|
The Mortgage Bankers Association anticipates ending of foreclosure crisis as they detect favorable signs. According to a published statement by Jay Brinkmann, MBA's chief economist, the end is expected as they could find continued and sizable drop in the 30-day delinquency rate.
Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said. This gives them growing confidence that the size of the problem now is about as bad as it will get, he added.
Brinkmann indicated that favorable signs were seen as there was no large spike in short-term mortgage delinquencies at the end of the year due to high heating bills and holiday expenditures. Moreover, the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent.
Bookmark &
Share
The affordable housing projects in the country have been facing tough times in the last couple of years. The price differences between affordable units and market-rate properties along with the tough-to-get mortgages have resulted in the decline of affordable housing in the country.
The condition is more severe in Far Rockaway, N.Y. where the projects are dragged as the existing units are affected by the slow sales. This makes the New York city housing officials and developers face a tough time.
Even though prices have been cut for almost 30 percent, the city subsidized housing in Far Rockaway and in other parts of the city selling for $250,000 to $350,000 has been remaining on the market for as long as 18 months without being sold.
According to City Housing Commissioner Rafael E. Cestero, when the projects were planned, these units were deeply affordable compared with what was then on the market. ''We had no idea what was going to happen,'' he said.
Bookmark &
Share
The residents of different life styles are not really interested to mingle with each other, reveals study. A study of mixed-income housing indicates that the residents are not willing to interact even with their next door neighbors. The study had examined three mixed income developments.
According to Professors Robert Chaskin and Mark Joseph of University of Chicago, the joint efforts to mingle low-income and high-income people were continuously disappointing. The relocated housing residents and their visitors are largely blamed for the concerns regarding safety and public order by middle-upper income residents, point out researchers.
The study also concluded that the house planners are helpless in solving many problems faced by low income residents and broader efforts are needed to reduce social inequity thereby promoting economic development.
Bookmark &
Share
The Commerce department has announced that the rate of construction of new houses has increased 2.8 percent from December with an annual rate of 591,000 in January. The revised rate of construction was 575,000 in December.
At the same time, the monthly confidence scale of home builders had rose two points in February to 17. According to the National Association of Home Builders Chair Bob Jones, the builder confidence has increased slightly as the housing recovery has finally begun to take root.
While evaluating the builder confidence, it has been seen that the builder confidence was highest in the Northeast and the South, weaker in the West and lowest in the Midwest.
Bookmark &
Share
Home buyers are in constant run to chase lenders who would provide loans within a short time. The buyers are eager to close the deal since they want to make it before tax credit expiry.
According to Spencer Rascoff, Chief Operating Officer of Zillow.com, even the buyers without A-plus credit would be able to get a loan if they approach enough lenders. However, the terms for such loans wouldn't be very attractive, he says.
There is one more option available for the buyers. They can propose a lease-purchase deal or land contract to the seller. Both the buyer and seller can get profit if the deal is structured properly.
Bookmark &
Share
Multi-million dollar properties are facing foreclosure and this drives the desperate owners to sell the luxury homes at auction.
Recent reports from the foreclosure marketer Realty Trac indicates that compared to 2008 records, the foreclosures have increased up to 162 percent in 2009. Around 18,817 properties worth at least $ 1 million have faced foreclosure last year, reports Realty Trac.
The home owners are going for auction sales rather than waiting for the right buyers for their million dollar properties as the prices of $1 million-plus properties are down about 25 percent since the year 2007.
According to John Brian Losh, CEO of LuxuryRealEstate.com, a Web site that specializes in high-end properties, any home owner selling in this economy is on the market because they have to be here."If they're frustrated and they can't figure out why they haven't gotten any offers, they might think an auction will generate some interest" says John.
Bookmark &
Share
Anticipating a real estate boom, the investors are snapping up vacant residential lots in US. The vacant lands look more attractive to the real estate investors as they can cost a developer about 25 percent of the finished home price.
There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare. Jumping upon the opportunity, the investors are buying the vacant lots, thinking that that the time will come soon when they will be in demand.
According to Scott Clark, President of American Development Partners, the country needs 1.2 million new units for the next 10 years just because of population growth. The company has bought thousands of vacant lots all over the West. The builders built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand, he said. “We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant”, he added.
Bookmark &
Share
The housing market indicates further slow down as the move-up buyers who represent 53% of the 2009 market are not able to take advantage of the move-up tax credit, reveals the National Association of Realtors. A significant number of home owners are unable to sell their current residencies or even get financing for a trade up.
According to Janice Leis, an associate with Coldwell Banker Boca Raton, Fla, even the young professionals with good salaries are disappointed with tax benefit. At first many think that it's great but when they take a close look, they are not satisfied. It's like false advertising. They get out with their hopes up, and they get their hopes dashed, Leis says.
"It's a real problem. For a well-functioning market, you have to have that trade-up buyer", confirms Mark Zandi, chief economist at Moody's Economy.com.
Bookmark &
Share
The US property market received a severe blow as the home values declined another five percent in the fourth quarter compared to the previous year, reveals zillow.com. With this, the decline has reached the 12th straight quarter in the year-over-year declines.
