In the last year with the help of the tax credit, there has been a rise in first time home buyers. The National Association of Realtors says the percentage of first time buyer is up to 47% in 2009 compared to 41% in 2008 and 36% in 2006.
The unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year.
Read more: http://rismedia.com/2009-11-17/housing-a…
The U.S. housing market continues to show signs of stabilization with a drop in the number of Multiple Listing Service (MLS)-listed homes for the twelfth consecutive month. The number of single family homes and condos listed for sale according to MLS data decreased in June 2009 from May by 2.1%, bringing the total number of active listings in 28 major U.S. markets to 696,858.
Other highlights from ZipRealty’s Housing Inventory Index, compiled from local Multiple Listing Service (MLS) data, for June 2009 include:
-Las Vegas, Los Angeles and Phoenix all recorded a decline in inventory which may have contributed to some homes receiving multiple bids.
-Median list prices have flattened or increased in Las Vegas, Phoenix, San Francisco Bay Area and Los Angeles, pointing toward stabilization in those areas.
-While South Florida has substantially fewer homes for sale than last summer, housing inventory there is plentiful. For example, Miami has 27.1% more homes listed for sale compared to Los Angeles even though Miami has a significantly smaller population than Los Angeles.
-California is seeing the most dramatic inventory declines with massive year-over-year inventory reductions: Los Angeles saw a 53.9% decrease year-over-year while Bakersfield/Fresno tracked a 56.2% decrease.
-Several major metros that have been hit hardest by foreclosures had limited inventory in June 2009, which is at levels not seen or experienced in years.
“‘Affordability’ has been the buzz word in real estate this summer, and with a significant number of listed homes bank-owned, we’re seeing instances in some areas of banks dropping prices to generate more offers from buyers,” said Zip RealtyZip Realty President and CEO Patrick Lashinsky. “If the number of home listings continue declining and buyer interest and activity remains strong, we should see sales prices and home values increase as we head into the fall.”
In these economic times, the decision to purchase a home has become a very serious consideration, with cost of ownership in both the short and long term being in the forefront of the buyer’s mind. One of the most important factors consumers should consider when buying a home is its energy efficiency rating, as this can add up to substantial savings over the life of the home. Today’s energy efficient manufactured home is no different from any other home, except it has been built off-site, usually in a controlled factory environment, using the latest in energy efficient technologies. Coupled with a lower cost per square foot as compared to site-built homes, today’s manufactured home is a smart investment for savvy homebuyers.
Each manufacturer may have a different label, but one that stands out is the Energy Star designation. The Environmental Protection Agency (EPA) created the Energy Star logo as the symbol for energy efficiency because of the direct link between wasted energy and air pollution. Manufacturers and builders voluntarily display the logo on products and new homes that meet or exceed high energy efficiency guidelines. Some of these everyday products include heaters, air conditioning units, household appliances, residential light fixtures, and new homes. The Manufactured Housing industry is proud to display this designation on its quality homes.
By implementing these standards into the construction of today’s manufactured home, consumers and builders alike can reap the benefits of energy efficient housing solutions, further emphasizing a manufactured home is not any different when it comes to energy efficiency. Manufacturers who utilize energy efficient light fixtures and appliances show that they are doing their part to help preserve and protect our precious natural resources, while offering the consumer significant savings on their utility bills. Combined with an almost 30% savings on heating, cooling and hot water, manufacturers make it possible for the consumer to afford more home, due to the lower cost per square foot that is inherent to the factory construction process.
Federal Reserve governors, unanimously proposed tough new consumer-friendly disclosure rules for mortgages and home equity loans last month, tackling one of the less-appreciated causes of the nation’s deep financial crisis.
After 18 months of study and consumer testing, the Fed’s division of consumer affairs proposed, and governors accepted, a change to how finance charges and the annual percentage rate would be calculated. They also proposed restricting some bonus compensation from lenders to those who originate loans.
The action by the Fed’s Board of Governors, which requires a four-month comment period before becoming final, came as Congress is weighing an Obama administration proposal to strip the central bank of some of its regulatory authority over consumer credit products such as mortgages and credit cards. The administration favors giving those powers to a new Consumer Financial Protection Agency, which would have the sole mandate of protecting consumers from abusive practices such as the weakened lending standards that triggered a collapse of the housing sector. This crisis in mortgage lending quickly morphed into a global financial crisis.
