Daily Archives: April 26, 2012

U.S. home values rise the most in six years: Zillow | North Salem NY Real Estate

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U.S. home values edged up 0.5% from February to March, making it the largest monthly increase in six years, real estate data firm Zillow ($33.45 0%) said in its latest home value index.

The data arrived the same week as Standard & Poor’s/Case-Shiller national indices report.

The S&P Case-Shiller note, which measures real estate data further out, said home values in nine metro areas reached record lows. S&P reported that its 10-city composite index experienced an annual home-price decline of 3.6% in February, while the 20-city composite index declined 3.5% from a year earlier.  

Zillow, which evaluates home prices in 30 markets using its value index, reported that nineteen markets have either reached a bottom in home prices or are expected to hit bottom by year’s end. 

Optimism is spreading over markets like Phoenix and Miami-Ft. Lauderdale, with Zillow estimating home price increases of 6.5% and 5.6%, respectively, in the two cities over the next year or so.

Nationally, home prices are expected to remain flat over the next 12 months, with values reaching a bottom in late 2012 and falling approximately 0.4% from the first quarter of 2012 to the first period of 2013, Zillow said.  

Metro areas like Chicago and Atlanta, on the other hand, are expected to see home price declines in the 3.8-to-4.1% range over the next 12 months.

“For people who have been waiting to time their home purchase close to market bottom, it’s time to start shopping,” said Zillow chief economist Dr. Stan Humphries. “When the bottom will hit will vary by market, and it’s nearly impossible to time a purchase exactly right. But home prices are not the only part of the equation. Buyers also should take into account the possibility that rising mortgage rates could offset any further home value declines that may occur.”

via housingwire.com

MA, NY attorneys general launch foreclosure prevention programs | Mt Kisco NY Real Estate

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Two high-profile attorneys general revealed how they will use part of their respective state’s portion of the $25 billion national mortgage servicing settlement.

On Wednesday, Massachusetts Attorney General Martha Coakley launched an initiative intended to prevent unnecessary foreclosures. Titled HomeCorps, the program increases the amount of loan modification specialists available to distressed borrowers and provides grant opportunities to ease the foreclosure crisis in the state.

Coakley is using the $44.5 million paid to Massachusetts as part of the national settlement with the five largest mortgage servicers. As part of the settlement, signed earlier this month by a federal judge, the banks are ordered to provide $14.6 million in cash payments to Bay State borrowers and $257 million worth of mortgage relief across the Commonwealth.

The first part of HomeCorps dedicates about $16 million to providing loan modification, representation and recovery assistance to distressed borrowers in Massachusetts facing foreclosure. Applications for grant programs in connection with the initiative were launched earlier in April. The second part of the program provides up to $10 million for crisis response and housing restoration.

Also on Wednesday, about 200 miles west, New York Attorney General Eric Schneiderman awarded $3 million in foreclosure prevention services to aid New Yorkers struggling through the foreclosure crisis.

Two million dollars will be funded by a $4 million agreement with Steven J. Baum and Pillar Processing as part of a settlement with New York State related to abuses in their foreclosure-related legal work.

The Baum firm was the largest foreclosure firm in New York state until it ceased most of its operations in late 2011 in the wake of the robo-signing scandal. Between 2007 and 2010, the Baum firm filed more than 100,000 foreclosure proceedings and represented many of the largest servicers of residential mortgage loans, according to the AG’s office.

Another $1 million of the $3 million allocation will be funded by unspent dollars from a settlement between the Attorney General’s Office and Ameriquest Mortgage. That investigation found that Ameriquest engaged in predatory and illegal lending practices to sell and refinance mortgages.

This comes weeks after Schneiderman designated $15 million of the $132 million his state secured from the national mortgage servicing settlement to extend funding for foreclosure prevention. Up to $9 million of that will support the state’s Foreclosure Prevention Services Program, which was set to expire April 1, and $6 million will support housing and community renewal activities statewide through not-for-profit community-based housing organizations.

An average of one in 10 mortgages is at risk of foreclosure in New York, Schneiderman noted. The Empire Justice Center projects that if foreclosures of currently distressed properties continue unabated, they will cost local governments in the state more than $5 billion.

In Massachusetts, more than five million people across the nation lost their homes to foreclosure during this economic crisis, including more than 45,000 people in Massachusetts, and thousands more are on the brink of foreclosure. According to the Warren Group, in February alone there were 1,394 foreclosure starts in Massachusetts, more than double the amount in February 2011.

“Our office worked hard to ensure the best possible outcome for Massachusetts borrowers from this national settlement,” Coakley said. “These new programs will now allow us to further assist distressed borrowers and stabilize communities deeply impacted by the foreclosure crisis.”

via housingwire.com

U.S. homeownership hits record low: Gallup | South Salem NY Real Estate

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The 62% of Americans who say they own their own home marks a new low since Gallup began tracking self-reported homeownership in 2001.

It’s down from 68% in 2011.

But those surveyed also said they thought it was a good time to buy and that they thought prices would rise this year.

