsibility, and free market competition among service providers.”
The good news — sort of
“As more and more baby boomers retire, the discussion on retirement, on retirement income, will become a national topic,” said Reynolds. “And I think it will spark the interest of retirement to all age groups.”
Let’s hope that’s the case because the problem is real. “America is facing an unprecedented retirement challenge as the U.S. population undergoes a radical demographic shift,” said Michael Falcon, head of retirement at J.P. Morgan Asset Management. “Twenty percent of the population will be over 65 years old by 2020 and, despite impressive aggregate asset growth, many Americans are still significantly short of the savings they will need for a dignified retirement and are unprepared for the complex financial choices they will need to make.”
URL to original article: http://www.builderonline.com/builder-pulse/the-american-dream-of-retirement-is-endangered.aspx?cid=BP:012612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Obama's refinance plan faces partisan paralysis
Source: MarketWatch
WASHINGTON (MarketWatch) — President Barack Obama’s State of the Union proposal to have Congress approve a sweeping mortgage-refinancing program funded by a bank tax has little or no chance of passage, analysts said.
Specifically, Obama said he’s sending to Congress a plan that would give homeowners a chance to save roughly $3,000 a year on their mortgage by refinancing to historically low rates. The plan would be paid for by a fee on the largest financial institutions, he added.
The plan is expected to be an expansion of an existing White House program that seeks to help underwater borrowers, who have no equity in their homes, to refinance at lower interest rates. However, that program, which already has been expanded, helps underwater borrowers refinance as long as their mortgage is backed by Fannie Mae and Freddie Mac, the government-controlled housing giants.
Analysts speculate that the program Obama is considering would also include millions of underwater borrowers who have mortgages that are not owned by Fannie or Freddie — an effort that would require congressional approval.
To reach this conclusion they point to a Jan. 4 white paper by Federal Reserve Chairman Ben Bernanke, who suggested that regulators could expand the program — known as the Home Affordable Refinance Program — to loans that are not owned by Fannie or Freddie. Read about the HARP program expansion
Bernanke said that perhaps 1 million to 2.5 million borrowers would be eligible to refinance through HARP, except that their mortgages aren’t backed by Fannie and Freddie. Read more about Bernanke's white paper
Yet analysts argue that obtaining congressional approval would be difficult at best. They also point out that the bank tax Obama seeks to pay for the refinancing program would also need statutory approval by Congress.
“Given the inability of Congress to agree on most big issues in the past couple of years, we believe the decision to refer a bill to Congress greatly reduces the chance of a mass refinancing program happening,” Barclays Capital analyst Ajay Rajadhyaksha wrote in a report.
Jaret Seiberg, analyst at Guggenheim Securities LLC in Washington, said he believes it has a one in three chance of being approved, as Republicans weigh whether they worry more about giving Obama a win or experience backlash from troubled homeowners or housing-lobby groups.
He added that Guggenheim believes it would be “almost impossible to enact the bank tax into law” with Republican opposition, but that Congress could find other mechanisms to fund the program that did not require their approval.
Paul Dales, senior U.S. economist at Capital Economics, agrees that it will be a “tough sell” to Republicans, who he said already think the government is too involved in housing.
The bank tax Obama said would pay for the costs of the program was a problem, according to Brian Gardner of Keefe, Bruyette & Woods. “We view the bank tax as a poison pill,” he said.
Mortgage fraud the big banks
Obama also announced that he is setting up a unit in the Justice Department to “expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.” It is unclear how this division, which is expected to be led by New York Attorney General Eric Schneiderman, will impact efforts by states to reach a settlement with five big banks over questionable foreclosure practices. Read more about state, Feds discussing bank-settlement goals.
Guggenheim’s Seiberg said the financial-crimes task force could derail the settlement talks. He noted that as part of an expected settlement, big banks are likely to receive relief from state claims on loans and that relief is worth less if federal prosecutors bring similar claims.
However, Geoff Greenwood, spokesman for Iowa Attorney General Tom Miller, said he did not believe the task force will impact settlement negotiations at all.
Miller is helping to lead the talks between state attorneys general and federal prosecutors and the five big banks: Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC +0.14% , J.P. Morgan Chase & Co. /quotes/zigman/272085/quotes/nls/jpm JPM +0.08% , Citigroup Inc. /quotes/zigman/5065548/quotes/nls/c C +0.13% , Wells Fargo & Co. /quotes/zigman/239557/quotes/nls/wfc WFC -0.10% and Ally Financial Inc. (formerly GMAC).
He said that while states would release servicing and origination claims against the five big banks, it would not grant criminal immunity to bank executives. Greenwood added that banks involved would not be released from any fraud related to securitizations and that the settlement does not involve other companies that originated fraudulent loans.
“So there are many other pieces of the puzzle, and this announcement will enable states and our federal partners to continue to work together to address those other pieces,” Greenwood commented.
URL to original article: http://www.builderonline.com/builder-pulse/obama-s-refinance-plan-faces-partisan-paralysis.aspx?cid=BP:012612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
WASHINGTON (MarketWatch) — President Barack Obama’s State of the Union proposal to have Congress approve a sweeping mortgage-refinancing program funded by a bank tax has little or no chance of passage, analysts said.
Specifically, Obama said he’s sending to Congress a plan that would give homeowners a chance to save roughly $3,000 a year on their mortgage by refinancing to historically low rates. The plan would be paid for by a fee on the largest financial institutions, he added.
The plan is expected to be an expansion of an existing White House program that seeks to help underwater borrowers, who have no equity in their homes, to refinance at lower interest rates. However, that program, which already has been expanded, helps underwater borrowers refinance as long as their mortgage is backed by Fannie Mae and Freddie Mac, the government-controlled housing giants.
Analysts speculate that the program Obama is considering would also include millions of underwater borrowers who have mortgages that are not owned by Fannie or Freddie — an effort that would require congressional approval.
To reach this conclusion they point to a Jan. 4 white paper by Federal Reserve Chairman Ben Bernanke, who suggested that regulators could expand the program — known as the Home Affordable Refinance Program — to loans that are not owned by Fannie or Freddie. Read about the HARP program expansion
Bernanke said that perhaps 1 million to 2.5 million borrowers would be eligible to refinance through HARP, except that their mortgages aren’t backed by Fannie and Freddie. Read more about Bernanke's white paper
Yet analysts argue that obtaining congressional approval would be difficult at best. They also point out that the bank tax Obama seeks to pay for the refinancing program would also need statutory approval by Congress.
“Given the inability of Congress to agree on most big issues in the past couple of years, we believe the decision to refer a bill to Congress greatly reduces the chance of a mass refinancing program happening,” Barclays Capital analyst Ajay Rajadhyaksha wrote in a report.
Jaret Seiberg, analyst at Guggenheim Securities LLC in Washington, said he believes it has a one in three chance of being approved, as Republicans weigh whether they worry more about giving Obama a win or experience backlash from troubled homeowners or housing-lobby groups.
He added that Guggenheim believes it would be “almost impossible to enact the bank tax into law” with Republican opposition, but that Congress could find other mechanisms to fund the program that did not require their approval.
Paul Dales, senior U.S. economist at Capital Economics, agrees that it will be a “tough sell” to Republicans, who he said already think the government is too involved in housing.
The bank tax Obama said would pay for the costs of the program was a problem, according to Brian Gardner of Keefe, Bruyette & Woods. “We view the bank tax as a poison pill,” he said.
Mortgage fraud the big banks
Obama also announced that he is setting up a unit in the Justice Department to “expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.” It is unclear how this division, which is expected to be led by New York Attorney General Eric Schneiderman, will impact efforts by states to reach a settlement with five big banks over questionable foreclosure practices. Read more about state, Feds discussing bank-settlement goals.
Guggenheim’s Seiberg said the financial-crimes task force could derail the settlement talks. He noted that as part of an expected settlement, big banks are likely to receive relief from state claims on loans and that relief is worth less if federal prosecutors bring similar claims.
However, Geoff Greenwood, spokesman for Iowa Attorney General Tom Miller, said he did not believe the task force will impact settlement negotiations at all.
Miller is helping to lead the talks between state attorneys general and federal prosecutors and the five big banks: Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC +0.14% , J.P. Morgan Chase & Co. /quotes/zigman/272085/quotes/nls/jpm JPM +0.08% , Citigroup Inc. /quotes/zigman/5065548/quotes/nls/c C +0.13% , Wells Fargo & Co. /quotes/zigman/239557/quotes/nls/wfc WFC -0.10% and Ally Financial Inc. (formerly GMAC).
He said that while states would release servicing and origination claims against the five big banks, it would not grant criminal immunity to bank executives. Greenwood added that banks involved would not be released from any fraud related to securitizations and that the settlement does not involve other companies that originated fraudulent loans.
“So there are many other pieces of the puzzle, and this announcement will enable states and our federal partners to continue to work together to address those other pieces,” Greenwood commented.
URL to original article: http://www.builderonline.com/builder-pulse/obama-s-refinance-plan-faces-partisan-paralysis.aspx?cid=BP:012612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Population Projections: United States and the World
On January 18, 2012, in Economist Commentaries, by Lawrence Yun, Chief Economist ..
Since the fall of the Berlin Wall in Germany, real estate prices in what was formally known as East Germany have barely risen over the past 20 years. The reason is simple: many Germans left East for West in search of better jobs. This hollowing-out phenomenon is not good for real estate.
Real Estate prices in Japan have been in the doldrums for at least the past 20 years as well. Part of the reason is due to the crash in bubble real estate prices in the 1980s. But there is also another simple reason: population in Japan has essentially stopped growing. The same number of people cannot create additional demand for real estate, unless they want to buy second and third homes.
In regards to the United States, some have claimed that the large number of people retiring and an eventual dying off of the baby boomers will mean less housing demand in the future. This ignores one simple fact about the broader population and not just the baby boomers. Every year about 3 million additional people live in the U.S. The projection by the Census further calls for more people for the foreseeable future with the total tally rising to 436 million by 2050 from the current total of 311 million people. Such growth assures steady housing demand.
Perhaps more encouraging or disturbing, depending upon your point of view, is the trend in the world population. For centuries upon centuries, the world population never exceeded a billion people. Then in 1900 there were 1.6 billion people living on this planet. In 2000, population had nearly quadrupled to 6 billion people. Most demographers believe that further population gains will occur throughout this century before eventually topping out and stabilizing. The stabilizing population, according to experts, is to be around 9 to 10 billion people. Hard to think about what all this means. Demand for real estate is automatically created. But how many by that time will be able to say that they own a property of their own?
Other questions to ponder: What will be the price of wild-caught sushi? Is there another Steve Jobs in the wings? Before panicking, consider this visual by the National Geographic, who calculated that the whole world population today could fit, shoulder-to-shoulder, into Rhode Island, the smallest state in the U.S. Another simpler way to think about the everyday impact is that going from the current 7 billion to 10 billion is not even a doubling of population. So imagine a condition where you see twice as many people around your local town and spatial area. Is that too much or it that absorbable?
URL to original article: http://economistsoutlook.blogs.realtor.org/2012/01/18/population-projections-united-states-and-the-world/?cid=WR01262012:40707&ed_rid=335836
For further information on Fresno Real Estate check: http://www.londonproperties.com
Since the fall of the Berlin Wall in Germany, real estate prices in what was formally known as East Germany have barely risen over the past 20 years. The reason is simple: many Germans left East for West in search of better jobs. This hollowing-out phenomenon is not good for real estate.
Real Estate prices in Japan have been in the doldrums for at least the past 20 years as well. Part of the reason is due to the crash in bubble real estate prices in the 1980s. But there is also another simple reason: population in Japan has essentially stopped growing. The same number of people cannot create additional demand for real estate, unless they want to buy second and third homes.
