By Justin T. Hilley
The nation’s homeowner housing vacancy rates declined in the first quarter as supply conditions in the rental sector tighten and the proportion of families in tenancy reached a 15-year high.
Rental vacancies dipped to 8.8% in the quarter, 0.9% lower than a year earlier and 0.6% below the previous quarter, according to the Department of Commerce’s Census Bureau. The homeownership vacancy rate stands at 2.2% in the period, down 0.4% from a year earlier and 0.1% from the fourth quarter of 2011.
Some 34.6% of families rented their home in the first quarter, increasing from 34% at the end of 2011.
Because the housing recovery is driven by investors and cash buyers acquiring homes to rent out, the nation's rise in rental rates continues, analysts at Capital Economics said.
“We think that the rental rate may rise slightly further yet, with the necessary flipside being that fewer households will own their own home,” analysts said. “This is positive for landlords, whose rental yields are approaching 6%.”
The bureau reported a national homeownership rate of 65.4% in the first quarter, falling 1% from the year-ago figure and 0.6% from the previous quarter.
Among regions, the rental vacancy rate was the highest in the South at 10.8% and lowest in the West at 6.3%. The Northeast was the only region to experience an annual rise in its vacancy rate in the first quarter, ascending from 6.8% to 7.8%..
For rental housing by area, vacancies inside principle cities (8.8%), in the suburbs (8.7%) and outside metropolitan statistical areas (9.2%) were not statistically different from each other.
“We expect strong demand and constrained supply to contribute to rental inflation of 3% or so in 2012, and for landlords’ rental yields to improve to 5.75%,” Capital Economics analysts said. “That would comfortably beat the yields available on Treasurys.”
URL to original article: http://www.housingwire.com/news/household-renting-reaces-15-year-high
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, April 30, 2012
Thursday, April 26, 2012
Ivy Zelman, among others, sees recovery in the making
Source: Los Angeles Times
Housing market may be on rebound at last New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since 2007. The housing market's long, cold winter may finally be heading into a springtime thaw. New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since before the start of the credit crunch nearly five years ago. The easing of foreclosures is seen as key by many economists, since the glut of these properties being sold at a discount has been a significant drag on home prices. "The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory," said Sean O'Toole, chief executive of the firm ForeclosureRadar.com. "If it continues, it will likely mean that we've either seen a bottom — or have passed a bottom — in prices because of limited supply and still strong demand." Home prices remain depressed from their peak in 2007, when the median-priced home in Southern California sold for $505,000. The median price last month was $280,000. The economy overall has been improving, however, with unemployment, retail sales, corporate profits and other measures showing steady if unspectacular gains. Housing has been one of the last holdouts, but analysts note that prices have stabilized and sales volume has been gaining. "What are important are sales and inventory, and those are pointing in the right direction," said Christopher Thornberg, a principal at Beacon Economics who was one of the early callers of the housing crash. "I would say that by the end of the year, they should translate into better prices." Thornberg added, "The recovery is here." Notices of default, the first step in the foreclosure process, fell to 56,258 statewide in the first three months of the year, a 17.6% drop from the same period last year, DataQuick of San Diego reported Tuesday. That was the fewest number of default notices filed since the second quarter of 2007. Banks still retain many foreclosed properties on their books, and some analysts have predicted that housing prices could weaken again if lenders dump these properties into the recovering market. But O'Toole and other analysts see that long-feared "second wave" as increasingly unlikely, pointing out that the banks would be acting against their own interests by undercutting prices through a fire sale. "A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem," DataQuick President John Walsh said. "It's not necessarily playing out the way some pundits thought." Low interest rates and the availability of bargain-priced properties are drawing more buyers into the market. Bobbie Dunlap, 61, an office manager, said she recently bought a bank-owned home for $225,000 that she intends to fix up and rent out. The South Gate resident said she had to raise her price to beat competing bids on the two-bedroom property in Bellflower. She hopes that the rental income from the investment will provide her with a financial cushion when she stops working. "It is in pretty good shape, but it still needs some extra work, of course," Dunlap said. Maryam Javadi of Palos Verdes Estates is hopeful that buyers will take the plunge this spring. She recently listed her 2,074-square-foot house at $950,000, and about 40 people showed up Sunday to check out the four-bedroom property, which has canyon views and sits near the end of a quiet cul-de-sac. "Some people have been back to see it two or three times already," Javadi said. Betting on the rebound, investors made up a record share of buyers in Southern California during the first two months of the year, according to DataQuick. As more foreclosed homes in hard-hit neighborhoods are filled with renters, an increasing number of everyday buyers will grow interested in owning, said Ivy Zelman, chief executive of Zelman & Associates, a New York housing research firm. "This is not a robust recovery, but I feel confident that we are not sitting here lingering," said Zelman, who predicts that home prices will end the year up about 1%. "There really is more meat to the bone." Other new housing data also point to a fledgling recovery. The real estate website Zillow estimated that home values in Los Angeles hit a bottom in the first quarter as the median price flattened from February to March; several communities posted price increases, including Compton, Manhattan Beach and Santa Monica. Zillow's is among several recent predictions that certain markets have put the worst behind them. New-home sales nationally fell 7.1% in March from the previous month, the Commerce Department said Tuesday, but that was partly because it revised February sales figures up significantly. Even though the figure for March was the lowest since November, overall sales of new homes are up about 16% for the first three months of the year from the same period a year earlier, the Commerce Department said. The report helped boost the Dow Jones industrial average 74 points to 13,001. That improvement means that new-home sales will probably be stronger than last year's, which were the worst on record. One of the most widely watched measures on home values, the Standard & Poor's/Case-Shiller index of 20 U.S. cities, showed price declines moderating from January to February. Prices fell 0.8% from January to February, and were down 3.5% from February 2011. Los Angeles fell 0.8% in February from the previous month, while San Francisco was down 0.7%. San Diego was slightly positive, up 0.2% from January. Many economists brushed off the decline as the Case-Shiller numbers capture the traditionally slow months of January and December, as well as February, because they average three months' worth of data. The index's year-over-year decline in home values has also been steadily shrinking in recent months.
URL to original article: http://www.builderonline.com/builder-pulse/ivy-zelman--among-others--sees-recovery-in-the-making.aspx?cid=BP:042612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Housing market may be on rebound at last New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since 2007. The housing market's long, cold winter may finally be heading into a springtime thaw. New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since before the start of the credit crunch nearly five years ago. The easing of foreclosures is seen as key by many economists, since the glut of these properties being sold at a discount has been a significant drag on home prices. "The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory," said Sean O'Toole, chief executive of the firm ForeclosureRadar.com. "If it continues, it will likely mean that we've either seen a bottom — or have passed a bottom — in prices because of limited supply and still strong demand." Home prices remain depressed from their peak in 2007, when the median-priced home in Southern California sold for $505,000. The median price last month was $280,000. The economy overall has been improving, however, with unemployment, retail sales, corporate profits and other measures showing steady if unspectacular gains. Housing has been one of the last holdouts, but analysts note that prices have stabilized and sales volume has been gaining. "What are important are sales and inventory, and those are pointing in the right direction," said Christopher Thornberg, a principal at Beacon Economics who was one of the early callers of the housing crash. "I would say that by the end of the year, they should translate into better prices." Thornberg added, "The recovery is here." Notices of default, the first step in the foreclosure process, fell to 56,258 statewide in the first three months of the year, a 17.6% drop from the same period last year, DataQuick of San Diego reported Tuesday. That was the fewest number of default notices filed since the second quarter of 2007. Banks still retain many foreclosed properties on their books, and some analysts have predicted that housing prices could weaken again if lenders dump these properties into the recovering market. But O'Toole and other analysts see that long-feared "second wave" as increasingly unlikely, pointing out that the banks would be acting against their own interests by undercutting prices through a fire sale. "A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem," DataQuick President John Walsh said. "It's not necessarily playing out the way some pundits thought." Low interest rates and the availability of bargain-priced properties are drawing more buyers into the market. Bobbie Dunlap, 61, an office manager, said she recently bought a bank-owned home for $225,000 that she intends to fix up and rent out. The South Gate resident said she had to raise her price to beat competing bids on the two-bedroom property in Bellflower. She hopes that the rental income from the investment will provide her with a financial cushion when she stops working. "It is in pretty good shape, but it still needs some extra work, of course," Dunlap said. Maryam Javadi of Palos Verdes Estates is hopeful that buyers will take the plunge this spring. She recently listed her 2,074-square-foot house at $950,000, and about 40 people showed up Sunday to check out the four-bedroom property, which has canyon views and sits near the end of a quiet cul-de-sac. "Some people have been back to see it two or three times already," Javadi said. Betting on the rebound, investors made up a record share of buyers in Southern California during the first two months of the year, according to DataQuick. As more foreclosed homes in hard-hit neighborhoods are filled with renters, an increasing number of everyday buyers will grow interested in owning, said Ivy Zelman, chief executive of Zelman & Associates, a New York housing research firm. "This is not a robust recovery, but I feel confident that we are not sitting here lingering," said Zelman, who predicts that home prices will end the year up about 1%. "There really is more meat to the bone." Other new housing data also point to a fledgling recovery. The real estate website Zillow estimated that home values in Los Angeles hit a bottom in the first quarter as the median price flattened from February to March; several communities posted price increases, including Compton, Manhattan Beach and Santa Monica. Zillow's is among several recent predictions that certain markets have put the worst behind them. New-home sales nationally fell 7.1% in March from the previous month, the Commerce Department said Tuesday, but that was partly because it revised February sales figures up significantly. Even though the figure for March was the lowest since November, overall sales of new homes are up about 16% for the first three months of the year from the same period a year earlier, the Commerce Department said. The report helped boost the Dow Jones industrial average 74 points to 13,001. That improvement means that new-home sales will probably be stronger than last year's, which were the worst on record. One of the most widely watched measures on home values, the Standard & Poor's/Case-Shiller index of 20 U.S. cities, showed price declines moderating from January to February. Prices fell 0.8% from January to February, and were down 3.5% from February 2011. Los Angeles fell 0.8% in February from the previous month, while San Francisco was down 0.7%. San Diego was slightly positive, up 0.2% from January. Many economists brushed off the decline as the Case-Shiller numbers capture the traditionally slow months of January and December, as well as February, because they average three months' worth of data. The index's year-over-year decline in home values has also been steadily shrinking in recent months.
URL to original article: http://www.builderonline.com/builder-pulse/ivy-zelman--among-others--sees-recovery-in-the-making.aspx?cid=BP:042612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Speed and efficiency absorbing foreclosures critical to progress
Source: Calculated Risk
From RealtyTrac: 54 Percent of U.S. Metros Post Quarterly Increase in Foreclosure Activity in First Quarter of 2012 First quarter foreclosure activity increased from the previous quarter in 26 out of the nation’s 50 largest metro areas, led by Pittsburgh (up 49 percent), Indianapolis (up 37 percent), Philadelphia (up 30 percent), New York (up 24 percent), Raleigh, N.C. (up 23 percent), and Virginia Beach, Va. (up 22 percent). The biggest quarterly decreases in foreclosure activity among the 50 largest metro areas were in Portland, Ore. (down 28 percent), Las Vegas (down 26 percent), Providence, R.I. (down 24 percent), Salt Lake City (down 22 percent), Boston (down 21 percent), and San Jose, Calif. (down 21 percent). “First quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, chief executive officer of RealtyTrac. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter — an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.” RealtyTrac doesn't mention this, but Pennsylvania, Indiana, New York and North Carolina are all judicial states (the top 5 metro increases were in those states). The states with the largest decreases in foreclosure activity - Oregon, Nevada, Rhode Island, Utah, Massachusetts, and California - are all non-judicial states. This really is a tale of two different foreclosure methods. Many of the judicial states still have a long way to go.
URL to original article: http://www.builderonline.com/builder-pulse/speed-and-efficiency-absorbing-foreclosures-critical-to-progress.aspx?cid=BP:042612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
From RealtyTrac: 54 Percent of U.S. Metros Post Quarterly Increase in Foreclosure Activity in First Quarter of 2012 First quarter foreclosure activity increased from the previous quarter in 26 out of the nation’s 50 largest metro areas, led by Pittsburgh (up 49 percent), Indianapolis (up 37 percent), Philadelphia (up 30 percent), New York (up 24 percent), Raleigh, N.C. (up 23 percent), and Virginia Beach, Va. (up 22 percent). The biggest quarterly decreases in foreclosure activity among the 50 largest metro areas were in Portland, Ore. (down 28 percent), Las Vegas (down 26 percent), Providence, R.I. (down 24 percent), Salt Lake City (down 22 percent), Boston (down 21 percent), and San Jose, Calif. (down 21 percent). “First quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, chief executive officer of RealtyTrac. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter — an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.” RealtyTrac doesn't mention this, but Pennsylvania, Indiana, New York and North Carolina are all judicial states (the top 5 metro increases were in those states). The states with the largest decreases in foreclosure activity - Oregon, Nevada, Rhode Island, Utah, Massachusetts, and California - are all non-judicial states. This really is a tale of two different foreclosure methods. Many of the judicial states still have a long way to go.
URL to original article: http://www.builderonline.com/builder-pulse/speed-and-efficiency-absorbing-foreclosures-critical-to-progress.aspx?cid=BP:042612:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, April 25, 2012
The new-vs.-used home sales ratio
Source: Calculated Risk
The solid new home sales report this morning is further confirmation that the recovery for the housing industry has started. New home sales are up about 17% from the weakest three month period during the housing bust. That is a significant improvement, even if the absolute levels are still very low.
The debate is now about the strength of the recovery, not whether there is a recovery. My view is housing will remain sluggish for some time, and I expect 2012 to be another historically weak year, but better than 2011.
For house prices, the Case-Shiller index has a serious lag, and the key right now is to see if the year-over-year change is declining (it is). Note: The current Case-Shiller report was an average of December, January and February closing prices, and some of those sales were probably negotiated last October, about six months ago!
More current, but less reliable, pricing data (such as asking prices, new home prices and some anecdotal comments) suggest that house prices have stopped falling in most areas, and I expect the year-over-year change in the Case-Shiller index to turn slightly positive in the not too distant future (it is difficult to predict when, although I'll try in a couple of months). Of course the number of REO sales (lender Real Estate Owned) are down, and some of the improvement is related to fewer foreclosures and other distressed sales.
Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders haven't been able to compete with the low prices of all the foreclosed properties.
I expect this gap to eventually close, but it will probably take a number of years.
Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
URL to original article: http://www.builderonline.com/builder-pulse/the-new-vs--used-home-sales-ratio.aspx?cid=BP:042512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
URL to original article: http://www.builderonline.com/builder-pulse/the-new-vs--used-home-sales-ratio.aspx?cid=BP:042512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Zandi: 'The crash is over'
Source: Bloomberg
The U.S. housing market is showing more signs of stabilization as price declines ease and home demand improves, spurring several economists to call a bottom to the worst real estate collapse since the 1930s.
“The crash is over,” Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a telephone interview yesterday. “Home sales -- both new and existing -- and housing starts are now off the bottom.”
Data released yesterday showing better-than-estimated new- home sales and a slowdown in price declines are bolstering optimism that the market is poised for a sustainable recovery. Economists including Bank of Tokyo-Mitsubishi UFJ’s Chris Rupkey, Bank of America Corp.’s Michelle Meyer and Mark Fleming of CoreLogic Inc. are also predicting prices are close to a trough after a 35 percent slump from a July 2006 peak, even as the threat of more foreclosures loom to boost supply.
