Posted by: tracycanningblog | March 19, 2013

Lenders easing up on downpayment requirements?

Tight credit conditions are showing more signs of easing, just in time for the spring buying market to heat up, CNBC reports. Homebuyers may be able to qualify with lower downpayments – a big shift from the last four years when 20 percent downpayments on a loan were practically required.

But mortgage giants such as Fannie Mae are reportedly approving more loans with lower downpayments, even buying loans with as little as 3 percent down. However, these loans do require private mortgage insurance.

Fannie Mae is seeing its share of the market rise as FHA – which used to be one of the only agencies to offer low downpayment loans – is seeing its market share shrink as it raises its premiums.

Loans with between 3 and 10 percent downpayments accounted for 18 percent of Fannie Mae’s business for home purchase loans in the third quarter of 2012, the latest data available.

“In general lenders have been willing to do more than they may have been willing to do in the past,” says John Forlines, chief credit officer for Fannie Mae’s single-family business. “Our requirements have not changed significantly, but other parties taking risk, the lenders and mortgage insurance companies in particular, have been more flexible than they may have been in the past.”

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

 

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Posted by: tracycanningblog | March 10, 2013

Forget ‘improving’ or ‘rebound’ – Fla. is ‘on fire’

Lesley Deutch, senior vice president at John Burns Real Estate Consulting, said the “Florida market is on fire” in her latest update on the state’s housing market.
Deutch says she traveled the state recently and visited more than 20 communities. While recovery reports differ between Florida cities and urban areas, she reports five major trends:
1. Land prices. While the price of land continues to rise quickly statewide, Orlando feels the most pressure. Deutch says she saw some submarkets where “land and finished lot prices have now surpassed peak levels.” In Orlando, she sees developers buying raw land “just to gain a position and market share.”
2. Home prices. Some communities, such as Orlando and Naples, are seeing 1- to 2-percent new-home price increases monthly, Deutch says. The hallmarks of a seller’s market have also returned, such as lotteries. She expects a 2013 price increase of at least 10 percent in many Florida markets.
3. 55-plus market. Deutch reports a 20- to 25-percent jump in potential buyers interested in active adult living, according to builders in Southwest Florida. She also notes a boost in customer traffic in second- and third-tier markets.
4. Foreign buyers. It’s more than Miami, Deutch says. While in Orlando, she visited a sales office that had three active buyers: One from Brazil, one from Germany and one from China.
5. Foreclosures. While the state has a notoriously long foreclosure process, Deutch says banks are slowly releasing foreclosures. But investors continue to buy new foreclosures shortly after they hit the market.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

Posted by: tracycanningblog | February 19, 2013

NAR: 4Q home prices see strongest increase in seven years

A growing number of metropolitan areas had higher median home prices in the fourth quarter, with the national price showing the strongest year-over-year increase in seven years, according to the latest quarterly report by the National Association of Realtors® (NAR). A companion report shows record high housing affordability conditions for metro areas in 2012.

The median existing single-family home price rose in 133 out of 152 metropolitan statistical areas (MSAs) based on closings in the fourth quarter compared with the same quarter in 2011, while 19 had price declines. In the third quarter, 120 areas showed increases from a year earlier. One year earlier – in fourth quarter 2011 – only 29 metros were up.

“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” says Lawrence Yun, NAR chief economist. “Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”

Yun says the nation needs more housing construction to relieve some of the pressure in the market and keep home prices from overheating.

The national median existing single-family home price was $178,900 in the fourth quarter, up 10 percent from $162,600 in the fourth quarter of 2011 – the strongest year-over-year price increase since the fourth quarter of 2005 when the median price jumped 13.6 percent. In the third quarter, the price rose 8.8 percent from a year earlier.

The median price is where half of the homes sold for more and half sold for less; medians are more typical than average prices, which are skewed higher by a relatively small share of upper-end transactions.

A shrinking market share of lower priced homes continues to account for some of the price growth. Distressed homes – foreclosures and short sales generally sold at deep discounts – accounted for 23 percent of fourth quarter sales, down from 30 percent a year ago.