Last month’s Fed vote also came hours after the National Association of Realtors reported that sales of existing homes rose 3.6% in June, the third consecutive month of increasing sales. All regions of the country posted growth, and the percentage of distress sales fell to 31% from 33% in May.
This report provides further evidence that activity in the housing market is stabilizing and that price declines are slowing. The increase in home sales over the last three months was the fastest since May 2004 (in percentage terms) and the NAR reports that the share of distressed sales is declining. This report, along with recent data on housing starts, building permits suggests that we may have seen the bottom in home sales and housing construction.
Wall Street cheered the housing news.
The Dow Jones Industrial Average closed up 188.03 points to 9069.29, crossing the psychological threshold of 9,000. The S&P 500 finished up 22.22 points to 976.29, and the Nasdaq wrapped up the day with a gain of 47.22 points to 1973.60.
Under the Fed proposal, lenders or other originators of mortgages-such as mortgage brokers-would have to provide borrowers with clear one-page explanations of how adjustable-rate mortgages, like those that triggered the housing crisis, differ from fixed-rate products. They’d have to provide clearer examples of what borrowers’ true costs would be, using the loans themselves rather than generic examples.
Lenders also would have to notify borrowers of payment changes 60 days beforehand, rather than the current 25 days. Similarly, for home-equity lines of credit, the notification period would be 45 days instead of 15.
Those moves are decidedly more consumer-friendly, giving borrowers more notice to adjust to pending changes and perhaps seek refinancing in the case of adjustable-rate loans.
The most controversial proposed change is restricting special compensation from lenders when mortgage brokers get borrowers into higher-priced loans when they qualified for lower rates. This bonus, called a yield-spread premium, was a factor in the explosion of sub-prime lending, which involved high-cost loans given to the weakest borrowers.
The National Association of Mortgage Brokers has defended these special commissions but it declined immediate comment on the proposed rule change, which expressly would prohibit steering consumers to higher-priced products in pursuit of personal gain.
During the comment period, the Fed will work to create similar disclosures at the Department of Housing and Urban Development, which has jurisdiction over the settlement documents involved in home purchases.
“It is a complex and comprehensive proposal, so I think an extended comment period is appropriate,” Fed Chairman Ben Bernanke said.
More information on this will be available approx. November 2009
Despite efforts by the federal government and banks to stop the home foreclosure disaster, frustrated borrowers are still battling red tape and delays in their attempts to negotiate lower payments, even as hundreds of thousands of them lose their homes every month. Banks say they’re swamped with inquiries and are just now completing the first mortgage “loan modifications” under the Obama administration’s Making Home Affordable plan, the program begun in April 2009 requiring borrowers to make three months of renegotiated payments before securing new loan terms.
Though the reasons are many, the problem is simple: Banks aren’t renegotiating enough loans to stem the rising tide of foreclosures, either through the federal program or on their own. If the banks wanted it to work, it would work.
The banks, however, continue to urge patience, particularly with the federal plan: “A lot of people had expectations about this program who didn’t understand it would take time, but the intention is there and we will move ahead,” said Rick Simon of Bank of America Home Loans.
Many banks started their own programs for modifying mortgages-lowering payments by changing the interest rate or the length of the loan, or in rare cases, forbearing some principal-before the administration’s plan was unveiled.
Foreclosures continue at a high rate. There are something like 2.5 million U.S. homes in foreclosure now, and 250,000 new foreclosures started every month.
Bankruptcy lawyers are particularly critical of the banks. The banks’ current efforts are “largely a farce,” according to Cathy Moran, a bankruptcy lawyer in Mountain View. She said most of her clients have been unable to modify their home loans. “I don’t think the people in the loan modification departments at banks are empowered to make deals,” Moran said.
“There is an amazing lack of staffing to support the flood of modification requests the banks are getting,” said San Jose bankruptcy lawyer Norma Hammes, past president of the National Association of Consumer Bankruptcy Attorneys. “Lenders lose stuff all the time, and they ask for stuff they don’t need. We have to jump over hurdles and through hoops.”
