Effective tomorrow, Oct. 1, 2011, Citizens Property Insurance Corp. won’t automatically cover sinkhole damage through an insurance rider in certain high-risk areas without a pre-coverage sinkhole inspection. While the inspection is a new requirement for the state-owned property insurer, many private insurers already require sinkhole inspections.
The change applies to all new policies in the affected areas – both existing homeowners applying for first-time sinkhole coverage and people planning to buy a home. Homeowners who currently have sinkhole coverage through Citizens do not need to schedule an inspection.
The new rule is effective for home purchases in four Florida counties: Hernando, Hillsborough, Pasco and Pinellas. The inspection applies statewide, however, if an answer is “yes” to any sinkhole-related question on the insurance application.
A Citizens-approved inspection firm must perform the sinkhole inspections. The homebuyer must pay half the inspection fee directly to the inspection company and Citizens will pay the other half, though the fee is non-refundable even if Citizens turns down the sinkhole coverage application.
“According to published information from Citizens Property Insurance, a sinkhole inspection report could take up to 30 days to complete,” says Margy Grant, Florida Realtors corporate counsel. “To avoid any delays before closing, we advise Realtors to secure property insurance sooner rather than later.”
According to Citizens, a negative sinkhole inspection does not automatically disqualify a home from coverage, but it makes the approval process more complicated.
Grant says that both residential purchase contracts available from Florida Realtors contain optional addendums that would protect buyers if they failed to secure sinkhole coverage. “Both the FAR-9 and the FAR/BAR contracts allow a buyer to withdraw if they cannot get ‘comprehensive’ homeowner’s insurance at an agreed upon price,” she says. But Grant reminds everyone that they must use the correct addendum.
Citizens has posted a PDF list of frequently asked questions on its website about the new sinkhole policies. For more information, go to https://www.citizensfla.com/utilitybar/policyholderfaqs.cfm
Source: Florida Realtors®
Friday, September 30, 2011
NFIP gets brief extension; insurance industry remains concerned
On Sept. 29, the National Flood Insurance Program (NFIP) received a short extension as the U.S. House passed a stopgap funding measure to keep the federal government running through Oct. 4.
However, the NFIP, originally set to expire on Sept. 30, remains in limbo as the House considers a U.S. Senate bill that offers yet another short-term extension of the flood insurance program until Nov. 18.
Both the House and the Senate have bills that would extend NFIP for a longer period. A five-year extension has already passed the full House; the Senate has a bill that has not yet come up for a vote.
“We hope there is a window of opportunity on the Senate’s floor schedule to move a bill forward,” says American Insurance Association, “but it’s too soon to tell if that will happen” when Congress returns in October.
If the flood insurance program expires on Oct. 4, homebuyers have a few options if they need coverage to secure a mortgage. Read more about it in an earlier Florida Realtors article, “Closing in Oct.? Get flood insurance now.”
Source: INFORMATION, INC.
However, the NFIP, originally set to expire on Sept. 30, remains in limbo as the House considers a U.S. Senate bill that offers yet another short-term extension of the flood insurance program until Nov. 18.
Both the House and the Senate have bills that would extend NFIP for a longer period. A five-year extension has already passed the full House; the Senate has a bill that has not yet come up for a vote.
“We hope there is a window of opportunity on the Senate’s floor schedule to move a bill forward,” says American Insurance Association, “but it’s too soon to tell if that will happen” when Congress returns in October.
If the flood insurance program expires on Oct. 4, homebuyers have a few options if they need coverage to secure a mortgage. Read more about it in an earlier Florida Realtors article, “Closing in Oct.? Get flood insurance now.”
Source: INFORMATION, INC.
Rate on 30-year mortgage falls to record 4.01%
Fixed mortgage rates have fallen to historic new lows for a fourth straight week and are likely to fall further.
The average on a 30-year fixed mortgage fell to 4.01 percent from 4.09 percent this week, Freddie Mac said Thursday. That’s the lowest rate since the mortgage buyer began keeping records in 1971. The last time long-term rates were lower was in 1951, when most long-term home loans lasted just 20 or 25 years.
The average on a 15-year fixed mortgage, a popular refinancing option, ticked down to 3.28 percent. Economists say that’s the lowest rate ever for the loan.
Mortgage rates tend to track the yield on the 10-year Treasury note. The 10-year yield has risen this week to around 2 percent. A week ago, it touched 1.74 percent – the lowest level since the Federal Reserve Bank of St. Louis started keeping daily records in 1962. As recently as July, the 10-year yield exceeded 3 percent.
Rates on mortgages could fall further after the Federal Reserve announced last week that it would take further action to try to lower long-term rates.
Still, low rates have so far done little to boost home sales or refinancing. Many would-be buyers or homeowners don't have enough cash or home equity to get a new loan.
High unemployment, scant wage gains and debt loads represent a heavy burden for many people. Others can't qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers.
This year is shaping up to be among the worst for sales of previously occupied homes in 14 years. Few are buying, even though the average rate on the 30-year fixed mortgage has fallen to around 4 percent.
A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
Consider a homeowner who owes $250,000 and is paying 5.09 percent on a 30-year fixed mortgage. That was the average rate being offered in January 2010. Refinancing the loan at 4.01 percent could save him or her roughly $2,000 a year.
But many homeowners with good jobs and stable finances have already refinanced over the past year as rates have fallen. The average rate on the 30-year loan fell to new lows in November, August and again this month.
Homeowners also typically pay a few thousand dollars in closing costs when they refinance. And the low rates being offered don’t include extra fees, which many borrowers must pay to get the rates. Those fees are known as points; one point equals 1 percent of the loan amount.
The average fee for the 30-year held steady at 0.7; for the 15-year, it rose to 0.7. The average fee for both the five-year and one-year adjustable-rate loans was unchanged at 0.6 point.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage was unchanged at 3.02 percent. The average for the one-year adjustable-rate mortgage ticked up to 2.83 percent.
Source: The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.
The average on a 30-year fixed mortgage fell to 4.01 percent from 4.09 percent this week, Freddie Mac said Thursday. That’s the lowest rate since the mortgage buyer began keeping records in 1971. The last time long-term rates were lower was in 1951, when most long-term home loans lasted just 20 or 25 years.
The average on a 15-year fixed mortgage, a popular refinancing option, ticked down to 3.28 percent. Economists say that’s the lowest rate ever for the loan.
Mortgage rates tend to track the yield on the 10-year Treasury note. The 10-year yield has risen this week to around 2 percent. A week ago, it touched 1.74 percent – the lowest level since the Federal Reserve Bank of St. Louis started keeping daily records in 1962. As recently as July, the 10-year yield exceeded 3 percent.
Rates on mortgages could fall further after the Federal Reserve announced last week that it would take further action to try to lower long-term rates.
Still, low rates have so far done little to boost home sales or refinancing. Many would-be buyers or homeowners don't have enough cash or home equity to get a new loan.
High unemployment, scant wage gains and debt loads represent a heavy burden for many people. Others can't qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers.
This year is shaping up to be among the worst for sales of previously occupied homes in 14 years. Few are buying, even though the average rate on the 30-year fixed mortgage has fallen to around 4 percent.
A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
Consider a homeowner who owes $250,000 and is paying 5.09 percent on a 30-year fixed mortgage. That was the average rate being offered in January 2010. Refinancing the loan at 4.01 percent could save him or her roughly $2,000 a year.
But many homeowners with good jobs and stable finances have already refinanced over the past year as rates have fallen. The average rate on the 30-year loan fell to new lows in November, August and again this month.
Homeowners also typically pay a few thousand dollars in closing costs when they refinance. And the low rates being offered don’t include extra fees, which many borrowers must pay to get the rates. Those fees are known as points; one point equals 1 percent of the loan amount.
The average fee for the 30-year held steady at 0.7; for the 15-year, it rose to 0.7. The average fee for both the five-year and one-year adjustable-rate loans was unchanged at 0.6 point.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage was unchanged at 3.02 percent. The average for the one-year adjustable-rate mortgage ticked up to 2.83 percent.
Source: The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.
Thursday, September 29, 2011
More Investors Bypass 'Flipping' for Renting
The days of flipping houses for big profits have all but vanished in many markets as more investors see bigger profits in rentals, according to an article by CNNMoney.
Investors flipped half of their purchases in July, which is down from 75 percent a year prior, Tom Popik, research director for Campbell Surveys, told CNNMoney. The other properties were being held onto to rent out, he notes.
A recent survey by the company HomeVestors found that their investor clients were 57 percent more likely than two years ago to buy a property for renting than to flip.
Rentals are serving as a bright spot in real estate. Demand for rentals has been on the rise, and rents are up about 25 percent from a few years ago. Housing analysts say that investors are buying properties cheaply and then earning good returns immediately from renting them out.
Investors haven’t completely turned their back on flipping homes for profit, though. For example, markets like San Diego are reporting home prices rebounding in some neighborhoods, which is making flipping an option there once again.
Source: “‘I Can’t Flip This House,’” CNNMoney (Sept. 29. 2011)
Investors flipped half of their purchases in July, which is down from 75 percent a year prior, Tom Popik, research director for Campbell Surveys, told CNNMoney. The other properties were being held onto to rent out, he notes.
A recent survey by the company HomeVestors found that their investor clients were 57 percent more likely than two years ago to buy a property for renting than to flip.
Rentals are serving as a bright spot in real estate. Demand for rentals has been on the rise, and rents are up about 25 percent from a few years ago. Housing analysts say that investors are buying properties cheaply and then earning good returns immediately from renting them out.
Investors haven’t completely turned their back on flipping homes for profit, though. For example, markets like San Diego are reporting home prices rebounding in some neighborhoods, which is making flipping an option there once again.
Source: “‘I Can’t Flip This House,’” CNNMoney (Sept. 29. 2011)
Bernanke: Long-term unemployment a national crisis
Federal Reserve Chairman Ben Bernanke said Wednesday that long-term unemployment is a “national crisis” and suggested that Congress should take further action to combat it. He also said lawmakers should provide more help to the battered housing industry.
Bernanke noted that about 45 percent of the unemployed have been out of work for at least six months.
“This is unheard of,” he said in a question-and-answer session after a speech in Cleveland. “This has never happened in the post-war period in the United States. They are losing the skills they had, they are losing their connections, their attachment to the labor force.”
He added: “The unemployment situation we have, the job situation, is really a national crisis.”
Bernanke said the government needs to provide support to help the long-term unemployed retrain for jobs and find work. And he suggested that Congress should take more responsibility.
Responding to a question, Bernanke said long-term unemployment, budgetary discipline and housing policy were the three most important areas where Congress could contribute to an economic recovery.
“There are certainly some areas where other policymakers could contribute,” he said.
Bernanke’s comments were his latest in a public effort to get Congress to act further to rejuvenate the economy. He suggested that the Fed can achieve only so much through policies that seek to lower long-term interest rates.
“The Federal Reserve has made enormous efforts to try to help this economy recover and stabilize” though its control of interest rates, or monetary policy, he said. Those policies have driven rates to record lows.
“Monetary policy can do a lot, but monetary policy is not a panacea,” Bernanke said.
On the housing crisis, Bernanke said strong government programs to help the industry recover would aid the Fed’s own efforts to boost housing by driving mortgage rates to their lowest levels in decades.
In his speech, Bernanke said the United States and other rich nations could re-learn a few lessons from fast-growing developing nations.
He said the successful emerging economies such as China had adopted disciplined budget policies, embraced freed trade, made public investments and supported education.
“Advanced economies like the United States would do well to re-learn some of the lessons from the experiences of the emerging market economies, such as the importance of disciplined fiscal policies,” Bernanke said.
But in the question-and-answer period, Bernanke cautioned U.S. lawmakers against cutting deficits too quickly to reduce budget deficits. He has said that could put the fragile economy at risk.
Bernanke noted in his speech that emerging markets such as China account for a large and growing share of the global economy, so they need to act accordingly.
“With increasing size and influence comes greater responsibility,” Bernanke said.
Emerging nations will be challenged in the future by their reliance on exports to drive growth, he said.
The Obama administration has been pushing the Group of 20 major economies, which includes traditional powers such as the United States and emerging economies such as China, Brazil and India, to boost domestic demand rather than relying so heavily on exports to rich nations.
Associated Press writer Thomas J. Sheeran in Cleveland contributed to this report.
Source: The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved.
Bernanke noted that about 45 percent of the unemployed have been out of work for at least six months.
“This is unheard of,” he said in a question-and-answer session after a speech in Cleveland. “This has never happened in the post-war period in the United States. They are losing the skills they had, they are losing their connections, their attachment to the labor force.”
He added: “The unemployment situation we have, the job situation, is really a national crisis.”
Bernanke said the government needs to provide support to help the long-term unemployed retrain for jobs and find work. And he suggested that Congress should take more responsibility.
Responding to a question, Bernanke said long-term unemployment, budgetary discipline and housing policy were the three most important areas where Congress could contribute to an economic recovery.
“There are certainly some areas where other policymakers could contribute,” he said.
Bernanke’s comments were his latest in a public effort to get Congress to act further to rejuvenate the economy. He suggested that the Fed can achieve only so much through policies that seek to lower long-term interest rates.
“The Federal Reserve has made enormous efforts to try to help this economy recover and stabilize” though its control of interest rates, or monetary policy, he said. Those policies have driven rates to record lows.
“Monetary policy can do a lot, but monetary policy is not a panacea,” Bernanke said.
On the housing crisis, Bernanke said strong government programs to help the industry recover would aid the Fed’s own efforts to boost housing by driving mortgage rates to their lowest levels in decades.
In his speech, Bernanke said the United States and other rich nations could re-learn a few lessons from fast-growing developing nations.
He said the successful emerging economies such as China had adopted disciplined budget policies, embraced freed trade, made public investments and supported education.
“Advanced economies like the United States would do well to re-learn some of the lessons from the experiences of the emerging market economies, such as the importance of disciplined fiscal policies,” Bernanke said.
But in the question-and-answer period, Bernanke cautioned U.S. lawmakers against cutting deficits too quickly to reduce budget deficits. He has said that could put the fragile economy at risk.
Bernanke noted in his speech that emerging markets such as China account for a large and growing share of the global economy, so they need to act accordingly.
“With increasing size and influence comes greater responsibility,” Bernanke said.
Emerging nations will be challenged in the future by their reliance on exports to drive growth, he said.
The Obama administration has been pushing the Group of 20 major economies, which includes traditional powers such as the United States and emerging economies such as China, Brazil and India, to boost domestic demand rather than relying so heavily on exports to rich nations.
Associated Press writer Thomas J. Sheeran in Cleveland contributed to this report.
Source: The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved.
NAR: Pending home sales slipped in August but up from 2010
Pending home sales slipped in August with a mixed regional performance but are higher than a year ago, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 1.2 percent to 88.6 in August from 89.7 in July but is 7.7 percent above August 2010 when it stood at 82.3. The data reflects contracts but not closings.
NAR Chief Economist Lawrence Yun said the decline reflects an uneven market.
“The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” he said. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.”
The PHSI in the Northeast fell 5.8 percent to 63.6 in August but is 1.3 percent higher than August 2010. In the Midwest the index declined 3.7 percent to 76.2 in August but is 8.2 percent above a year ago. Pending home sales in the South rose 2.6 percent to an index of 96.9 and are 7.6 percent higher than August 2010. In the West the index declined 2.4 percent to 108.1 in August but is 10.5 percent above a year ago.
Yun said the market is underperforming given a pent-up demand in household formation.
“We continue to experience a pattern in which financially qualified homebuyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” he said. “Based on the improving fundamentals of population growth, some job additions, rent increases and higher stock market wealth, we should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year. The unnecessarily restrictive mortgage underwriting standards are attenuating the housing recovery and are a risk factor for the overall economy.”
Although economic growth as measured by the Gross Domestic Product is expected to remain positive, uncertainty is causing some consumer hesitation.
