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Archive for December, 2009
29 Dec
Positive Expectations for 2010 According to Realtors Confidence Index
To put it mildly, the real estate market during the last decade was a rollercoaster. This year, though, seemed to be more of a low, and according to the most recent Realtors Confidence Index (RCI) by the National Association of Realtors (NAR), positive expectations are increasing.
According to a survey of more than 50,000 Realtors, sales expectations of real estate practitioners for residential properties for the next six months increased compared to a month ago for all types of housing.
Ratings include:
- Single-family homes: 41.1 (up from a rating of 38.7);
- Town-houses: 23.0 (up from 21.8);
- Condos: 18.2 (up from 16.7).
As for home prices, 60.1 percent of respondents expect home prices to increase 0 to 5.0 percent in the next year, but 30.4 percent believe home prices will fall over that same time period.
According to Lawrence Yun, NAR chief economist, home sales are expected to get a boost by roughly 15 percent next year. Existing-home sales are forecast to post 5.7 million units in 2010, up from 5 million units in 2009. In addition, Yun said new home sales will increase to 555,000, a jump from 400,000 in 2009.
By the middle of next year, Yun projects inventory will fall to a six to seven months’ supply, which means there are likely to be modest home price gains. Roughly speaking, a 2 to 5 percent price gain is likely in many parts of the country next year. Yun said home prices have been overcorrecting, leading to sizable destruction in middle-class housing-related wealth, but as home values increase, prices will be prevented from overcorrecting even further.
In his projection for 2010, Yun said the commercial real estate market will also benefit. However, the benefits in this market will, as usual, come after some lag time. As the economy becomes more fully entrenched in “recovery” mode, Yun projects employment will start to turn around. Rising employment and recovering consumer wealth will mean an eventual increase in demand for office, retail, and industrial space, Yun said.
“As always, there are some caveats,” Yun said. “Despite the very positive news on the housing stimulus, there remain significant risks to the forecast.”
According to Yun, mortgage rates will rise from their rock-bottom point as we move into 2010, and the Federal Reserve will slowly start the unwinding of its mortgage-backed securities purchases. In addition, Yun said consumer prices will be watched for any sign of accelerating inflation, and as a result, bond investors will be cautious about lending at such low rates. Up from the current rate of 5.0 percent, the 30-year fixed rate is likely to reach 5.7 percent by the end of 2010, Yun said.
Another worry of Yun’s is the labor market. He said the rising unemployment rate is a painful reminder that not all is well. The unemployment rate reached 10.2 percent in October, its highest level since 1983, and Yun said the climb is not over yet. He expects unemployment to hit 10.4 percent before reversing. While job cuts are continuing, Yun said there is a silver lining because the pace of job cuts is less sharp now than in the first half of 2009. Job creation is expected to turn positive by spring, and Yun said unemployment will likely be at 9.5 percent by November 2010.
“Despite the risks of rising mortgage rates and rising unemployment, the housing outlook has significantly improved,” Yun said. “As the fear of falling home values disappears, that one key negative factor that has held back home sales will no longer be in play. Happier days are ahead.”
Source: Brittany Dunn (DSNews)
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28 Dec
Homeless Grants Awarded Nearly $1.4 Billion
The Obama Administration today announced that the U.S. Department of Housing and Urban Development (HUD) is renewing grant funding needed to keep thousands of local homeless assistance programs operating. HUD Secretary Shaun Donovan said a total of nearly $1.4 billion will help an unprecedented 6,445 programs to continue offering critically needed housing and services to homeless persons and families.
The grants announced today are being awarded through HUD’s Continuum of Care programs. For the first time ever, HUD is quickly providing renewal grants to local programs to prevent any interruption in federal assistance and will announce funding to new projects in early 2010. For a local summary of the grants announced today, visit HUD’s website.
“As we move into the coldest time of the year, it’s critical that no program risk running out of money to keep their doors open,” said Donovan. “These grants will make certain that those programs on the front lines of helping the homeless have the resources they need to house and serve persons who might otherwise be forced to turn to the streets.”
Barbara Poppe, Executive Director of the U.S. Interagency Council on Homelessness, said, “Today we extend the federal partnership with communities to meet demand for homeless assistance and support programs that successfully end homelessness. This public-private partnership has demonstrated tremendous success at ending chronic homelessness and we are now working to build partnerships to end homelessness among veterans and prevent family, youth, and child homelessness.”
More on HUD’s Continuum of Care Grants.
More on the Homeless Prevention and Rapid Re-housing (HPRP) Program.
Source: U.S. Housing and Urban Development
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21 Dec
Major Lenders Suspend Foreclosure Actions During Holidays
Last week Fannie Mae, Freddie Mac, and Citigroup reported that they were all suspending foreclosure actions during the holidays.
And as expected, other major lenders have followed suit, including Bank of America, JPMorgan Chase, and Wells Fargo.
Bank of America is halting all foreclosure sales and evictions from December 21, 2009 to January 3, 2010. The company explained that the suspension will apply to mortgages in Bank of America’s held for investment portfolio, as well as for investors that concede to allow BofA to proceed with the moratorium. The institution said it will also comply with other moratoriums from investors who have requested foreclosure holds for a different period of time.