In regards to the United States, some have claimed that the large number of people retiring and an eventual dying off of the baby boomers will mean less housing demand in the future. This ignores one simple fact about the broader population and not just the baby boomers. Every year about 3 million additional people live in the U.S. The projection by the Census further calls for more people for the foreseeable future with the total tally rising to 436 million by 2050 from the current total of 311 million people. Such growth assures steady housing demand.
Perhaps more encouraging or disturbing, depending upon your point of view, is the trend in the world population. For centuries upon centuries, the world population never exceeded a billion people. Then in 1900 there were 1.6 billion people living on this planet. In 2000, population had nearly quadrupled to 6 billion people. Most demographers believe that further population gains will occur throughout this century before eventually topping out and stabilizing. The stabilizing population, according to experts, is to be around 9 to 10 billion people. Hard to think about what all this means. Demand for real estate is automatically created. But how many by that time will be able to say that they own a property of their own?
Other questions to ponder: What will be the price of wild-caught sushi? Is there another Steve Jobs in the wings? Before panicking, consider this visual by the National Geographic, who calculated that the whole world population today could fit, shoulder-to-shoulder, into Rhode Island, the smallest state in the U.S. Another simpler way to think about the everyday impact is that going from the current 7 billion to 10 billion is not even a doubling of population. So imagine a condition where you see twice as many people around your local town and spatial area. Is that too much or it that absorbable?
URL to original article: http://economistsoutlook.blogs.realtor.org/2012/01/18/population-projections-united-states-and-the-world/?cid=WR01262012:40707&ed_rid=335836
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home Ownership Rates by Age
On January 13, 2012, in Economist Commentaries, by Lawrence Yun, Chief Economist ..
In 2000 (a very normal housing year without a bubble), with virtually no discussion of it in the media or in the academic community, 67 percent of Americans lived as a homeowning household. Then came the easy credit conditions which fueled home buying beyond normal and the ownership rate rose to 69 percent. But the subsequent bust brought the ownership rate down to today’s 66 percent.
URL to original article: http://economistsoutlook.blogs.realtor.org/2012/01/13/homeowners-by-age/?cid=WR01262012:40706&ed_rid=335836
For further information on Fresno Real Estate check: http://www.londonproperties.com
In 2000 (a very normal housing year without a bubble), with virtually no discussion of it in the media or in the academic community, 67 percent of Americans lived as a homeowning household. Then came the easy credit conditions which fueled home buying beyond normal and the ownership rate rose to 69 percent. But the subsequent bust brought the ownership rate down to today’s 66 percent.
Not all age groups had similar experiences throughout this cycle. The very young were mildly impacted. The very old did not on average feel any pain – at least according to the statistics, though no doubt there were some retirees who painfully lost a home to a foreclosure. The big impact was felt among people in their 30’s, who have much the same homeownership rate today as back in 2000, well before the bubble. It is also this group where there is potential for re-entering into the homeownership market in the near future.
Also note the general higher ownership rate as people get older and more mature and presumably become more responsible. Note the very high ownership rate among the 65-and-over population, who would have for the large part already paid off their mortgages.
URL to original article: http://economistsoutlook.blogs.realtor.org/2012/01/13/homeowners-by-age/?cid=WR01262012:40706&ed_rid=335836
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, January 25, 2012
Economic mobility varies by degree
Source: The Atlantic
WEEKLY EARNINGS BY EDUCATION/BLS
URL to original article: http://www.builderonline.com/builder-pulse/economic-mobility-varies-by-degree.aspx?cid=BP:012512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Education pays off, in general. But sometimes, so does luck, grit, and natural smarts. The top 10% of earners who didn't go to college earn more than the typical college grad.
WEEKLY EARNINGS BY EDUCATION/BLSThe highest earners? They're the highest learners.
That is the simplest summation possible of a new report from the Bureau of Labor Statistics on workers' income.
The most interesting data compares earnings by education. The above graph looks within groups of similar education attainment and breaks down the weekly earnings of the richest and poorest in that group. For example, the "Not HS" group represents adults who never graduated from high school. The poorest 10 percent within that group earns less than $300 a week. Moving right along the graph, the typical non-high-school grad (at 50th percentile) earns just shy of $500 a week. The richest decile of non-high-school grads make $830 every week. That's more than the typical worker with partial college experience and more than the poorest 10% of advanced degree earners.
Like I said, the simplest explanation for this graph is that education is an investment that you should expect will pay off. Every step up the education ladder results in higher earnings in the aggregate.
But another conclusion you could reach from this graph is that the luckiest/most talented 10 percent of high school graduates who don't go to college (represented by the far right red dot) actually earn more than the typical college graduate. Educational attainment is directional, not destiny.
The most interesting data compares earnings by education. The above graph looks within groups of similar education attainment and breaks down the weekly earnings of the richest and poorest in that group. For example, the "Not HS" group represents adults who never graduated from high school. The poorest 10 percent within that group earns less than $300 a week. Moving right along the graph, the typical non-high-school grad (at 50th percentile) earns just shy of $500 a week. The richest decile of non-high-school grads make $830 every week. That's more than the typical worker with partial college experience and more than the poorest 10% of advanced degree earners.
Like I said, the simplest explanation for this graph is that education is an investment that you should expect will pay off. Every step up the education ladder results in higher earnings in the aggregate.
But another conclusion you could reach from this graph is that the luckiest/most talented 10 percent of high school graduates who don't go to college (represented by the far right red dot) actually earn more than the typical college graduate. Educational attainment is directional, not destiny.
URL to original article: http://www.builderonline.com/builder-pulse/economic-mobility-varies-by-degree.aspx?cid=BP:012512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Sales Stir Hope for Housing Market .
By ROBBIE WHELAN
Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.
Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors' chief economist, called the December gain "a good finish to a very tough year."
Many economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.
Still, economists cautioned that it's too early to assume that the market is recovering. "These were positive numbers, but that doesn't mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up," said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.
The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December's level. A six-month supply of homes typically is considered healthy, although NAR's numbers don't take into account the "shadow inventory" of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.
Prices, meanwhile, continue to fall. The median price in December was $164,500, down 2.5% from a year earlier. Prices were down in all regions except the West, where prices rose slightly, compared with a year ago. For all of 2011, the median was $166,100, the lowest since 2002.
"What you really want to see is sales going up, inventories going down, and prices going up, not down," said David Semmens, an economist with Standard Chartered. "People still feel they can hold off buying a house because the recovery won't be that aggressive. It's still very much a buyer's market."
That buyer's market allowed Andrew Gonzales, a 24-year-old police officer in Santa Fe, N.M., to be picky about price when looking for a home for himself and his three-year-old daughter. He closed last month on a $132,000, three-bedroom home in Rio Rancho, a suburb of Albuquerque, after the price was cut twice. Just before closing, the home was appraised for $18,000 higher than the sales price, at $150,000, by a private appraiser.
"I got tired of paying rent, and I'm a single father, so I wanted a home for my daughter," he said. "I was just waiting for the price to come down."
Vision Equity, a company that buys foreclosed homes at auctions in Indianapolis, stepped up the volume of its purchases this winter, buying about 45 homes a month in October, November and December, compared with about 30 homes a month last summer.
"There's a lot of cash investor activity right now," said Steve Olson, a spokesman for Vision Equity. "The chatter at the courthouse was, there's going to be a lot more product coming on the market, and the pricing is going to be good for investors. And we prepared our own investors for that."
URL to original article: http://online.wsj.com/article/SB10001424052970204616504577172701614674474.html?mod=WSJ_RealEstate_LeftTopNews
For further information on Fresno Real Estate check: http://www.londonproperties.com
Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.
Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors' chief economist, called the December gain "a good finish to a very tough year."
Many economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.
Still, economists cautioned that it's too early to assume that the market is recovering. "These were positive numbers, but that doesn't mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up," said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.
The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December's level. A six-month supply of homes typically is considered healthy, although NAR's numbers don't take into account the "shadow inventory" of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.
Prices, meanwhile, continue to fall. The median price in December was $164,500, down 2.5% from a year earlier. Prices were down in all regions except the West, where prices rose slightly, compared with a year ago. For all of 2011, the median was $166,100, the lowest since 2002.
"What you really want to see is sales going up, inventories going down, and prices going up, not down," said David Semmens, an economist with Standard Chartered. "People still feel they can hold off buying a house because the recovery won't be that aggressive. It's still very much a buyer's market."
That buyer's market allowed Andrew Gonzales, a 24-year-old police officer in Santa Fe, N.M., to be picky about price when looking for a home for himself and his three-year-old daughter. He closed last month on a $132,000, three-bedroom home in Rio Rancho, a suburb of Albuquerque, after the price was cut twice. Just before closing, the home was appraised for $18,000 higher than the sales price, at $150,000, by a private appraiser.
"I got tired of paying rent, and I'm a single father, so I wanted a home for my daughter," he said. "I was just waiting for the price to come down."
Vision Equity, a company that buys foreclosed homes at auctions in Indianapolis, stepped up the volume of its purchases this winter, buying about 45 homes a month in October, November and December, compared with about 30 homes a month last summer.
"There's a lot of cash investor activity right now," said Steve Olson, a spokesman for Vision Equity. "The chatter at the courthouse was, there's going to be a lot more product coming on the market, and the pricing is going to be good for investors. And we prepared our own investors for that."
URL to original article: http://online.wsj.com/article/SB10001424052970204616504577172701614674474.html?mod=WSJ_RealEstate_LeftTopNews
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications drop 5%
by KERRI PANCHUK
Mortgage applications fell 5% last week as home purchases and mortgage refinancing activity declined, an industry trade group said Wednesday.
The Mortgage Bankers Association's Market Composite Index – a measure of mortgage loan application volume – fell 5% on a seasonally adjusted basis from a week earlier. Those results include an adjustment for the Martin Luther King holiday.
The refinance index alone fell 5.2% from the previous week. Meanwhile, the seasonally-adjusted purchase index decreased 5.4%.
The same survey said the refinance share of mortgage activity fell from 82.2% to 81.3% in the latest period.
Meanwhile, the average interest rate on a 30-year, fixed-rate mortgage with a conforming loan limit increased to 4.11% from 4.06% a week earlier, and the average 30-year, FRM with jumbo loan balances declined from 4.40% to 4.39%. The average, 30-year FRM backed by the FHA increased to 3.97% from 3.91% a week earlier.
In addition, the 15-year, FRM increased to 3.40%, from 3.33%, and the 5/1 ARM stayed mostly the same at 2.91%, compared to 2.90% the previous week.
Data compiled from December shows 56.6% of mortgage applications were for 30-year loans, while 24.3% and 5.3% went for 15-year loans and ARMs, respectively.
URL to original article: http://www.housingwire.com/2012/01/25/mortgage-applications-drop-5
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications fell 5% last week as home purchases and mortgage refinancing activity declined, an industry trade group said Wednesday.
The Mortgage Bankers Association's Market Composite Index – a measure of mortgage loan application volume – fell 5% on a seasonally adjusted basis from a week earlier. Those results include an adjustment for the Martin Luther King holiday.
The refinance index alone fell 5.2% from the previous week. Meanwhile, the seasonally-adjusted purchase index decreased 5.4%.
The same survey said the refinance share of mortgage activity fell from 82.2% to 81.3% in the latest period.
Meanwhile, the average interest rate on a 30-year, fixed-rate mortgage with a conforming loan limit increased to 4.11% from 4.06% a week earlier, and the average 30-year, FRM with jumbo loan balances declined from 4.40% to 4.39%. The average, 30-year FRM backed by the FHA increased to 3.97% from 3.91% a week earlier.
In addition, the 15-year, FRM increased to 3.40%, from 3.33%, and the 5/1 ARM stayed mostly the same at 2.91%, compared to 2.90% the previous week.
