CNN Money.com
Sources: National Association of Realtors; Moody's Economy.com
The housing market hasn't bottomed out yet. For the third quarter, the closely-watched S&P Case-Shiller national home-price index fell 16.6%, and experts are predicting further declines. Of the top 100 markets, here are 10 with the worst forecasts.
1 of 10
1. Los Angeles
2008 median house price: $375,340
2009 projected change: -24.9%
2010 projected change: -5.1%
The median home price in the L.A.-Long Beach-Glendale metro area is projected to fall nearly 25% in 2009 - the biggest drop in the country.
2. Stockton, Calif.
2008 median house price: $248,050
2009 projected change: -24.7%
2010 projected change: -4.0%
One in every 94 homes received a foreclosure filing this November in this northern California market near Sacramento, according to RealtyTrac. Eight of the ten worst housing markets projected for 2009 are in California.
3. Riverside, Calif.
2008 median house price: $256,540
2009 projected change: -23.3%
2010 projected change: -4.8%A popular
4. Miami-Miami Beach
2008 median house price: $293,590
2009 projected change: -22.8%
2010 projected change: -6.4%Miami
5. Sacramento
State Capitol building in Sacramento
2008 median house price: $225,140
2009 projected change: -22.2%
2010 projected change: 2.3%
High jobless rates and low population growth are helping burst the capital city's inflated housing market. Prices are expected to fall another 22% in 2009, after tumbling 34% in 2008.
6. Santa Ana-Anaheim
2008 median house price: $532,810
2009 projected change: -22.0%
2010 projected change: -3.5%
Of the 100 biggest markets, this Orange County area, which includes Anaheim and Irvine, was the fifth most expensive place to live this year. But in 2009, prices are forecast to decline by $121,000.
7. Fresno
2008 median house price: $257,170
2009 projected change: -21.6%
2010 projected change: -3.3%
Fresno is located between Los Angeles and Sacramento, but it shared their housing woes. Prices in 2009 are expected to fall 44% from just two years ago.
8. San Diego
2008 median house price: $412,490
2009 projected change: -21.1%
2010 projected change: -2.9%
As the luxury condo boom continues to fizzles, median home prices in this southern California market are forecast to fall $87,000 to $326,000 in 2009.
9. Bakersfield, Calif.
2008 median house price: $227,270
2009 projected change: -20.9%
2010 projected change: -2.5%
This city north of Los Angeles had the ninth highest foreclosure rate in November, as one of the country's largest real estate bubbles continues to burst. Including Bakersfield, six of the ten worst foreclosure markets were in California.
10. Washington, D.C.
2008 median house price: $343,160
2009 projected change: -19.9%
2010 projected change: -5.7%
This market, which includes bordering Virginia towns Arlington and Alexandria, is cooling off from record highs. Forecasts call for median prices to slide 20% to $275,000 in 2009.
Sunday, June 28, 2009
Friday, June 26, 2009
Obama Mortgage Refinancing Program May Expand
Obama Mortgage Refinancing Program May Expand, Lockhart Says
By Dawn Kopecki and Jody Shenn
June 19 (AP) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.
The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.
The Home Affordable refinancing program, announced Feb. 18, is part of the U.S. government’s efforts to stem soaring foreclosures and bolster consumer spending. The 125 percent level on loan-to-values would preserve the ability of Fannie Mae and Freddie Mac to package and sell the debt into so-called real estate mortgage investment conduits, he said. While 125 percent loan-to-value ratio is on the table, Lockhart said “it’s not necessarily the number we’re going to end up with.” "
The program has been “seeing a slowdown” as mortgage rates increase, he said. The average rate on a typical 30-year fixed loan was 5.38 percent this week ended yesterday, according to McLean Virginia-based Freddie Mac. The rate is up from a record low of 4.78 percent at the end of April.
Under the program, borrowers with loans already owned or guaranteed by Washington-based Fannie Mae or Freddie Mac who have loan-to-value ratios of 80 percent to 105 percent and aren’t delinquent can refinance without buying mortgage insurance, or paying for more insurance than they already have.
Dow Jones and Bankrate.com reported the comments
By Dawn Kopecki and Jody Shenn
June 19 (AP) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.
The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.
