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February 8
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Housing May Turn the Corner in 2012: CoreLogic

CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.

In the first release of CoreLogic’s new MarketPulse newsletter Wednesday, Fleming explained his rationale for such an assessment.

He notes that housing is an industry with long business cycles. Regional housing recessions have typically taken anywhere from three to five years to find their bottom, and Fleming says the national housing recession has behaved similarly in that it has bounced along a bottom for the past two years.

Fleming points out that housing affordability is rising dramatically due to a combination of home price deflation and rock-bottom mortgage rates. In fact, he says, after adjusting for inflation, this has been a “lost decade” for housing as prices are the same as at the beginning of the millennium.

“The time is right in 2012 for prices to begin growing again,” Fleming said, “and housing affordability will put a floor under any further significant declines.”

Fleming says he will be watching the spring and summer buying season closely for positive signs of demand.

He points out that households are paying off their debts and at the same time accessing credit more easily, with some even adding Home Equity Lines of Credit in the third quarter of last year – the first such movement for these second-lien mortgage products since the financial crisis began.

Fleming cites a quarterly survey by the New York Federal Reserve Bank, which shows total household debt continues to decline. At the same time, consumer sentiment rebounded strongly in the latter part of 2011, posting a six-month high in December – an indication that consumers’ confidence in the strength of the economy is growing, according to Fleming.

Most housing statistics basically moved sideways in the latter part of 2011, but Fleming finds several positives in the numbers. Although market indicators are coming off of very low levels, he notes that both existing-home sales and single-family housing starts have begun to increase, homebuilder confidence is improving, and affordability is at an all-time high.

Putting all of these statistics together suggests that while there is a very long way to go, the housing market is likely to sustain these upward movements in 2012, according to Fleming.

“While we cannot say with a high degree of certainty what 2012 has in store for us, indications based on the latter part of 2011 are that both the broad economy and the housing market are moving toward positive growth in 2012,” Fleming said.

He concedes that some impediments do exist, including slower global economic growth, a recession in Europe, and fiscal and political uncertainty in the United States.

But Fleming says when you look at the big picture, “we are bullish on the prospect of improving economic performance in 2012 from 2011.”
 

Canada moving into a seller's market

December 21, 2011

National resale housing activity in Canada rose slightly in November, up from October, according to statistics released today by The Canadian Real Estate Association (CREA). Sales activity recorded through the MLS® Systems of real estate Boards and Associations in Canada edged upward by one-half of a percentage point, marking the third straight month in which national activity was up from the previous month’s levels.

“The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,” said Gary Morse (right), CREA’s president. Activity rose in about 60% of all local markets with a record November in the Halifax-Dartmouth region offsetting a dip in sales in Toronto.

Throughout most months in 2011, actual (not seasonally adjusted) national home sales were in line with the 10-year average. November sales marked a break in that pattern, climbing 7% above the 10-year average and reaching the fourth highest level on record for the month.

The national housing market remains balanced, but is edging closer to seller’s market territory. The national sales-to-new listings ratio, a measure of market balance, stood at 55.5% in November, up from 53.4% in October. This marks the third month in which the national ratio has risen, and it now stands at its highest reading since the spring. Based on a sales-to-new listings ratio of between 40% and 60%, just over half of local markets in Canada were balanced in November, while a third of markets qualified as sellers’ markets.

The actual (not seasonally adjusted) national average price for homes sold in November 2011 stood at $360,396 (€265,898). This represents a year-over-year increase of 4.6%, its smallest increase since January.

ICREA

 

Top 5 Reasons to Buy a Home in 2012

by Jonathan Slappey on January 6, 2012

The American dream of homeownership is a very feasible aspiration for 2012.

There are many benefits of owning a home.  Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.

The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.

There are some factors we can be certain about in this housing market such as home values rebounding.  This is true; the housing market often moves in cycles.

It’s safe to assume that many Americans harbored the same uncertainty during the George H. W. Bush administration in the early 1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.

In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability by stating “owning a home can increase responsibility and stake out a man’s place in his community…The man who owns a home has something to be proud of and reason to protect and preserve it.”

This statement is still true more than 50 years later.  There are many reasons to take pride in homeownership such as:

    * Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future.  Mortgage rates are near historic lows and home prices in many parts of the country are down.  This is the perfect recipe for home appreciation.  Additionally, many foreclosed homes are available for a fraction of the original cost.  This can translate to a higher profit if you decide to sell once the market rebounds.

    * Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible.  The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.

    * Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset.  Capital assets are given preferential tax treatment.

    * Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals.  Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This trend is called equity building.  Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster.  This rapid payment process allows borrowers to:

    * Pay off the principal balance faster
    * Lock in near-record-low interest rates
    * Shorten the length of their home loan
    * Own their home faster
    * Pay substantially less mortgage interest

Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners.  Also, home equity is the largest single source of household wealth for most Americans.

