Source: Bloomberg
Mortgage Seizure Plan Sparks Bondholder Talks With County
By Jody Shenn and John Gittelsohn - Jun 29, 2012 7:17 AM PT
A California county’s top executive addressed bondholders including Angelo Gordon & Co. and AllianceBernstein LP amid mounting concern it will use eminent domain to seize mortgages packaged into securities to aid homeowners who owe more than the properties’ values.
The Association of Mortgage Investors organized a conference call on June 27 with San Bernardino County Chief Executive Officer Greg Devereaux, said Chris Katopis, the Washington-based group’s executive director. Staff and members of other trade organizations were also invited to participate, he said, amid speculation the unprecedented strategy may serve as a template for other areas.
“I told them we haven’t decided to do anything yet,” Devereaux said yesterday in a telephone interview. “I said we have a very large problem that’s causing severe economic problems and part of our exploring ways to deal with it is hearing from people like those representatives of the securities industry.”
Eighteen trade groups including the American Bankers Association, National Association of Home Builders and Securities Industry and Financial Markets Association sent letters yesterday to California officials expressing their “strong objection.” They warned it would “actually further depress housing values in the county by restricting the flow of credit to home buyers.” The county is the largest by area in the U.S., excluding Hawaii and Alaska, according to its website.
Stabilize Markets
Advocates led by Mortgage Resolution Partners LLC say the strategy would help stabilize housing markets by reducing foreclosures and that it’s legally possible. The firm, which proposed the initiative, seeks to provide services including aid arranging the financing that local governments would need to purchase non-delinquent loans before cutting the balances and then refinancing borrowers into new debt. Asset managers and trade groups say that may be unlawful or unfair, and create bond losses that hurt other Americans and restrict lending.
“This gets an ’A’ for creativity but what are you actually accomplishing?” said Jonathan Lieberman, head of residential- mortgage securities at New York-based Angelo Gordon, which oversees about $24 billion. “The benefit to a few selected homeowners and the profits for the private sponsor will be vastly outweighed by the harm to responsible citizens, homeowners and investors. That’s not a legitimate ’public use’ for purposes of eminent domain.”
Forced Sales
The plan may affect 3,165 loans, with $1 billion in balances, in the two San Bernardino cities exploring it, according to a report yesterday by Amherst Securities Group LP. If extended to the rest of California, it might cover 214,355 mortgages, or $87.3 billion, with the amount elsewhere in the U.S. totaling 314,339 loans, or $69.5 billion, the firm said.
The proposal “does not sit well with anyone” in the market for home-loan securities, said Vincent Fiorillo, a senior portfolio manager at DoubleLine Capital LP, saying he was speaking as president of the mortgage-investor group. “We are going to try to make alternative suggestions to San Bernardino county.”
DoubleLine, which is based in Los Angeles, has about $35 billion in assets under management. Mike Canter, a portfolio manager at AllianceBernstein, is troubled that the proposal focuses on only one part of the market, a slice where principal forgiveness is already being used more often than in others, he said. The New York-based firm oversees about $400 billion.
Eminent Domain
San Bernardino is exploring the strategy along with the cities of Fontana and Ontario there. An agreement approved last week granted them the authority to study and create a program.
Robert Shiller, the economics professor at Yale University and co-creator of the S&P/Case-Shiller home-price indexes, supported the idea in a June 23 op-ed in the New York Times. By using eminent-domain powers, municipalities can force the sale of private property at prices deemed to be fair-market values if doing so serves a public purpose.
Other trade groups invited to the call this week included the Association of Institutional Investors, Securities Industry and Financial Markets Association and American Securitization Forum, Katopis said. The two latter organizations had begun publicly signaling opposition to the proposal.
“We had a very constructive dialog, and we have agreed to continue this dialog,” Katopis said, referring to the conference call. “AMI remains concerned and strongly opposed to San Bernardino’s plan as we understand it.”
Damaged Bondholders
ASF Executive Director Tom Deutsch said his staff didn’t join the call. His group is exploring whether a program would be “a legal and appropriate use of government power,” he said June 27. Members of Sifma, Wall Street’s largest lobbying organization, have “very serious concerns,” saidKen Bentsen, an executive vice president.
Damaged bondholders may include pension funds such as California Public Employees’ Retirement System that oversee money for retirees living in the areas, mutual funds and real estate investment trusts owned by retail investors, and government-tied holders such as American International Group Inc. (AIG), Fannie Mae (FNMA) and the federal public-private investment funds started in the financial crisis, Angelo Gordon’s Lieberman said.
Steven Gluckstern, the head of San Francisco-based Mortgage Resolution, said no bondholders will be hurt because the loans would be bought for amounts that could be objected to in court.
Fair Value
“The owner of the loan today would get fair value for it,” he said yesterday in a telephone interview. “I just think they haven’t actually looked at the facts.”
Based on mortgage-bond contracts, loan servicers and trustees probably have no obligation to object to the prices offered, leaving investors forced to accept amounts that are too low, Laurie Goodman, the Amherst analyst, said in her report.
An e-mail to the press office of Calpers this week wasn’t returned. James Ankner, a spokesman for New York-based AIG, declined to comment.
Mortgage Resolution’s proposal covers only loans in securities without government backing. While that excludes mortgages held by banks or guaranteed by Fannie Mae and Freddie Mac, the two government-supported firms also own those so-called non-agency bonds.
The Federal Housing Finance Agency, the overseer of Fannie Mae and Freddie Mac, “is reviewing this proposed use of eminent domain,” Stefanie Johnson, a spokeswoman, said in an e-mail.
Flat Fees
Gluckstern said his firm’s own potential role is misunderstood. It would charge flat per-loan fees for work managing the program, rather than profiting by buying and then reselling loans itself, he said.
It is “deep in conversations” with entities that may provide the needed, non-recourse financing to municipalities. Governments could likely resell debt after a refinancing for more than its purchase price and use the gain to pay interest to or share profits with those lenders, he said.
Devereaux, the county CEO, said an authority created to explore the program will probably next month begin the process of writing a request for proposals. He said “multiple” non- profit groups had also expressed interest in participating.
Scott Simon, the mortgage head at Pacific Investment Management Co., which runs the world’s largest bond fund, said the initiative could undermine investor desire to lend to homeowners. Government-backed programs have accounted for more than 90 percent of new mortgages since 2008 amid tumbling home values and soaring defaults.
‘Monster Payments’
“It would put another nail in the coffin of the private mortgage market,” Simon said. “It just means you’re going to need to have monster credit scores and monster down payments if you’re ever going to have a private market.”
Pimco is among investors that say they support greater targeted use of principal forgiveness for “underwater” borrowers with loans backing their bonds. More than 20 percent of U.S. homeowners with mortgages owe more than their property’s values, according to data firm CoreLogic Inc. About half of the homes with mortgages in San Bernardino are underwater, Devereaux said.
“We think this accelerates the clean-up of the problems that are preventing the private-label securitization market from coming back,” Gluckstern said.
URL to original article: http://www.builderonline.com/builder-pulse/opposition-surges-against-california-mortgage-seizure-plan.aspx?cid=BP:062912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 29, 2012
Fewer banks say they're tightening lending standards
Source: Housingwire
By Jon Prior
Fewer banks tightened underwriting standards, while a slightly more than last year even eased them, according to a survey conducted by the Office of the Comptroller of the Currency. The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system. Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011. "Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year," the OCC said in the report. Banks already cinched standards to historic levels after the housing market collapse in 2007. Fannie Mae, the largest mortgage financier in the U.S. reported an average FICO score of 763 in the first quarter and a loan-to-value ratio of 70% at origination, according to its latest financial filing. But nearly two-thirds of banks surveyed by OCC left standards unchanged so far in 2012, signaling "there is a slow continued trend from tightening to unchanged standards." "This year's survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes," said John Lyons, chief national bank examiner at the OCC. "Examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans."
URL to original article: http://www.builderonline.com/builder-pulse/fewer-banks-say-they-re-tightening-lending-standards.aspx?cid=BP:062912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Jon Prior
Fewer banks tightened underwriting standards, while a slightly more than last year even eased them, according to a survey conducted by the Office of the Comptroller of the Currency. The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system. Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011. "Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year," the OCC said in the report. Banks already cinched standards to historic levels after the housing market collapse in 2007. Fannie Mae, the largest mortgage financier in the U.S. reported an average FICO score of 763 in the first quarter and a loan-to-value ratio of 70% at origination, according to its latest financial filing. But nearly two-thirds of banks surveyed by OCC left standards unchanged so far in 2012, signaling "there is a slow continued trend from tightening to unchanged standards." "This year's survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes," said John Lyons, chief national bank examiner at the OCC. "Examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans."
URL to original article: http://www.builderonline.com/builder-pulse/fewer-banks-say-they-re-tightening-lending-standards.aspx?cid=BP:062912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 28, 2012
Home prices may have found a floor: Capital Economics
Source: Housingwire
Home prices have found their floor for the most part and are even trending upward in certain markets, said Paul Diggle, property economist for Capital Economics. Diggle said seasonal adjustments along with a high level of distressed home sales could be giving the misleading impression that home prices are strengthening in recent months. But he says even when accounting for these market distortions, "it appears that home prices have found a floor and, on some measures at least, are rising modestly." Diggle points out that both the Case-Shiller and CoreLogic home price indices reported gains in February, March and April. "Indeed annualized growth over that period was 6.2% and 10.9%, respectively, on the two indices—higher than our already above-consensus forecast for house prices to increase by 2% this year," Diggle said. Diggle said it's possible for home prices to in fact grow further this year if a solution is found for the euro-zone crisis, leading to a loosening in global credit conditions. However, with those issues unresolved, Diggle says Capital Economics will stick to its current forecast. "The good news is that the year-over-year change in house prices has improved noticeably in recent months too," he added. "Case-Shiller house prices have gone from falling at a rate of 4.5% year-over-year early last year, to a more moderate 1.9% year-over-year now. Meanwhile, CoreLogic house prices actually rose by 1.1% year-over-year in April. In other words, the recent improvement in house prices, although not quite as strong as the headline numbers suggest, appears to be genuine."
URL to original article: http://www.housingwire.com/content/home-prices-may-have-found-floor-capital-economics
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices have found their floor for the most part and are even trending upward in certain markets, said Paul Diggle, property economist for Capital Economics. Diggle said seasonal adjustments along with a high level of distressed home sales could be giving the misleading impression that home prices are strengthening in recent months. But he says even when accounting for these market distortions, "it appears that home prices have found a floor and, on some measures at least, are rising modestly." Diggle points out that both the Case-Shiller and CoreLogic home price indices reported gains in February, March and April. "Indeed annualized growth over that period was 6.2% and 10.9%, respectively, on the two indices—higher than our already above-consensus forecast for house prices to increase by 2% this year," Diggle said. Diggle said it's possible for home prices to in fact grow further this year if a solution is found for the euro-zone crisis, leading to a loosening in global credit conditions. However, with those issues unresolved, Diggle says Capital Economics will stick to its current forecast. "The good news is that the year-over-year change in house prices has improved noticeably in recent months too," he added. "Case-Shiller house prices have gone from falling at a rate of 4.5% year-over-year early last year, to a more moderate 1.9% year-over-year now. Meanwhile, CoreLogic house prices actually rose by 1.1% year-over-year in April. In other words, the recent improvement in house prices, although not quite as strong as the headline numbers suggest, appears to be genuine."
URL to original article: http://www.housingwire.com/content/home-prices-may-have-found-floor-capital-economics
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 27, 2012
Buying in: 10 tips to get into a good home
Source: Forbes
Buyers spend a lot of time looking at properties online, touring homes on the Sunday open house circuit, and talking to their real estate agent. They’re laser-focused on finding the best home that meets their needs. The problem is, buyers sometimes don’t take the long view of a property. They’re only looking at a home as a potential buyer — and not as someone who, years down the road, may also have to sell the property. Given that homes are such a big investment, there should be a little inside your head, picking away at your options and decisions. As the home buying market starts to heat up again, here are ten things you should consider when choosing your next home. 1. Location, location, location Perhaps nothing is more important than the three L’s, and there’s a reason why it’s said three times. Location is extremely important when it comes time to sell. You can have the worst house in the world with the ugliest kitchen and bath. But put it on a great block or in a good school district, and your home will be coveted. Location location location matters on so many different levels. At the highest level is the town where the house is located, then the school district, then the neighborhood and the block — right down to the location of the lot on the block. Keep all of this in mind when shopping. Also remember that while real estate markets rise and fall, no one can take a great location away from you. 2. The school district The school district is right up there on the list of what’s most important to many buyers. It’s not uncommon for buyers to start their search based solely on the school district they want to be in. Parents want their kids to go to the best school, which can drive up prices of homes in those districts. Even though you might not have children, buying a home in a good school district is always smart. If the schools are desirable, homes tend to hold their value. As a homeowner, you should always be aware of how the schools are doing, not unlike being aware of your roof’s condition, the neighborhood development or city government. 3. The home’s position on the lot Where the home sits on the lot in relation to the street or the overgrown oak are key elements in picking out a home. In the case of a condo, an end unit vs. an interior unit is a key consideration. You may have chosen the most beautifully renovated home in the best school district and figure all is good. But if the main living areas are shaded by a neighbor’s extension or the master bedroom looks into the neighbors’ family room, you may have a location problem. Light or privacy may not be a hot button for you, but chances are, they might be concerns for a future buyer. 4. Crime It’s a good idea to check the latest crime figures for a neighborhood. It can give you a good snapshot about the number and severity of crimes over a time period. So much information is online nowadays that when you find your perfect home, a quick Internet search on the area should provide you with the much-needed information. Most municipalities post their police blotters or crime statistics online these days. Don’t freak out if you notice more crime than what you’d have expected. Crime, especially petty crime, is everywhere. If you’re new to the area, consult with your real estate agent if you have concerns. 5. Walkability More than ever, ‘walkability’ is becoming a key factor in the search process. There are entire websites, apps and algorithms that help people figure out how walkable their future home is. As a matter of fact, Zillow even has a Walk Score for most homes. As people get out of their cars and slip into their Keds, they want a home in a walkable neighborhood. People put high value on the ability to walk to a store, school, work or public transportation. The more we move away from cars and the more we see invested in public transportation over the coming decades, the more of a huge value-add walkability will become. 6. The neighborhood’s character You may have found the absolute most perfect home, on the best block, in the best school district and on a great lot. But there could be circumstances outside your control that may give you pause — specifically, the character of the surrounding neighborhood. Check out the area late at night, early morning and in the middle of the day. See if there are any odd weather or traffic patterns and try to observe some of the neighbors. You may even go so far as talking to some neighbors. It’s important to walk around, open your eyes and ears and make sure there isn’t anything you’re overlooking. That next-door neighbor practicing drums in the garage at 9 p.m. could be a source of immediate neighbor conflict. Go into it with eyes wide open. 7. Don’t buy the best house on the block Simply put, avoid buying the best house on the block because there may not be any room for your investment to grow (unless you physically have the house moved to a better neighborhood). It’s better to buy the worst house on the best block, because you can improve the house to add value to an already great location. 8. Is it a fixer-upper? If you’re buying a fixer-upper, make sure you understand what you’re getting into. Did you set out to buy a home that needed work? Or does the home just happen to be in the most desirable neighborhood, the block of your dreams? Do your homework upfront. If you want to build an extension or add another story to the property, make sure it is within local zoning or building codes. Have the property inspected so that you know exactly what you’re getting yourself into. Sometimes, what appears to be a simple kitchen needing cosmetic work turns out to be a huge project. Ask yourself repeatedly if your life can support a home renovation. Not only does a renovation take money, it takes time, energy and emotional stress. 9. Will the home hold its value? A good real estate agent who’s been working the neighborhood for some time can vouch for the long-term value or investment potential of the property. But be sure to find ways to add value, or at least be certain the home will hold its value. The market may be strong when you purchase, but ask yourself, “Am I in a seller’s market?” “What would happen to this property if the market changed tomorrow”? Check out the median home value in the neighborhood as it compares to neighborhoods around it. The Zillow Home Value Index gives you one, five, and 10-year snapshots of how home values have gone up or down in neighborhoods and cities. 10. Taxes, dues and fees Many people overlook the monthly fees associated with homeownership. Nearly every property will have taxes, and any sort of planned community or homeowners association (HOA) will have regular assessments. Be sure that the amount of property tax and assessments are clear from the get-go. If in doubt, go to city hall or do research online. If you’d be buying into a condo complex, be sure to get your hands on the meeting minutes, financials of the HOA and the condo documents. Any mention of changes coming down the pike? Does the HOA seem well funded? It could take one quick $10K assessment to immediately affect property values if you need to turn around and sell your new home. And any uncertainty about the building, its integrity or the financials could scare off buyers when it’s time to sell.