“We need to remove the road blocks to the housing recovery for people who are trying to take advantage of excellent affordability conditions,” Yun added. “Unfortunately, some buyers also will face notably higher mortgage rates on jumbo loans because of a lack of competition in the banking industry.”
Source: Florida Realtors®
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 1.2 percent to 88.6 in August from 89.7 in July but is 7.7 percent above August 2010 when it stood at 82.3. The data reflects contracts but not closings.
NAR Chief Economist Lawrence Yun said the decline reflects an uneven market.
“The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” he said. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.”
The PHSI in the Northeast fell 5.8 percent to 63.6 in August but is 1.3 percent higher than August 2010. In the Midwest the index declined 3.7 percent to 76.2 in August but is 8.2 percent above a year ago. Pending home sales in the South rose 2.6 percent to an index of 96.9 and are 7.6 percent higher than August 2010. In the West the index declined 2.4 percent to 108.1 in August but is 10.5 percent above a year ago.
Yun said the market is underperforming given a pent-up demand in household formation.
“We continue to experience a pattern in which financially qualified homebuyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” he said. “Based on the improving fundamentals of population growth, some job additions, rent increases and higher stock market wealth, we should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year. The unnecessarily restrictive mortgage underwriting standards are attenuating the housing recovery and are a risk factor for the overall economy.”
Although economic growth as measured by the Gross Domestic Product is expected to remain positive, uncertainty is causing some consumer hesitation.
“We need to remove the road blocks to the housing recovery for people who are trying to take advantage of excellent affordability conditions,” Yun added. “Unfortunately, some buyers also will face notably higher mortgage rates on jumbo loans because of a lack of competition in the banking industry.”
Source: Florida Realtors®
Wednesday, September 28, 2011
Could Homes Soon Be Powered by Google?
The Internet giant is increasing its stake in the solar home power business with a $75 million “initial investment” to buy and own solar-panel generators on roofs of thousands of homes, The Wall Street Journal reports.
Google is investing in Clean Power Finance, a start-up company that matches solar-panel installers with investors willing to buy rooftop solar-panel systems. “With Google’s investment, solar-panel installers can find home owners who want solar panels on their roofs but don’t want to have to pay several thousand dollars to own the system,” The Wall Street Journal article notes.
"We're excited about the opportunity to really help accelerate residential solar," says Rick Needham, Google's director of green business operations.
The latest investment will likely help fund up to 3,000 home rooftop solar systems. In June, Google made a $280 million investment in residential rooftop solar-panel installations with SolarCity Corp. Google’s total investment in renewable energy has been more than $850 million.
Rooftop solar demand is growing, and home owners are finding paybacks too. Earlier this year, a study by Lawrence Berkeley National Laboratory found that solar panels not only saved home owners money on electricity bills but also helped boost a home’s resale value, particularly for existing homes.
Source: “Google Invests $75 Million in Home Solar Venture,” The Wall Street Journal (Sept. 27, 2011)
Google is investing in Clean Power Finance, a start-up company that matches solar-panel installers with investors willing to buy rooftop solar-panel systems. “With Google’s investment, solar-panel installers can find home owners who want solar panels on their roofs but don’t want to have to pay several thousand dollars to own the system,” The Wall Street Journal article notes.
"We're excited about the opportunity to really help accelerate residential solar," says Rick Needham, Google's director of green business operations.
The latest investment will likely help fund up to 3,000 home rooftop solar systems. In June, Google made a $280 million investment in residential rooftop solar-panel installations with SolarCity Corp. Google’s total investment in renewable energy has been more than $850 million.
Rooftop solar demand is growing, and home owners are finding paybacks too. Earlier this year, a study by Lawrence Berkeley National Laboratory found that solar panels not only saved home owners money on electricity bills but also helped boost a home’s resale value, particularly for existing homes.
Source: “Google Invests $75 Million in Home Solar Venture,” The Wall Street Journal (Sept. 27, 2011)
CoreLogic: Shadow inventory continues to decline
Current residential shadow inventory as of July 2011 declined slightly to 1.6 million units – representing a supply of 5 months – from a six-month supply of 1.9 million units one year earlier, according to CoreLogic. It’s also down from April 2011 when shadow inventory stood at 1.7 million units.
The reason is simple: Banks are disposing of distressed assets faster than they’re adding new ones into the system.
CoreLogic estimates the shadow inventory, also known as pending supply, based on the number of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent (90 days or more) – properties most likely to become bank-owned listings (REOs). Properties not yet delinquent aren’t included in the estimate of shadow inventory.
Data highlights:
• The shadow inventory of residential properties as of July 2011 fell to 1.6 million units, or a five-month supply, down from 1.9 million units, or a six-month supply, as compared to July 2010.
• Of the 1.6 million properties currently in the shadow inventory, 770,000 units are seriously delinquent (2.2-months’ supply), 430,000 are in some stage of foreclosure (1.2-months’ supply) and 390,000 are already in REO (1.1-months’ supply).
• As of July 2011, the shadow inventory is 22 percent lower than the peak in January 2010 at 2 million units, an 8.4-months’ supply.
• The total shadow and visible inventory was 5.4 million units in July 2011, down from 6.1 million units a year ago. The shadow inventory accounts for 29 percent of the combined shadow and visible inventories.
• The aggregate current mortgage debt outstanding of the shadow inventory was $336 billion in July 2011, down 18 percent from $411 billion a year ago.
“The steady improvement in the shadow inventory is a positive development for the housing market,” says Mark Fleming, chief economist for CoreLogic. “However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”
Source: Florida Realtors®
The reason is simple: Banks are disposing of distressed assets faster than they’re adding new ones into the system.
CoreLogic estimates the shadow inventory, also known as pending supply, based on the number of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent (90 days or more) – properties most likely to become bank-owned listings (REOs). Properties not yet delinquent aren’t included in the estimate of shadow inventory.
Data highlights:
• The shadow inventory of residential properties as of July 2011 fell to 1.6 million units, or a five-month supply, down from 1.9 million units, or a six-month supply, as compared to July 2010.
• Of the 1.6 million properties currently in the shadow inventory, 770,000 units are seriously delinquent (2.2-months’ supply), 430,000 are in some stage of foreclosure (1.2-months’ supply) and 390,000 are already in REO (1.1-months’ supply).
• As of July 2011, the shadow inventory is 22 percent lower than the peak in January 2010 at 2 million units, an 8.4-months’ supply.
• The total shadow and visible inventory was 5.4 million units in July 2011, down from 6.1 million units a year ago. The shadow inventory accounts for 29 percent of the combined shadow and visible inventories.
• The aggregate current mortgage debt outstanding of the shadow inventory was $336 billion in July 2011, down 18 percent from $411 billion a year ago.
“The steady improvement in the shadow inventory is a positive development for the housing market,” says Mark Fleming, chief economist for CoreLogic. “However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”
Source: Florida Realtors®
UF: Rise in Florida’s consumer confidence
Florida’s consumer confidence index rose this month to 64, up three points from a revised mark of 61 in August. However, confidence still remains low, according to the University of Florida (UF) survey.
Of the five components used by UF researchers to measure overall confidence, four edged upward. Expectations that personal finances would rise in the coming year went up five points to 78, and consumer anticipation that the U.S. economy will improve in the coming year rose by one point to 52. There was also a four-point increase to 66 in the overall expectation that the country will see economic gains during the next five years. Confidence that now is a good time to purchase retail big-ticket items, such as laptops and cars, rose six points to 74.
“It is not surprising that confidence rose this month as we get further from the debt-ceiling debate,” says Chris McCarty, director of UF’s Bureau of Economic and Business Research and Survey Research Center, which conducted the survey. “Confidence actually rose this month among both younger and older respondents.”
The only component to show a decline in September was the perception that personal finances today are lower than a year ago. It fell by three points to 50.
According to the survey, Florida’s seniors, whose perceptions accounted for much of the decline in August, remain pessimistic about the economy in both the short and long run. Confidence levels of those over 60 are at “record lows,” McCarty says.
The ongoing national debate over spending cuts and entitlements is only partly responsible for sluggish confidence levels. Florida’s unemployment rate also remained stuck at 10.7 percent for the past three months. In addition, a loss of government jobs along with those in other sectors offset employment gains in a rebounding tourist industry. Moreover, tourism itself could face temporary setbacks if economic troubles worsen in Europe.
Other indicators also affect the perceptions of Florida consumers. The median price of an existing single-family home in Florida went up slightly in August to $137,500. A drop in gas prices since August was a typical market adjustment following Labor Day, McCarty says. Finally, a volatile stock market that sharply declined in July and took dramatic swings in August and September could also be taking a toll on confidence.
McCarty expects consumer confidence to remain lackluster until next year, given the looming deadline of Nov. 23 for the deficit reduction plan by the U.S. Congress’ super-commission. He thinks it will reignite debates over federal spending and again shake consumer confidence.
The UF survey measures the mood of consumers 18 or older, living in households, who were randomly telephoned Sept. 11-22. The preliminary index for September was collected from 410 respondents.
The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
Source: Florida Realtors®
Of the five components used by UF researchers to measure overall confidence, four edged upward. Expectations that personal finances would rise in the coming year went up five points to 78, and consumer anticipation that the U.S. economy will improve in the coming year rose by one point to 52. There was also a four-point increase to 66 in the overall expectation that the country will see economic gains during the next five years. Confidence that now is a good time to purchase retail big-ticket items, such as laptops and cars, rose six points to 74.
“It is not surprising that confidence rose this month as we get further from the debt-ceiling debate,” says Chris McCarty, director of UF’s Bureau of Economic and Business Research and Survey Research Center, which conducted the survey. “Confidence actually rose this month among both younger and older respondents.”
The only component to show a decline in September was the perception that personal finances today are lower than a year ago. It fell by three points to 50.
According to the survey, Florida’s seniors, whose perceptions accounted for much of the decline in August, remain pessimistic about the economy in both the short and long run. Confidence levels of those over 60 are at “record lows,” McCarty says.
The ongoing national debate over spending cuts and entitlements is only partly responsible for sluggish confidence levels. Florida’s unemployment rate also remained stuck at 10.7 percent for the past three months. In addition, a loss of government jobs along with those in other sectors offset employment gains in a rebounding tourist industry. Moreover, tourism itself could face temporary setbacks if economic troubles worsen in Europe.
Other indicators also affect the perceptions of Florida consumers. The median price of an existing single-family home in Florida went up slightly in August to $137,500. A drop in gas prices since August was a typical market adjustment following Labor Day, McCarty says. Finally, a volatile stock market that sharply declined in July and took dramatic swings in August and September could also be taking a toll on confidence.
McCarty expects consumer confidence to remain lackluster until next year, given the looming deadline of Nov. 23 for the deficit reduction plan by the U.S. Congress’ super-commission. He thinks it will reignite debates over federal spending and again shake consumer confidence.
The UF survey measures the mood of consumers 18 or older, living in households, who were randomly telephoned Sept. 11-22. The preliminary index for September was collected from 410 respondents.
The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
Source: Florida Realtors®
Tuesday, September 27, 2011
Short Sales Lose Appeal Among First-time Buyers
Short sale transactions are becoming less popular among first-time home buyers. Buying a home in a short sale transaction may offer a huge bargain—sale prices average 27 percent lower than non-distressed properties—but more first-time home buyers say the processing delays aren’t worth the trouble.
Among first-time buyers, their short sale purchase share dropped to 39.7 percent of all short sale transactions in August—posting a three-month drop and reaching its lowest share ever recorded for first-time home buyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time home buyers’ share of short sales had reached a peak of 54.1 percent of all short sale transactions.
With bargain deals, why are short sales losing their appeal? Buyers are complaining that short sale transactions take too long to close, with approval times often taking several months after a buyer even submits an offers. Some buyers frustrated at the delays are placing offers on multiple properties, planning to close on whichever one is approved the fastest. The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.
Source: “First-Time Buyers Losing Interest in Short Sales,” RISMedia (Sept. 26, 2011)
Among first-time buyers, their short sale purchase share dropped to 39.7 percent of all short sale transactions in August—posting a three-month drop and reaching its lowest share ever recorded for first-time home buyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time home buyers’ share of short sales had reached a peak of 54.1 percent of all short sale transactions.
With bargain deals, why are short sales losing their appeal? Buyers are complaining that short sale transactions take too long to close, with approval times often taking several months after a buyer even submits an offers. Some buyers frustrated at the delays are placing offers on multiple properties, planning to close on whichever one is approved the fastest. The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.
Source: “First-Time Buyers Losing Interest in Short Sales,” RISMedia (Sept. 26, 2011)
Mortgage settlement was hasty, agency says
Government regulators may have cost taxpayers billions of dollars by settling mortgage-related claims with Bank of America before addressing questions about the methods used to evaluate the loans involved, according to a government report due out Tuesday.
Senior managers at the Federal Housing Finance Agency (FHFA), the independent agency that oversees government-sponsored mortgage giants Fannie Mae and Freddie Mac, failed to act in a timely way to “significant concerns” about the process Freddie Mac employed to determine which faulty loans it wanted Bank of America to buy back, the agency’s inspector general found.
By not expanding its inquiry to include loans that ran into problems three to five years after they were originated, “Freddie Mac did not review over 300,000 loans for possible repurchase claims,” the report states. That led a senior FHFA examiner to conclude that the company could be passing up “billions of dollars” that would have benefited taxpayers.
In January, the FHFA announced separate settlements with Bank of America in which the bank agreed to repurchase mortgages from Fannie and Freddie that did not meet the underwriting standards that had been represented to investors. The mortgages involved had been sold to Fannie and Freddie by the troubled mortgage company Countrywide Financial, which Bank of America bought in 2008. The settlements totaled $2.87 billion, including a $1.35 billion settlement for Freddie Mac.
The following month, several members of Congress began to question the adequacy of the deal and sought more information, and the FHFA began looking into the settlements in greater detail.
Although the inspector general did not independently examine Freddie Mac’s loan review process, the report states that had managers taken time to review the firm’s practices, FHFA “may have been in a better position to evaluate” the merits of the Bank of America settlement.
In response to the inspector general’s findings, FHFA officials said in a letter dated Sept. 19 that the agency “has not changed its view that the settlement reached in December was appropriate and reasonable.” Still, the agency has suspended approval of future repurchase agreements pending further review, and officials said the FHFA is working to improve ways “to raise and resolve” concerns brought forth by examiners.
“After reading the IG’s report, I am concerned that FHFA is not exercising independent judgment,” Rep. Randy Neugebauer (R-Tex.), chairman of the House Financial Services oversight subcommittee, said in a statement Monday. “Deferring to [Fannie and Freddie] in this case may well have cost U.S. taxpayers billions of dollars. The American taxpayers deserve better than business as usual, especially when they have already spent $160 billion to keep Freddie and Fannie afloat.”
Source: washingtonpost.com, Brady Dennis
Senior managers at the Federal Housing Finance Agency (FHFA), the independent agency that oversees government-sponsored mortgage giants Fannie Mae and Freddie Mac, failed to act in a timely way to “significant concerns” about the process Freddie Mac employed to determine which faulty loans it wanted Bank of America to buy back, the agency’s inspector general found.
By not expanding its inquiry to include loans that ran into problems three to five years after they were originated, “Freddie Mac did not review over 300,000 loans for possible repurchase claims,” the report states. That led a senior FHFA examiner to conclude that the company could be passing up “billions of dollars” that would have benefited taxpayers.
In January, the FHFA announced separate settlements with Bank of America in which the bank agreed to repurchase mortgages from Fannie and Freddie that did not meet the underwriting standards that had been represented to investors. The mortgages involved had been sold to Fannie and Freddie by the troubled mortgage company Countrywide Financial, which Bank of America bought in 2008. The settlements totaled $2.87 billion, including a $1.35 billion settlement for Freddie Mac.
The following month, several members of Congress began to question the adequacy of the deal and sought more information, and the FHFA began looking into the settlements in greater detail.
