Posts Tagged “homes”
 Moody’s Investors Service says it expects home price appreciation to be “soft” for the next couple of years. The company says there were 1.8 million more vacant homes sitting on the market than what is considered the norm
at the end of the second quarter. According to Moody’s, this imbalance of supply-and-demand, particularly in light of the steep falloff in home sales post-tax credit, means the home price correction is not yet over.
The credit ratings agency explained that the increase in excess housing supply reflects the rise in homes that lenders are repossessing now that many of the distressed borrowers who failed to qualify for the Home Affordable Modification Program (HAMP) or an alternate modification are going through the foreclosure process.
Repossessions by banks hit a record high in the first half of this year, according to data from RealtyTrac. Many of these homes are ending up in the tally of excess housing stock, and Moody’s says as lenders push these units off their balance sheets, house prices will fall.
“The increase in excess supply indicates that the market still has a substantial number of unwanted homes to work
through…. Indeed, it will not be until 2012 that demand and supply conditions are balanced enough to drive price appreciation that matches the pace of inflation,” Moody’s said in a research note released Monday.
Based on Moody’s estimates of Census data, the share of vacant homes averaged 6 percent of total housing stock over the past 20 years. The number of empty homes reached a record 7.7 percent reached in the second quarter, which implies the 1.8 million unit excess, the ratings agency explained.
That’s up from the first quarter’s 1.7 million estimated excess. According to Celia Chen, senior director for Moody’s Economy.com, the increase is “small, but disturbing and suggests that the market still has much healing to do.”
Moody’s cautions that it will take some time to work through the excess housing – a weak job recovery and tight underwriting standards, combined with the large number of households with impaired credit, will constrain the demand for owning a home. Nonetheless, the company’s analysts say the imbalance will self-correct.
“Under our baseline outlook of an economy that recovers weakly over the next several quarters, the demand for homeownership will increase as more jobs help more people move into their own homes. Concurrently, the homebuilding industry will continue to put up homes at a below trend pace, constrained by financing difficulties. These forces will help soak up excess housing units by the end of 2012,” Moody’s said.
In the meantime, the ratings agency says the lingering excess supply will weigh on house price appreciation until supply and demand conditions are better balanced. Moody’s expects the national house price index to bottom early next year, but price appreciation to remain weak for the next couple of years.
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4 bed Cape Cod on wonderful lot in East Highland Pk with long side drive, 2 car detached garage, finished lower level, and more. Come and see today! Buyer responsible for any/all compliances, taxes, room count, escrows, etc if required. All inspections/systems tests are at buyers expense. Offers require pre-approval & EM due in certified funds at acceptance. Addendum required after seller accepts offer. Cash deals require proof of funds. Seller addendum required before submitting offer. Cash deals require proof of funds. View the many pictures we have to offer at www.illinoisforeclosuredeals.com and call today to schedule a viewing of this property at 847-967-0022. This property is exclusively represented by The Helen Oliveri Team of Keller Williams Realty.
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By Dan Levy
June 30 (Bloomberg) — Homes in the foreclosure process sold at an average 27 percent discount in the first quarter as almost a third of all U.S. transactions involved properties in some stage of mortgage distress, according to RealtyTrac Inc.
A total of 232,959 homes sold in the period had received a default or auction notice or were seized by banks, RealtyTrac said in a report today. That’s down 14 percent from the fourth quarter and 33 percent from the peak a year earlier, the company said. The average price of a distressed property was $171,971, according to the Irvine, California-based data seller.
“The discount will probably stay between 25 percent and 30 percent as lenders carefully manage the number of new foreclosure actions in order to avoid flooding the market,” Rick Sharga, RealtyTrac’s senior vice president for marketing, said in an interview.
“We’re clearly creating more properties that will be sold at distressed prices than the market is absorbing,” Sharga said. There were more than 250,000 new bank seizures in the first quarter.
The discount reflects the average sales price of homes in the foreclosure process compared with the average sales price of properties not in distress. About 31 percent of all U.S. sales in the quarter were of homes in some stage of foreclosure, RealtyTrac said.
