Foreclosure Activity Slows for Third Straight Month
November 13, 2009
RealtyTrac one of the leading online marketplaces for foreclosure properties, released its October 2009 U.S. Foreclosure Market Report, which shows foreclosure filings—default notices, scheduled foreclosure auctions and bank repossessions—were reported on 332,292 U.S. properties during the month, a decrease of 3% from the previous month but still up nearly 19% from October 2008. The report also shows one in every 385 U.S. housing units received a foreclosure filing in October.
“Three consecutive monthly declines is unprecedented for our report, and on first blush an indication that the foreclosure tide may be turning,” said James J. Saccacio, chief executive officer of RealtyTrac. “However, the fundamental forces driving foreclosure activity in this housing downturn—high-risk mortgages, negative equity, and unemployment—continue to loom over any nascent recovery. And despite all the efforts and resources directed at helping homeowners avoid foreclosure, we continue to see foreclosure activity levels that are substantially higher than a year ago in most states.”
Nevada, California, Florida post top state foreclosure rates
Despite a 26% decrease in foreclosure activity from the previous month, Nevada continued to document the nation’s highest state foreclosure rate—one in every 80 housing units received a foreclosure filing in October. A total of 13,842 Nevada properties received a foreclosure filing during the month, a 4% decrease from October 2008 and the first ever year-over-year decrease in Nevada since RealtyTrac began tabulating the year-over-year change in January 2006. Nevada default notices were down 10% from October 2008, and scheduled foreclosure auctions were down 6% from October 2008, while bank repossessions were up 8% from October 2008. A new foreclosure mediation program implemented by state law (AB 149) in July may be slowing the inflow of distressed properties into the foreclosure pipeline.
With one in every 156 housing units receiving a foreclosure filing in October, California posted the nation’s second highest state foreclosure rate for the second month in a row. A total of 85,420 California properties received a foreclosure filing during the month, a decrease of 1% from the previous month but still nearly 50% above the total reported in October 2008. The state’s default notices and scheduled foreclosure auctions were up 120% and 73% respectively from October 2008, when California foreclosure activity was in the midst of a three-month trough after a law (SB 1137) requiring lenders to give distressed homeowners extra notification before initiating foreclosure took effect in September 2008.
Florida posted the third highest state foreclosure rate, with one in every 168 housing units receiving a foreclosure filing in October. A total of 51,911 Florida properties received a foreclosure filing during the month, a nearly 6% decrease from the previous month and a decrease of 4% from October 2008. It was the first year-over-year decrease in overall Florida foreclosure activity since July 2006.
Other states with foreclosure rates ranking among the nation’s 10 highest were Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah.
Four states account for more than 50 percent of national total
Four states accounted for 52% of the nation’s total foreclosure activity in October: California, Florida, Illinois and Michigan.
Illinois posted the third highest state total after California and Florida, with 19,946 properties receiving a foreclosure filing in October—a 56% spike from the previous month and the highest monthly total for Illinois since RealtyTrac began issuing its report in January 2005. The state’s foreclosure rate jumped from No. 11 in September to No. 6 in October, and it was the only state with a foreclosure rate in the top 10 to post a monthly increase in foreclosure activity. A recent state law (SB 2513) that gives distressed homeowners an extra grace period to seek counseling to help avoid foreclosure may have created some pent-up foreclosure activity in the state. After the law went into effect in April, Illinois foreclosure activity decreased for three straight months before beginning to climb again.
Michigan registered the fourth highest state foreclosure activity total despite a nearly 2% decrease from the previous month. A total of 16,468 Michigan properties received a foreclosure filing in October, an increase of nearly 45% from October 2008.
Other states with totals among the 10 highest in the country were Nevada (13,842), Arizona (13,345), Georgia (12,468), Texas (11,798), Ohio (11,646) and New Jersey (7,435).
Three states account for all top 10 metro foreclosure rates
Despite a 27% decrease in foreclosure activity from the previous month, Las Vegas continued to document the nation’s highest foreclosure rate among metropolitan areas with a population of at least 200,000. One in every 68 Las Vegas housing units received a foreclosure filing in October—more than five times the national average.
