London Properties: Fresno Valley Real Estate and Homes

New originations drop 30%, loan delinquencies decline

2012-01-27T15:53:00.000-08:00

by KERRI PANCHUK

Low interest rates are spurring some activity in the mortgage market, but opportunities for borrowers with low credit scores are limited, according to the latest Mortgage Monitor Report from LPS Applied Analytics.

New loan originations, overall, fell 30% year-over-year in November, with LPS reporting 537,720 originations in November, compared to 724,364 in December 2010. The report did not include new origination amounts for December 2011.

Vintage originations for the years 2010 and 2011 show a heightened focus on loan quality. Only six percent of 2011 originations, not backed by the Federal Housing Administration, had credit scores lower than 660 and a loan-to-value ratio greater than 80, LPS noted.

Meanwhile, FHA loan production accounted for 22% of all the originations made through the first eleven months of the year.

Delinquencies in December were down 25% compared to the peak reached in January 2010. The delinquency rate stood at 8.15% in December, down 7.7% from a year earlier, while the seriously delinquent rate on loans more than 90 past due hit 7.67%, down 5.9% from last year.

LPS said there's still a lag in getting foreclosures through the default pipeline with 50% of loans in foreclosure within judicial states not having made a payment in two years, compared to 28% in non-judicial states.

URL to original article: http://www.housingwire.com/2012/01/27/new-originations-drop-30-loan-delinquencies-decline

For further information on Fresno Real Estate check: http://www.londonproperties.com

Sharp divide exists between Dems, Repubs on gov't help in foreclosures

2012-01-27T15:19:00.000-08:00

by KERRY CURRY

The majority of Americans, 58%, want government action to prevent foreclosures, whereas 34% prefer the housing market resolve its problems on its own, according to a new Gallup poll that shows a sharp divide between Democrats and Republicans on the issue.

The Gallup poll shows 76% of Democrats and 61% of independents favor government action while only 31% of Republicans favor federal intervention.

Americans who make more than $90,000 per year were less likely to want government intervention to prevent foreclosures, but 52% of that group still favored some action, while 62% of those making less than $90,000 favored some federal action to stem foreclosures.

In the survey, 51% expressed worry about home values. The number was higher (57%) among only current homeowners.

Only 66% of Americans in the survey said they own their primary residence, down from 73% in 2006 and 2007 surveys, Gallup said. (Click on chart to expand.)

Results for the poll were based on telephone interviews conducted Jan. 5-8 and Jan. 14-15 with a random sample of 1,000 adults, aged 18 and older, living in the continental U.S. Samples were weighted by gender, age, race and other factors. They were selected using random-digit-dial sampling. The margin of error is plus or minus 4 percentage points.

URL to the original article: http://www.housingwire.com/2012/01/26/sharp-divide-exists-between-dems-repubs-on-govt-help-in-foreclosures

For further information on Fresno Real Estate check: http://www.londonproperties.com

Reports Say That Housing Will "Turn Corner" in 2012

2012-01-27T14:42:00.000-08:00

Source: Real Trends Update #1369

Many housing market forecasters have said that 2012 will be the year that housing turns the corner. For those who closely follow housing there is abundant evidence that housing has already turned the corner. Unit sales were up in December for the sixth consecutive month, without any new Federal government assistance (other than record low rates) and according to NAR pending home sales were up 11 months in a row, even though December's numbers appear to have drifted down somewhat.
Prices are still soft in the great majority of markets. However, when one looks at the data more closely there are several regions of the country where segments of the market are seeing price increases. There are segments of markets where inventory is at record lows and where historical precedent indicates prices will begin to rise shortly due to the shortage of inventory.
Each of these factors should bolster housing in 2012. One other factor not accounted for will be the interest of institutional funds in single family "buy-rent-hold" investment pools. Further positive news could come from the GSE attempts to structure bulk sales to investors of their foreclosed inventories.

For further information on Fresno Real Estate check: http://www.londonproperties.com

A Reprieve for Unemployed Borrowers

2012-01-27T12:24:00.000-08:00

Source: The New York Times
By VICKIE ELMER

FANNIE MAE and Freddie Mac’s recent extension of forbearance programs will give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.

In a forbearance program, a lender agrees not to foreclose on a property and gives a borrower several months’ grace from or reduction in monthly mortgage payments. The programs work best for temporary setbacks, like job loss, health problems or natural disasters.

Along with the reprieve come drawbacks — most significantly a larger total debt from the smaller payments. “Your unpaid balance keeps getting higher and higher and higher,” said Jennifer Murphy, the director of lender-servicer relations for the nonprofit Center for New York City Neighborhoods.

The new temporary mortgage payment is often set to 31 percent of your household income; in some cases lenders agree to accept no payments. Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring its approval as well as the lender’s.

But even with the program in place, your lender could still report a mortgage as delinquent, which would adversely affect your credit, so ask about its policy, said Martha Cedeno-Ross, a foreclosure assistance counselor with Neighborhood Housing Services of Waterbury, Conn. Because some agreements may add onerous terms and conditions, homeowners should also consult with a real estate lawyer, or a housing counselor certified by the Department of Housing and Urban Development.

Some 26,801 homeowners completed Fannie Mae loan forbearance and repayment plans in the first nine months of 2011, up 13 percent from the same period in 2010. By comparison, the total for all of 2008 was 7,892, according to Fannie Mae’s financial filings with the Securities and Exchange Commission.

To qualify, borrowers must be unemployed, which means not working at all, though a co-borrower could still be employed, said Brad German, a Freddie Mac spokesman.

To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.

You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — and Knowyouroptions.com.

Be sure to plan an “end strategy” well before the forbearance agreement runs out.

“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.

Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.

Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.

URL to original article: http://www.nytimes.com/2012/01/22/realestate/mortgages-a-reprieve-for-unemployed-borrowers.html?_r=2&ref=realestate

For further information on Fresno Real Estate check: http://www.londonproperties.com

The American Dream of retirement is endangered

2012-01-26T14:48:00.000-08:00

Source: MarketWatch

BOSTON (MarketWatch) — President Barack Obama, in his State of the Union speech, didn’t really touch on the subject near and dear to the hearts of millions of Americans — the State of Retirement in the U.S.

No doubt he had other pressing matters to address. So allow us the pleasure of issuing — thanks in large part to many experts on the topic — our State of Retirement column.

In short: Things are bad and, in the absence of action or in the presence of ill-advised action, could get much worse.

“I think the state of retirement in America is endangered as the ‘Great Recession’ has taken a toll on the financial status of many and as retirement savings were not adequate for many prior to the ‘Great Recession,’” said Matthew Greenwald, the president of Matthew Greenwald & Associates, a leading retirement research firm. “There are several things that need to be fixed, including addressing Social Security and helping people feel confident in the viability of the system, more effective defined-contribution plans that do a better job of encouraging participants to defer more of their income and more effective advice to retirees that helps them use their financial assets most effectively when they retire.”

Others are in the same camp. “There are many challenges,” said Anna Rappaport, the president of Anna Rappaport Consulting and chair of the Society of Actuary’s Committee on Post-Retirement Needs and Risks. But Rappaport also said there’s a lot of opportunity to fix those challenges.

Here’s a look at the challenges and some ways to respond.

Social Security
The combined Social Security trust funds will be exhausted in 2036 and at that point there will only be enough income coming in to pay for 77% of scheduled benefits.

Read the trustees’ report here.

Now 24 years might seem like plenty of time to fix that problem but there doesn’t seem to be the political will to do so. Elected officials are seemingly afraid to tackle the issue; they would rather a greater fool put their bid to be re-elected at risk than address an issue that will affect some 78.1 million Americans a generation from now, which we should note is twice the number of Americans age 65 and older today.

But the truth of the matter is that it’s time that President Obama (or someone) take a page from President Ronald Reagan’s book when, in 1981, he established a commission led by Alan Greenspan to reform Social Security.

Some two years later, as a result of that commission’s work, amendments to Social Security included a provision for raising the full retirement age from age 65 to 67, phased in over time. At the time, the Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age.

Given the current and predicted future state of Social Security, it’s time to once again raise the full retirement age, according to Bob Reynolds, the president and CEO of Putnam Investments. This time, Reynolds suggests, we might peg the full retirement age to life expectancy so as to adjust for improvements in the health of older people and increases in average life expectancy.

In 1940, for instance, the average 65-year-old male in the U.S. had a life expectancy of 77.7. In 1990, it was 80.3. And by 2006, it was 81.6. “You have to adjust for that,” Reynolds said. “It’s just too costly.”

FYI: Using 1940 as the benchmark ratio, the full retirement age could be raised, by my calculations, to 70¾.

Of course, you would phase the increase in over a period of time so that people have time to prepare for it, Reynolds said. And you might leave the full retirement age for people over age 55 as is, while adjusting it upward for those under age 55.

Reynolds also favors increasing the amount of earnings subject to taxation for a given year. For 2012, the annual limit, the contribution and benefit base for Social Security, is $110,100. He suggests that the contribution and benefit base be increased to “somewhere around” $150,000. “That would provide the base for a stable system long term,” Reynolds said. He noted, for instance, that there’s no limit on the amount one’s taxed to pay for Medicare.

What’s more, Reynolds is in favor of examining a needs-based system that would reduce one’s Social Security benefit based on one’s income or assets. “It’s something that should be looked at,” he said.

Others also see the need to shore up Social Security. For instance, Cynthia Egan, president of T. Rowe Price Retirement Plan Services, said: “Lower income earners, those who are not covered by a defined contribution plan, as well as ‘weak savers’ are going to be highly reliant on Social Security. It is what it is. So we must ensure the stability and reliability of the Social Security program for the future.”

Contribution rates
On average, workers — at least those who have such a plan — contribute about 7% of their compensation into their 401(k) plan and that, many experts say, is too low. According to Reynolds, one would need to save at least 10% to replace, when combined with Social Security benefits, 80% of one’s final pay in retirement. Others say contribution rates have to be even higher the longer one waits to save and the less one has socked away.

Maybe the time has come to put in place plans that would automatically escalate the amount one contributes to a 401(k) to a minimum of 10%, not just the 3% which is the norm. Others agreed. “People need to save more — and we need to figure out how to make that happen,” Rappaport said.

To be fair, not all experts are worried about contribution rates or the shortcomings of 401(k) plans.

For instance, Kevin Crain, head of Institutional Retirement & Benefit Services for Bank of America Merrill Lynch, offered the following: “We believe that privately sponsored corporate retirement systems are structured to be successful, and can be even more successful with employer’s continued focus on enhancements to their financial benefit plans and services. More specifically, within 401(k)s, we continue to see significant increases in employee engagement and utilization of these plans through such tools as auto enrollment and advice services.”

And Linda Wolohan, a spokeswoman for the Vanguard Group, said: “The U.S. retirement system, while rocked like any investment-based program during the severe market downturn of a few years ago, has shown great resilience.”

For instance, she noted that retirement wealth for the typical 401(k) plan participant grew over the past five years even in the face of the substantial market and economic shocks. What’s more, she said, while account balances have sometimes been cited as too low to be helpful in retirement, it’s important to note that the typical participant is a 46-year-old male who is saving 8.8%, with 20 to 25 more years to work and grow his account. “His retirement plan assets will be complemented by Social Security benefits and other savings, perhaps assets in other employer plans or a spouse’s plan, or personal savings,” she said. “Even though we always encourage people to save more — ideally at least 12% to 15% of their income — the reality is that more participants than you think may be on target for retirement.”

Coverage
Another issue plaguing the U.S. today is this: Just half of the 150 million or so working Americans have an employer-sponsored retirement plan at work. And the 75 million workers who don’t have a retirement plan at work aren’t saving anything at all for their golden years. But studies suggest that those workers might save if they did have a plan at work. So, Reynolds is in favor of creating what’s been called a universal, or automatic, IRA.

According to the Heritage Foundation, universal or automatic IRAs would provide a relatively simple, cost-effective way to increase retirement security for the millions of workers without plan coverage. The universal or automatic IRA, said the Heritage Foundation, is a way that employees of smaller businesses can choose to save for retirement by allowing their employers regularly transfer an amount from their paycheck to an IRA.

Read the Heritage Foundations report on automatic IRAs here.

For her part, Egan said there’s no need for another retirement plan, just incentives. “Small employers should be offered incentives to provide coverage,” she said. “We don’t need another vehicle. There are many, many providers who support small- and micro-plan services. We simply need to incent the smaller employer to make it happen and keep it simple for them.”

By the way, one big risk looming is the possibility that those folks who did the right thing and saved for retirement might end up paying in one way or another for those who didn’t.

Literacy and confidence
Sometime in March, the Employee Benefit Research Institute will release the 22nd annual Retirement Confidence Survey and it likely will show that only a few Americans are very confident about having enough money for retirement. In 2011, just 13% were very confident.

Reynolds suggests that there’s a correlation between financial literacy and confidence. To solve the confidence problem, we must solve the literacy problem. According to Reynolds, it’s time to provide the education and tools required to help people understand how much to save and how to invest, how much they will need to accumulate for retirement, and how to make their money last a lifetime once in retirement. Knowledge will lead to action, and action will lead to confidence.

Others agree. “Financial literacy and awareness are key components in helping Americans prepare for retirement,” said Suzanna de Baca, the vice president of wealth strategies at Ameriprise Financial. “Any American looking ahead to retirement can benefit from a written financial plan that will help them define their retirement goals and objectives, and guide them in creating a realistic plan to create a more confident financial future.”

Rachel McTague, a spokeswoman for the Investment Company Institute (ICI), also said education is needed. “ICI research finds that the system of saving for retirement in 401(k) plans and IRAs is a success, based on such survey data and modeling of potential savings over a full career with 401(k) plans,” she said. “Nonetheless, we believe there is room for improvement. Among other priorities, we support efforts to provide retirement savers with information and tools to help them use the system to accumulate assets and understand and navigate the distribution phase as well.”

Read the ICI research at this website.

In the absence of such education and planning, however, there are those who say policies that force people to save on their own for retirement hurt more than help. “Too much responsibility has been shifted to individuals, and they are not well prepared to handle them,” said Rappaport. “Financial literacy creates major challenges and we need systems that work without people having initiative.”

Outliving one’s assets
Right now, there’s much ado about outliving one’s assets. Experts are worried that average Americans don’t understand longevity risk and might draw down their assets too quickly during retirement. According to experts, many Americans should consider adding investments that insure against the risk of outliving one’s assets. But that’s unlikely to happen anytime soon. Most Americans are distrustful of such products. Nonetheless, it’s worth adding this opinion to the mix.

“Striking the right balance between growth and income to keep from outliving one’s retirement savings is an even more daunting task than it was before the current period of market volatility and low interest rates,” said Chris Winans, a spokesman for AXA Equitable. “The problem is that 401(k)s and plain-vanilla savings accounts without downside protection are exposed to the vagaries of the market. You wouldn’t think of not spending whatever it costs to insure from losing your house in a fire. Why wouldn’t you want protection on a portion of your retirement nest egg, too? Our challenge is to help people understand this value for themselves and their families. You hope your savings appreciate and nothing bad happens, but a lifetime income guarantee reduces some of the risk. That’s worth something.”

Tax breaks and retirement
Efforts to eliminate the so-called tax breaks Americans get for saving money in a 401(k) or other plan where they can save on a pre-tax basis could affect adversely the state of retirement in the U.S.

According to Reynolds, 401(k) plans and the like are not tax breaks. Rather they are tax-deferred plans. At some point in the future, Americans will pay ordinary income taxes on the money distributed from those plans. Efforts to eliminate or reduce incentives to save might backfire and reduce further the poor state of retirement in the U.S., not improve it.

Egan is of the same opinion. “Tax incentives must be preserved for retirement savings,” she said. “Our defined contribution system reflects ‘the American way.’ There’s a balance among government endorsement and oversight, corporate and plan sponsor fiduciary responsibility, individual responsibility, and free market competition among service providers.”

The good news — sort of
“As more and more baby boomers retire, the discussion on retirement, on retirement income, will become a national topic,” said Reynolds. “And I think it will spark the interest of retirement to all age groups.”

Let’s hope that’s the case because the problem is real. “America is facing an unprecedented retirement challenge as the U.S. population undergoes a radical demographic shift,” said Michael Falcon, head of retirement at J.P. Morgan Asset Management. “Twenty percent of the population will be over 65 years old by 2020 and, despite impressive aggregate asset growth, many Americans are still significantly short of the savings they will need for a dignified retirement and are unprepared for the complex financial choices they will need to make.”

URL to original article: http://www.builderonline.com/builder-pulse/the-american-dream-of-retirement-is-endangered.aspx?cid=BP:012612:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Obama's refinance plan faces partisan paralysis

2012-01-26T14:19:00.000-08:00

Source: MarketWatch

WASHINGTON (MarketWatch) — President Barack Obama’s State of the Union proposal to have Congress approve a sweeping mortgage-refinancing program funded by a bank tax has little or no chance of passage, analysts said.

Specifically, Obama said he’s sending to Congress a plan that would give homeowners a chance to save roughly $3,000 a year on their mortgage by refinancing to historically low rates. The plan would be paid for by a fee on the largest financial institutions, he added.

The plan is expected to be an expansion of an existing White House program that seeks to help underwater borrowers, who have no equity in their homes, to refinance at lower interest rates. However, that program, which already has been expanded, helps underwater borrowers refinance as long as their mortgage is backed by Fannie Mae and Freddie Mac, the government-controlled housing giants.

Analysts speculate that the program Obama is considering would also include millions of underwater borrowers who have mortgages that are not owned by Fannie or Freddie — an effort that would require congressional approval.

To reach this conclusion they point to a Jan. 4 white paper by Federal Reserve Chairman Ben Bernanke, who suggested that regulators could expand the program — known as the Home Affordable Refinance Program — to loans that are not owned by Fannie or Freddie. Read about the HARP program expansion

Bernanke said that perhaps 1 million to 2.5 million borrowers would be eligible to refinance through HARP, except that their mortgages aren’t backed by Fannie and Freddie. Read more about Bernanke's white paper

Yet analysts argue that obtaining congressional approval would be difficult at best. They also point out that the bank tax Obama seeks to pay for the refinancing program would also need statutory approval by Congress.

“Given the inability of Congress to agree on most big issues in the past couple of years, we believe the decision to refer a bill to Congress greatly reduces the chance of a mass refinancing program happening,” Barclays Capital analyst Ajay Rajadhyaksha wrote in a report.

Jaret Seiberg, analyst at Guggenheim Securities LLC in Washington, said he believes it has a one in three chance of being approved, as Republicans weigh whether they worry more about giving Obama a win or experience backlash from troubled homeowners or housing-lobby groups.

He added that Guggenheim believes it would be “almost impossible to enact the bank tax into law” with Republican opposition, but that Congress could find other mechanisms to fund the program that did not require their approval.

Paul Dales, senior U.S. economist at Capital Economics, agrees that it will be a “tough sell” to Republicans, who he said already think the government is too involved in housing.

The bank tax Obama said would pay for the costs of the program was a problem, according to Brian Gardner of Keefe, Bruyette & Woods. “We view the bank tax as a poison pill,” he said.

Mortgage fraud the big banks
Obama also announced that he is setting up a unit in the Justice Department to “expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.” It is unclear how this division, which is expected to be led by New York Attorney General Eric Schneiderman, will impact efforts by states to reach a settlement with five big banks over questionable foreclosure practices. Read more about state, Feds discussing bank-settlement goals.

Guggenheim’s Seiberg said the financial-crimes task force could derail the settlement talks. He noted that as part of an expected settlement, big banks are likely to receive relief from state claims on loans and that relief is worth less if federal prosecutors bring similar claims.

However, Geoff Greenwood, spokesman for Iowa Attorney General Tom Miller, said he did not believe the task force will impact settlement negotiations at all.

Miller is helping to lead the talks between state attorneys general and federal prosecutors and the five big banks: Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC +0.14% , J.P. Morgan Chase & Co. /quotes/zigman/272085/quotes/nls/jpm JPM +0.08% , Citigroup Inc. /quotes/zigman/5065548/quotes/nls/c C +0.13% , Wells Fargo & Co. /quotes/zigman/239557/quotes/nls/wfc WFC -0.10% and Ally Financial Inc. (formerly GMAC).

He said that while states would release servicing and origination claims against the five big banks, it would not grant criminal immunity to bank executives. Greenwood added that banks involved would not be released from any fraud related to securitizations and that the settlement does not involve other companies that originated fraudulent loans.

“So there are many other pieces of the puzzle, and this announcement will enable states and our federal partners to continue to work together to address those other pieces,” Greenwood commented.

URL to original article: http://www.builderonline.com/builder-pulse/obama-s-refinance-plan-faces-partisan-paralysis.aspx?cid=BP:012612:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Population Projections: United States and the World

2012-01-26T13:19:00.000-08:00

On January 18, 2012, in Economist Commentaries, by Lawrence Yun, Chief Economist ..

Since the fall of the Berlin Wall in Germany, real estate prices in what was formally known as East Germany have barely risen over the past 20 years. The reason is simple: many Germans left East for West in search of better jobs. This hollowing-out phenomenon is not good for real estate.

Real Estate prices in Japan have been in the doldrums for at least the past 20 years as well. Part of the reason is due to the crash in bubble real estate prices in the 1980s. But there is also another simple reason: population in Japan has essentially stopped growing. The same number of people cannot create additional demand for real estate, unless they want to buy second and third homes.

In regards to the United States, some have claimed that the large number of people retiring and an eventual dying off of the baby boomers will mean less housing demand in the future. This ignores one simple fact about the broader population and not just the baby boomers. Every year about 3 million additional people live in the U.S. The projection by the Census further calls for more people for the foreseeable future with the total tally rising to 436 million by 2050 from the current total of 311 million people. Such growth assures steady housing demand.

Perhaps more encouraging or disturbing, depending upon your point of view, is the trend in the world population. For centuries upon centuries, the world population never exceeded a billion people. Then in 1900 there were 1.6 billion people living on this planet. In 2000, population had nearly quadrupled to 6 billion people. Most demographers believe that further population gains will occur throughout this century before eventually topping out and stabilizing. The stabilizing population, according to experts, is to be around 9 to 10 billion people. Hard to think about what all this means. Demand for real estate is automatically created. But how many by that time will be able to say that they own a property of their own?

Other questions to ponder: What will be the price of wild-caught sushi? Is there another Steve Jobs in the wings? Before panicking, consider this visual by the National Geographic, who calculated that the whole world population today could fit, shoulder-to-shoulder, into Rhode Island, the smallest state in the U.S. Another simpler way to think about the everyday impact is that going from the current 7 billion to 10 billion is not even a doubling of population. So imagine a condition where you see twice as many people around your local town and spatial area. Is that too much or it that absorbable?

URL to original article: http://economistsoutlook.blogs.realtor.org/2012/01/18/population-projections-united-states-and-the-world/?cid=WR01262012:40707&ed_rid=335836

For further information on Fresno Real Estate check: http://www.londonproperties.com

Home Ownership Rates by Age

2012-01-26T13:07:00.000-08:00

On January 13, 2012, in Economist Commentaries, by Lawrence Yun, Chief Economist ..

In 2000 (a very normal housing year without a bubble), with virtually no discussion of it in the media or in the academic community, 67 percent of Americans lived as a homeowning household. Then came the easy credit conditions which fueled home buying beyond normal and the ownership rate rose to 69 percent. But the subsequent bust brought the ownership rate down to today’s 66 percent.

Not all age groups had similar experiences throughout this cycle. The very young were mildly impacted. The very old did not on average feel any pain – at least according to the statistics, though no doubt there were some retirees who painfully lost a home to a foreclosure. The big impact was felt among people in their 30’s, who have much the same homeownership rate today as back in 2000, well before the bubble. It is also this group where there is potential for re-entering into the homeownership market in the near future.

Also note the general higher ownership rate as people get older and more mature and presumably become more responsible. Note the very high ownership rate among the 65-and-over population, who would have for the large part already paid off their mortgages.

Lawrence Yun, Chief Economist

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

URL to original article: http://economistsoutlook.blogs.realtor.org/2012/01/13/homeowners-by-age/?cid=WR01262012:40706&ed_rid=335836

For further information on Fresno Real Estate check: http://www.londonproperties.com

Economic mobility varies by degree

2012-01-25T16:12:00.000-08:00

Source: The Atlantic

Education pays off, in general. But sometimes, so does luck, grit, and natural smarts. The top 10% of earners who didn't go to college earn more than the typical college grad.

WEEKLY EARNINGS BY EDUCATION/BLS

The highest earners? They're the highest learners.

That is the simplest summation possible of a new report from the Bureau of Labor Statistics on workers' income.

The most interesting data compares earnings by education. The above graph looks within groups of similar education attainment and breaks down the weekly earnings of the richest and poorest in that group. For example, the "Not HS" group represents adults who never graduated from high school. The poorest 10 percent within that group earns less than $300 a week. Moving right along the graph, the typical non-high-school grad (at 50th percentile) earns just shy of $500 a week. The richest decile of non-high-school grads make $830 every week. That's more than the typical worker with partial college experience and more than the poorest 10% of advanced degree earners.

Like I said, the simplest explanation for this graph is that education is an investment that you should expect will pay off. Every step up the education ladder results in higher earnings in the aggregate.

But another conclusion you could reach from this graph is that the luckiest/most talented 10 percent of high school graduates who don't go to college (represented by the far right red dot) actually earn more than the typical college graduate. Educational attainment is directional, not destiny.

URL to original article: http://www.builderonline.com/builder-pulse/economic-mobility-varies-by-degree.aspx?cid=BP:012512:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Sales Stir Hope for Housing Market .

2012-01-25T15:23:00.000-08:00

By ROBBIE WHELAN

Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.

Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors' chief economist, called the December gain "a good finish to a very tough year."

Many economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.

Still, economists cautioned that it's too early to assume that the market is recovering. "These were positive numbers, but that doesn't mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up," said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.

The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December's level. A six-month supply of homes typically is considered healthy, although NAR's numbers don't take into account the "shadow inventory" of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.

Prices, meanwhile, continue to fall. The median price in December was $164,500, down 2.5% from a year earlier. Prices were down in all regions except the West, where prices rose slightly, compared with a year ago. For all of 2011, the median was $166,100, the lowest since 2002.

"What you really want to see is sales going up, inventories going down, and prices going up, not down," said David Semmens, an economist with Standard Chartered. "People still feel they can hold off buying a house because the recovery won't be that aggressive. It's still very much a buyer's market."

That buyer's market allowed Andrew Gonzales, a 24-year-old police officer in Santa Fe, N.M., to be picky about price when looking for a home for himself and his three-year-old daughter. He closed last month on a $132,000, three-bedroom home in Rio Rancho, a suburb of Albuquerque, after the price was cut twice. Just before closing, the home was appraised for $18,000 higher than the sales price, at $150,000, by a private appraiser.

"I got tired of paying rent, and I'm a single father, so I wanted a home for my daughter," he said. "I was just waiting for the price to come down."

Vision Equity, a company that buys foreclosed homes at auctions in Indianapolis, stepped up the volume of its purchases this winter, buying about 45 homes a month in October, November and December, compared with about 30 homes a month last summer.

"There's a lot of cash investor activity right now," said Steve Olson, a spokesman for Vision Equity. "The chatter at the courthouse was, there's going to be a lot more product coming on the market, and the pricing is going to be good for investors. And we prepared our own investors for that."

URL to original article: http://online.wsj.com/article/SB10001424052970204616504577172701614674474.html?mod=WSJ_RealEstate_LeftTopNews

For further information on Fresno Real Estate check: http://www.londonproperties.com

Mortgage applications drop 5%

2012-01-25T14:13:00.000-08:00

by KERRI PANCHUK

Mortgage applications fell 5% last week as home purchases and mortgage refinancing activity declined, an industry trade group said Wednesday.

The Mortgage Bankers Association's Market Composite Index – a measure of mortgage loan application volume – fell 5% on a seasonally adjusted basis from a week earlier. Those results include an adjustment for the Martin Luther King holiday.

The refinance index alone fell 5.2% from the previous week. Meanwhile, the seasonally-adjusted purchase index decreased 5.4%.

The same survey said the refinance share of mortgage activity fell from 82.2% to 81.3% in the latest period.

Meanwhile, the average interest rate on a 30-year, fixed-rate mortgage with a conforming loan limit increased to 4.11% from 4.06% a week earlier, and the average 30-year, FRM with jumbo loan balances declined from 4.40% to 4.39%. The average, 30-year FRM backed by the FHA increased to 3.97% from 3.91% a week earlier.

In addition, the 15-year, FRM increased to 3.40%, from 3.33%, and the 5/1 ARM stayed mostly the same at 2.91%, compared to 2.90% the previous week.

Data compiled from December shows 56.6% of mortgage applications were for 30-year loans, while 24.3% and 5.3% went for 15-year loans and ARMs, respectively.