URL to original article: http://www.builderonline.com/builder-pulse/buying-in--10-tips-to-get-into-a-good-home.aspx?cid=BP:062512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Buyers spend a lot of time looking at properties online, touring homes on the Sunday open house circuit, and talking to their real estate agent. They’re laser-focused on finding the best home that meets their needs. The problem is, buyers sometimes don’t take the long view of a property. They’re only looking at a home as a potential buyer — and not as someone who, years down the road, may also have to sell the property. Given that homes are such a big investment, there should be a little inside your head, picking away at your options and decisions. As the home buying market starts to heat up again, here are ten things you should consider when choosing your next home. 1. Location, location, location Perhaps nothing is more important than the three L’s, and there’s a reason why it’s said three times. Location is extremely important when it comes time to sell. You can have the worst house in the world with the ugliest kitchen and bath. But put it on a great block or in a good school district, and your home will be coveted. Location location location matters on so many different levels. At the highest level is the town where the house is located, then the school district, then the neighborhood and the block — right down to the location of the lot on the block. Keep all of this in mind when shopping. Also remember that while real estate markets rise and fall, no one can take a great location away from you. 2. The school district The school district is right up there on the list of what’s most important to many buyers. It’s not uncommon for buyers to start their search based solely on the school district they want to be in. Parents want their kids to go to the best school, which can drive up prices of homes in those districts. Even though you might not have children, buying a home in a good school district is always smart. If the schools are desirable, homes tend to hold their value. As a homeowner, you should always be aware of how the schools are doing, not unlike being aware of your roof’s condition, the neighborhood development or city government. 3. The home’s position on the lot Where the home sits on the lot in relation to the street or the overgrown oak are key elements in picking out a home. In the case of a condo, an end unit vs. an interior unit is a key consideration. You may have chosen the most beautifully renovated home in the best school district and figure all is good. But if the main living areas are shaded by a neighbor’s extension or the master bedroom looks into the neighbors’ family room, you may have a location problem. Light or privacy may not be a hot button for you, but chances are, they might be concerns for a future buyer. 4. Crime It’s a good idea to check the latest crime figures for a neighborhood. It can give you a good snapshot about the number and severity of crimes over a time period. So much information is online nowadays that when you find your perfect home, a quick Internet search on the area should provide you with the much-needed information. Most municipalities post their police blotters or crime statistics online these days. Don’t freak out if you notice more crime than what you’d have expected. Crime, especially petty crime, is everywhere. If you’re new to the area, consult with your real estate agent if you have concerns. 5. Walkability More than ever, ‘walkability’ is becoming a key factor in the search process. There are entire websites, apps and algorithms that help people figure out how walkable their future home is. As a matter of fact, Zillow even has a Walk Score for most homes. As people get out of their cars and slip into their Keds, they want a home in a walkable neighborhood. People put high value on the ability to walk to a store, school, work or public transportation. The more we move away from cars and the more we see invested in public transportation over the coming decades, the more of a huge value-add walkability will become. 6. The neighborhood’s character You may have found the absolute most perfect home, on the best block, in the best school district and on a great lot. But there could be circumstances outside your control that may give you pause — specifically, the character of the surrounding neighborhood. Check out the area late at night, early morning and in the middle of the day. See if there are any odd weather or traffic patterns and try to observe some of the neighbors. You may even go so far as talking to some neighbors. It’s important to walk around, open your eyes and ears and make sure there isn’t anything you’re overlooking. That next-door neighbor practicing drums in the garage at 9 p.m. could be a source of immediate neighbor conflict. Go into it with eyes wide open. 7. Don’t buy the best house on the block Simply put, avoid buying the best house on the block because there may not be any room for your investment to grow (unless you physically have the house moved to a better neighborhood). It’s better to buy the worst house on the best block, because you can improve the house to add value to an already great location. 8. Is it a fixer-upper? If you’re buying a fixer-upper, make sure you understand what you’re getting into. Did you set out to buy a home that needed work? Or does the home just happen to be in the most desirable neighborhood, the block of your dreams? Do your homework upfront. If you want to build an extension or add another story to the property, make sure it is within local zoning or building codes. Have the property inspected so that you know exactly what you’re getting yourself into. Sometimes, what appears to be a simple kitchen needing cosmetic work turns out to be a huge project. Ask yourself repeatedly if your life can support a home renovation. Not only does a renovation take money, it takes time, energy and emotional stress. 9. Will the home hold its value? A good real estate agent who’s been working the neighborhood for some time can vouch for the long-term value or investment potential of the property. But be sure to find ways to add value, or at least be certain the home will hold its value. The market may be strong when you purchase, but ask yourself, “Am I in a seller’s market?” “What would happen to this property if the market changed tomorrow”? Check out the median home value in the neighborhood as it compares to neighborhoods around it. The Zillow Home Value Index gives you one, five, and 10-year snapshots of how home values have gone up or down in neighborhoods and cities. 10. Taxes, dues and fees Many people overlook the monthly fees associated with homeownership. Nearly every property will have taxes, and any sort of planned community or homeowners association (HOA) will have regular assessments. Be sure that the amount of property tax and assessments are clear from the get-go. If in doubt, go to city hall or do research online. If you’d be buying into a condo complex, be sure to get your hands on the meeting minutes, financials of the HOA and the condo documents. Any mention of changes coming down the pike? Does the HOA seem well funded? It could take one quick $10K assessment to immediately affect property values if you need to turn around and sell your new home. And any uncertainty about the building, its integrity or the financials could scare off buyers when it’s time to sell.
URL to original article: http://www.builderonline.com/builder-pulse/buying-in--10-tips-to-get-into-a-good-home.aspx?cid=BP:062512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
NAR: Pending home sales up 13.3% over year-ago figures
Source: Housingwire
By Jacob Gaffney
Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012. "The housing market is clearly superior this year compared with the past four years," said Lawrence Yun, NAR chief economist. "Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012." The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season. On a seasonally adjusted basis, the Standard & Poor's Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($17.39 0.04%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow ($35.30 2.08%) home value index posted a 0.5% increase in May. Housing analysts at Goldman Sachs ($91.36 0.33%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory. "These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?" they ask. Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity. "If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process," Yun said.
URL to original article: http://www.housingwire.com/news/nar-annual-home-sales-133
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Jacob Gaffney
Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012. "The housing market is clearly superior this year compared with the past four years," said Lawrence Yun, NAR chief economist. "Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012." The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season. On a seasonally adjusted basis, the Standard & Poor's Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($17.39 0.04%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow ($35.30 2.08%) home value index posted a 0.5% increase in May. Housing analysts at Goldman Sachs ($91.36 0.33%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory. "These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?" they ask. Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity. "If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process," Yun said.
URL to original article: http://www.housingwire.com/news/nar-annual-home-sales-133
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 22, 2012
Perchance to dream: size matters among prospective home buyers
Source: Trulia
Trulia’s latest American Dream survey reveals that consumer optimism is rebounding– faster than the housing market itself is. Prospective homebuyers are looking at bigger homes, thinking more seriously about buying and optimistically hoping for higher home prices in both the short-term and long-term.
To get American’s take on homeownership, we worked with Harris Interactive to conduct an online survey of 2,205 U.S. adults between May 22-24 and 2,230 U.S. adults between June 4-6. For the full methodology, see here.
The Return of Super-Sized Homes
Remember when Americans started looking for smaller-sized homes after the bubble burst? Well, it turns out that downsizing was not here for good. After a few months of encouraging housing market news, the “bigger is better” way of thinking is making a comeback. Now, 27% of Americans say their ideal home size is over 2,600 square feet–up from 17% in 2011. Furthermore, the “super-sized” house category, 3,200 square feet and up, saw an even more dramatic increase in interest. While just 6% of those surveyed in 2011 expressed desire for a super-sized home, 11% now say they want a home of this size — that’s almost double a year ago.
It turns out that new-home builders spotted this growing appetite for size: the Census recently reported the average home constructed increased from 2,392 square feet in 2010 to 2,480 square feet in 2011.
Wanting a super-sized home is one thing, but getting it is another. Although newly constructed homes are getting bigger, most inventory is existing homes, including foreclosures, and the current inventory of for-sale homes skews smaller than most people’s ideal. Although 27% of Americans say they that their ideal home size is bigger than 2,600 square feet, only 22% of the currently listed homes on Trulia are actually that big. Meanwhile, the super-sized category –3,200-plus–is pretty much on the money, but the majority of available homes fall in the smaller size categories–800 to 2,000 square feet. That means many Americans may have to downsize their dreams to fit a smaller reality.
Note: An additional 11% of survey respondents answered “not sure” to the “ideal home size” question. An additional 4% of Trulia’s for-sale inventory is homes with less than 800 square feet.
Tomorrow’s homebuyers also have high hopes for amenities. In our survey, we asked current renters[1] which amenities they would love to have in the first home that they buy. While the most desired features were a master bathroom (63%), a walk-in closet (56%) and a gourmet kitchen (50%), only 26%, 35% and 9% of actual home buyers reported having these respective features in the first home. For gourmet kitchens, that’s a 41% gap between expectations and reality: time to downsize those cooking fantasies! Consumers would be wiser to set their sights on the dream amenity that’s more likely to come true: wood floors, which 47% of renters want and 35% of buyers said they had in their first home.
Renters Want to Buy, But Can They?
Even though the homeownership rate has dropped, more renters are now thinking about buying a home. Job growth, low interest rates and ever-rising rents have pushed up renter interest in home buying. Now, 78% of renters said that they plan to purchase a home someday, up from 72% in early 2011. More than a quarter of renters (27%) want to buy in the next two years, compared with 22% in 2011. That’s a big increase.
But obstacles remain. Still hung over from the housing bubble, those who wish to buy still face very serious hurdles to achieving their dream. Tellingly, 47% were concerned about being able to make a down payment, 32% said poor credit history could be an issue and 25% wondered if they would even qualify for a mortgage. Even though consumers may be more willing than ever to buy, they may be in for a rude awakening when it comes time to pull together a downpayment and apply for a loan.
Prices are going up, up…up?
With home asking prices up 1.6% quarter over quarter nationally, and in positive territory in 86 of the 100 largest metros (according to the Trulia Price Monitor), it’s not surprising that 61% of Americans think that home prices in their local market will rise in the next year. But – get this — 58% believe that local home prices will return to their previous bubble-level peaks within the next 10 years. For residents of Pittsburgh, Dallas and other metros where prices held up well during the bubble, it makes sense to expect prices to return to their previous high in the next ten years. But residents of the hardest-hit metros, like Detroit and Las Vegas, are almost as optimistic about future price increases.
Is this irrational exuberance? Maybe. In metros where prices skyrocketed during the bubble and then plummeted, today’s prices are a lot closer to “normal” than those bubble highs were. Perhaps residents in metros with huge price drops are encouraged by all of the search activity in those areas: we’ve pointed out that far more searchers are looking for homes in places that had bigger price declines than the other way around. But that doesn’t mean people should bet on their home values returning to those crazy heights.
It’s important to dream, and dream big – this is America, after all. And the major housing indicators support renewed optimism. In our December 2011 survey, consumers told us that (1) fewer defaults and foreclosures and (2) more sales would be the two trends that would give them the most confidence in housing market recovery, and both of those measures are improving. But while some optimism is necessary for the housing market to recover, the pendulum may have swung a little too far. Too much optimism would get us back to a bubble.
URL to original article: http://www.builderonline.com/builder-pulse/perchance-to-dream--size-matters-among-prospective-home-buyers.aspx?cid=BP:062212:JUMP
For further inforamtion on Fresno Real Estate check: http://www.londonproperties.com
Trulia’s latest American Dream survey reveals that consumer optimism is rebounding– faster than the housing market itself is. Prospective homebuyers are looking at bigger homes, thinking more seriously about buying and optimistically hoping for higher home prices in both the short-term and long-term.
To get American’s take on homeownership, we worked with Harris Interactive to conduct an online survey of 2,205 U.S. adults between May 22-24 and 2,230 U.S. adults between June 4-6. For the full methodology, see here.
The Return of Super-Sized Homes
Remember when Americans started looking for smaller-sized homes after the bubble burst? Well, it turns out that downsizing was not here for good. After a few months of encouraging housing market news, the “bigger is better” way of thinking is making a comeback. Now, 27% of Americans say their ideal home size is over 2,600 square feet–up from 17% in 2011. Furthermore, the “super-sized” house category, 3,200 square feet and up, saw an even more dramatic increase in interest. While just 6% of those surveyed in 2011 expressed desire for a super-sized home, 11% now say they want a home of this size — that’s almost double a year ago.
It turns out that new-home builders spotted this growing appetite for size: the Census recently reported the average home constructed increased from 2,392 square feet in 2010 to 2,480 square feet in 2011.
Wanting a super-sized home is one thing, but getting it is another. Although newly constructed homes are getting bigger, most inventory is existing homes, including foreclosures, and the current inventory of for-sale homes skews smaller than most people’s ideal. Although 27% of Americans say they that their ideal home size is bigger than 2,600 square feet, only 22% of the currently listed homes on Trulia are actually that big. Meanwhile, the super-sized category –3,200-plus–is pretty much on the money, but the majority of available homes fall in the smaller size categories–800 to 2,000 square feet. That means many Americans may have to downsize their dreams to fit a smaller reality.
| Size (Square Footage) | Ideal (Survey) | Trulia Inventory |
| 800 to 1,400 | 8% | 29% |
| 1,401 to 2,000 | 29% | 29% |
| 2,001 to 2,600 | 25% | 17% |
| 2,601 to 3,200 | 16% | 10% |
| More than 3,200 | 11% | 12% |
Tomorrow’s homebuyers also have high hopes for amenities. In our survey, we asked current renters[1] which amenities they would love to have in the first home that they buy. While the most desired features were a master bathroom (63%), a walk-in closet (56%) and a gourmet kitchen (50%), only 26%, 35% and 9% of actual home buyers reported having these respective features in the first home. For gourmet kitchens, that’s a 41% gap between expectations and reality: time to downsize those cooking fantasies! Consumers would be wiser to set their sights on the dream amenity that’s more likely to come true: wood floors, which 47% of renters want and 35% of buyers said they had in their first home.
| Real Estate Expectations vs. Reality: Hard Pill to Swallow | ||
| Amenity | Renter Dreams2 | First-Time Homeowner Realities |
| En-suite master bathroom | 62% | 26% |
| Walk-in closet | 56% | 35% |
| Gourmet kitchen | 50% | 9% |
| Outdoor deck | 50% | 28% |
| Wood floors | 47% | 35% |
| Pre-wired entertainment system | 31% | 7% |
| Pool | 24% | 10% |
| Hot tub | 22% | 6% |
Renters Want to Buy, But Can They?
