Bloomberg
Americans Sees Biggest Home Equity Jump in 60 Years: Mortgages
By Kathleen M. Howley - Jun 14, 2012 9:57 AM PT
Americans are digging themselves out of mortgage debt.
Home equity in the first quarter rose to $6.7 trillion, the highest level since 2008, as homeowners taking advantage of record-low borrowing costs to refinance their loans brought cash to the table to pay down principal. The 7.3 percent gain was the biggest jump in more than 60 years, according to an analysis by Bloomberg of Federal Reserve data.
It’s the strongest sign yet that Americans’ home-loan debt burden is beginning to ease after the record borrowing that created, and ultimately popped, the housing bubble, leaving almost a quarter of homeowners with mortgages owing more than their properties were worth, said Richard DeKaser, deputy chief economist at Parthenon Group LLC in Boston. Half the mortgages refinanced in the fourth quarter reduced loan size, a record, according to Freddie Mac, the government-owned mortgage buyer.
“The willingness of homeowners to carry housing debt has been radically altered,” said DeKaser, former chairman of the American Bankers Association’s Economic Advisory Committee. “When the market was booming, a mortgage was used as a leveraging tool, and now it’s seen as a risk.”
Measured as a share, rather than in dollars, homeowner equity was 41 percent of U.S. residential property value in the first quarter, including homeowners who don’t have mortgages, according to the Fed study released last week. The last time the share was that high was in the third quarter of 2008 when it was 43 percent.
‘Bubble Burst’
“People got too overleveraged in the boom years, and that left them with too much debt when the bubble burst,” said Paul Miller, a managing director with FBR Capital Markets in Arlington, Virginia. “Now, they’re trying to put themselves back on solid ground.”
Residential mortgage debt peaked in 2007 at $10.6 trillion, doubling in six years, according to Fed data. Since then, it has fallen 7 percent as the value of all residential property has dropped 23 percent.
Americans aren’t just bringing money to the table when they refinance their mortgages. Many also are choosing to shorten the term of their loans, which increases monthly payments. The average mortgage term fell to 27 years in March and April from 29 years February. Almost all U.S. mortgages have either 30-year or 15-year terms. When the average falls, it shows more people are choosing the shorter period.
The average U.S. rate for a 30-year fixed mortgage has tumbled since early 2011 to 3.71 percent this week, rising from last week’s record-low 3.67 percent. Refinancing applications, meanwhile, are at a three-year high.
Lackluster Recovery
DeKaser of Parthenon attributes the reduction in mortgage debt to a “fear factor.” A lackluster recovery that still has one of every 15 people unemployed has persuaded some borrowers of the wisdom of thriftiness, he said.
“People are worried about falling home prices and they’re worried about the economy,” said DeKaser. “If they can afford it, they’re paying down their mortgages instead of buying things because it makes them feel like they’ll sleep better at night.”
Home prices tumbled for six straight months through March to the lowest level in a decade, 35 percent below the peak prices of the housing boom, according to the S&P/Case-Shiller price index of 20 U.S. metropolitan areas. A 3.4 percent increase in home sales last month may signal prices are beginning to stabilize, according to Eric Belsky, managing director of Harvard University’s Joint Center for Housing Studies, in its “State of the Nation’s Housing” report issued today.
Economic Growth
The U.S. economy probably will grow at a 2.2 percent pace in 2012, the third year after the end of the recession, according to the median forecast of 93 economists surveyed by Bloomberg. That compares with a 3.9 percent average expansion rate in the third-year period following the 1982, 1994, and 2001 recessions. In 2013, the growth rate probably will be 2.4 percent, according to the economists’ average estimate.
Homeowners who are able to shorten the terms of their loans or reduce their balances when they refinance are the lucky ones, said Chris Christopher, a senior economist at IHS Global Insight in Lexington, Massachusetts.
“Homeowners who are paying down mortgage debt are the survivors,” said Christopher. “They probably didn’t lose their jobs, so they’re in a better position to do that.”
About 23 percent of mortgage holders are underwater on their loans, meaning they owe more than their homes are worth, according to CoreLogic Inc., a mortgage data and software firm in Santa Ana, California. About 2.1 million properties were in foreclosure in April, according to Lender Processing Services, a mortgage data firm in Jacksonville, Florida.
‘Bubble Days’
“Consumers’ view of the housing market clearly has been radically changed since the bubble days,” said Dean Maki, chief U.S. economist at Barclays Plc in New York. “We saw what happened to people who were way overleveraged.”
“Paying down mortgage debt is bad for economic growth -- putting your money into your house usually means you’re spending less,” said FBR’s Miller. “It’s good for our economic health in the long run, though, because it improves household balance sheets.”
Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job growth and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed yesterday in Washington.
National Income
Annual increases in national income slowed to $581 billion in 2011 from $693 billion in the prior year, according to the Bureau of Economic Analysis. The first quarter’s $127.7 billion gain puts 2012 on course for a $510.8 billion increase, the lowest since income dropped in 2009.
“People are looking around them and seeing people they know getting their salaries cut or losing their jobs,” said Miller, a former examiner with the Federal Reserve Bank of Philadelphia. “If you want security, you can put your money in a savings bank for half a percentage point, or you can pay down your mortgage.”
FBR’s Miller said when he refinanced his home loan last year, he “brought a big check to the table” to reduce his mortgage balance. The reason?
“So my wife
would leave me alone,” said Miller. “Just like a lot of people, she wants to have no mortgage debt.”