URL to original article: http://www.housingwire.com/2012/01/25/mortgage-applications-drop-5

For further information on Fresno Real Estate check: http://www.londonproperties.com

Jobs gains fuel California economic traction

2012-01-24T17:39:00.000-08:00

Source: Sacramento Bee

The evidence keeps accumulating: California's economic recovery is gathering momentum. It's just nowhere near a boom yet.
Unemployment in California fell two-tenths of a point last month to 11.1 percent, the lowest level in nearly three years, the Employment Development Department reported Friday. Payrolls expanded for the sixth straight month, and economists pronounced themselves satisfied that the state is finally on the right track.
"We have sort of a nice string going," said Howard Roth, chief economist at the state Department of Finance. "This makes me more confident that it's not going to go away. … I think it's the real thing."
The growth in payroll jobs, which is considered the most reliable barometer of the job market, was a fairly weak 10,700 in December. That was offset somewhat by news that November's job growth was revised upward sharply.
Overall, Roth said, the results show the economy is mending but not operating at full throttle. "It's got to get a lot faster than this," he said. "But it looks like it has a good foundation."
Sacramento unemployment was unchanged at 10.9 percent. The region actually lost 3,700 jobs in December, a month that usually sees payrolls expand.
Nonetheless, economist Jeff Michael of the University of the Pacific said Sacramento's economy is still improving.
"These paths are not smooth," he said. "It's going to be a bit of a choppy pattern."
To a certain extent, December looked relatively weak in Sacramento because November was unusually strong. That was particularly true for retailers. After a better-than-expected surge of hiring in November, they added just 700 jobs across the region in December, less than half the usual amount, said EDD analyst Diane Patterson.
The dry December weather also kept the region's economy somewhat in check. Because of a lack of snow in the Sierra, the leisure and hospitality industry added just 300 jobs, well below normal, Patterson said.
Hiring at the ski resorts could finally start to pick up now that a long-awaited winter storm arrived this week.
Even with the December job losses, Sacramento has gained 6,100 jobs in the past year. The growth rate is well below the state's but suggests that Sacramento – held back for so long by troubles in housing and the public sector – is joining the recovery.
"Last winter was really the bottom for Sacramento," Michael said.
While Sacramento and other inland areas have lagged, coastal markets like San Jose, San Francisco and Orange County have been at the forefront of the recovery. The tech industry and manufacturing exports have been key drivers.
California has now added 240,300 jobs in the past year. That works out to a 1.7 percent growth rate, significantly above the U.S. average.
In another sign of the state's recovery, the California New Car Dealers Association said Friday that new-vehicle sales increased 9.9 percent in 2011. The association forecast an 8.5 percent gain for 2012.
Even though the state's payroll job growth was fairly weak in December, several experts said those figures might not fully represent what's happening out in the economy.
When an economic recovery starts to hit stride, as this one has, it's often accompanied by a surge in new startup companies. The firms, and their employees, don't get counted in the payroll data right away.
"It takes a while for the survey of firms to catch up," said Stephen Levy, director of Palo Alto's Center for Continuing Study of the California Economy.
He said it's no coincidence that in each of the past four months, the payroll figures have been revised upward the following month – sometimes dramatically. On Friday, officials at EDD said November job growth actually totaled 24,700. That's about four times as many new jobs as previously reported.
Levy said it's likely the December job growth, a mere 10,700, will be revised upward, too.
Sacramento tech startup HomeZada typifies the trend. Launched about a year ago, it likely won't show up in the state's monthly job data for a while.
HomeZada makes Web and mobile software to help homeowners track property documents, home-maintenance schedules – even contact information for long-forgotten carpet cleaners or appliance repairmen.
So far the company consists of its three co-founders, but it also employs several software developers and other professionals on a contract basis, said co-founder Elizabeth Dodson.
"We hope we're going to be very big," she said.

URL to original article: http://www.builderonline.com/builder-pulse/jobs-gains-fuel-california-economic-traction.aspx?cid=BP:012412:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

The trouble with appraisals

2012-01-24T17:20:00.000-08:00

Source: NAHB

January 23, 2012 - Zeroing in on yet another deficiency of a faulty appraisal process that is hurting home values, hampering a housing recovery and often killing sales of homes coming in below the contract sales price, the Government Accountability Office (GAO) earlier this month reported that the Appraisal Subcommittee, which oversees the appraiser regulatory programs established by the states, needs to improve its monitoring procedures.

“These findings underscore the need to establish an effective oversight system to ensure that appraisals accurately reflect true market values and don’t harm aspiring home buyers or builders,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

A recent NAHB survey shows that one out three builders have lost signed sales contracts because of flawed appraisals and a fall survey conducted by the National Association of Realtors shows that 18 percent of Realtors® reported a recent contract cancellation or delay as a result of a low appraisal.

Numerous flaws in the appraisal system have been causing inaccurate home valuations, both in times of housing weakness and strength. NAHB has been actively seeking improvements in appraiser education and training, particularly for appraisals of new homes, as well as more rigorous oversight so appraisal guidelines are enforced and errors can be corrected as they occur.

The GAO report found the Appraisal Subcommittee’s “enforcement tools and procedures for reporting compliance levels have been limited.” The GAO cited “several weaknesses” that have potentially limited the subcommittee’s ability to monitor state appraiser regulatory agencies, the federal financial institution regulators and the Appraisal Foundation, a private, non-profit corporation that sets criteria for appraisals and appraisers.

Under the Dodd-Frank Act, the Appraisal Subcommittee was granted the authority to establish a national hotline to receive complaints over noncompliance with appraisal independence standards and grievances from appraisers, individuals or other entities over attempts to improperly influence appraisers or the appraisal process. Currently, no such hotline exists and the GAO report states that the creation of a national hotline could strain the Appraisal Subcommittee’s resources.

Observing that “the critical role of real estate appraisals in mortgage underwriting underscores the importance of effective regulation of the appraisal industry,” the GAO study calls on the Appraisal Subcommittee to strengthen its oversight by developing specific policies and procedures for monitoring the appraisal requirements of the federal financial institutions regulators.

How homes are valued can have a dramatic effect on home owners’ mortgages, foreclosure rates, the health of banks and, ultimately, the condition of the U.S. financial system, said Nielsen.

“The current system is not working,” he said. “We must resolve a flawed appraisal process that produces inaccurate assessment of home values, because this fosters price instability, puts more families in danger of default or foreclosure, and undermines the housing and economic recovery. It’s time that regulators, appraisers, lenders and all of the stakeholders in this debate come together and agree on major reforms in appraisal practices and oversight to ensure that homes are appraised at their fair market rate.”

URL to original article: http://www.builderonline.com/builder-pulse/the-trouble-with-appraisals.aspx?cid=BP:012412:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Homeowners who bought at low-end most happy: HomeGain

2012-01-23T14:13:00.000-08:00

by KERRI PANCHUK

Homeowners who acquired properties for less than $75,000 remain the most satisfied with their home-buying selections, according to a new study from online appraisal firm HomeGain.

The study says homeownership satisfaction rates are largely contingent on what the borrower paid and home price appreciation.

Emeryville, Calif.-based HomeGain made those conclusions in its 2012 Home Ownership Satisfaction Survey, which was compiled from data secured during interviews with 1,400 homeowners.

Seventy-two percent of those surveyed said they're satisfied with their home purchases. The remaining 28% are dissatisfied with homeownership and mostly blame their frustrations on depreciating home values.

Homeowners who acquired properties for more than $800,000 are the most unhappy, with only 69% satisfied with their buys. Comparatively, homeowners who bought properties for $75,000 or less have a 77% satisfaction rate.

HomeGain says owners who nabbed properties three to eight years ago are the least satisfied, while those who bought properties in the last three years or more than eight years ago are classified as happy.

It turns out buyers who acquired homes via short sales are content with that decision, pushing that segment of the homebuyer market to an 83% satisfaction rate. Following closely behind are the homeowners who acquired foreclosures. HomeGain says 79% of those buyers are satisfied with the deals they secured.

URL to original article: http://www.housingwire.com/2012/01/23/homeowners-who-bought-at-low-end-most-happy-homegain

For further information on Fresno Real Estate check: http://www.londonproperties.com

Award Winners for the month of December!!!

2012-01-19T16:30:00.000-08:00

Port Royal Insurance Service is proud to announce that Julie Black is the Top Producing Insurance Agent for the month of December.

Royal Charter Mortgage want to announce that David Schilling is the Top Producing Loan Officer for the month of December.

London Properties want to announce that Kathy Papagni is the employee of the month for December.

London Properties want to announce that Jenn Guerra is the Advocate for the month for December.

Great job everyone!!! Here is another reason why working at London Properties is the BEST!!!

For more information about joining our team go to: www.tiore.com

Politicians 'out of step' with voters on home-ownership?

2012-01-19T16:23:00.000-08:00

Source: NAHB

On the long road back to normal from the most devastating recession since the Great Depression, the nation’s beleaguered housing industry should see modest improvement in 2012 and stronger conditions in 2013, although housing has yet to be adequately recognized by the political leadership in Washington for its potential to accelerate the disappointing pace of job creation and economic growth, according to participants in a Jan. 11 NAHB webinar on the outlook for the new year.

The webinar coincided with new polling by NAHB showing that politicians may be out of step with the voting public on policies supporting homeownership.

Majorities of the Democratic, Republican and Independent voters responding to the survey agreed that dealing with the mortgage and foreclosure crisis is key to stabilizing the economy. In the meantime, a majority felt that the condition of the housing market has been staying about the same — neither improving nor getting worse.

(A related story in this issue of Nation’s Building News covers the complete findings from the NAHB survey.)

Making it tougher to address the housing concerns of the electorate, the standoff between Democrats and Republicans is likely to continue when Congress reconvenes this month, and as the year progresses attention will increasingly turn to the November elections.

“The economic downturn will be the central issue in this presidential election year, and the political divide over how best to improve the economy will shape the political process in Washington,” said NAHB CEO Jerry Howard.

A Polarized Environment

“We are operating obviously in a very polarized environment on Capitol Hill,” said NAHB’s chief lobbyist, Jim Tobin.

“One issue where there does seem to be bipartisanship is over homeownership,” he said, referring to the latest NAHB poll of voters.

However, Congress has largely been ignoring the situation — with many arguing that now is the time for the federal government to disengage from long-standing policies in support of homeownership — but “they will do it at their own political peril if they continue down this road,” Tobin said.

NAHB's top legislative issue for 2012, he said, will be to end the “absolute dearth of credit for the construction of new homes.”

Many local markets now need new residential construction, “but community banks are not being allowed to lend to builders who can show a viable project.”

“This has been a frustrating issue for us,” he said, but progress was made with the introduction in the House last year of H.R. 1755, which “would let the regulators untie the hands of America’s banks to work with builders to get viable projects started again to get the country building again and creating jobs.”

A companion bill is being developed in the Senate, he said, and the House bill now has 85 cosponsors.

(To read H.R. 1755, go to http://thomas.loc.gov and enter the bill number in the box at the center of the page.)

Among other legislative priorities for NAHB:

•Housing finance reform

“Preserving a federal role for housing finance is vital for the continuation of 30-year, fixed-rate mortgages,” he said.

“At the end of the day, the conversation has to come back to whether lawmakers see a role for the federal government in the housing finance system,” he said.

Some bills are likely to be introduced in the House this year — perhaps direct attacks on Fannie Mae and Freddie Mac or proposals to create a private-sector mortgage market — but movement is not expected in the Senate, which will be laying the groundwork for legislation after the elections.

•Tax reform

“There is an impetus to do this,” he said, and broad support for making the tax system simpler and reducing the tax burden, “but when you layer in that this might mean the elimination or reduction of the mortgage interest deduction, that support shifts significantly.”

In the NAHB polling, two-thirds of voters started out favoring the idea of lowering federal income tax rates for individuals, by a difference of 38 percentage points over those who opposed it.

But if lowering tax rates meant that deductions — including for the home mortgage interest deduction — would be reduced or eliminated, 52% were in opposition to the idea, 12 percentage points higher than those who still favored it.

The Super Committee that was charged by Congress to find ways to cut the deficit over the next 10 years indicated that housing was on the table, Tobin said, putting housing for the first time “squarely in the crosshairs of deficit cutters.”

•Regulatory oversight

Tobin said that NAHB would continue to work with regulatory oversight agencies to reduce the costly and burdensome regulations that are stifling a housing recovery.

“Housing is one of the most heavily regulated industries,” he said. Even today, when it is not building as many homes as in the past — it must contend with regulations from the Environmental Protection Agency, the U.S. Army Corps of Engineers, the Occupational Safety and Health Administration and other agencies.

•Other critical issues

These include reforming the home appraisal system, removing the 20% downpayment requirement from the Qualified Residential Mortgage, finding innovative ways to get foreclosed homes off the market and improving housing to stimulate job growth and the economy. “We need to see good, strong job creation numbers and get people feeling good about the economy again,” Tobin said.
Favorable Economic Signs

Looking at just where housing is headed this year, NAHB Chief Economist David Crowe said that, “We are starting 2012 with the same amount of optimism we started in 2011.”

Unfortunately, he said, 2011 turned out to be significantly weaker than projected — buffeted by a range of factors, including a run-up in energy prices, slumping employment growth, a big dive in consumer confidence, an unusually harsh winter at home and a disastrous tsunami in Japan, and the unsettling spectacle of Congress coming to a standstill over raising the deficit ceiling.

This year has begun on a more auspicious note, with economic growth, job creation, unemployment claims, consumer confidence, home foreclosures and home sales all showing favorable signs by the end of 2011, he said.

“While this won’t be a roaring year, there will be an improvement,” Crowe said.

Household Formations

Perhaps most reassuring is that the economy has begun to emerge from its demographic doldrums, he said, with more growth in the number of households.

From a traditional average growth rate of a little over 1%, annual household formations faltered during the recession and its weak aftermath, even declining into negative territory during a few quarters.

Most recently, in the third quarter of 2011, household formations rose above the traditional historical rate of increase, suggesting a return to a normal pace of household formations, particularly among young people.

Crowe calculated that there is a backlog of as many as 2 million households that have yet to be formed because of the downturn. Those households are now beginning to materialize as young adults who resided with parents or friends when the economy was bad now find themselves on the threshold of moving out and renting or buying a home.

Trends in the annual percentage change in home owners and renters point to a significant share of new households moving into rental housing.

Crowe added that housing fundamentals remain favorable.

Mortgage interest rates are low, and even as they creep up a bit as the economic recovery gains strength and there is more demand for credit, rates should be relatively low through the end of 2012.

House prices have returned to their normal ratio of about 3.2 times income, down from 4.7 at the peak of the housing boom in 2005.

Improving Local Markets

The current housing recovery is deriving its strength from local housing markets that are added to the NAHB/First American Improving Markets Index (IMI) when they have shown six months of improvement in employment, single-family housing permits and home prices.

(A story on the January IMI appears in this issue of Nation’s Building News.)

“A lot of places are doing better than the national average and we need to focus on that,” said Crowe.

The most recent IMI, he said, shows that the recovery is “quite diverse, and it is happening in a lot of places, not just the middle of the country where it started."

Twelve metropolitan areas were on the index when it was initiated in September; the number has now grown to 76.

As the recovery continues to unfold, and employment and consumer confidence show further improvement, home purchases will start picking up again, Crowe said, which will lead to more construction.

He forecasted that growth of the gross domestic product, falling back some from a “pretty good” pace for the final quarter of 2011, will be in the 2.2%-2.3% range during 2012 and climb above 3% in 2013.

Single-family home starts are projected to climb to 501,000 in 2012, up 17% from 2011, which could turn out to be the worst year on record.

Reflecting healthy growth in the number of renters, about 178,000 multifamily starts are expected for 2011, which would represent a 56% jump.

Multifamily production is forecasted to climb another 17% in 2012, reaching the 208,000-unit level.

And residential remodeling of owner-occupied properties is “doing nicely,” Crowe said, and poised to register a 12% gain from the fourth quarter of 2011 to the fourth quarter of 2012.

URL to original article: http://www.builderonline.com/builder-pulse/politicians--out-of-step--with-voters-on-home-ownership-.aspx?cid=BP:011912:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Debunking the myth of the 'end of homeownership'

2012-01-19T15:26:00.000-08:00

Source: New Geography

It is well known that home ownership has declined in the United States from the peak of the housing bubble. According to Current Population Survey data, the national home ownership rate fell 2.9 percentage points from the peak of the bubble (4th quarter 2004) to the third quarter of 2011.

It is less well understood, however, that the spurt in home ownership was, like the housing bubble, an aberration. Looking over the data from the 2010 census, it seems clear that since 2000 the actual decline was a much smaller: 0.8 percentage points from the 2000 census. In fact the current home ownership rate tracks fairly well with that of the post 1960 and the entire pre-bubble period.

The End of Home Ownership? Analysts such as Richard Florida suggest an end to the preference for home ownership, citing the losses from the bubble, which were, in fact, an aberration. Most recently, Xavier University's Michael F. Ford wrote in the Washington Postabout home ownership having been driven to 69% by "guarantees" and "tax breaks," such as the mortgage interest deduction. He notes that this "spending spree" led to a loss of $6 trillion in US real estate value.

Ford does not mention the fact that home ownership had hovered between 60% and 65% for more than three decades before the bubble, without suffering any such losses. Nor does he mention the roles played by Fannie, Freddie and Frank (D-Massachusetts), along with others in Washington, or the related "drunken sailor" mortgage policies concocted by lenders and Wall Street that anyone familiar with credit should have known could only lead to disaster. This was obvious to many observers, although shockingly not to the Federal Reserve Board, as recent reports indicate .

There is no doubt that the "spending spree" led to the housing bust and triggered the Great Financial Crisis. However it was not the long-standing ownership support programs of the federal government that were primarily to blame. As late as the beginning of the decade, there was no bubble and the median multiple in major metropolitan areas averaged 2.9, within the maximum affordability rating of 3.0. The "spending spree" itself was a rational response to policies that turned housing into the equivalent of a speculative commodities market, with destructive results, in certain large markets. Critically the bubble did not appear in many others.

Speculation and the "Bubble States:" The extent to which speculation fueled house price increases is the subject of a recent Federal Reserve Bank of New York paper by Andrew Haughwout, Donghoon Lee, Joseph Tracy and Wilbert van der Klaauw. The researchers examine investment, or speculation in real estate markets, during the housing bubble. Investors buy houses that they do not intend to live in for the purpose of making money. In normal times, this investment is principally for rental income or long term capital gains. However, in the highly charged housing markets that developed in some metropolitan areas, prices rose so rapidly, that "flipping" (short term ownership) became very profitable, at least for some.

Pointing out that "The recent financial crisis—the worst in eighty years—had its origins in the enormous increase and subsequent collapse in housing prices during the 2000s," the New York Fed researchers show that speculative activity was much greater in California, Florida, Arizona and Nevada (which they label the "bubble states") than elsewhere. My analysis indicates that two-thirds of the house value drop in the nation before the Lehman Brothers collapse (September 15, 2008) occurred in the four "bubble states." According to the researchers, this greater speculative activity in these markets made the market more instable because unlike owner-occupiers, investors are far more likely to default on mortgage loans.

Missing the Geography of Speculation (the Geography of "Smart Growth"): The New York Fed research, however, ignores the geography of speculation. Why was speculation was so much more rampant in the bubble states? There is no reason to believe that residents of California, Florida, Arizona or Nevada are any less interested in making money or, in general, any more greedy. Yet speculators largely stayed out of markets in high demand areas, such as Dallas-Fort Worth, Houston and Indianapolis. In fact, in large parts of the nation, there was little speculative activity. In these markets prices were not rising inordinately so speculators did not bother with them. Instead they focused on more volatile markets where prices were already rising strongly, further swelling local price increases.

The geography of speculation corresponds largely to the geography of excessive land use restrictions, which created the shortage of land for housing that drove the prices up in the four bubble states (Note). It is a fundamental principle of economics that prices tend to rise where desired goods are in short supply.

In California and Florida, restrictive land use policies (smart growth or growth management) created a shortage of land for new housing relative to demand. The largest metropolitan areas of Nevada (Las Vegas) and Arizona (Phoenix) are surrounded by government owned land that was auctioned for development at such a slow rate that prices rose by more than five times during the bubble.

Astonishingly, having missed the geography of speculation, the New York Fed researchers suggest that a solution is to regulate speculation. There is a much simpler answer, which Florida has already implemented which is to repeal the restrictive land use regulations, without which inordinately speculative profits cannot occur.

Meanwhile, as the speculators have been driven out of the market, and despite federal government efforts to prop-up the artificially high house prices, values have fallen to below 2000 levels for the first time (Figure 1). Based upon Federal Reserve Board and Census Bureau data, it is estimated that the average owner-occupied house value in 2011 (three quarters) has fallen to $211,000, which is down from a peak of approximately $345,000 in 2006 and $222,000 in 2000 (adjusted for inflation).

There were 5,057,000 more home owners in 2010 than in 2000, and perhaps more surprisingly, 5,119,000 more home owners occupying detached housing. Detached, attached (town house) and apartment ownership each increased over the past decade (Figure 4). Contrary to new urbanist theoreticians, detached housing – not urban condos – overall accounted for the most housing growth, both owner-occupied and rentals.

Xavier's Ford calls the American Dream of home ownership a myth and even goes so far as to suggest that home ownership is "more important to special interests than it is to most Americans." In fact, Ford's interpretation is delusional. That home ownership continued its advance, however modestly, in the face of the worst economic downturn in 80 years, reveals the durability and, indeed the reality of home ownership as an American Dream.

URL to original article: http://www.builderonline.com/builder-pulse/debunking-the-myth-of-the--end-of-homeownership-.aspx?cid=BP:011912:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

A turning point to a better housing market seen

2012-01-18T16:35:00.000-08:00

Source: Bloomberg/Business Week

Jan. 13 (Bloomberg) -- Home sales and construction will improve this year, contributing “modestly” to economic expansion after acting as a drag on growth since 2006, according to a Fannie Mae forecast released today.

Sales of new and existing homes are likely to increase 3.5 percent and housing starts are projected to rise 16 percent, fueled by improvement in apartment development and a rebound in single-family house construction, according to the report by Douglas Duncan, Fannie Mae’s chief economist, and Orawin Velz, a director in its Economics and Mortgage Market Analysis group.

“With an expected improvement in housing activity in 2012, residential investment should start contributing to growth, albeit only modestly initially,” Duncan and Velz wrote.

The housing market has been held back by weak demand as high unemployment and concerns about job security prevent buyers from taking advantage of falling home prices and borrowing costs, Duncan said in an interview yesterday at Bloomberg’s New York offices.

“We see an incremental increase only in the number of residential units that get moved through sale,” Duncan said. “It’s another sort of holding pattern.”

Mortgage rates will continue to provide support for the market, rising only slightly in 2012, according to the report. The average rate for a 30-year fixed loan fell to 3.89 percent in the week ended yesterday, the lowest in records dating to 1971.

Originations to Decline

Mortgage originations in 2012 are expected to decline to $1.01 trillion from an estimated $1.36 trillion last year as refinancing “declines sharply,” according to the report. The refinancing portion is likely to drop to about 53 percent from about 66 percent last year because many homeowners have already taken advantage of lower rates, Duncan said.

The expansion this year of President Barack Obama’s three- year-old Home Affordable Refinance Program for Fannie Mae and Freddie Mac loans with little or no home equity will add about $200 billion to $300 billion to refinancings, Duncan said. This year’s expected decline in mortgage originations would be steeper without the expansion, he said.

URL to original article: http://www.builderonline.com/builder-pulse/a-turning-point-to-a-better-housing-market-seen.aspx?cid=BP:011812:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

U.S. May Be On Verge Of A Big Comeback With A Double Back-To-Back Economic Recovery

2012-01-18T15:31:00.000-08:00

Source: Forbes

For the first time, a highly respected and reputable economist with a huge impressive Wall Street following is suggesting that President Barack Obama could win reelection as he lays out well-grounded arguments that a “double back-to-back” economic recovery is within sight.

Dr. Ed Yardeni, president and chief investment strategist of Yardeni Research Inc., which has a large following among U.S. and global institutional investors, says the U.S. economy may be “on the verge of a huge comeback” and could “experience an ununsual second recovery over the next three years, following the weak initial recovery of the past three years.”

Lets’s be very clear, though. Yardeni, a conservative economist with a pragmatic approach to analyzing and interpreting the U.S. economy and what’s going on in the global economic picture, isn’t forecasting an Obama victory. Rather, he is pointing out, in his daily online newsletter for clients this morning, that several signposts strongly suggest that a second economic recovery may be on its way, for which the President could take all the credit for, and which would then turn the November elections his way.

True, the naysayers have been predicting a “double-dip recession” for the economy since the recession started in 2009. “I am suggesting that a more likely scenario might be a double back-to-back economic recovery,” says Yardeni.

The noted economist and investment adviser points out that in a second economic recovery, “President Obama is more likely to win a second term.” That’s because the unemployment rate is likely to fall in such a scenario, consumer confidence will brighten up, and stock prices will move higher – “and President Obama could take credit for it all — and he would win if enough voters give it to him,” argues Yardeni.

He underscores the facts that have been evident all along: The economy lost lots of jobs, and so far employment recovery has been anemic, with payrolls still 6.1 million below the record high set in January 2008. The housing situation has been in a depression, with the national single-family existing home median price down 28.9% since it peaked during July 2006, and home foreclosures are in the millions. The upturn in auto sales has been subpar and fiscal policy hasn’t been as stimulative as in past recoveries because there has been lots of fiscal drag from state and local governments. In the past, recessions were followed by one, not two, recoveries.

Indeed, the key sectors of the economy haven’t participated in the initial rebound.

“But finally we may be on the verge of doing so,” says Yardeni. Indeed, real GDP is up 5.5% from the recession trough during the second quarter of 2009 through the third quarter of 2011, to a record high of $13.3 trillion, Yardeni points out.

“The second recovery could take off as the pace of hiring quickens, housing activity finally picks up, auto sales head higher, and state and local governments stop retrenching,” says Yardeni. ”If so, then the U.S. would finally enjoy the benefits of a broader-based recovery,” he adds.

What about Europe and the impact of its problems on the U.S. economy? Here is what Yardeni says: “It could trip up America’s recovery, or maybe not.” While a depression in Europe might depress the U.S. economy and S&P corporate profits, there is another side to this story: “Better-than-expected growth in the U.S. should help Europe’s recession,” argues Yardeni.

So what’s Yardeni’s advice for U.S. investors? What should they do now that the outlook for the U.S. seems to be improving while the outlook for Europe is clearly deteriorating?

“U.S. investors should stay close to home,” advises Yardeni. For global investors, the U.S. “once again should be a safe haven in 2012 as it was in 2011.” And if Europe falls apart, “then the only safe havens are likely to be the U.S. dollar and U.S. Treasuries,” says Yardeni.

URL to original article: http://www.forbes.com/sites/genemarcial/2012/01/17/u-s-may-be-on-verge-of-a-big-comeback-with-a-double-back-to-back-economic-recovery/

For further information on Fresno Real Estate check: http://www.londonproperties.com

Hope Dimon's right

2012-01-17T14:27:00.000-08:00

Source: Wall Street Journal

The government and the banking industry needs to get serious about fixing the housing market’s problems, but there’s no one leading the charge, said Jamie Dimon, the chief executive of J.P. Morgan Chase & Co., during the bank’s quarterly conference call on Friday.

“I would convene all the people involved in the business. I would close the door. I would stay there until we resolved a bunch of these issues so we could have a more healthy mortgage market,” he said. “You could fix all this if someone was in charge.”

Mr. Dimon ticked off a list of unresolved issues, including foreclosure delays, the fate of Fannie Mae and Freddie Mac, conflicts of interest between owners and servicers of first mortgages and second mortgages, and pending rules from the Dodd-Frank Act that will establish new rules of the road for mortgages that are pooled into bonds.

“There is no one really in charge of all of this. It is just kind of sitting there,” he said. A “holistic” approach to tackle those issues could lead to a faster recovery in housing, he said, endorsing the sentiment behind the Federal Reserve’s call to action on housing last week with its release of a 26-page white paper.

Mr. Dimon also elaborated on his view that housing markets have neared bottom. “In half the markets in America it is now cheaper to … buy than to rent. Housing is at all-time affordability,” he said. “What you need to see is employment.”

An stronger surge in job growth would boost household formation, which coupled with positive demographics, means that “you’re going to have a turn at one point,” he said. “I don’t know if it’s three months, six months, nine months, but it’s getting closer.”

Mr. Dimon said his bank had made mistakes in handling mortgage foreclosures, and said the bank “should pay for the mistakes we made.” But he added that banks have also offered millions of mortgage modifications, and that banks “are doing it as aggressively as we can.”

He also brushed aside calls for widespread principal reductions, saying that he didn’t agree “that somehow principal forgiveness would be the end-all, the be-all.”

URL to original article: http://www.builderonline.com/builder-pulse/hope-dimon-s-right.aspx?cid=BP:011712:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Real estate--and economics--are local

2012-01-17T12:29:00.000-08:00

Source: The Atlantic

When we write about the economy, too often writers and analysts (myself, included) write as though there is one national economy moving forward or backward at a single speed. Nothing could be farther from the truth. In a North Dakota boomtown, mining companies are begging for workers, and wages are climbing. In Riverside, where housing prices have fallen more than 50 percent from their 2006 peak, unemployment is kissing 12 percent and wages are still falling.

One of the best ways to visualize the diversity of the U.S. economy is the PayScale Index, which tracks wages by metro and occupation over the last year. Here is the pay growth story by industry (click to enlarge)...

... and by metro (click to enlarge) ...

That's not a typo. According to PayScale, Riverside wages are still collapsing, five years after their housing prices peaked.

To see how pay compared to the national average by city and by industry, we rounded up these graphs, which PayScale kindly shared with The Atlantic. First the graphs, then some analysis and context (Important graph-watching note: The PayScale index measures income growth with a year-2006 base of 100. The fact that LA's line is lower than Houston doesn't mean LA wages are lower than Houston, but rather that Houston wages have grown more since 2006):

Not even these breakdowns capture the full diversity of the multi-speed economy, but they bring into focus a million little parts under the hood of the "national economy," illustrating a few trends we already know:

1) Houston vs. Riverside. Houston is booming. Riverside is still busting.

These are the polar ends of the multi-speed recession, and the story begins with housing. In Houston, where housing prices have fallen 11 percent from their peak in 2009, gross metropolitan product has led the 100 largest metros in the country. By contrast, Riverside, in which housing prices have fallen 55 percent from their peak in 2006, ranks among the ten worst metros in the country in unemployment and GMP change. Houston's reliance on energy has served it well in the last few years, while Riverside's real estate collapse has made it the poster-child of the post-bust depression city.

2) Food services and retail. What does it say about the economy that cheap jobs in food services and retail got even cheaper in the recession? One explanation is that unemployment has been so high among young and under-educated Americans that there's a surplus of desperate workers that could do these jobs. As with anything else, where supply greatly exceeds demand, prices drop. In this case, pay was the price. That leads us to number three...

3) Manufacturing wages had to go down before they went up. You can see in the gallery above that manufacturing wages fell after the Great Recession but have just begun to perk up. This jives well with our understanding of the manufacturing economy. Gutted in the 2000s and again by the Great Recession, manufacturing jobs have actually enjoyed a boomlet in the last two years.
Fully 300,000 of the 2+ million jobs added February 2010 (the nadir of unemployment) have come from manufacturing, and the Institute for Supply Management, which surveys American manufacturers, has been in positive territory for most of the year. One thing that made this boomlet possible is that the fact that manufacturing wages have declined while productivity increased, making U.S. manufacturing more competitive with the millions of factories overseas.

