Tag Archives: Cross River NY

Buyers Grow More Worried Over Prices | Cross River NY Homes

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Nearly three quarters of potential buyers believe home prices will increase in their neighborhood in the next twelve months, twice as many as in the first quarter.

Despite forecasts that prices will increase less in 2013 than this year, buyers are more concerned by rising prices than the overall economy. Thirty-three percent of buyers listed rising prices as a major concern in the fourth quarter, up from just 23 percent in the third quarter. Meanwhile, 22 percent said they were concerned with a weak economy, down from 27 percent in the third quarter, according to the Redfin Real-Time Homebuyer Survey. From November 30 to December 2, 2012, Redfin surveyed 1,084 active homebuyers who had toured a home with a Redfin agent since August 14.

More Than 70 percent of buyers believe prices will rise next year in their markets. The number of buyers who believe prices are rising shot up even higher in the fourth quarter, although most still expect gains to be modest. Ten percent of respondents expect home prices in their area to “rise a lot” over the next twelve months, the same as last quarter; 61 percent expect prices to “rise a little” an increase of ten percentage points over last quarter. Twenty-one percent expect prices to “stay the same,” 6 percent expect prices to “drop a little,” and less than 1 percent expect prices to “drop a lot.”

A growing number of buyers are planning to buy in order to get out in front of rising prices. Thirty-three percent of respondents indicated rising prices as a motivation for buying now, up from 29 percent in the third quarter and just 19 percent in the first quarter. Not surprisingly, a decreasing number of buyers cited “low home prices” as their reason for buying-just 28 percent in this quarter’s survey, down from 33 percent in the third quarter and 40 percent in the first quarter.

More than half (59 percent) of buyers listed low inventory as their top concern with buying now, consistent with last quarter’s rate. When we asked buyers how low inventory was affecting their home search, nearly half (46 percent) indicated that they have expanded their search to include new areas that they hadn’t previously been considering, while 38% indicated that they would be taking a break until more listings come on the market.

via realestateeconomywatch.com

Low rates spur uptick in refinancings | Cross River NY Real Estate

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“Home affordability has been high for much of the year, as mortgage rates have been at less than 4% for all but one week in 2012, and that trend continued in the period ending Dec. 7 as well,” reported Credit.com.

The news agency attributes sharp upticks in home refinancings to an ongoing wave of record low interest rates.

via housingwire.com

Freddie Mac Economist Sees New Households Outpacing Apartment Boom | Cross River Real Estate

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In his 2013 forecast, Freddie Mac’s chief economist, Frank Nothaft, sees more than a million new households bolstering housing starts, driving apartment vacancy rates down to ten year lows and outpacing the boom in new apartment construction.

“The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive. This has been a big change from a year ago, when some analysts worried that the looming ’shadow inventory’ would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery,” Nothaft says.

Here’s how Nothaft sees the coming year:

  • Next year some regions will post faster house price gains, while some will be stagnant or see value loss fof the year, but overall, the housing recovery continue to strengthen property values and most U.S. house price indexes will likely rise by 2 to 3 percent, according to 2012 forecast from Freddie Mac’s chief economist,
  • Look for fixed-rate mortgage rates to remain near their 65-year record lows for the first half of 2013 then begin rising a bit in the tail end of next year, but staying below 4 percent. In the single-family market, this means homebuyer affordability should remain very high in 2013 for those with good credit history, stable income, and sufficient savings.
  • Household formation will be up. Unemployment, while still high, will likely drift down toward 7.5 percent; the resulting job and income gains will facilitate household formations – meaning that more members of the boomerang generation who have been living in their parents’ basements should start to move out. Look for net growth of 1.20 to 1.25 million households in 2013. These gains will help drive more housing construction and reduce vacancy rates further. Housing starts should be up around the 1.0 million pace (seasonally adjusted annual rate) by the fourth quarter of 2013.
  • Vacancy rates have been trending lower for much of the past three years because household formations have outpaced new construction. To illustrate, in 2012, net household formations through the third quarter totaled 1.15 million but completions of newly built homes (both rental and for sale) were just under 700,000; the difference is made up by a reduction in vacancies. This trend will continue in 2013 and could bring total vacancy rates down to levels last seen a decade ago. While this is good news for property owners, tenants will likely see rents rise a bit faster than prices on all other goods.
  • Refinance activity accounted for the bulk of residential lending in 2012 and will account for the bulk of it in 2013, too. But, simply put, we’ve seen the peak in refinancing. Homeowners who obtained a loan with a low mortgage rate in 2012 or refinanced through the Home Affordable Refinance Program are unlikely to refinance in 2013. Next year’s likely pickup in home sales won’t be enough to offset the coming drop in refinance activity. Consequently, total single-family originations will probably drop by about 15 percent in 2013. On the other hand, permanent financing on newly built apartment buildings, a pickup in property transactions, and refinancing of loans exiting “yield maintenance” terms are expected to increase multifamily lending by about 5 percent.
via realestateeconomywatch.com

Short Sales Overtook REO Sales in Q3 | Cross River Real Estate

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For the first time ever, sales of properties in some stage of foreclosure (pre-foreclosure sales) outnumbered sales of bank-owned properties (REO) in the third quarter, as short sales continue to gain market share at the expense of REO and sales of completed foreclosures at auction.