Chase is moving through a backlog of 155,000 loans “as fast as we can, having hired nearly 3,000 people to help in the process, including 950 loan counselors,” spokesman Thomas Kelly said. The bank, which took over failed sub prime lender Washington Mutual, has approved 87,100 trial loan modifications under the federal plan, Kelly said, and an additional 50,900 under the bank’s own program.
Help for homeowners
The Obama administration is working with banks to help homeowners refinance into new loans or modify the terms of their existing loans. Here’s how the programs work:
-Refinancing program: Helps homeowners with existing Fannie Mae or Freddie Mac loans who are current on their mortgage payments but unable to refinance to a lower interest rate because the value of their home has declined.
-Loan modification program: Helps homeowners who have fallen behind on their payments because of a loss of income or other change in circumstance. Banks may agree through this program to change the interest rate, length of the loan, or even forebear some of the principal.
For information, visit www.makinghomeaffordable.gov.
The worst U.S. recession in 70 years should end over the next three to six months, judging by recently released data that showed that the economy’s contraction eased considerably from April through June.
The Commerce Department reported that the economy shrank at an annualized rate of 1% in the year’s second quarter, less than most analysts had expected, and far less than the dramatic 6.4% shrinkage in the first quarter, a figure revised downward from the initial estimate of 5.5%.
Independent economists think the economy now is poised to grow, albeit slowly.
The key point is that this is the last negative (growth) report in the Great Recession, signaling the end of the downturn. The economy won’t come charging back, but at it’s back.
Recent reports on improving home and auto sales also argue well for the near future. Leading indicators of activity are pointing up, and the housing sector appears to be stabilizing. As more stimulus dollars hit the street, we should see improvement in the difficult employment and financial conditions in many hard-hit regions of the country.
President Barack Obama credited the $787 billion economic stimulus plan that passed earlier this year for the emerging signs of recovery. “This and other difficult but important steps that we’ve taken over the last six months have helped us put the brakes on recession,” he said at the White House. “I am guardedly optimistic about the direction that our economy is going, but we’ve got a lot more work to do.”
There’s plenty that still can go wrong, I worry that we don’t have the foundations for a durable recovery, that we still have banks with large unrecognized losses. Layoffs were expected to continue throughout the year, with the jobless rate rising above 10%. That’ll test bank balance sheets. That’ll test business models generally. A lot of manufacturing and retail activity doesn’t look good when the unemployment rate is above 10 percent. 2010 remains a question, and nothing in these numbers tells you anything about 2010.”
In another worrisome sign, real personal-consumption expenditures fell 1.2% in the second quarter, after increasing 0.6% from January through March. Consumer spending powers two-thirds of U.S. economic activity. Sales of durable goods-big-ticket items such as large appliances and wide-screen televisions-shrunk 7.1% from April to June after expanding at a 3.9% annual rate in the three previous months. Consumer spending is unlikely to return to pre-recession levels until the nation stops shedding jobs. That’s bad news for retailers and restaurants. I think consumers are going to need a little more proof. These are certainly welcome signs, but I think it is going to take a little more time before we see consumers shift from necessity to discretionary purchases.
The National Restaurant Association was equally cautious. Its latest outlook, said that June marked the 13th consecutive month of sales declines for restaurant owners. Restaurant operators continued to report declines in same-store sales and customer traffic in June, and their outlook for sales growth in the months ahead remains mixed.
All in all it is starting to look the like the end of the recession in is sight.
Hi all, have an older car or SUV now is your chance to get a vehicle that gets better gas mileage and get 4,500.00 from the government to do it!!
The governments Cash for Clunkers program (C.A.R.S.) began stimulating the economy a month before the first rebate check was cut to a consumer for a new vehicle. “Manufacturers and dealers have spent millions to reach consumers who qualify for the $4,500 government funded rebates,” said Sharon O’Connell from www.CashForClunkersInformation.org.
Big budgets have been activated to implement campaigns targeting clunker consumers who are eligible for the program and the early results suggest the returns will be worth the investment. “We predict that the annualized selling rate for July will exceed 10 million vehicles for the first time this year due to the government program bringing dormant consumers back into the market,” adds O’Connell. “We think August could do even better with a million or more sales due to increased demand from the CARS program.”
