Thursday, April 10, 2014

Market Matters

Houses are about to get really, really smart
Source: CNBC

Improvements in smart technology have allowed homeowners to control their utilities, their temperature, even their security from hand-held devices outside the home, and experts say that in the next five years, home technology could learn to sense a person’s patterns so everything is automated and operating at maximum efficiency.
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California second least affordable state for renters, study says
Source: LA Times
 
The National Low Income Housing Coalition released a report that found California renters must earn more than triple the minimum wage to afford a two-bedroom apartment. The report states that an estimated 61 percent of California renters cannot afford a two-bedroom. In the Bay Area, a worker needs to earn $37.62 an hour to comfortably afford a two-bedroom apartment.
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Home prices fall in January but continue double-digit yearly gains
Source: The Hill
 
The Standard & Poor's/Case-Shiller 20-city home price index revealed that prices declined 0.1 percent in January, which is the third straight month of decline. However, there were healthy double-digit gains year over year, with a 13.2 percent increase from January 2013.
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The Water Crisis

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Monday, April 7, 2014

Market Matters


SoCal housing supply expands in February, Realtors say

Source: LA Times

According to new figures from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), the number of homes on the market jumped in February as supply expands ahead of the spring buying season. C.A.R.’s chief economist, Leslie Appleton-Young, commented, “It’s a sign we’re getting back to a more normal market, certainly.”
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U.S. Criticized for Lack of Action on Mortgage Fraud
Source: New York Times
The Justice Department’s inspector general, the department’s internal watchdog, released the results of an investigation and audit of efforts to address mortgage fraud. The department is facing scrutiny for closing hundreds of mortgage fraud cases after little or no investigation and making the crime a low priority. A lack of accountability after the collapse of the financial and housing markets has bolstered criticism that there has been a lack of action on mortgage fraud.
Making sense of the story
  • The report shows that the F.B.I. considered mortgage fraud to be its lowest-ranked national criminal priority. However, the F.B.I. received $196 million from the 2009 to 2011 fiscal years to investigate mortgage fraud.
  • The number of pending cases and agents investigating mortgage fraud dropped in 2011, despite the availability of funds, as new staff were not always used to exclusively investigate mortgage fraud.
  • Data was reported to the public that wildly overstated the government’s results. For example, it had been reported in 2012 that 530 people had been charged with fraud when in actuality only 107 people were charged. It took months of review to clarify the data.
  • The inspector general report also indicates that it was falsely reported that cases that had cost homeowners more than $1 billion had been addressed by authorities. This was a highly inflated number, as in reality it was $95 million.
  • The report calls on the Department of Justice to “implement a methodology for properly soliciting, collecting, and reviewing information before publicly reporting results.”
  • The department is also called on to develop a method to capture additional data that will allow it to better understand the results of its efforts in investigating and prosecuting mortgage fraud and identifying the position of mortgage fraud defendants within an organization.
Read the full story