Seven of the top 10 metro foreclosure rates were in California, led by Vallejo-Fairfield at No. 2 and Modesto at No. 3, both with one in every 81 housing units receiving a foreclosure filing. Other California cities in the top 10 were Riverside-San Bernardino-Ontario at No. 4 (one in 83), Bakersfield at No. 6 (one in 97), Merced at No. 7 (one in 100), Stockton at No 8 (one in 116), and Sacramento-Arden-Arcade-Roseville at No. 10 (one in 130).
Metro areas in Florida accounted for the remaining two spots in the top 10: Cape Coral-Fort Myers at No. 5 (one in 92) and Orlando-Kissimmee at No. 9 (one in 117).
For more information, visit www.realtytrac.com.
Read more: http://rismedia.com/2009-11-12/foreclosure-activity-slows-for-third-straight-month/#ixzz0WlhMOSVu
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U.S. Real Estate Confidence Retracts 4.11% in October
November 12, 2009
Point2 Technologies Inc. released the findings from its Real Estate Confidence Index (RECI) survey for the United States, for the month of October 2009. The Index measured 5.59 on the 1-10 Index Scale (1 being “bad” and 10 being “good”), down 4.11% month-over-month.
While the October RECI score came in below the September reading of 5.83, a number of brokers and agents leveraging foreclosure properties in most states cited and credited strong business activity to this category, enabled by the federal government’s $8,000 First-Time Buyer Credit.
The RECI tracks the opinions of thousands of real estate brokers and agents, measuring their forward-looking sentiment of the real estate market, across the United States.
Properties in the mid to low price ranges continued to generate the majority of market activity in most states, as indicated by brokers and agents who participated in the RECI survey in October.
Typical winter season market adjustments were also cited by some respondents as a reason why markets may slow down until activity starts to rebound beginning in February.
The RECI tracks the current market sentiment, short-term (3-6 months) optimism/pessimism and long-term (6-12 months) optimism/pessimism of real estate professionals in the United States. The median across all three time periods represents the forward-looking Index measure for the month.
Real estate professionals’ current sentiment, one of the three variables that make up the RECI, averaged 4.89 on a seasonally-adjusted basis, for the month of October. The change represents a 3.36% decrease in confidence across the country versus last month. October is the first time the current sentiment has turned negative compared to the previous month’s reading, since the RECI’s introduction in June.
The forward-looking short-term (3-6 months) optimism/pessimism reading came in at 5.37, remaining above the mid point on the RECI 1 – 10 scale despite it being 5.79 percentage points lower than the September score.
Long-term (6-12 months) optimism/pessimism remains in stronger positive territory at 6.51 on the scale, but also off by 3.12% versus the September reading of 6.72.
For more information, visit www.RealEstateConfidenceIndex.com or www.Point2.com.
Source: RISMedia
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Americans More Unhappy With Feds’ Housing Fixes
November 12, 2009
Trillions spent on propping up banks, buying mortgages, tax credits and new programs designed to lower payments and prevent foreclosures. And yet a new survey from Move Inc., the parent of Realtor.com, says Americans are growing increasingly dissatisfied with how Washington is handling the housing mess.
The October 2009 survey found that the federal government’s approval rating by consumers on housing issues has slipped since March 2009. By a six-percent margin, Americans said they don’t think the government is doing enough to stabilize the housing market (48.2% compared to 42.2% five months ago). According to the survey, consumers still want low interest rates (31.4%) and action by the government to help homeowners prevent foreclosures (28.5%), the same two top priorities expressed by survey respondents in March.
The survey found that public participation in the programs to prevent foreclosures is much lower than anticipated. In March 2009, several days after the details of the Making Home Affordable program were announced; Move’s survey found that 17.6 percent of those interviewed said they intended to participate in the Administration’s program. Now only 8.8 percent said they actually did participate.
The number of consumers interested in investing in real estate has doubled since March. One out of eight (12.1%) homebuyers today plan to purchase a home as an investment property, compared to 5.6 percent seven months ago.
