Great News for 

Home Prices!!

Home deliquencies are down in the majority of the country.  New England is a major exception. 

Deliquency translates into sellers behind in monthly mortgage payments.  These payments could be 1st Lein Home Mortgages and/or 2nd Lein/Equity Line Mortgages.  

Serious deliquent is typically defined as home owners that are 6 month or more behind on making timely mortgage payments.  Thus the 45% reduction in Virginia of home owners seriously delinquent translates in to substancially smaller pool of home owners that will be foreclose upon or seek to sell his/her home as a short sale.

If a home is in a market with sharply lower deliquencies, the values of the home rises.  Any market tends to rise as the drag of short sales and foreclosures on home prices lessens.

It is safe to say, in most of the country, the drag of short sales and foreclosures has lightened quite substancially.

Thus, your home's value is moving up again!!! 

It may seem never too soon to you.  Yet, in the big picture, this reduction in Serious Deliquencies bodes well for 2014 home prices and home sales.

Foreclosures Down for the Count??

Foreclosures in the news again!!

Yet, it is good news for home owners this time!  Foreclosures continue to decline both as a percentage of listed homes and of homes under contract.  The same is true for homes knows as a "Short Sale" in which the home owner owes more than what he/she can sell the home for in the present market.

With the continuing improvement in values caused by increased buyer activity(hoping to get the lowest rates before they go up) and the housing shortage,   you can expect fewer foreclosure filings and fewer foreclosure as time goes on.

Enjoy an encouraging read:

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Hampton Roads foreclosure rate dipped in June

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By Sarah Kleiner Varble
The Virginian-Pilot
© July 11, 2013

VIRGINIA BEACH

The Hampton Roads real estate market on Thursday got a double dose of good news as it lumbers toward recovery.

The percentage of sales that were either foreclosures or short sales – a segment that’s collectively considered “distressed” – dropped to a three-year low across the region, according to the Real Estate Information Network, a Virginia Beach-based multiple listing service.

And the median price of existing homes sold in South Hampton Roads in June leapt 10.6 percent to $219,500, up from $198,500 in June 2012, according to REIN’s data.

It was the largest year-over-year increase in any month since the market began to recover early last year.

Vinod Agarwal, a professor of economics at Old Dominion University, said he is “cautiously optimistic” that the local recovery is picking up steam but that it’s too early to say whether June’s figures were an anomaly or the start of a trend.

“It’s only one month,” Agarwal said.

The share of distressed sales in Hampton Roads is still significantly higher than it was before 2008, Agarwal said.

The percentage of sales of existing homes that were distressed in June dropped to 22.8 percent – the lowest it has been since June 2010, when it was at 20.8 percent.

“Once it comes down to about 10 percent or below, the effects of distressed sales would become insignificant,” Agarwal said, meaning median prices likely will climb.

Ideally, the share should decrease to 5 percent or below, he said.

Otherwise, the housing market continues to show signs of improvement, Agarwal said.

Median prices were up significantly in June, and sales volume in South Hampton Roads increased about 6 percent year-over-year.

The number of days a home spends on the market dipped to 83 – the lowest level since September 2010.

A statement from REIN said economists partly are attributing a spike in activity to the recent increase in mortgage rates, which spurred some fence-sitters to buy out of fear that rates would climb even higher.

Sarah Kleiner Varble, 757-446-2318, sarah.varble@pilotonline.com

Another Voice-CNN Update on Housing

Home prices: Biggest rise in more than 2 years

By Chris Isidore @CNNMoney November 27, 2012: 10:07 AM ET

Home prices are up for the 2nd straight quarter, the biggest year-over-year increase in more than two years.

NEW YORK (CNNMoney) -- In another sign of a housing market rebound, home prices posted the biggest percentage gain in more than two years in the third quarter, according to the closely followed S&P/Case-Shiller index.