Pre-foreclosure sales, largely short sales, increased 22 percent from the second quarter and were also up 22 percent from the third quarter of 2011, while the average sales price decreased 3 percent from the previous quarter and was down 5 percent from a year ago, according to RealtyTrac. A total of 98,125 pre-foreclosure sales occurred during the quarter compared to a total of 94,934 REO sales.

By contrast, REO sales increased 19 percent from the previous quarter but were still down 20 percent from the third quarter of 2011. A total of 193,059 U.S. properties in some stage of foreclosure or bank-owned (REO) were sold during the third quarter, an increase of 21 percent from the previous quarter, but still down 3 percent from the third quarter of 2011. Foreclosure-related sales accounted for 19 percent of all U.S. residential sales during the third quarter – down from 20 percent in the previous quarter but the same level as in the third quarter of 2011.

Pre-foreclosure properties sold for an average price of $191,025 in the third quarter, down 3 percent from the second quarter and down 5 percent from the third quarter of 2011. The average sales price of a pre-foreclosure residential property in the third quarter was 27 percent below the average sales price of a non-foreclosure residential property, up from a 25 percent discount in the previous quarter and a 19 percent discount in the third quarter of 2011.

The average REO sales price decreased 7 percent from the previous quarter but was still up 7 percent from the third quarter of 2011. REOs sold for an average price of $161,954 in the third quarter, down 7 percent from the second quarter but up 7 percent from the third quarter of 2011. The average sales price of a bank-owned home in the third quarter was 38 percent below the average price of a non-foreclosure home, up from a 33 percent discount in the second quarter but down from a 39 percent discount in the third quarter of 2011.

Homes in foreclosure or bank owned sold at an average price that was 32 percent below the average price of a home not in foreclosure, up from a 29 percent discount in the second quarter and a 31 percent discount in the third quarter of 2011.

Short sales of properties not in the foreclosure process increased 15 percent from the previous quarter and were up 17 percent from the third quarter of 2011. These non-foreclosure short sales accounted for an estimated 22 percent of all residential sales, bringing the total distressed sale share to an estimated 41 percent for the quarter. Non-foreclosure short sales prices in the third quarter fell short of the total amount of loans outstanding by an average of $82,312 per short sale. For all short sales, including non-foreclosure and in-foreclosure properties, the sales price was short of combined loan amounts by average of $94,896 per short sale.

“The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure,” said Daren Blomquist, vice president of RealtyTrac. “However, the scheduled expiration of the Mortgage Forgiveness Debt Relief Act at the end of this year could stifle this trend toward short sales. If that law expires as scheduled, homeowners who agree to a short sale could see their income tax jump significantly because the portion of the unpaid loan balance not covered by the short sale proceeds will be considered taxable income in many cases.

Pre-foreclosure homes that sold in the third quarter took an average of 359 days to sell after starting the foreclosure process, up from an average of 319 days in the previous quarter and up from an average of 318 days in the third quarter of 2011.

Third parties purchased a total of 94,934 bank-owned (REO) residential properties in the third quarter, an increase of 19 percent from the previous quarter but down 20 percent from the third quarter of 2011. REO sales accounted for 10 percent of all residential sales during the quarter, the same as in the second quarter but down from 11 percent of sales in the third quarter of 2011.

Separately, Lender Processing Services reported yesterday that foreclosure starts declined significantly foreclosure starts over the last two months – down 21.9 percent in October and almost 48 percent on a year-over-year basis – leading to a nearly 7 percent drop in overall foreclosure inventory.

“LPS observed a drop-off in foreclosure starts in September that accelerated in October,” Blecher said. “This decline coincided with the implementation of new procedural changes outlined in the National Mortgage Settlement, which requires, among other things, that mortgage servicers provide written notice to borrowers 14 days prior to referring a delinquent loan to a foreclosure attorney. This has resulted in what is likely a temporary slowdown in foreclosure starts that we do not believe is indicative of a longer-term trend. However, we will continue to monitor this activity closely in the coming months.”

The LPS Mortgage Monitor reported that September loan originations were down, likely due to the shortened number of business days in the month. However, prepayment speeds (historically a good indicator of refinance activity) rebounded in October, and as such, LPS expects to see overall origination numbers pick up for that month. LPS also found that mortgage spreads remain elevated, averaging 197 basis points above the 10-Year Treasury rates, with interest rates consistent across all product types.

via realestateeconomywatch.com