Tag Archives: Cross River Luxury Homes

‘Zombie’ foreclosures decline across the country | Cross River Real Estate

As the foreclosure crisis recedes, some unwanted consequences continue to haunt neighborhoods around the country.

“Zombie” foreclosures — those properties that are currently in the foreclosure process but vacant — fell again in the third quarter, according to Attom Data Solutions. Zombies made up 4.7% of all foreclosures, down 9% from a year ago.

Among the top ten states for zombies, there have been some big declines: zombies are down 28% in Florida, 26% in California, and 14% in Illinois compared to a year ago. But they’re up 6% in New York and 3% in Massachusetts.

Still, as the housing market stays hot, lenders seem to be moving more quickly to take possession of properties where homeowners are having trouble. The number of vacant bank-owned properties jumped 67% in the third quarter compared to a year ago, to 46,604, Attom said.

The states with the biggest number of properties in foreclosure are also the states with the most zombies. They are mostly states that require foreclosures to go through a court process, including New York, New Jersey, Florida, Illinois, and Indiana.

Judicial foreclosures can be a blessing, because they provide protections to homeowners, and a curse, because they take so long to complete. The lengthy and complicated process increases the likelihood that a foreclosure will become a zombie — but the hot housing market increases incentives for struggling homeowners to fight to hold on to their properties.


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San Francisco’s housing bubble is collapsing | Cross River Real Estate

house, San Francisco, California Flickr / Håkan Dahlström

Here’s the other side of central-bank engineered asset price inflation, or “healing the housing market,” as it’s called in a more politically correct manner:

San Francisco Unified school district, which employs about 3,300 teachers, has been hobbled by a teacher shortage. Despite intense efforts this year – including a signing bonus – to bring in 619 new teachers to fill the gaps left behind by those who’d retired or resigned, the district is short 38 teachers as of Monday, when the school year started. Others school districts in the Bay Area have similar problems.

For teachers, the math doesn’t work out. Average teacher pay for the 2014-15 school year was $65,000. And less after taxes. But the median annual rent was $42,000 for something close to a one-bedroom apartment. After taxes and utilities, there’s hardly any money left for anything else.

A teacher who has lived in the same rent-controlled apartment for umpteen years may still be OK. But teachers who need to find a place, such as new teachers or those who’ve been subject of a no-fault eviction, are having trouble finding anything they can afford in the city. So they pack up and leave in the middle of the school year, leaving classes without teachers. It has gotten so bad that the Board of Supervisors decided in April to ban no-fault evictions of teachers during the school year.

Yet renting, as expensive as it is in San Francisco, is the cheaper option. Teachers trying to buy a home in San Francisco are in even more trouble at current prices. And it’s not just teachers!

This aspect of Ben Bernanke’s and now Janet Yellen’s asset price inflation – and consumer price inflation for those who have to pay for housing – is what everyone here calls “The Housing Crisis.”

As if to drive home the point, so to speak, the California Association of Realtors just released itsHousing Affordability Index (HAI) for the second quarter. It is based on the median house price (only houses, not condos), prevailing mortgage interest rate, household income, and a 20% down payment.

urban houses san franciscoShutterstock

In San Francisco, the median house price – half sell for more, half sell for less – is $1.37 million. According to Paragon Real Estate, if condos were included, the median price would drop to $1.2 million.

The median household income in San Francisco is $84,160, including households with more than one earner. So a household of two teachers with $130,000 in household income is doing pretty well, comparatively speaking.

The monthly mortgage payment for the median house in San Francisco, after a 20% down payment and at the prevailing rock-bottom mortgage rates, is $6,740 per month, or $80,900 per year!

So what kind of minimum qualifying household income would be required for the mortgage of a median house, plus taxes and insurance? For the US on average, $47,200 per year. In San Francisco, $269,600 per year. It would require a household of four teacher salaries!

Only the top-earning 13% of households in San Francisco can afford to buy that median house!

Other Bay Area counties have similar out-of-whack affordability rates: In San Mateo County (part of Silicon Valley), only 14% can buy that median home; in Marin County (north of the Golden Gate) 18%; Santa Clara Country (where San Jose is) 19%; Alameda County (where Oakland is) 20%. And so on.

And this despite the historically low mortgage rates. If prevailing mortgage rates rose to 6%, practically no one could afford to buy.

Then there’s the issue of down payment that the CAR so elegantly glosses over: the 20% down payment of for that median house in San Francisco is $275,000!