Values in 20 U.S. cities fell 3.5 percent in February, the smallest 12-month drop since February 2011, the S&P/Case-Shiller index showed yesterday. The Federal Housing Finance Agency’s home-price index, which measures properties with mortgages backed by Fannie Mae or Freddie Mac, had a 0.4 percent rise for the same period, according to a separate report.
New Home Sales
New homes sold at an annual pace of 328,000 in March, up 7.5 percent from a year earlier, the Commerce Department said. The median estimate in a Bloomberg News survey forecast a rate of 319,000. The pace of sales for February was revised upward to 353,000, a two-year high.
A report on consumer confidence yesterday showed the most important signal that housing can only go up, said Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi in New York. The Conference Board said its confidence index was at 69.2 in April, compared with a revised 69.5 in March. Beneath the headline number, an important indicator was that consumers said jobs are easier to find, Rupkey said.
“Today’s consumer confidence shows labor markets recovering and that confidence is going to allow consumers to go out and buy homes,” Rupkey said in a telephone interview yesterday.
Contract Signings
The National Association of Realtors probably will say tomorrow that the number of Americans signing contracts to buy previously owned homes rose 1 percent in March, according to the median estimate of 43 economists surveyed by Bloomberg. That would put the pending home-sales index close to a two-year high.
Trulia Inc.’s housing barometer showed that the market was 32 percent of the way “back to normal” in March, up from 23 percent a year earlier, while down from 34 percent in January and February, said Jed Kolko, chief economist for the San Francisco-based real estate information service. The measure takes into account data on home construction, sales and mortgage delinquencies.
“The housing recovery is progressing, though it’s taken one step backwards after a few strides forward,” Kolko wrote in a note on Trulia’s website yesterday.
Foreclosure Supply
While the volume of sales has increased, prices still have a way to fall because as many as 6 million homes with delinquent mortgages and in the foreclosure process are likely to come to the market, Scott Simon, head of mortgage- and asset-backed debt at Newport Beach, California-based Pacific Investment Management Co., said yesterday on Bloomberg Television.
“We think we’d go down another 3 or 4 percent over the next 12 months, probably bottoming sometime next year,” Simon said on “Surveillance Midday” with Tom Keene. “One month doesn’t change anything.”
Robert Shiller, a Yale University economics professor and co-creator of the home-price index, also said prices may be poised to fall further.
“I’m more concerned about the downside than most people,” Shiller said yesterday on Bloomberg Radio. “I could see it staying languishing and edging down for years.”
Home values took eight years to reach a bottom during the Great Depression and 11 more years to regain their lost ground, according to data compiled by Shiller. Nominal U.S. home prices fell about 30 percent from 1925 to 1933 and didn’t return to their pre-crash peak until 1944, the year before World War II ended.
Rising Home Seizures
Foreclosure filings in the U.S. fell in the first quarter to their lowest level in more than four years after lenders under legal scrutiny slowed actions against delinquent homeowners, according to RealtyTrac Inc. Home seizures will increase as banks work through the backlog following a settlement by loan servicers over faulty mortgage practices, the Irvine, California-based data firm forecasts.
Meyer, senior economist with Bank of America in New York, said the recovery will be led by the parts of the country with fewer foreclosures and more job growth. She estimates that U.S. prices will reach bottom this year and stay little changed until 2014, when they may gain about 2.5 percent.
Home values in more than half of major U.S. markets will probably reach a bottom by the end of the year, according to Seattle-based Zillow Inc. Signs that the market is close to a trough include improving home sales and rising prices in some areas, said Chief Economist Stan Humphries. The market, which has been bolstered by investors, second-home buyers, and retirees, will need more traditional first-time and trade-up buyers to return for a rebound, he said.
‘Healing’ Market
“I characterize 2012 as a year in which the market is healing and the bottoming process is playing out,” Humphries said in a telephone interview.
Median prices averaged 5.8 percent higher in March than a year earlier in 53 metro areas surveyed for a monthly housing report by Re/Max LLC, the Denver-based company said in an April 16 report. It was the second consecutive month that home prices increased year-over-year and the ninth straight month of higher sales volume, according to the report.
“This year’s selling season is shaping up to be the strongest we’ve seen in years,” Margaret Kelly, Re/Max’s chief executive officer, said in a statement. “Although we don’t expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold.”
U.S. home prices compiled by CoreLogic, a Santa Ana, California-based real estate information service, had month- over-month gains in January and February when sales of distressed properties were excluded, said Fleming, the company’s chief economist.
“It’s just a matter of months before we get positive year- over-year numbers in the overall index,” Fleming said in a telephone interview from Washington. “Our data lags the reality. The turnaround is happening in the March, April and May time frame.”
URL to original article: http://www.builderonline.com/builder-pulse/zandi---the-crash-is-over-.aspx?cid=BP:042512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
URL to original article: http://www.builderonline.com/builder-pulse/zandi---the-crash-is-over-.aspx?cid=BP:042512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
California Pending Home Sales up for Third Straight Month, Highest Level in Nearly Three Years, C.A.R. Reports
LOS ANGELES--(BUSINESS WIRE)--California pending home sales posted higher for the third consecutive month in March, rising from both the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. Additionally, the share of distressed sales dropped for the second consecutive month, as equity sales typically increase with the start of the spring home buying season.
Pending home sales: C.A.R.’s Pending Home Sales Index (PHSI)* rose from a revised 126.5 in February to 143.7 in March, based on signed contracts. The March 2012 index was the highest since April 2009, when the PHSI was 146.9. The index also was up from the 128.9 index recorded in March 2011, marking the eleventh consecutive month that pending sales were higher than the previous year. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
Distressed housing market data: • The share of equity sales – or non-distressed property sales – compared to total sales increased in March to 55.4, up from 51.1 percent in February. Equity sales made up 50.2 percent of all sales in March 2011. • Meanwhile, the total share of all distressed property types sold statewide decreased in March to 44.6 percent, down from February’s 48.9 percent and from 49.8 percent in March 2011. • The share of short sales was down again in March. Of the distressed properties sold statewide in March, 21.1 percent were short sales, down from February’s share of 23 percent but up from last March’s share of 20.1 percent. • The share of REO sales also declined in March to 23.1 percent, down from February’s 25.2 percent and down from the 29.4 percent recorded in March 2011. Multimedia: •View a chart of closed housing sales in March by sales type. •View a chart of pending sales compared with closed sales. •View a chart of the historical trend in the share of equity sales compared with distressed sales. •View a chart of housing supply for REOs, short sales, and equity sales in March.
URL to original article: http://www.businesswire.com/news/home/20120424005571/en
For further information on Fresno Real Estate check: http://www.londonproperties.com
Pending home sales: C.A.R.’s Pending Home Sales Index (PHSI)* rose from a revised 126.5 in February to 143.7 in March, based on signed contracts. The March 2012 index was the highest since April 2009, when the PHSI was 146.9. The index also was up from the 128.9 index recorded in March 2011, marking the eleventh consecutive month that pending sales were higher than the previous year. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
Distressed housing market data: • The share of equity sales – or non-distressed property sales – compared to total sales increased in March to 55.4, up from 51.1 percent in February. Equity sales made up 50.2 percent of all sales in March 2011. • Meanwhile, the total share of all distressed property types sold statewide decreased in March to 44.6 percent, down from February’s 48.9 percent and from 49.8 percent in March 2011. • The share of short sales was down again in March. Of the distressed properties sold statewide in March, 21.1 percent were short sales, down from February’s share of 23 percent but up from last March’s share of 20.1 percent. • The share of REO sales also declined in March to 23.1 percent, down from February’s 25.2 percent and down from the 29.4 percent recorded in March 2011. Multimedia: •View a chart of closed housing sales in March by sales type. •View a chart of pending sales compared with closed sales. •View a chart of the historical trend in the share of equity sales compared with distressed sales. •View a chart of housing supply for REOs, short sales, and equity sales in March.
URL to original article: http://www.businesswire.com/news/home/20120424005571/en
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, April 24, 2012
Appraisal hell
Source: SmartMoney
U.S. home building fell for the second straight month down to its lowest level since October, Commerce Department data released Tuesday shows. Builders increasingly blame home appraisals, which often value properties less than expected – and sometimes come in even lower than the cost of constructing the house in the first place. One out of three builders say they lost signed sales contracts during the last half of 2011 because appraisals on their homes were less than the sales price the buyer agreed to, according to the latest data from the National Association of Home Builders. The association says the situation hasn’t improved since. And roughly a third of builders say the appraisal amount was less than the cost of building the home. Home appraisals occur after the buyer and builder agree to a purchase price and go into contract on the home. When an appraisal values the home below that price, buyers have difficulty getting a mortgage, increasing the chances that the deal will fall through. “We’re at the point where if anything goes wrong builders will think twice about building new homes – the appraisals are the last kicker,” says Steve Melman, director of economic services at the NAHB. The low appraisals come at a time when the homebuilding industry is already struggling to recover. Buyers have been hesitant to purchase new homes because they’re typically more expensive than existing ones. Just 306,000 new homes sold last year – their lowest level in 48 years. That said, building permits for new construction have actually been rising. Individuals who do try to purchase a new home often hit a roadblock once the appraisal is conducted, experts say. Appraisers determine the value of a home largely by reviewing the prices at which similar homes nearby sold for in recent months. Because few homes are selling, appraisers say they sometimes have to use homes that aren’t similar like foreclosures or short sales. That means homes with brand new appliances and fixtures could be compared to houses that are vacant and whose kitchens and bathrooms have been ripped out. Ken Chitester, a spokesman for the Appraisal Institute, an association of real estate appraisers, says they take such inconsistencies into account and consider what those properties would have sold for if they weren’t distressed. But he adds that what it costs to build a home doesn’t necessarily equal its value. “Appraisers are doing the same thorough research and thoughtful analysis they always have,” he says. “If home values are lower than some people might like them to be that’s because the market is down.” When appraisals derail a mortgage, the lender typically offers a smaller loan, and the buyer then has to find a way to make up the gap between their down payment and the amount covered by the loan. Builders will often come down in price in order to save the deal, says Melman, but that eats into their profits, which are already slim – net profits were 0.5% in “If home values are lower than some people might like them to be that’s because the market is down.” When appraisals derail a mortgage, the lender typically offers a smaller loan, and the buyer then has to find a way to make up the gap between their down payment and the amount covered by the loan. Builders will often come down in price in order to save the deal, says Melman, but that eats into their profits, which are already slim – net profits were 0.5% in 2010 (the latest data) and have likely not improved since, he says. “You can’t sell too many homes at a loss, so clearly they need to work this out,” he says.
URL to original article: http://www.builderonline.com/builder-pulse/appraisal-hell-2.aspx?cid=BP:042412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
U.S. home building fell for the second straight month down to its lowest level since October, Commerce Department data released Tuesday shows. Builders increasingly blame home appraisals, which often value properties less than expected – and sometimes come in even lower than the cost of constructing the house in the first place. One out of three builders say they lost signed sales contracts during the last half of 2011 because appraisals on their homes were less than the sales price the buyer agreed to, according to the latest data from the National Association of Home Builders. The association says the situation hasn’t improved since. And roughly a third of builders say the appraisal amount was less than the cost of building the home. Home appraisals occur after the buyer and builder agree to a purchase price and go into contract on the home. When an appraisal values the home below that price, buyers have difficulty getting a mortgage, increasing the chances that the deal will fall through. “We’re at the point where if anything goes wrong builders will think twice about building new homes – the appraisals are the last kicker,” says Steve Melman, director of economic services at the NAHB. The low appraisals come at a time when the homebuilding industry is already struggling to recover. Buyers have been hesitant to purchase new homes because they’re typically more expensive than existing ones. Just 306,000 new homes sold last year – their lowest level in 48 years. That said, building permits for new construction have actually been rising. Individuals who do try to purchase a new home often hit a roadblock once the appraisal is conducted, experts say. Appraisers determine the value of a home largely by reviewing the prices at which similar homes nearby sold for in recent months. Because few homes are selling, appraisers say they sometimes have to use homes that aren’t similar like foreclosures or short sales. That means homes with brand new appliances and fixtures could be compared to houses that are vacant and whose kitchens and bathrooms have been ripped out. Ken Chitester, a spokesman for the Appraisal Institute, an association of real estate appraisers, says they take such inconsistencies into account and consider what those properties would have sold for if they weren’t distressed. But he adds that what it costs to build a home doesn’t necessarily equal its value. “Appraisers are doing the same thorough research and thoughtful analysis they always have,” he says. “If home values are lower than some people might like them to be that’s because the market is down.” When appraisals derail a mortgage, the lender typically offers a smaller loan, and the buyer then has to find a way to make up the gap between their down payment and the amount covered by the loan. Builders will often come down in price in order to save the deal, says Melman, but that eats into their profits, which are already slim – net profits were 0.5% in “If home values are lower than some people might like them to be that’s because the market is down.” When appraisals derail a mortgage, the lender typically offers a smaller loan, and the buyer then has to find a way to make up the gap between their down payment and the amount covered by the loan. Builders will often come down in price in order to save the deal, says Melman, but that eats into their profits, which are already slim – net profits were 0.5% in 2010 (the latest data) and have likely not improved since, he says. “You can’t sell too many homes at a loss, so clearly they need to work this out,” he says.
URL to original article: http://www.builderonline.com/builder-pulse/appraisal-hell-2.aspx?cid=BP:042412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
How can house prices fall if sales are up?
Source: CNBC
Buyer traffic is strong, supply of homes for sale is low, and yet home prices continue to defy the usual formula, falling again in March. Prices usually rise as supply shrinks, but demand is still too low to make those historical “norms” compute, not to mention that the type of supply available is largely distressed.
Foreclosures and short sales (when the home is sold for less than the value of the mortgage) accounted for 47.7 percent of sales, in a three month running average measured by Campbell/Inside Mortgage Finance. That’s the 25th month in a row that distressed sales have topped 40 percent of the market.
“With nearly half of the market being distressed, we’re a long way from a return to a normal market,” said Thomas Popik, research director at Campbell Surveys. “Agents responding to our survey say that homeowners with well-maintained properties in good locations are very reluctant to list at today’s prices. That’s why inventory is low—and also why forced REO and short sales are such a big proportion of the remaining market.”
Home prices for non-distressed properties fell 5.7 percent in March year-over-year, according to the survey. Prices for “damaged” REO (bank-owned properties) fell 5.7 percent and for move-in ready REO fell 2.5 percent during the same period. The real sticker shock is in short sales. Prices of those homes fell 14.3 percent from March of 2011.
Short sales have been ramping up of late, as banks attempt to comply with the so-called “robo-signing” mortgage settlement. Those are part of the losses the banks are required to take in the $25 billion deal. Over the past six months, short sales have moved from 17.8 percent of all sales to 19.9 percent, according to the Campbell/IMF survey. They now represent the number one segment for distressed properties.
That share is likely to grow, as the conservator of Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA), last week announced it was directing the two mortgage giants to “develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure.” It includes a requirement that mortgage servicers review and respond to short sale requests within thirty days.
