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Posted on January 26, 2012 by Lyn

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Housing Recovery to Occur in Two Phases: Demand Institute

Posted on May 16, 2012 by Lyn

The housing recovery will come in two phases. First, home prices will rise by just under 1 percent in the second half of 2012. In 2013, prices will rise by 1.5 percent, then go up another 2.5 percent in 2014. For the second phase, home prices will increase 3 to 3.5 percent between 2015 and 2017. These are the predictions from a report released by the Demand Institute, which is jointly operated by The Conference Board and Nielsen.

The report, titled The Shifting Nature of U.S. Housing Demand, stated investors who buy rental properties will lead phase one of the recovery, as opposed to buyers who purchase properties as their own residence.

However, Bart van Ark, chief economist at The Conference Board and co-author of the report, said the expectation for homeownership rates is not expected to change in the long-term. Continue reading →

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Fannie Mae: Confidence in Economy and Home Values Increasing

Posted on May 10, 2012 by Lyn

Both the expectation for home prices and the percentage of those who think the U.S. economy is on the right path reached record highs in Fannie Mae’s April 2012 National Housing Survey.

Americans continue to expect home prices to go up, with the projection averaging 1.3 percent over the next 12 months, the highest value recorded.

At 71 percent, a high percentage of Americans still say it is a good time to buy while the percentage who said it is a good time to sell was 15 percent, a 1 point increase from March. Continue reading →

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Buying a home won’t get much cheaper

Posted on May 7, 2012 by Lyn

By Les Christie @CNNMoney May 3, 2012: 11:48 AM ET

NEW YORK (CNNMoney) — Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Several housing experts are predicting that this year will be the last chance for home buyers to cash in on the weak housing market.

Stuart Hoffman, chief economist for PNC Financial Services (PNC, Fortune 500), said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012. Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013. Continue reading →

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Home prices in Phoenix area up 20 percent in past 12 months

Posted on April 27, 2012 by Lyn

by Catherine Reagor – Apr. 26, 2012 11:36 PM
The Republic | azcentral.com

Home prices are surging in metro Phoenix, climbing 8 percent in March alone and 20 percent in the past 12 months.

The median price of a house in the region climbed to $134,900, according to a new report from the W. P. Carey School of Business at Arizona State University.

The trend is projected to continue throughout the year, although at a slower pace.

Mike Orr, director of the Center for Real Estate Theory at ASU, doesn’t expect home prices to continue to climb as fast as they did in March over the next few months. But he projects metro Phoenix’s housing appreciation for 2012 to reach 25 percent by September.

Orr credits the turnaround to steep drops in foreclosures and in the number of homes for sale, coupled with an increase in sales.

Fewer foreclosures means fewer inexpensive homes for buyers. The number of homes taken back by lenders in metro Phoenix is down 60 percent from March 2011

Housing inventory has dropped steadily during the past year because of a record number of investors snapping up properties out of foreclosure.

Home sales are up 35 percent from a year ago as more regular buyers have joined investors in the mix.

“Prices have begun to rise at a fast pace, and bargains are no longer plentiful,” Orr said. “Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price.”

March’s price increase was the sixth in a row for Phoenix’s housing market. Most real-estate analysts say the streak of rising home prices, along with slower foreclosures, is proof a housing recovery is under way.

A growing number of national real-estate analysts say metro Phoenix is leading the U.S.’ housing market’s recovery.

Metro Phoenix’s median home price is still at least $130,000 lower than it was during the boom but almost $30,000 higher than it was in August 2011.

Foreclosures are down, and so are the sales of lender-owned homes. Since March 2012, the number of foreclosures resold by lenders has plummeted 61 percent. At the same time, regular sales, new-home sales, investor purchases and short sales have climbed. All those types of transactions have higher median prices.

The number of houses on the market across the Phoenix area is down 64 percent from March 2011.

Frustrated real-estate agents have buyers ready to sign contracts but can’t find houses for them.

Don Paulsen of Peoria-based West USA Realty said the number of homes on the market is even lower when the number of homes that already have contracts written on them is subtracted.

An example would be a short sale in which the owner accepted an offer and the agent is showing the status as AWC — active with contingencies — until they get lender approval, he said.

“The reality is most agents will not show those homes because they know there is already an accepted contract on them,” Paulsen said.

Orr also expects foreclosures to continue to fall, which means even fewer inexpensive homes will be for sale.

“The very low number of inexpensive homes available for resale means more buyers are considering purchasing new homes as an option,” Orr said. “This signals the start of a distinct upward trend in new-home sales.”

Pinal County home prices are up 21.3 percent in price per square foot from March 2011 to March 2012, with Maricopa County prices per square foot up 12.9 percent.

The areas showing the greatest increases are those that suffered the most price damage from the foreclosure wave from 2007 to 2011, Orr said. Examples include El Mirage, up 20 percent in average price per square foot; Maricopa, up 20 percent; San Tan Valley, up 31 percent; Tolleson, up 20 percent; Glendale, up 16 percent; Phoenix, up 17 percent; and Anthem, up 17 percent.

In contrast, some areas least affected by foreclosures are still showing price decreases. Examples are Paradise Valley, down 2 percent; Tempe and Fountain Hills, down 3 percent; Sun City West, down 12 percent; and Wickenburg, down 18 percent.

Owner-occupied home sales, which have been eclipsed by foreclosures and short sales in recent years, also increased 47 percent from March 2011 to March 2012.

Prices are still below March 2011, but Orr said the trend has reversed recently, with the price per square foot rising 8.1 percent from February to March. The median normal resale price is now $166,650, still 4.8 percent below the $175,000 in March 2011.