URL to original article: http://www.builderonline.com/builder-pulse/homeowner-equity--yes-equity--on-the-rise.aspx?cid=BP:061412:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 14, 2012
Fighting Back Against Lowball Home Appraisals
Source: The Wall Street Journal
By RUTH SIMON
Record-low interest rates are a boon for home buyers and for homeowners seeking to refinance. But low appraisals are making it difficult or even impossible for some borrowers to take advantage. Samara Glassman and her husband David knew their ranch house in Phoenix had fallen in value. But they were surprised by a September 2011 appraisal valuing the four-bedroom home at $385,000, down from the $604,000 they paid in 2008. The appraisal put the couple underwater on their $402,000 mortgage—and threatened to sink their plans to refinance. When they examined the appraisal, they saw it was based on older homes a few blocks away that weren't directly comparable, says Ms. Glassman, a real-estate agent. They got a second appraisal in January that placed a $500,000 value on the property. That number was high enough for them to refinance into a new mortgage that will save them an estimated $250,000 over the life of the loan. After almost six years of falling home prices, such experiences have become common. About one-third of real-estate agents reported that low appraisals had resulted in the cancellation, delay or renegotiation of a purchase, according to an April survey by the National Association of Realtors. Ron Phipps, a real-estate broker in Warwick, R.I., says about half of his sales run into appraisal problems at some point. Lenders report that "overly pessimistic appraisals caused by appraisers using distressed sales as 'comparables'" are a key reason why deals are falling through, particularly in parts of the Southeastern U.S., says Michael Fratantoni, vice president of research at the Mortgage Bankers Association. Part of the problem is that home prices have plummeted further than many people would like to believe. "Everybody thinks the value of their house hasn't fallen nearly as much as every other house in their neighborhood," says Greg McBride, a senior financial analyst at Bankrate.com. "But the three foreclosures in the neighborhood are relevant to the current market price of your home, like it or not." Appraisal changes enacted in the wake of the financial crisis were designed to eliminate improper pressure on appraisers that often led to inflated valuations during the housing boom. But critics say those changes resulted in unnecessarily conservative valuations and the greater use of appraisers with little knowledge of local market conditions. Another problem: Accurate valuations can be difficult to come by when sales are thin and prices are just beginning to edge upward after prolonged declines. Many borrowers are "in a holding pattern for extended periods" because it's difficult to find comparable sales to support the appraisal value, says Terry Moore, global managing director of Accenture Credit Services, which provides consulting and mortgage-processing services to banks. There are steps you can take to improve your odds of getting a deal done. Mr. Phipps, the Rhode Island real-estate agent, advises borrowers to look at comparable sales from the last three to six months before seeking a mortgage. "Whether it's a purchase or a refinance, you want to know what the range of values is," he says. Borrowers can't pick their appraiser, but they can accompany the appraiser during the inspection, pointing out improvements that add to the home's value. They also can provide the appraiser with comparable sales that can be used to support the valuation. "It's perfectly acceptable to have a list prepared for the appraiser of improvements that might not be obvious," says Ken Chitester, a spokesman for the Appraisal Institute, a professional group. Data are "the lifeblood of the profession." Sometimes it makes sense to start over. Steve Walsh, the mortgage broker for the Glassmans, resubmitted the couple's loan application to a different lender a few months after the original refinancing fell apart because of the low valuation. Borrowers can request that the lender review the appraiser's findings, though the chances of success are slim. If you think the value is unreasonably low, look first for factual errors, such as an erroneous number of bedrooms or miscalculated square footage. To improve your odds of getting the appraisal overturned, you will need examples of recent comparable sales that weren't considered by the appraiser, Mr. Chitester says. You also can ask the lender to order a second appraisal, which you might have to pay for. The average appraisal cost $406 last year, according to Bankrate.com. At U.S. Bancorp, USB +1.47%borrowers who are unhappy with the valuation can ask to have the appraisal reviewed. If the bank agrees the appraisal wasn't good, it will order a new one. But borrowers can't simply request a new appraisal because they didn't like the initial valuation, says Dan Arrigoni, head of U.S. Bank Home Mortgage. "At our company, you have to have a reason to go for the second appraisal," he says. Citigroup, C +0.87%by contrast, sometimes asks for two or even three appraisals, with the bank picking up the added costs. "We know we don't influence appraisals at all," says CitiMortgage president Sanjiv Das. "We also know that appraisal is an art form. I will take another opinion to satisfy the customer that two came in at the same level."
URL to original article: http://online.wsj.com/article/SB10001424052702304821304577436731561271916.html?mod=WSJ_RealEstate_LeftTopNews
For further information on Fresno Real Estate check: http://www.londonproperties.com
By RUTH SIMON