Lengthy timelines have long been the biggest complaint in the short sale sector. Fannie Mae and Freddie Mac hold hundreds of thousands of distressed loans, and accelerating the process will surely move the numbers up quickly, although the rules don’t go into effect until June 1. The FHFA is requiring the two make final decisions on these sales within 60 days. Previously, short sales could take up to a year and even beyond, with buyers often dropping out in frustration.
“This could put short-term downward pressure on home prices, as short sales by their nature occur more quickly than foreclosures,” writes Jaret Seiberg, analyst at Guggenheim Partners. “That could raise questions about the status of the housing recovery, which could be negative for those with housing exposure. That would include homebuilders, mortgage lenders and mortgage insurers.”
On the plus side, short sales tend to sell at higher prices than foreclosures. It appear, however, that regardless of the FHFA edict, banks are already ramping up the short sales. Some began doing so in the aftermath of the robo-signing scandal, as foreclosures stalled. Even now, foreclosures falling as short sales rise. The good news is that sales of distressed properties are rising, but the headlines will likely focus more on the falling prices, than the much-needed clearing of these homes.
URL to original article: http://www.builderonline.com/builder-pulse/how-can-house-prices-fall-if-sales-are-up-.aspx?cid=BP:042412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
URL to original article: http://www.builderonline.com/builder-pulse/how-can-house-prices-fall-if-sales-are-up-.aspx?cid=BP:042412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, April 23, 2012
Role reversal: women elcipse men in career goals
Source: Pew Research
Young Women Now Top Young Men in Valuing a High-Paying Career
Reversing traditional gender roles, young women now surpass young men in saying that achieving success in a high-paying career or profession is important in their lives. Two-thirds (66%) of young women ages 18 to 34 rate career high on their list of life priorities, compared with 59% of young men. In 1997, 56% of young women and 58% of young men felt the same way.
There has also been an increase over the last 15 years in the share of middle-aged and older women who say being successful in a high-paying career or profession is "one of the most important things" or "very important" in their lives. Today, about the same share of women and men ages 35 to 64 share this view.
Read the full report which also explores trends for women in labor force participation and educational attainment, as well as attitudes of men and women about family and career.
URL to original article: http://www.builderonline.com/builder-pulse/role-reversal--women-elcipse-men-in-career-goals.aspx?cid=BP:042312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Young Women Now Top Young Men in Valuing a High-Paying Career
Reversing traditional gender roles, young women now surpass young men in saying that achieving success in a high-paying career or profession is important in their lives. Two-thirds (66%) of young women ages 18 to 34 rate career high on their list of life priorities, compared with 59% of young men. In 1997, 56% of young women and 58% of young men felt the same way.
There has also been an increase over the last 15 years in the share of middle-aged and older women who say being successful in a high-paying career or profession is "one of the most important things" or "very important" in their lives. Today, about the same share of women and men ages 35 to 64 share this view.
Read the full report which also explores trends for women in labor force participation and educational attainment, as well as attitudes of men and women about family and career.
URL to original article: http://www.builderonline.com/builder-pulse/role-reversal--women-elcipse-men-in-career-goals.aspx?cid=BP:042312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
A McMansion by any other name would sell as sweet
Source: The Atlantic Cities
Though it was coined in the 80s, the term "McMansion" didn't really catch on until the late 1990s. It took hold – arguably by descriptive necessity – because significantly larger homes were popping up in subdivisions and gated communities around the country. The average home size grew from 1,500 square feet in 1970 to more than 2,000 in 1990, eventually peaking at 2,521 in 2007.
As homes grew, many, many journalists, commentators, pundits, and critics began to characterize them with this new epithet, a jab at what many see as a tacky or overly-consumerist style. But it turns out that the people using the term didn't really have a good idea about what, precisely, it meant.
Brian Miller is a sociologist at Wheaton College who's been studying housing and suburban development. He began to notice that the term McMansion was being used to describe wildly different things.
"There's not a single process of McMansions going on," says Miller. "Sure, there are big houses across the United States, but not everyone's seeing them the same way or talking about them the same way."
Miller recently conducted a study on the use of the term in newspaper articles. He tracked every time the word McMansion appeared in both the New York Times and the Dallas Morning News from the beginning of 2000 to the end of 2009. The term appeared in 637 articles in the New York Times and 173 articles in the Dallas Morning News, with peak occurrence in late 2005. By contrast, it made only 27 appearances in both papers between 1990 and the end of 1999.
Miller analyzed each instance to try to understand how it was being used, and found that the term McMansion tended to fall into one of four general meanings: a large house, a relatively large house, a home with bad architecture or design, or a symbol for other issues, especially sprawl and consumerism. Most often, McMansion simply referred to a large house.
"But what constitutes a large house isn’t clear either," says Miller. "You have people who would suggest that 3,000-square-foot homes are McMansions. Well, it's 500 square feet more than the average new home, but that’s a lot different from other people who are describing 10,000-square-foot homes as McMansions."
Miller says that based on his analysis, the usage of the term is often a judgment call, and almost always negative.
Of the 637 instances of McMansion in the New York Times, 455 of them (or about 71 percent) were written by journalists as opposed to sources interviewed for articles. In the Dallas Morning News, 93 of the 173 mentions (about half) were by journalists.
"In Dallas, you had a lot more readers quoted using this term, both negatively and actually some in positive terms," says Miller. "There was actually a decent sized group of people in Dallas who did not use this totally as a negative term. Whereas New York City, it was pretty much completely negative."
But though Dallas may be more accepting of larger homes in general, that doesn't mean Texans like the word. "I don’t think there's too many homeowners that walk around calling their own homes McMansions," Miller says.
But to many, those homes are McMansions. Who's right is a matter of place and audience. There's no consensus on exactly what a McMansion is, it seems to be one of those things that you know when you see it.
URL to original article: http://www.builderonline.com/builder-pulse/a-mcmansion-by-any-other-name-would-sell-as-sweet.aspx?cid=BP:042312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Though it was coined in the 80s, the term "McMansion" didn't really catch on until the late 1990s. It took hold – arguably by descriptive necessity – because significantly larger homes were popping up in subdivisions and gated communities around the country. The average home size grew from 1,500 square feet in 1970 to more than 2,000 in 1990, eventually peaking at 2,521 in 2007.
As homes grew, many, many journalists, commentators, pundits, and critics began to characterize them with this new epithet, a jab at what many see as a tacky or overly-consumerist style. But it turns out that the people using the term didn't really have a good idea about what, precisely, it meant.
Brian Miller is a sociologist at Wheaton College who's been studying housing and suburban development. He began to notice that the term McMansion was being used to describe wildly different things.
"There's not a single process of McMansions going on," says Miller. "Sure, there are big houses across the United States, but not everyone's seeing them the same way or talking about them the same way."
Miller recently conducted a study on the use of the term in newspaper articles. He tracked every time the word McMansion appeared in both the New York Times and the Dallas Morning News from the beginning of 2000 to the end of 2009. The term appeared in 637 articles in the New York Times and 173 articles in the Dallas Morning News, with peak occurrence in late 2005. By contrast, it made only 27 appearances in both papers between 1990 and the end of 1999.
Miller analyzed each instance to try to understand how it was being used, and found that the term McMansion tended to fall into one of four general meanings: a large house, a relatively large house, a home with bad architecture or design, or a symbol for other issues, especially sprawl and consumerism. Most often, McMansion simply referred to a large house.
"But what constitutes a large house isn’t clear either," says Miller. "You have people who would suggest that 3,000-square-foot homes are McMansions. Well, it's 500 square feet more than the average new home, but that’s a lot different from other people who are describing 10,000-square-foot homes as McMansions."
Miller says that based on his analysis, the usage of the term is often a judgment call, and almost always negative.
Of the 637 instances of McMansion in the New York Times, 455 of them (or about 71 percent) were written by journalists as opposed to sources interviewed for articles. In the Dallas Morning News, 93 of the 173 mentions (about half) were by journalists.
"In Dallas, you had a lot more readers quoted using this term, both negatively and actually some in positive terms," says Miller. "There was actually a decent sized group of people in Dallas who did not use this totally as a negative term. Whereas New York City, it was pretty much completely negative."
But though Dallas may be more accepting of larger homes in general, that doesn't mean Texans like the word. "I don’t think there's too many homeowners that walk around calling their own homes McMansions," Miller says.
But to many, those homes are McMansions. Who's right is a matter of place and audience. There's no consensus on exactly what a McMansion is, it seems to be one of those things that you know when you see it.
URL to original article: http://www.builderonline.com/builder-pulse/a-mcmansion-by-any-other-name-would-sell-as-sweet.aspx?cid=BP:042312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, April 20, 2012
As household debt edges down, spending edges up
Source: New York Times
The bursting of the real estate bubble and the ensuing credit crisis forced American consumers to do something that they had little experience in trying: reduce their debt.
It has been a painful process both for borrowers, who have faced foreclosures and bankruptcies, and for lenders, whose have had to take losses vastly in excess of what they thought possible.
But the process is working far faster in the United States than in countries like Britain and Spain, which also faced plunging real estate prices. And now it appears to be contributing to an economic recovery that has gained a little momentum, despite facing headwinds from the European debt crisis. This week’s report that retail sales grew faster than expected in March was the latest sign that consumers — or at least a substantial number of them — are growing more optimistic.
One measure of the financial health of householders is the level of financial obligations, like required mortgage and credit card payments, to disposable income. By the fall of 2007, those obligations took up 14 percent of disposable income, more than at any time since the Federal Reserve began calculating the statistic in 1980.
But now the situation has turned around. The latest figures, for the final quarter of 2011, show that required debt service payments now make up just 10.9 percent of disposable income, the lowest proportion since 1994. A broader measure — which adds in such obligations as property tax and insurance premiums for homeowners, and rent for those who do not own their homes — has fallen to the lowest level since 1984.
There is little mystery in how that happened. First, debt levels have fallen. Over all, households owe about $13.2 trillion, nearly $600 billion less than in late 2008. Second, low interest rates mean that servicing that debt costs less. The Commerce Department says that mortgage interest payments, in dollars, are lower than at any time since 2005.
Getting those debt levels down was not a simple matter of making payments, of course. The McKinsey Global Institute estimates that about two-thirds of the reduction came from the cancellation of debt, through write-offs and foreclosures.
But the benefit is appearing. This week’s report of surprisingly strong retail sales in March may in part be because of warm weather. However, it also owes something to the fact that money that once went to mortgage payments may now be available for other things.
To get some idea of what needs to be done now — and what the result will be — the McKinsey institute points to two incidents in the early 1990s that got little attention at the time in the United States. Those were the bursting of real estate bubbles in Sweden and Finland. Details differ, but in each country there were two distinct phases of deleveraging.
“In the first,” the McKinsey institute said in an analysis published early this year, “households, corporations and financial institutions reduce debt significantly over several years, while economic growth is negative or minimal and government debt rises.” That is certainly what has happened in the United States.
The second phase is the good part, the institute said. “Growth rebounds and government debt is reduced gradually over several years.”
In this country, the deleveraging process has some way to go, with many foreclosures still pending, but it is at least possible that economic growth is beginning to accelerate. It is clear that the United States has made a lot more progress in cutting consumer debt than has been made in either Britain or Spain, two other countries that suffered from falling real estate prices.
To get the deleveraging process under way, it is important for lenders to face reality, admit losses and deal with them. For banks, and their regulators, there is a great temptation to obscure losses, hoping that the market will recover. That was a little harder to do in the recent cycle, thanks to new mark-to-market accounting rules. Those rules were weakened after they were denounced by banks, supported by their regulators, but they still had some effect.
Perhaps more significantly, many of the worst loans — and the ones that most needed to be dealt with — were generally not on bank balance sheets. The vast majority of home mortgage loans had been sold to investors in mortgage securitizations, many of them guaranteed by Fannie Mae and Freddie Mac and others privately issued. Securitizations must regularly report on how many loans are not performing. As a result, the losses could not be hidden — and the recovery process delayed — as happened in Japan during the decade after its bubble burst in 1990.
The McKinsey report identifies six markers of success that are useful in assessing a nation’s deleveraging process. A stable banking system must emerge. After the inevitable surge in government debt, there needs to be a credible plan for long-term fiscal sustainability. Structural reforms may be needed to make economies more competitive. Exports need to rise, as does private investment. Finally, the housing market needs to stabilize.
Susan Lund, the director of research for the McKinsey institute, says the two areas where the United States is weakest are in coming up with a credible fiscal plan and in stabilizing the real estate market. Home prices continue to fall in some of the hardest hit areas, where debts continue to be high relative to income. I’d add in private investment. Corporations are generating a lot more cash than they are willing to invest. To some extent, that may simply reflect the trauma of the crisis, when cash was king, and it may take time to solve it.
There are plenty of reasons to doubt that the current economic recovery will become self-sustaining, starting with Europe’s problems and including the threat that American fiscal policy will shut off growth by imposing too much austerity too soon.
Ms. Lund points out that from 2003 to 2007, American homeowners took out $2.2 trillion from home equity loans and mortgage refinancings, a source of economic stimulus that will not return anytime soon. “Compared to the much-debated government fiscal stimulus, this was more than twice the size,” she noted. She thinks the household deleveraging process will continue for two more years.
But who would have forecast that the burden of household debt — at least in much of the country — would by now have been reduced so far that consumers are again a source of growth? That fact is a reminder that the outlook is seldom as bleak as it seems in the immediate aftermath of a calamity.
Floyd Norris comments on finance and the economy at nytimes.com/economix.
This article has been revised to reflect the following correction:
Correction: April 19, 2012
An earlier version of this column referred to household debt of $13.2 trillion as being nearly $600 billion less than in 1998. The correct year is 2008.
URL to original article: http://www.builderonline.com/builder-pulse/as-household-debt-edges-down--spending-edges-up.aspx?cid=BP:042012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The bursting of the real estate bubble and the ensuing credit crisis forced American consumers to do something that they had little experience in trying: reduce their debt.
It has been a painful process both for borrowers, who have faced foreclosures and bankruptcies, and for lenders, whose have had to take losses vastly in excess of what they thought possible.
But the process is working far faster in the United States than in countries like Britain and Spain, which also faced plunging real estate prices. And now it appears to be contributing to an economic recovery that has gained a little momentum, despite facing headwinds from the European debt crisis. This week’s report that retail sales grew faster than expected in March was the latest sign that consumers — or at least a substantial number of them — are growing more optimistic.
One measure of the financial health of householders is the level of financial obligations, like required mortgage and credit card payments, to disposable income. By the fall of 2007, those obligations took up 14 percent of disposable income, more than at any time since the Federal Reserve began calculating the statistic in 1980.
But now the situation has turned around. The latest figures, for the final quarter of 2011, show that required debt service payments now make up just 10.9 percent of disposable income, the lowest proportion since 1994. A broader measure — which adds in such obligations as property tax and insurance premiums for homeowners, and rent for those who do not own their homes — has fallen to the lowest level since 1984.
There is little mystery in how that happened. First, debt levels have fallen. Over all, households owe about $13.2 trillion, nearly $600 billion less than in late 2008. Second, low interest rates mean that servicing that debt costs less. The Commerce Department says that mortgage interest payments, in dollars, are lower than at any time since 2005.
Getting those debt levels down was not a simple matter of making payments, of course. The McKinsey Global Institute estimates that about two-thirds of the reduction came from the cancellation of debt, through write-offs and foreclosures.
But the benefit is appearing. This week’s report of surprisingly strong retail sales in March may in part be because of warm weather. However, it also owes something to the fact that money that once went to mortgage payments may now be available for other things.