Even though the homeownership rate has dropped, more renters are now thinking about buying a home. Job growth, low interest rates and ever-rising rents have pushed up renter interest in home buying. Now, 78% of renters said that they plan to purchase a home someday, up from 72% in early 2011. More than a quarter of renters (27%) want to buy in the next two years, compared with 22% in 2011. That’s a big increase.
But obstacles remain. Still hung over from the housing bubble, those who wish to buy still face very serious hurdles to achieving their dream. Tellingly, 47% were concerned about being able to make a down payment, 32% said poor credit history could be an issue and 25% wondered if they would even qualify for a mortgage. Even though consumers may be more willing than ever to buy, they may be in for a rude awakening when it comes time to pull together a downpayment and apply for a loan.
Prices are going up, up…up?
With home asking prices up 1.6% quarter over quarter nationally, and in positive territory in 86 of the 100 largest metros (according to the Trulia Price Monitor), it’s not surprising that 61% of Americans think that home prices in their local market will rise in the next year. But – get this — 58% believe that local home prices will return to their previous bubble-level peaks within the next 10 years. For residents of Pittsburgh, Dallas and other metros where prices held up well during the bubble, it makes sense to expect prices to return to their previous high in the next ten years. But residents of the hardest-hit metros, like Detroit and Las Vegas, are almost as optimistic about future price increases.
Is this irrational exuberance? Maybe. In metros where prices skyrocketed during the bubble and then plummeted, today’s prices are a lot closer to “normal” than those bubble highs were. Perhaps residents in metros with huge price drops are encouraged by all of the search activity in those areas: we’ve pointed out that far more searchers are looking for homes in places that had bigger price declines than the other way around. But that doesn’t mean people should bet on their home values returning to those crazy heights.
It’s important to dream, and dream big – this is America, after all. And the major housing indicators support renewed optimism. In our December 2011 survey, consumers told us that (1) fewer defaults and foreclosures and (2) more sales would be the two trends that would give them the most confidence in housing market recovery, and both of those measures are improving. But while some optimism is necessary for the housing market to recover, the pendulum may have swung a little too far. Too much optimism would get us back to a bubble.
URL to original article: http://www.builderonline.com/builder-pulse/perchance-to-dream--size-matters-among-prospective-home-buyers.aspx?cid=BP:062212:JUMP
For further inforamtion on Fresno Real Estate check: http://www.londonproperties.com
Beyond 65, working, and loving it
Source: The Atlantic
For all the trauma your 401K has probably suffered over the past few years, here's a bit of news to take heart in: According to researchers at Boston College, most Americans are only going to have to work a few extra years to make it to retirement.
The new figures come out of BC's Center for Retirement Research, and are summed up in the graph below. Only about 48 percent of current working households will be ready for to pack it in and enjoy their golden years by the traditional retirement age of 65. But thanks in part to the premium Social Security recipients get from delaying their benefits, 86 percent of households will be prepared by 70.
Here's another way of looking at it. As noted before, almost half of all households will be ready to punch out by 65. Only a select few will have to work past 70.
Now here's the catch with all of this: These numbers all assume current levels of Social Security benefits, which play a major role in getting low-income households to the retirement finish line. If they change dramatically, especially for Americans at the bottom of the economic totem pole, retirement could really become a luxury for the rich.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-65--working--and-loving-it.aspx?cid=BP:062212:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
For all the trauma your 401K has probably suffered over the past few years, here's a bit of news to take heart in: According to researchers at Boston College, most Americans are only going to have to work a few extra years to make it to retirement.
The new figures come out of BC's Center for Retirement Research, and are summed up in the graph below. Only about 48 percent of current working households will be ready for to pack it in and enjoy their golden years by the traditional retirement age of 65. But thanks in part to the premium Social Security recipients get from delaying their benefits, 86 percent of households will be prepared by 70.
Here's another way of looking at it. As noted before, almost half of all households will be ready to punch out by 65. Only a select few will have to work past 70.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-65--working--and-loving-it.aspx?cid=BP:062212:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, June 21, 2012
Sharing house: does doubled-up mean 'pent-up'?
Source: The Washington Post
By Michael A. Fletcher
Millions of economically pressed Americans cushioned themselves against the recession by doubling up in houses and apartments, according to a Census Bureau report released Wednesday. The number of adults sharing households with family members or other individuals jumped 11.4 percent between 2007 and 2010, the report said. Overall, such living arrangements accounted for 22 million households in 2010 — or 18.7 percent of all U.S. households, compared with 17 percent in 2007. Young adults were the most likely to double up, the report said, accounting for more than half of those who moved in with family members or friends. Between 2007 and 2010, the number of adult children who lived in their parents’ homes increased by 1.2 million to 15.8 million. Those between the ages of 25 and 34 made up two-thirds of that increase, underscoring a prime reason for a broader slowdown in household formation that economists call both a symptom and a cause of the nation’s continued economic doldrums. Economists estimate that there are more than 2 million fewer occupied homes in the country than there would have been had Americans continued forming households at the rate they did before the recession. The slowdown has lowered demand for housing as well as for furnishings and appliances, placing a further drag on the economy. “Although reasons for household sharing are not discernible from the survey, our analysis suggests that adults and families coped with challenging economic circumstances over the course of the recession by joining households or combining households with other individuals or families,” said Laryssa Mykyta, a report co-author and a Census Bureau analyst. The report added that such moves proved beneficial, with many Americans escaping poverty by sharing homes with families or friends. The poverty rates for shared households were lower than for other households, although the adults who made up those households individually had high rates of personal poverty, which are defined by federal guidelines. That was especially true for young adults. Those who lived with their parents had a poverty rate of 8.4 percent, but that figure included the entire household in calculating income. If the poverty status was determined using solely individual incomes, the poverty rate for those doubled-up young adults would have been 45.3 percent, according to the Census Bureau. “It is difficult to assess the precise impact of household sharing on economic well-being,” Mykyta said. “But the higher personal poverty rates for adults heading shared households suggests that this group has fewer individual resources than their counterparts.” Overall, 27.7 percent of adults — 61.7 million people — were doubled up in households in 2007, a number that rose to 69 million, or 30.1 percent, in 2010. The Census Bureau defines “doubled up” households as those that include at least one “additional” adult — a person 18 or older who is not enrolled in school and is not a spouse or live-in partner. Americans were most likely to double up with other family members, the report found. In 2010, adult children accounted for 46 percent of those who doubled up, while parents who moved in with their adult children made up another 13 percent. Siblings, grandchildren and other relatives accounted for nearly 23 percent of those who doubled up, the report said.
URL to original article: http://www.builderonline.com/builder-pulse/sharing-house--does-doubled-up-mean--pent-up--.aspx?cid=BP:062112:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Michael A. Fletcher
Millions of economically pressed Americans cushioned themselves against the recession by doubling up in houses and apartments, according to a Census Bureau report released Wednesday. The number of adults sharing households with family members or other individuals jumped 11.4 percent between 2007 and 2010, the report said. Overall, such living arrangements accounted for 22 million households in 2010 — or 18.7 percent of all U.S. households, compared with 17 percent in 2007. Young adults were the most likely to double up, the report said, accounting for more than half of those who moved in with family members or friends. Between 2007 and 2010, the number of adult children who lived in their parents’ homes increased by 1.2 million to 15.8 million. Those between the ages of 25 and 34 made up two-thirds of that increase, underscoring a prime reason for a broader slowdown in household formation that economists call both a symptom and a cause of the nation’s continued economic doldrums. Economists estimate that there are more than 2 million fewer occupied homes in the country than there would have been had Americans continued forming households at the rate they did before the recession. The slowdown has lowered demand for housing as well as for furnishings and appliances, placing a further drag on the economy. “Although reasons for household sharing are not discernible from the survey, our analysis suggests that adults and families coped with challenging economic circumstances over the course of the recession by joining households or combining households with other individuals or families,” said Laryssa Mykyta, a report co-author and a Census Bureau analyst. The report added that such moves proved beneficial, with many Americans escaping poverty by sharing homes with families or friends. The poverty rates for shared households were lower than for other households, although the adults who made up those households individually had high rates of personal poverty, which are defined by federal guidelines. That was especially true for young adults. Those who lived with their parents had a poverty rate of 8.4 percent, but that figure included the entire household in calculating income. If the poverty status was determined using solely individual incomes, the poverty rate for those doubled-up young adults would have been 45.3 percent, according to the Census Bureau. “It is difficult to assess the precise impact of household sharing on economic well-being,” Mykyta said. “But the higher personal poverty rates for adults heading shared households suggests that this group has fewer individual resources than their counterparts.” Overall, 27.7 percent of adults — 61.7 million people — were doubled up in households in 2007, a number that rose to 69 million, or 30.1 percent, in 2010. The Census Bureau defines “doubled up” households as those that include at least one “additional” adult — a person 18 or older who is not enrolled in school and is not a spouse or live-in partner. Americans were most likely to double up with other family members, the report found. In 2010, adult children accounted for 46 percent of those who doubled up, while parents who moved in with their adult children made up another 13 percent. Siblings, grandchildren and other relatives accounted for nearly 23 percent of those who doubled up, the report said.
URL to original article: http://www.builderonline.com/builder-pulse/sharing-house--does-doubled-up-mean--pent-up--.aspx?cid=BP:062112:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
June 2012 U.S. Economic And Housing Market Outlook
Source: Freddie Mac
Rental Markets: A Sign of Strength MCLEAN, Va., June 19, 2012 /PRNewswire/ --
Freddie Mac (OTC:FMCC) released today its U.S. Economic and Housing Market Outlook for June showing that rental market activity has been a bright spot for the housing market, and due to rental demand by those postponing homeownership, further increases are expected in the coming year. Outlook Highlights Over the year ending March 2012, an additional 1.5 million households moved into rental housing, a 4 percent increase in a single year. Rental vacancy rates have dropped roughly 2 percentage points over the past two years. While nominal rents rose (2 to 4 percent) during the year ending March 2012, average rent on an inflation-adjusted basis remained below where it had been for much of the decade prior to the Great Recession. Multifamily property values are up on average about 25 percent during the past two years from their trough during the first quarter of 2010, according to the National Council of Real Estate Investment Fiduciaries index, but still about 14 percent below their peak prior to the Great Recession. Starts of buildings with at least five apartments have jumped 48 percent in the first five months of this year when compared to the same period a year ago. View the video overview and download the complete June 2012 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators. Quotes Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist. "Further increases in rental demand are likely in the coming year as newly formed households postpone homeownership decisions until the economy strengthens and they have accumulated sufficient savings. Overall apartment market trends may show further vacancy declines and rent gains, with property values improving as well." Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter:@FreddieMac Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.
URL to original article: http://freddiemac.mediaroom.com/index.php?s=12329&item=129717
For further information on Fresno Real Estate check: http://www.londonproperties.com
Rental Markets: A Sign of Strength MCLEAN, Va., June 19, 2012 /PRNewswire/ --
Freddie Mac (OTC:FMCC) released today its U.S. Economic and Housing Market Outlook for June showing that rental market activity has been a bright spot for the housing market, and due to rental demand by those postponing homeownership, further increases are expected in the coming year. Outlook Highlights Over the year ending March 2012, an additional 1.5 million households moved into rental housing, a 4 percent increase in a single year. Rental vacancy rates have dropped roughly 2 percentage points over the past two years. While nominal rents rose (2 to 4 percent) during the year ending March 2012, average rent on an inflation-adjusted basis remained below where it had been for much of the decade prior to the Great Recession. Multifamily property values are up on average about 25 percent during the past two years from their trough during the first quarter of 2010, according to the National Council of Real Estate Investment Fiduciaries index, but still about 14 percent below their peak prior to the Great Recession. Starts of buildings with at least five apartments have jumped 48 percent in the first five months of this year when compared to the same period a year ago. View the video overview and download the complete June 2012 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators. Quotes Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist. "Further increases in rental demand are likely in the coming year as newly formed households postpone homeownership decisions until the economy strengthens and they have accumulated sufficient savings. Overall apartment market trends may show further vacancy declines and rent gains, with property values improving as well." Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter:@FreddieMac Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.
URL to original article: http://freddiemac.mediaroom.com/index.php?s=12329&item=129717
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, June 20, 2012
Beyond the square foot--what's a neighborhood worth?