URL to original article: http://www.builderonline.com/builder-pulse/real-estate--and-economics--are-local.aspx?cid=BP:011712:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Single dad trying to take back home from Occupy Wall Street protesters

2012-01-16T10:21:00.000-08:00

Source: Fox News

They’re occupying his home.

Occupy Wall Street protesters announced with great fanfare last month that they moved a homeless family into a “foreclosed” Brooklyn, N.Y., home — even though they knew the house belonged to a struggling single father desperately trying to renegotiate his mortgage, The Post has learned.

“They’re trying to take a house and say the bank is robbing the people because the mortgage is too high — so contact the owner!” fumed Wise Ahadzi, 28, who owns the home at 702 Vermont St. in East New York.

Occupiers “reclaimed” the row house on Dec. 6 and ceremoniously put out the welcome mat for a homeless family.

But Bank of America, which has been in and out of foreclosure proceedings against Ahadzi since 2009, confirmed to The Post that he is still the rightful owner.

Meanwhile, the family that OWS claimed to be putting into the vacant house has not yet permanently moved in. And it turns out the family is not a random victim of the foreclosure crisis, but cast for the part, thanks to their connection to the OWS movement.

OWS last week said it has spent $9,500 breaking into the house and setting it up for the homeless Carrasquillo family. A photo of the smiling family covers a window, under the slogan, “A place to call home.”

The head of the family, Alfredo Carrasquillo, 28, is an organizer for VOCAL- NY, a group that works with OWS. His Facebook page shows him in a “99 Percent” T-shirt at an OWS protest in November.

The Post visited the Vermont Street home last week — six weeks after OWS announced that the Carrasquillos were moving in — and the family was nowhere to be found.

In fact, the only people occupying the house were occupiers themselves.

“They only stay here sometimes,” a protester named Charlie said of the Carrasquillos. “There’s not enough room for the kids.”

The occupier refused to say how many others were inside, but at least two more protesters could be seen at the house, along with mattresses on the floor, during The Post visit.

“We’re almost done with the basement,” he said of the renovations.

The real property owner is livid because he could be raising his two little girls, Imani, 3, and Kwazha, 10, in the two-story home instead of in a meager, two-bedroom rental in Brownsville while he tries to sort out his mortgage nightmare.

Police notified him in early December that the vigilante vagrants moved into his East New York digs, he said. He immediately ran over to the house to see for himself.

“Oh, don’t call the police!” an occupier begged him.

OWS leaders and Brooklyn Councilman Charles Barron, an OWS supporter, met with Ahadzi before the press conference to discuss the future of his property, he said. Ahadzi hoped that the group would help him regain his footing.

“Why can’t you fight for me?” he asked them.

“They told me I don’t qualify,” he said. “So my lawyer asked what the qualifications are. [They said] I have to be with an organization and they’ll deal with the bank and you have to be homeless.

“They said they couldn’t help me,” he added.

Ahadzi explained that he purchased the house for $424,500 in 2007 before the housing bubble burst and the market price plummeted to $150,000. He claimed he lost his job as a day trader in 2009 and couldn’t meet his mortgage payments.

He packed up and left after foreclosure proceedings began in 2009, he said.

“I paid the mortgage on the house for two years,” he added.

Ahadzi even attended the Dec. 6 press conference at the house when the Carrasquillos were introduced. He wanted to tell reporters his story.

“[OWS] told me not to talk to them [reporters] because they [OWS] had an offer for me,” he said.

At a second meeting after the press conference, however, organizers said they would not pay him for the house. At that point, he told them to leave.

Inside the house the walls are knocked down and all of his belongings, including a stove, refrigerator and bedroom furniture, have been moved to the basement.

“I’m pissed off,” he said.

“I’m trying to get my house back, and they’re trying to take it from me.”

URL to original article: http://www.housingwire.com/2012/01/16/single-dad-trying-to-take-back-home-from-occupy-wall-street-protesters-%e2%80%8e

For further information on Fresno Real Estate check: http://www.londonproperties.com/

Fannie Mae sees 2012 home sales up 3.5% to 4.74 million

2012-01-13T14:46:00.000-08:00

by ANDREW SCOGGIN

The housing sector will likely take incremental steps forward in 2012, though total originations will fall on fewer refinances, according to economists at Fannie Mae.

The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.

Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.

"We're entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior," Duncan said in a release. "Unfortunately, we expect this momentum to slow as we move through the first half of the year."

The report released Friday forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012.

The Federal Housing Finance Agency home sales price index, excluding refinances, could dip 1.1% for 2012 from a year before, according to the forecast. Economists predicted the 2011 index would finish 4.6% lower than 2010.

Mortgage originations as dollar volume could see a decline as well in 2012, largely on a steep drop in refinances. The Fannie report said total originations will fall to $1.01 trillion in 2012 from a predicted final 2011 tally of $1.36 trillion. Economists expected refinancing to plummet to $540 billion from $894 billion.

Purchase mortgages, however, will rise to $471 billion in 2012 from a estimated 2011 total of $464, according to the report.

Total single-family outstanding mortgage debt will likely drop 1.3% to $10.14 trillion in 2012.

For the U.S. economy as a whole, Fannie researchers predicted real GDP would increase 3.3% in the fourth quarter to finish the year at 1.7% growth. Economists forecast 2.3% GDP growth for 2012 and 2013.

URL to original article: http://www.housingwire.com/2012/01/13/fannie-mae-economists-see-2012-home-sales-up-3-5-to-4-72-million

For further information on Fresno Real Estate check: http://www.londonproperties.com

Marketplace Homes Expands in Weak Markets

2012-01-13T12:13:00.000-08:00

By:John Caulfield

Its formula of offering lease payments for unsold existing homes translated into 543 sales last year for its preferred builder network.

And you thought your salespeople were good.

Joel Parrot, who for the past 18 months has been a “solutions manager” for Marketplace Homes, helped that company’s preferred builders sell 144 new houses in 2011. Parrot was one of at least four of Marketplace’s 22 solutions managers who each negotiated more than 60 purchase agreements with buyers last year.

The Plymouth, Mich.-based Marketplace helped sell 543 homes last year, a 165% increase over 2010. The carrot that Marketplace has been dangling since 2003 to win over prospects is its guarantee of monthly lease payments on their existing homes for up to six years if they purchase a new house from one of the builders in Marketplace’s network. In many cases, those existing homes get rented instead of resold.

Mike Kalis, Marketplace Homes’ managing partner, believes that Parrot’s sales total might have been the highest for any individual seller in the industry last year. “We haven’t found too many other people who sold more than 50 [houses],” he tells Builder.

Parrot, who worked for Pulte for four years, has a master’s degree in real estate development and management. He attributes his success at Marketplace to the company’s leasing strategy. “Nearly every client I deal with feels stuck: They can’t move into a new house because they can’t sell their old home. We unstick them.” He says the majority of new homes he helped sell last year were priced in the low $200s to low $300s.

Parrot says he also benefits from the fact that he’s not tied to selling in just one area. On any given day he’s dealing with between four and six buyers in his two primary markets: Chicago, where he works with 10 builders; and Denver, where he works with four. In the fourth quarter of 2011 alone, Marketplace helped K Hovnanian sell more than 25 homes in Chicagoland, says Kalis.

Marketplace currently works with nearly 40 builders in 36 markets in 18 states. These include nationals such as PulteGroup and Lennar; regional players such as Ashton Woods, Orleans, The Drees Cos., William Ryan Homes, and Taylor Morrison; and market-specific builders such as Lombardo Homes, ICI, Maronda, and Goodall Homes.

Kalis says he’s seeing encouraging signs of improving consumer confidence. But home values in most markets are still a long way from being anywhere close to full recovery. These conditions are why Kalis projects that Marketplace can increase the number of purchase agreements it negotiates to 1,500 homes in 2012. He also predicts that a good number of new-home buyers’ existing houses will be converted to rental properties, some of them permanently.

As for Parrot, he’s shooting for 200 sales this year.

John Caulfield is senior editor for Builder magazine.

URL to original article: http://www.builderonline.com/sales/marketplace-homes-expands-in-weak-markets.aspx?cid=BP:011312:FULL

For further information on Fresno Real Estate check: http://www.londonproperties.com

A Good Rental History Can Help Borrowers

2012-01-13T11:34:00.000-08:00

Source: The New York Times

IF you’re planning to buy a home for the first time later this year, your chances of qualifying for a mortgage might be better if you’ve had a history of paying the rent on time.

Last year Experian, one of the three leading credit-reporting companies, added a section to millions of credit reports showing on-time rent payments, and raised the credit scores of many people. The company said that this year it would add in negative marks, including mentions of bounced checks or of tenants’ leaving before a lease was up.

Now two other companies, CoreLogic and FICO, are planning a new credit report and score that incorporates payment histories from landlords, as well as payday and other nontraditional loans, child support and, later on perhaps, utility and mobile phone bills.

“Evidence of positive rental payments could be a plus for consumers,” said Joanne Gaskin, FICO’s director of product management global scoring. Rental history data could show up on one in five of the new CoreScore credit reports, she estimated.

Around 35 percent of households nationwide were renters in 2010, according to the most recent census data, while in parts of New York City, three-quarters or more rent.

Incorporating rental payments into credit scores could affect millions of people who have not established credit histories through credit cards, student loan repayments and other credit sources. That includes recent college graduates, students and some divorced people. “The biggest impact is on individuals who were not previously scoreable,” said Brannan Johnston, the managing director of Experian’s rent bureau.

Almost half of those higher-risk consumers experienced an increase of 100 points or more after their positive rental history was added, Mr. Johnston said. (Those with average or higher scores did not experience major movement.)

CoreLogic said it was too early to show the effects of its new credit report, which began in December. The changes are “intended to allow lenders and consumers to have greater transparency,” said Tim Grace, a senior vice president of CoreLogic, and that could lead to increased lending.

People who have lost their homes to foreclosure and are now leasing may be able to rebuild their credit histories by being “very responsible renters,” Mr. Grace added.

But consumer groups and advocates are skeptical, noting that reports are sometimes riddled with mistakes and some landlord-tenant disputes may be difficult to capture in a credit report. Rent may not have been paid, for example, because the furnace was left unrepaired for months.

Consumers can dispute any information they believe is inaccurate. “We check and recheck all the information,” Mr. Grace said, adding that consumers could order a copy of their new CoreLogic credit reports online.

CoreLogic’s Core Score will cover about 100 million people. The three other major credit reporting companies, which also include Equifax and TransUnion, have reports on 200 million; their reports are available free once every 12 months at annualcreditreport.com. TransUnion collects rental payment information and shares it with landlords, but Experian is the only one of the three so far to add rental history to credit reports.

Experian has mostly major property managers and apartment companies reporting rent histories, via their accounting software. Most small landlords are not, though Experian is considering a system that could allow more independents to report on-time and problem renters.

If your landlord is participating, your rental contract may show up as debts owed on your credit report for up to 12 months, said Maxine Sweet, Experian’s vice president for public education. If your landlord is not yet reporting to Experian or CoreLogic, she added, you can build your own rental history by documenting on-time payments.

URL to original article: http://www.nytimes.com/2012/01/08/realestate/mortgages-a-good-rental-history-can-help-borrowers.html?_r=2&ref=realestate

For further information on Fresno Real Estate check: http://www.londonproperties.com

NeighborWorks invests $1.3 billion into rental homes

2012-01-12T14:53:00.000-08:00

by JON PRIOR

NeighborWorks America, which finances community development around the country, invested more than $1.3 billion in rental housing over its fiscal year ended Sept. 30.

The NeighborWorks network consists of 235 independent nonprofit organizations. It owns or manages more than 90,000 rental homes, according to its latest data. The investment of the last year included more than 5,100 homes and 2,800 apartments NeighborWorks built or purchased.

The organization's CEO Eileen Fitzgerald expects to grow the portfolio past 100,000 rental homes through 2013. It plans to acquire properties and construct some as well. The Washington firm expects additional nonprofits to join its network.

"Government housing budgets at all levels are under stress and the competition for capital priced at rates that make housing accessible for working families, while improved from a year ago, is still a factor in creating quality affordable rental homes for families with modest incomes," Fitzgerald said. "In short, the cost to construct, purchase and refinance homes to ensure tenant affordability remains a challenge."

The NeighborWorks money came from a variety of avenues. Community Housing Capital based in Georgia lends to NeighborWorks and helps it raise funds from other firms. NeighborWorks Capital in Maryland is another loan fund within the network that coordinates with other sources of private dollars such as the Calvert Foundation and the S.H. Cowell Foundation.

Acquiring and managing rental properties is becoming a growing interest. In August, the White House along with the Federal Housing Finance Agency began working on plans to sell large amounts of government-owned, repossessed homes in bulk to investors, who would possibly rent them out. The first transactions are expected in early 2012.

As a result, several firms are building out property management divisions. TenantAccess launched PropertyAccess in August to sell investors systems for management, billing and reporting. Green River Capital, an asset management firm that handles REO for Freddie Mac, also launched an REO rental program in September.

The challenge for these potential investors is gathering enough cash to meet the supply. NeighborWorks said it will continue reaching out to "social investors" to build out its portfolio as borrowing costs have risen and underwriting standards remain tight.

"In one of the toughest markets for securing capital for quality, affordable rental housing, the NeighborWorks network pushed ahead and found the partners they needed to create great housing for families," Fitzgerald said.

URL to original article: http://www.housingwire.com/2012/01/12/neighborworks-invests-1-3-billion-into-rental-homes

For further information on Fresno Real Estate check: http://www.londonproperties.com

Foreclosures drop to lowest level since 2007

2012-01-12T12:11:00.000-08:00

by JON PRIOR

Banks filed foreclosures on roughly 205,000 homes in December, the lowest monthly total since November 2007, according to RealtyTrac.

The 1.8 million foreclosures for 2011 dropped nearly 35% from 2010.

Unexpected delays kept 2011 numbers from passing the previous year's total as was originally expected. Still, one in every 69 homes received at least one filing.

"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, RealtyTrac's new CEO. "The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages — particularly in states with a judicial foreclosure process."

Problems arose late in 2010 of improper filings at the state courthouses. Mortgage servicers and third-party firms will spend much of 2012 sorting through any financial harm done to borrowers, and settlement talks with the state attorneys general continue.

Foreclosure timelines vary wildly from state to state. It takes the longest in New York. The foreclosures completed there in the fourth quarter of 2011 took an average 1,019 days to complete, up 37% from the same period one year ago. The next longest was Florida at 964 days.

In Texas, a nonjudicial state, foreclosures took an average of 90 days to complete. The national average for the foreclosure process increased to nearly one year from start to finish: 348 days.

One in 16 Nevada homes received a foreclosure filing in 2011, according to RealtyTrac. It's still the highest foreclosure rate in the country despite dropping 31% from the year before.

Scheduled foreclosure auctions in Arizona dropped 41% from November to December alone. Still, the state registered the second highest foreclosure rate for the third year in a row with one in 24 homes there receiving a filing.

One in 14 homes in Las Vegas received a foreclosure filing in 2011, the highest rate for metro areas of 200,000 population or more. Ten of the top 20 cities were in California, RealtyTrac said.

Moore said lenders showed signs of pushing through the backlogs in the second half of last year.

"We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010," he said.

URL to original article: http://www.housingwire.com/2012/01/11/foreclosures-drop-to-lowest-level-since-2007

For further information on Fresno Real Estate check: http://www.londonproperties.com

America's robo-recovery

2012-01-11T15:14:00.000-08:00

Source: Bloomberg/Business Week

It's a Man vs. Machine Recovery
Companies have been buying technology instead of hiring, and Okun's Law is broken

The U.S. produces almost one-quarter more goods and services today than it did in 1999, while using almost precisely the same number of workers. It’s as if $2.5 trillion worth of stuff—the equivalent of the entire U.S. economy circa 1958—materialized out of thin air.

Although businesses haven’t added many people, they’ve certainly bulked up on machines. Spending on equipment and software hit an all-time high in the third quarter of 2011. “Huge advances in technology have allowed businesses to do more with less,” vaporizing jobs for everyone from steelworkers to travel agents, President Barack Obama warned in December.

So are robots getting all the good jobs? This year may provide the answer as the economy gathers steam. Most economists, cheered by 540,000 hires since Labor Day, say technology inevitably destroys some jobs even as it ultimately creates new ones. But with more than 20 million Americans still jobless or underemployed, others worry that something fundamental has changed. “What’s different now is the speed and scale of what’s happening,” says Erik Brynjolfsson, director of the MIT Center for Digital Business. Brynjolfsson and Andrew McAfee, co-authors of the recently published book Race Against the Machine, argue that the economy is in the early stages of a “Great Restructuring” that is hollowing out the labor market and exacerbating inequality.

Nonsense, say economists including James D. Hamilton of the University of California at San Diego. There’s nothing new about machines replacing people. In 1900, 41 percent of Americans worked on farms. Today, thanks to labor-saving tractors and combines, the figure is less than 2 percent. Yet ex-farm workers found new jobs. And as manufacturing grew leaner in recent decades, factory workers—or their children—migrated to finance, health care, computers, and other growing industries.

“In 2005 the average U.S. worker could produce what would have required two people to do in 1970, what would have required four people in 1940, and would have required six people in 1910,” Hamilton writes in an e-mail. “The result of this technological progress was not higher unemployment but instead rising real wages. The evidence from the last two centuries is unambiguous—productivity gains lead to more wealth, not poverty.”

Americans have fretted about a dystopian future since the first industrial robot (called “Unimate”) started work at a General Motors (GM) plant in Ewing Township, N.J., in 1961. The worries grew more acute last year as the jobs-poor recovery ground on. Chris Matthews, host of MSNBC’s Hardball, recently ruminated on air about ubiquitous automated kiosks as well as the replacement of “seven or eight cameramen” on his program with machines. “Everywhere we go, it’s robots,” he said.

Google (GOOG) last year unveiled driverless cars. Lionbridge Technologies (LIOX) is taking orders for an automated translation service. Medical device maker Boston Scientific (BSX) is automating its Quincy (Mass.) distribution center, the company’s largest, with robots made by Kiva Systems of North Reading, Mass.

Technology is not just revolutionizing the assembly line. Paralegals can’t match software in accurately searching thousands of documents for specific words or patterns. New software apps easily best journeyman sportswriters at penning routine game wrap-ups. “The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.

As digital technology spreads, the classic relationship between rising output and rising employment—known as Okun’s Law—now appears to be broken. If the law, which postulates that every 3 percent gain in output should reduce the jobless rate by a percentage point, still applied, then today’s nearly 9 percent rate would be about 1 percent.

Crowded unemployment lines, however, aren’t necessarily a sign that machines are winning a zero-sum fight with humans. The surge of spending on automation and IT systems, for example, is one of the economy’s strongest props. In the third quarter, nonresidential investment, which includes labor-saving machinery, contributed 1.41 percentage points to gross domestic product growth, second only to consumer spending. Lincoln Electric Holdings (LECO), a maker of robotic welding gear, reported $55.5 million in third-quarter profits, up 71 percent from the same period in 2010.

Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.

So if machines aren’t responsible for the dearth of jobs, what is? Simple: lack of demand. Industry is using less of its productive capacity today than it did at the low point of the 1990-91 recession, according to the Federal Reserve. “We need a new source of demand,” says MIT’s Autor. “If people aren’t buying stuff, then no one’s hiring workers.”

The prosperous 1990s revealed the power of demand to simultaneously boost employment and spending on machines. Companies binged on new equipment and software in the late 1990s even more than today, yet the unemployment rate averaged 4.4 percent, notes economist Dean Baker of the Center for Economic & Policy Research in Washington, D.C. From the first quarter of 1997 through the end of 2000, even as productivity increased 14 percent, demand for goods and services was so great that the private sector created more than 9 million jobs.

One thing that’s different now: Instead of lifting all boats, as it once did, technology is sorting workers into winners and losers. Over the past three decades job growth has been fastest among high- and low-skill jobs, while mid-skill occupations atrophied, according to economists Jaison Abel and Richard Deitz of the Federal Reserve Bank of New York. Although the economy created nearly 50 million new nonfarm positions in that period, technology cut the ranks of some workforce mainstays, such as machine operators, by more than half.

Flat-lining living standards and a rich-man, poor-man job market add up to a scary new era. Despite their concerns, Brynjolfsson and McAfee remain “digital optimists.” Eventually, they say, revolutionary technologies will spawn unimagined new businesses and jobs. There’s certainly room for them. By the Congressional Budget Office’s reckoning, total output in the third quarter was 5 percent below potential. That amounts to almost $800 billion of missing demand—enough to occupy both man and machine.

The bottom line: Although machines may appear to get all the good jobs, there’s nothing wrong with the labor market that resurgent demand wouldn’t fix.

URl to original article: http://www.builderonline.com/builder-pulse/america-s-robo-recovery.aspx?cid=BP:011112:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

As Eurozone crisis mounts, searches for U.S. real estate safe havens grow

2012-01-11T14:05:00.000-08:00

Source: Wall Street Journal

Web traffic to a U.S. real-estate website jumped in the fourth quarter from countries at the center of the euro-zone crisis, suggesting that low prices could be luring foreign and domestic buyers alike.

But looking at home listings online is a long way from actually buying a new house, so the bump could be fleeting, fueled by Greeks and Italians admiring photos of Florida condos instead of reading more depressing financial news. Foreign buyers can play a significant role in a few U.S. markets such as Miami, but frequently searched cities such as New York and Los Angeles are unlikely to be altered by this traffic uptick.

The online traffic was measured by Trulia, a San Francisco-based company that aggregates U.S. real-estate listings and provides other real-estate analysis. Trulia only started tracking data on international visitors to its site in 2011, meaning it’s not possible to see how past crises might have affected Web traffic.

While Trulia saw an increase in traffic from Greece and Italy (and, to a lesser degree, Spain), clicks on its website were down from other European countries, led by a steep decline from the Netherlands. And some of those other countries, including Ireland, have seen their fair share of trouble from the debt crisis.

Guessing what’s behind the Web traffic is, to a certain extent, just that: Trulia doesn’t know the demographic makeup of the users other than where they are located. In other words, it might be someone who considers the U.S. market a safe bet, or just as easily someone waiting for prices to drop further.

European countries also have housing problems of their own. The Economist recently pointed out that several markets still appear to be overvalued by about 25% or more, including Belgium, France, the Netherlands and Spain — among others. As the Economist said, U.S. home prices look cheap in comparison.

Of course, as The Journal has written, falling prices in some European housing markets could make it a good time for American buyers fortunate enough to be looking for a vacation villa on the Continent.

URL to original article: http://www.builderonline.com/builder-pulse/as-eurozone-crisis-mounts--searches-for-u-s--real-estate-safe-havens-grow.aspx?cid=BP:011112:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Mortgage applications rise 4.5%

2012-01-11T12:40:00.000-08:00

by KERRI PANCHUK

Mortgage applications edged up 4.5% last week when compared to a week earlier, an industry trade group said Wednesday.

The Mortgage Bankers Association released its market composite index, which shows applications up 4.5%.

Refinancing activity also grew with the refinance index increasing 3.3% from a week earlier. The purchase index also grew 8.1%, while the unadjusted purchase index is now 41.9% higher than last year.

Refinancing activity overall represented 80.8% of all new mortgage applications, down from 81.9% a week earlier.

Interest rates still remain well below 5% with the 30-year, fixed-rate mortgage with a conforming loan limit edging up to 4.11%, compared to 4.07% a week ago.

The average interest rate on a 30-year, FRM with a jumbo-loan balance declined to 4.34% from 4.41% the previous week. The average 30-year, FRM backed by the FHA remained unchanged at 3.96%.

In addition, the 15-year, fixed-rate mortgage increased to 3.40% from 3.37%, while the 5/1 ARMs rate declined to 2.90% from 2.91% last week.

URL to original article: http://www.housingwire.com/2012/01/11/mortgage-applications-jump-4-5

For further information on Fresno Real Estate check: http://www.londonproperties.com

Mortgage modifications fall short of previous year

2012-01-10T13:39:00.000-08:00

by JON PRIOR

Mortgage servicers are on track to modify far fewer loans in 2011 than the previous year, according to the most recent data provided by the Hope Now alliance formed by these firms and others in the industry.

Through November, servicers modified roughly 969,000 mortgages through both private initiatives and the administration's flagship Home Affordable Modification Program. The 639,000 private workouts nearly double the 330,000 under HAMP.

Servicers completed 84,000 permanent modifications in November, up 6.3% from the month before.

With the December data yet to be released, the 2011 total currently stands just more than half of the 1.76 million modifications completed in 2010.

In November, foreclosure starts doubled the amount of modifications completed. Servicers started 166,000 in November, down from 209,000 the month before. Through the first 11 months of 2011, nearly 2.1 million foreclosure starts were reported. The total will likely fall short of the more than 2.6 million starts for all of 2010.

The slowdown across almost all servicer duties will result in a delayed recovery in housing. The amount of delinquent mortgages isn't subsiding, according to Lender Processing Services (LPS: 15.38 -0.39%) data. More than 7% of all outstanding mortgages in the U.S. are overdue by more than 90 days. The rate hasn't changed for the past six months.

But the slowdown itself is a result of several missteps by the servicers themselves, most notably the robo-signing scandal and constant paperwork problems. Consent orders signed in April with federal regulators forced servicers to install single points of contact and ended the practice of foreclosing on borrowers who are in the modification process.

Other shifts occurred. Fannie Mae and Freddie Mac are aligning servicing guidelines. Federal agencies are constructing national servicing standards. State and local governments are passing new laws and ordinances changing decades-old foreclosure rules.

Hope Now Executive Director Faith Schwartz said delinquencies have come down from the heights of nearly 4 million mortgages more than 60 days past due. She said the slowdown in assistance has been the result of an entire industry shift.

"Clearly, a combination of regulatory consent orders, litigation, mediation extended timelines adds to the timeframe a solution takes place," Schwartz said Tuesday. "As a reminder, we will exceed 1 million modifications this year which is still a material and important impact on foreclosure prevention. So we continued to be pleased with the focus and energy on helping homeowners keep their homes. "

Hope Now said several homeowner events are in the final stages of planning across the country. In the first quarter, the group will host gatherings in Charlotte, N.C.; Miami; Tampa, Fla.; Las Vegas; Sacramento, Calif.; and Los Angeles.

"There are more alternatives to foreclosure than ever before for homeowners through federal programs, proprietary modifications, and state level initiatives such as Hardest Hit Funds," Schwartz said. "Mortgage servicers and non-profit, housing counselors are using all tools at their disposal to find options that fit each individual homeowner’s situation whenever possible."

URL to original article: http://www.housingwire.com/2012/01/10/mortgage-modifications-in-2011-to-fall-short-of-previous-year

For further information on Fresno Real Estate check: http://www.londonproperties.com

Foreclosure victory pays little for Reno man

2012-01-09T14:49:00.000-08:00

Source: Las Vegas Review-Journal
If you told Emiliano Pasillas that he would be making history when he bought his new house in 2006, he likely would have a different kind of history in mind.

"My family and I used to live in a condominium before we moved to our new home," Pasillas said. "So this was the first house that I ever bought. I just felt wonderfully happy when we first moved in. It's our dream house."

Five years after buying his Reno home, however, Pasillas made a different kind of history. In July 2011, the Nevada Supreme Court ruled in his favor after determining that lender HSBC Bank did not negotiate in good faith during two foreclosure mediation sessions with Pasillas.

Along with the case of Southern Nevada resident Moises Leyva, which also reached the state Supreme Court, Pasillas' case set a precedent for the Nevada Foreclosure Mediation Program.

More specifically, both cases affirmed the need for banks and lenders to do their due diligence during foreclosure mediations with distressed borrowers who are trying to keep their homes. Otherwise, they will face sanctions for negotiating in bad faith.

The mediation program was created in 2009 after Assembly Bill 149 was passed by the Nevada Legislature.

"It was one of two seminal cases" defining how the foreclosure mediation program works, Reno lawyer Geoffrey Giles said.

"Prior to those cases, all we had was a statute that was very vague and gave broad discretion to judges. We had no guidance, which these two cases gave us. They're really quite important and shifted the direction of the foreclosure mediation process."

HOLLOW VICTORY

Today, however, Pasillas' victory at the state Supreme Court rings hollow.

Before appealing to the Supreme Court, Pasillas' petition for a judicial review was denied by District Judge Patrick Flanagan, who authorized foreclosure proceedings to move forward against the homeowner.

After the state Supreme Court ruled in favor of the Reno resident, his case was remanded back to Washoe County District Court.

There, Flanagan reached a new judgment in November, ordering another round of mediation for Pasillas.

Flanagan also sanctioned HSBC to pay for all mediation costs plus an additional $2,500 to be payable to Washoe Legal Services, a nonprofit that provides legal services to low-income county residents. That meant Pasillas could not use the money to pay his lawyer.

The decision was just about the most lenient interpretation of the state Supreme Court opinion, which gave the District Court leeway to impose tougher penalties on the bank, Reno lawyer Keith Tierney said.

"That decision is not normal," Tierney said. "What's normal is to have the prevailing party request sanctions with attorney's fees going to the homeowner. At least that's what you see in the East Coast, where courts have been coming down strongly on the side of homeowners in cases like this."

Giles also thought the judgment against HSBC was lighter than he expected, given the latitude provided by the state Supreme Court decision for sanctions.

"The Supreme Court reversed the District Court decision and imposed sanctions" on HSBC, Giles said. "A new mediation isn't much of a sanction."

Pasillas' lawyer Terry Thomas was particularly critical of Flanagan's order. Such a light sanction won't serve as a deterrent for banks that do not negotiate in good faith at foreclosure mediations, Thomas said.

"This sanction is a perpetual do-over, plus a few bucks to charity, which (the lender) can deduct as a contribution to a 501c3," Thomas said.

"Paying $2,500 isn't even a slap on the wrist for the banks. This order means simply that banks may do absolutely anything in bad faith at the mediation ... because there basically are no sanctions. It makes mediation a farce."

NOT ONLY PRECEDENT

Flanagan made some history of his own in early 2011 after coming down hard on Wells Fargo in the case of a Reno couple, Duke and Tina Renslow.

