Market News in Real Estate for the week of 1/4/10

MSNBC

Housing may be headed for double dip
A recent real estate report indicates that consumers may be taking their time house hunting this winter, which some economists believe could lead to a “double dip” in home prices. A recent report from the NATIONAL ASSOCIATION OF REALTORS® (NAR) showed that its pending home sales index declined 16 percent in November to a reading of 96, the first decline after nine consecutive months of gains.

Keep this in mind. . .

• NAR’s Pending Home Sales Index (PHSI) is a barometer of future sales. Typically, there is a one- to two-month lag between the signing of a sales contract and the close of escrow. Although government incentives, low interest rates, and affordable home prices have lured many buyers, especially first- timers, to the market, historically sales decline during the winter months and begin to rise in the spring.

• Because of the government’s efforts to stimulate the housing market, some economists believe that housing prices will decline once the incentives come to an end. However, the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) closely watched “2010 California Housing Market Forecast,” projected that the median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 in 2009.

• According to C.A.R.’s Vice President and Chief Economist Leslie Appleton-Young, unlike the rest of the nation, home sales in California already bottomed out more than two years ago, and the median home price reached its trough in February 2009.

• Although home buyers should not focus solely on future home price appreciation, according to data collected by C.A.R. over the last 40 years, homeowners who purchase a median-priced house, live in their home for at least five years, and sell it at the current median price, have averaged an annual rate of return of more than 11 percent.

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Sacramento Bee

Schwarzenegger proposes new round of home buyer tax credits
Gov. Arnold Schwarzenegger yesterday proposed a new round of $10,000 state tax credits for buyers of new and existing homes in California.

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The Wall Street Journal

NY Fed: Most successful mortgage modifications reduce borrowers’ principal
Borrowers who receive loan modifications that reduce loan balances and not simply interest rates are far less likely to redefault on their loans, according to a new study from the Federal Reserve Bank of New York.

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MSN Money

Losing a home? A tax bite may be next
You might avoid debt-relief taxes if your lender forecloses on your house and cancels your mortgage. But you could still wind up owing a lot of money to the IRS.

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Los Angeles Times

Homeowners forced to buy flood insurance after FEMA redraws maps
Tens of thousands of homeowners in Southern California are being forced to buy costly flood insurance because new maps issued by a federal agency say they live in a high-risk flood area.

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San Fransisco Chronicle

Foreclosures weigh on home appraisals
Across the country, agents and homebuilders are complaining too many appraisals are coming in low, scuttling deals.

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Market News for Real Estate for the week of 1/11/10

(MSN)

What’s ahead for home prices?

California remains ahead of the nation in market recovery with many first-time home buyers entering the market due to affordable homes prices, low mortgage rates, and first-time home buyer tax credits from the state and federal governments. However, credit still is tight and unemployment remains high, which could hinder a full market recovery until 2011.

Keep this in mind

• Home sales in California hit bottom more than two years, and the median home price of an existing, single-family home reached its trough in February, according to data collected by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). In November, the state’s median home price rose in year- to-year comparisons for the first time since August 2007.

• C.A.R.’s closely watched “2010 California Housing Market Forecast,” projects that the median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 in 2009.

• Some economists are forecasting another surge of foreclosures in 2010. However, C.A.R.’s economists expect that foreclosures will remain flat this year compared with 2009. In 2008, many lenders flooded the market with foreclosures, and as a result, the state’s median price declined by historic levels. By comparison, in 2009, lenders listed properties for sale at a more measured pace, which helped moderate another home price decline.

• Government efforts to maintain a low interest rate environment have stabilized the market. However, a mortgage analyst at a financial publishing company predicts that rates likely will rise to 5.5 percent by mid-2010 and close the year at 5.75 percent to 6 percent.

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(Chicago Tribune)

Rates on 30-year mortgages drop to 5.06 pct
Rates for 30-year home loans edged lower for the second straight week, a report said Thursday, but remained above last month’s record lows.

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(Los Angeles Times)

Signs of life in the home-building industry
A large-scale development in Irvine and profits posted by some builders bring hope for a turnaround, but the industry’s outlook remains fragile.
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(Daily Breeze)

State and national foreclosure filings continue to rise
Even as the economy and real estate market show signs of stabilizing, foreclosure filings continued to grow in California and nationwide last year.
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(Los Angeles Times)
Going to sell the house? Don’t wait for ’spring’ in February
The busiest season for home sales traditionally begins the day after the Super Bowl. But putting off getting the
word out about your property would probably be a mistake, some experts say.

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What you should know about the market…

• The government is expected to unveil a new program in the next couple of months that, if approved, may reimburse homeowners for up to half the cost of making their homes more efficient. Through the program, homeowners will receive the largest return from simple upgrades like caulking windows, adding insulation, and changing incandescent light bulbs to those that are more energy-efficient.

• To determine which energy-efficiency upgrades are best for their house, homeowners should obtain a home energy audit.  Homeowners are advised to hire a contractor licensed by the Building Performance Institute or the Residential Energy Services Network. These contractors have been trained to first test a home to determine the amount of energy it is losing, and then make suggestions on renovations.

Thinking about selling or buying, give us a call to discuss your next move, click here to send an email or give us a call at 916.759.1699.

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