Economist | The Norris Group Blog

The Norris Group Blog

California Real Estate Headline Roundup

Posts Tagged ‘economist’

The Norris Group Real Estate News Roundup 6/27/11

Monday, June 27th, 2011

Today’s News Synopsis:

Realty Times reported mixed results for the market this month: an increase in housing starts but a 3.8% decrease in existing-home sales. Analysts at Capital Economics found that cheaper and lower-quality homes will steadily decrease faster than homes at the higher end of the market. The Wall Street Journal reported that more mortgage applications are being rejected due to banks being extra careful about lending.

In The News:

DS News - “Homes at Low End of Market Remain Most Vulnerable to Price Drops” (6-27-11)

“A continuation of tight credit conditions for first-time buyers and a foreclosure pipeline full of homes bought with subprime loans will mean that house prices at the low end of the market will continue to fall at a faster rate than prices at either the middle or high end, according to analysts at the research firm Capital Economics.”

The Wall Street Journal - “Tighter Lending Crimps Housing” (6-27-11)

“The percentage of mortgage applications rejected by the nation’s largest lenders increased last year, spotlighting how banks’ cautious lending practices are hampering the nascent housing market recovery. ”

Bloomberg - “Mortgage-Bond Slump in U.S. Deepening as Jumbo, Alt-A Loans Extend Losses” (6-27-11)

“U.S. mortgage bonds without government backing are extending losses as signs of a weakening U.S. economy and concern that Greece may default on its debt curb risk-taking.”

CNN Money - “The tax man doesn’t want housing to recover” (6-27-11)

“During the housing boom, governments enjoyed windfalls from property taxes tied closely to home prices. But since the real estate bubble burst, the revenue stream officials had come to rely on to help pay for everything from education to roads has dried up.”

Housing Wire - “Florida court upholds foreclosure ‘rocket docket’ system” (6-27-11)

“A Florida appellate court denied a request from the American Civil Liberties Union to keep a property seizure case out of an accelerated foreclosure system, known as the ‘rocket docket’.”

Inman - “Denver home prices steady, some sellers on sidelines” (6-27-11)

“Metro Denver heads into the prime summer season with fewer available homes on the market. The monthly inventory of unsold homes in May declined 11.1 percent year-over-year to 19,573 units.”

Realty Times - “Real Estate Outlook: Mixed News amid Rising Initial Jobless Claims” (6-27-11)

“It was mixed news this week in the real estate market. While new housing starts were up after a month of declines, existing-home sales were down 3.8 percent from April.”

San Francisco Chronicle - “More than 1 in 4 denied a mortgage” (6-27-11)

“The pendulum has swung the other way. Banks have been blamed for being too lax in their lending practices in the past, haven given mortgages to millions that couldn’t afford them and contributing to the foreclosure debacle. Now, they are being cited as being too restrictive. Their conservative approach, critics say, is hampering the housing market from finding some stable ground, as willing buyers are being denied a mortgage.”

DS News – “Analysis: Private Markets Key to Preventing Housing Meltdown Sequel” (6-27-11)

“According to an analysis authored by Patric H. Hendershott and Kevin Villani, responsibility for the failure of Fannie Mae and Freddie Mac falls directly on regulators and indirectly on their political overseers.”

Los Angeles Times - “Treausury bond yields rise as some investors shun new debt sale” (6-27-11)

“Some investors have lost their appetite for U.S. Treasury bonds with yields at their lowest levels since late last year. Government bond yields rose Monday after the Treasury faced surprisingly weak demand at its auction of $35 billion in new two-year notes, the first of three note auctions this week.”

Housing Wire - “Freddie Mac economist sees sunny economy in second half” (6-27-11)

“Freddie Mac Chief Economist Frank Nothaft said the overall economy should begin to accelerate in the second half of 2011 with an improved housing market close behind.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: ACLU, Barclays Capital, bruce norris, Capital Economics, Case-Shiller Home Price index, Cato Institute, Christopher Thornberg, Denver, Dodd-Frank, economist, fannie mae, Federal Housing Finance Agency, Federal Reserve, Florida, Frank Nothaft, freddie mac, Home Mortgage Disclosure Act, Kevin Villani, NAHB, Patric H. Hendershott, rocket docket, Standard & Poor's, the norris group, treasury bond, U.S. Treasury
Posted in News | No Comments »

The Norris Group Real Estate News Roundup 6/15/11

Wednesday, June 15th, 2011

Today’s News Synopsis:

Fannie Mae announced that it will be extending its offering of money to partially cover the closing cost of a house that they earlier repossessed now back on the market. According to Inman News, economists have adjusted their predictions of the economy, now not expecting a recorver until 2012. The median price of homes in the Bay Area fell drastically from a year ago, according to DQ News.

