Market Matters Real Estate Report – Week Ending 08.22.2014

Where Have the First-Time Home Buyers Gone?
Source: Wall St. Journal

First-time home buyers aren’t playing as big a role in the mortgage market as they did a few years ago, when prices were lower and a big tax credit fueled a surge of sales. But according to researchers at the Federal Housing Finance Agency, when it comes to homes financed by conventional or government-backed loans, first-time buyers still account for a historically high share of purchases.

Making sense of the story:

• The FHFA found that the first-time buyer share of purchase-mortgage lending rose to a high of 63 percent in 2009, when Congress enacted an $8,000 tax credit for first-time buyers. That was from a nadir of 37 percent in 2003.

• First-time buyers accounted for a lower share of purchases from 2004 to 2006, when home prices were rising rapidly and credit was available on much easier terms from lenders that were selling those loans to Wall Street firms, bypassing Fannie, Freddie, and the FHA.

• First-time buyers’ share of loans began to increase steadily in 2007, until reaching that 2009 peak. Since 2009, the share of mortgages to first-time buyers has declined, dropping to 56% last year. That is still higher than at any time between 1993 and 2008.

• As expected, researchers found that the first-time buyer share tends to decline in states as home prices rise. States with the highest first-time buyer shares include California, Nevada, Maryland, New York, and Washington, D.C

• While other reports say first-time buyers are accounting for a woefully small share of the market, the FHFA research provides an interesting view of how the first-time borrower component has changed over time within a particular state. The data shows first-time buyers continue to make up a higher-than-average share of borrowers, even if they are off of their 2009 highs.

• Notably, the FHFA data doesn’t take into account the fact that the share of all-cash sales is much higher today than a few years ago.

• Also, the reported share of first-time buyers also could be higher in more expensive states due to the conforming loan limits. Fannie and Freddie, for example, can’t buy loans that exceed $417,000, though the limit was increased for certain high-cost areas in 2008.

Read the full story

In other news …

Bank of America to pay record $16.65 billion to settle mortgage claims
Source: LA Times

In what amounts to the largest settlement by a single company in U.S. history, the Justice Department has announced that Bank of America Corp. will pay $16.65 billion to end federal and state investigations into the sale of toxic mortgage securities during the subprime housing boom. California will receive $300 million from the settlement to reimburse the CalPERS and CalSTRS pension funds.

Read the full story

3 facts crippling California’s housing recovery
Source: HousingWire

While California’s job growth and economy continue to improve, major hurdles remain for housing’s recovery. Firstly, affordability is a huge concern as rapid home price increases, mixed with a lack of affordable inventory is leaving little room for first-time borrowers to jump into the market. Tight credit and stagnant incomes are another concern if prices remain high.

Read the full story

Housing construction surges in July
Source: The Hill

During July, housing construction hit its highest level in eight months as the sector shows signs of picking up pace in the second half of the year. After two months of drops, construction jumped 15.7 percent last month to a seasonally adjusted annual rate of 1.09 million homes, the fastest pace since the 1.11 million posted in November, according to the Commerce Department.

Read the full story

Two Good Omens for Housing Market
Source: New York Times

Is the nation’s modest housing recovery back on track? Many experts say that appears to be the case after numbers were released from both the government and Home Depot – both of which were each higher than analysts anticipated. Home Depot’s earnings experienced solid growth, and housing starts last month were up nearly 16 percent over June.

Read the full story

Realtor.com: July boasts the healthiest end to spring buying season in 3 years
Source: HousingWire

July shows the best price appreciation and inventory increases hit during the peak spring buying season in three years, according to data from Realtor.com. Its data reveals homeowners are more optimistic about selling than in previous years. Jonathan Smoke, chief economist for realtor.com, commented, “This year, we’re ending the traditional season with high buyer and seller confidence demonstrated by price appreciation, increases in inventory, and quick home sales.”

Read the full story

Where Cash Buys Are Hitting the Housing Market Hardest
Source: The Atlantic

Almost 40 percent of all U.S. home sales in the second quarter of 2014 were all-cash purchases, according to the latest report from RealtyTrac.com. For a handful of states, nearly half the home sales in Q2 were all-cash buys: Florida led the way (57.9 percent), followed by Michigan (49.7), New York (48.8), and Nevada (48.3). In Virginia, the state with one of the lowest figures, all-cash purchases still accounted for more than one-fifth of home sales (22.2 percent).

Read the full story

Talking Points …

• California home sales posted higher for the second straight month, and while the statewide median home price rose from the previous month as well as a year ago, the pace of appreciation continued to slow, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

• Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 398,940 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. July marked the ninth straight month that sales were below the 400,000 level and a full year that sales have declined on a year-over-year basis.

• Sales in July increased 1.2 percent from a revised 394,250 in June but were down 10 percent from a revised 443,500 in July 2013. The July 2014 sales rate was the highest since October 2013. The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the July pace throughout the year.

Thanks for reading!  Call with questions.

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

Market Matters Real Estate Report – Week Ending 03.21.14

U.S. Criticized for Lack of Action on Mortgage Fraud
Source: New York Times

The Justice Department’s inspector general, the department’s internal watchdog, released the results of an investigation and audit of efforts to address mortgage fraud. The department is facing scrutiny for closing hundreds of mortgage fraud cases after little or no investigation and making the crime a low priority. A lack of accountability after the collapse of the financial and housing markets has bolstered criticism that there has been a lack of action on mortgage fraud.

Making sense of the story:

• The report shows that the F.B.I. considered mortgage fraud to be its lowest-ranked national criminal priority. However, the F.B.I. received $196 million from the 2009 to 2011 fiscal years to investigate mortgage fraud.

• The number of pending cases and agents investigating mortgage fraud dropped in 2011, despite the availability of funds, as new staff were not always used to exclusively investigate mortgage fraud.

• Data was reported to the public that wildly overstated the government’s results. For example, it had been reported in 2012 that 530 people had been charged with fraud when in actuality only 107 people were charged. It took months of review to clarify the data.

• The inspector general report also indicates that it was falsely reported that cases that had cost homeowners more than $1 billion had been addressed by authorities. This was a highly inflated number, as in reality it was $95 million.

• The report calls on the Department of Justice to “implement a methodology for properly soliciting, collecting, and reviewing information before publicly reporting results.”