While the recession and financial crisis took place in 2008-2009, homeownership rates didn’t begin to reflect the bursting of the housing bubble until 2010, when 65% of Americans reported owning their own home — the lowest level recorded before this year.

Fifty-three percent of Americans believe their house is worth more today than when they bought it, down significantly from 80% in 2008 and 92% in 2006.

Still, 70% of Americans surveyed said it’s a good time to buy a house.

Americans are also much more positive about the direction of housing prices this year than they were last year.

Thirty-three percent expect houses in their neighborhood to rise in price. Last year, only 28% expected prices to rise.

Results were based on telephone interviews conducted April 9-12 with a random sample of 1,016 adults in all 50 states.

via housingwire.com

Rentals at College Towns | Cross River NY Real Estate

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Many colleges and universities are already reporting record high applications and enrollments at their campuses. Unless a school is purposely trying to downsize (going for quality rather than quantity) the simple statistics of an ever-increasing number of people high school age (15-to-19 years old) assures a steady, rising stream of potential college students in the near future. The conversion rate from high school to college enrollment is no doubt rising, not because of better scholastic achievements but because of social pressure to attend college and from easier access to student loans and grants.

That means buying a rental property in college towns or in college areas of a large city may provide a good return on investment for those who are patient. The past demography data of the number of people in the 15-to-19 years old age group suggest an investment in college student rentals from about 1985 onward was likely to be difficult because of far fewer people in that age group. But investment from about 1995 onward should have provided good rental income.

Regarding the future, there may be a slight stalling in occupancy rate for the next 3 to 5 years. But after that, expect a huge growth in college enrollment. Students will pay the rent because of easy access to student loan programs. How the student loan is repaid after graduation is a separate question, particularly given that tuition has risen by over 600 percent in the past 30-years. Let’s hope student loans do not go the way of subprime mortgages (easy access but eventual default). These graduates are the future first-time homebuyers.

via economistsoutlook.blogs.realtor.org

Government Home Price Data Shows National Growth | Bedford Hills NY Homes

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NAR Research’s Home Price Monitor Series reviews national home prices by examining several widely cited national measurements. It is released monthly and allows REALTORS® to gain insight into the recent performance of national prices, factors affecting that performance, and the likely direction of prices in the months ahead. The Home Price Monitor includes the same data covered in the national media that clients will expect their REALTORS® to know and be able to comment on and provides different, more complete coverage of the information all in one place. Today’s blog post focuses on the recent release of the FHFA Price Index.

  • For the first time since 2007, home prices measured by the government price index put out by FHFA that uses Fannie and Freddie loan data on home purchases increased in the year from February 2011 to February 2012.
  • Monthly data from the same source showed that prices were up 0.3 percent nationally from January to February.
  • Regionally, year over year prices showed growth in the Mountain, West South Central, East South Central, New England, and South Atlantic divisions. Small declines – less than 1 percent – were seen in other divisions. (For states by region, see the full FHFA report here.)
  • One other notable observation, the FHFA house price index does NOT exclude distressed properties from evaluation. Other research has shown that distressed properties typically sell at a discount, and data series that attempt to exclude distressed sales tend to show better price performance.
  • Get more information on other house price measures from NAR’s House Price Monitor here .
via economistsoutlook.blogs.realtor.org

Mortgage Purchase Applications, Durable Goods | Bedford NY Real Estate

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In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses mortgage purchase applications and durable goods orders.

  • There was a slight gain in the number of people submitting mortgage applications to buy a home in the latest week’s data.  This data, from the Mortgage Bankers Association, however, does not have any information about approval rates and misses out completely on home purchases made with all-cash.  This data has also not correlated well with home sales in the past year.
  • The number of applications for refinances declined in the past week.  But refinance activity year-to-date has been much better so far compared to the same period last year.  Mortgage bankers who have been making a living solely off refinances should prepare for some increase in refinance through the summer months this year because of various government programs to help out underwater homeowners, but they should also prepare for a near-collapse in refinance business in 2013 as long-term mortgage rates will surely rise.  Only the increases in mortgage originations for home purchases will be a source of income next year.
  • Separately, durable goods orders recovered in March after a brief lull in the prior month.  From a year ago, the heavy long-lasting manufacturing product orders are up by 9 percent.  That is a solid gain.  Due to huge cash holdings by companies that are bound to be released to the market and the housing market recovery, a possibility of a fresh economic recession in 2012 or 2013 is virtually zero.
  • The GDP forecast for the first quarter is raised a bit to 2.8 percent growth.  The second quarter GDP will likely be 2.5 percent.

via economistsoutlook.blogs.realtor.org

International Transactions Continue at Two Percent of Market | Pound Ridge NY Homes

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Sales of U.S. residential real estate to foreigners not residing in the U.S. continue to be in the 2 percent range, http://www.realtor.org/research/research/reps.  Other NAR surveys have indicated that an additional 2 to 3 percent of residential sales are made to international customers residing in the U.S.  Additional information on international activities is available at http://www.realtor.org/research/research/reportsintl.

via economistsoutlook.blogs.realtor.org