Data compiled from December shows 56.6% of mortgage applications were for 30-year loans, while 24.3% and 5.3% went for 15-year loans and ARMs, respectively.
URL to original article: http://www.housingwire.com/2012/01/25/mortgage-applications-drop-5
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, January 24, 2012
Jobs gains fuel California economic traction
Source: Sacramento Bee
The evidence keeps accumulating: California's economic recovery is gathering momentum. It's just nowhere near a boom yet.
Unemployment in California fell two-tenths of a point last month to 11.1 percent, the lowest level in nearly three years, the Employment Development Department reported Friday. Payrolls expanded for the sixth straight month, and economists pronounced themselves satisfied that the state is finally on the right track.
"We have sort of a nice string going," said Howard Roth, chief economist at the state Department of Finance. "This makes me more confident that it's not going to go away. … I think it's the real thing."
The growth in payroll jobs, which is considered the most reliable barometer of the job market, was a fairly weak 10,700 in December. That was offset somewhat by news that November's job growth was revised upward sharply.
Overall, Roth said, the results show the economy is mending but not operating at full throttle. "It's got to get a lot faster than this," he said. "But it looks like it has a good foundation."
Sacramento unemployment was unchanged at 10.9 percent. The region actually lost 3,700 jobs in December, a month that usually sees payrolls expand.
Nonetheless, economist Jeff Michael of the University of the Pacific said Sacramento's economy is still improving.
"These paths are not smooth," he said. "It's going to be a bit of a choppy pattern."
To a certain extent, December looked relatively weak in Sacramento because November was unusually strong. That was particularly true for retailers. After a better-than-expected surge of hiring in November, they added just 700 jobs across the region in December, less than half the usual amount, said EDD analyst Diane Patterson.
The dry December weather also kept the region's economy somewhat in check. Because of a lack of snow in the Sierra, the leisure and hospitality industry added just 300 jobs, well below normal, Patterson said.
Hiring at the ski resorts could finally start to pick up now that a long-awaited winter storm arrived this week.
Even with the December job losses, Sacramento has gained 6,100 jobs in the past year. The growth rate is well below the state's but suggests that Sacramento – held back for so long by troubles in housing and the public sector – is joining the recovery.
"Last winter was really the bottom for Sacramento," Michael said.
While Sacramento and other inland areas have lagged, coastal markets like San Jose, San Francisco and Orange County have been at the forefront of the recovery. The tech industry and manufacturing exports have been key drivers.
California has now added 240,300 jobs in the past year. That works out to a 1.7 percent growth rate, significantly above the U.S. average.
In another sign of the state's recovery, the California New Car Dealers Association said Friday that new-vehicle sales increased 9.9 percent in 2011. The association forecast an 8.5 percent gain for 2012.
Even though the state's payroll job growth was fairly weak in December, several experts said those figures might not fully represent what's happening out in the economy.
When an economic recovery starts to hit stride, as this one has, it's often accompanied by a surge in new startup companies. The firms, and their employees, don't get counted in the payroll data right away.
"It takes a while for the survey of firms to catch up," said Stephen Levy, director of Palo Alto's Center for Continuing Study of the California Economy.
He said it's no coincidence that in each of the past four months, the payroll figures have been revised upward the following month – sometimes dramatically. On Friday, officials at EDD said November job growth actually totaled 24,700. That's about four times as many new jobs as previously reported.
Levy said it's likely the December job growth, a mere 10,700, will be revised upward, too.
Sacramento tech startup HomeZada typifies the trend. Launched about a year ago, it likely won't show up in the state's monthly job data for a while.
HomeZada makes Web and mobile software to help homeowners track property documents, home-maintenance schedules – even contact information for long-forgotten carpet cleaners or appliance repairmen.
So far the company consists of its three co-founders, but it also employs several software developers and other professionals on a contract basis, said co-founder Elizabeth Dodson.
"We hope we're going to be very big," she said.
URL to original article: http://www.builderonline.com/builder-pulse/jobs-gains-fuel-california-economic-traction.aspx?cid=BP:012412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The evidence keeps accumulating: California's economic recovery is gathering momentum. It's just nowhere near a boom yet.
Unemployment in California fell two-tenths of a point last month to 11.1 percent, the lowest level in nearly three years, the Employment Development Department reported Friday. Payrolls expanded for the sixth straight month, and economists pronounced themselves satisfied that the state is finally on the right track.
"We have sort of a nice string going," said Howard Roth, chief economist at the state Department of Finance. "This makes me more confident that it's not going to go away. … I think it's the real thing."
The growth in payroll jobs, which is considered the most reliable barometer of the job market, was a fairly weak 10,700 in December. That was offset somewhat by news that November's job growth was revised upward sharply.
Overall, Roth said, the results show the economy is mending but not operating at full throttle. "It's got to get a lot faster than this," he said. "But it looks like it has a good foundation."
Sacramento unemployment was unchanged at 10.9 percent. The region actually lost 3,700 jobs in December, a month that usually sees payrolls expand.
Nonetheless, economist Jeff Michael of the University of the Pacific said Sacramento's economy is still improving.
"These paths are not smooth," he said. "It's going to be a bit of a choppy pattern."
To a certain extent, December looked relatively weak in Sacramento because November was unusually strong. That was particularly true for retailers. After a better-than-expected surge of hiring in November, they added just 700 jobs across the region in December, less than half the usual amount, said EDD analyst Diane Patterson.
The dry December weather also kept the region's economy somewhat in check. Because of a lack of snow in the Sierra, the leisure and hospitality industry added just 300 jobs, well below normal, Patterson said.
Hiring at the ski resorts could finally start to pick up now that a long-awaited winter storm arrived this week.
Even with the December job losses, Sacramento has gained 6,100 jobs in the past year. The growth rate is well below the state's but suggests that Sacramento – held back for so long by troubles in housing and the public sector – is joining the recovery.
"Last winter was really the bottom for Sacramento," Michael said.
While Sacramento and other inland areas have lagged, coastal markets like San Jose, San Francisco and Orange County have been at the forefront of the recovery. The tech industry and manufacturing exports have been key drivers.
California has now added 240,300 jobs in the past year. That works out to a 1.7 percent growth rate, significantly above the U.S. average.
In another sign of the state's recovery, the California New Car Dealers Association said Friday that new-vehicle sales increased 9.9 percent in 2011. The association forecast an 8.5 percent gain for 2012.
Even though the state's payroll job growth was fairly weak in December, several experts said those figures might not fully represent what's happening out in the economy.
When an economic recovery starts to hit stride, as this one has, it's often accompanied by a surge in new startup companies. The firms, and their employees, don't get counted in the payroll data right away.
"It takes a while for the survey of firms to catch up," said Stephen Levy, director of Palo Alto's Center for Continuing Study of the California Economy.
He said it's no coincidence that in each of the past four months, the payroll figures have been revised upward the following month – sometimes dramatically. On Friday, officials at EDD said November job growth actually totaled 24,700. That's about four times as many new jobs as previously reported.
Levy said it's likely the December job growth, a mere 10,700, will be revised upward, too.
Sacramento tech startup HomeZada typifies the trend. Launched about a year ago, it likely won't show up in the state's monthly job data for a while.
HomeZada makes Web and mobile software to help homeowners track property documents, home-maintenance schedules – even contact information for long-forgotten carpet cleaners or appliance repairmen.
So far the company consists of its three co-founders, but it also employs several software developers and other professionals on a contract basis, said co-founder Elizabeth Dodson.
"We hope we're going to be very big," she said.
URL to original article: http://www.builderonline.com/builder-pulse/jobs-gains-fuel-california-economic-traction.aspx?cid=BP:012412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The trouble with appraisals
Source: NAHB
January 23, 2012 - Zeroing in on yet another deficiency of a faulty appraisal process that is hurting home values, hampering a housing recovery and often killing sales of homes coming in below the contract sales price, the Government Accountability Office (GAO) earlier this month reported that the Appraisal Subcommittee, which oversees the appraiser regulatory programs established by the states, needs to improve its monitoring procedures.
“These findings underscore the need to establish an effective oversight system to ensure that appraisals accurately reflect true market values and don’t harm aspiring home buyers or builders,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.
A recent NAHB survey shows that one out three builders have lost signed sales contracts because of flawed appraisals and a fall survey conducted by the National Association of Realtors shows that 18 percent of Realtors® reported a recent contract cancellation or delay as a result of a low appraisal.
Numerous flaws in the appraisal system have been causing inaccurate home valuations, both in times of housing weakness and strength. NAHB has been actively seeking improvements in appraiser education and training, particularly for appraisals of new homes, as well as more rigorous oversight so appraisal guidelines are enforced and errors can be corrected as they occur.
The GAO report found the Appraisal Subcommittee’s “enforcement tools and procedures for reporting compliance levels have been limited.” The GAO cited “several weaknesses” that have potentially limited the subcommittee’s ability to monitor state appraiser regulatory agencies, the federal financial institution regulators and the Appraisal Foundation, a private, non-profit corporation that sets criteria for appraisals and appraisers.
Under the Dodd-Frank Act, the Appraisal Subcommittee was granted the authority to establish a national hotline to receive complaints over noncompliance with appraisal independence standards and grievances from appraisers, individuals or other entities over attempts to improperly influence appraisers or the appraisal process. Currently, no such hotline exists and the GAO report states that the creation of a national hotline could strain the Appraisal Subcommittee’s resources.
Observing that “the critical role of real estate appraisals in mortgage underwriting underscores the importance of effective regulation of the appraisal industry,” the GAO study calls on the Appraisal Subcommittee to strengthen its oversight by developing specific policies and procedures for monitoring the appraisal requirements of the federal financial institutions regulators.
How homes are valued can have a dramatic effect on home owners’ mortgages, foreclosure rates, the health of banks and, ultimately, the condition of the U.S. financial system, said Nielsen.
“The current system is not working,” he said. “We must resolve a flawed appraisal process that produces inaccurate assessment of home values, because this fosters price instability, puts more families in danger of default or foreclosure, and undermines the housing and economic recovery. It’s time that regulators, appraisers, lenders and all of the stakeholders in this debate come together and agree on major reforms in appraisal practices and oversight to ensure that homes are appraised at their fair market rate.”
URL to original article: http://www.builderonline.com/builder-pulse/the-trouble-with-appraisals.aspx?cid=BP:012412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
January 23, 2012 - Zeroing in on yet another deficiency of a faulty appraisal process that is hurting home values, hampering a housing recovery and often killing sales of homes coming in below the contract sales price, the Government Accountability Office (GAO) earlier this month reported that the Appraisal Subcommittee, which oversees the appraiser regulatory programs established by the states, needs to improve its monitoring procedures.
“These findings underscore the need to establish an effective oversight system to ensure that appraisals accurately reflect true market values and don’t harm aspiring home buyers or builders,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.
A recent NAHB survey shows that one out three builders have lost signed sales contracts because of flawed appraisals and a fall survey conducted by the National Association of Realtors shows that 18 percent of Realtors® reported a recent contract cancellation or delay as a result of a low appraisal.
Numerous flaws in the appraisal system have been causing inaccurate home valuations, both in times of housing weakness and strength. NAHB has been actively seeking improvements in appraiser education and training, particularly for appraisals of new homes, as well as more rigorous oversight so appraisal guidelines are enforced and errors can be corrected as they occur.
The GAO report found the Appraisal Subcommittee’s “enforcement tools and procedures for reporting compliance levels have been limited.” The GAO cited “several weaknesses” that have potentially limited the subcommittee’s ability to monitor state appraiser regulatory agencies, the federal financial institution regulators and the Appraisal Foundation, a private, non-profit corporation that sets criteria for appraisals and appraisers.