Flanagan used a provision in Nevada's foreclosure mediation law to modify Duke Renslow's mortgage, setting his payment to $1,145 a month and reducing his interest rate for the life of the note to 2 percent.

It was the first time a Nevada District Court judge used the provision, which is being challenged by lenders as unconstitutional.

At the time, lawyers such as Giles and Tierney lauded Flanagan's decision, calling it a game-changer for the foreclosure mediation program.

With other mediation-related cases scheduled to appear before Flanagan in District Court, lawyers wonder what kind of judgment they will get: one more in line with Pasillas or one that's closer to the Renslow case.

"That's the $64,000 question," Giles said. "On what basis does it go either way?"

A MATTER OF FAITH

In court documents explaining his decision, Flanagan cited an extraordinary display of bad faith by the bank as the reason he modified the Renslow mortgage.

Duke Renslow said he was meticulous in keeping records, including records and correspondence from the bank that proved his claims.

Meanwhile, Pasillas remains stuck in a quagmire that started back in 2008 after he lost his job.

Later that year, Pasillas stopped making house payments because his lender said he couldn't qualify for a loan modification unless he was late on his mortgage.

These days, Pasillas works part-time at a church, Iglesia de Cristo Miel, where he is a pastor. Pasillas already has paid $3,000 to his lawyer for his initial case.

He intends to pay Thomas the remaining $3,000 in legal fees he owes him for the services provided during his appeal.

Pasillas is puzzled that he did not get his legal fees reimbursed after the state Supreme Court ruled in his favor.

Given that his first two mediations failed because the bank did not bring the required paperwork both times, Pasillas worries the same thing will happen in his upcoming mediation.

The mediation will take place either this month or in February.

For now, Pasillas' hope is to get his payments lowered to $1,400 per month. With his $340,000 mortgage debt ballooning to $450,000 after late fees and penalties, however, he is uncertain about his prospects.

Meanwhile, his wrecked credit will make searching for an apartment tough if he loses his home, Pasillas said.

All he wants is for his family to get a chance to stay in their home, Pasillas said.

"I got a wife and six kids and this is our first house. We love this house. We love this neighborhood. Hopefully, we can continue to raise our kids here."

URL to original article: http://www.housingwire.com/2012/01/09/foreclosure-victory-pays-little-for-reno-man

For further information on Fresno Real Estate check: http://www.londonproperties.com

Presidential candidates must address housing

2012-01-09T13:11:00.000-08:00

by KERRI PANCHUK

The sky has been falling on housing for four years, and the 2012 presidential election cycle continues to be defined by arguments over the same namby-pamby sound bytes that defined U.S. elections before the housing crisis.

But don't bother sending an SOS to the leaders of the free world. They just don't get it.

The candidates have largely avoided this issue; and the president has tip-toed over it. A few months ago, the president told the public many of their fellow Americans are underwater on their mortgages. Really?

The Federal Reserve – even though it's not exactly popular itself – has been dropping subtle hints about housing to the president, Congress, the candidates and anyone who will listen.

Federal Reserve Board Governor Elizabeth Duke recently reiterated Chairman Ben Bernanke's plea for a focus on housing. Duke suggested overly restrictive lending standards, low consumer confidence and falling home prices remain major concerns. Indeed, investors of residential mortgage-backed securities refuse to jump back into a nascent private-label market until sounder, clearer securitization structures and practices are in place.

After all, these are true capitalists, and they need sound rules to play the game.

But what do we get from the presidential contenders? Honestly, very little detail on housing or what they will do with the mortgage finance space. Do they support bulk REO sales to clear the inventory of REOs held by Fannie Mae and Freddie Mac? What about Bernanke's call for a national rental program? No one knows because no one is talking about it in their platforms in a forward-looking way.

Telling the American people one's thoughts on housing may be dangerous territory with RMBS litigation exploding and former GSE executives on the opposite end of a Securities and Exchange Commission suit. Then there are millions of homeowners who have already lost their homes to foreclosure with nearly 2 million behind in their payments. Servicers initiated an average of more than 200,000 foreclosure starts every month in 2011, according to statistics through the month of November, according to Lender Processing Services. (LPS: 15.44 -1.97%).

While staying alive on the campaign trail often means living without specifics, it's time for the president and the candidates to provide a comprehensive, well-thought out housing and mortgage market plan.

Make it specific: Does the Corker plan to wind down the GSEs make sense or do you have another idea to get private-label moving again? What about reps and warranties issues? How would you handle the foreclosure backlog and the shadow inventory? What about underwater borrowers and tighter lending standards? Do you support the Consumer Financial Protection Bureau?

A leader who can discuss these issues intelligently is one who has the potential to capture attention. Times have changed. People are awake … and housing needs help.

SOS

Is anyone listening?

URL to original article: http://www.housingwire.com/2012/01/06/can-the-presidential-candidates-look-to-the-future-of-housing

For further information on Fresno Real Estate check: http://www.londonproperties.com

Home sales rise as prices hit historic lows in December

2012-01-09T12:50:00.000-08:00

by KERRI PANCHUK

New and existing-home sales increased year-over-year in December, while home prices continued to plummet, hitting levels of affordability not experienced since 1971, the Obama Administration said Monday.

In its December Housing Scorecard report, the administration said median-income families on average had double the funds needed to cover the cost of a home, but purchase demand remained relatively malaise as home prices continued to drop.

The report reflects data from the U.S. Department of Housing and Urban Development and the Treasury.

The Obama Administration said in the heat of the 2006 home price bubble, the average family could barely afford to buy a home.

Since then, affordability has greatly improved after 33-consecutive months of home price declines.

Citing sources from HUD and the Mortgage Bankers Association, the administration said 12.5 million homeowners have been able to refinance their mortgages in the past two years.

In addition, fewer homeowners fell into foreclosure during the month of November, while foreclosures declined year-over-year due to delays in processing on the lenders' part.

The increase in home sales is linked to low mortgage rates, with the average, 30-year, fixed-rate mortgage hitting 3.95%, down from 4.86% a year earlier.

In the last quarter, 2.58 million existing homes were on the sales block, down from 3.15 million a year earlier. New home sales dropped from 196,000 in 2010 to 158,000 in the most recent quarter.

The number of underwater borrowers remained relatively unchanged with 10.723 million borrows underwater in the most recent period, compared to 10.78 million a year earlier.

URL to original article: http://www.housingwire.com/2012/01/09/home-sales-rise-as-prices-hit-historic-lows-in-december

For further information on Fresno Real Estate check: http://www.londonproperties.com

Foreclosure Not Best Solution To Housing Crisis: Federal Reserve Report

2012-01-06T15:23:00.000-08:00

Source: The Huffington Post

More than four years into the housing crisis, and after millions of Americans have lost their homes, Federal Reserve Chairman Ben Bernanke is finally taking a stand.

Bernanke sent a Federal Reserve paper to the leaders of the House of Representatives' Committee on Financial Services arguing that relying heavily on foreclosures to deal with mortgage borrowers that can't meet their obligations is "costly and inefficient" for the housing market because they can lead to deteriorating homes and weigh on the property values in the surrounding community.

Instead, the paper encourages lenders to "aggressively" pursue loan modifications and for servicers to be given more incentives to seek alternatives to foreclosure.

Foreclosures "can result in 'deadweight losses,' or costs that do not benefit anyone, including the neglect and deterioration of properties that often sit vacant for months (or even years) and the associated negative effects on neighborhoods," the paper said. "These deadweight losses compound the losses that households and creditors already bear and can result in further downward pressure on house prices."

The Obama administration has already pursued policies aimed at encouraging lenders to modify loans, although to very limited success. The Home Affordable Modification Program, which Obama announced in February 2009, had helped fewer than 700,000 homeowners as of October, despite promises that the program would encourage banks to modify the loans of 3 to 4 million homeowners.

The paper mirrors findings from regional Fed banks indicating that foreclosures can be detrimental to more Americans than just those who are losing their homes. Properties that are occupied, but in foreclosure, drive down the surrounding property values twice as much as vacant properties, an October study from the Cleveland Federal Reserve found.

And with millions of foreclosed properties already in the pipeline, the foreclosure process is already taking longer than in recent memory -- a situation that may only be exacerbated if lenders don't take the Fed's advice. The average foreclosure process now takes 674 days, almost triple the time necessary in 2007.

Another alternative to foreclosure proposed in the paper is to combine a deed-in-lieu of foreclosure -- or a program where borrowers return the home to lenders without foreclosure proceedings -- with a rent-back arrangement. Others have floated a similar plan, including left-leaning economist Dean Baker, that would allow defaulting borrowers to stay in their homes, but as tenants.

The Obama administration also considered a plan in August to boost falling home prices by turning thousands of government-owned foreclosure properties into rentals. If the program goes through, the spaces would likely have some takers; the U.S. apartment sector has expanded past recovery, indicating a boost in rental demand.

URL to original article: http://www.huffingtonpost.com/2012/01/04/foreclosure-federal-reserve_n_1184369.html

For further information on Fresno Real Estate check: http://www.londonproperties.com

Realtor Revisions Make HIP Look Good

2012-01-05T14:22:00.000-08:00

Written by Jonathan Dienhart and Ken Lee

Do you trust your data sources? With so many different sets of data out there, it can be tough to know which one to use. A couple weeks ago, the National Association of Realtors (NAR) announced that they would be making substantial revisions to their existing home sales data going back to 2007, and noted that they had overstated the volume of sales during recent years due to a number of factors. In their defense, the Realtors have a tough job: they rely on data from their various member multiple listing services (MLS) and then have to estimate the number of transactions that occurred outside of MLS or outside of the coverage area. Here at Hanley Wood we are fortunate to have Housing IntelligencePro, which, instead of relying on MLS or estimates, calculates activity based upon actual closing records from each municipality. Based on this data of real transactions, we had always thought the NAR numbers were a little elevated. Prior to the revision, they had estimated existing home sales fell a total of 31% between 2005 and 2010. Meanwhile our figures from Housing IntelligencePro indicated that during the same time frame, resales fell by over 45%. Post revision, NAR’s numbers have moved much closer to ours and reflect a 41% decline. Going forward, we’re glad we don’t have the same task of estimation and guesswork that those without complete data are faced with. As the song goes, “Ain’t Nothing Like the Real Thing.”

In broader housing news, in 2012 we expect sales activity will very slowly begin to improve. While we didn’t see anything that could be described as “recovery” in 2011, pricing and demand have started to stabilize somewhat, and inventory has fallen to more manageable levels. Units of new home inventory are at new lows while units of existing home inventory are at their lowest levels since May 2005.

Join us in starting off the new year at our largest trade shows in January. See you in Las Vegas for Surfaces at the Mandalay Bay Convention Center from January 24-26 and World of Concrete from January 24-27 at the Las Vegas Convention Center.

The Economy
Consumer confidence has rebounded for two straight months since plunging to multi-year lows in October. The consumer confidence index jumped to a reading of 64.5 from a revised November figure of 55.2. The consumer confidence index was at its lowest level in October since April 2009 but increased 14.3 points in November and 9.3 points in December. This is the highest the index has been since April.

Final estimates for third quarter GDP growth showed the economy growing at a slower pace than both preliminary and advance estimates suggested. The U.S. economy expanded at a 1.6% pace in the final third quarter report which was revised down from 2.0% in preliminary estimates and 2.5% in advance estimates. This marks the ninth straight quarter that the U.S. economy has expanded. It is still the quickest rate of growth since the fourth quarter of last year. A downward revision in consumer spending was the main reason GDP was revised lower.

First-time jobless claims reversed recent trends and increased last week following two straight weeks of sharp declines. First-time unemployment claims increased by 15,000 to a seasonally-adjusted figure of 381,000 in the week ended December 24th from an upwardly revised figure of 366,000 in the previous week. Initial jobless claims had fallen to their lowest levels since April 2008 in the previous week. However, the recent downward trend in initial jobless claims is a positive sign for the labor market heading into next year.

Housing Market
After surging to higher levels at the end of November, purchase activity dipped for the remainder of the year. In the week ending December 30th, the Mortgage Bankers Association’s seasonally-adjusted purchase index declined 9.65% from the previous week. This is the fourth consecutive week that the purchase index has declined.

The National Association of Realtors’ Pending Home Sale Index increased again in November to a 19-month high. The index increased 7.3% from the previous month to a reading of 100.1 compared to an upwardly revised October figure of 93.3. The index is 5.9% higher than it was this time last year when it stood at 94.5. This is the highest the index has been since April 2010 when the federal homebuyer tax credit expired.

National average mortgage increased from the previous week to 3.95% with an average 0.7 points in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on December 29th. Rates are coming off all-time record lows that were set in the previous week. This is the first time in four weeks that rates have recorded a weekly gain. Rates have now averaged under 4.5% for 22 straight weeks and have averaged under 4.0% for four straight weeks.

Both new and existing home sales increased in November although historical revisions to existing home sales showed that activity was much weaker than previously thought. Stronger demand also did not help new home prices which continued to decline despite increased sales activity. Because of record low mortgage rates, affordability in both the new and existing home markets remain at historically high levels.

New home sales in November increased 1.6% from the previous month to a seasonally-adjusted annual rate of 315,000 units. This is the fastest annual pace for new home sales since April. It is also the third straight month that the pace of new home sales has increased. New home sales for the previous three months were revised higher by 3,000 units. New home sales are up 9.8% from the 287,000 units in November 2010 but are 16.0% lower than the November 2009 figure of 375,000 units. It is important to keep in mind that new home sales are being compared to year-ago levels when it stood near all-time lows following a drop in demand after the federal homebuyer tax credit expired.

In November, median new home prices declined to $214,100 from an upwardly revised October figure of $222,600. This is the lowest that median new home prices have been since October of last year. Median new home prices are down 2.5% from this time last year and are 2.1% lower than they were this time two years ago.

Lower prices and falling mortgage rates helped the new home affordability reach a new all-time record high in November. The new home affordability ratio increased again to a reading of 62.7% in November from a revised October reading of 62.4%.

In November, new home inventories declined from the previous month to 158,000 units on a seasonally-adjusted and non-seasonally adjusted basis. New home inventories are at new all-time record lows. New home inventory on a non-seasonally adjusted basis has not recorded a monthly increase since May 2007. Based on the current sales pace, there are now 6.0 months of new home inventory on the market in November. This matches the lowest months of new home inventory on the market since March 2006.

Existing home sales increased in November to a seasonally-adjusted annual rate of 4,420,000 units which is 4.0% higher than the 4,250,000 units in October, according to NAR. Existing home sales are 12.2% higher than they were compared to the 3,940,000 units in November of last year. This is the second straight month that existing home sales have increased and the fifth consecutive month that existing home sales have recorded year-over-year gains. However, year-over-year comparisons may be a bit skewed because they are being compared to depressed levels this time last year after the federal homebuyer tax credit expired. Existing single-family home sales increased 4.5% from last month to 3,950,000 units while condo and co-op resales remained unchanged from October levels at 470,000 units.

The median sales price of an existing home in November increased to $164,200 from $160,800 in October. This is the first time existing home prices have experienced a monthly gain since June. However, median existing home prices are still 3.5% lower than they were this same time last year when they stood at $170,200. Existing home prices have now recorded 12 straight months of year-over-year declines.

An increase in median existing home prices caused the existing home affordability ratio in November to record its first monthly drop since June. The existing home affordability ratio declined to 72.1% in November from an all-time record high of 72.5% in October. In spite of this month’s decline, existing home affordability remains at historically high levels. The existing home affordability ratio is almost three full percentage points higher than it was this time last year when it stood at 69.2%.

Existing home inventory continued to improve in November which will continue to help home prices stabilize. Inventory of existing homes declined 5.8% from the previous month to a preliminary figure of 2.74 million units. This is the fifth consecutive month that existing home inventory has declined and the lowest it has been since May 2005. Months of inventory improved last month due to an increase in sales activity coupled with the decline in inventory levels. At the current pace, there are 7.0 months of existing home supply on the market. This is the lowest months of existing home supply on the market since November 2009.

URL to original article: http://www.housingintelligence.com/economics/realtor-revisions-make-hip-look-good.html?cid=BP:010512:FULL

For further information on Fresno Real Estate check: http://www.londonproperties.com

Bernanke calls for nationwide REO rental program

2012-01-05T10:16:00.000-08:00

by JACOB GAFFNEY

The government should consider helping the nation's vacant, unsold stock of foreclosed properties by supporting initiatives to occupy.

Federal Reserve Chairman Ben Bernanke believes that one aspect should be a government support program that allows renters to move into those houses.

In a letter Wednesday to ranking members on the House Committee of Financial Services, Reps. Spencer Bachus, R-Ala., and Barney Frank, D-Mass., Bernanke said that inefficiencies in the foreclosure and mortgage origination processes are dragging on the economic recovery.

However, solutions are available, he added.

"Preliminary estimates suggest that about two-fifths of Fannie Mae’s REO inventory would have a cap rate above 8% — sufficiently high to indicate renting the property might deliver a better loss recovery than selling the property," Bernanke's staff writes in a supporting white paper.

"Estimated cap rates on the Federal Housing Administration's REO inventory are a bit higher — about half of the current inventory has a cap rate above 8% — because FHA properties tend to have somewhat lower values relative to area rents," they said.

According to the white paper, Atlanta holds the largest amount of government-sponsored enterprises REO (5,000). Second place tieholders: Chicago, Detroit, Phoenix, L.A., are all below 3,000, by way of comparison.

In a scenario of declining house prices such as this, homeownership should be promoted, according to the white paper. Indeed, they argue that in many cases REO-to-rentals may be inappropriate. Yet unless mortgage origination requirements, with tighter underwriting standards, are loosened in the immediate future, borrowers may have little choice but to rent.

Furthermore, support for such a program will cost mortgage servicers, bond investors and even taxpayers. But it may be a sacrifice for the greater good.

"Some actions that cause greater losses to be sustained by the GSE in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery," the white paper states.

URL to original article: http://www.housingwire.com/2012/01/04/bernanke-calls-for-nationwide-reo-rental-program

For further information on Fresno Real Estate check: http://www.londonproperties.com

Top 5 reasons 2012 is the year to get a mortgage

2012-01-04T09:41:00.000-08:00

Source: Bankrate

Mortgage interest rates are near all-time lows and are likely to remain attractive throughout 2012. That means the new year will continue to offer good opportunities for homebuyers who need a new mortgage and homeowners who want to refinance an existing obligation.

With that opportunity in mind, here are five reasons why you might want to get a new mortgage this year, and what you should know about the benefits and hurdles of accomplishing this goal.

Buying a personal residence

Economic uncertainty and volatile housing markets have kept so many homebuyers on the sidelines that mortgage purchase applications have dropped to a 15-year low in August, according to the Mortgage Bankers Association.

The lack of applications doesn't mean buying a home is a bad idea. In fact, quite the opposite is true, as depressed house prices and low mortgage rates have made homes more affordable.

The benefits of owning a home include federal income tax deductions and the satisfaction of not paying rent to a landlord, says Justin Lopatin, vice president of residential banking at Baytree National Bank & Trust in Chicago.

"The money you pay on your mortgage may be slightly higher," he says, "but at the end of the year, you get the mortgage interest write-off, so you get money back -- and you get to own your own property."

The slow pipeline of new applications can be blamed on the hurdles that buyers face in qualifying for loans. Chief among the challenges are a down payment and the ability to document at least two years of income, Lopatin says. Income documentation can be hard for people who've suffered temporary unemployment, are self-employed or have irregular wages.

Buying rental property

Many investors pay cash to purchase residential rental properties. But some take out a mortgage to increase their leverage, says Julie Miller, sales manager at Prospect Mortgage in Irvine, Calif. The benefit is that the investor who holds cash while financing real property can use the cash to make other investments.

Lopatin says low interest rates are also an inducement for investment property buyers.

"If you can take out an investment loan at 4.5 percent and rent out (the property) and make a few dollars a month, annually, the return will be worth the loan," he says. "Not to mention the tax write-offs and other advantages of owning real estate."

Mortgage insurance isn't an option for investment property, so a fat down payment, typically 20 percent or more, is a must.

Investment buyers also need to show that they have enough income and reserves to afford the payments even if the tenant fails to pay the rent or moves out. Lenders typically will count 75 percent of the rent toward the borrower's income-qualifying ratios, Lopatin says. For example, a monthly rent of $1,000 would count as $750 of income.

Refinancing to get a better rate

Low rates can make rate-and-term refinancing a smart financial move. This type of new loan is exactly what the name implies: a refinance in which the interest rate or term is changed, but the loan amount stays the same.

The chief benefit, Lopatin says, is "reducing your monthly overhead, restructuring your loan to obtain a lower payment."

Another benefit might be locking in a fixed interest rate instead of an adjustable rate that can rise if market rates go up.

Homeowners who want to refinance must provide income documentation and have a "decent" credit score, to use Miller's characterization.

Equity is also required for most, though not all, loan refinance programs. This hurdle can be troublesome because homeowners don't control the market value of their property, Lopatin says.

If your loan amount exceeds the value of your home, consider the Home Affordable Refinance Program, or HARP, which is part of the federal government's Making Home Affordable initiative. If your loan is insured by the Federal Housing Administration, or FHA, the FHA Short Refi program might enable you to refinance in a negative equity position.

Refinancing to cash out

A home equity loan or line of credit can be a good way to get cash for a variety of financial needs such as remodeling, major home repairs, paying off other debts or financing a college education.

The benefits, Lopatin says, include immediate cash, low-cost debt and potentially an income tax write-off.

Of course, there's a catch: You can't borrow against your equity if your mortgage debt exceeds your home's value.

"They have to be able to income-qualify for the increased loan amount, and the cash-out limit (means) they have to have a bigger equity cushion than a rate-and-term refinance," she says.

And along with the catch is a caveat: taking out cash isn't free money. In fact, a cash-out refinance increases your debt, which is "just not wise today," says Alfred McIntosh, principal of McIntosh Capital Advisors, a financial planning and investment management firm in Los Angeles.

"Part of the reason we're in this economic situation is that, for a long time, we used our homes as checking accounts," he says. "We need to break the cycle of constantly inflating our mortgages."

Helping a family member buy a home

Co-signing a loan to help a family member buy a home might sound like a feel-good proposition. But those warm fuzzies are the only benefit that co-signing a loan offers.

From a purely financial point of view, co-signing someone else's debt is a bad bargain.

"I see no reason why anyone should co-sign on anything for anyone, unless it's a relative, because you're putting yourself in a position to jeopardize your credit," Lopatin says. "I don't recommend it, unless there are extenuating circumstances."

Miller also says being a co-signer involves "more negatives than positives" because the co-signer is equally responsible for the loan. If the borrower fails to make the payments, the co-signer is on the hook.

URL to original article: http://www.builderonline.com/builder-pulse/top-5-reasons-2012-is-the-year-to-get-a-mortgage.aspx?cid=BP:010412:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Do you believe in pent-up demand?

2012-01-03T13:05:00.000-08:00

Source: NAHB Eye on Housing

Top 2011 Posts: Research on Pent-Up Housing Demand
With the end of 2011 approaching, the contributors of NAHB’s Eye on Housing thought it would be useful to take a look at the updates that attracted the most readers over the last year.

One of the most important stories of 2011 (and 2012) is the growning phenomenom of pent-up housing demand.

In February, an NAHB research paper quantified this “shadow demand.” Using Census data we estimated 2.1 million missing but expected households that have been delayed due to the Great Recession.

As the economy and the job market improves in 2012, these potential households, now doubled-up and living with family members, will be unlocked, leading to increased demand for rental housing and eventually emerging as prospective homebuyers.

URL to original article: http://www.builderonline.com/builder-pulse/do-you-believe-in-pent-up-demand-.aspx?cid=BP:010312:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

S&P: Buying, renting costs draw closer

2012-01-02T14:35:00.000-08:00

by ANDREW SCOGGIN

An index from Standard & Poor's shows a narrowing gap between the cost of buying a house and renting.

David Blitzer, chairman of the company's index committee, said the rent-buy price ratio from October "shows not extreme favoritism" either way, as it moves toward a long-run average near 90.

S&P calculates the index using the 10-city composite of the S&P/Case-Shiller home price index, as well as the consumer price index for rental of a primary residence.

The most-recent HPI showed home prices declined about 1.1% in the 10-city composite for October from a month earlier.

The rent-buy ratio has a 1987 benchmark reading of 100. Vertical movement on the index indicates a price difference, with upward movement showing an increase in rental prices, and vice versa.

Rental costs peaked in the late 1990s when the index approached 120, and buying costs topped out at a reading near 50 in the housing boom of the mid-2000s. The index has moved closer to average levels since the ensuing housing bust.

Some housing analysts look positively on rentals in projections, including Stuart Eisenberg at BDO USA, who sees residential rentals as one of the few bright spots in 2012.

In a separate measure, S&P said house prices fell in comparison to disposable income per person. The ratio fell to 90, well below the average value of 102 since 1987. "Houses are almost cheap" according to the measure, Blizter said.

URL to original article: http://www.housingwire.com/2011/12/30/sp-buying-renting-costs-draw-closer

For further information on Fresno Real Estate check: http://www.londonproperties.com

Analyst: Home price declines coming, but that could be a good thing

2011-12-30T14:02:00.000-08:00

by KERRI PANCHUK

If banks ramp up next year and begin moving backlogged foreclosure inventory onto the market, homeowners and buyers could see further home price drops and those declines could go as deep as 10% to 15%, said Lance Roberts, CEO, economist and chief strategist at Streettalk Advisors.

Yet, Roberts in his forecast for 2012 adds a bit of humor to his predictions. He is confident, but not overly committal to a forecast, and chuckles when pointing out that the media and mainstream financial analysts previously called for home price bottoms in 2010 and 2011. Now many are forecasting a bottom in 2012, but Roberts is careful to recognize all the many knowns and unknowns that weigh on economies.

"I am in the camp that we are going to have slower economic growth (in 2012)," he said.

Currently, other analysts are projecting 2% to 2.5% growth. Roberts sees a sub-2% or 1% growth rate for next year.

"There is a current belief that the U.S. can grow even as China slows and the eurozone goes into recession," Roberts said in an interview with HousingWire. "But 20% of our exports go to the eurozone. If they go into recession, it is going to be difficult for us to avoid a recession without some type of stimulus program."

As far as gaining political capital for a third round of quantitative easing, Roberts says the Federal Reserve doesn't need it since it functions independent of Congress. "Ben Bernanke can launch a third round of quantitative easing if he chooses to do so. I think there is a likelihood we could see more stimulus," he said. Still, he says that move is contingent on what happens in Europe, China and stateside.

Roberts describes the housing market as one that is still undergoing a series of changes.

He points out that a majority of recent housing starts occurred in the multifamily apartment segment, suggesting more Americans are deleveraging and realizing not everyone will own a home.

Roberts doesn't view the past downturn or the possibility of a coming recession with doomsday glasses. Based on the supply and demand curve, the 2008 crisis was a long-time coming because government policy created a decade-long imbalance where homes were truly out of reach for borrowers and cheap credit made up the difference, he believes.

He sees recessions — when handled properly and without too much intervention — as the solution to getting demand and prices in line.

"Let's think about the average American salary," he said. "They make $55,000 a year. They now have to come up with a 20% down payment. Gone are the days of ninja loans. It's going to be harder for them to qualify to buy a house. If that is the situation, prices will have to fall further than the historic norm."

This is where Roberts throws out the possibility of another 10% to 15% home price decline.

But Roberts is more optimistic in one way: he sees recessions as a natural occurrence of a functioning marketplace. "They are a natural part of a market cycle," he said. "If the economy just goes up, things get excessively expensive and you set yourself up for a 2008-type crash."

He believes the recent pain is the result of government involvement in pushing homeownership and cheap credit. "The American Dream has never been homeownership," he said. "It was to have an opportunity to create a better life for yourself."

His verdict on the years leading up to the crisis and the past few years: "We basically tattooed American society with a horrible investment structure."

URL to original article: http://www.housingwire.com/2011/12/30/analyst-deeper-home-prices-coming-could-be-a-good-thing

For further information on Fresno Real Estate check: http://www.londonproperties.com

Buyers, sellers continue to butt heads on home prices

2011-12-29T16:27:00.000-08:00

by JUSTIN T. HILLEY

Most Americans feel now is a good time to buy a home, but those who want to sell are having difficulty finding buyers at desired prices, causing seller sentiment to fall to record lows.

The low opinion is causing a wide gap between homebuying and home selling that won't narrow for at least the next five quarters, according to a new report by the Mortgage Bankers Association's Research Institute for Housing America.

From 1992 to 2005, positive seller sentiment fluctuated between 40% and 60%, according to the report. Since 2005, sentiment has plummeted to 7.6%, even while homebuyer opinions remain high. Despite high unemployment, slow economic growth and problems plaguing the economy, nearly 80% of American households believe now is a good time to buy a home.

Today's pattern of homebuying sentiment looks similar to past recessions, but what is different is today's historically low positive seller sentiment, according to Gary Engelhardt, Syracuse economics professor. The large overhang of mortgages past due or in foreclosure is a major factor for the difference. As market values have fallen, potential sellers have not adjusted their target selling prices downward fast enough to bring buyer and seller sentiment more in line with one another.

Engelhardt said it is difficult to determine the main driver of the gap, but offers a few more possible explanations for the discrepancy.

He says seller prices may be anchored to past market values such as the purchase price of the property or what a comparable property sold for recently, especially around the market peak.

"If owners update these anchor prices infrequently, then a wide gap in buyer and seller sentiment would emerge in the face of sharp, prolonged declines in market values, such as those seen in the last few years," Engelhardt says.

He also cites the underwater homeowners who can't or won't adjust their selling prices to below that of their outstanding mortgage amount, as they would need to bring cash to the table to pay off the mortgage plus transactions costs.

Currently, about 20% of all homeowners with mortgages nationally are underwater. In some particularly hard-hit markets, as many as half of all homeowners with mortgages are underwater. Those are the same places with the highest incidence of delinquent mortgages and foreclosures.

Also, with large declines in market values, sellers now hold a highly leveraged option that pays off with any future increase in prices, meaning there may be increased value in waiting, either to initially list, or to keep, the property on the market. This could hold prices high enough to drive a substantial wedge between the existing buyer and seller. And a poor jobs market with limited mobility, a key driver of housing-market transactions, may exacerbate this.