Although the inspector general did not independently examine Freddie Mac’s loan review process, the report states that had managers taken time to review the firm’s practices, FHFA “may have been in a better position to evaluate” the merits of the Bank of America settlement.
In response to the inspector general’s findings, FHFA officials said in a letter dated Sept. 19 that the agency “has not changed its view that the settlement reached in December was appropriate and reasonable.” Still, the agency has suspended approval of future repurchase agreements pending further review, and officials said the FHFA is working to improve ways “to raise and resolve” concerns brought forth by examiners.
“After reading the IG’s report, I am concerned that FHFA is not exercising independent judgment,” Rep. Randy Neugebauer (R-Tex.), chairman of the House Financial Services oversight subcommittee, said in a statement Monday. “Deferring to [Fannie and Freddie] in this case may well have cost U.S. taxpayers billions of dollars. The American taxpayers deserve better than business as usual, especially when they have already spent $160 billion to keep Freddie and Fannie afloat.”
Source: washingtonpost.com, Brady Dennis
Spring buying boosts U.S. home prices for 4th month
Home prices rose for a fourth straight month in most major U.S. cities in July on the strength of the peak buying season. But the housing market remains depressed, and prices are expected to decline in the coming months.
The Standard & Poor’s/Case-Shiller index shows home prices increased in July from June in 17 of the 20 cities tracked.
Over the past 12 months, prices fell in all but two cities – Detroit and Washington. Prices rose sharply in Minneapolis and Chicago. Prices in Las Vegas and Phoenix declined.
Housing is a key reason the economy has struggled more than two years after the recession officially ended. Home sales are on pace this year to be the worst since 1997.
Source: The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.
The Standard & Poor’s/Case-Shiller index shows home prices increased in July from June in 17 of the 20 cities tracked.
Over the past 12 months, prices fell in all but two cities – Detroit and Washington. Prices rose sharply in Minneapolis and Chicago. Prices in Las Vegas and Phoenix declined.
Housing is a key reason the economy has struggled more than two years after the recession officially ended. Home sales are on pace this year to be the worst since 1997.
Source: The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.
Closing in Oct.? Get flood insurance now
At present, the National Flood Insurance Program (NFIP) expires at midnight on Sept. 30, 2011, after Congress granted it a short-term extension in the hopes that along-term strategy could be created. Without funding, FEMA, which oversees the national flood insurance program, cannot issue new policies. Since many lenders require a flood insurance policy, especially for homes in high-risk flood zones, the change can impact some home closings.
The program has expired only twice recently, and Congress reinstated it shortly thereafter. U.S. lawmakers hope to enact a long-term extension for the program; but in the meantime, they’ve voted for a series of short-term extension to keep the insurance operating.
A bill passed yesterday by the U.S. Senate extends the program until Nov. 18, 2011. The House is also expected to pass the bill; however, that might not happen until early next week. In addition, President Obama must sign the flood insurance extension for it to become law.
The National Association of Realtors issued a Call for Action earlier, asking all Realtors to write to Congress and request a program extension before it expires. Visit The Realtor Action Center for more information.
Should NFIP expire, closings could still go through while it’s on hiatus under the following conditions:
• Pre-purchase flood insurance. According to FEMA, a flood insurance application and premium payment must be received before the end of the day on Sept. 30, 2011. The policy would then apply to closings Oct. 1 and later.
• Policy assignment. If a home seller has an existing flood policy, it can be assigned to the buyer even during an NFIP hiatus. To be effective, the insured seller must sign and date the endorsement request.
• Private flood insurance. A handful of companies issue private flood insurance coverage, generally at a higher cost than those offered through NFIP.
Homeowners with an existing flood insurance policy are generally not affected by a NFIP hiatus, though that might depend on how long it takes to renew the program. In the past, Congress has made its renewal retroactive to the time when the flood insurance program expired.
FEMA issued information on the possible NFIP hiatus and how it would impact residential and commercial property owners. To read it, visit Florida Realtors’ Legal Center on floridarealtors.org.
Source: Florida Realtors®
The program has expired only twice recently, and Congress reinstated it shortly thereafter. U.S. lawmakers hope to enact a long-term extension for the program; but in the meantime, they’ve voted for a series of short-term extension to keep the insurance operating.
A bill passed yesterday by the U.S. Senate extends the program until Nov. 18, 2011. The House is also expected to pass the bill; however, that might not happen until early next week. In addition, President Obama must sign the flood insurance extension for it to become law.
The National Association of Realtors issued a Call for Action earlier, asking all Realtors to write to Congress and request a program extension before it expires. Visit The Realtor Action Center for more information.
Should NFIP expire, closings could still go through while it’s on hiatus under the following conditions:
• Pre-purchase flood insurance. According to FEMA, a flood insurance application and premium payment must be received before the end of the day on Sept. 30, 2011. The policy would then apply to closings Oct. 1 and later.
• Policy assignment. If a home seller has an existing flood policy, it can be assigned to the buyer even during an NFIP hiatus. To be effective, the insured seller must sign and date the endorsement request.
• Private flood insurance. A handful of companies issue private flood insurance coverage, generally at a higher cost than those offered through NFIP.
Homeowners with an existing flood insurance policy are generally not affected by a NFIP hiatus, though that might depend on how long it takes to renew the program. In the past, Congress has made its renewal retroactive to the time when the flood insurance program expired.
FEMA issued information on the possible NFIP hiatus and how it would impact residential and commercial property owners. To read it, visit Florida Realtors’ Legal Center on floridarealtors.org.
Source: Florida Realtors®
Monday, September 26, 2011
Bid to lower mortgage rates may fall short
The Federal Reserve’s latest push to revive the economy this week had a key aim: Drive low mortgage rates even lower to strengthen the ailing housing market and help cash-strapped borrowers get out from under higher-interest loans.
But that attempt to throw a lifeline to struggling homeowners faces a stark reality: Despite historically low interest rates, the very people most in need of the kind of relief that could come from refinancing their homes have found it difficult to qualify.
Even as the Fed undertook new measures, a study released by the central bank this week found that tight lending standards and the continuing drop in home prices prevented 2.3 million homeowners from refinancing last year. A combination of high unemployment, strict lending requirements enacted after the financial crisis and the sheer number of borrowers who owe more than their homes are worth continues to thwart many Americans from taking advantage of lower rates.
“There’s a huge roadblock in place right now. Folks cannot refinance in the current marketplace,” said David Berenbaum, chief program officer at the National Community Reinvestment Coalition, a collection of community-based organizations that promotes equal access to credit. “It’s very disheartening.”
Analysts agree that allowing more homeowners to benefit from low rates could free up tens of billions of dollars in credit, potentially giving the economy a much-needed shot in the arm. Finding a fair and politically viable way to accomplish that goal, however, is proving difficult.
Unless policymakers undertake new fiscal policies aimed at helping troubled homeowners – and helping would-be buyers get access to loans so they can purchase the glut of homes on the market – the Fed’s push to keep rates low is unlikely to accomplish much.
“The fact of the matter is the administration and Congress have to take a much more straightforward and candid look at what’s happening in real estate finance,” Berenbaum said. “[Otherwise,] it’s going to continue to slow and drag down the economy.”
Given the current political environment, in which lawmakers have shown little propensity for compromise and where the focus has remained on cuts to the federal budget, congressional approval for new programs or additional spending seems unlikely.
Still, in his recent address to Congress to introduce a $447 billion jobs package, President Obama vowed to “work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent.” The administration has redoubled its efforts of late on housing, exploring a range of options to help revive the battered mortgage market.
Part of that has been a push by the White House to help borrowers lock in the low rates that the Fed has sought to maintain and to make their payments more affordable. The administration’s Home Affordable Refinance Program currently covers mortgages that were originated prior to June 2009 and are backed by government-sponsored mortgage giants Fannie Mae and Freddie Mac. To be eligible, borrowers must be current on their mortgage payments, and their loan must not exceed 125 percent of the value of the home.
At the end of June, 838,000 borrowers had refinanced through HARP, a significant number but well below initial expectations. The administration has sought to broaden the pool of homeowners who can qualify for the program, but any changes require the blessing of the independent Federal Housing Finance Agency, which oversees Fannie and Freddie.
Expanding the existing refinancing program could require Fannie and Freddie to drop certain fees or shoulder losses on the existing loans that are getting paid off. FHFA, which is charged with protecting the interests of Fannie and Freddie under its role as conservator, has been skeptical of any measures that could cost the companies more money and increase the burden for taxpayers.
Even so, FHFA has previously modified the program and said earlier this month that it “is carefully reviewing the mechanics of HARP” to find ways that might “reduce barriers” and allow more people to take advantage of it.
It’s a delicate balance.
Loosening the eligibility strings might help a portion of homeowners refinance, stave off foreclosures and give a jolt to the housing market, but it also creates potential problems. A recent Congressional Budget Office report estimated that a large-scale refinancing program would provide affected borrowers an average of $2,600 in the first year. But it noted that Fannie and Freddie, the Treasury Department and other investors in mortgage-backed securities would suffer losses as the existing loans got paid off early.
“If you get a lot of people refinancing, there are winners and losers,” said Ted Gayer, co-director of the Economic Studies program at the Brookings Institution. “It’s going to be a good thing for borrowers,” he added, but not necessarily for investors.
Ultimately, Gayer said, the Fed’s attempt to force interest rates lower might prove beneficial. But unless elected officials step in to complement the Fed’s actions, it won’t be enough to put the housing market back on solid footing. “It’s going to help some borrowers on the margins, but it won’t be the panacea to the housing market problems we face,” he said.
Source: washingtonpost.com, Brady Dennis
But that attempt to throw a lifeline to struggling homeowners faces a stark reality: Despite historically low interest rates, the very people most in need of the kind of relief that could come from refinancing their homes have found it difficult to qualify.
Even as the Fed undertook new measures, a study released by the central bank this week found that tight lending standards and the continuing drop in home prices prevented 2.3 million homeowners from refinancing last year. A combination of high unemployment, strict lending requirements enacted after the financial crisis and the sheer number of borrowers who owe more than their homes are worth continues to thwart many Americans from taking advantage of lower rates.
“There’s a huge roadblock in place right now. Folks cannot refinance in the current marketplace,” said David Berenbaum, chief program officer at the National Community Reinvestment Coalition, a collection of community-based organizations that promotes equal access to credit. “It’s very disheartening.”
Analysts agree that allowing more homeowners to benefit from low rates could free up tens of billions of dollars in credit, potentially giving the economy a much-needed shot in the arm. Finding a fair and politically viable way to accomplish that goal, however, is proving difficult.
Unless policymakers undertake new fiscal policies aimed at helping troubled homeowners – and helping would-be buyers get access to loans so they can purchase the glut of homes on the market – the Fed’s push to keep rates low is unlikely to accomplish much.
“The fact of the matter is the administration and Congress have to take a much more straightforward and candid look at what’s happening in real estate finance,” Berenbaum said. “[Otherwise,] it’s going to continue to slow and drag down the economy.”
Given the current political environment, in which lawmakers have shown little propensity for compromise and where the focus has remained on cuts to the federal budget, congressional approval for new programs or additional spending seems unlikely.
Still, in his recent address to Congress to introduce a $447 billion jobs package, President Obama vowed to “work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent.” The administration has redoubled its efforts of late on housing, exploring a range of options to help revive the battered mortgage market.
Part of that has been a push by the White House to help borrowers lock in the low rates that the Fed has sought to maintain and to make their payments more affordable. The administration’s Home Affordable Refinance Program currently covers mortgages that were originated prior to June 2009 and are backed by government-sponsored mortgage giants Fannie Mae and Freddie Mac. To be eligible, borrowers must be current on their mortgage payments, and their loan must not exceed 125 percent of the value of the home.
At the end of June, 838,000 borrowers had refinanced through HARP, a significant number but well below initial expectations. The administration has sought to broaden the pool of homeowners who can qualify for the program, but any changes require the blessing of the independent Federal Housing Finance Agency, which oversees Fannie and Freddie.
Expanding the existing refinancing program could require Fannie and Freddie to drop certain fees or shoulder losses on the existing loans that are getting paid off. FHFA, which is charged with protecting the interests of Fannie and Freddie under its role as conservator, has been skeptical of any measures that could cost the companies more money and increase the burden for taxpayers.
Even so, FHFA has previously modified the program and said earlier this month that it “is carefully reviewing the mechanics of HARP” to find ways that might “reduce barriers” and allow more people to take advantage of it.
It’s a delicate balance.
Loosening the eligibility strings might help a portion of homeowners refinance, stave off foreclosures and give a jolt to the housing market, but it also creates potential problems. A recent Congressional Budget Office report estimated that a large-scale refinancing program would provide affected borrowers an average of $2,600 in the first year. But it noted that Fannie and Freddie, the Treasury Department and other investors in mortgage-backed securities would suffer losses as the existing loans got paid off early.
“If you get a lot of people refinancing, there are winners and losers,” said Ted Gayer, co-director of the Economic Studies program at the Brookings Institution. “It’s going to be a good thing for borrowers,” he added, but not necessarily for investors.
Ultimately, Gayer said, the Fed’s attempt to force interest rates lower might prove beneficial. But unless elected officials step in to complement the Fed’s actions, it won’t be enough to put the housing market back on solid footing. “It’s going to help some borrowers on the margins, but it won’t be the panacea to the housing market problems we face,” he said.
Source: washingtonpost.com, Brady Dennis
Cybercrime: A billion-dollar industry
Are you protecting yourself from getting hacked? Think you’re not at risk? According to a recent Norton cybercrime report, 431 million adults in 24 countries experienced some type of cybercrime over the past year, which is up 3 percent from the 2010 study. (The top three cybercrimes, according to the study, are viruses or malware, online credit card fraud, and phishing – or e-mail scams.) In the United States, that comes to 141 victims per minute.
“Our study found over 41 percent of us don’t have software security,” said Helen Malani, Norton’s consumer cybercrime expert. “There’s a general apathy about it – a disconnect. Three times as many people have been the victim of online crimes, but yet they are more afraid that they will be robbed on the street.”
According to the study, over the past year the United States’ total bill for cybercrime topped $139 billion.
“We were astounded by the costs in terms of cash lost,” Malani said. “The number came to more than $388 billion globally. That’s more than the illegal drugs market in heroin, cocaine and marijuana. Cybercrime is an illegal underground economy and it needs to be taken seriously.”
Men are more at risk than women, Malani said, because the adult sites they frequent are more susceptible to cybercrimes. (The Norton report says men are four times more likely than women to view adult content online, and they are twice as likely to visit gambling sites.) Another concern, she said, is the rise in cybercrimes from our mobile devices.
“Mobile crimes are up 10 percent globally,” Malani said. “And if you are male, a millennial and mobile, you are the most at risk. Men spend more time online than women. They talk to more strangers online. They visit sites that are more risky, like gaming or adult sites. And the millennials use social networks more often so that is fertile ground for spreading malware.”
Here are some of Malani’s tips for protecting yourself from cybercrime.
• Don’t ignore software updates. “Many times the notice for an update will pop up on your computer screen, and people close it out and never go back to it,” she said. “It won’t take that long, and if you keep putting it off, you could be putting yourself at risk.”
• Don’t share too much on Twitter or Facebook. “Don’t say the names of your pets or your kids if those are what you use as your passwords,” Malani said. “We do leave the breadcrumbs of information about us online without even thinking about it.”
• Get creative with your passwords and change them frequently. Instead of a dictionary word or a real name, Malani suggested using an acronym of a phrase; IL2G2S could stand for ‘I love to go shopping’, for example. And be sure to change the passwords often.
“Also, consider answering the security questions with fake answers,” she said. “So instead of giving the real name of your pet or child, pick something that’s totally false.”
• Get an app for your mobile device that protects your data. Malani said only 20 percent of those accessing the Internet from their mobile devices have installed the most up-to-date mobile security.
“There are apps that wipe out your personal data if your phone is lost, or can lock your phone remotely,” she said. “Having these can definitely put your mind at ease if your phone is lost or stolen.”
