by The KCM Crew on March 2, 2012
http://www.kcmblog.com/2012/03/02/house-sales-in-the-u-s-3/
Updates from March, 2012
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House Sales in the U.S.
MSC Marketing
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Renting vs. Buying: It’s All about Finances
MSC Marketing
(MCT)—Renters often hear jeers that they’re paying somebody else’s mortgage.They feel pressure to escape rent increases and take advantage (More …)
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Finding the Positives in Economic and Housing Conditions in 2012
MSC Marketing
By Mark Fleming
While 2011 was clearly a challenging year, there is a lot to be positive about looking ahead. Economically, while buffeted by natural disasters and fiscal policy indecisiveness at home and a European sovereign debt crisis abroad, the U.S. economy was able to stave off economic stagnation in 2011 and is likely to continue to do so in 2012.
Housing statistics and the duration of the housing downturn to date indicate that 2012 may be the year we begin to turn the corner. In the summer of 2011, economic concerns peaked as the economy appeared to be on the brink of stagnation. (More …)
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Housing Bright Spot: Pending Home Sales Rise, Market on Uptrend
MSC Marketing
Pending home sales are on an upward trend, which has been uneven but meaningful since reaching a cyclical low last April, and are well above a year ago, according to the National Association of REALTORS®.The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 2.0 percent to 97.0 in January from a downwardly revised 95.1 in December and is 8.0 percent higher than January 2011 when it was 89.8. The data reflects contracts but not closings.
The January index is the highest since April 2010 when it reached 111.3 as buyers were rushing to take advantage of the home buyer tax credit. (More …)
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Positive Trends in Florida Housing Market, January 2012
MSC Marketing
ORLANDO, Fla., Feb. 22, 2012 – Florida’s housing market reported gains in median sales prices and a reduced inventory of homes for sale in January, according to the latest housing data released by Florida Realtors®.
“We’re seeing positive signs of a strengthening recovery in Florida’s housing market,” said 2012 Florida Realtors® President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “In both the statewide single-family and condo-townhome markets, pending sales are higher and the statewide median sales price rose — up 5.3 percent to $129,000 for single-family homes and up 18.8 percent to $95,000 for condo-townhomes. Improving the availability of affordable financing to qualified buyers and investors would continue to stabilize Florida’s housing market and economy.”
The median is the midpoint; half the homes sold for more, half for less. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to housing industry analysts. (More …)
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Two Things You May Have Missed
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by Dean Hartman on February 16, 2012
Before the end of the year, Congress and the President agreed to extend the payroll tax cut. In that bill, there were two items of interest for those involved in real estate.1.) The hike in the Guarantee Fees charged by the GSEs Fannie Mae and Freddie Mac.
The 10 basis point increase in the fees has translated to a .375% to .5% increase in mortgage rates for conventional loans. Many customers who started their loans a couple of months ago are being “surprised” with higher than expected rates. Heck, everything you read in the papers says rates are at historic lows and will likely stay there through 2014. Many consumers feel as if their lender is being unscrupulous. However, your lender has fallen victim to the increase in Guarantee Fees and how the secondary market is passing on the cost. What looks like possible lender greed is just a passing on of the increased expense imposed by the government. Sadly, the increased revenue isn’t even being used to help aid an ailing Fannie Mae or Freddie Mac. It is being turned over to the US Treasury to cover the temporary extension of the payroll tax cut.
2.) Permission for HUD to increase the insurance premiums they charge on FHA loans.
If you remember, HUD charges two insurance premiums – a monthly one and an up-front one that is usually added into the loan. Most recently, they reduced the up-front mortgage insurance premium (UFMIP) and dramatically raised the monthly fee (MMIP). It is widely anticipated that, maybe as soon as April, we will see a hike in the UFMIP with no adjustment to the MMIP. While this will help shore up the reserves in the insurance fund, it will simultaneously make buying a home more expensive. No one knows the effective date or amount of the increase. Buyers should look to buy before the increase in fees.
We always hear how our government officials tuck away things in their bills. In this case, while the headlines during the holidays praised Washington for preserving the payroll tax cut, they may have hurt us more in the long run.
