Thursday, December 31, 2009

HAPPY NEW YEAR! I want to wish you and you’re family a happy, healthy and prosperous new year! Thank you for your support and business!

Monday, December 28, 2009

Interest Rates Predicted to Reach 6%

Daily Real Estate News | December 28, 2009 |

Interest rates are likely to rise to 6 percent by the end of 2010, predicted Amy Crews Cutts, deputy chief economist at Freddie Mac.

The end of the Federal Reserve program that buys mortgage-backed securities will drive rates higher because private buyers will demand more return than the Fed.

"Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it's hard to imagine that the rates can go much lower than they are," Crews Cutts said. "Anything we get at or below 5 percent is a gift at this point."

Source: Washington Post, Dina ElBoghdady (12/26/2009)

Wednesday, December 23, 2009

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Tuesday, December 22, 2009

Report Criticizes Mortgage Program

WASHINGTON – Dec. 18, 2009 – A federal program that has cut mortgage payments for more than 500,000 homeowners since spring is falling well short of what’s needed to fix the nation’s foreclosure crisis, warns a congressional panel’s report out today.

“We’re concerned that not enough foreclosures will be prevented,” said Elizabeth Warren, who chairs the Congressional Oversight Panel for the $700 billion financial bailout program approved last year.

The panel’s report says the government’s mortgage modification program has three key problems:

*The kinds of mortgages that will make up growing numbers of foreclosures exceed the program’s eligibility requirements.

*With a goal of modifying only 25,000 to 30,000 loans a week, fewer than half of the predicted foreclosures would be avoided. One in eight homes are currently in foreclosure or default and 250,000 additional foreclosures are initiated monthly.

*Many modifications so far are still in a three-month trial period. As of Sept. 1, only 1,711 homeowners had received permanent modifications under the federal program. And after five years, many will see higher payments.

“The result for many homeowners could be that foreclosure is delayed, not avoided,” the report says.

Warren noted that the foreclosure problem has moved beyond subprime mortgages and that rising unemployment will cause more foreclosures.

The government’s program “appears to be targeted at the housing crisis as it existed six months ago rather than as it exists today,” she says.

Her panel’s cautionary report follows a more positive assessment Thursday by administration officials.

Under the federal program, the pace of trial modifications now exceeds the weekly pace of completed foreclosures, said Housing and Urban Development Secretary Shaun Donovan.

That means there are more families getting modifications through the federal program each month than families losing their homes to foreclosure, officials say.

“The fact we now have a pace of trial modifications that exceeds the pace of weekly foreclosures is a very important milestone,” Donovan said. “We believe we’ve reached an important turning point.”

Administration officials acknowledge that the start of a housing turnaround could still sour.

“We’re still living with the risk that housing is going to be a source of weakness in the economy,” says Treasury Secretary Timothy Geithner.

Copyright © 2009 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour and Paul Wiseman. All rights reserved.

Saturday, December 19, 2009

More Home Owners Walk Away

Daily Real Estate News | December 18, 2009 |

A growing number of home owners in Arizona, California, Florida, and Nevada—where prices have fallen the most—are walking away from their properties.

They are leaving the deal behind not because they can’t pay but because they don’t want to. A study by researchers at Northwestern University and the University of Chicago concludes that as many as 25 percent of defaults are driven by strategy, not necessity.

If many other people follow suit, “It’s going to be really difficult to prevent a cascade effect," says Paola Sapienza, a professor of finance at Northwestern.

Brent White, an associate law professor at the University of Arizona, points to actions by banks themselves to avoid staying in bad business deals as an example of why homeowners should make a decision "unclouded by unnecessary guilt or shame."

For instance, on Thursday, financial services firm Morgan Stanley announced that it is turning five San Francisco office buildings back over to its lender two years after it purchased them when the market was at its priciest. The buildings are estimated to be worth about half of what Morgan Stanley paid.

“This isn’t a default or foreclosure situation,” spokeswoman Alyson Barnes told Bloomberg News. “We are going to give them the properties to get out of the loan obligation.”

Morgan Stanley is apparently current on the loan, so this is what is known as a “strategic default.”