Source: the Chicago Tribune. Distributed by MCT Information Services
“Our study found over 41 percent of us don’t have software security,” said Helen Malani, Norton’s consumer cybercrime expert. “There’s a general apathy about it – a disconnect. Three times as many people have been the victim of online crimes, but yet they are more afraid that they will be robbed on the street.”
According to the study, over the past year the United States’ total bill for cybercrime topped $139 billion.
“We were astounded by the costs in terms of cash lost,” Malani said. “The number came to more than $388 billion globally. That’s more than the illegal drugs market in heroin, cocaine and marijuana. Cybercrime is an illegal underground economy and it needs to be taken seriously.”
Men are more at risk than women, Malani said, because the adult sites they frequent are more susceptible to cybercrimes. (The Norton report says men are four times more likely than women to view adult content online, and they are twice as likely to visit gambling sites.) Another concern, she said, is the rise in cybercrimes from our mobile devices.
“Mobile crimes are up 10 percent globally,” Malani said. “And if you are male, a millennial and mobile, you are the most at risk. Men spend more time online than women. They talk to more strangers online. They visit sites that are more risky, like gaming or adult sites. And the millennials use social networks more often so that is fertile ground for spreading malware.”
Here are some of Malani’s tips for protecting yourself from cybercrime.
• Don’t ignore software updates. “Many times the notice for an update will pop up on your computer screen, and people close it out and never go back to it,” she said. “It won’t take that long, and if you keep putting it off, you could be putting yourself at risk.”
• Don’t share too much on Twitter or Facebook. “Don’t say the names of your pets or your kids if those are what you use as your passwords,” Malani said. “We do leave the breadcrumbs of information about us online without even thinking about it.”
• Get creative with your passwords and change them frequently. Instead of a dictionary word or a real name, Malani suggested using an acronym of a phrase; IL2G2S could stand for ‘I love to go shopping’, for example. And be sure to change the passwords often.
“Also, consider answering the security questions with fake answers,” she said. “So instead of giving the real name of your pet or child, pick something that’s totally false.”
• Get an app for your mobile device that protects your data. Malani said only 20 percent of those accessing the Internet from their mobile devices have installed the most up-to-date mobile security.
“There are apps that wipe out your personal data if your phone is lost, or can lock your phone remotely,” she said. “Having these can definitely put your mind at ease if your phone is lost or stolen.”
Source: the Chicago Tribune. Distributed by MCT Information Services
Friday, September 23, 2011
15 Cities Where Listing Prices Are Rebounding
Prices are rising in Florida: Florida cities have had the largest year-over-year increases in average list prices, according to the latest real estate data from Realtor.com. Florida cities make up 9 of the top 10 places for highest year-over-year list price spikes, based off of August data of 2.2 million listings in 146 markets.
Nationwide, the average list price is $320,325, up 2.36 percent year-over-year.
Here are the top 15 cities boasting the highest percentage of year-over-year increases in average list prices.
1. Miami
Average list price: $640,332
Year-over-year increase: 27.4%
2. Fort Myers-Cape Coral, Fla.
Average list price: $443,570
Year-over-year increase: 26.27%
3. Central-Fla.-RSA
Average list price: $405,809
Year-over-year increase: 19.41%
4. Punta Gorda, Fla.
Average list price: $267,066
Year-over-year increase: 16.37%
5. Macon, Ga.
Average list price: $193,520
Year-over-year increase: 15.98%
6. Sarasota-Bradenton, Fla.
Average list price: $466,785
Year-over-year increase: 15.86%
7. Naples, Fla.
Average list price: $713,087
Year-over-year increase: 15.13%
8. West Palm Beach-Boca Raton, Fla.
Average list price: $591,895
Year-over-year increase: 14.68%
9. Ocala, Fla.
Average list price: $193,360
Year-over-year increase: 12.07%
10. Lakeland-Winter Haven, Fla.
Average list price: $181,409
Year-over-year increase: 11.48%
11. Oralndo, Fla.
Average list price: $319,419
Year-over-year increase: 10.56%
12. Portland-Vancouver, Ore.-Wash.
Average list price: $314,537
Year-over-year increase: 10.52%
13. Boise City, Idaho
Average list price: $212,588
Year-over-year increase: 10.43%
14. Springfield, Illinois
Average list price: $174,537
Year-over-year increase: 9.12%
15. Shreveport-Bossier City, La.
Average list price: $211,414
Year-over-year increase: 8.34%
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Nationwide, the average list price is $320,325, up 2.36 percent year-over-year.
Here are the top 15 cities boasting the highest percentage of year-over-year increases in average list prices.
1. Miami
Average list price: $640,332
Year-over-year increase: 27.4%
2. Fort Myers-Cape Coral, Fla.
Average list price: $443,570
Year-over-year increase: 26.27%
3. Central-Fla.-RSA
Average list price: $405,809
Year-over-year increase: 19.41%
4. Punta Gorda, Fla.
Average list price: $267,066
Year-over-year increase: 16.37%
5. Macon, Ga.
Average list price: $193,520
Year-over-year increase: 15.98%
6. Sarasota-Bradenton, Fla.
Average list price: $466,785
Year-over-year increase: 15.86%
7. Naples, Fla.
Average list price: $713,087
Year-over-year increase: 15.13%
8. West Palm Beach-Boca Raton, Fla.
Average list price: $591,895
Year-over-year increase: 14.68%
9. Ocala, Fla.
Average list price: $193,360
Year-over-year increase: 12.07%
10. Lakeland-Winter Haven, Fla.
Average list price: $181,409
Year-over-year increase: 11.48%
11. Oralndo, Fla.
Average list price: $319,419
Year-over-year increase: 10.56%
12. Portland-Vancouver, Ore.-Wash.
Average list price: $314,537
Year-over-year increase: 10.52%
13. Boise City, Idaho
Average list price: $212,588
Year-over-year increase: 10.43%
14. Springfield, Illinois
Average list price: $174,537
Year-over-year increase: 9.12%
15. Shreveport-Bossier City, La.
Average list price: $211,414
Year-over-year increase: 8.34%
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
In the U.S., 2 housing markets and 2 directions
In America, it’s starting to feel as if there are two housing markets. One for the rich and one for everyone else.
Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 – about what a buyer would have paid during the Great Depression.
Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multi-million-dollar mansions are selling quickly. Sales this August were up 21 percent from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street’s retail storefronts are full.
“We’re getting more showings, more offers and more sales,” says Ronni Keating, a real estate agent with Sotheby’s International.
Think of this housing market as bipolar. In the luxury sector, the recession is a memory and sales and prices are rising. But everywhere else, the market is moving sideways or getting worse.
In the housing market inhabited by most Americans, prices have fallen 30 percent or more since the peak in 2007. That’s a steeper decline than during the Depression. Some people have had their homes on the market for a year without a single offer.
Almost a quarter of American homeowners owe more on their house than it’s worth. Another quarter have less than 20 percent equity. About half of homeowners couldn’t get a mortgage if they applied today, says Paul Dales, senior U.S. economist for Capital Economics.
But then there is the other housing market, occupied by 1.5 percent of the U.S. population, according to Zillow.com. The one with outdoor kitchens and in-home spas; with his-and-her boudoirs and closets the size of starter houses. The one that is not local but global, with international buyers bidding in all cash. And where the gyrations of the stock market are cause for conversation, not cutting expenses.
In this land of luxury properties, the Great Recession seems over. Prices of $1 million-plus properties have risen 0.7 percent since February, according to Zillow. Prices of houses under $1 million have fallen more than 1.5 percent.
Normally, these two segments of the housing market rise and fall together. But now, they’re moving in opposite directions.
“Luxury is the best performing segment of the housing market right now,” says Zillow.com chief economist Stan Humphries.
After every recession since World War II, housing has led the economic recovery. Not this time. The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery. This bifurcation in the market is yet another reason Michelle Meyer, the chief economist at Bank of America Merrill Lynch, says her housing outlook is “increasingly downbeat.”
The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks versus Wal-Mart. Pay on Wall Street versus Main Street. Corporate profits versus family balance sheets.
The divide is also making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can’t get a mortgage? The banks aren’t granting credit to anyone “who even has a smudge on their application,” says Jonathan Miller, founder of real estate consulting firm Miller Samuel. Applications for new mortgages languish at 10-year lows.
Across the country, prices on high-end homes fell after the subprime crash in the fall of 2008. The price on the $25 million mansion became $20 million, then $15 million. Such “bargains” are pushing more luxury buyers to commit to more deals.
There are other factors, too. In Detroit, a recovering auto industry is helping propel high-end sales. All those car executives who have helped turnaround the American auto industry used to rent. Now they are using their performance bonuses to buy homes.
Wall Street’s recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than last.
But in the other housing market, an apartment tower built in 2007 in San Jose, Calif., recently converted to all-rental. The building had not sold a single unit. In Miami, a city that exemplifies the foreclosure epidemic, idled cranes dot the skyline. Unemployment shot up again this summer from 12 percent to 14 percent, a level not seen since the energy crisis in 1973. There are so many two-bedroom condos in gated communities with golf courses, private pools and rustic jogging paths that you can pick one up for $25,000, 66 percent off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.
“In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not,” says Peter Zalewski, founder of the real estate firm Condo Vultures.
One big factor in the divide is foreign cash, at least in the world of property. For international buyers, U.S. real estate is the new undervalued asset, the new fire sale, and foreigners are big buyers of luxury properties. International clients bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida, international buyers account for a third of purchases, up from 10 percent in 2007.
“Luxury properties are drawing buyers from all over the world,” says CoreLogic’s chief economist, Mark Fleming.
That’s true even in such seemingly all-American enclaves as Detroit. Step off a plane at the city’s futuristic new airport and the internationalization of the Motor City is obvious. All the signs – as well as the announcements on the public address system – are in both Chinese and English.
In the middle of the terminal sits a five-star Westin Hotel, the better to serve the global executive class that jets in and out as the U.S. auto industry regains its footing. Many of them are buying in Birmingham, where home values are up 3.1 percent this year, according to Zillow.com.
In Birmingham, local store owners say business is as good as it was during the boom years last decade. Chasta Fase, who owns Old World Olive Press, a boutique shop that sells $30 bottles of olive oil from all around the world says business “has been just awesome” since she opened her doors in November. And since April, she says, customers have been spending more than ever.
Real estate agent Keating says the same is happening to her sales. In June, she sold a lakefront mansion in Birmingham to a Russian entrepreneur. He had purchased a local steel company that he plans to turn around.
“They’re coming from all over,” says Keating, who for the past 30 years has sold most of the car barons their homes, from Roger Smith, the former CEO of General Motors, to former Chrysler CEO Bob Nardelli. “I don’t know who any of them are anymor
Source: The Associated Press, Michelle Conlin, AP Business Writer.
Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 – about what a buyer would have paid during the Great Depression.
Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multi-million-dollar mansions are selling quickly. Sales this August were up 21 percent from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street’s retail storefronts are full.
“We’re getting more showings, more offers and more sales,” says Ronni Keating, a real estate agent with Sotheby’s International.
Think of this housing market as bipolar. In the luxury sector, the recession is a memory and sales and prices are rising. But everywhere else, the market is moving sideways or getting worse.
In the housing market inhabited by most Americans, prices have fallen 30 percent or more since the peak in 2007. That’s a steeper decline than during the Depression. Some people have had their homes on the market for a year without a single offer.
Almost a quarter of American homeowners owe more on their house than it’s worth. Another quarter have less than 20 percent equity. About half of homeowners couldn’t get a mortgage if they applied today, says Paul Dales, senior U.S. economist for Capital Economics.
But then there is the other housing market, occupied by 1.5 percent of the U.S. population, according to Zillow.com. The one with outdoor kitchens and in-home spas; with his-and-her boudoirs and closets the size of starter houses. The one that is not local but global, with international buyers bidding in all cash. And where the gyrations of the stock market are cause for conversation, not cutting expenses.
In this land of luxury properties, the Great Recession seems over. Prices of $1 million-plus properties have risen 0.7 percent since February, according to Zillow. Prices of houses under $1 million have fallen more than 1.5 percent.
Normally, these two segments of the housing market rise and fall together. But now, they’re moving in opposite directions.
“Luxury is the best performing segment of the housing market right now,” says Zillow.com chief economist Stan Humphries.
After every recession since World War II, housing has led the economic recovery. Not this time. The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery. This bifurcation in the market is yet another reason Michelle Meyer, the chief economist at Bank of America Merrill Lynch, says her housing outlook is “increasingly downbeat.”
The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks versus Wal-Mart. Pay on Wall Street versus Main Street. Corporate profits versus family balance sheets.
The divide is also making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can’t get a mortgage? The banks aren’t granting credit to anyone “who even has a smudge on their application,” says Jonathan Miller, founder of real estate consulting firm Miller Samuel. Applications for new mortgages languish at 10-year lows.
Across the country, prices on high-end homes fell after the subprime crash in the fall of 2008. The price on the $25 million mansion became $20 million, then $15 million. Such “bargains” are pushing more luxury buyers to commit to more deals.
There are other factors, too. In Detroit, a recovering auto industry is helping propel high-end sales. All those car executives who have helped turnaround the American auto industry used to rent. Now they are using their performance bonuses to buy homes.
Wall Street’s recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than last.
But in the other housing market, an apartment tower built in 2007 in San Jose, Calif., recently converted to all-rental. The building had not sold a single unit. In Miami, a city that exemplifies the foreclosure epidemic, idled cranes dot the skyline. Unemployment shot up again this summer from 12 percent to 14 percent, a level not seen since the energy crisis in 1973. There are so many two-bedroom condos in gated communities with golf courses, private pools and rustic jogging paths that you can pick one up for $25,000, 66 percent off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.
“In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not,” says Peter Zalewski, founder of the real estate firm Condo Vultures.
One big factor in the divide is foreign cash, at least in the world of property. For international buyers, U.S. real estate is the new undervalued asset, the new fire sale, and foreigners are big buyers of luxury properties. International clients bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida, international buyers account for a third of purchases, up from 10 percent in 2007.
“Luxury properties are drawing buyers from all over the world,” says CoreLogic’s chief economist, Mark Fleming.
That’s true even in such seemingly all-American enclaves as Detroit. Step off a plane at the city’s futuristic new airport and the internationalization of the Motor City is obvious. All the signs – as well as the announcements on the public address system – are in both Chinese and English.
In the middle of the terminal sits a five-star Westin Hotel, the better to serve the global executive class that jets in and out as the U.S. auto industry regains its footing. Many of them are buying in Birmingham, where home values are up 3.1 percent this year, according to Zillow.com.
In Birmingham, local store owners say business is as good as it was during the boom years last decade. Chasta Fase, who owns Old World Olive Press, a boutique shop that sells $30 bottles of olive oil from all around the world says business “has been just awesome” since she opened her doors in November. And since April, she says, customers have been spending more than ever.
Real estate agent Keating says the same is happening to her sales. In June, she sold a lakefront mansion in Birmingham to a Russian entrepreneur. He had purchased a local steel company that he plans to turn around.
“They’re coming from all over,” says Keating, who for the past 30 years has sold most of the car barons their homes, from Roger Smith, the former CEO of General Motors, to former Chrysler CEO Bob Nardelli. “I don’t know who any of them are anymor
Source: The Associated Press, Michelle Conlin, AP Business Writer.
Rate on 30-year mortgage stays at record 4.09%
Fixed mortgage rates hovered at record lows for a third straight week. They are likely to fall even further now that the Federal Reserve said it would shuffle its holdings to drive down long-term interest rates.
The average rate on the 30-year fixed mortgage was unchanged at 4.09 percent this week, Freddie Mac said Thursday. That’s the lowest rate seen since 1951.
The average rate on the 15-year mortgage ticked down to 3.29 percent. Economists say that’s the lowest rate ever for the loan.
