By Kenneth R. Harney, Realty Times
Will housing outperform the overall economy in 2010 as we pull out of the Great Recession?
Nothing is absolute in the predictions business, but there are solid indications that, yes, housing is likely to rebound more energetically than the overall economy.
Here's why: Even the most bearish Wall Street analysts now concede that home sales are up in many areas from year-earlier levels -- sometimes by extraordinary percentages.
For example, MDA DataQuick reports that sales in the greater Phoenix market in November were 62 percent higher than the year before.
Prices either have bottomed out in dozens of these markets or are close to it. That's because the distressed sales component of local volume - short sales, REOs and foreclosures - has been declining slowly but steadily.
In his latest forecast, Jay Brinkmann, chief economist for the Mortgage Bankers Association, says both existing and new home sales will be higher in 2010 than in 2009 - and 2009 was better than 2008.
No question that a key part of the energy in housing will be the direct result of stimulus efforts by the federal government - especially the two tax credit programs -- that will push sales and even pricing through mid year.
The overall economy, on the other hand, according to Brinkmann, is likely only to grow slowly in the first half of 2010, and not really warm up until the second half.
The heavy anchor dragging on national economic growth -- and on housing demand -- will continue to be unemployment. Brinkmann says that "the time of job destruction is over" in this cycle - that is, the number of new layoffs and new unemployment insurance claims filings are trending down.
But we haven't yet moved into the next phase nationwide - that of "job creation," which may not begin until later in the year, he says, and may be a long, slow process.
The National Association of Realtors' chief economist, Lawrence Yun, sees a strong sales year ahead - up 20 percent over 2009. In some markets, he also expects to see a return to modest and sustained price increases - anywhere from two to five percent on average.
Will higher interest rates put a big dent in these projections? Many economists are forecasting 30 year rates in the upper 5 percent range later in the year.
Those higher rates won't help - but last week they headed in the opposite direction. Thirty year fixed rates averaged 5.1 percent and 15 year rates were half a point below that - both down slightly from the week before, according to the Mortgage Bankers' national survey.
Published: January 19, 2010
Tuesday, January 19, 2010
Friday, January 15, 2010
Take A Tour At Trump
Take a tour at Trump Tower with Tricia. This 3 bedroom, 3.5 bath has just been reduced in price. Now only $2,475,000!
Wednesday, January 13, 2010
What Do Real Estate Agents Do?
Real estate agents sometimes face a battle when it comes to justifying their value as a professional. Many sellers think of a real estate transaction is as simple as selling a futon on Craigslist, and are perfectly willing to try and negotiate their way out of paying for a professional service. This doesn't work well in other businesses and real estate is no exception.
Let the Tricia Fox Group show you what a difference a qualified agent can make!
Let the Tricia Fox Group show you what a difference a qualified agent can make!
Monday, January 11, 2010
2009 Mortgage Rates
Diane Swonk, chief economist of Mesirow Financial, predicted in late December 2008 that 30-year fixed rate mortgages “could go below 5%” in 2009.
The average nationwide rate of a 30-year fixed rate mortgage dropped to 4.71% on 12/03/09, an all-time record low.
(source: Money, Freddie Mac)
The average nationwide rate of a 30-year fixed rate mortgage dropped to 4.71% on 12/03/09, an all-time record low.
(source: Money, Freddie Mac)
Friday, January 8, 2010
Thursday, January 7, 2010
Trolley Tour
Join us for our first Trolley Tour of the year!
For more information or to RSVP visit our event website.
This event is for prospective clients only please.
For more information or to RSVP visit our event website.
This event is for prospective clients only please.
Wednesday, January 6, 2010
The Burj Dubai
When the world’s tallest building was inaugurated on January 4, 2010, the record books braced themselves to receive a flood of new entries.