Record-low interest rates are a boon for home buyers and for homeowners seeking to refinance. But low appraisals are making it difficult or even impossible for some borrowers to take advantage. Samara Glassman and her husband David knew their ranch house in Phoenix had fallen in value. But they were surprised by a September 2011 appraisal valuing the four-bedroom home at $385,000, down from the $604,000 they paid in 2008. The appraisal put the couple underwater on their $402,000 mortgage—and threatened to sink their plans to refinance. When they examined the appraisal, they saw it was based on older homes a few blocks away that weren't directly comparable, says Ms. Glassman, a real-estate agent. They got a second appraisal in January that placed a $500,000 value on the property. That number was high enough for them to refinance into a new mortgage that will save them an estimated $250,000 over the life of the loan. After almost six years of falling home prices, such experiences have become common. About one-third of real-estate agents reported that low appraisals had resulted in the cancellation, delay or renegotiation of a purchase, according to an April survey by the National Association of Realtors. Ron Phipps, a real-estate broker in Warwick, R.I., says about half of his sales run into appraisal problems at some point. Lenders report that "overly pessimistic appraisals caused by appraisers using distressed sales as 'comparables'" are a key reason why deals are falling through, particularly in parts of the Southeastern U.S., says Michael Fratantoni, vice president of research at the Mortgage Bankers Association. Part of the problem is that home prices have plummeted further than many people would like to believe. "Everybody thinks the value of their house hasn't fallen nearly as much as every other house in their neighborhood," says Greg McBride, a senior financial analyst at Bankrate.com. "But the three foreclosures in the neighborhood are relevant to the current market price of your home, like it or not." Appraisal changes enacted in the wake of the financial crisis were designed to eliminate improper pressure on appraisers that often led to inflated valuations during the housing boom. But critics say those changes resulted in unnecessarily conservative valuations and the greater use of appraisers with little knowledge of local market conditions. Another problem: Accurate valuations can be difficult to come by when sales are thin and prices are just beginning to edge upward after prolonged declines. Many borrowers are "in a holding pattern for extended periods" because it's difficult to find comparable sales to support the appraisal value, says Terry Moore, global managing director of Accenture Credit Services, which provides consulting and mortgage-processing services to banks. There are steps you can take to improve your odds of getting a deal done. Mr. Phipps, the Rhode Island real-estate agent, advises borrowers to look at comparable sales from the last three to six months before seeking a mortgage. "Whether it's a purchase or a refinance, you want to know what the range of values is," he says. Borrowers can't pick their appraiser, but they can accompany the appraiser during the inspection, pointing out improvements that add to the home's value. They also can provide the appraiser with comparable sales that can be used to support the valuation. "It's perfectly acceptable to have a list prepared for the appraiser of improvements that might not be obvious," says Ken Chitester, a spokesman for the Appraisal Institute, a professional group. Data are "the lifeblood of the profession." Sometimes it makes sense to start over. Steve Walsh, the mortgage broker for the Glassmans, resubmitted the couple's loan application to a different lender a few months after the original refinancing fell apart because of the low valuation. Borrowers can request that the lender review the appraiser's findings, though the chances of success are slim. If you think the value is unreasonably low, look first for factual errors, such as an erroneous number of bedrooms or miscalculated square footage. To improve your odds of getting the appraisal overturned, you will need examples of recent comparable sales that weren't considered by the appraiser, Mr. Chitester says. You also can ask the lender to order a second appraisal, which you might have to pay for. The average appraisal cost $406 last year, according to Bankrate.com. At U.S. Bancorp, USB +1.47%borrowers who are unhappy with the valuation can ask to have the appraisal reviewed. If the bank agrees the appraisal wasn't good, it will order a new one. But borrowers can't simply request a new appraisal because they didn't like the initial valuation, says Dan Arrigoni, head of U.S. Bank Home Mortgage. "At our company, you have to have a reason to go for the second appraisal," he says. Citigroup, C +0.87%by contrast, sometimes asks for two or even three appraisals, with the bank picking up the added costs. "We know we don't influence appraisals at all," says CitiMortgage president Sanjiv Das. "We also know that appraisal is an art form. I will take another opinion to satisfy the customer that two came in at the same level."
URL to original article: http://online.wsj.com/article/SB10001424052702304821304577436731561271916.html?mod=WSJ_RealEstate_LeftTopNews
For further information on Fresno Real Estate check: http://www.londonproperties.com
Foreclosure starts, sales increase in May in California
Source: Foreclosure Radar
Foreclosure activity was mixed in May, with lenders more likely impacted by local market conditions then any overall trends, according to the latest report by ForeclosureRadar. In California, foreclosure sales rose 6.1 percent compared with April, driven by sales to third parties that were up 14 percent. In California, three Senate Bills under the Homeowner Bill of Rights are being actively debated by the legislature. While Senate Bill 1473, Senate Bill 1474, and Assembly Bill 1950 have already been passed, they should have little impact on foreclosure activity throughout the state, according to ForeclosureRadar. However, if passed, two of the three remaining bills (Senate Bill 1470 and Senate Bill 1471) could significantly impact the foreclosure marketplace. While foreclosure starts increased 4.4 percent and foreclosure sales rose 6.1 percent, the time to foreclosure in California declined .7 percent in May, according to the report.
URL to original article: http://www.foreclosureradar.com/california-foreclosures
For further information on Fresno Real Estate check: http://www.londonproperties.com
Foreclosure activity was mixed in May, with lenders more likely impacted by local market conditions then any overall trends, according to the latest report by ForeclosureRadar. In California, foreclosure sales rose 6.1 percent compared with April, driven by sales to third parties that were up 14 percent. In California, three Senate Bills under the Homeowner Bill of Rights are being actively debated by the legislature. While Senate Bill 1473, Senate Bill 1474, and Assembly Bill 1950 have already been passed, they should have little impact on foreclosure activity throughout the state, according to ForeclosureRadar. However, if passed, two of the three remaining bills (Senate Bill 1470 and Senate Bill 1471) could significantly impact the foreclosure marketplace. While foreclosure starts increased 4.4 percent and foreclosure sales rose 6.1 percent, the time to foreclosure in California declined .7 percent in May, according to the report.