Mortgage rates tend to track the yield on the 10-year Treasury note. One day after the Fed’s announcement, the yield on the 10-year note touched 1.74 percent Thursday. That’s the lowest level since Federal Reserve Bank of St. Louis started keeping daily records in 1962.
In July, the yield on the 10-year note was above 3 percent.
Low mortgage rates have done little to boost home sales. This year is shaping up to be the worst for sales of previously occupied homes since 1997. Few are buying, even though the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks this year.
Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.
Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.
Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.
The average fees for the 30-year FRM held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable-rate loans were all at 0.6 point.
Once fees are factored in, the average rate on the 30-year loan rises to 4.25 percent, Freddie Mac said.
A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.
Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1-percentage point to make it worthwhile.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage rose to 3.02 percent. That’s higher than last week’s 2.99 percent.
The average rate for the one-year adjustable-rate mortgage increased slightly to 2.82 percent from 2.81 percent, the lowest rate on records going back to 1984.
Source: The Associated Press, Derek Kravitz (AP Real Estate Writer). All rights reserved.
The average rate on the 30-year fixed mortgage was unchanged at 4.09 percent this week, Freddie Mac said Thursday. That’s the lowest rate seen since 1951.
The average rate on the 15-year mortgage ticked down to 3.29 percent. Economists say that’s the lowest rate ever for the loan.
Mortgage rates tend to track the yield on the 10-year Treasury note. One day after the Fed’s announcement, the yield on the 10-year note touched 1.74 percent Thursday. That’s the lowest level since Federal Reserve Bank of St. Louis started keeping daily records in 1962.
In July, the yield on the 10-year note was above 3 percent.
Low mortgage rates have done little to boost home sales. This year is shaping up to be the worst for sales of previously occupied homes since 1997. Few are buying, even though the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks this year.
Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.
Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.
Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.
The average fees for the 30-year FRM held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable-rate loans were all at 0.6 point.
Once fees are factored in, the average rate on the 30-year loan rises to 4.25 percent, Freddie Mac said.
A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.
Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1-percentage point to make it worthwhile.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage rose to 3.02 percent. That’s higher than last week’s 2.99 percent.
The average rate for the one-year adjustable-rate mortgage increased slightly to 2.82 percent from 2.81 percent, the lowest rate on records going back to 1984.
Source: The Associated Press, Derek Kravitz (AP Real Estate Writer). All rights reserved.
Thursday, September 22, 2011
How Much Longer Will Housing Remain Sluggish?
The weak U.S. economy will likely dampen the housing market until 2015, according to a new survey of economists, analysts, and real estate professionals.
Home prices are expected to grow only slightly at 1.1 percent annually through 2015, the survey by MacroMarkets LLC and Pulsenomics notes. Yet, some local markets may see — or already are seeing — larger home price growth.
The report also notes that home price expectations for 2011 are not as dismal as once forecasted. Home prices haven’t fallen anywhere near the pace of 2008. Still, "average projection is somewhat more negative for each of the following four years," according to the report. More home owners continue to be underwater on their mortgage and foreclosures continue to grow.
Meanwhile, lawmakers are trying to come up with ways to stimulate the housing market, including urging banks to write down loan balances for borrowers seriously underwater or loosening standards to allow more home owners to refinance at current low mortgage rates. Recovery would also involve working with federal regulators on ways to rent out or clear the high inventory of foreclosed homes plaguing many markets.
Source: “Home Forecast Calls for Pain,” The Wall Street Journal (Sept. 21, 2011) and “Five More Years of Housing Problems, With Some Stability in Local Markets,” HousingWire (Sept. 21, 2011)
Home prices are expected to grow only slightly at 1.1 percent annually through 2015, the survey by MacroMarkets LLC and Pulsenomics notes. Yet, some local markets may see — or already are seeing — larger home price growth.
The report also notes that home price expectations for 2011 are not as dismal as once forecasted. Home prices haven’t fallen anywhere near the pace of 2008. Still, "average projection is somewhat more negative for each of the following four years," according to the report. More home owners continue to be underwater on their mortgage and foreclosures continue to grow.
Meanwhile, lawmakers are trying to come up with ways to stimulate the housing market, including urging banks to write down loan balances for borrowers seriously underwater or loosening standards to allow more home owners to refinance at current low mortgage rates. Recovery would also involve working with federal regulators on ways to rent out or clear the high inventory of foreclosed homes plaguing many markets.
Source: “Home Forecast Calls for Pain,” The Wall Street Journal (Sept. 21, 2011) and “Five More Years of Housing Problems, With Some Stability in Local Markets,” HousingWire (Sept. 21, 2011)
Fed moves to lower long-term rates more
In a further bid to shore up the anemic economy, the Federal Reserve Board will buy $400 billion in long-term Treasury securities by June 30.
The new program, called “The Twist” after a similar ‘60s-era program, means the Fed will sell its holdings of short-term Treasuries to finance its purchases on long-term notes and bonds.
“This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the Fed said in its statement Wednesday.
Other actions:
• The key fed funds rate will remain between 0 percent and 0.25 percent, probably through June 2013.
• The Fed will also buy mortgage-backed securities to keep mortgage rates low.
• In its statement, the Fed painted a picture of a barely growing economy: high unemployment, depressed housing, low household spending. The Fed said unemployment will only shrink slowly.
“It’s more like a ‘Twist and Shout,’“ says Mark Vitner, senior economist at Wells Fargo. “They’re making it known that they will do more if they need to.”
The Dow Jones industrial average plunged 284 points, or 2.5 percent, to 11,125, after the announcement. The bellwether 10-year Treasury note yield fell to 1.86 percent. The dollar rallied against the euro and the yen.
The Fed’s moves will presumably lower mortgage rates further. The current 30-year fixed-rate mortgage rate is 4.09 percent, the lowest since mortgage giant Freddie Mac began tracking them in 1970. “That’s good if you’re among those who can refinance,” says Ryan Brecht, senior economist at Action Economics.
Savers could see a very modest increase in short-term rates as the Fed sells off its short-term securities to buy long-term ones.
The Fed’s action showed it was unmoved by a letter sent Monday to Fed Chairman Ben Bernanke from four congressional Republican leaders that urged the Fed not to further stimulate the economy.
The letter is unprecedented in recent times. “It’s in our country’s long-term best interest to have an independent central bank, not one seen as kowtowing to the president or Congress,” Vitner says.
Brecht notes Wednesday’s statement stressed the Fed’s dual mandate of fighting inflation and promoting full employment. “The mandate doesn’t say that one is more important than the other,” he says.
Three members of the Fed’s policymaking committee dissented from the statement: Richard Fisher, Narayana Kocherlakota and Charles Plosser.
Source: USA TODAY, a division of Gannett Co. Inc.
The new program, called “The Twist” after a similar ‘60s-era program, means the Fed will sell its holdings of short-term Treasuries to finance its purchases on long-term notes and bonds.
“This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the Fed said in its statement Wednesday.
Other actions:
• The key fed funds rate will remain between 0 percent and 0.25 percent, probably through June 2013.
• The Fed will also buy mortgage-backed securities to keep mortgage rates low.
• In its statement, the Fed painted a picture of a barely growing economy: high unemployment, depressed housing, low household spending. The Fed said unemployment will only shrink slowly.
“It’s more like a ‘Twist and Shout,’“ says Mark Vitner, senior economist at Wells Fargo. “They’re making it known that they will do more if they need to.”
The Dow Jones industrial average plunged 284 points, or 2.5 percent, to 11,125, after the announcement. The bellwether 10-year Treasury note yield fell to 1.86 percent. The dollar rallied against the euro and the yen.
The Fed’s moves will presumably lower mortgage rates further. The current 30-year fixed-rate mortgage rate is 4.09 percent, the lowest since mortgage giant Freddie Mac began tracking them in 1970. “That’s good if you’re among those who can refinance,” says Ryan Brecht, senior economist at Action Economics.
Savers could see a very modest increase in short-term rates as the Fed sells off its short-term securities to buy long-term ones.
The Fed’s action showed it was unmoved by a letter sent Monday to Fed Chairman Ben Bernanke from four congressional Republican leaders that urged the Fed not to further stimulate the economy.
The letter is unprecedented in recent times. “It’s in our country’s long-term best interest to have an independent central bank, not one seen as kowtowing to the president or Congress,” Vitner says.
Brecht notes Wednesday’s statement stressed the Fed’s dual mandate of fighting inflation and promoting full employment. “The mandate doesn’t say that one is more important than the other,” he says.
Three members of the Fed’s policymaking committee dissented from the statement: Richard Fisher, Narayana Kocherlakota and Charles Plosser.
Source: USA TODAY, a division of Gannett Co. Inc.
Commercial market hits a snag in rebound
Some companies looking for office space have delayed their plans as uncertainty looms in the economy, stalling what had been a two-year rebound.
The commercial market had been picking up in recent months based on expectations that rents and occupancies would continue to rise. But the economy and fears of a double-dip recession has worried some investors about moving forward.
Companies such as UBS AG, Morgan Stanley and the Quidsi unit of Amazon.com Inc. have all recently postponed looking for office space in New York.
In the first half of 2011, U.S. commercial-property sales boomed, rising 107 percent over the same period a year earlier. Firms completed more than $93 billion in deals in that time, according to Real Capital Analytics Inc. Since then, sales growth slowed considerably.
More companies still planning to press ahead find deals falling apart when funding evaporates, thanks to banks that remain squeamish on issuing commercial loans. About 400 banks have failed since 2008, and bad commercial real estate loans are considered one of the primary culprits, according to a new report by Deutsche Bank AG analysts.
Some investors view any slowdown in the commercial market as temporary, particularly in hot spots like New York and Washington. Low interest rates and prices and rents in niches like high-end retail are still a major lure, analysts say.
Source: INFORMATION, INC.
The commercial market had been picking up in recent months based on expectations that rents and occupancies would continue to rise. But the economy and fears of a double-dip recession has worried some investors about moving forward.
Companies such as UBS AG, Morgan Stanley and the Quidsi unit of Amazon.com Inc. have all recently postponed looking for office space in New York.
In the first half of 2011, U.S. commercial-property sales boomed, rising 107 percent over the same period a year earlier. Firms completed more than $93 billion in deals in that time, according to Real Capital Analytics Inc. Since then, sales growth slowed considerably.
More companies still planning to press ahead find deals falling apart when funding evaporates, thanks to banks that remain squeamish on issuing commercial loans. About 400 banks have failed since 2008, and bad commercial real estate loans are considered one of the primary culprits, according to a new report by Deutsche Bank AG analysts.
Some investors view any slowdown in the commercial market as temporary, particularly in hot spots like New York and Washington. Low interest rates and prices and rents in niches like high-end retail are still a major lure, analysts say.
Source: INFORMATION, INC.
More home sellers paying full real estate commissions
Someone selling a home is more likely to pay a full real estate commission today than during the housing boom, when discounts ruled and most properties sold quickly.
Commissions have steadily increased in recent years, despite a rash of foreclosures and falling home values that have left sellers with little spare cash to pay a broker.
The average commission nationally at year-end 2010 was (higher than) 2005, according to Real Trends, a publishing and consulting company based in Castle Rock, Colo.
In the housing frenzy of 2000 to 2005, sellers often questioned the value of agents. The number of brokers ballooned, and the competition for listings led some agents to cut commissions.
But when the housing market soured beginning in 2006, agents couldn’t leave the profession fast enough, and it became much harder to sell homes. Agents say sellers have since grown more appreciative of what they do.
“Sellers are very happy to pay the full commissions, even though they’re getting less money for their homes,” said Claire Sheres of Coldwell Banker in south Palm Beach County, Fla.
“They’re not quibbling …” added Scott Agran, head of Boca Raton, Fla.-based Lang Realty. “They’re saying, ‘What can you do to sell my house for the highest price and in the quickest amount of time?’ “
Agents now have to spend more time and money marketing the properties, and their jobs aren’t limited to finding buyers and securing contracts, said Beverly Rothstein of the Christopher White Group in northwest Broward County.
Agents also have to help arrange financing and title insurance to keep the sales moving toward the closing table.
“No one really has given me any grief about commissions,” Rothstein said. “In this market, your best friend is your real estate agent.”
Robin Craig didn’t think she’d need an agent to sell her two-bedroom cottage in Fort Lauderdale’s Victoria Park. So in May she created a website and flyer and stuck a sign in her front yard.
But for Craig, a 43-year-old accountant, negotiating with prospective buyers’ real estate agents was challenging, and so was coordinating the many showings. Three weeks later, with the house still unsold and a deadline looming for her to move to a new job in Atlanta, Craig hired Tim Singer of Coldwell Banker.
She said she’ll happily pay the … commission on the $529,000 listing.
“I underestimated the amount of time that was involved,” she said. “And he’s got market data and experience that I don’t have.”
Agents say they typically avoid showing homes that owners are selling themselves. Some of the sellers are hostile toward agents and have no intention of paying a commission to the buyer’s broker, Singer said.
Jon Holbrook, president of Delray Beach, Fla.-based BuyOwner.com, said he encourages his clients to work with buyers’ agents and come to terms on some sort of compensation, should a sale result.
Still, with dwindling home equity an issue in South Florida and across the country, sellers would be wise to try selling their homes on their own, Holbrook said. Those who don’t end up losing much of their profit to commissions. “It’s painful,” he said.
Many homeowners who bought during the housing boom are “underwater,” owing more than the properties are worth.
Nearly half the homes with mortgages in Broward County – more than 205,000 properties – are underwater, according to a second quarter report Tuesday from CoreLogic, a California research firm. In Palm Beach County, 42 percent of the homes with mortgages, or more than 137,000 properties, are worth less that what’s owed.
Some of these homeowners will pay the real estate commissions out of their own pockets. But many are falling into foreclosure or completing short sales, in which they unload the properties for less than they owe, with the bank’s blessing. In those transactions, the sellers don’t have to worry about the commissions, which are paid by the lenders.
Banks tend to hold down commissions on short sales and foreclosures to minimize their losses, but some agents say lenders are paying the full (amount) so that the agents will actively market the homes.
“These homes aren’t selling by themselves,” said Douglas Rill, a longtime broker at Century 21 America’s Choice in West Palm Beach.
Source: the Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune News Service.
Commissions have steadily increased in recent years, despite a rash of foreclosures and falling home values that have left sellers with little spare cash to pay a broker.
The average commission nationally at year-end 2010 was (higher than) 2005, according to Real Trends, a publishing and consulting company based in Castle Rock, Colo.
In the housing frenzy of 2000 to 2005, sellers often questioned the value of agents. The number of brokers ballooned, and the competition for listings led some agents to cut commissions.
But when the housing market soured beginning in 2006, agents couldn’t leave the profession fast enough, and it became much harder to sell homes. Agents say sellers have since grown more appreciative of what they do.
“Sellers are very happy to pay the full commissions, even though they’re getting less money for their homes,” said Claire Sheres of Coldwell Banker in south Palm Beach County, Fla.
“They’re not quibbling …” added Scott Agran, head of Boca Raton, Fla.-based Lang Realty. “They’re saying, ‘What can you do to sell my house for the highest price and in the quickest amount of time?’ “
Agents now have to spend more time and money marketing the properties, and their jobs aren’t limited to finding buyers and securing contracts, said Beverly Rothstein of the Christopher White Group in northwest Broward County.
Agents also have to help arrange financing and title insurance to keep the sales moving toward the closing table.
“No one really has given me any grief about commissions,” Rothstein said. “In this market, your best friend is your real estate agent.”
Robin Craig didn’t think she’d need an agent to sell her two-bedroom cottage in Fort Lauderdale’s Victoria Park. So in May she created a website and flyer and stuck a sign in her front yard.
But for Craig, a 43-year-old accountant, negotiating with prospective buyers’ real estate agents was challenging, and so was coordinating the many showings. Three weeks later, with the house still unsold and a deadline looming for her to move to a new job in Atlanta, Craig hired Tim Singer of Coldwell Banker.
She said she’ll happily pay the … commission on the $529,000 listing.
