Mortgage Watch - Weekly Update

Housing Market Revocery - Still Rocky

Housing market in rocky recovery

The housing market is in the midst of a rocky recovery, but it’s too soon to declare the end of the worst real estate slide since the Great Depression.

Sales of existing homes picked up sharply last month and prices stabilized. But that’s because the market got a big boost from tax credits for first-time home buyers. It remains to be seen whether the momentum will carry over through next year after the program was extended through April.

One clue may lie in Wednesday’s report on new home sales for November, which took an unexpected drop. For technical reasons, the tax break didn’t give new sales the same boost as existing homes. That’s because new sales are recorded when contracts are signed, while existing sales are logged when the sale closes. To get the original $8,000 tax credit, buyers had to close before Nov. 30, so new homes purchased in November likely wouldn't have closed in time to qualify.

The housing outlook is further clouded by a big wave of foreclosures that’s expected to break in the next two years.

“We have a tsunami of foreclosures — 3.5 million people who are 60 days delinquent, seriously delinquent, and probably another 3 million after that who are going to reach that stage,” said Yale University economics professor John Geanakoplos. “All six million of those will probably be kicked out of their houses.”

The housing industry got some holiday cheer Tuesday as the latest monthly data showed the sales of existing homes in November posted the biggest gain in nearly three years. But when the impact of the Nov. 30 tax credit deadline wears off, the housing market could face something of a New Year’s hangover when the December figures are released.

“Existing-home sales are likely to plunge in December,” according to Patrick Newport, U.S. economist at IHS Global Insight.

Because it targeted first-time buyers, the impact of the tax credit was felt most heavily at the low end of the market. More than 70 percent of November sales involved houses priced under $250,000.

To keep the housing recovery going, Congress last month extended the tax credit and expanded it. Under the second round, buyers who have lived in their current homes for at least five years can claim a credit of up to $6,500 on a new home if they sign a purchase agreement by April 30.

The hope is that by next spring, the housing market and economy will begin showing sustainable growth without the help of the government. The risk is that the tax credit simply moves up future sales without creating new demand.

That risk was highlighted by a separate report Wednesday showing that sales of new single-family homes unexpectedly fell to their lowest level in seven months in November. (New home sales account for about 5 percent of the housing market.)

The Commerce Department said new home sales dropped 11.3 percent, the biggest decline since January, to a 355,000 unit annual rate. Still, there were some bright spots in the report. The median sale price for a new home rose 3.8 percent from October to $217,400, the highest level since May.

A sustained housing recovery will depend on several factors, including a recovery in the labor market. Most economists expect the unemployment rate, currently at 10 percent, to remain close to that level for through next year. Without a paycheck, those jobless workers can’t get a mortgage.

The housing market also faces a stiff headwind from the continuing high rate of foreclosures, which drives down prices and adds to the backlog of unsold homes as lenders put those properties back on the market. Foreclosure filings in the U.S. will hit another record this year, with an estimated 3.9 million notices sent to homeowners in default, according to RealtyTrac. A record 14 percent of homeowners with mortgages are either behind on payments or in foreclosure.

“It looks like builders are having a real problem trying to compete with the depressed prices in the existing home market,” said Joel Naroff, president of Naroff Economic Advisors.

Despite three government relief programs since the housing market collapsed in 2007, millions of families are expected to lose their homes over the next two years. Under the latest program launched in March, some 760,000 eligible borrowers have been offered modified loans, but only 31,000 of those trial plans had been made permanent as of last month, according to a report this week from bank regulators.

Part of the reason for the poor showing is that mortgage servicers don't have adequate staff and systems to process the increasing number of trial plans, the report said.

But lenders have also been slow to take more aggressive steps, such as cutting mortgage balances to reflect lost home values. Mortgages that were pooled and sold to investors have also created financial incentives for mortgage companies to drag out the process, according to Geanakoplos.

“They are leaving (owners) in their homes longer and longer because (mortgage servicers) realize they can continue to keep their fees coming, even as the people sit there,” he said.