Total existing-home sales, including single-family and condo, rose 5 percent to a seasonally adjusted annual rate of 4.90 million in the fourth quarter from 4.66 million in the third quarter, and were 12.1 percent above the 4.37 million pace during the fourth quarter of 2011. Sales in the last quarter were at the highest level since the fourth quarter of 2009 when they reached 4.95 million.

There were 1.82 million existing homes available for sale at the end of the fourth quarter, which is 21.6 percent below the close of the fourth quarter of 2011. Unsold inventory is at the lowest level since January 2001.

According to Freddie Mac, the national commitment rate on a 30-year conventional fixed-rate mortgage averaged a record low 3.36 percent in the fourth quarter, down from 3.54 percent in the third quarter and 4.01 percent in the fourth quarter of 2011.

“In reality, home prices over-corrected on the downside and homes in most of the country were selling for less than replacement construction costs, which means they were undervalued,” says NAR President Gary Thomas. “At the same time, we’ve had record low mortgage interest rates and slow but steady improvements in median family income. Combined, these factors boosted housing affordability conditions to the highest on record in 2012.”

In the condo sector, metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $179,900 in the fourth quarter, up 12.2 percent from the fourth quarter of 2011. Forty-seven metros showed increases in their median condo price from a year ago, one was unchanged and eight areas had declines.

Regionally, existing-home sales in the Northeast increased 2.2 percent in the fourth quarter and are 12.9 percent above the fourth quarter of 2011. The median existing single-family home price in the Northeast rose 0.7 percent to $228,400 in the fourth quarter from a year ago.

In the Midwest, existing-home sales rose 5.6 percent in the fourth quarter and are 18.3 percent higher than a year ago. The median existing single-family home price in the Midwest increased 9.2 percent to $143,800 in the fourth quarter from the same quarter in 2011.

Existing-home sales in the South rose 5.0 percent in the fourth quarter and are 13.2 percent above the fourth quarter of 2011. The regional median existing single-family home price was $160,100 in the fourth quarter, up 9.1 percent from a year earlier.

In the West, which is the region most impacted by limited housing supplies, existing-home sales increased 5.9 percent in the fourth quarter, and are 5.0 percent higher than a year ago. The median existing single-family home price in the West jumped 20.1 percent to $245,200 in the fourth quarter from the fourth quarter of 2011.

Housing Affordability Index

NAR’s national annual Housing Affordability Index, with breakouts for metropolitan areas, rose to a record high 193.5 in 2012 from 186.4 in 2011. The index is calculated on the relationship between median home price, median family income and average effective mortgage interest rate. The higher the index, the stronger household purchasing power; recordkeeping began in 1970. An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small downpayments, the affordability levels are relatively lower.

“The housing affordability index shows that the national median income of families was almost double the income needed to buy a median-priced home in 2012, so most buyers are able to stay well within their means,” Yun says. “Even with rising home prices, conditions are expected to stay very favorable with the index averaging 161 in 2013, which would be the third best on record.”

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

Posted by: tracycanningblog | January 29, 2013

U.S. home prices accelerate in November

U.S. home prices accelerated in November compared with a year ago, pushed higher by rising sales and a tighter supply of available homes.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.5 percent in November compared with the same month a year ago. That’s up from a 4.3 percent annual gain in October.

The biggest yearly gain was in Phoenix, where prices jumped nearly 23 percent. Prices in San Francisco increased 12.7 percent.

Prices also increased in half of the cities measured by the index in November from October. That’s up from seven in October. The biggest monthly gains were in San Francisco, Phoenix and Minneapolis.

Monthly prices are not seasonally adjusted and frequently decline over the winter.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

Posted by: tracycanningblog | January 18, 2013

Buyers: Don’t just list a home – prepare it first

To sell a home or get top dollar, sellers must look at their property through the eyes of a potential buyer. Consider the following five tips:

1. Get rid of clutter and Aunt Mary’s photo.

“Selling your house is about taking your personality out of it and having people going through it envisioning their own life and personality,” says Candice Olson, host of “Candice Tells All” on Canadian television station “W Network.”

