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Luxury Prices Fall Despite Tight Inventories | Waccabuc Real Estate

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Though inventory shortages began at the lower price tiers, tight inventories have worked their way up to the luxury levels in the past two quarters. Expensive homes are selling faster than they were a year ago but third quarter prices are down in many markets compared to a year ago.

The median luxury property is taking nearly 200 days to sell this week, far above the 5.4-month supply for all price ranges. However, this is the time of year when inventories traditionally increase, especially in the upper price tiers. Last year in December, the Institute for Luxury Home Marketing reported that homes in its market profile were spending an average of 231 days on market and luxury properties in all markets it tracks were averaging 215 days on market at the end of the year, a year-long high.

During the spring buying season, luxury homes were selling much faster. Days on market for luxury homes fell to 120 days, down from 155 days at the outset of the buying season in February.

Luxury agents and brokers around the country report brisk activity up to the onset of the holiday season, an indication that demand is strong. Tighter inventories are not translating into higher prices at the million dollar plus end of the spectrum, however.

In the Hamptons, Town and Country Realty reports the greatest gain in third quarter activity was in the $3.5 million to $4.99 million price range and the only price range to see a statistical decline was the $5 million to $9.9 million range. Total number of sales in the Hamptons was up 17 percent.

Luxury home sales in the Denver metro area almost doubled in October compared to October 2011, according to John Rebchook of Inside Real Estate News, citing a report by Coldwell Banker Residential Brokerage. However, the median sale price $1.31 million of a luxury home closed last month in the Denver market was off 4.8 percent from October 2011 and 3.9 percent from September. Homes also sold at a much faster pace year over year and sellers on average received a higher percentage of their asking price.

In Lake Tahoe, homes under and over the million-dollar mark both experienced significant increases in sales (37 and 33 percent, respectively) while overall prices fell around the lake. The median price of a home in Lake Tahoe is $330,000 (down 11 percent) and the average price is $538,289 (down 15 percent), according to Chase international.

Overall there was a 49 percent quarter-over-quarter and 39 percent year-over-year improvement in Lake Tahoe-area home sales, according to Better Homes and Gardens Mason-McDuffie Real Estate. In the third quarter, 122 homes changed hands, up from 82 homes sold in the second quarter and 88 homes sold in last year’s third quarter. In another sign the market is recovering, the average number of days a home was on the market before attracting a contract to purchase declined from 162 days a year ago to 101 days in this year’s third quarter.

In the greater Truckee area, the median price of a single-family detached home declined slightly from $451,129 in the second quarter to $450,083 in the third quarter, although it was up 3 percent from $437,261 in the third quarter of last year as the local real estate market continued to show signs of a recovery. Locally, a change in the mix of homes sold boosted the median sales price in Donner Lake by 50 percent year over year while low inventory pushed sales prices slightly higher in the Town of Truckee (+12% for the quarter and +7% for the year) and the Glenshire Area (+4 percent for the quarter and +3% compared with a year ago).

In Atlanta, while most of the real estate market is enjoying a nice rebound this year, luxury real estate is going backward. Sales of $2 million-plus single family detached resale homes are down 33 percent from 2011 (33 sales in 2012 vs. 49 during first 10 months of 2011) while sales of $3 million plus homes are down 67 percent (5 sales in 2012 vs. 15 in 2011). The average sales price for $2 million-plus homes is down 11 percent from 2011, while the average for $3 million-plus is up 1 percent. There are 112 single family detached new and resale homes in Buckhead currently on the market that are priced more than $2 million, which translates at the current rate of sale to a nearly four-year supply, according to Beacham and Company Realtors.