Effective foreclosure relief is only one piece of the housing outlook puzzle. A sustained recovery will also depend on the cost and availability of credit.

Mortgage rates remain below 5 percent, though they’ve been inching up in recent weeks. Those low rates have been engineered largely by the Federal Reserve through its program to buy $1.25 trillion in mortgage-backed securities. About two-thirds of that has already been spent. In its latest regular policy statement, the Fed included a reminder that the program is set to end next spring. It’s not clear whether rates will begin rising after the Fed stops buying mortgage-packed paper.

Low mortgage rates have helped millions of homeowners reduce payments on their existing homes; roughly three out of four mortgage applications in the first two weeks of December were for refinancing, according to the Mortgage Bankers Association. That will help household budgets and shore up consumer spending, but it hasn’t spurred home buying.

Consumer spending rose for a second straight month in November as incomes recorded their biggest gain in six months, the Commerce Department reported Wednesday.

Falling real estate prices also have helped boost demand for homes by making homes more affordable. The median price of existing homes sold in November was $172,600, down 4.3 percent from a year earlier.

The combination of cheap mortgage money and lower prices has pushed the so-called “affordability” index close to its highest level in nearly two decades, according to the National Association of Home Builders.

As prices stabilize, lenders may become more confident about writing new mortgages, helping sustain demand after government incentives expire, said Richard DeKaser an economist at Woodley Park Research. “I think that we’ll have the baton passed from the public to the private sector as lenders start to loosen up the purse strings," he said.

Tight credit — a reaction to the wave of easy money that sank the housing market in the first place — also could weigh on a sustained housing rebound. To help ease credit, President Barack Obama met this week with community bankers to seek ways to get more loans flowing to small businesses and home buyers. Lenders have argued that credit has slowed because the weak economy has cut the demand.

They have money to lend. Most banks have been steadily rebuilding their capital reserves as they profit from a favorable interest rate environment. But those reserves could take another hit next year unless the job market bounces back.

“We could see a secondary tightening of credit as the losses from 10 percent unemployment and defaults come through,” said Diane Swonk, chief economist at Mesirow Financial. “That’s is what the Fed's concerned about — averting that secondary tightening of credit.”

By John W. Schoen
Senior producer
msnbc.com

Weekly Mortgage Watch - December 20th 2009

Weekend Rates - Take look!

Ken Webb - Realtor
OCAR, NAR, CAR
F1RST TEAM
Real Estate
Email: kenwebb@firstteam.com
Phone/Text: (949) 243-6649
DRE Lic # 01844181

SEARCH JUST LIKE AN AGENT
http://www.kwrealestate.listingbook.com

CURRENT REAL ESTATE NEWS
http://kenwebbkwrealestate.blogspot.com


UP TO THE MINUTE UPDATES ON TWITTER
http://twitter.com/KW_Real_Estate

STATE WIDE AND LOCAL REAL ESTATE FACTS & FIGURES
http://clients.housingtrendsenewsletter.com/


"The finest compliment I could ever receive is a
referral from my friends and clients"

1 Minute Real Estate Updates - WOW!

CHECK OUT THE LINK TO MY NEW WEBSITE -

Added benefits to working with a Realtor who works hard for you.

Mortgage Updates -

I enjoy working for you - BUT,....

I needed to make sure a few things where clear for everyone.

1) I DO enjoy chatting with and working with everyone I come into contact with.

2) I do NOT mind sharing information and helpful "stuff"

3) I realize that my services are easy, simple to use and I am easy to work with and I have access and provide access to just about everything you could need in Real Estate (It's All In There!)


BUT

If you are already working with an AGENT and I am giving you information and access to homes your AGENT is not sharing - why are you doing still working with that other AGENT?

There is nothing personal here, but business is business. If you AGENT is NOT willing to share with you all the homes on the market - what do you think you are missing? A WHOLE BUNCH!


You need to take a step back and really look at your situation. If your current AGENT is your buddy, friend, family member, brother, sister or - whatever - FINE,..that is great that you can take some time out to help a friend. I think that is wonderful!

