Utah Real Estate News

Real Estate Outlook: Younger Generation Leads Way

2011-03-28T12:15:00.000-06:00

by Carla Hill

If the latest release from the National Association of Home Builders and Builder Magazine is any indication, it may just be the younger generation of Americans that leads the way to a housing recovery.

While they make up just 32 percent of the home-buying population, Generation X is the most mobile of the generations.

Mollie Carmichael, principal of John Burns Real Estate Consulting in Irvine, California, says, "They are in full force with their careers and they need to accommodate growing families."
In comparison, Baby Boomers, who make up 41 percent of potential buyers, are waiting it out until the market improves.

Is this part of the reason that existing-home sales fell in February for the third consecutive month? Some experts think so.

According to National Association of Realtors chief economist, Lawrence Yun, “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers.”

Regionally, the numbers were consistent. All four regions saw decreases in existing-home sales in February. And the declines were fairly hefty figures.
The Northeast was down 7.2 percent, with the median home price down 9.5 percent from a year ago. It is now around $230,000.

The Midwest saw the largest decline, at 12.2 percent. Their median price is a much more affordable $122,000, but is still down 5.4 percent from February 2010. And the South and West fell 10.2 and 8.0 percent, taking them to existing-home sale figures close to year ago levels.

Unfortunately, it's not just sellers feeling the crunch of the down market. Builders are feeling the pain, as well. Nationwide housing starts and permits were both down in February, according to the U.S. Commerce Department.

Bob Nielsen, NAHB chairman, says this decline is the effect of builder uncertainty. He says, "The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now. In an already-fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance."

And just like with existing-home sales, no region was immune.
Regional declines were nearly all in the double digits. The Northeast was down 37.5 percent. The West posted a 28 percent decline for February. And the Midwest was down a whopping 48.6 percent. The smallest decline was seen in the South, at just 6.3 percent.

Overall, the economy continues to try to recover. There are pockets of lights in areas all across the nation. Let's hope they start shining on some of the darker areas.

Published: March 28, 2011

Agency Relationships

2011-03-25T12:21:00.000-06:00

by Carla Hill

Understanding agency relationships can be difficult for those new to the real estate process. What does dual agency mean? Who is your agent representing? Who is responsible for what?

These details are crucial in helping you understand what your agent is responsible for and what they must disclose. Let's look over some of the terminology.

First up is Dual Agency. This means that your brokerage firm or agency is representing both the buyer and the seller. And while there shouldn't be a conflict of interest, dual agency must be disclosed and you must agree to work within the situation for it to be legal. In fact, written consent is required in many states.

One solution to this potential conflict of interest is a Designated Agent. This arrangement helps clear up an trickiness that might arise from dual agency. A brokerage will designate one agent as the seller's agent and then another as the buyer's agent.

A Buyer's Representative, on the other had, works soley with the buyer. This means they have your best interest at heart during the entire process. They help you find a house, put in the offer, and close the deal.

A Seller's Representative, sometimes known as the listing agent, is hired by the seller. The seller generally enters into a contract with the agent, agreeing to allow only that agent to sell the home. A seller is responsible for paying a commission to their agent upon sale, and sometimes negotiations with buyers mean the seller pays the buyer's agent as well.

Finally, let's look at Subagents. This can be a little complicated to understand, but the basic sentiment is this: A subagent is an agent from another brokerage that is supplying you with a service, such as showing you a house. The subagent is obligated to give you honest service the same as your regular agent. But on the flip side of the coin, they are not allowed to assist you in any way that would negatively impact the seller.

The key to understanding your particular situation is to ask questions. Be sure to ask your agent what sort of agency relationship they have with you.

Published: March 25, 2011

Treasury's Mortgage Debt Sale Comes at Tough Time for Housing - CNBC

2011-03-21T14:28:00.000-06:00

Treasury's Mortgage Debt Sale Comes at Tough Time for Housing - CNBC

Realty Times - Give Your Fireplace a Hot New Look that's Inviting to Buyers

2011-01-07T14:20:00.000-07:00

Realty Times - Give Your Fireplace a Hot New Look that's Inviting to Buyers

30-Year Fixed Mortgage Rate Dips to 4.77%

2011-01-06T12:24:00.000-07:00

By: Reuters

Rates on fixed mortgages dipped this week after rising steadily over the last two months.

Freddie Mac said Thursday the average rate on the 30-year mortgage dropped to 4.77 percent from 4.86 percent the previous week. It hit a 40-year low of 4.17 percent in November.

The average rate on the 15-year loan slipped to 4.13 percent from 4.20 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.

Rates have been rising since November. Investors have shifted money out of Treasurys and into stocks. Many expect the tax-cut plan will fuel economic growth and increase inflation. Yields tend to rise on inflation fears.

Mortgage rates tend to track the yield on the 10-year Treasury note. Those rates have been fluctuating in recent weeks.

Low mortgage rates did little to boost home sales last year and higher rates now could hamper a robust recovery.

The number of borrowers who applied for a mortgage in December was 10 percent below the same month in 2009, according to Capital Economics. Refinance activity has dropped off 44 percent since rates hit their lows. The number of purchase applications has been rising along with sales, but last year's sales pace was shaping up to be the slowest in 13 years.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage slipped to 3.75 percent from 3.77 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

The average rate on one-year adjustable-rate home loans fell to 3.24 percent from 3.26 percent.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year and 15-year loans in Freddie Mac's survey was 0.8 point. The average fee for the five-year ARM was 0.7 point, and the fee for the 1-year ARM was 0.6 point.

Published: Thursday, 6 Jan 2011,12:55 PM

Real Estate Outlook: Builders Regain Optimism

2011-01-03T15:23:00.000-07:00

by Carla Hill

As we enter the new year, builders are seeing many area market conditions returning to normal.

National Association of Home Builder's chairman, Bob Jones, reports that "we are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward. But first they need access to financing to build, which remains scarce during this critical phase of the recovery.”

Additionally, single-family home sales have risen by 5.5 percent. Theses new figures from the U.S. Commerce Department showed a partial bounce-back from sales in October.

This rise is attributed to sales increases in both the South, the nation's largest housing market, which saw a 5.8 percent gain, and the West, which saw an impressive 37.3 percent rebound over October.

The inventory of new homes for sale is now at an 8.2-month supply, at 197,000 units. According to the NAHB, this is the first time in 42 years the inventory has fallen below the 200,000 level.

NAHB's Jones reports that "while builders continue to face a great deal of competition from short-sale and foreclosure properties, the improvement registered in new-home sales in November is a good sign."

He continues that "with consumer interest in new homes expected to continue to revive as the economy and job markets improve, and inventories of new homes for sale near record lows, our concern now is that a lack of construction financing will keep builders from being able to expand the selection of what they have to offer buyers heading into the spring.”

In other news this week, the recently signed HR4853, otherwise known as the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, will extend Bush era tax brackets and a capital gains tax rate of 15 percent through 2011 and 2012.

It will also extend numerous energy efficiency credits through December 31, 2011 -- the Energy Efficient New Homes, Energy Efficient Existing Homes, and Energy Efficient Building credits.

Published: January 3, 2011

Massive Housing Data Dump Lends No Clarity - CNBC

2010-12-22T16:38:00.000-07:00

Massive Housing Data Dump Lends No Clarity - CNBC

Realty Times - Curb Appeal Projects Remain Cost-Effective

2010-12-21T13:36:00.000-07:00

Realty Times - Curb Appeal Projects Remain Cost-Effective

What Could Force More Short Sales

2010-12-17T14:00:00.000-07:00

By: Diana Olick
CNBC Real Estate Reporter

Despite a government program designed to streamline and incentivize the process, short sales have not even come close to keeping up with foreclosure sales.

That may be about to change.

If banks see higher losses from foreclosures than from short sales, they may put more resources into approving these deals, where the borrower is allowed to sell the home for less than the value of the loan.

"Loss severities on distressed U.S. residential mortgage loans are likely to increase an additional 5-10 percent from current levels due to higher loss mitigation and foreclosure expenses and weakening home values," according to a report from Fitch Ratings.

Fitch: The anticipated increases for each sector’s average loss severities are expected to be as follows:

Prime loans: currently 44%, increasing to 49%-54%;
Alt-A loans: currently 59%, increasing to 64%-69%;
Subprime loans: currently 75%, increasing to 80%-85%.

We are already seeing home prices double dip in many markets, and that is expected to continue at least through the first half of 2011. One way to mitigate the losses is through short sales. "Short sales generally experience recovery rates about 10 percent higher than foreclosure sales," according to Fitch.

Will this be enough to push the banks? Unclear.

Servicers actually rake in a lot of money from fees surrounding foreclosures, and so far the government's "Home Affordable Foreclosure Alternative," program, which pays servicers cash incentives for doing short sales, has had pretty poor results, really still in the hundreds of loans. Second liens pose a big problem, but many big bank servicers also hold the second liens.

It's all about where the math comes out. If home prices fall far enough, the equation may tip from foreclosure to short sale.

Published: Friday, 17 Dec 2010 | 1:02 PM ET

Realty Times - Most Say it's a Good Time to Buy

2010-11-04T10:16:00.000-06:00

Realty Times - Most Say it's a Good Time to Buy

Unexpected Cities See More Homes Go Back to the Bank

2010-10-28T12:39:00.002-06:00

TALK TO ME BEFORE THIS HAPPENS TO YOUR HOME - THERE ARE OPTIONS FOR YOU!

By: Diana Olick
CNBC Real Estate Reporter

Yes, the four states that we always talk about are still leading the nation in foreclosure rates. Okay, Florida, California, Arizona, Nevada...if you've been trapped under something heavy for the past few years. But for the past few months a new trend is emerging, and some numbers released today really put it into perspective.

Foreclosure "actions" in Q3, which include anything from default notices to bank repossessions, rose in 65 percent of the nation's top 200 housing markets.

In Seattle, they jumped 71 percent, in Chicago up 35 percent and big double-digit jumps in Houston and Atlanta too.

These are not cities that saw enormous price jumps during the housing boom (maybe Seattle, but not the others) and they definitely did not see the kind of investor activity that the fab four saw during housing's heyday.

Not in the general release, but in a little side-bar that Realty Trac sent me, you see really big jumps in bank repossessions, which are the final stage of foreclosure when the bank takes the house back and evicts you. Quarter to quarter, Seattle saw a 65 percent jump, Philadelphia a 38 percent jump, Boise, ID up 71 percent and even Richmond, VA taking a 28 percent leap. One word: Unemployment.

Of course the logical question next is, what happens to home prices in those cities, as foreclosures hit the for-sale inventory.

Sure, there are buyers out there looking for deals, but with the foreclosure robo-mess hanging over the market, some sales frozen, some not, there's not a whole lot of buyer confidence out there to take the leap into the "distressed" market.

That just means the prices on those homes have to go lower.

Published: Thursday, 28 Oct 2010 12:43 PM ET

Pending Home Sales Show Healthy Gain, Hint at Spring Surge

2010-04-05T10:44:00.002-06:00

Now is a GREAT time to GET OFF THE FENCE! You have until the end of April (this month) to have a home under contract to take advantage of the available Gov't money and it usually takes a couple of weeks to get to that stage. CALL ME NOW to FIND YOUR HOME - Steve 801-243-8202

Washington, April 05, 2010

Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he said. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”

The PHSI in the Northeast rose 9.0 percent to 77.7 in February and is 18.9 percent higher than February 2009. In the Midwest the index jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago. Pending home sales in the South increased 9.2 percent to an index of 107.0, and the index is 17.5 percent higher than February 2009. In the West the index fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.

“Anecdotally, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit,” Yun said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for March will be reported April 22 and the next Pending Home Sales Index will be on May 4; release times are 10 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

© Copyright NATIONAL ASSOCIATION of REALTORS®

Home Loan Demand Up as Purchase Activity Gains

2010-03-31T13:26:00.002-06:00

Great information on the state of home ownership as home loan demand is up and purchase activity gains momentum.

Published: Wednesday, 31 Mar 2010
By: Reuters

U.S. mortgage applications rose in the latest week for the first time in three weeks as demand for home purchase loans reached the highest level since October, data from an industry group showed on Wednesday.

If demand for home purchase loans, a tentative early indicator of home sales, continues to rise it will bode well for the spring season, the peak home buying season.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 1.3 percent for the week ended March 26.

The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 2.2 percent.

The MBA's seasonally adjusted purchase index increased 6.8 percent, hitting its highest level since the week ended Oct. 30.

Michael Fratantoni, the MBA's vice president of research and economics, said the activity may reflect the looming expiration of a homebuyer tax credit, just as many homebuyers in October had rushed to get loans closed before the original expiration of the tax credit.

"We may be seeing a similar pattern now, as the extended version of the tax credit ends next month," he said in a statement.

The government's $8,000 tax credit for first-time home buyers originally was to end on Nov. 30. The Obama administration then extended and expanded the program, adding a $6,500 credit for home owners buying a new residence and increasing income limits. Eligible borrowers must now sign contracts by April 30 and close loans by June 30.

Leif Thomsen, chief executive of Mortgage Master, in Walpole, Massachusetts, said the tax credit has become less relevant in increasing purchases over time, because most people who could have taken advantage of it have already done so.

"There are still some procrastinators out there who have yet to pull the trigger on their decision to purchase a home and they will find themselves out of time very soon," he said.