Thursday, April 3, 2014

Market Matters

California's vanishing distressed housing market
Source: The Record Searchlight

The CALIFORNIA ASSOCIATION OF REALTORS® reports that California's distressed housing market is a shadow of what it was at the height of the Great Recession. In January 2009, nearly seven of every 10 homes sold in California were a short sale or foreclosure. This January, that number had shrunk to 15.6 percent.
Read the full story
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Plan for Mortgage Giants Takes Shape
Source: Wall Street Journal
Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) have reached an agreement on winding down the government-sponsored enterprises Fannie Mae and Freddie Mac. The bipartisan proposal would replace the U.S.-owned mortgage financiers with government bond insurance that would kick in only after private capital suffered losses of at least 10 percent. Fannie Mae and Freddie Mac currently own or guarantee 60 percent of all U.S. home loans. Kevin Brown, the president of the CALIFORNIA ASSOCIATION OF REALTORS®, commented, “Whether it's called Fannie and Freddie or reconstituted as something else, it's clear we need a government guarantee.”
Making sense of the story
  • Under the proposal, a new agency called the Federal Mortgage Insurance Corp. (FMIC) would charge fees to issue a government guarantee on bonds. This guarantee would only be issued after investors suffer losses of at least 10 percent.
  • The agreement would aim to promote a smooth and stable transition from the old system to the new system by providing specific benchmarks and timelines to guide the FMIC and market participants. The FMIC would be modeled in part after the FDIC, including its regulatory authority.
  • The senators’ plan would require strong underwriting standards that mirror the definition of “qualified mortgage,” and set down payment requirement at 5 percent (except for first-time homebuyers at 3.5 percent).
  • Affordable housing goals would be eliminated and instead, housing-related funds would be established to ensure housing is available for all types of borrowers and renters. These funds would be financed through a user fee on lenders that seek FMIC backing.
  • Current conforming loan limits will be maintained under the agreement so that mortgage credit continues to be available in high-cost areas.
  • The plan also states that the new system will monitor consumer and market access to credit, and provide market based incentives and transparency to serve underserved areas.
Read the full story

Thursday, March 27, 2014

Market Matters

Spring Home Buying Season Starts Outside Polar Vortex
Source: Investor’s Business Daily

The spring home buying season, typically the busiest of the year, is now under way, and activity is brisk in many markets. Geoff McIntosh, managing broker and co-owner of Main Street REALTORS®, said, “We continue to see an extremely active marketplace. We've had a lot of pent-up demand and incredibly short inventory.” McIntosh is treasurer of the CALIFORNIA ASSOCIATION OF REALTORS®.
Read the full story
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Why You Can’t Find That Home For Sale on Zillow or Trulia
Source: Seattle PI
 
According to a recent study, large website portals have fewer real listings and display far more duplicates and expired listings. Consumers who rely solely on these avenues for listings are missing a huge portion of the market.
Read the full story
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Why a boost in pickup truck sales means the housing market is in for good news
Source: Washington Post

Reportedly, there is a strong correlation between the real estate market and auto sales, particularly the pickup truck since they are related to the construction industry. With an increase in home building activity, more workers buy pickup trucks when they are hired by construction companies.
Read the full story
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Obama administration says housing agency won't need Treasury aid
Source: Reuters
 
The Federal Housing Administration (FHA) has adequate reserves and will not need a second subsidy, according to the most recent budget proposal from the White House. When the fiscal year closed on September 30, the agency ended up drawing $1.7 billion in aid from the Treasury to shore up its finances.
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Monday, March 24, 2014

Newsline

Home Prices Lose Momentum 
Data through December 2013, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, showed that national home prices closed the year of 2013 up 11.3 percent. This represents a slight improvement over last quarter’s annual rate of 11.2 percent. In the fourth quarter of 2013, the National Index declined 0.3 percent.  
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In December, the 10-City Composite remained relatively unchanged while the 20-City Composite showed its second consecutive monthly decline of 0.1 percent. Year-over-year, the 10-City and 20-City Composites posted gains of 13.6 percent and 13.4 percent, approximately 30 basis points lower than their November rates. 
More info
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Pending home sales reverse two-month declineWith the statewide housing inventory slowly improving, California pending home sales picked up steam in January and reversed a two-month decline, but pending sales were still down from a year ago, C.A.R. reported.

California pending home sales posted higher in January, with the Pending Home Sales Index (PHSI) jumping 22.9 percent in January to reach 84.8, up from a revised index of 68.9 in December, based on signed contracts.  Pending sales were down 17.5 percent from the revised 102.8 index recorded in January 2013.  The year-over-year decline was the fifth straight annual double-digit drop in the PHSI.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market. 

January saw an increase in active listings across all property types, especially in equity properties, which helped to improve housing supply conditions.  The Unsold Inventory Index for equity sales climbed from 3 months in December to 4.4 months in January.  The supply of REOs rose from 2.8 months in December to 3.2 months in January, and the supply of short sales increased from 3.2 months in December to 4.6 months in January.
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