WASHINGTON (Reuters) – Pending sales of previously owned U.S. homes rose unexpectedly in July, an industry group said on Thursday, suggesting a tax credit-related housing market decline was close to bottoming.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in July, increased 5.2 percent to 79.4 from June. June contracts were revised to show a slightly bigger 2.8 percent decline instead of the previously reported 2.6 percent fall.

Compared to the July last year, pending home sales fell 19.1 percent. Economists polled by Reuters forecast the index, which leads existing home sales by a month or two, falling 1.0 percent in July.

Home sales and building activity have dropped sharply following the end in April of a popular tax credit for home buyers.

“Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” said Lawrence Yun, NAR chief economist.

news.yahoo.com

Sellers are discovering the cold reality of post-housing-bust prices: No matter what they think their homes are worth, what matters is what buyers are willing to pay. That can be a lot less in areas where the supply of houses for sale is swollen by foreclosures and short sales, often priced 20% to 30% below the ones being sold by financially healthy owners. Nationally, such properties account for a third of all sales three years after a historic chill blew over an overheated housing market.

Read full article USA TODAY

Congratulations to Helen Oliveri who was recently featured in This Chicago Agent Magazine Article on how she is excelling in a tough market. Helen was one of only 6 people featured as a real estate expert amongst her peers. What a nice tribute!

You can pose the question of “have we recovered?” to 100 Realtors and receive 100 different answers. The fact of the matter is that no one knows for sure if we are on the path to recovery, but many insist the market is showing positive signs. To get to the bottom of this issue, we spoke with a number of industry experts on the state of the real estate market, and also checked in with a few Realtors and other industry professionals who have found the path to success despite the direction of the economy. The market may be up or down at any given moment, but you are the one in control of your real estate career.

SUCCESS IS A MINDSET

By Helen Oliveri – Agent

In a shifting market, the key to our success has been tenacity and a strong focus on return on investment (ROI). Understanding the activities that generate the most return has been instrumental to our explosive growth. As well, assessing the market and where the source of our business comes from has been influential to sustained growth.

Every year, I have grown our business substantially and I firmly believe that the market will not dictate my level of success. I demand this mindset of anyone affiliated with me, and, in fact, this is a consistent mindset throughout my entire team. We are high-minded overachievers and winners who believe we are the solution to achieving our clients’ real estate goals. Testament to this philosophy is that I have sold over 104 properties so far in 2010, and we are on path to break records this year.

Our systems and tools to market our homes have proven to out-compete the market. Everything we do is completely different from the norm and this is what makes us unique and successful. We market extensively and creatively invest in our homes. Our marketing drives competition and competition creates urgency. Urgency drives sales and sales drive service. Stellar service drives referrals, referrals create raving fans and so on. Then the cycle repeats itself.

We provide the personal touch regardless of the fact that we are a volume-based business. We are focused on understanding the market, adjusting to it and educating our clients through it to achieve their goals. Our expertise in this market is critical and essential to sellers and buyers. Additionally, how we convey our expertise is equally critical.

As we know, real estate is localized, and depending on which area we are examining, the overall trend is that we are still in a declining market. It may be several years before we see an upswing in the market and trends indicate that we have a surplus of inventory and until this depletes, we will continue to be in a buyers’ market. Recovery seems to be further out than originally anticipated. Subsequently, telling people the truth is simply a must. At the end of the day, it is up to us to overcome the challenges of the market, to educate ourselves and our clients and to be honest, integrity-based professionals. This is the highest ROI a consummate professional can make. Invest in your business and in helping people and success will follow. To expect otherwise is just unacceptable.

My words of wisdom are to make the most of the market, invest in what works, be ethical and true, and the rest will fall into place. Success is a mindset, so never settle for less than being the best and success will follow.

Helen Oliveri is the founder of The Helen Oliveri team with Keller Williams, specializing in all of Northern Cook & Lake County real estate. For more information, visit helenoliveri.com, or contact her at 847.967.0022 or by e-mail at helen@helenoliveri.com.

The housing bust has made owning a home a lot more affordable — but in some places, prices are extraordinary; you can buy a nice condo for less than the cost of a new family car.

Some cities have dozens of attractive condominium listings selling for $50,000 or $25,000. There are some selling for less than a new Toyota Corolla. And these are not derelict hovels in crime-ridden communities: These homes are often in move-in condition and located in nice neighborhoods.

