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As the economy remains in a slump, a Federal Reserve official had suggested that keeping interest rates at record-low levels is important. The official is said to be President Obama's favored candidate for vice chair of the Fed.
Fed remains committed to doing what's necessary to hold down interest rates, says Janet Yellen, head of the Federal Reserve Bank of San Francisco in a recent speech. She added that any significant run-up in mortgage rates would create risks for a housing recovery.
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Age restricted communities are no more in the favoring list of developers. They are switching to those which invite a broader range of residents.
Communities aimed at people older than 55 were springing up all over before the start of the housing meltdown. Enclaves for the elderly have diminished in popularity over the last couple of years. Even long-time senior-citizen communities like Sun City Grand in Surprise, Ariz. have been allowing people of ages 45 to 54 in 15 percent of the homes thereby expanding access.
According to Sun City Grand's membership director Meda Cates, as we age, we golf less, we spend less money doing activities, and we also wanted to be perceived as a younger community.
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April 5th has become a deciding date for the potential buyers of short-sale homes for making a formal offer.
This is because that is the date when the federal government will begin offering lenders financial incentives to hasten the process. Under the new rules, the banks would let the sellers know a minimum number they are willing to accept after seeking a BPO before the property is listed for sale. The lender must accept the deal within 10 days if the sellers bring a buyer with a good offer.
According to the Home Affordable Foreclosure Alternatives (HAFA), not all sellers are eligible for the program. However it is worth waiting since eligible seller numbers are satisfactory.
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The home prices are threatened to be pushed down further in some parts of the country following rising of the inventory of foreclosed homes that banks are sitting on.
According to analysts at Barclays Capital, banks and mortgage investors held about 645,800 foreclosed homes in January, up 4.6 percent from December. That is down significantly from the peak of 845,000 in November 2008, they estimate.
Florida, Arizona, Nevada, California, and Michigan are states with the largest number of foreclosures.
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As a part of joining the Federal Government's program to modify second mortgages, the Wells Fargo & Co. has joined Bank of America as the first two banks to sign onto the program.
According to the government's plan, borrowers who have been extended loan modifications on first mortgages can now apply to reduce their second mortgages.
However, the banks have been reluctant to adopt this part of the government's loan modification program because they continue to hold most second mortgages and forgiving them would be costly, say analysts.
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The Federal Reserve has renewed its commitment and has decided to keep key interest rates near zero for an extended period. However it would no more buy mortgage-backed securities at the end of March.
The housing starts have been flat at depressed levels and the employers remain reluctant to add to payrolls as a reason for extending the cap on interest rates, says the Federal during the regular meeting which began on Tuesday.
According to the Federal open market committee statement, the committee would continue to monitor the economic outlook and financial developments and would employ its policy tools as necessary to promote economic recovery and price stability.
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The home builder's confidence has been discouraged by the lousy winter weather which has pushed their confidence index down two points from January where it was 15.
There are only a fewer buyers and the prevalence of foreclosures is making it harder to persuade the prospect clients that a new home is the right choice, reveals monthly survey of 477 builders by the National Association of Home Builders.
According to NAHB Chair Bob Jones, the continual flow of distressed properties priced below the cost of production is having an adverse effect on new-home appraisals and also making it tough for builder's customers to sell their existing homes.
More sales would happen later in the year in response to pent-up demand, predicts NAHB Chief Economist David Crowe.
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Better days are anticipated in the housing market as some of the nation's top economists believe that the housing industry has turned favorably. Hurdles in the industry like rising interest rates would be overcome by the increase in jobs, credit and affordable homes. The housing marketing would be pushed towards recovery by the expiration of the Federal stimulus program, says Dean Maki, chief U.S. economist for Barclays Capital.
According to Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College, the improvement in the housing market are at the bottom level and more development would be seen in the coming months.
Bruce Kasman, chief economist at JPMorgan Chase & Co says that the underlying trend in the industry is turning positive.
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Some economists likely expect a second major wave of foreclosures as many home buyers are continuing to fall behind on their mortgages, in spite of signs of a recovery. However, the housing market appears to be stabilizing. This next upsurge in foreclosures could cause more disruption and push prices down farther.
Housing experts say that the recent favorable housing data doesn't reflect the number of properties that banks have left in limbo - repossessed, but not yet on the market.
According to Massoud Ahmadi, director of research for the Maryland Department of Housing and Community Development, the lenders are deluged by late-stage delinquencies. The pent-up foreclosure inventory is still there, he added.
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The real estate sales associates are sure to deal with some cranky client at some part of their career. But it is natural that the client gets angry when they are worried about the transaction.
There are certain ways to deal with such type of cranky clients. The associates should pay close attention to the client's concern and should use a 'pattern interrupt', in which they take time to note down what he or she is saying. According to Neurolinguistic programming experts, the anger would recede as they read back what has been said once they calm down later.