Some might ask: If strategic defaults are OK for banks, why aren’t they OK for ordinary homeowners?

Source: The Wall Street Journal, James R. Hagerty and Nick Timiraos (12/17/2009) and Bloomberg, Emily Friedlander (12/17/2009)

Friday, December 18, 2009

Home Price Expectations-Will They Rise?

by Phoebe Chongchua
According to a recent fourth quarter survey by HomeGain.com, 72 percent of Realtors believe that home prices will either stay the same (48 percent) or increase (24 percent) in the next six months. Despite that news, the study found that an increasing number of homeowners (41 percent) think that their homes should be listed 10 to 20 percent higher than what is being recommended by Realtors. In the third quarter of this year that figure was down to 38 percent and in the second quarter it was at 36 percent.

But the flip side of the coin shows that 62 percent of buyers think homes are still overpriced. According to the survey, that figure is slightly down from 64 percent in the third quarter but up from first quarter statistics (59 percent).

The national study surveys 1,000 current and former HomeGain Realtor members and was conducted between December 1 to 6. According to the study, 21 percent of those surveyed say that half of their transactions involved a first-time homebuyer. The extension of the tax incentives for buying homes is being credited. (Read my column: Extended Tax Credit for Homebuyers and Homeowners.)

In a statement issued by HomeGain’s Louis Cammarosano, the company’s general manager, said, "The fourth quarter HomeGain Home Prices Survey of Realtors shows that Realtors believe that the first-time homebuyers tax credit has driven sales and stabilized home prices, for now. Realtors, however, expressed concerns about the cost of the credit to taxpayers and whether sales will continue once the credit expires later next year and additional inventory hits the market.” The study also asked respondents “whether they approved or disapproved of President Obama’s performance so far—42 percent approved and 58 percent disapproved, unchanged from the third quarter and down from the second quarter when the President’s approval rating stood at 57 percent.

Another poll, the Rasmussen Daily Presidential Approval Rating Tracking Poll, published on December 11, 2009, stated that, “Overall, 47 percent of voters say they at least somewhat approve of the President's performance. Fifty-one percent (51 percent) disapprove.” Still, respondents remain optimistic about the housing industry, “The vast majority of Realtors expect prices to remain the same or increase in the first six months of 2010,” said Cammarosano.

With more first-time buyers searching the market for homes, everything from short sales to foreclosures is being considered. And for sellers, estimates that as high as one in five of homeowners is underwater are causing them to take a hard look at their financial situation. Some are turning to an informational Web site called PayorGo.com. It offers a calculation service to help make the decision but doesn’t offer financial or legal advice on the site. The site aims to address this question, “Is it in my economic interest to walk away? You decide.

This calculator is just a tool to help. Numerous variables are involved but the biggest is probably your assessment of the future of housing pricing.” Interestingly, buyers may not be capitalizing on all of the available incentives and resources. In an article published in the San Francisco Chronicle in early December, Walter Zhovreboff, the administrative director of the Bay Area Home Buyer Agency (that promotes homeownership) said, "Many cities have adequate funding to assist families here (with down payments) and we're not running out of money. It's phenomenally frustrating." Some cities still offer down payment assistance for low-to-moderate income levels. Many of these loans are known as “sleeper loans” which provide a period where no money is initially needed to be paid toward repayment, then a moderate interest rate is applied and the loan is paid back over many years.

Check with your agent and city for more available resources.

Published: December 18, 2009

Thursday, December 17, 2009

Backlog of foreclosures likely to hold back home prices, report says

FILE - In this Oct. 16, 2009 file photo, homeowners get help from a counselor at the Cow Palace in Daly City, Calif. About 1.7 million homeowners were on the verge of foreclosure in the fall, a looming "shadow inventory" of homes that will be put up for sale in the coming years and weigh down prices, a report said Thursday, Dec. 17, 2009. (AP Photo/Marcio Jose Sanchez, file) (Marcio Jose Sanchez, AP / October 16, 2009)


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Real Estate Agents ALAN ZIBEL

AP Real Estate Writer

4:55 p.m. EST, December 17, 2009
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WASHINGTON (AP) — About 1.7 million homeowners were on the verge of foreclosure in the fall, a looming "shadow inventory" of homes that will be put up for sale in the coming years and weigh down prices, a report said Thursday.

