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Dennis Norman A report just issued by Zillow shows that home values in the United States continued to decline in the second quarter of 2010, with the Zillow Home Value Index falling 3.2 percent year-over-year and 0.6 percent from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines. Ted Gayer, Co-Director of Economic Studies, Brookings Institute The U.S. Department of the Treasury and the Department of Housing and Urban Development released June data for the Obama administration’s Home Affordable Modification Program (HAMP). HAMP is the foreclosure prevention program targeted at borrowers who are delinquent in their mortgage payment or facing imminent risk of default on their mortgage. It has always been an open question whether HAMP would prevent foreclosures or whether it would just delay inevitable foreclosures. While those who qualify for HAMP receive reduced mortgage Dennis Norman Previously I have written about an effort supported by the Missouri Association of REALTORS (MAR) to protect Missouri homeowners from facing double taxation through a real estate transfer tax by backing an effort to amend the Missouri Constitution to prohibit such a tax. Unfortunately, after Missouri citizens supported this initiative in overwhelming numbers, the effort was dealt a blow today when effort by the Missouri Secretary of State’s office announced its conclusion that the Vote “YES” To Stop Double Taxation amendment did not receive enough signatures of registered voters to qualify for the ballot. Dennis Norman NAR Pending Home Sales Index at Lowest Level Since Index Began in 2001 At dropping 30 percent in May as a result of the rush to buy a home before the April 30th tax credit deadline, the National Association of REALTORS Pending Home Sales Index for June shows a further decline of 2.6 percent in the index in June (seasonally adjusted) which is 18.6 percent below June 2009. While the decrease in home sales was expected, I’m a little surprised we are running so far behind last year (which, might I remind you, wasn’t that great of Continue Reading → Dennis Norman This week I attended an event at the St. Louis Association of REALTORS® in which Lawrence Yun, Chief Economist for the National Association of REALTORS® was the featured speaker and gave his take on the housing market as well as his housing market outlook. Fannie Mae Rolls out New Loan Quality Initiative (LQI) Program – Tightens underwriting requirements and aims to reduce borrower fraud. These rules could derail some closings for buyers who rack up purchases or even take out new store credit cards before their home sales have closed. Dennis Norman This morning S&P/Case-Shiller Index report for May was released showing that the annual growth rates in 15 of the 20 Metro Area’s their reports cover improved in May compared to April 2010. The 10-city composite is up 5.4 percent from the year before and the 20-city composite is up 4.6 percent from the year before. Dennis Norman Yes, the headline is correct….New home sales in June were up 23 percent from May, but unfortunately the revised May annual new home sales rate of 267,000 was the lowest rate of sale on record therefore even after a 23.6 percent increase it only brought June up to 330,000 new homes, a rate that is now the second lowest new home sales rate on record. June’s new home sales rate is 16.7 percent below a year ago. There is some good news in the report; the inventory of new homes (seasonally adjusted) at the end of Continue Reading → Dennis Norman Multiple Offers and Homes Selling for prices ABOVE list price? Is this a reprint of a post from 2005? Nope. Believe it or not, this is exactly what was in a report released this morning by Zip Realty. The report is based upon home sales activity in the second quarter of this year and says that, despite slowdowns in home sales across the country, California is still the nation’s hottest spot for home buying activity. California was home to 91 out of the country’s 100 “hottest” zip codes in terms of home sales during the quarter. Continue Reading → Dennis Norman Home sales activity was up in May, but the mix of sales shifted toward less-expensive properties in many cities throughout the U.S. according to the May 2010 Radarlogic Housing Market Report. In addition, the report states that while their home price composite index for the 25 metro areas covered did increase in May by 2.1 percent on a year-over-year basis, the “gains were not large enough to be described as a recovery” and “there was more evidence of weakness in the market than strength.” Highlights from the report include: Home prices have remained stagnant since the Continue Reading → Dennis Norman Last month I said that I expected to see some elevated numbers in the existing home sales report for May and June since this report would reflect the actual closing of the home purchases from buyers that raced to buy before the April 30th home-buyer tax credit deadline. Even though Congress has extended the deadline to close on these purchases until August 31st, the majority of the tax-credit induced sales will have closed by June 30th and therefore be reflected in today’s report which I would say has happened. Today’s existing home sales report from theNational Association Continue Reading → The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) issued a their report on New Residential Construction for June 2010 showing a decrease in building permits and a decrease in new home starts