“I underestimated the amount of time that was involved,” she said. “And he’s got market data and experience that I don’t have.”
Agents say they typically avoid showing homes that owners are selling themselves. Some of the sellers are hostile toward agents and have no intention of paying a commission to the buyer’s broker, Singer said.
Jon Holbrook, president of Delray Beach, Fla.-based BuyOwner.com, said he encourages his clients to work with buyers’ agents and come to terms on some sort of compensation, should a sale result.
Still, with dwindling home equity an issue in South Florida and across the country, sellers would be wise to try selling their homes on their own, Holbrook said. Those who don’t end up losing much of their profit to commissions. “It’s painful,” he said.
Many homeowners who bought during the housing boom are “underwater,” owing more than the properties are worth.
Nearly half the homes with mortgages in Broward County – more than 205,000 properties – are underwater, according to a second quarter report Tuesday from CoreLogic, a California research firm. In Palm Beach County, 42 percent of the homes with mortgages, or more than 137,000 properties, are worth less that what’s owed.
Some of these homeowners will pay the real estate commissions out of their own pockets. But many are falling into foreclosure or completing short sales, in which they unload the properties for less than they owe, with the bank’s blessing. In those transactions, the sellers don’t have to worry about the commissions, which are paid by the lenders.
Banks tend to hold down commissions on short sales and foreclosures to minimize their losses, but some agents say lenders are paying the full (amount) so that the agents will actively market the homes.
“These homes aren’t selling by themselves,” said Douglas Rill, a longtime broker at Century 21 America’s Choice in West Palm Beach.
Source: the Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune News Service.
Wednesday, September 21, 2011
Google+ Opens to the Public
Expected to be Facebook’s chief rival, Google+ is now open to the public. The new social networking site had a limited release in June, allowing users to sign up only via invitation-only.
Even with its exclusivity, Google Inc.’s social network had a big start with more than 25 million unique visitors per month. (Facebook has more than 750 million active monthly users.)
Now that Google is open to the public, it will make its social network available up to its more than 1 billion monthly visitors who use its search engine and other services.
Some of the most notable perks with Google+, according to tech experts: You can search for information on numerous topics (including real estate) and then see relevant Google+ users and their posts on that topic as well as relevant content on the Web. The social network also is putting a heavy emphasis on video, such as its video “hangout” feature, which allows up to 10 people to video chat simultaneously or even make it open to the public. You can also use Google+ to share comments, articles, photos and videos with “circles” of friends or contacts or share it publicly--allowing you more control over who sees your posts. (Facebook recently made a similar upgrade to its site.)
Source: “Google+ Social Network Opened to Public,” The Wall Street Journal (Sept. 20, 2011)
Even with its exclusivity, Google Inc.’s social network had a big start with more than 25 million unique visitors per month. (Facebook has more than 750 million active monthly users.)
Now that Google is open to the public, it will make its social network available up to its more than 1 billion monthly visitors who use its search engine and other services.
Some of the most notable perks with Google+, according to tech experts: You can search for information on numerous topics (including real estate) and then see relevant Google+ users and their posts on that topic as well as relevant content on the Web. The social network also is putting a heavy emphasis on video, such as its video “hangout” feature, which allows up to 10 people to video chat simultaneously or even make it open to the public. You can also use Google+ to share comments, articles, photos and videos with “circles” of friends or contacts or share it publicly--allowing you more control over who sees your posts. (Facebook recently made a similar upgrade to its site.)
Source: “Google+ Social Network Opened to Public,” The Wall Street Journal (Sept. 20, 2011)
2 Important Factors in Judging Neighborhoods
With home prices falling, buyers are looking for a neighborhood that has a greater likelihood of holding its value over the long term. But how do you know what neighborhood is doomed and which will appreciate over time?
A recent article at Bankrate.com says judging a neighborhood’s worth over the long haul comes down to two main factors: Jobs and access to amenities.
For example, Andrew Schiller, creator of NeighborhoodScout.com, says signs of long-term opportunities for jobs in an area would be low unemployment, high household income, large or prominent colleges and universities, and seats of federal or state government. He says the Bureau of Labor Statistics is a good resource, particularly its Local Area Unemployment Statistics map, which provides unemployment information by metro area and county, as well as its Current Employment Statistics, which tells you how many people are employed in different sectors of the economy in a certain area.
As for judging a neighborhood's amenities that can generate long-term value, Schiller cites characteristics like a neighborhood that offers a variety of nearby retail stores, low crime rates, parks, distinctive architecture, and good public schools.
Source: “How a Neighborhood Holds Property Value,” Bankrate.com (September 2011)
A recent article at Bankrate.com says judging a neighborhood’s worth over the long haul comes down to two main factors: Jobs and access to amenities.
For example, Andrew Schiller, creator of NeighborhoodScout.com, says signs of long-term opportunities for jobs in an area would be low unemployment, high household income, large or prominent colleges and universities, and seats of federal or state government. He says the Bureau of Labor Statistics is a good resource, particularly its Local Area Unemployment Statistics map, which provides unemployment information by metro area and county, as well as its Current Employment Statistics, which tells you how many people are employed in different sectors of the economy in a certain area.
As for judging a neighborhood's amenities that can generate long-term value, Schiller cites characteristics like a neighborhood that offers a variety of nearby retail stores, low crime rates, parks, distinctive architecture, and good public schools.
Source: “How a Neighborhood Holds Property Value,” Bankrate.com (September 2011)
Citizens’ rates still going up despite OIR ruling
Rates will continue to rise for home and business owners in Florida covered by policies from the state-backed Citizens Property Insurance Corp., but not as quickly as the company had hoped.
The Office of Insurance Regulation signed off late Monday night on a statewide average of 6.2 percent for standard coverage and a hike of 32.9 percent for sinkhole policies, although Citizens’ customers in some parts of the state could pay far more for sinkhole protection. It’s far from what Citizens initially sought.
The new rates on homeowners and dwelling fire policies take effect on Jan. 1 for new and renewal multi-peril business, and Feb. 1 for new and renewal wind-only business.
Insurance Commissioner Kevin McCarty said Tuesday that a Citizens policyowner of a $180,000 home in the hard-hit region encompassing Pasco and Hernando counties in west-central Florida will be looking at a premium increase of approximately $440. That’s a far cry from the company’s initial request to OIR that would have resulted in the cost of sinkhole coverage skyrocketing by thousands of dollars.
But McCarty said Tuesday that the states largest property insurer with some 1.4 million policies didn’t have the actuarial data to support that request.
“What they did in their original filings we considered had a lot of anomalies,” McCarty said. “They tried to achieve that by changing the curve and that’s simply not acceptable.”
Gov. Rick Scott said Tuesday he had not seen McCarty’s final order on Citizens rates, but that it’s important Citizens remains financially viable.
“We’ve got to make sure rates are as fair as we can for consumers, but they want to have a product they can rely on, a company they can rely on,” Scott said. “God forbid if we have a hurricane – that it can pay the claims.”
McCarty, however, was sympathetic with Citizens’ plight.
Citizens received about $32 million in premiums for sinkhole coverage in 2010 compared to losses and loss-related expenses estimated to total $245 million.
“We see that in the sinkhole area that Citizens is really the market of only resort, not just the market of last resort,” McCarty said.
The Legislature passed an omnibus bill (SB 408) in May that they hoped would drive down costs for private insurers and stabilize the states fragile property insurance market. It eliminated a 10 percent statutory cap on sinkhole rates and also enacted fundamental changes to reduce sinkhole losses and would have also allowed Citizens to raise rates to whatever level it believed necessary to offset losses.
McCarty said regulators didn’t believe Citizens adjusted for the cost savings that were provided for by the new legislation.
Source: The Associated Press, Brent Kallestad.
The Office of Insurance Regulation signed off late Monday night on a statewide average of 6.2 percent for standard coverage and a hike of 32.9 percent for sinkhole policies, although Citizens’ customers in some parts of the state could pay far more for sinkhole protection. It’s far from what Citizens initially sought.
The new rates on homeowners and dwelling fire policies take effect on Jan. 1 for new and renewal multi-peril business, and Feb. 1 for new and renewal wind-only business.
Insurance Commissioner Kevin McCarty said Tuesday that a Citizens policyowner of a $180,000 home in the hard-hit region encompassing Pasco and Hernando counties in west-central Florida will be looking at a premium increase of approximately $440. That’s a far cry from the company’s initial request to OIR that would have resulted in the cost of sinkhole coverage skyrocketing by thousands of dollars.
But McCarty said Tuesday that the states largest property insurer with some 1.4 million policies didn’t have the actuarial data to support that request.
“What they did in their original filings we considered had a lot of anomalies,” McCarty said. “They tried to achieve that by changing the curve and that’s simply not acceptable.”
Gov. Rick Scott said Tuesday he had not seen McCarty’s final order on Citizens rates, but that it’s important Citizens remains financially viable.
“We’ve got to make sure rates are as fair as we can for consumers, but they want to have a product they can rely on, a company they can rely on,” Scott said. “God forbid if we have a hurricane – that it can pay the claims.”
McCarty, however, was sympathetic with Citizens’ plight.
Citizens received about $32 million in premiums for sinkhole coverage in 2010 compared to losses and loss-related expenses estimated to total $245 million.
“We see that in the sinkhole area that Citizens is really the market of only resort, not just the market of last resort,” McCarty said.
The Legislature passed an omnibus bill (SB 408) in May that they hoped would drive down costs for private insurers and stabilize the states fragile property insurance market. It eliminated a 10 percent statutory cap on sinkhole rates and also enacted fundamental changes to reduce sinkhole losses and would have also allowed Citizens to raise rates to whatever level it believed necessary to offset losses.
McCarty said regulators didn’t believe Citizens adjusted for the cost savings that were provided for by the new legislation.
Source: The Associated Press, Brent Kallestad.
Fla.’s home, condo sales and median prices higher in August
Sales activity and median prices for Florida’s existing home and existing condo markets rose in August, according to the latest housing data released by Florida Realtors®. Existing home sales increased 15 percent last month with a total of 16,206 homes sold statewide compared to 14,131 homes sold in August 2010, according to Florida Realtors. The statewide median sales price for existing homes last month was $137,500, up 2 percent from the year-ago figure of $134,900. August’s statewide existing home median price was also slightly higher than it was in July.
“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is another positive sign that the housing recovery is gaining strength.”
According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2011 was $168,400, down 5.4 percent from a year ago, according to NAR. In California, the August statewide median resales price was $297,060; in Maryland, it was $241,564.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.
In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase. According to NAR, the national median existing condo sales price was $167,500 in August 2011.
NAR’s latest industry outlook notes that despite high affordability conditions, sales activity is underperforming, partially as a result of overly restrictive lending standards.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR Chief Economist Lawrence Yun. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in August, down from the 4.43 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is another positive sign that the housing recovery is gaining strength.”
According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2011 was $168,400, down 5.4 percent from a year ago, according to NAR. In California, the August statewide median resales price was $297,060; in Maryland, it was $241,564.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.
In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase. According to NAR, the national median existing condo sales price was $167,500 in August 2011.
NAR’s latest industry outlook notes that despite high affordability conditions, sales activity is underperforming, partially as a result of overly restrictive lending standards.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR Chief Economist Lawrence Yun. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in August, down from the 4.43 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Tuesday, September 20, 2011
Fannie, Freddie May Hike Fees in 2012
In overhauling Fannie Mae and Freddie Mac, the government may require more private mortgage insurance from borrowers and charge lenders higher fees to guarantee loans--moves that could increase borrowing costs, Edward DeMarco, acting director of the Federal Housing Finance Agency, said this week at a mortgage conference in Raleigh, N.C.
Such steps are aimed at making the mortgage market more competitive and trim costs to the federal government by $28 billion over 10 years.
The government-sponsored enterprises buy loans from lenders and package them into securities that are then sold to investors. The GSEs charge a “guarantee fee” when they buy mortgages, a fee likely to be raised in 2012.
The increase could lead to a modest increase to mortgage borrowers. “Increasing the guarantee fees by 0.1 percentage point, as the White House proposed, would raise the monthly cost of a $220,000 mortgage by about $15,” The Wall Street Journal article notes.
Fannie and Freddie may also require borrowers to hold more private mortgage insurance to lessen the risks on taxpayers. The federal government took over the GSEs in 2008.
Any changes would be made “gradually” to avoid harming the already fragile housing market, DeMarco said.
Source: “Fannie, Freddie to Raise Fees,” The Wall Street Journal (Sept. 19, 2011) and “Mortgage Finance Head: Shift Risk From Treasury,” Associated Press (Sept. 19. 2011)
Such steps are aimed at making the mortgage market more competitive and trim costs to the federal government by $28 billion over 10 years.
The government-sponsored enterprises buy loans from lenders and package them into securities that are then sold to investors. The GSEs charge a “guarantee fee” when they buy mortgages, a fee likely to be raised in 2012.
The increase could lead to a modest increase to mortgage borrowers. “Increasing the guarantee fees by 0.1 percentage point, as the White House proposed, would raise the monthly cost of a $220,000 mortgage by about $15,” The Wall Street Journal article notes.
Fannie and Freddie may also require borrowers to hold more private mortgage insurance to lessen the risks on taxpayers. The federal government took over the GSEs in 2008.
Any changes would be made “gradually” to avoid harming the already fragile housing market, DeMarco said.
Source: “Fannie, Freddie to Raise Fees,” The Wall Street Journal (Sept. 19, 2011) and “Mortgage Finance Head: Shift Risk From Treasury,” Associated Press (Sept. 19. 2011)
McCarty dramatically cuts Citizens rate request
Florida Insurance Commissioner Kevin McCarty dramatically reduced the amount that the state-backed Citizens Property Insurance Corp. can charge home and business owners for sinkhole coverage late Monday.
McCarty ruled Citizens failed to provide evidence to support its bid to raise rates an average of more than 440 percent on sinkhole coverage. He instead set the maximum at 32.8 percent.
“Although more credible data and study is required, these established rates will start Citizens on the path of having a sound rate for their sinkhole risk,” McCarty said.
The effective dates for the new rates on homeowners’ and dwelling fire policies are January 1, 2012, for new and renewal multi-peril business, and Feb. 1, 2012, for new and renewal wind-only business.
Existing Citizens customers will see a rate increase on average of 6.2 percent on standard homeowner policies under McCarty’s ruling.
“While this rate hike approval is much less terrible than the original plan, it still hurts,” consumer advocate Sean Shaw said. “There is no reason to believe that it won’t be much worse next year.”
The board that oversees Citizens held an emergency conference call last week and voted to cap rate hikes for sinkhole coverage at 50 percent in 2012 and then phase in future hikes over the next several years.
The new chairman of the Citizens board, Carlos Lacasa, said the decision to phase in the rate hikes was an effort to highlight the severity of the sinkhole claims crisis while allowing time for provisions of a new state law to moderate future rate need.
The Legislature passed a broad property insurance bill (SB 408) earlier this year that they said would help drive down costs for private insurers and stabilize the state’s fragile market. That measure eliminated a 10 percent statutory cap on sinkhole rates and also enacted fundamental changes to reduce sinkhole losses. The new law would have also allowed Citizens to raise rates to whatever level it believed necessary to offset losses. The company has more than 1.4 million policyholders across the state.
“The Office’s decision is intended to reflect the Legislature’s intention to give Citizens actuarially supportable rates for the sinkhole portion of the premium,” McCarty said.
Citizens received about $32 million in premiums for sinkhole coverage in 2010 compared to losses and loss-related expenses estimated to total $245 million.
Source: The Associated Press, Brent Kallestad. All rights reserved.
McCarty ruled Citizens failed to provide evidence to support its bid to raise rates an average of more than 440 percent on sinkhole coverage. He instead set the maximum at 32.8 percent.
“Although more credible data and study is required, these established rates will start Citizens on the path of having a sound rate for their sinkhole risk,” McCarty said.
