SUNNYVALE (KCBS)— New townhome projects continue at a rapid pace in Sunnyvale, where home construction can barely keep up with demand. The 14 currently under construction probably won’t be empty for long. Home values increased nearly 11-percent nationwide over the last year, but homes in the Bay Area are getting even greater gains.

The Standard Poor’s/Case-Shiller home price index released Tuesday showed that all 20 cities measured by the report posted year-over-year gains for the third straight month.

And prices rose in 15 cities in March from February. That’s up from only 11 in the previous month. The monthly figures aren’t seasonally adjusted and may reflect the beginning of the spring buying season.

• Latest Case-Shiller Survey Results
• DataQuick’s Median Bay Area House Price By County

Prices rose in Phoenix by 22.5 percent over the past 12 months, the biggest gain among cities. It was followed by the Bay Area (22.2 percent) and Las Vegas (20.6 percent).

Niccole Beckerman said her family has been priced out of the Silicon Valley.

“It’s really expensive. My parents were trying to buy a house and it’s really expensive just because the schools are really good,” Beckerman said.

The story is the same throughout much of the Bay Area. According to the San Francisco Association Of Realtors, the median Bay Area price for a single-family home has crossed above the $1 million mark for the first time since 2007.

The Inventory of available homes remains extremely low according to San Jose realtor David Martz. He said there are only about 1,000 homes for sale in a population of nearly two-million people in the greater San Jose area.

“Combined with the fact that we currently have interest rates at an all-time low, it’s possible to get an interest rate close to three percent, which is driving demand, so the buyers are out there in force,” said Martz.

Martz said four out of every five homes that come on the market here receive multiple offers, with prices, in some cases, going up hundreds of thousands of dollars over asking.

Despite the gains, a limited number of homeowners are putting their houses on the market. That’s helped lift home prices. And it’s made builders more willing to ramp up construction. Applications for building permits rose in April to the highest level in nearly five years.

The supply of available homes jumped in April, but was still 14 percent below its level a year earlier.

Stan Humphries, chief economist at Zillow, a real estate data provider, said that the increase in the Case-Shiller index has been skewed higher by cities such as Phoenix and San Francisco. Fewer homes are available in those areas because many homeowners still owe more on their mortgages than their homes are worth. That makes it difficult to sell.

Still, even excluding those markets, home prices are rising steadily nationwide, Humphries said. The increases are “certainly confirmation that the housing market is experiencing a brisk recovery,” he added.

The housing recovery is creating more construction jobs and bolstering the economy in other ways. Higher home prices make homeowners feel wealthier and encourages them to spend more.

Rising prices also encourage more would-be buyers to purchase homes, before prices rise further. They also enable more homeowners to sell homes, by reducing the number of people who owe more on their mortgages than the homes are worth.

Prices have been increasing steadily since last summer. Still, they are about 29 percent below the peak reached in July 2006.

Banks have raised their credit standards since the housing bubble burst and are demanding larger down payments. That’s made it particularly hard for potential first-time buyers to get a mortgage.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Article source: http://sanfrancisco.cbslocal.com/2013/05/28/builders-cant-keep-pace-with-demand-as-bay-area-housing-booms-again/

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Ricardo Rodriguez, a San Francisco resident who has been fighting to save his home from foreclosure, has received some good news from Bank of America. After unsuccessfully applying for at least 10 loan modifications since 2009, Rodriguez was accepted by Bank of America last week for a trial loan modification.

He has made his first payment and will get to stay in his home. If he makes his payments on time during the three-month trial period, he may qualify for permanent loan restructuring.

“We’re just happy we get to keep our house after more than three years of this stuff,” Rodriguez said Monday. He said he is optimistic that he can meet the requirements to make the trial loan permanent.

NBC Bay Area and the Center for Investigative Reporting highlighted Rodriguez’s case in a joint report in April on questionable foreclosure practices in the Bay Area. The investigation found that thousands of homeowners were fighting in court to save their homes from a foreclosure system filled with mistakes, mismanagement and, on occasion, fraud. The report also found that in some cases, Bank of America was skirting proper foreclosure procedures, leaving Rodriguez and other borrowers unsure of the status of their loan modifications or who owned the rights to their home.

When Rodriguez lost his job delivering newspapers in 2011, he had trouble making the payments on his mortgage. He repeatedly applied for loan modifications but said Bank of America lost his paperwork and shuffled him among account managers, despite a state law requiring banks to provide homeowners with a single contact. Rodriguez became fed up and joined a local advocacy group to fight foreclosures in his neighborhood.

Bank of America spokeswoman Jumana Bauwens said in April that the bank previously had worked with Rodriguez and reduced his interest rate to 2 percent, but he was unable to pay the lower amount.

“If even the lowest possible payment is not affordable for a borrower, homeownership may not be the best or most responsible option for them,” the bank said at the time.

Bank of America plays the largest role of any bank in Bay Area foreclosures. From July 2008 through October, Bank of America’s foreclosure trustee, ReconTrust, handled 1 in 5 defaulted properties in the Bay Area, roughly 70 percent more than the next biggest trustee, according to RealtyTrac Inc., a real estate information company.

Article source: http://www.nbcbayarea.com/news/local/Homeowner-Fighting-Foreclosure-Wins-Trial-Loan-Modification-210295101.html

A colleague who was looking to refinance his mortgage to today’s record low interest rates, just told me that he opted instead for a “modification.”

No, he’s not behind on his monthly payments, nor even struggling to make them. He is current, and modifications on current loans have been around for years, though they are increasingly rare and consequently few people know about them.

My colleague’s bank, New Jersey-based First Niagara, allowed him to do the modification to a lower interest rate. Here’s the best part: My colleague had to pay just $500 for his 7/1 Adjustable Rate Mortgage (ARM) to go from 4 percent to 3.125 percent, which is an eighth of a percentage point above the going rate, but still a great move. No principal payment, no new underwriting, no nothing.

I called First Niagara and asked if they do mortgage recasts. The first agent said yes, but when I asked to be transferred to a mortgage specialist, and then identified myself as a reporter, I was disconnected … three times.

On the fourth try, I did finally get a nice agent, who called another department and said yes, they do modifications, but more often do “recasts,” in which case a sizeable principal payment is required. Hmmm. Then she said she had to leave a message for someone to give me more details. Still waiting.

Apparently mortgage recasts do exist.

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