But, if this business relationship is not a good business relationship and the business part turns sour - what do you think that will do to your friendship?

One think I have learned is that business is business - period. No exceptions. If friends, family or co workers use your services - then it is business. Expect the same level of service you would from any service provider and if they cannot provide it - no harm, no foul. Stay friends and just move on.

With all of that being said. I want everyone to be sure that whomever you choose to be your Realtor/AGENT of choice - let that be your choice. If they do not provide you the service you need and you have to go to someone else to get the job done - do just that - move on.

Do the right thing and stay friends but move your business on to the person that is getting the job done for you.


Whew!

With that said, I do not mind helping you find a home or finding loans or helping you figure some next steps. But do not come to me after we have been working together on a home and tell me you already have an agent and could you please send the AGENT the information because your agent doesn't have clue as to what you are talking about.

This situation at the very least makes it pretty difficult for me want to help you further if you have already mislead me this far.

Be honest, be straight forward and have integrity. I work hard for your business - as you can tell. If mine is better -- I would be thankful if you choose me as your Realtor & Agent because of my service and work. Just think, if I have been great this far - it will continue to be so.

If you Agent is not keeping you updated on homes or property & you have to go elsewhere to find the information - why would you stay in the less then optimum situation where you do NOT have someone looking out for your best interests.

Sound fair?

Of course it does. You would expect the same respect show to yourself.

Have a GREAT weekend - and do not be shy to ask questions! If I am the Agent who takes care of you then do the right thing and choose me as your Realtor. You have already taken the steps to stay in touch and communicate. The next step to retain me as your AGENT & REALTOR is just as easy.

See you at the next Open House!

Ken Webb - Realtor
OCAR, NAR, CAR
F1RST TEAM
Real Estate
Email: kenwebb@firstteam.com
Phone/Text: (949) 243-6649
DRE Lic # 01844181

SEARCH JUST LIKE AN AGENT
http://www.kwrealestate.listingbook.com

CURRENT REAL ESTATE NEWS
http://kenwebbkwrealestate.blogspot.com


UP TO THE MINUTE UPDATES ON TWITTER
http://twitter.com/KW_Real_Estate



"The finest compliment I could ever receive is a
referral from my friends and clients"

It's All In There - See For Yourself

Searching for Homes - Is it all in there?

Yes.



How Many Different Counties can you search? 10!
Imperial, Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, & Ventura Counties.
I am your Southern California Real Estate Professional and your Local Area Expert. Yes, my area is a bit big, but wouldn't you want an Agent who can help you no matter where you wanted to live?

You can also search by City, School districts, Zip Codes, MLS areas (Yes, just like an agent).

You can search by Single family Home, Condo, Townhouse.

You can search by Bedrooms, Bathrooms, SqFt, Age, Acres, Lot SqFt.

You can search by Street name, Builder Tract, Price range, Remarks, and MLS number.


You can Advance Search and pinpoint the exact area(s) on a map where you want to live!

You can search by a list of Features (Appliances, Cul-De-Sac, Fireplace, Golf Course- up to 24 different features!

You can search by Pool - Private or Association - up to 4 different choices

You can search by Views-Canyon, Coastline, Ocean, Catalina, Desert, Water, City Lights or Mountain Views.


You can even search SOLD, PENDING, WITHDRAWN or OTHER to see what homes sold for or what is in the process of being sold.


Did you know,

Each Home will pull up data for Area Sales, Loan Report (you can customize this and get a very good estimate on your monthly costs).

You also get access to Community Information that will tell you stats on the what kind of neighborhood this is all the way down to the school district and that particular school's report card!


When I say

SEARCH JUST LIKE AN AGENT
http://www.kwrealestate.listingbook.com


I MEAN IT!

This search tool puts at your fingertips all of the information found on the MLS plus more. It also provides you much easier and faster way to really get into the details of a home and the surrounding community.

Isn't this what you had wanted in a HOME SEARCH anyway?