The effective dates for the new rates on homeowners’ and dwelling fire policies are January 1, 2012, for new and renewal multi-peril business, and Feb. 1, 2012, for new and renewal wind-only business.
Existing Citizens customers will see a rate increase on average of 6.2 percent on standard homeowner policies under McCarty’s ruling.
“While this rate hike approval is much less terrible than the original plan, it still hurts,” consumer advocate Sean Shaw said. “There is no reason to believe that it won’t be much worse next year.”
The board that oversees Citizens held an emergency conference call last week and voted to cap rate hikes for sinkhole coverage at 50 percent in 2012 and then phase in future hikes over the next several years.
The new chairman of the Citizens board, Carlos Lacasa, said the decision to phase in the rate hikes was an effort to highlight the severity of the sinkhole claims crisis while allowing time for provisions of a new state law to moderate future rate need.
The Legislature passed a broad property insurance bill (SB 408) earlier this year that they said would help drive down costs for private insurers and stabilize the state’s fragile market. That measure eliminated a 10 percent statutory cap on sinkhole rates and also enacted fundamental changes to reduce sinkhole losses. The new law would have also allowed Citizens to raise rates to whatever level it believed necessary to offset losses. The company has more than 1.4 million policyholders across the state.
“The Office’s decision is intended to reflect the Legislature’s intention to give Citizens actuarially supportable rates for the sinkhole portion of the premium,” McCarty said.
Citizens received about $32 million in premiums for sinkhole coverage in 2010 compared to losses and loss-related expenses estimated to total $245 million.
Source: The Associated Press, Brent Kallestad. All rights reserved.
U.S. mortgage finance head: Shift risk from Treasury
Government-controlled mortgage buyers Fannie Mae and Freddie Mac may reduce taxpayer risk by requiring more mortgage insurance from borrowers and charging lenders higher fees, steps that could increase borrowing costs, the head of their government caretaker agency said Monday.
Reshaping the mortgage giants three years after the federal government took them over requires spreading lending risks, Federal Housing Finance Agency (FHFA) acting director Edward DeMarco said Monday at a mortgage conference in Raleigh.
The changes that could lead to higher costs for borrowers would be pursued gradually over time to avoid shocking the weak housing market, DeMarco said. But with Washington still unable to restructure Fannie and Freddie, the FHFA needed to act under its own statutory authority to ensure Fannie and Freddie continued to keep money flowing into financing home purchases, DeMarco said.
“We all knew that reforming the housing finance system was going to be difficult, but I think the general expectation was that more progress would have been made by now,” DeMarco said.
Reducing the risk to taxpayers may mean private interests taking on more risk, perhaps by requiring more private mortgage insurance from borrowers and higher fees from lenders to guarantee loans, DeMarco said.
The federal government took control of the two massive mortgage buyers in 2008 to prevent their collapse as the housing market deteriorated. Bush administration officials said the action was needed to protect taxpayers and continue the availability of mortgages.
Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and sell them to investors around the world. The mortgage giants charge lenders a guarantee fee that covers projected credit losses from borrower defaults over the life of the loans. Fannie and Freddie will likely begin increasing those fees starting next year, DeMarco said.
President Barack Obama’s deficit reduction package released Monday includes a proposal for Fannie and Freddie to increase guarantee fees by one-tenth of one percent for new mortgages, adding less than $15 a month to a typical $220,000 home loan. The administration said the increase would save the budget $28 billion over 10 years.
Changes in loan guarantee fees could vary based on the risk of loans and the borrower’s location, with higher fees in states where it is more expensive and time-consuming for banks to foreclose on property, he said.
“These are steps we can take, and we think that we’re charged with taking that are supportive in that direction,” DeMarco said in an interview with reporters after his talk. “Consumers will ultimately measure this by the price and availability of mortgage credit, and in a more macro sense … whether there’s a sense of stability or confidence in housing markets.”
Talk of raising borrowing costs while home sales are slow is part of the dichotomy of expectations the housing finance agencies are facing, said Michael Lea, who directs real estate studies at the San Diego State University business school and is a former chief economist at Freddie Mac. The FHFA can’t afford to raise costs to borrowers now, but removing taxpayer support has to come eventually, he said.
“It’s a tough situation because they get pressure from both sides on that,” Lea said.
The FHFA’s most pressing tasks include creating a framework allowing more borrowers who are underwater on their mortgages to refinance at rates now at levels not seen in decades. Few people are qualifying to refinance a home because they don’t have the equity needed to refinance.
FHFA is considering expanding its Home Affordable Refinance Program to allow some borrowers whose mortgages are held by Fannie and Freddie to refinance into lower-rate loans even if they owe greater than 125 percent more than their home is worth, DeMarco said
The second key current priority is figuring out how Fannie and Freddie can resell thousands of government-owned foreclosures to improve returns to taxpayers and help boost falling home prices. A federal “request for information” seeking ideas closed last week resulted in nearly 4,000 proposals, many tailored to local economic conditions around the country. One of the ideas FHFA is considering is allowing previous homeowners to rent out the homes or for current renters to lease to own.
Source: The Associated Press, Emery P. Dalesio, AP business writer. All rights reserved.
Reshaping the mortgage giants three years after the federal government took them over requires spreading lending risks, Federal Housing Finance Agency (FHFA) acting director Edward DeMarco said Monday at a mortgage conference in Raleigh.
The changes that could lead to higher costs for borrowers would be pursued gradually over time to avoid shocking the weak housing market, DeMarco said. But with Washington still unable to restructure Fannie and Freddie, the FHFA needed to act under its own statutory authority to ensure Fannie and Freddie continued to keep money flowing into financing home purchases, DeMarco said.
“We all knew that reforming the housing finance system was going to be difficult, but I think the general expectation was that more progress would have been made by now,” DeMarco said.
Reducing the risk to taxpayers may mean private interests taking on more risk, perhaps by requiring more private mortgage insurance from borrowers and higher fees from lenders to guarantee loans, DeMarco said.
The federal government took control of the two massive mortgage buyers in 2008 to prevent their collapse as the housing market deteriorated. Bush administration officials said the action was needed to protect taxpayers and continue the availability of mortgages.
Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and sell them to investors around the world. The mortgage giants charge lenders a guarantee fee that covers projected credit losses from borrower defaults over the life of the loans. Fannie and Freddie will likely begin increasing those fees starting next year, DeMarco said.
President Barack Obama’s deficit reduction package released Monday includes a proposal for Fannie and Freddie to increase guarantee fees by one-tenth of one percent for new mortgages, adding less than $15 a month to a typical $220,000 home loan. The administration said the increase would save the budget $28 billion over 10 years.
Changes in loan guarantee fees could vary based on the risk of loans and the borrower’s location, with higher fees in states where it is more expensive and time-consuming for banks to foreclose on property, he said.
“These are steps we can take, and we think that we’re charged with taking that are supportive in that direction,” DeMarco said in an interview with reporters after his talk. “Consumers will ultimately measure this by the price and availability of mortgage credit, and in a more macro sense … whether there’s a sense of stability or confidence in housing markets.”
Talk of raising borrowing costs while home sales are slow is part of the dichotomy of expectations the housing finance agencies are facing, said Michael Lea, who directs real estate studies at the San Diego State University business school and is a former chief economist at Freddie Mac. The FHFA can’t afford to raise costs to borrowers now, but removing taxpayer support has to come eventually, he said.
“It’s a tough situation because they get pressure from both sides on that,” Lea said.
The FHFA’s most pressing tasks include creating a framework allowing more borrowers who are underwater on their mortgages to refinance at rates now at levels not seen in decades. Few people are qualifying to refinance a home because they don’t have the equity needed to refinance.
FHFA is considering expanding its Home Affordable Refinance Program to allow some borrowers whose mortgages are held by Fannie and Freddie to refinance into lower-rate loans even if they owe greater than 125 percent more than their home is worth, DeMarco said
The second key current priority is figuring out how Fannie and Freddie can resell thousands of government-owned foreclosures to improve returns to taxpayers and help boost falling home prices. A federal “request for information” seeking ideas closed last week resulted in nearly 4,000 proposals, many tailored to local economic conditions around the country. One of the ideas FHFA is considering is allowing previous homeowners to rent out the homes or for current renters to lease to own.
Source: The Associated Press, Emery P. Dalesio, AP business writer. All rights reserved.
August home building fell 5%, slide continues
Builders broke ground on fewer homes in August, a reminder that the housing market remains depressed.
The Commerce Department said Tuesday that builders began work on a seasonally adjusted 571,000 homes last month, a 5 percent decline from July. That’s less than half the 1.2 million that economists say is consistent with healthy housing markets.
Single-family homes, which represent roughly two-thirds of home construction, fell 1.4 percent. Apartment building plunged 12.4 percent. Building permits, a gauge of future construction, rose 3.2 percent.
Hurricane Irene also slowed construction in the Northeast.
Overall, homebuilding fell to its lowest levels in 50 years in 2009, when builders began work on just 554,000 homes. Last year was not much better.
While home construction represents a small portion of the housing market, it has an outsize impact on the economy. Each home built creates an average of three jobs for a year and about $90,000 in taxes, according to the National Association of Home Builders.
After previous recessions, housing accounted for at least 15 percent of economic growth in the United States. Since the recession officially ended in June 2009, it has contributed just 4 percent.
Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales, when lenders allow borrowers to sell homes for less than what is owed on their mortgages. And few homes are selling.
New-home sales fell in July to a seasonally adjusted annual rate of 298,000, the weakest pace in five months. This year is shaping up to be the worst for sales on records dating back a half-century.
Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their homes. Still, the surge in apartments has not been enough to offset the loss of single-family homebuilding.
Another reason sales have fallen is that previously occupied homes are a better deal than new homes. The median price of a new home is nearly 28 percent higher than the median price for a resale. That’s almost twice the markup in a healthy housing market.
The trade group said Monday that its survey of industry sentiment fell slightly to 14 in September. The index has been below 20 for all but one month during the past two years. Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.
Source: The Associated Press, Derek Kravitz, AP real estate writer.
The Commerce Department said Tuesday that builders began work on a seasonally adjusted 571,000 homes last month, a 5 percent decline from July. That’s less than half the 1.2 million that economists say is consistent with healthy housing markets.
Single-family homes, which represent roughly two-thirds of home construction, fell 1.4 percent. Apartment building plunged 12.4 percent. Building permits, a gauge of future construction, rose 3.2 percent.
Hurricane Irene also slowed construction in the Northeast.
Overall, homebuilding fell to its lowest levels in 50 years in 2009, when builders began work on just 554,000 homes. Last year was not much better.
While home construction represents a small portion of the housing market, it has an outsize impact on the economy. Each home built creates an average of three jobs for a year and about $90,000 in taxes, according to the National Association of Home Builders.
After previous recessions, housing accounted for at least 15 percent of economic growth in the United States. Since the recession officially ended in June 2009, it has contributed just 4 percent.
Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales, when lenders allow borrowers to sell homes for less than what is owed on their mortgages. And few homes are selling.
New-home sales fell in July to a seasonally adjusted annual rate of 298,000, the weakest pace in five months. This year is shaping up to be the worst for sales on records dating back a half-century.
Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their homes. Still, the surge in apartments has not been enough to offset the loss of single-family homebuilding.
Another reason sales have fallen is that previously occupied homes are a better deal than new homes. The median price of a new home is nearly 28 percent higher than the median price for a resale. That’s almost twice the markup in a healthy housing market.
The trade group said Monday that its survey of industry sentiment fell slightly to 14 in September. The index has been below 20 for all but one month during the past two years. Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.
Source: The Associated Press, Derek Kravitz, AP real estate writer.
Monday, September 19, 2011
House Fails to Vote on Extending Loan Limits
Conforming loan limits on government-backed mortgages at Fannie Mae and Freddie Mac are set to expire on Oct. 1, because attempts to extend them haven't gain traction in Congress.
In 2008, Congress raised the limits up to $729,750 in some areas to make larger mortgages available in high-priced housing markets. The limits will drop to $625,500 on Oct. 1 in the many areas of the country, mostly affecting housing markets on West and East Coasts.
The Conforming Loan Limits Extension Act introduced in July by Reps. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) would allow GSEs and the Federal Housing Administration to purchase or guarantee mortgages worth as much as $729,750 in most areas. (Additionally, Reps. Brad Sherman (D-Calif.) and Gary Miller (R-Calif.) introduced a bill in May to make the loan limits permanent.)
Another bill, the Homeownership Affordability Act of 2011, introduced in August by Senators Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) would keep the higher limits in place by increasing the guarantee fees charged on loans between $625,500 and $729,500. (Guarantee fees are charged by loan guarantors prior to bundling mortgages into securities.)
None of the bills in the House and Senate to extend the loan limits have been voted upon. The Conforming Loan Limits Extension Act, one of the House’s plans to extend the limits, failed to make it into a short-term spending bill, which will be voted on soon.
"We are focusing all of our effort and attention on making sure that a temporary extension of the current conforming loan limits is included in an omnibus spending bill that it appears the House and Senate will consider late this year," said a spokesman for Rep. John Campbell, R-Calif., who introduced the bill in the House.
The National Association of Home Builders has said it fears more than 17 million homes nationwide will become ineligible for more affordable federal funding if the loan limit expires. Federal Reserve Chairman Ben Bernanke has said he’s confident that the private market, including investors and insurers, would step up to fill the void when the conforming loan limits expired — although likely at a higher cost to borrowers.
"We expect to see significant negative consequences for the struggling housing market as a result of the limit drop after Oct. 1," Campbell's office said. "Therefore, it will be even more pressing and pertinent that Congress acts quickly to reverse the limit reduction at the next opportunity."
Source: “Extension of Conforming Loan Limits Fail in House,” HousingWire (Sept. 16, 2011)
In 2008, Congress raised the limits up to $729,750 in some areas to make larger mortgages available in high-priced housing markets. The limits will drop to $625,500 on Oct. 1 in the many areas of the country, mostly affecting housing markets on West and East Coasts.
The Conforming Loan Limits Extension Act introduced in July by Reps. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) would allow GSEs and the Federal Housing Administration to purchase or guarantee mortgages worth as much as $729,750 in most areas. (Additionally, Reps. Brad Sherman (D-Calif.) and Gary Miller (R-Calif.) introduced a bill in May to make the loan limits permanent.)
Another bill, the Homeownership Affordability Act of 2011, introduced in August by Senators Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) would keep the higher limits in place by increasing the guarantee fees charged on loans between $625,500 and $729,500. (Guarantee fees are charged by loan guarantors prior to bundling mortgages into securities.)
None of the bills in the House and Senate to extend the loan limits have been voted upon. The Conforming Loan Limits Extension Act, one of the House’s plans to extend the limits, failed to make it into a short-term spending bill, which will be voted on soon.
"We are focusing all of our effort and attention on making sure that a temporary extension of the current conforming loan limits is included in an omnibus spending bill that it appears the House and Senate will consider late this year," said a spokesman for Rep. John Campbell, R-Calif., who introduced the bill in the House.
The National Association of Home Builders has said it fears more than 17 million homes nationwide will become ineligible for more affordable federal funding if the loan limit expires. Federal Reserve Chairman Ben Bernanke has said he’s confident that the private market, including investors and insurers, would step up to fill the void when the conforming loan limits expired — although likely at a higher cost to borrowers.
"We expect to see significant negative consequences for the struggling housing market as a result of the limit drop after Oct. 1," Campbell's office said. "Therefore, it will be even more pressing and pertinent that Congress acts quickly to reverse the limit reduction at the next opportunity."
Source: “Extension of Conforming Loan Limits Fail in House,” HousingWire (Sept. 16, 2011)
2011 tax credits available for ‘green’ updates
Adding green technology to a home can help homeowners save money in the long run, but some may not be able to afford the upfront investment. Several tax credits effective this year, however, can help homeowners – and buyers – save on green updates.