Source: The New York Times
The American Dream: Phase II
By ALLISON ARIEFF
Sprawl … It’s the American dream unfolding before your eyes.” That’s L. Brooks Patterson’s irresistible description of sprawl, proving yet again how masterful the stalwarts of the status quo are at messaging that which they hope to preserve in amber. In a speech to his constituents earlier this year, Patterson, the county executive of Oakland County, Mich., continued to wax poetic on the topic: “I love sprawl. I need it. I promote it. Oakland County can’t get enough of it. Are you getting the picture? Sprawl is not evil. In fact, it is good … [it] is new jobs, new hope and the fulfillment of lifelong dreams.” Patterson’s rousing stump speech for sprawl is emblematic of how we as a culture are far too invested in a vision of the American dream that doesn’t make sense in the 21st century. Over the past 30 years we’ve stripped away the supporting mechanisms of sprawl but have continued to create it. We’ve built more houses than we’ve needed — and built them farther away from jobs. This has led to longer commutes, which has created more traffic. In response, we built more highways, increasing fuel consumption and, as transportation planners acknowledge, doing little if anything to reduce traffic. It’s a vicious, seemingly endless cycle, and at its core is the notion that the American dream can exist only within the framework of the single-family home on a large lot. Indeed, we’ve become so fixated on this as the sole delivery mechanism of that American dream that we’ve spent a disproportionate amount of our collective energies (home-) improving it without considering meaningful alternative visions — or devoting at least a smidgen of attention to what’s outside the front door or down the block. Everything in our culture today reinforces this idea of home as castle (or fortress) rather than home as part of a larger whole (i.e., neighborhood). We need to find our way to the latter view, and part of that means finding a better way to talk about it. The good news is that more and more people are. It’s true that for years, homebuilders and home-sellers were touting Patterson’s sprawl-friendly sales pitch. If you were to walk into the sales center of any subdivision or master-planned community, from Modesto, Calif., to Tampa, Fla., the first question you’d be asked was, “How much square footage are you looking for?” Not “What kind of community would you like to be a part of?” But increasingly, many of those looking for places to live found that the market had nothing for them. Houses were too big, too isolated, too generic, too hard to maintain. Or they were designed for the quintessential nuclear family that exists more in our cultural imagination than in reality. Few homes offered options for aging in place, for returning college kids or elderly parents, or even decent home office space. Would-be residents lamented the lack of amenities like a café or a playground within walking distance in master-planned communities of 5,000, 10,000 or even 40,000 homes (!), an absence often explained away with “a community of this size couldn’t support it.” For years, I heard from builders and developers who said they knew there was a market for smaller, more sustainable properties — they just couldn’t get such projects to pencil out. Now, it seems those pencils have been sharpened. “The giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs” are doing an about-face, suddenly building smaller neighborhoods in and close to cities, noted an article in USA Today last month. The market slowdown, the article went on to explain, “has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.” In short, builders are recognizing that buyers (and renters, too!) value the neighborhood as much as — if not more than — the house. And what they want from that neighborhood might not be McMansions and four-car garages after all. Resale value may not in fact trump all else. Young and old, whether they’re in the city or the suburbs, want to walk to places like restaurants and shops. (And let’s stop talking about the integration of things like cafes, public transit and bike racks as “urbanizing” an area, which only reinforces the divide between two entities that are divided enough already.) People have begun to wake up to the fact that the more time spent in the car means poorer health and less time with their families — and they’re seeking shorter commutes. They’re interested in smaller homes that are easier to maintain (and less expensive to heat and cool). Young millennials and older baby boomers are also showing less and less interest in car ownership and a corresponding greater interest in public transit, walking and biking. And again, it’s likely that we’re all less interested in continuing to discuss “urban” and “suburban” as dueling polar opposites — and more interested in recognizing there’s mutual benefit to some overlap. The aforementioned changes point to the fact that a paradigmatic shift in our concept of the American dream is underway. And this shift is not just because of the recession, says Gregory Vilkin, managing principal and president of MacFarlane Partners, quoted in that USA Today piece, “It’s no longer the American dream to own a plot of land with a house on it and two cars in the driveway.” The country could be moving toward something much better, something that’s less about consumption (of stuff, of such essential resources) and more about quality of life. Neighborhood groups have perhaps never been so strong a force, joining together to create an array of community-building offerings that make shared space the place to be (rather than the place to enter the garage from). Groups like Western Massachusetts Alliance to Develop Power have been building a “community economy” to address problems of jobs, housing and energy; the ever-expanding Build a Better Block shows that citizens care about their neighborhoods enough to begin to improve them on their own. It seems every day there are hybrid fix-it shops/cafes (instead of tossing that coffee maker, have a neighbor repair it and join her for a cup when it’s working again), sharing programs that encourage collaboration over competition (everything from tools to office space, babysitting services to garden plots) — even cargo-bike sharing (the latter to facilitate car-free, short-distance errands like food shopping), and an infinite number of smartphone apps to facilitate everything from easier use of public transit (Routesy or NextBus are great examples) or the effortless swapping of kids’ clothes. For years now, people have been looking for an alternative, and the market — and the culture — is responding. A recent piece in Next American City demonstrates that even parts of notoriously sprawled-out states like Florida, Georgia and South Carolina are recognizing that investments in downtown cores will pay far more dividends than investments in their peripheries. Government can play an important role here, too: Since 2009, the Obama administration’s Partnership for Sustainable Communities has supported this shift, promoting more transportation choices, equitable and affordable housing, and efforts to make government work better. And yet … there are still those who are having none of it. And they are a vocal and often breathtakingly well-funded minority. For them, the sprawl that characterized the years leading up to the financial crisis remains a dream to strive for. Any threat to the McMansion of yore is equated to “feudal socialism” (I kid you not). And these opponents not only excel at mobilizing the troops but at mastering the message. Take a look at the rhetoric of, say, the Texas Republican party, which recently passed “Resist 21” in opposition to Agenda 21, the United Nations’ sustainable communities strategy adopted in 1992. Taken together, proclaims Resist 21, those strategies aspire to “the comprehensive control of all our population and its reduction to sustainable levels and the socialization of all activities by their relocation to highly restricted urban settlement centers.” Living better and smarter shouldn’t be a partisan issue, nor should attempts at facilitating it be equated with destroying “our fundamental rights and liberties as a people.” (Come on, Texas!) It is true that advocates for livable communities err in presenting their case with soulless terms like “smart growth” and “transit-oriented development” and, yes, “Agenda 21,” which is far from anyone’s idea of “home.” Those in favor of keeping things as they are, foreclosures and foreign oil be damned, go too far in demonizing good intent. As Jeremy Madsen, the executive director of the Greenbelt Alliance explained to me recently, “Everyone from environmentalists to the Tea Party deserves a voice. Even if over the next 30 years the majority of new communities consist of town homes and apartments near transit there will still be plenty of single-family homes available for those who want them.” The only difference? People who want another option will have a greater opportunity to live their own version of the American dream.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-the-square-foot--what-s-a-neighborhood-worth-.aspx?cid=BP:062012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The American Dream: Phase II
By ALLISON ARIEFF
Sprawl … It’s the American dream unfolding before your eyes.” That’s L. Brooks Patterson’s irresistible description of sprawl, proving yet again how masterful the stalwarts of the status quo are at messaging that which they hope to preserve in amber. In a speech to his constituents earlier this year, Patterson, the county executive of Oakland County, Mich., continued to wax poetic on the topic: “I love sprawl. I need it. I promote it. Oakland County can’t get enough of it. Are you getting the picture? Sprawl is not evil. In fact, it is good … [it] is new jobs, new hope and the fulfillment of lifelong dreams.” Patterson’s rousing stump speech for sprawl is emblematic of how we as a culture are far too invested in a vision of the American dream that doesn’t make sense in the 21st century. Over the past 30 years we’ve stripped away the supporting mechanisms of sprawl but have continued to create it. We’ve built more houses than we’ve needed — and built them farther away from jobs. This has led to longer commutes, which has created more traffic. In response, we built more highways, increasing fuel consumption and, as transportation planners acknowledge, doing little if anything to reduce traffic. It’s a vicious, seemingly endless cycle, and at its core is the notion that the American dream can exist only within the framework of the single-family home on a large lot. Indeed, we’ve become so fixated on this as the sole delivery mechanism of that American dream that we’ve spent a disproportionate amount of our collective energies (home-) improving it without considering meaningful alternative visions — or devoting at least a smidgen of attention to what’s outside the front door or down the block. Everything in our culture today reinforces this idea of home as castle (or fortress) rather than home as part of a larger whole (i.e., neighborhood). We need to find our way to the latter view, and part of that means finding a better way to talk about it. The good news is that more and more people are. It’s true that for years, homebuilders and home-sellers were touting Patterson’s sprawl-friendly sales pitch. If you were to walk into the sales center of any subdivision or master-planned community, from Modesto, Calif., to Tampa, Fla., the first question you’d be asked was, “How much square footage are you looking for?” Not “What kind of community would you like to be a part of?” But increasingly, many of those looking for places to live found that the market had nothing for them. Houses were too big, too isolated, too generic, too hard to maintain. Or they were designed for the quintessential nuclear family that exists more in our cultural imagination than in reality. Few homes offered options for aging in place, for returning college kids or elderly parents, or even decent home office space. Would-be residents lamented the lack of amenities like a café or a playground within walking distance in master-planned communities of 5,000, 10,000 or even 40,000 homes (!), an absence often explained away with “a community of this size couldn’t support it.” For years, I heard from builders and developers who said they knew there was a market for smaller, more sustainable properties — they just couldn’t get such projects to pencil out. Now, it seems those pencils have been sharpened. “The giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs” are doing an about-face, suddenly building smaller neighborhoods in and close to cities, noted an article in USA Today last month. The market slowdown, the article went on to explain, “has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.” In short, builders are recognizing that buyers (and renters, too!) value the neighborhood as much as — if not more than — the house. And what they want from that neighborhood might not be McMansions and four-car garages after all. Resale value may not in fact trump all else. Young and old, whether they’re in the city or the suburbs, want to walk to places like restaurants and shops. (And let’s stop talking about the integration of things like cafes, public transit and bike racks as “urbanizing” an area, which only reinforces the divide between two entities that are divided enough already.) People have begun to wake up to the fact that the more time spent in the car means poorer health and less time with their families — and they’re seeking shorter commutes. They’re interested in smaller homes that are easier to maintain (and less expensive to heat and cool). Young millennials and older baby boomers are also showing less and less interest in car ownership and a corresponding greater interest in public transit, walking and biking. And again, it’s likely that we’re all less interested in continuing to discuss “urban” and “suburban” as dueling polar opposites — and more interested in recognizing there’s mutual benefit to some overlap. The aforementioned changes point to the fact that a paradigmatic shift in our concept of the American dream is underway. And this shift is not just because of the recession, says Gregory Vilkin, managing principal and president of MacFarlane Partners, quoted in that USA Today piece, “It’s no longer the American dream to own a plot of land with a house on it and two cars in the driveway.” The country could be moving toward something much better, something that’s less about consumption (of stuff, of such essential resources) and more about quality of life. Neighborhood groups have perhaps never been so strong a force, joining together to create an array of community-building offerings that make shared space the place to be (rather than the place to enter the garage from). Groups like Western Massachusetts Alliance to Develop Power have been building a “community economy” to address problems of jobs, housing and energy; the ever-expanding Build a Better Block shows that citizens care about their neighborhoods enough to begin to improve them on their own. It seems every day there are hybrid fix-it shops/cafes (instead of tossing that coffee maker, have a neighbor repair it and join her for a cup when it’s working again), sharing programs that encourage collaboration over competition (everything from tools to office space, babysitting services to garden plots) — even cargo-bike sharing (the latter to facilitate car-free, short-distance errands like food shopping), and an infinite number of smartphone apps to facilitate everything from easier use of public transit (Routesy or NextBus are great examples) or the effortless swapping of kids’ clothes. For years now, people have been looking for an alternative, and the market — and the culture — is responding. A recent piece in Next American City demonstrates that even parts of notoriously sprawled-out states like Florida, Georgia and South Carolina are recognizing that investments in downtown cores will pay far more dividends than investments in their peripheries. Government can play an important role here, too: Since 2009, the Obama administration’s Partnership for Sustainable Communities has supported this shift, promoting more transportation choices, equitable and affordable housing, and efforts to make government work better. And yet … there are still those who are having none of it. And they are a vocal and often breathtakingly well-funded minority. For them, the sprawl that characterized the years leading up to the financial crisis remains a dream to strive for. Any threat to the McMansion of yore is equated to “feudal socialism” (I kid you not). And these opponents not only excel at mobilizing the troops but at mastering the message. Take a look at the rhetoric of, say, the Texas Republican party, which recently passed “Resist 21” in opposition to Agenda 21, the United Nations’ sustainable communities strategy adopted in 1992. Taken together, proclaims Resist 21, those strategies aspire to “the comprehensive control of all our population and its reduction to sustainable levels and the socialization of all activities by their relocation to highly restricted urban settlement centers.” Living better and smarter shouldn’t be a partisan issue, nor should attempts at facilitating it be equated with destroying “our fundamental rights and liberties as a people.” (Come on, Texas!) It is true that advocates for livable communities err in presenting their case with soulless terms like “smart growth” and “transit-oriented development” and, yes, “Agenda 21,” which is far from anyone’s idea of “home.” Those in favor of keeping things as they are, foreclosures and foreign oil be damned, go too far in demonizing good intent. As Jeremy Madsen, the executive director of the Greenbelt Alliance explained to me recently, “Everyone from environmentalists to the Tea Party deserves a voice. Even if over the next 30 years the majority of new communities consist of town homes and apartments near transit there will still be plenty of single-family homes available for those who want them.” The only difference? People who want another option will have a greater opportunity to live their own version of the American dream.
URL to original article: http://www.builderonline.com/builder-pulse/beyond-the-square-foot--what-s-a-neighborhood-worth-.aspx?cid=BP:062012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices' 3 key drivers
Source: BUSINESS INSIDER
Some argue that the U.S. housing market has bottomed already, and recent housing data suggests that national home prices are in the early stages of recovery. But housing is local, and price growth changes depend on the market. We drew on a new housing market report by Beata Caranci, Deputy Chief Economist at TD Bank Group who identified the three most important factors affecting home prices. 1. There is a strong connection between the pace of job growth and rising home prices North Dakota, Oklahoma, Utah, Texas and West Virginia are among the top 10 states that have seen home price growth over the past year and, also rank among the top 10 states for job growth. This connection is seen even at the macro levels with cities like Dallas and Phoenix seeing strong price and employment gains, while the opposite is true in cities like Las Vegas and Chicago. This also explains why we haven't seen improved housing affordability in some of the hardest hit states like California where prices are 47 percent off their peak translate into stronger housing demand. 2. States that have attracted foreign interest have seen home prices increase more than states that haven't International buyers accounted for only 8 percent of all home transactions in 2011, but foreign purchase activity is highly concentrated in key markets. "58% of foreign related purchases were in Florida, California, Arizona, and Texas. In fact, Florida alone accounted for 38% of the foreign purchases." Moreover, foreign demand is important right now because the credit conditions in the domestic market are constrained, and foreign purchasers pay 100 percent of their purchase in cash. Vacation spots like Florida and Arizona have a larger portion of their market driven by foreign demand. Canadians account for the largest source of foreign demand, especially in markets like Florida. There are concerns that the slowdown in Canada's housing market could translate into fewer purchases in the U.S.. And that a slowdown in Europe and China could also hurt foreign demand. 3. Supply of homes including foreclosures also heavily impact home prices The number of existing home sales have fallen significantly in the last year. The number of vacant homes for sale dropped across all four census regions show that inventories are tightening across the country. But this is only part of the story. Delinquent and foreclosed homes also need to be considered and Florida is ground zero for this, since 14.3 percent of ts mortgages are in foreclosure. But just because home prices have appreciated 4.7 percent over the past year doesn't mean Florida homes have defied supply and demand principles in economics. "What drives prices is not the absolute amount of foreclosures backlogged in a court system or review process. Rather, it is the rate at which they trickle onto the market and, thus, their share of total sales."
URL to original article: http://www.builderonline.com/builder-pulse/home-prices--3-key-drivers.aspx?cid=BP:062012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Some argue that the U.S. housing market has bottomed already, and recent housing data suggests that national home prices are in the early stages of recovery. But housing is local, and price growth changes depend on the market. We drew on a new housing market report by Beata Caranci, Deputy Chief Economist at TD Bank Group who identified the three most important factors affecting home prices. 1. There is a strong connection between the pace of job growth and rising home prices North Dakota, Oklahoma, Utah, Texas and West Virginia are among the top 10 states that have seen home price growth over the past year and, also rank among the top 10 states for job growth. This connection is seen even at the macro levels with cities like Dallas and Phoenix seeing strong price and employment gains, while the opposite is true in cities like Las Vegas and Chicago. This also explains why we haven't seen improved housing affordability in some of the hardest hit states like California where prices are 47 percent off their peak translate into stronger housing demand. 2. States that have attracted foreign interest have seen home prices increase more than states that haven't International buyers accounted for only 8 percent of all home transactions in 2011, but foreign purchase activity is highly concentrated in key markets. "58% of foreign related purchases were in Florida, California, Arizona, and Texas. In fact, Florida alone accounted for 38% of the foreign purchases." Moreover, foreign demand is important right now because the credit conditions in the domestic market are constrained, and foreign purchasers pay 100 percent of their purchase in cash. Vacation spots like Florida and Arizona have a larger portion of their market driven by foreign demand. Canadians account for the largest source of foreign demand, especially in markets like Florida. There are concerns that the slowdown in Canada's housing market could translate into fewer purchases in the U.S.. And that a slowdown in Europe and China could also hurt foreign demand. 3. Supply of homes including foreclosures also heavily impact home prices The number of existing home sales have fallen significantly in the last year. The number of vacant homes for sale dropped across all four census regions show that inventories are tightening across the country. But this is only part of the story. Delinquent and foreclosed homes also need to be considered and Florida is ground zero for this, since 14.3 percent of ts mortgages are in foreclosure. But just because home prices have appreciated 4.7 percent over the past year doesn't mean Florida homes have defied supply and demand principles in economics. "What drives prices is not the absolute amount of foreclosures backlogged in a court system or review process. Rather, it is the rate at which they trickle onto the market and, thus, their share of total sales."
