SAN DIEGO REAL ESTATE AGENT BLOG » Economic Stimulus

FORECLOSURE RISES DESPITE ECONOMIC STIMULUS

Michael Carter - San Diego Real Estate Agent — Thu, 16 Jul 2009 23:18:06 +0000

The foreclosure crisis continued to grow in the first half of 2009, affecting more than 1.5 million homes, according to a mid-year report from foreclosure listing service RealtyTrac Inc.

The report cites a 9 percent increase in total properties in foreclosure compared to the previous six months, and a nearly 15 percent increase in total properties facing foreclosure compared to the first six months of 2008.

The report also says that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.

“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” said James J. Saccacio, chief executive officer of RealtyTrac, in a prepared statement.

States with the highest foreclosure rates are:

Nevada
Arizona
Florida
California
Utah
Georgia
Michigan
Illinois
Idaho
Colorado

States with the highest number of actual foreclosures are:

California
Florida
Arizona
Illinois
Nevada
Michigan
Ohio
Georgia
Texas
Virginia

Source: RealtyTrac (07/16/2009)

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

Pending Home Sales Increase

Michael Carter - San Diego Real Estate Agent — Wed, 03 Jun 2009 00:19:19 +0000

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.

Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

Geographical Breakdown

Northeast: The Pending Home Sales Index shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago.
Midwest: The index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008.
South: The index slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago.
West: The index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

NAR President Charles McMillan said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment. Buyers who are wondering about their options should contact a REALTOR, who can advise consumers on the housing assistance programs and resources available in a given area.”

Affordable Housing
NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, which makes it the second-highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Pending Vs. Existing Sales
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.

Existing-home sales for May will be released June 23. The next Pending Home Sales Index will be on July 1.

Source: NAR (06/02/09)

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

HOME SALES ROSE 2.9% in April 09

Michael Carter - San Diego Real Estate Agent — Wed, 27 May 2009 15:32:18 +0000

WASHINGTON (Reuters) – Sales of existing homes in the United States rose 2.9 percent in April, according to an industry survey on Wednesday that supported views the three-year housing recession was near a bottom.

The National Association of Realtors said sales climbed to an annual rate of 4.68 million from a 4.55 million pace in March. That was slightly higher than market expectations for a 4.66 million-unit pace.

“Most of the sales are taking place in lower price ranges and activity is beginning to pick-up in the mid-price ranges, but high-end home sales remain sluggish,” NAR chief economist Lawrence Yun told reporters.

During the month, single-family home sales rose 2.5 percent to an annual rate of 4.18 million, while condos jumped 6.4 percent to a 500,000 annual pace. Home sales were up in three of the four regions.

U.S. financial markets showed little reaction to the data.

“This report seems to offer another piece of evidence that home sales are stabilizing,” said Zach Pandl an economist at Nomura Global Economics in New York.

Housing, which is at the heart of the 17-month old recession, is showing signs of stabilizing. Analysts reckon home sales and groundbreaking for the construction of new homes will probably reach bottom by mid-year.

Plunging home values and rising unemployment are forcing consumers to drastically cut back on spending, a factor seen holding back the economy from a quick recovery once the recession ends.

In April, the inventory of existing homes for sale rose 8.8 percent to 3.97 million. The median national home price fell 15.4 percent to $170,200, compared to the same period a year-ago. That was the second biggest percentage decline on record.

A separate report from the Federal Housing Finance Agency showed prices for U.S. single-family homes fell 7.3 percent over the 12 months ended in March. On Tuesday, the Standard & Poor’s/Case-Shiller survey showed prices off 18.7 percent in March compared to the same period last year.

Distressed properties accounted for 45 percent of all sales in April and NAR’s Yun said these were distorting the median home price.

“Because foreclosed properties will likely be released into the market over the rest of the year, it is critical that distressed homes be quickly cleared from the market,” said Yun.

He also urged the Federal Reserve to help restore liquidity in the jumbo mortgage market to boost sluggish high-end home sales.

A separate report from the Mortgage Bankers Association showed applications for home loans fell to their lowest level since early March as the highest lending rates in more than two months sapped demand for refinancing last week.

By Lucia Mutikani

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

Final score: $8,000 for San Diego homebuyers

David Marasco - San Diego Real Estate Agent — Mon, 23 Feb 2009 14:57:43 +0000

There’s a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama’s signature on Tuesday. San Diego First-time buyers can claim a credit worth $8,000 – or 10% of the home’s value, whichever is less – on their 2008 or 2009 taxes.

A big plus is that the credit is refundable, meaning San Diego tax filers see a refund of the full $8,000 even if their total tax bill – the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns – was less than that amount. But there has been a lot of confusion over this provision. Tom Schein of San Diego wrote to CNNMoney.com asking:

“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”

The short answer? Yes, Billings would get back the $8,000 plus what he’d overpaid. The long answer? It depends. Here are three scenarios:

Scenario 1: Your final tax liability is normally $6,000. You’ve had taxes withheld from every paycheck and at the end of the year you’ve paid Uncle Sam $6,000. Since you’ve already paid him all you owe, you get the entire $8,000 tax credit as a refund check.

Scenario 2: Your final tax liability is $6,000, but you’ve overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.

Scenario 3: Your final tax liability is $6,000, but you’ve underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. San Diego Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Additionally, there are income restrictions: To qualify, San Diego buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)

Applying for the credit will be easy – or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. San Diego Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

By Les Christie, CNNMoney.com staff writer

Mike Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774