Rising Seizures
Home foreclosures set a record for the second straight month in May, with increases in every state, as lenders stepped up property seizures, RealtyTrac said earlier this month. Bank repossessions climbed 44 percent from a year earlier and will probably set a record in the second quarter, the company said.
Distressed sales totaled more than 1.2 million last year, a 25 percent increase from 2008 and a more than four-fold rise from 2007, according to RealtyTrac.
Such transactions accounted for 29 percent of all sales last year, up from 23 percent in 2008 and 6 percent in 2007. The average foreclosure discount was 25 percent in 2009, 22 percent in 2008 and 26 percent in 2007.
A “normal” market would show foreclosures accounting for less than 2 percent of sales, Sharga said.
Bank-owned properties sold for an average 34 percent discount in the first quarter, up from 32 percent both in the previous quarter and a year earlier. Such properties accounted for 19 percent of all U.S. home sales, up from almost 16 percent in the fourth quarter and down from 21 percent in the first quarter of 2009, RealtyTrac data show.
Short Sales
Properties in default or scheduled for auction sold for an average discount of almost 15 percent, up from almost 14 percent in the previous quarter and down from 16 percent a year earlier. These homes are often sold in short sales, where lenders accept less than the outstanding loan amount for the property, RealtyTrac said. Sales of properties either in default or headed for auction accounted for 12 percent of all sales.
The average price was $154,740 for bank-owned properties and $199,950 for homes in default or scheduled for auction, RealtyTrac said.
“The competing forces will be bank-owned properties and short sales,” Sharga said. “The more short sales, the lower the average discount is likely to be.”
Nevada had the highest proportion of distressed sales of any U.S. state, with 64 percent of all transactions involving properties in mortgage distress.
California ranked second, with such sales accounting for 51 percent of all sales and Arizona was third at 50 percent.
Discounts on distressed homes were highest in Ohio, Kentucky and Illinois, where they sold for an average of at least 39 percent less than non-foreclosures.
RealtyTrac sells default data from more than 2,200 counties representing 90 percent of the U.S. population.
–Editors: Daniel Taub, Sharon L. Lynch
Businessweek.com
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Commentary
The housing sector continues to show signs of recovery. Together the tax credit (which expired at the end of April), the more upbeat consumer confidence, and favorable market conditions all contributed to bolstering April’s sales activity – with existing home sales increasing for the second straight month.
The return of buyer confidence with much of the home price correction believed to be over, encouraging economic developments and historically low mortgage rates, will provide the stepping stone for further market stabilization.
Meanwhile, stagnant job growth and elevated levels of foreclosure continue to be cause for concern. The government is now taking proactive steps to restructure the mortgage industry with risk-management measures seen by experts as a “huge cut in red tape” that would ultimately benefit consumers.
The Housing Market
Existing Home Sales
Existing home sales strengthened in April to 5.77 million, up 8.7% from March and 22.8%from last April. This is the tenth consecutive month of year-over-year increases.
According to Lawrence Yun, NAR chief economist, although part of the uptick was expected from the tax credit, there’s also been a return of buyer confidence, for those who remained on the sideline last year. The return of confidence is a result of stabilized prices, an improved economy, and continued advantageous interest rates.
In March, 49% of sales were from first-time buyers.
Median Home Price
The median price for an existing home was $173,100 in April, up 2.1% from a year ago and 4% from March. Distressed homes, accounting for a third of last month’s sales, continued skewing prices downward slightly as they typically are discounted 15% compared to typical home sales. Overall, prices this past year showed increased stability over the previous year.
Inventory
Total housing inventory rose slightly to 4.04 million in March, representing slightly less than an eight-and-a-half month supply of sales (if homes continue to sell at the current pace consistently and no new homes come on the market). Compared to the previous year, there are now 3% more homes on the market. Although this is the first rise in twenty consecutive months of decline when compared to the previous year, NAR’s chief economist believes this increase can be attributed to the summer selling season and that home prices are back on track.