URL to original article: http://www.builderonline.com/builder-pulse/home-prices--3-key-drivers.aspx?cid=BP:062012:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Got $2 million? You can survive the end of the world
Source: Housingwire
If you are looking for somewhere to hide when global warming finally destroys us all in a nuclear blast followed by anarchy, why not a $2 million condo? Well, it seems your chance has passed. These luxury disaster-proof, underground condos in rural Kansas are all sold out. The structure (shown at left), which is the brainchild of Larry Hall – a former software engineer, is being built from a hollowed out Atlas F missile silo, and includes such amenities as a pool, a movie theater, a classroom and minor surgery center. The 15-story building - dubbed "Survival Condos" - has six full-floor residences and one half-floor residence. The full-floor condos (shown below) have three bedrooms, two bathrooms, a kitchen, a dining room and a great room and go for $2 million. The half-floor condos go for $1 million, have one or two bedrooms, one bathroom, a kitchen and a great room. All of the condos feature state-of-the-art kitchen appliances, granite or custom concrete counters, Jacuzzi tubs in the master bath and a list of other amenities that would be attractive in any condo – much less one with 2.5 to 9 foot thick walls that will protect against nuclear war and shockwaves traveling up to 2,000mph. So why the protection? "Because of all of the perceived threats in the world, everything from global food shortages to civil unrest to economic uncertainty," said Hall. This isn't a new idea – a company called Vivos is selling underground survival shelters priced from $25,000 per person – but it is a whole new level of luxury. And unlike Vivos, which you have to apply for and are selected for membership based on the contributions you are able to offer to the survival of the community, with these condos you just have to be able to fork out $2 million. But, Hall said he's not really worried about their ability to survive. "In a perfect world, you get a good mix of people with different skill sets and that's what we were hoping for. It looks like we are going to get that with the final mix of people," he said. And if that fails, the bunker comes equipped with enough food to feed 70 people for quite a while, state of the art water filtration systems and a psychologist-approved layout to prevent people from going stir crazy. Hall said he consulted psychologists on everything from ceiling height, the quality of lighting and the square footage per person. They are the reason, for instance, that the condos come with fake windows that show you lovely pictures of the outside that adjust the lighting depending on the time of day. Hall said the condos will be ready by the end of October, and are now about two-thirds done. And while they will be live-in ready, Hall said he doesn't know of anyone using it as their primary residence. Most are using it as a vacation home. I hope they enjoy those vacations, because if the world ends, they'll be vacationing down there for quite a while.
URL to original article: http://www.housingwire.com/rewired/got-2-million-you-can-survive-end-world
For further information on Fresno Real Estate check: http://www.londonproperties.com
If you are looking for somewhere to hide when global warming finally destroys us all in a nuclear blast followed by anarchy, why not a $2 million condo? Well, it seems your chance has passed. These luxury disaster-proof, underground condos in rural Kansas are all sold out. The structure (shown at left), which is the brainchild of Larry Hall – a former software engineer, is being built from a hollowed out Atlas F missile silo, and includes such amenities as a pool, a movie theater, a classroom and minor surgery center. The 15-story building - dubbed "Survival Condos" - has six full-floor residences and one half-floor residence. The full-floor condos (shown below) have three bedrooms, two bathrooms, a kitchen, a dining room and a great room and go for $2 million. The half-floor condos go for $1 million, have one or two bedrooms, one bathroom, a kitchen and a great room. All of the condos feature state-of-the-art kitchen appliances, granite or custom concrete counters, Jacuzzi tubs in the master bath and a list of other amenities that would be attractive in any condo – much less one with 2.5 to 9 foot thick walls that will protect against nuclear war and shockwaves traveling up to 2,000mph. So why the protection? "Because of all of the perceived threats in the world, everything from global food shortages to civil unrest to economic uncertainty," said Hall. This isn't a new idea – a company called Vivos is selling underground survival shelters priced from $25,000 per person – but it is a whole new level of luxury. And unlike Vivos, which you have to apply for and are selected for membership based on the contributions you are able to offer to the survival of the community, with these condos you just have to be able to fork out $2 million. But, Hall said he's not really worried about their ability to survive. "In a perfect world, you get a good mix of people with different skill sets and that's what we were hoping for. It looks like we are going to get that with the final mix of people," he said. And if that fails, the bunker comes equipped with enough food to feed 70 people for quite a while, state of the art water filtration systems and a psychologist-approved layout to prevent people from going stir crazy. Hall said he consulted psychologists on everything from ceiling height, the quality of lighting and the square footage per person. They are the reason, for instance, that the condos come with fake windows that show you lovely pictures of the outside that adjust the lighting depending on the time of day. Hall said the condos will be ready by the end of October, and are now about two-thirds done. And while they will be live-in ready, Hall said he doesn't know of anyone using it as their primary residence. Most are using it as a vacation home. I hope they enjoy those vacations, because if the world ends, they'll be vacationing down there for quite a while.
URL to original article: http://www.housingwire.com/rewired/got-2-million-you-can-survive-end-world
For further information on Fresno Real Estate check: http://www.londonproperties.com
Why rates stay so low
Source: MarketWatch
By Amy Hoak, MarketWatch CHICAGO
(MarketWatch)—Glimmers of hope in the housing market suggest a turnaround is near, with statistics showing stabilizing home prices and an increasing number of home sales. Yet even as housing conditions improve, mortgage interest rates remain near record-low levels. Rates on a 30-year fixed-rate mortgage averaged 3.71% for the week ending June 14, according to Freddie Mac’s weekly survey of conforming rates. Before that week, rates had broken record lows for six weeks in a row. It’s a situation that seems to defy supply-and-demand logic: If there’s more demand in the housing market, wouldn’t the cost of borrowing funds to buy a home be on the rise? Not necessarily. Mortgage rates are influenced by a number of factors, including policy decisions from the U.S. Federal Reserve and the overall economic picture both in the U.S. and abroad. The Fed has kept long-term interest rates low, in part through its Operation Twist program, scheduled to end this month, said Frank Nothaft, chief economist at Freddie Mac. Operation Twist involves the Fed buying long-term securities and selling short-term debt. There has been chatter among members of the Federal Open Market Committee about the possibility of extending the program or taking other steps to keep long-term interest rates low, Nothaft said. The uncertainty in Europe—including continuing worry about whether the euro zone will remain integrated and new concerns about Spain’s economy—also is affecting rates. Out of fear, more investors are moving their money to safe havens, pushing yields on investments such as 10-year Treasury notes downward. The secondary mortgage market uses yields on the 10-year Treasury as a barometer of how to set 30-year fixed-rate interest rates, said Matt Vernon, a mortgage executive at Bank of America Home Loans. Right now, there’s “rampant uncertainty” about how the story in Europe will play out, so investors are playing it safe, said Michael Fratantoni, the Mortgage Bankers Association’s vice president of research and economics. The descent of fixed-rate mortgage rates has gone beyond most people’s expectations, however. “Rates have come down far, far more than I would have thought at the beginning of this year,” Nothaft said. While improvements in the U.S. economy can influence mortgage rates, there simply hasn’t been enough good news domestically to drive mortgage rates higher. “Some of the major housing metrics are better than a year ago,” Nothaft said, including housing starts—the number of new homes on which builders broke ground—and home sales. But they’re still anemic. Prices seem to have stopped their downward spiral, but homes aren’t appreciating at rates that are normal by historical standards, added Alex Villacorta, director of research and analytics at Clear Capital, a provider of data for real-estate asset valuation. Clear Capital recently reported that national home prices were up only 0.1% in the second quarter, from the year-early period. That’s far from the 3% to 4% appreciation expected in a healthy market. “National home prices are up, and that’s the first time that’s happened in some time,” Villacorta said. “This is a necessary first step to this recovery,” he added. A recent report from Harvard University’s Joint Center for Housing Studies suggests the housing recovery is still in its early stages and faces obstacles, including foreclosure inventory yet to hit the market and the drop in median household incomes. Read more: Housing market rebounding, but slowly. Given all the factors, the Mortgage Bankers Association expects the 30-year fixed-rate mortgage to end the year at an average 4.2%. That’s higher than current rates, but still relatively low. Freddie Mac’s most recent projection also pegs the 30-year fixed-rate mortgage at 4.2% by year-end. For borrowers, that means low mortgage rates aren’t expected to go away anytime soon. And that’s a good thing since many would-be buyers continue to have jitters about making a purchase, said Ron Chicaferro, a mortgage-industry consultant in Scottsdale, Ariz. Often, worries about job stability are preventing people who otherwise could buy a home from making a purchase. “The desire is there,” he said, “but the fear prevents the move.” Those interested in refinancing, however, should be aware that rates are near their lowest points on record, and are expected to eventually start creeping up. So if it makes sense to do a refinance at the current rates, and you can qualify for the loan, it’s a good idea to take action sooner rather than later.
URL to original article: http://www.builderonline.com/builder-pulse/why-rates-stay-so-low.aspx?cid=BP:061912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Amy Hoak, MarketWatch CHICAGO
(MarketWatch)—Glimmers of hope in the housing market suggest a turnaround is near, with statistics showing stabilizing home prices and an increasing number of home sales. Yet even as housing conditions improve, mortgage interest rates remain near record-low levels. Rates on a 30-year fixed-rate mortgage averaged 3.71% for the week ending June 14, according to Freddie Mac’s weekly survey of conforming rates. Before that week, rates had broken record lows for six weeks in a row. It’s a situation that seems to defy supply-and-demand logic: If there’s more demand in the housing market, wouldn’t the cost of borrowing funds to buy a home be on the rise? Not necessarily. Mortgage rates are influenced by a number of factors, including policy decisions from the U.S. Federal Reserve and the overall economic picture both in the U.S. and abroad. The Fed has kept long-term interest rates low, in part through its Operation Twist program, scheduled to end this month, said Frank Nothaft, chief economist at Freddie Mac. Operation Twist involves the Fed buying long-term securities and selling short-term debt. There has been chatter among members of the Federal Open Market Committee about the possibility of extending the program or taking other steps to keep long-term interest rates low, Nothaft said. The uncertainty in Europe—including continuing worry about whether the euro zone will remain integrated and new concerns about Spain’s economy—also is affecting rates. Out of fear, more investors are moving their money to safe havens, pushing yields on investments such as 10-year Treasury notes downward. The secondary mortgage market uses yields on the 10-year Treasury as a barometer of how to set 30-year fixed-rate interest rates, said Matt Vernon, a mortgage executive at Bank of America Home Loans. Right now, there’s “rampant uncertainty” about how the story in Europe will play out, so investors are playing it safe, said Michael Fratantoni, the Mortgage Bankers Association’s vice president of research and economics. The descent of fixed-rate mortgage rates has gone beyond most people’s expectations, however. “Rates have come down far, far more than I would have thought at the beginning of this year,” Nothaft said. While improvements in the U.S. economy can influence mortgage rates, there simply hasn’t been enough good news domestically to drive mortgage rates higher. “Some of the major housing metrics are better than a year ago,” Nothaft said, including housing starts—the number of new homes on which builders broke ground—and home sales. But they’re still anemic. Prices seem to have stopped their downward spiral, but homes aren’t appreciating at rates that are normal by historical standards, added Alex Villacorta, director of research and analytics at Clear Capital, a provider of data for real-estate asset valuation. Clear Capital recently reported that national home prices were up only 0.1% in the second quarter, from the year-early period. That’s far from the 3% to 4% appreciation expected in a healthy market. “National home prices are up, and that’s the first time that’s happened in some time,” Villacorta said. “This is a necessary first step to this recovery,” he added. A recent report from Harvard University’s Joint Center for Housing Studies suggests the housing recovery is still in its early stages and faces obstacles, including foreclosure inventory yet to hit the market and the drop in median household incomes. Read more: Housing market rebounding, but slowly. Given all the factors, the Mortgage Bankers Association expects the 30-year fixed-rate mortgage to end the year at an average 4.2%. That’s higher than current rates, but still relatively low. Freddie Mac’s most recent projection also pegs the 30-year fixed-rate mortgage at 4.2% by year-end. For borrowers, that means low mortgage rates aren’t expected to go away anytime soon. And that’s a good thing since many would-be buyers continue to have jitters about making a purchase, said Ron Chicaferro, a mortgage-industry consultant in Scottsdale, Ariz. Often, worries about job stability are preventing people who otherwise could buy a home from making a purchase. “The desire is there,” he said, “but the fear prevents the move.” Those interested in refinancing, however, should be aware that rates are near their lowest points on record, and are expected to eventually start creeping up. So if it makes sense to do a refinance at the current rates, and you can qualify for the loan, it’s a good idea to take action sooner rather than later.