• The department is also called on to develop a method to capture additional data that will allow it to better understand the results of its efforts in investigating and prosecuting mortgage fraud and identifying the position of mortgage fraud defendants within an organization.

Read the full story

In other news …

SoCal housing supply expands in February, Realtors say
Source: LA Times

According to new figures from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), the number of homes on the market jumped in February as supply expands ahead of the spring buying season. C.A.R.’s chief economist, Leslie Appleton-Young, commented, “It’s a sign we’re getting back to a more normal market, certainly.”

Read the full story

Young Buyers Positively View Economy
Source: DSNews.com

Seventy-four percent of Americans feel the economy is either better off (41 percent) or the same (33 percent) as it was this time last year, according to the latest Home Index Survey released by PulteGroup, Inc. A majority of Millennials in particular said now is a good or excellent time to buy the things they want or need—including homes.

Read the full story

Are post-crisis credit requirements holding back 1.2M mortgages?
Source: HousingWire

As many as 1.2 million loans were “missing” in 2012 alone due to lower credit availability when compared to 2001 lending standards. This has disproportionately impacted African-American and Hispanic households, according to Laurie Goodman, center director for the Housing Finance Policy Center at the Urban Institute.

Read the full story

America’s 1,000 Richest Neighborhoods
Source: Atlantic Cities

America’s 1,000 richest neighborhoods are home to two million Americans, a group that makes up just 0.6 percent of the country’s population, and 18 of these neighborhoods have mean household incomes above $500,000. Their numbers are overwhelmingly concentrated in the upscale suburbs of America’s increasingly bicoastal economy.

Read the full story

4 million renters want to buy. Can they?
Source: CNBC

More and more Americans are gaining confidence and hoping to jump into homeownership as the market continues to recover. Zillow surveyed renters in the nation’s 20 largest housing markets, and 10 percent of U.S. renters say they would like to buy a home in the next year. However, the number of homes for sale are still well below historical norms across most markets.

Read the full story

Fannie Mae Wind-Down Deemed Threat to Home Recovery: Mortgages
Source: Bloomberg

A plan to dismantle Fannie Mae and Freddie Mac and replace it with a government-backed mortgage-bond insurer has led critics to say the plan will cause lenders to further limit risk through tighter underwriting, thereby slowing the rate of the recovery.

Read the full story

New Report Finds You’ll Never Own a Home in San Francisco
Source: KQED

How much housing you can buy with a million dollars in each of the major U.S. cities? San Francisco’s real estate boom limits a million dollars to buying only about 1,500 square feet. On the other end of the spectrum, the median list price in beleaguered Detroit is just $12 per square foot — 55 times cheaper than in San Francisco.

Read the full story

Talking Points …

• According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), housing inventory increased as sellers gear up for the spring home-buying season. The available supply of existing, single-family detached homes for sale increased in February to 4.7 months, up from January’s Unsold Inventory Index of 4.3 months.

• Overall, California home sales fell in February, as it marked the fourth straight month that sales were below the 400,000 level and the seventh straight decline on a year-over-year basis. Sales in February slipped 0.7 percent from a revised 363,930 in January but were down 13.7 percent from a revised 418,520 in February 2013.

• The statewide median price of an existing, single-family detached home declined 1.6 percent from January’s median price of $410,990 to $404,250 in February. February’s price was 21.3 percent higher than the revised $333,180 recorded in February 2013, marking two full years of consecutive year-over-year price increases.

Thanks for reading!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

Market Matters Real Estate Report – Week Ending 03.14.14

Plan for Mortgage Giants Takes Shape
Source: Wall Street Journal

Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) have reached an agreement on winding down the government-sponsored enterprises Fannie Mae and Freddie Mac. The bipartisan proposal would replace the U.S.-owned mortgage financiers with government bond insurance that would kick in only after private capital suffered losses of at least 10 percent. Fannie Mae and Freddie Mac currently own or guarantee 60 percent of all U.S. home loans. Kevin Brown, the president of the CALIFORNIA ASSOCIATION OF REALTORS®, commented, “Whether it’s called Fannie and Freddie or reconstituted as something else, it’s clear we need a government guarantee.”

Making sense of the story:

• Under the proposal, a new agency called the Federal Mortgage Insurance Corp. (FMIC) would charge fees to issue a government guarantee on bonds. This guarantee would only be issued after investors suffer losses of at least 10 percent.

• The agreement would aim to promote a smooth and stable transition from the old system to the new system by providing specific benchmarks and timelines to guide the FMIC and market participants. The FMIC would be modeled in part after the FDIC, including its regulatory authority.

• The senators’ plan would require strong underwriting standards that mirror the definition of “qualified mortgage,” and set down payment requirement at 5 percent (except for first-time homebuyers at 3.5 percent).

• Affordable housing goals would be eliminated and instead, housing-related funds would be established to ensure housing is available for all types of borrowers and renters. These funds would be financed through a user fee on lenders that seek FMIC backing.

• Current conforming loan limits will be maintained under the agreement so that mortgage credit continues to be available in high-cost areas.

• The plan also states that the new system will monitor consumer and market access to credit, and provide market based incentives and transparency to serve underserved areas.

Read the full story

In other news …

California’s vanishing distressed housing market
Source: The Record Searchlight

The CALIFORNIA ASSOCIATION OF REALTORS® reports that California’s distressed housing market is a shadow of what it was at the height of the Great Recession. In January 2009, nearly seven of every 10 homes sold in California were a short sale or foreclosure. This January, that number had shrunk to 15.6 percent.

Read the full story

Consumers Show Renewed Confidence in Housing Recovery
Source: DSNews.com

Consumer attitudes toward housing brightened overall in February, according to Fannie Mae’s most recent National Housing Survey. Overall, 50 percent of respondents said they expect improvements in home price trends, which is a recovery from a slide to 43 percent in January.

Read the full story

U.S. Projects $179 Billion Profit from Fannie Mae, Freddie Mac
Source: Bloomberg

If the government-sponsored enterprises Fannie Mae and Freddie Mac continue operating under federal conservatorship, they could return $179.2 billion in profits to taxpayers over the next 10 years, according to White House budget analysts. Both will have sent $202.9 billion back to the Treasury by the end of March.