Meanwhile, higher mortgage rates are muting home loan refinancing. The MBA's seasonally adjusted index of refinancing applications decreased 1.3 percent, reaching its lowest level since the week ended Feb. 19.

"Interest rates are the No. 1 indicator of how the housing market is faring right now, with unemployment coming in a close second," Thomsen said.

The MBA said borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.04 percent in the latest week, up 0.03 percentage point from the previous week and also above the year-ago level.

An all-time low of 4.61 percent was set in the week ended March 27, 2009, based on a weekly survey conducted since 1990.

The MBA said fixed 15-year mortgage rates averaged 4.34 percent, up from 4.33 percent the previous week. Rates on one-year ARMs increased to 6.88 percent from 6.75 percent. Mortgage rates play a crucial role in housing affordability.

February home sales data indicated a lull in the market after signs of a recovery late last year. New home sales fell for a fourth straight month in February to hit a record low, while existing home sales fell for a third straight month.

Any improvement in the housing market would bode well for the U.S. economy, as it points to better demand in the sector where the first signs of the latest recession took root.

Copyright 2010 Reuters.

Real Estate Outlook: Steady Growth Expected

2010-03-29T11:51:00.002-06:00

by Kenneth R. Harney

New economic reports indicate steady growth expected for Real Estate. Great news for all of us. Call me now to find your home. Steve @ 801-243-8202.

Harsh weather conditions held back home sales in February -- leading to some renewed gloominess by Wall Street analysts.

But several new economic reports, including on employment, suggest that during the coming several months we're likely to see steady but unspectacular national economic growth, and some pretty good housing rebound numbers to boot.

Even the February home sales numbers were nowhere near as negative as you might expect under the circumstances. Existing home sales were down slightly for the month – by six tenths of a percent – but were still clicking along at more than 5 million on an annualized basis.

Sales in the Northeast region, which took the brunt of the storms, were actually up by nearly 3 percent! Median prices in the northeast gained seven and a half percent!

New home sales were harder hit – down by 2.2 percent for the month. But median prices on new homes sold for the month jumped by six percent over January and were up five percent year over year, according to the Commerce Department.

In California, median home prices rose 11 percent in February and total sales were up by 8 percent, according to MDA Data Quick.

And look for that rising-value trend to continue in many parts of the country, according to statisticians at First American CoreLogic. In a new report they forecast home prices are likely to gain four and a half percent over the coming 12 months. Take out distressed sales from the equation – and prices would otherwise gain 5.6 percent.

A new study by economists at the Federal Deposit Insurance Corp (or FDIC) also provides a positive take on where we're headed. The US housing market, according to the FDIC, is showing "tangible signs of improvement". Affordability – which is obviously a crucial factor in whether households can buy or not – is at "historic high levels," says the report.

Economists at UCLA weighed in last week with their own projections. Not only will there be no so-called "double dip"—that's the bad news scenario where the US economy slips back into recession sometime this year – but the economic expansion will continue rolling along at a two to three percent quarterly rate of increase in the gross domestic product or GDP.

Meanwhile, last week's new filings for unemployment insurance dropped much more than analysts had predicted. This suggests that maybe – just maybe – we're finally on the verge of seeing some new job creation and fewer layoffs.

Bottom line: Don't get bogged down by the economic naysayers and snow storms. The national economy -- and housing -- are moving ahead on a recovery path.

Published: March 29, 2010

Building permits up in Salt Lake, Summit counties

2010-03-19T10:38:00.002-06:00

This is awesome news for us here in both Salt lake and Summit counties. I am a new construction specialist and if what your heart desires is a "new" home, give me a call and lets get to work on it. Steve Jackson 801-243-8202.

March 18th, 2010 @ 10:42am

SALT LAKE CITY (AP) -- Some parts of Utah are weathering the recession without significant job losses or real-estate troubles, according to a leading Utah economist.

Jim Wood says Tooele County, with more than 15,000 non-farm jobs, lost only 17 jobs over the past year, while the full state lost 65,000.

Wood is head of the University of Utah's Bureau of Economic Research.

He says residential construction has barely slowed down in Summit County, home of three Park City-area ski resorts. Residential building permits were up by nearly 80 percent there in 2009.

Salt Lake County lost some jobs but permits for apartment construction were up by a third in 2009.

Wood's report is a snapshot of the uneven effects of the recession on Utah. He prepared it for Commercial Real Estate Solutions.

Effective Price Versus Value Counseling

2010-02-27T10:30:00.005-07:00

by Dirk Zeller

The "price" of your home is often not the "value" of your home. A quick lesson on the two terms we so often use interchangably.

We have seen many marketplaces shift nationally in recent years. The skill of price value counseling is a more essential tool than others in the last five years. My contention is most Agents are ineffective or out of practice in this discussion.

fundamental mistake that most Agents are guilty of is using the wrong terminology. The buzzword most Agents use is price or price of the home. This word is incorrect because it's not about price; it's about value. The first step in effective price value discussion is beginning to use the word value instead of price. We need to focus the client on what the value of the home is today, in today's marketplace and market conditions.

When we look at price and the influence of price, it's really fundamentally connected to marketing. The raising or lowering of the price of something creates a layer or smaller pool of potential purchasers, based on how the potential purchasers perceive the value. We all make our buying decisions based on value. Our job as Champion Agents is to position the property relatively close to the value to widen the pool of prospective purchasers. Price is clearly a function of marketing, not value.

As an example, a ten-year-old BMW 7 Series car has a certain value. You can price it at $100,000, but the real value of the car is substantially less than that. In fact, the Kelly Blue Book value is right around $15,000. What are the odds (pricing this car at $100,000; $50,000; or even $25,000) that you would receive even close to those figures? As they say in Texas, slim to none, and slim just left town.

To demonstrate our value and why we should be hired, we need to separate price from a value discussion. We must secure agreement on the value of the property before we proceed to a strategic marketing or price discussion. In the end, the value of the home is what we are trying to reflect through our CMA.

Too many Agents still believe that price and value are interchangeable, but they are not. Value relates to what something is really worth; what one could expect to receive in money in the free market. It doesn't matter what the value was last year, last month, or even last week. Value is determined by the conditions and influences of the marketplace. Too often, sellers get hung up on that fact when the marketplace shifts against them so to speak. They don't want to view the reality that their home was worth $750,000 a year ago and today, based on supply and demand, is only worth $680,000. Value is extended by the scarcity of something and the ease of replacement with similar, equal, or better products or service. In essence, this all reconnects with the law of supply and demand.

Here are a couple scripts to help you have a price value discussion:

1. "Mr. Smith, many Agents are more concerned with seeing the listing rather than having a real conversation about the value of your property. They will talk in terms of price, not value. They will get you all worked up about the price and set you up for the big surprise. The question is, do you want the truth now or later?"

2. "Mr. Smith, let's agree to talk in terms of value – what your house is worth. Once we agree on that, we can talk about price, which is really a marketing strategy. Is that agreeable with you?"

Published: February 26, 2010
by Dirk Zeller

The Mortgage Walkaway Number

2010-02-23T17:30:00.002-07:00

By: Diana Olick
CNBC Real Estate Reporter

With more and more evidence of more and more borrowers walking away from their mortgage commitments due to overwhelming negative equity, I got to thinking: What exactly is the monetary tipping point for a homeowner, someone occupying the home, hanging pictures on the walls, perhaps raising their kids in the second and third bedrooms, going to the neighborhood block parties...what exactly is the negative equity number that makes them say, "We're outta here."

Negative $70,000.

At least according to First American Core Logic. FACL put out its quarterly negative equity report today, showing that the number of "underwater" loans is rising, from 10.7 million in Q3 to 11.3 million in Q4 or 24 percent of all borrowers from 23 percent.

What interested me was a paragraph lower down in the report:

"The rise in negative equity is closely tied to increases in pre-foreclosure activity and is a major factor in changing homeowner default behavior. Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors."

This behavior is apparently measured by the actual data, that is, the default rates of investors vs.. owners and comparing that to loan-to-value ratios.

I asked for a little deeper explanation from their economist, Mark Fleming.

"The closing of the gap between owners and investors represents the change in owners behavior because up to that point investors default at higher rates, but beyond that point owners propensity to default increases to nearly match that of investors.

It’s not necessarily strategic default – I don’t even like that term because it can’t be identified – but I would characterize it as the behavior becoming more rational or calculating. Put another way, when someone is 25% or on average $70k in the hole, they know they will not climb out of that hole for some time and they figure that they can default and repair their damaged credit while saving money faster than they can ride out the price recovery."

HOME PRICES RISE FOR 6TH STRAIGHT MONTH IN NOV.

2010-01-27T09:03:00.003-07:00

Awesome News!!! National home prices continue to rise, according to Case-Shiller. To find out if your area's home prices have stabilized give me a call 801.243.8202.

MIAMI (AP) — Home prices rose for the sixth straight month in November, with 14 of 20 metro areas posting improvements from the month before.

The Standard & Poor's/Case-Shiller home price index released Tuesday inched up 0.2 percent to a seasonally adjusted reading of 145.49. The index was off 5.3 percent from November last year, nearly matching analyst's estimates that it would fall by 5.1 percent.

The index is now up 3.4 percent from its bottom in May, but still 30 percent below its peak in May 2006.

Phoenix and San Francisco posted the highest month-to-month gains on a seasonally adjusted basis, while New York and Chicago had the largest declines.

Recent price gains have been fueled by a federal tax credit for first-time homebuyers, who rushed to purchase homes ahead of a Nov. 30 deadline. Congress eventually extended the deadline into the spring, and expanded the program to include a tax credit for current homeowners.

While prices have risen steadily on a national basis, some economists predict they will dip again early this year because of high unemployment and foreclosures.

"Until we get job growth, we won't get complete healing of the housing market," said Jeff Humphreys, an economist with the University of Georgia.

Humphreys said data for December and January could show price declines due to a lull in buyer activity after the tax credit was extended.

Rising prices are important to the economic recovery because they make homeowners feel wealthier and lead them to spend more money. They also help millions of homeowners who owe more to the banks than their houses are worth.

Only 100 Days left to claim the $8,000 or $6,500 tax credit for new home owners

2010-01-21T13:49:00.003-07:00

There are a few changes you need to be aware of regarding FHA purchase:

* Max seller concessions is now 3% max ( use to be 6% )

* Clients with a fico score of 580 will need to put down 10% ( Not many companies will do these loans anyway so not a big deal )

* Remember, only 100 Days left to claim the $8000 tax credit for new home owners

November 6, 2009, Congress voted to extend and expand the First-Time Home Buyer Tax Credit program. The expiration date of the up-to-$8,000 tax credit has been pushed forward to spring, requiring home buyers to be under contract for a home no later than April 30, 2010, and to be closed no later than June 30, 2010.

In addition, “move-up” buyers were also added to the program’s eligibility list meaning you don’t have to be a first-time home buyer to be eligible for the tax credit. If you’ve lived in your home for 5 of the last 8 years, you meet the IRS requirements.Move-up buyers are capped at a total tax credit of $6,500.

* The tax credit’s basic eligibility requirements remain the same:
* You can’t purchase the home from a parent, spouse, or child
* You can’t purchase the home from an entity in which they’re a majority owner
* You can’t acquire the home by gift or inheritance
* All parties to the purchase must meet eligibility requirements

The new law includes some notable updates. First, the subject property’s sales price may not exceed $800,000. Homes sold for more than $800,000 are ineligible. Also, household income thresholds have been raised to $125,000 for single-filers and $225,500 for joint-filers.

And lastly, don’t forget that the program is a true tax credit — not a deduction. This means that a tax filer who’s eligible for the full $8,00 credit and whose “normal” tax liability totals $5,000 would receive a $3,000 refund from the U.S. Treasury at tax time.

The complete list of qualifying criteria is posted on the IRS website. Review it with a tax professional to determine your eligibility. Then mark your calendar for April 30, 2010.

Have a great day, and let me assist you in the purchase of your new home!

Information aquired from:
Mike Yancey, Senior Loan Officer
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Home builders press ahead from tough 2009

2010-01-13T12:21:00.002-07:00

By Lesley Mitchell
The Salt Lake Tribune
Updated: 01/13/2010 12:14:12 AM MST

For home builders along the Wasatch Front, 2009 was one of the worst years ever -- but a step up from a particularly dismal 2008.

Builders took out permits for the construction of 4,337 single-family homes last year, up from a low of 3,992 in 2008. But home-building activity in the state's most populous area is still off from a peak of more than 15,400 permits in 2005, according to a report by Construction Monitor, a service that tracks activity throughout the West.

Hundreds of small builders have gone out of business in recent years, and those remaining are focusing on first-time buyers and setting prices in the $300,000-and-under range.

"We've definitely seen the bottom, and we're going to see some improvement this year, but I don't think we're going to go back anytime soon the levels of construction activity we saw in 2006 and 2007," Clark Ivory of Ivory Homes said Tuesday.

Ivory believes his company will see a 12 percent increase in closings this year, compared with 2009. But even with the increase, Ivory would be building at 2002-2003 levels.

"People this year will be motivated by (low) interest rates and tax credits," Ivory said.

But mortgage rates, which hit historic lows last year, are expected to inch ever higher. And federal income tax credits for buyers as high as $8,000 apply only to those who go under contract by the end of April.