The Home Affordable refinancing program, announced Feb. 18, is part of the U.S. government’s efforts to stem soaring foreclosures and bolster consumer spending. The 125 percent level on loan-to-values would preserve the ability of Fannie Mae and Freddie Mac to package and sell the debt into so-called real estate mortgage investment conduits, he said. While 125 percent loan-to-value ratio is on the table, Lockhart said “it’s not necessarily the number we’re going to end up with.” "
The program has been “seeing a slowdown” as mortgage rates increase, he said. The average rate on a typical 30-year fixed loan was 5.38 percent this week ended yesterday, according to McLean Virginia-based Freddie Mac. The rate is up from a record low of 4.78 percent at the end of April.
Under the program, borrowers with loans already owned or guaranteed by Washington-based Fannie Mae or Freddie Mac who have loan-to-value ratios of 80 percent to 105 percent and aren’t delinquent can refinance without buying mortgage insurance, or paying for more insurance than they already have.
Dow Jones and Bankrate.com reported the comments
Monday, June 22, 2009
"Tax Credit For Home Purchases Could Rise"
Hello bloggers! I have been speaking for months about lifting the limits of the tax credit so that ALL BUYERS could receive a credit. I also feel that a cap gains exemption might be another avenue to consider since the government needs tax money with all the new spending but they will not be receiving much from cap gains for the next few years. Here's the article....
By Stephanie Armour, USA TODAY
Lawmakers and businesses are calling for expansion of a tax credit for first-time home buyers that has helped spark home sales in an otherwise dismal real estate market. With the tax credit scheduled to expire in fall, some business groups say the amount of the credit, now capped at $8,000, should be raised to $15,000 and applied to anyone who buys a home.
First-time buyers make up a hefty 40% of home purchases, according to the National Association of Realtors (NAR), which is about 5 percentage points higher than the historical average. The credit, introduced in July 2008, was expanded in February as part of the economic stimulus package. The proposals may face headwinds amid growing public criticism of government spending to rescue the economy and the widening budget deficit.
Some economists say a tax benefit is vital to spur home buying and help stabilize prices.
"I'm fairly confident that (Congress) will extend the tax credit, because it is so important that housing come back," says Bernard Baumohl, an economist at the Economic Outlook Group. "But raising the tax credit will be difficult because it reduces taxes even more."
The White House had no immediate comment Sunday.
Current proposals:
•A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.
"It would go a long way toward inducing trade-up buyers into the market," says Lawrence Yun, chief economist at the NAR.
•A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It also would provide a $3,000 credit to homeowners who refinance.
•Another bill in the House, introduced by Rep. Eddie Bernice Johnson, D-Texas, would extend the credit to all home buyers through 2010.
The Business Roundtable, a consortium of CEOs from large companies, urged Congress this month to expand the tax credit to $15,000 and make all home buyers eligible.
"The issue is how do we stimulate the move-up market, and that's essential for the economy," says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker, Sotheby's International Realty and ERA.
"I think it's going to be a bipartisan effort," Smith says. "The issue is how to pay for it."
The current tax credit does not apply to singles earning more than $95,000 a year and couples who earn more than $170,000. Some business leaders want the income caps eliminated.
Buyers do not have to repay the tax credit if they occupy the home for three years or more.
"A lot of people are taking advantage of it," says David Thomas, a Realtor in Washington, D.C., who adds that expanding the credit would boost the market. "That would be a fantastic idea, to enhance and expand the incentives
By Stephanie Armour, USA TODAY
Lawmakers and businesses are calling for expansion of a tax credit for first-time home buyers that has helped spark home sales in an otherwise dismal real estate market. With the tax credit scheduled to expire in fall, some business groups say the amount of the credit, now capped at $8,000, should be raised to $15,000 and applied to anyone who buys a home.
First-time buyers make up a hefty 40% of home purchases, according to the National Association of Realtors (NAR), which is about 5 percentage points higher than the historical average. The credit, introduced in July 2008, was expanded in February as part of the economic stimulus package. The proposals may face headwinds amid growing public criticism of government spending to rescue the economy and the widening budget deficit.
Some economists say a tax benefit is vital to spur home buying and help stabilize prices.