To get some idea of what needs to be done now — and what the result will be — the McKinsey institute points to two incidents in the early 1990s that got little attention at the time in the United States. Those were the bursting of real estate bubbles in Sweden and Finland. Details differ, but in each country there were two distinct phases of deleveraging.
“In the first,” the McKinsey institute said in an analysis published early this year, “households, corporations and financial institutions reduce debt significantly over several years, while economic growth is negative or minimal and government debt rises.” That is certainly what has happened in the United States.
The second phase is the good part, the institute said. “Growth rebounds and government debt is reduced gradually over several years.”
In this country, the deleveraging process has some way to go, with many foreclosures still pending, but it is at least possible that economic growth is beginning to accelerate. It is clear that the United States has made a lot more progress in cutting consumer debt than has been made in either Britain or Spain, two other countries that suffered from falling real estate prices.
To get the deleveraging process under way, it is important for lenders to face reality, admit losses and deal with them. For banks, and their regulators, there is a great temptation to obscure losses, hoping that the market will recover. That was a little harder to do in the recent cycle, thanks to new mark-to-market accounting rules. Those rules were weakened after they were denounced by banks, supported by their regulators, but they still had some effect.
Perhaps more significantly, many of the worst loans — and the ones that most needed to be dealt with — were generally not on bank balance sheets. The vast majority of home mortgage loans had been sold to investors in mortgage securitizations, many of them guaranteed by Fannie Mae and Freddie Mac and others privately issued. Securitizations must regularly report on how many loans are not performing. As a result, the losses could not be hidden — and the recovery process delayed — as happened in Japan during the decade after its bubble burst in 1990.
The McKinsey report identifies six markers of success that are useful in assessing a nation’s deleveraging process. A stable banking system must emerge. After the inevitable surge in government debt, there needs to be a credible plan for long-term fiscal sustainability. Structural reforms may be needed to make economies more competitive. Exports need to rise, as does private investment. Finally, the housing market needs to stabilize.
Susan Lund, the director of research for the McKinsey institute, says the two areas where the United States is weakest are in coming up with a credible fiscal plan and in stabilizing the real estate market. Home prices continue to fall in some of the hardest hit areas, where debts continue to be high relative to income. I’d add in private investment. Corporations are generating a lot more cash than they are willing to invest. To some extent, that may simply reflect the trauma of the crisis, when cash was king, and it may take time to solve it.
There are plenty of reasons to doubt that the current economic recovery will become self-sustaining, starting with Europe’s problems and including the threat that American fiscal policy will shut off growth by imposing too much austerity too soon.
Ms. Lund points out that from 2003 to 2007, American homeowners took out $2.2 trillion from home equity loans and mortgage refinancings, a source of economic stimulus that will not return anytime soon. “Compared to the much-debated government fiscal stimulus, this was more than twice the size,” she noted. She thinks the household deleveraging process will continue for two more years.
But who would have forecast that the burden of household debt — at least in much of the country — would by now have been reduced so far that consumers are again a source of growth? That fact is a reminder that the outlook is seldom as bleak as it seems in the immediate aftermath of a calamity.
Floyd Norris comments on finance and the economy at nytimes.com/economix.
This article has been revised to reflect the following correction:
Correction: April 19, 2012
An earlier version of this column referred to household debt of $13.2 trillion as being nearly $600 billion less than in 1998. The correct year is 2008.
URL to original article: http://www.builderonline.com/builder-pulse/as-household-debt-edges-down--spending-edges-up.aspx?cid=BP:042012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Is 2012 the 'bounce back' year?
Source: ABC30
FRESNO, California (KFSN) -- The first four months of 2012 is proving to be a bounce back year for local home builders. There are new communities springing up everywhere and they're not all the same type of home.
Granville Homes is in the midst of building four new communities in Fresno County. In the first quarter alone, the company is seeing a 70-percent spike in home sales compared to this time last year.
Granville Homes President, Darius Assemi told Action News, "Most of our communities are almost sold out. So much that we're concerned that we're going to have a shortage of lots in the Fresno area."
Granville isn't the only one busy building homes left and right.
Wilson Homes is in the middle of creating two new communities on Herndon and Valentine which include both urban style housing and the single family home that are the most popular in the Valley.
While these are just two examples of projects in full swing -- the building industry association says there are dozens of other permits being approved to start new ones.
"We're going to have a better year for building new construction in 2012 than we had in 2011," said Mike Prandini. "But that's not saying a lot because was such a bad year."
Mike Prandini doesn't share the same enthusiasm as Granville Homes. But he's hearing that the number of re-sale homes are declining -- resulting in an increase of bids for home ownership. "We're looking at and hoping to get a 1,000 units or more this year in the Fresno/Clovis area. Last year we had less than a 1,000 so."
We're not even half-way through the year -- but already there are encoring signs that the housing market will bounce back in a big way.
"There are a lot of folks that are ready to buy or have been ready to buy for the last few years. They just wanted to make sure they're investing their dollars wisely in an economy that's on its way up."
URL to original article: http://abclocal.go.com/kfsn/story?section=news/business&id=8625721
For further information on Fresno Real Estate check: http://www.londonproperties.com
FRESNO, California (KFSN) -- The first four months of 2012 is proving to be a bounce back year for local home builders. There are new communities springing up everywhere and they're not all the same type of home.
Granville Homes is in the midst of building four new communities in Fresno County. In the first quarter alone, the company is seeing a 70-percent spike in home sales compared to this time last year.
Granville Homes President, Darius Assemi told Action News, "Most of our communities are almost sold out. So much that we're concerned that we're going to have a shortage of lots in the Fresno area."
Granville isn't the only one busy building homes left and right.
Wilson Homes is in the middle of creating two new communities on Herndon and Valentine which include both urban style housing and the single family home that are the most popular in the Valley.
While these are just two examples of projects in full swing -- the building industry association says there are dozens of other permits being approved to start new ones.
"We're going to have a better year for building new construction in 2012 than we had in 2011," said Mike Prandini. "But that's not saying a lot because was such a bad year."
Mike Prandini doesn't share the same enthusiasm as Granville Homes. But he's hearing that the number of re-sale homes are declining -- resulting in an increase of bids for home ownership. "We're looking at and hoping to get a 1,000 units or more this year in the Fresno/Clovis area. Last year we had less than a 1,000 so."
We're not even half-way through the year -- but already there are encoring signs that the housing market will bounce back in a big way.
"There are a lot of folks that are ready to buy or have been ready to buy for the last few years. They just wanted to make sure they're investing their dollars wisely in an economy that's on its way up."
URL to original article: http://abclocal.go.com/kfsn/story?section=news/business&id=8625721
For further information on Fresno Real Estate check: http://www.londonproperties.com
March unemployment rate lower than last year
Written by Business Journal staff
All four Central Valley counties followed the same trend in March, as the month-to-month unemployment rate went up but the year-to-year unemployment rate declined, according to the monthly statistics released by the Employment Development Department.
Madera County’s unemployment rate remains the lowest of the four counties at 16.6 percent, followed by Fresno and Kings counties at 17.4 percent and Tulare Counties at 18.3 percent.
The previous month all four counties had lower rates, with Madera County at 15.4 percent, Fresno County at 17.2 percent, Kings County at 16.9 percent and Tulare County at 17.6 percent in February.
But in the year-to-year statistics, each county is doing better compared last March when Madera County was at 17 percent, Fresno County was at 18 percent, Kings County was at 18.2 percent and Tulare County was at 18.7 percent.
However Madera County was the only county showing a decrease in total jobs, as it lost 200. Fresno County gained 2,800, Tulare County increased by 2,100 and Kings County saw a rise of 1,300 total jobs.
The unemployment rate for California was 11.5 percent and the nation was 8.4 percent.
URL to original article: http://www.thebusinessjournal.com/news/employment/1593-march-unemployment-rate-lower-than-last-year
For further information on Fresno Real Estate check: http://www.londonproperties.com
All four Central Valley counties followed the same trend in March, as the month-to-month unemployment rate went up but the year-to-year unemployment rate declined, according to the monthly statistics released by the Employment Development Department.
Madera County’s unemployment rate remains the lowest of the four counties at 16.6 percent, followed by Fresno and Kings counties at 17.4 percent and Tulare Counties at 18.3 percent.
The previous month all four counties had lower rates, with Madera County at 15.4 percent, Fresno County at 17.2 percent, Kings County at 16.9 percent and Tulare County at 17.6 percent in February.
But in the year-to-year statistics, each county is doing better compared last March when Madera County was at 17 percent, Fresno County was at 18 percent, Kings County was at 18.2 percent and Tulare County was at 18.7 percent.
However Madera County was the only county showing a decrease in total jobs, as it lost 200. Fresno County gained 2,800, Tulare County increased by 2,100 and Kings County saw a rise of 1,300 total jobs.
The unemployment rate for California was 11.5 percent and the nation was 8.4 percent.
URL to original article: http://www.thebusinessjournal.com/news/employment/1593-march-unemployment-rate-lower-than-last-year
For further information on Fresno Real Estate check: http://www.londonproperties.com
California Bay Area home sales hit 5-year high
By Justin T. Hilley
March home sales in California’s Bay Area reached their highest level for the month in five years, the result of lower prices, low interest rates and an improving economy.
About 7,700 new and resale houses and condos sold in the nine-county Bay Area in March, up 34.9% from 5,702 in February, and up 9.1% from 7,051 a year earlier, according to San Diego-based DataQuick.
The February to March sales jump is normal for the season, but the latter’s sales count was the highest for the month since 8,317 homes were sold in 2007. Since 1988, March sales have ranged from 4,898 in 2008 to 12,645 in 2004, with an average of 8,812.
“This is the time of year when buying patterns usually start to normalize,” said DataQuick President John Walsh. “And while the changes we’re seeing are incremental, they’re incremental in a positive direction. That said, there’s a long way to go.”
The median price paid for all new and resale houses and condos sold in the Bay Area in March totaled $358,000, a 10.2% increase from $325,000 in February, but down 0.6% from $360,000 in March 2011.
To put these figures in perspective, the low point of the current real estate cycle fell to $290,000 in March 2009, while the peak rose to $665,000 in June/July 2007.
Statewide median home prices posted their first year-over-year increase in 16 months. The California Association of Realtors members said tight inventory (4.1 months) throughout the state and particularly robust sales in the San Francisco Bay area helped fuel the price increase.
“Two of the big issues to watch closely are how fast distressed properties are being put on the market, and the availability of, or lack of availability of, mortgage financing,” DataQuick's Walsh said.
Distressed property sales, according to the firm, made up 44.3% of the resale market, down from 48.8% in February and 48.2% a year earlier.
Foreclosure resales accounted for 24.9% of resales in March, falling from 26.4% in February, and down from 31.5% in the year-ago period. Foreclosure resales averaged about 10% over the past 17 years.
Short sales made up 19.4% of Bay Area resales in the month, down from 22.4% in the previous month and up from 16.7% a year earlier.
URL to original article: http://www.housingwire.com/news/california-bay-area-home-sales-hit-5-year-high
For further information on Fresno Real Estate check: http://www.londonproperties.com
March home sales in California’s Bay Area reached their highest level for the month in five years, the result of lower prices, low interest rates and an improving economy.
About 7,700 new and resale houses and condos sold in the nine-county Bay Area in March, up 34.9% from 5,702 in February, and up 9.1% from 7,051 a year earlier, according to San Diego-based DataQuick.
The February to March sales jump is normal for the season, but the latter’s sales count was the highest for the month since 8,317 homes were sold in 2007. Since 1988, March sales have ranged from 4,898 in 2008 to 12,645 in 2004, with an average of 8,812.
“This is the time of year when buying patterns usually start to normalize,” said DataQuick President John Walsh. “And while the changes we’re seeing are incremental, they’re incremental in a positive direction. That said, there’s a long way to go.”
The median price paid for all new and resale houses and condos sold in the Bay Area in March totaled $358,000, a 10.2% increase from $325,000 in February, but down 0.6% from $360,000 in March 2011.
To put these figures in perspective, the low point of the current real estate cycle fell to $290,000 in March 2009, while the peak rose to $665,000 in June/July 2007.
Statewide median home prices posted their first year-over-year increase in 16 months. The California Association of Realtors members said tight inventory (4.1 months) throughout the state and particularly robust sales in the San Francisco Bay area helped fuel the price increase.
“Two of the big issues to watch closely are how fast distressed properties are being put on the market, and the availability of, or lack of availability of, mortgage financing,” DataQuick's Walsh said.
Distressed property sales, according to the firm, made up 44.3% of the resale market, down from 48.8% in February and 48.2% a year earlier.
Foreclosure resales accounted for 24.9% of resales in March, falling from 26.4% in February, and down from 31.5% in the year-ago period. Foreclosure resales averaged about 10% over the past 17 years.
Short sales made up 19.4% of Bay Area resales in the month, down from 22.4% in the previous month and up from 16.7% a year earlier.
URL to original article: http://www.housingwire.com/news/california-bay-area-home-sales-hit-5-year-high
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, April 19, 2012
Short Sales Surpass Foreclosures as Banks Agree to Deals
By John Gittelsohn
The number of U.S. home short sales surpassed foreclosure deals for the first time as banks became more agreeable to selling houses for less than the amount owed on their mortgages, according to Lender Processing Services Inc. (LPS)
Short sales accounted for 23.9 percent of home purchases in January, the most recent month available, compared with 19.7 percent for sales of foreclosed homes, data compiled by the Jacksonville, Florida-based company show. A year earlier, 16.3 percent of transactions were short sales and 24.9 percent involved foreclosures.
“It’s a fairly recent phenomenon that short sales have been increasing,” Jonathon Weiner, a vice president in the applied analytics division of Lender Processing Services, said in a telephone interview. “Short sales should be the dominant way of disposing of assets” in distress, he said.
Lenders are catching up to short sales after being slow to provide the staffing and incentives necessary to complete the deals, Weiner said. The transactions typically fetch a higher price for banks than sales of homes that have gone through foreclosure. In January, foreclosed homes sold for an average of 29 percent less than comparable non-distressed properties, compared with a 23 percent discount for short sales, according to Lender Processing Services. The gap has narrowed as short sales become more common, Weiner said.
Distressed-Property Inventory
The growing percentage of short sales, which don’t require going through the drawn-out foreclosure process, is a sign that the U.S. is making progress in working through its inventory of distressed properties, Weiner said. The increase in short sales also may help values find a floor quicker.
“Our baseline scenario is that home prices will hit a bottom at the end of this year,” he said.
The Federal Housing Finance Agency ordered loan servicers to respond to all short-sale offers within 30 days, and approve or reject them within 60 days, in an effort to expedite a process that can take months longer than conventional home sales, the agency said in a statement today.
The FHFA, which oversees mortgage companies Fannie Mae and Freddie Mac, wants to improve the short-sale process “to prevent foreclosure, keep homes occupied and help maintain stable communities,” Edward J. DeMarco, the agency’s acting director, said in the statement. Freddie Mac and Fannie Mae completed 125,456 short sales last year, the most recent period for which figures are available.
Cash Incentives
Banks including Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) last year began giving cash inducements as high as $35,000 to selected homeowners who agreed to a short sale as a way of speeding up the process.