Apologies from the side of associates should be avoided since they can escalate the situation. It would be better to take a proactive approach instead and ask them what can be done to fix the problem. This strategy would reduce the tension of the situation and make the client feel better about working with the associate.
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Home developers put in new efforts to promote their sales in the Los Angeles area. This time it is the KB Homes, a California-based builder who offer high-voltage vehicle charging stations as an incentive for buying in its newest developments in the area.
The number and popularity of electric cars are increasing with each day. Companies like Nissan. GM and Ford re already offering models or about to offer very soon. Moreover, the sale of electric cars has been mostly successful in this region of California.
The electric cars have batteries that need to be charged. According to KB, homes that are equipped with the charging stations would have more value as they can perform the function quickly when needed. Bookmark &
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Arrests and civil actions have reached record level with the State and Federal investigators making the laws strict for mortgage scammers.
According to mortgagedaily.com, the mortgage related lawsuits has been showing an increase of 76 cases compared to the third quarter. There were 46 cases in fourth quarter of 2008 and this has become 134 cases in fourth quarter of 2009.
Since more states are aggressively enforcing related laws, the upward trend in related fraud litigation is likely to continue, predicts Patrick McManemin, a partner in Patton Boggs, a law firm that specializes in mortgage litigation. Bookmark &
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The Home Owners Association (HOA) and Condominium are desperately seeking ways to get money by introducing a new tactic called "reverse foreclosure" which compels banks to pay association fees.
According to the process, when a borrower stops paying the mortgage, banks delay taking the property into foreclosure. When banks delay, the association fees are neither paid by bank nor the former home owner. As a remedy to this, the association takes over the title and files its own foreclosure notice. But the association doesn't have rights to sell the property due to bank's lien to it. So the association moves to court, hands over the property and asks the judge to give back the title to the bank.
When the judge gives the power to bank, they are entitled to pay the fees. This technique is becoming popular in many parts of the country where there are a lot of foreclosed condos, point out experts.
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Real estate prices are touching the skies in China and critics are criticizing it as a bubble. According to Nicholas Lardy, an economist from the Peterson Institute for International Economics in Washington, D.C, the number of Chinese people moving to big cities and doing well there have been increasing and this is fueling the real estate price boom. While the critics blame that the increasingly unaffordable prices are caused due to greedy developers and government policies.
Most of the action takes place in Shanghai. Since 2003 the prices have risen more than 150 percent there. A typical 1,100-square-foot apartment costs about $200,000. However by American standards that doesn't sound very great as the average resident earns less than $5,000 a year.
Some properties are sold for more than $2,000 a square foot which shows that the luxury prices are high. According to Prudential Douglas Elliman real estate, the average luxury apartment in Manhattan was sold for less than $1,900 a square foot in the fourth quarter of 2009.
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According to an analysis, the housing prices would remain flat for many more years and aren't going to rise in the recent future. The prediction was given by predict analysts for Barclays Capital in its Residential Credit Strategy report.
The Barclays Capital has put the blame on the government programs that have slowed down the foreclosures. The report says that the hangover of distressed inventory is a huge negative technical. It points out that any rise in price would probably be met by increased distressed sales.
Even though the home prices are cheaper than rent and the income also suggest the same, but an extreme low price is not fair, report concludes.
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The jumbo loan market has been melting and this makes it easier for the move-up buyers to borrow. Earlier the jumbo loan rates of more than $729,750 in highest priced markets rose throughout the financial crisis and lending standards tightened to the point where borrowers were not able to refinance or get a new loan.
According to rate tracker Informa Research Services, the average interest rate on an aged fixed rate jumbo fell to 5.79 percent recently. Moreover, rates are even lower on hybrid adjustables.
Fannie Mae, Freddie Mac, and the Federal Housing Administration are no longer insuring the banks and the availability of the jumbo loan implies that the banks are feeling more confident.
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The housing market is flat as the 2010 home sales is likely to be equal to last years', says noted housing economist Tom Lawler. He added that the market would remain flat without the tax credits. All these times, the home buyer tax credit had supported things in a big way, Lawler said.
He thinks that housing would continue in despair if more jobs are not created. But it won't go for free fall. For acquiring a significant recovery, the interest rates should remain affordable and must limit the number of homes in foreclosures. This should be complimented with a rise in employment opportunities too, Lawler suggested.
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According to the housing experts, the $6,500 move-up tax credit is not considerable enough to have an impact on the housing crisis.
Based on a poll by Campbell Communications and Inside Mortgage Finance involving 1,500 real estate agents, the percentage of current home owners who are considering buying had remained unchanged from January which is traditionally a slow month, to February, where business is usually better.
Roberton Williams, senior fellow at the Tax Policy Center in Washington said that the problem is really big and requires big guns to solve it. The tax credit is not big enough, he added. According to Patrick Newport, an economist with IHS Global Insight the credit has been hardly registering on the economic Richter scale.
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