"I'm fairly confident that (Congress) will extend the tax credit, because it is so important that housing come back," says Bernard Baumohl, an economist at the Economic Outlook Group. "But raising the tax credit will be difficult because it reduces taxes even more."
The White House had no immediate comment Sunday.
Current proposals:
•A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.
"It would go a long way toward inducing trade-up buyers into the market," says Lawrence Yun, chief economist at the NAR.
•A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It also would provide a $3,000 credit to homeowners who refinance.
•Another bill in the House, introduced by Rep. Eddie Bernice Johnson, D-Texas, would extend the credit to all home buyers through 2010.
The Business Roundtable, a consortium of CEOs from large companies, urged Congress this month to expand the tax credit to $15,000 and make all home buyers eligible.
"The issue is how do we stimulate the move-up market, and that's essential for the economy," says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker, Sotheby's International Realty and ERA.
"I think it's going to be a bipartisan effort," Smith says. "The issue is how to pay for it."
The current tax credit does not apply to singles earning more than $95,000 a year and couples who earn more than $170,000. Some business leaders want the income caps eliminated.
Buyers do not have to repay the tax credit if they occupy the home for three years or more.
"A lot of people are taking advantage of it," says David Thomas, a Realtor in Washington, D.C., who adds that expanding the credit would boost the market. "That would be a fantastic idea, to enhance and expand the incentives
Wednesday, June 17, 2009
FINALLY THE WORD IS GETTING OUT THERE- THE HIGH-END NEEDS HELP!
For about 6 months now I have used just about every opportunity on National Television to voice my concern that giving incentives just to the low-end and first-time home buyers would not be enough to help housing. It is time we give incentives to ALL BUYERS. We are now seeing more problems in higher-end areas due to high lending requirements such as: high down payments & high mortgage rates, and to the perception that high-end areas will still decline.
When sub-prime loans disappeared, homes in low-end areas dropped drastically but low rates, FHA loans requiring a 3.5 percent down payment and a first-time home buyer credit DRAMATICALLY INCREASED DEMAND. We do not have the same help for high-end areas thus far and if something is not done SOON, I agree with Jody Shenn's Bloomberg article, the suffering will continue.
Here is that article.......
Millionaire Homes’ May Lose Value Until 2012-
By Jody Shenn, June 16, BLOOMBERG
Prices for the most expensive U.S. homes may not reach bottom for another few years, according to JPMorgan Chase & Co. analysts. The CHART OF THE DAY shows the supply of unsold homes by price in California, data that the mortgage-bond analysts including John Sim and Matthew Jozoff used in a June 12 report to illustrate the weakening market for the most-expensive residential properties. The supply of homes priced $750,000 to $1 million held steady while the supply of more expensive properties increased. “Tighter lending standards and the lack of cheap financing for these borrowers continue to be key issues,” the New York- based analysts wrote, referring to “jumbo” mortgages. That’s after so-called interest-only and option adjustable-rate loans were a “major driver” of soaring values, they said.
The government’s moves to aid the housing market include the Federal Reserve’s mortgage-bond purchases to drive down interest rates; President Barack Obama’s “Home Affordable” loan modification and refinancing programs; and new tax credits for some first-time buyers. None of the U.S. initiatives “directly focused on helping the sales of these so-called millionaire homes,” the analysts wrote. “Currently, we have national home prices bottoming in 2011,” they said. “However, prices for more expensive homes may not bottom out until 2012, and ultimately result in peak-to- trough declines in excess of 60 percent (compared to 40 percent nationally).”
“California is probably worse than other states, but higher-priced homes in general are going to be a problem,” Sim said in a telephone interview today. The state’s median sales price for existing single-family homes fell 37 percent in April from a year earlier, to $256,700, according to California’s Association of Realtors. Nationwide, the price fell 15 percent to $169,800, according to the National Association of Realtors.
When sub-prime loans disappeared, homes in low-end areas dropped drastically but low rates, FHA loans requiring a 3.5 percent down payment and a first-time home buyer credit DRAMATICALLY INCREASED DEMAND. We do not have the same help for high-end areas thus far and if something is not done SOON, I agree with Jody Shenn's Bloomberg article, the suffering will continue.
Here is that article.......