At over 800 meters and with more than 160 floors, here are some of the essential numbers associated with the world’s tallest building:
95 – the distance in kilometers at which Burj Dubai’s spire can still be seen
124 – the floor location of "At The Top, Burj Dubai", the world’s highest and only publicly accessible observation deck with an outdoor terrace
160 – the number of luxury hotel rooms and suites
605 – the vertical height in meters to which concrete was pumped in the construction of Burj Dubai, a world record for concrete pumping
504 – the distance traveled, or ‘rise’ in meters of Burj Dubai’s main service lift, the most of any elevator
49 – the number of office floors, including the 12-floor annex
57 – the number of elevators
1,044 – the total number of residential apartments inside Burj Dubai
3,000 – the number of underground parking spaces
5,500 – the capacity in kilograms of the tower’s service lift
31,400 – the amount of steel rebar in metric tonnes used in the structure of Burj Dubai
28,261– the number of glass cladding panels making up the exterior of tower and its two annexes
15,000 – the amount of water in liters collected from the tower’s cooling equipment that will be used for landscaping irrigation
900 – the length in feet of the world’s tallest performing fountain, The Dubai Fountain, that lies at the foot of the tower
19 – the number of hectares of lush green landscaping that envelops the foot of the tower
12,000 – the numbers of workers on site during peak of construction
Monday, January 4, 2010
Home Value Loss Now but Increased Pricing Expected in 2010
By Phoebe Chongchua, Realty Times
There’s bad news and good news coming out of the housing market. Forbes Magazine released study results by Local Market Monitor that showed the cities that lost the most value are concentrated in some areas of California, Florida, Nevada, and the Northeast.
These cities were impacted by local and national factors such as increased unemployment and the rising cost of housing which resulted in homebuyers gambling on the odds of whether they could afford long-term housing.
West Coast housing markets fared the worst, losing the most value—21.6 percent since their peak. Florida housing lost 31 percent, the Northeast lost an average of 8.6 percent, and the Midwest lost, on average, 5.6 percent. The top five cities to lose value in the West (most in California): in California--Merced, (-62.11 percent), Stockton (-54.29), Modesto (-52.42), Vallejo-Fairfield (-47.62), and in Nevada—Las Vegas-Paradise (-47.53) In the South, the top five cities to lose the most value are located in Florida: Port St. Lucie (-46.43), Cape Coral-Fort-Myers (-46.38), Naples-Marco Island (-43.63), Bradenton-Sarasota-Venice (-41.52), and Fort Lauderdale-Pompano Beach-Deerfield Beach (-39.93).
In the Northeast, the top five cities to lose value are: Providence-New Bedford, R.I. (-17.30), Worcester, Mass. (-16.17), Atlantic City, N.J. (-16.15), Poughkeepsie-Newburgh, N.Y. (-14.60), and Barnstable Town, Mass. (-14.48).
Moving to the Midwest, the top five cities to lose value are in Michigan: Detroit-Livonia (-30.66), Warren-Troy-Farmington Hills (-27.95), Flint (-27.47), Ann Arbor (-20.37), and Jackson (-17.30). Source: Forbes, Francesca, Levy (12/21/2009).
According to First American CoreLogic’s LoanPerformance Home Price Index, home prices are expected to fall another 4.2 percent in 45 of the largest housing markets before hitting bottom. The Press Release states that, “The declines will be driven primarily by the large levels of foreclosures in these areas. However, improvement in both levels of inventories and unemployment are projected to prevail in the spring of next year, resulting in an average year-over-year appreciation of just under one percent by October of 2010 for these metropolitan markets.
The report also stated that, “In August 2010, the index is projecting that 12-month appreciation for national home prices will be 4.6 percent and that home prices in two of the most depressed markets, California and Florida, will show gains in excess of 7 percent.” Cities that are projected to experience the strongest recovery in 2010 are primarily concentrated in the large urban areas of California: San Francisco (+5.7 percent), Los Angeles (+5 percent), San Diego (+4.7 percent) and Sacramento (+4.6 percent).
The report cautions that a large inventory of homes owned by banks but not yet on the market could affect the increased pricing progress. Mark Fleming, chief economist for First American CoreLogic stated in a December Press Release, "We are continuing to see improvements in the year-over-year home price change as prices have remained relatively stable since April. The additional government support for the housing market has stimulated demand and restricted supply in 2009.” However, Fleming, added, “How these government supports are removed in 2010 and the moderation of pending inventory and negative equity will be critical to the continued stability of the housing market.”
There’s bad news and good news coming out of the housing market. Forbes Magazine released study results by Local Market Monitor that showed the cities that lost the most value are concentrated in some areas of California, Florida, Nevada, and the Northeast.