URL to original article: http://www.foreclosureradar.com/california-foreclosures
For further information on Fresno Real Estate check: http://www.londonproperties.com
International Sales Continue to Climb in U.S. Market, Realtors® Report
Source: National Association of Realtors
WASHINGTON (June 11, 2012) – Due to low prices and the relative weakness of the dollar, international buyers continue to identify the U.S. as a desirable place to own property and make a profitable investment. According to the National Association of Realtors® 2012 Profile of International Home Buying Activity, total residential international sales in the U.S. for the past year ending March 2012 equaled $82.5 billion, up from $66.4 billion in 2011. Total international sales were evenly split between non-resident foreigners and recent immigrants. The survey asked Realtors® to report their international business activity within the U.S. for the 12 months ending March 2012. “Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi, broker-owner of Veissi & Associates, Inc. in Miami, Fla. “Low housing prices, a good inventory condition and increased buying power with today’s exchange rates help attract international clients. Foreign buyers also have the advantage of working with a Realtor®. Realtors® who specialize in serving international clientele have a truly global perspective; they know what hurdles foreign buyers face when purchasing property in the U.S., and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices.” International buyers bought homes throughout the country, but four states accounted for 51 percent of the purchases – Florida, California, Texas and Arizona. Florida has been the fastest growing destination of choice, accounting for 26 percent of foreign purchases. California was second with 11 percent and Texas and Arizona accounted for seven percent. Proximity to the home country, the presence of relatives and friends, the convenience of air transportation, and climate and location are all important considerations to prospective foreign buyers. Locations on the East Coast generally attract European buyers, while Asian buyers tend to purchase on the West Coast, particularly California. Florida attracts a diverse set of international buyers including South Americans, Europeans and Canadians. Meanwhile, Texas remains popular among Mexican buyers. Within markets in an individual state, it is not unusual to find concentrations of people grouped by nationality. “Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,” said Veissi. “Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community.” International buyers came from all over the globe, but Canada, China (The People’s Republic of China including Hong Kong), Mexico, India, and the United Kingdom accounted for 55 percent of all international transactions, according to the survey. Canada and China remain the fastest-growing home countries. Canada accounted for 24 percent of international sales while China accounted for 11 percent, up from nine percent in 2011. Mexico was third with eight percent of sales and India and the U.K. both accounted for six percent. Forty-five percent of international purchases were under $250,000. In addition, there appears to be a gradual increasing trend toward purchases in the $250,000 to $500,000 price range. In 2012 this range accounted for 30 percent of purchases, up from 28 percent in 2011. The average price paid by an international buyer was $400,000 compared to the overall U.S. average of $212,000. Several reasons account for why the average international home price is higher than the average overall price. The international client is typically wealthier than the domestic buyer and is looking for a property in a specialized niche, for example, a larger property suitable for multi-generational living, or a property that establishes the individual’s presence and standing in the community. Many homes purchased by foreign buyers are used as a primary residence. Vacation and rental use are also major reasons for a purchase. More than half – 66 percent – of survey respondents reported international buyers purchased detached single-family homes. About half of international buyers, 52 percent, preferred to buy in a suburban area and about a quarter, 23 percent, bought in a central city/urban area. Sixty-two percent of international purchases were all cash, which has increased since 2007. International buyers still experience many financing challenges when purchasing a home in the U.S. In fact, among transactions that failed, Realtors® reported that in 26 percent of the cases financing issues were the problem. The difficulties facing foreign buyers in trying to obtain a mortgage include lack of U.S.-based credit history and hurdles in meeting mortgage requirements. Other reasons for not purchasing properties were cost/taxes/insurance and immigration laws. Twenty-seven percent of Realtors® reported having worked with international clients this year. Fifty-two percent of Realtors® reported that international transactions accounted for one to 10 percent of their total transactions, while 27 percent reported that they made up more than 10 percent of total transactions. Realtor® specialization on the buyer’s side of the market – such as foreign language capabilities, cultural affinity or orientation with the prospective purchaser and experience in explaining the U.S. real estate – appear to be important in working with foreign buyers. NAR helps Realtors® expand their businesses globally. The Certified International Property Specialist designation prepares Realtors® to service the growing international market in their local community by focusing on culture, exchange rates, investment trends, and legal issues. The CIPS® Global Network is comprised of over 2,000 Realtors® worldwide. In addition, Realtor.com® International delivers U.S. residential listings to buyers across the global, as well as listings from international data providers. As NAR’s official property website, Realtor.com® increases exposure of U.S. properties to global markets and helps Realtors® grow their global business. Last month over 950,000 international unique visitors searched for U.S. properties on the site (as reported by Omniture Site Catalyst for May 2012 as an aggregate of all countries other than the U.S.). The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
URL to original article: http://www.realtor.org/news-releases/2012/06/international-sales-continue-to-climb-in-us-market-realtors-report
For further information on Fresno Real Estate check: http://www.londonproperties.com
WASHINGTON (June 11, 2012) – Due to low prices and the relative weakness of the dollar, international buyers continue to identify the U.S. as a desirable place to own property and make a profitable investment. According to the National Association of Realtors® 2012 Profile of International Home Buying Activity, total residential international sales in the U.S. for the past year ending March 2012 equaled $82.5 billion, up from $66.4 billion in 2011. Total international sales were evenly split between non-resident foreigners and recent immigrants. The survey asked Realtors® to report their international business activity within the U.S. for the 12 months ending March 2012. “Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi, broker-owner of Veissi & Associates, Inc. in Miami, Fla. “Low housing prices, a good inventory condition and increased buying power with today’s exchange rates help attract international clients. Foreign buyers also have the advantage of working with a Realtor®. Realtors® who specialize in serving international clientele have a truly global perspective; they know what hurdles foreign buyers face when purchasing property in the U.S., and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices.” International buyers bought homes throughout the country, but four states accounted for 51 percent of the purchases – Florida, California, Texas and Arizona. Florida has been the fastest growing destination of choice, accounting for 26 percent of foreign purchases. California was second with 11 percent and Texas and Arizona