Home prices heading for triple-dip
By Les ChristieOctober 31, 2011: 5:37 AM ET
NEW YORK (CNNMoney) -- The besieged housing market has even further to fall before home prices really hit rock bottom.
According to Fiserv (FISV), a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.
Several factors will be working against the housing market in the upcoming months, including an increase in foreclosure activity and sustained high unemployment, explained David Stiff, Fiserv's chief economist.
Should home values meet Fiserv's expectations, it would make it the third (and lowest) trough for home prices since the housing bubble burst.
The first post-bubble bottom was hit in 2009, when prices fell to 31% below peak. The First-Time Homebuyer Credit helped perk prices up by mid-2010, but by the time the credit expired, prices fell again.
In the second dip, which was reached last winter, prices were down 33%before staging a mild rally that was artificially spurred as banks slowed the processing of foreclosures following the robo-signing scandal, which found that loan servicers were rapidly signing foreclosures without properly vetting them.
Now that the scandal is mostly resolved, lenders are speeding more cases through the foreclosure pipeline and back onto the market, weighing on home prices even further.
Earlier this month, RealtyTrac reported the first quarterly increase in foreclosure filings in three quarters. Even more discouraging: new default notices were up 14%.
There's also a "shadow inventory" of homes in foreclosure that have yet to go back onto the market.
The specter that those foreclosed homes could flood the market at any time and drive prices significantly lower is a huge concern, said Mark Dotzour, an economist for Texas A&M University. "That's the elephant in the room," he said, noting that there are 6 million home currently in shadow inventory.
Biggest losers
Many of the regions that will be hardest hit were already beaten up during the previous two dips.
Naples, Fla., for example, is expected to take the biggest hit of any metro area, a price drop of another 18.9% by the end of next June, according to Fiserv. Home prices in the area have already fallen 61% from the peak.
Other cities expected to be hit hard include the not-so-lucky Las Vegas, which is expected to see home prices fall another 15.9% for a total loss of 66%; Riverside, Calif., is projected to fall another 14.8% (for a total decline of 61%); Miami is expected to decline by 13.2% (total loss: 57%), and Salinas, Calif. could drop by another 13% (for a total loss of 66%).
There will be some winners, however, led by Madera, Calif. and Carson City, Nev., which will each gain 15.5%. That's some consolation for hard-hit residents: The average home in each of these metro areas has lost more than half its value.
Other metro areas Fiserv expects to recover nicely are Yuma, Ariz. (up 9.5%), Yuba City, Calif. (9.2%) and Farmington, N.M. (8.3%).
Slow recovery ahead
Even after the housing market begins its comeback in mid-2012, the recovery is predicted to be modest at best. Nationwide, Fiserv is projecting that home prices will climb just 2.4% between June 2012 and June 2013.
A few individual metro areas will do better, with 31 of the 385 markets Fiserv monitors expected to pile up double-digit gains. Another 71 markets are expected to post increases of 5% or better.
I bought my dream retirement home -- cheap!
Many of the markets that will record the biggest increases are vacation or retirement communities that had taken some of the biggest hits during the bust.
The biggest "winner" will be Ocala, Fla.,with a 22.4% spike for the 12 months ending June 30, 2013. Ocala was one of the hardest hit communities in the U.S. over the past several years, with home prices falling some 50%.
Others anticipated gainers will be Napa, Calif., which Fiserv projects will improve by 20.9% over that same period; Panama City, Fla. (an estimated 18.2% jump) and Bremerton, Wash. and Carson City, Nev. (both expected to see home prices climb 17.9%).
Some cities will continue to fade, however. Fort Lauderdale, Fla.'s forecast is for a 9.2% drop through next June and another 6.7% the 12 months after that. Its neighbor, Miami, will endure 13.5% and 5.2% declines, respectively.
From: http://money.cnn.com/2011/10/31/real_estate/home_prices/index.htm?iid=Lead
Monday, October 31, 2011
Tuesday, October 25, 2011
Case-Shiller Continues to Record Improvements in Annual Price Changes
Case-Shiller Continues to Record Improvements in Annual Price Changes
10/25/2011 By: Carrie Bay
The annual rate of change in home prices continues to show improvement, according to Standard & Poor’s.
