Delinquent Mortgages Reach Record Levels
Almost 10 percent of all mortgages on one- to four-unit properties are in some stage of foreclosure, up from 2.65 percent a year ago on a seasonally adjusted basis, according to the Mortgage Bankers Association’s National Delinquency Survey released Thursday.The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in an MBA delinquency survey.The bankers blamed the high foreclosure levels on unemployment. “Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent,” says Jay Brinkmann, MBA’s chief economist.Brinkmann points out that prime fixed-rate loans represent the largest share of foreclosures and are the biggest driver of the increase in foreclosures.Home builders and housing analysts mostly shrugged at the high foreclosure-rate information.“My prediction is we’ll probably recover on a seasonal basis,” Robert Toll, chairman and CEO of Toll Brothers, the largest builder of luxury houses, said yesterday at a conference in New York sponsored by Citigroup Inc. “It’s generally accepted that the homebuilding industry is off the mat and on the road to recovery.”Josh Levin, a housing analyst at Citigroup Global Markets Inc. in New York, said he expects sales to continue to be slow until January or early February, followed by a surge as buyers try to beat the April 30 expiration of the tax credit.“The bouncing along the bottom is distorted by government policies,” he said in an interview with Bloomberg News yesterday.Source: Mortgage Bankers Association (11/19/2009) and Bloomberg, Kathleen M. Howley and John Gittelsohn (11/20/2009)
Friday, November 20, 2009
Thursday, November 12, 2009
$8000 Tax Credit Extended
The Tax CredGets an Extension and an Expansion!
Existing Homeowners: Now’s Your Chance!
I am extremely pleased to share with you an exciting new tax credit, designed for first time home buyers and existing homeowners.
The new bill calls for an incentive for existing homeowners who have owned their current homes at least five years, making them eligible for tax credits of up to $6,500 when they purchase a new home. First time homebuyers – or anyone who hasn’t owned a home in the last three years – would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010 and close by June 30.
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.
As an industry, we are certainly pleased about this new tax credit. The key to returning stability to the economy lies within the housing market, and this is a meaningful credit that will create a strong foundation for future growth and make a measurable difference over the next seven months in our economy.
Furthermore, tax credits like this only work by creating the sense of urgency to take advantage of them. This is said to be the last extension of the home buyer tax credit and I urge people – whether you’re a first time home buyer who has always dreamed of having a home of your own or someone who has been gridlocked in the challenges of our move-up market to take advantage of this opportunity.
Now is the time! If you’d like to learn more, please contact me today.
New Homes Colorado Springs Team @ Coldwell BankerColdwell Banker Colorado Springs2075 Research Parkway Ste BColorado Springs, CO 80920
info@newhomescoloradosprings.com
www.newhomescoloradosprings.com
719.593.1518
©2009 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Coldwell Banker Residential Brokerage Office Is Owned And Operated by NRT LLC. If your property is listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully.
Wednesday, November 4, 2009
6 signs your home will increase in value
1. The unemployment rate It's quite simple: Without a job, you can't buy a home.
And as the unemployment rate rises, fewer individuals are capable of purchasing a home. That decreases the demand for homes, which drives prices down. (Currently, to get approved for a mortgage, you'll need to show proof of income, says DeVol.)
Video: Has housing hit a bottom?
To find a city's unemployment rate, and see whether it's rising or falling, visit the Bureau of Labor Statistics' Web site. The most recent report, from Oct. 28, breaks down the unemployment rates in each state's major metropolitan areas and compares those numbers to the previous year's.
Also, see if local businesses are hiring and if large corporations are moving into the area. More jobs leads to more employees buying homes in the area.
2. Rising incomes House hunters who want to dig a little deeper can look at the average or median change in income among households in a neighborhood.
At a minimum, confirm that incomes are being adjusted for inflation (or, ideally, rising.) Homeowners who have stagnant or declining salaries may not have much cash left over after they pay their mortgage; as a result, they might not maintain their homes or stay on top of repairs, which could lower a home's value and even the value of neighboring homes, says Zandi.
The Bureau of Economic Analysis (BEA) offers some insight on personal income. Click here and choose tabs labeled "per capita personal income" and "all metropolitan areas" to see how an area's personal income compares to others and to previous years.
A big drawback is that the data released this year ends with 2007 figures. (The BEA will release 2008 data in April 2010.)
