Posts Tagged ‘Housing Market’
Inventory of homes for sale shrinks in South Florida
The number of homes and condominiums for sale across South Florida has steadily declined over the past two years, an encouraging sign for the region’s battered housing market. Still, industry observers worry about a sizable “shadow inventory” of foreclosed homes that could complicate any real estate recovery. Broward County had 19,869 properties on the market in July, down 35 percent from July 2008, according to a multiple listing service report compiled by the Keyes Co. Palm Beach County’s inventory of homes and condos slid 31 percent to 23,947 during the same period. The supply of new homes being built in the two counties also has decreased sharply in the past two years, said Brad Hunter of the Metrostudy research firm in Palm Beach Gardens. In 2005, sellers rushed to list their homes, hoping to fetch record prices during the housing boom. But the frenzy led to a collapse and prices plummeted. Thousands of foreclosures and short sales have clogged the market ever since, giving buyers plenty of choices and little reason to pay top dollar. “You won’t get price appreciation until you get the inventory in balance,” said Mike Pappas, president of Keyes. “We’re making great strides.” Declines in homes for sale already have helped stabilize prices recently. The median price in Broward rose 7 percent during April, May and June to $209,800 from a year ago, the Florida Realtors said Wednesday. Palm Beach County’s median increased at the beginning of the year but dipped 2 percent in the second quarter to $235,500. Pappas said his firm is handling fewer transactions involving foreclosed homes, and he thinks that’s an indication the foreclosure market has peaked. But some analysts disagree, pointing to a recent surge in homes repossessed by lenders that is pushing inventory levels higher in recent months. Banks are on pace to take back nearly 50,000 properties in Palm Beach, Broward and Miami-Dade counties this year, according to CondoVultures.com, a real estate consulting firm. Many lenders are careful to hold off listing those properties for sale all at once to prevent widespread price declines. Sean Snaith, an economist at the University of Central Florida, expects more foreclosures to result from homeowners losing their jobs. And he said the sagging labor market likely will discourage potential homebuyers. “You have to have a healthy labor market as a foundation for a healthy housing market,” Snaith said. Another concern is the expiration of the federal homebuyer tax credits. Buyers who signed contracts by April 30 and close by the end of September are eligible for the $8,000 and $6,500 tax rebates. But people who put homes under contract after April 30 don’t qualify. While pending sales still are robust, demand for homes is expected to wane in the second half of the year. Fewer sales would keep the supply of homes elevated and ultimately hurt pricing, said Chris Lafakis, an economist covering Florida for Moody’s Economy.com in West Chester, Pa. “Our forecast is that ... demand won’t be strong enough to work off the excess inventory fast enough to stave off future price declines,” Lafakis said. “But by this time next year, the worst of the declines will be over.” Copyright © 2010 Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune Information Services.
Housing construction rises 1.7 percent in July
New home construction edged up slightly in July but applications for building permits tumbled to the lowest point in 14 months, a sign of continued stress in housing. Construction of new homes and apartments rose 1.7 percent in July, the Commerce Department reported Tuesday. Still, applications for building permits, considered a good sign of future activity, fell 3.1 percent. A rebound in housing is considered critical for a sustained economic recovery. But builders continue to struggle with weak demand for new homes caused by high unemployment and a glut of foreclosed homes on the market. The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units. Building activity in June was weaker than first reported. It fell 8.7 percent to an annual rate of 537,000 units, the slowest pace since October of last year. Housing construction got a boost earlier in the year when the government offered buyers up to $8,000 in federal tax credits. But after the incentives expired at the end of April, sales and constructions activity slumped. Driving the July increase was a 32.6 percent surge in construction of apartments and condominiums, which jumped to an annual rate of 114,000 units. The bigger single-family sector declined 4.2 percent, falling to an annual rate of 432,000 units. The drop in building permits left applications for new construction at a seasonally adjusted annual rate of 565,000, the slowest pace since May 2009. Construction activity surged 30.5 percent in the Northeast and was up 10.7 percent in the Midwest. However, construction fell 6.3 percent in the South and was flat in the West. In advance of the report on housing starts, the National Association of Home Builders reported Monday that its monthly index of builder sentiment dropped to 13 in August. That was the lowest reading in 17 months. Readings below 50 indicate negative sentiment about the housing market. The last time builders’ index was above 50 was in April 2006. Builders say consumers remain worried about the weak economic recovery and the sluggish jobs market. Among those who are buying, many are opting for deeply discounted foreclosed properties. Copyright © 2010 The Associated Press, Martin Crutsinger, AP economics writer.
