Existing home sales jump 10%

Real estate agents were busy in October, when sales of existing homes jumped 10.1 percent from the previous month, according to the National Association of Realtors.

Existing home sales were up 23.5 percent from a year earlier and sales activity was at the highest pace since February 2007, NAR said.

In the West, which includes Hawaii, home sales rose 1.6 percent in October, NAR reported.

"Many buyers have been rushing to beat the deadline for the first time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," said NAR chief economist Lawrence Yun. "With such a sale spike, a measurable decline should be anticipated in December and early net year before another surge in spring and early summer."

The $8,000 first time buyer tax credit has been extended until April 30. It has also been expanded to include many buyers who are not buying their first home, with a credit of as much as $6,500, depending on income.

Low interest rates are also fueling the rise in sales. Last week, Freddie Mac reported 30-year fixed-rate mortgages fell to an average of 4.83 percent, near an all-time low.

In the West, home prices were down 14.7 percent year-over-year in October. The median price was $220,200.

Total housing inventory at the end of October fell 3.7 percent, to a 7 month supply, down from an 8 month supply in September. Unsold homes on the market are now down 14.9 percent from a year ago, to the lowest level in two and a half years.


Source: www.pacific.bizjournals.com, Monday, November 23, 2009

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Pending Home Sales Rise for Record Eight Straight Months

Pending home sales rose again, marking eight consecutive monthly gains–the longest streak since measurement began in 2001, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September 2009, rose 6.1% to 110.1 from a reading of 103.8 in August, and is 21.2% higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.

Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”

The Pending Home Sales Index in the Northeast slipped 2.0% to 83.6 in September but remains 16.9% above September 2008. In the Midwest the index rose 8.1% to 98.2 in September and is 17.8% higher than a year ago. In the South, pending home sales increased 4.9% to an index of 109.7 and is 22.8% above September 2008. In the West the index jumped 10.2% to 143.8 and is 23.7% above a year ago.

Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”

For more information, visit www.realtor.org.


Source: www.rismedia.com, November 3, 2009

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Home sales scale 2-year high in September

WASHINGTON (Reuters) - Sales of previously owned U.S. homes jumped to a two-year high last month, according to data on Friday, though the looming expiry of a tax incentive for first-time home buyers was a major factor spurring sales.

The National Association of Realtors said sales of existing homes jumped 9.4 percent in September to an annual rate of 5.57 million units, the highest level since July 2007. Financial markets had expected sales to rise to a 5.35 million unit pace after a surprise decline in August.

Sales were partly driven by first-time buyers rushing to take advantage of the government's popular $8,000 tax credit, which is due to expire at the end of November. Sales were up 9.2 percent compared to September of last year.

"The rapid gain in home sales over the past few months likely owes, in part, to the home buyer tax credit. That said, the trend in home sales is still higher amid greater affordability and an improving economic outlook," said Michelle Meyer, an economist at Barclays Capital in New York.

Despite the bullish report, U.S. stock prices fell as investors fretted over disappointing results from chip maker Broadcom Corp and silicon producer MEMC Electronic Materials Inc, which bucked a recent trend of solid earnings reports.

However, home appliances maker Whirlpool Corp and manufacturing group Fortune Brands Inc reported third quarter profits that were above market expectations. Fortune Brands also raised the low end of its full-year profit forecast, citing signs of stabilization in housing construction.

The housing sector's collapse and subsequent global credit crisis helped to push the U.S. economy into recession at the end of 2007. The downturn was the worst in 70 years.

The housing market is now crawling out of a three-year slump and analysts believe homebuilding probably contributed to economic growth in the third quarter, which would be its first positive contribution since the end of 2005.

ECONOMY GROWING AGAIN

Signs of recovery in the housing market, coupled with other fairly upbeat data, strongly suggest the economy started growing again last quarter for the first time since the second quarter of 2008. The government will release data on third-quarter gross domestic product next week.

Sales for both new and previously owned homes have been boosted by a combination of the tax credit, depressed prices and low mortgage rates.

There are worries the expiration of the tax credit could hamper the recovery, however, and many lawmakers want to extend the program, with some pushing to expand it to all buyers.

The tax credit has so far cost the government about $10 billion and the Obama administration has yet to decide whether it will back an extension, weighing it against the impact it will have on an already bloated budget deficit.

"We are hopeful the tax credit will be extended and possibly expanded to more buyers ... because the rising sales momentum needs to continue for a few additional quarters until we reach a point of self-sustaining recovery," said Lawrence Yun, chief economist at the Realtors' trade group.

Distressed properties made up 29 percent of sales last month and first-time buyers accounted for 31 percent, but analysts said other forces also helped.

"Our view is that near-record affordability and falling inventory is pulling people into the market," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.

The inventory of existing homes for sale in September dropped 7.5 percent to 3.63 million units, the NAR said.

September's sales pace pushed the supply of previously owned homes on the market down to 7.8 months' worth, the lowest in 2-1/2 years, from 9.3 months in August.

