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Home Prices May Not Rebound in Our Lifetime

Posted on May 3, 2012 in arizona, california, florida, housing news with no comments

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Last Tuesday home valuation expert, Robert Shiller sounded a decidedly more pessimistic note than in previous weeks.  Earlier in the spring he sounded slightly more upbeat that we may have seen the trough on home valuations.  This past week, however, he told a Reuter’s reporter that a poor labor market, high gas prices and general consumer pessimism were overwhelming all of the positive things going on in the housing market.  Low interest rates and home values cannot overcome the negatives in the economy that may prevent any significant home value increases for the foreseeable future.

The February Case-Shiller report posted another decline in both the 10- and 20-city composites at an annual rate of 3.6% and 3.5% respectively. Both composites fell by .8% over the month.  It was the sixth straight month of decline.

While the annual rate of decline is smaller on average than in the past several years, Shiller claimed that the report was a “very mixed bag.” Nine of the twenty cities continued to show declining or flat prices. Shiller particularly sounded pessimistic for recovery in suburban communities where high gas prices continue to hold down growth.  Home buyers now want to live in “walkable” cities where work and all the conveniences are within walking distance or are available with a public transit commute.

As of February average home prices across the 20-city composite list was at late 2002 levels while the 10-city composite prices compared with those in early 2003.

Only Phoenix, Miami and San Diego saw monthly price increases.  Phoenix’s values appear to be turning around with a 1.2% jump in one month and 3.3% improvement over the year.  On the other hand, Atlanta posted a 2.5% drop in value in February and a 17.3% decline year-over-year.

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Cleveland Fed’s Forefront Report Cautious About Recovery

Posted on May 1, 2012 in economy, ohio with no comments

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The latest quarterly Cleveland Federal Reserve Bank Forefront report signals a caution sign to those who would be optimistic about the country’s economic recovery.

The report specifically highlights the weakened economic picture of several public entities and forecasts the dampening effect that default among some of the nation’s cities and other public entities will have on the economy as a whole.

On the positive side, the Cleveland Fed projects that pension funds commonly thought to be in trouble are actually healthier than originally thought.  While the default of major funds is not impossible, Cleveland concludes that it is unlikely.

Weakening public finances, however, does cast a cautionary note for the economy and leaves considerable uncertainty on economic recovery.

Other topics covered in the report include bank capital requirements, tax system tradeoffs, cash futures, conversion rates for home vacancies to rentals, and conversion rates for community colleges as a “bridge to business.”

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Which Lenders/Servicers Process Short Sales the Fastest?

Posted on May 1, 2012 in foreclosures, housing news, investor tips, short sales with no comments

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RealtyTrac reports that Fannie Mae, Freddie Mac and FHA loans lead the pack for the fastest Short Sale approval timeline.  As of January 2012 the timeline for getting Short Sales accomplished was 193 days for the GSEs. In January 2011 that timeline extended to 248 days on average.

In second place for Short Sale approval speed was Ally with an average of 321 days from the time the property went into default until the Short Sale was completed.  Ally’s timeline decreased from 393 days the previous year.

Here were the results for several other lenders/servicers:  PNC Financial Group (353 days), Wells Fargo (385 days), Bank of New York Mellon (402 days), Bank of America (403 days) and Sun Trust (404 days).

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Home Values Up in 53 Markets According to RE/MAX

Posted on May 1, 2012 in arizona, florida, georgia, housing news, missouri with no comments

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The RE/MAX National Housing Report for March 2012 has identified a strong surge in home values in most of the 53 markets it surveys. Median prices were up in these markets for March 2012 5.8% above values a year ago. This was the second month where values have been above those twelve months ago.

Home sales were also up 25.4% higher than in February and 1.5% higher than February 2012. This was the 9th month that the MLS data pulled from 53 markets reached higher than the same month the year before.

RE/MAX officials believe the spring and summer of 2012 will be the strongest selling seasons in years because inventory levels will be lower inducing more competition into the mix to force prices up.

The median sales price in the RE/MAX survey was $184,525, a 7.3% increase over prices in February sales and 5.8% above March 2011 sales. Of the 53 markets surveyed price increases occurred in 36 of them year-over-year and 10 markets saw double-digit increases. The top markets for price increases on an annual basis were: Detroit, MI (+22.8%), Miami, FL (up 21.8%), St. Louis, MO (18.5% increase), Phoenix, AZ (18.2% gain), Atlanta, GA (up 13.7%) and Orlando, FL (12.7% price jump).

The RE/MAX survey shows encouraging signs of housing market recovery and is generally more positive than the numbers presented in the NAR monthly index, perhaps because the RE/MAX survey is a subset of the total market.

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Zack Childress Replay

Posted on April 27, 2012 in investor tips with no comments

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For those of you who couldn’t make it onto last night’s business automation webinar with Zack Childress, here is a replay!  I can’t leave it up for long because of the discounted price, so hurry up and watch it!

Viewing this content requires Silverlight. You can download Silverlight from http://www.silverlight.net/getstarted/silverlight3.