The number, up from 1.1 million a year earlier, is likely to keep rising through the middle of next year or later, said Mark Fleming, chief economist of First American CoreLogic, the real estate research firm that released the study.

Already, the foreclosure backlog is equal to nearly half the 3.8 million unsold new and existing homes currently on the market, First American said.

"We're going to be dealing with high levels of distressed (sales) in the marketplace for at least a couple of years," Fleming said. "It's not just all going to disappear."

Other reports have come up with larger estimates. But FirstAmerican assumes that fewer delinquent borrowers — only about one-third — will wind up losing their homes. It also estimates that nearly 30 percent of bank-owned properties have already been listed for sale.

In many markets around the country, the number of new foreclosures has dropped in recent months as homeowners are reviewed for loan modification programs. But real estate agents, who have seen this as an encouraging sign, still fear that an onslaught is coming.

"We've been in recovery mode for most of the year. How many foreclosures do they have to dump on the market to affect that? I don't know," Deborah Farmer, owner of StarLight Realty in Tampa, Fla. "Any house priced under $225,000 will be affected by a large increase in foreclosures in this market."

__

AP Real Estate Writer J.W. Elphinstone contributed to this report.
Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Related storiesFrom other South Florida sources
Foreclosure backlog estimated at 1.7M|miamiherald.com
Report: S. Florida Home Prices To Drop 30% In 2010|cbs4.com

Wednesday, December 16, 2009

HOA Project Roll-Out

by Richard Thompson RealtyTimes.com

Winter is the time of year that a homeowner association board should be soliciting and reviewing proposals for fair weather renovation projects like painting, fencing, pool replastering, asphalt sealing and roofing. There are several practical reasons for starting the process early:

Contractors are more available. Winter is a slow time for many contractors. This means they have the time to thoughtfully consider your work and produce a good proposal.

Better pricing. Sometimes the work you want done can be performed during the winter months, (even certain kinds of roofing). If you agree to start the project now, you just may save a significant amount of money. When work is slow, many contractors are willing to offer better pricing to "seal the deal."

Scheduling preference. If you accept a contractor's proposal now, you can generally dictate the scheduling. Set the date now. If you wait you may not make the schedule at all.

Arranging for money. If you haven't accumulated enough reserve funds, you will need several months to discuss, approve and collect a special assessment.

Coordination with residents. If the project is extensive and disruptive, you will want to warn residents well in advance. This will give them the opportunity to work around or even plan vacations strategically.

Always get references and check them out. It is important to use only contractors that have a good track record. Make sure the references are for work that is comparable in size and complexity to yours. It is not uncommon for small contractors to get in over their head when trying to nail down work. Feel comfortable that they can deliver what they promise.

Always, always, always use contractors that are properly licensed, bonded and insured to do the work they are contracting to perform. If you have any question about requirements, contact the state licensing board. Use it.

Get named on their insurance. Insist on getting a current copy of the contractor's liability insurance coverage directly from his insurance agent. If you accept the proposal, require that the HOA be included on this insurance as an "additional insured" and get an appropriate and current insurance certificate from the contractor's insurance agent to prove it.

Make progress payments. Do not make advance payments on the project work. This is often the sign of a contractor on a "shoe string" that may be using your money to pay other jobs' labor or supply bills. You could be left high and dry with uncompleted work. Instead, use progress payments that pay for work actually completed. Usually, make no more than one per month and be sure to inspect the work to verify completion.

Consider paying for a Performance Bond. For large and expensive projects, requiring a Performance Bond provides assurance that the contractor will perform, or, another contractor can be hired to finish the job. It costs extra but is often worth it.