On the prices front, the national median home price fell 8.5 percent to $174,900 in September from a year earlier, the smallest percentage decline in 13 months.


Source: www.reuters.com, Fri Oct 23, 2009

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The Case of the Missing REO Inventory
  
Certain things in life are simply meant to be mysteries. There are age-old philosophical questions that have kept philosophers busy for millennia: What is the sound of one hand clapping? If a tree falls in the forest and no one is there, does it still make a sound? Other mysteries hang heavy with intrigue: What really happened to Amelia Earhart? And who really kidnapped the Lindbergh baby? And still others simply defy logic: If Denny’s is open 24 hours a day, 365 days a year, why are there locks on the doors?

Now we can add another question to the list of ongoing mysteries: With foreclosure activity breaking records nearly every month, where are all the REOs?

It’s a fair question. In normal market situations, a bank will repossess a home and usually process it through to a listing agent to put on the MLS within 30 days. In a relatively short period of time, virtually every marketable REO property finds itself listed for sale on the local MLS. Today, that’s simply not the case; it’s likely that between 450,000 and 500,000 properties repossessed over the past year are still not on the market. And with buyers hungry for housing bargains, and agents and brokers champing at the bit ready to sell the properties, it begs for a reasonable answer.

Lenders and servicers admit that it’s taking longer to process REOs than it has in the past, and they offer a number of legitimate reasons:

1. Many of the properties have title issues that need to be resolved
2. Many of the properties are in states of utter disrepair
3. A number of states have strict redemption rights periods, which prevents the lender from reselling the property
4. A few states have extended the length of eviction proceedings
5. The sheer volume of REO activity has created a “pig in the python” phenomena, (to put this in perspective, there will be roughly four times the number of REOs this year as in the last “normal” year, 2005)

What else could be slowing things down? A popular theory is that many banks are holding the properties off the market in order to defer losses. There is some accounting logic to this theory, as in most cases banks aren’t required to adjust asset prices until the actual resale of the property. Another idea is that the industry is holding back the inventory to create leverage with the government in order to force the creation of a “toxic bank” or RTC-like entity that would buy the distressed assets at 50 to 60 cents on the dollar rather than the 30 to 35 cents available on the market today. This theory suggests that, seeing the threat of a massive inventory of distressed homes being released all at once, the government would “blink” rather than risk another housing market meltdown.

Whatever the reason — process issues or conspiracies — we’re going to continue to see record-breaking numbers of REOs for at least the next year, and will all be watching to see when these sought-after homes finally make their way to the market.

Source: RealtyTrac,September 2009 Vol 3 Issue 20, By Rick Sharga

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Hawaii Foreclosures Head Downward in August

Hawaii foreclosure activity fell in August, down to 869 properties with foreclosure filings for the month, a 12 percent decrease from the previous month but still 159 percent above the level reported in August 2008, according to the latest RealtyTrac® U.S. Foreclosure Market Report.

“Hawaii foreclosures headed downward in August,” said James J. Saccacio, chief executive officer of RealtyTrac. “This is no surprise as the state had the second highest jump in home sales during the second quarter, and its unemployment rate remains well below the national average. If these trends continue, we may see foreclosures here drop further.”

Hawaii ranked 37th in the country in total foreclosures reported for the month. With one in every 583 housing units receiving a foreclosure filing, its foreclosure rate ranked 20th among the 50 states.

Report methodology
The RealtyTrac Monthly U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the month — broken out by type of filing at the county, state and national level. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month — which is extremely rare — only the most recent filing is counted in the report. The report also checks if the same type of document was filed against a property in a previous month. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.

Source: RealtyTrac,September 2009 Vol 3 Issue 20

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High-tech perks can keep building's tenants happy

As anyone in business knows, broadband is no longer a luxury — it's an absolute necessity. In Hawaii, where real estate represents a huge source of revenue for everyone from families to REITs (real estate investment trusts), bandwidth is just as important a component of a building as parking or plumbing.

So what kinds of options does a building owner have when it comes to setting up Internet services?

Don Mangiarelli, systems manager for Pacific Office Properties, which owns seven buildings in Honolulu, says a building owner can negotiate either directly with a carrier to provide phone, Internet and e-mail services, or hire a third-party networking company to provide the same services as well as advanced applications such as Voice Over Internet, off-site backup, VPN, access to cloud computing, etc.

There are a number of experienced third-party networking companies in town such as Century Computing and Systemmetrics, which can both provide infrastructure upgrades, such as an Ethernet network, in a building as well as a variety of Internet and telecom applications.

Rick Marine, a founder of Century Computing, says the key for building owners is to understand what their tenants need and what, if anything, the building will require in the way of upgrades. The owner also has to be clear about his expectations. Does he plan to make Internet services a possible profit center, or will he offer it as a value-added service?

Both Earl Ford, founder of Systemmetrics, and Marine say that if a building has enough potential customers, their company may be willing to do the entire upgrade at no cost to the owner in exchange for the future revenue generated by the tenants.