accounted for seven percent. Proximity to the home country, the presence of relatives and friends, the convenience of air transportation, and climate and location are all important considerations to prospective foreign buyers. Locations on the East Coast generally attract European buyers, while Asian buyers tend to purchase on the West Coast, particularly California. Florida attracts a diverse set of international buyers including South Americans, Europeans and Canadians. Meanwhile, Texas remains popular among Mexican buyers. Within markets in an individual state, it is not unusual to find concentrations of people grouped by nationality. “Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,” said Veissi. “Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community.” International buyers came from all over the globe, but Canada, China (The People’s Republic of China including Hong Kong), Mexico, India, and the United Kingdom accounted for 55 percent of all international transactions, according to the survey. Canada and China remain the fastest-growing home countries. Canada accounted for 24 percent of international sales while China accounted for 11 percent, up from nine percent in 2011. Mexico was third with eight percent of sales and India and the U.K. both accounted for six percent. Forty-five percent of international purchases were under $250,000. In addition, there appears to be a gradual increasing trend toward purchases in the $250,000 to $500,000 price range. In 2012 this range accounted for 30 percent of purchases, up from 28 percent in 2011. The average price paid by an international buyer was $400,000 compared to the overall U.S. average of $212,000. Several reasons account for why the average international home price is higher than the average overall price. The international client is typically wealthier than the domestic buyer and is looking for a property in a specialized niche, for example, a larger property suitable for multi-generational living, or a property that establishes the individual’s presence and standing in the community. Many homes purchased by foreign buyers are used as a primary residence. Vacation and rental use are also major reasons for a purchase. More than half – 66 percent – of survey respondents reported international buyers purchased detached single-family homes. About half of international buyers, 52 percent, preferred to buy in a suburban area and about a quarter, 23 percent, bought in a central city/urban area. Sixty-two percent of international purchases were all cash, which has increased since 2007. International buyers still experience many financing challenges when purchasing a home in the U.S. In fact, among transactions that failed, Realtors® reported that in 26 percent of the cases financing issues were the problem. The difficulties facing foreign buyers in trying to obtain a mortgage include lack of U.S.-based credit history and hurdles in meeting mortgage requirements. Other reasons for not purchasing properties were cost/taxes/insurance and immigration laws. Twenty-seven percent of Realtors® reported having worked with international clients this year. Fifty-two percent of Realtors® reported that international transactions accounted for one to 10 percent of their total transactions, while 27 percent reported that they made up more than 10 percent of total transactions. Realtor® specialization on the buyer’s side of the market – such as foreign language capabilities, cultural affinity or orientation with the prospective purchaser and experience in explaining the U.S. real estate – appear to be important in working with foreign buyers. NAR helps Realtors® expand their businesses globally. The Certified International Property Specialist designation prepares Realtors® to service the growing international market in their local community by focusing on culture, exchange rates, investment trends, and legal issues. The CIPS® Global Network is comprised of over 2,000 Realtors® worldwide. In addition, Realtor.com® International delivers U.S. residential listings to buyers across the global, as well as listings from international data providers. As NAR’s official property website, Realtor.com® increases exposure of U.S. properties to global markets and helps Realtors® grow their global business. Last month over 950,000 international unique visitors searched for U.S. properties on the site (as reported by Omniture Site Catalyst for May 2012 as an aggregate of all countries other than the U.S.). The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
URL to original article: http://www.realtor.org/news-releases/2012/06/international-sales-continue-to-climb-in-us-market-realtors-report
For further information on Fresno Real Estate check: http://www.londonproperties.com
Foreclosures down for 20th straight month
By Jon Prior
Servicers started more foreclosures in May from the month before but filings were still down 4% from last year, according to RealtyTrac. "U.S. foreclosure activity has now decreased on a year-over-basis for 20 straight months including May, but the jump in May foreclosure starts shows that it's going to be a bumpy ride down to the bottom of this foreclosure cycle," said RealtyTrac CEO Brandon Moore. The market expected more foreclosures after the $25 billion settlement was struck in March over past abuses and documentation problems. But most of the foreclosures started in May will likely end up as short sales instead of REO, Moore said. In the first quarter, homes sold before foreclosure netted the bank $27,000 more on average than a traditional REO. "More banks are now recognizing that treating the problem of delinquent mortgages with short sales rather than bank repossessions can help them minimize their losses and also avoid taking on more REOs, which they then have to manage, maintain and market for sale," Moore said. Still, the process in some areas began to restart. The more than 205,000 filings in May nationally is the first time above the 200,000 level since February. Keller Mackie, a partner at the Texas foreclosure firm Mackie Wolf Zientz & Mann, said at HousingWire's REO Expo Wednesday that foreclosure filings in the Lone Star State picked up 25% to 30% since the settlement was signed. For the first time since 2006, the highest foreclosure rate in the country belonged to Georgia, where filings increased 32% from April, according to RealtyTrac.
URL to original article: http://www.housingwire.com/news/foreclosures-down-20th-straight-month
For further information on Fresno Real Estate check: http://www.londonproperties.com
Servicers started more foreclosures in May from the month before but filings were still down 4% from last year, according to RealtyTrac. "U.S. foreclosure activity has now decreased on a year-over-basis for 20 straight months including May, but the jump in May foreclosure starts shows that it's going to be a bumpy ride down to the bottom of this foreclosure cycle," said RealtyTrac CEO Brandon Moore. The market expected more foreclosures after the $25 billion settlement was struck in March over past abuses and documentation problems. But most of the foreclosures started in May will likely end up as short sales instead of REO, Moore said. In the first quarter, homes sold before foreclosure netted the bank $27,000 more on average than a traditional REO. "More banks are now recognizing that treating the problem of delinquent mortgages with short sales rather than bank repossessions can help them minimize their losses and also avoid taking on more REOs, which they then have to manage, maintain and market for sale," Moore said. Still, the process in some areas began to restart. The more than 205,000 filings in May nationally is the first time above the 200,000 level since February. Keller Mackie, a partner at the Texas foreclosure firm Mackie Wolf Zientz & Mann, said at HousingWire's REO Expo Wednesday that foreclosure filings in the Lone Star State picked up 25% to 30% since the settlement was signed. For the first time since 2006, the highest foreclosure rate in the country belonged to Georgia, where filings increased 32% from April, according to RealtyTrac.
