Very Interesting with ALL the hype floating around with the market dropping 10%.. I dont agree! Read Below :-)
NEW YORK (CNNMoney.com) -- Home prices rose slightly in May compared with a month earlier, appearing to have stablized at the lower levels that followed the end of the residential real estate bubble, according to the S&P/Case-Shiller Home Price Index of 20 major housing markets released Tuesday.
Prices were up 1.3% from April, and 4.6% from 12 months earlier.
The price rise might have reflected one of the last gasps of the government's incentive program, which paid tax refunds of as much as $8,000 to homebuyers if they signed a sales contract before May 1.
"It does look like the market was boosted by the tax credit," said Robert Dye, senior economist for PNC Financial Services. "It seems to have pulled some of the demand forward."
Although the increase was welcome news for the beleaguered housing market, S&P spokesman David Blitzer downplayed the gain.
"While May's report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery," he said. "Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level. The last seven months have basically been flat."
Home prices peaked back in July 2006 and fell for 33 straight months before bottoming out in April 2009. The peak-to-trough decline came to more than 32%.
The index went on a short upswing for five months, regaining 5.3% of its loss before turning tail again, declining 2.2% before a modest rebound in April.
Winners and one loser
Only one of the 20 metro areas, Las Vegas, reported a price decline for May, with a 0.5% loss. Minneapolis had the largest spike: prices jumped 2.8% and were up 11.6% over the prior 12 months.
San Francisco had the largest year-over-year gain, 18.3% higher than May 2009. San Diego, at 12.4%, and Los Angeles, at 9.7%, have also posted healthy year-over-year gains.
In a way, the index may understate its positive results. It counts all sales, including distressed properties. Those have become a major component of the market, with short sales and bank repossessions accounting for close to a third of all sales.
Repossessions sell, on average, for 27% less than conventional sales, according to a recent report from MIT economist Parag Pathak and two Harvard researchers, John Campbell and Stefano Giglio.
"It's not surprising that there is a discount due to foreclosure," said Pathak in a release. "But it is surprising that it's so large."
The repossession discount comes from a couple of factors. Borrowers who lose their homes to foreclosure may not have had the funds or the incentive to maintain their homes well. The homes often come onto the market in poor condition, lowering their values.
In addition, lenders often want to sell the homes very quickly to avoid all the expenses of home ownership - taxes, utilities, insurance and maintenance - so they're willing to sell at far below comparable homes.
Maureen Maitland, vice president for index services at S&P, said foreclosure and short sale data is included in the index because they represent such a big part of the market. "In some metro areas they're 50% to 60% of sales," she said.
They're expected to remain so for a long time. The run rate for bank repossessions so far this year indicates more than a million homes will be lost to foreclosure and put back on the market by the banks.
That will extend the overhang on inventory, which along with the end of the tax credit will probably keep prices down for at least the summer months, according to Maitland.
It may be autumn, if then, before improvement in the economy puts housing markets back on a firm footing, according to Dye.
"Housing has firmed up since the dark days of 2008 and 2009, but it's still wobbly," he said.
Wednesday, July 28, 2010
Friday, July 23, 2010
Exhaust all options prior to foreclosure, or should I just let it go?
We speak to people every day that have it embedded in their mind to just let their property go to foreclosure. One of the main reasons for this, is they don’t know the options in order to avoid foreclosure in the first place.
The biggest item of consideration with this decision is the impact on credit. A foreclosure has a very aggressive impact on credit, both immediately, and in the future. Most importantly, every time a loan application is filled out, you will always need to inform the potential lender that you have a foreclosure in your past. This is a huge red flag for lenders when attempting to get a loan in the future.
Each of the alternatives to foreclosure can help you avoid both the short term and the long term stress. Whether it be an attempt to modify the mortgage, sell the property prior to the foreclosure date through a Short Sale, each will have a less damaging impact on your credit. Depending on the terms of the negotiation, it can show on credit as a settlement or as paid in full. The ramifications of this are less damaging.