Read the full story

Big Investors Boosting Home Prices, And Not Everyone’s Pleased
Source: Reuters

Hedge funds, private equity firms and other large investors have moved aggressively into the residential market over the past two years by buying tens of thousands of distressed properties, often at bargain prices. Concerns remain that middle-class buyers will struggle to enter the market in light of these bulk purchases.

Read the full story

Questions You Need to Ask a Real Estate Agent
Source: Fox Business

Buying a home is the single largest transaction you will ever make, so vetting a REALTOR®’s experience, abilities and whether he or she is a good fit is an important first step, since the home-buying process can be long and complicated.

Read the full story

New-Home Building Is Shifting to Apartments
Source: The Wall Street Journal

The share of new homes being built as rental apartments is at the highest level in at least four decades. This shift is partly due to tighter lending standards make it more difficult to buy and younger Americans forming their own households.

Read the full story

Things You Should Be Doing Right Now if You Plan to Sell Your House This Spring
Source: Bloomberg

The spring selling season is drawing near, so if you’re thinking about putting your house on the market, now is the time to prepare if you haven’t already.

Read the full story

Talking Points …

• According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), California’s distressed housing market is now just a fraction of what it was during the Great Recession, thanks to vastly improved home prices over the past five years.

• In January 2009, 69.5 percent of all homes sold in California were distressed, which includes short sales and real estate-owned (REOs) properties. Five years later, that figure has shrunk to 15.6 percent.

• During the same time period, California’s median home price has soared more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014. Also, the statewide share of equity sales hit a high of 86.4 percent in November 2013 and has been above 80 percent for the past seven months.

Thanks for reading!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

 

February Market Matters Report – Week Ending 02.21.14

Finding ways to help young adults make their first home purchases
Source: LA Times

Stricter mortgage underwriting standards, higher unemployment, and heavy student debt are among the key factors that stand in the way of many potential buyers in their 20s and 30s. But first-time home buyers in this age group may be able to turn to effective techniques that family members, friends, and even employers can use to bridge the generational gap by offering a helping hand.

Making sense of the story:

• Americans who were 30 to 34 in 2012 had the lowest homeownership rate of any similarly aged group in recent decades at 47.9 percent.

• In comparison, Americans born between 1948 and 1957 had a 57.1 percent ownership rate by the time they hit the 30-to-34 bracket. This is despite record low mortgage rates and bargain-priced foreclosures and short sales.

• A new federal rule imposing a 43 percent maximum debt-to-income ratio for “qualified mortgages” is particularly difficult for younger buyers with high student debt. Student debts average $21,402 but can balloon as high as six figures.

• According to one industry estimate, 27 percent of first-time buyers last year received gift money from relatives to help defray the down payment and closing costs.

• With professional help, some family members are providing either second mortgages or first mortgages, and properly structured, these loans provide annual returns to family members well in excess of money-market funds or bank deposits.

• Money provided as a loan cannot be disguised as a loan. If the money is a gift, there needs to be a formal letter making the purpose of the gift explicit and the specific transaction for which it is to be used. Documentation is also needed to attribute the source of the funds and the capacity of the gift giver to provide the money.

Read the full story

In other news …

U.S. Home Sellers Return for Spring as Buyers Get Relief
Source: Bloomberg

As the housing market’s busiest season approaches, escalating values are spurring more listings as homeowners regain equity lost in the worst crash since the 1930s. With more sellers looking to cash in on rising prices, would-be buyers likely will have more choice and therefore, relief from the bidding wars of last year.

Read the full story

If investors bail on housing, what then?
Source: CNBC

After the housing crash, investors bought thousands of distressed properties with billions of dollars in cash. It is estimated that institutional investors have purchased well over 100,000 homes, but some experts are concerned that if investors pull out of the housing market this year, there could be a “significant” or “somewhat significant” impact on the markets.

Read the full story

Student debt may hurt housing recovery by hampering first-time buyers
Source: Washington Post

Millions of Americans are carrying heavy student debt, which could prevent a generation of potential buyers from purchasing their first homes. Purchases from first-time buyers are well below the historical norm, thereby undermining the housing recovery’s momentum.

Read the full story

Cold weather saps homebuilder confidence in February
Source: The Hill

In February, homebuilder confidence fell to its lowest level since May due to unusually cold weather. In light of the decline in buyer traffic as rampant snowstorms blanketed the country, there was a 10-point drop on the National Association of Home Builders(NAHB)/Wells Fargo Housing Market Index (HMI).

Read the full story

Dirty Mortgage Words
Source: Forbes

Forbes outlines some of the dreaded terms used in the mortgage industry, whether they’re consumer-centric or industry words. “Adverse” is described as the dirtiest word in the consumer-centric mortgage world since it is mortgage-speak for decline.

Read the full story

Gap Between Most, Least Expensive Housing Markets Still Wide
Source: Wall Street Journal

Evidence of a widening price gap was made clear in the annual affordability survey from the NATIONAL ASSOCIATION OF REALTORS®. While homes in much of the nation are affordable, on the coasts, especially California, a familiar pattern is reemerging: Too many people, not enough homes, and price growth that outstrips income growth.

Read the full story

The best and worst housing markets for taxes
Source: HousingWire

According to analysis of data from the Office of Revenue Analysis, homeowners in the housing market with the heaviest overall tax burden paid a percentage of their income seven times greater than the burden borne by the housing market with the lowest overall tax burden.

Read the full story

Talking Points …

• Between the years 2007 and 2011, 42,000 new residents moved from Los Angeles County to San Bernardino County, which represents the largest migration into a region in the United States, according to the U.S. Census Bureau’s migration report. Affordability of housing is attributed as the number one reason for the migration.

• The median home price in the San Bernardino County is hundreds of thousands of dollars cheaper in comparison to Los Angeles County and Orange County. The huge savings have led to the greater inland migration, and the Inland Empire has a greater share of undeveloped property.

• According to the report, the second largest area of migration was from Los Angeles County to Orange County, with 40,000 people. The third largest is from Asia, with 35,000 people from Asia moving into Los Angeles County.

Thanks for reading!  Feel free to call with questions, (714) 963-8000!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

It Pays to Use a REALTOR!