URL to original article: http://www.builderonline.com/builder-pulse/why-rates-stay-so-low.aspx?cid=BP:061912:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, June 18, 2012
California Housing Market Continues to Post Strong Gains in May, Home Sales Rise to Highest Level in More Than Three Years, Low Inventory a Critical Issue, C.A.R. Reports
Source: Business Wire
LOS ANGELES--(BUSINESS WIRE)--California’s housing market continued to improve in May, with home prices posting solid gains for the third straight month and home sales well above last year’s pace, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. “California home sales were strong in May, continuing the gradual recovery of the California housing market,” said C.A.R. President LeFrancis Arnold. “First-time buyers are recognizing that the housing market has hit bottom and are now seeing a sense of urgency to take advantage of ultra-low interest rates and advantageous home prices. Additionally, trade-up buyers are returning to the market after sitting it out for the past few years to get in on favorable home prices.” Closed escrow sales of existing, single-family detached homes in California climbed 3.4 percent from April’s revised 553,670 to a seasonally adjusted annualized rate of 572,260 in May, according to information collected by C.A.R. from more than 90 local REALTOR®associations and MLSs statewide. May sales surged 21.5 percent from May 2011’s revised 470,910 pace, marking the highest year-over-year sales increase since May 2009. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the May pace throughout the year and is adjusted to account for seasonal factors that typically influence home sales. The May 2012 sales pace was the highest since February 2009, when 598,770 homes were sold at a seasonally adjusted annualized rate. Home prices appear to be stabilizing, with the median home price posting both month-over-month and year-over-year gains for the third consecutive month. The statewide median price of an existing, single-family detached home was $312,110 in May, the highest since September 2010. May’s price was up 1 percent from a revised $309,050 in April and 6.6 percent from a revised $292,850 recorded in May 2011. The May 2012 figure was 27.3 percent higher than the cyclical bottom of $245,230 reached in February 2009. The median price has posted above the $300,000 level for the second straight month after remaining below that mark for 15 months. The increase in the median price can be attributed to the strong sales increase in the higher-priced coastal regions, particularly in the San Francisco Bay Area, where job growth is strong and the economy is growing faster than other areas of the state. California’s housing inventory sank lower in May, with the Unsold Inventory Index for existing, single-family detached homes dropping to 3.5 months in May, down from 4.2 months in April. May’s housing inventory was down from a revised 5.7 months in May 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal. “Low housing inventory continues to be the critical issue in the California market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Inventory levels have not been this low since December 2005, when the supply matched the current level. The Bay Area has the greatest shortage of homes for sale, with inventory levels in the two- to three-month range for Santa Clara, San Mateo, Alameda, and Contra Costa counties.” Interest rates continued their downward trend in May, with 30-year fixed-mortgage interest rates averaging 3.80 percent, down from 3.91 percent in April and 4.64 percent in May 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.74 percent in May, down from 2.78 in April and 3.13 percent in May 2011. Homes are moving faster on the market with the median number of days it takes to sell a single-family home dropping to 46.6 days in May, down from a revised 48.9 days in April and 52.0 days in May 2011. •View Unsold Inventory by price range. Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS®throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. Due to the low sales volume in some areas, median price changes in December may exhibit unusual fluctuation. Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
URL to original article: http://www.businesswire.com/news/home/20120615005106/en
For further information on Fresno Real Estate check: http://www.londonproperties.com
LOS ANGELES--(BUSINESS WIRE)--California’s housing market continued to improve in May, with home prices posting solid gains for the third straight month and home sales well above last year’s pace, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. “California home sales were strong in May, continuing the gradual recovery of the California housing market,” said C.A.R. President LeFrancis Arnold. “First-time buyers are recognizing that the housing market has hit bottom and are now seeing a sense of urgency to take advantage of ultra-low interest rates and advantageous home prices. Additionally, trade-up buyers are returning to the market after sitting it out for the past few years to get in on favorable home prices.” Closed escrow sales of existing, single-family detached homes in California climbed 3.4 percent from April’s revised 553,670 to a seasonally adjusted annualized rate of 572,260 in May, according to information collected by C.A.R. from more than 90 local REALTOR®associations and MLSs statewide. May sales surged 21.5 percent from May 2011’s revised 470,910 pace, marking the highest year-over-year sales increase since May 2009. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the May pace throughout the year and is adjusted to account for seasonal factors that typically influence home sales. The May 2012 sales pace was the highest since February 2009, when 598,770 homes were sold at a seasonally adjusted annualized rate. Home prices appear to be stabilizing, with the median home price posting both month-over-month and year-over-year gains for the third consecutive month. The statewide median price of an existing, single-family detached home was $312,110 in May, the highest since September 2010. May’s price was up 1 percent from a revised $309,050 in April and 6.6 percent from a revised $292,850 recorded in May 2011. The May 2012 figure was 27.3 percent higher than the cyclical bottom of $245,230 reached in February 2009. The median price has posted above the $300,000 level for the second straight month after remaining below that mark for 15 months. The increase in the median price can be attributed to the strong sales increase in the higher-priced coastal regions, particularly in the San Francisco Bay Area, where job growth is strong and the economy is growing faster than other areas of the state. California’s housing inventory sank lower in May, with the Unsold Inventory Index for existing, single-family detached homes dropping to 3.5 months in May, down from 4.2 months in April. May’s housing inventory was down from a revised 5.7 months in May 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal. “Low housing inventory continues to be the critical issue in the California market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Inventory levels have not been this low since December 2005, when the supply matched the current level. The Bay Area has the greatest shortage of homes for sale, with inventory levels in the two- to three-month range for Santa Clara, San Mateo, Alameda, and Contra Costa counties.” Interest rates continued their downward trend in May, with 30-year fixed-mortgage interest rates averaging 3.80 percent, down from 3.91 percent in April and 4.64 percent in May 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.74 percent in May, down from 2.78 in April and 3.13 percent in May 2011. Homes are moving faster on the market with the median number of days it takes to sell a single-family home dropping to 46.6 days in May, down from a revised 48.9 days in April and 52.0 days in May 2011. •View Unsold Inventory by price range. Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS®throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. Due to the low sales volume in some areas, median price changes in December may exhibit unusual fluctuation. Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
URL to original article: http://www.businesswire.com/news/home/20120615005106/en
For further information on Fresno Real Estate check: http://www.londonproperties.com
A different housing bubble but the same housing trouble
Source: New York Times
Bloomberg View’s excellent economic history blog tells of an earlier housing bubble, from the same country and era that brought us tulip-mania. This bubble concerned 17th-century Dutch dollhouses, which were both sentimentally and financially a precursor to the recent American housing bust: [The dollhouses] were exact replicas, miniature rooms furnished with fine Dutch craftsmanship — tiny silver platters in the kitchen, inlaid walnut sideboards in the hall. … The dollhouses were “not playthings but miniature memorials, records of dearly beloved objects,” according to Witold Rybczynski, author of “Home: A Short History of an Idea.” He believes the bourgeois Dutch invented the very idea of “home.” They brought “together the meaning of house and of household, of dwelling and of refuge, of ownership and of affection,” he wrote. “You could walk out of the house, but you always returned home.” … [The dollhouses] were also investments in themselves. They were commissioned and sold at auction, in the same way as oil paintings and other luxury crafts. Collectors tracked their worth as investments in account books. They were listed as assets in dowries. One collector charged admission to visitors. A dollhouse owned by an Amsterdam merchant’s wife named Petronella Oortman, which is displayed at the Rijksmuseum, was worth almost the price of an actual canal house. I wonder: Can dollhouses be foreclosed upon?
URL to original article: http://www.builderonline.com/builder-pulse/a-different-housing-bubble-but-the-same-housing-trouble.aspx?cid=BP:061812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Bloomberg View’s excellent economic history blog tells of an earlier housing bubble, from the same country and era that brought us tulip-mania. This bubble concerned 17th-century Dutch dollhouses, which were both sentimentally and financially a precursor to the recent American housing bust: [The dollhouses] were exact replicas, miniature rooms furnished with fine Dutch craftsmanship — tiny silver platters in the kitchen, inlaid walnut sideboards in the hall. … The dollhouses were “not playthings but miniature memorials, records of dearly beloved objects,” according to Witold Rybczynski, author of “Home: A Short History of an Idea.” He believes the bourgeois Dutch invented the very idea of “home.” They brought “together the meaning of house and of household, of dwelling and of refuge, of ownership and of affection,” he wrote. “You could walk out of the house, but you always returned home.” … [The dollhouses] were also investments in themselves. They were commissioned and sold at auction, in the same way as oil paintings and other luxury crafts. Collectors tracked their worth as investments in account books. They were listed as assets in dowries. One collector charged admission to visitors. A dollhouse owned by an Amsterdam merchant’s wife named Petronella Oortman, which is displayed at the Rijksmuseum, was worth almost the price of an actual canal house. I wonder: Can dollhouses be foreclosed upon?
URL to original article: http://www.builderonline.com/builder-pulse/a-different-housing-bubble-but-the-same-housing-trouble.aspx?cid=BP:061812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Overpriced 'setup' houses are used to sell other nearby homes
Source: Los Angeles Times
WASHINGTON — In the real estate brokerage field they're often known as "setups" or "pinball" homes, and this spring's improving conditions in some markets could be stimulating more of them. A setup or pinball property is a house listed with an unrealistically high asking price that pulls in lots of visits by agents and shoppers, but no offers. The problem is this: Real estate agents, including even the listing agent, are using the overpriced house as a negative example to sell similar homes in the area that carry lower asking prices. "It's like a pinball machine," said Debbie Cook, an agent with Long & Foster Real Estate in Silver Spring, Md. The "setup" is the foil — the house that agents show clients to make other, more realistically priced listings look better. Maybe the sellers — encouraged by reports of rising sales and low mortgage rates — insisted on the aggressive asking price and wouldn't list for anything less. Or maybe the sellers' agent, not wanting to lose the listing, didn't fully brief them about what the house could command in today's conditions. Whatever the specifics, such houses tend to see heavy foot traffic but go nowhere until the sellers drop the asking prices, usually by significant amounts. Before then, however, they may be used without the sellers' knowledge to market other houses. Since no one seriously expects them to sell at their original asking price, agents are happy to exploit the overpricing to facilitate other sales. "We're definitely seeing it," said Sandy Nichols Acevedo, an agent at Prudential California Realty in Oxnard. "Some people think they can go higher now because the market seems to be doing better." Joe Manausa, owner-broker at Century 21 First Realty in Tallahassee, Fla., who wrote about the phenomenon on Active Rain, a Seattle-based industry blog with more than 220,000 members, offers this hypothetical example: "If two very similar homes are near each other, with one priced at $250,000, and the other at $280,000, the higher-priced home is often shown first. Then the real estate agent says, 'If you like this home at $280,000, you are going to love the home down the street at $250,000!'" Bill Gillhespy, an agent in Fort Myers Beach, Fla., has a real-life example: He has a listing on the 14th floor of a luxury condominium project overlooking the Gulf of Mexico. The asking price is $450,000. There's a unit on the same floor with similar views, similar square footage and layout, but with a more updated decor, that is listed for nearly $150,000 more. When Gillhespy is asked by another agent or a prospective buyer to see his unit, he often says, "Let me first show you a unit just down the hall. It's one of the nicest in the entire building." The higher-priced model shows well, but shoppers immediately remark on the $150,000 difference "and they can't see how it's justified." Perrin Cornell, a broker at Century 21 Exclusively in Wenatchee, Wash., says some sellers in the mid-to-upper price brackets in his area "are exuberant" that we're finally out of the recession and are tempted to disregard agents' more sobering recommendations on pricing. What happens to such listings? "Unless we're using it for a setup," Cornell said, "we stop showing it" until the seller agrees to lower the price to a sensible number. But as a matter of principle and ethics, should realty agents accept listings from homeowners who refuse to listen to reason? Manausa is adamant that they should not. "If you list a property at a price you know will not sell," he said, "you are misleading the seller. Effectively you are saying, 'I don't think it will sell, but I'll put my name on anything hoping to get paid." Acevedo agrees that agents have a fiduciary duty to educate even the most headstrong owners about sobering market realities, but has a compromise solution: Take the listing but require the seller to sign a contractual agreement requiring an automatic price reduction to a specified level if the house doesn't sell in the first two to three weeks. Bottom line here for owners thinking about selling in modestly improving markets: Get as much information as you can about sale prices of comparable houses in your area. Talk to multiple realty agents before listing. Sure, you can try pushing a little on price, but if you go overboard, you risk becoming the unwitting setup, the pinball, the out-of-touch competition everybody else loves to visit.
URL to original article: http://www.builderonline.com/builder-pulse/overpriced--setup--houses-are-used-to-sell-other-nearby-homes.aspx?cid=BP:061812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
WASHINGTON — In the real estate brokerage field they're often known as "setups" or "pinball" homes, and this spring's improving conditions in some markets could be stimulating more of them. A setup or pinball property is a house listed with an unrealistically high asking price that pulls in lots of visits by agents and shoppers, but no offers. The problem is this: Real estate agents, including even the listing agent, are using the overpriced house as a negative example to sell similar homes in the area that carry lower asking prices. "It's like a pinball machine," said Debbie Cook, an agent with Long & Foster Real Estate in Silver Spring, Md. The "setup" is the foil — the house that agents show clients to make other, more realistically priced listings look better. Maybe the sellers — encouraged by reports of rising sales and low mortgage rates — insisted on the aggressive asking price and wouldn't list for anything less. Or maybe the sellers' agent, not wanting to lose the listing, didn't fully brief them about what the house could command in today's conditions. Whatever the specifics, such houses tend to see heavy foot traffic but go nowhere until the sellers drop the asking prices, usually by significant amounts. Before then, however, they may be used without the sellers' knowledge to market other houses. Since no one seriously expects them to sell at their original asking price, agents are happy to exploit the overpricing to facilitate other sales. "We're definitely seeing it," said Sandy Nichols Acevedo, an agent at Prudential California Realty in Oxnard. "Some people think they can go higher now because the market seems to be doing better." Joe Manausa, owner-broker at Century 21 First Realty in Tallahassee, Fla., who wrote about the phenomenon on Active Rain, a Seattle-based industry blog with more than 220,000 members, offers this hypothetical example: "If two very similar homes are near each other, with one priced at $250,000, and the other at $280,000, the higher-priced home is often shown first. Then the real estate agent says, 'If you like this home at $280,000, you are going to love the home down the street at $250,000!'" Bill Gillhespy, an agent in Fort Myers Beach, Fla., has a real-life example: He has a listing on the 14th floor of a luxury condominium project overlooking the Gulf of Mexico. The asking price is $450,000. There's a unit on the same floor with similar views, similar square footage and layout, but with a more updated decor, that is listed for nearly $150,000 more. When Gillhespy is asked by another agent or a prospective buyer to see his unit, he often says, "Let me first show you a unit just down the hall. It's one of the nicest in the entire building." The higher-priced model shows well, but shoppers immediately remark on the $150,000 difference "and they can't see how it's justified." Perrin Cornell, a broker at Century 21 Exclusively in Wenatchee, Wash., says some sellers in the mid-to-upper price brackets in his area "are exuberant" that we're finally out of the recession and are tempted to disregard agents' more sobering recommendations on pricing. What happens to such listings? "Unless we're using it for a setup," Cornell said, "we stop showing it" until the seller agrees to lower the price to a sensible number. But as a matter of principle and ethics, should realty agents accept listings from homeowners who refuse to listen to reason? Manausa is adamant that they should not. "If you list a property at a price you know will not sell," he said, "you are misleading the seller. Effectively you are saying, 'I don't think it will sell, but I'll put my name on anything hoping to get paid." Acevedo agrees that agents have a fiduciary duty to educate even the most headstrong owners about sobering market realities, but has a compromise solution: Take the listing but require the seller to sign a contractual agreement requiring an automatic price reduction to a specified level if the house doesn't sell in the first two to three weeks. Bottom line here for owners thinking about selling in modestly improving markets: Get as much information as you can about sale prices of comparable houses in your area. Talk to multiple realty agents before listing. Sure, you can try pushing a little on price, but if you go overboard, you risk becoming the unwitting setup, the pinball, the out-of-touch competition everybody else loves to visit.