    * Pride – Homeownership offers many benefits to many different types of people.  For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk.  For me, homeownership will permit me to build an NBA regulation size basketball court on my own property.  For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams.  No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.

Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale

Housing News: 11 Trends from 2011

The National Association of Realtors surveys homebuyers and sellers each year to uncover housing trends and monitor changes taking place in the industry. This year's report highlights a number of trends that haven't been seen in years. Here are just 11 highlights from the 2011 report.

1. In 2011, 37% of homebuyers were first-time buyers - which was down from 50% in 2010.

2. Last year, 88% of homebuyers used the Internet to search for a home. That number was down slightly from a high of 90% in 2009.

3. The typical homebuyer searched for 12 weeks and viewed 12 homes.

4. The number of buyers who purchased their home through a real estate agent or broker climbed to 89% - a share that has steadily increased from 69% in 2001.

5. Nearly 1 out of 4 buyers said the application and approval process was "somewhat more difficult" than expected and 16% reported it was "much more difficult" than expected.

6. About half of home sellers traded up to a larger and more expensive home and 60% traded up to a new home.

7. The top 3 factors influencing neighborhood choice were: the quality of the neighborhood, the convenience to job, and the overall affordability of homes.

8. The typical seller lived in their home for 9 years. That number has increased from 6 years in 2007.

9. Although 61% of sellers said they reduced their asking price at least once, the average home sold for 95% of the listing price.

10. Only 10% of sellers sold their homes without the assistance of a real estate agent. Of those people, 40% knew the buyer prior to the sale.

11. The typical "for sale by owner" home sold for $150,000 compared to $215,000 for the average agent-assisted home sale.

All Contents 2012 The National Association of Realtors.

When snowbirds roost, local economy gets boost

 

 

 

 

From left, Alberta O’Neil, Audrey Warner, Bonnie Clements, Al Murchie and Andy Clements are part of the early flock of snowbirds who annually migrate south from Canada to area beachside accommodations, including the Ocean Trillium Suites condominium, background, in New Smyrna Beach. The retirees own units there, and biking on the beach is popular. (NJ | Bob Koslow.

 

"We've all been coming here for so long, we're like a family," Bonnie Clements said of the residents who make their oceanfront Trillium Ocean Suites condominium home for the winter. "We're not going to be sitting alone crying, wishing someone was here."

The Clements are part of the annual snowbird migration of tens of thousands of Canadians and others from cold U.S. climates to sunny Volusia and Flagler counties.

Some stay a couple of weeks while others, mostly retirees, linger here up to four, five or six months.

A majority of snowbirds usually arrive shortly after New Year's Day and leave by late March, close to Easter, but some come here as early as October.

"The fall here is the summer we never get in Canada," said Audrey Warner, another Ocean Trillium Suites condo unit owner and winter escapee from Ontario, Canada.

"Sometimes we have to put on sun block and that's just great," said Al Murchie, who is married to Warner.

After a couple years of declining snowbird visitors, local real estate officials who rent and manage condos and homes are expecting a busier winter season.

"I expect a good winter; bookings are up 25 to 30 percent from previous years," said Steve Tyler of Tyler Property Management, which has offices in Palm Coast and Holly Hill. "People are saying if they can afford it or not, they're going south to get away from the snow."

The problem right now is there's not much snow in the Upper Midwest, New England or Canada.

"They're still seeing the grass back home," said Andy Clements.

Snow is what rings the local phones, said Bill Roe, owner of Ocean Properties Real Estate and Management in New Smyrna Beach.

"The more snow there, the better for us," he said. "If severe weather hits, the more last minute bookings we get."

A change Roe has seen in the snowbird market is more last-minute bookings, as short as 30 days out, and fewer bookings a year to six months ahead of time.

"A lot depends on the weather up north," Roe said. "And they're all on the Internet navigating to find the best deal possible so we have to be competitive. But this year, if they wait too long, they may miss out."

The weather, locally, is also a factor. For many snowbirds, it's the main reason for coming here.

They flock to Florida in the fall and winter so they can walk and ride bikes on the beach, fish and play golf.

But while here, they also get out and about, spending money at area restaurants and other businesses.

"If it wasn't for them, many of us would be out of business," Roe said.

Some of the snowbirds interviewed for this article said when they were kids they used to vacation here with their parents.

"I was coming to Florida back in the '60s with my parents and we traveled all around Florida," said Alberta O'Neil, another Canadian snowbird and unit owner at Ocean Trillium Suites.

"About 25 years ago, a group of Canadian teachers bought this bankrupt hotel and made it into a 31-unit condo. About half the owners are American now," O'Neil said.