House in San FranciscoJustin Sullivan/Getty Images

How are people going to save $275,000 after taxes while living and renting in a city that is as pocket-cleaning expensive as San Francisco? Saving $275,000 on a median household income of $84,160 while paying $42,000 a year in rent, plus taxes, utilities, food, transportation, clothes, parking tickets…..

Saving anything is going to be tough. But even if that household, using herculean discipline, can save 5% of its income a year (so $4,200 a year), it would take 65 years to save that down payment. Oh well. There goes the dream.

These are a scary numbers for the housing market! If only 13% can buy that median home – when in a healthier housing market, over 50% should be able to buy a median home – who the heck is going to buy the rest of the homes?

This puts a stranglehold on demand. To sustain these crazy home prices, San Francisco needs to bring in an endless flow of highly paid people, including absentee foreign investors, to replace the teachers and other middle-class households, the artists and shop keepers and office workers, and to push out city employees, nurses, and the like. That’s how the process has worked.

But that endless influx of highly paid people and investors is grinding to a halt. Some companies are still hiring, but others are laying off, and highly paid workers are just switching jobs rather than pouring into the city in large numbers. That’s a sea change for this housing market.

It comes at a time when a historic building boom is throwing thousands of high-end condos and apartments on the market every year, for years to come.


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US homeownership rate matches a 51-year low | Cross River Real Estate

The proportion of U.S. households that own homes has matched its lowest level in 51 years — evidence that rising property prices, high rents and stagnant pay have made it hard for many to buy.

Just 62.9 percent of households owned a home in the April-June quarter this year, a decrease from 63.4 percent 12 months ago, the Census Bureau said Thursday. The share of homeowners now equals the rate in 1965, when the census began tracking the data.

The trend appears most pronounced among millennial households, ages 18 to 34, many of whom are straining under the weight of rising apartment rents and heavy student debt. Their homeownership rate fell 0.7 percentage point over the past year to 34.1 percent. That decline may reflect, in part, more young adults leaving their parents’ homes for rental apartments.

The overall decline appears to be due largely to the increased formation of rental households, said Ralph McLaughlin, chief economist at the real estate site Trulia. McLaughlin cautioned, though, that the decrease in homeownership from a year ago was not statistically significant.

America added nearly a million households over the past year and all of them were renters. Home ownership has declined even as the housing market has been recovering from the 2007 bust that triggered the Great Recession. Ownership peaked at 69.2 percent at the end of 2004.

Home prices have been steadily outpacing gains in average earnings. This has made it harder for first-time buyers to save for down payments, thereby delaying their ability to purchase a home.

The median home sales price was $247,700 in June, up 4.8 percent from a year ago, according to the National Association of Realtors. That increase is roughly double the pace of average hourly wage gains.

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US New Home Sales at 10-Month High | Cross River Real Estate

New Home Sales in the United States is expected to be 526.44 Thousand by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate New Home Sales in the United States to stand at 539.95 in 12 months time. In the long-term, the United States New Home Sales is projected to trend around 589.69 Thousand in 2020, according to our econometric models.

United States New Home Sales


Forecast Actual Q1/16 Q2/16 Q3/16 Q4/16 2020 Unit
New Home Sales 544 526 533 536 540 590 Thousand
United States New Home Sales Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States New Home Sales using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – United States New Home Sales – was last predicted on Wednesday, January 27, 2016.
United States Housing Last Q1/16 Q2/16 Q3/16 Q4/16 2020
Building Permits 1232 1245 1249 1254 1259 1310
Housing Starts 1149 1165 1173 1182 1192 1288
New Home Sales 544 526 533 536 540 590
Pending Home Sales 2.7 1.99 1.7 1.54 1.45 1.33
Existing Home Sales 5460 5546 5402 5396 5378 5115
Construction Spending -0.4 0.22 0.27 0.29 0.3 0.31
Housing Index 0.5 0.48 0.44 0.43 0.42 0.31
Nahb Housing Market Index 60 59.27 58.97 58.48 58.01 53.23
Mortgage Rate 4.02 4.6 4.9 5.1 4.19 6.5
Mortgage Applications 8.8 0.98 0.48 0.48 0.48 0.48
Home Ownership Rate 63.7 63.7 63.7 63.7 63.7 63.7
Case Shiller Home Price Index 183 183 182 181 180 160



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Homes in the Rental Housing Stock | Cross River Real Estate

While renting a home is often associated exclusively with apartment living, there are many types of homes in the rental housing stock. Renting a home, regardless of structure type, can provide a housing option for individuals and families who are on a budget, saving to purchase a home, or who expect to change locations in the near-term. And while builders have accelerated their pace of multifamily construction to meet rising rental demand, it is useful to understand the composition of the current rental housing stock.

