Home prices rise in August

 

Home prices in the nation's largest cities rose from July to August, according to a closely watched index, adding to a turnaround in housing this year.
The Standard & Poor's/Case-Shiller index of 20 American cities, a key measure that is closely watched by economists, rose 0.9% from July to August and 2.0% from August 2011.
Nineteen of the 20 cities posted positive monthly gains in August.
“Home prices continued climbing across the country in August,” David Blitzer, chairman of the S&P index committee, said in a release announcing the new data Tuesday.
The Phoenix metro area isleading the home price recovery, with home prices there up 18.8% from August 2011. Los Angeles was up 2.1%, San Diego 1.9% and San Francisco 5.3%.
Atlanta continued to lag the recovery down 6.1% year-over-year. Chicago was down 1.6% and New York 2.3%.
Housing sales figures Florida:
These figures for August 2012 reflect increases from August 2011:
Condo sales in Broward: up 2.4%; Total number of sales: 1,419
Condo sales in Miami-Dade: up 8% to 1,492
House sales in Broward: up 15% to 1,369
House sales in Miami-Dade: up 5% to 1,059
SOURCE: Miami Association of Realtors

U.S Goverment sues Bank of America for $1 billion over mortgage losses

The U.S. government has sued Bank of America for more than $1 billion, charging it sold risky mortgages to Fannie Mae and Freddie Mac, defrauding taxpayers in the process.

The civil suit, filed in a U.S. district court Wednesday, charges that the bank, as well as a company it acquired in 2008, originated home loans under a program called "The Hustle," aimed at making loans as fast as possible while forgoing checks on their quality. Those risky loans were then guaranteed by Fannie Mae and Freddie Mac, and when they defaulted, it cost taxpayers more than $1 billion.

The suit alleges that Countrywide Financial began the activity in 2007. When the home loan lender was purchased by Bank of America in 2008, the practice continued through 2009.

"The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope. As alleged, through a program aptly named ‘the Hustle,’ Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill," said U.S. Attorney Preet Bharara. "These toxic products were then sold to the government sponsored enterprises as good loans.

"This lawsuit should send another clear message that reckless lending practices will not be tolerated,”.

 

Fannie and Freddie were originally created as independent government-sponsored private enterprises, but were taken over fully by the federal government in September 2008 as they teetered on the brink of collapse. Through the end of 2011, the government had pumped $183 billion into the two entities to keep them afloat, and the Obama administration has called for the entities to eventually be wound down and replaced with a new housing finance system.

Countrywide recently attracted scrutiny on Capitol Hill after it was revealed that several former and current members received favorable mortgage terms under a VIP program organized by the lender's former CEO, Angelo Mozilo. The lawmakers receiving the loans have maintained they did not know they were receiving favorable terms, and Mozilo has since been barred from heading public companies, and is paying a $22.5 million penalty to settle charges he misled investors while heading Countrywide.

The suit marks the second of its kind filed by Bharara this month. Earlier in October, the U.S. filed a civil suit against Wells Fargo, similarly alleging the bank wrongfully certified risky mortgages as high quality before selling them to the Federal Housing Administration, which was stuck with hundreds of millions of dollars in losses when they defaulted.

And in September, New York Attorney General Eric Schneiderman filed a suit against JPMorgan Chase, charging it with widespread fraud in the marketing and selling of risky mortgage-backed securities in the lead-up to the financial crisis that caused billions of dollars in losses for investors. Schneiderman is also the head of President Obama's task force charged with sniffing out mortgage fraud. The banks facing those suits have vowed to fight the charges, and Bank of America did not respond to an immediate request for comment.

