From Business Week:
Although it’s too early to say the market has bottomed out, there are some indicators that prices may be stabilizing.
MAKING SENSE OF THE STORY FOR CONSUMERS
· The median price for existing, single-family homes rose 2.2 percent in March in California, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). March marked the first month since August 2007 that the state’s median sales price rose in month-to-month comparisons. According to the C.A.R. sales and price report, the median price of existing, single-family homes stood at $253,040 in March.
· Sales in California have soared in recent months, with existing, single-family home sales increasing 63.8 percent in March to a seasonally adjusted rate of 522,980 on an annualized basis.
To read the full story, please click here
30 April 2009
Bidding wars are emerging on foreclosures
From Wall Street Journal:
Real estate industry experts are reporting that favorable home prices in many parts of the country, including California, have ignited bidding wars as first-time buyers compete with investors for many of the same foreclosed properties.
MAKING SENSE OF THE STORY FOR CONSUMERS
· While the inventory of homes for sale still outpaces demand in many areas, inventory is shrinking and some middle class neighborhoods are running into shortages of moderately priced homes. C.A.R.’s Unsold Inventory Index (UII) stood at 5 months in March in California, compared with 12.2 months in March 2008.
· Although home prices in most areas of the country are still lower than a year ago, the Federal Housing Finance Agency (FHFA) reported last week that home prices nationwide rose a seasonally adjusted 0.7 percent in February from January, led by gains on the West Coast. While this is a positive sign for the market, it could mean that the window of opportunity for first-time home buyers is narrowing.
· Many economists and housing analysts predict that the most hard-hit areas of the country, such as Sacramento and San Diego, will be among the first to recover. According to an executive with Lyon Real Estate, if sales of foreclosed homes in Sacramento maintain its current pace, the supply will be exhausted in about one month. For non foreclosures, the executive at Lyon Real Estate speculates that the inventory will be exhausted in about eight months.
· It is important to note that many banks and sellers favor all-cash bids or offers from buyers who seem certain to qualify for financing. In some cases, sellers may choose the offer least likely to fall through rather than the highest bid.
· In some instances, buyers should make offers that are at or above the asking price of a home. If the home is extremely desirable or in a neighborhood that previously was out of many buyers’ price ranges, putting in an offer slightly higher than the asking price may help to seal the deal.
To read the full story, please click here
Real estate industry experts are reporting that favorable home prices in many parts of the country, including California, have ignited bidding wars as first-time buyers compete with investors for many of the same foreclosed properties.
MAKING SENSE OF THE STORY FOR CONSUMERS
· While the inventory of homes for sale still outpaces demand in many areas, inventory is shrinking and some middle class neighborhoods are running into shortages of moderately priced homes. C.A.R.’s Unsold Inventory Index (UII) stood at 5 months in March in California, compared with 12.2 months in March 2008.
· Although home prices in most areas of the country are still lower than a year ago, the Federal Housing Finance Agency (FHFA) reported last week that home prices nationwide rose a seasonally adjusted 0.7 percent in February from January, led by gains on the West Coast. While this is a positive sign for the market, it could mean that the window of opportunity for first-time home buyers is narrowing.
· Many economists and housing analysts predict that the most hard-hit areas of the country, such as Sacramento and San Diego, will be among the first to recover. According to an executive with Lyon Real Estate, if sales of foreclosed homes in Sacramento maintain its current pace, the supply will be exhausted in about one month. For non foreclosures, the executive at Lyon Real Estate speculates that the inventory will be exhausted in about eight months.
· It is important to note that many banks and sellers favor all-cash bids or offers from buyers who seem certain to qualify for financing. In some cases, sellers may choose the offer least likely to fall through rather than the highest bid.
· In some instances, buyers should make offers that are at or above the asking price of a home. If the home is extremely desirable or in a neighborhood that previously was out of many buyers’ price ranges, putting in an offer slightly higher than the asking price may help to seal the deal.
To read the full story, please click here
03 April 2009
Mortgage rates drop to record low
Rates on 30-year, fixed-rate mortgages averaged 4.85 percent for the week ending March 26, following an announcement by the Federal Reserve that it is launching a new effort to assist the U.S. housing market. The rate marked a record low in the history of the Freddie Mac survey. The previous low was 4.96 percent set during the week of Jan. 15.
02 April 2009
Fast Facts for April 2009
Calif. median home price - February 09: $247,590(Source: C.A.R.)
Calif. highest median home price by C.A.R. region February 09: Santa Barbara So. Coast $715,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region February 09: High Desert $121,970(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 3/26/09 30-yr. fixed: 4.85% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.85% Fees/points: 0.6% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region February 09: Santa Barbara So. Coast $715,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region February 09: High Desert $121,970(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 3/26/09 30-yr. fixed: 4.85% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.85% Fees/points: 0.6% (Source: Freddie Mac)
01 March 2009
Bodega Bay Market Summary - Feb 2009
Activity continues to improve as buyers snap up some of the few REO's and short sales in Bodega Bay. This is certainly impacting the median price but could begin to increase confidence as people realize that our local real estate is relatively safer than the stock market.
