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State Farm to cut homeowners’ insurance rates in California | Katonah Homes
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Daily Archives: February 7, 2013
Housing Market Still Needs Fannie Mae, Says Chief Economist Doug Duncan | South Salem Homes
No matter what indicator you look at, the housing market is improving. New and existing home sales are rising. So are home prices. Even foreclosures are declining. In the latest housing data release, the National Association of Home Builders Wednesday reported that the housing recovery has spread to 70% of the 361 metro markets tracked by an NAHB/First American index compared to just 3% in September 2011.
Fannie Mae, the government-sponsored enterprise which buys and packages mortgages into securities for investors, says its own survey of consumers shows increasing optimism about the housing market, and the broader economy.
“We ask one question that nobody else asks,” Chief Economist Doug Duncan tells The Daily Ticker. “Is it a good time to sell a house [because] five out of six people who buy a house have to sell one first. That’s been a steady climb month over month.”
And the rebound in housing “will be the support” for the broader economy, says Duncan.
Some analysts like David Stockman worry that the housing is forming another bubble financed once again by extremely low interest rates maintained by the Federal Reserve. Duncan says that could be the case in some selected housing markets where prices are rising at a faster rate than the local economy is improving and building exceeds demand, but it’s not broad based. He expects home price appreciation will slow as a result of some overbuilding.
Fixed mortgage rates remain mostly unchanged: Freddie Mac | Katonah NY Real Estate
Fixed mortgage rates relaxed this week, showing rates either remaining unchanged or dropping slightly, Freddie Mac said in its Primary Mortgage Market Survey.
The 30-year, fixed rate was 3.53% for the week ending Feb. 7, the same as last week, but down from 3.87% a year before.
The 15-year, FRM dropped to 2.77%, down from 2.81% last week and down from 3.16% last year.
Meanwhile, the 5-year Treasury-indexed ARM averaged 2.63% this past week, down from 2.70% and down from 2.83% a year earlier.
Additionally, the 1-year Treasury-indexed ARM averaged 2.53% this week, down from 2.59% last week and down from 2.78% last year.
“Mortgage rates were either unchanged or lower this week following a mostly positive employment data report for January,” said Frank Nothaft, vice president and chief economist for Freddie Mac.
He added, “In January, the economy gained 157,000 new jobs and revisions to November and December added another 127,000 workers. On top of that, the annual benchmark update showed payrolls grew by an additional 424,000 jobs between April 2011 and March 2012. The only downside to the report was that the unemployment rate ticked up from 7.8% to 7.9% in January, which is still historically high.”
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Justice Sues S&P; Is It Time to Rethink the Role of Ratings Agencies? | Bedford Hills Real Estate
Most of the time, court cases are manna for journalists. The politicians and corporations we cover aren’t in the habit of dishing out information they don’t want the public to know. But along comes a lawsuit, and the parties are often forced to put a lot of juicy details on the public record. So when the Justice Department yesterday announced a joint federal and state lawsuit against the ratings agency Standard & Poor’s for defrauding investors in the run up to the financial crisis with its overly optimistic ratings of mortgage-related investments, I was excited to see what new dirt the complaint would unearth.
Much to my chagrin, however, the complaint is a fairly mundane read for the simple fact that we have known for years that the ratings agencies were hamstrung by a fundamental conflict of interest: They are paid by the sellers of securities rather than the buyers. So during the inflation of the real estate bubble in the early 2000s, as investment banks scrambled to package mortgages into complex financial instruments, ratings agencies also scrambled to figure out how to get those investment banks to chose them to rate their securities. What was S&P’s strategy to entice investment banks to pay it rather than its competitors? Rate their securities higher.
The complaint does put this dynamic into sharper relief, as it provides us with the details of conversations, emails, and instant message exchanges that show the evolution of S&P’s ratings philosophy from one focused primarily on accurate
Phoenix housing market rises from the ashes | Bedford NY Real Estate
By Megan Hopkins• February 7, 2013 • 11:23am
The Phoenix housing market has seen dramatic change over the past year after the sand state reached a low point in September 2011.
In November, DataQuick reported that Phoenix home sales reached the highest level in seven years, while the median price hit a four-year high.
From December 2011 to December 2012, the median single-family home sales price jumped almost 34% from $122,500 to $164,000, according to a report from the Arizona State University.
Click on the table below to see a full breakdown of the median sales price for home-types in the Phoenix market.