The 3.6% increase from a year earlier is more than three times the rise in the previous quarter and was the biggest jump in prices since the second quarter of 2010. But that 2010 rise was much more of a temporary blip caused by a homebuyer's tax credit of up to $8,000 on homes purchased in late 2009 and early 2010.

This latest rise comes as the housing market has shown numerous other signs of recovery in recent months. The rebound is spurred by a combination of record low mortgage rates, an improving jobs market and a drop in foreclosures to a five-year low, reducing the supply of distressed homes available. There is also a tighter supply of both new and previously owned homes on the market.

The improvement in housing market fundamentals have helped to lift the pace of both home sales and home building.

Dean Baker, the co-director of the Center for Economic and Policy Research who was one of the earliest economists to warn about the housing bubble and the trouble that lay ahead, said this recovery in the housing market should lead to some sustained housing price increases in the coming years.

"I've been an optimist as of late," he said. "Some think it'll get back to bubble prices and that's crazy. But we'll probably do better than inflation for the next few years, and people who have been underwater on their mortgage will get out from that, and build some equity."

The latest rise in the Case-Shiller index was the second straight quarter of year-over-year improvement, while the monthly annual reading has climbed for four months in a row, with six straight month-over-month increases.

"With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

The increases are widespread, with only two of the 20 cities tracked by index -- Chicago and New York -- showing modest price declines from a year earlier. The biggest rise was in Phoenix, one of the cities hardest hit when the housing bubble burst. Prices there in September were 20.4% higher than a year ago.

"Home price gains are becoming more widespread across cities, and some of the largest rebounds have been in areas that were most heavily affected during the initial housing slump," said Cooper Howes, an economist with Barclays Capital. "We expect this trend to persist into next year as part of a broad-based housing recovery that includes starts, sales and prices"

Home prices are now back to where they were in early 2003, before the housing bubble inflated over the next three years before bursting. Even with the recent gain, the national index is down 28.6% from the peak level reached the first quarter of 2006.

 

Housing...Market Savior!!!!!

As been frequently noted in this blog(how did I know?) and Jim's Mortgage Update, the housing market has strengthened throughout 2012.  Only given areas of the country(like Northeast) are still suffering depressed values....most of us are seeing upperward pressure on prices.

So now, in Jim's notes, you will see the terms "Savior" attached to the housing industry as relates to the U.S. economy as it struggles with mortgage financing restrictions and uncertainty on the budget agreement.   It was bound to happen....good things are continuing to happen!!!

Read and enjoy.  Question and contradict(is so inclined).















Keeping you updated on the market!

For the week of
November 19, 2012



MARKET RECAP


All the hype and hoopla that centered on shadow inventory and its ability to depress the housing market earlier this year seems a little overdone in retrospect.

Indeed, shadow inventory has almost become a non-issue these days, and heading into 2013 it will likely become even less of an issue. We say that because the Mortgage Bankers Association reports mortgage delinquencies hit a four-year low in the third quarter. At the same time, the foreclosure inventory rate fell 20-basis points, posting the lowest quarterly drop since the MBA began surveying the market.

The delinquency and foreclosure trend has actually been on the decline since peaking two years ago. We expect it will continue to decline through 2013, and very likely beyond.There are a number of reasons we think distressed properties won't spoil the recovery.

For one, negative equity is declining. Zillow reports that negative equity declined 30% in the third quarter of 2012, the largest percentage decline Zillow has ever reported.

The decline in negative equity is the corollary to rising home prices. Over the past year, we've continually, and almost without fail, reported on rising home prices. Keeping the streak alive, we report this week that Zillow's data show home values rose 1.3% in the third quarter compared to the second quarter, with the national median home price rising to $153,800.

A dearth of inventory will keep home prices rising, and thus further reduce the negative-equity overhang. New-home inventory is at record lows. The National Association of Realtors will report existing-home inventory next week, and most industry watchers are expecting inventory levels will be down sharply year over year in October. Low supply plus rising demand equals rising prices.

The current interest-rate environment should continue to ensure a minimum level of demand going forward. We are all aware that mortgage lending rates are at multi-decade lows, and that's unlikely to change through 2013.

