People optimistic about economy
Californians are feeling better about the economy than they were a few months ago, but they continue to hold back on big-ticket spending, according to a recent survey by Chapman University.
Road to Recovery: Local Housing Market Shows Signs of Strength
The median price of existing single-family homes in California in May was $324,430, a 23.2 percent increase compared with a median price of $263,440 in May 2009. The May 2010 median price increased 5.9 percent compared with April’s $306,230 median price.
While home prices are rising month-over-month and year-over-year, affordability continues to remain at near-record highs. In the first quarter of 2010, 66 percent of first-time home buyers in California could afford to purchase an entry-level home in the state.
Many first-time home buyers in California timed the opening and closing of escrow to capitalize on both the federal and state tax credits, helping propel home sales in May.
While home prices are rising month-over-month and year-over-year, affordability continues to remain at near-record highs. In the first quarter of 2010, 66 percent of first-time home buyers in California could afford to purchase an entry-level home in the state.
Many first-time home buyers in California timed the opening and closing of escrow to capitalize on both the federal and state tax credits, helping propel home sales in May.
Percentage of homes with price reductions declines in June
A new report found 22 percent of homes listed for sale nationwide experienced at least one price reduction as of June 1 compared with 23.6 percent in June 2009, according to Trulia.com. The average discount for price-reduced homes remained unchanged at 10 percent of the listing price.
Cities in the Western U.S. experienced the largest decreases in price reductions compared with the previous year. Las Vegas led the way with a 67 percent decrease and six California cities (Oakland, San Jose, Los Angeles, Sacramento, San Francisco, and San Diego) experienced a price reduction of 24 percent or more, according to the report.
Price reduction levels for luxury homes--those listed at $2 million and higher--continued to hold steady with 21 percent of homes experiencing a price reduction and an average reduction of 14 percent off the listing price.
Cities in the Western U.S. experienced the largest decreases in price reductions compared with the previous year. Las Vegas led the way with a 67 percent decrease and six California cities (Oakland, San Jose, Los Angeles, Sacramento, San Francisco, and San Diego) experienced a price reduction of 24 percent or more, according to the report.
Price reduction levels for luxury homes--those listed at $2 million and higher--continued to hold steady with 21 percent of homes experiencing a price reduction and an average reduction of 14 percent off the listing price.
Senate Extends Tax Credit Closing Deadline
The U.S. Senate voted Wednesday to extend the home buyer tax credit closing deadline to Sept. 30, giving an estimated 180,000 buyers who met the contract deadline of April 30 extra time to close the transaction.
The extension was added to a bill to pay for jobless benefits.
The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.
The measure still must be approved by the House.
The extension was added to a bill to pay for jobless benefits.
The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.
The measure still must be approved by the House.
Foreclosure activity continues to decline in May
Foreclosure filings – notices of default, scheduled auctions, and bank repossessions – declined 3 percent in May compared with April, but increased less than 1 percent compared with the same period a year ago, RealtyTrac reported.
Properties receiving a notice of default declined 7 percent in May compared with April and 22 percent compared with May 2009.
Foreclosure auctions decreased 4 percent in May compared with the prior month, while bank repossessions increased 1 percent during the same period, according to the report.
California accounted for more than 22 percent of the total number of properties receiving a foreclosure notice in May, an increase of 3 percent from April, but a decrease of nearly 22 percent compared with a year ago.
Properties receiving a notice of default declined 7 percent in May compared with April and 22 percent compared with May 2009.
Foreclosure auctions decreased 4 percent in May compared with the prior month, while bank repossessions increased 1 percent during the same period, according to the report.
California accounted for more than 22 percent of the total number of properties receiving a foreclosure notice in May, an increase of 3 percent from April, but a decrease of nearly 22 percent compared with a year ago.
Harvard study finds job growth key to housing recovery
Improved affordability for first-time buyers and government incentives led to increases in sales of existing homes last year, according to Harvard University.
The study also found a record number of foreclosures continue to add pressure to the housing market and millions of homeowners.
Despite some positive signs early in the spring-buying season this year, housing continues to face significant challenges.
The study also found a record number of foreclosures continue to add pressure to the housing market and millions of homeowners.
Despite some positive signs early in the spring-buying season this year, housing continues to face significant challenges.
California consumer confidence rises in May
The California Composite Index of Consumer Confidence increased to 82.7 in May, slightly higher than February.
An index level lower than 100 reflects a higher percentage of pessimistic consumers compared with those who are optimistic.
The index measuring consumers’ planned spending on big-ticket items decreased to 71.4 percent, the lowest reading since the first quarter of 2009.
An index level lower than 100 reflects a higher percentage of pessimistic consumers compared with those who are optimistic.
The index measuring consumers’ planned spending on big-ticket items decreased to 71.4 percent, the lowest reading since the first quarter of 2009.