Get Lien Waivers. When making payments, have the contractor sign a Lien Waiver for the amount tendered. (Your attorney can provide the appropriate form or ask the state contractor's board for a sample.) A Lien Waiver is the contractor's promise that he has paid (or will pay) all labor, material and supply bills related to the work to date. Keep in mind that if your contractor "forgets" to pay his suppliers or subcontractors, those folks have the right to place a lien on the HOA property to secure their debt. It's a good policy to require copies of all supply, material and labor bills be attached to and referenced in the signed Lien Waiver.

It's also appropriate to have all materials delivered directly to the job site and to pay for materials directly. You will need someone in charge of ordering the material and making sure it's delivered and secured.

For any substantial construction, it is very important to involve an attorney who can draft or review the contract. Don't bypass this important step. There's a lot riding on what the Board is obligating the HOA to.

For more innovative homeowner association management strategies, see Regenesis.net.

Monday, December 14, 2009

Washington Report: FHA Condo Rules

by Kenneth R. Harney
The Federal Housing Administration puts its long-awaited new financing rules for condominium units into operation last week -- immediately affecting sales in hundreds of condo projects across the country.

Among the key make-or-break rules that condo marketers, buyers, lender and realty agents now need to know about are the following:

FHA won't insure mortgages in buildings or complexes where less than 30 percent of the units haven't already been sold.

At least 50 percent of the units in a project must be owner-occupied or sold to purchasers who intend to occupy them.

No individual owner or investor can hold title to more than 10 percent of the units in the entire project.

No more than 25 percent of the square footage of a condo project can be non-residential -- in other words, used for commercial purposes.

No more than 50 percent of the units can have FHA insured financing on them. FHA doesn't want to “concentrate its risk” in any single project.

No more than 15 percent of the units in a project can be 30 days or more delinquent on their monthly payments to the condo association.

Although some developers and in urban areas welcomed the new rules, industry critics say they will actually curtail the availability of low-downpayment FHA financing for many individual buyers. Others say some of the percentage thresholds are off the mark.

For example, Phil Sutcliffe, a national condo financing expert based outside Philadelphia, says he recently had to turn down two condo projects that sought FHA financing - even though both were more than 50 percent owner occupied and pre-sold. The reason: The developers had chosen to rent out more than 10 percent of the unsold units to generate cash flow. But by doing so, Sutcliffe said, they crossed the “single owner” maximum, thereby denying future FHA financing to all remaining units in the building.

“It just makes no sense in this situation,” he said. With no FHA loans available to potential purchasers, “the owners may have to hand back the keys to the bank.”

Andrew Fortin, vice president for government affairs at the Community Associations Institute, which represents condominium, cooperative and planned unit developments across the country, told Realty Times that the 25 percent commercial-use cutoff is “problematic” because many projects have been designed for “mixed use” in urban areas.

Fortin's group also is critical of the new 15 percent delinquency ratio on association dues. Not only is a 30-day delinquency measure “a very arbitrary standard,” he said, but it's also not a good indicator of the association's underlying financial health.

Published: December 14, 2009

Thursday, December 10, 2009

New FHA Guidelines Could Amp Condo Sales

by David Fletcher - Realtytimes.com

"FHA approved" may become the most popular condominium amenity in the United States soon, thanks to the new guidelines established by the FHA to take effect February 1, 2010.

The guidelines addressed the two imperatives facing condominium sales: down payments and the financial integrity of condominium associations. Both are equally important to a condominium recovery.

"FHA approved" used to mean a 3.5% down payment. Starting early next year, "FHA approved" will mean 3.5% down plus a financially stable association approved by your lender. This is huge.

According to Attorney Richard D. Vetstein, who writes the Massachusetts Real Estate Law Blog, the revised FHA Condominium Lending Guidelines include the following requirements:

To qualify for FHA mortgages, associations must:


•Maintain a reserve equal to 10 percent of the annual budget

•Make sure no more than 15 percent of its owners are more than 30 days late with condominium fees

•Allow lenders to review their financials and insurance policies

•No more than 10% of the units may be held by a single investor

•Fidelity insurance must be obtained for 20+ unit projects

•No more than 25 percent of space allowed for commercial use.
"The new FHA guidelines (combined with the almost year old Fannie Mae condominium guidelines) really make it imperative for condominium associations to get their collective acts together with respect to the financial management of the association," counsels Attorney Vetstein. "Condominium boards need to ensure that reserve accounts are adequately funded, condo fee delinquency rates are low and that the association is generally well run financially. If they don’t, they are contributing to a drag on market value for all units due to non-compliance with the new condominium guidelines.

