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Five issues for housing in 2012

Just as in 2011, in 2012 many will be trying to figure out where housing is headed.

While the housing market didn¡¦t worsen in 2011, it also didn’t stabilize either. This year, the story will be about local markets. While many housing markets rose and fell together, they’re recovering at difference paces so talking about housing on a national level is not beneficial.

Making sense of the story

Confidence and jobs: Housing is more affordable than it has been in decades, but many would-be buyers are worried about buying today if prices are going to be lower tomorrow. Still, others don¡¦t want to buy a house until they have more evidence that they¡¦re not going to get laid off or see their hours cut back.

Foreclosures: Banks and other mortgage investors own around 440,000 foreclosed properties, but there¡¦s another 3.4 million loans in foreclosure or serious delinquency, according to estimates by Barclays Capital. Because banks are faster to cut prices to unload inventory than are traditional sellers, home values can fall further as the share of distressed sales rises.

Rents: If low mortgage rates aren’t enough to give urgency to would-be buyers, rent hikes could accelerate buyers decisions to take the plunge

Mortgage credit and rates: It’s still hard for many buyers to get approved for a mortgage because banks are demanding lots of documentation of borrowers incomes.

Regulation: Many analysts don’t expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012.

Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments. This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency.

Read the full story http://on.wsj.com/wHMaiG

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by lcartolano on January 11, 2012  •  Permalink
Posted in California Real Estate, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on January 11, 2012

http://lcartolano.wordpress.com/2012/01/11/five-issues-for-housing-in-2012/

Home bargains abound, but willing lenders are rare breed

Faced with finicky lenders, would-be home buyers are increasingly turning to family members, friends, and even strangers they meet online. While this is understandable, given the abundant bargains on the market, they also present significant risks.

 

Making sense of the story

  • So-called peer-to-peer lending sites, such as Prosper and Lending Club, say demand for home-related financing is on the rise. In September, Weemba, a socialnetworking site, launched a platform to connect lenders directly with prospective home buyers and other borrowers.
  • Despite historically low mortgage rates, traditional lenders remain reluctant to provide mortgages to anyone with less than stellar credit. And, in certain markets, lenders are requiring down payments of more than 20 percent of the home’s purchase price.
  • Borrowers taking loans from family members – so-called intrafamily loans – save on interest since family members are likely to charge less than the banks. Additionally, parent lenders can earn a higher return from their child’s interest payments than they would on a certificate of deposit or money-market fund. Under federal law, on a loan of more than nine years, parents must charge at least roughly 2.8 percent, in most cases.
  • Consumers who prefer to look for loans beyond the family can apply at peer-to-peer lending sites. If approved for a loan after a screening by the companies, applicants may then receive money from investors.
  • However, these alternative routes to financing can be expensive for borrowers. Rates at Lending Club run from around 7 percent to 28 percent. At Prosper, rates run roughly 7 percent to 35 percent. The companies say these rates, which are fixed, are higher than traditional mortgage rates in part because their loans are unsecured.

 

Read the full story http://on.wsj.com/rxbaM0

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by lcartolano on December 20, 2011  •  Permalink
Posted in California Real Estate, Finances, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on December 20, 2011

http://lcartolano.wordpress.com/2011/12/20/home-bargains-abound-but-willing-lenders-are-rare-breed/

Where are the priciest homes in California?

Realtor.com’s monthly housing report — based on information posted on brokers listing services— found the priciest big housing markets in California in September. Two Bay Area cities are on the list-

1. San Francisco — $635,000 median selling price; down 8.63% in a year. Homes listed for sale was 5,516 — down 20.78% in a year. Median time on market of 66 days; down 2.94% in a year.

7. Oakland — $340,000 median selling price; up 6.25% in a year. Homes listed for sale was 7,338 — down 37.58% in a year. Median time on market of 49 days; down 7.55% in a year.

The rest of the list:

2. Santa Barbara-Santa Maria-Lompoc

3. San Jose —

4. Orange County

5. Ventura

6. San Diego

8. Los Angeles

9. Sacramento

10. Riverside-San Bernardino

11. Stockton-Lodi

12. Fresno

13. Bakersfield

 

Read the full story

http://on.car.org/rstbSo

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by lcartolano on November 15, 2011  •  Permalink
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Posted by lcartolano on November 15, 2011

http://lcartolano.wordpress.com/2011/11/15/where-are-the-priciest-homes-in-california/

Mortgage probe may open new path for housing


Five major banks could be required to commit roughly $15 billion to reduce principal balances for struggling homeowners and modify loans in other ways under a proposed deal to settle allegations linked to the “robo-signing” scandal.