In The News:

Housing Wire – “Risk retention may slow return of private-label mortgage finance” (6-15-11)

“Banking executives believe private capital will rebuild the mortgage finance market, but don’t expect non-agency funding to flood the market anytime soon, according to panelists at Standard & Poor’s recent “Housing Summit: Boom, Bust and Beyond.”

Inman – “Economists revise forecasts for real estate recovery” (6-15-11)

“In what has become a mid-year ritual, housing economists have quietly trimmed their annual forecasts after a lackluster start to the year, pushing back a housing recovery until 2012. ”

Bloomberg - “Homebuilder Confidence in U.S. Slides to Nine-Month Low on Sales Outlook” (6-15-11)

“Confidence among U.S. homebuilders slumped in June to the lowest level in nine months as executives turned more pessimistic on the outlook for sales, a sign that any pickup will take time to develop.”

DSNews - “Phoenix-Area Foreclosures Sales Drop for Third Straight Month” (6-15-11)

“Foreclosures are claiming a smaller share of the Phoenix sales market. The ratio has dropped for three straight months, according to a new report from the W. P. Carey School of Business at Arizona State University.”

RisMedia - “HUD, VA to Provide Permanent Housing and Case Management to Homeless Veterans” (6-15-11)

“ U.S. Housing and Urban Development Secretary Shaun Donovan and U.S. Department of Veterans Affairs Secretary Eric K. Shinseki announced recently that HUD will provide $5.4 million to public housing authorities in 18 states to supply permanent housing and case management for 676 homeless Veterans in America. This is the fourth and final round of the FY 2010 Veterans Affairs Supportive Housing Program (HUD-VASH) funding to support homeless Veterans.”

Inman – “Fannie matches Freddie’s $1,200 agent bonus on REOs” (6-15-11)

“Fannie Mae is extending through October an offer to provide closing-cost assistance to buyers of homes it’s repossessed, and will also match a $1,200 bonus that rival Freddie Mac is currently paying agents who bring buyers to transactions that help reduce its real estate owned (REO) inventory.”

Housing Wire - “Shiller wants pre-planned workouts on future mortgages” (6-15-11)

“Economist Robert Shiller called the Home Affordable Modification Program a failure and said lawmakers and regulators should provide an incentive to create private mortgages with a pre-planned workout.”

The Wall Street Journal - “Pittsburgh Is Remade as Steal City” (6-15-11)

“Pittsburgh, once written off as a dying steel town, has turned into one of the most resilient office-rental markets in the U.S., prompting a flurry of building sales as some longtime owners take profits.”

Orange County Register - “SoCal rents in biggest jump in 2 years” (6-15-11)

“Rents in Southern California rose at an annual rate of 1.7% in May — as measured by the regional Consumer Price Index.”

Mortgage Bankers Association - “Mortgage Applications Increase in Latest MBA Weekly Survey” (6-15-11)

“Mortgage applications increased 13.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 10, 2011.”

DQ News - “Bay Area May Home Sales, Median Price Inch Up from April; Fall below 2010″ (6-15-11)

“The Bay Area housing market in May posted modest month-to-month gains in sales and median prices, but those same measures fell sharply from year-ago levels, which had been pumped up artificially by homebuyer tax credits. Move-up buying and new-home sales were especially weak last month, while the share of sales involving distressed properties, cash buyers and investors remained far above normal, a real estate information service reported.”

Looking Back:

MDA DataQuick reported a total of 22,270 new and resale houses and condos closed escrow in Southern California the prior month. According to the NAHB, builder confidence in the market for newly built, single-family decreased in June of 2010. Having a home with a view was on the top 10 list of preferences for 44.5 percent of men. Morgan Stanley’s research lead the company to conclude that low mortgage rates would prevent a double dip in prices.

Tags: bruce norris, Consumer Price Index, David Semmens, economist, fannie mae, Federal Reserve Bank of New York, freddie mac, hamp, HomePath, HUD, Mark Zandi, mortgage bankers association, mortgage finance, NAHB, Phoenix, risk retention, Shaun Donovan, southern california, Standard and Poor's, the norris group, Wells Fargo
Posted in News | No Comments »

The Norris Group Real Estate News Roundup 4/20/11

Wednesday, April 20th, 2011

Today’s News Synopsis:

Mortgage application volume rose 5.3%, according to the MBA. The NAR said existing home sales increased 3.7%. Economists from CSU Fullerton believe O.C. home prices will rise by less than 5% this year.