Data just released by the agency shows the 20-city composite and 10-city composite readings of the S&P/Case-Shiller index for August came in below their year-ago levels by 3.8 percent and 3.5 percent, respectively. The previous month, S&P reported a 4.1 percent and 3.7 percent annual decline.
Sixteen of the 20 cities covered by the index posted improved annual returns compared to July’s data. Los Angeles and Miami saw no change, while Atlanta and Las Vegas saw their annual rates of change fall deeper into negative territory.
At -8.5 percent, Minneapolis posted the lowest year-over-year return, but has improved in each of the
last three months. Detroit and Washington D.C. were the only two cities to see positive annual returns of +2.7 percent and +0.3 percent, respectively.
The closely watched Case-Shiller index posted a 0.2 percent increase in August versus July for both the 20-city and 10-city measurements, marking the fifth consecutive monthly gain. Ten of the 20 cities in the index saw home prices rise for the month.
“There was some weakness in the monthly statistics, as 10 of the cities post price declines in August over July,” said David M. Blitzer, chairman of the index committee at S&P Indices. “In the August data, the good news is continued improvement in the annual rates of change in home prices.”
Blitzer went on to explain, “In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing. With 16 of 20 cities and both composites seeing their annual rates of change improve in August, we see a modest glimmer of hope with these data.”
As of August 2011, Blitzer says the crisis low for the 10-city composite was back in April 2009. It was more recent for the 20-city composite – the double-dip recorded in March 2011. Both readings are now about 3.9 percent above their cycle lows.
(developing story)
From: http://ping.fm/7YKcD
10/25/2011 By: Carrie Bay
The annual rate of change in home prices continues to show improvement, according to Standard & Poor’s.
Data just released by the agency shows the 20-city composite and 10-city composite readings of the S&P/Case-Shiller index for August came in below their year-ago levels by 3.8 percent and 3.5 percent, respectively. The previous month, S&P reported a 4.1 percent and 3.7 percent annual decline.
Sixteen of the 20 cities covered by the index posted improved annual returns compared to July’s data. Los Angeles and Miami saw no change, while Atlanta and Las Vegas saw their annual rates of change fall deeper into negative territory.
At -8.5 percent, Minneapolis posted the lowest year-over-year return, but has improved in each of the
last three months. Detroit and Washington D.C. were the only two cities to see positive annual returns of +2.7 percent and +0.3 percent, respectively.
The closely watched Case-Shiller index posted a 0.2 percent increase in August versus July for both the 20-city and 10-city measurements, marking the fifth consecutive monthly gain. Ten of the 20 cities in the index saw home prices rise for the month.
“There was some weakness in the monthly statistics, as 10 of the cities post price declines in August over July,” said David M. Blitzer, chairman of the index committee at S&P Indices. “In the August data, the good news is continued improvement in the annual rates of change in home prices.”
Blitzer went on to explain, “In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing. With 16 of 20 cities and both composites seeing their annual rates of change improve in August, we see a modest glimmer of hope with these data.”
As of August 2011, Blitzer says the crisis low for the 10-city composite was back in April 2009. It was more recent for the 20-city composite – the double-dip recorded in March 2011. Both readings are now about 3.9 percent above their cycle lows.
(developing story)
From: http://ping.fm/7YKcD
Wednesday, October 12, 2011
Impact of Short Sales and Foreclosures on getting a new loan...
With all the foreclosures and short sales in the past few years, many of us in the real estate business are coming across clients with this history. I thought this information might help you and you clients if the occasion arises.
There are many variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or a short sale; however, the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure are as follows.