URL to original article: http://www.builderonline.com/builder-pulse/overpriced--setup--houses-are-used-to-sell-other-nearby-homes.aspx?cid=BP:061812:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, June 15, 2012
Bottom dollars set bets that housing's due for a rise
Source: Bloomberg
Investors are accepting the lowest yields since the real estate boom peaked in 2005 on the debt of U.S. homebuilders relative to the rest of the junk-bond market as evidence mounts that housing is on the rebound. Homebuilder yields have fallen 1.1 percentage points below the average for U.S. speculative-grade notes, the biggest gap since September 2005, after the housing bust pushed them above the average. Debt of Hovnanian Enterprises Inc. (HOV) to Los Angeles- based KB Home (KBH) has returned 11 percent this year, the highest for the period since 2009 and more than double the 5 percent gain for junk overall, Bank of America Merrill Lynch index data show. The housing market is stabilizing, bolstering the balance sheets of those builders that survived the worst financial crisis since the Great Depression, even as the world’s biggest economy shows signs of weakness. Home prices advanced 1.1 percent in April from a year earlier, according to data provider CoreLogic Inc., while purchases of new homes rose to an almost two-year high as record-low mortgage rates lure buyers. “After a couple of challenging years, people feel that the worst is over,” said Sabur Moini, who manages about $2.5 billion of high-yield assets at Los Angeles-based Payden & Rygel. Moini, who owns bonds of KB Home and Lennar Corp. (LEN), said in a telephone interview that housing prices have probably “bottomed out.” ‘More Confidence’ Credit-default swaps on the 10 biggest homebuilders climbed 15 percent since the end of April to 348.6 basis points, according to data compiled by Bloomberg. That’s half the 32 percent increase in the cost of protection on the benchmark Markit CDX North America Investment Grade Index, which rose as U.S. employers added the smallest number of jobs in a year in May. “People have gained some more confidence in the fundamentals,” said Jennifer Machan, a senior high-yield analyst in Des Moines, Iowa, at Principal Global Investors, which manages $258 billion. “Home prices are starting to show some stabilization.” Homebuilder bonds yielded 1.135 percentage points less than speculative-grade debt on June 8, the least since Sept. 29, 2005, Bank of America Merrill Lynch Index data show. Over the past seven years, yields in the U.S. junk market were 0.8 percentage points less than the homebuilder index on average. Default Swaps Elsewhere in credit markets, the cost of protecting corporate bonds from default in the U.S. fell, with the Markit CDX North America Investment Grade Index, which investors use to hedge against losses or to speculate on creditworthiness, declining by 1.6 basis points to a mid-price of 123.3 basis points as of 11:51 a.m. in New York, according to prices compiled by Bloomberg. The index typically falls as investor confidence improves and rises as it deteriorates. Credit-default swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt. The U.S. two-year interest-rate swap spread, a measure of bond market stress, rose 0.41 basis point to 30.85 basis points as of 11:52 a.m. in New York. The gauge widens when investors seek the perceived safety of government securities and narrows when they favor assets such as corporate bonds. Bonds of General Electric Co. (GE) are the most actively traded dollar-denominated corporate securities by dealers today, with 42 trades of $1 million or more as of 11:51 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Home Prices Home price declines are easing. Values in 20 U.S. cities fell 2.6 percent in the 12 months through March, the slowest pace in more than a year, according to the S&P/Case-Shiller index. Prices will likely rise 1.4 percent next year, 3.7 percent in 2014 and 4.4 percent in 2015, JPMorgan analysts led by John Sim wrote in a June 12 report. “There’s less of a fear of another major drop,” Martha Ucko, an analyst at CreditSights Inc., said in a telephone interview. “The builders prepped their balance sheets and their businesses to survive at these levels.” Purchases of new homes in the U.S. rose 3.3 percent in April from the previous month to an annual pace of 343,000, the Commerce Department said May 23. Homeowners are benefiting from falling borrowing costs. The average 30-year U.S. mortgage rate dropped to 3.67 percent in the week ended June 7, down from 5.05 percent in February 2011, and the lowest since McLean, Virginia- based Freddie Mac began records in 1971. An index of housing affordability is at the highest level in data going back to 1986, according to the National Association of Realtors. The gauge, which is updated every quarter, climbed to 205.9 at the end of March. Recovery Stage “People are a bit more confident about purchasing homes,” said Bob Curran, a New York-based analyst at Fitch Ratings. “You need a catalyst and there’s been pent-up demand as people had deferred on buying homes.” Hovnanian earned $1.8 million in the three months ended April 30, after losing money for the previous eight quarters, Bloomberg data show. The Red Bank, New Jersey-based company’s $797 million of 10.625 percent notes due October 2016 climbed to 90.5 cents for a yield of 13.6 percent on June 12 from 80 cents and 16.9 percent at the end of last year, Trace data show. “We’re encouraged that the homebuilding industry may be entering the early stages of recovery,” Larry Sorsby, Hovnanian’s chief financial officer, said yesterday at a conference organized by Deutsche Bank AG. Toll Brothers At Toll Brothers Inc. (TOL), orders climbed to 1,290 homes in the first quarter from 879 a year earlier. Hovnanian’s net contracts for its fiscal second quarter jumped to 1,775 homes from 1,166 a year earlier. Yields on some homebuilders’ junk-rated debt are at or approaching levels of investment-grade companies. The debt of Toll Brothers, based in Horsham, Pennsylvania, yields 4.05 percent on average, better than the 4.12 percent for BBB rated companies, Bank of America Merrill Lynch index data show. The yield on Fort Worth, Texas-based DR Horton Inc.’s bonds averages 4.16 percent, while that of Ryland Group Inc., based in Westlake Village, California, is 4.74 percent. Lack of issuance by the companies is partly responsible for the low yields, according to Principal’s Machan. “Anything available to buy has been getting grabbed in a hurry,” said Machan, who doesn’t own any homebuilder bonds. “People don’t want to be short the sector anymore.”
URL to original article: http://www.builderonline.com/builder-pulse/bottom-dollars-set-bets-that-housing-s-due-for-a-rise.aspx?cid=BP:061512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Investors are accepting the lowest yields since the real estate boom peaked in 2005 on the debt of U.S. homebuilders relative to the rest of the junk-bond market as evidence mounts that housing is on the rebound. Homebuilder yields have fallen 1.1 percentage points below the average for U.S. speculative-grade notes, the biggest gap since September 2005, after the housing bust pushed them above the average. Debt of Hovnanian Enterprises Inc. (HOV) to Los Angeles- based KB Home (KBH) has returned 11 percent this year, the highest for the period since 2009 and more than double the 5 percent gain for junk overall, Bank of America Merrill Lynch index data show. The housing market is stabilizing, bolstering the balance sheets of those builders that survived the worst financial crisis since the Great Depression, even as the world’s biggest economy shows signs of weakness. Home prices advanced 1.1 percent in April from a year earlier, according to data provider CoreLogic Inc., while purchases of new homes rose to an almost two-year high as record-low mortgage rates lure buyers. “After a couple of challenging years, people feel that the worst is over,” said Sabur Moini, who manages about $2.5 billion of high-yield assets at Los Angeles-based Payden & Rygel. Moini, who owns bonds of KB Home and Lennar Corp. (LEN), said in a telephone interview that housing prices have probably “bottomed out.” ‘More Confidence’ Credit-default swaps on the 10 biggest homebuilders climbed 15 percent since the end of April to 348.6 basis points, according to data compiled by Bloomberg. That’s half the 32 percent increase in the cost of protection on the benchmark Markit CDX North America Investment Grade Index, which rose as U.S. employers added the smallest number of jobs in a year in May. “People have gained some more confidence in the fundamentals,” said Jennifer Machan, a senior high-yield analyst in Des Moines, Iowa, at Principal Global Investors, which manages $258 billion. “Home prices are starting to show some stabilization.” Homebuilder bonds yielded 1.135 percentage points less than speculative-grade debt on June 8, the least since Sept. 29, 2005, Bank of America Merrill Lynch Index data show. Over the past seven years, yields in the U.S. junk market were 0.8 percentage points less than the homebuilder index on average. Default Swaps Elsewhere in credit markets, the cost of protecting corporate bonds from default in the U.S. fell, with the Markit CDX North America Investment Grade Index, which investors use to hedge against losses or to speculate on creditworthiness, declining by 1.6 basis points to a mid-price of 123.3 basis points as of 11:51 a.m. in New York, according to prices compiled by Bloomberg. The index typically falls as investor confidence improves and rises as it deteriorates. Credit-default swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt. The U.S. two-year interest-rate swap spread, a measure of bond market stress, rose 0.41 basis point to 30.85 basis points as of 11:52 a.m. in New York. The gauge widens when investors seek the perceived safety of government securities and narrows when they favor assets such as corporate bonds. Bonds of General Electric Co. (GE) are the most actively traded dollar-denominated corporate securities by dealers today, with 42 trades of $1 million or more as of 11:51 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Home Prices Home price declines are easing. Values in 20 U.S. cities fell 2.6 percent in the 12 months through March, the slowest pace in more than a year, according to the S&P/Case-Shiller index. Prices will likely rise 1.4 percent next year, 3.7 percent in 2014 and 4.4 percent in 2015, JPMorgan analysts led by John Sim wrote in a June 12 report. “There’s less of a fear of another major drop,” Martha Ucko, an analyst at CreditSights Inc., said in a telephone interview. “The builders prepped their balance sheets and their businesses to survive at these levels.” Purchases of new homes in the U.S. rose 3.3 percent in April from the previous month to an annual pace of 343,000, the Commerce Department said May 23. Homeowners are benefiting from falling borrowing costs. The average 30-year U.S. mortgage rate dropped to 3.67 percent in the week ended June 7, down from 5.05 percent in February 2011, and the lowest since McLean, Virginia- based Freddie Mac began records in 1971. An index of housing affordability is at the highest level in data going back to 1986, according to the National Association of Realtors. The gauge, which is updated every quarter, climbed to 205.9 at the end of March. Recovery Stage “People are a bit more confident about purchasing homes,” said Bob Curran, a New York-based analyst at Fitch Ratings. “You need a catalyst and there’s been pent-up demand as people had deferred on buying homes.” Hovnanian earned $1.8 million in the three months ended April 30, after losing money for the previous eight quarters, Bloomberg data show. The Red Bank, New Jersey-based company’s $797 million of 10.625 percent notes due October 2016 climbed to 90.5 cents for a yield of 13.6 percent on June 12 from 80 cents and 16.9 percent at the end of last year, Trace data show. “We’re encouraged that the homebuilding industry may be entering the early stages of recovery,” Larry Sorsby, Hovnanian’s chief financial officer, said yesterday at a conference organized by Deutsche Bank AG. Toll Brothers At Toll Brothers Inc. (TOL), orders climbed to 1,290 homes in the first quarter from 879 a year earlier. Hovnanian’s net contracts for its fiscal second quarter jumped to 1,775 homes from 1,166 a year earlier. Yields on some homebuilders’ junk-rated debt are at or approaching levels of investment-grade companies. The debt of Toll Brothers, based in Horsham, Pennsylvania, yields 4.05 percent on average, better than the 4.12 percent for BBB rated companies, Bank of America Merrill Lynch index data show. The yield on Fort Worth, Texas-based DR Horton Inc.’s bonds averages 4.16 percent, while that of Ryland Group Inc., based in Westlake Village, California, is 4.74 percent. Lack of issuance by the companies is partly responsible for the low yields, according to Principal’s Machan. “Anything available to buy has been getting grabbed in a hurry,” said Machan, who doesn’t own any homebuilder bonds. “People don’t want to be short the sector anymore.”
URL to original article: http://www.builderonline.com/builder-pulse/bottom-dollars-set-bets-that-housing-s-due-for-a-rise.aspx?cid=BP:061512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Housing economy 'good news'
Source: Bloomberg/BusinessWeek
The housing market’s been giving mixed signals, flashes of hope mixed with sudden bad news. There’s no sign yet that a real recovery has taken hold, but some new data are optimistic. Home prices and sales are on the rise. DataQuick says the average sale price for the past 30 days was $189,500, up $7,000 from a month earlier. Sales are also up 8.2 percent during this time. In Southern California, for example, DataQuick says the market is continuing its “step-by-tiny-step trek back toward normalcy.” Shadow inventory is shrinking quickly. The so-called shadow inventory refers to distressed properties that aren’t listed for sale but probably will be—homes on which borrowers are grossly delinquent or already in foreclosure, or that banks have already repossessed. CoreLogic says in April, 1.5 million homes were in the shadows, which equates to a four-month supply, down from a six-month supply a year earlier. A smaller shadow inventory can be positive for prices because it means there are fewer distressed homes poised to come on the market. Foreclosures are up. In the fall of 2010, the robo-signing scandal erupted over how banks were using faulty paperwork to evict borrowers. They cut back on processing foreclosures, building up a backlog of distressed properties. In March, banks agreed to a $25 billion robo-signing settlement, and new data show banks are restarting the foreclosure machinery. In May, banks filed to foreclose on 205,990 properties—a 9 percent increase during April, according to RealtyTrac. The foreclosure pickup hurts the people who are losing their homes but helps the housing market in the long run because it lets banks get through the backlog and eventually move on. Borrowers are building more equity in their homes. Our colleagues at Bloomberg News report that homeowners have made the biggest jump in home equity in more than 60 years. Half of borrowers who are refinancing are paying down some of their debt and reducing their loans. They’re also refinancing into shorter-term loans that have higher monthly payments but let them pay down principal quicker. Overall, mortgage debt is down 7 percent since 2007—a small consolation for the decline in home values, which are down 23 percent over the same period. Finally, if you’re looking for more data and a big-picture view, check out Harvard’s annual State of the Nation’s Housing report that’s out today. It also sees signs of recovery in the market and says unless something comes along to dent the broad economy, the housing picture should become even brighter.
URL to original article: http://www.builderonline.com/builder-pulse/housing-economy--good-news-.aspx?cid=BP:061512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The housing market’s been giving mixed signals, flashes of hope mixed with sudden bad news. There’s no sign yet that a real recovery has taken hold, but some new data are optimistic. Home prices and sales are on the rise. DataQuick says the average sale price for the past 30 days was $189,500, up $7,000 from a month earlier. Sales are also up 8.2 percent during this time. In Southern California, for example, DataQuick says the market is continuing its “step-by-tiny-step trek back toward normalcy.” Shadow inventory is shrinking quickly. The so-called shadow inventory refers to distressed properties that aren’t listed for sale but probably will be—homes on which borrowers are grossly delinquent or already in foreclosure, or that banks have already repossessed. CoreLogic says in April, 1.5 million homes were in the shadows, which equates to a four-month supply, down from a six-month supply a year earlier. A smaller shadow inventory can be positive for prices because it means there are fewer distressed homes poised to come on the market. Foreclosures are up. In the fall of 2010, the robo-signing scandal erupted over how banks were using faulty paperwork to evict borrowers. They cut back on processing foreclosures, building up a backlog of distressed properties. In March, banks agreed to a $25 billion robo-signing settlement, and new data show banks are restarting the foreclosure machinery. In May, banks filed to foreclose on 205,990 properties—a 9 percent increase during April, according to RealtyTrac. The foreclosure pickup hurts the people who are losing their homes but helps the housing market in the long run because it lets banks get through the backlog and eventually move on. Borrowers are building more equity in their homes. Our colleagues at Bloomberg News report that homeowners have made the biggest jump in home equity in more than 60 years. Half of borrowers who are refinancing are paying down some of their debt and reducing their loans. They’re also refinancing into shorter-term loans that have higher monthly payments but let them pay down principal quicker. Overall, mortgage debt is down 7 percent since 2007—a small consolation for the decline in home values, which are down 23 percent over the same period. Finally, if you’re looking for more data and a big-picture view, check out Harvard’s annual State of the Nation’s Housing report that’s out today. It also sees signs of recovery in the market and says unless something comes along to dent the broad economy, the housing picture should become even brighter.
URL to original article: http://www.builderonline.com/builder-pulse/housing-economy--good-news-.aspx?cid=BP:061512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
'Affordability' vs. buying power
Wall Street Journal
Home prices and mortgage rates have made monthly mortgage payments lower than at any time in the past decade. But housing isn’t any more affordable than it was five years ago, during the go-go lending days, after factoring in down payment requirements and other financing terms, according to a new paper. The National Association of Realtors and other housing economists typically measure housing affordability by looking at home prices and mortgage rates. Prices of course have fallen to nearly 10-year lows nationally, while rates have never been lower. Freddie Mac on Thursday said rates stood at 3.71% this past week for the average 30-year fixed-rate mortgage. But the total cost of homeownership, as a share of a borrower’s income, is the same today as it was during the height of the housing mania, according to the study by Andrew Davidson and Alexander Levin of mortgage consulting firm Andrew Davidson & Co. The reason: borrowers have to put more money down to get a loan, and the exotic lending products that allowed borrowers to make low initial payments have gone away. That means while the absolute monthly payments are lower, the all-in costs of homeownership haven’t become more favorable. Today, most lenders require minimum down payments of 20%, though loans with down payments of just 3.5% are still available through the Federal Housing Administration. During the peak of the housing boom, borrowers could bypass pesky down payments by taking out second mortgages or obtaining mortgage insurance. “Home affordability needs to be considered in light of the full financing package,” said Mr. Davidson. “During the bubble the low all-in cost of mortgage financing allowed borrowers to purchase homes, even at inflated prices.” The erosion of down-payment requirements from 2000 to 2006 reduced borrower costs by around 15%, according to Messrs. Davidson and Levin, while tighter down-payment standards since 2006 have raised borrower costs by 22%. That more than offsets the benefit of a drop in interest rates from around 6% to less than 4%. At the peak of the housing bubble, loan payments were the only cost that borrowers had to consider given the ability to take out no-money-down loans. But today, loan payments constitute roughly 50% of the total cost of ownership “and are rather modest by historical standards,” the paper says. “This explains why the record-low interest rates do not impress borrowers and do not propel home prices up.” The authors estimate that the all-in cost of a home purchase stood at more than 9% of the property value in 2011, compared to around 7% in 2006. The gap is even wider in states like California, where borrowers took advantage of exotic loan products during the boom. As a result, rising interest rates could be more than offset by more flexible underwriting standards.