ItPaysToUseRealtor

The typical For Sale By Owner (FSBO) home sold for $46,000 LESS during the past year than homes that sold with the assistance of a REALTOR.

Most difficult tasks for FSBO sellers:

  • Understanding and performing paperwork.
  • Setting the right price.
  • Preparing/Fixing up the home for sale.
  • Helping buyer obtain financing.
  • Attracting potential buyers.
  • Selling within the planned length of time.
  • Having enough time to devote to all aspects of the sale.

It’s the quality and ease of experience!  Don’t hesitate, call today.

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

February Market Matters Report – Week Ending 02.07.14

U.S. Banks Start to Ease Limits on Lending
Source: Wall Street Journal

A brightening economic outlook for the country could be enhanced as big banks begin to ease limits on lending, thereby creating new opportunities for consumers and businesses to borrow and obtain credit. According to the U.S. Office of the Comptroller of the Currency, institutions’ risk appetite has grown, along with the economy, as access to loans has steadily increased.

Making sense of the story:

• According to new reports, banks relaxed the criteria for businesses and consumers to obtain credit during the 18 months leading up to June 30, 2013.

• A limited pool of loans and a sustained low-interest-rate environment has supported this credit thaw, in addition to the rosier economic picture.

• A decrease on limits in lending is expected to bolster growth projections. The Federal Reserve predicts U.S. growth between 2.8 and 3.2 percent.

• In the aftermath of the financial crisis of 2008, U.S. loan growth ground largely to a halt and has remained weak in light of the easy-lending policies that contributed to inflating the credit bubble.

• Banks are offering the following changes to entice customers: Less onerous conditions for corporate borrowers, giving banks fewer tools if a loan gets in trouble, and longer terms for auto loans.

• Loan growth has hovered at about 3 percent since late 2012 but is poised to increase. The Federal Reserve Bank of New York’s measurement of U.S. household debt increased slightly in the third quarter of 2013, despite a downward trend since 2008.

Read the full story

In other news …

Income Growth Remains a Challenge for Housing
Source: Eye on Housing

The decline in income growth of key age groups for home buying is holding back a more robust recovery, as home demand is affected by the inability of some to rent their first apartment or purchase their first home. Data reveals that since 2000, the largest reductions in income have been experienced by those under age 24, followed by people 45 to 54.

Read the full story

Southern California’s luxury housing market rebounds
Source: Los Angeles Daily News

Sales of homes costing $1 million or more soared 45 percent, which is reportedly their highest level in six years for the luxury housing market. While there were 10,602 buyers in 2013 for these luxury properties, it was Southern California in particular that dominated the luxury market.

Read the full story

Officials Press for Quicker Action on Fannie, Freddie
Source: Wall Street Journal

Overhauling the government-sponsored enterprises Fannie Mae and Freddie Mac should happen sooner than later, according to White House advisers and officials who are worried about the window of opportunity closing and momentum dissipating. If a bipartisan plan is not ratified in the Senate this year then the process will start from scratch in 2015.

Read the full story

Mortgages get new rules. Do you qualify?
Source: San Diego Union-Tribune

New mortgage-lending rules were implemented in January to prevent risky lending practices that powered the housing bubble. Ability-to-repay requirements will be imposed on consumers under the qualified mortgage rule, or QM.

Read the full story

Why the Homeownership Rate Is Misleading
Source: The New York Times

The nation’s homeownership rate fell to 64.9 percent in 2013, the lowest level since 1995. But is that percentage misleading? One expert says the headship rate is the more important number because it determines the total number of households, so a rise in the headship rate means more new households. The headship rate is expected to increase as more young adults move out.

Read the full story

Not all housing bubbles crash equally
Source: CNN Money

As the global economy still recovers from the financial crisis triggered largely by the collapse of America’s housing market, investors and economists are worried a similar boom-and-bust scenario is developing in China due to soaring home prices. But a real estate bubble in China is likely to have very different effects since its economy has major differences from America.

Read the full story

How Will History See Bernanke’s Legacy?
Source: Wall Street Journal

Ben Bernanke has departed as Chairman of the Federal Reserve, which has led to evaluations of his legacy after eight years in the role. Bernanke led during a challenging period, and his efforts to stabilize the economy had a lasting impact on markets.

Read the full story

Talking Points …

• According to Clear Capital’s Home Data Index (HDI) Market Report, prices have normalized post-bubble and future rates of growth will look more like historical rates of growth based on the fact that home prices are right in line with inflation adjusted long-run average levels.

• The report indicates that home prices have typically gained between three and five percent a year, and at the current quarterly rate of national growth (1.2 percent), peak prices won’t be reached until the year 2021, which is healthy for the industry overall.

• Inflation adjusted home prices at the metro level show 46 out of 50 metro markets’ home price levels at pre-2003 levels, with 25 out of 50 metros reporting prices below 2000 level. Each market saw yearly gains top out around 30 percent and now are seeing price gains cool substantially.

Thank you for reading!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

Closing 2013 & Questioning Housing Affordability

Following the strong beginning to the year, the last quarter of 2013 closed on a mediocre note. Sales slowed significantly and so has the price appreciation for single family existing homes in California. However, the slowdown may not be that different than what we have seen in the past. Let’s put things into perspective by looking at some numbers:

The average percent decrease from October to November in the past 5 years was 13.2 percent. For 2013, October to November decline of 13.6 percent is larger than the average, but not significantly higher. In other words, the double-digit decrease on a month to month basis is not out of the ordinary for this time of the year, at least not for the last 5 years. One troubling statistic however is the decline in pending sales on a year-over-year basis in November 2013. The decline was smaller than that observed from October 2012 to October 2013, which was 10.4 percent, but the decrease was slightly higher than the last 3-month year-to-year average decline of 9.1 percent. One must keep in mind though that mortgage rates hit historical lows in September through November of 2012, while the sales also reached the highest point  of last year in October of 2012. Given the very strong housing market in the fall of 2012, it is difficult to make any determination  about the weakness of the current market by simply comparing it to the last fall.

The question is whether the recent declines in sales are due to weaknesses in the housing fundamentals or the economic fundamentals. The  economic fundamentals are certainly improving and are better than anything we saw in the last 5 years. The housing fundamentals for primary  home buyers are at question. If the increase in interest rates is the culprit, then the question we should ask is whether the housing recovery is  sustainable in the prevailing affordability environment.