If your home is uninhabited or rented, insurance coverage changes
In many neighborhoods around the country, “for sale” signs outnumber telephone poles, and some of those signs are looking awfully weather-beaten. Even owners of oceanfront properties are having trouble finding buyers, at least at a price that will cover the amount they owe on the home. One way around this problem is to stay put until the economy turns around and the housing market recovers. But if you’ve lost your job and need to move to find employment, that’s not an option. Even if you’re lucky enough to find a buyer, closing the deal could take weeks or even months. In the interim, it’s not enough to ask your next-door neighbor to keep one eye on your property until the new owners move in. You should also contact your insurance agent, or the company that provides your homeowners insurance. Standard homeowners policies are designed to cover homes that are occupied. If you leave your home uninhabited for a month or longer, your policy may not cover damage or losses, says Michael McRaith, director of the Illinois Department of Insurance. You could also expose yourself to lawsuits, McRaith says. If a child gets hurt while playing on your property, your insurance may not protect you from liability, he says. The amount of time you can leave your home unoccupied before it affects your coverage varies, depending on your insurer. Some insurance policies exclude coverage for fire-related damage if the property has been vacant or unoccupied for 30 days, says Richard McGrath, chief executive officer of McGrath Insurance Group in Sturbridge, Mass. For others, it’s 60 days, he says. Other types of claims may also be excluded if your home has been left unattended. For example, State Farm’s homeowners policy probably doesn’t cover damage caused by vandalism after a home has been vacant for 30 days, spokesman Dick Luedke says. Damage caused by frozen pipes may also be excluded if the home was vacant when the pipes burst, he says. Adjusting your coverage Once you notify your insurer that you’re leaving, a couple of things could happen: • Your insurer will adjust your policy to one that covers vacant properties. If you know how long your home will be vacant, you may be able to buy a policy that will cover that period of time. You’ll pay a higher premium for vacancy coverage, but without it, you could be on the hook for the cost of repairing or replacing your home. • You’ll have to get a new policy. Some insurers won’t cover vacant homes. In that case, you’ll need to find a company that will. Some insurers specialize in covering higher-risk properties, such as vacant homes, says Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry-funded education organization. An independent insurance agent can help you search for policies that will fit your circumstances. Insuring rental property If you manage to rent your home, you’ll be able to cover at least some of the cost of the mortgage. But here, too, you’ll probably have to pay more for homeowners insurance. Insurers consider a rented home a higher risk than one that’s occupied by its owners because renters have less interest in caring for a property. “When you’re a homeowner, your care and upkeep is probably going to be a lot better,” McGrath says. If you rent your home, you’re going to need a landlord policy, Salvatore says. Premiums for these policies are higher than premiums for owner-occupied homes. But it will reimburse you for lost rental income if the house burns down or becomes otherwise uninhabitable, she says. A landlord policy will also increase your liability coverage, protecting you in the event that your tenant sues you, Salvatore says. A landlord policy won’t cover your tenant’s possessions if they’re stolen or damaged in a house fire or other disaster, Salvatore says. If your tenant wants that kind of protection, he’ll need to buy a renters insurance policy. Renters insurance is relatively inexpensive – premiums average $150 to around $200 a year, depending on the state where the rental property is located. Renters insurance also provides liability coverage in the event that one of your tenant’s houseguests falls and sues him for negligence. Copyright © 2010 USA TODAY, a division of Gannett Co. Inc., Sandy Block. Related Topics: Property insurance Press Releases Advertising Privacy Policy Copyright Notice Terms of Use Florida Realtors® Headquarters - Orlando: (407) 438-1400 Office of Public Policy - Tallahassee: (850) 224-1400 © 2010 Florida Realtors® // // //
Risks abound if too many refinance
Lots of homeowners are frustrated these days that they can’t seem to get a mortgage refinance even though interest rates are at historical lows. It turns out they’re not alone. Plenty of people on Wall Street would also love to see a boom in refinancing activity, saying it would be a near-painless way to inject more money into the economy. If more people can refinance, the thinking goes, the more cash they’ll have to spend. Those economists and analysts calling for a mass mortgage reset say it could be engineered by the government, which controls the giant mortgage lenders Fannie Mae and Freddie Mac. Have them loosen underwriting standards and give breaks on fees, and more people will qualify to refinance. Here’s what the Obama administration says about that idea: Don’t get your hopes up. And that’s a good thing, since ushering in a refinancing boom would only be a short-term fix for the housing market and the economy that would have long-term consequences. A widespread refinancing of loans would mean reverting to looser lending standards, one of the things that got us into this mess. It could also boost mortgage rates for new borrowers and force U.S. taxpayers to shoulder more risk, since they technically own Fannie and Freddie. “At some point, we have to ask ourselves how much more can we ask taxpayers to do to support people staying in their homes,” says Dean Baker, co-director of the left-leaning Center for Economic and Policy Research in Washington. Wall Street has been abuzz in recent weeks over the possibility of the government engineering a broad refinancing of loans. Mortgage rates for a 30-year fixed home loan are now 4.49 percent, the lowest it has been since Freddie Mac began tracking rates in 1971. But millions of borrowers haven’t been able to benefit from those low rates. A big reason has to do with the fact that falling housing prices have left many borrowers with little or no home