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Home builders boost prices amid rising rates

Thu, 25 Jul 2013 03:40:36 +0000

Mortgage rates jumped over a full percentage point from May through June of this year, robbing home buyers of much-needed purchasing power. While they have now settled back a bit, they are far from the record lows of the past two years.

“The recent increase in mortgage rates hasn’t slowed demand, as long as home affordability remains high,” noted Bob Walters, chief economist at Quicken Loans. “We are, however, seeing an increased urgency from potential new home buyers as they move to secure today’s historically low rates.”

New home sales jumped more than 8 percent month-to-month in June, but May’s sales numbers were revised sharply lower, and prices, while up from a year ago, are down 11.5 percent from April. That has some housing skeptics less optimistic about the builders’ prospects.

(Read more: Map: Tracking the US real estate recovery)

“Remember, last month on the ‘strong’ but FAKE new home sales print of 476k, home builders rallied, and every bull took a huge victory lap. Today we learned that was all garbage,” noted California-based analyst Mark Hanson. “Bottom line: May was a huge miss. Prices have tumbled as rates surged. And June is suspect because of the huge lower May revision.”

Article source: http://www.cnbc.com/id/100910336

More Homes Are Above Water, But Some Sellers Still Suffer

Thu, 13 Sep 2012 04:56:08 +0000

As home sale prices rise, overall home equity rises, and consequently more and more mortgages are no longer “under water.”

1.3 million homes that were previously worth less than the mortgages on them came back into positive territory in the first half of this year, according to CoreLogic.

Billions of dollars in home equity are returning, but what exactly are homeowners doing with this new found cash? Not much.

They certainly aren’t taking it out of their homes the way they used to. In fact, they are actually putting more cash in during refinances, according Freddie Mac. Lenders say it is becoming nearly the norm.

“I continue to see large cash infusions at closing to pay down to conforming [loan] limits, as well as increases in monthly payments to obtain lower rates on shorter amortizations, both of which are very atypical traditionally, but more and more common in this latest refi market,” said Craig Strent, CEO of Rockville, Maryland-based Apex Home Loans.

As for home sales, the reason so many people cannot move isn’t entirely negative equity, but what’s called “near negative equity,” or having less than 5 percent equity in your home. 10.8 million or 22.3 percent of all residential properties with a mortgage were in a negative equity position at the end of the second quarter of 2012, according to CoreLogic, but an additional 2.3 million borrowers had less than 5 percent equity. (Read More: Pending Home Sales Beat Expectations in July.)

The bottom line is that most move-up buyers, the ones desperately needed for a real robust housing recovery, cannot move if they can’t make enough in the sale not only to cover the mortgage but to cover real estate agent fees, closing fees and of course a down payment on a new home.

Much of the recovery in the housing market of late has been thanks to investors, who are often all-cash buyers and who do not have to sell a home in order to buy another. All that activity on the very low/distressed end of the market is pushing overall prices higher. (Read More: How Investors Are Skewing Home Price Recovery.)

Many Realtors with whom I’ve spoken have said yes, the low end is still on fire, and even the very high end is doing well because high end buyers don’t rely so much on credit. It’s the middle that is still suffering.

But wait! According to CoreLogic’s report, negative equity is concentrated on the low end of the housing market: “For example, for low-to-mid value homes (less than $200,000) the negative equity share is 32 percent, almost twice the 17 percent of borrowers with home values greater than $200,000.”

So with less negative equity in the middle, why is the low end moving and the middle not? (Read More: Where Are the Move-Up Home Buyers?)

Because the low end activity is largely in short sales (when the home is sold for less than the value of the mortgage) and foreclosure sales. That’s also where we’re seeing investors do all the bulk deals. Witness Fannie Mae’s sale of 699 properties earlier this week to Pacifica Group, a real estate investment company. The homes in that deal averaged around $111,000.

The middle of the market is still struggling with near negative equity, not to mention tighter credit the higher the loan value is. The more expensive the home, the bigger down payment you’re going to need to meet today’s tough standards. Home prices are going to have to come back a whole lot more strongly before the middle of the market is able to move again.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49005248?__source=RSS*blog*&par=RSS

More Homes Are Above Water, But Some Sellers Still Suffer

Thu, 13 Sep 2012 04:56:08 +0000

As home sale prices rise, overall home equity rises, and consequently more and more mortgages are no longer “under water.”

1.3 million homes that were previously worth less than the mortgages on them came back into positive territory in the first half of this year, according to CoreLogic.

Billions of dollars in home equity are returning, but what exactly are homeowners doing with this new found cash? Not much.