Under the Dodd-Frank Act, the Appraisal Subcommittee was granted the authority to establish a national hotline to receive complaints over noncompliance with appraisal independence standards and grievances from appraisers, individuals or other entities over attempts to improperly influence appraisers or the appraisal process. Currently, no such hotline exists and the GAO report states that the creation of a national hotline could strain the Appraisal Subcommittee’s resources.
Observing that “the critical role of real estate appraisals in mortgage underwriting underscores the importance of effective regulation of the appraisal industry,” the GAO study calls on the Appraisal Subcommittee to strengthen its oversight by developing specific policies and procedures for monitoring the appraisal requirements of the federal financial institutions regulators.
How homes are valued can have a dramatic effect on home owners’ mortgages, foreclosure rates, the health of banks and, ultimately, the condition of the U.S. financial system, said Nielsen.
“The current system is not working,” he said. “We must resolve a flawed appraisal process that produces inaccurate assessment of home values, because this fosters price instability, puts more families in danger of default or foreclosure, and undermines the housing and economic recovery. It’s time that regulators, appraisers, lenders and all of the stakeholders in this debate come together and agree on major reforms in appraisal practices and oversight to ensure that homes are appraised at their fair market rate.”
URL to original article: http://www.builderonline.com/builder-pulse/the-trouble-with-appraisals.aspx?cid=BP:012412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, January 23, 2012
Homeowners who bought at low-end most happy: HomeGain
by KERRI PANCHUK
Homeowners who acquired properties for less than $75,000 remain the most satisfied with their home-buying selections, according to a new study from online appraisal firm HomeGain.
The study says homeownership satisfaction rates are largely contingent on what the borrower paid and home price appreciation.
Emeryville, Calif.-based HomeGain made those conclusions in its 2012 Home Ownership Satisfaction Survey, which was compiled from data secured during interviews with 1,400 homeowners.
Seventy-two percent of those surveyed said they're satisfied with their home purchases. The remaining 28% are dissatisfied with homeownership and mostly blame their frustrations on depreciating home values.
Homeowners who acquired properties for more than $800,000 are the most unhappy, with only 69% satisfied with their buys. Comparatively, homeowners who bought properties for $75,000 or less have a 77% satisfaction rate.
HomeGain says owners who nabbed properties three to eight years ago are the least satisfied, while those who bought properties in the last three years or more than eight years ago are classified as happy.
It turns out buyers who acquired homes via short sales are content with that decision, pushing that segment of the homebuyer market to an 83% satisfaction rate. Following closely behind are the homeowners who acquired foreclosures. HomeGain says 79% of those buyers are satisfied with the deals they secured.
URL to original article: http://www.housingwire.com/2012/01/23/homeowners-who-bought-at-low-end-most-happy-homegain
For further information on Fresno Real Estate check: http://www.londonproperties.com
Homeowners who acquired properties for less than $75,000 remain the most satisfied with their home-buying selections, according to a new study from online appraisal firm HomeGain.
The study says homeownership satisfaction rates are largely contingent on what the borrower paid and home price appreciation.
Emeryville, Calif.-based HomeGain made those conclusions in its 2012 Home Ownership Satisfaction Survey, which was compiled from data secured during interviews with 1,400 homeowners.
Seventy-two percent of those surveyed said they're satisfied with their home purchases. The remaining 28% are dissatisfied with homeownership and mostly blame their frustrations on depreciating home values.
Homeowners who acquired properties for more than $800,000 are the most unhappy, with only 69% satisfied with their buys. Comparatively, homeowners who bought properties for $75,000 or less have a 77% satisfaction rate.
HomeGain says owners who nabbed properties three to eight years ago are the least satisfied, while those who bought properties in the last three years or more than eight years ago are classified as happy.
It turns out buyers who acquired homes via short sales are content with that decision, pushing that segment of the homebuyer market to an 83% satisfaction rate. Following closely behind are the homeowners who acquired foreclosures. HomeGain says 79% of those buyers are satisfied with the deals they secured.
URL to original article: http://www.housingwire.com/2012/01/23/homeowners-who-bought-at-low-end-most-happy-homegain
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, January 19, 2012
Award Winners for the month of December!!!
Port Royal Insurance Service is proud to announce that Julie Black is the Top Producing Insurance Agent for the month of December.
Royal Charter Mortgage want to announce that David Schilling is the Top Producing Loan Officer for the month of December.
London Properties want to announce that Kathy Papagni is the employee of the month for December.
London Properties want to announce that Jenn Guerra is the Advocate for the month for December.
Great job everyone!!! Here is another reason why working at London Properties is the BEST!!!
For more information about joining our team go to: www.tiore.com
Royal Charter Mortgage want to announce that David Schilling is the Top Producing Loan Officer for the month of December.
London Properties want to announce that Kathy Papagni is the employee of the month for December.
London Properties want to announce that Jenn Guerra is the Advocate for the month for December.
Great job everyone!!! Here is another reason why working at London Properties is the BEST!!!
For more information about joining our team go to: www.tiore.com
Politicians 'out of step' with voters on home-ownership?
Source: NAHB
On the long road back to normal from the most devastating recession since the Great Depression, the nation’s beleaguered housing industry should see modest improvement in 2012 and stronger conditions in 2013, although housing has yet to be adequately recognized by the political leadership in Washington for its potential to accelerate the disappointing pace of job creation and economic growth, according to participants in a Jan. 11 NAHB webinar on the outlook for the new year.
The webinar coincided with new polling by NAHB showing that politicians may be out of step with the voting public on policies supporting homeownership.
Majorities of the Democratic, Republican and Independent voters responding to the survey agreed that dealing with the mortgage and foreclosure crisis is key to stabilizing the economy. In the meantime, a majority felt that the condition of the housing market has been staying about the same — neither improving nor getting worse.
(A related story in this issue of Nation’s Building News covers the complete findings from the NAHB survey.)
Making it tougher to address the housing concerns of the electorate, the standoff between Democrats and Republicans is likely to continue when Congress reconvenes this month, and as the year progresses attention will increasingly turn to the November elections.
“The economic downturn will be the central issue in this presidential election year, and the political divide over how best to improve the economy will shape the political process in Washington,” said NAHB CEO Jerry Howard.
A Polarized Environment
“We are operating obviously in a very polarized environment on Capitol Hill,” said NAHB’s chief lobbyist, Jim Tobin.
“One issue where there does seem to be bipartisanship is over homeownership,” he said, referring to the latest NAHB poll of voters.
However, Congress has largely been ignoring the situation — with many arguing that now is the time for the federal government to disengage from long-standing policies in support of homeownership — but “they will do it at their own political peril if they continue down this road,” Tobin said.
NAHB's top legislative issue for 2012, he said, will be to end the “absolute dearth of credit for the construction of new homes.”
Many local markets now need new residential construction, “but community banks are not being allowed to lend to builders who can show a viable project.”
“This has been a frustrating issue for us,” he said, but progress was made with the introduction in the House last year of H.R. 1755, which “would let the regulators untie the hands of America’s banks to work with builders to get viable projects started again to get the country building again and creating jobs.”
A companion bill is being developed in the Senate, he said, and the House bill now has 85 cosponsors.
(To read H.R. 1755, go to http://thomas.loc.gov and enter the bill number in the box at the center of the page.)
Among other legislative priorities for NAHB:
•Housing finance reform
“Preserving a federal role for housing finance is vital for the continuation of 30-year, fixed-rate mortgages,” he said.
“At the end of the day, the conversation has to come back to whether lawmakers see a role for the federal government in the housing finance system,” he said.
Some bills are likely to be introduced in the House this year — perhaps direct attacks on Fannie Mae and Freddie Mac or proposals to create a private-sector mortgage market — but movement is not expected in the Senate, which will be laying the groundwork for legislation after the elections.
•Tax reform
“There is an impetus to do this,” he said, and broad support for making the tax system simpler and reducing the tax burden, “but when you layer in that this might mean the elimination or reduction of the mortgage interest deduction, that support shifts significantly.”
In the NAHB polling, two-thirds of voters started out favoring the idea of lowering federal income tax rates for individuals, by a difference of 38 percentage points over those who opposed it.
But if lowering tax rates meant that deductions — including for the home mortgage interest deduction — would be reduced or eliminated, 52% were in opposition to the idea, 12 percentage points higher than those who still favored it.
The Super Committee that was charged by Congress to find ways to cut the deficit over the next 10 years indicated that housing was on the table, Tobin said, putting housing for the first time “squarely in the crosshairs of deficit cutters.”
•Regulatory oversight
Tobin said that NAHB would continue to work with regulatory oversight agencies to reduce the costly and burdensome regulations that are stifling a housing recovery.
“Housing is one of the most heavily regulated industries,” he said. Even today, when it is not building as many homes as in the past — it must contend with regulations from the Environmental Protection Agency, the U.S. Army Corps of Engineers, the Occupational Safety and Health Administration and other agencies.
•Other critical issues
These include reforming the home appraisal system, removing the 20% downpayment requirement from the Qualified Residential Mortgage, finding innovative ways to get foreclosed homes off the market and improving housing to stimulate job growth and the economy. “We need to see good, strong job creation numbers and get people feeling good about the economy again,” Tobin said.
Favorable Economic Signs
Looking at just where housing is headed this year, NAHB Chief Economist David Crowe said that, “We are starting 2012 with the same amount of optimism we started in 2011.”
Unfortunately, he said, 2011 turned out to be significantly weaker than projected — buffeted by a range of factors, including a run-up in energy prices, slumping employment growth, a big dive in consumer confidence, an unusually harsh winter at home and a disastrous tsunami in Japan, and the unsettling spectacle of Congress coming to a standstill over raising the deficit ceiling.
This year has begun on a more auspicious note, with economic growth, job creation, unemployment claims, consumer confidence, home foreclosures and home sales all showing favorable signs by the end of 2011, he said.
“While this won’t be a roaring year, there will be an improvement,” Crowe said.
Household Formations
Perhaps most reassuring is that the economy has begun to emerge from its demographic doldrums, he said, with more growth in the number of households.
From a traditional average growth rate of a little over 1%, annual household formations faltered during the recession and its weak aftermath, even declining into negative territory during a few quarters.
Most recently, in the third quarter of 2011, household formations rose above the traditional historical rate of increase, suggesting a return to a normal pace of household formations, particularly among young people.
Crowe calculated that there is a backlog of as many as 2 million households that have yet to be formed because of the downturn. Those households are now beginning to materialize as young adults who resided with parents or friends when the economy was bad now find themselves on the threshold of moving out and renting or buying a home.
Trends in the annual percentage change in home owners and renters point to a significant share of new households moving into rental housing.
Crowe added that housing fundamentals remain favorable.
Mortgage interest rates are low, and even as they creep up a bit as the economic recovery gains strength and there is more demand for credit, rates should be relatively low through the end of 2012.
House prices have returned to their normal ratio of about 3.2 times income, down from 4.7 at the peak of the housing boom in 2005.
Improving Local Markets
The current housing recovery is deriving its strength from local housing markets that are added to the NAHB/First American Improving Markets Index (IMI) when they have shown six months of improvement in employment, single-family housing permits and home prices.
(A story on the January IMI appears in this issue of Nation’s Building News.)
“A lot of places are doing better than the national average and we need to focus on that,” said Crowe.
The most recent IMI, he said, shows that the recovery is “quite diverse, and it is happening in a lot of places, not just the middle of the country where it started."
Twelve metropolitan areas were on the index when it was initiated in September; the number has now grown to 76.
As the recovery continues to unfold, and employment and consumer confidence show further improvement, home purchases will start picking up again, Crowe said, which will lead to more construction.
He forecasted that growth of the gross domestic product, falling back some from a “pretty good” pace for the final quarter of 2011, will be in the 2.2%-2.3% range during 2012 and climb above 3% in 2013.