According to Zillow, more than twenty percent of US home owners are in debt on their mortgages than their properties are worth. This estimates that more than 29 percent of homes sold in the US in the year 2009 went for prices less than what were originally paid for them.
In a statement, Zillow Chief Economist Stan Humphries says that while the next few months are likely to bring further home value declines in most markets, a national bottom in home prices are expected by the middle of the year. After that the home values would likely bounce along the bottom with real appreciation remaining negligible for some time, he said.
Bookmark &
Share
The real estate business remain in the hands of Fannie Mae and Freddy Mac as the two companies were given a total of nearly $111 billion by the US government to but mortgages originated by others. The two companies together fund 90 percent of U.S. mortgages even an year after the global financial meltdown.
Fannie and Freddie had been keeping the mortgages as investments and repackaging other for sale to investors as securities. The companies have also helped in reinstalling the lending by state and local housing-finance agencies by guaranteeing $24 billion in debt. The apartment also gets a helping hand from the companies as they are lending it to builders and buyers.
The situation would probably go on for a while as Obama can bypass Congress by relying on Fannie and Freddie. Daniel Mudd, the former CEO of Fannie Mae criticizes that the government is running Fannie and Freddie as an instrument of national economic policy, not as a business. He had been forced out of the company in September 2008 as government took control of it.
However, Assistant Treasury Secretary Michael Barr defends the allegation by saying that Fannie and Freddie are owned by the taxpayers in the middle of the biggest housing crisis in 80 year and the administration's actions have been prudent and consistent with taxpayer protection.
Bookmark &
Share
According to sources, toy magnate Alfred R. Kahn, who had bought Bernard Madoff's Manhattan penthouse, has put it under contract. Even though the contract price wasn't disclosed, there are rumors that Anne Corey and Serena Boardman of Sotheby's International Realty have the listing.
Alfred R. Kahn is the chairman and chief executive of 4Kids Entertainment, the New York Company behind such hits as Cabbage Patch Kids and Pokemon. The duplex property was originally listed for $9.9 million in September but the price was later cut by $1 million.
The apartment is one of three Bernard Madoff properties the US government seized and is selling to help reimburse victims of his fraud of $65 billion Ponzi scheme. His beach house in Montauk, N.Y.was sold about 6 percent above asking price. The asking price for his Palm Beach, Fla., mansion is $7.25 million, down from $8.5 million in September. The mansion has been listed by Jim McCann and Burt Minkoff of Corcoran Group.
Bookmark &
Share
Economic development zones in many parts of China are taking up farmland. Experts cite that millions of farmers are losing their lands in the recent real estate boom. However, farmers in China have developed a new strategy to get more for their property.
The farmers are given compensation for their land after assessing the size of the house on the property. For better profits, the farmers are setting up large flimsy buildings without proper foundations.
According to Wen Tiejun, Head of the School of Agricultural Economics and Rural Development at Renmin University in Beijing, even though the practice is illegal; many farmers continue to do it. The practice would be put to an end only if corruption in real estate business is curbed.
Bookmark &
Share
There has been increase in the percentage of vacant homes in U.S from 2.6 percent to 2.7 percent in the third quarter of 2009. Nearly 2.09 million vacant homes were available for sale, which is up from 1.99 million.
"The market was propped up by the original tax credit and now we are starting to see underlying weakness," says Patrick Newport, an economist at IHS Global Insight. "The extension of the credit, so far, is not having much of an effect."
Bookmark &
Share
By the end of fourth quarter 2009, percentage of American home owners fell to 67.3 percent. During 2004, homeownership reached a high of 69 percent, fueled by low interest rates and easy credit. But in 2006, the rate began to fall as some owners failed to make their payments and faced foreclosure. Since then nearly 4 million homes have been lost to foreclosure.
“The homeownership data I think really just underscores how this country as a whole became obsessed with getting people into homes," says Mike Larson, real estate and interest rate analyst at Weiss Research Inc., an investment-research firm. "You can do all kinds of things to get people into a house, which we did; the real problem is making it so they can stay there."
Bookmark &
Share
Still most of the real estate companies are not keen on adopting digital marketing strategies, according to a survey. In the same survey, it was found that nearly 76 percent of companies less than 40 percent on digital marketing. They prefer traditional media over digital marketing. Nearly 58 percent do not adopt search engine marketing. Of those who do, only 33 percent invest in search engine optimization.
Report states that 53 percent of respondents will increase their digital marketing budget in future, while 37 percent will keep it at the same level and 10 percent plan to decrease their digital marketing.
Bookmark &
Share
Nowadays, most of the buyers are interested in buying cost effective features. According to a survey, buyer preferences have changed, they want these things in their new homes:
• Large kitchens • Energy efficient appliances and windows • Home offices • Outdoor living space • Ceiling fans • Soaking tube in the master suite • Playgrounds • Two car garages These are some of the features which buyers want in their new house. Bookmark &
Share
According to Freddie Mac, in the last quarter of 2009, nearly 33 percent of borrowers refinanced their loans and in the process, lowered the principal balance. The share of borrowers who increased their loan balance by 5 percent or more during the fourth quarter was at a record low of 27 percent. From September of 2008 to November 2009, consumers cut $100 billion in revolving debt from their obligations, according to the Federal Reserve fund.
Bookmark &
Share
|
Real Estate Investment News