It’s hard for buyers to imagine themselves in a home decorated wall-to-wall with photographs of people they do not know, and knick-knacks that hold no special meaning. In preparing a home for sale, all the things that personalize a home to the family within should be stored for the next home – including all the pictures and magnets on the refrigerator.

Olson says even art on the wall should be analyzed because people have different tastes. She recommends retaining any mirrors, however. “Art is very personal, but mirrors aren’t,” she says. “Mirrors are great for adding depth and dimension and visual space and light … it’s non-committal art.”

2. Focus on the kitchen and bathrooms.

Most buyers who fall in love with a kitchen fall in love with the house. However, that doesn’t mean sellers should invest in an expensive upgrade. The best kitchen is one that aligns with buyers’ tastes, and that’s not always one with upscale cabinets and granite countertops. At the least, the expensive of those upgrades may not come back to the owner in a higher selling price. Sellers should also focus on lighting.

Hilary Farr of the Toronto-based “Love It or List It” television show suggests spending upgrade money on refacing kitchen cabinets and counter upgrades, such as replacing the backsplash.

Olson has simple advice for any would-be seller considering a kitchen upgrade: “Is the juice worth the squeeze?”

3. Make your home look like a hotel suite – inviting but neutral.

Floors make a big impression because they’re big, the “first thing that strike you when you walk in the front door,” Farr says.

Bathrooms should look like a just-cleaned hotel room: New soaps, clean towels and perhaps some cut flowers. Beds should be made with neutral blankets or comforters.

Jonathan and Drew Scott, the “Property Brothers” on television, suggest that sellers consider a home stager. Stagers arrange furniture and furnishings or bring in their own to make the house look as appealing as possible to potential buyers.

“Staging is such a crucial part of it,” says Drew. “It’s just as important as any sort of renovation, because if a buyer can’t walk into a space and picture themselves living there, they’re not going to give you top dollar, for one, and they might just turn and walk away.”

4. Price the home based on market value, not your personal opinion

Do you need to recoup the money you spent at the market’s height in 2006? Buyers don’t care. Did you raise three kids in the home? Your fond memories aren’t worth anything to potential buyers.

Sellers have to switch from emotional attachments and see the sale of their home as a business decision. Realtors give unbiased opinions, and some home sellers even have an appraisal done before they list their home.

5. Focus on curb appeal first

If buyers love the outside of a house – their first impression – there’s a greater chance they’ll love the inside. Sellers can upgrade kitchens and bathrooms all they want, but if a buyer chooses not to enter the home because the outside doesn’t dazzle them, but upgrades won’t do any good.

Paint shingles, doors, garages and railings. Plant new shrubbery and trim existing greenery. In summer, mow the grass twice per week.

A new-looking exterior doesn’t have to be expensive to make potential buyers look twice.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

Posted by: tracycanningblog | January 7, 2013

Real estate pros expect good things in 2013

A lot of things could happen on the cusp of 2013, but most real estate experts predict an improving recovery for most local U.S. markets.

One variable that’s hard to predict: How long will homeowners hold off listing their home? Many owners have wanted to move for a while, but they’ve been afraid to move forward because they’re underwater or their home is worth less than they wish. As prices recover, when will these homeowners jump into the market?

By the end of 2012, many potential buyers believed that housing values had hit bottom, and – coupled with a fear that record-low mortgage rates could again rise – jumped into the market. An increase in buyers and decrease in inventory kicked off home price increases in many markets and even bidding wars. The number and timing of new listings could slow that process down.

Even so, economists and analysts interviewed by Forbes call for 3.1 percent price appreciation in 2013, and a seller’s market as more buyers enter the market and owners continue to hold off for even higher selling prices.

Mortgage rates should also remain low at least through early 2013, as The Federal Reserve stays actively involved, seeing a housing market rebound as key to a complete U.S. economic recovery. Low rates allow buyers with modest budgets to stay competitive even if home prices rise. At the close of 2012, rates hovered around 3.34 percent.

“Mortgage rates started the year near record lows which should continue to aid the ongoing housing recovery,” says Freddie Mac vice president and chief economist Frank Nothaft.