New York City is suffering from an acute lack of inventory throughout the sales marketplace, according to Warburg Realty. Foreign money is snapping up the high and mid-priced condominiums all over Manhattan. But the profound shortage of inventory which has developed in the co-op market defies expectations. Throughout the city, resident New Yorkers are hamstrung month after month in their new home searches. At $20 million, at $10 million, at $5 million, at $1 million – few new listings appear. The customers, hoping that there is still seasonality in the market ask, “Won’t there be a lot more inventory hitting the market in September?” Sadly, the answer was no. Many of these customers asked the same questions in April. There was no major spike in inventory in the spring and not much more in the fall. And we don’t anticipate one any time soon, at least not on the resale side, not even with the almost certain increase in the capital gains tax burden for sellers looming on the 2013 horizon.

via realestateeconomywatch.com

Community bank lending on upswing | Waccabuc Real Estate

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Need a loan? Local banks want your business.

The area’s community banks grew their loan portfolios 7 percent during the past two quarters, according to data from the Federal Deposit Insurance Corp.

This is good news for smaller institutions, many of which got a boost in business during the downturn as larger banks pulled back on lending. The new figures show that big banks have returned to more aggressive lending this year, but small banks are still winning a lot of deals.

Total loans outstanding — excluding McLean-based Capital One N.A., which skews the data with its size — grew …

via bizjournals.com

3 things to avoid when buying or selling | Waccabuc Real Estate

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Advice on what to do and how to do it is everywhere these days. Whether you want to know what to eat, how much money to save or how to learn a new language, it seems that the answers are a mere Google away.

And that has created its own set of problems, chief among them the issue of information overload. Sorting through the overwhelming inundation of information about how to proceed with any major life endeavor — including real estate matters like buying, selling or refinancing a home — has become a sort of pre-action step.

Often, the most helpful action-sorting, order-creating, overwhelm-abolishing advice turns out not to be advice about what to do, but advice about what not to do. To that end, here are my top three real estate don’ts:

1. Buy too soon. As I see it, the drive to buy a home before your finances, your family and even your personal development are truly ready (and the complicity of lenders who were all too happy to make loans to borrowers, prematurely) is to blame for much of the real estate mayhem we saw in the recent real estate recession.

If you have no money to put down, no cash cushion, poor spending, saving and debting habits, or uncertainty about how stable you and your household will be in the next five or so years, geographically and otherwise, buying a home is a move that is highly likely to end in a tale of woe.

As strongly as I believe in the power of homeownership, I have seen time and time again that it is better deferred until you are truly ready than rushed into and regretted.

2. Take it personally. Whatever it is. Buyers who get overly attached to a property, emotionally speaking, put themselves behind the eight ball when it comes to negotiations, and are also likely to panic and make bad decisions when it comes to responding to inspection reports and borrowing mortgage money.

Know that there are literally hundreds, possibly thousands, of prospective homes in your area that might fit your needs, so beware of allowing any single one to get you too worked up, before you have it in contract, have your inspection reports in hand, and have made it through appraisal and underwriting phases.

For sellers, the potential to take things personally is exponentially greater, given that your home is both your largest asset and the place that has been good enough for you and your family to live in for, perhaps, years. It’s very easy to get offended by everything from the real estate agent’s estimation of what your home is worth, staging and property preparation advice (which can feel like your taste and lifestyle are under attack), lowball offers, appraisals — you name it.

The very best practice is to find and work with professionals you trust, six months or even a year in advance of when you want to make your move, then be open and attentive to their advice, even if it hurts. Do not allow your emotional attachment to your home to get in the way of the financial and personal progress you seek from trying to sell it.

3. Avoid discomfort. As a general rule, many of the best things in life require us to go through some discomfort or small, recurring pain to get them. To get fit, you have to get up and exercise when you might feel like curling up and snoozing. To get ahead in your career, you have to exercise discipline in your work habits, putting in hours and ideas even when the going gets tough.

It is no different with real estate; in fact, the nature of the real estate game is so foreign to what most of us consider our zones of comfort and competence that making a series of informed, smart real estate decisions can actually require a series of uncomfortable commitments, several months or even years of agreement to endure little pains to reach your goal.