Mortgage Rates
Mortgage rates dipped back below 5% this month due largely in part to the European debt crisis. As confidence in the value of the Euro eroded, more investors chose the U.S. dollar instead. With more demand for dollars, the cost of debt (interest rate) dropped. This event has also shown the global recovery is not free-and-clear of roadblocks to complete recovery. However, experts still anticipate rates will increase to between 6% and 6.5% by the end of the year. As the recovery gains increasing traction, the Federal Reserve will need to increase rates to prevent inflation.
Affordability
Affordability remains advantageous, supported by some of the lowest mortgage rates in decades as well as less expensive home prices. The home price-to-income ratio continues to remain well below the historical average of 25%. The ratio now stands at 14.9%.
Sources: National Association of Realtors, Freddie Mac
Government Action
FHA Turns to Lenders to Monitor Brokers
As the Federal Housing Administration (FHA), the government agency that insures home loans, saw its market share rise to about one-third of the mortgage market last year, up from 2% in 2006, the number of brokers seeking to arrange FHA-backed loans has mushroomed to 9,043 at the end of 2009 from 5,759 just two years earlier.
The agency, finding itself inadequately equipped to monitor its brokers, is shifting the responsibility to its lenders.
The FHA expects the new policies to result in better risk management, and the cut in red tape should produce better rates for consumers.
As of May 20, the FHA no longer certifies mortgage brokers or tracks the performance of brokers’ loans. Instead, lenders are now required to sponsor brokers and assume responsibility for loans they originate, including losses from fraud or mistakes in underwriting. In addition to revamping broker insight, the agency also beefed up oversight of its lenders by increasing net-worth requirements to $1 million from $250,000. The change is in effect for one year for existing lenders.
Source: WSJ.com
Topics For Buyers & Sellers
Myths about Distressed Properties – Debunked!
 Distressed properties – foreclosures and short sales alike – represent potentially great value for prospective buyers. However, common misconceptions about the time and money investment involved with buying such properties may keep many from inquiring further into this market. KW Research survey findings, taken from more than 2,500 KW associate respondents who have worked with distressed properties, can help steer clear of concerns as you make your way to homeownership.
| Buyer Concern |
Research Found |
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It’s going to take forever to find
one I want.
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3 out of 5 REO buyers and 1 in every 2 short sale buyers spent less than one month searching for a home before writing an offer. |
| How many offers do I have to write before one gets accepted? 10? 20? |
7 out of 10 distressed property buyers wrote three or fewer offers before one was accepted.
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| I know I am getting a good deal but will the cost of repairs eat up the savings? |
Half of REO buyers and almost one-third of short sale buyers spent less than $5,000 in repairs.
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Brought to you by
The Helen Oliveri Team of Keller Williams Realty
www.helenoliveri.com |
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Introducing The Helen Oliveri Team iPhone App!
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Features:
Search through 1,000s properties near you and see whats close to you using google maps.
Get detailed information about each property directly from the MLS.
See all your search results on an easy to use interactive Google map.
Contact us directly from the app to schedule a showing for a property you are interested in.
Requirements:
Compatible with iPhone and iPod Touch.
Requires iPhone OS 3.0 or later
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Distressed properties may not be driving the spring home-selling market, but they can be considered a co-pilot.
Sales of existing homes in Chicago recorded their sixth consecutive month of year-over-year improvement in February, the first month of what is traditionally the start of the buying season. But for every 10 single-family homes and condominiums sold within the city last month, four were distressed properties.
Foreclosures, once dismissed as unseemly, are increasingly in upscale neighborhoods and in move-in condition, and their bargain-priced sales are causing a ripple throughout the market.
In the past six months, the median sales price in Chicago has plummeted 21.6 percent, to $176,500 in February from $225,000 in September, according to data from the Illinois Association of Realtors. For the Chicago area as a whole, the median sales price has dropped 17 percent, to $165,000 in last month from $199,000 in September.
Meanwhile, the Illinois Association of Realtors reported Monday that February sales of existing single-family homes and condos in the Chicago area rose 32 percent last month compared with the same month a year ago. It was the eighth consecutive month of year-over-year sales-volume improvement. Compared with a year ago, the median price fell 10.3 percent.