Under a potential settlement, the five banks — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial — would have to meet dollar targets to reduce principal for underwater borrowers.
“I think it will be a step in the right direction,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “The AGs hope this could work as a pilot program, and show how principal reduction could work.”
$15 Billion will be a drop in the bucket in terms of really impacting underwater homeowners. This may be the opening to prompt banks to expand principal reduction programs to more homeowners. Until now, most of the principal reduction has been directed toward only the riskiest loans
Fannie and Freddie have been hesitant about principal reduction because it limits the value of the mortgages held in portfolios. Principal reduction may be a good way to avoid foreclosures and this may be the reasoning to sway Fannie and Freddie to jump on board with the idea.
I personally think principal reduction make sense. One of the major negative impacts on the market are homeowners that are underwater. It has been the downward spiral that has caused the crash of the market. Banks and lenders have been losing money on foreclosures and short sales. With principal reduction homeowners can better afford to stay in their homes and thus helping to stem the tide of foreclosures. The banks have had the help of the tax payers and have seen record profits. Seems like a common sense approach to the long terms issues that homeowners and the general economy have been facing.

Read the full story 

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by lcartolano on November 10, 2011  •  Permalink
Posted in California Real Estate, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on November 10, 2011

http://lcartolano.wordpress.com/2011/11/10/mortgage-probe-may-open-new-path-for-housing/

San Francisco Apartment Vacancies—Lows Not Seen Since the .Com Bubble

 

The San Francisco Business Times reports what many locals already know-rentals are hard to find in San Francisco. The vacancy rate according to the report from Cassidy Turley indicates that the vacancy rate is just a paltry 3.2%. It might seem counter intuitive, but the unemployment rate in San Francisco is lower than the national average (currently at 8.8%) Couple that with an increase in the local population and the fact that the Bay Area has produced very little new housing over the last few years it starts to make sense.

 In addition many have remained renters instead of becoming homeowners and previous homeowners are now renters again due to a short sale or foreclosure of their home. All of these factors have had an impact on the rental market in the Bay Area.

It will be interesting to see how the rental market impacts the local real estate market. As the .com era saw as rents became harder to find and more expensive those who can buy find that they can often times spend less on a mortgage than rent.

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by lcartolano on November 8, 2011  •  Permalink
Posted in California Real Estate, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on November 8, 2011

http://lcartolano.wordpress.com/2011/11/08/san-francisco-apartment-vacancies%e2%80%94lows-not-seen-since-the-com-bubble/

HARP Refinance Program Expanded– Will It Really Help?

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down.  The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.  Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013.  New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

With the limits on the eligibility (see below), this will not reach many homeowners, especially those who are having a hard time making consistent payments. The requirements are pretty narrow, and I wonder how well the lenders are going to play along. The real challenge is having the banking institutions cooperate with these guidelines fully. It is a step in the right direction, but I don’t think it goes far enough.

The basic eligibility requirements for an enhanced HARP loan are as follows:

  • Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac.  To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
  • Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
  • Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
  • Current loan-to-value (LTV) ratio must be more than 80%.
  • Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.


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by lcartolano on October 25, 2011  •  Permalink
Posted in California Real Estate, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on October 25, 2011

http://lcartolano.wordpress.com/2011/10/25/harp-refinance-program-expanded-will-it-really-help/

Bay Area Homes Sales Up, but Median Price Down From a Year ago

According to DataQuick the San Francisco Bay Area real estate market saw an increase in the number of homes sold, but a decrease in the average price.

“As interesting as today’s market is, what’s more interesting is what’s not happening. While there has been a lot of talk about ‘shadow supply,’ especially distressed properties that haven’t been put on the market, demand continues to accumulate. Empty-nesters want something smaller, growing families want something bigger. People still die, they get married, retire – all of this generates demand. And only a fraction of that demand is being met in today’s market,” said John Walsh, DataQuick president.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $365,000. That was down 1.4 percent from $370,000 in August, and down 7.6 percent from $395,000 in September 2010.

The low point of the current real estate cycle was $290,000 in March 2009. The peak was $665,000 in June/July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but below peak levels reached over the past few years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.