Whether your personal discomfort zone is triggered by one or all of the following:

  • staunching your spending hemorrhage.
  • saving money when you’d rather take a trip.
  • working through your financial maths repeatedly.
  • negotiating.
  • asking hard questions (and continuing to ask them until you are satisfied).
  • thoroughly reading literally hundreds of pages of disclosure, inspection, and homeowners association (HOA) and loan documents.

My last “don’t” is this: Don’t avoid any of these uncomfortable processes, practices and moments. They are each an essential element of the process of buying or selling or mortgaging a home with wisdom and long-term sustainability.

via inman.com

Widows Pushed Into Foreclosure by Mortgage Fine Print | Waccabuc Realtor

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Ms. Bates, 70, is caught in a foreclosure trap that is ensnaring widows across America: she cannot get help lowering her payments until her name is added to the mortgage note, but the lender says she must be current on payments before that can happen.

“I keep praying,” said Ms. Bates, who is fighting with the bank to stay in the four-bedroom house.

Just as the housing market is recovering, a growing group of homeowners — widows over the age of 50 whose husbands alone were holders of the mortgage — are losing their homes to foreclosure because of a paperwork flaw that keeps them from obtaining loan modifications.

In the latest chapter of the foreclosure crisis, homeowners over 50 are falling into foreclosure at the fastest pace of any age group, according to nationwide data, in part because women are outliving their spouses and are unable to cope with cuts in their pensions, ballooning medical costs — and the fine print on their mortgages.

While there are no exact measures of how many widows have entered foreclosure, figures compiled by AARP show the rate of foreclosures among people over 50 increased by 23 percent from 2007 to 2011, resulting in 1.5 million foreclosures.

A few lenders have tweaked their procedures to navigate the problem, and housing advocates are petitioning the Consumer Financial Protection Bureau to devise guidelines for lenders in situations that involve surviving relatives. Banks say that while the volume of delinquent mortgages means that they need a blanket policy to cover all homeowners who are behind on their payments, they are willing to work closely with widows.

Still, interviews with elder-care advocates, housing lawyers and borrowers suggest that the problem is spreading fast, propelled by an aging population. Legal aid offices in California, Florida, Ohio and New York say it is among the top complaints from clients. Billy Howard, a consumer lawyer in Tampa, Fla., said he had more than two dozen cases involving widows, up from virtually none before 2007.

“These women are essentially invisible,” said Gladys Gerson, a lawyer for Coast to Coast Legal Aid of South Florida.

At first glance, the issue seems little more than a logistical headache. To stay in the home, and play slot game to earn and pay bills, the surviving spouse needs to take over the mortgage. But to do that, most banks require that the borrower assuming the mortgage be up-to-date on payments. Housing advocates say that their clients, especially if one spouse experienced a prolonged illness, often find they are already thousands of dollars behind.

“Surviving spouses are trapped without a clear way to preserve their home,” said Arabelle Malinis, a lawyer at Housing and Economic Rights Advocates in California.

The conundrum is pushing some widows into foreclosure by choking off a lifeline that could save their homes. As of 2011, 6 percent of loans held by people over 50 were delinquent, up from about 1 percent in 2007, according to a July study by AARP, an advocacy group for Americans over 50. The study, which housing lawyers say accurately describes the tide of foreclosures on seniors’ homes, analyzed mortgage data over a five-year period.

Part of the problem, according to Debra Whitman, AARP’s executive vice president for policy, is that older Americans are saving less and borrowing more. Debt for Americans ages 65 to 74 is outpacing any other group, according to the Federal Reserve.

Some help is on the way. JPMorgan Chase, for example, allows surviving relatives to complete a loan modification and mortgage assumption simultaneously. And the consumer bureau is finishing rules to provide tighter oversight of mortgage servicing companies, which collect payments from homeowners.

Housing advocates say most of their widowed clients still remain in their foreclosed homes.