Florida Markets Top Ten Turnaround Report

Though the past four years have seen many cities suffering from large numbers of foreclosures and a loss in home values, ten of these real estate markets are now leading the nation towards a general recovery and stability of the housing sector.
Realtor.com’s Top 10 Turnaround Town Report, based on third quarter 2011 data, includes six Florida markets: Miami, Orlando, Fort Myers-Cape Coral, Fort Lauderdale, Sarasota-Bradenton, and Lakeland-Winter Haven.
Each of these markets has experienced positive year-over-year median price appreciation, reductions in year-over-year median age of inventory and inventory counts, while also experiencing lower unemployment rates on a year-over-year basis. Florida’s success can also be tied to foreign buyers; the number of foreign buyers purchasing homes there increased from 10 percent in 2007 to 31 percent in 2011.
Let’s take a closer look:
Miami, FL: The number one town on the report, Miami has gone from being one of the first victims of the subprime crash to having a healthy inventory that is only half the size from a year ago. Today, Miami is only reporting one foreclosure for every 407 homes, compared to the national rate of one per every 213. And, condo sales have increased 79 percent in the first five months of this year, largely due to an influx of foreign investors.
Orlando, FL: Ranked second on the report, Orlando leads the nation in the ratio of Realtor.com searches to listings. Inventory has also obtained a balance with demand. Foreclosures hurt the market in 2007-08, but foreclosures in Orlando were down 58 percent in September, compared to last year.
Fort Myers-Cape Coral, FL: Median prices in Fort Myers-Cape Coral have increased almost 33% year-over-year, according to Realtor.com’s October 2011 Real Estate Trend Data. In addition, foreclosures are down–only one in 313 homes in September–while inventory has been reduced and foreign buyers have been attracted to the area’s real estate prices. The metro ranked third on the turnaround report.
Fort Lauderdale: FL: A decrease in inventory coupled with an uptick in prices earns Fort Lauderdale the number five spot on the report. Inventory decreased almost 38 percent year-over-year, according to Realtor.com’s October data report. Prices have fallen about 46 percent since 2006, but are now going up.
Sarasota-Bradenton, FL: A total of 11 percent of all foreign buyers in Florida are in Sarasota-Bradenton specifically. Number six on the turnaround report, the market has seen a list prices increase of more than 17 percent year-0ver-year and a decrease of inventory of 32 percent according to the Realtor.com October data. The market still has a long way to go, after losing more than 55 percent of home values from 2006 to the second quarter of 2011 due to foreclosures.
Lakeland-Winter Haven, FL: A year ago, Lakeland-Winter Haven topped national foreclosure filing lists, but now the area’s distressed sale market share has decreased 46 percent. The area–ranked 7th on the turnaround list–has seen total listings decreased more than 36 percent year-over-year and median age of inventory decrease more than 17 percent, according to Realtor.com’s October data. Prices are also up 12 percent compared to last October.
Realtor.com’s Top Ten Turnaround Town Report is compiled using a formula based on price appreciation, changes in inventory, median age of inventory, searches by Realtor.com visitors, and unemployment data.

Home prices up, hitting 2004 levels

 

Home prices rise, says FHFA

According to the Federal Housing Finance Agency’s (FHFA’s) monthly House Price Index (HPI), home prices rose 0.8 percent between March and April, on a seasonally adjusted basis. Previously, the FHFA had reported a 1.8 percent price increase in March, which has been revised to a 1.6 percent increase. Over the last year, home prices have risen 3.0 percent, the Agency reports.
The results were better than what was forecasted, as economists surveyed by Dow Jones Newswires had only expected a 0.4 percent monthly increase.

Prices, sales, and inventory levels

The U.S. index is down 17.6 percent from its April 2007 peak and is now roughly the same as the April 2004 index level. Today, the National Association of Realtors reported that in May, home prices rose, and sales are slowed slightly by tight supply levels.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to a record low 3.80 percent in May from 3.91 percent in April; the rate was 4.64 percent in May 2011; recordkeeping began in 1971.
Meanwhile, banks are looking to alternatives to foreclosures that continue to punish home values, as seen in the reduced number of seizures, falling 18 percent between May 2011 and May 2012, according to RealtyTrac.

Call it a comeback?

Speaking to May’s data (one month ahead of FHFA data), the National Association of Realtors’ Chief Economist, Dr. Lawrence Yun said, “The recovery is occurring despite excessively tight credit conditions and higher downpayment requirements, which are negating the impact of record high affordability conditions.”
The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine census divisions, seasonally adjusted monthly price changes from March to April ranged from -1.2 percent in the New England division to +2.2 percent in the Pacific division.

Home Values See Highest Monthly Increase Since 2006

Zillow issued a released Friday reporting that both national home values and rents rose in the month of April.

According to the April Zillow Real Estate Market Reports, national home values rose 0.7 percent in April to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, and it makes April the second month in a row in which home values climbed up.