Bank of America Corp. paid $19.9 million in the first two months of this year for 22,534 homeowners to relocate after short sales and deeds in lieu of foreclosure, when borrowers agree to return the property deed in exchange for debt forgiveness, the Charlotte, North Carolina-based company said March 16. Its short sales rose 31 percent in January and February from a year earlier.
Banks have struggled to reduce losses from delinquent mortgages. Almost 4.4 percent of homes with loans had received a notice of foreclosure sale at the end of 2011, the 11th consecutive quarter the rate has been higher than 4 percent, according to the Mortgage Bankers Association.
Falling Foreclosures
Foreclosure filings, including notices of defaults and bank repossessions, fell 16 percent in the first quarter from a year earlier after lenders under legal scrutiny slowed actions against delinquent homeowners, RealtyTrac Inc. reported April 12.
Lender Processing Services, a 2008 spinoff from title- insurance company Fidelity National Financial Inc. (FNF), counts short sales by tallying mortgage and property transfer documents filed with county recorders, Weiner said.
Other reports haven’t shown the same magnitude of short- sale growth. The National Association of Realtors reported that 13 percent of transactions were short sales and 22 percent were foreclosures in January. In February, short sales increased to 14 percent and foreclosure-related transactions declined to 20 percent, the group said March 21.
Showing an ‘Uptick’
The Realtors collect their data from transactions on the Multiple Listing Service, a database of homes on the market, and a survey of about 3,000 members, said Walter Molony, a spokesman for the association.
“The February data is showing a bit of an uptick,” he said in an e-mail from Washington. “We’re hearing the process is going a bit more smoothly now, so that comes as no surprise.”
The U.S. Department of Housing and Urban Development reported a preliminary 19,600 short sales in January, compared with the Lender Processing Services tally of 48,721. An April 6 HUD report showed that the number of short sales rose 4.3 percent from a year earlier as the number of real estate owned, or REO, sales -- another name for foreclosure sales -- fell 39 percent.
Before agreeing to accept a loss on a short sale, lenders usually require homeowners to show evidence of hardship, such as inability to afford their mortgage payments or the need to relocate for a job, said Weiner of Lender Processing Services.
California, Arizona
Short sales outnumbered foreclosures in states with some of the largest shares of homes facing foreclosure, such as Arizona, California, Florida, Nevada and New Jersey, Lender Processing Services reported.
In New Jersey, short sales have exceeded REO deals every month since June 2010. In January, short sales accounted for more than 15 percent of the 3,033 New Jersey homes sold, compared with 3.9 percent for foreclosures. It took 966 days for banks to repossess a home in New Jersey, second only to New York, according to RealtyTrac. Both states require judicial hearings for foreclosure approval.
In New York, where it takes 1,056 days to repossess a home, 7.9 percent of purchases in January were short sales while 2.3 percent involved bank-owned properties.
“In general, markets where larger incentives are provided usually have extended foreclosure timelines, such as Florida,” Tom Goyda, a spokesman for Wells Fargo, said in an e-mail from Ellisville, Missouri. Wells Fargo, which doesn’t disclose its short-sale totals, offers homeowners as much as $20,000 to relocate, he said.
Florida Short Sales
In Florida, the number of short sales has exceeded foreclosures since July, according to Lender Processing Services. That’s about nine months after banks imposed a moratorium on home seizures amid allegations they used improper documentation and forged paperwork to claim title to properties with delinquent mortgages. The five largest loan servicers, including Wells Fargo, Bank of America and JPMorgan, agreed in February to a $25 billion settlement of the allegations.
In California, which has the largest number of homes facing foreclosure, short sales have outnumbered sales of bank-owned homes since August. In January, 37.2 percent of homes sold in the state were short sales compared with 25.8 percent for foreclosures, according to Lender Processing Services.
Banks have sped up the short-sale approval process, requiring less paperwork to prove hardship, especially for homeowners who haven’t made a mortgage payment for months on their primary residence, said Ethan Gregory, a broker with First Coast Realty Associates in Jacksonville, Florida. Banks have offered his clients as much as $13,000 to relocate, an incentive that gets the homeowners engaged in selling the home, he said.
Banks “embraced it before the settlement, but the settlement pushed them to do more streamlining,” said Gregory, whose firm handles about 50 short sales a year. “They understand it’s really the best exit for them.”
URL to original article: http://www.bloomberg.com/news/2012-04-17/short-sales-surpass-foreclosures-as-banks-agree-to-deals.html
For further information on Fresno Real Estate check: http://www.londonproperties.com
The number of U.S. home short sales surpassed foreclosure deals for the first time as banks became more agreeable to selling houses for less than the amount owed on their mortgages, according to Lender Processing Services Inc. (LPS)
Short sales accounted for 23.9 percent of home purchases in January, the most recent month available, compared with 19.7 percent for sales of foreclosed homes, data compiled by the Jacksonville, Florida-based company show. A year earlier, 16.3 percent of transactions were short sales and 24.9 percent involved foreclosures.
“It’s a fairly recent phenomenon that short sales have been increasing,” Jonathon Weiner, a vice president in the applied analytics division of Lender Processing Services, said in a telephone interview. “Short sales should be the dominant way of disposing of assets” in distress, he said.
Lenders are catching up to short sales after being slow to provide the staffing and incentives necessary to complete the deals, Weiner said. The transactions typically fetch a higher price for banks than sales of homes that have gone through foreclosure. In January, foreclosed homes sold for an average of 29 percent less than comparable non-distressed properties, compared with a 23 percent discount for short sales, according to Lender Processing Services. The gap has narrowed as short sales become more common, Weiner said.
Distressed-Property Inventory
The growing percentage of short sales, which don’t require going through the drawn-out foreclosure process, is a sign that the U.S. is making progress in working through its inventory of distressed properties, Weiner said. The increase in short sales also may help values find a floor quicker.
“Our baseline scenario is that home prices will hit a bottom at the end of this year,” he said.
The Federal Housing Finance Agency ordered loan servicers to respond to all short-sale offers within 30 days, and approve or reject them within 60 days, in an effort to expedite a process that can take months longer than conventional home sales, the agency said in a statement today.
The FHFA, which oversees mortgage companies Fannie Mae and Freddie Mac, wants to improve the short-sale process “to prevent foreclosure, keep homes occupied and help maintain stable communities,” Edward J. DeMarco, the agency’s acting director, said in the statement. Freddie Mac and Fannie Mae completed 125,456 short sales last year, the most recent period for which figures are available.
Cash Incentives
Banks including Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) last year began giving cash inducements as high as $35,000 to selected homeowners who agreed to a short sale as a way of speeding up the process.
Bank of America Corp. paid $19.9 million in the first two months of this year for 22,534 homeowners to relocate after short sales and deeds in lieu of foreclosure, when borrowers agree to return the property deed in exchange for debt forgiveness, the Charlotte, North Carolina-based company said March 16. Its short sales rose 31 percent in January and February from a year earlier.
Banks have struggled to reduce losses from delinquent mortgages. Almost 4.4 percent of homes with loans had received a notice of foreclosure sale at the end of 2011, the 11th consecutive quarter the rate has been higher than 4 percent, according to the Mortgage Bankers Association.
Falling Foreclosures
Foreclosure filings, including notices of defaults and bank repossessions, fell 16 percent in the first quarter from a year earlier after lenders under legal scrutiny slowed actions against delinquent homeowners, RealtyTrac Inc. reported April 12.
Lender Processing Services, a 2008 spinoff from title- insurance company Fidelity National Financial Inc. (FNF), counts short sales by tallying mortgage and property transfer documents filed with county recorders, Weiner said.
Other reports haven’t shown the same magnitude of short- sale growth. The National Association of Realtors reported that 13 percent of transactions were short sales and 22 percent were foreclosures in January. In February, short sales increased to 14 percent and foreclosure-related transactions declined to 20 percent, the group said March 21.
Showing an ‘Uptick’
The Realtors collect their data from transactions on the Multiple Listing Service, a database of homes on the market, and a survey of about 3,000 members, said Walter Molony, a spokesman for the association.
“The February data is showing a bit of an uptick,” he said in an e-mail from Washington. “We’re hearing the process is going a bit more smoothly now, so that comes as no surprise.”
The U.S. Department of Housing and Urban Development reported a preliminary 19,600 short sales in January, compared with the Lender Processing Services tally of 48,721. An April 6 HUD report showed that the number of short sales rose 4.3 percent from a year earlier as the number of real estate owned, or REO, sales -- another name for foreclosure sales -- fell 39 percent.
Before agreeing to accept a loss on a short sale, lenders usually require homeowners to show evidence of hardship, such as inability to afford their mortgage payments or the need to relocate for a job, said Weiner of Lender Processing Services.
California, Arizona
Short sales outnumbered foreclosures in states with some of the largest shares of homes facing foreclosure, such as Arizona, California, Florida, Nevada and New Jersey, Lender Processing Services reported.
In New Jersey, short sales have exceeded REO deals every month since June 2010. In January, short sales accounted for more than 15 percent of the 3,033 New Jersey homes sold, compared with 3.9 percent for foreclosures. It took 966 days for banks to repossess a home in New Jersey, second only to New York, according to RealtyTrac. Both states require judicial hearings for foreclosure approval.
In New York, where it takes 1,056 days to repossess a home, 7.9 percent of purchases in January were short sales while 2.3 percent involved bank-owned properties.
“In general, markets where larger incentives are provided usually have extended foreclosure timelines, such as Florida,” Tom Goyda, a spokesman for Wells Fargo, said in an e-mail from Ellisville, Missouri. Wells Fargo, which doesn’t disclose its short-sale totals, offers homeowners as much as $20,000 to relocate, he said.
Florida Short Sales
In Florida, the number of short sales has exceeded foreclosures since July, according to Lender Processing Services. That’s about nine months after banks imposed a moratorium on home seizures amid allegations they used improper documentation and forged paperwork to claim title to properties with delinquent mortgages. The five largest loan servicers, including Wells Fargo, Bank of America and JPMorgan, agreed in February to a $25 billion settlement of the allegations.
In California, which has the largest number of homes facing foreclosure, short sales have outnumbered sales of bank-owned homes since August. In January, 37.2 percent of homes sold in the state were short sales compared with 25.8 percent for foreclosures, according to Lender Processing Services.
Banks have sped up the short-sale approval process, requiring less paperwork to prove hardship, especially for homeowners who haven’t made a mortgage payment for months on their primary residence, said Ethan Gregory, a broker with First Coast Realty Associates in Jacksonville, Florida. Banks have offered his clients as much as $13,000 to relocate, an incentive that gets the homeowners engaged in selling the home, he said.
Banks “embraced it before the settlement, but the settlement pushed them to do more streamlining,” said Gregory, whose firm handles about 50 short sales a year. “They understand it’s really the best exit for them.”
URL to original article: http://www.bloomberg.com/news/2012-04-17/short-sales-surpass-foreclosures-as-banks-agree-to-deals.html
For further information on Fresno Real Estate check: http://www.londonproperties.com
Report: Sellers’ Asking Prices Rose in March
By Nick Timiraos
Here’s a sign that sellers are feeling more optimistic about their prospects this spring: median asking prices in March jumped by 5.6% from a year ago, and were up 1% from February, according to a report released Tuesday.
The jump in median asking prices comes amid a sharp drop in the number of homes listed for sale from one year ago. While listing inventories in March rose by 1.5% from February, they were still 21.5% below last year’s levels.
Inventories of homes listed for sale tend to go up in the spring, and the 1.8 million listings in March represented the second straight increase for the year. Over the past 27 years, the average increase in for-sale listings in March has been 1.8% from February, according to research firm Zelman & Associates.
The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t cover all homes for sale, including those that are “for sale by owner” and newly constructed homes that aren’t always listed by the services.
Compared with February, inventories declined in roughly less than half of the top 30 metros tracked by Realtor.com during March, with the biggest declines in Phoenix (-6.4%), Seattle (-4.8%) and Orlando, Fla. (-4.2%).
Northeastern cities showed the largest inventory gains — a finding that shouldn’t surprise given that sellers are more likely to list their homes when the weather improves. Washington, D.C., saw a 9.5% gain, followed by Philadelphia (8.1%) and Boston (7.4%).
But compared with one year ago, inventories are still down sharply in almost all of the 145 markets tracked by Realtor.com. Just two, Philadelphia and Hartford, Conn., have seen any annual inventory increases. Listings are down by more than half in Oakland and Bakersfield, Calif.
Where are prices rising? Median asking prices were up from one year ago or unchanged in the vast majority of markets, with whopping increases of 23% in Phoenix, 22% in Miami, 17% in Washington, D.C.
The biggest monthly price gains were reported in San Francisco (6.1%), Seattle (5%) and Washington, D.C. (4.1%).
Where are prices falling? Chicago topped the list, with median asking prices down by 9.5% from last year’s levels. Orange County, Calif., saw a 5.4% decline and Los Angeles posted a 3% drop.
Compared with February, asking prices turned up in all but one of the cities, with Minneapolis posting a 2.2% drop in median listing prices from February.
URL to original article: http://blogs.wsj.com/developments/2012/04/17/report-sellers-asking-prices-rose-in-march/
For further information on Fresno Real Estate check: http://www.londonproperties.com
Here’s a sign that sellers are feeling more optimistic about their prospects this spring: median asking prices in March jumped by 5.6% from a year ago, and were up 1% from February, according to a report released Tuesday.
The jump in median asking prices comes amid a sharp drop in the number of homes listed for sale from one year ago. While listing inventories in March rose by 1.5% from February, they were still 21.5% below last year’s levels.
Inventories of homes listed for sale tend to go up in the spring, and the 1.8 million listings in March represented the second straight increase for the year. Over the past 27 years, the average increase in for-sale listings in March has been 1.8% from February, according to research firm Zelman & Associates.
The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t cover all homes for sale, including those that are “for sale by owner” and newly constructed homes that aren’t always listed by the services.
Compared with February, inventories declined in roughly less than half of the top 30 metros tracked by Realtor.com during March, with the biggest declines in Phoenix (-6.4%), Seattle (-4.8%) and Orlando, Fla. (-4.2%).
Northeastern cities showed the largest inventory gains — a finding that shouldn’t surprise given that sellers are more likely to list their homes when the weather improves. Washington, D.C., saw a 9.5% gain, followed by Philadelphia (8.1%) and Boston (7.4%).
But compared with one year ago, inventories are still down sharply in almost all of the 145 markets tracked by Realtor.com. Just two, Philadelphia and Hartford, Conn., have seen any annual inventory increases. Listings are down by more than half in Oakland and Bakersfield, Calif.
Where are prices rising? Median asking prices were up from one year ago or unchanged in the vast majority of markets, with whopping increases of 23% in Phoenix, 22% in Miami, 17% in Washington, D.C.
The biggest monthly price gains were reported in San Francisco (6.1%), Seattle (5%) and Washington, D.C. (4.1%).
Where are prices falling? Chicago topped the list, with median asking prices down by 9.5% from last year’s levels. Orange County, Calif., saw a 5.4% decline and Los Angeles posted a 3% drop.
Compared with February, asking prices turned up in all but one of the cities, with Minneapolis posting a 2.2% drop in median listing prices from February.