Within Chicago, sales posted a 41.5 percent increase in February over the year-ago period, representing a sixth consecutive month of year-over-year gains. Sales of Chicago condos rose 44 percent. The February median price for the city as a whole was down 19.3 percent year over year, and down 10.7 percent for condos.
The growing disconnect between sales volume and price is a concern for homeowners looking to list their home for sale this spring, real estate agents say.
Read full story…
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65 N. Tournament Dr., Hawthorn Woods, IL 60047 | Real Estate Virtual Flyer by VirtuallyShow.com
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65 N. Tournament Dr., Hawthorn Woods, IL 60047 |
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Exceptional 4 Bedroom Home |
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Price: $659,000
MLS: 07470787
Type: For Sale
Bedrooms: 4
Bathrooms: 2.1
Sq. Footage: 0
Year Built: 2005
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Beautiful “Columbia” model in Hawthorn Woods Country Club! This home is set on a lovely corner lot and has luscious views. With lots of living space this home features 4 bedrooms including 2.5 baths & 3 car garage. Home boasts 2-story foyer & family room with wood burning fireplace with gas starter and granite surround. Spacious unfinished lower level with walk out to exterior and rough-in for future bath. High end mechanicals with 2 furnaces, zoned heat and air. Large cook’s kitchen includes Cherry stained cabinets, large island with granite breakfast bar, Bosch and Thermador stainless steel appliances, hardwood floors, granite counters, tile backsplash and closet pantry. Plush upgraded carpet and pad in living, dining, family room, and all upstairs bedrooms area. Master bath dual shower with tile, Jacuzzi Tub & upgraded maple vanities in all baths. Bright study with plush carpet and wood window treatments throughout the home add terrific ambiance. Alarmed home with home audio and speaker system carefully thought out. Finally, an in-ground sprinkler system, patio with brick pavers and fire-pit make for perfect outdoor relaxation. Neutral décor to customize and create your own color palette! Resort style living in a fabulous upper scale community.
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Office: 847-967-0022
Mobile: 847-967-0044
Email: helen@helenoliveri.com
Website: www.helenoliveri.com
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By ALAN ZIBEL
The Associated Press
Thursday, February 25, 2010; 3:48 PM
WASHINGTON — Lawmakers are taking aim at the Obama administration’s struggling mortgage assistance program, with Republicans calling it a worthless exercise and Democrats saying it doesn’t go far enough.
In a report Thursday, Reps. Darrell Issa, R-Calif. and Jim Jordan, R-Ohio., called the program a misuse of taxpayer money. Though $75 billion has been set aside for the program, so far only $15 million has been spent.
They also said it distorts the housing market by keeping people in their homes who would be better renting.
“Many Americans are throwing their money into homes that they believed the government would help them keep, only to find out thousands of dollars later that they will face foreclosure anyway,” Jordan said at a House hearing.
Obama administration officials, however, say the program gives a second chance to homeowners who were given shoddy loans during the housing boom. And they defend their track record, even though only 116,000 homeowners have completed the process out of the 1 million enrolled since the program’s launch last March.
While “challenges remain”, the program “is helping homeowners who have faced real financial hardship,” said Phyllis Caldwell, chief of the Treasury Department’s homeownership preservation office.
Democrats, however, argued that the Treasury Department needs to put more pressure on the lending industry to reduce borrowers’ outstanding principal balances
The program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. To complete the process, homeowners need to make three payments and provide proof of their income, plus a letter documenting their financial hardship.
But experts warn that hundreds of thousands of borrowers will not complete the process because they are found to be ineligible during an initial trial phase. Housing counselors complain that many homeowners remain stuck in limbo without final word on their applications
Treasury officials acknowledge that the treatment of borrowers under the program has been a problem. They have been working on new consumer protections such as giving those rejected from the program 30 days to appeal the decision and barring lenders from lenders continuing with foreclosures while homeowners were being evaluated for help.
Last week, President Barack Obama announced that housing agencies in Arizona, California, Florida, Michigan and Nevada will receive $1.5 billion in financial rescue money. The funds will go to local programs to help unemployed homeowners, “under water” borrowers who owe more than their home is worth, or pay lenders to assist borrowers with second mortgages.