Parallel to price appreciation, the inventory of homes available for sale last month dropped 6% from January 2012. Distressed home supplies plummeted 42% during the same time period.
“2012 was all about low inventory, which has been driving up home prices,” explains Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business.
The number of foreclosures dropped a whopping 51% from December 2011 to December 2012, signaling the end of a housing crisis for the Phoenix-area market.
“Foreclosures and short sales have gone down, eliminating the sources of many cheap homes, so the more expensive types of transactions, like normal resales and new-home sales, went up,” added Orr.
As bargains become tougher for the average buyer to find, they turn to new-home construction, creating a stronger demand for developers.
“Developers are stocking up on vacant lots – having purchased almost 2,300 of them, plus several tracts of undeveloped land, in December alone. However, the number of permits to build on the lots hasn’t shot up, so it looks like developers are trying to remain flexible, deciding whether to build or hold the land for the future,” said Orr.
via housingwire.com
Actual homeownership becomes an illusory dream | Bedford Corners Real Estate
Homeownership is said to be at the core of the American Dream, but data posted on the Cato Institute’s website suggests the dream of owning one’s home outright has become an illusory dream for most Americans.
A blog post from Cato’s Mark Calabria claims fewer Americans actually own their homes outright today when compared to 1960 or even as far back as 1890. This data presented by Calabria suggests most Americans carry mortgages for their entire lives.
Calabria writes: “Currently, the percentage of homeowners that own without any mortgage is just under 30%. Prior to 1960, an actual majority of owners held their homes with no mortgage at all. For most of American history, the typical homeowner did not have any mortgage, not having to answer to a bank and also having some wealth to pass along to future generations.”
“The primary impact of U.S. homeownership policy has not been to increase homeownership, but to increase debt along with driving up housing prices.”
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Barbie lists ‘Malibu mansion’ on Trulia for $25 million | Chappaqua NY Real Estate
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The Case-Shiller Index : Flawed, Unreliable, And Soaring In November | Armonk NY Real Estate
Standard & Poor’s Case-Shiller Index reports that home values rose between October and November of last year, and between November 2011 to November 2012. In some cities, values rose by a lot.
The November 2012 Case-Shiller Index shows what today’s home buyers have already learned the hard way — that purchasing power has dropped as the housing market has recovered.
Click here to check today’s mortgage rates.
Case-Shiller Index : Phoenix, Detroit Lead Recovery
Standard & Poor’s recently released its November 2012 Case-Shiller Index. The index tracks home price changes from month-to-month, and year-to-year, in select cities nationwide including San Diego, California; Los Angeles, California; and Las Vegas, Nevada.
As compared to October 2012, home values rose in 10 of the 20 Case-Shiller Index-tracked markets, led by a 1.4% gain in San Francisco, California and in Phoenix, Arizona. Minneapolis, Minnesota also showed strong growth, rising 1.0 percent between October and November.
On an annual basis, the Case-Shiller Index showed broader U.S. gains. Nineteen of the 20 tracked markets improved in the twelve months ending November 2012. Phoenix and San Francisco led all cities with annual gains of 22.8% and 12.7%, respectively. Detroit, Michigan ranked third with annual home value gains of 11.9%.
Only New York City, New York posted an annual loss. The area — comprised of Manhattan, Brooklyn, Queens, Staten Island, and Yonkers — lost 1.2% in value between November 2011 and November 2012.
Regardless of what city in which you’re buying, however, show restraint about the Case-Shiller data — it should not be used to make buy or sell decisions with a home. The Case-Shiller Index is a flawed metric and may push you to improper conclusion.
The Case-Shiller Index’s first flaw is its most obvious — its limited sample set.
Click here to check today’s mortgage rates.
Flaw 1 : Not Enough Cities Included
According to Wikipedia, there are more than 3,100 municipalities nationwide. Yet, the Case-Shiller Index includes data from just 20 of them — and they’re not the 20 largest cities, either.
Four of the 10 Most Populous U.S. Cities — Houston, Texas; Philadelphia, Pennsylvania; San Antonio, Texas; and San Jose, California — are specifically excluded from the Case-Shiller Index sample set whereas smaller cities such as Minneapolis, Minnesota (#48) and Tampa, Florida (#55) are not.
The 20 Case-Shiller cities account for fewer than 1 percent of all U.S. cities which renders the “national figures” of the Case-Shiller Index not very national at all.