To read the full article click here

Sales Volume Median Price
All homes   Sep-10 Sep-11 %Chng   Sep-10 Sep-11 %Chng
Alameda    1,226   1,348 10.0%   $371,000   $348,000    -6.2%
Contra Costa    1,323   1,394   5.4%   $289,500   $252,000   -13.0%
Marin     216     239 10.6%   $702,500   $628,409   -10.5%
Napa      118     124   5.1%   $337,000   $315,000    -6.5%
Santa Clara    1,477   1,560   5.6%   $500,000   $470,000    -6.0%
San Francisco      442     399 -9.7%   $620,000   $613,750    -1.0%
San Mateo      517     607 17.4%   $571,500   $551,000    -3.6%
Solano      543     606 11.6%   $205,000   $195,000    -4.9%
Sonoma      472     472   0.0%   $332,000   $307,000    -7.5%
Bay Area    6,334   6,749   6.6%   $395,000   $365,000    -7.6%
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by lcartolano on October 25, 2011  •  Permalink
Posted in California Real Estate, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on October 25, 2011

http://lcartolano.wordpress.com/2011/10/25/bay-area-homes-sales-up-but-median-price-down-from-a-year-ago/

Foreclosure starts mixed in September

Following a steep spike in August, foreclosure starts returned to levels more in line with prior months in September, and were below the numbers reached at the peak.  California has seen a drop in activity of 56 percent since its peak, from 58,623 Notice of Default filings in March of 2009 to 25,778 today.

Foreclosure sales were mixed in September, with declines in Arizona, California and Nevada, while Oregon and Washington both showed increases. Despite the declines, the percentage purchased by third parties, typically investors, was at or near peak levels. In California, third parties made up a record 27.4 percent of all sales last month.

California statistics:
• Foreclosure starts declined 20.9 percent
• Foreclosure sales declined 23.3 percent
• Foreclosure timeframes declined 3.9 percent

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by lcartolano on October 20, 2011  •  Permalink
Posted in California Real Estate, Real Estate
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Posted by lcartolano on October 20, 2011

http://lcartolano.wordpress.com/2011/10/20/foreclosure-starts-mixed-in-september/

Mortgage delinquencies increase

Mortgage delinquencies ticked up during the second quarter after declining for five consecutive quarters, according to a report by the Office of the Comptroller of the Currency.

With many home owners having trouble refinancing due to soft values, it is not completely suprising that there is an increase in delinquencies. You would think banks would get the idea if they would help homeowners modify their current loans, that we might actually see a reduction in foreclosures.
Read the full story

http://blogs.wsj.com/developments/2011/09/29/mortgage-delinquencies-increase/

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by lcartolano on October 14, 2011  •  Permalink
Posted in California Real Estate, Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on October 14, 2011

http://lcartolano.wordpress.com/2011/10/14/mortgage-delinquencies-increase/

Determining a home’s value

Declining property values are preventing some homeowners from taking advantage of today’s historically low interest rates and refinancing.
Making sense of the story
Many homeowners nationwide have either no equity or are in a negative equity position in their homes. This leaves them with two options for refinancing, paying extra at the closing or what’s known as a cash-in mortgage.Those considering refinancing will need to determine the current valuation, comparing it with the mortgage balance. If the balance is at least 15 to 20 percent higher than what is owed, a refinance without a second down payment is possible.
To obtain a good valuation, some homeowners hire an appraiser, at a cost of $300 to $600, or more on a large or expensive property. While this may be informative, most lenders require an official appraisal anyway, and that will have to be conducted by someone on the lender’s approved list.
Another, less costly, option a homeowner can use prior to approaching a lender, is to check the comparable sales in the neighborhood and see which homes and for what amounts homes have sold in the last three to six months.
Homeowners also can go to the county assessor’s office and look up specific homes that have sold recently in the neighborhood.

When looking at comps, homeowners should consider homes with similar amenities and square footage as the property in question.

Just before the home is scheduled for its official appraisal, homeowners should spend a ew hours touching up and making sure it looks well maintained. Hiring a cleaning crew, repairing any broken windows, and providing documentation on upgrades also can help the appraiser.
Read the full story

http://nyti.ms/rcVGkP

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by lcartolano on October 13, 2011  •  Permalink
Posted in Real Estate, SF Bay Area Real Estate
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Posted by lcartolano on October 13, 2011

http://lcartolano.wordpress.com/2011/10/13/determining-a-home%e2%80%99s-value/

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