Many have been coming back so long, they are part of the local scenery.

"I had a cashier at Publix come up to me and say hello and said that she had not seen me for awhile," said Bonnie Clements. "It's so friendly here. We've made friends from all over."

New Smyrna Beach and Daytona Beach tend to attract a heavy dose of Canadians with fewer American snowbirds, while the Flagler County properties are more mixed between the two groups, area property managers say.

Brent Bruns of Hammock Coastal Real Estate in Palm Coast said he sees a lot of New York, Chicago and Wisconsin residents come here for the winter, including a significant number of "younger, family-types."

"February and March are our busy times. We're booked for that time, up about 25 percent from the past couple of years and we could rent double what we have," he said.

Canadians biggest foreign buyers of U.S. real estate

STEVE LADURANTAYE - The Globe and Mail

Now that’s cross-border shopping: Canadians bought $9.4-billion of U.S. real estate in the last year.

Canadians were the largest foreign buyers of U.S. real estate in the 12 months ending March 31, according to the U.S. National Association of Realtors annual survey, accounting for 23 per cent of all sales to foreigners.

China moved into second place at 9 per cent, while Mexico, Britain and India tied at 7 per cent. Together, foreign buyers spent $43-billion.

From the study:

The total U.S. existing home sales market was approximately $1.07-trillion in the 12-months ending in March 2011. Foreign clients purchased an approximate $41-billion share of homes, the same as the previous year. In addition, recent immigrants (who have moved to the U.S. within the past 2 years) and individuals with visas for more than six months purchased an additional $41-billion, for $82-billion, up from $66-billion reported in 2010.

International buyers came from a total of 70 countries; the top five (Canada, Mexico, China, U.K., and India) accounted for 53 percent of transactions. Most states had at least one international transaction, but four states – Arizona, California, Florida, and Texas – accounted for 58 per cent of transactions.

Proximity to the home country, convenience of air transportation, and climate and location appear to be important considerations to purchasers.

The average price paid by international buyers was $315,000, compared to the overall U.S. average of $218,000. Comparable median prices were $200,000 and $170,000. Approximately 61 per cent of international purchasers bought single family detached homes; the comparable figure for overall U.S. sales was 88 per cent. Approximately 3 per cent of international sales involved the purchase of commercial property.

Almost 80 per cent of agents reported that the value of the U.S. dollar had an impact on international sales. U.S. home prices have declined in recent years in both dollars and euros. When the euro’s value relative to the dollar increases, the real price of a U.S. home to a euro based purchaser declines.

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Flagler Beach Art & Craft Festival

 

Flagler Beach, FL hosted the Flagler Beach Art & Craft Festival at Veteran’s Park December 30^th and January 1^st.  There was a FANTASTIC turnout with beautiful, sunny weather on both days.  Snowbirds are rapidly arriving from New York, Michigan and Canada to relish in the awesome and mild winters here in Flagler Beach and the surrounding areas.  Debra Wingo, Selby Group, snapped photos of kids enjoying the inflatable walking water balls – Ahhhh, January in Florida!

 

 

 

How long will low mortgage rates last?

WASHINGTON– Jan. 4, 2012 – For nine consecutive weeks, the 30-year fixed-rate mortgage has been hovering at or below record lows of 4 percent, pushing housing affordability for homebuyers even higher.

But will these low rates stick around much longer?

The Federal Reserve has vowed to keep rates low through 2013 so rates likely will hang around for a few more months, at least, but whether mortgage rates will stay at the current record-lows, many experts say it’s unlikely.

The 30-year fixed-rate mortgage is expected to inch up to an average 4.5 percent for 2012 and increase to 5.4 percent in 2013, according to Freddie Mac economists’ forecasts.

While that forecast means rates are expected to move higher in the coming months, the rates will still be low by historical standards, economists told the Los Angeles Times. For comparison, 30-year rates averaged more than 16 percent in 1981 and 1982. What’s more, until 2000, rates typically were above 8 percent, Freddie Mac notes.

However, many homebuyers have been unable to take advantage of the low rates. Lenders’ tighter underwriting standards for loans following the housing crisis shut out some buyers who have poor credit, low downpayments or unsteady employment.

Freddie Mac had predicted that home-purchase applications would comprise two-thirds of all mortgage applications by the end of 2011. But the Mortgage Bankers Associations says that about 80 percent of the mortgage applications instead came from homeowners who wanted to refinance.

Source: “Low Mortgage Rates Likely to Continue Through 2012, Experts Say,” Los Angeles Times (Jan. 3, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

 

Underwater rescue

Short sales offer a viable option for homeowners who want to sell

Last Updated: 1:59 AM, November 15, 2011

Posted: 11:41 PM, November 14, 2011