Most economists agree the federal incentive and low interest rates have had a positive impact on the home-building industry nationwide.

Set to expire Nov. 30, the federal income tax credit has since been extended to first-time buyers (or anyone who hasn't owned a home in the past three years) who sign on the dotted line as late as April 30. It's also been expanded to include a $6,500 incentive for repeat buyers.

A state-level incentive that helped further motivate buyers in Utah last year, is no longer available. About 1,650 grants worth $6,000 each were quickly claimed by new home buyers as part of the state's "Home Run" program. A second round of 1,400 grants worth $4,000 also went quickly. Unlike the federal incentive, which applies to buyers of new and existing homes, the Home Run program was geared specifically toward buyers of properties never before occupied.

Like the new-home sector, the existing-home market has received a boost from the federal incentives and also is poised for a rebound. But it is expected to be just as tepid.

In its 2010 Housing Forecast released this week, the Salt Lake Board of Realtors predicts sales of existing homes this year along the Wasatch Front could increase as much as 10 percent compared to 2009.

Home prices are another matter. The cost of an existing single-family house is already off 13 percent from its peak three years ago and sits at a median sales price of $222,000, the board says. And the prediction for this year is that prices probably will fall another 3 percent to 5 percent.

"I think we're going to see a year of downward pressure on prices, and then it should stabilize in 2011 and begin to inch back up, but nothing like what we've seen before," said Bill Heiner, president of the Salt Lake Board of Realtors. He was referring to the 2005-2007 time period, when many areas posted double digit home-price gains.

In the new-home sector, Utah's Ivory Homes remained the top builder along the Wasatch Front last year, according to Construction Monitor, with permits issued for the construction of 444 single-family units.

Utah County-based Salisbury Development, which focuses on entry-level housing, was a distant No. 2, with 228 units. Richmond American, part of Denver-based MDC. Holdings, Inc. , which has struggled along with many of the other nation's builders, was No. 3.

North Salt Lake-based Woodside Homes, which filed for Chapter 11 bankruptcy reorganization in 2008, is No. 4. Neither Salisbury, Woodside or Richmond American representatives immediately returned calls seeking comment.

Fort Worth, Texas-based DR Horton, which has been trying to carve a niche in Utah, rounded out the top 5.

Homebuilding: A slight rebound
Builders took out permits for the construction of 15,428 single-family homes along the Wasatch Front in 2005, a peak building year. Building activity hit a low of just under 4,000 units in 2008, but thanks to unprecedented federal home-buying incentives, the industry experienced a slight rebound last year.
2009: 4,337
2008: 3,992
2007: 9,898
2006: 15,370
2005: 15,428

Source: Construction Monitor

Utah outlook on housing is improving

2010-01-13T12:17:00.001-07:00

By Jasen Lee
Deseret News

The Wasatch Front housing market has been on a historic roller coaster ride for the better part of the past decade, reaching its pinnacle just over two years ago. A new report indicates that wild market ride may finally be "pulling into the station" this year, offering some hope to wearied consumers, Realtors and other industry insiders.

"In Salt Lake County, we've probably touched bottom in 2009 and we're going to see a slight improvement in 2010," Jim Wood, director of the University of Utah's Bureau of Economic and Business Research and author of the "2010 Salt Lake Housing Forecast," told the Deseret News.

Wood said while the new year might eventually see some growth in new single-family home sales and construction, the previous year was among the most challenging on record.

"In 2009, only 900 new single-family homes were built in Salt Lake County — the lowest level since the war years of the 1940s — while about 9,100 existing single-family homes were sold," he said in the report, released Monday.

He added that existing homes for sale make up the disproportionate amount of inventory currently on the market, which should continue to work in favor of buyers during 2010.

Consequently, Salt Lake County home sales this year will show some slight improvement over last year, he said in the report.

The report showed that median housing prices in the Salt Lake metropolitan area peaked during the third quarter of 2007 at $246,600, dropping just over 11 percent over a two-year period to $218,900.

For Salt Lake County, the median value peaked at $254,900 during the 2007 third quarter before falling nearly 10 percent to $230,000 in the third quarter of 2009.

Wood predicted that home values along the Wasatch Front would continue to decline this year, falling another 3 percent to 5 percent.

"This will bring the decline in median sales price of homes in Salt Lake County to 15 percent through 2010," he said in the report. "By then, the price declines should be over, replaced by stable to slightly improving prices in 2011."

As for the current number of unsold inventory left available in the wake of the statewide housing crisis, another local analyst is optimistic the tide is beginning to change.

Speaking at the 2010 Salt Lake Housing Forecast breakfast Monday at the Little America Hotel in downtown Salt Lake City, Arthur "Chris" Nelson, presidential professor of city and metropolitan planning at the University of Utah and director of the Metropolitan Research Center, told the audience of about 800 real estate professionals that demand in the Utah housing market is on the upswing, as is the state's overall population.

"Between 2010 and 2011, we're going to have to build 100,000 new housing units in Utah to meet the needs of pent-up demand and growth by the end of 2011," Nelson said.

He said while that kind of construction is unlikely to occur in the near term, it demonstrates the long-term viability of the state's housing market.

"This is going to be the year of a slow uptick," he said.

"The bottom has passed and we are going to be inching up, and 2011 and 2012 are going to be extraordinary years for homebuilding."

Men's Health ranks Salt Lake City Top #3 in Nation

2009-12-30T13:15:00.002-07:00

Mens Health Mag ranks Salt Lake City #3 on the list for best cities for men to live in 2010.

Salt Lake City, UT: Men's Health.com

Real Estate Franchises: Most Recognizable Brands for 2009

2009-12-15T15:08:00.001-07:00

I JUST MADE THE RIGHT MOVE, KELLER WILLIAMS IS #1.

by Stefan Swanepoel

11,000+ Agents Cast 390,000 Votes to Select the Top 10

It’s been almost 40 years since franchising entered the residential real estate industry; a move that has shaped the industry like few other concepts or strategies before or since. The impact of franchising ranks with MLS and the Internet as the top three game changing strategies in real estate since WW II.

Today there are a growing number of agents questioning the value proposition of real estate franchising. They point to some of the “older models” that seem to offer little more than a brand; a brand of questioned value in today’s online world. A franchise company’s long term success (or failure) is therefore dependent upon both its model standing the test of time and its implementation systems supporting the local franchisee in successfully putting those models into operation.

In the 2010 Swanepoel TRENDS Report, scheduled for publication on February 8th, 2010 — reserve a copy now at www.RETrends.com) — a whole trend is dedicated to analyzing real estate franchising. The trend discusses the changes that have occurred during the last year including bankruptcies, acquisitions, large mergers, the re-introduction of previously dormant franchise brands and the launch of several new ones.

The Report details the Top 20 largest franchises based on agent count as of December 2009, inclusive of recent changes and acquisitions up and including that date.

However, as an additional test RealSure (www.realsure.com), the publishers of the Swanepoel TRENDS Report and the Swanepoel SOCIAL MEDIA Report, decided that it would be interesting to compare agent count rankings with the perception and recognizability of franchise brands by the industry itself.

So on Thursday December 3rd a nationwide online survey was launched to determine the “Most Recognizable Franchise Brand in Real Estate.”

With real estate agents being independent contractors and fiercely loyal to their respective brand the vote quickly garnished huge attention. It went viral through various social media networks, blogs and emails encouraging agents to vote.

In the end an astonishing 11,355 agents voted, casting just over 390,000 votes for 33 different real estate franchise brands making this — according to knowledge — the largest survey of its kind in the industry. The survey required real estate professionals to vote for a franchise on a scale from 0 – 5; starting from “Never heard of the brand” all the way up to “Excellent brand.” The brand’s scores in all categories were taken into consideration to determine the overall rankings. In the end there was a significant difference in the vote count between most of the top 10, thereby solidifying the placement of the brands.

Although another survey can produce different results and rankings, we are confident that this is a very good reflection of the real estate brokerage industry’s current opinion and awareness of the franchise brands that serve them.

The Top 10 real estate franchises, most recognized by the real estate industry as quality national brands are:

1.Keller Williams Realty
2.Coldwell Banker Real Estate
3.RE/MAX International
4.Century 21 Real Estate
5.Prudential Real Estate
6.Sotheby’s International Realty
7.EXIT Realty
8.ERA Real Estate
9.Weichert Real Estate Affiliates
10.Better Homes & Gardens Real Estate

The franchises that made it to the Top 5 were to be expected and are also the five largest real estate franchises in the country. The Top 5 also comfortably attracted more votes than the second five on the list, strongly pointing to the industry’s own internal belief that these are the top five franchise brands that agents would like to work for.

Keller Williams Realty’s surprising #1 ranking was most likely due to the strong, above average online and social media presence of their agents and the fact that during 2009 KW surpassed RE/MAX in agent count according to a widely published REAL Trends survey..

The 103-year old Coldwell Banker franchise has been the beneficiary of many NRT, Inc. acquisitions that have allowed the brand to remain at the forefront of many agents in a positive way. RE/MAX with their powerful consumer portal has also enjoyed the highest profile on national television of all the brands, thereby probably contributing to their high ranking.

Most interesting was the strong showing of Sotheby’s International Realty at #6, ahead of ERA Real Estate (a more established brand in real estate) and EXIT Realty (a more bolder promoter). The ranking was most likely attributed to the luxury homes image that many agents attach to the brand.

Long standing independent and northeast-based regional Weichert REALTORS converted to a franchise seven years ago and has steadily grown. Impressively it was able to break into the top 10 as a recognizable national brand.

Also surprising was the fact that newcomer Better Homes & Gardens squeezed out companies like Realty Executives, John L Scott and Windermere (both still regional players) to claim the last spot in the Top 10. This was most likely attributable to the recent news that 2,000-agent Metro Brokers switched from GMAC to BH&G as well as a few other key acquisitions.

The housing market is smaller than it was three years ago, yet we have more franchisors today than we did back then. Clearly the market is over saturated and yet the franchises reflected on this list are, according to thousands of agents that work for them and for their competitors, the best of the best.

At the end of the day, real estate brokers and agents want and need different kinds of support and thus different franchisors will attract different brokers and agents. For a detailed discussion on franchising, what the 7 key different types of real estate franchises are and which of the strategies currently work the best, read the 2010 Swanepoel TRENDS Report. Secure your copy at a special pre-publication discount of 34% when ordering at http://www.realestatebooks.org/items/Swanepoel_TRENDS_Report_2010.htm

Survey methodology:

The poll was conducted online within the United States between December 3rd and December 11th, 2009 among 11,355 real estate professionals.

All surveys and polls are subject to multiple sources of error that are not possible to quantify. Especially with online polls the errors associated with wording, selection, exposure and attempts to manipulate the vote make it very difficult to guarantee results. Post-survey weighting and adjustments are made to adjust for irregularities found in the voting but we avoid using the term “margin of error” as we feel it is still misleading.

Due to the very large number of real estate professionals that voted it is felt that the results closely reflect the opinion of the majority in the industry.

If You Don't Buy a House Now, You're Stupid or Broke

2009-12-14T11:16:00.001-07:00

By Marc Roth

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth.

Well, you may not be stupid or broke. Maybe you already have a house and you don't want to move. Or maybe you're a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don't act soon, you will regret it. Here's why: historically low interest rates.

As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on Mortgage-X.com—shows, is the lowest the rate has been in nearly 40 years.

In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

And it is exactly that, based on what the graph shows us. Let's look at the point on the far left.

In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers.

But they weren't happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons
And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We've since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable.

So, what can we learn from the historical trends and numbers?

First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years.

Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low.

Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home.

Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let's assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs
Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let's put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is "more stable" and it's safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you're borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

Marc Roth is the founder and president of Home Warranty of America

Banks Take Losses on Short Sales as Foreclosures Soar

2009-12-08T21:35:00.001-07:00

By John Gittelsohn and Margaret Collins

Dec. 4 (Bloomberg) -- Drew Schlosser tried for two years to sell his three-bedroom Punta Gorda, Florida, waterfront condominium for less than he owed on its two mortgages. The deal only went through last month when Wells Fargo & Co. agreed to take a $165,000 loss on the loans.

Even after he had an offer of $155,000 for the property, it took five months for the San Francisco-based lender to approve the purchase, a so-called short sale, in which the bank accepts less than the balance owed on a property. Schlosser said earlier offers had fallen through as bidders lost faith the bank would take less than the $320,000 in two mortgages.

“It was just kind of a mess,” said Schlosser, 31, a market research company director living in Estero, Florida. “You really have to get buyers who are patient.”

Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

“It’s really finally dawning on banks that they’re better off with a short sale,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”

Obama Pressure

Wells Fargo, Bank of America Corp. and JPMorgan Chase & Co. this year have hired and trained more staff, developed software systems for expediting short sales, and increased marketing of short sales to delinquent borrowers.

Banks are increasing such sales under pressure from the Obama administration and lawmakers who criticized them for favoring foreclosures and delaying short sales, Green said. Lenders and loan servicers also stand to receive up to $2,000 in incentives to close short sales under a Treasury Department plan unveiled Nov. 30.

“Judging by how slowly the modification plan is up and running, it doesn’t lend confidence this is going to jump start things,” Mark Zandi, chief economist with Moody’s Economy.com, said in a phone interview. “They’re saying the right things, but nothing so far suggests it’s going to work in a measurable way.”