New-home sales are concentrated in the southeast Valley, with Gilbert and Chandler recording the most sales in March, Orr reported.

by Catherine Reagor – Apr. 26, 2012 11:36 PM
The Republic | azcentral.com

Home prices are surging in metro Phoenix, climbing 8 percent in March alone and 20 percent in the past 12 months.

The median price of a house in the region climbed to $134,900, according to a new report from the W. P. Carey School of Business at Arizona State University.

The trend is projected to continue throughout the year, although at a slower pace.

Mike Orr, director of the Center for Real Estate Theory at ASU, doesn’t expect home prices to continue to climb as fast as they did in March over the next few months. But he projects metro Phoenix’s housing appreciation for 2012 to reach 25 percent by September.

Orr credits the turnaround to steep drops in foreclosures and in the number of homes for sale, coupled with an increase in sales.

Fewer foreclosures means fewer inexpensive homes for buyers. The number of homes taken back by lenders in metro Phoenix is down 60 percent from March 2011 Continue reading →

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Lenders that Sell Short Sales Faster and for Less, According to RealtyTrac

Posted on April 25, 2012 by Lyn

Pursuing a short sale is often thought of as a painstaking process, and it’s not uncommon to hear of complaints about slow responses from servicers and last minute rejections on offers. Fortunately, not all lenders/servicers are the same when it comes to dealing with short sales, and RealtyTrac compiled a list of data revealing which institutions tend to move through the process quicker and for less.

Fannie Mae, Freddie Mac, and FHA had the shortest timelines at 193 days in January 2012, a decrease compared to a year ago in January 2011, when short sales averaged 248 days. Ally Financial came in second at 321 days, reducing its timeline as well from 393 days a year ago.

PNC Financial Group was third, taking 353 days, though the bank takes longer than it did a year ago when the it took 206 days. Wells Fargo came in fourth (385 days). Bank of New York Mellon took the fifth longest (402 days), followed by Bank of America (403 days) and Sun Trust (404 days). The short sale timeline includes the time a property starts the foreclosure process to the time it’s sold as a pre-foreclosure property.

Recently, Fannie Mae and Freddie Mac announced new guidelines to take effect in June requiring servicers to respond within 30 days after receiving a short sale offer or a borrower application. Bank of America recently announced that its providing a decision on a short sale offer in 20 days.

In terms of pricing, Fannie Mae, Freddie Mac, and FHA sold homes for the least amount in January 2012, averaging $128,642, a drop from year ago prices in January 2011 when they averaged $160,982. Deutsche Bank’s average price was $132,996, followed by Sun Trust Banks ($144,024), and CitiGroup ($148,411), and PNC Financial Group Inc ($149,332). Bank of America Wells Fargo were the bottom two on the top 10 list, averaging $158,632 and $167,371, respectively, for January 2012.

As for the number of short sales, Bank of America completed the most in January 2012, with 5,276, followed by Chase (2,967), Wells Fargo (2,788), MERS (1,429), and Bank of New York Mellon (1,401).

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Three Nonprofits Join to Transform Vacant REOs into Future Residences

Posted on April 25, 2012 by Lyn

Three nonprofits are working together toward an effort to rehabilitate vacant REO properties and support homeownership. Rebuilding Together, NeighborWorks America, and the National Community Stabilization Trust are committing to a three-year partnership to turn vacant and dilapidated properties into affordable homes in the communities they serve.

“Bringing stability back to neighborhoods hard hit by foreclosures will take new innovative collaborations between partners with the insight, resources, and expertise to impact change,” said Craig Nickerson, president of the National Community Stabilization Trust.

The joint initiative focuses on three areas. The first is providing training for local Rebuilding Together affiliates to operate programs to acquire, rehabilitate, and resell REO properties to help stabilize communities affected by foreclosure. Continue reading →

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Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Posted on April 5, 2012 by Lyn

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scoresrequired prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

 

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Fewer Homes are for Sale in Phoenix…Prices UP!!!

Posted on April 3, 2012 by Lyn
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Home sales jump more than 4 percent in January

Posted on February 23, 2012 by Lyn

 

WASHINGTON — Sales of previously occupied homes rose in January to the highest pace in nearly two years, flashing modest signs of health ahead of the spring-buying season.

The National Association of Realtors said Wednesday that U.S. sales increased 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million. That’s the highest level since May 2010.

Home sales have risen in three of the past four months. But they remain well below the 6 million that economists equate with a healthy market.

The report offered a mixed picture of the slowly improving housing market. The number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That’s still below 40 percent, which tends to signal a healthy market.

Sales of homes at risk of foreclosure also increased to 35 percent of all purchases. Those sales hurt the market by lowering broader home prices.

The Realtors group also revised December’s sales figures to show a 0.5 percent decline. It had initially reported a 5 percent increase.

Economists say conditions are improving and that could mean further gains this year. Prices have declined. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year — and they responded in January to that interest by requesting more permits to construct single-family homes.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound. In January, employers added 243,000 net jobs — the most in nine months — and the unemployment rate fell to 8.3 percent, the lowest level in nearly three years.

Economists caution that the damage from the housing bust is deep and the industry is years away from fully recovering. Since the bubble burst, sales have slumped under the weight of foreclosures, tighter credit and falling prices.

Many can’t qualify for loans or meet higher down-payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling.

Sales are measured when buyers close on homes. Another problem is that many deals are collapsing before that point. Deals have been scuttled after banks declined mortgage applications, home inspectors found problems, appraisals showed a home was worth less than the bid, or a buyer lost a job.

The high rate of foreclosures has made resold homes cheaper than new ones. The median price of a new home is roughly 30 percent above the price of one that’s been occupied before — twice the normal markup. Investors are taking advantage of the discounts.

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Housing Crisis to End in 2012 as Banks Loosen Credit

Posted on February 16, 2012 by Lyn

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings. Continue reading →

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