Fear of foreclosure is fading. In March 52.5 percent of all survey respondents said they were concerned that they or someone they know may face foreclosure in the next 6 to 12 months. That number dipped slightly to 45.1 percent in October.
The survey of 1,000 people was conducted the third week of October.
Source: BusinessWeek
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Home Prices Fall But Sales Continue to Climb
November 11, 2009
A real estate group says home prices fell in eight out of every 10 U.S. cities in the third quarter of this year as heavily discounted distressed sales made up 30 percent of all deals.
But home sales continued their climb, with quarterly sales outpacing the second quarter and the previous year’s figures, the National Association of Realtors said Tuesday.
The median sales prices of existing homes declined in 123 out of 153 metropolitan areas compared with the same period a year ago. Prices rose in the other 30 cities.
The national median price was $177,900, or 11 percent below that of the third quarter last year.
“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas,” said Lawrence Yun, the group’s chief economist. “But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market.”
Separately, the Treasury Department said Tuesday that as of the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for the Obama administration’s mortgage-relief program to reduce monthly payments to more affordable levels.
Launched with great fanfare in March, the plan got off to a weak start, but now nearly 920,000 loan-modification offers have been sent to more than 3.2 million eligible homeowners. That works out to 29 percent, up from 15 percent at the end of July.
The homes report said prices in Fort Myers, Fla., plunged 40 percent to $98,000 from a year ago, the worst in the nation. Las Vegas saw its median price tumble almost 35 percent to $138,500 year over year.
The largest price gain, by contrast, was in Cumberland, Md., where prices jumped 19 percent to $122,100. Davenport, Iowa, followed with an increase of 14 percent to $115,600.
The federal tax credit of up to $8,000 for first-time homebuyers helped boost sales in the third quarter. U.S. home sales rose in 45 states from the second quarter, with 28 states posting double-digit gains.
Total quarterly sales reached a seasonally adjusted annual rate of 5.3 million, up more than 11 percent from 4.76 million in the second quarter.
President Obama signed a bill last week extending and expanding the federal tax credit. Now, buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500. First-time homebuyers – or anyone who hasn’t owned a home in the past three years – would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
Meanwhile, though the Obama administration’s mortgage-relief program has reached one in five eligible homeowners, most of those borrowers are on temporary trial plans.
To make the change permanent, borrowers must complete a big stack of paperwork and show they can make their payments on time. At the beginning of September, only about 1,700 permanent modifications had been made. The Treasury Department expects to release updated data later this month.
“We’re seeing some early indications that the servicers haven’t done enough to get all the documents in,” said Michael Barr, an assistant Treasury secretary.
In California, about 130,000 homeowners have been enrolled in the “Making Home Affordable” loan-modification plan. That works out to about 19 percent of the state’s homeowners who were either two payments behind or in foreclosure at the end of last month, according to Treasury Department data.
Two other hard-hit states, Arizona and Nevada, had similar rates of assistance as California, at 22 percent and 18 percent respectively. Florida, however, was much lower, at 12 percent, possibly because of high numbers of investor-owned properties that don’t qualify for the program.
Government officials say they are pressing mortgage companies hard to improve their performance. Still, many housing advocates have been disappointed with the $50 billion plan’s progress and say that getting a loan modification remains a battle.
Source: The Washington Times
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Fed Officials See Choppy Recovery for U.S. Economy
November 11, 2009
High unemployment and reluctant consumers will likely make an incipient U.S. economic recovery weak and erratic, top Federal Reserve officials said in a string of speeches across the country on Tuesday.
That means interest rates, currently at historic lows close to zero, should remain near that floor for the foreseeable future, the policymakers said.
“The strength and durability of the expansion is in question,” said Janet Yellen president of the Federal Reserve Bank of San Francisco, in Phoenix, Arizona. “High unemployment, weak job growth and paltry wage increases are a recipe for sluggish consumer spending growth and a tepid recovery.”
Echoing her remarks, Richard Fisher, head of the Dallas Fed, flagged commercial real estate and a heavy reliance on government stimulus as other key risks.