19 February 2009
The Crisis of Credit video
Here's a simple video explanation of the crisis. I found it on a great site called Planet Money and you can get their podcast every Mon/Wed/Fri. I highly recommend it.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Summary: Homeowner Affordability and Stability Plan
From the president of California Association of Realtors...
Feb. 18, 2009
Dear C.A.R. Member,
Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.
The plan contains three main components, and only applies to primary residences. The loans referenced in the plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits. I’ve outlined the plan in greater detail below.
The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance. Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. The U.S. Treasury Dept. estimates that about 5 million homeowners will be helped by this portion of the program.
The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification. Primary mortgages would be reduced to monthly payments that do not exceed a 38 percent debt-to-income ratio, with the costs of doing so borne by the lender. The government and lender then would split the costs of further reducing the monthly payments until they were at a 31 percent debt-to income ratio. An important aspect of the initiative is that homeowners do not have to be delinquent to participate.
The Homeowner Stability Initiative also will create incentives for servicers, mortgage holders, and homeowners. Servicers would receive an up-front fee of $1,000 for every eligible modification meeting the initiative’s guidelines. Guidelines are scheduled to be released by March 4. Mortgage holders will receive an incentive payment of $1,500, and servicers $500, for modifications made on loans that are current but at risk of imminent default.
The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications. The Obama Administration plans to work with federal agencies, banking and credit union regulators, and the private sector in order to develop loan modification guidelines that can be implemented across the entire mortgage market. While adoption of the guidelines will be voluntary for the private sector, all financial institutions receiving Financial Stability Plan assistance going forward will be required to implement the loan modification guidelines.
The government estimates that between 3 and 4 million homeowners will benefit from the Homeowner Stability Initiative component of the plan.
The third component of The Homeowner Affordability and Stability Plan is supporting low mortgage rates by strengthening Fannie Mae and Freddie Mac. The Treasury Dept. plans to increase their Preferred Stock Purchase Agreements with both Fannie Mae and Freddie Mac from its current $100 billion in both entities to $200 billion in each. The Treasury Dept. also will continue to purchase Fannie Mae and Freddie Mac mortgage-back securities in order to help promote stability and liquidity in the marketplace. Additionally, the Treasury Dept. will increase Fannie Mae and Freddie Mac’s portfolios by $50 billion, for a total of $900 billion. The Obama Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers, such as CalHFA. Funding for this will not come from TARP money but from the Housing and Economic Recovery Act.
While some of the details still are being developed, such as the modification guidelines, the Obama Administration plans on using programs and funding already allocated for The Homeowner Affordability and Stability Plan and will need little legislative approval for programs under the plan.
We’ll keep you updated on the Homeowner Affordability and Stability Plan as more details and information become available to us.
Sincerely,
James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
Feb. 18, 2009
Dear C.A.R. Member,
Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.
The plan contains three main components, and only applies to primary residences. The loans referenced in the plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits. I’ve outlined the plan in greater detail below.
The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance. Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. The U.S. Treasury Dept. estimates that about 5 million homeowners will be helped by this portion of the program.
The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification. Primary mortgages would be reduced to monthly payments that do not exceed a 38 percent debt-to-income ratio, with the costs of doing so borne by the lender. The government and lender then would split the costs of further reducing the monthly payments until they were at a 31 percent debt-to income ratio. An important aspect of the initiative is that homeowners do not have to be delinquent to participate.
The Homeowner Stability Initiative also will create incentives for servicers, mortgage holders, and homeowners. Servicers would receive an up-front fee of $1,000 for every eligible modification meeting the initiative’s guidelines. Guidelines are scheduled to be released by March 4. Mortgage holders will receive an incentive payment of $1,500, and servicers $500, for modifications made on loans that are current but at risk of imminent default.
The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications. The Obama Administration plans to work with federal agencies, banking and credit union regulators, and the private sector in order to develop loan modification guidelines that can be implemented across the entire mortgage market. While adoption of the guidelines will be voluntary for the private sector, all financial institutions receiving Financial Stability Plan assistance going forward will be required to implement the loan modification guidelines.
The government estimates that between 3 and 4 million homeowners will benefit from the Homeowner Stability Initiative component of the plan.
The third component of The Homeowner Affordability and Stability Plan is supporting low mortgage rates by strengthening Fannie Mae and Freddie Mac. The Treasury Dept. plans to increase their Preferred Stock Purchase Agreements with both Fannie Mae and Freddie Mac from its current $100 billion in both entities to $200 billion in each. The Treasury Dept. also will continue to purchase Fannie Mae and Freddie Mac mortgage-back securities in order to help promote stability and liquidity in the marketplace. Additionally, the Treasury Dept. will increase Fannie Mae and Freddie Mac’s portfolios by $50 billion, for a total of $900 billion. The Obama Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers, such as CalHFA. Funding for this will not come from TARP money but from the Housing and Economic Recovery Act.
While some of the details still are being developed, such as the modification guidelines, the Obama Administration plans on using programs and funding already allocated for The Homeowner Affordability and Stability Plan and will need little legislative approval for programs under the plan.
We’ll keep you updated on the Homeowner Affordability and Stability Plan as more details and information become available to us.
Sincerely,
James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
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