Single-family home starts are projected to climb to 501,000 in 2012, up 17% from 2011, which could turn out to be the worst year on record.
Reflecting healthy growth in the number of renters, about 178,000 multifamily starts are expected for 2011, which would represent a 56% jump.
Multifamily production is forecasted to climb another 17% in 2012, reaching the 208,000-unit level.
And residential remodeling of owner-occupied properties is “doing nicely,” Crowe said, and poised to register a 12% gain from the fourth quarter of 2011 to the fourth quarter of 2012.
URL to original article: http://www.builderonline.com/builder-pulse/politicians--out-of-step--with-voters-on-home-ownership-.aspx?cid=BP:011912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
On the long road back to normal from the most devastating recession since the Great Depression, the nation’s beleaguered housing industry should see modest improvement in 2012 and stronger conditions in 2013, although housing has yet to be adequately recognized by the political leadership in Washington for its potential to accelerate the disappointing pace of job creation and economic growth, according to participants in a Jan. 11 NAHB webinar on the outlook for the new year.
The webinar coincided with new polling by NAHB showing that politicians may be out of step with the voting public on policies supporting homeownership.
Majorities of the Democratic, Republican and Independent voters responding to the survey agreed that dealing with the mortgage and foreclosure crisis is key to stabilizing the economy. In the meantime, a majority felt that the condition of the housing market has been staying about the same — neither improving nor getting worse.
(A related story in this issue of Nation’s Building News covers the complete findings from the NAHB survey.)
Making it tougher to address the housing concerns of the electorate, the standoff between Democrats and Republicans is likely to continue when Congress reconvenes this month, and as the year progresses attention will increasingly turn to the November elections.
“The economic downturn will be the central issue in this presidential election year, and the political divide over how best to improve the economy will shape the political process in Washington,” said NAHB CEO Jerry Howard.
A Polarized Environment
“We are operating obviously in a very polarized environment on Capitol Hill,” said NAHB’s chief lobbyist, Jim Tobin.
“One issue where there does seem to be bipartisanship is over homeownership,” he said, referring to the latest NAHB poll of voters.
However, Congress has largely been ignoring the situation — with many arguing that now is the time for the federal government to disengage from long-standing policies in support of homeownership — but “they will do it at their own political peril if they continue down this road,” Tobin said.
NAHB's top legislative issue for 2012, he said, will be to end the “absolute dearth of credit for the construction of new homes.”
Many local markets now need new residential construction, “but community banks are not being allowed to lend to builders who can show a viable project.”
“This has been a frustrating issue for us,” he said, but progress was made with the introduction in the House last year of H.R. 1755, which “would let the regulators untie the hands of America’s banks to work with builders to get viable projects started again to get the country building again and creating jobs.”
A companion bill is being developed in the Senate, he said, and the House bill now has 85 cosponsors.
(To read H.R. 1755, go to http://thomas.loc.gov and enter the bill number in the box at the center of the page.)
Among other legislative priorities for NAHB:
•Housing finance reform
“Preserving a federal role for housing finance is vital for the continuation of 30-year, fixed-rate mortgages,” he said.
“At the end of the day, the conversation has to come back to whether lawmakers see a role for the federal government in the housing finance system,” he said.
Some bills are likely to be introduced in the House this year — perhaps direct attacks on Fannie Mae and Freddie Mac or proposals to create a private-sector mortgage market — but movement is not expected in the Senate, which will be laying the groundwork for legislation after the elections.
•Tax reform
“There is an impetus to do this,” he said, and broad support for making the tax system simpler and reducing the tax burden, “but when you layer in that this might mean the elimination or reduction of the mortgage interest deduction, that support shifts significantly.”
In the NAHB polling, two-thirds of voters started out favoring the idea of lowering federal income tax rates for individuals, by a difference of 38 percentage points over those who opposed it.
But if lowering tax rates meant that deductions — including for the home mortgage interest deduction — would be reduced or eliminated, 52% were in opposition to the idea, 12 percentage points higher than those who still favored it.
The Super Committee that was charged by Congress to find ways to cut the deficit over the next 10 years indicated that housing was on the table, Tobin said, putting housing for the first time “squarely in the crosshairs of deficit cutters.”
•Regulatory oversight
Tobin said that NAHB would continue to work with regulatory oversight agencies to reduce the costly and burdensome regulations that are stifling a housing recovery.
“Housing is one of the most heavily regulated industries,” he said. Even today, when it is not building as many homes as in the past — it must contend with regulations from the Environmental Protection Agency, the U.S. Army Corps of Engineers, the Occupational Safety and Health Administration and other agencies.
•Other critical issues
These include reforming the home appraisal system, removing the 20% downpayment requirement from the Qualified Residential Mortgage, finding innovative ways to get foreclosed homes off the market and improving housing to stimulate job growth and the economy. “We need to see good, strong job creation numbers and get people feeling good about the economy again,” Tobin said.
Favorable Economic Signs
Looking at just where housing is headed this year, NAHB Chief Economist David Crowe said that, “We are starting 2012 with the same amount of optimism we started in 2011.”
Unfortunately, he said, 2011 turned out to be significantly weaker than projected — buffeted by a range of factors, including a run-up in energy prices, slumping employment growth, a big dive in consumer confidence, an unusually harsh winter at home and a disastrous tsunami in Japan, and the unsettling spectacle of Congress coming to a standstill over raising the deficit ceiling.
This year has begun on a more auspicious note, with economic growth, job creation, unemployment claims, consumer confidence, home foreclosures and home sales all showing favorable signs by the end of 2011, he said.
“While this won’t be a roaring year, there will be an improvement,” Crowe said.
Household Formations
Perhaps most reassuring is that the economy has begun to emerge from its demographic doldrums, he said, with more growth in the number of households.
From a traditional average growth rate of a little over 1%, annual household formations faltered during the recession and its weak aftermath, even declining into negative territory during a few quarters.
Most recently, in the third quarter of 2011, household formations rose above the traditional historical rate of increase, suggesting a return to a normal pace of household formations, particularly among young people.
Crowe calculated that there is a backlog of as many as 2 million households that have yet to be formed because of the downturn. Those households are now beginning to materialize as young adults who resided with parents or friends when the economy was bad now find themselves on the threshold of moving out and renting or buying a home.
Trends in the annual percentage change in home owners and renters point to a significant share of new households moving into rental housing.
Crowe added that housing fundamentals remain favorable.
Mortgage interest rates are low, and even as they creep up a bit as the economic recovery gains strength and there is more demand for credit, rates should be relatively low through the end of 2012.
House prices have returned to their normal ratio of about 3.2 times income, down from 4.7 at the peak of the housing boom in 2005.
Improving Local Markets
The current housing recovery is deriving its strength from local housing markets that are added to the NAHB/First American Improving Markets Index (IMI) when they have shown six months of improvement in employment, single-family housing permits and home prices.
(A story on the January IMI appears in this issue of Nation’s Building News.)
“A lot of places are doing better than the national average and we need to focus on that,” said Crowe.
The most recent IMI, he said, shows that the recovery is “quite diverse, and it is happening in a lot of places, not just the middle of the country where it started."
Twelve metropolitan areas were on the index when it was initiated in September; the number has now grown to 76.
As the recovery continues to unfold, and employment and consumer confidence show further improvement, home purchases will start picking up again, Crowe said, which will lead to more construction.
He forecasted that growth of the gross domestic product, falling back some from a “pretty good” pace for the final quarter of 2011, will be in the 2.2%-2.3% range during 2012 and climb above 3% in 2013.
Single-family home starts are projected to climb to 501,000 in 2012, up 17% from 2011, which could turn out to be the worst year on record.
Reflecting healthy growth in the number of renters, about 178,000 multifamily starts are expected for 2011, which would represent a 56% jump.
Multifamily production is forecasted to climb another 17% in 2012, reaching the 208,000-unit level.
And residential remodeling of owner-occupied properties is “doing nicely,” Crowe said, and poised to register a 12% gain from the fourth quarter of 2011 to the fourth quarter of 2012.
URL to original article: http://www.builderonline.com/builder-pulse/politicians--out-of-step--with-voters-on-home-ownership-.aspx?cid=BP:011912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Debunking the myth of the 'end of homeownership'
Source: New Geography
It is well known that home ownership has declined in the United States from the peak of the housing bubble. According to Current Population Survey data, the national home ownership rate fell 2.9 percentage points from the peak of the bubble (4th quarter 2004) to the third quarter of 2011.
It is less well understood, however, that the spurt in home ownership was, like the housing bubble, an aberration. Looking over the data from the 2010 census, it seems clear that since 2000 the actual decline was a much smaller: 0.8 percentage points from the 2000 census. In fact the current home ownership rate tracks fairly well with that of the post 1960 and the entire pre-bubble period.
The End of Home Ownership? Analysts such as Richard Florida suggest an end to the preference for home ownership, citing the losses from the bubble, which were, in fact, an aberration. Most recently, Xavier University's Michael F. Ford wrote in the Washington Postabout home ownership having been driven to 69% by "guarantees" and "tax breaks," such as the mortgage interest deduction. He notes that this "spending spree" led to a loss of $6 trillion in US real estate value.
Ford does not mention the fact that home ownership had hovered between 60% and 65% for more than three decades before the bubble, without suffering any such losses. Nor does he mention the roles played by Fannie, Freddie and Frank (D-Massachusetts), along with others in Washington, or the related "drunken sailor" mortgage policies concocted by lenders and Wall Street that anyone familiar with credit should have known could only lead to disaster. This was obvious to many observers, although shockingly not to the Federal Reserve Board, as recent reports indicate .
There is no doubt that the "spending spree" led to the housing bust and triggered the Great Financial Crisis. However it was not the long-standing ownership support programs of the federal government that were primarily to blame. As late as the beginning of the decade, there was no bubble and the median multiple in major metropolitan areas averaged 2.9, within the maximum affordability rating of 3.0. The "spending spree" itself was a rational response to policies that turned housing into the equivalent of a speculative commodities market, with destructive results, in certain large markets. Critically the bubble did not appear in many others.
Speculation and the "Bubble States:" The extent to which speculation fueled house price increases is the subject of a recent Federal Reserve Bank of New York paper by Andrew Haughwout, Donghoon Lee, Joseph Tracy and Wilbert van der Klaauw. The researchers examine investment, or speculation in real estate markets, during the housing bubble. Investors buy houses that they do not intend to live in for the purpose of making money. In normal times, this investment is principally for rental income or long term capital gains. However, in the highly charged housing markets that developed in some metropolitan areas, prices rose so rapidly, that "flipping" (short term ownership) became very profitable, at least for some.
Pointing out that "The recent financial crisis—the worst in eighty years—had its origins in the enormous increase and subsequent collapse in housing prices during the 2000s," the New York Fed researchers show that speculative activity was much greater in California, Florida, Arizona and Nevada (which they label the "bubble states") than elsewhere. My analysis indicates that two-thirds of the house value drop in the nation before the Lehman Brothers collapse (September 15, 2008) occurred in the four "bubble states." According to the researchers, this greater speculative activity in these markets made the market more instable because unlike owner-occupiers, investors are far more likely to default on mortgage loans.
Missing the Geography of Speculation (the Geography of "Smart Growth"): The New York Fed research, however, ignores the geography of speculation. Why was speculation was so much more rampant in the bubble states? There is no reason to believe that residents of California, Florida, Arizona or Nevada are any less interested in making money or, in general, any more greedy. Yet speculators largely stayed out of markets in high demand areas, such as Dallas-Fort Worth, Houston and Indianapolis. In fact, in large parts of the nation, there was little speculative activity. In these markets prices were not rising inordinately so speculators did not bother with them. Instead they focused on more volatile markets where prices were already rising strongly, further swelling local price increases.