“The more demand you steal from the future, the less future demand there is for you to steal,” Fisher told the Austin Headliners’ Club, a group of Texas business executives, lobbyists and politicians.
The U.S. economy grew 3.5 percent in the third quarter, unofficially emerging from its worst recession in generations. But the jobs picture remains dismal, with the unemployment rate surging to 10.2 percent in October, its highest level since 1983. A Reuters poll on Tuesday showed economists expect it to hit 10.5 percent in mid-2010 before subsiding.
Source: Reuters
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Top 5 Home Improvement Projects Based on Cost and Return on Investment
November 10, 2009
HomeGain.com, one of the first websites to offer Web-based free instant home values, announced that it has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey.
HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes.
According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are:
1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI)
Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment.
“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.”
Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.
The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase).
“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999.
For more information, visit www.homegain.com.
Source: RISMedia
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Expanded Version of Tax Credit Will Allow More Homebuyers to Qualify
November 9, 2009
President Obama recently signed an expanded version of the $8,000 first-time homebuyer tax credit that was set to expire on November 30. “The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples:
Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.
Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. “If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”
The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”
There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others
-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).
-The credit applies even if you have co-signers on your mortgage loan
For more information, visit www.CMPSInstitute.org.
Read more here.
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5 Spaces to Consider When Creating a Flexible Home
November 9, 2009
The definition of family has expanded far beyond the traditional image of a married couple and 2.2 children, and daily lives are busier than ever. Understanding a family’s unique needs and lifestyle is important in helping them find a house that really feels like home.
Flexibility may be the buzzword of the millennia. Flexible schedules, flexible work hours, flexible space—Americans are regaining control by rearranging the flow of their day-to-day lives. Very few of us lead cookie-cutter lives, so cookie-cutter home solutions don’t always work. If every family has a unique configuration and life pattern—consider single moms, empty nesters with visiting kids and grandkids, families with young children, multigenerational families—shouldn’t the architecture that surrounds them be flexible enough to accommodate their needs? The opportunity is to identify houses that offer “adaptable possibilities” and develop talking points aligned with your client’s situational needs.
Buying a home today is an emotional, economic and deeply considered purchase. That home will be a base station for family, friends, neighbors, school, work and play and its layout and traffic pattern will need to accommodate the “busy-ness” of life. As buyers imagine themselves in a potential home, adaptable space may be a selling point over and above simple staging. Here are a few spaces to consider:
-Kitchen: We cook, we do homework, we entertain, we do crafts there. Open or co-located areas for simultaneous activities and multiple people usually top the wish list. If space is limited, suggest a corner of the kitchen or an adjoining dining room as a homework/conversation area.
-Open, accessible plans: If your client is single, an open plan delivers a great space for entertaining. An older or multi-generational family may view it in terms of accessibility. Either will have visiting family members, so having a “visitable” home offers the opportunity to welcome anyone regardless of age or ability. One zero-threshold entry, wide doorways and a main floor bathroom offer ease of use and accessibility whether you’re unloading groceries or have a temporary or permanent physical impairment.
-Home office/library/reading space: Part of a dining room, den, extra bedroom or even an extra closet can be furnished to create a small space for quiet activities. Bookcases lining a wall speak volumes regarding functionality far beyond the original intention of the room.
-Basement: This extra square footage offers many options so even if the space is un- or partially-finished, paint the vision for tomorrow’s media room, game room, exercise or craft area.
-Outdoor living spaces: Whether it’s a tiny lot or large open space, suggesting ideas that go “beyond the deck” with landscaping, pathways and sitting areas brings even the mundane to life.
Seeing a home through a different lens may help your clients imagine the space as they would actually use it and gain a new perspective on possibilities. Going beyond the basics of BR/BA-speak to engage your clients in lifestyle discussions will not only help you find solutions that are right for each family; it will help them find the perfect fit for the architecture of their lives.
Melissa Birdsong is vice president for Trend, Design & Brand, Lowe’s Companies, Inc.
For more information, visit www.lowes.com.
Source: RISMedia
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