20-city price index falls..

A monthly home-price index recorded unprecedented year-over-year drops in the price of resale single-family homes in February 2009 compared to the same month a year earlier in 10 of 20 market areas, with 15 markets showing double-digit percentage declines.
The composite index for the 20 metro areas, down 18.6 percent year-over-year in February, did not set a new record -- breaking a string of 16 record-setting months.
The Standard & Poor's/Case-Shiller 20-metro area price index, which compares repeat sales over time for thousands of U.S. homes, found a 35.2 percent year-over-year decline in the Phoenix, Ariz., market in February -- the steepest index drop among the 20 tracked areas.
Next on the list was Las Vegas (-31.7 percent), San Francisco (-31 percent), and Miami, (-29.5 percent).
The slightest year-over-year index declines were in Dallas (-4.5 percent), Denver (-5.7 percent), and Boston (-7.2 percent).
The largest price drop from January 2009 to February 2009 was in Cleveland (-5 percent), and the slightest drop was in Dallas (-0.3 percent).
The Case-Shiller price index has come under fire from critics -- some within and some outside the real estate industry -- who question whether the selected metro areas and the index data paint a clear picture of price changes across the U.S.
And where home-price charts are concerned there is often disagreement over their accuracy and questions about their methodology -- the Wall Street Journal last week reported on a challenge by economist Thomas Lawler over Yale University economist Robert Shiller's use of a chart showing U.S. home price trends since 1890.

NAR Seeks Moratorium on Appraisal Rules

The National Association REALTORS® and the National Association of Mortgage Brokers are pushing hard to delay implementation of the new Fannie Mae and Freddie Mac rules governing real estate appraisals.The new rules are supposed to take effect May 1, but the REALTORS®, in a letter to the Federal Housing Finance Agency, argued that there hasn’t been enough time to properly implement the changes and the result would be higher costs for borrowers. They seek a one-year moratorium.The goal of the change is to eliminate alleged collusion between mortgage lenders and appraisers to pump up home values. Among other things, the rule change prevents mortgage brokers from ordering appraisals directly, requiring them to go through lenders. Mortgage brokers say this will make it hard for them to compete with lenders. Borrowers shopping for the best rate could be asked to pay for multiple appraisals, says Michael Carrier, an associate with the Mortgage Bankers Association.Read the NAR's letters to Fannie Mae and Freddie Mac on the issue. Source: The Wall Street Journal, Jessica Holzer (04/29/2009)

Four Perks of New Homes

It could be a great time to buy a brand now home because prices are down and builders are motivated to unload declining, but still significant, inventories. Marty Gillespie, president of Heartland Homes, a custom home builder in western Pennsylvania, offers these reasons for buying new rather than existing properties.● Buying new means new everything. New homeowners don’t have to replace carpeting, paint, or redo the kitchen.● Mortgages on new homes are often lower. That gives new homebuyers bargaining power.● Appreciation is greater. New homes tend to gain more value than existing homes during the first five to seven years.● New homes are often more energy efficient. Gillespie says his company’s research shows that new homes are 30 to 35 percent more energy efficient than a home built 10 years ago.

Fight Inflation: Buy a Home

Some economic analysts say that the possibility that the economy will go into overdrive and inflation will skyrocket is a much more frightening possibility than the current recession.One inflation hedge nearly all of them point to is real estate. Owning it outright is the best scenario, but if that’s not possible, a low-rate, 30-year fixed mortgage is the next best thing. As inflation drives up salaries, mortgage payments will stay the same, analysts point out. Source: USA Today, John Waggoner (04/24/2009)