If a building owner is willing to pay for an upgrade, he might be able to turn bandwidth revenue into a potential profit center. However, there may be a price to pay. Tenants might not want to feel like they are "nickel and dimed" for every service.

Mangiarelli thinks that giving his tenants at Pacific Properties discounted Internet services is the best way to go.

"Our philosophy," says Mangiarelli, "is to guarantee low telecom costs and use bandwidth as a perk."

By making their lives easier, Mangiarelli reckons he's going to engender loyalty from tenants.

Both Ford and Marine agree.

In the long run, a landlord can add more value by outfitting an office with phone, Web access, e-mail and other services in one package rather than burdening a tenant with ever more vendors.


Sourced: www.starbulletin.com, Oct 11, 2009

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REALOGY SUPPORTS NEW BI-PARTISAN SENATE BILL TO EXTEND FIRST-TIME HOMEBUYER TAX CREDIT FOR 6 MONTHS
CEO Richard A. Smith Applauds Proposed Extension as "An Important Next Step" and will Continue Efforts to Expand the Tax Credit to All Homebuyers

PARSIPPANY, N.J., September 17, 2009 - Realogy Corporation, a global provider of real estate and relocation services, today announced its support of a bi-partisan Senate bill (S. 1678) introduced last night that would create a six-month extension of the $8,000 federal tax credit for first-time homebuyers and move the current expiration date forward to June 1, 2010.

"This is an important next step for maintaining positive momentum toward a recovery in the housing markets and the overall U.S. economy," said Realogy President & CEO Richard A. Smith, who also serves as chair of the Business Roundtable's Housing Working Group. While we applaud this effort and support passage of this prudent and necessary legislation, we also want to make it clear that we will continue to work with Congress to broaden the scope of the credit.

Specifically, Realogy supports expanding the existing first-time homebuyer tax credit to all homebuyers of a principal residence, increasing the size of the tax credit, and eliminating the existing income eligibility caps, all of which we believe are critical to the "move-up" or repeat buyers who we expect will drive the essential second phase of a housing recovery.

"We believe that stimulating demand for housing ? particularly in the repeat buyer or 'move-up' market is the most effective way for Congress to truly accelerate a broader economic recovery," said Smith.

The bill was introduced last night by U.S. Senator Benjamin L. Cardin (D-MD), along with Senators John Ensign (R-NV), Harry Reid (D-NV), Johnny Isakson (R-GA) and Debbie Stabenow (D-MI). The current tax credit provision for first-time homebuyers, passed as part of the American Recovery and Reinvestment Act, expires December 1, 2009.  According to the most recent data from the Department of the Treasury, nearly 530,000 Americans have applied for the tax cut to help them purchase their first home. About 40 percent of all homebuyers this year will be eligible for the tax credit.

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Fight in Congress Looms on Tax Break for Home Buyers

DALLAS — When Congress passed an $8,000 tax credit for first-time home buyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it.

As many as 40 percent of all home buyers this year will qualify for the credit. It is on track to cost the government $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February.

In the view of the real estate industry and some economists, all that money is well spent. They contend the credit is doing what it was meant to do, encouraging a recovery in the housing market that is gathering steam. Analysts say the credit is directly responsible for several hundred thousand home sales.

Skeptics argue that most of the money is going to people who would have bought a home anyway. And they contend that unless it is allowed to expire on schedule in late November, the tax credit is likely to become one more expensive government program that refuses to die.

The real estate industry, including the powerful 1.1 million-member National Association of Realtors, wants Congress to extend the credit at least through next summer. The group hopes to expand the program to $15,000 and to allow all buyers, not just those who have been out of the market for at least three years, to qualify. The price tag on that plan: $50 billion to $100 billion.

Joseph and Chassity Myers are among the two million buyers eligible for the credit this year. The newlyweds heard they could get money from the government for something they were tempted to do anyway.

“It was a no-brainer,” said Mr. Myers, a commercial underwriter. “Owning something is the American family dream.”

The couple bought a two-bedroom condominium here in the spring for $171,000 and amended their 2008 taxes immediately, receiving their windfall by direct deposit a few weeks later.

Their home is now a monument to the government’s generosity. They bought a leather couch, a kitchen table, a bed, television stand, china cabinet, kitchen table, coffee table, grill and patio set.

“We did exactly what the government wanted us to do,” said Ms. Myers, a third grade teacher. “We stimulated the economy.”

Mortgage applications increased nearly 10 percent for the week ending Sept. 3 from late August, the largest gain since early April and the latest of many signs of life in real estate. The upturn can be attributed to several factors: the return of confidence, very low mortgage rates, and prices in some markets that are at decade-low levels.

But the looming expiration of the tax credit on Nov. 30 seems to be playing a role too, particularly in relatively low-cost markets like Phoenix, Las Vegas and Dallas.

The 50-year-old complex that the Myerses live in, grandly named the Lawn at Bluffview, provides a snapshot of the credit’s influence — and limitations. Two years ago, the buildings were converted from apartments to condominiums by their owner, a local developer. In January, before the credit, only 30 of the 70 units had sold.