Millionaire Homes’ May Lose Value Until 2012-
By Jody Shenn, June 16, BLOOMBERG
Prices for the most expensive U.S. homes may not reach bottom for another few years, according to JPMorgan Chase & Co. analysts. The CHART OF THE DAY shows the supply of unsold homes by price in California, data that the mortgage-bond analysts including John Sim and Matthew Jozoff used in a June 12 report to illustrate the weakening market for the most-expensive residential properties. The supply of homes priced $750,000 to $1 million held steady while the supply of more expensive properties increased. “Tighter lending standards and the lack of cheap financing for these borrowers continue to be key issues,” the New York- based analysts wrote, referring to “jumbo” mortgages. That’s after so-called interest-only and option adjustable-rate loans were a “major driver” of soaring values, they said.
The government’s moves to aid the housing market include the Federal Reserve’s mortgage-bond purchases to drive down interest rates; President Barack Obama’s “Home Affordable” loan modification and refinancing programs; and new tax credits for some first-time buyers. None of the U.S. initiatives “directly focused on helping the sales of these so-called millionaire homes,” the analysts wrote. “Currently, we have national home prices bottoming in 2011,” they said. “However, prices for more expensive homes may not bottom out until 2012, and ultimately result in peak-to- trough declines in excess of 60 percent (compared to 40 percent nationally).”
“California is probably worse than other states, but higher-priced homes in general are going to be a problem,” Sim said in a telephone interview today. The state’s median sales price for existing single-family homes fell 37 percent in April from a year earlier, to $256,700, according to California’s Association of Realtors. Nationwide, the price fell 15 percent to $169,800, according to the National Association of Realtors.
Monday, June 8, 2009
TAX CREDIT MAY BE GIVEN AS CASH TO BUYERS & 100 % FINANCING MAY BE HERE AGAIN-
This is targeting some buyers with the least amount of disposable income and many who are not in the best position financially, with a delicate economy, to take on this responsibility.
Current policies are helping to make buying a home (in certain areas and price ranges) almost too good to pass up. This is a good thing but only when qualified buyers participate. We experienced what happened when housing was "hot", when word spread and greed took over.
We already know that allowing people to purchase a home with very little down is a bad idea. There should be a significant investment that gives buyers a real incentive to stay in their home and honor their contractual commitments regardless of the market or a personal situation.
The number of first-time home buyers will decrease and our market will be left with traditional buyers who are not responding as strongly to the market but tax incentives could help this trend improve.
It is unfair that low-end housing and first-time home buyers have all the existing benefits and sellers in other higher-end markets and buyers making over a certain limit are simply being ignored.
A first-time home buyer buying in the low-end could have the following options: 100 percent financing, low mortgage rates, very low home prices, and now cash to make buying even easier and risks of buying even lower should the buyer decide to just walk away from the property and his/her responsibilities.
Connie De Groot
Comment:
Roberto Magalhaes at 6:01pm June 8
Hi Connie,Aren't there financial qualifiers for the 100% home financing or is the government taking on some of the risk?My general experience, not necessarily in the US, is that 100% financing of capital goods always lends itself to a loss on the lender side since recovery of foreclosed assets is costly.Dank u! Roberto
Current policies are helping to make buying a home (in certain areas and price ranges) almost too good to pass up. This is a good thing but only when qualified buyers participate. We experienced what happened when housing was "hot", when word spread and greed took over.
We already know that allowing people to purchase a home with very little down is a bad idea. There should be a significant investment that gives buyers a real incentive to stay in their home and honor their contractual commitments regardless of the market or a personal situation.
The number of first-time home buyers will decrease and our market will be left with traditional buyers who are not responding as strongly to the market but tax incentives could help this trend improve.
It is unfair that low-end housing and first-time home buyers have all the existing benefits and sellers in other higher-end markets and buyers making over a certain limit are simply being ignored.
A first-time home buyer buying in the low-end could have the following options: 100 percent financing, low mortgage rates, very low home prices, and now cash to make buying even easier and risks of buying even lower should the buyer decide to just walk away from the property and his/her responsibilities.