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Visit the all new Helenoliveri.com
After months of preparation we have upgraded our entire website with a fresh new look and better functionality. We’ve put a lot of thought and effort into our new website in order to make it more appealing and user friendly to our visitor. Here are just a few of the new features for you to check out on the new www.Helenoliveri.com.
New Search Features
We have a great new search tool that gives you more options to choose from in order to narrow down your search to fit your specific needs. You can use the Basic search on our homepage that gives you the most common search criteria. If you know exactly what you’re looking for, use our Advanced Search that gives you precise control over your home search.
Other New Search options:
Search by Map
Search by MLS Number
Search by Address
Save your Searches and Receive FREE Custom Home Alerts
Another great new feature to our Searches is the ability to save your searches and get Custom Home Alerts for new properties matching your search criteria sent directly to your email. You can also join our VIP’s List and receive our monthly newsletters and be the first to know about upcoming Events and Contests from The Helen Oliveri Team. Create your FREE account today.
New FREE iPhone Application
With the vast improvement of mobile phones over the past few years, more people are looking to search for a new home even when they are away from their computer. For that reason we now have an iPhone Application that lets you search not only our properties but the entire MLS all from your iPhone. Download our new iPhone application and enter 5372 when it asks for the Agent code on your phone.
Coming Soon
Check back soon for our Neighborhood guides that will give you great information and highlights of the neighborhoods we service. We also hope to add more mobile phone support to be able to search for properties anywhere on your mobile phone. We are constantly trying to improve our website and bring new features to our visitors, if there is something you would like to see on our website or if you have any problems using our website please contact us with your feedback and we will try to add it.
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Jan 21st 2010 | WASHINGTON, DC | From The Economist print edition
WHEN American house prices finally started rising in June last year, ending a three-year decline, homeowners and economists rejoiced. The steep plunge in values, about 33% nationally from peak to trough, caused widespread damage in the American economy and abroad. The stabilisation of prices turned out to be a precursor to broader economic recovery.
Since bottoming out between May and June, prices have ticked upwards every month, while sales have risen from their recession lows. And yet gloom persists. The pace of foreclosures has not abated, and there has been no improvement in employment in residential construction.
Worse still, the momentum now seems to be ebbing. Mortgage applications for purchases fell sharply in November, to their lowest level since 1997. Confidence among home-builders declined in November for a second consecutive month. And figures released on January 20th showed that new housing construction, which recovered from the record lows of early 2009 to plateau late last year, fell by 4% between November and December. The fear is that prices will soon start to fall again, touching off another round of pain for homeowners, workers and banks.
The stalling housing market can be blamed, in part, on the end of the government supports that have buoyed recovery. Purchases of mortgage-backed securities by the Federal Reserve and the government’s bailed-out mortgage giants, Fannie Mae and Freddie Mac, helped keep mortgage credit flowing and interest rates low. But Fed purchases, the bulk of the support, are due to end in March.
Other interventions are less admirable. A large tax credit originally offered to first-time buyers was extended in November to cover all buyers with incomes under a certain threshold, and to last until the end of April. Although this has boosted sales, it has largely done so by moving them forward (at no small expense to taxpayers). With the end of the programme the bill will come due, in terms of reduced sales.
All told, government support boosted house prices by about 5% last year, according to a recent Goldman Sachs analysis. As their end approaches concern has grown, not least because the underlying fundamentals remain shaky. With many mortgage loans underwater, continuing job losses are pushing ever more households into default. Nearly 3m properties entered foreclosure last year, and filings increased by 14% from November to December. Foreclosures place downward pressure on house prices, contributing to a vicious cycle of economic pain.
In all likelihood, prices will not begin a new and steep decline. Economic output is now growing again, and most economists believe the economy will begin adding jobs by the spring. Equally important, house prices are no longer out of line with fundamentals. Relative to rents, for instance, house prices are now 3% below their long run average using the S&P/Case-Shiller national index. At the peak of the bubble, they were 40% overvalued. But the end of government support will put housing markets under great strain. It is a difficulty the American economy had better get used to.
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