“Not to sound like a salesman, but there are some real bargains out there,” said Kevin Berman, a broker with Bankers Realty Services in Fort Lauderdale, Fla.

The housing bust has taken down the national median home price by about 23% since 2007, according to the National Association of Realtors (NAR). But condo have fallen even further, down about 25%.

In Sacramento, Calif., condo prices have fallen 59% from what they averaged in 2007, according to NAR. Miami condo prices have plunged 65%, and in Las Vegas they are off 66%.

Prices of individual units are down even more. One condo in Deerfield Beach, Fla., that sold for $115,000 five years ago now lists for $25,000. That’s a drop of nearly 80%.

Much of these price drops can be attributed to over development during the boom. Much of that came in Sand State markets such as Las Vegas Miami and Phoenix, where prices for all properties are have fallen precipitously.

Berman has a one bedroom condo in one of these areas with a listing price of $15,000. He said it needs a little work, and it’s in a community that doesn’t allow you to rent out the property,, but still, $15,000?

“It’s great for a vacation property or a retirement home,” he said.

Another of his listings is in North Miami, about three miles from the beach. It’s a 900-square foot, one-bedroom, one-and-a-half bath with a community swimming pool, central air and assigned parking that costs just $23,450. That’s less than a fully loaded new Camry.

In Las Vegas, there are more than 200 condos listed for $30,000 or less. A two-bedroom, two-bath condo with a covered patio in North Las Vegas can be had for just $30,000.

Of course, condo owners have other expenses, particularly maintaining the grounds and common areas, but these tend to be quite low. And the property taxes are also often modest.

Plus, if these housing markets ever rebound, there’s even likely to be some price appreciation for these homes. You can’t say that about a new car.

money.cnn.com

WASHINGTON—It is difficult to locate a silver lining in the latest prognosis for the battered American dream, with new data suggesting an unprecedented housing meltdown has slipped even more deeply into the crater of joblessness.

But some commentators managed to do just that Thursday, trumpeting a new RealtyTrac survey that showed the worst may be over for 23 of the 25 cities most ravaged by the foreclosure crisis.

From Las Vegas to Bakersfield to Tampa, almost all the most bubblicious of American towns appear to be levelling off after hemorrhaging housing value during the sub-prime mortgage plunge.

But in fact all 25 cities still suffer from foreclosure rates two to five times the national average. More ominously, the RealtyTrac figures showed foreclosures creeping throughout the rest of the country to recession-battered cities not closely associated with the original crisis. In all, 75 per cent of 206 metropolitan areas with at least 200,000 residents saw a spike in home auctions, repossessions or notices of default between January and June of this year. Fully one in 78 homes were embroiled in foreclosure.

Behind all the numbers, social researchers are only just beginning to come to grips with the human toll. And this too makes for grim reading, albeit one with a different smidgen of hope.

“It really is breathtaking in a terrible sort of way to look across the range of impacts, from housing to joblessness,” said Rich Morin, who tracking the pain for the Pew Research Centre.

The Pew research team’s most recent findings – based on in-depth interviews with nearly 1,000 jobless Americans as part of a larger nationwide survey of 3,000 people — are embodied in their report’s title: Lost Income, Lost Friends — and Loss of Self-respect.

What is especially striking is the sense of permanence that has settled in among some Americans who’ve suffered the most — middle-class, middle-income, middle-aged Americans, especially Baby Boomers in the 50-64 age bracket, many of whom have burned through all their assets and now face a retirement under unchangeably diminished circumstances.

“A few years ago we spoke about the Baby Boom being at the peak of earning potential,” Morin said in an interview. “But they were the ones who made major investments in larger homes and really took it on the chin. Many did so well for so long and now this. It’s like a reward for our hubris, being flat broke.

“This translates to psychological impacts. Four out of 10 of the unemployed we spoke to tell us family relations have suffered, 40 per cent said they lost contact with close friends. And a third say they have lost self-respect.

“The data suggests this is going to alter retirement plans. For people who are losing their house, when the recession ends they aren’t getting that money back. And many have rethought their careers in the downward sense, settling for and making due with jobs that just aren’t as good as what they had.”

So where is that glimmer? Pew found that despite everything, a majority of Americans say they still has faith in home ownership.

“They know it’s going to be hard, they know it’ll be a long while yet,” said Morin. “But owning property, for the majority, is the way you become a fully formed person in America. To own a home, to put down roots in a place you call your own – that ideal is intact.