The statewide housing affordability index (HAI) for the 3rd quarter of 2013 is 32 percent, which is much stronger than that observed in  2005-2006 boom years. The index of 32 indicates that 32 percent of households can buy a median priced home. The HAI actually decreased  significantly from 2012 when it peaked at 56 percent in the first quarter of 2012. Assuming that home prices stay at or around the current level for the next two to three quarters, the housing affordability index should be floating around at the high 20’s and the low 30’s for the state as a
whole. Just as a point of reference, the historical average going back to 1988 for HAI is 31.9 percent. That is hard to believe! So while the  affordability has decreased, it is still at the historical average. With that said, what should we expect in 2014? In the short run, the pending sales  index suggests that sales of existing homes will remain at the current levels through the end of the first quarter. Assuming that the economy will  have a decent growth in 2014, the housing market should be stronger for the last 3 quarters of 2014. However, housing affordability will remain an issue in 2014, especially in the Bay Area where prices rose precipitously over the last couple of years and, unlike the rest of the state, have not  yet slowed down.

Brought to you by:

David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

 

December Market Matters Report IV

Record rebound in home equity gives owners new options
Source: LA Times

In what amounts to a record rebound for a 12-month period, homeowners’ net equity holdings soared $2.2 trillion from the third quarter of 2012 to the third quarter of this year. This turnaround has provided some much-needed relief to the personal finances of hundreds of thousands of owners, who for years have been underwater on their mortgages. With increased equity, homeowners now have more options at their disposal.

Making sense of the story: 

—> With these improved conditions, homeowners are able to borrow against their equity to help pay for college tuition, home improvements, and other items. They also may be able to refinance their mortgages without having to use a government-aided program.

—> Equity is typically improved in the following ways: Reduced debt from making payments to your lender, improved market conditions that increase the value of your home, or upgrades that raise the home’s sales value. 

—> If your house is worth $300,000 and you owe the bank $150,000 — whether from a single mortgage or multiple loans — you have $150,000 in equity.

—> CoreLogic estimates that 791,000 homes moved from negative to positive equity status during the third quarter of this year alone, and more than 3 million have done so since the beginning of 2013.

—> According to the CoreLogic’s study, 92 percent of all mortgaged homes in the country valued at more than $200,000 have positive equity, while just 82 percent of homes valued at or below $200,000 have positive equity.

—> Values have roared back in the last two years in California, as now the state has just a 13 percent negative equity rate. This is significantly lower than Ohio (18 percent), Michigan and Illinois (both 17.7 percent), Rhode Island (16.6 percent) and Maryland (15.6 percent) 

Read the full story…


In other news…

Predictions for the New Year
Source: New York Times  

Experts predict that in 2014 mortgage rates will continue to increase, lenders will loosen up requirements a little, adjustable-rate mortgages will make a comeback, and homeownership rates will flatten or fall.

Read the full story… 

Wall Street Unlocks Profits From Distress With Rental Revolution
Source: Bloomberg

With rental housing turning into an industry, big landlords are benefiting from access to financing at a time when banks remain reluctant to lend to home buyers. Investors from multibillion dollar hedge funds to individuals buying as few as 10 properties have acquired more than 1 million homes in the past three years. 

Read the full story…

Single-family refi purchases still dominate Freddie’s portfolio
Source: HousingWire

Freddie Mac’s total mortgage portfolio fell at an annual rate of 2 percent in November, as its mortgage portfolio continues to shrink. Refis are still making up 53 percent of the GSE’s total single-family mortgage portfolio, and single-family refinance loan purchase and guarantee volume hit $11 billion last month.

Read the full story… 

Delaying Fannie, Freddie Fee Hike
Source: Wall Street Journal

The incoming director of the Federal Housing Finance Agency, Rep. Mel Watt (D., N.C.), announced that he intends to delay an increase in mortgage fees charged by the housing-finance giants. These fee increases would likely be passed along to borrowers in the form of higher mortgage rates. 

Read the full story…

Move-in-ready homes are the latest fad in high-end housing
Source: LA Times

Fully appointed homes are the latest fad in the ultra-luxury market, as high-end buyers look to purchase an instant lifestyle with designer furnishings, art, knickknacks, and linens included with the home. 

Read the full story…

U.S. early warning system for financial crises gets low marks
Source: Reuters

The Office of Financial Research at the U.S. Treasury, which was created to help the nation avoid the next financial crisis, is struggling to stay relevant after passage of the 2010 Dodd-Frank law. Other regulators are hesitant to share data and expertise with the office.

Read the full story… 

Saving Loses Its Allure
Source: Wall Street Journal

The saving rate has been trending down among American consumers. Households saved just 4.2 percent of the after-tax income in November. The average was close to 6 percent from 2009 until 2011. Wealth gains from existing assets, such as rising home values, may explain why households are saving less.

Read the full story…
 

Talking Points …

—> According to Realtor.com’s predictions for the national housing market in the new year, the market will see a rise in inventory to bring it in line with more normal levels. The beginning of 2013 was in many ways characterized as the “year of low inventory.”

—> Realtor.com reports that 10 million homeowners have less than 20 percent equity in their homes, but since prices are expected to continue rising in 2014, it predicts that more homeowners will be lifted into positive territory.

—> September marked the 36th straight month of declining foreclosure activity on an annual basis, according to Realtor.com; this movement is expected to continue in 2014.

Hope this information helps!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

December Market Matters Report III

How Important Is Down Payment in Determining Default?
Source: DSNews.com

The Federal Housing Finance Agency (FHFA) recently released a working paper on the impact of down payment amounts on loan performance at the GSEs and Federal Housing Administration (FHA). In light of new regulations and increased focus on underwriting standards, the agency issued the findings, and overall found a nonlinear relationship between loan-to-value (LTV) ratio and foreclosure rates.

Making sense of the story:

—> For loans with FICO scores of 620 and debt-to-income (DTI) ratios of 31 percent, the foreclosure rate for GSE loans with 100 percent LTV is a little more than twice that of loans with 80 percent LTV.