Bay Area home sales climb above last year as median falls below $300K

March 19, 2009
La Jolla, CA.----Bay Area home sales beat the year-ago mark for the sixth straight month in February as the winter market sizzled in many foreclosure-heavy inland areas offering the deepest discounts. The median price dipped below $300,000 for the first time since late 1999, pushed lower by an abundance of inland distressed sales and a dearth of coastal high-end activity, a real estate information service reported.
A total of 5,032 new and resale houses and condos closed escrow in the nine-county Bay Area last month. That was essentially unchanged from 5,050 in January but up 26.1 percent from 3,989 in February 2008, according to MDA DataQuick of San Diego.
Last month’s sales were the fifth-lowest for a February since 1988, when DataQuick’s statistics begin, and 22 percent below the average 6,410 for the month. February sales have ranged from a low of 3,989 in 2008 to a high of 8,901 in 2002.
Only 321 newly constructed homes sold last month, down 55 percent from 713 a year ago, the lowest on record for a February, and the second-lowest for any month back to 1988. Many builders have had a difficult time competing with falling resale prices – especially foreclosures.
The allure of such discounted foreclosures helped lift sales of existing single-family houses to record levels for a February in Vallejo, Brentwood, Antioch, Pittsburg and Oakley.
The use of government-insured, FHA loans – a common choice among first-time buyers – represented a record 24.9 percent of all Bay Area purchase loans last month.
Conversely, use of so-called jumbo loans to finance high-end property remained at abnormally low levels. Before the credit crunch hit in August 2007, jumbo loans, then defined as over $417,000, represented 62 percent of Bay Area purchase loans, compared with just 17.5 percent last month.
The difficulties potential high-end buyers have had in obtaining jumbo loans helps explain why sales of existing single-family houses fell to record-low or near-record-low levels for a February in some higher-end communities. They included Orinda, Walnut Creek, San Rafael, San Francisco, Burlingame, San Mateo, Los Gatos, and Los Altos.
“A lot of Bay Area activity is basically on hold, waiting for the jumbo mortgage spigot to reopen. That could start to happen during the second quarter, although slowly. Yesterday’s move by the Federal Reserve to buy more mortgage securities could be a turning point,” said John Walsh, MDA DataQuick president.
Across the nine-county region, the median price paid for all new and resale houses and condos combined fell to $295,000 last month. That was down 1.7 percent from $300,000 in January and down a record 46.2 percent from $548,000 a year ago.
The February median stood at its lowest since it was $299,000 in December 1999 and was 55.6 percent below the peak median of $665,000 reached in June and July of 2007.
The median price – the point where half of the homes sold for more and half for less – has fallen on a year-over-year basis for 15 consecutive months. Its near free-fall in recent months overstates the decline in the value of the typical Bay Area home. The median’s plunge also reflects the sluggishness of high-end sales, which are now under-represented in the statistics; a shift toward more sales occurring in the less-expensive inland markets; and buyers’ preference for discounted foreclosures.
Last month 52 percent of all homes that resold in the Bay Area had been foreclosed on at some point in the prior 12 months, up from a revised 51.9 percent in January and 22.3 percent a year ago.
At the county level, foreclosure resales last month ranged from 12.1 percent of resales in San Francisco to 69.5 percent in Solano County. In the other seven counties, foreclosure resales were as follows: Alameda, 46.2 percent; Contra Costa, 65.1 percent; Marin, 18.9 percent; Napa, 63.1 percent; Santa Clara, 42.9 percent; San Mateo, 31.3 percent; and Sonoma, 57.1 percent.
San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales in late February were estimated in Alameda and San Mateo counties.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,286 last month, down from $1,297 the previous month, and down from $2,606 a year ago. Adjusted for inflation, current payments are 50.2 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 63.2 percent below the current cycle's peak in July 2007.
Indicators of market distress continue to move in different directions. Foreclosure activity has waned recently but remains near record levels, while financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable. Non-owner occupied buying activity is above-average in some markets, MDA DataQuick reported.

Sales Volume
Median Price
All homes
Feb-08
Feb-09
%Chng
Feb-08
Feb-09
%Chng
Alameda
753
971
29.0%
$486,500
$290,000
-40.40%
Contra Costa
753
1,283
70.4%
$450,000
$216,500
-51.90%
Marin
136
111
-18.4%
$775,000
$573,409
-26.00%
Napa
57
88
54.4%
$525,000
$322,500
-38.60%
Santa Clara
984
1,079
9.7%
$658,000
$408,750
-37.90%
San Francisco
431
272
-36.9%
$736,000
$640,000
-13.00%
San Mateo
343
311
-9.3%
$646,500
$502,250
-22.30%
Solano
278
557
100.4%
$350,000
$195,000
-44.30%
Sonoma
254
360
41.7%
$400,000
$282,000
-29.50%
Bay Area
3,989
5,032
26.1%
$548,000
$295,000
-46.20%
Source: MDA DataQuick Information Systems, www.DQNews.com

California Home Prices Looking Steady

Median home prices in California slipped less than a half percent in March compared to February, a sign that the state’s troubled housing market is stabilizing, according to MDA Data Quick, which tracks housing prices.The firm said the market was similarly stable in January and February. "History suggests that these are the kinds of signs you see when a market is approaching stabilization in terms of pricing," Data Quick spokesman Andrew Lesage says. "Are we at the bottom? That's not clear."Source: The Associated Press, Jacob Edelman (04/16/2009)

Open Houses: 6 Ways to Capture Clients on the Spot

Try these tips for turning your open houses into a dependable flow of income for your business.
By Rich Levin, Sales Coach
Levin, Sales Coach

If you're getting ready to hold an open house, lock the door. And forget about programming all your visitors' numbers on your phone's speed dial: You never want to call them back.