“I suppose that says something about American culture. There’s something to be said for the eternal optimist. Americans as a species have always tended to look on the bright side. And it appears we still do.”

thestar.com

Chicago’s collar counties are bracing for millions of dollars in lost revenue if Gov. Pat Quinn signs a bill that would give banks the choice to hire private companies to handle the growing number of home foreclosures across northern Illinois.

The measure garnered near unanimous support in the General Assembly, but now some of the lawmakers who once championed it are urging Quinn to veto the bill.

“I’m in favor of the governor vetoing this or at least letting us go back and change it in such a way that it doesn’t hurt counties,” said state Rep. Dan Brady, R-Bloomington, who co-sponsored the bill in the House but then removed his name from the measure last week. “I don’t think many of us realized what the unintended consequences of this might be.”

State Sen. A.J. Wilhelmi, D-Joliet, who co-sponsored the bill in the Senate, said he has asked for a meeting with Quinn to warn him about the financial risks.

“I now have concerns about the potential negative consequences that may result to counties,” Wilhelmi said.

The governor’s office is reviewing the bill and has reached out to its sponsors, said spokeswoman Annie Thompson.

At a time of soaring home foreclosures across Chicago and its suburbs, counties have created a valuable extra stream of revenue by tacking on fees to each transaction.

In Will County, where years of housing growth have given way to mounting foreclosures, administrative fees brought in an additional $1.5 million last year and are expected to rake in close to $2.5 million in 2010, officials said. Records show similar fees earned DuPage and Lake counties more than $1.2 million in 2009; Kane County pulled in about $1 million.

In Cook County, private companies already compete with the county for foreclosures and have secured about 98 percent of the business, said sheriff’s spokesman Steve Patterson.

When a foreclosure is filed in court, judges appoint someone — typically the local sheriff’s office — to oversee the proceedings, from handling the eviction to filing paperwork and reselling the home.

“(An eviction) can be a really emotional time for most families, and I think it’s helpful to have a uniformed officer on hand to explain all your options,” said Will County sheriff’s spokesman Pat Barry.

Counties recoup some of the money spent during a foreclosure by tacking on administrative fees, often hundreds of dollars, that is directed back into their general fund.

The new bill would tweak the existing law by transferring power from judges to the plaintiffs — banks or mortgage lenders — who could streamline the sales process and avoid paying county administrative fees by hiring a private company to mediate the foreclosure.

The measure’s staunchest supporter, state Rep. Lou Lang, D-Skokie, views the bill as “consumer friendly” and says it’s simply clarifying a law that has been co-opted by judges looking to boost revenue at the county level.

“With foreclosures having increased in the last couple of years, I think counties see this as a chance to pile on,” said Andrew Schusteff, president of Intercounty Judicial Sales, a Chicago company that handles foreclosure proceedings and sales. “Besides a money grab by the counties, what justification can be made for the sheriff’s departments to be involved in these cases?”

Schusteff said private companies can often put homes back on the market within weeks after a foreclosure, compared with months for the sheriff’s department. Quicker proceedings may save families money if they’re able to work out an agreement to save their homes from the bank, Schusteff said, and it could improve surrounding property values and save municipalities the costly upkeep of abandoned homes.

Schusteff said Intercounty was among a handful of private firms who helped draft the bill, and records show it has been a generous contributor to Lang’s re-election efforts. Intercounty and its founder, Fred Lappe, have donated $30,800 to Lang’s campaigns since 2001, according to the State Board of Elections’ Web site.

Lang bristles at those who say those donations explain his support of the bill.

“Of course people support people who support them,” Lang said. “But under that argument, all campaign donations are tainted. That’s wrong, and it’s insulting to me.”

chicagotribune.com

People who applied for a mortgage as of June 1 might see their finances — specifically their debt — under renewed scrutiny days before they are scheduled to complete a home purchase.

Fannie Mae, the giant government-run mortgage finance company, rolled out a new policy this summer that encourages lenders to retrieve a borrower’s “refreshed” credit report just before a loan closes.

The goal is to check whether the borrower has taken on additional debt or opened new lines of credit since applying — such as a second mortgage or an auto loan. Such new debt could undermine the ability to repay the mortgage.