from May. The report shows the following: Building permits issued for single-family residences in June were at an annual rate of 421,000 which is 3.4 percent below the revised May rate of 4216,000 and a decrease of 6.7 percent from a year ago when the rate was 451,000. Housing starts for single-family residences in June were at an annual rate of 454,000 Continue Reading → Dennis Norman Next month St. Louis County and St. Charles County will hold their annual collector’s real property tax sale. The City of St. Louis holds their property tax sale on five separate dates beginning in May and running through October. The general perception among many people is that at these sales property is sold for back-taxes owed, which is not entirely accurate. Under tax sales the property owner may in fact lose ownership of their property to the purchaser at the tax sale but, in St. Charles and St. Louis County, not until after a “redemption” period Continue Reading → Dennis Norman Missouri one of 32 States Identified as “Low” risk of mortgage fraud According to the 2010 Mortgage Fraud Trends Report released by CoreLogic this week, fraud risk in the mortgage industry has declined by 25 percent since it peaked in the third quarter of 2007. Even though the trend is down it is still estimated that there were $14 billion in fraud losses experienced in 2009 alone. CoreLogics’ fraud index can drill down to show states, cities and even streets that have the highest mortgage fraud risk. Highlights of the report: Overall mortgage fraud risk has Continue Reading → Dennis Norman According to a report released by Trulia.com, 24 percent of the homes for sale as of July 1, 2010 have experienced at least one price cut. This is a 9 percent increase from the prior month. The average discount for price-reduced homes continues to hold at 10 percent off of the original listing price. Western U.S. Leads with Price Reduction Increases For the first six months of this year, cities in the Western U.S. saw a reduction in their price declines, however for this month those same cities have experienced some of the largest surges Continue Reading → Dennis Norman According to a report issued today by CoreLogic, their home price index shows home prices in the U.S. increased in May, marking the fourth-consecutive month there was a year-over-year increase in home prices. U.S. home prices in May 2010 increased by 2.9 percent over May 2009. St. Louis home prices did better than the U.S. average, increasing by 3.49 percent in May 2010 compared with May 2009. No doubt some of the good news was the result of buyers rushing to buy a home before the April 30th deadline to receive tax credits. This will affect Continue Reading → Dennis Norman I may be getting desperate to find something good to write about with regard to the Housing Market, but nonetheless I found some good news today! According to a report titled “Foreign Investment in U.S. Real Estate” that was released recently by the National Association of REALTORS®, investment in residential real estate in the U.S. by foreigners shot up by almost 80% for the 12-month period ending April 2010 from the 12 month period ending April 2009. For the 12 month period ending April 2010 foreign purchases of residential real estate in the U.S. totaled $64 Continue Reading → Dennis Norman While there has been much discussion about the causes and effects of the Housing Boom as well as the Bust (including by yours truly in prior posts) I don’t think we need to refrain from continuing to examine this part of history that is affecting millions of people across the country. Perhaps we can learn some lessons from this that will help us avoid another such collapse of the housing market in the future. My topic today actually has a silver lining of sorts. The topic is debt and how so many homeowners across the country Continue Reading → Dennis Norman There was no question in my mind that home sales would plummet after the April 30th deadline to buy a home and qualify for the home-buyer tax credit passed, the only question was how bad? Today the National Association of REALTORS released it’s Pending Home Sales Index for May showing a decrease of 30.0 percent in the index from April (seasonally adjusted) and a 15.9 percent increase from May 2009. In my past articles I have spoke of a “sugar-rush” created in the market by the tax credits and the sudden slow-down after that wears off…we are Continue Reading → The state of Missouri funded a $15 million tax credit incentive program in January of this year to help spur home sales, but few have taken advantage of the program. Now, Missouri home buyers must complete the purchase of their home by August 31, 2010 to take advantage of the program. The Missouri Housing Development Commission (MHDC) must receive their HOPE application by September 30, 2010. HOPE stands for Home Ownership Purchase Enhancement. Homes purchased after August 31, 2010 will not be eligible for the HOPE program. The HOPE program was expected to pay the property taxes for 9,000 Continue Reading → Dennis Norman Average discount on Foreclosure and Bank-Owned Homes is 27 Percent This morning RealtyTrac released a report stating that 31 percent of all residential sales in the first quarter of 2010 were foreclosure homes or bank-owned homes. They are reporting 233,000 foreclosure and bank-owned homes sold during first quarter 2010 at an average price discount of 27 percent (based upon average sale price of non-foreclosure properties). This data is fairly consistent