For a new condominium to qualify for FHA financing the following guidelines apply:

Effective February 1, 2010:


•50 percent of the total units must be presold before FHA financing is approved

•50 percent of the total units must be owner occupied

•No more than 10% of units may be held by a single investor

•Unit owners must obtain individual HO-6 insurance policies if the master policy doesn’t cover interiors

•Recertification is required every two years
Projects that received approval between October 1, 2008 and December 7, 2009 will be "grandfathered" and will have to follow the new guidelines’ recertification process .

The marketing benefits are significant:


1.More buyers will enter the market because they can afford the lower down payment.

2.No single investor can purchase more than 10% of the units, so the idea of a controlled association by one or two investors is no longer a threat.

3.More inventory will offer wider choices tending to keep prices in check, as "FHA approved’ condominiums come on line.

4.More real estate agents will be willing to show condominiums to their buyers, because the lender who provides the mortgage will have to approve not only the condo documents, but the condo association’s budget, reserve account and its fidelity insurance policy.

5.New construction developers have the guidelines needed to create urgency in their pricing strategies, which is key to building and maintaining momentum.

6.Commercial lenders will have a more comfortable level with developers. While the 50% presale requirement may look obtrusive, it is actually a benefit to the developer, because it will create urgency for buyers to purchase.

7.Established associations that have dragged their feet to get their finances in order, now have a valid value-based reason to become "FHA Approved."

8.Real estate agents will show FHA approved condominiums with confidence in the association’s finances, not just because the down payment is low.

9.Forward thinking lenders will hustle to become a "an approved lender’ in resale and new communities alike

10.Knowing the property already has approved lenders will make competition for listings tighter and will attract more buyers and more prospects to the listing.
Brokers taking listings in condo communities without FHA financing will be competing with ones that do, making it important for associations to serious consider becoming FHA approved.

First time home buyers are generally thought of as the primary market for FHA financing. There is something to that, but in today’s world, many who bought their first homes years ago and lost them during this recession will appreciate the FHA financing availability even more than those coming out of rentals.

For now let’s agree that the FHA is being responsive and fair by giving new homes developers livable guidelines, associations a tool to become financially stable, and all associated with the industry, hope.

There will no doubt be other changes as the market calls for them "FHA was given a difficult task under the Housing and Economic Recovery Act of 2008 (HERA) to revamp the approval process for condominium projects, and before it established its latest guidelines, invited and was open to industry experts from organizations like the Commuity Associations. "As a result, significant improvements to the initial requirements have been made and dialogue continues between CAI and HUD in an attempt to create regulations that will lead to greater stability in the condominium market," Dawn Bauman, vice president of Strategic Initiatives for the Community Association Institute said. CAI is an organization representing more than 29,000 individual members, 60 local chapters, and the interests of the one in five homeowners living in a community association. For more information visit www.caionline.org.

It’s good to see that the buyer’s interest is represented. It shows. And it will pay off handsomely in the days ahead.

For a complete review of guideline details visit here or contact Attorney Vetstein at info@vetsteinlawgroup.com.

Published: December 9, 2009

Wednesday, December 9, 2009

Refinancing Drives Mortgage Activity

Daily Real Estate News | December 9, 2009 |

Mortgage activity rose last week to the highest level in about two months, mainly from borrowers locking in low mortgage rates by refinancing, the Mortgage Bankers Association said on Wednesday.

Nearly three of every four loan requests last week was for a refinancing rather than a purchase, the industry group said. Total mortgage applications, based on the group's seasonally adjusted market index, rose 8.5 percent to 665.6, the highest since early October.
Demand for loans to buy a home increased by 4.0 percent to 241.5, the highest since the last week of October, while refinancing applications jumped 11.1 percent to 3,185.9 last week to a two-month high, the industry group's indexes showed.