Analyst expect home prices to stabilize in 2012.

The current lack of positive sentiment cuts across almost all demographic categories and regions. Positive seller sentiment is stronger among nonwhite households.

Engelhardt says that over the next five quarters, positive homebuying sentiment is forecast to align with current and long-run average levels. In contrast, positive seller sentiment is projected to remain at current and historically low levels. This indicates that home-selling sentiment and, hence, market activity, will also remain sluggish in the near term.

URL to original article: http://www.housingwire.com/2011/12/29/gap-between-homebuyer-and-seller-sentiment-at-record-level

For further information on Fresno Real Estate check: http://www.londonproperties.com

California pending home sales post higher for seventh straight month

2011-12-29T13:00:00.000-08:00

Source: California Association of Realtors

California pending home sales decline in November, but year-to-year sales post higher for seventh straight month, C.A.R. reports

LOS ANGELES (Dec. 21) – Pending home sales in California fell in November but were up from the previous year for the seventh consecutive month. Additionally, distressed home sales dropped in November from both the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

Pending home sales:

California pending home sales fell 9.1 percent in November but were up from a year ago, according to C.A.R.’s Pending Home Sales Index (PHSI)*. The index was 109.8 in November, based on contracts signed in that month, down from October’s index of a revised 120.9. However, the index was up 11 percent from November 2010, marking the seventh consecutive month that pending sales rose from the previous year. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

“The strong year-over-year growth in pending sales observed in the last several months suggests we should see an increase in December’s closed sales over the same month last year,” said C.A.R. President LeFrancis Arnold.

Distressed housing market data:

At 55.1 percent, equity sales made up more than half of home sales in November, up from 53.9 percent in October and 54.4 percent in November 2010.
The total share of all distressed property types sold statewide fell to 44.9 percent in November, down from October’s 46.1 percent and 45.6 percent in November 2010.
Of the distressed properties sold statewide in November, 21 percent were short sales, up slightly from the previous month’s share of 20.7 percent and up from last November’s share of 19 percent.
At 23.5 percent, the share of REO sales was down from October’s 24.9 percent, and down from the 26.2 percent reported in November 2010.
Multimedia:

Closed housing sales by sales type.
Pending sales compared with closed sales.
Historical trend in the share of equity sales compared with distressed sales.
housing supply for REOs, short sales, and equity sales.
**Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually becomes closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.

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.car.org/newsstand/newsreleases/2011newsreleases/novpending/

For further information on Fresno Real Estate check: http://www.londonproperties.com

Depending on how you look, housing could be a bull or a lot of bull

2011-12-29T11:55:00.000-08:00

Source: Fortune

Despite today's gloomy housing market, a few are betting 2012 will mark the beginnings of a fundamental turnaround for the industry. Barclays analysts recently raised their price targets for homebuilders D.R. Horton, Lennar Corporation, Meritage Homes Corporation, Pulte Group and Toll Brothers.

The outlook, the analysts say, comes chiefly because prices for non-distressed homes have stabilized. They point out that the sales of foreclosed homes are no longer dragging down prices for the rest of the housing industry. What's more, the job market has improved during the past 12 months with the creation of 1.8 million jobs, an average of 150,000 a month. And since job creation has been considerably better this fall than last year, the bullish argument goes, this sets the stage for a strong spring selling season.

URL to original article: http://www.builderonline.com/builder-pulse/depending-on-how-you-look--housing-could-be-a-bull-or-a-lot-of-bull.aspx?cid=BP:122911:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

National Association of Realtors' Pending Home Sales Index reaches 19-month high

2011-12-29T11:43:00.000-08:00

Source: Reuters

(Reuters) - Pending sales of existing homes surged to a 1-1/2 year high in November, an industry group said on Thursday, offering more signs of a tentative recovery in the housing market.

The National Association of Realtors' Pending Home Sales Index, based on contracts signed in November, increased 7.3 percent to 100.1 -- the highest level since April 2010.

Economists polled by Reuters had expected pending sales to rise only 2 percent. Pending sales lead existing home sales by a month or two.

Recent data on home sales and construction have been fairly upbeat, suggesting an improvement in the sector, but prices continue to trend lower.

URL to original article: http://www.builderonline.com/builder-pulse/national-association-of-realtors-pending-home-sales-index-reaches-19-month-high.aspx?cid=BP:122911:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Most Americans say they're better off than their parents were

2011-12-28T14:51:00.000-08:00

Source: Gallup

WASHINGTON, D.C. -- The large majority of Americans (69%) say they are better off financially than their parents were when they were the same age. However, this is down slightly from 74% in 1998, the last time Gallup asked the question.

The same Nov. 28-Dec. 1 Gallup poll also finds Americans only somewhat less likely now than in the more economically robust 1998 to be satisfied with their future prospects, income, net worth, and housing situation. Taken together, these results reveal that the majority of Americans do feel good about their personal financial situations, despite the struggling national economy.

Seniors More Positive Than Younger Generations

Four in five Americans aged 65 and older say they are better off financially than their parents were at their age. This is somewhat higher than the 64% to 70% of younger age groups saying the same.

High-income Americans are significantly more likely than those with lower incomes to say they are doing better financially than their parents were when they were the same age. Still, even a majority of lower-income Americans say they are better off financially than their parents were.

Bottom Line

Most Americans still think they are doing better financially than their parents did when they were the same age. This is positive news, given the difficult state of the U.S. economy over the past several years -- with millions of Americans seeing their home values deteriorate and jobs evaporate.

But Americans appear to be more upbeat when comparing their current situations with the past than with the unknown future. A Gallup survey from earlier this year found fewer Americans than ever saying today's youth will have a better life than their parents. And, while seniors and high-income Americans are the most positive regarding how they themselves are doing today compared with their parents, both groups were the least likely to predict that today's youth will be better off than their parents. So those who are most likely to think they are doing better than previous generations of Americans are apparently the least optimistic that future generations will enjoy the same prosperity.

URL to original article: http://www.builderonline.com/builder-pulse/most-americans-say-they-re-better-off-than-their-parents-were.aspx?cid=BP:122811:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Predictions 2012: home prices

2011-12-28T12:00:00.000-08:00

Source: Kiplingers

The median home price in the U.S. has plunged nearly 40% in a little over five years, but the worst is definitely over: The market has finally wrung out the last excess valuations born of the housing bubble. Before you break out the party hats, note that this doesn�t mean prices across the nation are poised to rebound anytime soon. Alex Villacorta, director of research and analytics at Clear Capital, a provider of real estate data and analytics, says the housing market is in a �suspended state,� with positive and negative factors offsetting one another. But he doesn�t expect another free fall in prices, assuming �things are left to work themselves out and there are no further shocks to the economy.�

Although the percentage of sales of distressed homes will rise, the federal government�s latest loan-modification program might allow as many as 1.5 million to two million homeowners to refinance, estimates Mark Zandi, chief economist at Moody�s Analytics. Zandi says that further home-price declines nationwide will be limited to 3% to 5% and that 2012 will be the year that prices finally stabilize -- setting the stage for gains in 2013.

Short-lived spikes in prices will affect some cities sooner. When housing markets touch bottom and begin to stabilize, price appreciation tends to be spread unevenly, creating a lot of confusion about where the recovery is occurring and when, says David Stiff, chief economist at Fiserv Case-Shiller. Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.

Touching bottom
In the year ending September 30, home prices across the U.S. fell by 2.6%, and the median home price stood at $171,250, according to Clear Capital. That comes on the heels of a 2.5% decrease from September 2009 to September 2010. In the five-plus years since the peak of the market, home prices nationally fell by 38.1%. Detroit (down 74.7%) is the biggest loser, crushed by subprime lending, foreclosures and the gutted auto industry. A few cities enjoyed small price appreciation, largely because they missed the bubble to begin with: the Clarksville, Tenn., metro area; cities in upstate New York, including Syracuse, Buffalo and Rochester; and Pittsburgh.

Houses haven�t been this affordable since appliances came in harvest gold or avocado green. The benchmark of affordability -- the ratio of median home price to median family income -- has fallen to 2.6, below the historical ratio of 2.9, says Stiff. Another measure, the percentage of monthly family income consumed by a mortgage payment (principal and interest, using a mortgage rate of 4.1%), is 12% nationally, the lowest since 1971.

Homes in many cities are now substantially undervalued as measured by affordability, says Stiff, and that can lead to double-digit bounces in prices -- say, a jump of 10% to 15% in the year following the trough, as the natural optimists, especially investors with cash, jump in to catch the bottom. It might look like a bubble all over again, but it won�t last long. A good example is Cape Coral-Fort Myers, Fla., where investors pushed up prices by 12% during the year ended September 30. Such a bounce will be followed by a sideways drift, during which the �glass half-empty� folks will slowly return to the market.

Theoretically, low rates should help push buyers to act. The average interest rate on 30-year fixed mortgages fell to 3.94% in the first week of October 2011, according to Freddie Mac. The past couple of years� predictions that rates would rise were based on the premise that the economy would improve, says Guy Cecala, publisher of Inside Mortgage Finance, an industry publication. �As long as the economy remains stagnant, unemployment remains high, and the housing market is in the toilet, rates will remain near historic lows,� he says. At least for the first part of 2012, he adds, rates should hover between 4% and 5%.

Other positive signs: Existing home sales increased during the summer and early fall of 2011, according to the National Association of Realtors, after a deep slump following the expiration of the first-time home buyer tax credit. Although the inventory of homes on the market and in foreclosure remains high, a lull in home building over the past three years is gradually easing the surplus. The months� supply figure, or how long it would take to sell the inventory of homes on the market at the current pace of sales, improved to 8.5 months in September -- although that ratio still favors buyers (six months� supply represents a normal balance between sellers and buyers).

The lure of affordability and low mortgage rates hasn�t increased buyer demand as much as one might expect. Some would-be buyers can�t get a mortgage, given lenders� stiffer requirements. Many more are hesitant to pull the trigger on a home purchase for fear that home prices will continue to fall or that their job prospects are uncertain. Although the recession has technically ended, the economy doesn�t feel better to many.

But Celia Chen, director of research at Moody�s Analytics, says that both corporate and household balance sheets are healthier and should lead to stronger economic growth and improved confidence. She anticipates more robust growth by the second half of 2012, assuming that Congress follows through on its debt-ceiling deal, the Fed keeps interest rates low, and there are no new shocks to the economy (see Investing Outlook 2012).

The foreclosure problem
The dark cloud of foreclosures still hangs over the housing market. The pace of foreclosures has slowed as lenders, loan servicers and regulators have sorted out paperwork and pro�cedures in the wake of the robo-signing controversy that emerged a year ago. But RealtyTrac, which monitors the foreclosure market, says that foreclosure filings have begun to ramp back up.

Nevada, California and Arizona -- among the epicenters of the boom and bust -- still suffer the highest rates of foreclosure. Georgia, Florida, Utah, Michigan, Idaho, Illinois and Colorado round out the top ten. Among metro areas, Las Vegas still tops the list.

Currently, about 1.84 million home loans are 90 days or more delinquent (a strong predictor of foreclosure) but not yet foreclosed on, and 2.17 million have finished the foreclosure process but haven�t yet been offered for sale, according to Lender Processing Serv�ices (LPS). What happens to home prices if and when they come to market? Villacorta, of Clear Capital, says that despite the downward pressure on prices by foreclosures, prices won�t tank as long as lenders continue to bring additional foreclosures to market at a steady pace.

Bank-owned foreclosures sell for an average discount of one-third off the per-square-foot price of conventional homes for sale, according to RealtyTrac. Buyers who want to snag a bargain on a distressed property will face competition from investors, and the biggest bargains may require a lot of work. Short sales, or homes sold with lenders� permission for less than their owners owe on their mortgages, have also grown in number. Lenders take an average of 16 weeks to sign off on a short sale, so patience is imperative.

Of course, the longer lenders take to work through the foreclosure glut, the longer it will take for home-price appreciation to return to its normal pace of 2% to 4% a year. To hasten the process, the federal government may introduce more policy initiatives -- although whether they�ll have any meaningful impact or come soon enough is debatable. In October, Fannie Mae and Freddie Mac, along with their regulator, the Federal Housing Finance Agency, expanded the Home Affordable Refinance Program to allow more underwater borrowers to refinance out of their mortgages into more manageable loans. The FHFA, the Department of Housing and Urban Development and the U.S. Treasury have called for ideas to handle the foreclosures they own, such as converting them to rental properties for purchase by investors.

URL to original article: http://www.builderonline.com/builder-pulse/predictions-2012--home-prices.aspx?cid=BP:122811:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Call it 2011's hangover before the hangover

2011-12-28T11:48:00.000-08:00

Source: Business Week

They say a picture's worth a thousand words. Lucky for everybody, this one's worth less, like just about everything else. It may be said someday that if one can get a loan, it may be the moment of a lifetime to buy a home, and that's likely to be the case for months, as home prices continue to wander down during at least the first half of 2012. Curiously, at some point in a real estate cycle hence, it should hardly come as a surprise for homeowners, localities, states, nations, even the globe, to find ourselves collectively kneeling, hugging porcelain, promising "never again." Business Week's Drake Bennett offers this timely turn on Charles Dickens' Bleak House

A bleak, by-the-numbers portrait of home prices, home sales, homeowners, and the construction and mortgage industries—all in distress.

URL to original article: http://www.builderonline.com/builder-pulse/call-it-2011-s-hangover-before-the-hangover.aspx?cid=BP:122811:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

The echo boom, housing's next really big thing

2011-12-27T15:05:00.000-08:00

Source: Forbes

Tim Smith blogs on the “Echo Boom”, also known as Generation Y (Americans born between 1980 – 1995). His most recent guest post indicated that Echo Boomers might not be that excited about becoming homeowners. There are a lot of them and they will have to live somewhere, so there may still be opportunity in housing them.

Seize the Next Biggest Financial Opportunity

Are you an investor in real estate? Are you a real estate agent? Are you a homeowner looking to sell? Are you trying to rent a nice apartment complex? If you have any interest in housing, you may have cringed when reading about the Millennial attitude toward housing. However, whether Echo Boomers rent or buy, they will need housing, and there are 80 million of them. In other words, recognizing their demographics and preferences will separate the winners from the losers and that has huge financial implications in a generation as large as the Echo Boomers.

Who Will Buy and Who Will Rent?

In the past, I’ve argued that single moms and females will produce the strongest demand for housing in the future. Then a few articles I covered mentioned a different take: the new renter is probably a single mom. However, single moms and females of the Millennial generation listed owning a home as a financial goal more than males, even though males are more likely to be homeowners (by a 7% margin). Married Echo Boomers also reported home ownership as a financial goal (approximately 21% of Echo Boomers are married). As this generation matures, I’d expect the strongest demand to come from these three segments of the Millennial generation.

Many single males stated that home ownership was not a financial goal. A few of these male renters wanted to buy land and build their own home outside of the city (approximately 10-15%), while the rest seemed satisfied with renting. Those in the real estate industry should be aware that renters are a profitable group, if you build housing that renters want.

Are there exceptions to these trends? Of course, and if the Millennial generation sees its marriage rate increase, there will be a growing demographic to sell homes to. In some cases Echo Boomers may opt to live with relatives or friends rent-free due to their economic circumstances. But even the ones who lived with their relatives or friends told me that they planned to be independent soon.

What Will They Want?

For now, most of Generation Y seem to want modest homes, the demand of which may be indicative of their young age. But it might also represent a demographic shift against large housing that is often overpriced and unnecessary. Because many Echo Boomers don’t have or make significant money, a small house offers the ability to save on energy. Other traits of housing that Echo Boomers want:
· Some Echo Boomers prefer to drive less or take public transportation. This indicates that they would prefer housing that is close to work, school and social areas. Keep in mind, that close housing will save them money so that they can afford other things in the area (an opportunity to attract businesses).
· For apartments, modern designs with social areas are replacing old apartments (and this will continue to grow). An example of this in terms of design, an example would be to replace carpet with hardwood floors. Builders and real estate developers can also attract businesses that offer social areas, like coffee shops, to open near the area.
· Since some Echo Boomers lack financial resources, always consider how your housing saves them money. Is it small and efficient? “This place will save you money on bills.” Is it close to their favorite places? “This place will save you money and time on transportation.” Does it offer their favorite activities? “This place offers a gym without an additional cost.” Always create win-win situations – it communicates that you value your customers.

Time Will Be the Ultimate Judge

While Echo Boomers may mature like older generations and buy houses in the suburbs, they may not. Time will answer questions about the housing demand from the Millennial generation, and what type of housing they’ll prefer. Either experts are right when they state that Echo Boomers are extending adolescence, or the zeitgeist of “making it” is changing for this generation. For now, anyone with a financial interest in real estate should pay attention to trends and find ways to meet their consumers’ needs. And best of all, you can win with the renters or the owners – you’re not stuck with one opportunity

URL to original article: http://www.builderonline.com/builder-pulse/the-echo-boom--housing-s-next-really-big-thing.aspx?cid=BP:122711:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Prices remain weighted by distress going into 2012

2011-12-27T11:13:00.000-08:00

Source: Calculated Risk

S&P/Case-Shiller released the monthly Home Price Indices for October (a 3 month average of August, September and October). This release includes prices for 20 individual cities and and two composite indices (for 10 cities and 20 cities).

Data through October 2011, released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices ... showed decreases of 1.1% and 1.2% for the 10- and 20-City Composites in October vs. September. Nineteen of the 20 cities covered by the indices also saw home prices decrease over the month. The 10- and 20-City Composites posted annual returns of -3.0% and -3.4% versus October 2010, respectively.

“There was weakness in the monthly statistics, as 19 of the cities posted price declines in October over September,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Eleven of the cities and both composites fell by 1.0% or more during the month.

The Composite 10 index is off 32.9% from the peak, and down 0.5% in October (SA). The Composite 10 is at a new post bubble low (Seasonally adjusted), but still above the low NSA.

The Composite 20 index is off 33.0% from the peak, and down 0.6% in October (SA). The Composite 20 is also at a new post-bubble low.

The Composite 10 SA is down 3.0% compared to October 2010.

The Composite 20 SA is down 3.4% compared to October 2010. This was a slightly smaller year-over-year decline for both indexes than in September.

Prices increased (SA) in 4 of the 20 Case-Shiller cities in October seasonally adjusted (only one city increased NSA). Prices in Las Vegas are off 61.3% from the peak, and prices in Dallas only off 8.8% from the peak.

The NSA indexes are only about 2% above the March 2011 lows - and these indexes will hit new lows in the next few months since prices are falling again. Using the SA data, the Case-Shiller indexes are now at new post-bubble lows!

URL to original article: http://www.builderonline.com/builder-pulse/prices-remain-weighted-by-distress-going-into-2012.aspx?cid=BP:122711:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

New home sales at 7-month high in November

2011-12-26T16:30:00.000-08:00

(Reuters) - New U.S. single-family home sales rose to a seven-month high in November and the months' supply of houses on the market was the lowest in 5-1/2 years, adding to signs of a budding recovery in the sector.

The Commerce Department said on Friday sales rose 1.6 percent to a seasonally adjusted 315,000-unit annual rate. Octobers' sales pace was revised up to 310,000 units from the previously reported 307,000 units.

Economists polled by Reuters had forecast sales at a 313,000-unit rate. In the 12 months through November, new home sales were up 9.8 percent.

Coming on the heels of data this week showing a rise in sales of previously owned homes and surge in housing starts, the report implied a recovery was starting to take shape in the housing market.

The housing market, which triggered the 2007-09 recession, remains constrained by an oversupply of unsold homes, falling prices and high unemployment.

Sales were up in two of the four regions, with the number of homes sold in the Midwest the highest since November 2009.

The median sales price for a new home fell 3.8 percent to $214,100 last month. Compared to November last year, the median price was down 2.5 percent.

There were a record low 158,000 new homes on the market last month and at November's sales pace, it will take 6 months to clear them - the shortest amount of time since March 2006. That compared to 6.2 months in October.

A 6-month supply is generally considered ideal, with higher readings indicating steep price declines.

URL to original article: http://www.reuters.com/article/2011/12/23/us-new-home-sales-idUSTRE7BM0VY20111223

For further information on Fresno Real Estate check: http://www.londonproperties.com

New home sales increase 1.6%

2011-12-23T15:30:00.000-08:00

by KERRI PANCHUK

New single-family home sales edged up 1.6% in November when compared to the previous month, a government report said Friday.

The Commerce Department said home sales hit an annual rate of 315,000 units, up from 310,000 in October and 287,000 in November 2010.

Meanwhile, the median sales price for a new home in November hovered at $214,000, while the average sales price hit $242,900.

The adjusted rate of new homes for sale at the end of November hit 158,000, creating a six-month supply of homes at the current rate.

URL to original article: http://www.housingwire.com/2011/12/23/new-home-sales-edge-up-1-6

For further information on Fresno Real Estate check: http://www.londonproperties.com

Holiday season marked by record low interest rates

2011-12-22T10:46:00.000-08:00

by KERRI PANCHUK

Mortgage rates remain near all-time lows with the 30-year, fixed-rate mortgage setting a new record with an interest rate of 3.91%, Freddie Mac said Thursday. That's down from 3.94% a week ago.

Meanwhile, the 15-year, FRM remained at 3.21%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.85% this week, down from 2.86% last week.

Freddie Mac also reported that the 1-year Treasury-indexed ARM averaged 2.77%, down from 2.81% last week.

Freddie Mac concluded the 30-year, FRM and adjustable-rate products reached new all-time lows in this week's rate survey.

"Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today’s homebuyers are paying over $1,200 less per year on a $200,000 loan," said Frank Nothaft, vice president and chief economist of Freddie Mac. "This greater affordability helped push existing home sales higher for the second consecutive month in November to an annualized pace of 4.42 million, the most since January."

On the same day, the Federal Housing Finance Agency said the national average contract mortgage rate hit 4.22% in November.

In addition, the average interest rate for a conventional, 30-year, FRM on loans of $417,000 or less increased 4-basis points last month to 4.40%. The contract rate on the composite of all mortgages, including fixed and adjustable rate mortgages, hit 4.20% in November, up 3 basis points from 4.17%.

URL to original article: http://www.housingwire.com/2011/12/22/holiday-season-marked-by-record-low-interest-rates-2

For further information on Fresno Real Estate check: http://www.londonproperties.com

Existing home sales up 4% in November

2011-12-21T09:48:00.000-08:00

by JASON PHILYAW

Sales of existing homes rose 4% in November, according to the National Association of Realtors, which is revising its benchmarks for sales and inventory data since 2007.

The trade group said sales of single-family homes, townhomes, condos and co-ops increased to a seasonally adjusted rate of 4.42 million units from 4.25 million in October.

NAR said November existing home sales were 12.2% higher than 3.94 million a year ago.

Lawrence Yun, chief economist at NAR, said existing home sales reached a 10-month high in November, as people are taking advantage of a buyer's market. Yun said the current pace is 34% higher than the middle of 2010, and "a genuine sustained sales recovery appears to be developing."

Earlier Wednesday, CoreLogic (CLGX: 12.43 -2.66%) said home prices across the country are dropping as the glut of distressed properties continues to plague the real estate economy.

Potential homeowners also have access to the lowest mortgage interest rates in 40 years. Freddie Mac recently reported the average 30-year, fixed rate fell to 3.94% from 3.99% a week earlier and 4.83% a year ago.

"With record low mortgage interest rates and bargain home prices, NAR's housing affordability index shows that a median-income family can easily afford a median-priced home," according to Moe Veissi, president of the trade group and broker-owner of Veissi & Associates Inc. in Miami.

NAR said the median price of all homes sold in November was $164,200, down 3.5% from a year earlier. Sales of distressed properties accounted for 29% of all sales last month, which is up slightly from October and down from one-third of all sales a year earlier.

"With record low mortgage interest rates and bargain home prices, NAR's housing affordability index shows that a median-income family can easily afford a median-priced home," according to Moe Veissi, president of the trade group and broker-owner of Veissi & Associates Inc. in Miami.

NAR also revised benchmarks on existing home sales for the past four years. There were 4.19 million existing homes in 2010, which is down 14.6% from prior estimates of more than 4.9 million sales last year. The trade group lowered sales and inventory by 14.3% for 2007 through 2010, and expects the change to impact upcoming GDP revisions by the federal government.

The trade group said the housing inventory at Nov. 30 decreased to 2.58 million existing homes for sale, representing a seven-month supply, which is down from 7.7-months supply at Oct. 31.

"Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels," Yun said.

Single-family homes sales increased 4.5% in November to an annual rate of 3.95 million from 3.78 million a month prior and rose 13% from 3.5 million a year earlier. The median price of an existing single-family home dipped 0.2% to $164,100 in November.

URL to original article: http://www.housingwire.com/2011/12/21/existing-home-sales-up-4-in-november

For further information on Fresno Real Estate check: http://www.londonproperties.com

California home sales show year-over-year improvements

2011-12-15T10:17:00.000-08:00

by KERRI PANCHUK

Home sales in the San Francisco area edged up in November over year-ago figures, although they dipped from October. Statewide, sales across California also declined month-over-month, but showed an increase from year-ago figures, DataQuick said.

A total of 6,317 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 2% from 6,444 in October, and up 3.4% from 6,111 in November 2010, according to San Diego-based DataQuick.

Overall, California had an estimated 32,669 home sales statewide last month, down 4.2% from 34,087 in October, but up 4% from 31,403 in November 2010.

DataQuick President John Walsh said buyers remain hesitant to jump back into the market.

"These days, buyers and sellers have to contend with two sets of problems, which sometimes play into each other and sometimes conflict with each other," Walsh said. "The first is the lousy economy and the opportunities it presents, for better or worse. The second is the dysfunctional mortgage finance system. Interest rates may be at record lows, but the types of mortgages that are available have been drastically reduced and qualifying is a true grind."

The median sales price on all Bay Area homes in November fell to $363,000 from the prior month, buy increased 3.9% from $350,000 last year.

Statewide the median price for a California home was $244,000, up 1.7% from $240,000 in October and down 4.3% from $255,000 a year ago.

URL to original article: http://www.housingwire.com/2011/12/15/california-home-sales-shows-year-over-year-improvements

For further information on Fresno Real Estate check: http://www.londonproperties.com

Housing Market Sees Signs of Stability: Clear Capital

2011-12-13T11:58:00.000-08:00

By: Krista Franks

The housing market may be stabilizing as house prices and REO saturation rates show little change on a quarterly and yearly basis, according to Clear Capital’s most recent Home Data Index.

Nationally, prices rose just 0.3 percent while REO saturation rate was relatively unchanged at 24.6 percent over the most recent quarter, according to Clear Capital data ending in November. Clear Capital measures housing data on a rolling quarter, which compares the most recent four months with the previous three.

“With only a one percent drop in national home prices since January and virtually no change in prices over the last six months, strong evidence suggests the big swings that many market participants are accustomed to could become a thing of the past,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital.

Villacorta also reiterated a point he and other analysts made at a panel discussion a few days ago at the Five Star MPact Conference and Expo: Market data must be granular to be effective.

“Although many of the nation’s major markets are experiencing no significant movement in prices, there are still several micro markets that are underperforming the overall market due to high levels of REO saturation,” Villacorta said in the Home Data Index.

He continued: “As lien holders continue to process their foreclosures and the flow of REOs continue to come to market, it will be critical for industry participants to ensure they understand the micro economic nature of specific markets.”
Over the recent quarter, prices changed by less than one percentage point in three of four U.S. regions, while the Midwest demonstrated a price increase of 1.2 percent.

The West was the only region to post a decline, falling 0.8 percent over the quarter. This decline is slightly lower than the quarterly price decline reported last month in the region – 1 percent.

“As this improvement comes at the beginning of the winter slow down, it suggests the stubborn quarter-over-quarter and year-over-year declines seen consistently in the hard hit region may be easing,” stated Clear Capital’s report.

The Northeast posted a 0.5 percent increase for the quarter, and the South posted a 0.2 percent increase.

While price changes did not vary drastically from region to region, they also did not vary widely from market to market.

The difference between the No. 1 highest performing market – Washington D.C. – and the 15th highest performing market – Cleveland, Ohio (1.7 percent) was just 3.1 percent.

However, the difference between the top and bottom ranked markets on the list of 15 lowest performing markets was much greater. In the No. 1 spot, Atlanta posted a 9.7 percent decline, while Dallas, at No. 15, posted a 0.4 percent decline.

Atlanta’s decline is likely the result of a decrease in transactions and an increase in distressed properties.

In keeping with Villacorta’s assertion that some markets are underperforming due to high REO saturation rates, Atlanta’s REO saturation rate is 42.8 percent, significantly higher than the national rate of 24.6 percent.

Also notable, Florida, which has seen a 59.1 percent decline in prices since their 2006 peak, has seen a 12 percent decline in REO saturation over the past year.

Additionally, four Florida metro markets – all of which experienced high foreclosure rates and sharp price declines over the past two years – held positions on the list of 15 highest performing markets for the second month in a row. Orlando, Tampa, Jacksonville, and Miami are now seeing rising prices.

URL to original article: http://www.dsnews.com/articles/housing-market-sees-signs-of-stability-clear-capital-2011-12-09

For further information on Fresno Real Estate check: http://www.londonproperties.com

Fresno, CA - Recent New Home Sales Numbers Give Hints Market Decrease is Slowing

2011-12-13T11:26:00.000-08:00

Source: Builder News

Sales of new homes fell year-over-year in September in the Fresno, CA market, but the percentage fall was not as severe as August 2011, giving suggestion that the market may be evening out. Sales sank 19.0% from a year earlier to 94, relative to a 19.5% decline in August from the year earlier.

In the 12 months ending September 2011, there were 1,165 new home sales, down from an annualized 1,187 in August.

Compared to a year earlier, new home sales reflected 6.4% of overall housing sales, down from 8.3% last year. For new and existing homes, sales increased year-over-year in September after also increasing in August year-over-year.
Pricing and Mortgage Trends
Average price of newly sold homes saw a 5.9% decline year-over-year in September to $241,462 per unit. This decline is higher than the 13.1% decline in August from a year earlier.

