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
Monday, January 3, 2011
Wednesday, December 22, 2010
Tuesday, December 21, 2010
Friday, December 17, 2010
What Could Force More Short Sales
By: Diana Olick
CNBC Real Estate Reporter
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
Thursday, November 4, 2010
Thursday, October 28, 2010
Unexpected Cities See More Homes Go Back to the Bank
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
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
Monday, April 5, 2010
Pending Home Sales Show Healthy Gain, Hint at Spring Surge
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®
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®
Subscribe to:
Posts (Atom)
Posts