—> When it comes to FHA loans with the same credit characteristics, the foreclosure rate is almost three times as much among loans with LTVs of 100 percent compared to loans with LTVs of 80 percent. 

—> LTV ratios hold a stronger relationship with foreclosure rates among FHA loans than GSE loans.

—> The FHFA found that the LTV-foreclosure rate relationship is sensitive to FICO. This finding was evident when observing various LTV ratios among different classes of FICO scores.

—> According to the FHFA, once LTV rises above 95 percent, the foreclosure rate tends to correlate less with LTV ratio.

—> The relationship between LTV and foreclosure is most dramatic between LTVs of 90 and 95 percent when it comes to FHA loans. 

Read the full story…

In other news…

Housing starts surge in November — sign of housing pickup?
Source: LA Times

The U.S. Commerce Department reported this week that housing starts in November increased by nearly 23 percent from the previous month. Clearly, the housing market recovery is picking up pace heading into next year. The number of homes that builders started last month was well above October estimates.

Read the full story… 

Jumbos Surge 34% With Record ARMs Belying ’08 Anxiety: Mortgages
Source: Bloomberg

Jumbo loans, both adjustable and fixed-rate, increased by 34 percent to $216 billion in the first nine months of this year, with ARMs comprising the majority of the gain. 

Read the full story…

Where the Renters Live Now
Source: The Atlantic

The Census Bureau has unveiled a new mapping tool which allows for the visualization of the share of residents, by census tract, who live in homes they own themselves. This data maps out where homeownership rates are the highest and, conversely, where renters live.

Read the full story… 

U.S. Home Builders’ Confidence Climbs
Source: Wall Street Journal

The National Association of Home Builders has reported that its housing-market index rose to 58 this month from 54 in November. This is the highest level since August, and an index rate over 50 indicates expansion for the industry. 

Read the full story…

FHA reports improvements in finances, but net worth still negative
Source: LA Times

Coming off a $1.7-billion bailout, the Federal Housing Administration is projecting that it will replenish its financial reserves to required levels in 2015. The agency’s net worth is still in the red by $1.3 billion, but its finances have improved by $15 billion from a year ago. 

Read the full story…

Many California families struggle to pay for basics, study says
Source: LA Times

According to the California Budget Project, a nonpartisan research group, many California families are struggling from paycheck to paycheck, and expensive housing, high childcare costs and rising healthcare expenses are the main factors. Nearly one-third of households in the state spent at least half their income on rent.

Read the full story… 

US Federal Reserve pulls back on stimulus effort
Source: BBC News

The Federal Reserve has announced that it will scale back its stimulus for the economy by cutting the amount of bonds it purchases every month by $10 billion, citing the improved outlook of the labor market. With the start of the new year, it will buy $35 billion in mortgage bonds and $40 billion in Treasury debt.

Read the full story…

Talking Points…

—> According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), an increase in home prices, coupled with higher interest rates, put downward pressure on housing affordability and led to the fourth straight month of sales declines in November. 

—> The available supply of existing, single-family detached homes for sale edged up in November to 3.6 months, up from October’s Unsold Inventory Index of 3.4 months. The index was 3 months in November 2012.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.

—> The median number of days it took to sell a single-family home also increased to 36.7 days in November, up from 33.1 days in October, but was down from 37.5 days in November 2012.

Hope this information helps!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

December Market Matters Report II

When Buying A Home Is Too Costly And The Rent Is Too High
Source: NPR

A new report from the Harvard Joint Center for Housing Studies finds that affordability problems for renters have skyrocketed over the past decade, and in the aftermath of the economic recession, more people have been driven out of the housing market and into rental housing. As monthly rent swallows ever larger portions of Americans’ paychecks, homeownership grows out of reach. Overall, the number of American renters paying unaffordable amounts for housing reached an all-time high last year.

Making sense of the story:

- More than half of renters – 21.1 million              households – were cost burdened in 2012, paying more than 30 percent of income for housing. This is the greatest number of housing-cost-burdened renters on record. 

- According to the study, between 2000 and last year, the nation’s median rent, adjusted for inflation, increased 6 percent, while the median income for renters fell 13 percent.

- Twenty-eight percent of renters paid more than 50 percent of their income on housing in 2011.

- From 2001 to 2011, nearly one in five households headed by someone in their 30s switched from owning a home to renting at some point; nearly one in seven households headed by a person in their 40s did the same.

- In order  to pay their monthly housing costs, low-income households with severe housing cost burdens cut back most heavily on their spending             for food, transportation, health care, and retirement savings.

- According to the study, about 13 percent of extremely low-income renters reside in homes with structural deficiencies. 

Read the full story…

In other news …

Banking Under Dodd-Frank Takes Shape With Volcker-Rule Approval
Source: Bloomberg

Regulators have now finalized and approved the Volcker Rule, which is intended to stop banks from engaging in certain types of risky behavior. The rule stems from the Dodd-Frank financial reform act that passed in 2010, and it bars banks from speculating with their own money.

Read the full story…

Trulia: Repeat homebuyers to dominate 2014 market
Source: HousingWire

In his latest housing predictions for 2014, Jed Kolko, chief economist with Trulia, posited that the housing market will see the dominance of the repeat homebuyer. This is a shift from the dominance of investors in 2013.

Read the full story…

Housing Market Overstocked With Older Homes
Source: AOL Real Estate

A recent survey from research firm RealtyTrac indicates that 71 percent of U.S. single-family homes were built before 1990. New-home construction is well below normal long-term levels.

Read the full story…

U.S. Senate confirms Mel Watt as next FHFA director
Source: HousingWire 

This week the U.S. Senate confirmed Congressman Mel Watt’s nomination to lead the Federal Housing Finance Agency. There were 57 votes in Watt’s favor to replace Ed DeMarco. It remains to be seen how Watt’s leadership will affect the agency as the conservator of Fannie Mae and Freddie Mac.

Read the full story…

Correcting three myths about the housing market
Source: Reuters

Reuters states persistent myths about the market are obscuring the data and driving policy in the wrong direction. Specifically, the publication suggests the following are myths: 1) The foreclosure crisis is over; 2) We have to let homeowners fail; and 3) There’s nothing more the government can do.