URL to original article: http://www.housingwire.com/news/foreclosures-down-20th-straight-month
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 13, 2012
More 'can't get no' satisfaction
Source: GALLUP
PRINCETON, NJ --
Twenty percent of Americans say they are satisfied with the way things are going in the United States, a slight decline from recent months, when between 24% and 26% were satisfied. Satisfaction has reached as high as 36% during President Obama's first term, before falling back to 11% last August and September. Compared with May, satisfaction ratings are down nine percentage points among Democrats (from 43% to 34%) and three points among independents (20% to 17%), while they are up three points among Republicans (9% to 12%). Democrats remain much more satisfied than either independents or Republicans. Low satisfaction ratings are an ominous sign for a president seeking re-election. Today's 20% satisfaction among all Americans is similar to the final ratings prior to the 1980 and 1992 elections, when Jimmy Carter and George H.W. Bush were defeated for re-election. In November 1979 (Gallup did not ask about satisfaction in 1980), 19% of Americans were satisfied with the direction of the country, and in August-September 1992, 22% were. In contrast, Ronald Reagan (48% in 1984), Bill Clinton (39% in 1996), and George W. Bush (44% in 2004) were re-elected at times when Americans were much more satisfied with national conditions. One factor that may mitigate the current low level of satisfaction is that more Americans are satisfied now than just before Obama took office in January 2009, 13%. Satisfaction also improved during Clinton's and Reagan's first terms, while declining in both Bush presidents' first terms. For the younger Bush, the decline was from a very high 56% in January 2001 to a level still above the historical average 39% satisfaction rating. Economic Concerns Remain Paramount The state of the economy is undoubtedly a factor in Americans' generally sour mood. Sixty-eight percent of Americans mention some aspect of the economy when asked about the most important problem facing the country today, with the economy in general (31%) and unemployment (25%) most often mentioned as specific concerns. Americans are a bit less likely now than just before Obama took office (79%) to mention any economic issue as the most important problem facing the country. Since that time, there has been a significant drop in the percentage mentioning the economy in general as the most important problem (from 57%), but an increase in the percentage mentioning unemployment (from 11%). The economy and unemployment have ranked first and second on the most important problem list each month since December 2009. After those two issues, Americans' next-biggest concerns are dissatisfaction with government, mentioned by 12%, and the federal budget deficit, mentioned by 11%. Americans' perceptions of the most important problem are similar to what Gallup found in May as well as in prior months. Implications Americans' preoccupation with the economy and broader dissatisfaction with the way things are going in the United States are not working in President Obama's favor as voters prepare to decide whether he deserves a second term. At the same time, Americans are a bit less concerned about economic issues, and a bit more satisfied with the way things are going, than they were when he took office in the midst of arguably the worst U.S. economy since the Great Depression. Whether voters emphasize the current state of affairs, or how things have changed since Obama took office, may ultimately determine his re-election fate.
URL to original article: http://www.builderonline.com/builder-pulse/more--can-t-get-no--satisfaction.aspx?cid=BP:061312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Twenty percent of Americans say they are satisfied with the way things are going in the United States, a slight decline from recent months, when between 24% and 26% were satisfied. Satisfaction has reached as high as 36% during President Obama's first term, before falling back to 11% last August and September. Compared with May, satisfaction ratings are down nine percentage points among Democrats (from 43% to 34%) and three points among independents (20% to 17%), while they are up three points among Republicans (9% to 12%). Democrats remain much more satisfied than either independents or Republicans. Low satisfaction ratings are an ominous sign for a president seeking re-election. Today's 20% satisfaction among all Americans is similar to the final ratings prior to the 1980 and 1992 elections, when Jimmy Carter and George H.W. Bush were defeated for re-election. In November 1979 (Gallup did not ask about satisfaction in 1980), 19% of Americans were satisfied with the direction of the country, and in August-September 1992, 22% were. In contrast, Ronald Reagan (48% in 1984), Bill Clinton (39% in 1996), and George W. Bush (44% in 2004) were re-elected at times when Americans were much more satisfied with national conditions. One factor that may mitigate the current low level of satisfaction is that more Americans are satisfied now than just before Obama took office in January 2009, 13%. Satisfaction also improved during Clinton's and Reagan's first terms, while declining in both Bush presidents' first terms. For the younger Bush, the decline was from a very high 56% in January 2001 to a level still above the historical average 39% satisfaction rating. Economic Concerns Remain Paramount The state of the economy is undoubtedly a factor in Americans' generally sour mood. Sixty-eight percent of Americans mention some aspect of the economy when asked about the most important problem facing the country today, with the economy in general (31%) and unemployment (25%) most often mentioned as specific concerns. Americans are a bit less likely now than just before Obama took office (79%) to mention any economic issue as the most important problem facing the country. Since that time, there has been a significant drop in the percentage mentioning the economy in general as the most important problem (from 57%), but an increase in the percentage mentioning unemployment (from 11%). The economy and unemployment have ranked first and second on the most important problem list each month since December 2009. After those two issues, Americans' next-biggest concerns are dissatisfaction with government, mentioned by 12%, and the federal budget deficit, mentioned by 11%. Americans' perceptions of the most important problem are similar to what Gallup found in May as well as in prior months. Implications Americans' preoccupation with the economy and broader dissatisfaction with the way things are going in the United States are not working in President Obama's favor as voters prepare to decide whether he deserves a second term. At the same time, Americans are a bit less concerned about economic issues, and a bit more satisfied with the way things are going, than they were when he took office in the midst of arguably the worst U.S. economy since the Great Depression. Whether voters emphasize the current state of affairs, or how things have changed since Obama took office, may ultimately determine his re-election fate.