Click Here to Order

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Home Sales Fall 2.6% in March

Posted on April 25, 2012 in housing news with no comments

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The March Existing Home Sales report of the National Association of Realtors® shows that existing home sales fell 2.6% on the month.  The seasonally adjusted sales for March were 4.48 million compared to 4.60 in February.  It would appear that the good winter weather across much of the country siphoned sales that might have started in the spring.

The good news is that sales are 5.2% above March 2011 levels when sales were 4.26 million units.  Listed inventory declined month over month by 1.3% which is a 6.3 month supply.  Supply issues are particularly becoming a problem in parts of California and in Florida.

The March average home sale price was $163,800 which was up 2.5% from March 2011. Distressed homes represented 29% of March sales of which 18% were foreclosures and 11% were short sales.  In February distressed sales were 34% and in March 2011 they were 40%.

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Fannie and Freddie Set Tighter Timelines for Short Sales

Posted on April 25, 2012 in Fannie Mae, freddie mac, short sales with no comments

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Fannie Mae and Freddie Mac have joined Bank of America in tightening timelines for lender response to homeowners on Short Sale approvals.

They will require all lenders and servicers to make the go- or no-go decision on a Short Sale within 30 to 60 days.  Now a lender can take up to 90 days to respond as long as they give weekly updates to homeowners and their agents.  Last year Fannie and Freddie did a combined 125,000 Short Sales; it will be interesting to see if that number jumps substantially in 2012.

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Will 2012 be the Year of the Short Sale?

Posted on April 25, 2012 in arizona, california, colorado, florida, foreclosures, georgia, indiana, kentucky, massachusetts, michigan, missouri, new jersey, new york, short sales, south carolina, utah, wisconsin with no comments

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The statistics are beginning to indicate that 2012 will be a bumper crop year for Short Sales.  RealtyTrac reports that in January pre-foreclosure sales increased by 33% compared to a year ago.  Even foreclosures are not keeping up the same pace as Short Sales.  Twelve states saw more Short Sales in January than foreclosure sales: Arizona, California, Colorado, Florida, Indiana, New Jersey, New York and Utah.

The states with the biggest annual increase in Short Sales were:  Georgia (113% increase), Michigan (up 90%), Wisconsin (77% higher), South Carolina (up 76%) and Utah (70% gain).

On average Short Sales closed with a 21% discount.  States with the highest discounts were Massachusetts (40.86%), Missouri (35.5%), California (29.93%), Indiana (29.82%), and Georgia (29.31%). The top five MSAs for Short Sale discounts were: Kansas City, MO (56.53%), Louisville/Jefferson County, KY (44.25%), Milwaukee-Waukesha-West Allis, WI (43.64%), Boston-Cambridge-Quincy, MA (41.57%), and Indianapolis-Carmel, IN (37.26%). As of the first quarter 2012 it takes on average 306 days from the time a property goes into the foreclosure process until it is sold as a Short Sale.

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Housing May be in Chronic Down Cycle Like Japan

Posted on April 25, 2012 in housing news with no comments

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A paper prepared for the Atlanta Fed Conference, A Birds Eye View of OECD Housing Markets by Christophe Andre compares 27 world housing markets over time and notes some similarities between the price-to-income and rent-to-income ratios for the United States compared to other economies.

In the U.S. the divergence between home affordability and rental affordability is very apparent.  It is generally cheaper to buy than to rent in the U.S., even though both became more affordable since the housing price decline began in 2006.  Prices and rents are still in decline relative to income according to Andre’s chart.  In looking at the rent and own affordability in Japan it shows that both have been in decline since the 1990s.  The problems of price decline have become endemic.

Andre speculates that the same kind of systemic decline may be in play in the U.S. especially since the housing market and the normal business cycle have become decoupled as a result of the unusually long price upsurge in the early 2000s.  Historically, the housing and economic cycles have followed the same pattern over an average 6 year cycle.  When the housing boom lasted 12 years it broke the relationship and conceivably may not get in synch again.  That means that just because the economy begins to pick up does not mean that the housing market will follow suit.  People may decide to continue being renters, or may be forced to because of tight credit.

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HAMP Working on 63% of Eligible Second Mortgages

Posted on April 18, 2012 in HAMP, housing news with no comments

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A new Treasury Department report indicates that through February the HAMP program had started loan modifications for 63% of all eligible second mortgages. Servicers started 71,133 second-lien modifications of the 113,774 eligible loans. More than 15,600 of them have been fully forgiven.

Of the $29.9 billion allocated for HAMP, roughly $2.7 billion is set aside for modifying second liens, according to the Special Inspector General for the Troubled Asset Relief Program.  In January, the Treasury boosted incentives to investors who allow the workouts, doubling the pay from earlier in the program.

In order for a loan to be eligible for the second-lien program under HAMP, the servicer must determine that a permanent first lien modification has been approved.  According to the Treasury Dept. about 315,000 HAMP first-lien loan modifications have been matched to a second, but many are deemed ineligible because of a redefault on the first lien, an extinguishment before it entered HAMP.

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