Lenders are speeding up their processes for successful short sales of properties, so it is possible that your lender will move swiftly to get your property sold. Whether it is through the Foreclosure process or the short sale process, there is one guarantee. You will have to move.
Ultimately, the question that needs to be asked is are you willing to deal with the long term stress of future inability to obtain a loan, or will you exhaust all options prior to moving? There is plenty of help available to restore credit, and according to most of the information given, you can obtain a loan after a short sale as soon 2 years, whereas through the foreclosure process, not for 7-10 years.
Exhaust all options, you deserve it.
The biggest item of consideration with this decision is the impact on credit. A foreclosure has a very aggressive impact on credit, both immediately, and in the future. Most importantly, every time a loan application is filled out, you will always need to inform the potential lender that you have a foreclosure in your past. This is a huge red flag for lenders when attempting to get a loan in the future.
Each of the alternatives to foreclosure can help you avoid both the short term and the long term stress. Whether it be an attempt to modify the mortgage, sell the property prior to the foreclosure date through a Short Sale, each will have a less damaging impact on your credit. Depending on the terms of the negotiation, it can show on credit as a settlement or as paid in full. The ramifications of this are less damaging.
Lenders are speeding up their processes for successful short sales of properties, so it is possible that your lender will move swiftly to get your property sold. Whether it is through the Foreclosure process or the short sale process, there is one guarantee. You will have to move.
Ultimately, the question that needs to be asked is are you willing to deal with the long term stress of future inability to obtain a loan, or will you exhaust all options prior to moving? There is plenty of help available to restore credit, and according to most of the information given, you can obtain a loan after a short sale as soon 2 years, whereas through the foreclosure process, not for 7-10 years.
Exhaust all options, you deserve it.
Wednesday, July 21, 2010
Mortgage Rates Fall to 4.59%, Enough To Move Demand
By Nick Timiraos
Finally.
Record low mortgage rates spurred an uptick in new-purchase mortgage applications last week for just the second time in the past two months, while more Americans also applied to refinance, according to the Mortgage Bankers Association.
Rates fell last week to 4.59% on an average 30-year fixed-rate mortgage, which is down from 4.69% one week ago and the lowest ever recorded by the trade group since its survey began in 1972. Other measures show that rates continued to fall this week: Zillow’s Mortgage Marketplace quoted an average of 4.37% on Tuesday.
Those low rates haven’t done much to drive up demand for new home loans in recent weeks. Purchase activity is still more than 40% down from its highs of April, though it ticked up by 3.4% last week. That’s largely because home-buyer tax credits pulled demand forward. But the recent drop in applications to 14-year lows “smacks of more than a temporary, one-off fall in activity,” says Paul Dales, chief economist at Capital Economics.
Refinance activity has held up better because it’s driven much more by low rates than other economic factors that go into buying a house. Refinance applications were up by 9% last week and are up by almost 30% over the past four weeks, though activity is still below the near-term May 2009 peak. Around 80% of mortgage activity last week was for refinances, the highest refinance share since April 2009.
Still, refinancing activity isn’t as high as would be expected at current rates, in part because it’s harder to get a loan today. Also, many borrowers have lost equity or taken a hit to their incomes or credit and either can’t qualify or aren’t willing to pay extra fees that come with being a bigger credit risk.
Of course, it doesn’t make sense for everyone to refinance. Borrowers who plan to sell in the next few years will want to think twice about paying closing costs to get a low rate. Also, borrowers who’ve had their loans for a long time—and are therefore paying a greater share of their payment towards their loan principal, as opposed to interest—may not want to refinance.
Finally.
Record low mortgage rates spurred an uptick in new-purchase mortgage applications last week for just the second time in the past two months, while more Americans also applied to refinance, according to the Mortgage Bankers Association.
Rates fell last week to 4.59% on an average 30-year fixed-rate mortgage, which is down from 4.69% one week ago and the lowest ever recorded by the trade group since its survey began in 1972. Other measures show that rates continued to fall this week: Zillow’s Mortgage Marketplace quoted an average of 4.37% on Tuesday.