For newly sold homes, the average mortgage size sank year-over-year along with average price of new homes. The average mortgage size dropped to $175,401 in September, marking an 18.1% fall compared with last year. In August 2011, average mortgage size declined 29.9% from a year earlier. For new home sales, the percentage of the sale price that was being financed slid 10.9 percentage points year-over-year to 72.6% in September 2011.

URL to original article: http://www.builderonline.com/local-housing-data/pacific/fresno-ca.aspx?cid=lmkt_fresno-ca20111212&rdrnum=183826

For further information on Fresno Real Estate check: http://www.londonproperties.com

Real estate supply's dead weight sits atop jobs rebound

2011-12-12T16:25:00.000-08:00

Source: Federal Reserve Bank of St. Louis

Why Is Employment Growth So Low?
Juan M. Sanchez, Economist
Daniel L. Thornton, Vice President and Economic Adviser

Total nonfarm payroll employment declined by
nearly 8.75 million jobs from December 2007 to
February 2010 and has since increased by 2 million,
reducing the unemployment rate from 10.1 percent in
October 2009 to 9.1 percent in September 2011. A widely
asked question is why employment growth is so low. We
don’t know all the reasons, but the data suggest that the
pre-recession boom in residential and commercial real
estate and the subsequent bust are very important factors.
The chart shows total nonfarm employment and employment
in construction for January 2002 through September
2011. Both declined significantly during the 2007-09 recession
and for several months after. From the beginning of
the recession (December 2007) to the trough in total
employment (February 2010), total nonfarm employment
declined by 8.7 million jobs, while construction employment
declined by nearly 2 million jobs—
22 percent of the total. Hence, construction
alone accounts for much of the decline in
employment since the start of the recession.
These construction numbers, even though
high, likely underestimate the importance of
construction in explaining the slow growth
in employment for at least two reasons. First,
as the chart shows, the peak in construction
employment occurred in April 2006, well in
advance of the recession and near the time
house prices and residential investment
peaked.1 By the start of the recession, construction
employment had already declined
by nearly a quarter million jobs from its peak;
this number could be added to the decline in
construction employment attributed to the
recession.
Second, the numbers in the figure reflect
only the direct effect of the decline in construction
employment and not the indirect
effects that caused a slump in employment in
other industries. We estimate these indirect
effects using the Employment Requirements Matrix of the
Bureau of Labor Statistics.2 Assuming that about 1 million
construction jobs were lost when the real estate bubble
burst, we estimate that nearly 800,000 additional jobs were
lost in other industries as a consequence. Hence, the decline
in construction accounts for nearly 40 percent of the total
decline in employment between December 2007 and
February 2010.
To best evaluate employment growth, it is important
to note that while real GDP is now slightly above its prerecession
peak and real consumption is about 1.5 percent
above its pre-recession peak, real fixed investment is still
19 percent below its pre-recession peak, which occurred
in the first quarter of 2006, and 15 percent below its prerecession
level. Essentially all of the slow growth in investment
is directly attributable to low levels of real estate
investment. Real residential investment is nearly 60 percent
below its peak in the fourth quarter of 2005 and 38 percent
below its pre-recession level. Indeed, it has declined slightly
more since the end of the recession in June 2009. Real
nonresidential investment in structures (investment in commercial
real estate) is 28 percent below its pre-recession
level. All other components of real fixed investment are
very near or significantly above their pre-recession levels.
Hence, the anemic investment in residential and commercial
real estate has significantly contributed to the slow
growth in employment. The problem appears to be an
excess supply of real residential and commercial real estate,
which will continue to impede investment in residential
and commercial real estate. Unfortunately, the real supply
of real estate can only adjust by depreciation, population
growth (two very slow processes), or by a decline in its real
value, which occurs when real estate prices decline relative
to the prices of other commodities. While these adjustments
take place, we expect only moderate growth rates of
employment.

URL to original article: http://www.builderonline.com/builder-pulse/real-estate-supply-s-dead-weight-sits-atop-jobs-rebound.aspx?cid=BP:121211:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Bankrate: Jumbo Mortgage Rates Hit New Record Low

2011-12-12T16:21:00.000-08:00

NEW YORK, Dec. 8, 2011 /PRNewswire/ -- The jumbo 30-year fixed mortgage rate fell to a new record low of 4.68 percent, according to Bankrate.com's weekly national survey. The average jumbo 30-year fixed mortgage has an average of 0.4 discount and origination points.

The average conforming 30-year fixed mortgage inched lower to 4.24 percent while the 15-year fixed mortgage held steady at 3.48 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM sliding to 3.18 percent and the 10-year ARM inching down to 3.8 percent.

Mortgage rates are low, but based on the ultra-low levels of benchmark interest rates such as 10-year Treasury notes, mortgage rates could be even lower. Since August, the European debt crisis has pushed the spread between risk-free U.S. government bonds and those of other bonds, such as mortgage-backed bonds, to the highest levels since the spring of 2009. At that time, financial tensions were at a fever pitch, particularly surrounding the health of the U.S. banking system. This time, its Europe's banking system in the crosshairs, but the result is much the same -- a higher-than-typical cost of borrowing when compared to the rock-bottom government rates.

The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.24 percent, the monthly payment for the same size loan would be $982.71, a difference of $259 per month for anyone refinancing now.

SURVEY RESULTS

30-year fixed: 4.24% --down from 4.25% last week (avg. points: 0.36)

15-year fixed: 3.48% -- unchanged from last week (avg. points: 0.31)

5/1 ARM: 3.18% -- down from 3.21% last week (avg. points: 0.34)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/.

The survey is complemented by Bankrate's weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. There is no clear consensus, with 46 percent predicting that mortgage rates will remain more or less unchanged while 39 percent forecast an increase in mortgage rates. Just 15 percent of the respondents expect mortgage rates to decline in the coming week.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI.

About Bankrate, Inc. (NYSE: RATE)

The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, InsureMe, CreditCardGuide.com, Bankaholic, CreditCards.com and NetQuote. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), The Wall Street Journal and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 500 newspapers.

URL to original article: http://www.prnewswire.com/news-releases/bankrate-jumbo-mortgage-rates-hit-new-record-low-135237728.html

For further information on Fresno Real Estate check: http://www.londonproperties.com

Mortgage Delinquencies to Decline in 2012: Study

2011-12-09T14:52:00.000-08:00

By: Krista Franks

The current year will close with a 7 percent yearly decline in mortgage delinquencies, matching last year’s decline, according to predictions released Wednesday by TransUnion.

The percent of borrowers 60 days or more delinquent will fall to 5.95 percent by the end of the year, and will fall to 5 percent by the end of 2012, according to TransUnion.

However, despite yearly declines, the forecasters expect a slight rise in delinquencies through the first quarter of 2012.

After reaching 6.02 percent in the first quarter, delinquencies will decline for the following three quarters, the forecasters predict.
Tim Martin, group VP of U.S. housing in TransUnion’s financial services business unit, believes house prices and unemployment will continue to pose problems for the market in the coming year, but the market will see some positive movement due to “improving credit quality of new originations, consumer confidence, and GDP.”

“If things go as expected, there are no additional negative shocks to the U.S. economy and the average borrower’s situation, mortgage delinquencies could fall as much as 16% in 2012 compared to 2011,” Martin said.

While the nation is expected to experience overall declines in mortgage delinquencies in the coming year, 12 states and the District of Columbia will likely see increases. Thirty-eight states will experience declines.

TransUnion expects Florida, Nevada, and the District of Columbia to close the fourth quarter of 2012 with the highest delinquency rates.

Florida and Nevada will be seeing double-digit delinquency rates at 13.20 percent and 11.09 percent respectively. The District of Columbia will follow with a rate of 7.91 percent.

At the other end of the spectrum, North Dakota will see the lowest delinquency rate in the nation at the end of 2012 at 1.3 percent.

South Dakota and Wisconsin will follow with rates of 1.96 percent and 2.11 percent respectively.

URL to original article: http://www.dsnews.com/articles/mortgage-delinquencies-to-decline-in-2012-study-2011-12-07

For further information on Fresno Real Estate check: http://www.londonproperties.com

Mortgage rates dip below 4% — again

2011-12-09T13:50:00.000-08:00

by KERRY CURRY

Fixed-rate mortgages rates were largely unchanged and near record lows, according to Freddie Mac and Bankrate mortgage surveys.

The 30-year fixed dipped to 3.99% for the week ending Dec. 8 with an average 0.7 point, and at 3.27%, the 15-year, fixed-rate mortgage with an average 0.8 point, was just slightly above its all-time low of 3.26%, which it hit on Oct. 6, according to Freddie Mac.

The 30-year FRM dipped from last week when it averaged 4%. Last year at this time, the 30-year FRM averaged 4.61%, the GSE said.

The 15-year FRM is down from last week's 3.3%. A year ago it averaged 3.96%.

Freddie said the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.93%, up from last week's 2.9% but down from 3% a year ago.

The 1-year Treasury-indexed ARM averaged 2.8%, up from last week's 2.78% but down from 3.27% a year ago.

"These low rates and home prices have pushed housing affordability to record highs this year," said Frank Nothaft, vice president and chief economist at Freddie Mac.

Bankrate reported that the benchmark 30-year, fixed-rate mortgage fell 1 basis point this week to 4.24%, according to its survey of large lenders.

Mortgages in the survey had an average total of 0.36 discount and origination points. One year ago, the mortgage index was 4.89%.

The benchmark 15-year, fixed-rate mortgage was 3.48%, unchanged from last week. The 5/1 adjustable-rate mortgage fell 3 basis points, to 3.18%.

URL to original article: http://www.housingwire.com/2011/12/08/mortgage-rates-dip-below-4-%E2%80%94-again

For further information on Fresno Real Estate check: http://www.londonproperties.com

Bubble vision

2011-12-09T13:02:00.000-08:00

Source: New York Times

Carl Richards is a certified financial planner in Park City, Utah. His sketches are archived here on the Bucks blog. His new book, “The Behavior Gap,” will be out in January.

During a recent conversation, someone asked me if I thought the last few years made me better equipped to spot the next bubble. Since we had recently been through a real estate and credit bubble could anyone credibly claim that they would be prepared to spot the next one?

My response was simple: no.
While the last few years hasn’t made me any better at bubble spotting, it has made me realize that when it comes to investing it’s truly better to be safe than sorry. For anyone who thinks that living through a market that clearly got ahead of itself somehow makes you better able to forecast the next bubble completely misses the point.

The supposed ability to spot bubbles is just another way of talking about market timing. Market timing, while not impossible, has certainly proven to be highly improbable.

It’s certainly tempting to believe that somehow we could identify a variable or series of variables that would tell us when the market was officially in a bubble. It reminds me of a conversation I had a few years ago where somebody who was clearly exasperated said, “All I want is for someone to tell me to sell before the market goes down and to buy before it goes up. Seems quite simple to me!”

Looking for a bubble spotter is just the latest way we’ve come up with to trick ourselves into thinking that there is a way to time the markets. We can get very sophisticated in the stories we tell ourselves. We look for things like quantitative models, advanced forecasting software, years of academic research and studies. But in the end, it’s all just market timing. And for the most part, it simply doesn’t work.

One of the big problems with some of the recent bubble spotting methods is that they work perfectly, just so long as you’re looking backwards. Many of these techniques are based on extensive research that relies heavily on back-tested models.

We are very good at analyzing the past and coming up with surefire ways of avoiding the exact same mistake again in the future. But what we are particularly bad at is thinking about things that we have never thought of before. Most bubbles are blazingly obvious with the benefit of hindsight, but when we’re honest with ourselves, we have to admit that often they were caused by things that we hadn’t even considered possible. And the exact cause of the next bubble will surely be different than the cause of the last bubble.

This current obsession we have with bubble spotting isn’t new. It’s just the latest reincarnation of the age-old desire we have to make sense of the world around us and have some sense of control about the future. But if we do want to use history as a guide, we need to realize that even those that were best positioned to spot bubbles have been wrong.

In July 2009, The Wall Street Journal surveyed 50 economists about where interest rates on the 10-year Treasury bills would be one year later. Rates were sitting at 3.3 percent when the article came out. Forty-eight respondents said they would be higher one year later, while only two suggested rates would fall below 3 percent. The rate was 2.95 percent on June 30, 2010.

And it’s not just in recent times that the bubble predictors didn’t get it right. As Jason Zweig recently noted in The Wall Street Journal, even the guy who wrote the most famous book about bubbles missed a big one:

On Oct. 2, 1845, [Charles] Mackay wrote that “those who sound the alarm of an approaching railway crisis have somewhat exaggerated the danger.” He went on to ridicule anyone who argued that “the Railway mania of the present day” was similar to the devastating bubbles he had described in his own book. “There is no reason whatever to fear” a crash, he concluded. He couldn’t have been more wrong. From 1845 to 1850, railway stocks fell by two-thirds — the equivalent of roughly $1 trillion of losses in today’s money. Mackay never fessed up to his own extraordinary delusion.

So back to the original question. If we’re not any more prepared to spot the next bubble than we were just a few years ago, then what?

The point is we should stop trying to trick ourselves into believing that if we just buy a bigger computer, hire the right analyst, find the secret newsletter and read enough magazines or books then we’ll somehow be able to buy before the market goes up and sell before the market goes down.

We need to give up on the idea of timing the market and finally pay attention to the academic research that shows it’s a fool’s errand. Instead we should devote at least some of that time to developing a financial plan that starts with where we are today and plots a course to where we want to go. Once we have built a plan, no matter how basic, then we can figure out how we need to invest our money to meet those goals.

URL to original article: http://www.builderonline.com/builder-pulse/bubble-vision.aspx?cid=BP:120911:

For further information on Fresno Real Estate check: http://www.londonproperties.com

TransUnion Forecasts Mortgage Delinquencies to Rise, and Then Fall in 2012; Credit Card Delinquencies to Remain Steady

2011-12-08T13:13:00.000-08:00

Source: TransUnion

CHICAGO, IL--(Marketwire - Dec 7, 2011) - TransUnion released its annual forecasts today on consumer credit, which indicate that national mortgage loan delinquencies (the ratio of borrowers 60 or more days past due) will decline to about 5% by the end of 2012 from just under 6% at the conclusion of 2011. After six consecutive quarterly declines between Q4 2009 and Q2 2011, 60-day mortgage delinquencies are expected to rise through Q1 2012, peaking at 6.02%. TransUnion forecasts mortgage delinquencies, a statistic generally considered a precursor to foreclosure, to decline for the last three quarters of 2012.

"Although house prices and unemployment will likely face continued pressure next year, this forecast calls for gradual improvements in the second half of 2012 to other key variables, like improving credit quality of new originations, consumer confidence and GDP, that will positively influence homeowners' ability and willingness to pay their mortgages," said Tim Martin, group vice president of U.S. housing in TransUnion's financial services business unit. "If things go as expected, there are no additional negative shocks to the U.S. economy and the average borrower's situation, mortgage delinquencies could fall as much as 16% in 2012 compared to 2011."

The expected mortgage delinquency decline in 2012 would follow recent yearly trends, including an expected 7% decrease by the end of this year and a 7% reduction in 2010. This is in contrast to more than 50% year-over-year increases between 2006 and 2009.

TransUnion is projecting 2012 declines in mortgage delinquencies for 38 states with the largest percentage declines expected in Arizona (-46.25%), Wisconsin (-45.52%) and Colorado (-40.34%). Twelve states and the District of Columbia are expected to see increases.

Credit Cards

Credit card delinquency rates (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) reached their lowest levels in 17 years during the second quarter of 2011 (0.60%) and TransUnion expects them to remain relatively low in 2012, decreasing approximately 7% from 0.74% in Q4 2011 to 0.69% in Q4 2012.

"Credit card delinquencies are expected to remain fairly steady in 2012 ranging between 0.69% and 0.76% -- levels far below those typically observed in the last 15 years," said Steve Chaouki, group vice president in TransUnion's financial services business unit. "In today's uncertain economy, consumers have found that credit cards are among their most valued assets due to the flexibility they provide. As a result, consumers have made a concerted effort to make on-time payments and maintain relatively low balances. In fact, credit card debt per borrower in the third quarter of 2011 stood at $4,762, approximately $1,000 less than the second quarter of 2009, the quarter in which the recession ended."

Thirty-nine states and the District of Columbia are projected to see credit card delinquency declines in 2012 with only 11 experiencing increases. States expected to see the largest credit card delinquency declines in 2012 include Delaware (-30.74%), Oklahoma (-23.74%) and California (-22.97%). The largest increases are expected in Connecticut (14.87%), Missouri (12.46%) and Louisiana (10.11%).

TransUnion's forecasts are based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates and real estate values. The forecasts would change if there are unanticipated shocks to the global economy affecting recovery in the housing market, or if home prices fall more than expected.

60-Day Mortgage Loan Delinquency Projections for 2012

2010-2012 Q4 2010 Q4 2011 Q4 2012
USA 6.41% 5.95% 5.00%

Highest Mortgage Delinquency States Q4 2012
Florida 13.20 %
Nevada 11.09 %
District of Columbia 7.91 %

Lowest Mortgage Delinquency States Q4 2012
North Dakota 1.30 %
South Dakota 1.96 %
Wisconsin 2.11 %

90-Day Credit Card Delinquency Projections for 2012

2010-2012 Q4 2010 Q4 2011 Q4 2012
USA 0.82% 0.74% 0.69%

Highest Credit Card Delinquency States Q4 2012
Mississippi 1.03 %
Louisiana 0.99 %
Missouri 0.92 %

Lowest Credit Card Delinquency States Q4 2012
North Dakota 0.36 %
Wyoming 0.44 %
Alaska 0.44 %

The most current mortgage and credit card delinquency data for the nation and every state can be found at www.transunion.com/trenddata.

TransUnion's Trend Data database
TransUnion's Trend Data is a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels. For the purpose of this analysis, the term "credit card" refers to those issued by banks.

URL to original article: http://newsroom.transunion.com/press-releases/transunion-forecasts-mortgage-delinquencies-to-ris-0829772

For further information on Fresno Real Estate check: http://www.londonproperties.com

Fresno home prices decrease again

2011-12-07T15:18:00.000-08:00

Written by Business Journal staff

Fresno home prices continue to fall according to a home price index just released by CoreLogic, a provider of consumer, financial and property information for business and government.

In Fresno, home prices, including distressed sales, declined by 10.8 percent in October of 2011, compared to October of 2010 and declined by 10.9 percent in September 2011, compared to September of 2010.

Excluding distressed sales, year-over-year prices declined by 8.5 percent in October of this year, compared to October of 2010 and by 9.5 percent in September of 2011, compared to September of last year.

The index shows that home prices in the U.S. decreased 1.3 percent on a month-over-month basis, the third consecutive monthly decline. They declined by 6.2 percent in California.

“Home prices continue to decline in response to the weak demand for housing,” said Mark Fleming, chief economist for CoreLogic. “While many housing statistics are basically moving sideways, prices continue to correct for a supply and demand imbalance. Looking forward, our forecasts indicate flat growth through 2013.”

Including distressed sales, the five states with the highest appreciation were: West Virginia at 4.8 percent, South Dakota at 3.1 percent, New York at 3 percent, District of Columbia at 2.4 percent and Alaska at 2.1 percent.

Including distressed sales, the five states with the greatest depreciation were: Nevada at -12.1 percent, Illinois at -9.4 percent, Arizona at -8.1 percent, Minnesota at -7.9 percent and Georgia at -7.3 percent.

URL to original article: http://www.thebusinessjournal.com/real-estate/12395-fresno-home-prices-decrease-again

For further information on Fresno Real Estate check: http://www.londonproperties.com

2012's 'sleeper' risks for housing

2011-12-07T10:07:00.000-08:00

Source: Fortune

There have been recent signs of strength in the battered housing market but investors may need reminding that there's growing political risk to a rebound.

We've noticed a lot of investors getting positive on housing recently. In fact, housing is cited as the driver for the UBS economic team's rosy 2012 forecast. While we don't dispute that recent economic data has been better than feared, we take significant exception to the idea that housing is poised for smooth sailing. Here we present two risk factors looming large in our outlook but virtually unnoticed among investors: the 2012 election and the prospect for significant disruption to the current housing finance system.

The amount of political risk in the housing market is currently large and underappreciated. The FHA's share of mortgage purchase volume is just under 40%, while Fannie and Freddie combined have an almost 60% market share, leaving a sliver (less than 5%) for the private lenders.

Government support for the housing market is currently at or extremely near its high-water mark, and there's very limited potential for upside from here. If government support gets curbed, private lenders won't step up unless rates rise significantly and credit risk decreases (i.e. higher down payments and tighter standards). These factors will decrease demand and make home prices fall. Falling prices will in turn increase lenders' caution towards the asset class, creating a downward spiral.

2012 Presidential Election

The two current front-runners in the Republican primary, Newt Gingrich and Mitt Romney, hold very similar views about the housing market. Both believe that the market should be allowed to clear -- a euphemism for accelerating the realization of the downside. That means, at minimum, that no new initiatives will be forthcoming, and pressure will be applied to existing initiatives. Don't come crying to Mitt Romney when your home price falls.

Here's what the candidates have had to say:

"As to what to do for the housing industry specifically, and are there things you can do to encourage housing? One is, don't try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up, and let it turn around and come back up. The Obama administration has slow walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang. Number two, the credit (that) was given to first time homebuyers was insufficient and inadequate to turn around the housing market. I think it was an ineffective idea. It was a little bit like the cash-for-clunkers program, throwing government money at something which was not market oriented, did not staunch the decline in home values anymore than it encouraged the auto industry to take off. I think the idea of helping people refinance homes to stay in them is one that's worth further consideration. But I'm not signing on until I find out who's going to pay and who's going to get bailed out, and that's not something which we know all the answers to."- Mitt Romney speaking to the Las Vegas Review-Journal's editorial board.

"Remove obstacles to job creation imposed by destructive and ineffective regulations, programs and bureaucracies. Steps include: Repealing the Sarbanes-Oxley Act, which did nothing to prevent the financial crisis and is holding companies back from making new investments in the U.S; Repealing the Community Reinvestment Act, the abuse of which helped cause the financial crisis; Repealing the Dodd-Frank Law which is killing small independent banks, crippling loans to small businesses and crippling home sales; Breaking up Fannie Mae and Freddie Mac, moving their smaller successors off government guarantees and into the free market; Replacing the Environmental Protection Agency with an Environmental Solutions Agency that works collaboratively with local government and industry to achieve better results; and Modernizing the Food and Drug Administration to get lifesaving medicines and technologies to patients faster." - Newt Gringrich campaign website.

Right now, Intrade has Obama winning re-election at 50.3% - clearly too close to call. As far as the Republican nomination goes, Intrade currently has Romney at 46% and Gingrich at 33%. The following charts demonstrate.

The Fannie Mae quagmire

President Obama and the current legislators haven't expressed much interest in further housing initiatives, either. HARP 2.0, the slightly-expanded refinance program, fell well short of what its advocates had been hoping for, and the long-rumored GSE bulk REO program hasn't gone anywhere in months.

Finally, the recent failure of the combined lobbying might of the NAR, NAHB, and MBA to get higher GSE loan limits extended underscores the total lack of government appetite for housing programs.

So the possible outcomes for the 2012 election are either no change (Obama re-election) or a decrease in support (Republicans win the presidency).

Two catalysts for government support to fall

There are at least two important catalysts in 2012 that will force the government to reconsider current support levels – the GSEs' Treasury Support Agreement and an FHA bailout.

The first, as we've noted in the past, is the expiration of the GSEs' Treasury Support Agreement at year-end 2012. While the agreement to continue funding the GSEs will probably get renewed, there's a small risk that it won't – and either way, the approaching deadline could drive plenty of noise and spook the markets. (The debt-ceiling debate might be a good analogy here.)

The second catalyst is the FHA, which looks increasingly like it will need a bailout. In its annual report to Congress, released a few weeks ago, the FHA reported estimated economic net worth of $2.6 billion backing $1.078 trillion insurance in force, for a capital ratio of just 0.24% (or 417x leverage). One year ago, the capital ratio was 0.50%, and in 2007 it was 6.4%. The FHA's annual report claims it's adequately capitalized, but this conclusion relies on home prices not falling at all from here. Specifically, its says:

"With economic net worth being very close to zero under the base-case forecast, the chance that future net losses on the current, outstanding portfolio could exceed current capital resources is close to 50 percent. Negative house price growth in FY 2012, rather than stable or growing prices, would cause such a situation to develop."

Needless to say, our view on home prices is different from the FHA's median assumption of growth in 2012.

Three reasons why the job market still stinks

The government will have to pony up to recapitalize the FHA. FHA mortgages are fed into Ginnie Mae MBS, and Ginnie Mae MBS are explicitly backed by the full faith and credit of the United States government. So if the FHA runs out of funds, the government will have little choice but to step up. To do otherwise would be a default – not out of the question these days, but not very likely either.

How to play it

The clear way to play FHA turmoil is with the private mortgage insurers. These companies compete with (and are constantly undercut by) the FHA. An FHA pullback could be read as a big positive for Radian Group (RDN), Genworth Financial (GNW), Old Republic International (ORI), and MGIC (MTG) (and PMI Group, should it emerge from bankruptcy). However, we think enthusiasm would be short-lived. A dramatic decline in the 40% of the market that the FHA is now supporting would be a big negative for demand, and home price declines would follow. Since the MIs are so exposed to home prices, this would be a net negative for the industry. Accordingly, we would use any strength on FHA rumors as an opportunity to put these battered stocks back out on the short side.

URL to original article: http://www.builderonline.com/builder-pulse/2012-s--sleeper--risks-for-housing.aspx?cid=BP:120611:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

As NAR revision nears, existing inventory drops

2011-12-07T09:39:00.000-08:00

Source: Calculated Risk

Another update: I've been using inventory numbers from HousingTracker / DeptofNumbers to track changes in inventory. Tom Lawler mentioned this back in June (Tom also discussed how the NAR estimates existing home inventory - they don't aggregate data from local boards!)

In the near future, the NAR is expected to release revisions for their existing home sales and inventory numbers for the last few years. The sales and inventory revisions will be down (the NAR has pre-announced this).

Using the deptofnumbers.com for monthly inventory (54 metro areas), it appears inventory will be below the December 2005 levels this month. Unfortunately the deptofnumbers only started tracking inventory in April 2006.

HousingTracker is reporting that inventory in the 54 metro area is down 17.5% from the same week in 2010. If this adjustment is close, existing home inventory is now below the levels of late 2005 - and that is when inventory started rising sharply.

This is just "visible inventory" (inventory listed for sales). There is a large percentage of distressed inventory, and various categories of "shadow inventory" too, but visible inventory has clearly declined in many areas.

In a previous post, I used this data to estimate the coming NAR downward revision for sales, see: A few comments on the expected NAR existing home sales revisions.

URL to original article: http://www.builderonline.com/builder-pulse/as-nar-revision-nears--existing-inventory-drops.aspx?cid=BP:120611:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Economy gains 120,000 jobs; unemployment drops to 8.6%

2011-12-02T17:13:00.000-08:00

Source: New York Times

Somehow the American economy appears to be getting better, even as the rest of the world is looking worse.

In the midst of the European debt crisis, lingering instability in the oil-rich Middle East and concerns about a Chinese economic slowdown, the American unemployment rate unexpectedly dropped last month to 8.6 percent, its lowest level in two and a half years. The nation’s employers modestly increased their hiring, too, the Labor Department said Friday.

The figures come just a few months after economists were warning that the economy’s prospects were waning.

“If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior United States economist at Capital Economics. “Since that point, we’ve become more and more worried about the euro zone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off.”

Resilient as the economy has apparently been since then, the fate of the recovery appears to be more dependent on external — and especially European — events.

So far Europe’s problems have been relatively contained to the Continent. Many economists worry, however, that a disorderly default of Greece or Italy, which still looks alarmingly possible, could lead to a financial crisis that would plunge not only Europe but the entire world into a depression.

If recent history is any guide, even a modest credit tightening could throw the American economy off course; earlier this year, a series of shocks from higher oil prices, the Japanese earthquake and the stalemate over the United States debt ceiling managed to drain the energy from a newly rejuvenated recovery.

In addition to hawking its domestic jobs package, the Obama administration has stepped up its involvement in the euro zone crisis in recent days. The Treasury Department announced Friday that Secretary Timothy F. Geithner will visit European political and financial leaders in several cities next week.

“As president, my most pressing challenge is doing everything I can every single day to get this economy growing faster and create more jobs,” President Obama said Friday in Washington.

November’s drop in unemployment to 8.6 percent was a welcome relief, given that the jobless rate had been stuck at 9 percent for most of 2011.

The decline in the unemployment rate had a downside, though: It fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force. That left the share of Americans actively participating in the work force at a historically depressed 64 percent, down from 64.2 percent in October.

A separate survey of employers, which economists pay more attention to than the unemployment rate, found that companies added 120,000 jobs last month, after adding 100,000 jobs in October.

These payroll numbers were not particularly impressive by historical standards — payroll growth was just about enough to keep up with population growth — but there were other signs of resilience. Employment in the previous two months was revised upward substantially, and the report showed that companies have been taking on more and more temporary workers, indicating that more permanent hires may be in the cards, too.

Other recent economic reports have also been positive, including increases in help-wanted advertising, retail sales and auto sales in particular; decreases in jobless claims; and a loosening of credit conditions for small businesses. Perhaps most encouraging was a recent survey of small businesses that found hiring intentions to be at their highest level since September 2008, when Lehman Brothers collapsed.

“Small businesses were cheering up at the end of last year, but then got clobbered by the jump in oil prices, the Japanese earthquake and then the debt ceiling fiasco,” said Ian Shepherdson, chief United States economist at High Frequency Economics. “Small businesses employ half the work force, and we need them on board.”

Still, serious concerns remain about the economy’s ability to weather the financial and economic turmoil from abroad.

American governments at all levels continued to bleed workers, for one. Even excluding the hundreds of thousands who left the labor force, the country still had a backlog of more than 13 million unemployed workers, whose unemployment averaged an all-time high of 40.9 weeks.

“They say businesses are refusing to look at résumés from the unemployed,” said Esther Perry, 59, of Bedford, Mass., who participated in a recent report on unemployed workers put together by USAction, a liberal coalition. “What do you think my chances are? Once unemployment runs out, I don’t know what I will do.”