The geography of speculation corresponds largely to the geography of excessive land use restrictions, which created the shortage of land for housing that drove the prices up in the four bubble states (Note). It is a fundamental principle of economics that prices tend to rise where desired goods are in short supply.
In California and Florida, restrictive land use policies (smart growth or growth management) created a shortage of land for new housing relative to demand. The largest metropolitan areas of Nevada (Las Vegas) and Arizona (Phoenix) are surrounded by government owned land that was auctioned for development at such a slow rate that prices rose by more than five times during the bubble.
Astonishingly, having missed the geography of speculation, the New York Fed researchers suggest that a solution is to regulate speculation. There is a much simpler answer, which Florida has already implemented which is to repeal the restrictive land use regulations, without which inordinately speculative profits cannot occur.
Meanwhile, as the speculators have been driven out of the market, and despite federal government efforts to prop-up the artificially high house prices, values have fallen to below 2000 levels for the first time (Figure 1). Based upon Federal Reserve Board and Census Bureau data, it is estimated that the average owner-occupied house value in 2011 (three quarters) has fallen to $211,000, which is down from a peak of approximately $345,000 in 2006 and $222,000 in 2000 (adjusted for inflation).
There were 5,057,000 more home owners in 2010 than in 2000, and perhaps more surprisingly, 5,119,000 more home owners occupying detached housing. Detached, attached (town house) and apartment ownership each increased over the past decade (Figure 4). Contrary to new urbanist theoreticians, detached housing – not urban condos – overall accounted for the most housing growth, both owner-occupied and rentals.
Xavier's Ford calls the American Dream of home ownership a myth and even goes so far as to suggest that home ownership is "more important to special interests than it is to most Americans." In fact, Ford's interpretation is delusional. That home ownership continued its advance, however modestly, in the face of the worst economic downturn in 80 years, reveals the durability and, indeed the reality of home ownership as an American Dream.
URL to original article: http://www.builderonline.com/builder-pulse/debunking-the-myth-of-the--end-of-homeownership-.aspx?cid=BP:011912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
It is well known that home ownership has declined in the United States from the peak of the housing bubble. According to Current Population Survey data, the national home ownership rate fell 2.9 percentage points from the peak of the bubble (4th quarter 2004) to the third quarter of 2011.
It is less well understood, however, that the spurt in home ownership was, like the housing bubble, an aberration. Looking over the data from the 2010 census, it seems clear that since 2000 the actual decline was a much smaller: 0.8 percentage points from the 2000 census. In fact the current home ownership rate tracks fairly well with that of the post 1960 and the entire pre-bubble period.
The End of Home Ownership? Analysts such as Richard Florida suggest an end to the preference for home ownership, citing the losses from the bubble, which were, in fact, an aberration. Most recently, Xavier University's Michael F. Ford wrote in the Washington Postabout home ownership having been driven to 69% by "guarantees" and "tax breaks," such as the mortgage interest deduction. He notes that this "spending spree" led to a loss of $6 trillion in US real estate value.
Ford does not mention the fact that home ownership had hovered between 60% and 65% for more than three decades before the bubble, without suffering any such losses. Nor does he mention the roles played by Fannie, Freddie and Frank (D-Massachusetts), along with others in Washington, or the related "drunken sailor" mortgage policies concocted by lenders and Wall Street that anyone familiar with credit should have known could only lead to disaster. This was obvious to many observers, although shockingly not to the Federal Reserve Board, as recent reports indicate .
There is no doubt that the "spending spree" led to the housing bust and triggered the Great Financial Crisis. However it was not the long-standing ownership support programs of the federal government that were primarily to blame. As late as the beginning of the decade, there was no bubble and the median multiple in major metropolitan areas averaged 2.9, within the maximum affordability rating of 3.0. The "spending spree" itself was a rational response to policies that turned housing into the equivalent of a speculative commodities market, with destructive results, in certain large markets. Critically the bubble did not appear in many others.
Speculation and the "Bubble States:" The extent to which speculation fueled house price increases is the subject of a recent Federal Reserve Bank of New York paper by Andrew Haughwout, Donghoon Lee, Joseph Tracy and Wilbert van der Klaauw. The researchers examine investment, or speculation in real estate markets, during the housing bubble. Investors buy houses that they do not intend to live in for the purpose of making money. In normal times, this investment is principally for rental income or long term capital gains. However, in the highly charged housing markets that developed in some metropolitan areas, prices rose so rapidly, that "flipping" (short term ownership) became very profitable, at least for some.
Pointing out that "The recent financial crisis—the worst in eighty years—had its origins in the enormous increase and subsequent collapse in housing prices during the 2000s," the New York Fed researchers show that speculative activity was much greater in California, Florida, Arizona and Nevada (which they label the "bubble states") than elsewhere. My analysis indicates that two-thirds of the house value drop in the nation before the Lehman Brothers collapse (September 15, 2008) occurred in the four "bubble states." According to the researchers, this greater speculative activity in these markets made the market more instable because unlike owner-occupiers, investors are far more likely to default on mortgage loans.
Missing the Geography of Speculation (the Geography of "Smart Growth"): The New York Fed research, however, ignores the geography of speculation. Why was speculation was so much more rampant in the bubble states? There is no reason to believe that residents of California, Florida, Arizona or Nevada are any less interested in making money or, in general, any more greedy. Yet speculators largely stayed out of markets in high demand areas, such as Dallas-Fort Worth, Houston and Indianapolis. In fact, in large parts of the nation, there was little speculative activity. In these markets prices were not rising inordinately so speculators did not bother with them. Instead they focused on more volatile markets where prices were already rising strongly, further swelling local price increases.
The geography of speculation corresponds largely to the geography of excessive land use restrictions, which created the shortage of land for housing that drove the prices up in the four bubble states (Note). It is a fundamental principle of economics that prices tend to rise where desired goods are in short supply.
In California and Florida, restrictive land use policies (smart growth or growth management) created a shortage of land for new housing relative to demand. The largest metropolitan areas of Nevada (Las Vegas) and Arizona (Phoenix) are surrounded by government owned land that was auctioned for development at such a slow rate that prices rose by more than five times during the bubble.
Astonishingly, having missed the geography of speculation, the New York Fed researchers suggest that a solution is to regulate speculation. There is a much simpler answer, which Florida has already implemented which is to repeal the restrictive land use regulations, without which inordinately speculative profits cannot occur.
Meanwhile, as the speculators have been driven out of the market, and despite federal government efforts to prop-up the artificially high house prices, values have fallen to below 2000 levels for the first time (Figure 1). Based upon Federal Reserve Board and Census Bureau data, it is estimated that the average owner-occupied house value in 2011 (three quarters) has fallen to $211,000, which is down from a peak of approximately $345,000 in 2006 and $222,000 in 2000 (adjusted for inflation).
There were 5,057,000 more home owners in 2010 than in 2000, and perhaps more surprisingly, 5,119,000 more home owners occupying detached housing. Detached, attached (town house) and apartment ownership each increased over the past decade (Figure 4). Contrary to new urbanist theoreticians, detached housing – not urban condos – overall accounted for the most housing growth, both owner-occupied and rentals.
Xavier's Ford calls the American Dream of home ownership a myth and even goes so far as to suggest that home ownership is "more important to special interests than it is to most Americans." In fact, Ford's interpretation is delusional. That home ownership continued its advance, however modestly, in the face of the worst economic downturn in 80 years, reveals the durability and, indeed the reality of home ownership as an American Dream.
URL to original article: http://www.builderonline.com/builder-pulse/debunking-the-myth-of-the--end-of-homeownership-.aspx?cid=BP:011912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, January 18, 2012
A turning point to a better housing market seen
Source: Bloomberg/Business Week
Jan. 13 (Bloomberg) -- Home sales and construction will improve this year, contributing “modestly” to economic expansion after acting as a drag on growth since 2006, according to a Fannie Mae forecast released today.
Sales of new and existing homes are likely to increase 3.5 percent and housing starts are projected to rise 16 percent, fueled by improvement in apartment development and a rebound in single-family house construction, according to the report by Douglas Duncan, Fannie Mae’s chief economist, and Orawin Velz, a director in its Economics and Mortgage Market Analysis group.
“With an expected improvement in housing activity in 2012, residential investment should start contributing to growth, albeit only modestly initially,” Duncan and Velz wrote.
The housing market has been held back by weak demand as high unemployment and concerns about job security prevent buyers from taking advantage of falling home prices and borrowing costs, Duncan said in an interview yesterday at Bloomberg’s New York offices.
“We see an incremental increase only in the number of residential units that get moved through sale,” Duncan said. “It’s another sort of holding pattern.”
Mortgage rates will continue to provide support for the market, rising only slightly in 2012, according to the report. The average rate for a 30-year fixed loan fell to 3.89 percent in the week ended yesterday, the lowest in records dating to 1971.
Originations to Decline
Mortgage originations in 2012 are expected to decline to $1.01 trillion from an estimated $1.36 trillion last year as refinancing “declines sharply,” according to the report. The refinancing portion is likely to drop to about 53 percent from about 66 percent last year because many homeowners have already taken advantage of lower rates, Duncan said.
The expansion this year of President Barack Obama’s three- year-old Home Affordable Refinance Program for Fannie Mae and Freddie Mac loans with little or no home equity will add about $200 billion to $300 billion to refinancings, Duncan said. This year’s expected decline in mortgage originations would be steeper without the expansion, he said.
URL to original article: http://www.builderonline.com/builder-pulse/a-turning-point-to-a-better-housing-market-seen.aspx?cid=BP:011812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Jan. 13 (Bloomberg) -- Home sales and construction will improve this year, contributing “modestly” to economic expansion after acting as a drag on growth since 2006, according to a Fannie Mae forecast released today.
Sales of new and existing homes are likely to increase 3.5 percent and housing starts are projected to rise 16 percent, fueled by improvement in apartment development and a rebound in single-family house construction, according to the report by Douglas Duncan, Fannie Mae’s chief economist, and Orawin Velz, a director in its Economics and Mortgage Market Analysis group.
“With an expected improvement in housing activity in 2012, residential investment should start contributing to growth, albeit only modestly initially,” Duncan and Velz wrote.
The housing market has been held back by weak demand as high unemployment and concerns about job security prevent buyers from taking advantage of falling home prices and borrowing costs, Duncan said in an interview yesterday at Bloomberg’s New York offices.
“We see an incremental increase only in the number of residential units that get moved through sale,” Duncan said. “It’s another sort of holding pattern.”
Mortgage rates will continue to provide support for the market, rising only slightly in 2012, according to the report. The average rate for a 30-year fixed loan fell to 3.89 percent in the week ended yesterday, the lowest in records dating to 1971.
Originations to Decline
Mortgage originations in 2012 are expected to decline to $1.01 trillion from an estimated $1.36 trillion last year as refinancing “declines sharply,” according to the report. The refinancing portion is likely to drop to about 53 percent from about 66 percent last year because many homeowners have already taken advantage of lower rates, Duncan said.
The expansion this year of President Barack Obama’s three- year-old Home Affordable Refinance Program for Fannie Mae and Freddie Mac loans with little or no home equity will add about $200 billion to $300 billion to refinancings, Duncan said. This year’s expected decline in mortgage originations would be steeper without the expansion, he said.
URL to original article: http://www.builderonline.com/builder-pulse/a-turning-point-to-a-better-housing-market-seen.aspx?cid=BP:011812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
U.S. May Be On Verge Of A Big Comeback With A Double Back-To-Back Economic Recovery
Source: Forbes
For the first time, a highly respected and reputable economist with a huge impressive Wall Street following is suggesting that President Barack Obama could win reelection as he lays out well-grounded arguments that a “double back-to-back” economic recovery is within sight.