That may not sound like your traditional advice for holding open houses. After all, isn't the idea to land more clients—not to mention, a buyer for the listing? But this unconventional strategy can work. Here's why.

Open houses are the perfect opportunity to expand your potential buyer pool. But if you're not careful, you may come across as too pushy, and that can be a quick turnoff that sends buyers running for the door. (No, that's not the reason you should lock it. I'll get to that shortly.)

Try these six tips to make open houses a more effective business tool.


Rule #1: Never plan on calling people later.

Instead of telling visitors you'll give them a call afterwards to follow up, you should use the valuable in-person time at the open house to say what you need to say. You're much more likely to make a stronger impression face-to-face than during a phone call at a later time. When meeting visitors at open houses, these are the main questions you want them to answer for you:
Are they interested in the property?
What other properties may be of interest to them? What are they looking for?
Will they be willing to set up an appointment to talk further with you, or are they interested in viewing additional properties that may be a better fit?

Note, there is an exception to the no-callback rule: When you have a crowded open house, you may not have enough time to talk with everyone. In this case, it may make sense to pick up the phone and ask if they needed any additional information.


Rule #2: Welcome visitors at the door.

The best way to welcome visitors to the open house: Lock the door. Neither you nor the owners want people walking into the house unannounced. This won't only ensure you get to talk to everyone who wanders in but it's also a safety issue. (Read: 9 Open House Safety Tips)

Try this approach:
Greet people at the door.
Welcome and thank them for coming.
Hand them information on the property.
As they look at the information, talk about a special feature or two in the home that they may want to notice as they go through the property.
Ask for their name, phone number, and e-mail address, or have them fill out an open house register so you'll have their contact information. If they decline to give you their contact information (and they don't appear threatening), you should still let them view the property. You'll find most visitors are willing to give you their contact information.
Explain that there is additional information about the listing on the dining room or kitchen table that may be of interest to them.

Rule #3: Stage your informational packets.

The dining room or kitchen table can be a great spot to capture visitors' attention with extra information about the listing. Place a variety of items here, such as property details, school information, and community brochures. Don't forget to attach a bold label (in 24- to 48-point font) with your contact information on each type of information you provide.

The goal is to get visitors to pause and look at these resources, encourage them to speak with you, and build your credibility as an important resource—not only about the listing, but about the community too.


Rule #4: Approach visitors during the walk-through.

After you've allowed visitors to wander through the house on their own, you'll want to catch up to them and see if they have any questions and gauge what they like or dislike. Approach carefully; you don't want to be a pest. This can be your prime chance to land them as a client.


Rule #5: Get the house in showing-shape.

You'll want the house looking its best outside and in. Instruct your sellers to trim shrubs, unclutter rooms, shampoo rugs, add a fresh coat of paint, check the home's smell (Tip: Try fresh-baked cookies for a welcoming scent), and clean absolutely everything. (Provide sellers with a helpful checklist: "18 Simple Tips for Better Home Showings," part of REALTOR® Magazine's Handouts for Customers.)

Here's what you can do to prepare:
Send invitations to the neighborhood and to anyone in your sphere of influence who lives in the area.
Arrive early on open house day, turn on all the lights, open the curtains, and have soft, relaxing music playing in the background.
Display signs throughout the house that point to special features: “Look down, hardwood floors”; “Gas fireplace, push this button”; and “Walk-in closet, walk in.” These can help distinguish your listing as well as make it easier for you to engage visitors about certain qualities of the house.


Rule #6: Choose your open houses carefully.

Avoid holding an open house just because your seller wants it or another practitioner asks you to. Typically, open houses that garner the most traffic are newer listings, reasonably priced, and easy to access from main roads. (Not sure if an open house is right for your listing? Read what other practitioners had to say in the YPN Lounge blog—"Open Houses: Are They Worth It?)

When you invest the time and energy into conducting an open house, you'll be able to turn them into much more than just a neighbor snoop-fest. Open houses can serve as a dependable flow of leads for your other listings. And who knows, you may just find the perfect buyer for that listing.

Housing Recovery? Not This Year, Experts Say

Housing Recovery? Not This Year, Experts Say
One in every nine homes in the United States is sitting vacant, according to the U.S. Census Bureau. Economists predict that getting rid of this glut nationwide will take at least three years.