Underwriting is the more pressing issue these days. Lending standards remain tight, particularly with lower-rated borrowers. A less diverse lending environment is one reason they remain restrictive. Private investment has yet to return in mass following the financial-sector meltdown in 2008.

Risk aversion is another reason. Lenders are rightfully concerned with the costs Obamacare will impose on the economy next year. They are also concerned with the fiscal cliff, which would mean tax-rate hikes and spending cuts. It also appears more likely that Europe could fall into recession. If that occurs, the probability rises that the United States could fall into recession too.

The fiscal cliff is the most oppressive concern these days. Democrats and Republicans have attempted to pound out various compromises. We've heard some chatter that the mortgage income tax deduction is on the table. One bipartisan plan would limit the deduction to $25,000 worth of mortgage interest annually. Other proposals include eliminating the deduction for taxpayers earning $250,000 or more, ending the deduction on second homes, and even ending the deduction entirely (this last option is unlikely).

In short, there is a heckuva lot of uncertainty in the financial markets today. Until some of the uncertainty is removed, we can expect mortgage rates to remain low, but we can also expect for underwriting standards to remain elevated.

Economic Indicator Release        Date and Time        Consensus  Estimate            Analysis

Existing Home Sales(October)    Mon., Nov. 19,     4.8 Million(Annualized) Important.sales momentum, but
                                                  10:00am,ET                                               the trend is being held in check
                                                                                                                     by low inventory.


Home Builder Index(November)Mon., Nov. 19,      42 Index                       Important. Strengthening
                                                 10:00am, ET                                               demand and new construction 
                                                                                                                    projects continue to lift builder
                                                                                                                    sentiment


Housing Starts(October)           Tues., Nov. 20,       835,000 (Annualized)    Important.The surge in starts
                                                8:30 am, ET                                                  points to housing as a leading
                                                                                                                     economic driver in 2013.

Mortgage Applications              Wed., Nov. 21,       None                            Important.Applications spiked
                                                7:00 am, ET                                                 on the return of Northeast
                                                                                                                    borrowers, but week-to-week
                                                                                                                    purchase activity remains
                                                                                                                    volatile


Housing as Savior

Times certainly change. Until early this year, most pundits and commentators were lamenting how housing was a drag on the economy. No more, housing is now looked at in many circles as the savior that will get the economy going. The great investor Warren Buffett, for one, sees housing growth stimulating the economy (and he is investing in housing and banking accordingly).

While its growth has been far from parabolic, housing has been the one constant this year. Equity markets, commodities, Europe, and our own domestic economy have displayed fits of volatility and stagnation. Housing in contrast, has continually pushed forward.

This is very good news, and better than most people appreciate. Residential fixed investment accounted for 0.33% of one percentage point of GDP growth (a sixth of its growth) during the third quarter of 2012, up from 0.19% in the second quarter, and up from 0.03% in the year-ago quarter. Housing is obviously a big contributor to economic growth.

Housing is also a big contributor to consumer confidence. Many people don't understand the stock market or the European debt crisis or the fiscal cliff, but everyone understands housing. As housing goes, so goes consumer confidence. Considering the direction housing is going, that's a strong positive indicator of how things could go in 2013.

Have You Missed the Housing Recovery???

As always, Jim Beloit's Mortgage Matters will get you thinking!!    A matter that has been discussed
fully in my blog, news reports and other platform is tightness in financial markets.   Qualified buyers without out hefty down payments or slightly less than stellar credit(guessing Jim is talking under 660 as that seems to be the magic credit score now needed) are being left out of the market.

He restate a National Assoc. of Realtor study that shows only 32% vs typical 45% of first time home buyers have a shot at buying a home right now.  And this is the best time ever to buy a home.

Prices  have improve but aren't in most parts of the country and specifically here in Hampton Roads have not recovered to pre-2008 levels.  So bargains are plenty.  Add historically low 3.5% mortgage money, we should have a very robust housing market.  But as noted the banks aren't in an environment which
encourages them to lend as broadly as they might to qualified buyers that just fall outside the 'stellar buyer' profile.