Based on the Census Bureau’s 2013 American Housing Survey, the rental stock increased 1. 4 million from 2011 to 2013 to a total of 40 million residences. Contrary to popular expectations, most rental homes are smaller properties, single-family homes and multifamily buildings with 2 to 4 units.

Single-family detached homes made up the largest individual share of the rental housing stock, 29 percent of the entire rental market in 2013. Combining that portion of the market with the share of townhomes (single-family attached), all single-family residences accounted for 35 percent of the occupied rental stock.

The second largest share of rental stock was multifamily homes with 2 to 4 units (19 percent).


It is the case that rental housing tends to be located in urban areas. 85 percent of rental homes were located in metropolitan areas (MSAs), with 43 percent in central cities and 42 percent in suburbs. Multifamily dominated the housing rental market in both central cities and suburbs, largely due to the high land costs. Single-family rental homes were most popular in non-metropolitan areas.


The share of rental homes increased moderately almost across all structure types from 2011 to 2013, except for townhomes. The rental share of single-family homes, including both detached and townhomes, increased three percent from 2011 to 2013, compared to only a one percent increase in multifamily rental share. However, the increase for single-family rental inventory was not due to initially built-for-rent purposes, but came from formerly owner-occupied to rental homes.





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Mortgage Rates average 3.94% | Cross River Realtor

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates reversing course and nudging higher for the first time in four weeks.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.94 percent with an average 0.6 point for the week ending August 13, 2015, up from last week when it averaged 3.91 percent. A year ago at this time, the 30-year FRM averaged 4.12 percent.
  • 15-year FRM this week averaged 3.17 percent with an average 0.6 point, up from last week when it averaged 3.13 percent. A year ago at this time, the 15-year FRM averaged 3.24 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.93 percent this week with an average 0.5 point, down from last week when it averaged 2.95 percent. A year ago, the 5-year ARM averaged 2.97 percent.
  • 1-year Treasury-indexed ARM averaged 2.62 percent this week with an average 0.3 point, up from last week when it averaged 2.54 percent. At this time last year, the 1-year ARM averaged 2.36 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Attributed to Sean Becketti, chief economist, Freddie Mac.

“The jobs report for July showed that the economy added 215,000 jobs, in line with expectations. Wage growth remains modest at 2.1 percent compared to the same time last year, and another solid if not stellar employment report leaves a potential Fed rate hike on the table for September. However, this year’s theme of overseas economic turbulence continues with the focus shifting east to China. Over the past few days the Chinese Yuan has fallen sharply. In the midst of these mixed data mortgage rates inched up, increasing 3 basis points to 3.94 percent. Headed into the fall, we’ll likely see continued interest rate tension, with dollar appreciation weighing against possible Fed rate hikes leaving the rate outlook clouded.”

Homeownership rate drops to 48-year low | Cross River Real Estate

The homeownership rate in the United States in the second quarter declined to 63.4%, the lowest it has been since 1967, according to data from the Department of Commerce’s Census Bureau.

Further, the steady decline since 2009 continues.

Click to enlarge

(Source: Census Bureau)

On a quarterly basis, the rate was 1.3 percentage points (+/-0.4) lower than the second quarter 2014 rate (64.7%) and 0.4 percentage points (+/-0.4) lower than the rate last quarter (63.7%).

For the second quarter 2015, the homeownership rates were highest in the Midwest (68.4%) and lowest in the West (58.5%). The homeownership rates in the Northeast, Midwest, South and West were lower than the rates in the second quarter 2014.

Click to enlarge

(Source: Census Bureau)

National vacancy rates in the second quarter 2015 were 6.8% for rental housing and 1.8% for homeowner housing.

“The flipside of such strong rental demand is that the homeownership rate fell once again in the second quarter,” said Ed Stansfield, chief property economist at Capital Economics. “This suggests that homeownership has not kept pace with the cyclical rebound in household formation which is now underway, and gives weight to the idea that first-time buyers in particular are still struggling to gain a foothold in the market.