The increase in banks agreeing to take losses on mortgages is helping some home buyers and real estate brokers.

‘Lucky Deal’

Pat Meislik, 63, started looking for a house in San Diego in March and said she felt locked out of the California market until short sales in her price range became available.

“There were times when I had looked at homes before and could only afford a condo,” said Meislik, an accountant and financial analyst.

Meislik closed on a three-bedroom “fixer upper” for $280,000 in May. “By the time it ended I felt lucky.”

Lender Countrywide Financial Corp., now part of Bank of America, lost about $150,000 on the $406,000 loan to the previous owner, said Meislik’s realtor Deborah Reed. Wells Fargo settled the second $47,252 mortgage on the home for less than 10 cents on the dollar, she said.

“The tide is turning,” said Reed, who works at Coldwell Banker in San Diego, where the price of a single family home has dropped 38 percent since the peak, according to the S&P Case- Shiller Home Price Indexes. “All of a sudden the banks are being more cooperative.”

More Short Sales

Reed said she completed four short sales in the past four months and the banks agreed to as much as $400,000 in losses.

Lenders have been reluctant to do such sales because they didn’t have procedures for employees to approve a financial loss for the company, said Alan White, assistant professor at Valparaiso University School of Law in Valparaiso, Indiana.

“A short sale requires somebody to stick their neck out and make a decision,” said White, an expert in consumer law and bankruptcy. “There are not good structures in place to incentivize losses.”

Bankers also have been slow to sign off on short sales because homeowner associations, mortgage insurers and second- lien holders may not agree to the terms of the deal, said Michael Frantantoni, vice president of single family research at the Mortgage Bankers Association.

Loan Modifications

The first choice for lenders has been to try to keep borrowers in their homes, offering loan modifications as an alternative to foreclosure, Frantantoni said. More than half of the modifications of delinquent mortgages re-defaulted within a year, according to a Sept. 30 report by the Office of the Comptroller of the Currency.

“The single biggest problem was the lack of a vehicle or mechanism at most banks to handle short sales,” said Walter Molony, a National Association of Realtors spokesman. “You could say they were shortsighted in dealing with the problem.”

Pressure is building to approve short sales as the number of delinquent mortgages has grown to 3.2 million and an estimated 7 million foreclosures loom in the next two to three years, according to Irvine, California-based RealtyTrac Inc., which compiles and sells U.S. mortgage delinquency data.

New Treasury Department guidelines for foreclosure alternatives scheduled to take effect in April 2010 will require lenders to consider borrowers for a short sale on their primary residence 30 days after missing two consecutive payments on a modified loan or after the borrower requests a short sale.

Treasury Plan

The Treasury Department would pay up to $1,500 for a homeowner to relocate, $1,000 to loan servicing companies that accept a sale and a maximum of $1,000 to help settle a second mortgage or subordinate lien. A lender must agree to release the borrower from all liability for repayment for the mortgage, under the Treasury plan.

In July, Wells Fargo began mailing notices to delinquent borrowers advising them that short sales might be an option to avoid foreclosure.

“When we determine that a loan is not affordable for the customer -- either because a modification was denied or failed - - we obtain the value of the property, run it through our loan decision tool and then send a letter to the customer advising them of our short sale program, including the short sale price we are willing to take on the property,” Debora Blume, a spokeswoman for Wells Fargo Home Mortgage said in an e-mail.

‘Pick a Pay Loans’

Wells Fargo is focusing on delinquent borrowers in Florida and California homeowners with “Pick-a-Pay” loans originated by Wachovia Corp., Blume said. Wells Fargo acquired Wachovia in December 2008 and owns the “Pick-a-Pay” loans outright, said J.K. Huey, the bank’s senior vice president overseeing short sales and bank-owned properties. That allows the company to approve a short sale without consulting investors or parties that can hold up transactions.

“Pick-a-Pay” mortgages have among the highest rates of negative equity, because borrowers could select their monthly payments, often paying less than the interest, with the difference added to the principal. That formula means that total loan debt was increasing at a time property values were falling.

Wells Fargo held $87.8 billion of such loans as of Sept. 30, down $7.5 billion from the end of last year. Wells Fargo Chief Financial Officer Howard Atkins said on an Oct. 21 earnings call that the bank is reducing the number of loans with “negative amortization potential.” As of the end of the third quarter, 26 percent of the loans in that portfolio now have minimum monthly payments that fully cover the interest due so that the total principal does not grow, up from 16 percent at the end of last year.

As of Sept. 30, Wells Fargo had modified 43,500, or 22 percent, of the distressed loans to reduce borrowers’ payments, Atkins said.

Reaching Out

JPMorgan doubled the number of staff trained to handle short sales after adding 5,000 people since Jan. 1 to deal with distressed mortgages, said Thomas Kelly, a spokesman for the New York-based bank’s home lending division.

Chase services 10.3 million mortgages worth $1.4 trillion, according to Kelly. Of its portfolio, Chase reported 422,000 loans more than 60 days delinquent, about one third of which were in loan modification programs, according to a Nov. 10 Treasury Department report on the Obama administration’s Making Home Affordable Program.

“We’re reaching out to people who are struggling with the Obama loan modifications or our own,” Kelly said. “Approaching customers is a very recent phenomenon.”

Bank of America, the nation’s largest loan servicer, had one of the lowest loan modification rates, with 14 percent of problem loans in trial workout plans as of Oct. 31, according to the Obama Administration.

The Charlotte, North Carolina-based bank started a “cooperative short sales” program in October and may close its first short sale through the program this month, said Dave Sunlin, senior vice president for foreclosure and real estate management.

Pay-Option Mortgages

Many are borrowers with pay-option adjustable-rate mortgages issued by Countrywide Financial Corp., Sunlin said. BofA bought Countrywide, once the nation’s largest mortgage originator, for $4 billion in stock in 2008.

Short sales benefit a neighborhood because they clear out stagnant properties that may have an adverse effect on values, said Sean Shallis, a senior real estate strategist with Weichert Realtors in Hoboken, New Jersey. Shallis has one home with bank approval for a short sale and three others waiting approval on the same street in Jersey City with views of the Manhattan skyline.

“In every case we had multiple offers from people who had plenty of money to put down,” Shallis said. “Americans are out there still buying homes and trying to move it along.”

Cutting Losses

Short sales also help the bank, because foreclosed properties lose more value when they are vacant or a homeowner vandalizes a house on the way out, Sunlin said.

“We typically expect a 10 to 15 percent decrease of loss severity with a short sale,” Sunlin said.

Losses on prime loans going through the foreclosure process averaged 49 percent versus 34 percent for a short sale as of Oct. 1, according to a Nov. 10 report by Laurie S. Goodman, senior managing director of Amherst Securities Group LP. For subprime loans, losses averaged 73 percent for a foreclosure compared with 59 percent for a short sale, Amherst reported.

“The loss severity of short sales is lower but it’s not low,” Goodman said.

For a borrower’s credit history, a short sale is typically reported as “settled” and considered as severe as a foreclosure, said Maxine Sweet, vice president of public education for Experian PLC, the world’s largest credit-reporting company. The impact of a short sale on a credit score is similar to that of a foreclosure. It may drop a credit score of 780 to 620, according to Minneapolis-based FICO Corp.

Hardship Letter

For sellers like Drew Schlosser, who bought 10 properties in Florida as investments during the housing bubble, getting a short sale was a relief even if the process was difficult.

Schlosser said he had to provide Wells Fargo a hardship letter, demonstrating that his financial situation merited a short sale. He also had to provide pay stubs, bank account information and past tax returns. To avoid fraud, the bank also required evidence that the transaction was an arms-length sale and not to one of his relatives, he said.

“They don’t agree to do it because you’re upside down,” Schlosser said. “If they think you can pay for it they’re not going to let you out of it.”

To contact the reporters on this story: John Gittelsohn in New York at johngitt@bloomberg.net; Margaret Collins in New York at mcollins45@bloomberg.net.

Signs of the Bottom of Your Real Estate Market

2009-12-07T22:16:00.001-07:00

by M. Anthony Carr
We've been watching a buyer's market for so long, we've almost forgotten how to see the signs of the building of a seller's market. Keep in mind, a seller's market slowly builds (over months) while a buyer's market can hit overnight.

While the National Association of Realtors announced sales of resale homes jumped more than 10 percent nationally in October 2009 over a year earlier – those numbers are not the numbers to watch while you're trying to find the bottom of your local market. Don't make a local decision based on national information.

The resale numbers have been up in markets all across the country for more than a year, we just never heard about it from the evening news, et. al., because your national news venues don't watch local markets. You should.

Most buyers and the media in general look to pricing to dictate that the bottom of the market has been hit. But before making that dictum, a buyer must first define what the bottom really is. Many would say, it's when prices hit the lowest they've been. True. That's part of the signs to watch.

And if price is you're only interest, then go ahead and wait for the bottom in pricing. Keep in mind, however, that everyone else is also looking for that number. When prices start to move up, they are moving up because the demand is starting to outpace supply and higher priced homes are starting to sell again, thus you may have missed the optimal time to purchase a house at a low price with someone else's money to help you with closing costs.

When the prices hit bottom (and the only way you can figure that out is the first month that prices start moving up, you've already missed the bottom), consumers are already starting to beat each other out for a shrinking inventory.

So, here are the indicators to watch to find the bottom:

1. Inventory: Watch for inventory to start dropping. When this happens, you've entered the bottom territory. Buyers start jumping on the bandwagon once there is so much inventory that prices have hit an acceptable low level.

2. Seller Subsidy: When sellers are giving back maximum amounts allowed by loan programs, you've hit the bottom. Some loan programs allow up to 6 percent of the sales price to be given back to the buyer at the settlement table from the seller for closing costs. Imagine, purchasing a house for $300,000 and getting $18,000 back from the seller for the buyer's closing costs – that's a sign of the bottom. (And this is most likely after getting 3 or 4 percent off the sales price – another $9,000 to $12,000).

3. Pricing: Now this is where everyone watches, when in reality it's the sign that the market has been climbing up from the bottom for several months. If you're going to track pricing as a bottom indicator, then start watching it from month to month, instead of year over year. Thus, when prices start moving up, say, from March to April to May to June – THEN you may have hit the bottom on pricing. A market can experience price increases month after month while still showing lower prices than a year before – thus the buyer, while waiting for signs that prices are moving up over last year, may have missed the bottom on pricing. By the time value starts surpassing year over year, the climb up has already begun.

4. Multiple offers: As buyers start competing for the best properties that have hit the lowest price, then you've found another sign of the bottom of the market.

5. Days on market: Once prices have hit bottom and buyers start gobbling up houses and start competing with each other – then you'll see the days on market begin dropping.

For some markets across the country, all of these indicators have already started showing signs of the bottom, such as Florida, Washington DC, Phoenix, Las Vegas, Las Angeles, and other metropolitan areas that were hit heavy by foreclosures.

Watching your local numbers is the only way to determine if you've hit the bottom of the market for your local real estate market.

Published: December 7, 2009

Existing-Home Sales Jump To Highest Level in 2-1/2 Years

2009-11-23T13:02:00.002-07:00

Published: Monday, 23 Nov 2009 | 10:46 AM ET
By: Reuters

Sales of previously owned U.S. homes rose in October at a faster-than-expected pace to the highest in more than 2-1/2 years as buyers rushed to take advantage of a popular tax credit, a survey showed Monday.

The National Association of Realtors said sales surged a record 10.1 percent month-over-month to an annual rate of 6.10 million units, the highest since February 2007, from a downwardly revised 5.54 million-unit pace in September.

Analysts polled by Reuters had expected October sales to jump to a 5.70 million-unit pace from the previously reported 5.57 million units in September. Compared to October last year, home sales were up by a record 23.5 percent. U.S. stock indexes extended gains on the data, while Treasury debt prices were little changed.

"Many buyers have been rushing to beat the deadline for first-time buyer credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," said Lawrence Yun, NAR's chief economist.

Distressed transactions accounted for 30 percent of sales last month and continued to weigh on house prices. First-time buyers made up a third of sales in October.

The national median home price fell 7.1 percent from October last year, the smallest decline in over a year, to $173,100. Homes in foreclosure typically sell for 15 to 20percent less than traditional homes.

"Existing home sales have already bottomed. Home prices are almost there. We are seeing a less of a decline in house values," said Yun.

The housing market is slowly mending after a three-year decline, which contributed to tipping the U.S. economy into its worst recession in seven decades. Housing construction contributed to economic growth in the third quarter for the first time since 2005.

Recovery is being supported by the $8,000 tax credit for first-time buyers, low mortgage rates and falling house prices. The government this month extended the incentive into next year and added a $6,500 credit for home owners buying a new residence. It had been due to expire on Nov. 30.

"The tax benefits going into the housing market are working, and that's a relief," said William Larkin, portfolio manager at Cabot Money Management in Boston. "Everything is about housing and jobs right now."

The improvement in October sales was broad-based, with sales of single-family homes, the biggest segment of the market, rising 9.7 percent to an annual rate of 5.33 million units, while condominium and co-ops increased 13.2 percent to a 770,000-unit rate.

Sales were up in all four regions of the country. Prices rose 1.1 percent in the Midwest, which didn't see the same boom as the rest of the country, while declining in the other three. The rise in the Midwest was the first price increase in any region since November 2008.