Read the full story…

Nobel laureate: Everyone should have a financial adviser
Source: InvestmentNews

Robert Shiller, the Nobel Prize-winning economist, argued in a recent speech that financial advice should be readily available to all Americans, not just the wealthy. He pointed to a lack of good financial advice as one of the reasons for the financial crisis, and he compared the need for financial advice with the need for health care.

Read the full story…

Chinese investors snatch up U.S. houses
Source: CNN Money

Chinese buyers purchased $8.2 billion worth of U.S. property in 2012, and New York and Los Angeles are two cities that attracted the most interest from buyers. But Philadelphia and Detroit came in at No. 3 and No. 4, and the top 10 list is rounded out by Houston, Chicago, Las Vegas, Atlanta, San Diego and Memphis. Most of these transactions are paid in cash.

Read the full story…

Fannie, Freddie to Raise Loan Fees
Source: Wall Street Journal

Home-loan borrowing costs for U.S. homeowners could be affected by an increase in fees that Fannie Mae and Freddie Mac charge lenders. There will be a 0.1 percentage point increase in the so-called “guarantee” fees that lenders are charged. However, in the majority of states, this increase will be offset by the removal of crisis-era fees.

Read the full story…


Talking Points …

—> According to the latest report from Morningstar Credit Ratings, distressed inventory is on the decline, but the number of months it takes to clear distressed inventory from the market is on the rise.

—> The time to clear this inventory has increased by five months from the second quarter of this year and 11 months from September 2012, according to Morningstar’s analysis. According to its forecasts, it will take 49 months to work through the private-label RMBS sector’s distressed inventory.

—> Judicial states hold about 61 months of distressed inventory, while non-judicial states hold about 32 months’ worth. Short sales made up 49 percent of distressed sales in the third quarter of this year, up from 45 percent a year ago.

Thanks for reading!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

Why Buy Now?

Why should you buy a home now instead of waiting?

The year 2013 can be categorized by a significant turnaround in the housing market across the nation. While lack of homes available for sale constrained home sales in many markets across California, it contributed to a substantial increase in home prices. Existing single family sales for 2013 are predicted to fall 2.1 percent short of 2012 sales, yet median home prices are expected to show a 28 percent improvement over 2012 – – with the median reaching $408,600.

The increase in home prices coupled with a percentage point increase in mortgage interested rates led to a sharp decrease in affordability. Despite decreased affordability, current market conditions still warrant buying a home sooner rater then later. First, interest rates are still at historical lows but are poised to increase in 2014. Over the past year, mortgage interest rates increased by about one percentage point, from about 3.5 percent to 4.5 percent. On average, a half percentage point fluctuation in the mortgage rate changes the payment by $100 per month on a median priced home of $415, 770. Most of the predictions for 2014 put the 30-year fixed rate mortgage at 5.3 percent.

While interest rates have moved down since their spike during the summer, the uncertainty over the Fed’s policies make it difficult to hope for any improvement in interest rates. The Fed’s bond buying is the key consideration – – not just the tapering, but the general pace of withdrawal. While tapering was considered certain in September, December 2013 is now an increasingly possible date after the most recent employment report showed marked improvement in hiring.

The second reason to buy a home sooner has to do with the new lending rules going into effect on January 1, 2014 which are set to raise the cost of borrowing. The ability-to-repay rule and the associated qualified-mortgage definition will raise the overall cost of originating home loans, with borrowers taking the brunt of the financial hit.

There are two other important market conditions to keep in mind. We started the year with a heated market that was at times described as “a bubble”. Since the autumn, the housing market has cooled off. On one hand, due to decreased affordability and increased mortgaged rates, demand for housing has subsided and bidding wars are not as frequent or as aggressive as we saw earlier in the year. Additionally, inventory of homes for sale has shown improvement with more homes on the market now. These two conditions suggest a more favorable market for buyers and one that resembles a shift towards a ‘’normal” market.

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

December Market Matters Report I

Housing markets rebound faster when foreclosures proceed quickly
Source: The LA Times

Appraisal industry experts have posited that real estate markets rebound much faster in areas where state law permits foreclosures to proceed quickly. Allowing homes with defaulted loans to move into new owners’ hands quickly prevents them from being tied up in court procedures for years, which negatively affects values of neighboring properties and the overall health of the housing market.

Making sense of the story:

—> Delays are most pronounced in judicial states, where post-default proceedings can stall foreclosure completions for two to three years or even longer.

—> The fastest-rebounding markets, comprised of strong sales, price increases and low inventories of unsold houses, were located in so-called nonjudicial states, where foreclosures can proceed without the intervention of courts.

—> Home-price recoveries are hindered when lenders are prevented from recovering and reselling the units to buyers due to legal limbo. Also, investors and other buyers can’t swoop in and return them to residential use rapidly.

—> Since California is a nonjudicial state, some of the best-performing market areas were Los Angeles and San Diego. In California, foreclosures now account for just 10 percent of all sales, while in slow-moving judicial states, 25 to 50 percent of sales are foreclosures.

—> The worst performers were judicial states. Specifically, Florida markets such as Tampa and Fort Myers, as well as parts of Illinois and Wisconsin.

Research reveals nonjudicial states bottomed out sooner than judicial states, and have seen greater appreciation since the bottom (typically 50 to 80 percent compared with just 10 to 45 percent for judicial states).

Read the full story…

In other news…

White House Representative Speaks on Housing Finance Reform
Source: DSNews.com

Gene Sperling, director of the National Economic Council for the White House, recently discussed the president’s four major principles for housing finance reform at an industry symposium. Sperling emphasized maintaining widespread access to the 30-year, fixed-rate mortgage, and enhancing the role of private capital in the market.

Read the full story…

New home sales surge in October
Source: The LA Times

The Commerce Department is reporting that sales of newly built single-family houses rose 25.4 percent from September to a seasonally adjusted annual rate of 444,000. Sales are up 21.6 percent in comparison to October 2012.

Read the full story…

Mortgage loan quality improved in 2013
Source: HousingWire

Home loan eligibility jumped to 96.44 percent in the first half of the year from 93.66 percent in 2012, according to a new report from compliance technology firm Quality Mortgage Services.

Read the full story…

FHFA: Conforming Loan Limits Remain Unchanged
Source: DSNews.com

The Federal Housing Finance Agency has announced that the 2014 maximum loan limit for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 for one-unit properties in most areas of the country. There is a cap of $625,500 in high-cost areas.