JPMorgan Chase is also placing a freeze on foreclosures through January 3, 2010. When contacted by DSNews.com, though, a company representative said the bank was “not publicizing” the holiday season suspension.
Wells Fargo confirmed that it too will not evict customers or move forward with any foreclosure sales for customers who occupy their homes on loans owned by the bank, effective December 19, 2009 through January 3, 2010. The company said it also will follow investor guidelines regarding foreclosure suspensions for the rest of the mortgages it services.
“Foreclosure is always the last resort we use only after exhausting all other available options.” a Wells Fargo spokesperson added. “This includes regularly instituting individual moratoriums throughout the year where we think another option is reachable.”
Source: DSNews.com
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18 Dec
A Morning Cup of Inspiration (Dec. 18, 2009)
Happiness cannot be traveled to, owned, earned, worn or consumed.
Happiness is the spiritual experience of living every minute with
Love, Grace and Gratitude.
– Denis Waitley
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17 Dec
New HUD rules to help consumers save $$$
The Department of Housing and Urban Development (HUD) has released an updated version of a booklet that’s intended to help consumers comparison-shop for a mortgage.
Much of the 49-page publication, “Shopping for Your Home Loan: HUD’s Settlement Cost Booklet,” is devoted to the new standardized Good Faith Estimate and HUD-1 settlement statement forms that lenders must begin using on Jan. 1.
The forms and other changes to implementation of the Real Estate Settlement Procedures Act (RESPA) are intended to help consumers comparison shop. HUD believes the new RESPA rules, which encourage lenders to package settlement services like title insurance with loans, will save consumers an average of nearly $700 in costs and fees per mortgage.
The new RESPA rules place restrictions on changes to estimated loan origination and settlement service charges as disclosed on the GFE. The RESPA rule changes also require that mortgage brokers disclose “yield spread premiums” — rebates paid by lenders when borrowers take out loans at higher interest rates than they could qualify for — and credit them against a borrower’s closing costs.
HUD has posted a RESPA “FAQ” — answers to “frequently asked questions” — and other information on a dedicated RESPA page to help lenders, settlement services providers and consumers understand the new rules.
Source: Inman News
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Stay Informed. Stay Connected.
15 Dec
Shrinking pool of foreclosure buyers?
The latest results of a periodic national survey by Trulia.com and RealtyTrac show reduced appetite for foreclosure purchases, but also more realistic expectations.
The November survey found 43 percent of the 2,203 adults surveyed would be at least somewhat likely to consider buying a foreclosed home in the future, compared with 55 percent of adults surveyed in May.
Among all respondents, negative sentiment towards a foreclosure purchase remained high at 81 percent, compared with 85 percent in May.
Top concerns included hidden costs, the riskiness of the process, and fear that the home will lose value after it is purchased.
Read more…
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14 Dec
Give the Gift of Financial Literacy – 10 simple tips
The holidays can be an opportune time to instill financial values in children and grandchildren. Wish lists and gift shopping can help them distinguish between needs and wants. Donations and volunteering introduces them to the concept of giving.
Below are 10 tips to help teach children about financial responsibility, sharing, and the connection between money and values:
1. Be a positive role model.
Children absorb values by observing adult behavior. Set an example, and model a healthy attitude toward work, earning, spending and giving. Keep the role of money in perspective in the family and don’t use it as a means of comparing yourself to others.
2. Understand their environment.
Try to unearth the experiences your children are having with money among their own peer group. Values, attitudes and beliefs are continuously evolving, so it’s important to help your child interpret what he or she may be hearing, seeing and feeling.
3. Establish good behavior.
As soon as your children are ready, set up an age-appropriate allowance for children and a schedule for dispensing it between savings, spending and giving. For teens and college students, consider giving them an allowance to last over several months and let them have a chance to allocate it over time.
4. Talk about money.
Talk openly about money in the family. Do not treat the topic of money as taboo. A candid, honest and ongoing dialogue about money in the household can help children develop healthy attitudes and learn valuable lessons.
5. Make it fun.
Talking about money doesn’t have to feel formal or dull. Window shopping and trips to the library can teach important lessons about needs vs. wants and borrowing. Many classic board games like Monopoly, Life and Payday are springboards for basic lessons in finance.
6. Do it together.
Create a “family fund.” Saving toward a common goal, such as a vacation or donation to a charity, offers children the opportunity to get involved with conducting research, creating the budget, and more. Grandparents and relatives can be invited to join the fund too.
7. Give back to the community.
Help your children determine how they would like to contribute their time by showing them their options. Perhaps someone in your family is musically talented and can arrange a performance for people at a local hospital. Or utilize the skills of the entire family by serving at a soup kitchen or helping to build a home for a family in need.
8. Be fair.
While you may not be able to be completely consistent between children because of differences in ages, do make every effort to avoid comparing siblings or creating monetary competition in the household.
9. Accept mistakes and celebrate success.
Protecting children completely can lead to financial problems when they are adults, so allow them to make mistakes. But do set limits and make rules. Equally important is to celebrate their successes.
10. Be patient.
The results of your efforts may not be apparent until much later on in your children’s lives. Trust that you’re doing the best you can and take the setbacks in stride.
Source: Lisa Caputo and Linda Descano
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