Short Sale with FHA loan
• Can purchase right away with no mortgage default/late payments
• 3 year wait if in default or late payments at the closing
• Reduced wait if the borrower has re-established good credit and can show more qualifying circumstances *
Short Sale with Fannie Mae Loan
• 2 year wait if the borrower puts 20 % down
• 4 year wait if the borrower puts between 10% to 20% down
• 7 year wait if the borrower puts less than 10% down
• 2 year wait if the borrower can show extenuating circumstances and puts more than 10% down *
Short Sale with Freddie Mac Loan
• 4 year wait before being able to get a loan
• 2 year wait if the borrower can show extenuating circumstances *
Foreclosure with an FHA Loan
• 3 year wait before being able to get a loan
• Reduced wait if the borrower can show extenuating circumstances and re- establishes good credit *
Foreclosure with a Fannie Mae Loan
• 7 year wait from the completed foreclosure sale date
• 3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
• 7 year wait for a 2nd home, cash out re-financing, or an investment property
Foreclosure with a Freddie Mac Loan
• 5 year wait from the completed foreclosure sale date
• 3 year wait if the borrower can show extenuating circumstances *
*Qualifying/Extenuating circumstances are not applicable in most situations
There are many variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or a short sale; however, the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure are as follows.
Short Sale with FHA loan
• Can purchase right away with no mortgage default/late payments
• 3 year wait if in default or late payments at the closing
• Reduced wait if the borrower has re-established good credit and can show more qualifying circumstances *
Short Sale with Fannie Mae Loan
• 2 year wait if the borrower puts 20 % down
• 4 year wait if the borrower puts between 10% to 20% down
• 7 year wait if the borrower puts less than 10% down
• 2 year wait if the borrower can show extenuating circumstances and puts more than 10% down *
Short Sale with Freddie Mac Loan
• 4 year wait before being able to get a loan
• 2 year wait if the borrower can show extenuating circumstances *
Foreclosure with an FHA Loan
• 3 year wait before being able to get a loan
• Reduced wait if the borrower can show extenuating circumstances and re- establishes good credit *
Foreclosure with a Fannie Mae Loan
• 7 year wait from the completed foreclosure sale date
• 3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
• 7 year wait for a 2nd home, cash out re-financing, or an investment property
Foreclosure with a Freddie Mac Loan
• 5 year wait from the completed foreclosure sale date
• 3 year wait if the borrower can show extenuating circumstances *
*Qualifying/Extenuating circumstances are not applicable in most situations
Bank of America Launches 'Test-and-Learn' Short Sale Program in Florida
Bank of America Launches 'Test-and-Learn' Short Sale Program in Florida
10/11/2011 By: Carrie Bay
Bank of America has begun a pilot program in Florida offering extra incentive payouts to distressed homeowners who agree to and successfully close on a short sale.
Incentive payments for relocation assistance range between $5,000 and $20,000. The program is being offered on a limited basis for investor-approved, pre-offer short sales.
Bank of America is calling it a pilot “test-and-learn” program.
A spokesperson for the bank explained that Florida is experiencing higher foreclosure rates than other parts of the country, and is therefore seen as a “viable market to gauge incremental short sale response and completion rates when presenting homeowners with relocation assistance at closing.”
If successful in Florida, Bank of America says the “test-and-learn” could be expanded to other states.
The short sale must be initiated between September 26 and November 30, 2011 and close by August 31, 2012.
Florida homeowners who qualify for the “test-and-learn” program will receive a solicitation mailer directly from Bank of America, or may learn about the program if they are working with a real estate agent who handles pre-approved short sales for BofA.
The bank has a dedicated team of short sale specialists standing by to help agents determine if their homeowner client qualifies for the short sale relocation assistance at: 877.459.2852.
Bank of America has already been offering short sale payouts in the state of Florida, albeit for smaller amounts.
Susie Kirkland with RE/MAX Southern Realty in Destin says she’s closed five transactions within the past couple of months through what BofA calls its Cooperative Short Sale Program. The bank awarded Kirkland’s short sellers $2,500 upon closing.
BofA is even extending short sale incentives to some investors. Steve Kravitz of Bankers Realty Services, Inc. in Fort Lauderdale just completed a short sale transaction last week on an investment property. BofA offered the non-occupant owner/seller $3,600.