In The News:

Bloomberg - “Meyer Interview About U.S. Housing Market” (4-20-11)

“Michelle Meyer, a senior economist at Bank of America Merrill Lynch, talks about the outlook for the U.S. housing market. Sales of U.S. previously owned homes rose in March as a mounting supply of properties in or near foreclosure lured investors.”

Mortgage Bankers Association – “Press Release – Weekly Application Survey” (4-20-11)

“mortgage loan application volume, increased 5.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5.9 percent compared with the previous week. The Refinance Index increased 2.7 percent from the previous week.”

NAR - “Existing-Home Sales Rise in March” (4-20-11)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit.”

Orange County Register – “CSUF: O.C. home prices to rise by less than 5%” (4-20-11)

“Business School economists at California State University, Fullerton, are sticking to their earlier forecast that Orange County home prices won’t gain much ground this year.”

DSNews - “Moody’s: Commercial Real Estate Prices Just 0.8% Above Cycle Low” (4-20-11)

“commercial real estate (CRE) prices as measured by the Moody’s/REAL Commercial Property Price Index (CPPI) fell 3.3 percent at the national level in February. The index is down 4.9 percent from 12 months earlier and only 0.8 percent above its post-peak low set in August 2010.”

Looking Back:

One year ago, 81,054 Notices of Default were recorded at county recorder offices during the January-to-March period in California. Marcus & Millichap Real Estate Investment Services claimed that the gap between monthly rents and mortgage payments was at its lowest level in almost 20 years. Cushman & Wakefield estimated the commercial real estate market would take the longest to recover. HAMP completed 230,000 permanent modifications over 12 months.

Tags: Bank of America, bruce norris, commercial property, economist, foreclosure, Merrill Lynch, Michelle Meyer, Moody's, mortgage, NAR, norris group
Posted in News | No Comments »

The Norris Group Real Estate News Roundup 3/29/11

Tuesday, March 29th, 2011

Today’s News Synopsis:

The Associated General Contractors of America reports California ranked 18th in year over year economic improvement. According to LPS, Option ARM foreclosures currently represent 18.8% of foreclosure inventory. The Congressional Oversight Panel estimates HAMP will avert only 800,000 foreclosures. Statistics from S&P shows home prices decreased 3.1% year over year.

In The News:

Sign On San Diego – “California construction jobs up in February” (3-29-11)

“California added 15,500 construction jobs from January to February, far outpacing all other states. But it still ranks 18th in year-over-year improvement, according to the Associated General Contractors of America.”

CNN - “Home prices near a double dip” (3-29-11)

“January home prices fell for the sixth month in a row, edging closer to a double dip. The S&P/Case-Shiller home price index covering 20 major markets fell 3.1% year-over-year, hovering near the market’s bottom set in April 2009.”

Housing Wire – “House Democrats give Geithner plan to revamp HAMP” (3-29-11)

“the Congressional Oversight Panel estimates HAMP will avert only 800,000 foreclosures before the program ends, far short of the 3 million to 4 million originally estimated.”

Mercury News – “As gas, food prices rise, consumer confidence falls” (3-29-11)

“The Conference Board’s Consumer Confidence Index fell more than expected to 63.4 from a revised 72.0 in February. Economists expected a decline to 65.4, according to FactSet. A reading of 90 indicates a healthy economy.”

Housing Wire – “Foreclosure inventory volume outpacing actual foreclosure sales: LPS” (3-29-11)

“Another significant shift occurred in February with data showing a 23% hike in Option ARM foreclosures in the past six months. Option ARM foreclosures now make up 18.8% of the foreclosure inventory, outpacing subprime foreclosures.”

Bloomberg - “U.S. Treasury to Publicly Grade Mortgage Servicers Over Loan Modifications” (3-29-11)

“The U.S. Treasury Department plans to publicly grade mortgage servicers on how well they respond to homeowners seeking reductions in payments as the government encourages loan modifications to stem foreclosures.”

Housing Wire – “Average national mortgage rate rose in February: FHFA” (3-29-11)

“The average national contract mortgage rate for the purchase of previously occupied homes by combined lenders hit 4.79% in February, up 0.8% from the previous month, the Federal Housing Finance Agency said Tuesday.”

Housing Wire – “Regulators vote for 20% down on QRM” (3-29-11)

“Federal regulators voted in favor of the initial mortgage risk-retention proposal Tuesday. Qualified residential mortgages exempt from the rule will require a 20% down payment.”

