Friday, May 30, 2014

Home prices remain on the rise

My website: www.sandralew.com

Home prices still rising but at slower pace. Prices still remain around 18% below their prior peak which was reached in the summer of 2006. Housing market is improving and that's good news.

Home prices remain on the rise

  @CNNMoney May 27, 2014: 10:57 AM ET

case schiller 052714 

NEW YORK (CNNMoney)

U.S. home prices remain on the upswing at the start of 2014, as a slow recovery from the bust that led to the financial crisis continues.

In the first three months, prices rose 10.3% on an annual basis, according to the S&P/Case-Shiller report. In March, an index of 20 large housing markets gained 12.4% year-over-year.

The year-over-year gains are likely to moderate, according to Stan Humphries, chief economist for Zillow, because current prices are being compared with months when many markets were at or near their post-bust bottoms. Coming comparisons will be against less depressed prices.

There are several other factors that continue to boost prices, however, including unusually low mortgage rates and the diminishing number of foreclosures and short sales on the market, which tend to sell for less. Those factors will take time to disappear.

"We're still several years away from a housing market driven purely by fundamentals like income growth and rising household formations," said Humphries.

Prices remain about 18% below their peak, which was reached in the summer of 2006.

Trends in the housing market have been mixed, with a bounce back for housing starts in April and better new home sales. Buyers have been able to take advantage of very low mortgage interest rates, but tight loan underwriting still keeps many potential homebuyers out of the market.

Even though price gains have moderated, all the cities in the 20-city index recorded gains year over year, led by Las Vegas at 21.2%. Prices in San Francisco, San Diego and Los Angeles also rose faster than average. 

On a monthly basis, New York was the only city with a decline in March.
The price increases will have a positive impact on mortgage borrowers, according to Bill Banfield, Quicken Loans vice president.

"While the increase in home prices is slowing, homeowners have still gained a significant amount of equity in the last year, " he said.

That will push some of the 9 million borrowers who are still underwater on their loans, owing more than their homes are worth, above water for the first time in years. That will make them less likely to lose their homes to foreclosure and help stabilize prices. 

Source: http://money.cnn.com/2014/05/27/real_estate/home-prices/index.html

 

Wednesday, May 28, 2014

'I'm too afraid to sell my home'

My website: www.sandralew.com

Even though homeowners may get top dollar these days if they sell their home some cannot as will not be able to find a replacement home if they do. There is still a shortage of available homes in high demand areas. All cash deals still reign as well with 43% of these type of home sales the first quarter of 2014.

'I'm too afraid to sell my home'

  @CNNMoney May 20, 2014: 12:17 PM ET

home sale fear


NEW YORK (CNNMoney)

In hot real estate markets all over the country, homeowners are feeling stuck: They know they can get top dollar if they sell their home, but fear they will have no place to go if they leave.

The concern: An ongoing shortage of available homes for sale in cities like San Francisco, Los Angeles, Boston, New York and Washington, D.C., has made it extremely difficult for buyers to find homes they want to move into -- or can afford.

"One of the things we hear all the time is, 'I'm afraid to sell my house because I can't find another one," said Glenn Kelman, CEO of real estate brokerage firm Redfin.

And the competition for the homes that are available is so intense that buyers need to bring plenty of cash to the table. In fact, all-cash deals hit a record 43% of home sales in the first quarter of this year, according to RealtyTrac.

Tim Trampedach, a 36-year-old business owner who lives in San Francisco, has seen his home's value soar from $1.2 million to $1.6 million in the past three years. He and his wife want to move into a bigger place, but there are simply no homes within their price range in their Portrero Hill neighborhood.

"My wife and I are effectively locked into the house," he said. "We can't sell because we can't afford anything else nearby."

San Francisco is one of the most extreme examples. The number of homes for sale fell by more than 8% year-over-year in March, while listing prices soared 11.5% to a median of $867,000.

When inventory shrinks and prices move higher, it makes it even more difficult for a buyer to upgrade to a larger home. And if they can't buy, they can't sell, reducing the number of lower priced, starter homes.

"It's people like us, who live in a fully turnkey home, who can't supply homes because we have nowhere else to go in the city," said Trampedach.

Three thousand miles away, Kathleen Jackson has wanted to sell her South Boston home for three years. With two young children and a third on the way, her family has outgrown their small two-bedroom home.

But she has found few listings, even outside of Boston.

In fact, demand is so high that real estate agents are actively seeking people who are willing to sell. "You get letters in the mail asking if you're interested in selling," said Jackson. "People knock on your doors."

In mid-April she got an enticing, unsolicited offer on the house, which Zillow estimates to be worth $420,000.

"My husband and I talked it over," she said. "We hemmed and hawed. It was too good to be true, but we worried: Would we find a house we wanted?"