Even on a city-by-city basis, the Case-Shiller Index gets it wrong. By lumping disparate neighborhoods into a single, city-wide result, the index ignores the relative strength of one area at the expense of another.
In Chicago, for example, in which home values increased 0.8% over the past 12 months, there were some neighborhoods which performed better than average, and other which underperformed. Residents of Lincoln Park and Lakeview no doubt saw different appreciation/depreciation levels as compared to residents of Wicker Park and Bucktown.
Such is the nature of real estate.
Flaw 2 : Too Few “Home-Types” Included
A second Case-Shiller Index flaw is its methodology for measuring changes in home value.
The index considers only “repeat sales” of the same home in its findings, and those homes must be single-family, detached property. Condominiums, multi-family homes, and new construction are not included.
In some cities, “excluded” property types can account for a large percentage of total monthly sales. New York City meets this criteria with its heavy concentration of condos and co-ops, as does Chicago, Boston, and, to a lesser extent, Los Angeles whose footprint extends into Orange County.
With its limited property type set, Case-Shiller captures just a portion of the overall housing market.
Click here to check today’s mortgage rates.
Flaw 3 : Too Aged To Be Accurate
And, third, the Case-Shiller Index is flawed by “age”.
Because Standard & Poor’s publishes on a 60-day delay, the Case-Shiller Index is reporting on a housing market that no longer exists. And, it’s not a 60-day delay, even — it’s more like 6 months.
This is because home sales that closed in November are actually based on purchase contracts for homes written between August-October — half a year ago! — and it’s these contracts upon which the Case-Shiller Index is based.
Historical data helps economists and policy-makers understand the long-term trends of U.S. housing, but it does little good for today’s buyers and sellers in need of accurate, real-time data. For that, you need something current.
How Much Home Can You Afford?
If you plan to buy a home in 2013 or 2014, the Case-Shiller Index highlights the broader trend toward rising home prices nationwide, even as it overlooks the market as it exists “right now”.
Buyers can use the Case-Shiller as supplemental research, but the best data will come from a real estate professional who’s deep in business every business day.
Now, it’s time to find out how much home you can afford. Get started with today’s mortgage rates and plug them into your budget. It’s fast and free, and there’s no social security number required.
Consumer confidence breaks darkness surrounding housing | Mt Kisco Real Estate
Higher home sales and growing optimism on the jobs front are further signs of a stabilizing real estate market, Fannie Mae concluded Thursday.
“Concerns about job loss are waning as payrolls are growing – a trend that may give potential homebuyers more confidence that they can meet the financial obligation of homeownership,” said Doug Duncan, chief economist for Fannie Mae.
The government-sponsored enterprise released the results of its January 2013 National Housing Survey.
After polling just over 1,000 Americans, Fannie Mae concluded more survey respondents believe now is a good time to sell a home, with 23% responding favorably to that question, up from 11% last year.
Expectations around personal finances remain flat, while projections for consumer home prices and rental and ownership properties are at their highest levels in two-and-a-half years.
About 41% of respondents believe prices will rise in the next 12 months, down 2 percentage points from December’s survey high.
Those who believe prices will continue to drop reached a low of 10%. Forty-one percent of respondents expect mortgage rates to tick up in the coming year.
Americans also see rental prices rising alongside property values, with 50% predicting an uptick in rental prices in the next 12 months.
The good news is homeownership is still a valued endeavor, with 65% of surveyed Americans saying they would buy if moving in the near future.
via housingwire.com
Sellers Awaken and Buyers Accelerate | North Salem NY Real Estate
The percentage of customers signing offers in January increased by 12 percentage points according to a leading brokerage and 23 percent of Americans think it is a good time to sell compared to 11 percent the same time last year, according to Fannie Mae’s January 2013 National Housing Survey results.
Customers signing offers increased 70.4 percent in January, compared with an increase of 58.5 percent a year earlier and customers requesting home tours were up 57.9 percent in January, compared with to 52.0 percent in 2012 according to Redfin’s Real-Time Demand Pulse.
The increase in homebuyer demand seen in January paired with a nation-wide inventory shortage has created an extreme seller’s market, the brokerage said. Particularly in Redfin’s Southern California markets, bidding wars involving thirty or more offers have become increasingly common.
Fannie’s Mae’s monthly survey found that while expectations regarding personal finances stayed relatively flat, other housing indicators remained at or near survey highs, indicating consumers remain confident in the stability of the housing market.