equity, which is also known as being “underwater.” As a result, they can’t qualify for refinancing. Others are deterred from refinancing by strict lending standards and the high fees that come with it. To get more mortgage resets done, some well-known economists and analysts at firms like Morgan Stanley and Goldman Sachs say the government should encourage a refinancing wave by adjusting lending policies at Fannie and Freddie. The mortgage lenders were taken over by the government two years ago. They own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. They buy home loans from lenders, package them into bonds with a guarantee against default and sell them to investors. The savings from a major mortgage reset could be significant. Allow someone with a $200,000 mortgage at 6 percent to refinance down to 4.5 percent, and suddenly there is $3,000 a year available to be plunged back into the economy. Add that up across millions of people, and you have what Morgan Stanley economist David Greenlaw calls a “slam dunk stimulus.” The government is already trying to help borrowers refinance, but its existing program has been a bust. The Home Affordable Refinance Program, or HARP, is directed at homeowners whose loans nearly or completely outsize the value of their homes. The government had hoped HARP would lead to millions of mortgage resets, but only a few hundred thousand have been done. The problem is that there are too many restrictions when trying to refinance under HARP. That’s why some people on Wall Street want the government to roll out a less restrictive program to get more mortgages resets done. Regardless of the pressure coming from homeowners and some on Wall Street for the government to ease refinancing rules, Treasury Department spokesman Andrew Williams tells The Associated Press that “the administration is not considering a change in policy in this area.” The government sees where the pitfalls are. Taxpayers have already pumped $145 billion into Fannie and Freddie over this last two years, and widespread refinancing now could raise that burden. Fannie and Freddie would very likely see their earnings decline and writedowns on their mortgage securities go up. In total, a mass mortgage reset could cost the mortgage lenders $75 billion, according to research from investment firm Keefe, Bruyette & Woods. Let’s also consider that a refinancing boom could have unintended consequences. The pace of foreclosures might not slow. A lower interest rate still might not be attractive enough for deeply underwater borrowers to stay in their homes. To some, it is not worth paying any money toward a depreciating asset, regardless of the interest rate. New borrowers could also face higher interest rates. A large refinancing wave would depress the value of mortgage-backed securities, making them less attractive to investors such as pension funds and foreign governments. Weak demand for those securities could lead to higher mortgage rates because lenders could have a harder time selling off their loans to investors. A short-term refinancing wave could help stabilize the housing market now, but it could also hurt home sales later. Homeowners who are able to lock in a once-in-a-lifetime interest rate could be deterred from moving in the future. Hitting the mortgage reset button could put more money into homeowners’ pockets today, and would also give the economy a quick jolt. But the ultimate costs may be too high. Copyright © 2010 The Associated Press, Rachel Beck, AP business writer.
Mortgage rates hit low of 4.49%
Mortgage rates dropped to the lowest level in decades for the sixth time in seven weeks, offering the most attractive opportunity for those who qualify to refinance or purchase a home. Government-controlled mortgage buyer Freddie Mac said Thursday that the average rate for 30-year fixed loans this week was 4.49 percent, down from 4.54 percent last week. That’s the lowest since Freddie Mac began tracking rates in 1971. The average rate on the 15-year fixed loan dropped to 3.95 percent, down from 4 percent last week and the lowest on record. Rates have fallen since spring as investors seek the safety of U.S. Treasury bonds. That has lowered the yield on Treasurys. Mortgage rates tend to track those yields. The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years. Low rates have sparked some activity in the weak housing market, but not a massive boom in refinancing. Applications to refinance loans increased 1.3 percent and those to purchase homes increased 1.5 percent, according to the Mortgage Bankers Association. Nevertheless, high unemployment, slow job growth and tight credit have made it difficult for many to purchase homes. The housing industry received a boost this spring when the government offered homebuying tax credits, but housing activity has plummeted since they expired in April. The number of buyers who signed contracts to purchase homes plunged in June to the lowest level on records dating back to 2001, according to the National Association of Realtors. To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day. Rates on five-year adjustable-rate mortgages averaged 3.63 percent, down from 3.76 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.55 percent from 3.64 percent. The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for all loans. Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
5 Reasons to Buy a Home Now
The tax credit expired, but it’s still a great time to buy a home thanks to low mortgage rates and motivated sellers. Here are five reasons why now is a great time to buy: 1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. That means they can absorb a few ups and downs as the still-recovering housing market gains traction. 2. Houses are in move-in condition. Homeowners continue to spend on maintenance and repair, according to the Harvard Joint Center on Housing. As these houses enter the market, they stand in marked contrast to tattered foreclosures. 3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system, and they are being replaced by some very attractive properties. 4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market. 5. Plenty of programs. Many programs that encourage middle-class families to buy homes still exist, despite market downturns. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates. Source: ForSaleByOwner.com (07/29/2010) © Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688
Yes, You Can Still Afford To Get Your Dream Home!