Kravitz says his client had been late on a few payments, but there was no foreclosure filing on the property. BofA and other lenders are looking to short sales earlier on in the process, and getting ahead of the foreclosure crisis in areas where the system is already bogged down with distressed properties.
“We’ve had cases here where we’ve gotten short sales through where there haven’t even been any late payments at all,” Kravitz said.
Kravitz says short sales just make sense for a market as hard-hit as Florida. Not only can a short sale be more cost efficient when lenders are facing a foreclosure timeline of nearly two years, but it “gets more product and better product out to buyers,” he says.
He explained that oftentimes, a foreclosure property can sit vacant for more than a year, whereas with a short sale, the home is typically occupied up until a week or a few days prior to changing hands, which translates to a better quality home in better shape.
Kravitz says banks are becoming “more cooperative” and approving short sales more quickly. The investment property short sale Kravitz closed last week took just 45 days.
Other lenders are also extending incentive payouts to short sellers in Florida and some other hard-hit states such as California.
In July, DSNews.com reported that Wells Fargo, JPMorgan Chase, and Citi were all offering extra relocation assistance to borrowers opting for a short sale in certain markets.
Robert Valenzuela with Century 21 Schwartz Realty in Key Largo, Florida, says he’s completed six short sale transactions in which the seller was given money to help with relocation, the largest of which was a $45,000 payment from Chase Bank.
From: http://ping.fm/HxysS
10/11/2011 By: Carrie Bay
Bank of America has begun a pilot program in Florida offering extra incentive payouts to distressed homeowners who agree to and successfully close on a short sale.
Incentive payments for relocation assistance range between $5,000 and $20,000. The program is being offered on a limited basis for investor-approved, pre-offer short sales.
Bank of America is calling it a pilot “test-and-learn” program.
A spokesperson for the bank explained that Florida is experiencing higher foreclosure rates than other parts of the country, and is therefore seen as a “viable market to gauge incremental short sale response and completion rates when presenting homeowners with relocation assistance at closing.”
If successful in Florida, Bank of America says the “test-and-learn” could be expanded to other states.
The short sale must be initiated between September 26 and November 30, 2011 and close by August 31, 2012.
Florida homeowners who qualify for the “test-and-learn” program will receive a solicitation mailer directly from Bank of America, or may learn about the program if they are working with a real estate agent who handles pre-approved short sales for BofA.
The bank has a dedicated team of short sale specialists standing by to help agents determine if their homeowner client qualifies for the short sale relocation assistance at: 877.459.2852.
Bank of America has already been offering short sale payouts in the state of Florida, albeit for smaller amounts.
Susie Kirkland with RE/MAX Southern Realty in Destin says she’s closed five transactions within the past couple of months through what BofA calls its Cooperative Short Sale Program. The bank awarded Kirkland’s short sellers $2,500 upon closing.
BofA is even extending short sale incentives to some investors. Steve Kravitz of Bankers Realty Services, Inc. in Fort Lauderdale just completed a short sale transaction last week on an investment property. BofA offered the non-occupant owner/seller $3,600.
Kravitz says his client had been late on a few payments, but there was no foreclosure filing on the property. BofA and other lenders are looking to short sales earlier on in the process, and getting ahead of the foreclosure crisis in areas where the system is already bogged down with distressed properties.
“We’ve had cases here where we’ve gotten short sales through where there haven’t even been any late payments at all,” Kravitz said.
Kravitz says short sales just make sense for a market as hard-hit as Florida. Not only can a short sale be more cost efficient when lenders are facing a foreclosure timeline of nearly two years, but it “gets more product and better product out to buyers,” he says.
He explained that oftentimes, a foreclosure property can sit vacant for more than a year, whereas with a short sale, the home is typically occupied up until a week or a few days prior to changing hands, which translates to a better quality home in better shape.
Kravitz says banks are becoming “more cooperative” and approving short sales more quickly. The investment property short sale Kravitz closed last week took just 45 days.
Other lenders are also extending incentive payouts to short sellers in Florida and some other hard-hit states such as California.