Analysts are cautiously hoping a sustained housing market recovery will help to improve the psychology of households, which has been shaken by rising unemployment.

While the economy resumed growing in the July-September period after four quarters of decline, sluggish consumer spending is seen slowing the momentum.

The inventory of existing homes for sale in October fell 3.7 percent to 3.57 million units from the previous month, NAR said. At October's sales pace, that represented a supply of 7.0 months, the lowest in 2-1/2 years, from September's revised 8.0 months.

Copyright 2009 Reuters.

Low Interest Rates Spur Refinancing, Buying Interest

2009-11-19T08:44:00.001-07:00

by Broderick Perkins

If you purchased a home a year ago and have the equity and creditworthiness to swing it, a refinance today could save you hundreds of dollars a month.

Or, if you are in the market to buy a home, interest rates will make for a more affordable deal.

Freddie Mac's Primary Mortgage Market Survey for Nov. 12 put the average fixed interest rate for 30-year conforming mortgages at 4.91 percent.

Last year at the same time, the 30-year fixed rate mortgage (FRM) averaged 6.14 percent.

"Keeping rates at historically low levels for a sustained period of time has to remain a cornerstone of Fed policy until the economy gets back on track," said Nancy Osborne, chief operating officer of Erate.com.

On a $300,000 mortgage the principle and interest payment at today's average rate would be about $1,594, compared to $1,825 a year ago, according to Erate's calculators.

That's a monthly savings of $231. Put another way, a year's worth of the savings -- $2,772 -- amounts to almost two mortgage payments on a $300,000 mortgage at today's average rate.

Both home buyers and owners who want to refinance may have some time yet to shop around and dicker for the best interest rate deal.

"I don't suspect rates will begin to rise until we see at least three consecutive months of solid employment growth," Osborne said.

Freddie Mac also said the 15-year FRM averaged 4.36 percent, down from 5.81 percent a year ago.

Adjustable rate mortgages (ARMs)

The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averaged 4.29 percent this week, down from 5.98 percent a year ago. The one-year Treasury-indexed ARM averaged 4.46 percent, down from 5.33 percent in 2009 at this time.

Published: November 19, 2009

Congress Poised to Keep Homebuyers’ Tax Credit

2009-11-04T15:30:00.000-07:00

By JACKIE CALMES
Published: November 3, 2009

WASHINGTON — The Senate and House are poised to agree on a compromise measure to extend unemployment benefits that also would expand a popular $8,000 tax credit for homebuyers, despite a recent government report on extensive mistakes and suspected fraud in the program.

The Senate might pass its version as early as Wednesday, and aides to Congressional leaders say the House could accept it this week, sending the bill to President Obama to sign into law. After weeks of partisan delay in the Senate, Democrats are eager to show progress before Friday, when the October jobless report is again expected to show high unemployment.

The homebuyers’ credit — enacted last year, expanded this year and scheduled to expire Nov. 30 — would be extended to cover homes under contract by April 30. Also, it no longer would be limited to first-time buyers; people who have owned a home for at least five years could get a $6,500 credit on a new residence. Income limits for eligibility would be raised, making many more people qualify.

Extending and expanding the credit would cost an estimated $11 billion, on top of the $10 billion spent so far. It would be a big victory for the housing and real estate lobby and for the Senate majority leader, Harry Reid, Democrat of Nevada, who faces a tough re-election race next year in the state with the most claims for the credit per capita.

Critics complain that most of the credits go to taxpayers who would have bought their homes anyway, which even the industry acknowledges. Also, a Congressional subcommittee released a Treasury Department report last month about suspected criminal and civil abuses of the program.

Government officials testified, however, that many of the problems may be due to confusion among taxpayers and the Internal Revenue Service about the overlapping 2008 and 2009 versions of the tax credit. With Congress likely to change the eligibility provision again, the new measure could present further administrative problems for the I.R.S., although the measure does include several new safeguards.

“It’s not unreasonable to think that this is going to provide some further challenges for them, both in terms of implementing a third version of it and in terms of ensuring taxpayers’ compliance,” said James R. White, director of tax issues for the Government Accountability Office.

The Treasury Department report said that as of Sept. 30, the I.R.S. had identified 167 suspected criminal schemes and was examining nearly 107,000 cases of potential civil violations.

The first person to be convicted of defrauding the tax credit program was a tax preparer in Jacksonville, Fla., who was sentenced last month to 30 months in prison. According to the Justice Department, he claimed the credit for ineligible clients, many of whom were unsuspecting, and electronically paid himself $1,000 of the credit’s value each time.

Investigators found that more than 500 claimants of the tax credit nationwide were minors as young as 4, so the new measure will require applicants to be at least 18. Homes cannot be acquired from relatives, and taxpayers must submit a settlement statement as proof of purchase, though officials acknowledge that could be a problem for those who file tax returns electronically.

While real estate groups and some economists say the credit has helped stabilize the housing market, critics say it is too costly a subsidy when low interest rates and home prices are incentives enough for most.

Of the 1.4 million claimants of the credit, fewer than a third — about 350,000 to 400,000 — are believed to have bought their homes because of the credit, according to independent and industry-affiliated economists.

Under the new legislation, individuals with income up to $125,000 a year and couples earning up to $225,000 would be eligible. The current income limits are $75,000 for individuals and $150,000 for couples. Under both the House and Senate versions, smaller amounts are available to people of slightly higher incomes until the credit phases out.

The expanded homebuyers’ tax credit was attached to a bill intended to extend unemployment compensation for up to 20 weeks for people who have been out of work for long periods. Another amendment would sweeten a tax break for businesses with net operating losses in 2008 and 2009.

Survey: Most economists see recovery beginning

2009-10-13T11:48:00.001-06:00

By Mae Anderson
The Associated Press

New York » More than 80 percent of economists believe the recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist.

That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday.

"The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines," said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University.

The forecasters upgraded the economic outlook for the next several quarters, but cautioned that unemployment rates and the federal deficit are expected to remain high through the next year. Forecasters now expect the economy, as measured by gross domestic product, to advance at a 2.9 percent pace in the second half of the year, after falling for four straight quarters for the first time on records dating to 1947. They expect a 3 percent gain in 2010.

Still, the federal deficit has ballooned and the jobless rate is expected to lag behind, as employers remain cautious.

The unemployment rate rose to 9.8 percent in September from 9.7 percent, the Labor Department said earlier this month, the highest point in 26 years.

Forecasters expect the unemployment rate to continue to rise, to 10 percent in the first quarter of next year, before edging down to 9.5 percent by the end of 2010.

The recession, the worst since the 1930s, has eliminated a net total of 7.2 million jobs. More job cuts were announced last week. Thermo Fisher Scientific Inc., which makes industrial and scientific equipment, said it will close a plant in Dubuque, Iowa, next year, costing 350 jobs.

Worries about unemployment are likely to continue to constrain household spending. Personal consumption spending likely began rising in the second half of this year, but is expected to remain low in 2010. Still, Americans aren't expected to save as much as they have in past decades. The savings rate is expected to be above the 2 percent average of the past four years, but below the 9 percent average in the 1970s and 1980s.

The housing recovery is one bright spot. Forecasters expect 2010 to be the first year since 2005 that the housing sector will contribute to overall growth. Home prices are expected to rise 2 percent in 2010, but panelists do not believe that will stifle the housing recovery.

Inflation is expected to remain low due to the weak labor market and other factors. Thus, the NABE panel -- which consists of 44 economists surveyed Sept. 2 through Sept. 24 -- expects the federal funds rate to remain at its current record low near zero until late next spring, before a gradual rise begins.

"The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation," said Reaser.

Home-buying incentives available, but time is short

2009-10-13T11:42:00.002-06:00

Economy » The two programs are intended to help spur the sale of houses.

By Lesley Mitchell
The Salt Lake Tribune

Homebuyers along the Wasatch Front are racing to meet a deadline for purchasing incentives that expire on Nov. 30.

The larger of the two incentives is an $8,000 federal income tax credit geared toward first-time buyers of new or existing homes, although anyone who hasn't owned a home in the past three years is eligible. Utah also is offering a $4,000 grant for buyers of newly built homes. Both state and federal officials stress that there is no leeway on the deadlines for the incentives, which are aimed at boosting the sagging economy and real estate sector.

"You could be a day late and $8,000 short," said IRS spokesman Bill Brunson.

Salt Lake City Realtor DeAnna Dipo is telling prospective buyers who are interested in either incentive they probably are going to need to be under contract to buy a home no later than the end of October to allow for sufficient time for loan underwriting and to beat the Nov. 30 deadline to close.

"It's definitely getting people off the fence," said Ryan Kirkham, president of the Salt Lake Board of Realtors. "There's no question that it's having a positive effect on home sales right now." Further motivating buyers are super-low mortgage rates of about 5 percent or even below 5 percent.

"A lot of people realize that rates aren't always going to be this low," Kirkham said.

First-time buyer Saxony Sharkey qualified this summer for a mortgage at 5.25 percent to purchase an existing home in West Jordan. Like other buyers, she first heard about the federal home-buying incentive last year. But last year, the incentive was a $7,500 no-interest loan that had to be repaid.

Only this year, when the government started offering an $8,000 tax credit -- it does not have to be repaid if the home remains a primary residence for at least 36 months -- did she make her move.

"I thought, this is something I didn't want to pass it up," she said.

The state incentive, dubbed "Home Run 2," provides $4,000 grants to buyers who meet certain criteria and buy new construction. It follows the original Home Run program, which provided $6,000 grants to new home buyers. That program ended in June after all the funds were exhausted and 1,652 grants had been issued.

Today, there's about 1,400 grants available out of 1,950 when the program debuted on Sept. 4.

"The interest level has been very high," said Grant Whitaker, president and CEO of the Utah Housing Corp., which is administering the program.

Clark Ivory, who lobbied the state to create the grant program, said his home-building company had 60 sales in September, up from 47 in September 2008.

Cristy and Luis Duran, who are renting, didn't think they could afford to buy. But after a local real estate agent told them about the incentives, they went to a mortgage lender to see if they could qualify to buy a townhome.

They did qualify, and are using the $4,000 state incentive toward their down payment. Once they close in a few weeks, they will file an amended return to get the $8,000 federal incentive, which they plan to use to finish their basement.

"Without this money, we would not have been able to buy this home," Cristy Duran said.

Sharkey said she elected to amend her 2008 tax return after she bought her home this summer, and expects to get the tax credit money sometime over the holidays. Others are waiting to file for the credit in early 2010 when they file their 2009 return. Half of Sharkey's $8,000 was earmarked for some upgrades; the other half is destined for her saving account.

"I wanted to use some of its on upgrades," she said. "But based on the way things are going right now [with the economy], I thought it would be good [to put] half of it in savings."

lesley@sltrib.com

Utah execs more upbeat about state's economy

2009-05-28T10:36:00.001-06:00

After two years of growing pessimism about the economy, some Utah business leaders are saying that the worst of the recession may be over.

Optimism among executives about the futures of their companies increased in the opening three months of 2009 for the first time since the fourth quarter 2006, according to the bank's latest quarterly forecast of the economy, released Tuesday.

"It's the first time I've seen attitudes look more upbeat, to see hope for the future, rather than a steady decline," said Julie Olsen, an analyst for Dan Jones and Associates, the Salt Lake City market research firm that constructed the forecast for Zions.

Olsen said it's too soon to call the upswing the start of a recovery from the worst recession gripping Utah since the 1930s. But "at least during this quarter we are willing to say that the executives in this survey see [the economy] improving."

The level of optimism hardly compares to when Zions established its quarterly report in the second quarter 2006, when Utah's economy was booming. Back then 90 percent of the executives who took part were bullish on their businesses, compared with 65 percent today.

In hindsight, second quarter 2006 turned out to be the survey's high point. Except for small increases in the fourth quarters of 2006 and 2007, optimism fell steadily until the first quarter 2009, and business leaders hope the turnaround sticks.

"We have seen an uptick in demand, which is very good," said Dan England, chairman of Salt Lake City-based trucking giant C.R. England Inc. "We are not going to be too aggressive on our predictions, but we are hoping and thinking that things may be improving a little bit."

The Zions forecast is based on a survey of 337 executives from April 2 through April 30. Olsen said a "notable" number of executives believe their companies' "health" will improve in the second quarter ending June 30. Forty-four percent sense better times ahead, compared with just 22 percent in the last three months of 2008.

Similarly, more executives expect their companies to maintain or boost spending on capital projects and add employees during the quarter, she said. Fifty-seven percent of executives in the statewide survey anticipate spending as much or more on capital expenditures, compared with 41 percent in the fourth quarter.

The executives showed more inclination to hire additional workers in the second quarter. Twenty-six percent said their work forces would increase somewhat or greatly, up from 17 percent who in the first quarter said their payrolls probably would increase.

"What you have is some optimism that there are parameters to the recession," said Mark Knold senior economist at the state Department of Workforce Services.

"Before, it just felt like it was in a free fall, like nobody knew where it was going to go [or] what it would take to get their hands around it.

"What's changed now is there is a feeling that a bottom is somewhere close, and some of the indicators may have seen their deepest day," he said.

Knold doesn't think Utah is out of the woods, though. Initial claims for unemployment benefits are still hovering around 3,000 per week, three times greater than normal levels.

"I'd like to see them trending below 2,000" before calling a bottom to the labor market, he said.