Connie De Groot
Comment:
Roberto Magalhaes at 6:01pm June 8
Hi Connie,Aren't there financial qualifiers for the 100% home financing or is the government taking on some of the risk?My general experience, not necessarily in the US, is that 100% financing of capital goods always lends itself to a loss on the lender side since recovery of foreclosed assets is costly.Dank u! Roberto
Tuesday, June 2, 2009
Home Sales Are On The Rise But How Can We Keep Up The Momentum?
REASONS SOME BUYERS ARE BUYING:
The expiration of the first-time home buyer tax credit is coming soon and is one reason buyers are buying now therefore this buying trend will most probably continue until rates change affordability for those first-time home buyers.
2. Commodity prices are up, the dollar is weakening and inflation is already being discussed so some are buying as a hedge against inflation.
3. Consumer confidence leaped up in May so this is also a contributing factor as to why pending sales are up by 6.7 percent which is the largest gain in 7 years!
4. Pending home sales are up for the 3rd month in a row based on affordability (prices, mortgage rates and income) and the first-time home buyer tax credit.
HOW TO KEEP THE MOMENTUM GOING
1. Give a tax incentive to buyers of ALL HOMES and also allow multiple purchases and consider extending it past Dec 09 but DO NOT ANNOUNCE IT NOW.
2. Raise the tax credit limit to 15,000 dollars to give incentive in higher priced marketplaces who also have desperate sellers
3. Consider raising the conforming loan limits higher than $ 729, 750 in higher priced areas and also ONLY FOR A LIMITED PERIOD OF TIME.
4. If giving buyers credits on each home they purchase is not favorable,why not offer repeat home buyers a capital gains exception for as long as they own those properties.
5. There is no secondary market for jumbo loans so perhaps the Federal Reserve could help restore liquidity in this market by buying these loans under the TALF program.
CONCERNS:
1. 1 in 12 mortgages in the U.S. are delinquent.
2. There is a stark rise in prime loan delinquencies.
3. Continued lack of financing for jumbo loans (no secondary market and lenders fears that prices will continue to come down in that market).
4. Continued job losses will negatively impact delinquencies and foreclosures.
5. Interest rates have come off their lows and if this upward trend continues many buyers will not be able to afford to buy.
6. A 40 month supply of homes above 750K currently exist and that market has virtually no tax incentive,difficult financing if a jumbo is required, and buyers are still concerned prices will continue to fall so they are on the fence.
The expiration of the first-time home buyer tax credit is coming soon and is one reason buyers are buying now therefore this buying trend will most probably continue until rates change affordability for those first-time home buyers.
2. Commodity prices are up, the dollar is weakening and inflation is already being discussed so some are buying as a hedge against inflation.
3. Consumer confidence leaped up in May so this is also a contributing factor as to why pending sales are up by 6.7 percent which is the largest gain in 7 years!
4. Pending home sales are up for the 3rd month in a row based on affordability (prices, mortgage rates and income) and the first-time home buyer tax credit.
HOW TO KEEP THE MOMENTUM GOING
1. Give a tax incentive to buyers of ALL HOMES and also allow multiple purchases and consider extending it past Dec 09 but DO NOT ANNOUNCE IT NOW.
2. Raise the tax credit limit to 15,000 dollars to give incentive in higher priced marketplaces who also have desperate sellers
3. Consider raising the conforming loan limits higher than $ 729, 750 in higher priced areas and also ONLY FOR A LIMITED PERIOD OF TIME.
4. If giving buyers credits on each home they purchase is not favorable,why not offer repeat home buyers a capital gains exception for as long as they own those properties.
5. There is no secondary market for jumbo loans so perhaps the Federal Reserve could help restore liquidity in this market by buying these loans under the TALF program.
CONCERNS:
1. 1 in 12 mortgages in the U.S. are delinquent.
2. There is a stark rise in prime loan delinquencies.
3. Continued lack of financing for jumbo loans (no secondary market and lenders fears that prices will continue to come down in that market).
4. Continued job losses will negatively impact delinquencies and foreclosures.
5. Interest rates have come off their lows and if this upward trend continues many buyers will not be able to afford to buy.
6. A 40 month supply of homes above 750K currently exist and that market has virtually no tax incentive,difficult financing if a jumbo is required, and buyers are still concerned prices will continue to fall so they are on the fence.
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