Average 30-year mortgage rates rose 0.09 percentage point to 4.88 percent but haven't moved much from all-time lows.The rate was down from 5.44 percent a year ago and compared with a record low of 4.61 percent set in March, according to the Mortgage Bankers Association.

Source: Reuters, Mortgage Bankers Association (12/9/2009)

Tuesday, December 8, 2009

Real Estate Outlook: Signs of Rebound

by Kenneth R. Harney
Unemployment and foreclosures continue to be huge weights holding back the economy, but housing's performance is just the opposite: Its signs of rebound keep getting stronger and stronger.

Take a look at this week's numbers: Pending home sales rose again for the ninth straight month, up by nearly 4 percent.

Dr. Lawrence Yun, chief economist for the National Association of Realtors, says the combination of tax credits, affordable prices and rock-bottom mortgage rates are “helping unleash a pent-up demand” from tens of thousands of financially-qualified renters and other buyers who'd been glued to the sidelines for months or even years.

Pending sale, where contracts have been signed but closings have not yet occurred, are a key indicator of where we're headed in housing over the coming several months.

The Northeast region led the country this time around -- up by an exceptional 20 percent for the month. In the Midwest, pending sales jumped nearly 12 percent, while in the South they were up by 5 percent.

Only the Western region saw a decline -- a sizable one at 11 percent.

Yun said the strong sales outlook in most parts of the country is beginning to make a real dent in unsold inventories -- now around a seven month supply -- and that sometime in the first half of next year, the housing market should reach a “self-sustaining” point where prices are moving up moderately and demand is strong.

Meanwhile, sales of newly constructed houses nationwide jumped by 6.2 percent in the latest monthly survey by HUD and the Census Bureau. The rate of total sales is now 31 percent higher than it was in January.

Mortgage rates continue to make both new and resale home purchases easier: Thirty year fixed rates declined to just below 4.8 percent on average last week, according to the Mortgage Bankers Association.

Fifteen year rates dropped below 4.3 percent, which is the lowest recorded by the MBA since it began its national rate survey in 1970.

There was even a hint of better news coming on the employment front last week. The consulting firm of Challenger, Gray & Christmas reported that layoffs by employers dropped sharply in November to about 50,000, down from 182,000 in November of 2008.

That's obviously still a lot of people losing jobs, and the unemployment rate is still stuck in double digits, but even the smallest hints of stabilization on jobs could prove to be hugely important for housing and real estate.

Published: December 8, 2009

Saturday, December 5, 2009

Mortgage-Related Fraud on the Rise

Daily Real Estate News | December 4, 2009 |
Mortgage-Related Fraud on the Rise
This year, the FBI expects to track an estimated 174,000 reports of suspicious activity for mortgage-related fraud–a 276 percent increase over 2008.

Hard-hit states like Arizona, Michigan, California, and Nevada have been especially aggressive in fighting this kind of fraud. Sen. John Kyl, an Arizona Republican, has cosponsored a bill that would protect home buyers from fraudulent practices and provide $200 million for states to combat scams. President Obama created a federal task force Nov. 17.

Sometimes it is hard for victims–and law enforcement officials–to tell the good guys from the bad. For instance, an organization called United Law Group has gotten both recommendations from other lawyers and numerous complaints from clients who say they paid United Law thousands and got no help.

The State Bar of California recently placed the attorney who started it, Sean Rugledge, on “inactive enrollment” for alleged misconduct related to loan modifications. A spokesperson in his office blamed complaints about the organization on unresponsive banks.

Source: Christian Science Monitor, Lourdes Medrano (12/02/2009)

REALTOR® Magazine-Daily News-Mortgage-Related Fraud on the Rise

REALTOR® Magazine-Daily News-Mortgage-Related Fraud on the Rise

Friday, December 4, 2009

Nar: FHA Key to Housing Market and Recovery

Daily Real Estate News December 3, 2009

The Federal Housing Administration mortgage insurance program is a critical part of the American housing fabric and has never been more important than it is in today’s market, NAR President Vicki Cox Golder told a congressional panel this week.