URL to original article: http://blogs.wsj.com/developments/2012/04/17/report-sellers-asking-prices-rose-in-march/
For further information on Fresno Real Estate check: http://www.londonproperties.com
March home sales and price report
Source: California Association of Realtors
California median home price posts first year-to-year increase in 16 months;
low inventory demonstrates limited need for bulk REO sales, C.A.R. says
LOS ANGELES (April 16) – California home sales declined in March from February’s pace, while the median home price snapped a 16-month annual price decline and posted its first year-over-year gain, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
“While home sales were down statewide, the housing market continued to perform at a solid pace by historical standards. In fact, sales jumped significantly in most regions of the state, with many areas experiencing double-digit gains,” said C.A.R. President LeFrancis Arnold. “Tight inventory and robust home sales, particularly in the San Francisco Bay Area, fueled the substantial increase in the March median home price.”
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 505,360 units in March, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. Sales in March were down 4.5 percent month-over-month and 2.3 percent year-to-year. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The statewide median price of an existing, single-family detached home jumped 9.2 percent to $291,080 in March from February’s $266,660 median price and was up 1.6 percent from a revised $286,550 recorded in March 2011. The month-to-month increase was the largest since March 2004.
“Housing inventory remains extremely tight throughout the state and at levels severely under normal market conditions,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average. These low inventory levels demonstrate that the pilot program is not necessary in California.”
The pilot program calls for the sale of more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and Riverside counties to institutional investors.
Other key facts of C.A.R.’s March 2012 resale housing report include:
• California’s housing inventory declined in March, with the Unsold Inventory Index for existing, single-family detached homes decreasing to 4.1 months in March, down from a revised 5.4 months in February and down from the 5.4-month supply in March 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal.
• Interest rates edged up slightly in March. Thirty-year fixed-mortgage interest rates averaged 3.95 percent during March 2012, down from 4.84 percent in March 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.77 percent in March 2012, compared with 3.22 percent in March 2011.
• The median number of days it took to sell a single-family home fell to 53.1 days in March 2012 and was down from a revised 57 days for the same period a year ago.
• View Unsold Inventory by price range.
Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. Due to the low sales volume in some areas, median price changes in December may exhibit unusual fluctuation.
Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
URL to original article: http://www.car.org/newsstand/news/march2012sales
For further information on Fresno Real Estate check: http://www.londonproperties.com
California median home price posts first year-to-year increase in 16 months;
low inventory demonstrates limited need for bulk REO sales, C.A.R. says
LOS ANGELES (April 16) – California home sales declined in March from February’s pace, while the median home price snapped a 16-month annual price decline and posted its first year-over-year gain, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
“While home sales were down statewide, the housing market continued to perform at a solid pace by historical standards. In fact, sales jumped significantly in most regions of the state, with many areas experiencing double-digit gains,” said C.A.R. President LeFrancis Arnold. “Tight inventory and robust home sales, particularly in the San Francisco Bay Area, fueled the substantial increase in the March median home price.”
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 505,360 units in March, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. Sales in March were down 4.5 percent month-over-month and 2.3 percent year-to-year. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The statewide median price of an existing, single-family detached home jumped 9.2 percent to $291,080 in March from February’s $266,660 median price and was up 1.6 percent from a revised $286,550 recorded in March 2011. The month-to-month increase was the largest since March 2004.
“Housing inventory remains extremely tight throughout the state and at levels severely under normal market conditions,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average. These low inventory levels demonstrate that the pilot program is not necessary in California.”
The pilot program calls for the sale of more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and Riverside counties to institutional investors.
Other key facts of C.A.R.’s March 2012 resale housing report include:
• California’s housing inventory declined in March, with the Unsold Inventory Index for existing, single-family detached homes decreasing to 4.1 months in March, down from a revised 5.4 months in February and down from the 5.4-month supply in March 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal.
• Interest rates edged up slightly in March. Thirty-year fixed-mortgage interest rates averaged 3.95 percent during March 2012, down from 4.84 percent in March 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.77 percent in March 2012, compared with 3.22 percent in March 2011.
• The median number of days it took to sell a single-family home fell to 53.1 days in March 2012 and was down from a revised 57 days for the same period a year ago.
• View Unsold Inventory by price range.
Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. Due to the low sales volume in some areas, median price changes in December may exhibit unusual fluctuation.
Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
URL to original article: http://www.car.org/newsstand/news/march2012sales
For further information on Fresno Real Estate check: http://www.londonproperties.com
February home remodeling maintains post-recession high
By Andrew Scoggin
A measure of home remodeling rose in February for the third straight month as it continues to run counter to other readings of residential construction.
The BuildFax seasonally adjusted index climbed to 2.89 million projects in February data released Monday, gauged through the collection of building permits. It’s up 3% from a revised January total and 23% from a year earlier.
But February’s index actually fell from an initial January reading of roughly 3 million that BuildFax adjusted downward to 2.81 million.
The remodeling numbers still mark post-recession highs and outpace other measures of residential construction across the country. Total spending on residential buildings changed little in February from January, according to the Commerce Department, and remain far below housing-boom levels.
Homebuilder sentiment fell in April in a survey detailed Monday by the National Association of Home Builders.
Remodeling rose in monthly and year-earlier figures in all four regions of the country. The Northeast saw the biggest increases in projects at 24% from January and 33% from February 2011.
URL to original article: http://housingwire.com/news/february-home-remodeling-maintains-post-recession-highs
For further information on Fresno Real Estate check: http://www.londonproperties.com
A measure of home remodeling rose in February for the third straight month as it continues to run counter to other readings of residential construction.
The BuildFax seasonally adjusted index climbed to 2.89 million projects in February data released Monday, gauged through the collection of building permits. It’s up 3% from a revised January total and 23% from a year earlier.
But February’s index actually fell from an initial January reading of roughly 3 million that BuildFax adjusted downward to 2.81 million.
The remodeling numbers still mark post-recession highs and outpace other measures of residential construction across the country. Total spending on residential buildings changed little in February from January, according to the Commerce Department, and remain far below housing-boom levels.
Homebuilder sentiment fell in April in a survey detailed Monday by the National Association of Home Builders.
Remodeling rose in monthly and year-earlier figures in all four regions of the country. The Northeast saw the biggest increases in projects at 24% from January and 33% from February 2011.
URL to original article: http://housingwire.com/news/february-home-remodeling-maintains-post-recession-highs
For further information on Fresno Real Estate check: http://www.londonproperties.com
Strategic Defaults to Plague Real Estate Market Throughout 2012, According to FICO Survey
MINNEAPOLIS — April 11, 2012 — FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced additional results from its latest quarterly survey of bank risk professionals, finding that a plurality of respondents (46 percent) expected the volume of strategic defaults in 2012 to surpass 2011 levels, as more than 25 percent of U.S. homeowners owe more on their mortgages than their homes are worth. “After five years of a brutal housing market, many people now view their homes more objectively and with less sentimentality,” said Dr. Andrew Jennings chief analytics officer at FICO and head of FICO Labs. “Regardless of legal or ethical issues around strategic defaults, lenders must account for this risk when they evaluate mortgage applications in declining markets. Many homeowners who find themselves upside down on mortgages in the future are likely to consider strategic default as an acceptable exit strategy.” Concerns about strategic defaults were also reflected in response to a question about the consumer payment hierarchy. When asked if the current generation of homeowners considers their mortgage to be their most important credit obligation, 49 percent of bankers said no. By comparison, 29 percent said yes.Signs of stability despite worries about strategic defaultsAlthough concerns remain regarding strategic defaults, other signs point to growing stability in the housing market. More respondents (26 percent) expected delinquencies on mortgages to decline in the coming months than at any previous time in the two years FICO has been conducting this survey. Furthermore, 53 percent of respondents said the housing market would improve by the end of 2012, compared to 24 percent who said the market would deteriorate.“Lenders seem to believe the housing market is starting to stabilize,” said Jennings. “Defaults, whether strategic or not, continue to be problematic. However, a gradually improving job market could begin changing the dynamics in housing. If job creation continues, banks will be more likely to embrace mortgage lending once again. A healthy job market is essential for improving the quality of mortgage applications and reducing default risk.”Credit gap expected to persistA majority of survey respondents (56 percent) expected the supply of credit for residential mortgages to fall short of demand over the next six months. A similar majority (53 percent) expected the supply of credit for mortgage refinancing to fall short of demand, indicating that lenders remain cautious about the risks in the real estate market.A detailed report of FICO’s quarterly survey results is available at http://www.prmia.org/PRMIA-News/Fico-1stQuarterApr2012a.pdf. The survey included responses from 263 risk managers at banks throughout the U.S. in February 2012. FICO and PRMIA extend a special thanks to Columbia Business School’s Center for Decision Sciences for its assistance in analyzing the survey results. About PRMIAThe Professional Risk Managers’ International Association (PRMIA) is a higher standard for risk professionals, with 65 chapters and more than 80,000 members worldwide. A non-profit, member-led association, PRMIA is dedicated to defining and implementing the best practices of risk management through education, including the Professional Risk Manager (PRM) designation and Associate PRM certificate; webinar, online, classroom and in-house training; events; networking; and online resources. More information can be found at http://www.prmia.org/About FICOFICO (NYSE:FICO) delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through http://www.myfico.com/.FICO: Make every decision count™.For FICO news and media resources, visit www.fico.com/news. Statement Concerning Forward-Looking InformationExcept for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2011 and its last quarterly report on Form 10-Q for the period ended December 31, 2011. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.FICO and “Make every decision count” are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.
URL to original article: http://www.fico.com/en/Company/News/Pages/04-11-2012.aspx
For further information on Fresno Real Estate check: http://www.londonproperties.com
URL to original article: http://www.fico.com/en/Company/News/Pages/04-11-2012.aspx
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, April 18, 2012
Is a Garage a Deal Breaker?
Garages are becoming more important, as evidenced by the rising demand for more space and amenities in this part of a property. But many homes don’t even have one. How crucial is a garage for today’s demanding buyers?
April 2012 By Barbara Ballinger
Home owner Carol Meerschaert had three criteria when she bought her house in Paoli, Pa., four year ago: central air conditioning, a master bathroom, and a garage.
“I was commuting by train to Philadelphia and purposely bought in a town where I could walk to most places: a bank, post office, and several restaurants, but there was no way I ever would get into a boiling hot car in the summer or a snow-covered car in the winter. I needed a garage,” she says.
And the single-car garage that’s part of her ranch-style house has suited her quite nicely, says Meerschaert, director of marketing and communications at the Healthcare Businesswomen’s Association, a nonprofit leadership association, in Fairfield, N.J.
Other home buyers feel similarly about the importance of a garage. So, will the absence of one stymie a deal? Many older or smaller homes, as well as homes in the entry price range and even those in certain warm climates, may not have one. Or they may just have a carport with a roof but no garage door.
There’s a second key question to ponder. Should sellers of houses without a garage construct one to compete when there’s so much inventory on the market?
In both cases, there’s no definitive answer since the importance of a garage hinges on so many factors, including a home’s overall value, whether other houses in the same neighborhood have one, and the area’s climate.
Saleswoman Peggy Patenaude, with Prudential Howe & Doherty, REALTORS®, in Andover, Mass., a Boston suburb, thinks a garage definitely increases the value of a property if it’s in a mid-level or higher price range and in a cold climate. Moreover, if a home doesn’t have one, it may prove a deal breaker, she says. “I think a two-car attached or detached garage can add $30,000 to a home’s value; a one-car attached or detached garage may increase it by $15,000 to $20,000,” she says.
Real estate investor and author Grant Cardone, whose eponymous company is based in Los Angeles, thinks having a garage is especially critical in this turbulent real estate market. Yet, he’ll consider buying a house as an investment if it doesn’t have a garage, as long as there’s room to add it. “It was different four years ago because there was so much less inventory,” he says.
But Cardone also believes that the investment is a good one. “The average two-car garage will return the investment two to two-and-a-half times. It doesn’t mean you have to have one with polished or painted floors and other fancy amenities, but it does have to be clean and roomy. Adding some extra square footage doesn’t cost that much more with this type of construction,” he says.
Patenaude also recommends always including an electric door opener and, if possible, designing the garage so it’s located on the side of a house with enough turnaround room rather than having it face the street, which is less visually attractive, she says.
Chicago architect Allan J. Grant thinks that a typical two-car garage should be at least 20 feet wide — 24 feet is optimal — and at least 22 to 25 feet deep. A single-car garage should be a minimum of 10 feet wide. He adds that making it slightly roomier allows for storage space for bicycles, garden equipment, outdoor furniture, and other “stuff” without much extra expense. Plumbing, electrical outlets and circuits, and a roof structure being expanded and enhanced to run air ducts for future heating and cooling all would increase the construction cost, but would permit converting the garage to a habitable room, if desired.
Grant also advises designing a garage to match a home’s exterior materials and roofline, which may bump up the cost more. “If you’re using brick, expensive wood, or stone for the facade and slate for the roof, you could easily double the $25,000 to $30,00 cost for materials and labor for a two-car garage, but if you go with more basic framing and asphalt roof shingles, the cost will be far less,” he says.
Besides the dollar consideration, sellers need to weigh the time frame, since building on requires checking local zoning ordinances regarding how big it can be and if there’s room due to setback rules. “Getting approval and construction take time,” Grant says.
Patenaude agrees. “By the time sellers usually are ready to list their home, many aren’t interested in investing that kind of money or in the wait. It’s better to price the house according to what it has — and doesn’t have,” she says.
URL to original article: http://realtormag.realtor.org/home-and-design/architecture-coach/article/2012/04/garage-deal-breaker
For further information on Fresno Real Estate check: http://www.londonproperties.com
April 2012 By Barbara Ballinger
Home owner Carol Meerschaert had three criteria when she bought her house in Paoli, Pa., four year ago: central air conditioning, a master bathroom, and a garage.
“I was commuting by train to Philadelphia and purposely bought in a town where I could walk to most places: a bank, post office, and several restaurants, but there was no way I ever would get into a boiling hot car in the summer or a snow-covered car in the winter. I needed a garage,” she says.
And the single-car garage that’s part of her ranch-style house has suited her quite nicely, says Meerschaert, director of marketing and communications at the Healthcare Businesswomen’s Association, a nonprofit leadership association, in Fairfield, N.J.
Other home buyers feel similarly about the importance of a garage. So, will the absence of one stymie a deal? Many older or smaller homes, as well as homes in the entry price range and even those in certain warm climates, may not have one. Or they may just have a carport with a roof but no garage door.
There’s a second key question to ponder. Should sellers of houses without a garage construct one to compete when there’s so much inventory on the market?
In both cases, there’s no definitive answer since the importance of a garage hinges on so many factors, including a home’s overall value, whether other houses in the same neighborhood have one, and the area’s climate.
Saleswoman Peggy Patenaude, with Prudential Howe & Doherty, REALTORS®, in Andover, Mass., a Boston suburb, thinks a garage definitely increases the value of a property if it’s in a mid-level or higher price range and in a cold climate. Moreover, if a home doesn’t have one, it may prove a deal breaker, she says. “I think a two-car attached or detached garage can add $30,000 to a home’s value; a one-car attached or detached garage may increase it by $15,000 to $20,000,” she says.
Real estate investor and author Grant Cardone, whose eponymous company is based in Los Angeles, thinks having a garage is especially critical in this turbulent real estate market. Yet, he’ll consider buying a house as an investment if it doesn’t have a garage, as long as there’s room to add it. “It was different four years ago because there was so much less inventory,” he says.
But Cardone also believes that the investment is a good one. “The average two-car garage will return the investment two to two-and-a-half times. It doesn’t mean you have to have one with polished or painted floors and other fancy amenities, but it does have to be clean and roomy. Adding some extra square footage doesn’t cost that much more with this type of construction,” he says.