They certainly aren’t taking it out of their homes the way they used to. In fact, they are actually putting more cash in during refinances, according Freddie Mac. Lenders say it is becoming nearly the norm.

“I continue to see large cash infusions at closing to pay down to conforming [loan] limits, as well as increases in monthly payments to obtain lower rates on shorter amortizations, both of which are very atypical traditionally, but more and more common in this latest refi market,” said Craig Strent, CEO of Rockville, Maryland-based Apex Home Loans.

As for home sales, the reason so many people cannot move isn’t entirely negative equity, but what’s called “near negative equity,” or having less than 5 percent equity in your home. 10.8 million or 22.3 percent of all residential properties with a mortgage were in a negative equity position at the end of the second quarter of 2012, according to CoreLogic, but an additional 2.3 million borrowers had less than 5 percent equity. (Read More: Pending Home Sales Beat Expectations in July.)

The bottom line is that most move-up buyers, the ones desperately needed for a real robust housing recovery, cannot move if they can’t make enough in the sale not only to cover the mortgage but to cover real estate agent fees, closing fees and of course a down payment on a new home.

Much of the recovery in the housing market of late has been thanks to investors, who are often all-cash buyers and who do not have to sell a home in order to buy another. All that activity on the very low/distressed end of the market is pushing overall prices higher. (Read More: How Investors Are Skewing Home Price Recovery.)

Many Realtors with whom I’ve spoken have said yes, the low end is still on fire, and even the very high end is doing well because high end buyers don’t rely so much on credit. It’s the middle that is still suffering.

But wait! According to CoreLogic’s report, negative equity is concentrated on the low end of the housing market: “For example, for low-to-mid value homes (less than $200,000) the negative equity share is 32 percent, almost twice the 17 percent of borrowers with home values greater than $200,000.”

So with less negative equity in the middle, why is the low end moving and the middle not? (Read More: Where Are the Move-Up Home Buyers?)

Because the low end activity is largely in short sales (when the home is sold for less than the value of the mortgage) and foreclosure sales. That’s also where we’re seeing investors do all the bulk deals. Witness Fannie Mae’s sale of 699 properties earlier this week to Pacifica Group, a real estate investment company. The homes in that deal averaged around $111,000.

The middle of the market is still struggling with near negative equity, not to mention tighter credit the higher the loan value is. The more expensive the home, the bigger down payment you’re going to need to meet today’s tough standards. Home prices are going to have to come back a whole lot more strongly before the middle of the market is able to move again.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49005248?__source=RSS*blog*&par=RSS

Fannie Mae’s New CEO: ‘Comfortable’ With Decision Not to Slash Mortgage Balances

Thu, 09 Aug 2012 12:43:20 +0000

Fannie Mae is no longer bleeding cash, at least for now.

After devastating losses since 2008, the mortgage giant reported its second straight quarter of positive net income, even after making a $2.9 billion dividend payment to the U.S. Treasury. Fannie Mae has taken $117.1 billion from the Treasury since the fall of 2008.

Improving home prices and decreasing mortgage delinquencies have helped to boost the bottom line, but Fannie Mae’s CEO Tim Mayopoulos, who took the reigns of the company earlier this summer, says he’s not convinced housing is out of the woods yet.

“I think it’s too early to declare a national housing recovery,”Mayopoulos said in an interview Wednesday on CNBC. “What’s driving our results has been home price improvements. We are not expecting to see huge improvements going forward.”

Fannie Mae reported net income of $5.1 billion in the second quarter of this year, up from $2.7 billion in the first quarter. Foreclosures, however, still weigh heavily on the balance sheet, despite the far higher quality of loans in the new book of business since 2009. 59 percent of Fannie Mae’s single-family guaranty book of business as of the end of the second quarter consisted of loans it had purchased or guaranteed since the beginning of 2009.

Expectations of an improving housing market prompted Fannie Mae to reduce its future loan loss reserves to $68 billion from nearly $77 billion in the first quarter. The company notes in its report that it believes credit-related expenses will be lower in 2012 than in 2011. Mayopoulos, again, seems to hedge that somewhat.

“We are very excited about the new book of business we’ve been writing since the beginning of the crisis. We believe that we could be profitably going forward but it doesn’t mean we will necessarily make enough every quarter to be able to cover the entire dividend payment to the Treasury,” said Mayopoulos, who added that he is very comfortable with where Fannie Mae’s underwriting standards are now, despite criticism from housing industry players who claim credit is too tight.