But the rule is causing angst among lenders, who say the policy creates logistical nightmares that could trip up home purchases at a critical time in the housing market’s struggle to recover. They say new debt, even if it’s a short-term obligation, could skew a borrower’s credit profile enough so that preapproved loans do not get funded.

This week, Fannie said that it is reviewing the policy based on feedback from lenders and that it will offer more guidance by the end of July. In an update on its Web site, the company said it did not intend to require additional credit reports, but only to emphasize existing policies that require lenders to perform due diligence on loans before selling them to Fannie.

Deborah Slade-Horsey, a vice president at Fannie, said the company was merely making a suggestion to lenders. “Never was the intent that it is something that you are required to do on 100 percent of the loans,” she said. “We think that this is one of the tools they can use.”

On Wednesday, Fannie removed from its online documents any reference to refreshing credit reports.

Lenders concerned

Until Fannie settles the confusion, lenders are anxious about the consequences. They say a credit report is a mere snapshot and can be especially misleading at closing time. In those final days, borrowers tend to use their credit cards or open new accounts to pay for movers, furniture and appliances. These charges can add to their debt temporarily, even if they plan to pay off the loans the following month.

“Credit changes all the time. It’s not a static thing,” said David J. Bridges of McLean Mortgage. “People can’t shut down their lives for 60 days while they’re purchasing a home.”

Lenders said that, in the past, they pulled credit reports when prospective borrowers applied for a loan. Those reports are valid for 90 days. Lenders would not update them unless they had reason, said Richard Green, a sales manager at Presidential Bank Mortgage in Bowie. For instance, if the original report showed that the borrower had applied for new credit cards, the lender would check to see if the credit was granted, Green said.

“The lender was always supposed to turn over the stones that were in front of him, but this goes beyond that,” he said. “We never pulled an additional credit report unless we saw something suspicious early on.”

When Fannie Mae’s new policy kicked in last month, larger lenders started to pull fresh credit reports three to five days before closing, sometimes creating a mad scramble at the most stressful time in the home-buying process, said Mike McNamara, regional vice president of United One Resources, which supplies credit reports to lenders.

McNamara said that, for example, one lender pulled a new credit report the day before a home purchase was about to close and learned that the buyer had applied for a new credit card. That triggered an inquiry that left the borrower in limbo at the last minute, McNamara said.

“Imagine if someone had five or six inquiries on their credit report and we have to contact every creditor,” he said.

Such delays can be costly to borrowers, especially if they are buying foreclosures or taking part in short sales that allow distressed homeowners to sell their properties for less than what they owe on the mortgage.

“These types of purchase contracts are very harsh in terms of late closings,” said Faramarz Moeen-Ziai of Bank of Commerce in California. “In many cases, there’s a $100-a-day fee to our borrowers for any delay.”

Warning on new credit

Eric Gates, a mortgage broker at Apex Home Loans in Rockville, said people who locked in favorable interest rates might have to pay to extend the rate lock if their closing is delayed. They also might have to pay to store their belongings if they cannot move on time.

“We keep telling people: ‘Don’t open new accounts. Don’t close existing accounts. Don’t do anything whatsoever that will alter your credit situation,’ ” Gates said. “But there will be people who can’t avoid increasing their credit card balances, or already have, and that’s where the problems will crop up.”

The initiative has riveted the lending community because of the critical role that Fannie plays in the mortgage market. It, like its sister company Freddie Mac, buys loans from lenders and sells them as mortgage-backed securities to investors. It will not purchase loans that do not meet its rules, meaning lenders have to abide by Fannie’s guidelines or lose a key source of financing.

If loans sold to Fannie go bad because of fraud or poor underwriting, lenders risk having to buy back those loans or compensate Fannie for its losses. In the first quarter, lenders repurchased about $1.8 billion in loans, up from $1.1 billion a year earlier.

In announcing its new policy, Fannie warned that if a borrower defaults, any debts that were not adequately disclosed up to the time of closing would subject the lender to a repurchase. The company also said that if a lender pulls a credit report the day before closing that is consistent with the original report, the lender will remain responsible for any new debt.

“Imagine if a borrower is planning to close on a house tomorrow and goes out to buy a car this afternoon unbeknownst to the lender,” said Brian Chappelle, a banking consultant. “That may not immediately show up on the credit report. But if that borrower defaults on the loan two years from now, the lender may have to repurchase that loan.”

By Dina ElBoghdady

washingtonpost.com