In February 2009, President Obama introduced to the nation his comprehensive Financial Stability Plan, addressing the key problems that are at the heart of our country's current housing crisis. A core and critical component of that plan is his Making Home Affordable program, a plan with the goals of stabilizing the housing market and providing immediate and necessary relief to struggling homeowners so that they may avoid foreclosure and get back on their feet again. The Home Affordable Modification Program provides all eligible homeowners with the wonderful opportunity to modify and restructure their existing mortgages in order to make them affordable and maintainable. To date, over a million homeowners received assistance and the program is well on its way to helping 3 to 4 million homeowners by the year 2012. If your family can no longer afford your current monthly loan payments, then you may be able to qualify for a loan modification that would make your monthly mortgage payment affordable. Default and late payments aside, if you are one of the millions of borrowers who happen to be current, but are having difficulties with making their payments, as well as, borrowers who have missed payments may be eligible. Don't worry about whether or not you are already in foreclosure. The program was designed especially for you. Foreclosure proceedings cease at the moment the modification process starts. The first thing you will want to do if you find yourself in this predicament is contact your loan servicer, provided they have not already contacted you. Your loan servicer is the whichevever financial institution collecting your mortgage payments and is responsible for all accounting and management of the loan. The loan servicer will provide you with all the necessary paperwork and instructions for creating your loan modification package. There is free foreclosure help available to you on the Obama Administrations "Making Home Affordable" website and you may find additional support at the HUD (Housing and Urban Development) website. If you are having problems making your mortgage payment or need assistance with a loan modification, please contact us today at http://www.unitedloanmods.com and we can help save your home! United Mortgage Solutions is a Texas Based Loan Modification company!
When to Hire an Attorney to Fight Your Foreclosure
Both the economy in general and housing market in particular have experienced major upheavals. This combined with a several additional negative economic factors has resulted in a record number of foreclosures throughout the United States, causing untold devastation for American families. Innumerable homeowners and renters facing foreclosure have no idea where to turn to for help. Despite all the lawyer jokes, an attorney can actually be your best asset in the fight against foreclosure. Renters Can Be Foreclosure Victims Too Homeowners far outnumber renders in terms of the percentage of people affected by foreclosures. However, renters can certainly be foreclosure victims as well - and in no small measure - if their landlords lose their homes or apartments to the foreclosure process. Being a renter in a property pending foreclosure can be extremely confusing, so contacting an attorney early on would be prudent - unless you are already prepared to leave anyway. You will want an attorney who specializes in real estate and foreclosures. What is the Foreclosure Process for Renters Renters must be provided advance notice of the foreclosure and impending eviction well ahead of the day they are required to move out. This is mandated by law in most U.S. states. Even if you have a new landlord, that person still must give you at least several weeks notice if they need to evict you. Depending on the laws in your geography, they may even be required to honor your lease to its expiration. This would allow you to remain in your house or apartment until your lease is up, buying you much more time to locate an alternative living arrangement. The Foreclosure Process for Homeowners Homeowners should still consider seeking the assistance of a qualified attorney to help push back on the foreclosure. A real estate attorney - primarily one specializing in foreclosures - will certainly know the ins and outs of the foreclosure process, helping you take advantage of legitimate loopholes and small windows of opportunities available to you. Why Hire an Attorney Attorneys are familiar with foreclosure procedures and possible means of stopping one. They can provide you expert advice on prudent actions to take and can also assist in dealing directly with your lender, thus preventing you from making costly mistakes that would normally decrease your chances of holding onto your home. The foreclosure process is a grim reality, but you almost certainly do not know the specifics of all the laws and procedures involved. This is why tapping into the expertise of a real estate attorney can be your best opportunity to fight foreclosure.
Why Canada’s Housing Market Didn’t Crash
They saw a housing boom, they saw a recession, and yet the Canadian housing market is still cooking with gas. Why? Fundamental differences in Canadian banking, borrowing and home buying.
Redfin CEO and Others Pull Back on Housing
I had a chance today to sit down this morning with the CEO of online real estate brokerage Redfin, Glenn Kelman, who is one of the few people actually making money in the housing market these days.