“The stimulus helps local markets more than national car companies because car dealers stimulate the local economy through their big advertising expenditures, job creation and enormous state tax revenue,” said O’Connell. “A small dealership who sells 100 vehicles a month spends an average of $500 per car in advertising, which is a total of $50,000 that is spent in local advertising.”
Courtesy Chevrolet, one of GM’s largest dealerships in the country, “bought new inventory, hired additional salespeople and increased our ad budget by 88%,” said Scott Gruwell. “We spent $200,000 on a targeted direct mail and Web campaign to every customer in our market and we launched a regional information portal called www.CashForClunkersDC.com,” said Vince Sheehy, owner of www.Sheehy.com in Washington, DC, Virginia, Maryland and Baltimore. “So far we have sold over 100 vehicles while most dealers in our area are just getting started.”
Early Spenders are the Early Winners
Most of the economic activity generated up to this point has come from early spenders who also appear to be early winners in the race to reach clunker consumers. The winning retailers have been marketing to consumers for weeks while others are just getting started. Hyundai and a small group of dealer groups got a head start when they announced they would help consumers participate in the program starting on July 1st, while others were turning them away until the final rule was published on the 24th. The NHTSA and the National Automobile Dealers Assn. warned dealers against doing transactions before the final rules were announced on July 24th. Despite these warnings, Hyundai and a few dealers took the risk to help consumers get rebates when the law said they could. “Hyundai has attributed 10 percent of July’s sales to the program and some dealers have generated hundreds of incremental sales,” said O’Connell.
More than 70% of the clunkers were Ford or Chevy trade ins, 71% of the clunkers were SUVs, 93% had over 100k miles and 71% qualified for the $4,500 because SUV’s only need a 5 mpg improvement to get the full $4,500 rebate. The average clunker trade in gets 17 mpg and the average new vehicle gets 25 mpg, which is an average of an 8 mpg improvement.
Some dealers had over 100 orders by the time the final rule was announced and our customers appreciated the fact that we could help them when they were turned away by other dealers that weren’t ready,” said Sheehy. It turns out their strategy was not very risky because the Consumer Assistance to Recycle and Save Act clearly states that consumers were eligible for rebates starting July 1st.
RealtyTrac®, a leading online marketplace for foreclosure properties, has released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings – default notices, auction sale notices and bank repossessions – were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.
Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.
“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac.
“Unemployment-related foreclosures account for much of this increased activity, and the high number of
borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent
a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”
Nevada, Arizona, Florida post top state foreclosure rates
More than 6 percent of Nevada housing units (one in 16) received at least one foreclosure filing in the first half of 2009, giving it the nation’s highest foreclosure rate during the six-month period. A total of 68,708 Nevada properties received a foreclosure filing from January to June, an increase of 23 percent from the previous six months and an increase of 61 percent from the first half of 2008.
Arizona registered the nation’s second highest state foreclosure rate in the first half of 2009, with 3.37 percent of its housing units (one in 30) receiving at least one foreclosure filing, and Florida registered the nation’s third highest state foreclosure rate, with 3.08 percent of its housing units (one in 33) receiving at least one foreclosure filing. Other states with foreclosure rates ranking among the nation’s 10 highest were California (2.94 percent), Utah (1.46 percent), Georgia (1.42 percent), Michigan (1.34 percent), Illinois (1.31 percent), Idaho (1.26 percent) and Colorado (1.25 percent).
California, Florida, Arizona post highest foreclosure totals
A total of 391,611 California properties received a foreclosure filing in the first half of 2009, the nation’s highest total and 2.94 percent of the state’s housing units (one in 34) – the nation’s fourth highest state foreclosure rate. California foreclosure activity in the first half of 2009 increased nearly 14 percent from the previous six months and increased nearly 15 percent from the first half of 2008.
With 268,064 properties receiving a foreclosure filing in the first six months of 2009, Florida documented the second highest state total. Florida foreclosure activity in the first half of 2009 increased 7 percent from the previous six months and was up nearly 42 percent from the first half of 2008.