DSNews - “House Republicans Introduce Eight Bills to Speed Wind-Down of GSEs” (3-29-11)

“The eight proposals include measures to raise guarantee fees the GSEs will charge for mortgage-backed securities they insure and to prevent the GSEs from offering any new products while they are under conservatorship or receivership.”

Looking Back:

One year ago, a study from USC showed that immigrants were more attracted to mid-size cities. Goodman claimed HAMP was bound to fail because of its failure to address negative equity. According to Realpoint, the delinquency rate among commercial mortgage-backed securities reached 6 percent within a month. First American CoreLogic estimated the average home experiencing negative equity would not obtain positive equity until late 2015.

Tags: Associated General Contractors, Case-Shiller, construction, economist, FHFA, foreclosure, Geithner, gse, hamp, loan, modification, residential, S&P, treasury
Posted in News | No Comments »

218-TNG Radio – Leslie Appleton-Young 3-25-11

Friday, March 25th, 2011

Leslie Appleton-Young

Vice President of C.A.R.

(Full Bio)

This week Bruce is joined again by Leslie Appleton-Young. She is the Vice President and Chief Economist for the California Association of Realtors; a statewide trade organization with over 165,000 members. Leslie directs the activities of the association’s member information groups, she oversees the analysis of housing markets and broker industry trends, member communications and member development activities. She is well known as a speaker in the California real estate community.

UCLA’s business school has projected that California’s unemployment will remain in the double digits until 2013. This does not surprise Leslie. We are experiencing cyclical job losses, because there are few sectors that have not been impacted. To some extent, our problem is structural. Sending jobs over seas to lower wage countries has been occurring for a long time.

During the downturn of the 90s, there were job losses concentrated in California due to a loss of migration. Leslie does not believe this is our main problem though. Our biggest issues are coming from the restructuring of corporations and businesses. 70% of costs are directly tied to labor, so the easiest way to become more efficient is to use fewer workers.

Leslie is uncertain of the impact that gas prices will have on real estate. Gas affects real estate because it impacts the overall economy. High prices means there will be less discretionary income available for purchasing. The cost of gas also impacts the ability of people to move further out. The UCLA forecast assumed there would be no significant long term reductions in gas supply, and that we would be able to weather the increases, but we do not know that.

Affordability is close to an all time high. The gap between California’s affordability and the U.S.’s affordability is much closer now as well. The California median home price peaked at $594,000, and the U.S. peaked at $230,000, so we were still over twice as expensive. California’s current median is $300,000, and the U.S. median is $170,000, so there is still a big gap between the two.

Bruce believes this all time low for housing affordability is going to give us a boost in migration. The challenge will be to provide job opportunities for the migration.

In a county like Riverside, where it is common to develop 250 to 300 subdivisions every year, there is going to be a huge increase in demand. The inventory that has been bought from lower priced years will be able to increase in value. Bruce notes that Riverside has only developed 10 subdivisions this year.

There has been a significant increase in household size over the last couple years, because families have been moving in with each other to weather the bad economy. Many people who chose to move in with their family will be looking to move once the economy improves, and that will create demand.

In another five years, Leslie believes down payment requirements and interest rates will be significantly higher. Getting rid of Fannie Mae and Freddie Mac will affect us for many years. The private sector will be demanding higher risk premiums to originate.

A number of surveys from Fannie Mae and others show that many people still aspire to own a home. Leslie does not believe this will change. However, financing will become a bigger burden. Leslie does not believe 30 year mortgages will be very popular in the future. Bruce believes that we must be heading towards a lower percentage of home ownership.

In business, when you have an advertising campaign that you know will work, that is called a control piece. The only way you change that control piece is by changing one thing at a time to see if something emerges as better or worse. We had a control piece called a zero down VA loan. This program produced less than 1% foreclosures, and FHA did the same thing for a long time. Unfortunately, we changed everything about how we performed loans within 5 years, and we got a bad result. Bruce does not understand why we won’t go back to the way things were before.

In 2005, the GSE delinquency rate was 7.8%, and the private label delinquency rate was 28.6%. In 2006, GSEs had a delinquency rate of 23.3%, and the private label delinquency rate was 45.1%. For loans originated in 2007, the GSE rate was 14.9%, and the private label rate was 42%. This information must have been overlooked by the people discussing what to do with our financial system in the future. Fannie and Freddie worked until 2005 and 2006 when then decided to get into the subprime and Alt-A market. Bruce is not sure if our sufferings would have been eased much had Fannie and Freddie not gotten involved in subprime lending. If they had not touched subprime, there still would have been a large amount of inventory being overpriced because of the easy financing available at that time. What we did wrong was pretend that it was okay to loan people money based on a stated income and without a down payment.