Patenaude also recommends always including an electric door opener and, if possible, designing the garage so it’s located on the side of a house with enough turnaround room rather than having it face the street, which is less visually attractive, she says.
Chicago architect Allan J. Grant thinks that a typical two-car garage should be at least 20 feet wide — 24 feet is optimal — and at least 22 to 25 feet deep. A single-car garage should be a minimum of 10 feet wide. He adds that making it slightly roomier allows for storage space for bicycles, garden equipment, outdoor furniture, and other “stuff” without much extra expense. Plumbing, electrical outlets and circuits, and a roof structure being expanded and enhanced to run air ducts for future heating and cooling all would increase the construction cost, but would permit converting the garage to a habitable room, if desired.
Grant also advises designing a garage to match a home’s exterior materials and roofline, which may bump up the cost more. “If you’re using brick, expensive wood, or stone for the facade and slate for the roof, you could easily double the $25,000 to $30,00 cost for materials and labor for a two-car garage, but if you go with more basic framing and asphalt roof shingles, the cost will be far less,” he says.
Besides the dollar consideration, sellers need to weigh the time frame, since building on requires checking local zoning ordinances regarding how big it can be and if there’s room due to setback rules. “Getting approval and construction take time,” Grant says.
Patenaude agrees. “By the time sellers usually are ready to list their home, many aren’t interested in investing that kind of money or in the wait. It’s better to price the house according to what it has — and doesn’t have,” she says.
URL to original article: http://realtormag.realtor.org/home-and-design/architecture-coach/article/2012/04/garage-deal-breaker
For further information on Fresno Real Estate check: http://www.londonproperties.com
Curb your enthusiasm
Source: Business Week/Bloomberg
So the latest housing number is kind of bad: 654,000 new units were started in March, 5.8 percent below the revised February numbers. Economists surveyed by Bloomberg were expecting something considerably higher. The median estimate of the 82 who ventured a guess was 705,000. Even the lowball forecast, 670,000, was too high. It’s the rare economic survey where the biggest bear isn’t bearish enough. Clearly we’ve been fooled by housing again: Just when it looked like he was getting out of bed, the perpetual sick man of the recovery rolls over with some phlegmy numbers.
But how disappointed should we be? Housing starts last month were still 10 percent higher than a year earlier. And building permits were strong, up 4.5 percent from February and 30 percent higher than they were a year earlier. Permits data tend to be the more dependable number anyway, compared with the choppy starts number that tends to get significantly revised. Of course, it’s a lot easier to file a building permit than to start building the thing.
So much of the recently nice housing data was apparently being goosed by the unseasonably warm temperatures over the last several months—which everyone knew. “I thought the weather would give us a bigger lift,” says Joe Lavorgna, chief U.S. economist at Deutsche Bank (DB), who forecast 725,000 housing starts in March.
Betting on the weather can be tricky, though. The minute you start depending on it, it becomes undependable. “What you thought was a weather effect in the earlier numbers suddenly isn’t there in the March data,” says Lavorgna. Turns out that rather than creating new economic activity, the warm weather was probably just pulling it forward, stealing from the spring and giving to the winter. Which seems to be part of the story behind last month’s low U.S. jobs number.
Julia Coronado, chief economist of North America for BNP Paribas (BNP), figured the housing starts number would go one of two ways: “It was either going to be big on the upside or big on the downside.” Coronado chose the upside, forecasting 720,000 new starts. “It was the warmest March on record. We thought that might mean an early start to activity,” she says. At the same time, after a warm fall and a record warm winter when much of the country never froze, construction activity never got postponed. “So we clearly didn’t see the spring surge in starts we typically see in March.”
Among those colored not surprised is Barry Ritholtz, whose “Debunking the Housing Recovery” series has done just that, fairly thoroughly. Ritholtz’s continued housing bearishness can be summed up thusly: There are still too many unsold homes on the market, they’re still too expensive for first-time buyers, there are still lots more foreclosures coming down the pike, and renting is too good an option for too many people, compared with owning.
Which brings us to the final piece of the puzzle: multi-family housing. A lot of the recent housing build over the last few months has been driven by multi-family units: apartment buildings, condos, duplexes—all of which were underbuilt during the housing boom. Some people believe the U.S. is still not building nearly enough rental units, especially considering the relatively high cost of owning. Which makes one of the more troubling lines of the March starts report even more troubling: Buildings with five units or more fell by 20 percent. Reading too much into that isn’t worth the exercise, especially when the percent change for the whole data set has a margin of error of plus or minus 15.6 percentage points.
Still, not everyone’s reading these numbers as bad.
Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce (CM), says the strong permits data refute the warm weather argument, and that construction will grow through the year. Shenfeld, who forecast 675,000 housing starts, believes housing will actually contribute to GDP this year, and that it might already be doing so, despite consecutive decreases in construction spending since December.
Still, even housing bulls are tepid in their enthusiasm. “This isn’t the big recovery in construction we’re waiting for. It’s merely a crawl off the bottom of low homebuilding levels,” says Shenfeld. “Still, the mini-bounce off the bottom has begun.”
URL to original article: http://www.builderonline.com/builder-pulse/curb-your-enthusiasm.aspx?cid=BP:041812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
So the latest housing number is kind of bad: 654,000 new units were started in March, 5.8 percent below the revised February numbers. Economists surveyed by Bloomberg were expecting something considerably higher. The median estimate of the 82 who ventured a guess was 705,000. Even the lowball forecast, 670,000, was too high. It’s the rare economic survey where the biggest bear isn’t bearish enough. Clearly we’ve been fooled by housing again: Just when it looked like he was getting out of bed, the perpetual sick man of the recovery rolls over with some phlegmy numbers.
But how disappointed should we be? Housing starts last month were still 10 percent higher than a year earlier. And building permits were strong, up 4.5 percent from February and 30 percent higher than they were a year earlier. Permits data tend to be the more dependable number anyway, compared with the choppy starts number that tends to get significantly revised. Of course, it’s a lot easier to file a building permit than to start building the thing.
So much of the recently nice housing data was apparently being goosed by the unseasonably warm temperatures over the last several months—which everyone knew. “I thought the weather would give us a bigger lift,” says Joe Lavorgna, chief U.S. economist at Deutsche Bank (DB), who forecast 725,000 housing starts in March.
Betting on the weather can be tricky, though. The minute you start depending on it, it becomes undependable. “What you thought was a weather effect in the earlier numbers suddenly isn’t there in the March data,” says Lavorgna. Turns out that rather than creating new economic activity, the warm weather was probably just pulling it forward, stealing from the spring and giving to the winter. Which seems to be part of the story behind last month’s low U.S. jobs number.
Julia Coronado, chief economist of North America for BNP Paribas (BNP), figured the housing starts number would go one of two ways: “It was either going to be big on the upside or big on the downside.” Coronado chose the upside, forecasting 720,000 new starts. “It was the warmest March on record. We thought that might mean an early start to activity,” she says. At the same time, after a warm fall and a record warm winter when much of the country never froze, construction activity never got postponed. “So we clearly didn’t see the spring surge in starts we typically see in March.”
Among those colored not surprised is Barry Ritholtz, whose “Debunking the Housing Recovery” series has done just that, fairly thoroughly. Ritholtz’s continued housing bearishness can be summed up thusly: There are still too many unsold homes on the market, they’re still too expensive for first-time buyers, there are still lots more foreclosures coming down the pike, and renting is too good an option for too many people, compared with owning.
Which brings us to the final piece of the puzzle: multi-family housing. A lot of the recent housing build over the last few months has been driven by multi-family units: apartment buildings, condos, duplexes—all of which were underbuilt during the housing boom. Some people believe the U.S. is still not building nearly enough rental units, especially considering the relatively high cost of owning. Which makes one of the more troubling lines of the March starts report even more troubling: Buildings with five units or more fell by 20 percent. Reading too much into that isn’t worth the exercise, especially when the percent change for the whole data set has a margin of error of plus or minus 15.6 percentage points.
Still, not everyone’s reading these numbers as bad.
Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce (CM), says the strong permits data refute the warm weather argument, and that construction will grow through the year. Shenfeld, who forecast 675,000 housing starts, believes housing will actually contribute to GDP this year, and that it might already be doing so, despite consecutive decreases in construction spending since December.
Still, even housing bulls are tepid in their enthusiasm. “This isn’t the big recovery in construction we’re waiting for. It’s merely a crawl off the bottom of low homebuilding levels,” says Shenfeld. “Still, the mini-bounce off the bottom has begun.”
URL to original article: http://www.builderonline.com/builder-pulse/curb-your-enthusiasm.aspx?cid=BP:041812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, April 17, 2012
US homebuilders request most permits in 3½ years
Written by DEREK KRAVITZ, AP Real Estate Writer
(AP) — U.S. builders requested the most permits in March for single-family homes and apartments in 3½ years, suggesting that many expect the housing market to improve over the next year.
The Commerce Department said Tuesday that permits, a gauge of future construction, rose 4.5 percent to a seasonally adjusted annual rate of 747,000 in March. That's the highest level since September 2008.
The rise in permits helped offset a slower month of construction.
Jonathan Basile, director of economics at Credit Suisse, said more permits is a "good sign for broader economic activity" and should lead to increase in construction in the coming months.
Builders broke ground at a seasonally adjusted annual pace of 654,000 homes last month. That's down 5.8 percent from February. Apartment construction, which can fluctuate sharply from month to month, fell nearly 20 percent. Single-family homebuilding was mostly unchanged.
Yet the rate of construction and the level of permits requested remain only about half the pace considered healthy. Economists say that construction activity is still depressed and the housing market has a long way to go before it is back to full health.
Since the fall, builders had slowly grown more confident in the market after seeing more people express interest in buying a home. But that interest has yet to materialize into many sales. As a result, builder confidence fell this month for the first time since September.
Part of the reason for the previous optimism was a mild winter allowed builders to keep working in most parts of the country. And an improving job market has many slightly more optimistic about home sales this year.
January and February were the best for sales of previously occupied homes in five years. And an average of 212,000 jobs was created each month from January through March. Unemployment has sunk from 9.1 percent in August to 8.2 percent last month.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what's owed on the mortgage.
After previous recessions, housing accounted for at least 15 percent of U.S. economic growth. Since the recession officially ended in June 2009, it has contributed just 4 percent.
Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That's nearly twice the markup typical in a healthy housing market.
URL to original article: http://www.thebusinessjournal.com/news/national/1531-us-homebuilders-request-most-permits-in-3-years
For further information on Fresno Real Estate check: http://www.londonproperties.com
(AP) — U.S. builders requested the most permits in March for single-family homes and apartments in 3½ years, suggesting that many expect the housing market to improve over the next year.
The Commerce Department said Tuesday that permits, a gauge of future construction, rose 4.5 percent to a seasonally adjusted annual rate of 747,000 in March. That's the highest level since September 2008.
The rise in permits helped offset a slower month of construction.
Jonathan Basile, director of economics at Credit Suisse, said more permits is a "good sign for broader economic activity" and should lead to increase in construction in the coming months.
Builders broke ground at a seasonally adjusted annual pace of 654,000 homes last month. That's down 5.8 percent from February. Apartment construction, which can fluctuate sharply from month to month, fell nearly 20 percent. Single-family homebuilding was mostly unchanged.
Yet the rate of construction and the level of permits requested remain only about half the pace considered healthy. Economists say that construction activity is still depressed and the housing market has a long way to go before it is back to full health.
Since the fall, builders had slowly grown more confident in the market after seeing more people express interest in buying a home. But that interest has yet to materialize into many sales. As a result, builder confidence fell this month for the first time since September.
Part of the reason for the previous optimism was a mild winter allowed builders to keep working in most parts of the country. And an improving job market has many slightly more optimistic about home sales this year.
January and February were the best for sales of previously occupied homes in five years. And an average of 212,000 jobs was created each month from January through March. Unemployment has sunk from 9.1 percent in August to 8.2 percent last month.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what's owed on the mortgage.
After previous recessions, housing accounted for at least 15 percent of U.S. economic growth. Since the recession officially ended in June 2009, it has contributed just 4 percent.
Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That's nearly twice the markup typical in a healthy housing market.
URL to original article: http://www.thebusinessjournal.com/news/national/1531-us-homebuilders-request-most-permits-in-3-years
For further information on Fresno Real Estate check: http://www.londonproperties.com
Housing starts fall 5.8%, disappointing analyst estimates
By Kerri Panchuk
Starts on new homes fell 5.8% in March to 654,000 units, compared to 694,000 in February, the government said Tuesday.
Analysts surveyed by MarketWatch anticipated stronger home construction levels of 703,000 starts for March, but activity levels remained well below that point.
Analyzing the report, economists for Econoday said, "Housing starts dipped 5.8% in March after decreasing 2.8% in February. The March pace of 0.654 million units came in lower than market expectations for 0.700 million and is up 10.3% on a year-ago basis. In March, weakness was led by the multifamily component although single-family edged down."
Econoday noted that housing permits showed signs of "moderate strength."
"Permits gained 4.5%, following a 4.8% increase in February," the research firm said. "The latest figure of 0.747 million units posted above the consensus estimate of 0.713 million. Strength was in the multifamily component."
The disappointing report shows the real estate market facing the headwinds of economic uncertainty and tight lending, real estate executives say.
"The report shows a housing industry that can’t get going," said Mitchell Hochberg, principal with Madden Real Estate Ventures in New York. "With a lack of lending taking place and an absence of job growth it’s hard to gain momentum."
Paul Dales, U.S. senior economist with Capital Economics, saw a few silver linings in the report, but not enough to take the edge off the disappointing housing starts update.
"It's a bit more encouraging that single-family starts were broadly unchanged last month, while multifamily starts fell by 17% month-to-month. And total building permits did rise by 4.5% month-to-month, to 747,000 from 715,000," Dales said.
"Nonetheless, these data are still disappointing, especially when the unseasonably warm weather should have allowed builders to work more. Residential investment probably still rose in the first quarter, but it may well decline in the second."
Analysts with Keefe, Bruyette Woods (KBW) noted that "recent national housing data has appeared to lag more optimistic expectations embedded in housing stock prices. New home construction and most housing data remain subdued."
KBW added, "Anecdotal evidence and mortgage purchase application data suggest continued choppy selling conditions although the non-seasonally adjusted purchase application index has recently risen. Mortgage credit remains a long-term constraint."
URL to original article: http://www.housingwire.com/news/housing-starts-fall-58-disappointing-analyst-estimates
For further information on Fresno Real Estate check: http://www.londonproperties.com
Starts on new homes fell 5.8% in March to 654,000 units, compared to 694,000 in February, the government said Tuesday.
Analysts surveyed by MarketWatch anticipated stronger home construction levels of 703,000 starts for March, but activity levels remained well below that point.
Analyzing the report, economists for Econoday said, "Housing starts dipped 5.8% in March after decreasing 2.8% in February. The March pace of 0.654 million units came in lower than market expectations for 0.700 million and is up 10.3% on a year-ago basis. In March, weakness was led by the multifamily component although single-family edged down."
Econoday noted that housing permits showed signs of "moderate strength."
"Permits gained 4.5%, following a 4.8% increase in February," the research firm said. "The latest figure of 0.747 million units posted above the consensus estimate of 0.713 million. Strength was in the multifamily component."