Ken Webb - Realtor
OCAR, NAR, CAR
F1RST TEAM
Real Estate
Email: kenwebb@firstteam.com
Phone/Text: (949) 243-6649
DRE Lic # 01844181

SEARCH JUST LIKE AN AGENT
http://www.kwrealestate.listingbook.com

CURRENT REAL ESTATE NEWS
http://kenwebbkwrealestate.blogspot.com


UP TO THE MINUTE UPDATES ON TWITTER
http://twitter.com/KW_Real_Estate



"The finest compliment I could ever receive is a referral from my friends and clients"

30 second Update - From The Desk of Ken Webb - First Team Real Estate, KW Realtor

Do not forget to check up on your Twitter updates.

HOT BUYS - 

http://twitter.com/KW_Real_Estate

New Hot Buys Posted - Great Deals on South OC Homes

Check out the new updates on Rentals/Leases and Homes for Sale.  Maybe you are curious about a house down the street if it is a Short Sale or REO?

http://www.kwrealestate.listingbook.com 

Working hard to get the tools you need.

Ken Webb - Realtor 

OCAR, NAR, CAR

KW Real Estate - First Team Estates

Email:  kenwebb@firstteam.com  

Phone/Text: (949) 243-6649 

DRE Lic # 01844181

"The finest compliment I could ever receive is a 

referral from my friends and clients"

Affordability at Historic Highs in 2009

By: Sara Sutachan, Senior Research Analyst & Oscar Wei, Senior Research Analyst

Seasonally adjusted and annualized sales in the third quarter of 2009 increased to 537,690 units, up 1.7 percent from the previous quarter sales figure of 528,580 homes and up 7.7 percent from the year ago figure of 499,110 units. The size of the year-to-year percentage gains has been gradually diminishing since the beginning of this year, as sales level of 2008 continued to recover in the second half of the year. Although sales gains continue to be driven in part by large shares of deeply-discounted distressed sales in the low end of the market, the high end market has been improving. In fact, sales of million dollar homes in the last month of the quarter experienced their first year-to-year percent increase since the mid of 2007.

Even as home prices in California began to show some signs of stabilizing since hitting a recent quarterly bottom in the first quarter of 2009 at $247,800, the median price at $290,760 in the third quarter was still 15 percent below that of a year earlier. However, this was a far cry from the year-over-year price declines in the 30-40 percent range in the five consecutive quarters prior to the current quarter.

In the third quarter of 2009, lower prices across the state had sent affordability in the state to record high levels. C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI), which measures the share of all households that can afford the entry-level home, hit 64 percent in California. That meant that nearly two-thirds (64 percent) of California’s households could afford a home at an entry-level price of $247,150 (defined as 85 percent of the median home price). While this affordability index only goes back to 2000, other affordability measures indicate that affordability has been at a historically high level in 2009 even compared to the 1980s and 1990s. In fact, the FTB-HAI reached a historic high in the first quarter of 2009 at 69. In other words, during the first three months of the year close to seven in 10 households could afford the entry-level home priced at $210,630. The index is calculated based on an entry-level home price, a 10 percent downpayment, an ARM effective composite rate, and a 40 percent debt-qualifying ratio.

The monthly mortgage payment including interest, taxes, and insurance (PITI) in the third quarter—based on a 10 percent downpayment and the prevailing mortgage rate of 4.79 percent—added up to $1,450. That is $340 less than the monthly PITI of $1,790 a year ago, when the entry-level home was priced at $290,490 and the mortgage rate was 5.30 percent. The FTB-HAI was nine points higher than the third quarter of 2008 when only 55 percent of the households were able to afford a home.

With lower prices and relatively low mortgage rates, affordability has improved dramatically in 2009, creating great opportunities for well-qualified buyers with a steady job and stable income situation. In addition, the extension of the Homebuyer Tax Credit will also make buying a home more affordable to home buyers in the coming months. However, constraints on inventory as well as the tighter underwriting standards and qualifying thresholds remain to be a huge barrier today’s housing market.