Read the full story…

Senate opens door for immediate housing finance reform
Source: The Hill

Due to the Senate’s elimination of the filibuster for presidential nominations, many experts believe Rep. Mel Watt (D-N.C.) finally will be as the next director of the Federal Housing Finance Agency, and with that change in leadership, there could be immediate major housing finance reform that provides greater access to the conventional housing finance market for a variety of buyers.

Read the full story…

Key U.S. housing markets challenged by lack of multifamily builds
Source: HousingWire

The latest building permit numbers indicate there were 387,000 authorizations for new multifamily units in October, which is an increase from the past two months. However, experts argue the number is too low and that equity financing for apartment projects is not growing.

Read the full story…

Southland home buyers shifting to condos as house prices rise
Source: The LA Times

Since home prices jumped in price this year, southern California home buyers purchased fewer single-family homes in October due to affordability concerns. However, since condos are the only affordable path to homeownership in many urban areas, demand increased this year.

Read the full story…

Talking Points…

—> According to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.), California pending home sales rose in October, with the Pending Home Sales Index (PHSI) climbing 2.5 percent in October to 109.3, up from 106.7 in September, based on signed contracts.  The monthly increase was considerably greater than the average September-to-October change of 0.7 percent over the past five years.

—> The share of equity sales – or non-distressed property sales – dipped slightly in October, but still made up more than eight in 10 sales, marking the fourth straight month that equity sales have been more than 80 percent of total sales.

—> Housing inventory levels tightened slightly for the first time in five months but were still extremely low.  The Unsold Inventory Index for equity sales dipped from 3.5 months in September to 3.4 months in October.

Thanks for reading.

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com

 

November Market Matters Report I

Americans Recover Home Equity at Record Pace

Source: Bloomberg

Low inventory may ease as more owners are able to sell, as the number of Americans who owe more on their mortgages than their homes are worth fell at the fastest pace on record in the third quarter with prices increasing. Owners are finding it easier to list properties and buy a new place because the share of owners with at least 20 percent equity climbed to 60.8 percent from 58.1 percent.

Making sense of the story:

- As more people gain the equity they need to sell their house and have a down payment for the next one, home sales are expected to pick up.

- The pent-up demand created by the low inventory is evident in the fact that the number of homes for sale reached a low of 1.8 million in early 2013, which was the fewest in more than a decade.

- As the real estate market recovers, furniture sales and renovations will add to consumer spending, as homeowners build equity and opt to sell their homes.

- According to Zillow, 10.8 million homeowners were underwater on their mortgages in the third quarter, down from 12.2 million in the second quarter.

- There are about 20 million people who had negative equity or less than 20 percent equity, down from 21.5 million in the prior three months.

- The median price of an existing home rose 12.8 percent last month. In August, it increased 13.4 percent, which was the fastest rate since the height of the real estate boom in 2005.

Read the full story…

 

In other news …

Foreclosure Inventory Plunges Nearly 30%

Source: DSNews.com

The industry’s foreclosure inventory rate is down 29.61 percent from last year, according to Lender Processing Services (LPS). Overall, foreclosure inventory has contracted for 18 consecutive months and is now at its lowest point since the end of 2008, totaling 1.28 million loans, or just 2.54 percent of today’s active mortgages.

Read the full story…

Senate rule change bolsters Watt’s chances to become top housing regulato

Source: The Hill

The Senate recently voted to prevent the minority party (i.e. Republicans) from filibustering nominations, which means Rep. Mel Watt now could be confirmed to lead the Federal Housing Finance Agency (FHFA) during the week of Dec. 9. Watt lost his first bid to win Senate confirmation due to Republican opposition.

Read the full story….

Weak October Sales Have Home Builders Fretting About Spring

Source: The Wall Street Journal

Builders are concerned that political acrimony over the federal budget and debt, as well as the fragility of the economic recovery, will hamper the spring selling season early next year. A monthly survey of builders across the nation by John Burns Real Estate Consulting reveals concern about a decline in home sales by 8 percent in October from the September level and by 6 percent from a year earlier.

Read the full story…

Can You Measure The American Dream?

Source: Bloomberg

Three professors have created the American Dream Composite Index as a way to measure what makes people feel happy, successful, and productive. The quality of life index ranks the extent to which people feel they are reaching their goals, including homeownership.

Read the full story…

Faucets at $1,000 Abound as Home Equity Spigot Opens: Mortgages

Source: Bloomberg

As there were significant gains in property prices this year, spending on home renovations is rising to records with banks such as Wells Fargo & Co. and JPMorgan Chase & Co. (JPM) increasing lending for home equity lines of credit. This spending on renovations is benefiting retailers who sell construction supplies.

Read the full story…

Americans Are Very Confused About What They Want Out of a Community

Source: The Atlantic

The NATIONAL ASSOCIATION OF REALTORS® has released the results of its latest national community preference survey and among the priorities listed by participants was the following: Improving the availability of affordable housing (59 percent list it as either “extremely high” or “high” priority), protecting the environment (57 percent), and preserving farms and open spaces from development (54 percent). But Americans also still prefer conventional suburban development with large lots.

Read the full story…

Pending Home Sales Take a Quick Turn South

Source: The Wall Street Journal

For the fifth consecutive month, the pending home sales index declined, and is now at its lowest reading since December 2012. In June, pending home sales were up 11 percent from their year-ago levels, but by October, pending sales were down 1.6 percent on a year-over-year basis.

Read the full story…

Talking Points …

—> According to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 Renter Survey,” renters continue to hold homeownership in high esteem, and it remains a goal for the majority of them. Nearly three-quarters of renters rated homeownership as “important,” and more than half of renters (52 percent) said they plan to buy a home in the future.

—> Most renters (44 percent) who expressed the desire to own instead of rent were only renting out of financial necessity and the majority plan to buy in the next three years or longer.

—> More than four out of every 10 renters (41 percent) indicated they plan to purchase in the same county where they currently reside, and 14 percent plan to buy in the same neighborhood. Currently, about half (51 percent) of all renters live in an apartment, with the remainder residing in a single-family home, a townhouse, or a condominium.

Hope this helps!

Cordially,
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com