Since then, another seven units have sold, including the one bought by the Myerses. Brian Denbow, who works for a subprime auto financing firm, also was spurred to action by the credit. He too intends to use the money for furniture. Five of the buyers did not qualify for the credit for various reasons.

The Lawn at Bluffview remains nowhere near full. Potential buyers “just want a deal,” said the sales agent, Beverly Bell. Two weeks ago, the price of the unsold units was cut 10 percent.

The National Association of Realtors estimates that about 350,000 sales this year would not have happened without the lure of the tax credit. Moody’s Economy.com used computer modeling to put the number at 400,000.

The government’s efforts to directly reward home buyers began more than a year ago with a $7,500 tax credit that had to be repaid over 15 years. Last winter, amid fears of another Great Depression, the Senate came up with a much sweeter $15,000 package as part of the stimulus bill. That measure was ultimately reduced to the $8,000 credit.

Now the sponsor of the original Senate bill, Johnny Isakson, Republican of Georgia, is back with a new bill that would give a maximum $15,000 credit to any buyer who stays in a home for at least two years.

“The problem now is not first-time buyers, it’s the move-up market — the guy transferred from Chicago to Atlanta who can’t sell his house,” said Mr. Isakson, a former real estate agent.

Without a new and more generous credit, he warned, there would be a downward spiral of home sales and more foreclosures, provoking a second recession.

The real estate industry is lobbying heavily for the bill, but acknowledges that in an atmosphere that is less crisis-driven than last winter it will almost certainly have to settle for less.

“There will be a lot of water under the bridge, a lot of compromise, between now” and a final bill, said Richard A. Smith, chairman of the Business Roundtable’s Housing Working Group.

Economists are sharply split on the merits of another round of government help.

Mark Zandi, chief economist of Moody’s Economy.com, favors expanding the credit to all home buyers, even investors, into next summer. “The risks of not doing something like this are too great,” he said. “I don’t think the coast is clear.”

James Glassman of JPMorgan Chase echoed those views but said he favored continuing to restrict the credit to first-time buyers.

On the other side of the issue is the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. It labeled the original credit as one of the worst provisions of the stimulus package, on the grounds that the money is a bonus for people who would buy a house anyway. The center has an even dimmer view of extending the credit to all buyers.

“Is this the best way to spend money we don’t have?” asked senior fellow Roberton Williams.

Dean Baker of the Center for Economic and Policy Research called the credit “a questionable redistributive policy” from renters to home buyers, but said that he used it himself when he bought a house.

He wrote on his blog: “Thank you very much, suckers!”


Source: www.nytimes.com, September 15, 2009

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Oahu home sales edge upward

Sales of single-family homes on Oahu were up in July over the same month a year before, and median prices also rose over the previous month’s prices.

There were 265 single-family homes sold in July, a 5.6 percent increase over July 2008 when 251 homes sold, the Honolulu Board of Realtors reported.

The median price was $595,000, down 4 percent from $620,000 in July 2008. But it was up almost 5 percent over the median price of $569,000 in June.

The median price of a condominium was $312,000, down 5 percent from $329,900 during the same month a year ago but up slightly from $310,000 in June.

“This is the second consecutive month we’ve had an uptick in single-family home resales and it is a welcome change for the current housing market,” said board President Sandra “Sam” Bangerter. “While we’re continually monitoring economic conditions, both nationally and locally, the numbers we’re seeing for the Oahu residential real estate market may be indicating that we’re already past the bottom.”

Sales of condos, however, fell 10 percent in July, to 327 units, down from 365 units sold in July 2008.

“Credit our small, continually shrinking inventory for maintaining relatively stable price levels, even with the lower demand for housing,” said Harvey Shapiro, the board’s research economist. “President Obama says that the government stimulus programs are bearing fruit, particularly for the auto sector, so we’re hopeful that the housing industry will follow suit.”

The Ewa plain region, which includes Ewa Beach and Kapolei, saw the most sales of single-family homes last month with 51 houses changing hands, up 13 percent from July 2008. The areas that saw the greatest increases were Makakilo and the Makaha-Nanakuli area.


Source: www.bizjournals.com, Tuesday, August 4, 2009

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Welcome to the bottom: Housing begins slow rebound

It was — note the past tense — the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession's trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Now take a deep breath and exhale. The worst is over.

By every measure, except foreclosures, the housing market has stabilized and many areas are recovering, according to a spate of data released in the past two weeks. Nationwide, home resales in June are up 9 percent from January, on a seasonally adjusted basis. Sales of new homes have climbed 17 percent during the same period. And construction, while still anemic, has risen almost 20 percent since the beginning of the year.

Even home prices, down one third from the top, edged up in May, the first monthly increase since June 2006.

"The freefall is over," says Dean Baker of the Center for Economic and Policy Research.

The problem is that, Baker, like many economists, expects the housing market will "be bouncing around the bottom" for the second half of the year.