Zillow also reported that rents rose from March to April, increasing by 1.6 percent, according to the Zillow Rent Index. Of the 178 markets covered by Zillow, 78 percent experienced a rise in rents.
The Miami-Fort Lauderdale and Phoenix metro areas saw the biggest increases in home values, rising 1.6 and 1.9 percent, respectively. Values continued to decrease in hard-hit markets like Atlanta, where home values fell 0.7 percent.
“The housing market continues to show positive signs, with home values increasing significantly in April,” said Dr. Stan Humphries, chief economist at Zillow. “The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market. With almost one-third of homeowners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We’ll continue to watch this signal as increasing home values turn from a blip into a trend.”
Foreclosures also continued to decline in April, with 6.8 out of every 10,000 homes being foreclosed across the U.S. That figure was down from 8 out of every 10,000 in March.

Home Prices Rise

For the first time in 18 months, home prices increased year-over-year in February, a turnaround that RE/MAX said signifies a "very active selling season." A RE/MAX housing survey released Wednesday shows national home prices in February rose 1.1% from a year earlier and 1.4% from January to $171,881. Of the 53 metro areas included in the survey, 24 experienced price increases from February 2011, including: Miami (20.5%), Orlando, Fla. (15.8%), Phoenix (12.5%), Tampa, Fla. (11.1%), St. Louis (9.8%) and Detroit (8.9%). Home sales in February rose 8.7% from a year earlier, continuing a trend of eight straight months above the previous year's total. February home sales climbed 8.1% above sales in January. Of the metros, 45 saw increases over February 2011, with 26 jumping double digits, including: Albuquerque, N.M. (46.6%), Providence, R.I. (36.7%), Raleigh, N.C. (33.8%), Boston (30.5%) and Chicago (27.5%). “All the data is pointing to a very active spring and summer selling season this year, which is great news for a recovering housing market,” RE/MAX Chief Executive Margaret Kelly said. “As sales numbers have trended higher for several months, we have been anticipating a turnaround in home prices, and it looks like it’s finally starting.” Analysts at Barclays Capital on Monday said the homebuilder spring selling season has "arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005." Properties sold in February stood on the market for an average of 103 days, the same as in January and a year earlier, according to RE/MAX findings. In the last 12 months, the average fell below 90 in only two months — 88 in both July and September.

Real Estate Buyers Tips

If you're looking for ways to ensure your buyer offers get accepted the first time, every time then keep reading.

Here I share these 20 tips for turning offers into closed deals:
1. Offer above list price.2. Have the buyer write an emotional letter stating why they want the property.3. Ask the listing agent what they want to see in an acceptable offer.4. Don’t bug the listing agent by calling hourly.5. Offer to pay cash, and submit a verification of funds.6. Offer substantial earnest monies.7. Make the earnest money nonrefundable.8. Shorten inspection periods.9. Offer to buy the property "as-is."10. Waive the appraisal contingency.11. Offer to pay any HOA transfer fees.12. Waive any qualifying contingencies.13. Use the listing agent’s title company.14. Have the buyer pay for the home warranty.15. Don’t ask the seller for any buyer closing costs.16. Offer to help the seller move.17. Be present when the offer is presented to the seller.18. Use an escalation clause that outbids other offers. Cap the increase and ceiling amounts, and ask for a copy of the best offer.19. Ask the listing agent what other offers have been received and when will they be presented.20. Be 25 percent more assertive than usual.

REO'S and Foreclosures vs Rental Market

After an extended period of talking about selling off their massive inventory of foreclosed properties (Real Estate Owned properties, or REOs), the Federal Housing Finance Agency today announced the kickoff to their initiative to sell their inventory to investors in an effort to turn them into rental properties to serve the new generation of renters, many of whom are former homeowners. The vision is to reduce the number of vacant homes and increase the availability of rental units as the market shifts.
The initiative is aimed at the areas hit hardest by foreclosures, where entire streets are sitting vacant as the virus of foreclosures has hit – with one house getting foreclosed upon then becoming vacant, pulling the values of surrounding homes down as it sits on the market at a slashed rate, then another home is foreclosed upon and goes vacant, pulling values down even more, and so on and so forth. These undesirable areas could theoretically be improved as they are bought by investors through the government.
FHFA is now allowing interested investors to pre-qualify for the program and ultimately, investors will be able to invest in pools of foreclosed properties, with the agreement that they will turn the properties into listings for a predetermined number of years.
The FHFA said in a statement, “This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. Pre-qualification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.”
FHFA Acting Director Edward J. DeMarco said, “This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities. I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”