39% of defaults between 2006 and 2008 were due to home equity borrowing. Leslie does not believe it is healthy for people, as well as the real estate market, to borrow in such a way that they owe more on their home after a year of ownership. Bruce does not totally agree with that, because in the past that behavior was not as simple. Leslie believes it is bad for people to leave themselves no cushion. Bruce agrees with this statement.

In 1934, FHA did 80% LTV loans with 20 year terms. Gradually we went to 30 year terms, and the down payment requirements went to 10, to 5, to even 3%.

Bruce is concerned that if we lower loan limits, it will cause a significant price drop, and then you will have a continuous negative equity position. Bruce and Leslie hopes the government does not restrict the market too much in this manner. Leslie has noticed that the government’s decisions tend to be imbalanced.

When Bruce bought his first home and mowed the grass for the first time, it made him feel like a man. Being an owner changed the way he felt about himself. It is a big deal, and it is one of the big reasons for why people come to California.

Bruce was very frustrated when the president of MERS was questioned in front of the senate, because not one of the senators read his deposition. If you are going to make a huge decision against a very influential company like MERS, why not take an hour to try and understand the problem?

CAR’s website is www.car.org

Tags: affordability, broker, bruce norris, CAR, delinquency, economist, economy, employment, equity, fannie mae, FHA, freddie mac, gas, gse, inventory, Leslie Appleton, Leslie Appleton-Young, migration, norris group, real estate, realtor, UCLA, VA loan, zero down
Posted in Radio | No Comments »

The Norris Group Real Estate News Roundup 3/23/11

Wednesday, March 23rd, 2011

Today’s News Synopsis:

The Commerce Department said single-family home sales dropped 16.9% in February. However, a survey from Bloomberg shows many economists believe home sales probably increased in February. Mortgage applications increased 2.7% last week, according to the MBA.

In The News:

MBA - “Mortgage Applications Increase in Latest MBA Weekly Survey” (3-23-11)

“Mortgage applications increased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 18, 2011.”

NAHB - “New-Home Sales Hit Record Low in February” (3-23-11)

“Sales of newly built, single-family homes declined 16.9 percent in February to a record-low seasonally adjusted annual rate of 250,000 units, according to figures released today by the U.S. Commerce Department.”

Bloomberg - “Sales of New U.S. Homes Probably Rose in February After Slump in January” (3-23-11)

“Purchases, tabulated when contracts are signed, climbed 2.1 percent to a 290,000 annual pace after slumping 13 percent in January, according to the median estimate in a Bloomberg News survey of 77 economists. Even with the gain, sales are close to the record-low 274,000 pace reached in August.”

Housing Wire – “Architectural design industry making slow recovery: AIA” (3-23-11)

“The Architecture Billings Index increased slightly, up to 50.6 in February from 50 in January, according to American Institute of Architects data released Wednesday.”

Bloomberg - “Foreclosure Terms May Pose ‘Moral Hazard,’ State Attorneys General Say” (3-23-11)

“The settlement offer ‘appears to reach well beyond the scope of our enforcement role, and, in some instances, far exceeds the scope of the misconduct which was the subject of our original investigation,’ according to the letter, which was verified by Brian Gottstein, a spokesman for Cuccinelli.”

Housing Wire – “SEC clears shareholder vote for foreclosure reviews at major banks” (3-23-11)

“The Securities and Exchange Commission upheld a New York City pension funds request that big bank shareholders will get to vote on whether or not those vested financial institutions conduct foreclosure reviews.”

Housing Wire – “FDIC’s Bair: Dodd-Frank will strengthen smaller banks” (3-23-11)

“Reforms under the Dodd-Frank Act will go further to benefit smaller community banks than the ineffective rules established just before the crisis, Federal Deposit Insurance Corp. Chairman Sheila Bair said before the Independent Community Bankers Association Tuesday.”

Orange County Register – “Forecast: Calif. home prices to rise 23%” (3-23-11)

“All told, Beacon is basically projecting that California home prices will jump 23% in five years ($57,800) – from a typical selling price of $256,136 in 2010 to $323,368 in 2015. Depending on one’s view, that projected 2015 pricing would be equal to the highest since 2008, back at early 2004 levels – or still 38% off the 2007 peak.”

Looking Back:

One year ago, existing home sales decreased by 0.6 percent within one month. The California senate approved of a new homebuyer tax credit. Nothaft claimed the 30-year fixed mortgage rate would reach 5.6 percent by the end of 2010. The Los Angeles-based home builder, KB Homes, experienced a profit loss beyond which was previously expected.