There are also real threats that could poison this budding recovery. The unemployment rate, which is 9.5 percent, is expected to surpass 10 percent, leaving even more homeowners unable to pay their mortgages. Mortgage rates could rise, making homeownership less affordable. And the federal tax credit for first-time homebuyers, which as lured many into the market, is set to expire on Nov. 30.

"As long as jobs are being lost, regardless of all the federal programs out there to help the borrowers, you're still going to have problems in the housing market," says Steve Cumbie, executive director of the Center for Real Estate Development at the University of North Carolina's Kenan-Flagler Business School.

True, but when you've got bidding wars for foreclosures in places like Las Vegas, Phoenix and Los Angeles, it's time to call the bottom.

_ Northeast

Nobody knows the power of a dollar like New Yorkers.

After home on Long Island sat on the market for four months recently, the sellers' real estate agent told them to drop the price from the mid-$600s to $599,000. The house sold the next weekend.

In Merrick, about 30 miles east of New York City, homes are starting to sell "as long as they're priced right," the agent said.

In January, with the ground and financial markets still frozen, few would have believed that the worst of the housing crisis in the Northeast would turn around within six months.

But the evidence is clear: home resales in the region in June hit a seasonally adjusted pace of 820,000, up 28 percent from the beginning of the year. Sales of new homes were also up slightly and construction in the region more than doubled.

Even the median sales price of $249,400 in June was up 10 percent from January and was off just 6 percent from year-ago levels, according to the National Association of Realtors.

"We certainly had our share of problems, but overall the severity of what happened here was far less" than what happened elsewhere, says Michael Lynch, an economist with IHS Global Insight.

Pittsburgh has the region's strongest home market in terms of sales and prices because the city saw less of a housing bubble and the area has 7.7 percent unemployment rate that is below the national rate.

One of the weakest markets, by contrast, was Providence, R.I., where a jobless rate of 12 percent exacerbated the city's foreclosure crisis. Too many residents took out risky subprime loans they couldn't afford when the interest rates spiked within a few years. Today, more than one in 10 homeowners with a mortgage in the state is at least one month behind or in foreclosure.

The Northeast, more than any other region, felt the full force of the credit crisis that reshaped Wall Street. Manhattan's real estate market, long immune from price declines, tanked this year as tens of thousands of people lost their jobs.

Prices of for-sale apartments plunged in the second quarter by the largest amount in decades. Prices have fallen, on average, between 13 and 19 percent, according to four reports published recently by real estate firms.

Northeast states: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

Data compares June vs. January and June vs. June 2008:

Home resales: up 28 percent; down 5 percent

Median price: $249,400, up 10 percent from January; down 6 percent

New home sales: up 3 percent; down 11 percent

New home construction: up 113 percent, down 68 percent

Mortgage delinquencies as of March: 10.4 percent

Regional outlook: The region should experience "a nice rebound in home construction" over the rest of the year, according to IHS Global Insight, an economic research firm. Sales for new and existing homes are likely to rise. Just don't expect your home's value to shoot up. Rising unemployment will lead to more foreclosures, and that will keep a lid on prices.

_ South

The real estate market in the South remains one of extremes.

On one end, are oil-rich cities in Texas, Arkansas and Oklahoma that nearly skirted the housing recession altogether. Tipping the scale on the other side are foreclosure-ridden areas in Atlanta and swaths in Florida where prices are still falling annually by double digits.

Taken as a whole, home resales in the 17-state region rose 10 percent in the first half of this year on a seasonally adjusted basis, and are off just 4 percent from June of last year, according to the National Association of Realtors.

"Generally speaking, the rate of decrease, both in sales and prices, has started to bottom," says the University of North Carolina's Cumbie. "But that doesn't mean it's going to come roaring back."

Mass layoffs at Bank of America and Wachovia, for example, have taken their toll in their home state of North Carolina. Home price declines in Charlotte accelerated this year, and home resales in June were off nearly 30 percent from last year.

Home and apartment construction, a key economic engine, will also vary widely across the region. Parts of the South, notably Florida and Atlanta, were vastly overbuilt during the housing boom. So construction in the region rose a meager 7 percent in the first half of the year, the lowest of the four regions, according to the Commerce Department.

There was little reason for builders to start laying new foundations. New home sales fell 2 percent from January to June, the only region in the country to post a decline.

"In the longer term, I'm confident that the real estate market is going to shift where buyers are coming out not only because of attractive interest rates and low prices, but because more people are getting jobs," says Les Simmonds, president of L.G. Simmonds Real Estate Corp. in Longwood, Fla. an Orlando suburb. "But, as we speak, it's not right. It's going to take more time."

Southeast states: Alabama, Arkansas, Delaware, D.C., Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

Data compares June vs. January and June vs. June 2008:

Home resales: up 10 percent; down 4 percent

Median price: $163,200 up 14 percent; down 12 percent

New home sales: down 2 percent; down 34 percent

New home construction: up 7 percent; down 44 percent

Mortgage delinquencies as of March: 12.7 percent

Regional outlook: The southern market has several characteristics that could help it recover, Cumbie says. The population continues to grow and businesses continue to move into the region. But the weight of foreclosures and job losses stretching into next year could delay any meaningful recovery.