Read the comments on the silver lining from Sandy!!  Love to hear your thoughts...especially if you live in New York/New Jersey or have family there!

Keeping you updated on the market! For the week of  November 5, 2012 MARKET RECAP “Dog bites man” has been a leading theme as we head toward 2013. By that, we mean we continually report on improving home prices; to the point where home prices are almost no longer longer news. We say “almost,” because after years of reporting on falling prices, we still have a ways to go on the upside to balance the scales. The latest price data from S&P/Case-Shiller added more weight to the rising-price side. Case-Shiller's data show home prices edged up 0.9% month-over-month in August for 19 of the 20 cities it follows. Case-Shiller's data continue to affirm the positive price-trend data issued by other popular pricing providers, such as Zillow, Fiserv, and CoreLogic. Speaking of CoreLogic, its latest data release shows continued improvement in distressed properties. CoreLogic reports that completed foreclosures posted at 57,000 in September, down from 83,000 a year earlier and slightly lower than the 59,000 foreclosures reported in August. Improved pricing and greater demand, which have enabled more short sales, are allowing more underwater borrowers to escape their obligation without foreclosure. The downward trend in foreclosures, along with a gradual clearing of the shadow inventory and rising home price, leave little doubt that we are in the midst of wide-spread housing recovery. Of course, ulta-low mortgage lending rates have aided the recovery in no small measure. Rates today continue to hold their lows (though they haven't been setting new lows lately). Today, the concern, if not the lament, among housing-market participants is credit availability. Last week, we reported on the Mortgage Bankers Association lament that too many qualified borrowers are not getting their loan. Overly strict lending standards, in short, are retarding the speed of the housing recovery. Most of us know that credit availability is a chief concern among first-time home buyers, many of whom lack strong credit scores or large down payments. This segment usually constitutes 45% of the overall home-buying market, but today it's down to 32%, according to the National Association of Realtors. There is still too much uncertainty in the market for lenders to venture farther out on the risk curve. Impending new regulations have lenders understandably nervous. The new regulations will determine risk held by lenders, as well as down payment required for borrowers. To be sure, we need to balance regulation with access to credit, but that's a fine balancing act. What's more, it's not a constant act. The system must be sufficiently flexible to meet market demand.  The good news is that the purse strings show signs of loosening. A recent survey by the Federal Reserve shows that banks, on net, are reporting easing lending standards. (The survey encompasses all forms of credit, not just mortgage.) We think we will see a less restrictive mortgage market in 2013. Economic growth and job creation are expected to improve next year. An improving economy leads to more liberal lending policies and more accommodating regulation. Economic Indicator Release Date and Time Consensus Estimate Analysis Mortgage Applications Wed., Nov. 7, 7:00 am, et None Important. The trend in purchase applications continues to point to higher home sales. Consumer Credit (September) Wed., Nov. 7, 3:00 pm, et $10 Billion (Increase) Important.Rising credit use is reflective of rising consumer confidence. International Trade (September) Thurs., Nov. 8, 10:00 am, et $45.1 Billion (Deficit) Moderately Important. A slight uptick in domestic demand for foreign goods is reflective of economic growth. Import Prices (October) Fri., Nov. 9, 8:30 am, et 0.5% (Increase) Moderately Important. Prices remain subdued and non-inflationary. Uncreative Destruction Hurricane Sandy swept through 12 U.S. states this past week, causing wide-spread flooding and an estimated $10 billion to $20 billion in potential losses, according to research firm Capital Economics. That means a lot of money will be earmarked toward home repairs and new-home construction. Some commentators have viewed this as a silver lining. To be sure, more money spent on housing will help the housing sector, but there is an unseen and a frequently neglected opportunity cost: Money spent on housing is money that could have been spent elsewhere. A natural disaster means money must be spent to replace what already existed; that's money that could have been spent on other goods or services or investments. This lost opportunity to spend elsewhere is what the 19 th century French economist Frederic Bastiat referred to as “the unseen.” Yes, we can see more money being spent on housing, but we can't see where it would have been spent had there been no hurricane. In other words, Hurricane Sandy will provide a boost to housing, which is our gain, but that doesn't translate into a boost to the overall economy because of the lost opportunity to spend elsewhere. The point we want to emphasis is that it's always worth considering Bastiat's the unseen. The seen in housing is improving sales and pricing, but the unseen is what the housing recovery could be if it were unhampered by the exclusion of unfunded qualified borrowers. This unseen is our loss.

