Housing supplies steadily declining

Housing supplies steadily declining
New data from Altos Research shows that housing supplies have been steadily declining for the last 16 months. The company says there are 20 percent fewer homes for sale now than there were in 2008. Some fear this decline is because banks have been holding back their repossessed properties, but Altos doesn't expect this so-called shadow inventory to result in a real estate day of reckoning in 2010 as some market observers have warned.Scott Sambucci, VP of data analytics at Altos Research, says the industry won't see any effects from the supply of homes lurking in the darkness until inventory levels pick up. And he doesn't foresee that happening anytime soon, primarily because banks have no immediate motivation to offload these assets from their balance sheets, and are keenly aware that a sudden jump in the number of homes on the market could be detrimental to already-fragile property values. With a smaller selection of inventory, buyers will pay a higher price-the rudimentary concept of supply and demand. Sambucci says he's already seen definite evidence of a price floor in 2009. Home price statistics started out 2010 on a good foot, according to Altos' data, with seven-day moving averages within the company's index bouncing off their lows and starting to tick up. In addition, the number of homes with price reductions and the magnitude of these discounts are diminishing, although Sambucci says that could indicate buyers' willingness to pay more or it could just mean sellers are becoming more realistic about what they can get. Either way, price reduction stats, while still elevated, are moving in the right direction, he says.Altos' researchers expect to see some seasonal bounce back in prices and short-term strength in the coming months as a result of government stimulus, such as the homebuyer tax credit and the last of the Federal Reserve's purchases of mortgage securities. But Sambucci says that momentum will likely fall off toward the latter half of 2010, and any price gains seen this year will be lost as the government programs wind down. Altos Research expects home prices to start 2011 at the same level they are now in early 2010. Sambucci explained that if inventory continues to decline, by next year price points should become more attractive and activity can still be sustained.

Source: DSNews.com, Carrie Bay (01/27/2010)

Mixed messages for home price

Mixed messages for home price

Data through November 2009, released today by Standard & Poor's for its S&P/Case-Shiller Home Price Indices show that the annual rates of decline of the 10-City and 20-City Composites continue to improve, in spite of price declines being measured across many markets during November. This marks approximately 10 months of improved readings in the annual statistics, beginning in early 2009, and is the third consecutive month these statistics have registered single digit declines, after 20 consecutive months of double digit declines. Four of the markets-Charlotte, Las Vegas, Seattle and Tampa-posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and November is now considered their current trough value. On the flip side, there are still some markets that continue to improve month-over-month. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for at least six consecutive months. Looking at the annual figures, four markets-Dallas, Denver, San Diego and San Francisco-have finally entered positive territory, something we really haven't seen in at least two years in most markets. Charlotte, Las Vegas, Seattle and Tampa all reached new low levels in November. For Las Vegas, in particular, prices have declined for 39 consecutive months, with a peak-to-trough reading of -55.6%. It is now just 4% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.

FHA to provide early relief to struggling homeowner

FHA to provide early relief to struggling homeowners

In an announcement Friday, HUD said homeowners with mortgages insured by the Federal Housing Administration (FHA) who are experiencing financial hardship are now eligible for loss mitigation assistance before they fall behind on their mortgage payments.Previously, these homeowners were not eligible for such assistance until after they had missed payments. But the Helping Families Save Their Home Act of 2009 signed into law by President Obama expanded FHA's authority to use its loss mitigation tools for borrowers facing "imminent default." FHA issued guidance Friday to its loan servicers on how to assist these homeowners before they default.According to FHA Commissioner David Stevens, FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options. But now, he says, servicers will have additional options for those homeowners who seek help before they go delinquent, increasing the likelihood that the borrower will be able to retain their home.Effective immediately, the loss mitigation options of forbearance and FHA's Home Affordable Modification Program may be used to assist borrowers facing imminent default. FHA defines a "borrower facing imminent default" to be one who is current or less than 30 days past due on their mortgage obligation, and who is experiencing a significant reduction in income or some other hardship that will prevent them from making the next required payment.Under the agency's forbearance program, the loan servicer can agree to postpone, reduce, or suspend payments due on a loan for a limited and specific time period. FHA-HAMP allows qualified FHA-insured borrowers to reduce their monthly mortgage payment to an affordable level by permanently reducing the payment through the use of a partial claim combined with a loan modification. The partial claim defers the repayment of a portion of the mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off. The remaining balance is then modified through re-amortization and in some cases, an interest rate reduction.The borrower must be able to document the cause of the imminent default, such as unemployment or reduced pay, or a change in household financial circumstances such as a death in the family or serious illness. FHA said loan servicers are required to document the basis for their determination that a payment default is imminent and retain all documentation used to reach that conclusion. The servicer's documentation must also include information on the borrower's financial condition.Source: Carrie Bay, DSNews.com

Lexington South Carolina Market Conditions

Read Recently on Zillow.

Zillow Real Estate Market Reports First Quarter: January-March 2009

U.S. home values continued to slide for the ninth consecutive quarter, declining 14.2 percent from a year ago.

Zillow Q1 Real Estate Market Reports track 161 metropolitan statistical areas (MSAs) throughout the U.S., identifying market trends including, but not limited to: five and 10-year annualized change, negative equity, short sales and foreclosure transactions.

Pricing in Metro Columbia area as follows
Nationwide 14% Decrease over last year
Lexington Showed a 5% Decrease over last year
West Columbia Showed a 3% Decrease over last year
Irmo Showed a 6.5% Decrease over last year
Chapin Showed a 14% Decrease over last year
Gilbert Showed a 5% Decrease over last year

This shows what I am seeing that on the average Lexington area is doing better than the nation in general and is very competitive in the metro area.


Edwin Gerace
www.EdwinGerace.com
www.EdwinGeracesRealestateBlog.com
803-609-SOLD(7653)

HUD Action Allows Home Buyers To Use $8,000 Tax Credit For Downpayments

PRESS RELEASE
May 14, 2009
For Immediate Release
Contact: Russell & Jeffcoat Realtors, Edwin Gerace 803-609-7653


HUD Action Allows Home Buyers To Use $8,000 Tax Credit For Downpayments
On FHA-Insured Loans

HUD Secretary Shaun Donovan's decision to allow consumers to use the $8,000 first-time home buyer tax credit to help cover their downpayment and closing costs on FHA-insured mortgages will be a big boost to the housing market, according to the National Association of Home Builders (NAHB).
"The biggest obstacle for first-time buyers is coming up with a downpayment," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track."
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or "bridge loans" up to the amount of the $8,000 first-time home buyer tax credit.Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buyer would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.

Robson and others NAHB leaders discussed this matter and other housing-related issues with Secretary Donovan last week.