3. Fewer foreclosure filings and sales On average, foreclosed houses sell for 30% less than similar homes in the same area, although the figure varies by market, says Rick Sharga, a senior vice president at RealtyTrac.com, which tracks foreclosures. In areas hit hardest, especially cities in Sunbelt states, foreclosed homes often sell at half the price.
4. Inventories are declining In most areas where "for sale" signs are common, home prices are far from recovery.
In general, when more than 2% of homes in a neighborhood are selling at the same time, inventory is high, says Dean Baker, a co-director at the Center for Economic Policy and Research. As the number of homes for sale decrease, sellers have more leverage and a better shot at getting an offer close to their asking price.
Look at the month's supply of inventory, or how many months it will take at the current sales pace for inventory to be depleted. Five to six months is the normal range, but the current average is just under 10 months.
5. The list-to-sales price ratio is shrinking On a national level, homes are selling at around 5% to 10% below their asking price, says Baker.
Look at list-to-sales price ratios, which is the difference between the listing price of a home and the price at which it sold. If the price difference is shrinking for an area that suggests the real estate market is improving, says Michael Evans, the president of the American Society of Appraisers and owner of Evans Appraisal Service, which appraises residential properties.
Appraisers also can provide average list-to-sales price ratios and historical comparisons.
6. Home prices are falling On the other hand, decreasing sales prices could mean that the housing market has hit its bottom, says Baker. They also guarantee that the buyer is getting into a market at a fraction of the price that buyers paid during the bubble.
And as the unemployment rate rises, fewer individuals are capable of purchasing a home. That decreases the demand for homes, which drives prices down. (Currently, to get approved for a mortgage, you'll need to show proof of income, says DeVol.)
Video: Has housing hit a bottom?
To find a city's unemployment rate, and see whether it's rising or falling, visit the Bureau of Labor Statistics' Web site. The most recent report, from Oct. 28, breaks down the unemployment rates in each state's major metropolitan areas and compares those numbers to the previous year's.
Also, see if local businesses are hiring and if large corporations are moving into the area. More jobs leads to more employees buying homes in the area.
2. Rising incomes House hunters who want to dig a little deeper can look at the average or median change in income among households in a neighborhood.
At a minimum, confirm that incomes are being adjusted for inflation (or, ideally, rising.) Homeowners who have stagnant or declining salaries may not have much cash left over after they pay their mortgage; as a result, they might not maintain their homes or stay on top of repairs, which could lower a home's value and even the value of neighboring homes, says Zandi.
The Bureau of Economic Analysis (BEA) offers some insight on personal income. Click here and choose tabs labeled "per capita personal income" and "all metropolitan areas" to see how an area's personal income compares to others and to previous years.
A big drawback is that the data released this year ends with 2007 figures. (The BEA will release 2008 data in April 2010.)
3. Fewer foreclosure filings and sales On average, foreclosed houses sell for 30% less than similar homes in the same area, although the figure varies by market, says Rick Sharga, a senior vice president at RealtyTrac.com, which tracks foreclosures. In areas hit hardest, especially cities in Sunbelt states, foreclosed homes often sell at half the price.
4. Inventories are declining In most areas where "for sale" signs are common, home prices are far from recovery.
In general, when more than 2% of homes in a neighborhood are selling at the same time, inventory is high, says Dean Baker, a co-director at the Center for Economic Policy and Research. As the number of homes for sale decrease, sellers have more leverage and a better shot at getting an offer close to their asking price.
Look at the month's supply of inventory, or how many months it will take at the current sales pace for inventory to be depleted. Five to six months is the normal range, but the current average is just under 10 months.
5. The list-to-sales price ratio is shrinking On a national level, homes are selling at around 5% to 10% below their asking price, says Baker.
Look at list-to-sales price ratios, which is the difference between the listing price of a home and the price at which it sold. If the price difference is shrinking for an area that suggests the real estate market is improving, says Michael Evans, the president of the American Society of Appraisers and owner of Evans Appraisal Service, which appraises residential properties.
Appraisers also can provide average list-to-sales price ratios and historical comparisons.
6. Home prices are falling On the other hand, decreasing sales prices could mean that the housing market has hit its bottom, says Baker. They also guarantee that the buyer is getting into a market at a fraction of the price that buyers paid during the bubble.
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