15November2008
Posted by admin under: Sell House.
House for sale: Remarks: You’ll really get your money’s worth in this stucco home on.35 acres. Great features include new carpet,paint,lighting fixtures,newer roof. 2 bedrooms, 2 bathrooms, dining room, great room, master suite with walk-in closet dual sinks, vanity, cheery breakfast nook. Inside laundry with washer/dryer. Security system, French doors to enclosed glass room. 2-car garage with side door.
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14November2008
Posted by John under: News.
Mortgage giants Fannie Mae or Freddie Mac may back 30 million mortgages. But that doesn't mean that the new foreclosure prevention program announced this week by the Bush administration will rescue every troubled borrower on their books.
14November2008
Posted by John under: News.
A shameless plug here that I participated in a 30-minute segment on the "state of the housing market" on NPR's Here's a link to the audiocast, on the off-chance you weren't glued to NPR all day Thursday.
At one point, I interjected and asked Shiller if he thought we were hurtling toward a depression. What prompted me to ask were comments Shiller had made in a separate interview recently where he was pretty bearish. On Talk of the Nation, Shiller seemed a little more hopeful that we can dig our way out this time -- noting that after the Crash of 1929, the country had to wait three years for do-nothing Hoover to leave office and make way for FDR and his aggressive agenda to create jobs through public works programs. This time, we only have to wait another two months (though even that short delay could be enough time for GM and the other automakers to file bankruptcy first).
Photo credit: The National Post, which published an interview with Shiller in early October and which is recommended reading.
13November2008
Posted by John under: News.
If you are trying to sell a house, this chart might make it hard for you to sleep tonight. It shows what you're up against. The figures come from a Nov. 1-8 nationwide survey of real estate agents conducted by Campbell Communications and sponsored by the publication Inside Mortgage Finance. More than 2,500 agents participated.
As you can see, 29% of all sales in September and October were REO--real estate owned. That means the previous owners lost the houses in foreclosure and the current owners--usually banks--were unloading them. Another 12% were short sales. That means the current owners were selling them for less than the money owed on the mortgage(s).
In other words, about 4 in 10 sales were by people who were highly motivated to get rid of the properties even if they couldn't get very high prices. That helps explain why ordinary sellers are having such a hard time finding buyers. The chart calls them "non-distressed," but a lot of them are feeling quite distressed anyway, thank you.
The survey also found that total sales fell 19% from September to October as economic and financial conditions worsened. It's bad out there.
13November2008
Posted by John under: News.
Mortgage rates fell for the second week in a row, finance firm Freddie Mac said Thursday, as the weakening economy resulted in the slowest pace of home purchase applications in nearly eight years.
13November2008
Posted by John under: News.
The $189 billion California Public Employees’ Retirement System, the largest and most closely watched pension fund in the country, has revealed a huge hit to its real estate portfolio. Its housing related assets are down 35% to $6.1 billion as of June 30. Until recently, the big fund was still reporting double-digit increases in its real estate investments. According to a report that will be presented to the fund’s investment committee on Nov. 17, CalPERS’ overall real estate portfolio is down 11.2% for the fiscal year that ended in June.
The fund seems to have made some very basic investment mistakes, including over concentration in its once red-hot home market of California. Among its biggest disappointments is a nearly $1 billion investment in a partnership involving homebuilder Lennar, forestry giant Weyerhaeuser and private equity firms Cerberus and MacFarlane Partners. That partnership, called Land Source, is now in bankruptcy. A report prepared for the fund by independent consultant Le Pastrier Development Consulting found that high-levels of leverage contributed to the volatility of the fund’s housing investments.
CalPERS, known for agitating for corporate governance changes at big companies it invests in, is adjusting its own policies in the wake of the real estate debacle. The fund is busily restructuring its partnerships to reduce debt. In the future, real estate investments will have to pass muster with an internal review committee, an independent fiduciary and a board consultant. CalPERS is still looking for a new chief investment officer. The fund’s previous top manager, Russell Read, bailed out last spring.
13November2008
Posted by John under: News.
You might be surprised to learn that the California foreclosure rate actually decreased by 18% in October compared to September, according to RealtyTrac’s new report. But the news isn’t necessarily good.
The state’s filings have dropped for two straight months because of a new law that requires lenders to make a number of attempts to contact homeowners and then wait 30 days before issuing default notices. This has slowed down the number of foreclosures and will likely just delay the inevitable.
Despite the drop in the California rate, foreclosures nationwide increased 5% from the previous month and 25% from Oct. 2007, RealtyTrac said.
And the worst is likely on the way. Rick Sharga, RealtyTrac's vice president of marketing, told me today that he expects a sharp increase in coming months as the economy worsens and more and more people lose jobs.
"Another wave right now is about to come, driven by the economic downturn," Sharga said.
12November2008
Posted by John under: News.
Rep. Barney Frank, chairman of the House Committee on Financial Services, highlighted the need for a bailout program for troubled homeowners on Wednesday. But he stressed that not all borrowers should necessarily be rescued.
11November2008
Posted by John under: News.
The flurry of announcements by the government and major banks that they are engaging in a massive campaign to modify mortgages that are in or are hurtling toward default and foreclosure will certainly give rise to predictions that the housing market has been stabilized and disaster averted. If only it were so.
Make no mistake, policymakers and banking executives had to launch this concerted campaign to try to stop the wave after wave of foreclosures that seems to feed on itself. As lenders foreclose on one delinquent borrower, and then sell the home at what is invariably a steep discount, that just pushes a number of nearby homeowners so far underwater that they just move out and mail their keys in, which just sets the cycle in motion again.
But anyone hoping that this synchronized effort to modify millions mortgages that are in trouble is likely to be disappointed. Because behind the splashy headlines, there are limits to what the government and banks can hope to achieve. And trying to slow the free-fall in housing markets is akin to the government trying to put its finger in the dike.
The fact is that despite the double-digit declines in housing values in most cities, housing remains significantly overvalued in many markets by all of the traditional benchmarks: One key ratio – the median cost of a new home vs. median income – suggests that home prices nationwide still need to drop another 15% to 20% on average, as you can see in this chart compiled by money manager Barry Ritholtz. And the equilibrium price is far more than that in bubble markets like southern California and Florida. According to this "fair value" calculator, one suburban neighborhood outside Washington, D.C. that I checked (Alexandria, Va., where I lived in the mid-1990s) is now 47% overvalued. Ditto for a few communities in Los Angeles that I surveyed.
11November2008
Posted by John under: News.
The Bush administration on Tuesday unveiled a new program to modify mortgages and stabilize the battered real estate market, but the plan stops short of providing direct government financial help to at-risk homeowners.