“However, foreclosure rates are declining steadily, employment and incomes are growing at a healthy pace and credit conditions are gradually loosening,” Stansfield said. “What’s more, there is no evidence of a fundamental shift in homeownership aspirations. Accordingly, we expect that the homeownership rate will soon find a floor.”


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Why Our Credit Scores Are Improving | Cross River Real Estate

As of March 2015, credit scores have never been higher! In fact, The Federal Reserve Bank of New York found that the average credit score was 699. It is even predicted that if present trends continue, the average credit score could cross the 700 threshold within coming months.
The increase in the average credit score can benefit consumers by increasing their flow of credit. This in turn encourages more people to apply for new credit. Additionally, with increasing scores, banks are more willing to lend to the consumer.
Before 2008, getting approved for a new line of credit or for a loan from a bank was relatively easy. However, after the banking crisis, this ‘easy credit’ that consumers were so used to changed drastically. Banks were no longer willing to give out loans unless borrowers had a stable income they could document and could afford the loan they were applying for. This forced consumers to reduce their bad debt by deleveraging and to start paying attention to how credit scores work.
Some articles suggest that increasing credit scores are due to time frames that have gone by since the banking crisis. A recent article in Forbes stated that since the crisis occurred in 2008 and negative information on credit comes off after 7 years, this is why credit scores will continue to rise. There may be a certain amount of individuals that have seen higher scores due to time passing from the crisis, but many began experiencing losses years after the crisis hit and continued to have damaged credit. Individuals lost employment as well as their homes over many years, so it is highly doubtful that scores are on the rise due to the time passing from the banking crisis and the time frames for negative information to remain on credit.
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Rotterdam to consider trialling plastic roads | Cross River Real Estate

Dutch city could be first to pave its streets with recycled plastic bottles, a surface claimed to be greener, quicker to lay and more reliable than asphalt

Plans unveiled for recycled plastic roads are being considered by Rotterdam city council.
Plans unveiled for recycled plastic roads are being considered by Rotterdam city council. 


The Netherlands could become the first country to pave its streetswith plastic bottles after Rotterdam city council said it was considering piloting a new type of road surface touted by its creators as a greener alternative to asphalt.

The construction firm VolkerWessels unveiled plans on Friday for a surface made entirely from recycled plastic, which it said required less maintenance than asphalt and could withstand greater extremes of temperature– between -40C and 80C. Roads could be laid in a matter of weeks rather than months and last about three times as long, it claimed.

The company said the environmental argument was also strong as asphalt is responsible for 1.6m tons of CO2 emissions a year globally – 2% of all road transport emissions.

Rolf Mars, the director of VolkerWessels’ roads subdivision, KWS Infra, said: “Plastic offers all kinds of advantages compared to current road construction, both in laying the roads and maintenance.”

The plastic roads are lighter, reducing the load on the ground, and hollow, making it easier to install cables and utility pipelines below the surface.

Sections can be prefabricated in a factory and transported to where they are needed, reducing on-site construction, while the shorter construction time and low maintenance will mean less congestion caused by roadworks. Lighter materials can also be transported more efficiently.

Mars said the PlasticRoad project was still at the conceptual stage, but the company hopes to be able to put down the first fully recycled thoroughfare within three years. Rotterdam, a keen supporter of sustainable technology, has already signalled its interest in running a trial.

Jaap Peters, from the city council’s engineering bureau, said: “We’re very positive towards the developments around PlasticRoad. Rotterdam is a city that is open to experiments and innovative adaptations in practice. We have a ‘street lab’ available where innovations like this can be tested.”



Employment Situation in June for Housing | Cross River Real Estate

Strong job gains in April and May were revised downward by 60 thousand and the unemployment rate fell 0.2 percentage points based on a reversal of the labor market expansion in May. Overall, the employment situation in June was decent, but the recovery from the weakness in March was less vibrant than originally estimated.

The Bureau of Labor Statistics (BLS) reported that payroll employment expanded by 223 thousand in June. This brings average monthly payroll gains to 208 thousand in the first half of 2015 compared to 239 thousand in the first half of 2014 and 260 thousand for all of 2014. The unemployment rate dropped to 5.3% in June from 5.5% in May despite a decline in employed persons in the household survey and based on a reduction in the labor force of 432 thousand. The labor force expanded by 397 thousand in May.

blog emp 2015_06


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