Testifying before the House Committee on Financial Services, Golder said that the FHA program is fiscally sound with responsible underwriting, and needs enhancements not radical reform. She urged Congress and the administration to tread lightly before making changes to a program that has a profound impact on economic recovery and serves the nation’s families.

“With the collapse of the private mortgage market, the importance of the FHA mortgage insurance program has never been more apparent. Thus far in 2009, nearly 80 percent of all FHA insured purchasers are first-time homebuyers. And if you take a closer look at the numbers, you’ll see that program is doing exactly what it was designed to do—make more affordable mortgage financing available to homeowners,” said Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

She pointed out that this year almost 50 percent of non-white Hispanic borrowers used FHA insurance or the Veterans Administration’s loan guaranty for home-purchase loans and 21 percent used the FHA or VA program to refinance a home loan. Last year, more than 60 percent of home-purchase loans and about 45 percent of refinance loans to black homebuyers were insured or guaranteed by either FHA or VA.

“As the leading advocate for homeownership and housing issues, NAR knows that without FHA mortgage insurance, our housing market could never start to recover,” Golder said.

FHA’s decline in reserves is in part a reflection of a projected change in home price values, and is not tied to excessive increases in defaults or unsound underwriting practices, she said. In citing the recent FHA audit, Golder said, “If FHA makes no changes to the way it does business today, the reserves will actually exceed 2 percent in the next several years. FHA has sufficient reserves.”

FHA cash reserves and capital reserves give the agency combined assets of $30.4 billion—enough to pay all claims over a 30-year period. Most banks are required to hold reserves sufficient to pay only one year of claims. “REALTORS® strongly believe that FHA is taking the necessary steps to assure its financial solvency,” Golder said.

“We look forward to working with the Department of Housing and Urban Development. We have confidence that FHA Commissioner Dave Stevens will do what’s needed to ensure the financial health and stability of the FHA fund. We encourage FHA to take steps that will have the least impact on FHA borrowers who are such an important part of our housing and economic recovery,” said Golder.

NAR strongly opposes H.R. 3706, the “FHA Taxpayer Protection Act of 2009,” which would increase FHA’s downpayment requirement. The bill would not add anything to FHA reserves but would put homeownership out of reach for many creditworthy borrowers.

“REALTORS® believe that the best way to ensure FHA’s success is to strengthen it,” she said.

Golder also thanked Chairman Barney Frank (D-Mass.) and the committee for passing legislation to extend the higher loan limits through 2010, but urged the committee to make the higher limits permanent. “The higher limits are not just for a few states with high median prices. There are currently 245 counties in 28 states that have high cost limits—this is a national issue,” she said.

Source: NAR

REALTOR® Magazine-Daily News-New Home Sales Rise in October

REALTOR® Magazine-Daily News-New Home Sales Rise in October

Thursday, December 3, 2009

Office construction on hold in Miami-Dade | Florida Real Estate Journal

Monday, November 16th, 2009

MIAMI - Concerns earlier in the year about the effects of new supply on near-term office property performance measures in Miami-Dade County have eased, supplanted by the realization that job losses continue to weaken space demand, according to a fourth-quarter Office Research Report by Marcus & Millichap.

Projected completions for 2009 have been scaled back, as two developments totaling more than 1.1 msf have been delayed until 2010, presumably as a result of tepid pre-leasing.

“In the investment market, a slowdown in deal flow persists,” says Kirk Felici, regional manager of the Miami office of Marcus & Millichap.

Following are some of the most significant aspects of the Miami-Dade Office Research Report:

- Roughly 27,000 jobs are expected to be cut in the county this year, a decrease of 2.6%. Office-using employment is on track to be reduced by 5,900 workers. Total employment contracted 3.4%, or by 36,400 jobs, in 2008.

- With the deferral of two large projects until next year, builders will now complete 600,000sf in 2009. Last year, deliveries totaled 339,000sf.

- As employers continue to eliminate jobs and reduce space needs, the vacancy rate is forecast to climb 390 basis points this year to 15.3% on negative net absorption of 1.2 msf. In 2008, vacancy increased 270 basis points.