GSEs release HAFA guidelines
Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac last week released guidelines for implementing the Treasury Dept.’s Home Affordable Foreclosure Alternatives Program (HAFA). The new guidelines apply to loans owned or guaranteed by the GSEs; servicers are required to implement the new policies no later than Aug. 1.
While largely consistent with the HAFA guidelines for non-GSE mortgages, both Fannie and Freddie have implemented changes. To qualify for the Freddie Mac HAFA program, borrowers must be more than 60 days delinquent and have cash reserves of less than $5,000 or three times the current monthly mortgage payment, whichever is greater.
Similar to the non-GSE HAFA program, Fannie Mae allows borrowers to qualify if they are at imminent risk of default. However, Fannie prohibits borrowers from participating in HAFA if the borrower: Has the ability to continue making mortgage payment, but chooses not to do so; has substantial encumbered assets of significant cash reserves equal to or exceeding three times the borrower’s total monthly mortgage payment or $5,000, whichever is greater; or has high surplus income.
Fannie and Freddie both allow the real estate commission in the listing agreement, but not more than 6 percent. Consistent with the non-GSE HAFA program, Fannie and Freddie guidelines do not permit subordinate lien holders to require contributions from the real estate agent or borrower as a condition for releasing its lien and releasing the borrower from personal liability.
More info on Fannie Mae guidelines
More info on Freddie Mac guidelines
While largely consistent with the HAFA guidelines for non-GSE mortgages, both Fannie and Freddie have implemented changes. To qualify for the Freddie Mac HAFA program, borrowers must be more than 60 days delinquent and have cash reserves of less than $5,000 or three times the current monthly mortgage payment, whichever is greater.
Similar to the non-GSE HAFA program, Fannie Mae allows borrowers to qualify if they are at imminent risk of default. However, Fannie prohibits borrowers from participating in HAFA if the borrower: Has the ability to continue making mortgage payment, but chooses not to do so; has substantial encumbered assets of significant cash reserves equal to or exceeding three times the borrower’s total monthly mortgage payment or $5,000, whichever is greater; or has high surplus income.
Fannie and Freddie both allow the real estate commission in the listing agreement, but not more than 6 percent. Consistent with the non-GSE HAFA program, Fannie and Freddie guidelines do not permit subordinate lien holders to require contributions from the real estate agent or borrower as a condition for releasing its lien and releasing the borrower from personal liability.
More info on Fannie Mae guidelines
More info on Freddie Mac guidelines
Fears rise U.S. rebound slowing
The U.S. economy may be headed for a slowdown reminiscent of the one it suffered in 2002 as the debt crisis in Europe, fading government support and persistently high joblessness weigh on expansion in the second half of the year.
The economy expanded at a 3.6 percent pace in the nine months through the first quarter, the latest data available from the government. Growth in the second quarter may be even faster. However, economists have begun to lower their forecasts for the first time since the recovery began in the middle of 2009.
While there have been good signs in the last four months, there's some fragility based on Europe's debt problems and U.S. state-government budget cuts as among the forces restraining growth and endangering the economic rebound.
The economy expanded at a 3.6 percent pace in the nine months through the first quarter, the latest data available from the government. Growth in the second quarter may be even faster. However, economists have begun to lower their forecasts for the first time since the recovery began in the middle of 2009.
While there have been good signs in the last four months, there's some fragility based on Europe's debt problems and U.S. state-government budget cuts as among the forces restraining growth and endangering the economic rebound.
FHA Seeks Comments on Flipping Waiver Conditions
On January 15, 2010, the US Department of Housing and Urban Development (HUD) announced that it is temporarily expanding the property flipping waiver to include investors and entities that purchase foreclosures either singly or in bulk for resale. FHA is now seeking comments on the 90-day flipping waiver.
Under the waiver, homes that were foreclosed on and are being sold by the mortgagee or on its behalf may be purchased by Federal Housing Administration (FHA) borrowers without regard to the 90-day seasoning period.
To be eligible for the waiver, approved mortgagees must meet two conditions: 1) all transactions must be arms-length; and 2) when the sale of the property is greater than 20 percent above the seller's acquisition cost the lender must justify the increased value with supporting documentation or an appraisal and a property inspection must be ordered and provided to the purchaser before closing.
Under the waiver, homes that were foreclosed on and are being sold by the mortgagee or on its behalf may be purchased by Federal Housing Administration (FHA) borrowers without regard to the 90-day seasoning period.
To be eligible for the waiver, approved mortgagees must meet two conditions: 1) all transactions must be arms-length; and 2) when the sale of the property is greater than 20 percent above the seller's acquisition cost the lender must justify the increased value with supporting documentation or an appraisal and a property inspection must be ordered and provided to the purchaser before closing.
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