By Paul Beebe
The Salt Lake Tribune
Updated: 05/26/2009 08:54:56 PM MDT

National papers put spotlight on Salt Lake City

2009-05-19T10:24:00.000-06:00

May 18th, 2009 @ 4:16pm
By Amanda Butterfield

SALT LAKE CITY -- Two of the most-read newspapers in the country have recently published lengthy articles about Utah, and they're very positive. That has community leaders very excited.

"National coverage is great. It gives a lot of creditability for what we're doing here across Salt Lake," said Jason Mathis, executive director of the Downtown Alliance.

Mathis couldn't be happier with the recent articles in USA Today and the New York Times. The USA Today article notes what a great place Salt Lake is to have a second home and how there's so much so do that's all close by for visitors.

"Utah has a unique connection of urban city center and mountain resorts. Nobody else has that," Mathis said.

The New York Times article goes into detail about Salt Lake's construction of the City Creek project. At a time when other building projects across the country are at a standstill, The Church of Jesus Christ of Latter-day Saints is on schedule reviving downtown.

"We've got great construction going with more the 1,000 construction workers in the downtown area every day. We have dozens of small businesses that have opened up in the past month," Mathis said.

He says it's important to note, because the construction workers are from all over the valley, the money being made doesn't just stay downtown. "The money generated downtown goes throughout the entire region," he said.

Whether you were born and raised in Utah or recently moved to the state, Mathis says these articles prove Utahns have a lot to be proud of. "We take living here for granted, but people who come from outside, they see the mountains, the awesome city, and they're floored. This is really a remarkable place to live," he said.

Even the magazine Men's Fitness magazine is taking notice of Salt Lake City. In February, Salt Lake was named the nation's fittest city.

Economists React: ‘Plunge Is Over’ in Existing-Home Sales

2009-04-24T12:56:00.003-06:00

Economists and others weigh in on the decline in existing-home sales.

Home sales have stabilized following the post-Lehmans plunge and remain above January’s trough of 4,490,000. March’s fall is probably just noise rather than a renewed downward trend. Admittedly, around 50% of sales are now related to distressed properties, which is hardly a sign of strength.

But at least these sales are helping to reduce the inventory overhang… Overall, with the housing market having led the economy into the recession, it is no surprise that it might be the first sector to stabilise. Nonetheless, we suspect that prices have yet to reach their floor. –Paul Dales, Capital Economics

This is a bit disappointing but the big picture is still clear; the plunge in sales following the Lehman blowup is over. Unfortunately … prices will continue to fall rapidly for the foreseeable future, though at least the rate of decline should not get any worse. The floor for prices is probably a late 2010 story. –Ian Shepherdson, High Frequency Economics

The report was very disappointing, particularly given the broad-based nature of the declines… With the backdrop for U.S. households continuing to deteriorate on account of the worsening labor market conditions and weakening economy, we expect the housing market correction to continue well into this year. Nevertheless, the pace of decline is likely to ease as improved housing affordability conditions begin to spur housing demand. –Millan L. B. Mulraine, TD Securities

The weaker-than-expected result does not change the broad trend in sales, however, which continues to point to a tenuous stabilization… Sales in the western United States, where foreclosure activity is most prevalent, show a distinctly different pattern than those in other regions. Total existing sales (single family sales plus condos and co-ops) are up 19% year-to-year in the West… The improvement in sales in the Western region is an encouraging sign that discounted prices, record low mortgage rates and various tax incentives are stimulating new demand. –Nomura Global Economics

Although home resales were down in March, one can make a reasonable argument that resales are bottoming (albeit as a result of steep cuts in price as distressed and foreclosure sales make up a large share of existing home sales) as the average level of sales in the first quarter was similar to the fourth quarter’s average. –RDQ Economics

After dropping by 11% in October and November combined, likely reflecting the fallout from the financial meltdown in September, resales have held between 4.49 million and 4.74 million units, pointing to some stabilization in housing demand. With housing affordability rising dramatically thanks to lower prices and lower mortgage rates, demand from first-time homebuyers seems to be on the rise and is clearly supporting the market.

Indeed, the NAR pointed out that first-time buyers accounted for just over half of all existing home sales in March. Still, first-time buyers typically purchase at the lower end of the market, which could help to explain why half of all resales last month were distressed properties. –Omair Sharif, RBS

Compiled by Phil Izzo
Economic insight and analysis from The Wall Street Journal.

Utah may see relatively fast economic recovery

2009-03-19T10:00:00.001-06:00

While tied to outside influences more than ever and facing slipping economic statistics, Utah nonetheless will fare better than many states when emerging from the economic downturn, the chief economist in the Governor's Office said Tuesday.

Speaking Wednesday at the Utah Foundation's annual meeting, Juliette Tennert said Utah's economy is "more broadly integrated" with the national and global economy than ever before and thus Utah's performance will depend on what happens at those levels. But several factors — unique demographics and industry diversity among them — work in Utah's favor for recovery, she said.

"We have one of the most diverse economies in the nation," Tennert said. "That means that while we're certainly impacted by the national contraction, we'll recover quicker than many other states."

Tennert is predicting Utah's unemployment rate to pass 6.5 percent in 2010 although still be relatively low when compared to most other states and the national prediction of above 9 percent. Utah employment will move from slight growth to a 2.5 percent decline in 2009 and flatten in 2010. "This will be the worst decline since the 1950s; however, it will not be as bad as the 3-plus decline that's expected at the national level," Tennert said.

"If not for the infusion of cash (from the federal economic stimulus package), I expect that this picture would be even grimmer," Tennert said. "While the outlook over the next year is certainly weak, we should not forget about the inherent strength and durability of Utah's economy. We are well-positioned to manage the downturn, and we really should be grateful for those dynamics that I mentioned that will help keep Utah's downturn less severe and help us to recover quicker than in many other states."

Economic woes led the Legislature to budget cuts of $250 million and later $350 million. Senate Majority Assistant Whip Greg Bell, R-Fruit Heights, described those cuts as "truly Draconian" but also "done with as much precision as possible."

Federal stimulus funds "effectively hide" effects of budget cuts in 2010, but the full effects will be seen in 2011, he said.

"We don't live in a vacuum, and I think that's going to be the message today, that Utah is doing extraordinarily well in so many regards and though our ship seems to sail fairly well, we are getting a lot of backwash from national and international conditions over which we have no control," Bell said. "So for a while it seemed some were immune and now it seems no one is, and we're all going to have to live with the difficult circumstances and conditions imposed upon us by these challenging times."

Natalie Gochnour, chief operating officer at the Salt Lake Chamber, said long-term economic success for Utah can be tied to globalization efforts, including continued funding and a building to house the World Trade Center Utah and becoming a "more welcoming" state. "We live in a post-American world, period," she said. Improving education and air quality and developing energy security were among her other suggestions.

By Brice Wallace
Deseret News
Published: Wednesday, March 18, 2009

Study: Utah poised to rebound from recession quickly

2009-03-18T13:31:00.002-06:00

SALT LAKE CITY -- A new study shows Utah may be poised to recover from the recession more quickly than most states. The reason, according to the conservative authors, is Utah's business-friendly environment.

This is a conservative study with a lot of praise for Utah's conservative Legislature and its policies, but the forecast is a pragmatic look at what businesses want and what Utah has.

Poised to attract more high-tech companies, more in research and medicine, in recreation, tourism and energy; Utah may have what it takes to climb out of the recession first.

"We do have a very attractive environment for business, and it's been stable," said Sen. Wayne Niederhauser, R-Sandy.

Niederhauser is one of the legislators cited in the study "Rich States, Poor States." Written on behalf of the conservative American Legislative Exchange Council, or ALEC, it claims Utah is one of the states that has advantages over other states.

One of the advantages comes in the area of tax policy, specifically income tax reform. Utah also has less government regulation and involvement is a plus for businesses.

Gov. Jon Huntsman is also working to promote Utah as a future renewable energy hub. Together, it could add up to an even more prosperous future for Utah.

"There probably is not another state in America right now with better practices, in terms of attracting, building and promulgating renewable energy," Huntsman said.

At the same time, Utah has a chance to lead the way in using prosperity to create a better life for people. It can do so in many ways. One example is in being smart about health care reform.

"We're saying it's great the state is embarking on health system reform. Let's make sure that, at the end of the day, those reforms result in predictable costs for businesses and affordable costs for employees so they can succeed on the job," said Judi Hilman, with the Utah Health Policy Project.

By comparison, states like California and New York have been raising taxes steadily. That has led to a very difficult downward spiral for those states.

By Richard Piatt
KSL-Salt lake City, Utah

Waiting for gov's signature on $6,000 grant bill

2009-03-18T11:14:00.000-06:00

We're getting lots of questions about the $6,000 "Home Run" grant program. Utah Housing says they are not releasing any more information about the program until the governor signs the billl.

They say, in the meantime, people should start house shopping and talking with their lender. When the program is implemented, the lender will be the key link to getting the grant. We'll keep you posted here with any new developments on the program.

Ut Assoc Realtors's Notes

UTAH'S NEW $6,000 GRANT FOR NEW CONSTRUCTION - THIS IS HUGE, DON'T WAIT - PLEASE READ AND CONTACT ME!

2009-03-13T13:35:00.001-06:00

I'm told that this can be used for FHA and Conventional financing and is not limited to first time home owners. However, this is only good for spec homes and new construction. Ill keep you posted once I have more information on getting the money.

Most of you have now heard about the State's effort to boost home
sales by passing HB-0206 bill aimed at the New Construction industry.
This bill will set aside $10 Million dollars of the Federal Stimulus money for the home buyer grants. Theoretically, this would provide grants to about 1,600 purchasers.

I have already been on the phone with key people finding out the specifics of the program and am happy to share the following information with you.

FACTS:
1. As of 12:30PM today, the bill has actually NOT been signed by the governor yet. But it is expected to be signed by end of day.
2. The program will be administered by the Utah Housing Corporation (www.utahhousingcorp.org
- (801) 902-8200 Darlene)
3. Lenders wishing to participate in the program must register with UHC even if they have been registered in the past for a divverent program.
4. Criteria for the loans are simple. 1) Income restriction of no more than $75K individual or $150K couple, 2) Loan must be 30 Year Fixed of any type (FHA or Conv), and 3) Must reside in residence for 3 Years. Final details will be listed on their site as soon as the governor signs the bill.
5. New Construction is defined as a home that has NEVER been lived in. No matter how long it has sat on the market.
6) It only takes about 48-hours to get approved for the Grant.
7) The fund will be reserved for 30 Days.
8) Unfinished homes qualify as long as you can get a 30-year Fixed loan.

I have signed up to receive the official notification once it is posted on the UHC web site which will mark the official start-up of the program.

STEVE JACKSON
801-243-8202
sjackson@signaturegrouputah.com
www.signaturegrouputah.com/sjackson
http://realtor4utah.blogspot.com

Real Estate Outlook: Housing Positioned For Growth

2009-03-03T13:57:00.000-07:00

No economist has more information at his or her disposal than Federal Reserve chairman Ben Bernanke, and what he told Congress last week should be encouraging news for anyone interested in real estate: The recession that has gripped the country painfully for 18 months will "end" later this year - moving us into positive economic growth.

In the meantime, housing may be better positioned than other major industries. That's because there appears to be significant interest in the improved $8.000, nonrepayable home buyer tax credit plus a historically-favorable combination of low interest rates and rolled-back home prices.

In a new research report, the National Association of Home Builders found that affordability of houses is now at its best level in years. The association's "Housing Opportunity Index" -- which measures the percentage of homes sold in local markets around the country that are affordable to families earning area median incomes -- hit a near-record 62.4 percent in the most recent quarter for which data is available.

By contrast a year earlier, the index was at 47, meaning that less than half of households could afford to buy a median priced home. During the boom years it was even worse.

Although rising unemployment is a sobering counter-trend, the improvement in affordability may be setting the stage for a real estate rebound -- even if monthly ebbs and flows in sales look gloomy in the first quarter of the year .

Mortgage rates continue to hover in the mid-5 percent range for 30-year fixed rate loans. Fifteen year rates are at 4.7 percent.

While average prices of homes continue to decline on a national basis, according to the Federal Housing Finance Agency, dozens of local markets -- most of them ignored by widely-publicized surveys such as Standard & Poor's Case-Shiller Index -- continue to show net positive selling price performance.

You don't hear about these positives because these areas were lower profile during the boom, never experienced a bust, and are just not on the New York radar screens.

But they're for real, and their moderate, sensible growth patterns may be where we're headed in real estate this year.

by Kenneth R. Harne,y Published: March 3, 2009

Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation.

First Time Homebuyer Credit...A Simple Explanation

2009-02-23T09:30:00.005-07:00

First-Time Home Buyer Tax Credit: 6 Things to Know

While the proposed $15,000 home-buyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Barack Obama signed into law Tuesday includes a similar--albeit smaller--measure designed to help revive the real estate market. Here are six things you need to know about the reshly-enacted $8,000 first-time home buyer tax credit.

1. Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.

2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.

3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.

4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.

5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.