_ Midwest

It's no surprise that the housing market and the auto industry are intertwined in Detroit, though, this is the first time anybody can remember that you can buy a home for less than the price of a new car.

But step out of devastated towns in Michigan, Ohio and Indiana and the housing market in the Midwest is showing some of the strongest signs of recovery in the country.

Thanks to places like the Dakotas, Iowa and Nebraska, the median sales price in the region rose almost 20 percent to an affordable $157,000 in June from January levels.

Sales of new homes jumped almost 38 percent in the first half of the year, which encouraged builders to get out their hammers. Construction, which was at a standstill in some communities, rose 86 percent on a seasonally adjusted basis, which accounts for typical variations in weather and other factors.

"New construction has been a good indicator for us in the past of what the general market is doing," says Chris Collins, president of the Kansas City Regional Association of Realtors. "Our new market is not what we've been used to but it's substantially better than other parts of the country."

The home resale market, however, remains weaker than the nation as a whole. That again can be blamed on the economy. The jobless rate in the Midwest is 10.2 percent compared with 9.5 percent nationally. And if you don't have a job you are not buying a house.

William Strauss, a senior economist for the Federal Reserve Bank of Chicago, cautioned that job cuts are still high in the region, and loss of income is the No. 1 reason homeowners default.

"We never got as bad as (other) states but nonetheless we still took a hit," he says, and the market remains "soft in the Midwest."

Midwest states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin

Data compares June vs. January and June 2008:

Home resales: up 7 percent, down 2 percent

Median price: $157,000, up 20 percent, down 9 percent

New home sales: up 38 percent, up 6 percent

New home construction: up 86 percent, down 21 percent

Mortgage delinquencies as of March: 11.5 percent

Regional outlook: "Before we can even talk about the housing sector materially improving, we're going to have to see these job losses get down quite a bit," said William Strauss, a senior economist for the Federal Reserve Bank of Chicago. Financial markets must also improve, he said, so more homebuyers can qualify for a mortgage.

_West

For years Las Vegas symbolized the boom, as mile after mile of desert gave way to three-bedroom homes and swimming pools. Then came the crash and it symbolized something else: a decade of speculation and excess.

Now, Las Vegas is one of the hottest housing markets in the region again. This city has always profited from others' misfortune, and the same can be said of the current housing market.

In Clark County, Nev., home to Sin City, one in every 11 homes had received at least one foreclosure-related notice in June, according to RealtyTrac. The glut of deeply discounted foreclosures has almost doubled sales activity for most of this year.

"In January the market was busy, and since that time, it's gone a little haywire," says Brad Snyder, an agent with ZipRealty in Las Vegas. "There's (sales) activity now that we haven't seen even since '04."

The situation is similar in California's Riverside, San Joaquin and San Bernardino counties, where one out of every 14 homes was in foreclosure.

After falling 18 percent in the second half of 2008, monthly home prices were flat in the first half of this year, on a seasonally adjusted basis, according to the National Association of Realtors.

Markets like these have seen a surge this year in all-cash buyers, many of them investors, scooping up the sharply discounted properties. It's not uncommon to see multiple offers on a single property, and that's helped slow the rate of price declines a little. The demand also has helped whittle down the inventory of homes for sale to the lowest level since the boom.

"We have seen such a steep decline in supply right now, that when a home comes on the market it's first day there could be seven or eight or 10 people there in a matter of hours," Snyder says.

To lure buyers away from foreclosures, homebuilders have slashed prices or are simply tearing down vacant homes. New home sales jumped almost 59 percent in the first half of the year, while construction in these grossly overbuilt markets slid 12 percent.

In the Pacific Northwest and states such as Utah, by contrast, housing markets are on a different timer than the rest of the West. Home sales and values held up better and longer while markets in the Southwest were already in decline. These markets also haven't seen as many foreclosures wreaking havoc with home prices.

States in the region: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming

Data compares June vs. January and June 2008:

Home resales: down 1 percent, up 12 percent

Median price: $214,800, flat, down 25 percent

New home sales: up 59 percent, down 10 percent

New home construction: down 12 percent, down 42 percent

Mortgage delinquencies as of March: 12 percent

Regional outlook: The recession remains the region's wild card. Unemployment is at 10.2 percent in the West, but that could go higher if the economy worsens. If that happens, expect more foreclosures and a slower turnaround.

Adrian Sainz reported from Miami, Alex Veiga reported from Los Angeles, Daniel Wagner from Washington, and David Twiddy from Kansas City. AP Data Specialist Allen Chen contributed to this report.

Source: Associated Press, www.ap.org, August 1, 2009

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Isle developers consider impact of 'Great Recession'
One economist says full recovery will not occur until credit eases and tourism improves

There are "green shoots" -- signs of recovery -- in Hawaii's real estate market, but they will need serious fertilizer to take root.