Dr. Ed Yardeni, president and chief investment strategist of Yardeni Research Inc., which has a large following among U.S. and global institutional investors, says the U.S. economy may be “on the verge of a huge comeback” and could “experience an ununsual second recovery over the next three years, following the weak initial recovery of the past three years.”
Lets’s be very clear, though. Yardeni, a conservative economist with a pragmatic approach to analyzing and interpreting the U.S. economy and what’s going on in the global economic picture, isn’t forecasting an Obama victory. Rather, he is pointing out, in his daily online newsletter for clients this morning, that several signposts strongly suggest that a second economic recovery may be on its way, for which the President could take all the credit for, and which would then turn the November elections his way.
True, the naysayers have been predicting a “double-dip recession” for the economy since the recession started in 2009. “I am suggesting that a more likely scenario might be a double back-to-back economic recovery,” says Yardeni.
The noted economist and investment adviser points out that in a second economic recovery, “President Obama is more likely to win a second term.” That’s because the unemployment rate is likely to fall in such a scenario, consumer confidence will brighten up, and stock prices will move higher – “and President Obama could take credit for it all — and he would win if enough voters give it to him,” argues Yardeni.
He underscores the facts that have been evident all along: The economy lost lots of jobs, and so far employment recovery has been anemic, with payrolls still 6.1 million below the record high set in January 2008. The housing situation has been in a depression, with the national single-family existing home median price down 28.9% since it peaked during July 2006, and home foreclosures are in the millions. The upturn in auto sales has been subpar and fiscal policy hasn’t been as stimulative as in past recoveries because there has been lots of fiscal drag from state and local governments. In the past, recessions were followed by one, not two, recoveries.
Indeed, the key sectors of the economy haven’t participated in the initial rebound.
“But finally we may be on the verge of doing so,” says Yardeni. Indeed, real GDP is up 5.5% from the recession trough during the second quarter of 2009 through the third quarter of 2011, to a record high of $13.3 trillion, Yardeni points out.
“The second recovery could take off as the pace of hiring quickens, housing activity finally picks up, auto sales head higher, and state and local governments stop retrenching,” says Yardeni. ”If so, then the U.S. would finally enjoy the benefits of a broader-based recovery,” he adds.
What about Europe and the impact of its problems on the U.S. economy? Here is what Yardeni says: “It could trip up America’s recovery, or maybe not.” While a depression in Europe might depress the U.S. economy and S&P corporate profits, there is another side to this story: “Better-than-expected growth in the U.S. should help Europe’s recession,” argues Yardeni.
So what’s Yardeni’s advice for U.S. investors? What should they do now that the outlook for the U.S. seems to be improving while the outlook for Europe is clearly deteriorating?
“U.S. investors should stay close to home,” advises Yardeni. For global investors, the U.S. “once again should be a safe haven in 2012 as it was in 2011.” And if Europe falls apart, “then the only safe havens are likely to be the U.S. dollar and U.S. Treasuries,” says Yardeni.
URL to original article: http://www.forbes.com/sites/genemarcial/2012/01/17/u-s-may-be-on-verge-of-a-big-comeback-with-a-double-back-to-back-economic-recovery/
For further information on Fresno Real Estate check: http://www.londonproperties.com
For the first time, a highly respected and reputable economist with a huge impressive Wall Street following is suggesting that President Barack Obama could win reelection as he lays out well-grounded arguments that a “double back-to-back” economic recovery is within sight.
Dr. Ed Yardeni, president and chief investment strategist of Yardeni Research Inc., which has a large following among U.S. and global institutional investors, says the U.S. economy may be “on the verge of a huge comeback” and could “experience an ununsual second recovery over the next three years, following the weak initial recovery of the past three years.”
Lets’s be very clear, though. Yardeni, a conservative economist with a pragmatic approach to analyzing and interpreting the U.S. economy and what’s going on in the global economic picture, isn’t forecasting an Obama victory. Rather, he is pointing out, in his daily online newsletter for clients this morning, that several signposts strongly suggest that a second economic recovery may be on its way, for which the President could take all the credit for, and which would then turn the November elections his way.
True, the naysayers have been predicting a “double-dip recession” for the economy since the recession started in 2009. “I am suggesting that a more likely scenario might be a double back-to-back economic recovery,” says Yardeni.
The noted economist and investment adviser points out that in a second economic recovery, “President Obama is more likely to win a second term.” That’s because the unemployment rate is likely to fall in such a scenario, consumer confidence will brighten up, and stock prices will move higher – “and President Obama could take credit for it all — and he would win if enough voters give it to him,” argues Yardeni.
He underscores the facts that have been evident all along: The economy lost lots of jobs, and so far employment recovery has been anemic, with payrolls still 6.1 million below the record high set in January 2008. The housing situation has been in a depression, with the national single-family existing home median price down 28.9% since it peaked during July 2006, and home foreclosures are in the millions. The upturn in auto sales has been subpar and fiscal policy hasn’t been as stimulative as in past recoveries because there has been lots of fiscal drag from state and local governments. In the past, recessions were followed by one, not two, recoveries.
Indeed, the key sectors of the economy haven’t participated in the initial rebound.
“But finally we may be on the verge of doing so,” says Yardeni. Indeed, real GDP is up 5.5% from the recession trough during the second quarter of 2009 through the third quarter of 2011, to a record high of $13.3 trillion, Yardeni points out.
“The second recovery could take off as the pace of hiring quickens, housing activity finally picks up, auto sales head higher, and state and local governments stop retrenching,” says Yardeni. ”If so, then the U.S. would finally enjoy the benefits of a broader-based recovery,” he adds.
What about Europe and the impact of its problems on the U.S. economy? Here is what Yardeni says: “It could trip up America’s recovery, or maybe not.” While a depression in Europe might depress the U.S. economy and S&P corporate profits, there is another side to this story: “Better-than-expected growth in the U.S. should help Europe’s recession,” argues Yardeni.
So what’s Yardeni’s advice for U.S. investors? What should they do now that the outlook for the U.S. seems to be improving while the outlook for Europe is clearly deteriorating?
“U.S. investors should stay close to home,” advises Yardeni. For global investors, the U.S. “once again should be a safe haven in 2012 as it was in 2011.” And if Europe falls apart, “then the only safe havens are likely to be the U.S. dollar and U.S. Treasuries,” says Yardeni.
URL to original article: http://www.forbes.com/sites/genemarcial/2012/01/17/u-s-may-be-on-verge-of-a-big-comeback-with-a-double-back-to-back-economic-recovery/
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, January 17, 2012
Hope Dimon's right
Source: Wall Street Journal
The government and the banking industry needs to get serious about fixing the housing market’s problems, but there’s no one leading the charge, said Jamie Dimon, the chief executive of J.P. Morgan Chase & Co., during the bank’s quarterly conference call on Friday.
“I would convene all the people involved in the business. I would close the door. I would stay there until we resolved a bunch of these issues so we could have a more healthy mortgage market,” he said. “You could fix all this if someone was in charge.”
Mr. Dimon ticked off a list of unresolved issues, including foreclosure delays, the fate of Fannie Mae and Freddie Mac, conflicts of interest between owners and servicers of first mortgages and second mortgages, and pending rules from the Dodd-Frank Act that will establish new rules of the road for mortgages that are pooled into bonds.
“There is no one really in charge of all of this. It is just kind of sitting there,” he said. A “holistic” approach to tackle those issues could lead to a faster recovery in housing, he said, endorsing the sentiment behind the Federal Reserve’s call to action on housing last week with its release of a 26-page white paper.
Mr. Dimon also elaborated on his view that housing markets have neared bottom. “In half the markets in America it is now cheaper to … buy than to rent. Housing is at all-time affordability,” he said. “What you need to see is employment.”
An stronger surge in job growth would boost household formation, which coupled with positive demographics, means that “you’re going to have a turn at one point,” he said. “I don’t know if it’s three months, six months, nine months, but it’s getting closer.”
Mr. Dimon said his bank had made mistakes in handling mortgage foreclosures, and said the bank “should pay for the mistakes we made.” But he added that banks have also offered millions of mortgage modifications, and that banks “are doing it as aggressively as we can.”
He also brushed aside calls for widespread principal reductions, saying that he didn’t agree “that somehow principal forgiveness would be the end-all, the be-all.”
URL to original article: http://www.builderonline.com/builder-pulse/hope-dimon-s-right.aspx?cid=BP:011712:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The government and the banking industry needs to get serious about fixing the housing market’s problems, but there’s no one leading the charge, said Jamie Dimon, the chief executive of J.P. Morgan Chase & Co., during the bank’s quarterly conference call on Friday.
“I would convene all the people involved in the business. I would close the door. I would stay there until we resolved a bunch of these issues so we could have a more healthy mortgage market,” he said. “You could fix all this if someone was in charge.”
Mr. Dimon ticked off a list of unresolved issues, including foreclosure delays, the fate of Fannie Mae and Freddie Mac, conflicts of interest between owners and servicers of first mortgages and second mortgages, and pending rules from the Dodd-Frank Act that will establish new rules of the road for mortgages that are pooled into bonds.
“There is no one really in charge of all of this. It is just kind of sitting there,” he said. A “holistic” approach to tackle those issues could lead to a faster recovery in housing, he said, endorsing the sentiment behind the Federal Reserve’s call to action on housing last week with its release of a 26-page white paper.
Mr. Dimon also elaborated on his view that housing markets have neared bottom. “In half the markets in America it is now cheaper to … buy than to rent. Housing is at all-time affordability,” he said. “What you need to see is employment.”
An stronger surge in job growth would boost household formation, which coupled with positive demographics, means that “you’re going to have a turn at one point,” he said. “I don’t know if it’s three months, six months, nine months, but it’s getting closer.”
Mr. Dimon said his bank had made mistakes in handling mortgage foreclosures, and said the bank “should pay for the mistakes we made.” But he added that banks have also offered millions of mortgage modifications, and that banks “are doing it as aggressively as we can.”
He also brushed aside calls for widespread principal reductions, saying that he didn’t agree “that somehow principal forgiveness would be the end-all, the be-all.”
URL to original article: http://www.builderonline.com/builder-pulse/hope-dimon-s-right.aspx?cid=BP:011712:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Real estate--and economics--are local
Source: The Atlantic
When we write about the economy, too often writers and analysts (myself, included) write as though there is one national economy moving forward or backward at a single speed. Nothing could be farther from the truth. In a North Dakota boomtown, mining companies are begging for workers, and wages are climbing. In Riverside, where housing prices have fallen more than 50 percent from their 2006 peak, unemployment is kissing 12 percent and wages are still falling.
One of the best ways to visualize the diversity of the U.S. economy is the PayScale Index, which tracks wages by metro and occupation over the last year. Here is the pay growth story by industry (click to enlarge)...
... and by metro (click to enlarge) ...
That's not a typo. According to PayScale, Riverside wages are still collapsing, five years after their housing prices peaked.
To see how pay compared to the national average by city and by industry, we rounded up these graphs, which PayScale kindly shared with The Atlantic. First the graphs, then some analysis and context (Important graph-watching note: The PayScale index measures income growth with a year-2006 base of 100. The fact that LA's line is lower than Houston doesn't mean LA wages are lower than Houston, but rather that Houston wages have grown more since 2006):
Not even these breakdowns capture the full diversity of the multi-speed economy, but they bring into focus a million little parts under the hood of the "national economy," illustrating a few trends we already know:
1) Houston vs. Riverside. Houston is booming. Riverside is still busting.