URL to original article: http://www.builderonline.com/builder-pulse/more--can-t-get-no--satisfaction.aspx?cid=BP:061312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Single-family rental's star rises as REO deals abound
Source: Wall Street Journal
By Nick Timiraos
A San Francisco-based company that buys foreclosed homes and rents them out is finding that the stampede of private cash into the nascent single-family rental sector is changing its business plan: it’s already cashing out. Landsmith L.P., which has amassed a portfolio of more than 250 occupied rentals in Phoenix, said Tuesday it has sold a package of 75 homes to an undisclosed institutional investor for $7.5 million, a substantial markup from the $5.3 million, before management and renovation costs, that the company paid to acquire the homes over the past year. Landsmith buys foreclosed homes either in courthouse auctions or through normal retail listings. Its plan is still to hold onto the homes for five years or so. “But if people are willing to pay a price that lets us realize an upfront return, we don’t need to wait,” says James Breitenstein, the firm’s chief executive. “The potential for this asset class is being realized sooner than we thought.” Eager to jump into the sector, investors such as Oaktree Capital Management and Colony Capital have raised hundreds of millions for the task. But with few bulk sales from banks and mortgage investors Fannie Mae and Freddie Mac, the market has been dominated by smaller outfits like Landsmith that buy homes one at a time. The emergence of a secondary market for single-family rentals shows how larger investors may be more willing to accept more modest returns than the smaller companies that are demanding bigger yields. Those firms face high upfront costs from scaling up an acquisition and property management infrastructure. Phoenix has been ground zero for the hold-and-rent strategy over the past year because the market had an abundance of cheap, recently constructed housing and a better job market. Investor demand has helped ignite a rally in Phoenix home prices and has sent Landsmith and other firms in search of the next gold rush market. Landsmith, a privately held real estate investment trust, says it’s now entering five more markets and that it plans to expand into 10 by the end of 2013. The firm is looking to raise capital from institutional investors and pension funds to finance that next expansion.
URL to original article: http://www.builderonline.com/builder-pulse/single-family-rental-s-star-rises-as-reo-deals-abound.aspx?cid=BP:061312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Nick Timiraos
A San Francisco-based company that buys foreclosed homes and rents them out is finding that the stampede of private cash into the nascent single-family rental sector is changing its business plan: it’s already cashing out. Landsmith L.P., which has amassed a portfolio of more than 250 occupied rentals in Phoenix, said Tuesday it has sold a package of 75 homes to an undisclosed institutional investor for $7.5 million, a substantial markup from the $5.3 million, before management and renovation costs, that the company paid to acquire the homes over the past year. Landsmith buys foreclosed homes either in courthouse auctions or through normal retail listings. Its plan is still to hold onto the homes for five years or so. “But if people are willing to pay a price that lets us realize an upfront return, we don’t need to wait,” says James Breitenstein, the firm’s chief executive. “The potential for this asset class is being realized sooner than we thought.” Eager to jump into the sector, investors such as Oaktree Capital Management and Colony Capital have raised hundreds of millions for the task. But with few bulk sales from banks and mortgage investors Fannie Mae and Freddie Mac, the market has been dominated by smaller outfits like Landsmith that buy homes one at a time. The emergence of a secondary market for single-family rentals shows how larger investors may be more willing to accept more modest returns than the smaller companies that are demanding bigger yields. Those firms face high upfront costs from scaling up an acquisition and property management infrastructure. Phoenix has been ground zero for the hold-and-rent strategy over the past year because the market had an abundance of cheap, recently constructed housing and a better job market. Investor demand has helped ignite a rally in Phoenix home prices and has sent Landsmith and other firms in search of the next gold rush market. Landsmith, a privately held real estate investment trust, says it’s now entering five more markets and that it plans to expand into 10 by the end of 2013. The firm is looking to raise capital from institutional investors and pension funds to finance that next expansion.
URL to original article: http://www.builderonline.com/builder-pulse/single-family-rental-s-star-rises-as-reo-deals-abound.aspx?cid=BP:061312:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Low rates spark urgency
Source: Calculated Risk
From the MBA:
Mortgage Applications Reach Highest Level Since 2009 in Latest MBA Weekly Survey The Refinance Index increased over 19 percent from the previous week to the highest index level since April 2009. The seasonally adjusted Purchase Index increased around 13 percent from one week earlier. “Mortgage application volume increased sharply last week. The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009,” said Michael Fratantoni, MBA's Vice President of Research and Economics. “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months. HARP volume has been steady in recent weeks at about 28 percent of refinance applications.” The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.88 percent from 3.87 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The purchase index is still very weak, but appears to be moving up recently. Refinance activity continues to increase as mortgage rates are near the record low set the previous week. It usually takes around a 50 bps decline from the previous mortgage rate low to get a huge refinance boom - and rates have fallen about that far - and refinance activity is now at the highest level since 2009. According to the MBA, HARP volume was still at 28% of all refinance activity, so HARP activity is increasing at the same rate as overall refinance activity.
URL to original article: http://www.calculatedriskblog.com/2012/06/mba-mortgage-applications-reach-highest.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+(Calculated+Risk)&utm_content=Google+Feedfetcher
For further information on Fresno Real Estate check: http://www.londonproperties.com
From the MBA:
Mortgage Applications Reach Highest Level Since 2009 in Latest MBA Weekly Survey The Refinance Index increased over 19 percent from the previous week to the highest index level since April 2009. The seasonally adjusted Purchase Index increased around 13 percent from one week earlier. “Mortgage application volume increased sharply last week. The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009,” said Michael Fratantoni, MBA's Vice President of Research and Economics. “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months. HARP volume has been steady in recent weeks at about 28 percent of refinance applications.” The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.88 percent from 3.87 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The purchase index is still very weak, but appears to be moving up recently. Refinance activity continues to increase as mortgage rates are near the record low set the previous week. It usually takes around a 50 bps decline from the previous mortgage rate low to get a huge refinance boom - and rates have fallen about that far - and refinance activity is now at the highest level since 2009. According to the MBA, HARP volume was still at 28% of all refinance activity, so HARP activity is increasing at the same rate as overall refinance activity.