In July, DSNews.com reported that Wells Fargo, JPMorgan Chase, and Citi were all offering extra relocation assistance to borrowers opting for a short sale in certain markets.
Robert Valenzuela with Century 21 Schwartz Realty in Key Largo, Florida, says he’s completed six short sale transactions in which the seller was given money to help with relocation, the largest of which was a $45,000 payment from Chase Bank.
From: http://ping.fm/HxysS
Tuesday, October 4, 2011
New Foreclosure Actions Jump Nearly 20% in August
New Foreclosure Actions Jump Nearly 20% in August
10/03/2011 By: Carrie Bay
Data released by Lender Processing Services (LPS) Monday shows that foreclosure starts were up in August by 19.7 percent when compared to the previous month.
However, LPS noted in its report that the 247,957 foreclosures initiated in August represents a 12.2 percent decline from a year earlier.
At the same time, of the approximately 4 million loans that are either 90 or more days delinquent or in foreclosure, the number in the 90-plus day delinquency bucket – 2,148,179 – has contracted to levels not seen since 2008, according to LPS’ study.
That’s not the only indicator of improvement LPS documented for problem loans. The company’s latest report also showed that, of loans that were current six
months prior, 1.4 percent had become seriously delinquent by August.
LPS says that percentage is less than half the rate seen in 2009, when the loan deterioration rate peaked at 2.9 percent.
At the same time, “first-time” delinquencies – new problem loans that had never been delinquent before – accounted for approximately a quarter of all new delinquencies, another sign of an improving trend for problem loans, according to LPS.
The company points out, however, that 23 percent of the nearly 46 million loans that were current as of the end of August were still at risk as a result of negative equity – a leading indicator of a borrower’s propensity to default.
LPS’ analysis of mortgage performance data at August month-end showed an all-time high in the number of loans shifting from foreclosure back into delinquent status, suggesting that process reviews and potential loss mitigation activity are continuing.
As a result, the company says foreclosure timelines continue to increase, with the average loan in foreclosure having been delinquent for a record 611 days.
Average delinquencies in non-judicial states continue to be about six months shorter at the time of foreclosure sale when compared to their judicial counterparts, where
LPS says backlogs continue to be extremely high.
From: http://www.dsnews.com/articles/new-foreclosure-actions-jump-nearly-20-in-august-2011-10-03
10/03/2011 By: Carrie Bay
Data released by Lender Processing Services (LPS) Monday shows that foreclosure starts were up in August by 19.7 percent when compared to the previous month.
However, LPS noted in its report that the 247,957 foreclosures initiated in August represents a 12.2 percent decline from a year earlier.
At the same time, of the approximately 4 million loans that are either 90 or more days delinquent or in foreclosure, the number in the 90-plus day delinquency bucket – 2,148,179 – has contracted to levels not seen since 2008, according to LPS’ study.
That’s not the only indicator of improvement LPS documented for problem loans. The company’s latest report also showed that, of loans that were current six
months prior, 1.4 percent had become seriously delinquent by August.
LPS says that percentage is less than half the rate seen in 2009, when the loan deterioration rate peaked at 2.9 percent.
At the same time, “first-time” delinquencies – new problem loans that had never been delinquent before – accounted for approximately a quarter of all new delinquencies, another sign of an improving trend for problem loans, according to LPS.
The company points out, however, that 23 percent of the nearly 46 million loans that were current as of the end of August were still at risk as a result of negative equity – a leading indicator of a borrower’s propensity to default.
LPS’ analysis of mortgage performance data at August month-end showed an all-time high in the number of loans shifting from foreclosure back into delinquent status, suggesting that process reviews and potential loss mitigation activity are continuing.
As a result, the company says foreclosure timelines continue to increase, with the average loan in foreclosure having been delinquent for a record 611 days.
Average delinquencies in non-judicial states continue to be about six months shorter at the time of foreclosure sale when compared to their judicial counterparts, where
LPS says backlogs continue to be extremely high.
From: http://www.dsnews.com/articles/new-foreclosure-actions-jump-nearly-20-in-august-2011-10-03
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