Here’s the math: The number of housing units in the United States increased by 8.65 million from 2002 to 2007. During that period, the number of U.S. households rose by only 6.7 million. Subtract a half-million homes that will be torn down or lost to fire, and that leaves an excess of 1.3 million units, not including vacation homes.

The country adds about 1.5 million households every year, but the recession and a slowdown in immigration is reducing that number. Additionally, Gen Xers, most of who are within the age range when people tend to have the most children, are relatively small in number and won’t create an enormous need for larger living space.

Factor in the number of new homes being built—about 700,000 this year, according to Arthur C. Nelson, director of the University of Utah’s Metropolitan Research Center— and the bottom line is a multi-year recovery.

As Robert Lang, head of the Metropolitan Institute at Virginia Tech, puts it, "Population is still growing, and sooner or later, you'll want to move out of relatives' basements."

Utah’s Nelson analyzed government and private housing data and predicts that hard-hit housing markets in the West and South will start to bounce back later this year and during the first half of 2010. The Northeast and Midwest will have the slowest comeback, possibly extending beyond 2012, he says.

Source: USA Today, Hava El Nasser (09/10/2009)

S&P/Case-Shiller Home Price Indices show continued declines

S&P/Case-Shiller Home Price Indices show continued declines

Nationwide, prices of existing, single-family homes showed continued declines in January, with 13 of the 20 metro areas showing record rates of annual decline, and 14 reporting declines in excess of 10 percent compared with January 2008, according to the S&P Case-Shiller Home Price Index.

“Home prices, which peaked in mid-2006, continued their decline in 2009,” says David M. Blitzer, chairman of the Index committee at Standard & Poor’s. “There are very few bright spots that one can see in the data. Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and nine of the MSAs falling more than 20 percent in the last year.”

As of January 2009, average home prices across the United States are at level similar to those in late 2003.

More info

Mortgage rates bounce back

Still under 5% for borrowers with good credit

By Inman News, Thursday, April 9, 2009.

Inman News

Mortgage rates bounced back this week but remained below 5 percent for borrowers with good credit and 20 percent down payments, Freddie Mac said in releasing the results of its weekly survey of lenders.

Applications for conventional purchase mortgages are up 22 percent since the end of February, and demand for refinancings is up 129 percent, Freddie Mac said, citing data from the Mortgage Bankers Association.

Freddie Mac said 30-year fixed-rate mortgages averaged 4.87 percent with an average of 0.7 point for the week ending April 9, up from 4.78 percent a week ago and 5.88 percent a year ago.

The 15-year fixed-rate mortgage averaged 4.54 percent with an average 0.7 point, up from 4.52 percent last week and 5.42 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.93 percent with an average 0.7 point, up from 4.92 percent last week and 5.56 percent a year ago.

One-year Treasury-indexed ARMs averaged 4.83 percent with an average 0.5 point, up from 4.75 percent last week and 5.18 percent a year ago.

Those rates were for mortgages eligible for purchase or guarantee by Freddie Mac. Borrowers taking out loans too large or risky for Freddie Mac, or providing down payments less than 20 percent, can expect to pay more.

Applications for both refinance and purchase loans were up last week, the Mortgage Bankers Association reported in a separate survey.

The MBA said loan applications were up 4.7 percent during the week ending April 3. Demand for purchase loans was up 11.1 percent, driven by a 17.1 percent jump in applications for government-backed loans, largely FHA. Demand for conventional purchase loans was up 7.7 percent.

Demand for refinance loans increased a more modest 3.2 percent. Refinance applications made up 77.9 percent of all mortgage applications during the week ending April 3, down from 79.1 percent the previous week.

Looking back one year, applications for purchase loans are down about 23 percent, while demand for refinance loans is up 150 percent. At this time a year ago, refinance applications made up 52.2 percent of mortgage applications.

Fannie Mae recently reported it nearly doubled the dollar volume of refinancings from February to March, to $77 billion -- the company's largest refinance month since 2003.

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http://www.newcondosonline.com/california-condos/san-francisco-new-condos/

Fannie Mae Announces Guidelines for Loan Limits in High Cost Areas

Fannie Mae Announces Guidelines for Loan Limits in High Cost Areas

On March 30, 2009, Fannie Mae issued Announcement 09-08, implementing the 2009 conforming loan limits for high cost areas ("high-balance" loans above $417,000). The American Recovery and Reinvestment Act (ARRA) raised loan limits for high cost areas for 2009 to the higher of the permanent limits in effect for 2009 or the temporary limits in effect for 2008. In most cases the 2008 limits are higher. The guidelines apply to loans delivered to Fannie Mae starting May 1, 2009.

The Fannie Mae announcement specifies eligibility requirements for high-balance loans, including:

—Loan must be conventional, first-lien mortgages only.