URL to original article: http://www.calculatedriskblog.com/2012/06/mba-mortgage-applications-reach-highest.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+(Calculated+Risk)&utm_content=Google+Feedfetcher
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, June 11, 2012
Moody's tempers multifamily bubble fears
By Jon Prior
More than 34% of the national housing stock is being rented and the percentage is climbing, according to Moody's Analytics. Slow income growth coming out of the recession and a lack of savings for a down payment pushed rental demand higher. Vacancy rates, according to Moody's, dropped for all types of properties during 2011. But for multifamily units of five or more, vacancies plunged below 10.5% from a high of 12.5% at the beginning of 2010. To meet the escalating demand, construction starts on multifamily properties averaged 221,000 multifamily units from February to April, up from an average of 67,000 at the end of 2009. Many of the construction crews laid off after the housing bust are migrating to multifamily projects, though unemployment in the sector remains difficult. Multifamily properties escaped overbuilding in the boom, but now some fear a bubble may be forming. Moody's analysts said the fear is "misplaced." "Acceleration in apartment construction exceeds that of single-family construction, but in the context of longer term trends apartment construction is not keeping up with households," Moody's said. Still, rents are climbing. According to Property Portfolio Research, rents in the largest areas increased an average 5% from last year. Research from Fannie Mae earlier in the year showed more than half of renters have to spend at least 30% of their monthly income on housing. Moody's analysts suggested investors could profit from converting distressed borrowers into renters with the intent of selling the property once appreciation occurs. Bank of America ($7.46 -0.1%) began such a pilot program last year. "Very few new single-family units are being built, with even fewer being built with the intent to rent," Moody's said. "Conversions to rental units are the main way of adding to supply."
URL to original article: http://www.housingwire.com/news/moodys-tempers-multifamily-bubble-fears
For further information on Fresno Real Estate check: http://www.londonproperties.com
More than 34% of the national housing stock is being rented and the percentage is climbing, according to Moody's Analytics. Slow income growth coming out of the recession and a lack of savings for a down payment pushed rental demand higher. Vacancy rates, according to Moody's, dropped for all types of properties during 2011. But for multifamily units of five or more, vacancies plunged below 10.5% from a high of 12.5% at the beginning of 2010. To meet the escalating demand, construction starts on multifamily properties averaged 221,000 multifamily units from February to April, up from an average of 67,000 at the end of 2009. Many of the construction crews laid off after the housing bust are migrating to multifamily projects, though unemployment in the sector remains difficult. Multifamily properties escaped overbuilding in the boom, but now some fear a bubble may be forming. Moody's analysts said the fear is "misplaced." "Acceleration in apartment construction exceeds that of single-family construction, but in the context of longer term trends apartment construction is not keeping up with households," Moody's said. Still, rents are climbing. According to Property Portfolio Research, rents in the largest areas increased an average 5% from last year. Research from Fannie Mae earlier in the year showed more than half of renters have to spend at least 30% of their monthly income on housing. Moody's analysts suggested investors could profit from converting distressed borrowers into renters with the intent of selling the property once appreciation occurs. Bank of America ($7.46 -0.1%) began such a pilot program last year. "Very few new single-family units are being built, with even fewer being built with the intent to rent," Moody's said. "Conversions to rental units are the main way of adding to supply."
URL to original article: http://www.housingwire.com/news/moodys-tempers-multifamily-bubble-fears
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 7, 2012
Americans expect 1.4% increase in home prices: Fannie Mae
Source: Housingwire
Most Americans interviewed by Fannie Mae believe home prices will increase at least 1.4% over the next 12 months, the government-sponsored enterprise said. Fannie Mae interviewed approximately 1,000 survey respondents for its May National Housing Survey. 34% of those who responded — the highest level since March 2011 — said home prices will rise over the course of the next 12 months. In addition, 41% of respondents believe home mortgage rates will likely go up over the course of the next year, an increase from the previous month. The percentage of Americans who say it's a good time to buy a home increased one-percentage point to 72% in May, while the percentage of respondents who believe it's a good time to sell held at 15% of those surveyed. Americans see home rental prices also going up over the next year, with the average respondent predicting a 4.1% rate increase. Forty-nine percent of those surveyed believe rental prices will in fact rise. Approximately 38% of those surveyed believe the economy is on the right track. 46% of respondents expect their financial situations to stay consistent over the next year, an increase of 2-percentage points from the previous month. 15% of those interviewed say their household income is now lower than it was a year ago—a record low for this particular indicator. In addition, 32% of those interviewed see their expenses increasing significantly over the next 12 months, a four-percentage point decline from last month and the lowest level reached since the survey began.
URL to original article: http://www.housingwire.com/content/average-americans-expect-14-increase-home-prices
For further information on Fresno Real Estate check: http://www.londonproperties.com
Most Americans interviewed by Fannie Mae believe home prices will increase at least 1.4% over the next 12 months, the government-sponsored enterprise said. Fannie Mae interviewed approximately 1,000 survey respondents for its May National Housing Survey. 34% of those who responded — the highest level since March 2011 — said home prices will rise over the course of the next 12 months. In addition, 41% of respondents believe home mortgage rates will likely go up over the course of the next year, an increase from the previous month. The percentage of Americans who say it's a good time to buy a home increased one-percentage point to 72% in May, while the percentage of respondents who believe it's a good time to sell held at 15% of those surveyed. Americans see home rental prices also going up over the next year, with the average respondent predicting a 4.1% rate increase. Forty-nine percent of those surveyed believe rental prices will in fact rise. Approximately 38% of those surveyed believe the economy is on the right track. 46% of respondents expect their financial situations to stay consistent over the next year, an increase of 2-percentage points from the previous month. 15% of those interviewed say their household income is now lower than it was a year ago—a record low for this particular indicator. In addition, 32% of those interviewed see their expenses increasing significantly over the next 12 months, a four-percentage point decline from last month and the lowest level reached since the survey began.
URL to original article: http://www.housingwire.com/content/average-americans-expect-14-increase-home-prices
For further information on Fresno Real Estate check: http://www.londonproperties.com
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