SEE THE NEWS: MARKET IMPROVING

Stripped from the headlines....okay it was buried in the business news section on June 13th 

Yet another epistle of great news that the Real Estate Market is Turning Around!!!   The trends are positive:

   Rates below 4%

   Foreclosures and Short Sales down

   Home Values Improving!!!

Thank you, Josh Brown for getting the word out!

Region’s home sales and prices rise as foreclosures decelerate

By Josh Brown

The Virginian-Pilot

   Home sales rose in South Hampton Roads in May and prices ticked up after months of easing foreclosures, according to a report released Tuesday.

   The Real Estate Information Network, a Virginia Beach-based multiple-listing service, reported that 1,208 existing homes sold last month, up 5.5 percent from May 2011. Meanwhile, the median price was $198,000 in May, up 4.8 percent from a year earlier, the listing service reported.

   The report was more good news for the housing market, which in recent years has struggled to gain solid footing. May marked the third consecutive month of year-over-year increases in median existing home prices. The median is the point at which half of all sale prices were higher and half were lower. Until March, year-over-year median prices had not risen in South Hampton Roads since November 2010.

   D i st ressed s a les , which have played a major role in Hampton Roads in recent years, have been sliding as a percentage of all homes sold in recent months. Last month, foreclosures and sales by homeowners whose homes were worth less than their mortgage balances – known as short sales – accounted for 26 percent of all sales, down from 31 percent a year earlier.

   Foreclosures and short sales as a portion of all sales reached a high of 42 percent in March 2011.

   Last month, the number of homes for sale across the region rose to 11,802 – up slightly from April but down 18 percent from a year earlier, according to the report.

   Josh Brown, 757-446-2318, josh.brown@pilotonline.comt

Really..Rent rather than Buy???

Finally back from a bit of vacation in lovely Hawaii...tough to come back!!!

As I review emails, I saw a recent update from Jim Belote.  I have regularly shared his "Mortgage Matter" updates as they provided another view of the real estate market.

In reading the update, Jim starts with noting continued growth in sales(new home starts) and trend for improved market.  Yet, the ending paragraphs speak of Warren Buffet(whom I highly respect) and of another voice saying,"I would buy a bunch of homes and rent them out" or "foreclosures should be turned to rentals"...my paraphrase!

If you are an investor, as Buffet is, this is a very rational statement.  With rates low, prices competitive and an inventory of foreclosures, it is a prime time to build a rental inventory.  

Yet, if you are wavering between buying and renting, this very same scenario yells "BUY".   Renting will always benefit the investor but not a tenant...no tax benefit or improvement of life benefit living in someone else's house.

So please see the kernels of truth in this wonderful update:

If an investor, 

                     BUY NOW THE MARKET IS PRIME!

If home owner or one who desires to own an home,

                     BUY NOW...MARKET IS PRIME! 