with date from the National Association of REALTORS which reported there were right at 1 million existing homes sold in the first quarter of 2010 and Continue Reading → Dennis Norman This morning S&P/Case-Shiller Index report for April was released showing that theannual growth rates of all 20 Metro Area’s their reports cover improved in April compared to March 2010. The 10-city composite is up 4.6 percent from the year before and the 20-city composite is up 3.8 percent from the year before. However, in spite of this little bit of encouragement, David Blitzer, Chairman of the Standard & Poor’s Index Committee casts a negative light on the market by pointing out the, while this report does show some price gains, “many of the gains are modest Continue Reading → Dennis Norman While there are many factors that go into what makes for a good or bad housing market and ultimately how well an investment in real estate will do in a market, two things in my book are key; population growth and job growth. Actually job growth brings population growth so perhaps it is the most important factor, but I think one could argue that population growth also brings jobs. Those states that, for one reason or another, attract people to live there (ie; no, or low state income tax, good public education, Continue Reading → Dennis Norman According to a report issued by Radar Logic Incorporated government-sponsored enterprises (GSEs) and Federal agencies involved in housing finance currently have an inventory of over 200,000 repossessed homes. Being the largest owner of foreclosed homes in the U.S. gives the government a lot of power and influence over the housing market for years to come as they will generate significant pressure on home prices as they sell off foreclosed homes in the coming years. Foreclosed homes currently sell at significant discounts to the unpaid balances of the mortgages they back, generating a loss for the seller Continue Reading → Dennis Norman I spent this morning reading a sobering and, quite frankly depressing, report issued by the Center for Responsible Lending that focused on the demographics of people losing their homes as a result of foreclosure. The report is done well and looks at the impact of foreclosures on different races and ethnicity’s and then addresses what they believe to be the cause of this crisis. While the reports main subject was eye opening, what really got my attention as I went through the report were some of the facts and figures being quoted. This caused me to Continue Reading → Dennis Norman Last month after the new home sales reports came out I had this to say: “I’m very encouraged by home sales in March and April, both in new homes and existing home sales and, if it wasn’t for the fact the homebuyer tax-credit incentive expired April 30th, no doubt a factor that caused buyers to rush to buy, I would feel the market was turning. However, I have strong concerns that this recent “housing recovery” is the result of an artificial market created by incentives, leading to sort of a “sugar-rush” among homebuyers, and now that Continue Reading → Dennis Norman May and June Sales Expected to Remain Elevated as Buyers Rush to Close By June 30th Deadline for Tax Credits. The deadline to buy a home and qualify for the home-buyer tax credit was April 30th so it’s not surprising we saw pending home-sales increase dramatically in March and April as buyers rushed to get “under-contract” before the April 30th deadline. For those home-buyers that were lucky enough to qualify for the home-buyer tax credit they have, unless Congress extends the deadline, until June 30, 2010 to close on the purchase of their home. Therefore, as I Continue Reading → Dennis Norman A report just issued by Radarlogic shows that, since 2006, lower-priced homes have been selling better than higher-priced ones. Given the current economy this is not all that surprising but it is a dramatic change from what the norm was during the “housing boom”. Highlights from the report include: During the housing boom (2000 through 2005) sales of homes for less than $350,000 remained pretty constant on a year-over-year basis while homes in the $350,000 – $900,000 range increased by 32 percent per year on average. In 2006 the number of home sales in all price Continue Reading → Dennis Norman According to a press release issued by the FBI, nearly 500 people have been arrested in a nationwide mortgage fraud take-down as part of “Operation Stolen Dreams.” This operation was launched on March 1, 2010 and, according to the FBI, has lead to a total of 485 arrests, 330 convictions and the recovery of nearly $11 million. The FBI estimates that losses from a variety of fraud schemes are estimated to exceed $2 billion. Operation Stolen Dreams is the government’s largest mortgage fraud take-down to date. But FBI Director Robert S. Mueller cautioned that there is Continue Reading → The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) issued a their report on New Residential Construction for May 2010 showing a decrease in building permits and a decrease in new home starts from April. The report shows the following: Building permits issued for single-family residences in May were at an annual rate of 438,000 which is 9.9 percent below the revised April rate of 486,000 and an increase of 3.1 percent from a year ago when the rate was 425,000. Housing starts for single-family residences in May were at an annual rate of 468,000 Continue Reading → |
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