Today’s News Synopsis:
Capital Economics claims that U.S. home values are 20 percent undervalued. Yields on Fannie Mae and Freddie Mac mortgage securities fell to record lows. Trulia reports that 19 percent of homes had a price reduction last month. Real estate appraisers claim that Obama’s new foreclosure program encourages fraud.
In The News:
ABC - “More Work Ahead on Housing Market: Treasury” (3-9-10)
“Michael Barr, the Treasury’s assistant secretary for financial institutions, said in prepared remarks to state housing agency officials that the Obama administration’s housing policies ‘are helping to stabilize housing markets’. He said mortgage rates remain near historic lows, unsold home inventories are falling and prices are declining less rapidly in most markets with some prices increasing.”
The Press Enterprise – “State law to save foreclosure victims from losing shirt on taxes” (3-9-10)
“Passing the Assembly by a 47-27 vote, the bill authored by Sen. Lois Wolk (D-Davis) would exempt people who did short sales or received loan modifications or lost their houses in foreclosure last year from having to pay state tax on any mortgage debt that was forgiven. Otherwise the forgiven debt would be considered income for the homeowners even though they received no money from the sale of their home.”
Housing Wire – “State Housing Finance Agencies Uneven in Plans to Use $1.5bn Federal Fund” (3-9-10)
“Last week, the US Treasury Department cleared select state HFAs to submit proposals for the fund. President Barack Obama announced the plan in February to use $1.5bn of the Troubled Asset Relief Program (TARP) to help homeowners in states where house prices have dropped 20% from peak. Nevada, California, Arizona, Florida and Michigan are making plans to target unemployed or underwater borrowers and provide second-lien relief.”
Housing Wire – “Economists Find US House Prices are Undervalued Globally” (3-9-10)
“House prices in the United States are nearly 20% undervalued, especially in the states of California, Nevada, Michigan and Ohio, when compared to global markets, according to a report from independent macroeconomic research consultancy firm Capital Economics.”
Bloomberg - “Fannie Mae Mortgage-Bond Spreads Fall to Record: Credit Markets” (3-9-10)
“Yields on Fannie Mae and Freddie Mac mortgage securities that guide U.S. home-loan rates fell to the lowest relative to Treasuries on record, even as the scheduled end of Federal Reserve purchases approaches. The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries narrowed about 0.01 percentage point to 0.61 percentage point as of 4:15 p.m. in New York, the smallest gap since at least 1984, according to data compiled by Bloomberg.”
Inman - “Trulia: Price reductions reach new low” (3-9-10)
“As of the first day of this month, sellers had reduced prices on less than 20 percent of listed homes for the first time since Trulia started tracking price reductions in April 2009, the property search site announced in a report Tuesday. The March report found that sellers had reduced prices at least once on 19 percent of the homes listed on the site, compared with 21 percent the month before. The report included about 3 million properties and excluded foreclosures and new homes from its calculations.”
Inman - “Beware listings scammers” (3-9-10)
“Real estate agents beware: Scammers can take the listings information from your real estate Web site and peddle them as rental properties to try to bleed unsuspecting prospective tenants of their money and personal information, according to a story by a news agency in Pittsburgh, Pa.”
Orange County Register - “Fed sees ‘little change’ in West’s housing” (3-9-10)
“Demand for housing appeared to be little changed on net, while demand for commercial real estate slid further. The pace of home sales was mixed across areas but appeared to be largely unchanged after adjusting for normal seasonal variation. Home prices reportedly rose a bit further in some areas of the District. However, the number of available homes for sale remained elevated, which substantially offset builders’ incentives to increase the pace of new home construction. Demand slid further for commercial real estate, and tenants continued to push for and often achieve rent concessions and other favorable terms through renegotiation of existing leases. However, one contact noted an increase in leasing activity in some segments of the major markets in the District, as well as slightly improved availability of financing for new commercial development and investment transactions.”
Orange County Register – “Appraisers: Obama plan encourages fraud” (3-9-10)
“Real estate appraisers today announced their opposition to part of an Obama administration plan to pay homeowners in trouble to move if they agree to a short sale, saying the program will lead to mortgage fraud. Under the plan, which takes effect April 5, delinquent borrowers who couldn’t get a loan modification can get $1,500 to move if they sell for less than the balance of the mortgage. Banks and second mortgage lenders would get $1,000 to process each of these short sales.”
Orange County Register – “Laguna Beach homes selling slower” (3-9-10)
“Homes are selling at a slower pace than two weeks ago, according to a biweekly report by Steven Thomas of Altera Real Estate. Laguna Beach’s market time, or home-selling pace, slowed from 9.14 months to 11.07 months. Countywide, the trend was the same. Two weeks ago, it would have taken an expected 2.51 months to sell Orange County’s home stock, which improved to 2.77 months.”
Looking Back:
One year ago, the San Francisco real estate market had the second largest year-to-year price decline in the United States. Economists claimed that the United States was in danger of deflation. Orange county had a 4 month supply of unsold home inventory. San Diego condo sales increased by 40 percent from 2008 to 2009.