Mayopoulos expects home prices to bounce around more before finding a solid bottom, and that will in turn keep millions of borrowers, around 11 million by several recent accounts, in a negative equity position, owing more on their mortgages than their homes are currently worth. The Obama administration has been pushing hard for Fannie Mae and Freddie Mac to participate in the government’s program that pays lenders to reduce balances on troubled loans. Last week, however, Fannie Mae and Freddie Mac’s conservator, FHFA director Edward DeMarco, said the mortgage giants would not participate in that program.

“We are comfortable with where Director Demarco came out. We believe that we have the tools here at Fannie Mae to really help homeowners in terms of doing modifications and to help people who are in distress,” Mayopoulos said.

Fannie Mae completed 35,332 loan modifications in the second quarter, down from 46,671 in the previous quarter. It also approved just over 24,000 short sales and deeds-in-lieu of foreclosure, up from just over 22,000 in the previous quarter. Refinances were far higher, with Fannie Mae acquiring 247,000 of those loans in the quarter.

Fannie Mae still has over 109,000 foreclosed properties on its books, despite selling more of them than they took in during the quarter. Its foreclosure rate is falling as are its loan delinquencies, but the legacy losses are still quite large. Fannie Mae has been experimenting with bulk sales of foreclosures as well as bad loans to investors.

As for the future of the mortgage giant, which along with Freddie Mac and FHA accounts for around 90 percent of all new mortgage originations, Mayopoulos said he would leave that to policy makers. Until then, he is somewhat hopeful that Fannie Mae will continue on its own path to recovery.

“We do think over the long term Fannie Mae can have strong profitability and can return a considerable amount of value to taxpayers, but over the next few quarters I think it’s going to really depend on housing prices and other factors.”

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48570817?__source=RSS*blog*&par=RSS

Huge Jump in Housing Starts Does Not Point to Solid Recovery

Tue, 19 Jul 2011 19:52:55 +0000

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How could anyone take pot shots at a nearly 15 percent monthly jump in anything, not to mention housing starts, which have been mired in the mud for ages now?

Apparently pretty easily.

I knew the moment I saw the number that there would be those arguing that any gain in new home construction is a negative because of the already bloated inventory of new, existing and foreclosed properties on the market.

Miller Tabak’s Peter Boockvar provided that: “Bottom line, I repeat again that we don’t need an increase in single family housing starts with a 9.3 month inventory to sales ratio of existing homes, but hopefully the pace of permits will prove the June jump as being an outlier (admittedly, the pace is still extremely depressed). Multi-family is where the housing construction benefits are being seen, and that will be the case for years to come.”

While single family starts were up over 9 percent, it was multi-family driving the train in this report, up nearly 32% month-to-month. We all saw that coming, as rental demand has been surging, and there is not near enough supply in the pipeline. Patrick Newport of IHS Global Insight sees today’s report as highly predictive of housing’s slow slog back.

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Article source: http://www.cnbc.com/id/43809723?__source=RSS*blog*&par=RSS

San Francisco 49ers: Don’t Believe the Hype, Top 5 Lockout-Induced Fabrications

Thu, 30 Jun 2011 21:08:32 +0000

Last but not least, the greatest comeback in the history of the NFL is reportedly taking place in San Francisco.

This overhyped story takes the cake.

I know California is the capital of medical marijuana, but the memory issues in the Bay Area are beyond explanation now.

Alex Smith has played horribly. Regardless of the excuses and besides a couple bright moments, Alex Smith has been awful for six years.

Let’s put this in perspective.

I am a Real Estate guy. If you asked me to sell your home, and I failed, not once, not twice, but six freaking times, would you ask me to return for a seventh?

No you would not. You wouldn’t even ask me back for a second time.

Would it matter to you if I had a bunch of excuses? No.

The bottom line is, you want your house sold.

Well, the 49ers want to win games. And they want a quarterback that will help them do that.

I will admit Alex is doing great as a fill-in coach. I would love for him to play five to seven more years on the 49ers as a backup.

I think he would be the top No. 2 in the league and very helpful for Colin Kaepernick, or whoever for that matter. But make no mistake, Alex Smith is not going to transform into Joe Montana or Steve Young or even Jeff Garcia. He is going to be Alex Smith.

So please, just stop it.

This is Ryan The Broker, signing off for, “Wake Up San Francisco!”

Thanks for reading!

Please join me on Twitter @ryanthebroker.

Article source: http://bleacherreport.com/articles/753473-san-francisco-49ers-dont-believe-the-hype-top-5-lockout-induced-fabrications

Paperwork Issues Still Stall Foreclosures

Thu, 10 Mar 2011 10:44:28 +0000

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Despite the fact that banks claim they are ramping up repossessions again and refiling foreclosure documents, the numbers don’t appear to prove that. Foreclosure filings fell 14 percent in February month to month and fell 27 percent year over year. That is the largest annual drop since RealtyTrac began running the numbers in 2005.

“Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” said James J. Saccacio, chief executive officer of RealtyTrac.

“While a small part of February’s decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures. We expect to see the numbers bounce back, but that will likely take several months. And monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.”

To prove the point, in this month’s report RealtyTrac broke out the numbers by judicial foreclosure states (where foreclosure documents are filed in court before a judge) and non-judicial foreclosure states; the former are where the banks froze most actions, but they are also slowing the process and going over procedures in non-judicial foreclosure states as well.

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Article source: http://www.cnbc.com/id/41998996?__source=RSS*blog*&par=RSS

Fast Forward Property Management Lists Top Six Mistakes San Francisco Bay Area …

Fri, 04 Mar 2011 12:04:48 +0000

Petaluma, CA (Vocus/PRWEB) March 04, 2011

In real estate, as in any business, mistakes can cost time and money. Fast Forward Property Management, a team of seasoned Bay Area Property Management specialists with over forty years of experience, offers advice to property owners to help them become more profitable and efficient.

The following is a list of the six most common mistakes landlords make when maintaining and making repairs to their property:

1.    Overpaying contractors

Contractors can charge whatever they choose for any job. Therefore, to ensure a fair price, it is always advisable to get multiple bids for a project, rather than settling for the first one. To get the best value with contractors it is best to agree on an hourly rate ahead of time and agree to pay at cost for the materials.

2.    Trying to save money by hiring unskilled workers

On the other hand, trying to save money by using unskilled workers can backfire. Genaro Mendoza of Fast Forward Property Management explains, “If you pay someone $15 an hour for a job that takes that person 10 hours to complete, that job cost you $150. If you pay an expert $50 an hour to do that same job, but it only takes him or her 2 hours to complete it, you only spent $100 on work that is most likely of a higher caliber and therefore less likely to require repairs in the near future (which would cost you even more money).” The bottom line comes down to value. A higher rate doesn’t always equal a higher final bill.

3.    Personally Performing Time-Consuming Repairs to Save Money

Landlords with the proper skills can save a significant amount of money on labor by doing construction and maintenance work themselves. In order to save enough money to make this worthwhile, however, the job must be completed quickly. Many owners brag about how much money they saved in preparing a vacant unit for rental, but not all of them do it swiftly, in which case the money saved in labor expenses would have been negated by the weeks of rent lost due to the vacancy.

“If you save $900 by doing the work yourself, but lose $1,400 in rent by not filling the vacancy promptly, you have actually lost income,” .said Mendoza. Most professionals can paint a unit and replace flooring in just a few days, and then the unit can be rented.

4.    Allowing Tenants to do Repairs Themselves

While it is common practice to give a tenant some money off of their rent for making a repair, it exposes landlords to great risk. If someone falls from a ladder or gets injured while hired to do work, and the landlord does not have workers’ compensation insurance for them, then the landlord could be held personally responsible for paying for their medical bills and loss of income.

5.    Not Inspecting Properties Regularly

“We regularly hear stories of owners who have, after a long-term tenant moved out, found extensive damage to a unit that could have been easily prevented,” says Mendoza. “It is essential to inspect units (even the rented ones) regularly so that repairs can be done before further damage is done to your building.”

6.    Deferring Maintenance

Maintenance is a significant expense for most property owners. Some landlords have an “If it’s not broken, why fix it?” mentality, but deferred maintenance will cost more in the long run, as well as lower property value. Additionally, rent in buildings that have areas in obvious need of improvement tends to be lower, and many tenants will move if their landlord will not fix things or keep their units up to date. Few things frustrate tenants more than landlords who do not respond quickly to service requests. Neglecting maintenance to save money now will cost more in the future.

For more information about avoiding mistakes when maintaining and making repairs to property, property management, and other services provided by Fast Forward Property Management, visit them on the web at fastforwardpm.com, call them at 707-266-8100 or 888-737-8116, or visit their office located at 620 E. Washington Street, Petaluma, CA 94952.

About Fast Forward Property Management

Fast Forward Property Management is a property management firm in the San Francisco Bay Area that specializes in managing apartment buildings, HOA, and commercial properties. The staff at Fast Forward Property Management has over 40 years experience in rental management. They serve the Greater Bay Area communities of Sacramento, San Francisco, San Jose, Santa Rosa, and Sonoma County with expert property management services.

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For the original version on PRWeb visit: www.prweb.com/releases/prwebbay-area/property-management/prweb8181488.htm

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/03/04/prweb8181488.DTL