Those low rates haven’t done much to drive up demand for new home loans in recent weeks. Purchase activity is still more than 40% down from its highs of April, though it ticked up by 3.4% last week. That’s largely because home-buyer tax credits pulled demand forward. But the recent drop in applications to 14-year lows “smacks of more than a temporary, one-off fall in activity,” says Paul Dales, chief economist at Capital Economics.
Refinance activity has held up better because it’s driven much more by low rates than other economic factors that go into buying a house. Refinance applications were up by 9% last week and are up by almost 30% over the past four weeks, though activity is still below the near-term May 2009 peak. Around 80% of mortgage activity last week was for refinances, the highest refinance share since April 2009.
Still, refinancing activity isn’t as high as would be expected at current rates, in part because it’s harder to get a loan today. Also, many borrowers have lost equity or taken a hit to their incomes or credit and either can’t qualify or aren’t willing to pay extra fees that come with being a bigger credit risk.
Of course, it doesn’t make sense for everyone to refinance. Borrowers who plan to sell in the next few years will want to think twice about paying closing costs to get a low rate. Also, borrowers who’ve had their loans for a long time—and are therefore paying a greater share of their payment towards their loan principal, as opposed to interest—may not want to refinance.
Tuesday, July 20, 2010
Banks Repossess US homes at a record pace
Compliments of Green Street Realty
Banks Repossess US homes at a record pacePosted on 19 Jul, 2010 by admin If you were running the US Government, and had the choice on how to resuscitate the Real Estate housing economy, how would you do it? Would your answer be 1) to have the lenders repossess homes, that will eventually go back on the market at a slashed price in order to sell them fast, or 2) would you force the lenders to take a reasonable offer at or near current market value, get a new homeowner into the home at a fixed interest rate for 30 years?
An ideal situation would be option number 2, but there are so many investor backed loans that lenders are being forced to gamble by refusing these reasonable offers. The investor will take a hit, no matter the circumstance, but why take more of a hit by seeking the alternative?
We feel, that it’s time for the economy to rebound, but putting houses back on the market at a slashed price, after they’ve been foreclosed on, only continues to drive the value of the rest of the properties in the subdivision much lower than is necessary.
At some point, someone will do the math and understand when the time is right to stop the foreclosure process and start following the rules of the short sale. Take less of a hit now, get the property off the lenders’ books, and move on. At face value, it’s a win-win-win situation for everyone involved. There has to be something much deeper than what is seen at face value. Maybe it’s a bonus on the back end for the investor by taking it to auction. When doe the greater good for the economy outweigh the individual outcome of this foreclosure process?
As the market continues to tumble, we may look to the repossession of these homes by lenders as a reason for the continued struggle.
Banks Repossess US homes at a record pacePosted on 19 Jul, 2010 by admin If you were running the US Government, and had the choice on how to resuscitate the Real Estate housing economy, how would you do it? Would your answer be 1) to have the lenders repossess homes, that will eventually go back on the market at a slashed price in order to sell them fast, or 2) would you force the lenders to take a reasonable offer at or near current market value, get a new homeowner into the home at a fixed interest rate for 30 years?
An ideal situation would be option number 2, but there are so many investor backed loans that lenders are being forced to gamble by refusing these reasonable offers. The investor will take a hit, no matter the circumstance, but why take more of a hit by seeking the alternative?
We feel, that it’s time for the economy to rebound, but putting houses back on the market at a slashed price, after they’ve been foreclosed on, only continues to drive the value of the rest of the properties in the subdivision much lower than is necessary.
At some point, someone will do the math and understand when the time is right to stop the foreclosure process and start following the rules of the short sale. Take less of a hit now, get the property off the lenders’ books, and move on. At face value, it’s a win-win-win situation for everyone involved. There has to be something much deeper than what is seen at face value. Maybe it’s a bonus on the back end for the investor by taking it to auction. When doe the greater good for the economy outweigh the individual outcome of this foreclosure process?
As the market continues to tumble, we may look to the repossession of these homes by lenders as a reason for the continued struggle.
Subscribe to:
Posts (Atom)