—One to four unit properties are eligible.

—Loans must be fixed-rate or adjustable rate loans (no balloons).

—Loans must meet loan-to-value (LTV) and minimum credit score requirements. For one unit properties with a fixed rate mortgage, the maximum LTV is 90% and the minimum credit score is 700 for LTVs above 75% and 660 for LTVs at or below 75%. For one unit properties with an adjustable rate mortgage, the maximum LTV is 75% and the minimum credit score is 680. For second homes and investment properties, the maximum LTV is 65% and the minimum credit score is 740. Other rules apply to other categories.

Fannie Mae Announcement 09-08, Temporary High-Cost Area Loan Limits and Revised
www.freddiemac.com
Eligibility Requirements for High-Balance Mortgage Loans

Come Out and Play!

Come Out and Play!

--posted by irongrace on Mar 11, 2009

I thought it was rather odd when my friend from the nursing home asked me to motor her wheelchair through the puddles that formed from the melting snow. I didn't really get it, but I went along with it. We were out on one of our walks or what I like to call one of our"weekly strolls" because I stand and she rolls. Adhering to my friend's peculiar request, we were off on our watery wheelchair adventure! We splashed through each puddle together and came out of each experience, slightly damp and smiling. In fact, after a few puddle excursions, even I started looking out for larger and more daunting puddles to sail through until one day we were out on our stroll, and to our dismay, no puddles were to be found. They had all dried up.

Keen on keeping our strolling adventure alive, we discovered something new that awaited us. As we headed down the residential street, there was a small pile of leaves. My friend asked me to roll her through them and we did like two small children rushing into a cluster of autumn leaves which flew up into the air, softly floated around us and then made their way gently back to the earth.

It was at that moment that I reflected more deeply on my friend's predicament. My friend had been in a wheelchair her whole entire life. As a child she never gotten to splish and splash through puddles or sprinklers or fly into a pile of leaves or roll through snow or feel her toes wiggle in the warm grainy sand. Her family always instructed her to "be an adult" and as the obedient daughter, she did her best to fit the mold, but I now see that the spirit of the child had been locked inside her for all these years. So, all she wanted to be with me, was a child who was free, free to laugh and play and get wet.

From wheelchair speeding through puddles and leaves, and across lawns, to howling with laughter, and screaming for no particular reason, we were like two playmates realizing what it truly meant to enjoy life, despite the strange looks or grouchy remarks we would hear from those around us who had let the joy of life slip through their worn fingers.

Thanks to my friend, I am now on a mission to find all those children within us and make them come out and play!

U.S. Treasury: Mortgage Rates 'as Low as 2 percent'

U.S. Treasury: Mortgage Rates 'as Low as 2 percent'
by Broderick Perkins

Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.

Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.

A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.

Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.

The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.

The modification program, also designed to standardize a hodge-podge of modification efforts by lenders, comes with financial incentives for both homeowners and lenders.

Loan servicers get thousands of dollars for modifying mortgages and borrowers get a principal reduction also for thousands of dollars over five years for paying on time.

MHA modifications are designed to make the monthly cost of housing more affordable by reducing the mortgage payment to as little as 31 of household income. Lenders can accomplish that by reducing interest rates, extending the life of the loan and even reducing the principal -- though to date most lenders have balked on forgiving debt.

"To reach the target affordability level of 31 percent, interest payments will first be reduced down to as low as 2 percent. If at that rate the debt to income level is still over 31 percent, lenders then extend the term or amortization period up to 40 years, and finally forbear principal at no interest, until the payment is reduced to the 31% target," according to the Treasury's "Making Home Affordable Updated Detailed Program Description."

The program runs through 2012, allows borrowers to modify a loan only once and applies only to loans made on or before Jan. 1 2009. Mortgages for single-family homes worth more than $729,750 are excluded.

• Do you qualify? Visit FinancialStability.gov's modification area to find out.

• There's more mortgage modification news that really hits home by helping you make the right choices to get the lender on your side.

Refinancing help

MHA also includes a refinancing provision for those with loans held by Fannie Mae or Freddie Mac.

Homeowners with less than 20 percent equity in their homes, who now find it difficult if not impossible to refinance, may be eligible to get new loans at lower interest rates provided the new note doesn't exceed 105 percent of the home's value.

The refinanced loans can be as large as $729,750 in high cost areas and go to those who are current and on time with their mortgage payments.

• Do you qualify? Visit FinancialStability.gov's refinance area to find out.

• For more information on all the provisions of the Obama administration's MHA, visit Making Home Affordable on line.