Tags: Bloomberg, Commerce Department, Dodd-Frank, economist, FDIC, foreclosure, MBA, NAHB, sec, Sheila Bair, single-family
Posted in News | No Comments »

217-TNG Radio – Leslie Appleton-Young 3-19-11

Friday, March 18th, 2011

Leslie Appleton-Young

Vice President of C.A.R.

(Full Bio)

This week Bruce is joined by Leslie Appleton-Young. She is the Vice President and Chief Economist for the California Association of Realtors; a statewide trade organization with over 165,000 members. Leslie directs the activities of the association’s member information groups, she oversees the analysis of housing markets and broker industry trends, member communications and member development activities. She is well known as a speaker in the California real estate community.

Leslie started with CAR in 1984. At that time, California was in the middle of a bad cycle. The biggest difference between our recent downturn and downturns of the past was the change in median home prices. In the early 80s, the median home price flattened when transactions dropped over 60%. In the early 90s, the market contracted 25% and home prices did drop, but the biggest single annual decline was less than 5%. In our recent downturn, the statewide median home price dropped 59% within one year.

In earlier cycles, sellers had equity, so if the market was doing poorly, they would rely on their equity to help them through the bad times. This time around, the flood of non-discretionary sellers overwhelmed the market, and caused the sharp descent in prices.

Surveys from ThinkTank and Fannie Mae show that homeownership is still sought after. The demand for housing from first time buyers and investors is still robust. The idea of owning a home has not been too badly damaged, however, the buyer’s ability to gauge market timing has. People are too worried that prices have not bottomed, so they are waiting until prices stabilize. Leslie also thinks people now realize that buying a home is not going to make them rich quickly.

In 2006, a lot of people were buying homes because they wanted more room, nicer neighborhood, and better school districts. Leslie believes most home buyers are not buying for these reasons any more.

1 in 4 mortgages are underwater today. Leslie believes this will impact the strength of the housing market over the next couple years.

In 2005, net cash to seller was a median of $220,000. Last year it was $35,000. In the distressed sales market, the net cash to seller was around negative $143,000. This means many of those people will not have the necessary cash to buy a home in the near future. A survey showed that only 33% of sellers were planning on re-buying a home in the near future.

When we released 500,000 home sales in 2010, that means we have to manufacture 250,000 buyers that aren’t showing up out of natural causes. Leslie is very glad we have investors to help create buyers for those sales.

Approximately 23% of California home sales are bought for cash. In the luxury markets, those numbers are significantly higher. Bruce read a survey stating that 60% of Beverly Hills homebuyers use all cash in their purchase. Many of the people buying in that area are global home buying clients, and California looks very attractive and affordable to them.

Leslie believes the homebuyer tax credits were the most beneficial of the real estate programs to come from the government. The $8,000 tax credit was very effective at encouraging buyers to enter the market. It also encouraged investors to get their properties ready for potential buyers.

Leslie believes the home market will not receive much federal aid in 2011. Also, the reduction in the $729,000 loan limit will occur this year. She believes the government will go back to a $625,000 loan limit. The government’s efforts to wind-down Fannie and Freddie means financing will be more expensive. However, Fannie and Freddie are not currently expected to be taken away quickly, because the government believes that would negatively impact the economy. Because financing will become more expensive once Fannie and Freddie leave, people will be encouraged to buy sooner rather than later.

Leslie cannot imagine a scenario where interest rates will ever be lower than they are now. Bruce does not think monthly payments for housing will ever be lower. Down payment requirements are going up as well as credit score requirements. This should make people rush to buy.

In January of 2011, there was a 6.7 months supply of homes in the California market. This means that at the pace in which homes were selling during January, it would take over six months to get rid of the entire inventory. The typical average for inventory supply is 6 and 7 months, so that is actually fairly balanced. However, when you break the inventory down by price category, properties priced above 1 million have a 13.8 months supply, $750,000 to $1 million properties have a 9 month supply, $500 to $750 properties have a 7 month supply, $300 to $500 properties have a 6.5 month supply, and under $300,000 is 6.3 months supply. This is a critical piece of information for buyers and sellers.

The most expensive prices have the most discretionary sellers. The more expensive the home, and the more expensive the community, the lower number of distressed sales there will be. Many higher priced sellers also have a lot of equity in their home.

If sellers are discretionary then they are not being forced out of their home. Short sales are considered to be non-discretionary sales. That category is expected to grow considerably. Realtors are hoping lenders will be encouraged to look at short sales in a more positive light. Lenders typically get a higher price for short sales than if the sale goes through foreclosure.