In the latest Pending Home Sales Index released by the National Association of Realtors® (NAR), homes under contract reached the highest level in two-and-a-half years. Pending home sales rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October. Year-to-year, pending home sales rose 9.8 percent. On a year-over-year basis, pending home sales have risen for 19 consecutive months.

“Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions,” says Lawrence Yun, NAR chief economist.

Yun predicts that existing-home sales should rise 8 to 9 percent in 2013 to approximately 5.1 million, following a 10 percent gain expected for all of 2012. He predicts that the median existing-home price should rise just over 4 percent in 2013, after rising more than 7 percent in 2012.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

 

Posted by: tracycanningblog | December 21, 2012

Fla.’s housing market continues upswing in November

Closed sales, pending sales, median prices and average prices rose in Florida’s housing market in November, while the inventory of homes and condos for sale shrunk, according to the latest housing data released by Florida Realtors®.

“The sizzle is back,” said 2012 Florida Realtors President Summer Greene, describing the state of Florida’s real estate market. “With home sales strongly trending up and the supply of homes for sale drying up, the market is hot. And we expect these trends to continue into 2013 with the jobs market improving, low mortgage rates continuing and consumer confidence getting stronger.” Greene is regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale.

Statewide closed sales of existing single-family homes totaled 17,072 in November, up 24.4 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 45.8 percent over the previous November. The statewide median sales price for single-family existing homes in November was $150,000, up 11.2 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in October 2012 was $178,700, up 10.9 percent from the previous year. In California, the statewide median sales price for single-family existing homes in October was $341,370; in Massachusetts, it was $287,000; in Maryland, it was $239,802; and in New York, it was $209,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that 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.

Looking at Florida’s year-to-year comparison for sales of townhome-condos, a total of 8,079 units sold statewide last month, up 18.3 percent compared to November 2011. Meanwhile, pending sales for townhome-condos in November increased 30 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $112,000, up 23.1 percent over the previous year. NAR reported that the national median existing condo price in October 2012 was $177,500.

The inventory for single-family homes stood at a 5.1-months’ supply in November; inventory for townhome-condo properties was at a 5.3 months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“Particularly striking in this market is the degree to which prices have risen,” said Florida Realtors Chief Economist Dr. John Tuccillo. “This might be expected to be the case for median prices as investors absorb the inventory at the lower end of the market, but average prices are up dramatically as well – and that suggests we’re seeing real appreciation occur in the marketplace, another sign of how solid Florida’s real estate recovery has become.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.35 percent in November 2012, down from the 3.99 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the November report. Or go to Florida Realtors Media Center (http://media.floridarealtors.org/ and download the November 2012 data report PDF under Market Data.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

Posted by: tracycanningblog | December 8, 2012

Improving markets surge 60% in Dec.

The number of housing markets considered “improving” in the National Association of Home Builders (NAHB)/First American Improving Markets Index (IMI) surged by 76 – to a total of 201 metros – in December. The number of states (plus the District of Columbia) represented by at least one metro increased from 38 to 44.

For the index to consider a city “improving” for the index, it must have shown growth from its respective trough in housing permits, employment and house prices for at least six consecutive months.

While the list grew by 76, a total of 84 new metros were added. The number was offset by eight cities that dropped off the list, though none were in Florida.

“The big gain in improving markets this December indicates that key measures of housing and economic strength have now been holding steady or improving in metros across the country for six months or more, which is an important signal of stability amidst the slowly emerging recovery,” says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “The main thing that’s limiting progress … is difficulty that potential buyers continue to experience with overly tight mortgage qualifying standards.”

The index has improved for four consecutive months, and over half the cities are now “improving.”

“In general, we expect the overall housing recovery to continue expanding in 2013,” says NAHB Chief Economist David Crowe. “However, that is absent a major policy change of the kind that some policymakers have been discussing with regard to the mortgage interest deduction.”

The IMI measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas (MSAs). The three indicators are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. An MSA must improve in all three measures before it’s included on the improving markets list.

A complete list of all 201 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in December, is available at www.nahb.org./imi.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

 

Posted by: tracycanningblog | November 25, 2012

Biggest mortgage servicers and lenders

According to Mortgage Daily’s third quarter report, residential originations rose 11 percent since the second quarter. Total mortgage production hit $475 billion. HARP 2.0 activity helped boost the third quarter numbers.