6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

Copyright © 2009 U.S.News & World Report, Luke Mullins

Obama sets aside $75 billion to slow foreclosures

2009-02-18T14:22:00.002-07:00

Program would seek to bring mortgage payments down to 31% of income

By Ronald D. Orol, MarketWatch
Last update: 2:38 p.m. EST Feb. 18, 2009

WASHINGTON (MarketWatch) -- The White House unveiled a plan Wednesday to help 9 million "at risk" homeowners modify their mortgages, committing $75 billion of taxpayer money to back the initiative.

The plan contains two separate programs. One program is aimed at 4 million to 5 million homeowners struggling with loans owned or guaranteed by Fannie Mae or Freddie Mac to help them refinance their mortgages through the two institutions.

A separate program would potentially help 3 million to 4 million additional homeowners by allowing them to modify their mortgages to lower monthly interest rates through any participating lender. Under this plan, the lender would voluntarily lower the interest rate, and the government would provide subsidies to the lender.

"The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in subprime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments," President Barack Obama said.

Homeowners that have Fannie Mae or Freddie Mac loans, who are having a difficult time refinancing and owe more than 80% of the value of their homes, would be eligible to refinance with this program. Even if homeowners with Fannie or Freddie loans have negative equity on their mortgages, they can qualify for this refinancing program. The program would only help homeowners occupying the property, not individuals who own property as investors.

To help fund the program, the Treasury Department is hiking an existing funding commitment to Fannie Mae and Freddie Mac. It will buy $200 billion of Fannie and Freddie preferred stock, up from its previously preferred stock purchase agreement of $100 billion. It also will buy more mortgage securities backed by Fannie Mae and Freddie Mac, raising the total to $900 billion, up from $850 billion previously.

Fannie and Freddie own or guarantee more than 30 million mortgages, or almost 60% of all single-family loans, according to recent estimates.

Under the $75 billion modification program involving government subsidies to lenders, the lenders will be responsible for bringing down interest rates so that a borrower's monthly mortgage payment is no more than 38% of pretax income. After that, the government program would match the amount reduced by the lender to bring a homeowner's payments down to 31% of pretax income.

Should a lender have a difficult time getting a homeowner's payment down to 31% of pretax income by lowering its interest rates, it can also lower the principal owed on the mortgage and take advantage of government assistance.

As part of the $75 billion initiative, servicers will receive $1,000 for each successful modification, as well as additional government funding for each month the borrower stays current on its loan. Homeowners can also receive $1,000 a year for five years as part of the program, as long as they stay current on their loan payments.

The program also provides additional incentives to lenders who modify at-risk loans before the borrower falls behind. The program takes effect March 4.

Loan servicers owned by financial institutions that receive government assistance from the remaining funds in the bank bailout bill would be required to implement "loan modification plans" based on Treasury guidance.

Henry Sommer, director at the National Association of Consumer Bankruptcy Attorneys, said he believes the incentives should encourage servicers to participate in the program. However, he added that even with the program, mortgage servicers may not have the staffing and resources to adjust a critical mass of troubled mortgages.

"It puts servicers in a better position to participate, but I still worry about staffing," Sommer
commented.

Obama traveled to a hard-hit Arizona community Wednesday to announce details of the program. He and Housing and Urban Development Secretary Shaun Donovan discussed their plan in Mesa, Ariz., a suburb of Phoenix that has been reeling from the housing-industry meltdown and economic slowdown.

Mesa -- Arizona's third-largest city -- saw its median home price fall 35% over the past 12 months to $140,000 in January. More than 300 families lost their homes to foreclosure there in January.

Funding

For the $75 billion program, $50 billion will come from the remaining $350 billion in Troubled Asset Relief Program funds, and $25 billion will come from Fannie Mae and Freddie Mac, according to a Treasury official.

Obama plans to package this approach within a larger housing bill that lets bankruptcy judges alter mortgages and lower interest rates for troubled homeowners. Such a provision was approved by the House Judiciary Committee last month. House Speaker Nancy Pelosi, D-Calif., said "Congress stands ready" to act on the committee's legislation.

Sommer said bankruptcy-judge authority would be the only way to provide serious help to troubled homeowners that have second loans. "These second lien loans were very prevalent in many problematic markets."

Citigroup Inc. has endorsed this approach, though other banks have yet to do so.
The new lower interest rate must be kept in place for five years. Leif Thomsen, chief executive of Boston-based mortgage lender Mortgage Master, said he believes that the government should make those lower interest rates permanent, but five years is better than a shorter period.
"A five-year modification is better than a six-month modification," he commented.

Sommer also said he believed the Treasury's time frame was set because government officials are hoping the financial system will stabilize by then.

The program also requires quarterly meetings to monitor the program among the Federal Deposit Insurance Corp., Housing and Urban Development Department and the Federal Reserve.

In another smaller, separate program to be announced Wednesday, funding of $1.5 billion would be provided to help renters displaced by foreclosure to relocate and $2 billion to stabilize neighborhoods that are experiencing high levels of foreclosure.

The Obama mortgage plan
Below is a list of key elements of the plan outlined Wednesday by President Obama that aims to aid as many as 9 million households in fending off foreclosures:

*Allows 4 million–5 million homeowners to refinance via government-sponsored mortgage giants Fannie Mae and Freddie Mac.

*Establishes $75 billion fund to reduce homeowners' monthly payments.

*Develops uniform rules for loan modifications across the mortgage industry.

*Bolsters Fannie and Freddie by buying more of their shares.

*Allows Fannie and Freddie to hold $900 billion in mortgage-backed securities — a $50 billion increase.

Ronald D. Orol is a MarketWatch reporter, based in Washington.

WHY TO BUY A HOME NOW

2009-02-13T14:15:00.002-07:00

Why to Buy a Home Now

by Phoebe Chongchua

If you're renting and wondering if you should buy a home, consider what bestselling author, David Bach, says, "The average homeowner is worth 35 times more than the average renter."

He advises renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way they're only buying as much home as they can afford.

The longer you rent, the longer it may take you to eventually get into homeownership. If the market conditions have scared you, perhaps you're not looking at the other side of the coin. Owning a home becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.

According to a MarketWatch news article, buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. "People can get a lot of what they need and almost all of what they want today," said Jay Papasan, one of the authors of "Your First Home".

While poor market conditions have created a troubling situation for some homeowners, the downturn has made the buying market ripe for others. The affordability of homes is better than ever. The National Association of Realtors' housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.

How long will you be in the home? Some experts advise that if you are planning to move within a year, buying may not be the best option because of the expenses associated with moving. However, if you're searching for a place to live for, at least, several years, buying now could be a good choice for you.

How much you can afford. Don't let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don't get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes -- simpler living.

Mortgage rates drop to historical low. How much home you can afford is affected by mortgage interest rates that, right now, are highly appealing. Good credit, documenting your income, and a substantial down payment will make you a better candidate for the better mortgage rates.

Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures. Buyers can peruse the market and have the freedom to select the home they really want. If you're interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy.

Quality of life. Buying a home can create a higher quality of life, giving you pride of homeownership, and something to enjoy improving and developing over the years.

Tax credit benefit. Last summer, the federal government started providing up to a $7,500 tax credit to buyers who have not owned a home in at least three years; the tax credit must be repaid within 15 years. But that figure may increase. The National Home Builders Association and National Association of Realtors are pushing for more significant help for all home buyers -- not just those who are buying for the first time. The Senate, as part of a stimulus package, this month approved a temporary new tax credit to be applied to homebuyers' tax bills. The credit would give buyers 10 percent of the purchase price of any home, up to $15,000. Alan Zibel of the Associated Press writes, "Anyone who buys a home within a year of the bill's signature would qualify. To deter speculators, buyers must occupy the house as their main residence for at least two years." At the time of this writing, the stimulus package had not yet gone to the White House.

Anyone Ready For The Stimulus Bill???

2009-02-11T15:11:00.001-07:00

Key lawmakers reach deal on $789B stimulus bill.

By DAVID ESPO, AP Special Correspondent David Espo, Ap Special Correspondent

WASHINGTON – Moving with lightning speed, key lawmakers announced agreement Wednesday on a $789 billion economic stimulus measure designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the bill within days..
"The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill," said Senate Majority Leader Harry Reid, one of the participants in an exhausting and frenzied round of bargaining.
The bill includes help for victims of the recession in the form of unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in their own programs.
It also preserves Obama's signature tax cut — a break for millions of lower and middle income taxpayers, including those who don't earn enough to pay income taxes.
Officials had said previously that one of the final issues to be settled was money for school modernization, a priority of Pelosi as well as Obama and one on which they differed with Collins and other moderates whose votes will be essential for final Senate approval.
It was not immediately clear when final votes in the two houses would occur. A House vote was possible as early as Thursday, with the Senate to follow before lawmakers begin a scheduled weeklong vacation.
There was no immediate reaction from the White House, but the president's chief of staff and other aides were intimately involved in the negotiations that led to the agreement.
Stocks moved higher in the moments after Reid stepped to the microphone just outside the Senate chamber.
Sen. Joseph Lieberman, an independent from Connecticut, predicted the bill "will be the beginning of the turnaround for the American economy."
Reid said the legislation would create 3.5 million jobs.
Obama has been campaigning energetically for the legislation in recent days, saying it was essential to avoid having the worst economic crisis in a generation turn into a catastrophe.
As if to underscore the urgency, he said a few hours before the agreement was announced that machinery giant Caterpillar Inc. plans to rescind some of the 22,000 layoffs the firm recently announced — once the stimulus is signed into law.
The real decisions were made in Capitol office suites where Pelosi, Reid and other key lawmakers, often joined by White House officials and their own aides, worked late Tuesday night and picked up again in the morning.
Sen. Max Baucus, D-Mont., one of the negotiators, earlier announced agreement to hold the bill to $789 billion, tens of billions below the cost of both the House and Senate bills that had cleared in recent days, and that 35 percent of the total would be in the form of tax cuts.
The reductions in the bill's size caused grumbles among liberal Democrats, who described them as a concession to the moderates, particularly Sen. Arlen Specter, R-Pa., who are under pressure from conservative Republicans to hold down spending.
The principal components of the emerging measure included money to help victims of the recession, as much as $44 billion in aid for states, which face cuts of their own as a result of lower tax receipts, and the president's proposed tax cut for lower and middle-income wage earners.
Negotiators tentatively agreed to include a one-time payment to recipients of Social Security, Supplemental Security Income and veterans' pensions and disability. While the size of the checks remained unsettled, officials said it would be less than the $300 originally proposed by the Senate.
Officials said there was agreement to accept the White House's call to provide the tax break to workers who pay Social Security taxes but do not earn enough to owe income taxes, although it was possible the amount would be scaled back somewhat. The president sought $500 for individuals and $1,000 for couples.
Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.
It also appeared a compromise was in the works on the administration's demand for school construction funds.
Sen. Tom Harkin, D-Iowa, told reporters that $6 billion would be set aside, and officials said it could be spent only on repair and modernization work, a limitation designed to appease the moderates.
But officials said House Democrats were holding out for as much as $9 billion.
With numerous demands for the funds in the bill, lawmakers worked to satisfy competing demands.
A Senate-passed provision to give $10 billion to the National Institutes of Health for research — a favorite of both Harkin and Specter, appeared likely to survive.
The officials who described the negotiations did so on condition of anonymity, saying they were not authorized to disclose the details of the closed-door negotiations.
Obama has spoken out repeatedly in recent days to urge Congress to act quickly in the face of the worst economic crisis since the Great Depression.
"We're at the doorstep of getting this plan through Congress, but the work is not over," he said in Springfield, Va., where he visited a construction site.
Even after the measure becomes law, he said, the challenge will be to effectively make use of the funds in an "endeavor of enormous scope and scale."
Republicans, too, took note of the size of the bill, and they said it included billions that would be wasted.
The original House bill, with a price tag of $820 billion, passed without a single Republican vote.
The $838 billion Senate bill that cleared on Tuesday had the backing of only three of 41 Republicans — but that was enough to give it the 60 votes it needed.
Collins told reporters she hoped fellow GOP lawmakers would reconsider when the final compromise comes to a vote "rather than just reflexively oppose this."
She said the negotiators had "tightened and scrubbed it" to eliminate wasteful spending.
___
Associated Press Writers Andrew Taylor and Ben Feller contributed to this story.