The 6.7 months of inventory does not account for inventory that should be on the market but is not. We have a large number of delinquent properties that should be in foreclosure and entering the market, but are not.

Leslie’s website is www.car.org

Tags: banks, bruce norris, C.A.R., CAR, economist, equity, fannie mae, foreclosure, foreclosures, homebuyer, investor, lender, Leslie Appleton, Leslie Appleton-Young, norris group, realtor, seller, short sale, ThinkTank
Posted in Radio | No Comments »

The Norris Group Real Estate News Roundup 3/9/11

Wednesday, March 9th, 2011

Today’s News Synopsis:

Mortgage applications increased 15.5% last week, according to the MBA. UCLA economists predict California’s unemployment rate will remain above 10% until 2013. Freddie Mac’s level of REO properties has grown 145.7% over the past two years. Obama threatened to veto bills terminating the Federal Housing Administration’s Short Refi and the Department of Housing and Urban Development’s Emergency Homeowner Loan Program.

In The News:

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (3-9-11)

“Mortgage applications increased 15.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 4, 2011.”

Los Angeles Times – “California labor market recovery to go more slowly than predicted, report says” (3-9-11)

“The state’s unemployment rate will remain in double digits until early 2013, according to a report slated for release Wednesday by UCLA’s Anderson School of Management . That’s three months later than the university’s economists forecast in December, as California’s weak housing market continues to weigh on the region’s recovery.”

Housing Wire – “AARP sues HUD over reverse mortgage foreclosures” (3-9-11)

“A reverse or Home Equity Conversion Mortgage allows the borrower, who must be at least 62 years old, to convert a portion of the equity in the home for cash. No repayment is required until the borrower no longer uses the home as a principal residence or does not meet the obligations of the loan, often in the event of death.”

Housing Wire – “Cleveland Fed economist calls for toxic asset bad bank” (3-9-11)

“James Thomson, vice president and financial economist for the Federal Reserve Bank of Cleveland, believes regulators can ease the pain of future financial meltdowns by creating a bad bank to acquire all toxic assets, including underperforming mortgages.”

Housing Wire – “Freddie Mac implores mortgage servicers to reach borrowers early” (3-9-11)

“Freddie announced it will use a new scorecard to measure how its mortgage servicers perform beginning in the third quarter. The change is part of a wider revamp of how Freddie will manage its 1,400 servicing companies and monitor how they put troubled mortgages through the loss mitigation process.”

Housing Wire – “Freddie Mac hires two REO servicers to help handle rising inventory” (3-9-11)

“The partnership is designed to manage expected increases in REO inventory, Freddie Mac said. At the end of February, the GSE said,the level of its REO properties grew 145.7% in just two years. In 2008, REO inventory was 29,346 compared to 72,093 homes in 2010.”

Housing Wire – “Obama threatens to veto bills killing foreclosure programs” (3-9-11)

“The House Financial Services Committee voted last week approving two bills that would terminate the Federal Housing Administration’s Short Refi and the Department of Housing and Urban Development’s Emergency Homeowner Loan Program.”

Bloomberg - “Hotel Purchases Will Soar on Rising Room Rates, Jones Lang LaSalle Says” (3-9-11)

“Hotel rates will gain this year as a recovery in business travel fills more rooms, lodging companies including Marriott International Inc., the biggest hotelier in the U.S., said yesterday in Berlin. Leisure travel is also rebounding after consumers trimmed spending during the recession. Revenue per room in the hotel industry rose worldwide in 2010, according to researcher STR Global.”

Looking Back:

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.

Tags: aarp, borrower, bruce norris, economist, Emergency Homeowner Loan Program, employment, equity, Federal Reserve, foreclosure, gse, HUD, inventory, James Thomson, Jones Lang LaSalle, labor, Marriott International, MBA, mortgage, norris group, reo, short refi, STR Global, UCLA Anderson
Posted in News | No Comments »

The Norris Group Real Estate News Roundup 2/23/11

Wednesday, February 23rd, 2011

Today’s News Synopsis:

The NAR said existing home sales rose 2.7% in January. The FHA’s REO inventory has increased 47% year over year. A California judge upheld the rights of the Mortgage Electronic Registration Systems to the trust deed, granting MERS the right to foreclose. A Federal Reserve economist predicts the government will soon provide an alternative to the national homebuyer tax credit

In The News:

NAR - “Existing-Home Sales Rise Again in January” (2-23-11)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (2-23-11)

“mortgage loan application volume, increased 13.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14.8 percent compared with the previous week. The Refinance Index increased 17.8 percent from the previous week. The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier.”