When comparing lenders, individual market share was a little less concentrated at the top during the third quarter. However, business improved since the second quarter, and, according to Mortgage Daily, the uptick should hold at least through 2012. It predicts fourth quarter results will mirror the uptick seen in the third quarter.

“The servicing landscape is undergoing a transformation,” the company says in a release.

FHA loans accounted for about 13 percent of third quarter originations, a slight decline from the 14 percent in the second quarter. Fannie Mae and Freddie Mac were responsible for around 74 percent of third quarter activity compared to 73 percent in the second quarter.

While the five biggest lenders had the same rank in originations that they did in the second quarter, all but Quicken Loans and Bank of America saw a decline in market share. Combined share for the top five was 53 percent; in the second quarter, the top five had a 54 percent share compared to 54 percent in the second quarter.

Biggest Q3 lenders
1. Wells 29.3 percent
2. Chase 10.0 percent
3. USBank 4.5 percent
4. BofA 4.5 percent
5. Quicken 4.2 percent

PennyMac achieved the biggest increase from the second quarter, then Stonegate Mortgage, United Shore Financial Services and Quicken. Fifth Third had the worst performance.

Compared to the third-quarter 2011, PennyMac had the biggest gain. Next were Stonegate and United Shore. The worst record was Ally Financial’s.

A shakeup in progress is likely to significantly alter the biggest servicer lineup. Ocwen Financial plans to acquire Homeward Residential and ResCap mortgage assets. Nationstar Mortgage and Walter Investment each reported servicing rights of at least $500 billion in their acquisition pipelines.

Biggest mortgage servicers at the end of the third quarter
1. Wells Fargo
2. BofA
3. Chase
4. Citigroup
5. USBank

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

Posted by: tracycanningblog | November 12, 2012

Survey: More renters think it’s time to buy

Americans show growing confidence that home prices will increase over the next 12 months, according to results from Fannie Mae’s October 2012 National Housing Survey.

At the same time, consumers expect an even higher surge in rental prices, suggesting that more renters may be motivated to jump into the real estate market in the coming months, survey authors say.

“This has been a year of steady growth in the percentage of consumers with positive home price expectations,” says Doug Duncan, senior vice president and chief economist of Fannie Mae. “Increasing household formation, encouraged by an improving labor market, is adding additional momentum to the housing recovery and putting upward pressure on rental price expectations. Expected increases in both owning and renting costs may encourage more consumers to buy and add further strength to the housing recovery already under way.”

In October, survey respondents, on average, expected home prices to increase 1.7 percent in the next 12 months. The share who said home prices will decrease in the next year dropped to 10 percent – 13 percentage points lower than October 2011 and the lowest level since the survey’s inception in June 2010.

The percentage of respondents who believe mortgage rates will go up climbed 4 percentage points to 37 percent following a steep drop in September. Respondents’ average rental price expectation jumped by 0.8 percent to 3.9 percent, and 50 percent believe home rental prices will rise in the next year – a 3 percentage point increase over last month and the highest level since the survey began.

Survey highlights

Homeownership and renting
• Consumers’ average home price change expectation edged up slightly to 1.7 percent.
• Ten percent of those surveyed say that home prices will go down in the next 12 months, a 13 percentage point decrease since October 2011.
• After a sharp drop last month, the percentage who think mortgage rates will go up rose 4 percentage points in October to 37 percent.
• 72 percent of respondents say it’s a good time to buy, while 18 percent say it’s a good time to sell.
• The average rental price expectation increased by 0.8 percent to 3.9 percent.
• 50 percent said home rental prices will go up in the next 12 months, a 3-percentage point rise over last month.

The economy and household finances
• The percentage who expect their personal financial situation to get better over the next 12 months remained level at 43 percent.
• 19 percent of respondents said their household income is significantly higher than it was 12 months ago, a slight increase from last month’s total of 17 percent.
• Household expenses remained stable over the past month, with 56 percent responding that their household expenses stayed the same compared to 12 months ago.

Source: Florida Realtors   Reprinted with permission. Florida Realtors® All Rights Reserved

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