Keeping you updated on the market! For the week of  March 5 , 2012 MARKET RECAP Home sales have developed a positive up trend in the past six months, and it appears that trend will be sustained at least into the near future. The pending home sales index rose 2.0 percent in January to hit 97, the highest reading in nearly two years. New contract signings were particularly strong in the South, which posted an impressive 10.5-percent gain. The good is that the rest of the country isn't lagging far behind: national year-over-year contracts are up 8.0 percent. Lower prices are an obvious factor in driving sales volume. While lower prices drive demand, they also reduce supply. Home supply has been dropping nationally for some time now, though concrete numbers are tough to gauge given the uncertainty over the hidden inventory of foreclosed properties. The estimates we've seen on these shadow homes range between two million to four million nationally. Whatever the actual numbers are on distressed properties, it appears many markets have already reached peak saturation, which means levels should begin falling. According to analysts at Clear Capital, Atlanta and Tuscon, Ariz. are two regions likely to see a drop in REO properties during the year. We wouldn't be surprised to see similar prognostications forthcoming for Las Vegas, Phoenix, and Central California. The fact markets are reaching an REO saturation point is one sign that housing is reaching a tipping point. Affordability is another. In many parts of the country, affordability is at a multi-decade high. We've been preaching over the past year that residential real estate is the investment for the next decade. We stand by our exhortations. Unfortunately, many potential buyers still feel otherwise. They are weary of catching a falling knife; that is, buying a property that will continue to depreciate. Falling knives were a very real concern three years ago; that's not the case today. Yes, home prices nationally could continue to fall, but you always have to look past national numbers to the local market – many of which are rebounding. Mortgage rates are another reason we like real estate. Rates continue to skim along a 60-year low. But the economy is improving – GDP posted a better-than-expected annual 3.0-percent growth rate for the fourth quarter of 2011. What's more, job growth has accelerated and unemployment has dropped. In other words, rates are unlikely to go much lower. Costs associated with mortgages could go higher, though. The buzz on the new HARP 2.0 is growing louder and attracting many underwater borrowers keen to refinance. The buzz will grow even louder over the next month as interest intensifies. Rising loan demand tilts the table toward lenders, so we think its prudent for potential buyers to not wait and to take advantage of what remains a very low-cost mortgage financing market. Economic Indicator Release Date and Time Consensus Estimate Analysis Factory Orders (January) Mon., March 5, 10:00 am , et 0.5% (Increase) Moderately Important. Manufacturing continues to lead the economy's recovery. Mortgage Applications Wed., March 7, 7:00 am , et None Important. The rising percentage of purchases to refinances reflects greater interest in leveraged real estate. Consumer Credit (January) Wed., March 7, 3:00 pm , et $10 Billion (Increase) Important. The uptrend in credit use reflects rising consumer confidence and continued economic growth. Employment Situation (February) Fri., March 9, 8:30 am , et Unemployment Rate: 8.3% Payrolls: 208,000 (Increase) Very Important. Continued strong job growth could force the Federal Reserve to rethink its low-interest rate policies International Trade (January) Fri., March 9, 8:30 am , et $48.8 Billion (Deficit) Moderately Important. A depreciating dollar and higher oil prices have raised the deficit over the past two months. The Foreclosures-to-Rental Solution We tend to become more cautious when a theme grips the market. Residential rental property is the hottest theme these days. Even the great Warren Buffett is bullish on rentals, declaring that he would buy a couple hundred thousand single-family homes and rent them, if only he had a way to manage them. Another prominent supporter of rentals, Lewis Ranieri, the co-inventor of the mortgage-backed security, lays out the case in a research paper for using federal entities to support converting foreclosed properties into rentals. According to Ranieri, his foreclosure-to-rental model can be developed in “most every market in the United States,” and thus help clear the distressed-housing overhang. We see a few unintended consequences, though. When markets don't develop organically, there tends to be inefficiency – you get too much or too little of something. Just look at housing six years. The market was incentivized for more home ownership, and we got too much of it. Single-family rental properties are fine, to be sure, but large swaths of single-family rentals might not be. Rents are rising, but they don't always rise. Rents impacted capitalization rates. If rents drop, so will capitalization rates and property values. In addition, renters don't care for properties as well as owners. Could a higher percentage of neglected properties translate into more downward price pressure for owners? All we're saying is that before we ask for something we need to be sure we really want it; unintended consequences can be very costly in the long run.