Here are two main tax credits available for those interested in making energy efficient improvements to their homes:
1. Wind, solar, geothermal and fuel cell tax credit: This tax credit is available for existing homes and new construction. Homeowners can receive a credit up to 30 percent off the cost of their improvements between Jan. 1 and Dec. 31 this year. The following green updates qualify: Geothermal heat pumps, solar panels, solar water heaters, small wind energy systems, and fuel cells.
2. Qualified energy efficiency improvements: This credit gives a 10 percent tax credit for purchases “placed in service” between Jan. 1 and Dec. 31, 2011. The maximum credit for a taxpayer for all taxable years is $500, and no more than $200 of such credit may be attributable to expenditures on windows. This rule means that taxpayers who have claimed $500 or more of this tax credit in prior years, particularly 2009 and 2010, can no longer participate in the program.
Learn more about what upgrades are eligible as well as how to apply on the National Association of Home Builders’ website.
Source: INFORMATION, INC.
Here are two main tax credits available for those interested in making energy efficient improvements to their homes:
1. Wind, solar, geothermal and fuel cell tax credit: This tax credit is available for existing homes and new construction. Homeowners can receive a credit up to 30 percent off the cost of their improvements between Jan. 1 and Dec. 31 this year. The following green updates qualify: Geothermal heat pumps, solar panels, solar water heaters, small wind energy systems, and fuel cells.
2. Qualified energy efficiency improvements: This credit gives a 10 percent tax credit for purchases “placed in service” between Jan. 1 and Dec. 31, 2011. The maximum credit for a taxpayer for all taxable years is $500, and no more than $200 of such credit may be attributable to expenditures on windows. This rule means that taxpayers who have claimed $500 or more of this tax credit in prior years, particularly 2009 and 2010, can no longer participate in the program.
Learn more about what upgrades are eligible as well as how to apply on the National Association of Home Builders’ website.
Source: INFORMATION, INC.
Friday, September 16, 2011
Sellers Say Their Homes Are Worth More
Seventy-five percent of home owners say their homes are worth more than the recommended listing price, according to real estate professionals recently surveyed by HomeGain. On the other hand, 68 percent of home buyers say homes are overpriced.
However, home owners may be getting more realistic about falling home values. Forty-five percent of home owners say they expect home values to decrease within the next six months, while 47 percent of real estate professionals say they expect values to also decrease within that time period.
HomeGain surveyed more than 500 real estate professionals and 2,200 home owners for its third quarter home values survey.
Top 5 States Where Home Prices Will Rise in the Next 6 Months
Real estate professionals surveyed were most optimistic about these housing markets to see a rise in home values in the next six months:
Top 5 States Where Home Prices Will Fall in the Next 6 Months
Real estate professionals surveyed expected these housing markets to see a drop in home values in the next six months:
Source: “HomeGain Releases 3rd Quarter 2011 National Home Values Survey Results,” HomeGain (September 2011)
However, home owners may be getting more realistic about falling home values. Forty-five percent of home owners say they expect home values to decrease within the next six months, while 47 percent of real estate professionals say they expect values to also decrease within that time period.
HomeGain surveyed more than 500 real estate professionals and 2,200 home owners for its third quarter home values survey.
Top 5 States Where Home Prices Will Rise in the Next 6 Months
Real estate professionals surveyed were most optimistic about these housing markets to see a rise in home values in the next six months:
- Arizona
- Florida
- Texas
- California
- Ohio
Top 5 States Where Home Prices Will Fall in the Next 6 Months
Real estate professionals surveyed expected these housing markets to see a drop in home values in the next six months:
- New Jersey
- Pennsylvania
- North Carolina
- Georgia
- Virginia
Source: “HomeGain Releases 3rd Quarter 2011 National Home Values Survey Results,” HomeGain (September 2011)
Florida bouncing back, and recession not likely, report says
Florida’s improving economy should avoid recession, even as the recovery fights significant headwinds from a devastated real estate industry.
That’s the conclusion from the latest outlook for the Sunshine State by Wells Fargo, which sees South Florida and Tampa leading the rebound in hiring this year. Both markets have seen modest job growth in recent months, and payrolls are up about 1 percent in both regions during the last three months.
“Florida is slowly battling back from its worst recession in modern times,’’ the report reads. Wells Fargo expects economic growth to hit 2.2 percent next year in Florida, despite growing anxiety that the nation is heading for a second recession.
The Wells Fargo report credits a strong rebound in foreign tourism for Florida’s improving fortunes, with South Florida and Orlando enjoying outsized boosts from their popularity with travelers from Europe and Latin America.
Still, South Florida gets special mention in the report as a particularly troubled region. “South Florida’s recovery from the Great Recession has been painfully slow,” the report reads. Among the biggest problems Wells Fargo cites: nearly 40 percent of the region’s mortgages are either in foreclosure or at least 90 days overdue, compared to the national average of 11 percent.
Source: The Miami Herald, Douglas Hanks. Distributed by MCT Information Services
That’s the conclusion from the latest outlook for the Sunshine State by Wells Fargo, which sees South Florida and Tampa leading the rebound in hiring this year. Both markets have seen modest job growth in recent months, and payrolls are up about 1 percent in both regions during the last three months.
“Florida is slowly battling back from its worst recession in modern times,’’ the report reads. Wells Fargo expects economic growth to hit 2.2 percent next year in Florida, despite growing anxiety that the nation is heading for a second recession.
The Wells Fargo report credits a strong rebound in foreign tourism for Florida’s improving fortunes, with South Florida and Orlando enjoying outsized boosts from their popularity with travelers from Europe and Latin America.
Still, South Florida gets special mention in the report as a particularly troubled region. “South Florida’s recovery from the Great Recession has been painfully slow,” the report reads. Among the biggest problems Wells Fargo cites: nearly 40 percent of the region’s mortgages are either in foreclosure or at least 90 days overdue, compared to the national average of 11 percent.
Source: The Miami Herald, Douglas Hanks. Distributed by MCT Information Services
Rate on 30-year mortgage falls to record 4.09%
Fixed mortgage rates fell to the lowest level in six decades for the second straight week. But few Americans can take advantage of the historically low rates.
Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage fell to 4.09 percent this week, down from 4.12 percent. That’s the lowest rate seen since 1951.
The average rate on the 15-year mortgage, a popular refinancing option, fell to 3.30 percent from 3.33 percent. Economists say it is likely the lowest rate on the 15-year ever.
Mortgage rates tend to track the yield on the 10-year Treasury note. Worries over Europe’s debt crisis are pushing investors to shift money into safe Treasurys, forcing the yield lower.
Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. That compares with five years ago, when the average 30-year fixed rate was near 6.5 percent. A decade ago, it exceeded 8 percent.
Still, cheap mortgage rates haven’t helped home sales. Sales of new homes are on pace for the worst year on records dating back a half-century. The pace of re-sales is shaping up to be the worst in 14 years.
Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.
Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.
Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.
The average fees for the 30-year held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable rate loans were all at 0.6 point.
Once fees are factored in, the average rate on the 30-year loan rises from 4.09 percent to 4.25 percent, Freddie Mac said.
A drop in mortgage rates could provide some help to the economy if more people could refinance. The Obama administration is looking at expanding a government program to help more eligible homeowners refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.
Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1 percentage point to make it worthwhile.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent. That’s higher than last week’s 2.96 percent, the lowest records dating to January 2005 and the sixth straight week of record lows for this type of loan.
The average rate for the one-year adjustable-rate mortgage fell to 2.81 percent from 2.84 percent. That’s the lowest on records going back to 1984.
Source: The Associated Press, Derek Kravitz, AP economics writer. All rights reserved.
Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage fell to 4.09 percent this week, down from 4.12 percent. That’s the lowest rate seen since 1951.
The average rate on the 15-year mortgage, a popular refinancing option, fell to 3.30 percent from 3.33 percent. Economists say it is likely the lowest rate on the 15-year ever.
Mortgage rates tend to track the yield on the 10-year Treasury note. Worries over Europe’s debt crisis are pushing investors to shift money into safe Treasurys, forcing the yield lower.
Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. That compares with five years ago, when the average 30-year fixed rate was near 6.5 percent. A decade ago, it exceeded 8 percent.
Still, cheap mortgage rates haven’t helped home sales. Sales of new homes are on pace for the worst year on records dating back a half-century. The pace of re-sales is shaping up to be the worst in 14 years.
Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.
Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.
Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.
The average fees for the 30-year held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable rate loans were all at 0.6 point.
Once fees are factored in, the average rate on the 30-year loan rises from 4.09 percent to 4.25 percent, Freddie Mac said.
A drop in mortgage rates could provide some help to the economy if more people could refinance. The Obama administration is looking at expanding a government program to help more eligible homeowners refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.
Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1 percentage point to make it worthwhile.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent. That’s higher than last week’s 2.96 percent, the lowest records dating to January 2005 and the sixth straight week of record lows for this type of loan.
The average rate for the one-year adjustable-rate mortgage fell to 2.81 percent from 2.84 percent. That’s the lowest on records going back to 1984.
Source: The Associated Press, Derek Kravitz, AP economics writer. All rights reserved.
Thursday, September 15, 2011
NAR: Increased Lending, Short Sales Will Reduce REOs
Improving access to affordable mortgage financing for qualified home buyers and investors and committing additional resources to loan modifications and short sales will help reduce current and future inventories of real estate owned (REO) properties held by government agencies, according to the National Association of REALTORS®.
In a letter sent today to the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency, and the U.S. Department of the Treasury, NAR responded to the agencies’ recent request for input and offered its recommendations for selling REO properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration.
In its letter, NAR urged the agencies to create an advisory board as they explore new options for selling foreclosed properties to ensure that efficiently disposing of agency REO properties will minimize taxpayer losses and reduce the negative effects that distressed properties have on local real estate markets.
“As the leading advocate for housing issues, REALTORS®know that foreclosures affect families, communities, the housing market and our nation’s economy,” said NAR President Ron Phipps. “We believe the government has an opportunity to minimize the impact of distressed properties on local markets by expanding financing opportunities, bolstering loan modifications and short sales efforts, and enhancing the efficient disposition of REO properties. This will help stabilize home prices and neighborhoods and help support the broader economic recovery.”
Phipps said that the lack of available and affordable mortgage financing is hurting REO sales and the entire housing market, and urged increased consumer and investor lending. While NAR supports strong underwriting standards, the lack of private capital in the mortgage market, unduly tight underwriting standards, and increasing fees have discouraged many potential home buyers from applying for mortgages. NAR believes ensuring mortgage availability for qualified home buyers and investors will help absorb the excess REO inventory.
To prevent further REO inventory increases, NAR also recommended that the agencies take more aggressive steps to modify loans and, when a family is absolutely unable keep their home, to quickly approve reasonable short sale offers that allow families to avoid foreclosure. Phipps said that while federal programs have been put into place to help keep families in their homes, many of these have fallen short of expectations, and advocated that those resources be applied toward modifying loans and expediting short sales, which are typically less costly than foreclosure.
“Loan modifications keep families in their home and reduce defaults, while short sales keep homes occupied, helping stabilize neighborhoods and home values,” Phipps said. “Expanding resources and ensuring the use of already allocated funds for pre-foreclosure efforts is the best opportunity to reduce taxpayer costs and creates more positive outcomes for homeowners and their communities.”
NAR’s letter also outlined concerns about proposals to pool large volumes of REO properties for bulk sales. While these types of transactions may help quickly alleviate high REO inventories, taxpayers would be required to accept larger losses than are necessary. Phipps said that efforts should be made to incentivize individual versus bulk sales, except in small geographic areas that meet certain criteria, since selling in bulk to large national investors puts a large section of the housing market into the hands of fewer market participants and puts individual home buyers and sellers at a disadvantage.
He also said the success of any bulk sale programs should be determined by the stabilizing effect the program has on a locale and whether it maximizes value to taxpayers. Maximizing the recovery on the agencies’ assets will depend on how property valuations are determined and that those valuations are accurate, appropriate, and reflective of market conditions, such as the valuations available through the Realtors Property Resource™, an NAR subsidiary.
NAR is also concerned about proposals that include lease-to-own elements. Phipps said that agency policies should first be focused on keeping families in their homes through loan modifications or short sales if that’s a better option, and that the agencies should not expedite foreclosures so that those properties could be included in a lease-to-own program. He added that any lease-to-own programs should not be administered by the government, but instead should include the participation of local investors or nonprofits that can manage the specialized needs and challenges of the local market.
“REALTORS® welcome the agencies’ desire to receive input and ideas to help address their REO inventory. We look forward to serving on any advisory board and working together with agency staff, real estate professionals, property managers, and others with extensive real estate industry experience to develop sound strategies and solutions to ongoing REO issues,” said Phipps.
Source: NAR
In a letter sent today to the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency, and the U.S. Department of the Treasury, NAR responded to the agencies’ recent request for input and offered its recommendations for selling REO properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration.
In its letter, NAR urged the agencies to create an advisory board as they explore new options for selling foreclosed properties to ensure that efficiently disposing of agency REO properties will minimize taxpayer losses and reduce the negative effects that distressed properties have on local real estate markets.
“As the leading advocate for housing issues, REALTORS®know that foreclosures affect families, communities, the housing market and our nation’s economy,” said NAR President Ron Phipps. “We believe the government has an opportunity to minimize the impact of distressed properties on local markets by expanding financing opportunities, bolstering loan modifications and short sales efforts, and enhancing the efficient disposition of REO properties. This will help stabilize home prices and neighborhoods and help support the broader economic recovery.”
Phipps said that the lack of available and affordable mortgage financing is hurting REO sales and the entire housing market, and urged increased consumer and investor lending. While NAR supports strong underwriting standards, the lack of private capital in the mortgage market, unduly tight underwriting standards, and increasing fees have discouraged many potential home buyers from applying for mortgages. NAR believes ensuring mortgage availability for qualified home buyers and investors will help absorb the excess REO inventory.
To prevent further REO inventory increases, NAR also recommended that the agencies take more aggressive steps to modify loans and, when a family is absolutely unable keep their home, to quickly approve reasonable short sale offers that allow families to avoid foreclosure. Phipps said that while federal programs have been put into place to help keep families in their homes, many of these have fallen short of expectations, and advocated that those resources be applied toward modifying loans and expediting short sales, which are typically less costly than foreclosure.
“Loan modifications keep families in their home and reduce defaults, while short sales keep homes occupied, helping stabilize neighborhoods and home values,” Phipps said. “Expanding resources and ensuring the use of already allocated funds for pre-foreclosure efforts is the best opportunity to reduce taxpayer costs and creates more positive outcomes for homeowners and their communities.”
NAR’s letter also outlined concerns about proposals to pool large volumes of REO properties for bulk sales. While these types of transactions may help quickly alleviate high REO inventories, taxpayers would be required to accept larger losses than are necessary. Phipps said that efforts should be made to incentivize individual versus bulk sales, except in small geographic areas that meet certain criteria, since selling in bulk to large national investors puts a large section of the housing market into the hands of fewer market participants and puts individual home buyers and sellers at a disadvantage.
He also said the success of any bulk sale programs should be determined by the stabilizing effect the program has on a locale and whether it maximizes value to taxpayers. Maximizing the recovery on the agencies’ assets will depend on how property valuations are determined and that those valuations are accurate, appropriate, and reflective of market conditions, such as the valuations available through the Realtors Property Resource™, an NAR subsidiary.
NAR is also concerned about proposals that include lease-to-own elements. Phipps said that agency policies should first be focused on keeping families in their homes through loan modifications or short sales if that’s a better option, and that the agencies should not expedite foreclosures so that those properties could be included in a lease-to-own program. He added that any lease-to-own programs should not be administered by the government, but instead should include the participation of local investors or nonprofits that can manage the specialized needs and challenges of the local market.
“REALTORS® welcome the agencies’ desire to receive input and ideas to help address their REO inventory. We look forward to serving on any advisory board and working together with agency staff, real estate professionals, property managers, and others with extensive real estate industry experience to develop sound strategies and solutions to ongoing REO issues,” said Phipps.
Source: NAR
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