That was the assessment of a speaker's panel at yesterday's Hawaii Developers' Council annual mid-year real estate forecast.

"I do see a pattern of stabilization showing up, which is the basis for the recovery that will occur," said economist Paul Brewbaker.

He called the current economy the "Great Recession" because it's not as bad as the Great Depression, but it's worse than a normal recession.

Shrinking inventory and growing affordability are among the most visible green shoots emerging in Hawaii real estate, the panelists said. But full recovery will not be possible until consumer confidence returns, the credit market eases and the health of Hawaii's tourism industry improves, nourishing these tender shoots, they said.

Hawaii's housing market has rebounded slightly in the last six months after experiencing a significant drop in single-family home and condominium sales following the Lehman Brothers collapse in September, which was like "green shoots meet lawn mower," said Brewbaker, who is the principal of TZ Economics.

"I would hazard a guess that that was the bottom for both of these cycles," he said. "People freaked out after Lehman Brothers, but now they are over that."

While residential home sales may be stabilizing, Brewbaker said home prices will drop further.

"Oahu prices are vulnerable to downside risk. I expect we could see another 10 percent drop and that the (single-family) median may be around $525,000 to $530,000 next year," he said.

Lower demand for residential real estate and declining sales this year caused Oahu's total sales volume to drop 40 percent off of an already lackluster year, said Harvey Shapiro, research economist for the Honolulu Board of Realtors. But as the market has weakened affordability has improved, Shapiro said.

While it took about 60 percent of a family's income to buy a median-priced single-family home in 1999, it took about 46 percent last year, he said.

"2009 will be a slow year, but it's not going to be disastrous," Shapiro said.

Brewbaker said the market will need to stabilize before it begins to recover slowly.

"In 2010 and 2011 no one will believe that the market is in recovery," he said. "By 2012, a few people will believe and by then the hedge funds will have bought everything."

Meanwhile, tight control of Oahu's housing permits and limited inventory will result in another housing bubble, Brewbaker said.

"I'm pretty sure that it will happen again, and likely in the 20-teens," he said.

Depressed economic conditions also have continued to wreak havoc on Hawaii's commercial, retail and resort real estate sectors.

Vacancy rates for Oahu office space dropped to 6 percent in 2006, but are now about 9.2 percent, said Norb Buelsing, president of A&B Properties Inc.

"The good news is that inventory in office is not growing, and hopefully that means that there are opportunities," Buelsing said.

Oahu's retail real estate market has slowed, too, said Mark Bratton, president of Bratton Realty Advisors Ltd.

"The marketing time to lease these properties has gone from 191 days to a year," Bratton said, adding that average retail rents are down 5.9 percent from year-end 2008.

PETCO, Longs Drugs, Safeway, Walgreens and Lowe's are expanding; however, many other retailers such as Hilo Hattie, Starbucks and Jamba Juice are downsizing, he said.

Hawaii's resort real estate has been particularly hard hit, said Joe Toy, president of Hospitality Advisors LLC.

Hawaii's hotel industry has lost $816 million since April 2008, Toy said.

"They are averaging a loss of $51 million a month, or $1.7 million a day," he said, adding that the industry lost $300,000 during the three-hour panel discussion.


Source: www.starbulletin.com, Jul 09, 2009

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HOPEFUL FIRST TIME HOMEBUYER

Dear Joan,

We’re confused and hope you can help. We have seen a lot of news recently about an $8,000 tax credit that is available for first time homebuyers. Can you explain how this credit works and who is eligible? Also, when does it expire? With a lot of homes out there at good prices, and with interest rates still low, we think this is the time to buy.

Signed,

Hopeful first time homebuyer

Dear Hopeful,

There has been some confusion about the $8,000 first time homebuyers tax credit and let me try to be of help. I want to note, however, that this is only a summary of the tax credit provisions and it is best check with a tax professional to see how it applies to your specific situation. In addition, trained professionals such as your local Realtor and various lenders and mortgage brokers are able to help you through the process.

First some “breaking news.” Under guidelines released by the federal Department of Housing and Urban Development (HUD) on May 29, FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront.

Under the guidance, FHA-approved lenders can develop bridge loans that homebuyers can use to help cover their closing costs, buy down their interest rate, or put down more than the FHA-minimum 3.5 percent. The loans can't be used to cover the minimum 3.5 percent down payment.

It’s important to remember that all eligible first time homebuyers can utilize the tax credit, but if their loan is not with an FHA approved lender, they will receive the benefit of the tax credit after the home is purchased and when they file their tax return.

Those who qualify for the 2009 tax credit are first-time homebuyers who buy their homes between January 1, 2009 and December 1, 2009. To qualify as a first-time homebuyer, the buyer or his/her spouse may not have owned a residence during the three years prior to purchase. Unlike the earlier version of the tax credit, passed by Congress in 2008, the buyer does not need to repay the 2009 tax credit if the home purchased is occupied for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale of the property.