http://www.kcmblog.com/2012/02/16/two-things-you-may-have-missed/
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FHFA Sends Congress Strategic Plan for Fannie and Freddie
MSC Marketing
Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco recently sent to Congress a strategic plan for the next phase of the conservatorships of Fannie Mae and Freddie Mac (the Enterprises).The plan builds on the Acting Director’s February 2010 letter to Congress on the conservatorships and sets forth objectives and steps FHFA is taking or will take to meet FHFA’s obligations as conservator. Fannie Mae and Freddie Mac were placed into conservatorships Sept. 6, 2008 and have since received more than $180 billion in taxpayer support. (More …)
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National Mortgage Settlement: What You Need To Know
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by The KCM Crew on February 13, 2012
Last week, the Federal government and 49 state governments (Oklahoma being the exception) agreed to a $25 billion settlement regarding robo-signing and the challenges it created in the foreclosure process. We want to give a synopsis of the settlement and some perspective on what effect it will have on the housing market in 2012.The Basics
The $25 billion in funds will be dispersed as follows:
$17 Billion National Commitment to Foreclosure Relief Efforts
The servicers collectively agree to commit a minimum of $17 billion directly to borrowers through foreclosure relief effort options, including principal reduction for qualifying borrowers, short sales, anti-blight measures, and enhanced homeowner transition programs.$3 Billion National Commitment to Underwater Mortgage Refinancing Program
The servicers collectively agree to commit $3 billion to refinance “underwater” homes (when a homeowner owes more on a mortgage than a home’s current market value). To qualify, borrowers must be current on their mortgage payments on a mortgage owned by one of the five banks.$5 Billion Payment to States and Federal Government
The servicers’ $4.25 billion payment to the states includes $1.5 billion for payments to borrowers who lost their home to foreclosure by one of the five servicers…$750 million of the state-federal payment will go to the federal government to resolve federal claims.For further details on the settlement you can go to the official website.
Will the Settlement Have a Major Impact on a Housing Recovery?
Probably not. Though it is a step in the right direction, it may be too little too late. Here are some opinions on the settlement:
“Like many previous plans to stem foreclosures, this agreement will help at the edges. The problem is too big for it to have a large impact, however…This agreement will help the housing market move ahead in 2012 in a small way. But it is hardly a game changer.”
“While there is no doubt some benefit to formalizing and organizing the process of foreclosure and better monitoring of the process, the fact is that the settlement changes little.”
“While it is good that the settlement has been finalized and will offer principal reductions and refinancing schemes to borrowers, the bigger picture is that the settlement is not large enough to dramatically alter the outlook for the housing market or the wider economy.”
What about Foreclosures Moving Forward?
The settlement did bring clarity to one major issue – foreclosures. Banks have been holding off the foreclosure process on millions of homes over the last 18 months as they waited for the particulars of the settlement. They now know how they can move forward without penalty. The result will be an increase in foreclosures coming to the housing market.
“It will speed up processing, and perhaps mean that foreclosures that have been waiting around since robo-signing came to light in 2010 will now gain legitimacy.”
“It does appear the number of completed foreclosures will increase following this settlement – especially in some judicial states with large backlogs – so there will probably be more REOs (lender Real Estate Owned) for sale.”
“The $25 billion settlement with banks over foreclosure abuses may result in a wave of home seizures…Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes. With yesterday’s agreement, banks are likely to resume property seizures.”
“Mark Vitner, a senior economist at Wells Fargo Securities, said the settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled. Many lenders have refrained from foreclosing on homes as they awaited the settlement.”
http://www.kcmblog.com/2012/02/13/national-mortgage-settlement-what-you-need-to-know/
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Mayfair International February 2012 Newsletter
Beth Ward
Which Real Estate Agent Should You Fall For?
With romance in the air this February Nick Churton of Mayfair International Realty takes a loving look at how we could fall head over heels with…a real estate agent.
Spring is round the corner and love is in the air. Yet spare a thought for poor real estate agents. These, often undervalued, creatures are amongst the least likely to receive a lot of affection from their clients on Valentine’s Day – or any other day for that matter.
But right at the moment, in this challenging economic climate, good brokers and agents are a bit like perfect sweethearts. There are times in life when it is best to have someone by your side who really values you, who will fight for you, who won’t answer back – too much, who will only hang around your home when you want them to and has all your best interests at heart. Such a person may not make such a bad partner.
Of course there are good partners and bad partners. Selling real estate well rests heavily on the partnership built up between seller and agent. A good agent will lovingly put your home on a pedestal and then negotiate fiercely to achieve the best deal for you. On the other hand, a lesser agent may just put your property on the internet with all the others and then haggle to find the easiest deal all round.
There is a great difference between the two – often many thousands of dollars. You could come to love the former but hate the latter. The trick is finding the right one at the outset. It’s a bit like finding the best date. They all may look roughly the same but in practice they each act very differently.
So if you are searching for the type of broker or agent you could come to love this spring invite a few around to give you some marketing advice and see how you get on. Then ask yourself which you would prefer, the flashy one who brags a lot and is cheap or the one who you feel most comfortable with to act in the most decent way: the one you can come to depend on.
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Do Appraisers Use Distressed Properties as Comparables?
MSC Marketing
Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:
“Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”
On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):
“An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
And they explained the possible differences between short sales and foreclosures:“A short sale … might have involved atypical seller motivations and so might not be an ideal comp…
A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”
Bottom Line
Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.
http://www.kcmblog.com/2012/02/07/do-appraisers-use-distressed-properties-as-comparables/
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