URL to original article: http://www.builderonline.com/builder-pulse/-affordability--vs--buying-power.aspx?cid=BP:061512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices and mortgage rates have made monthly mortgage payments lower than at any time in the past decade. But housing isn’t any more affordable than it was five years ago, during the go-go lending days, after factoring in down payment requirements and other financing terms, according to a new paper. The National Association of Realtors and other housing economists typically measure housing affordability by looking at home prices and mortgage rates. Prices of course have fallen to nearly 10-year lows nationally, while rates have never been lower. Freddie Mac on Thursday said rates stood at 3.71% this past week for the average 30-year fixed-rate mortgage. But the total cost of homeownership, as a share of a borrower’s income, is the same today as it was during the height of the housing mania, according to the study by Andrew Davidson and Alexander Levin of mortgage consulting firm Andrew Davidson & Co. The reason: borrowers have to put more money down to get a loan, and the exotic lending products that allowed borrowers to make low initial payments have gone away. That means while the absolute monthly payments are lower, the all-in costs of homeownership haven’t become more favorable. Today, most lenders require minimum down payments of 20%, though loans with down payments of just 3.5% are still available through the Federal Housing Administration. During the peak of the housing boom, borrowers could bypass pesky down payments by taking out second mortgages or obtaining mortgage insurance. “Home affordability needs to be considered in light of the full financing package,” said Mr. Davidson. “During the bubble the low all-in cost of mortgage financing allowed borrowers to purchase homes, even at inflated prices.” The erosion of down-payment requirements from 2000 to 2006 reduced borrower costs by around 15%, according to Messrs. Davidson and Levin, while tighter down-payment standards since 2006 have raised borrower costs by 22%. That more than offsets the benefit of a drop in interest rates from around 6% to less than 4%. At the peak of the housing bubble, loan payments were the only cost that borrowers had to consider given the ability to take out no-money-down loans. But today, loan payments constitute roughly 50% of the total cost of ownership “and are rather modest by historical standards,” the paper says. “This explains why the record-low interest rates do not impress borrowers and do not propel home prices up.” The authors estimate that the all-in cost of a home purchase stood at more than 9% of the property value in 2011, compared to around 7% in 2006. The gap is even wider in states like California, where borrowers took advantage of exotic loan products during the boom. As a result, rising interest rates could be more than offset by more flexible underwriting standards.
URL to original article: http://www.builderonline.com/builder-pulse/-affordability--vs--buying-power.aspx?cid=BP:061512:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
U.S. Mortgage Rates Rise for First Time in Eight Weeks
Source: Bloomberg
Mortgage rates in the U.S. rose from a record low, breaking a seven-week streak of declines that fueled demand for home loans. The average rate for a 30-year fixed mortgage increased to 3.71 percent in the week ended today from 3.67 percent, the lowest level in records dating to 1971, according to a statement from McLean, Virginia-based Freddie Mac. (FMCC) The average 15-year rate climbed to 2.98 percent from 2.94 percent. Low borrowing costs are pushing homeowners to reduce their monthly payments while also helping to stabilize the housing market. Mortgage applications surged 18 percent in the week ended June 8, the Washington-based Mortgage Bankers Association said yesterday. An index measuring refinancing increased 19 percent to the highest level since 2009, while the purchase gauge climbed 13 percent. “Mortgage rates are just very low right now, and that’s causing some strengthening in demand,” said Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania. “The refis have been rising consistently for a while now. On the purchase side, I guess people are starting to feel more confident in the housing market.” Home prices advanced for a second straight month in April, rising 1.1 percent from a year earlier, CoreLogic (CLGX) said on June 5. It was the first consecutive increase since June 2010, according to the Santa Ana, California-based data provider.
URL to original article: http://www.bloomberg.com/news/2012-06-14/u-s-mortgage-rates-rise-for-first-time-in-eight-weeks.html
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage rates in the U.S. rose from a record low, breaking a seven-week streak of declines that fueled demand for home loans. The average rate for a 30-year fixed mortgage increased to 3.71 percent in the week ended today from 3.67 percent, the lowest level in records dating to 1971, according to a statement from McLean, Virginia-based Freddie Mac. (FMCC) The average 15-year rate climbed to 2.98 percent from 2.94 percent. Low borrowing costs are pushing homeowners to reduce their monthly payments while also helping to stabilize the housing market. Mortgage applications surged 18 percent in the week ended June 8, the Washington-based Mortgage Bankers Association said yesterday. An index measuring refinancing increased 19 percent to the highest level since 2009, while the purchase gauge climbed 13 percent. “Mortgage rates are just very low right now, and that’s causing some strengthening in demand,” said Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania. “The refis have been rising consistently for a while now. On the purchase side, I guess people are starting to feel more confident in the housing market.” Home prices advanced for a second straight month in April, rising 1.1 percent from a year earlier, CoreLogic (CLGX) said on June 5. It was the first consecutive increase since June 2010, according to the Santa Ana, California-based data provider.
URL to original article: http://www.bloomberg.com/news/2012-06-14/u-s-mortgage-rates-rise-for-first-time-in-eight-weeks.html
For further information on Fresno Real Estate check: http://www.londonproperties.com
Investors See Gold Rush in Foreclosure-to-Rental Properties
Source: The Wall Street Journal
By Nick Timiraos
A San Francisco-based company that buys foreclosed homes and rents them out is finding that the stampede of private cash into the nascent single-family rental sector is changing its business plan: it’s already cashing out. Landsmith L.P., which has amassed a portfolio of more than 250 occupied rentals in Phoenix, said Tuesday it has sold a package of 75 homes to an undisclosed institutional investor for $7.5 million, a substantial markup from the $5.3 million, before management and renovation costs, that the company paid to acquire the homes over the past year. Landsmith buys foreclosed homes either in courthouse auctions or through normal retail listings. Its plan is still to hold onto the homes for five years or so. “But if people are willing to pay a price that lets us realize an upfront return, we don’t need to wait,” says James Breitenstein, the firm’s chief executive. “The potential for this asset class is being realized sooner than we thought.” Eager to jump into the sector, investors such as Oaktree Capital Management and Colony Capital have raised hundreds of millions for the task. But with few bulk sales from banks and mortgage investors Fannie Mae and Freddie Mac, the market has been dominated by smaller outfits like Landsmith that buy homes one at a time. The emergence of a secondary market for single-family rentals shows how larger investors may be more willing to accept more modest returns than the smaller companies that are demanding bigger yields. Those firms face high upfront costs from scaling up an acquisition and property management infrastructure. Phoenix has been ground zero for the hold-and-rent strategy over the past year because the market had an abundance of cheap, recently constructed housing and a better job market. Investor demand has helped ignite a rally in Phoenix home prices and has sent Landsmith and other firms in search of the next gold rush market. Landsmith, a privately held real estate investment trust, says it’s now entering five more markets and that it plans to expand into 10 by the end of 2013. The firm is looking to raise capital from institutional investors and pension funds to finance that next expansion.
URL to original article: http://blogs.wsj.com/developments/2012/06/12/investors-see-gold-rush-in-foreclosure-to-rental-properties/
For further information on Fresno Real Estate check: http://www.londonproperties.com
By Nick Timiraos
A San Francisco-based company that buys foreclosed homes and rents them out is finding that the stampede of private cash into the nascent single-family rental sector is changing its business plan: it’s already cashing out. Landsmith L.P., which has amassed a portfolio of more than 250 occupied rentals in Phoenix, said Tuesday it has sold a package of 75 homes to an undisclosed institutional investor for $7.5 million, a substantial markup from the $5.3 million, before management and renovation costs, that the company paid to acquire the homes over the past year. Landsmith buys foreclosed homes either in courthouse auctions or through normal retail listings. Its plan is still to hold onto the homes for five years or so. “But if people are willing to pay a price that lets us realize an upfront return, we don’t need to wait,” says James Breitenstein, the firm’s chief executive. “The potential for this asset class is being realized sooner than we thought.” Eager to jump into the sector, investors such as Oaktree Capital Management and Colony Capital have raised hundreds of millions for the task. But with few bulk sales from banks and mortgage investors Fannie Mae and Freddie Mac, the market has been dominated by smaller outfits like Landsmith that buy homes one at a time. The emergence of a secondary market for single-family rentals shows how larger investors may be more willing to accept more modest returns than the smaller companies that are demanding bigger yields. Those firms face high upfront costs from scaling up an acquisition and property management infrastructure. Phoenix has been ground zero for the hold-and-rent strategy over the past year because the market had an abundance of cheap, recently constructed housing and a better job market. Investor demand has helped ignite a rally in Phoenix home prices and has sent Landsmith and other firms in search of the next gold rush market. Landsmith, a privately held real estate investment trust, says it’s now entering five more markets and that it plans to expand into 10 by the end of 2013. The firm is looking to raise capital from institutional investors and pension funds to finance that next expansion.
URL to original article: http://blogs.wsj.com/developments/2012/06/12/investors-see-gold-rush-in-foreclosure-to-rental-properties/
For further information on Fresno Real Estate check: http://www.londonproperties.com
International home shoppers attracted to U.S.
Source: Los Angeles Times
Foreign buyers hunting for safe investments are flocking to the U.S. housing market, attracted by low prices, according to a report. Foreign buyers hunting for safe investments are flocking to the U.S. housing market, attracted by low prices, according to a report. International clients accounted for $82.5 billion worth of sales for the 12 months that ended in March, according to the survey by the National Assn. of Realtors. That compares with $66.4 billion over the period a year earlier. Buyers from Canada, China, Mexico, India and Britain made up 55% of all international purchasers. Four states -- Arizona, California, Florida and Texas -- accounted for 51% of the states in which international buyers purchased homes. A variety of factors drove foreign buyers to purchase where they did, including proximity to their home countries, convenience and climate. The East Coast attracted Europeans buyers, while the West Coast was favored by Asians. Florida drew South Americans, Canadians and Europeans.
URL to original article: http://www.latimes.com/business/money/la-fi-mo-foreign-buyers-20120611,0,2597373.story
For further information on Fresno Real Estate check: http://www.londonproperties.com
Foreign buyers hunting for safe investments are flocking to the U.S. housing market, attracted by low prices, according to a report. Foreign buyers hunting for safe investments are flocking to the U.S. housing market, attracted by low prices, according to a report. International clients accounted for $82.5 billion worth of sales for the 12 months that ended in March, according to the survey by the National Assn. of Realtors. That compares with $66.4 billion over the period a year earlier. Buyers from Canada, China, Mexico, India and Britain made up 55% of all international purchasers. Four states -- Arizona, California, Florida and Texas -- accounted for 51% of the states in which international buyers purchased homes. A variety of factors drove foreign buyers to purchase where they did, including proximity to their home countries, convenience and climate. The East Coast attracted Europeans buyers, while the West Coast was favored by Asians. Florida drew South Americans, Canadians and Europeans.
URL to original article: http://www.latimes.com/business/money/la-fi-mo-foreign-buyers-20120611,0,2597373.story
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications rise to highest level sin
Source: Mortgage Bankers Association
WASHINGTON, D.C. (June 13, 2012) — Mortgage applications increased 18.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 8, 2012. Last week’s results included an adjustment for the Memorial Day holiday. The Market Composite Index, a measure of mortgage loan application volume, increased 18.0 percent on a seasonally adjusted basis from one week earlier to the highest level since May 2009. On an unadjusted basis, the Index increased over 30 percent compared with the previous week. The Refinance Index increased over 19 percent from the previous week to the highest index level since April 2009. The seasonally adjusted Purchase Index increased around 13 percent from one week earlier. The unadjusted Purchase Index increased over 23 percent compared with the previous week and was 4 percent higher than the same week one year ago. “Mortgage application volume increased sharply last week. The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009,” said Michael Fratantoni, MBA's Vice President of Research and Economics. “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months. HARP volume has been steady in recent weeks at about 28 percent of refinance applications.” The refinance share of mortgage activity increased to 79 percent of total applications from 78 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remains around 5 percent of total applications from the previous week. The average loan size of all loans for home purchase in the US was $243,733 in May 2012, up from $238,135 in April 2012. The average loan size for a refinance was $226,576, up from $219,664 in April. The largest purchase loans were made in the Pacific region at $357,978 while the largest refinance loans were also made in the Pacific region at $313,826. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.88 percent from 3.87 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.12 percent from 4.13 percent, with points increasing to 0.41 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.71 percent from 3.70 percent, with points decreasing to 0.59 from 0.60 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.23 percent from 3.20 percent, with points increasing to 0.48 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 5/1 ARMs remained unchanged at 2.78 percent, with points increasing to 0.49 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact mbaresearch@mortgagebankers.org or click here. The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100. ###
URL to original article: http://www.mortgagebankers.org/NewsandMedia/PressCenter/81017.htm
For further information on Fresno Real Estate check: http://www.londonproperties.com
WASHINGTON, D.C. (June 13, 2012) — Mortgage applications increased 18.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 8, 2012. Last week’s results included an adjustment for the Memorial Day holiday. The Market Composite Index, a measure of mortgage loan application volume, increased 18.0 percent on a seasonally adjusted basis from one week earlier to the highest level since May 2009. On an unadjusted basis, the Index increased over 30 percent compared with the previous week. The Refinance Index increased over 19 percent from the previous week to the highest index level since April 2009. The seasonally adjusted Purchase Index increased around 13 percent from one week earlier. The unadjusted Purchase Index increased over 23 percent compared with the previous week and was 4 percent higher than the same week one year ago. “Mortgage application volume increased sharply last week. The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009,” said Michael Fratantoni, MBA's Vice President of Research and Economics. “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months. HARP volume has been steady in recent weeks at about 28 percent of refinance applications.” The refinance share of mortgage activity increased to 79 percent of total applications from 78 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remains around 5 percent of total applications from the previous week. The average loan size of all loans for home purchase in the US was $243,733 in May 2012, up from $238,135 in April 2012. The average loan size for a refinance was $226,576, up from $219,664 in April. The largest purchase loans were made in the Pacific region at $357,978 while the largest refinance loans were also made in the Pacific region at $313,826. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.88 percent from 3.87 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.12 percent from 4.13 percent, with points increasing to 0.41 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.71 percent from 3.70 percent, with points decreasing to 0.59 from 0.60 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.23 percent from 3.20 percent, with points increasing to 0.48 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 5/1 ARMs remained unchanged at 2.78 percent, with points increasing to 0.49 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact mbaresearch@mortgagebankers.org or click here. The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100. ###
URL to original article: http://www.mortgagebankers.org/NewsandMedia/PressCenter/81017.htm
For further information on Fresno Real Estate check: http://www.londonproperties.com
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