- In 2009, asking rents are projected to fall 2.7% to $29.85 psf. Effective rents are forecast to recede 5.9% to $24.07 psf. Asking rents rose 6.1% last year, accompanied by a 2.7% jump in effective rents

Wednesday, December 2, 2009

Uncertainty in Housing Continues as Affordability Hits Recored-High Yet Starts Decline

by Peter L. Mosca Realty Times.com
Nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The HOI showed that 70.1 percent of all new and existing homes sold in the third quarter of 2009 were affordable to families earning the national median income of $64,000, down slightly from a near-record 72.3 percent during the previous quarter and up from 56.1 percent during the third quarter of 2008.

"At a time when housing is at its most affordable, we applaud the recent actions taken by Congress and President Obama to stimulate housing by extending the federal tax credit beyond its Nov. 30 deadline and expanding it to a wider group of eligible home buyers," said NAHB Chairman Joe Robson, a home builder from Tulsa (OK).

"With interest rates now lower than last quarter, the tax credit will encourage even more home buyers to enter the market and help stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices." Indianapolis was the most affordable major housing market in the country during the third quarter, a position the metro area now has held for 17 consecutive quarters. Almost 95 percent of all homes sold were affordable to households earning the area’s median family income of $68,100. Also near the top of the list of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa., and three Michigan metropolitan areas, Detroit-Livonia-Dearborn; Warren-Troy-Farmington Hills; and Grand Rapids-Wyoming.

On the flip side, New York-White Plains-Wayne, N.Y.-N.J., was the nation’s least affordable major housing market during the third quarter of 2009, the New York metro area’s sixth consecutive appearance at the bottom of the list. Slightly more than 19 percent of all homes sold during the third quarter were affordable to those earning the New York area’s median income of $64,800. The other major metro areas near the bottom of the affordability scale included San Francisco; Honolulu; Santa Ana-Anaheim-Irvine, Calif.; and Nassau-Suffolk, N.Y.

At the same time affordability brought good news to the market, nationwide housing production fell 10.6 percent to a seasonally adjusted annual rate of 529,000 units in October. Some attributed the drop to builder hesitance on the pending tax credit extension while others attributed the decrease to an industry that has yet to right itself.

"As of October, the deadline for starting a home that could be completed in time for purchasers to take advantage of the $8,000 first-time home buyer tax credit had come and gone, and builders had no clear sign of whether Congress would extend the credit beyond the end of November," explained Robson. "However, now that Congress has wisely moved to extend the tax credit into next year and expand its eligibility to more buyers, we hope and expect that this will have a substantial stimulative effect on home sales and help keep the housing market solidly on the road to recovery." Single-family housing starts declined 6.8 percent in October to a seasonally adjusted annual rate of 476,000 units, the slowest pace since May of this year. Meanwhile, multifamily housing starts fell by a dramatic 34.6 percent to a seasonally adjusted annual rate of just 53,000 units – the slowest pace on record. Combined starts activity fell across the board in October, with the Northeast posting an 18.8 percent decline, the Midwest a 10.6 percent decline, the South a 9.6 percent decline and the West an 8.5 percent decline, respectively.

"Builders were clearly in a holding pattern in October as the future of the home buyer tax credit hung in the balance," agreed NAHB Chief Economist David Crowe. "That said, significant challenges continue to confront builders with regard to obtaining financing for viable projects and appropriate appraisal values on newly built homes." Permit issuance, which can be an indicator of future building activity, fell 4 percent overall in October to a seasonally adjusted annual rate of 552,000 units, due primarily to a double-digit drop-off on the multifamily side. While single-family permits held virtually flat at 451,000 units, multifamily permits were down nearly 18 percent to 101,000 units.

Regionally, permit activity was mixed, with the Northeast posting no change for the month, the Midwest registering a 2 percent gain, the South posting a 5.8 percent decline and the West posting a 6.7 percent decline, respectively.

[Note: The NAHB/Wells Fargo HOI is a measure of the percentage of homes sold in a given area that are affordable to families earning that area's median income during a specific quarter, www.nahb.org/hoi]

Published: December 2, 2009

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