The December 1, 2009 deadline is a critical date because most sales take between 60-90 days to close. The property must close by December 1 to qualify for the tax credit. That means you may want to make an offer and enter into a sales contract by September 1, if possible, and no later than October 1. Make your home purchase decision with this timeframe in mind. The clock is ticking.

The 2009 First-Time Home Buyer Tax Credit may be applied to a primary residence (generally where you live for at least 51 percent of the time); these include single-family homes, condos, townhomes, and co-ops. The maximum allowable credit is determined by two factors. The first factor is the price of the home. The tax credit is equal to 10 percent of the purchase price of the home up to $8,000. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. The second factor is the income of the homebuyer. Single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 may receive the maximum tax credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for homebuyers filing jointly. The amount of the tax credit decreases as the income level approaches the maximum limit. Homebuyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

There is no pre-purchase authorization, application or similar approval process for the tax credit. To receive the tax credit, eligible purchasers simply claim the credit on their IRS Form 1040 tax return. Every dollar of a tax credit reduces income taxes by a dollar. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov.

According to estimates by the National Association of Home Builders (NAHB), the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation—101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. For more information go online to the NAHB at http://www.federalhousingtaxcredit.com/2009/index.html, or NAR at http://www.realtor.org/government_affairs/gapublic/homebuyer_tax_credit.

Source: “Open House” is a factual and sometimes lighthearted look at real estate concerns on Maui. If you have a question you want answered contact Joan Martin at Joanm@firsthawaii.com.

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Increase in Refinancing Debt to Equity Ratio Values for Home Mortgages:

Fannie Mae and Freddie Mac will begin refinancing mortgages with loan-to-value ratios of as much as 125 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

Housing and Urban Development Secretary Shaun Donovan made the announcement in a statement July 1, 2009.

The Obama program applies to mortgages that meet Washington-based Fannie Mae and McLean, Virginia-based Freddie Macs conforming loan limits. That cap is $417,000 for some areas and as high as $729,750 for the 250 most expensive real estate markets. (Hawaii is $729,750)

The companies each said in separate statements today that borrowers with loan-to-value ratios of between 105 percent and 125 percent must refinance through their existing mortgage company to qualify. Fannie Mae is additionally paying lenders an incentive equal to half a percentage point, to encourage refinancings to shorter terms of 20 or 25 years. Freddie Mac said it is also offering a special price incentive as well to borrowers that accept a shorter repayment schedule.

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Now is a great time to buy

Potential home buyers who aren’t eligible for the $8,000 first-time home buyer tax credit because they currently own a home actually have what could be an even bigger advantage — the opportunity to buy a new home that is bigger and better than they could have just a year or two before.

"Now may be an ideal time for any family looking to upgrade from their starter home to one more suited to their current or future needs," said Joe Robson, chairman of the National Association of Home Builders and a home builder from Tulsa, Okla. "Buyers are able to get more home for their money by taking advantage of current prices and interest rates, along with the bargaining power that comes from the large number of homes on the market."

Here are the top five reasons current home owners should consider upgrading to their dream home:

Interest rates are at historic lows, which means you can buy more house than you could a year ago — for the same monthly mortgage payment.

Prices have come down. Even if your current home is worth less than during the last housing market peak, your dream home is likely more affordable too.

There are plenty of homes on the market right now, both new construction and existing, giving you lots of choice—and negotiating power.

You can move in to your new home faster, as many builders either have completed homes in inventory or they can start work right away due to the production slowdown.

You may have outgrown your home, but it’s probably someone else’s ideal starter home. With the $8,000 tax credit expiring Nov. 30, now is the time to market your home to first-time buyers.

The current housing market offers unprecedented opportunities for first-time and move-up buyers alike. For more information on the $8,000 first-time home buyer tax credit, go to www.federalhousingtaxcredit.com.

For further information on home buying or shopping for a builder please contact the Greater Fort Worth Builders Association at 817-284-3566.


Source: www.star-telegram.com, Fri, Jun. 05, 2009

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DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market

WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.

"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.

Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.

For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.


Source: www.hud.gov/news,  May 29, 2009

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New Law Exempts Real Estate Professionals

Gov. Linda Lingle has signed into law a bill that excludes real estate professionals from the definition of a distressed property consultant under a law passed last year.

The Mortgage Foreclosure Rescue Fraud Prevention Act made it difficult for real estate agents and brokers to take listings from homeowners trying to sell their homes to avoid foreclosure.

The state law was intended to protect consumers facing foreclosure from predators, but it made it difficult for real estate professionals to handle short sales, where a homeowner sells a property for less than what is owed to the lender. In that situation, real estate agents could fall under the definition of distressed property consultants, which requires them to abide by a separate set of rules outlined in the law.

The new law excludes licensed real estate brokers and salespersons from that definition. It also prohibits real estate professionals from “certain conduct relating to” acquiring an ownership interest in a distressed property.


Source: www.pacific.bizjournals.com, Thursday, May 21, 2009

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