Inman - “New CoreLogic market reports incorporate MLS data” (2-23-11)

“CoreLogic’s Listing and Market Activity Report — the first in a series of new products the company is developing to generate revenue from the data it receives from cooperating MLSs — provides key information including updated listings, comparable sales, property valuations, days on market, price trends and inventory.”

Housing Wire – “FHA REO inventory up 47% from one year ago” (2-23-11)

“The Federal Housing Administration held 60,739 properties repossessed through foreclosure on its books as of December 2010, up 47% from the year before.”

Housing Wire – “Freddie Mac finalizing major revamp of mortgage servicers” (2-23-11)

“Freddie Mac is in the final stages of changing how its 1,400 mortgage servicing companies handle its loans, and will implement a new scorecard measuring their performance. Furthermore, the government-sponsored enterprise is announcing that it will case review the way servicers treat delinquent borrowers, in order to ensure quality control.”

Housing Wire – “Bank failures hit 18-year high in 2010″ (2-23-11)

“The Federal Deposit Insurance Corp. held 884 financial institutions on its ‘Problem List’ as of the end of 2010, and the 157 insured banks that failed was the highest amount since 1992.”

Housing Wire – “MERS rights upheld in largest foreclosure state” (2-23-11)

“An appellate judge in California last week upheld the rights of the Mortgage Electronic Registration Systems to the deed of trust, giving MERS the right to foreclose, according to court documents.”

Housing Wire – “Fannie Mae to start grading mortgage servicers” (2-23-11)

“Fannie Mae will launch a new program for evaluating the performance of its mortgage servicers over the next 30 days. The Servicer Total Achievement and Rewards (STAR) program will gauge how servicers support the housing recovery and keep homeowners out of foreclosure.”

Housing Wire – “Fed economist pushes homebuyer tax credit alternative” (2-23-11)

“A Federal Reserve Bank of Cleveland research economist predicted Wednesday that the government would soon provide an alternative to the national homebuyer tax credit that expired in April.”

Bloomberg - “Existing Home Sales in U.S. Probably Fell in January From Seven-Month High” (2-22-11)

“Sales of U.S. previously owned homes probably dropped in January from a seven-month high, showing any recovery will take time to develop, economists said before a report today. Purchases decreased 1.1 percent from December to a 5.22 million annual rate, according to the median forecast of 73 economists surveyed by Bloomberg News.”

Looking Back:

The NAR predicts that the commercial real estate market will not recover until after 2011. In California, single family home sales decreased by 3 percent during January. The Standard & Poor’s index shows that national home prices increased slightly during December. 702 banks made the ‘Problem List’ for the FDIC in 2009.

Tags: banker, Bloomberg, borrower, condominium, CoreLogic, credit, delinquent, economist, fannie mae, FHA, foreclose, freddie mac, homebuyer, inventory, MERS, MLS, mortgage, NAR, properties, property, refinance, reo, single-family, tax, townhome
Posted in News | 1 Comment »

212-TNG Radio – Marsha Norris 2-12-11

Friday, February 11th, 2011

Marsha Norris

Mother, Grandmother, 17 Year Cancer Fighter

(Full Bio)

Marsha Norris lost her brave battle with cancer on January 22nd. For the next several weeks, we honor her memory by re-airing three shows she recorded leading up to our I Survived Real Estate events that raised awareness and money for breast cancer.

Thank You for the notes, flowers, and prayers during this difficult time. We truly appreciate your concern and all the support over the years. We feel the love. We will deeply miss Marsha (Mom) but will forever cherish the wonderful memories.

Tags: auctioneer, bruce norris, cancer, economist, I Survived, investor, KOMEN, Marsha Norris, mortgage, real estate, realtor
Posted in Radio | No Comments »

E-Mail
Password

Equipping California Real Estate Investors for Tomorrow's Challenges

Training Portal Login

The Norris Group Blog

California Real Estate Headline Roundup

Posts Tagged ‘economist’

Today’s News Synopsis:

In The News:

Today’s News Synopsis:

In The News:

Looking Back:

Today’s News Synopsis:

In The News:

Looking Back:

Today’s News Synopsis:

In The News:

Looking Back:

Leslie Appleton-Young

Today’s News Synopsis:

In The News:

Looking Back:

Leslie Appleton-Young

Today’s News Synopsis:

In The News:

Looking Back:

Today’s News Synopsis:

In The News:

Looking Back:

Marsha Norris

Mother, Grandmother, 17 Year Cancer Fighter

Recent Posts

Archives

Here are some helpful links