Even those who are employed are in fragile positions. Average hourly earnings fell 0.1 percent in November, and a Labor Department report released Wednesday found that the share of national income going to labor was at an all-time low last quarter.

These softer spots in Friday’s numbers underscored just how much President Obama needs additional stimulus, a tidy and fast resolution to the European debt crisis or some other economic breakthrough to reinvigorate the job market before the 2012 presidential election.

On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which is currently scheduled to expire at the end of this month. Economists have said that allowing the expiration of the tax cut — which lets more than 160 million mostly middle-class Americans keep two percentage points more of their pay checks — could be a severe drag on both job creation and output growth.

“If isn’t extended, it will have an impact on consumer spending in the first half of next year because it’ll put a big dent in consumer income,” said Conrad DeQuadros, senior economist at RDQ Economics. “To the extent that reduces spending, there will be second-round effects on hiring.”

Extending the tax cut would likely lead to 600,000 to 1 million more jobs, according to Adriana Kugler, the chief economist at the Department of Labor.

The other major stimulus program scheduled to expire by 2012 is the extended unemployment insurance benefits, which allow some jobless workers to continue receiving benefits for as long as 99 weeks. Already, millions of workers have exhausted their benefits, and ending extended benefits is likely to affect another sizable chunk of the unemployed.

Failing to renew the federal benefit extensions will cause 5 million additional people to lose benefits next year, Labor Secretary Hilda Solis said in an interview.

Unemployment benefits are believed to have one of the most stimulative effects on the economy, since recipients of these benefits are likely to spend all of the money they receive quickly and so pump more spending through the economy.

URL to original article: http://www.builderonline.com/builder-pulse/economy-gains-120-000-jobs--unemployment-drops-to-8-6-.aspx?cid=BP:120211:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Expert: Apartment sales to rise 35% this year

2011-12-02T16:22:00.000-08:00

Source: The Business Journal

Apartment sales in Central California are staging a slow but somewhat steady rise, continuing last year’s trend in which apartment sales more than doubled their 2009 numbers.

Apartment sales got off to a fast start this year before hitting some rough patches and then picking up steam again. Central California’s 2010 apartment sales were valued at more than $40 million, but the 2011 numbers surpassed that in the first nine months, said Robin Kane, founder of RCK Organization in Fresno and an expert on the multi-family housing market.

“Last year, apartment sales were just above the $40 million mark,” Kane said. “Through September of this year, we were at $43 million, and right now we’re at $47.6 million.”
Kane said that in the wake of the housing bust and the persistent recession, more families are renting apartments rather than buying houses like they would have in years past. He said those interesting in buying apartment complexes do so because they are much easier to manage.

“With apartments, you have a resident manager to oversee things,” he said. “But the same number of houses over three states — or even one city — is much harder to manage.”

While representing United Development in October, Kane was involved in the $3.1 million purchase of the 104-unit Evergreen Terrace Apartments south of Fresno Yosemite International Airport on Olive Avenue.

New apartments are being built in the area as well. Penstar Group, a Fresno-based development group, is overseeing construction of The Shires luxury apartment community near the intersection of Ninth and Cedar avenues in North Fresno. Leta Ciavaglia, corporate president for Penstar and the project executive for The Shires, said the first phase of the 122-unit site should be finished by spring 2012.

“The units are 900, 1,200 and 1,445 square feet; all have garages,” Ciavaglia said, adding that the community should attract a number of families. “People who are not quite ready to buy a home — husband, wife and children.”

Ciavaglia said that the foundations have been poured and the plumbing is being installed. The entire complex should be completed in fall 2012 if the weather cooperates.

“In development, everything is a roll of the dice,” she said.

Apartment sales are not only on the rise in Central California, but all across the country. Kane said that the latest census showed that 4.5 million Americans were added to the renter’s group, and that nationally, multifamily dwellings — most of which are apartments — are selling the best out of all the commercial real estate sections.

“Multifamily is the flavor of the month nationally,” Kane said. “The popularity in apartment sales is due to the [lower] percentage of home ownership.”

Commercial real estate brokers Marcus and Millichap said in their 2011 National Apartment Report that over the next five years, the 20- to 34-year-old age group will grow by 3.2 million individuals. Members of this age group have a higher percentage of renters than any other, and rising interest rates, large down payment requirements and tight lending standards will influence these younger households toward renting.

Kane said that while apartment sales don’t compare to where they were a few years ago, they are headed back in the direction of a much more normal market.

“At the end of this year, we should be at about 35 percent over where we were last year,” he said.

URL to original article: http://www.thebusinessjournal.com/real-estate/12341-expert-apartment-sales-to-rise-35-this-year

For further information on Fresno Real Estate check: http://www.londonproperties.com

Stuck in neutral: first-time buyers

2011-12-01T17:03:00.000-08:00

Source: Associated Press

This should be a great time to buy a first home. Prices have sunk to 2002 levels. Sellers are waiting anxiously as homes languish on the market. Mortgage rates are their lowest ever.

Yet the most likely first-time homeowners, especially young professionals and couples starting families, won't buy these days. Or they can't. Or they already did, during the housing boom. And their absence helps explain why the housing industry is still depressed.

The obstacles range from higher down payments to heavy debt from credit cards and student loans. But even many of those who could afford to buy no longer see it as a wise investment. Prices have sunk 15 percent in three years.

"I've looked for a home, but the places we can afford with the money we have are not that great," says Seth Herter, 23, a store manager in suburban St. Louis. "It also doesn't seem smart anymore to buy with prices falling. Buying a home just doesn't make sense to us."

The proportion of U.S. households that own homes is at 65.1 percent, its lowest point since 1996, the Census Bureau says. That marks a shift after nearly two decades in which homeownership grew before peaking at 70 percent during the housing boom.

The housing bubble lured so many young buyers that it reduced the pool of potential first-timers to below-normal levels. That's contributed to the decline in new buyers in recent years.

In 2005, at the height of the boom, about 2.8 million first-timers bought homes, according to the National Association of Realtors. By contrast, for each of the four years preceding the boom, the number of first-timers averaged fewer than 2 million.

Still, the bigger factors are the struggling economy, shaky job security, tougher credit rules and lack of cash to put down, said Dan McCue, research manager at Harvard University's Joint Center for Housing Studies. The unemployment rate among typical first-timers, those ages 25 to 34, is 9.8 percent, compared with 9 percent for all adults.

"The obstacles facing first-time buyers are big, and it's changing the way they look at home ownership," McCue says. "It's no longer the American Dream for the younger generation."

First-timers usually account for up to half of all sales. Over the past year, they've accounted for only about a third.

A big reason is tougher lending standards.

Lenders are demanding more money up front. In 2002, the median down payment for a single-family home in nine major U.S. cities was 4 percent, according to real estate website Zillow.com. Today, it's 22 percent.

And one-third of households have credit scores too low to qualify for a mortgage. The median required credit score from FICO Inc., the industry leader in credit ratings, has risen from 720 in 2007, when the market went bust, to 760 today.

Homes in many places are the most affordable in a generation. In the past year, the national median sale price has sunk 3.5 percent. Half the homes listed in the Tampa Bay area are priced below $100,000.

The average mortgage rate for a 30-year fixed loan is 4 percent, barely above an all-time low. Five years ago, it was near 6.5 percent. In 2000, it exceeded 8 percent.

When the economy eventually strengthens, the housing market will, too. More people will be hired. Confidence will rise. Down payments won't be so hard to produce.

The question is whether first-time buyers will then start flowing into the housing market. That will depend mainly on whether they think prices will rise, said Mark Vitner, senior U.S. economist at Wells Fargo.

"It's a guessing game as to when things will turn around," Vitner said. "But until they do, you won't see young people buying homes."

URL to original article: http://www.builderonline.com/builder-pulse/stuck-in-neutral--first-time-buyers.aspx?cid=BP:120111:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Luxury Home Values Rise in Third Quarter of 2011

2011-12-01T15:04:00.000-08:00

SAN FRANCISCO--(BUSINESS WIRE)--Luxury home values rose in Los Angeles, San Diego and San Francisco in the third quarter of 2011 compared to the second quarter, according to the First Republic Prestige Home Index™ by First Republic Bank, a leading private bank and wealth management company.

In the quarter ended Sept. 30, 2011, the Index indicated the following:

•Los Angeles area values rose 0.7% from the second quarter of 2011 and increased 2.5% from the third quarter a year ago. The average luxury home in Los Angeles is now $2.01 million.
•San Diego area values increased 1.1% from the second quarter and fell 3.9% year-over-year. The average luxury home in San Diego is now $1.63 million.
•San Francisco Bay Area values climbed 1% from the second quarter and declined 1.4% from a year ago. The average luxury home in San Francisco is now $2.53 million.
“Luxury home prices in many California communities increased due to low inventories, low interest rates, and home prices that have declined over the past few years. This has improved the economics of investing in residential real estate,” said Katherine August-deWilde, President and Chief Operating Officer of First Republic Bank. “All three major metropolitan areas in California experienced gains in home prices in the third quarter, which is the first time that has occurred since the fourth quarter of 2010.”

First Republic Bank produces the Prestige Home Index each quarter with Fiserv CSW Inc., a leading provider of automated property valuation services and home price metrics to U.S. financial institutions. Historical results of the Index, which has tracked luxury homes since 1985, are accessible at www.firstrepublic.com. First Republic Bank is an active lender in the luxury home market for primary residences and vacation homes.

Los Angeles Area Values

In Los Angeles, values have increased in three of the past four quarters. The highest end of the luxury market appeared to be the most robust, agents said.

“For homes priced at $5 million and up, the market remains active,” said Jane Brill Graven of Coldwell Banker Beverly Hills East. “There are well-qualified buyers who are looking for properties at the very top end and they have the upper hand. Owners are having to reduce prices to where the market is.”

Along the beach communities, the market was largely unchanged from a year ago. “If we had more and better product, we would have had more transactions in the past 12 months,” said Barry Host of South Bay Brokers in Manhattan Beach. “Buyers with money are out there, but there is also a lot of uncertainty. Unless the news starts to settle, the market will continue to bump along.”

San Diego Area Values

San Diego prices turned positive again after declining in the first half of 2011.

Despite the modest quarterly increase, luxury home prices remain soft, and many buyers remain uncertain. “We are very busy, but every single deal is a major struggle,” said Lucy Kelts of Prudential California Realty in Rancho Santa Fe. “You have to talk realistically with sellers up front. We’re not going to get out of this mess until the jobless rate goes down by half.”

Greg Noonan of Prudential California Realty in La Jolla said the lower end of the luxury market was picking up. “I’m seeing a bit of pent up demand in the $1.5 million to $3 million range. At $4 million and above, it is a fairly soft market. Buyers are being extremely aggressive in their thinking about price. If a property is on the market for $4 million, buyers want to pay $3.5 million to build in some downside protection.”

San Francisco Bay Area Values

In San Francisco and Silicon Valley, the luxury market is strong due to technology-driven wealth creation, lower interest rates and lower home prices. The market also benefitted from higher rents, which further enhances the attractiveness of residential real estate as an investment.

“The higher end market has been pretty strong,” said Hugh Cornish of Coldwell Banker in Menlo Park. “There has been less inventory in the higher end and more from $2.5 million to $5 million. Palo Alto has been the strongest market, followed by Menlo Park and Atherton. We are seeing multiple offers, but not for every property.”

In San Francisco, the higher end of the luxury market was active. “Above $5 million, the market is healthy,” said Mary Lou Castellanos of Sotheby’s International Realty. “Smart money is buying now and is taking advantage of lower prices and lower interest rates. At the same time, a growing number of sellers are getting more realistic about price.”

In the Wine Country, a number of high-dollar sales have taken place over the past few months. “We’re seeing a real surge in the upper end of the market,” said Jim Perry of Pacific Union in St. Helena. “People have been waiting on the sidelines. With interest rates so low and prices down, that’s hard to pass up.”

About The First Republic Prestige Home Index

The First Republic Prestige Home Index™ is the first statistical model of its kind customized to measure changes in homes valued at more than $1 million in key California urban markets. Some common features of luxury homes in the Index: 3,000 to 6,000 square feet, three to six bedrooms, and three to six bathrooms. San Francisco Bay Area properties include a cross-section of luxury homes in Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough, Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto, Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma, Tiburon and Woodside. Properties in Los Angeles represent a cross-section of luxury homes in Arcadia, Beverly Hills, Calabasas, La Cañada Flintridge, Encino, Los Angeles, Malibu, Marina del Rey, North Hollywood, Pacific Palisades, Pasadena, Playa del Rey, Santa Monica, Studio City and the West Los Angeles enclaves of Bel Air, Brentwood and Westwood. San Diego properties represent a cross-section of luxury homes in Carlsbad, Coronado, Del Mar, Encinitas, La Jolla, La Mesa, Poway, Rancho Santa Fe, San Diego and Solana Beach. In producing the Index, Fiserv CSW Inc. draws upon its economic database and years of experience in tracking single-family home values; collects and cross-checks data from multiple sources; achieves a weighted balance of validation elements such as repeat sales, comparable sales, and physical home characteristics; and combines this with First Republic's extensive local market knowledge.

About First Republic Bank

First Republic Bank (NYSE:FRC) and its subsidiaries provide private banking, private business banking and private wealth management. Founded in 1985, First Republic specializes in exceptional, relationship-based service offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Boston, Greenwich and New York City. First Republic offers a complete line of banking products for individuals and businesses, including deposit services, as well as residential, commercial and personal loans. First Republic is a component of the S&P Total Market Index, the Wilshire 5000 Total Market IndexSM, the Russell 1000®, Russell 3000® and Russell Global indices and six Dow Jones indices.

About First Republic Private Wealth Management

First Republic Private Wealth Management is the investment management, trust and brokerage group of First Republic Bank. First Republic Private Wealth Management offers objective advice and fully customized solutions with the same level of exceptional client service that has been the hallmark of First Republic Bank for more than 25 years. First Republic has the flexibility to provide individuals, families, businesses, endowments, schools and non-profit organizations with appropriate choices that responsibly meet a client’s specific investment objectives. Securities Products and Services are offered by First Republic Securities Company, LLC - Member FINRA/SIPC. First Republic Securities Company and First Republic Investment Management are wholly owned subsidiaries of First Republic Bank. Unless otherwise disclosed, investments through First Republic Investment Management and First Republic Securities Company, LLC are not FDIC-insured, not bank guaranteed and may lose value.

URL to original article: http://www.businesswire.com/news/home/20111128005268/en

For further information on Fresno Real Estate check: http://www.londonproperties.com

Pending Home Sales Jump in October

2011-12-01T13:38:00.000-08:00

Source: National Association of Realtors

Pending home sales rose strongly in October and remain above year-ago levels, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, surged 10.4 percent to 93.3 in October from 84.5 in September and is 9.2 percent above October 2010 when it stood at 85.5. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, said improved contract activity is a hopeful sign. “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this is indicates more buyers are taking advantage of the excellent affordability conditions,” he said.
“Many consumers are recognizing that home buyers in the past two years have had one of the lowest default rates in history. Moreover, continued inventory declines are another healthy sign for the housing market,” Yun added.
The PHSI in the Northeast surged 17.7 percent to 71.3 in October and is 3.4 percent above October 2010. In the Midwest the index jumped 24.1 percent to 88.7 in October and remains 13.2 percent above a year ago. Pending home sales in the South rose 8.6 percent in October to an index of 99.5 and are 9.7 percent higher than October 2010. In the West the index slipped 0.3 percent to 105.5 in October but is 8.1 percent above a year ago.
“Although contract signings are up, not all contracts lead to closings. Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one,” Yun said. “Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close the margins of qualifying, or they might get a loan but with less favorable terms.”
NAR encourages consumers to be aware of their credit score and actions which could hurt or enhance it. HouseLogic.com, the association’s consumer website devoted to all aspects of homeownership, offers tips for improving credit scores at http://buyandsell.houselogic.com/articles/7-tips-improving-your-credit/.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.

NOTE: Existing-home sales for November will be reported December 21 and the next Pending Home Sales Index will be released December 29; release times are at 10:00 a.m. EST.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.

URL to original article: http://www.realtor.org/press_room/news_releases/2011/11/phs_oct

For further information on Fresno Real Estate check: http://www.londonproperties.com

Fewer underwater borrowers, but 'walkaway' risk remains high

2011-11-30T15:06:00.000-08:00

Source: Wall Street Journal

The number of Americans whose homes are underwater – meaning they owe more in mortgage debt than the value of the home – is falling, even as home prices continue to fall or remain stagnant in most markets.

Data-provider CoreLogic’s third-quarter negative equity report, released Tuesday morning, shows that the number of homeowners with negative equity fell from 10.9 million to 10.7 million in the third quarter of 2011. If you include homeowners who have less than 5% equity in their homes, 27.1% of all properties with a mortgage are underwater or near to it, CoreLogic says.

The negative equity figure is crucial for two reasons: first, having home equity is a big economic driver because it increases consumer borrowing power and labor mobility, which are important in the early stages of recovery; second, homeowners who are underwater are far more likely to default on their loans and fall into foreclosure than those who are not.

CoreLogic’s report – released on the same day as the latest Standard & Poor’s Case-Shiller indices, which chalked up a 3.9% yearly decline in home values nationally – shows that negative equity is concentrated largely in a few states, the usual suspects of the housing boom: Nevada, Arizona, Florida, Michigan, Georgia and California. New York has the lowest level of negative equity of all 50 states, with only 6.3% of borrowers underwater.

The national level of negative equity has mostly been falling since the fourth quarter of 2009, with a slight blip at the end of 2010, when the level rose, as some homeowners have lost their homes to foreclosure and others have seen prices stabilize in their markets.

URL to original article: http://www.builderonline.com/builder-pulse/fewer-underwater-borrowers--but--walkaway--risk-remains-high.aspx?cid=BP:113011:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Pending home sales get traction

2011-11-30T13:57:00.000-08:00

Source: CNBC

Potential home buyers came out of the woodwork in October, signing contracts to buy existing homes at a higher-than expected pace.

Pending home sales jumped 10.4 percent compared to September, according to the National Association of Realtors, with the biggest gains in the Midwest, up 24 percent.

The Northeast also saw sizeable gains, as did the South. Only out West did buyers stay on the sidelines, with pending home sales there basically flat month to month.

“Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows, and there is a pent-up demand from buyers who normally would have entered the market in recent years," said Realtor chief economist Lawrence Yun. "We hope this is indicates more buyers are taking advantage of the excellent affordability conditions.”

But even the Realtors caution that not all contracts turn into actual closed home sales. In fact, 18 percent of Realtors reported at least one cancelled contract in September, which is a huge jump from the normal level of between 4 and 6 percent.

Cancellations are running high for several reasons. First and foremost is credit. Many potential buyers are either not qualifying for a loan or not getting the interest rate they need; another reason is short sales, which are making up a growing percentage of distressed sales. This is when the bank allows the borrower to sell for less than the value of the mortgage. Short sales are a long and difficult process, requiring bank approval, and many potential buyers drop out in frustration.

Consumer confidence is not helping matters either. As the crisis in world financial markets sends the U.S. stock market on a roller coaster ride, many buyers get cold feet.

They also see continued home price declines, as seen in Tuesday's report from S&P/Case Shiller. That, Realtors say, can easily scuttle a deal.

URL to original article: http://www.builderonline.com/builder-pulse/pending-home-sales-get-traction.aspx?cid=BP:113011:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

How housing's crisis hits buyers, sellers, and neither

2011-11-29T14:20:00.000-08:00

Source: Business Insider

With each and every report comes "hope" that maybe, potentially, somehow the moribund housing market has finally reached its inevitable bottom and is now on the verge of the next great advance. Nothing could be further from the truth.

I say this with a bit of pain because I am a homeowner. I do not like seeing the annual appraisal values on my home falling - even though it means lower taxes. My home, as with most, is a very large investment of mine that I would like to see appreciate, however, the reality is that things may remain depressed for quite some time. In order to understand where we are potentially headed we have to understand where we have been.

Furthermore, it is critical to understand that all changes, whether in the markets or in housing, occur at the margin. Think about it this way - the majority of homeowners today are not sellers, they bought their home and they plan to live there for some period of time (7 years on average). Changes in life such as a job loss or change, children or retirement lead to most decisions to buy or sell. However, out of the total population of home owners there is only a small percentage at any one time that are making decisions, either by force or choice, to complete a transaction. Therefore, as we analyze housing reports it is important to remember that changes to housing occur at the edges with those individuals that are actively seeking to buy or sell a property right now. Unfortunately, those activities at the margin affect the values of the whole.

Today the mainstream media stated that "New U.S. single-family home sales rose in October and the supply of homes on the market fell to its lowest level since April of last year, showing some healing in the battered housing sector." This certainly sounds like a very encouraging report until you begin to look into the numbers.

New home sales, according to the report, rose to 307,000 in October from 303,000 in September. However, this is only after September's sales were revised down from 313,000 to 303,000 and August was revised down by 3,000. Therefore, to put this in perspective new home sales for October were at the same level that they were in May and below where they were in January.

Even more disappointing is that the current level of sales is more than 50% below the long term average of new home sales of 672,000 each month. Of course, the lack of sales in new homes is dragging down prices as the glut of inventory overwhelms the limited number of buyers. In other words, the activity at the margin, which is dismal from a historical perspective, is dragging down the pricing of all homes affecting you and me.

However, this is not just occurring in new home sales alone. If we take a look at the recent releases of existing home sales we see much of the same dismal level of activity occurring. In October the number of existing homes sold, according to the National Association of Realtors, was 497,000 which was up slightly from the September level of 491,000 but down from the August levels of 503,000.

With existing home sales well off of levels that would be considered healthy; we must also remember that there are two things that are occurring at the margin that affect all homeowners individually.

The first is that many of the sales in existing homes are occurring due to distress, default, delinquency, etc. Furthermore, existing homes compete with new homes in pricing. Therefore, the pressure to reduce the selling price of existing homes to compete with new homes on the market continues unabated. The current level of price "reversion" still has quite a bit more to go before reaching the long term median home price levels. With personal incomes on the decline, credit conditions very tight and inflationary prices continuing to rise the "affordability" of housing may continue to remain under pressure for some time to come.

Secondly, this pricing pressure at the margin affects particularly those that need to sell to get out from underneath the mortgage burden. However, the decline in prices has left them stranded because now their home is worth less than what they owe on it. This is turn leads to what is called "lack of mobility" as these homeowners would like to sell in order to move to a better location for a better job, move into a rental to reduce the burden on the income or sell to downsize into something more affordable but can't because they are literally "stuck" in their home.

This activity at the margin also affects home builder's ability to build new homes. Not surprisingly a very weak housing market, pricing pressures between new and existing homes and very tight credit conditions is keeping new home construction at very depressed levels. This is important because new home construction is a critical component to economic recovery. Each dollar invested in building a new home has a "multiplier effect" in the overall economy of more than $4. This is why all economic recoveries in the past have been led by new home construction and a resurgence in manufacturing. Without those two components engaged a strong economic recovery is likely to remain very elusive.

With housing starts and permits continuing to plumb the lows not seen in the history of the index back to 1960 the overburden of existing supply for sale and a limited number of qualified buyers will continue to keep home builders on the sidelines. Furthermore, it should not be a surprise, that there is an inverse correlation between employment and new home starts - "no job = no house."

While recent reports have shown mild upticks in data it is important to keep it all into perspective. The ongoing credit crunch, high unemployment, lower values, excess supply and low household formation will continue to pressure real estate prices for quite some time to come. So while the media looks for its daily dose of sunshine the reality is that at the margin the changes that are occurring is driven by the supply and demand of those that have a "For Sale" sign in the lawn and those who are actively looking to buy. When prices were going parabolic it was the "idiots" that we loved for driving our home prices higher. The belief was that the cycle of higher home prices would continue indefinitely and somehow our home became an investment vehicle.

Now, the fallacy of that illusion which was caused by those at the margin has come home to roost. With more sellers than buyers in the market the supply/demand curve is skewed heavily to supply dragging prices lower. As a result all homeowners will very likely continue to experience the effects of home price deflation in urban areas. Yet, because home prices are such an emotional topic, the mainstream media and economists alike will continue to troll for nuggets of goodness. However, as individuals with a real stake in the game, we should be considering the impact of sustained depreciation on the psyche of homeowners and, in turn, the impact on the economy longer term.

URL to original article: http://www.builderonline.com/builder-pulse/how-housing-s-crisis-hits-buyers--sellers--and-neither.aspx?cid=BP:112911:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Hispanic households grow, accounting for more than half of new homeowners

2011-11-29T12:05:00.000-08:00

by JUSTIN T. HILLEY

Hispanic households accounted for more than half of the nation's homeowners in the third quarter, evidence of the potential purchasing power of Latinos during the housing recovery.

According to Census Bureau data provided by Alejandro Becerra, former senior housing fellow at the Congressional Hispanic Caucus Institute, the number of Hispanic owner-occupiers grew by 288,000 from 6.21 million in the second quarter to 6.49 million in the third quarter.

Of 545,000 new household units in the third quarter, 53% were Hispanic households. The remaining 47%, or 257,000 units, consisted of other minority groups and non-Hispanic whites.

"We have to give due cause to Hispanic real estate professionals, to the many nonprofit groups out the that are trying to put into place the foreclosure prevention programs to keep people in their homes, to help new homebuyers," Becerra said. "All this is beginning to bear fruit in reaching out to these households."

Minority households are taking advantage of the lower end of the housing market where, Becerra believes, prices have hit the bottom. "It's the only place where the possibility of buying is right now," he said.

In contrast, middle-income families and even upper income households are stalled because many of them owe more than their homes are worth "so the only hope for the future has to come from the younger households who are able to buy now," Becerra said. The chart below, provided by National Association of Hispanic Real Estate Professionals, shows the growth of Hispanic purchasing power has more than doubled.

According to Fannie Mae's 2010 third-quarter housing survey, 61% of Hispanics said they expect their financial situation to get better over the next year, compared to 41% of all Americans and 57% of Hispanics consider owning a home a symbol of success whereas only 33% of all Americans feel that way.

Ernie Reyes and Gary Acosta, co-founders of NAHREP said home-buying activity among Latinos will be even greater as the market stabilizes. Reyes and Acosta have tracked the progress of Hispanic home ownership over the past 10 years.

“Latinos do not believe in renting. “They believe in owning,” says Reyes. “If our community was given half the opportunity it deserves, this volume would grow by leaps and bounds.”

Foreclosures related to the subprime crisis delivered a highly disproportionate blow to Latinos, however.

Blacks and Hispanics with credit scores higher than 660 received subprime and option adjustable-rate mortgages three times as often as white borrowers in similar financial standing between 2004 and 2008, according to a new study from the Center for Responsible Lending.

"Hispanics are now helping struggling local economies across our nation through population growth and purchase power. We believe these same dynamics will be a driving force in the resurgence of the housing market in the near term," said NAHREP President Carmen Mercado.

NAHREP is a 20,000-member real estate trade association with 50 affiliate chapters in 48 states.

URL to original article: http://www.housingwire.com/2011/11/28/hispanic-households-grow-accounting-for-more-than-half-of-new-homeowners

For further information on Fresno Real Estate check: http://www.londonproperties.com

Welcome New Family Members

2011-11-29T08:23:00.000-08:00

Just wanted to take a minute to Welcome aboard our wonderful new agents.

In our Hanford office, Richard Lee will be working with the great agents and Harold Zapata our manger.

Janelle Pereira formerly of Coldwell Banker in Merced, will be working out of our great Merced office.

Joey Bertao will be working out of our Chowchilla office.

Justin Anderson has joined our great Clovis Office.

Welcome to the family and go get'em!!!!

If you or anyone your know is looking for a new career...give Real Estate a try. Go to www.tiore.com

As housing crash rash hits other nations, U.S. housing's undervalued

2011-11-28T11:20:00.000-08:00

Source: The Economist

MANY of the world’s financial and economic woes since 2008 began with the bursting of the biggest bubble in history. Never before had house prices risen so fast, for so long, in so many countries. Yet the bust has been much less widespread than the boom. Home prices tumbled by 34% in America from 2006 to their low point earlier this year; in Ireland they plunged by an even more painful 45% from their peak in 2007; and prices have fallen by around 15% in Spain and Denmark. But in most other countries they have dipped by less than 10%, as in Britain and Italy. In some countries, such as Australia, Canada and Sweden, prices wobbled but then surged to new highs. As a result, many property markets are still looking uncomfortably overvalued.

The latest update of The Economist’s global house-price indicators shows that prices are now falling in eight of the 16 countries in the table, compared with five in late 2010. (For house prices from more countries see our website). To assess the risks of a further slump, we track two measures of valuation. The first is the price-to-income ratio, a gauge of affordability. The second is the price-to-rent ratio, which is a bit like the price-to-earnings ratio used to value companies. Just as the value of a share should reflect future profits that a company is expected to earn, house prices should reflect the expected benefits from home ownership: namely the rents earned by property investors (or those saved by owner-occupiers). If both of these measures are well above their long-term average, which we have calculated since 1975 for most countries, this could signal that property is overvalued.

Based on the average of the two measures, home prices are overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden (see table). Indeed, in the first four of those countries housing looks more overvalued than it was in America at the peak of its bubble. Despite their collapse, Irish home prices are still slightly above “fair” value—partly because they were incredibly overvalued at their peak, and partly because incomes and rents have fallen sharply. In contrast, homes in America, Japan and Germany are all significantly undervalued. In the late 1990s the average house price in Germany was twice that in France; now it is 20% cheaper.

This raises two questions. First, since American homes now look cheap, are prices set to rebound? Average house prices are 8% undervalued relative to rents, and 22% undervalued relative to income (see chart). Prices may have reached a floor, but this is no guarantee of an imminent bounce. In Britain and Sweden in the mid-1990s, prices undershot fair value by around 35%. Prices in Britain did not really start to rise for almost four years after they bottomed. Some 4m foreclosed homes could come onto America’s market, which may hold down prices.

The second question is whether home prices in markets that are still overvalued are likely to fall. Some economists reject our measures of overvaluation, arguing that lower interest rates justify higher prices because buyers can take out bigger mortgages. There is some truth in this, but interest rates will not always be so low. The recent jump in bond yields in some euro-area countries has raised mortgage rates for new borrowers.