Arizona’s 89,799 properties receiving a foreclosure filing in the first six months of 2009 was the third highest state total. Arizona foreclosure activity in the first half of 2009 increased 13 percent from the previous six months and was up nearly 55 percent from the first half of 2008.Other states with totals among the 10 highest in the country were Illinois (68,932), Nevada (68,708), Michigan (60,786), Ohio (58,937), Georgia (56,391), Texas (49,144) and Virginia (28,368).
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the first half of the year at the state and national level. Data is also available at the individual county level. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population.
RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default – Notice of Default (NOD) and Lis Pendens (LIS); Auction – Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS) and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during six-month period, only the most recent filing is counted in the report.
The current economic crisis is having a lasting impact on many older Americans, forcing them to make difficult financial decision because they have so little time and resources available to them to recover from losses in the housing and financial markets.
A new survey from Golden Gateway Financial shows that these losses are causing many seniors to consider retiring at a later age than originally planned. The survey asked Americans aged 62-and-older how the economic crisis was affecting their retirement plans. Not surprisingly, the number of respondents planning to retire after age 70 because of the economic crisis increased substantially from those planning to retire at that age before the crisis.
“Even though some economists are beginning to grow optimistic, older Americans continue to feel real pain and must make hard trade offs and decisions,” said Eric Bachman, founder and CEO of Golden Gateway Financial. “This is the worst possible time for the 40 percent of seniors now considering delaying retirement to be searching for jobs. It’s unfortunate that the hopes and dreams of these retirees are being put on hold.”
Overall, the survey found that many seniors understand exactly how the economy is affecting their retirement finances and plans. It also illustrates the concern that many seniors have about the prospects for their continued ability to sustain retirement. Additional observations include:
- Before the economic crisis, 67 percent of respondents planned to retire before age 70
- Now, the number of seniors planning to retire by age 70 dropped to 40 percent
- Before the economic crisis, 30 percent of those surveyed planned to retire after age 70
- Now, almost 50 percent of seniors plan to retire after age 70
- More than 40 percent of seniors polled said the current economy has had some kind of negative affect on their ability to retire
- More than 50 percent of respondents said they are concerned that their overall net worth may no longer be enough to sustain their retirement
- 86 percent of seniors said they had a reasonable understanding of their net worth, and 50 percent said that net worth had declined by between 10 and 30 percent
The independent online survey, conducted with United Sample, Inc. www.unitedsample.com) in partnership with Golden Gateway Financial, polled a nationwide representative sample of more than 500 senior citizens aged 62 or older. A complete list of questions and percentage answers are available at the Golden Gateway Financial website or by contacting the company.
SACRAMENTO – The pace of home sales at California new-home communities in May was still below year-ago levels but continued to improve from preceding months, the California Building Industry Association reported today.
The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 26 percent below May 2008, but is improved from the 31 percent decline in the prior month and is the fourth consecutive month of that improvement trend.
During May, 3,019 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 4,094 in May 2008. Sales of single family homes were down by 30 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 24 percent and sales of condominiums were off by 16 percent.
Compared with the same period last year, the median base price of homes sold dropped by 5 percent.
Non-seasonally adjusted total new-home sales were 9 percent higher than levels seen last month. This is an improvement from a year ago when the April-May interval was a decline of 6 percent. While sales volume is still approximately one quarter off year-ago levels, the steadily shrinking year-over-year sales declines suggest the market is stabilizing.
Jonathan Dienhart, Director of Published Research for HWMI, notes the recent month-to-month increases are a positive sign.
“Typically March is the strongest selling month of the year, not May,” said Dienhart. “The incremental gains since March are counter to this typical seasonal trend, which suggests the market has found the bottom and is truly stabilizing, albeit slowly. But with the state tax credits for home purchases running out and continued troubles in the broader economy, it is not yet clear that an actual recovery is at hand.”
Robert Rivinius, CBIA’s President and CEO, agreed, and added that the continued weakness in the new-home market means that policy-makers need to reduce government fees and restrictions – and to stop trying to impose additional barriers.
“State and local governments must remember that we need to be building more new homes and apartments – not less – to meet the demand caused by our steadily growing population. Many communities have actually reduced impact fees in order to accommodate new housing, we must see more of that, and the continuation of the state tax credit will be critical to sustaining the improvements in the marketplace,” said Rivinius.