The trouble for Ms. Bates, of Jacksonville, Fla., began after her husband Robert, a World War II veteran, died last February. Mr. Bates had obtained a trial loan modification but died before he could make the first payment. Determined to make good on the hard-won plan, Ms. Bates said she notified HSBC, the servicer, of her husband’s death and sent in a check for $1,125.47.

Ms. Bates said she was devastated when the check was returned, with a letter explaining the money could not be accepted because she was not on the mortgage. Ms. Bates still owes roughly $131,000 on the original $140,000 mortgage. HSBC declined to comment on the case, but said in a statement, “HSBC has a strong commitment to home preservation and regards foreclosure as a last resort.”

Complaints from widows about botched forms, unanswered calls and the peculiar frustration of being asked repeatedly by servicers for the same documents echo the concerns that culminated in a $26 billion settlement in February over other mortgage flaws with the country’s five largest mortgage servicers.

via nytimes.com

Mortgage rates barely budge from record lows | Waccabuc NY Homes

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After hitting record lows last week, mortgage rates have stayed tanked amid growing concerns that lawmakers won’t reach a compromise to avoid a “fiscal cliff” of automatic tax increases and spending cuts scheduled to take place next year, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.

Rates on 30-year fixed-rate mortgages averaged 3.32 percent with an average 0.8 point for the week ending Nov. 29, up from 3.31 percent last week but down from 4.00 percent a year ago. Last week’s rate was a new record in Freddie Mac records dating to 1971.

For 15-year fixed-rate loans, rates averaged 2.64 percent with an average 0.6 point, up from 2.63 percent last week but down from 3.30 percent a year ago. Last week’s rate was a record in records dating to 1991.

Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.72 percent with an average 0.6 point, down from 2.74 percent last week and 2.90 percent a year ago. Rates on five-year ARM loans hit a low in records dating to 2005 of 2.69 percent during the week ending July 19.

For one-year Treasury-indexed ARM loans, rates averaged 2.56 percent with an average 0.5 point, unchanged from last week but down from 2.78 percent a year ago. Rates on one-year ARM loans hit a low in records dating to 1984 of 2.55 percent during the week ending Nov. 15.

A separate survey by the Mortgage Bankers Association showed applications for purchase mortgages were up 3 percent during the week ending Nov. 23 compared to the week before. The survey, which included an adjustment for the Thanksgiving holiday, showed purchase loan demand up 8 percent from a year ago.

A Federal Reserve report published Wednesday summarizing commentary on current economic conditions around the country found markets for single-family homes improving in 10 of 12 Federal Reserve Districts. Boston and Philadelphia were the exceptions.

The “Beige Book” report — based on reports from Federal Reserve Bank and branch directors, and interviews with business contacts, economists, market experts, and other sources — found sales growth generally slowed for both the condominium and single-family home markets in the Boston District.

Fed officials in the Philadelphia District said their sources noted that October “began as a disappointing month for some Realtors, only to be punctuated by Hurricane Sandy.”

Reports from the New York District were “mixed but generally firm prior to the storm. Selling prices were steady or rising.”

Declining or tight inventories were reported in Boston, New York, Richmond, Atlanta, Kansas City, and Dallas.

Single-family housing starts were up in the Cleveland District, while builders in the Richmond District reported “significant pent-up demand in the first-time buyer segment.

In the Atlanta District, existing home sales were up slightly compared to a year ago, with investors more active in Florida than in the rest of the District.

Residential construction of single- and multifamily homes increased at a slow but steady pace in the Chicago District, while reports from the Minneapolis District indicated that “segments of construction and real estate were growing at a double-digit clip.”

Real estate activity was characterized as “brisk” by the Kansas City District, with a solid rise in home sales reducing inventories.

The St. Louis District reported continued improvement in residential real estate market conditions.

In the Dallas District, single-family housing activity remained strong, with both new and existing home sales up.

Demand for homes continued to strengthen in the San Francisco District, and sustained growth in home sales has spurred new home construction.

via inman.com