And low rates need to be balanced against the fact that tighter credit conditions make it harder for homebuyers to get mortgages. The average deposit needed by a British first-time buyer is now equivalent to 90% of average annual earnings, according to Capital Economics, a consultancy. It was less than 20% in the late 1990s. Another popular argument used to justify sky-high prices in countries such as Australia and Canada is that a rising population pushes up demand. But this should raise both prices and rents, leaving their ratios unchanged.

Prices do not necessarily need to drop sharply to return to fair value. Adjustment could come through higher rents and wages. With low inflation, however, it could take a decade or more before price ratios return to their long-run average in some countries.

Jingle mail

American prices fell sharply, even though homes were less overvalued than they were in many other countries, because high-risk mortgages and a surge in unemployment caused distressed sales. In most other countries, lenders avoided the worst excesses of subprime lending, and unemployment rose by less, so there were fewer forced sales dragging prices down. America is also unusual in having non-recourse mortgages that let borrowers walk away with no liability.

An optimist could therefore argue that our gauges overstate the extent to which house prices are overvalued, and that if markets are only a bit too expensive they can adjust gradually without a sharp fall. It is important to remember, however, that lower interest rates and rising populations were used to justify higher prices in America and Ireland before their bubbles burst so spectacularly.

Another concern is that Australia, Britain, Canada, the Netherlands, New Zealand, Spain and Sweden all have even higher household-debt burdens in relation to income than America did at the peak of its bubble. Overvalued prices and large debts leave households vulnerable to a rise in unemployment or higher mortgage rates. A credit crunch or recession could cause house prices to tumble in many more countries.

URL to original article: http://www.builderonline.com/builder-pulse/as-housing-crash-rash-hits-other-nations--u-s--housing-s-undervalued.aspx?cid=BP:112811:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Is upward mobility over?

2011-11-28T10:19:00.000-08:00

Source: Brookings Institution

The original version of this essay was the cover story in the November 14, 2011 issue of National Review, available at http://www.nationalreview.com/articles/282292/mobility-impaired-scott-winship.

What’s the most important issue in American politics? In a narrow sense, the sputtering economy and ballooning deficits are likely to dominate the 2012 election season. But while every election has its own particular concerns, fundamentally it is to the American Dream that our politicians must tend — that libertarian and egalitarian bundle of values and hopes that transcend our partisan, economic, and social divisions.

When the Pew Economic Mobility Project (EMP) surveyed people about what the American Dream meant, it got widely ranging answers.[1] Indiana’s governor, Mitch Daniels, recently hit on a common sentiment when he observed that “upward mobility from the bottom is the crux of the American promise.” But even those who would focus more broadly on the rising tide that lifts all boats should be concerned about the state of economic mobility in America. The economic inefficiency that results when much of the population is stuck at the bottom (and the top) means the tide may lift everyone less than it could.

One way to assess the extent of mobility is to ask whether people tend to be better off than their parents were at the same age — whether they experience upward absolute mobility. Research for EMP conducted by my colleagues at the Brookings Institution Julia Isaacs, Isabel Sawhill, and Ron Haskins shows that two-thirds of 40-year-old Americans are in households with larger incomes than their parents had at the same age, even taking into account the fact that the cost of living has risen.[2] That’s pretty impressive, but it actually understates the improvement between generations. Household size declined over these decades, so incomes now are divided up among fewer family members, leaving them better off than bigger households of the past. Another EMP study shows that when incomes are adjusted for household size, four out of five adults today are better off than their parents were at the same age.[3]

The finding of pervasive upward absolute mobility flies in the face of liberal accounts of a stagnant middle class. These accounts generally conflate disappointing growth in men’s earnings with growth in household income, which has been impressive. Growth in women’s earnings has also been impressive, but economic pessimists have twisted these bright spots to fit a gloomy narrative.[4] They claim that household incomes have kept pace only because wives have been forced into work to make up for the shrinking bacon their husbands bring home. That ignores the long-term trend of women’s obtaining more education in industrialized nations around the world, presumably with an intention to put it to use in the work force someday. It also ignores the evidence that married men rationally chose to reduce their work hours as their wives increased theirs (even as single men continued working the same hours), and the fact that employment grew more among the wives of better-educated men than among the wives of less-educated men.[5]

Nevertheless, incomes have not grown as fast in recent decades as they did in the middle of the 20th century. While the vast majority of Americans end up better off than their parents, the difference is probably not as great as the improvement of their parents over their grandparents was.

There’s another way to look at intergenerational mobility — asking whether those whose parents were at the bottom or at the top relative to Americans as a whole end up in the same place in adulthood. This is the question of relative mobility. You may have a higher income than your parents did, but if that is generally true of your generation, then your rank may be no different than your parents’ rank was. It may even be lower. And having less than others can figure more prominently in our assessment of our well-being than does merely having more than our parents did — as may be the case with scarce commodities, such as homes in the best school districts or slots at the best universities.

The EMP/Brookings analyses break the parent and child generations into fifths on the basis of each generation’s income distribution. If being raised in the bottom fifth were not a disadvantage and socioeconomic outcomes were random, we would expect to see 20 percent of Americans who started in the bottom fifth remain there as adults, while 20 percent would end up in each of the other fifths. Instead, about 40 percent are unable to escape the bottom fifth.[6] This trend holds true for other measures of mobility: About 40 percent of men will end up in low-skill work if their fathers had similar jobs, and about 40 percent will end up in the bottom fifth of family wealth (as opposed to income) if that’s where their parents were.[7]

URL to original aticle: http://www.builderonline.com/builder-pulse/is-upward-mobility-over-.aspx?cid=BP:112811:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Applications for purchase mortgages rise

2011-11-23T12:13:00.000-08:00

Source: Calculated Risk

The Refinance Index decreased 4.0 percent from the previous week to its lowest level since July 29, 2011. The seasonally adjusted Purchase Index increased 8.2 percent from last week to its highest level since August 12, 2011.
...
"Purchase applications increased last week, returning to levels from before the Veteran's Day holiday," said Michael Fratantoni, MBA's Vice President of Research and Economics. "However, purchase activity remains almost 5 percent below last year's level."
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 4.23 percent, with points decreasing to 0.46 from 0.52 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. ...

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500)increased to 4.59 percent from 4.56 percent, with points decreasing to 0.40 from 0.46 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Although the purchase index increased, the index is still sharply below the levels of June and July - and at about the same level as in 1996. This does not include cash buyers, and, according to the NAR, cash buyers "accounted for 29 percent of purchases in October".

URL to original article: http://www.builderonline.com/builder-pulse/applications-for-purchase-mortgages-rise.aspx?cid=BP:112311:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

October Existing-Home Sales Rise, Unsold Inventory Continues to Decline

2011-11-23T11:04:00.000-08:00

Source: National Association of Realtors

Existing-home sales improved in October while the number of homes on the market continued to decline, according to the National Association of Realtors®.

Total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 1.4 percent to a seasonally adjusted annual rate of 4.97 million in October from a downwardly revised 4.90 million in September, and are 13.5 percent above the 4.38 million unit level in October 2010.

Lawrence Yun, NAR chief economist, said the market has been fairly steady but at a lower than desired level. “Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions. Many people who are attempting to buy homes are thwarted in the process,” he said.

“A higher rate of contract failures has held back a sales recovery. Contract failures2 reported by NAR members jumped to 33 percent in October from 18 percent in September, and were only 8 percent a year ago, so we should be seeing stronger sales,” Yun added.

Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses. “Other recent factors include disruption in the National Flood Insurance Program, and lower loan limits for conventional mortgages, which paradoxically force some of the most creditworthy consumers to pay unnecessarily higher interest rates,” Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.07 percent in October from 4.11 percent in September; the rate was 4.23 percent in October 2010.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said consumers can increase their odds of obtaining a mortgage by being aware of how credit scores are determined. “If you want to get a mortgage, don’t buy a car or take on new installment debt or credit cards,” he said.

“Pay all your bills on time, maintain old credit lines and don’t use more than 30 percent of your credit limit. Realtors® can help you understand the issues surrounding access to affordable credit, in addition to helping you find the right home and negotiate terms,” Veissi said.

An ongoing positive trend is a steady decline in the number of homes on the market. Total housing inventory at the end of October fell 2.2 percent to 3.33 million existing homes available for sale, which represents an 8.0-month supply3 at the current sales pace, down from an 8.3-month supply in September. Inventories have been trending gradually down since setting a record of 4.58 million in July 2008.

The national median existing-home price4 for all housing types was $162,500 in October, which is 4.7 percent below October 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – slipped to 28 percent of sales in October from 30 percent in September (17 percent were foreclosures and 11 percent were short sales); they were 34 percent in October 2010.

“In some areas we’re hearing about shortages of foreclosure inventory in the lower price ranges with multiple bidding on the more desirable properties,” Yun said. “Realtors® in such areas are calling for a faster process of getting foreclosure inventory into the market because they have ready buyers. In addition, extending credit to responsible investors would help to absorb inventory at an even faster pace, which would go a long way toward restoring market balance.”

All-cash sales accounted for 29 percent of purchases in October, little changed from 30 percent in September and 29 percent in October 2010; investors make up the bulk of cash transactions.

Investors purchased 18 percent of homes in October, compared with 19 percent in September and 19 percent in October 2010. First-time buyers accounted for 34 percent of transactions in October, up from 32 percent in September; they were 32 percent in October 2010.

Single-family home sales increased 1.6 percent to a seasonally adjusted annual rate of 4.38 million in October from 4.31 million in September, and are 13.8 percent higher than the 3.85 million-unit pace one year ago. The median existing single-family home price was $161,600 in October, which is 5.8 percent below October 2010.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 590,000 in October but are 10.5 percent above the 534,000-unit level in October 2010. The median existing condo price5 was $160,300 in October, down 1.5 percent from a year ago.

Regionally, existing-home sales in the Northeast fell 5.1 percent to an annual level of 750,000 in October but are 1.4 percent above October 2010. The median price in the Northeast was $224,400, down 5.5 percent from a year ago.

Existing-home sales in the Midwest rose 2.8 percent in October to a pace of 1.10 million and are 19.6 percent higher than October 2010. The median price in the Midwest was $132,800, which is 4.7 percent below a year ago.

In the South, existing-home sales increased 2.1 percent to an annual level of 1.94 million in October and are 14.1 percent above a year ago. The median price in the South was $145,700, down 1.6 percent from October 2010.

Existing-home sales in the West rose 4.4 percent to an annual pace of 1.19 million in October and are 15.5 percent higher than October 2010. The median price in the West was $207,500, which is 1.6 percent below a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

URL to original article: http://www.realtor.org/press_room/news_releases/2011/11/ehs_oct

For further information on Fresno Real Estate check: http://www.londonproperties.com

As inventory falls to a four-year low, the question now is: Scarcity or just plain scared?

2011-11-22T12:04:00.000-08:00

Source: Wall Street Journal

The number of homes listed for sale fell for the fifth straight month in October, hitting the lowest level in more than four years.

The 2.12 million homes listed for sale in October was down by 3.5% from September and down by 21% from one year ago, according to data compiled by Realtor.com.

The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t include all homes for sale, including those that are “for sale by owner” and other properties that aren’t marketed through multiple-listing services.

Inventories typically rise by around 0.8% in October from September, according to Zelman & Associates, a research firm. But they have been falling for several recent months amid a slowdown in foreclosures by banks and as home sellers, frustrated by low-ball offers, hold their properties from the market.

Inventories declined in 29 of the 30 major metro areas during October, led by Portland, Ore. (-6.9%); Seattle (-5.3%); and Dallas (-5.2%). Inventories increased in Phoenix by 0.4%.

Six markets saw a monthly uptick in median asking prices, led by Phoenix (5.1%), Dallas (1.2%), and San Francisco (0.6%). Prices were flat in another eight markets, while they fell in 16 metros including Cleveland (-2.3%), St. Louis and Philadelphia (-2.1%).

For the year, the inventory of homes listed for sale is down most sharply in Miami (-49%), Phoenix (-48%), and Orlando (-45%).

The National Association of Realtors also reported a decline in the number of homes on the market. At the end of October, total housing inventory fell 2.2% to 3.33 million homes, the lowest level of the year.

URL to original article: http://www.builderonline.com/builder-pulse/as-inventory-falls-to-a-four-year-low--the-question-now-is--scarcity-or-just-plain-scared-.aspx?cid=BP:112211:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Existing home sales beat 'The Street'

2011-11-21T16:18:00.000-08:00

Source: Calculated Risk
The NAR reports: October Existing-Home Sales Rise, Unsold Inventory Continues to Decline

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 1.4 percent to a seasonally adjusted annual rate of 4.97 million in October from a downwardly revised 4.90 million in September, and are 13.5 percent above the 4.38 million unit level in October 2010.

Sales in October 2011 (4.97 million SAAR) were 1.4% higher than last month, and were 13.5% above the October 2010 rate. According to the NAR, inventory decreased to 3.33 million in October from 3.41 million in September.

Inventory decreased 13.8% year-over-year in October from October 2010. This is the ninth consecutive month with a YoY decrease in inventory.

Months of supply decreased to 8.0 months in October, down from 8.3 months in September. This is still higher than normal. These sales numbers were just above the consensus.

URL to original article: http://www.builderonline.com/builder-pulse/existing-home-sales-beat-the-street.aspx?cid=BP:112111:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Make Money in 2012;A smaller house will make a big difference

2011-11-21T13:59:00.000-08:00

By Carla Fried, Janice Revell, Donna Rosato and Tali Yahalom @Money

(MONEY Magazine) -- Last year the economic forecasting firm Fiserv predicted that home values would sink around 5% in 2011, and that prices in three-quarters of the nation's major metro areas would fall. The bad news is, the firm wasn't that far off the mark. The good news: In the coming year, Fiserv thinks 95% of the 384 metro areas it tracks will see prices rise.

Don't expect the market to move much beyond first gear, though. The median expectation among more than 100 economists and real estate pros surveyed by MacroMarkets is that home values will inch ahead by a mere 0.25%, compared to their 2011 median forecast decline of 2.8%. They also foresee annualized gains through 2015 of just 1.1%, as the real estate market slowly works its way through a mountain of foreclosures.

Those foreclosures will continue to weigh on the market. According to Core- Logic, there are 5.4 million homes that are for sale or part of the market's "shadow inventory" -- which includes bank-owned properties, homes in the foreclosure pipeline that haven't hit the market yet, or properties where owners are seriously behind on payments.

To put that in perspective, Freddie Mac forecasts that only 4.8 million homes will be purchased in all of 2012. A market with six months of inventory is considered healthy. That there's more than a year's worth of housing stock now tells you what a tough slog this will still be. "It's analogous to a flood," says Mark Fleming, CoreLogic's chief economist. "The water is very deep in the living room, but it's no longer getting deeper and is starting to recede.

Helping that process along will be low-interest-rate mortgages that are expected to remain cheap. Jay Brinkmann, chief economist at the Mortgage Bankers Association, says the 4.2% rate on a 30-year fixed rate in late October might not last long. Still, he expects the 30-year fixed mortgage rate to stay below 5% throughout 2012.

The action plan: It will pay to think small -- as in reduce your mortgage bills and focus on modest homes.

Buyers: Downsize the dream. For those gearing up to make a purchase, 2012 could be a great opportunity, what with cheap prices, low borrowing rates, and little competition among prospective bidders.

Before you take the plunge, remember that the price you pay matters, as does your ability to easily resell that home down the road.

Make Money in 2012: Jobs
This means it's best to focus on smaller properties in your area near restaurants and retail. McMansions of at least 2,600 square feet, which were the ideal in the boom years, are coveted by a mere 18% of households today, according to a recent survey by Trulia. And that figure could fall even more.

A separate survey by the National Association of Home Builders found that home-construction firms expect U.S. houses to average 2,152 square feet in 2015 -- down 10% from last year.

Some of this is attributable to the lingering effects of the past recession, which has eaten into housing budgets. But there's also a permanent change at play. "Baby boomers are trading down. They don't need the McMansion, and they don't want to drive as much," says Trulia chief economist Jed Kolko.

Sellers: Price it right. The longer you can wait for prices to stabilize in your area and for demand to pick up, the less likely you'll need to entertain low-ball offers. If you have to make a move in 2012, though, the trick will be to price your home correctly out of the gate.

According to a recent national survey of real estate agents, 75% of homeowners believe their house is worth more than what agents put the fair market value at, and nearly one in two homeowners still overestimate their home's value by more than 10%.

Meanwhile, Trulia reports that about one in four homes in its database has gone through at least one price reduction, and the average price cut for those homes is 8%.

Joe Magdziarz, president of the Appraisal Institute, says you and your agent should stick with comparable sales data just within the past 90 days, as that's what lenders expect appraisers to use.

What to do when mom and dad move in
If you don't trust your agent's recommendation, shell out $300 to $400 for an outside appraisal. That will be money well spent if it pushes you to list your home in sync with current market valuations and you sell faster.

Owners: Shorten your loan. Refinancing your old mortgage to a new fixed-rate loan could have you smiling for years to come. If there's any chance you can refinance into a 15-year loan, go for it; the 3.45% rate in late October was near an all-time low. On a $250,000 mortgage, going from a 30-year mortgage at 4.2% to a 15-year loan charging 3.45% would save you $120,000 in interest over the life of the loan.

What if the added $560 monthly payment is too steep to handle? Shop for a 20-year loan. The rate is likely to be only slightly less than on a 30-year loan, but the faster payback will save you in the long run.

Can't refinance because you don't have the 20% equity lenders typically demand these days? As long as you plan on being in your home for at least five years, look into a cash-in refinancing, where you bring some money to the closing table to push up your equity.

"If you can use cash that doesn't eat into your emergency savings, this makes a lot of sense," notes Michigan financial planner Gary Gilgen. "I'd rather have that money get my mortgage lower than have it sitting in the bank earning less than 1%."

URL to original article: http://money.cnn.com/2011/11/11/pf/make_money_2012_housing.moneymag/index.htm

For further information on Fresno Real Estate check: http://www.londonproperties.com

Job Growth, Though Modest, Slows Mortgage Delinquencies.

2011-11-21T11:52:00.000-08:00

By Nick Timiraos

The number of U.S. households delinquent on their mortgage payments fell below 8% in the third quarter on a seasonally adjusted basis, down from 9.1% one year ago to the lowest level since the end of 2008, according to the Mortgage Bankers Association.

Around 4.4% of all households were in some stage of foreclosure, a number that is essentially unchanged over the past year.

The share of mortgages that had missed one payment during the third quarter fell to 3.2%, down from 3.5% last quarter to the lowest level in more than four years.

The decline in delinquencies is good news for the housing market and the economy. It follows a surprise uptick earlier this year that had raised concerns that the mortgage crisis was worsening.

The numbers are “reflecting that fact that we are continuing to get positive job growth” even though unemployment remains high, said Michael Fratantoni, vice president of research for the MBA.

Assuming the economy doesn’t sputter, “we’ll continue to see very gradual improvement in the delinquency rate,” he said. The housing market is at least three to four years away from moving towards a foreclosure rate that is closer to the historical 1% average. While “we’re on the downhill side of the mountain now,” he said, “we still have a long way to go.”

The data continue to show how state-specific foreclosure processes are increasingly determining the rate at which states clear their backlog of bad loans. States that require banks to process foreclosures by going to court tend to have larger foreclosure inventories than so-called “non-judicial” states.

In Florida, more than 14% of all mortgages were in foreclosure. That state has long led the nation in problem loans and had one of the biggest housing booms and busts.

But New Jersey, a state that didn’t have nearly as dramatic a building boom, had the second highest foreclosure inventory, above 8%, ahead of Nevada, which has had the highest rate of delinquent mortgages. Nine of the 10 states that exceeded the national average in foreclosure inventory are judicial states.

URL to original article: http://blogs.wsj.com/developments/2011/11/17/mortgage-delinquencies-decline-in-the-third-quarter/

For further information on Fresno Real Estate check: http://www.londonproperties.com

Housing inventory continues to drop

2011-11-18T09:51:00.000-08:00

by JACOB GAFFNEY

The recent uptick in foreclosures is not yet translating to more houses on the market.

The total number of homes for sale is down 21% in October, year-on-year, according to the latest RE/MAX national housing report. The number dropped for 16 straight months.

The real estate agent franchise added that the month supply of properties is slightly down, to an average of 7.7 months to clear market inventory. Six months on market denotes more balance between supply and demand.

The months supply peaked a nearly 11 months in December 2010, by way of comparison.

On an annual basis, national sales prices are down 5.4%, but transactions are up 9%.

As the market moves deeper into Winter, RE/MAX expects a monthly decline in home sales.

URL to original article: http://www.housingwire.com/2011/11/17/housing-inventory-continues-to-drop

For further information on Fresno Real Estate check: http://www.londonproperties.com

Housing affordability improves in California

2011-11-17T16:20:00.000-08:00

by KERRY CURRY

Housing affordability increased in 22 of the Golden State's 28 metropolitan areas during the third quarter, according to the California Building Industry Association.

On a statewide basis, a family earning the median income could have afforded 63.5% of the new and existing homes sold during the three months ended Sept. 30, up from 61.3% in the second quarter.

"As builders continue to compete with a glut of foreclosures and as housing prices continue to find their footing, this remains an opportune time for prospective home buyers," said Mike Winn, CBIA’s president and CEO.

The San Francisco, San Mateo and Marin County metro area was California’s least-affordable for the 12th consecutive quarter, and second in the nation with just one-third of homes sold being affordable to a family earning the median income. That is also higher than 27.5% in the second quarter.

The metro area of Sutter County and Yuba County, about an hour north of Sacramento, was California’s most-affordable with 89.3% affordability, up from 88% in the second quarter.

Nationwide, 72.9% of new and existing homes sold in the third quarter were affordable to families earning the national median income, up slightly from 72.6% in the second quarter.

The New York City metro area is the nation's least-affordable market for the 14th consecutive quarter with 23.3% affordability. Fairbanks, Alaska, was the most-affordable housing market in the U.S. with 97.8% of its properties affordable for the average family.

URL to original article: http://www.housingwire.com/2011/11/17/housing-affordability-improves-in-california

For further information on Fresno Real Estate check: http://www.londonproperties.com

Jobless claims at lowest level since April

2011-11-17T10:14:00.000-08:00

by JASON PHILYAW

Initial jobless claims fell again last week, to the lowest level in seven months.

The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Nov. 12 decreased by 5,000 to 388,000 from 393,000 the previous week, which was revised upward 3,000.

Analysts surveyed by Econoday expected 395,000 new jobless claims last week with a range of estimates between 382,000 and 400,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening. Initial claims have now been lower than this threshold for a month.

The four-week moving average, which is considered a less volatile indicator than weekly claims, declined by 4,000 claims to 396,750 from the prior week's slightly revised 400,750.

The seasonally adjusted insured unemployment rate for the week ended Nov. 5 remained unchanged at 2.9%, according to the Labor Department.

The total number of people receiving some sort of federal unemployment benefits for the week ended Oct. 29 fell to 6.77 million from nearly 6.84 million the prior week.

URL to original article: http://www.housingwire.com/2011/11/17/jobless-claims-at-lowest-level-since-april

For further information on Fresno Real Estate check: http://www.londonproperties.com

Homebuilder confidence improves, gradual gains expected in 2012

2011-11-16T10:24:00.000-08:00

by KERRY CURRY

Homebuilder confidence in the market for new single-family homes rose by three points to 20 on the National Association of Home Builders/Wells Fargo (WFC: 25.365 +0.30%) housing market index for November, the second consecutive monthly gain.

The NAHB said the number builds on a revised three-point increase in October, and brings the confidence gauge to its highest level since May 2010.

The trade group also predicted more gains next year.

"While this second solid monthly gain on the builder confidence scale is encouraging, the overall measure remains quite low due to the many challenges that homebuilding continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing and accurate appraisals, and the restrictive lending environment that is discouraging potential buyers," said Bob Nielsen, NAHB chairman and a homebuilder from Reno, Nev.

NAHB Chief Economist David Crowe said some buyers are being tempted back to the market by affordable prices and low interest rates.

"We are anticipating further, gradual gains in the builder confidence gauge heading into 2012 due to these pockets of improving conditions that are slowly spreading," Crowe said.

The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The component gauging current sales conditions rose three points to 20 — its highest level since May 2010 — while the component gauging future sales expectations rose two points to 25 — its highest level since March. The component gauging traffic of prospective buyers rose one point to 15, its highest since May 2010.

URL to original article: http://www.housingwire.com/2011/11/16/homebuilder-confidence-improves-gradual-gains-expected-in-2012

For further information on Fresno Real Estate check: http://www.londonproperties.com

Report: Fresno home prices rose in October

2011-11-15T16:25:00.000-08:00

Written by Business Journal staff

Median home prices in Fresno rose from September to October of this year, the California Association of Realtors reports.

The median price for a Fresno County home stood at $144,460 in October, compared to $141,770 in September, according to figures released on Tuesday. The rise is encouraging for sellers, however the median price is down from $149,460 recorded in October of 2010.

Fresno homes for sale were spending an average 4.3 months on the market in October, compared to 3.8 months in September. Last year’s figure was unavailable.

By contrast, homes in Sacramento County stayed on the market an average of 2.2 months in both September and October.

The association also reported that California home sales rose .9% from September to October of this year, with 493,240 housing units sold in October. October home sales also were up 8.5% from the 454,740 housing units sold during October of last year.

But in the Bay area and Southern California, many cities saw declines in median home prices.

“Based on preliminary analysis, it appears that the lower conforming loan limits has had a cooling effect on home sales in October, particularly in the higher cost markets across the state such as the San Francisco Bay area and coastal regions of Southern California,” said LeFrancis Arnold, president of the California Association of Realtors.

Low conforming loan limits apparently had minimal impact in most Central Valley counties. At the same time, lower prices and bottom-level interest rates attracted investors and family home buyers to the area.

Madera County saw a rise in median home prices from $125,380 in September to $132,500 in October. The prices were down from $140,000 in October of 2010. In Tulare County, the median price moved slightly upward from $122,940 in September to $123,080 in October. That compares to $123,750 in October of last year.

Kings County sellers were disappointed as median home prices fell slightly from $141,670 in September to $138,180 in October. Both figures were down from $135,000 recorded in October of 2010.

URL to original article: http://www.thebusinessjournal.com/real-estate/12115-report-fresno-home-prices-rose-in-october

For further information on Fresno Real Estate check: http://www.londonproperties.com

California expands mortgage help to those with second homes

2011-11-15T09:20:00.000-08:00

by JON PRIOR

California expanded its $2 billion program to help homeowners avoid foreclosure to those with second homes as well.

The California Housing Finance Agency established the four Keep Your Home programs using money from the Treasury Department's $7.6 billion Hardest Hit Fund. Before, borrowers were restricted from modifications, unemployment funds, relocation assistance and even principal reductions if they had a second home.

Officials eliminated the exclusion, because they said many homeowners are co-signers on a second home or are underwater on their first property.

Other changes to the programs include allowing borrowers to take advantage of principal reduction offers even if they completed a cash-out refinance in the past, which many Californians did during the boom.

CalHFA also increased the amount of unemployment assistance qualified borrowers would receive and how long they could get it. Out-of-work homeowners can receive up to $3,000 in mortgage and tax assistance per month for up to nine months, an increase from six months before the change.

Borrowers can also get $20,000 through a reinstatement program to use for past-due mortgage payments, up from $15,000.

"This expanded eligibility will allow more families to qualify and receive greater assistance," said Claudia Cappio, Executive Director of the California Housing Finance Agency.

In order to qualify for these programs, the borrower's servicer must participate. CalHFA said nearly 50 mortgage servicers now participate in at least one of the four. But only 11 servicers participate in the principal reduction program that requires the bank to match each dollar the agency removes from the loan.

While Bank of America (BAC: 6.10 +0.83%) joined the California principal reduction program in July, Fannie Mae and Freddie Mac loans are still excluded.

The California Attorney General Kamala Harris recently called on both companies to provide principal reduction to her constituents.

URL to original article: http://www.housingwire.com/2011/11/10/california-expands-mortgage-help-to-those-with-second-homes

For further information on Fresno Real Estate check: http://www.londonproperties.com

Los Banos man wins St. Jude Dream Home

2011-11-14T15:11:00.000-08:00

Written by Business Journal staff

A Los Banos man got some great news this weekend upon winning the grand prize in the 8th annual St. Jude Dream Home Giveaway, a charity drive that has raised over $1 million this year to help young cancer patients in the Central Valley.

David Winterstein's winning $100 ticket was pulled Nov. 13 for the $430,000 house located in the Chestnut Grove community in northeast Fresno.

The home, built by local homebuilder DeYoung Properties, measures 2,019 square feet with three bedrooms, two baths and a formal dining room.

The home also includes a three-car tandem garage, an open-air courtyard, a covered patio and three gas fireplaces and comes complete with an alarm system and energy-efficient appliances.

Nineteen other prizes were given away during the drawing held by KMPH. St. Jude patients Sarah Bordona and Audra Koelewyn pulled out the winning tickets for a Pandora bracelet from Rogers Jewelers, a home plate box for a Fresno Grizzlies 2012 game, a $1,000 jewelry gift from the Fresno Coin Gallery and other giveaways.

“We are very appreciative to DeYoung Properties, KMPH FOX 26, KJUG 106.7, the Z 104.9, Univision Radio, The Fresno Bee, Business Street Online, Mor Furniture, Epsilon Sigma Alpha, Alpha Delta Kappa, Fresno Coin Gallery, Fresno County Federal Credit Union, Holiday Inn Riverpark, Rollo Latino Magazine, national sponsor, Brizo and the volunteers, local businesses and local residents whose generous support made this event possible,” said Clovis City Councilman Bob Whalen, Central Valley St. Jude Dream Home Chairman, in a press release.

Founded by Danny Thomas in 1962, St. Jude Children's Research Hospital has treated more than 24,000 young cancer patients from the Central Valley and across the world at no cost to their families.

URL to original article: http://www.thebusinessjournal.com/nonprofits/12107-los-banos-man-wins-st-jude-dream-home

For further information on Fresno Real Estate check: http://www.londonproperties.com