The buyer agreed to give the couple until October to find a new place, so they took the offer.
One way sellers can protect themselves is to make the sale of their home contingent upon their ability to find another one to move into.

Patrick Matson and his fiance, Margarita Munoz, insisted on such a clause when they put their Anaheim, Calif. home up for sale. Up until last Friday they had an offer on their home, but their own search did not go well.

The couple had made offers on two homes in La Mirada, where they liked the school district for their four-year-old son. But both offers were rejected.

The homes they looked at were between $430,000 and $480,000, but were no bigger or better than their current place, which they listed for $415,000.

Discouraged, the couple decided to reject the offer and take their home off the market.

"It was not an easy decision to make, provided that we knew the folks who had an offer in on our home were going to be disappointed and it wasn't what we wanted either," said Matson.

The couple plans to make some upgrades to their current place and will try again in a year or two, he said. "Hopefully the market won't be so competitive by then."

 Source: http://money.cnn.com/2014/05/20/real_estate/home-sales-fear/index.html


Friday, May 9, 2014

Mortgage rates fall, 30-year fixed average at 4.29%, Freddie Mac says

My website: www.sandralew.com

Mortgage rates still historically low as inflation is still at bay. 

Mortgage rates fall, 30-year fixed average at 4.29%, Freddie Mac says

Interest rates fall slightly for 30-year and 15-year mortgages

 Interest rates fell slightly this week for 30-year and 15-year mortgages, Freddie Mac said. But borrowers taking out adjustable-rate loans were paying more. (Justin Sullivan / Getty Images)

May 1, 2014

With inflation fears at bay, fixed-rate home loans got a bit cheaper this week, with Freddie Mac’s survey putting the average interest rate for a 30-year mortgage at 4.29%, down from 4.33% a week ago.

The average rate for 15-year fixed mortgages declined to 3.38% from 3.39%.
The starting points for adjustable-rate loans edged slightly higher, however, the big home finance company said Thursday.

Gross domestic product estimates released this week showed a rise of just 0.1% for the first quarter, well below market expectations, noted Frank Nothaft, Freddie Mac’s chief economist.

That provides reason for worries about the economy, but not concern that inflation could take hold, driving interest rates higher.

Freddie Mac asks lenders each week about the terms they are offering to borrowers considered low risk. The cost of appraisals and title insurance, usually paid by borrowers, is not included.

The survey assumes the borrowers pay less than 1% of the loan amount in fees and discount points to the lenders. Paying additional points upfront can reduce the rate, while borrowers often obtain no-cost loans by accepting a higher interest rate.

Copyright © 2014, Los Angeles Times

Source:http://www.latimes.com/business/la-fi-mo-freddie-mac-mortgage-rates-20140501-story.html

Monday, May 5, 2014

Foreclosure activity lowest in 8 years in California, Los Angeles County

My website: www.sandralew.com

The real estate market continues to stabilize with foreclosure activity further declining. While the market is no longer flush with bargains those with homes are once again feeling wealthy again as home values have risen again.

Foreclosure activity lowest in 8 years in California, Los Angeles County

California’s foreclosure activity has flatlined.

For the last three quarters, the number of homeowners receiving default notices has hovered around a level last seen eight years ago, according the the latest report from market tracker DataQuick.

Foreclosures, as well, are at pre-recession levels. It’s the housing market’s response to an improving economy and rising house and condo prices, the organization says.

It’s also become the double-edged blade of the current housing market.

If you are looking to buy something — especially that all-important first home — this is not great news because the market is no longer flush with bargains. But if you already have a mortgage, you feel more wealthy now than a couple of years ago because home values have been rising.

From January through March, lenders issued 19,215 default notices to property owners across the state, up 3.5 percent from 18,568 in the first three months of 2013, La Jolla-based DataQuick said.

Lenders issured 18,120 default notices in last year’s fourth quarter and 20,314 in the third quarter.
Meanwhile, the number of foreclosures plunged 43 percent, to 7,799 from 13.592 a year earlier.

The same picture emerged in Los Angeles County, where defaults rose 5 percent in the quarter, to 4,191 from 3,984 a year ago. Foreclosures fell 45 percent, to 1,212 from 2,217 a year ago.

Lenders have been steadily extricating themselves from the mess that resulted from all those goofy loans made in the middle of the last decade.

“It may well be that the foreclosure starts in recent quarters don’t reflect the ebb and flow of financial distress as much as they reflect a steady state of workload capacity on the part of the servicers. They may well be just working their way through a backlog, stacks of paper piled high on desks,” said DataQuick analyst John Karevoll.

In other word, foreclosure processors are still mostly plowing through that pool of toxic subprime mortgages originated back in mid to late 2006, products that eventually helped plunge the nation into the Great Recession.

Source: http://www.dailynews.com/business/20140501/foreclosure-activity-lowest-in-8-years-in-california-los-angeles-county