These are the polar ends of the multi-speed recession, and the story begins with housing. In Houston, where housing prices have fallen 11 percent from their peak in 2009, gross metropolitan product has led the 100 largest metros in the country. By contrast, Riverside, in which housing prices have fallen 55 percent from their peak in 2006, ranks among the ten worst metros in the country in unemployment and GMP change. Houston's reliance on energy has served it well in the last few years, while Riverside's real estate collapse has made it the poster-child of the post-bust depression city.
2) Food services and retail. What does it say about the economy that cheap jobs in food services and retail got even cheaper in the recession? One explanation is that unemployment has been so high among young and under-educated Americans that there's a surplus of desperate workers that could do these jobs. As with anything else, where supply greatly exceeds demand, prices drop. In this case, pay was the price. That leads us to number three...
3) Manufacturing wages had to go down before they went up. You can see in the gallery above that manufacturing wages fell after the Great Recession but have just begun to perk up. This jives well with our understanding of the manufacturing economy. Gutted in the 2000s and again by the Great Recession, manufacturing jobs have actually enjoyed a boomlet in the last two years.
Fully 300,000 of the 2+ million jobs added February 2010 (the nadir of unemployment) have come from manufacturing, and the Institute for Supply Management, which surveys American manufacturers, has been in positive territory for most of the year. One thing that made this boomlet possible is that the fact that manufacturing wages have declined while productivity increased, making U.S. manufacturing more competitive with the millions of factories overseas.
URL to original article: http://www.builderonline.com/builder-pulse/real-estate--and-economics--are-local.aspx?cid=BP:011712:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, January 16, 2012
Single dad trying to take back home from Occupy Wall Street protesters
Source: Fox News
They’re occupying his home.
Occupy Wall Street protesters announced with great fanfare last month that they moved a homeless family into a “foreclosed” Brooklyn, N.Y., home — even though they knew the house belonged to a struggling single father desperately trying to renegotiate his mortgage, The Post has learned.
“They’re trying to take a house and say the bank is robbing the people because the mortgage is too high — so contact the owner!” fumed Wise Ahadzi, 28, who owns the home at 702 Vermont St. in East New York.
Occupiers “reclaimed” the row house on Dec. 6 and ceremoniously put out the welcome mat for a homeless family.
But Bank of America, which has been in and out of foreclosure proceedings against Ahadzi since 2009, confirmed to The Post that he is still the rightful owner.
Meanwhile, the family that OWS claimed to be putting into the vacant house has not yet permanently moved in. And it turns out the family is not a random victim of the foreclosure crisis, but cast for the part, thanks to their connection to the OWS movement.
OWS last week said it has spent $9,500 breaking into the house and setting it up for the homeless Carrasquillo family. A photo of the smiling family covers a window, under the slogan, “A place to call home.”
The head of the family, Alfredo Carrasquillo, 28, is an organizer for VOCAL- NY, a group that works with OWS. His Facebook page shows him in a “99 Percent” T-shirt at an OWS protest in November.
The Post visited the Vermont Street home last week — six weeks after OWS announced that the Carrasquillos were moving in — and the family was nowhere to be found.
In fact, the only people occupying the house were occupiers themselves.
“They only stay here sometimes,” a protester named Charlie said of the Carrasquillos. “There’s not enough room for the kids.”
The occupier refused to say how many others were inside, but at least two more protesters could be seen at the house, along with mattresses on the floor, during The Post visit.
“We’re almost done with the basement,” he said of the renovations.
The real property owner is livid because he could be raising his two little girls, Imani, 3, and Kwazha, 10, in the two-story home instead of in a meager, two-bedroom rental in Brownsville while he tries to sort out his mortgage nightmare.
Police notified him in early December that the vigilante vagrants moved into his East New York digs, he said. He immediately ran over to the house to see for himself.
“Oh, don’t call the police!” an occupier begged him.
OWS leaders and Brooklyn Councilman Charles Barron, an OWS supporter, met with Ahadzi before the press conference to discuss the future of his property, he said. Ahadzi hoped that the group would help him regain his footing.
“Why can’t you fight for me?” he asked them.
“They told me I don’t qualify,” he said. “So my lawyer asked what the qualifications are. [They said] I have to be with an organization and they’ll deal with the bank and you have to be homeless.
“They said they couldn’t help me,” he added.
Ahadzi explained that he purchased the house for $424,500 in 2007 before the housing bubble burst and the market price plummeted to $150,000. He claimed he lost his job as a day trader in 2009 and couldn’t meet his mortgage payments.
He packed up and left after foreclosure proceedings began in 2009, he said.
“I paid the mortgage on the house for two years,” he added.
Ahadzi even attended the Dec. 6 press conference at the house when the Carrasquillos were introduced. He wanted to tell reporters his story.
“[OWS] told me not to talk to them [reporters] because they [OWS] had an offer for me,” he said.
At a second meeting after the press conference, however, organizers said they would not pay him for the house. At that point, he told them to leave.
Inside the house the walls are knocked down and all of his belongings, including a stove, refrigerator and bedroom furniture, have been moved to the basement.
“I’m pissed off,” he said.
“I’m trying to get my house back, and they’re trying to take it from me.”
URL to original article: http://www.housingwire.com/2012/01/16/single-dad-trying-to-take-back-home-from-occupy-wall-street-protesters-%e2%80%8e
For further information on Fresno Real Estate check: http://www.londonproperties.com/
They’re occupying his home.
Occupy Wall Street protesters announced with great fanfare last month that they moved a homeless family into a “foreclosed” Brooklyn, N.Y., home — even though they knew the house belonged to a struggling single father desperately trying to renegotiate his mortgage, The Post has learned.
“They’re trying to take a house and say the bank is robbing the people because the mortgage is too high — so contact the owner!” fumed Wise Ahadzi, 28, who owns the home at 702 Vermont St. in East New York.
Occupiers “reclaimed” the row house on Dec. 6 and ceremoniously put out the welcome mat for a homeless family.
But Bank of America, which has been in and out of foreclosure proceedings against Ahadzi since 2009, confirmed to The Post that he is still the rightful owner.
Meanwhile, the family that OWS claimed to be putting into the vacant house has not yet permanently moved in. And it turns out the family is not a random victim of the foreclosure crisis, but cast for the part, thanks to their connection to the OWS movement.
OWS last week said it has spent $9,500 breaking into the house and setting it up for the homeless Carrasquillo family. A photo of the smiling family covers a window, under the slogan, “A place to call home.”
The head of the family, Alfredo Carrasquillo, 28, is an organizer for VOCAL- NY, a group that works with OWS. His Facebook page shows him in a “99 Percent” T-shirt at an OWS protest in November.
The Post visited the Vermont Street home last week — six weeks after OWS announced that the Carrasquillos were moving in — and the family was nowhere to be found.
In fact, the only people occupying the house were occupiers themselves.
“They only stay here sometimes,” a protester named Charlie said of the Carrasquillos. “There’s not enough room for the kids.”
The occupier refused to say how many others were inside, but at least two more protesters could be seen at the house, along with mattresses on the floor, during The Post visit.
“We’re almost done with the basement,” he said of the renovations.
The real property owner is livid because he could be raising his two little girls, Imani, 3, and Kwazha, 10, in the two-story home instead of in a meager, two-bedroom rental in Brownsville while he tries to sort out his mortgage nightmare.
Police notified him in early December that the vigilante vagrants moved into his East New York digs, he said. He immediately ran over to the house to see for himself.
“Oh, don’t call the police!” an occupier begged him.
OWS leaders and Brooklyn Councilman Charles Barron, an OWS supporter, met with Ahadzi before the press conference to discuss the future of his property, he said. Ahadzi hoped that the group would help him regain his footing.
“Why can’t you fight for me?” he asked them.
“They told me I don’t qualify,” he said. “So my lawyer asked what the qualifications are. [They said] I have to be with an organization and they’ll deal with the bank and you have to be homeless.
“They said they couldn’t help me,” he added.
Ahadzi explained that he purchased the house for $424,500 in 2007 before the housing bubble burst and the market price plummeted to $150,000. He claimed he lost his job as a day trader in 2009 and couldn’t meet his mortgage payments.
He packed up and left after foreclosure proceedings began in 2009, he said.
“I paid the mortgage on the house for two years,” he added.
Ahadzi even attended the Dec. 6 press conference at the house when the Carrasquillos were introduced. He wanted to tell reporters his story.
“[OWS] told me not to talk to them [reporters] because they [OWS] had an offer for me,” he said.
At a second meeting after the press conference, however, organizers said they would not pay him for the house. At that point, he told them to leave.
Inside the house the walls are knocked down and all of his belongings, including a stove, refrigerator and bedroom furniture, have been moved to the basement.
“I’m pissed off,” he said.
“I’m trying to get my house back, and they’re trying to take it from me.”
URL to original article: http://www.housingwire.com/2012/01/16/single-dad-trying-to-take-back-home-from-occupy-wall-street-protesters-%e2%80%8e
For further information on Fresno Real Estate check: http://www.londonproperties.com/
Friday, January 13, 2012
Fannie Mae sees 2012 home sales up 3.5% to 4.74 million
by ANDREW SCOGGIN
The housing sector will likely take incremental steps forward in 2012, though total originations will fall on fewer refinances, according to economists at Fannie Mae.
The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.
Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.
"We're entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior," Duncan said in a release. "Unfortunately, we expect this momentum to slow as we move through the first half of the year."
The report released Friday forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012.
The Federal Housing Finance Agency home sales price index, excluding refinances, could dip 1.1% for 2012 from a year before, according to the forecast. Economists predicted the 2011 index would finish 4.6% lower than 2010.
Mortgage originations as dollar volume could see a decline as well in 2012, largely on a steep drop in refinances. The Fannie report said total originations will fall to $1.01 trillion in 2012 from a predicted final 2011 tally of $1.36 trillion. Economists expected refinancing to plummet to $540 billion from $894 billion.
Purchase mortgages, however, will rise to $471 billion in 2012 from a estimated 2011 total of $464, according to the report.
Total single-family outstanding mortgage debt will likely drop 1.3% to $10.14 trillion in 2012.
For the U.S. economy as a whole, Fannie researchers predicted real GDP would increase 3.3% in the fourth quarter to finish the year at 1.7% growth. Economists forecast 2.3% GDP growth for 2012 and 2013.
URL to original article: http://www.housingwire.com/2012/01/13/fannie-mae-economists-see-2012-home-sales-up-3-5-to-4-72-million
For further information on Fresno Real Estate check: http://www.londonproperties.com
The housing sector will likely take incremental steps forward in 2012, though total originations will fall on fewer refinances, according to economists at Fannie Mae.
The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.
Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.
"We're entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior," Duncan said in a release. "Unfortunately, we expect this momentum to slow as we move through the first half of the year."
The report released Friday forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012.
The Federal Housing Finance Agency home sales price index, excluding refinances, could dip 1.1% for 2012 from a year before, according to the forecast. Economists predicted the 2011 index would finish 4.6% lower than 2010.
Mortgage originations as dollar volume could see a decline as well in 2012, largely on a steep drop in refinances. The Fannie report said total originations will fall to $1.01 trillion in 2012 from a predicted final 2011 tally of $1.36 trillion. Economists expected refinancing to plummet to $540 billion from $894 billion.
Purchase mortgages, however, will rise to $471 billion in 2012 from a estimated 2011 total of $464, according to the report.
Total single-family outstanding mortgage debt will likely drop 1.3% to $10.14 trillion in 2012.
For the U.S. economy as a whole, Fannie researchers predicted real GDP would increase 3.3% in the fourth quarter to finish the year at 1.7% growth. Economists forecast 2.3% GDP growth for 2012 and 2013.
URL to original article: http://www.housingwire.com/2012/01/13/fannie-mae-economists-see-2012-home-sales-up-3-5-to-4-72-million
For further information on Fresno Real Estate check: http://www.londonproperties.com
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