The disappointing report shows the real estate market facing the headwinds of economic uncertainty and tight lending, real estate executives say.
"The report shows a housing industry that can’t get going," said Mitchell Hochberg, principal with Madden Real Estate Ventures in New York. "With a lack of lending taking place and an absence of job growth it’s hard to gain momentum."
Paul Dales, U.S. senior economist with Capital Economics, saw a few silver linings in the report, but not enough to take the edge off the disappointing housing starts update.
"It's a bit more encouraging that single-family starts were broadly unchanged last month, while multifamily starts fell by 17% month-to-month. And total building permits did rise by 4.5% month-to-month, to 747,000 from 715,000," Dales said.
"Nonetheless, these data are still disappointing, especially when the unseasonably warm weather should have allowed builders to work more. Residential investment probably still rose in the first quarter, but it may well decline in the second."
Analysts with Keefe, Bruyette Woods (KBW) noted that "recent national housing data has appeared to lag more optimistic expectations embedded in housing stock prices. New home construction and most housing data remain subdued."
KBW added, "Anecdotal evidence and mortgage purchase application data suggest continued choppy selling conditions although the non-seasonally adjusted purchase application index has recently risen. Mortgage credit remains a long-term constraint."
URL to original article: http://www.housingwire.com/news/housing-starts-fall-58-disappointing-analyst-estimates
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, April 16, 2012
Homes sales down, prices up in March
Written by Business Journal staff
California home sales were down in March compared to the month before, although prices were up for the first time in 16 months.
According to data from the California Association of Realtors, sales of single-family detached homes totaled 505,360 units in March, which is down 4.5 percent from February and 2.3 percent from March 2011.
The median price of a home in March was $291,080, up from $266,660 the previous month and $286,550 a year ago.
In Fresno County, home sales were up 19.6 percent in March, but dropped 3.7 percent from March 2011. The median home price of $137,350 for the month reflected a decline of 3.5 percent from February and 0.6 percent from a year ago.
In Kings County, sales improved 12.5 percent in the month and 11 percent over the last year. The median price slipped 2.1 percent over the month to $141,430, which is 3 percent higher than a year ago.
Sales in Madera County were down 2.4 percent from the previous month and 49.4 percent from March 2011. The median price of a home in the county picked up 21 percent in the month to $125,000, which is down 6.4 percent from a year ago.
In Tulare County, sales were up 23.1 percent in February but down 6.6 percent from last year. The median price of $121,280 in March represents an increase of 1.6 percent from February but 0.5 percent drop from a year earlier.
California's unsold inventory index, or number of months needed to deplete the supply of homes at the current sales rate, decreased to 4.1 months in March, down from 5.4 months in both February and March 2011.
The median number of days it took to sell a single-family home fell to 53.1 days in March, down from 58.9 days in February and 57 days in March 2011.
URL to original article: http://www.thebusinessjournal.com/news/real-estate/1522-homes-sales-down-prices-up-in-march
For further information on Fresno Real Estate check: http://www.londonproperties.com
California home sales were down in March compared to the month before, although prices were up for the first time in 16 months.
According to data from the California Association of Realtors, sales of single-family detached homes totaled 505,360 units in March, which is down 4.5 percent from February and 2.3 percent from March 2011.
The median price of a home in March was $291,080, up from $266,660 the previous month and $286,550 a year ago.
In Fresno County, home sales were up 19.6 percent in March, but dropped 3.7 percent from March 2011. The median home price of $137,350 for the month reflected a decline of 3.5 percent from February and 0.6 percent from a year ago.
In Kings County, sales improved 12.5 percent in the month and 11 percent over the last year. The median price slipped 2.1 percent over the month to $141,430, which is 3 percent higher than a year ago.
Sales in Madera County were down 2.4 percent from the previous month and 49.4 percent from March 2011. The median price of a home in the county picked up 21 percent in the month to $125,000, which is down 6.4 percent from a year ago.
In Tulare County, sales were up 23.1 percent in February but down 6.6 percent from last year. The median price of $121,280 in March represents an increase of 1.6 percent from February but 0.5 percent drop from a year earlier.
California's unsold inventory index, or number of months needed to deplete the supply of homes at the current sales rate, decreased to 4.1 months in March, down from 5.4 months in both February and March 2011.
The median number of days it took to sell a single-family home fell to 53.1 days in March, down from 58.9 days in February and 57 days in March 2011.
URL to original article: http://www.thebusinessjournal.com/news/real-estate/1522-homes-sales-down-prices-up-in-march
For further information on Fresno Real Estate check: http://www.londonproperties.com
February home remodeling maintains post-recession high
By Andrew Scoggin
A measure of home remodeling rose in February for the third straight month as it continues to run counter to other readings of residential construction.
The BuildFax seasonally adjusted index climbed to 2.89 million projects in February data released Monday, gauged through the collection of building permits. It’s up 3% from a revised January total and 23% from a year earlier.
But February’s index actually fell from an initial January reading of roughly 3 million that BuildFax adjusted downward to 2.81 million.
The remodeling numbers still mark post-recession highs and outpace other measures of residential construction across the country. Total spending on residential buildings changed little in February from January, according to the Commerce Department, and remain far below housing-boom levels.
Homebuilder sentiment fell in April in a survey detailed Monday by the National Association of Home Builders.
Remodeling rose in monthly and year-earlier figures in all four regions of the country. The Northeast saw the biggest increases in projects at 24% from January and 33% from February 2011.
URL to original article: http://www.housingwire.com/news/february-home-remodeling-maintains-post-recession-highs
For further information on Fresno Real Estate check: http://www.londonproperties.com
A measure of home remodeling rose in February for the third straight month as it continues to run counter to other readings of residential construction.
The BuildFax seasonally adjusted index climbed to 2.89 million projects in February data released Monday, gauged through the collection of building permits. It’s up 3% from a revised January total and 23% from a year earlier.
But February’s index actually fell from an initial January reading of roughly 3 million that BuildFax adjusted downward to 2.81 million.
The remodeling numbers still mark post-recession highs and outpace other measures of residential construction across the country. Total spending on residential buildings changed little in February from January, according to the Commerce Department, and remain far below housing-boom levels.
Homebuilder sentiment fell in April in a survey detailed Monday by the National Association of Home Builders.
Remodeling rose in monthly and year-earlier figures in all four regions of the country. The Northeast saw the biggest increases in projects at 24% from January and 33% from February 2011.
URL to original article: http://www.housingwire.com/news/february-home-remodeling-maintains-post-recession-highs
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, April 13, 2012
California: waging a war on suburbia?
Source: Wall Street Journal
By WENDELL COX
It's no secret that California's regulatory and tax climate is driving business investment to other states. California's high cost of living also is driving people away. Since 2000 more than 1.6 million people have fled, and my own research as well as that of others points to high housing prices as the principal factor.
The exodus is likely to accelerate. California has declared war on the most popular housing choice, the single family, detached home—all in the name of saving the planet.
Metropolitan area governments are adopting plans that would require most new housing to be built at 20 or more to the acre, which is at least five times the traditional quarter acre per house. State and regional planners also seek to radically restructure urban areas, forcing much of the new hyperdensity development into narrowly confined corridors.
In San Francisco and San Jose, for example, the Association of Bay Area Governments has proposed that only 3% of new housing built by 2035 would be allowed on or beyond the "urban fringe"—where current housing ends and the countryside begins. Over two-thirds of the housing for the projected two million new residents in these metro areas would be multifamily—that is, apartments and condo complexes—and concentrated along major thoroughfares such as Telegraph Avenue in the East Bay and El Camino Real on the Peninsula.
For its part, the Southern California Association of Governments wants to require more than one-half of the new housing in Los Angeles County and five other Southern California counties to be concentrated in dense, so-called transit villages, with much of it at an even higher 30 or more units per acre.
To understand how dramatic a change this would be, consider that if the planners have their way, 68% of new housing in Southern California by 2035 would be condos and apartment complexes. This contrasts with Census Bureau data showing that single-family, detached homes represented more than 80% of the increase in the region's housing stock between 2000 and 2010.
The campaign against suburbia is the result of laws passed in 2006 (the Global Warming Solutions Act) to reduce greenhouse gas emissions and in 2008 (the Sustainable Communities and Climate Protection Act) on urban planning. The latter law, as the Los Angeles Times aptly characterized it, was intended to "control suburban sprawl, build homes closer to downtown and reduce commuter driving, thus decreasing climate-changing greenhouse gas emissions." In short, to discourage automobile use.
If the planners have their way, the state's famously unaffordable housing could become even more unaffordable.
Over the past 40 years, median house prices have doubled relative to household incomes in the Golden State. Why? In 1998, Dartmouth economist William Fischel found that California's housing had been nearly as affordable as the rest of the nation until the more restrictive regulations, such as development moratoria, urban growth boundaries, and overly expensive impact fees came into effect starting in the 1970s. Other economic studies, such as by Stephen Malpezzi at the University of Wisconsin, also have documented the strong relationship between more intense land-use regulations and exorbitant house prices.
The love affair urban planners have for a future ruled by mass transit will be obscenely expensive and would not reduce traffic congestion. In San Diego, for example, an expanded bus and rail transit system is planned to receive more than half of the $48.4 billion in total highway and transit spending through 2050. Yet transit would increase its share of travel to a measly 4% from its current tiny 2%, according to data in the San Diego Association of Governments regional transportation plan. This slight increase in mass transit ridership would be swamped by higher traffic volumes.
Higher population densities in the future means greater traffic congestion, because additional households in the future will continue to use their cars for most trips. In the San Diego metropolitan area, where the average one-way work trip travel time is 28 minutes, only 14% of work and higher education locations could be reached within 30 minutes by transit in 2050. But 70% or more of such locations will continue to be accessible in 30 minutes by car.
Rather than protest the extravagance, California Attorney General Kamala D. Harris instead has sued San Diego because she thinks transit was not favored enough in the plan and thereby violates the legislative planning requirements enacted in 2006 and 2008. Her predecessor (Jerry Brown, who is now the governor) similarly sued San Bernardino County in 2007.
California's war on suburbia is unnecessary, even considering the state's lofty climate-change goals. For example, a 2007 report by McKinsey, co-sponsored by the Environmental Defense Fund and the Natural Resources Defense Council, concluded that substantial greenhouse gas emissions reductions could be achieved while "traveling the same mileage" and without denser urban housing. The report recommended cost-effective strategies such as improved vehicle economy, improving the carbon efficiency of residential and commercial buildings, upgrading coal-fired electricity plants, and converting more electricity production to natural gas.
Ali Modarres of the Edmund G. "Pat" Brown Institute of Public Affairs at California State University, Los Angeles has shown that a disproportionate share of migrating households are young. This is at least in part because it is better to raise children with backyards than on condominium balconies. A less affordable California, with less attractive housing, could disadvantage the state as much as its already destructive policies toward business.
URL to original article: http://www.builderonline.com/builder-pulse/california-waging-a-war-on-suburbia.aspx?cid=BP:041312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By WENDELL COX
It's no secret that California's regulatory and tax climate is driving business investment to other states. California's high cost of living also is driving people away. Since 2000 more than 1.6 million people have fled, and my own research as well as that of others points to high housing prices as the principal factor.
The exodus is likely to accelerate. California has declared war on the most popular housing choice, the single family, detached home—all in the name of saving the planet.
Metropolitan area governments are adopting plans that would require most new housing to be built at 20 or more to the acre, which is at least five times the traditional quarter acre per house. State and regional planners also seek to radically restructure urban areas, forcing much of the new hyperdensity development into narrowly confined corridors.
In San Francisco and San Jose, for example, the Association of Bay Area Governments has proposed that only 3% of new housing built by 2035 would be allowed on or beyond the "urban fringe"—where current housing ends and the countryside begins. Over two-thirds of the housing for the projected two million new residents in these metro areas would be multifamily—that is, apartments and condo complexes—and concentrated along major thoroughfares such as Telegraph Avenue in the East Bay and El Camino Real on the Peninsula.
For its part, the Southern California Association of Governments wants to require more than one-half of the new housing in Los Angeles County and five other Southern California counties to be concentrated in dense, so-called transit villages, with much of it at an even higher 30 or more units per acre.
To understand how dramatic a change this would be, consider that if the planners have their way, 68% of new housing in Southern California by 2035 would be condos and apartment complexes. This contrasts with Census Bureau data showing that single-family, detached homes represented more than 80% of the increase in the region's housing stock between 2000 and 2010.
The campaign against suburbia is the result of laws passed in 2006 (the Global Warming Solutions Act) to reduce greenhouse gas emissions and in 2008 (the Sustainable Communities and Climate Protection Act) on urban planning. The latter law, as the Los Angeles Times aptly characterized it, was intended to "control suburban sprawl, build homes closer to downtown and reduce commuter driving, thus decreasing climate-changing greenhouse gas emissions." In short, to discourage automobile use.
If the planners have their way, the state's famously unaffordable housing could become even more unaffordable.
Over the past 40 years, median house prices have doubled relative to household incomes in the Golden State. Why? In 1998, Dartmouth economist William Fischel found that California's housing had been nearly as affordable as the rest of the nation until the more restrictive regulations, such as development moratoria, urban growth boundaries, and overly expensive impact fees came into effect starting in the 1970s. Other economic studies, such as by Stephen Malpezzi at the University of Wisconsin, also have documented the strong relationship between more intense land-use regulations and exorbitant house prices.
The love affair urban planners have for a future ruled by mass transit will be obscenely expensive and would not reduce traffic congestion. In San Diego, for example, an expanded bus and rail transit system is planned to receive more than half of the $48.4 billion in total highway and transit spending through 2050. Yet transit would increase its share of travel to a measly 4% from its current tiny 2%, according to data in the San Diego Association of Governments regional transportation plan. This slight increase in mass transit ridership would be swamped by higher traffic volumes.
Higher population densities in the future means greater traffic congestion, because additional households in the future will continue to use their cars for most trips. In the San Diego metropolitan area, where the average one-way work trip travel time is 28 minutes, only 14% of work and higher education locations could be reached within 30 minutes by transit in 2050. But 70% or more of such locations will continue to be accessible in 30 minutes by car.
Rather than protest the extravagance, California Attorney General Kamala D. Harris instead has sued San Diego because she thinks transit was not favored enough in the plan and thereby violates the legislative planning requirements enacted in 2006 and 2008. Her predecessor (Jerry Brown, who is now the governor) similarly sued San Bernardino County in 2007.
California's war on suburbia is unnecessary, even considering the state's lofty climate-change goals. For example, a 2007 report by McKinsey, co-sponsored by the Environmental Defense Fund and the Natural Resources Defense Council, concluded that substantial greenhouse gas emissions reductions could be achieved while "traveling the same mileage" and without denser urban housing. The report recommended cost-effective strategies such as improved vehicle economy, improving the carbon efficiency of residential and commercial buildings, upgrading coal-fired electricity plants, and converting more electricity production to natural gas.
Ali Modarres of the Edmund G. "Pat" Brown Institute of Public Affairs at California State University, Los Angeles has shown that a disproportionate share of migrating households are young. This is at least in part because it is better to raise children with backyards than on condominium balconies. A less affordable California, with less attractive housing, could disadvantage the state as much as its already destructive policies toward business.
URL to original article: http://www.builderonline.com/builder-pulse/california-waging-a-war-on-suburbia.aspx?cid=BP:041312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
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