Utah Governor to Help Homeowners

2009-01-30T14:51:00.000-07:00

Utah Governor to Help Homeowners, Posted by Dick
I’m visiting the Utah REALTORS® this week, and several members of the Utah State leadership and I had a chance to meet with Gov. John Huntsman and Lt. Gov. Gary Herbert on Tuesday.
Joining me in the photo below are (left to right) Taylor Oldroyd, CEO of the Utah County Association; Kenny Parcell, President of the Utah County Association; Lt. Gov. Gary Herbert; Matt Barton, President-Elect of the Utah County Association, Chris Kyler, CEO of the Utah Association; and Lerron Little, 2009 President-Elect of the Utah Association.
As some of you know, Gary Herbert is a REALTOR® and a past chair of NAR’s Issues Mobilization Committee. Both he and Gov. Huntsman are strong advocates for real estate. Utah’s economic strength is a credit to their good work and leadership. We are fortunate to have them both in office, and I am hopeful that Gary will follow Gov. Huntsman, who has said that he will not run for another term.
Although Utah has fared better than some other states in the current housing cycle, it has not been immune to the problems in the credit markets and the rise in foreclosures. I was very excited to hear that Gov. Huntsman is planning to set aside $30 million to help people who are have trouble with their mortgages avoid foreclosure. A portion would also help renters.
While the federal government is taking steps to address broad issues in the financial and housing markets, they can’t (and shouldn’t) be the only answer. I personally thank Gov. Huntsman and Lt. Gov. Herbert for their leadership in Utah, and I encourage other state and local leaders to do the same.
REALTORS® stand ready to work with public officials at all levels of government to help strengthen our communities and keep homeownership alive and well.
On Wednesday morning, I met with members who give significantly to RPAC through the Utah County Association. I talked to them about how we make decisions on which candidates to support, and I emphasized that 70 percent of the money they contribute stays right here in Utah. It was a good meeting, and I thank all of the Utah members who participate in our advocacy through RPAC and Grassroots.
Later that morning, I had the opportunity to speak to nearly 500 members at the Utah general membership meeting. They have three of these meetings per year, and to have that many people attend is remarkable. I spoke to them about how much we have accomplished this year, particularly on the public policy front. And I assured them that we will keep working to help REALTORS® and their clients in this challenging time.
The entire visit was inspiring, but the highlight for me was hearing Kenny Parcell address the members. Not only is he an incredible leader, but the experiences he shared, and the way he was able to reach out to REALTORS® in Utah, were just incredible.
Thanks to all of the wonderful folks in Utah for inviting me to visit – I am so proud to be your NAR President. Keep up the great work. You continue to prove that there is nothing we can’t accomplish when we work “All Together.” – Dick Gaylord, 2008 NAR President

Why Utah’s economy is soaring above its neighbours

2008-12-16T11:20:00.002-07:00

The Mormon work ethic:

NOBODY knows quite how the contagion that broke out in Wall Street will affect the rest of America, nor how deep or how long the likely recession will be. What is certain is that some places will suffer more than others. So far Utah, a state best-known for Mormonism and pretty rocks, is looking unusually healthy. “We’ve got a lot to be proud of,” says Jon Huntsman, the governor. “Certainly more than many of our neighbours.”

Indeed, Utah has more to be proud of than any other state in the West. In September its unemployment rate was just 3.5%—less than half of California’s and the second-lowest rate in the region after oil- and gas-rich Wyoming. Last month the Milken Institute declared Provo, a sprawling settlement south of Salt Lake City, America’s best-performing city for technology output and job and wage growth. Salt Lake City itself came third.

Hardly a month goes by without Utah announcing a corporate relocation or a new factory. The state has experienced a minor semiconductor boom in part because of its cheap, coal-fired power. Ogden, until recently a decaying railway town north of Salt Lake City, has quietly become the world centre of winter sports equipment. Mike Dowse, who oversees brands such as Atomic and Salomon for Amer Sports, gives three reasons: “the mountains, the mayor and the money”.

The mountains are the Rockies, which lure young workers who like to go skiing. The mayor is Matthew Godfrey, a business-minded man who has aggressively recruited several companies to Ogden (Mr Huntsman, a former chemicals executive, likes to work the phones, too). The money, which comes partly from the city and partly from the state, is a mixture of relocation grants and tax breaks tied to the creation of well-paying jobs.

Utah’s housing market is relatively healthy, largely because it did not heat up too much in the middle of this decade. In August its foreclosure rate was lower than the national average. Nevada, Utah’s neighbour to the west, had America’s highest rate of foreclosure filings, according to Realtytrac. California had the second-highest rate and Arizona the third. Colorado’s front range, which includes Denver, is also littered with abandoned houses. Such areas have suffered from sharply falling property prices, reduced consumer spending and job losses among construction workers.

Another, hidden, source of strength is Utah’s strange demography. Mormons tend to start families young: the average Utah woman marries at just 22. That means the “echo boom”—the peak of childbearing by baby boomers—took place not around 1990, as in the rest of America, but ten years earlier. One reason unemployment is rising across the West is that a wave of teenagers is crashing onto the job market. Utah, by contrast, has few teenagers and lots of productive people in their late twenties and early thirties. “The timing is pretty good for a recession,” says Pam Perlich of the University of Utah.

The “cultural thing”, as businessmen from out of state delicately refer to Mormonism, helps in other ways. Utah’s almost universal conservatism makes for stable, consensual politics. It took the state legislature just two days last month to plug a $272m hole in the budget. By contrast, California’s budget was 85 days late. Nevada’s politicians are preparing for a nasty fiscal fight next year.

Mormons do not come to work nursing hangovers, and they are inclined to stay put in the promised land rather than pursue better-paying jobs elsewhere. Matthew Donthnier, who is hiring for a new Procter & Gamble plant, has only one complaint about the local workforce: it can be a little difficult to persuade people to toil on Sundays.

Oct 23rd 2008 SALT LAKE CITY
From The Economist print edition

If I Sell My Home, Will I Have to Pay Capital Gains Tax?

2008-12-16T11:18:00.000-07:00

The IRS permits a maximum exclusion on capital gain of $250,000 for individuals and $500,000 for married couples filing a joint return who sell their home, but of course some conditions apply.

For the five-year timeframe prior to the date of the sale of your primary residence, you must meet the Ownership and Use Tests the IRS provides in Publication 523, Selling Your Home. These rules ensure you have owned the home for at least two years, and lived in the home for at least 24 months out of the last five years. Additionally, you may not have excluded a gain on your taxes from the sale of a different home within the last two years. Note that if you sell your property for less than your original purchase price, you cannot claim a capital loss.

A 'reduced maximum exclusion' can apply to those who must sell their home due to a change in their place of employment, health issues, or unforeseen circumstances that affect qualified individuals. In all cases, it is best to consult your tax professional or IRS guidelines if you have any questions about the taxes you may be responsible for if you sell your home.

Happy Thanksgiving

2008-11-26T16:32:00.002-07:00

Happy Thanksgiving to everyone. This is the time to take a moment before the craziness of the Holidays set in. Enjoy your family and friends, make new acquaintances and nurture old ones. And if real estate is in your cards this Holiday season, I'll be here for you.

From me to you, Happy Thanksgiving!

SALT LAKE CITY UTAH MARKET? YOU BET

2008-10-22T11:31:00.001-06:00

Home Prices: Now for the Good News

When the headlines about the housing market are apocalyptic, the last thing a homeowner wants to do is sell. But a funny thing happened to Jeff and Jennifer Boyd when they put their three-bedroom house in Philadelphia's Graduate Hospital district on the market this summer: They turned a profit. Just 45 days after the listing went up, a buyer snapped up the property for $555,000-$29,000 more than the Boyds paid in 2006. "We were pretty hesitant, knowing what the market is like," says Jeff. "But a few weeks later, it was gone."
Here's a surefire way to start an argument: Suggest that the housing market has reached bottom. To be sure, the near-term outlook is still grim, and nobody is forecasting a rapid nationwide rebound. But there are signs that the overbuilding and speculative pricing that inflated the bubble are working their way through the system. In October 2005, near the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income; by this May it had fallen to 5.7, in line with historical norms. Nationally, the rate of decline in sales is slowing, and in some regions sales numbers have actually perked up. "The indicators are starting to look better," says Adam York, an economic analyst with Wachovia.

Why the disconnect? For starters, the national sales figures that get so much attention-and remain depressing-are brought down by boom-and-bust markets like Las Vegas, Miami and Phoenix. David Berson, chief economist with mortgage insurance firm The PMI Group, says that if hard-hit states like California, Arizona, Nevada and Florida are taken out of the statistical mix, the picture is much more promising. According to PMI's "risk index," which estimates the odds of prices falling in a given market, at least 65 percent of the nation's 386 metro areas have less than a 10 percent chance of seeing lower prices two years from now. What's more, the government's sweeping bailout of the financial sector could boost the housing market by making borthe rowing easier for buyers.
We dug into those numbers as well as other forecasts and analysis to determine which markets are in the best shape for a rebound. We also talked with housing experts to learn which kinds of neighborhoods and suburbs are thriving. Our search led us to 25 metropolitan areas that look particularly promising, and there are more than a few surprises. Here, we profile seven of the best-looking markets; for the full list of 25, see November's issue of SmartMoney magazine.

Salt Lake City
Salt Lake City supports a diverse economy that could be called “Mormons and more.” The Church of Jesus Christ of Latter-Day Saints remains a large employer here, but the area has also seen steady job gains in health care, education and natural resources. That diversity has offset tough times for local home builders and information technology companies, keeping job growth in positive territory–and putting a safety net under home prices. “There’s a very pro-business, pro-development atmosphere,” says Jeff Thredgold, the economist for regional Zions Bank.
The city’s downtown is a testament to that. The 40-square-block area buzzes with construction projects, many of them related to City Creek Center, a $1.5 billion development that will include retail stores, offices and condos. The downtown area is home to several of Salt Lake City’s hottest residential neighborhoods, along with the Utah Jazz NBA team, outdoor concerts, theater and nightlife (though you may have to join a private club to be served alcohol). Of the seven zip codes in Salt Lake County that saw median prices rise in the second quarter of this year, three were downtown locales.
This fall, Kolaleh Rahimi, 40, moved with her daughter into a historic 1934 home in the Avenues, a popular neighborhood with an eclectic mix of Victorians, bungalows and ranch homes just north of downtown. Rahimi, a pharmacy manager, bikes five minutes downtown for shopping, music festivals and the Saturday farmers’ market. “Whatever you can do in downtown New York these days, you can do in downtown Salt Lake,” she says. But there’s nothing New Yorkish about home prices: Three-bedroom houses in the Avenues sell for around $360,000.

By Brad Reagan and Elizabeth O'Brien
Oct 20th, 2008

Fed Cuts Rates

2008-10-09T11:03:00.000-06:00

Global Banks Unite in Unprecedented Rate Cuts Ben Bernanke and the Fed brought financial aid to the streets, lowering the Federal Funds Rate and Discount Rate by 0.50%. In an unprecedented emergency move, central banks across the globe joined in lowering interest rates.
This move follows Washington's passing of the $700 billion Rescue Plan. From Wall Street to Main Street, a common concern has been heard by Washington. "We need money... no, let me rephrase that...we need cheap money."
Rates Could Rise From Here. Home loan rates have benefited from the weakness in the financial markets. Fixed rate mortgages remain very attractive. However, the Fed lowers short term interest rates to shore up financial markets. This could cause home loan rates to rise in the coming weeks and months if confidence returns to the stock markets.
ARM Holders Take Notice! Anyone that has an Adjustable Rate Mortgage (ARM), take note. The London Interbank Offered Rate (LIBOR) has soared from uncertainty in financial companies...And six million home loans in the United States are tied to LIBOR which determines the interest rate at the time of adjustment.
If you know someone with an ARM, let them know potential trouble lies ahead and the time to act is now. Information provided by Mike Yancey, Senior Loan Officer, SLC, Ut.

2008-09-22T13:20:00.000-06:00

The Wall Street that shaped the financial world for two decades ended last night, when Goldman Sachs Group Inc. and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken. The Federal Reserve's approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp. ``The decision marks the end of Wall Street as we have known it,'' said William Isaac, a former chairman of the Federal Deposit Insurance Corp. ``It's too bad.''
Freddie Mac Chief Executive Officer Richard Syron stood before investors at New York's Palace Hotel in May last year lauding his company's ``cautious'' avoidance of the subprime-mortgage crisis. What Syron, who was ousted last week, didn't say was that Freddie Mac had been gorging on subprime and Alt-A debt. While it and the larger Fannie Mae bought the safest classes of the mortgage-loan pools, Freddie's purchases totaled $158 billion, or 13 percent, of all the securities created in 2006 and 2007, according to data from its regulator and Inside MBS & ABS, a Bethesda, Maryland-based newsletter used by Federal Reserve researchers. Fannie, which was also seized by the U.S. on Sept. 7, bought an additional 5 percent. The purchases by Freddie and Fannie helped fuel the boom in lending that led to frozen credit markets, more than $514 billion in bank losses and the collapse of two of the country's biggest securities firms. Expect rates and the market to be a little crazy for the next few weeks as investors adapt to these new changes. Content provided by Mike Yancey, Mortgage officer.

2008-09-17T14:34:00.000-06:00

At the last minute the Fed decided to bail out AIG (American International Group) (the 18th largest corporation in the world), who also owns AG (American General a life company that itself formerly owned Wilmington Finance, and UG (United Guarantee) the Mortgage Insurance group. The Fed now owns 79.9% of the group. This morning, fixed income investors who typically move to buy MBS have been moving their sights to Treasuries this morning, in a flight to quality as MBS have really been negatively impacted by headlines such as Lehman, AIG MBS portfolios, etc, showing that the crisis is still here and very much alive. This is a great example of why you can't follow the 10 year anymore. The 10 year is down to 3.397 and mortgage rates are UP. Looks like MBS are showing signs of improvement so we will see how today pans out. Today the crystal ball is foggy. Currently we are off about a quarter in price from yesterdays last re-price, but still holding strong under the 6% mark for the 30yr fixed. Oil is currently up almost 3 bucks at 93.89 - Dow is down just over 243 points.
Lehman brothers is also in talks with some very aggressive investors about taking over part of their assets, therefore being able to still employee almost 6000 of their employees.

Expect the markets and news to be a little shaky these next few weeks as investors adapt to what is going on and eventually they will start to see the light at the end of the tunnel... This is a good thing!!! Information courtesy of: Mike Yancey/Loan Officer.