These cities were impacted by local and national factors such as increased unemployment and the rising cost of housing which resulted in homebuyers gambling on the odds of whether they could afford long-term housing.
West Coast housing markets fared the worst, losing the most value—21.6 percent since their peak. Florida housing lost 31 percent, the Northeast lost an average of 8.6 percent, and the Midwest lost, on average, 5.6 percent. The top five cities to lose value in the West (most in California): in California--Merced, (-62.11 percent), Stockton (-54.29), Modesto (-52.42), Vallejo-Fairfield (-47.62), and in Nevada—Las Vegas-Paradise (-47.53) In the South, the top five cities to lose the most value are located in Florida: Port St. Lucie (-46.43), Cape Coral-Fort-Myers (-46.38), Naples-Marco Island (-43.63), Bradenton-Sarasota-Venice (-41.52), and Fort Lauderdale-Pompano Beach-Deerfield Beach (-39.93).
In the Northeast, the top five cities to lose value are: Providence-New Bedford, R.I. (-17.30), Worcester, Mass. (-16.17), Atlantic City, N.J. (-16.15), Poughkeepsie-Newburgh, N.Y. (-14.60), and Barnstable Town, Mass. (-14.48).
Moving to the Midwest, the top five cities to lose value are in Michigan: Detroit-Livonia (-30.66), Warren-Troy-Farmington Hills (-27.95), Flint (-27.47), Ann Arbor (-20.37), and Jackson (-17.30). Source: Forbes, Francesca, Levy (12/21/2009).
According to First American CoreLogic’s LoanPerformance Home Price Index, home prices are expected to fall another 4.2 percent in 45 of the largest housing markets before hitting bottom. The Press Release states that, “The declines will be driven primarily by the large levels of foreclosures in these areas. However, improvement in both levels of inventories and unemployment are projected to prevail in the spring of next year, resulting in an average year-over-year appreciation of just under one percent by October of 2010 for these metropolitan markets.
The report also stated that, “In August 2010, the index is projecting that 12-month appreciation for national home prices will be 4.6 percent and that home prices in two of the most depressed markets, California and Florida, will show gains in excess of 7 percent.” Cities that are projected to experience the strongest recovery in 2010 are primarily concentrated in the large urban areas of California: San Francisco (+5.7 percent), Los Angeles (+5 percent), San Diego (+4.7 percent) and Sacramento (+4.6 percent).
The report cautions that a large inventory of homes owned by banks but not yet on the market could affect the increased pricing progress. Mark Fleming, chief economist for First American CoreLogic stated in a December Press Release, "We are continuing to see improvements in the year-over-year home price change as prices have remained relatively stable since April. The additional government support for the housing market has stimulated demand and restricted supply in 2009.” However, Fleming, added, “How these government supports are removed in 2010 and the moderation of pending inventory and negative equity will be critical to the continued stability of the housing market.”
Treasury Policy Change
By Kenneth R. Harney, Realty Times
The Obama administration announced a blockbuster policy change over the holidays that didn't get a lot of press attention, but will affect the housing market for years.
The Treasury department said it is now committed to support Fannie Mae and Freddie Mac with as many billions of dollars as is necessary to get them through the next three years. There'll be no limit whatsoever anymore.
Previously the Treasury had limited its support to $200 billion apiece for the two formerly-private, now government-controlled, mortgage finance giants.
From here on, the Treasury said in its policy announcement, there will no “uncertainty about the (government's) commitment to support the firms as they continue to play a vital role in the housing market during the current crisis.”
Though some critics howled that the Obama administration is writing a blank check, the significance of the move for real estate is potentially huge, for several reasons.
Number one: Fannie and Freddie provide funding for well over half the U.S. mortgage market -- making home sales and purchases possible for hundreds of thousands of consumers.
Number two: The fact that the two companies have an explicit, full faith and credit backstop from the U.S. Treasury means that Fannie and Freddie can borrow in the capital markets at more favorable rates. Those lower costs of capital can then be passed along - at least in part - to home loan borrowers in the form of lower interest rates.
Finally, a key reason for the policy change - which also included permission for the firms to retain larger mortgage-asset portfolios - is to help Fannie and Freddie provide deeper loan modification assistance to greater numbers of seriously troubled borrowers.
Both companies are now expected to reach out and offer loan principal forgiveness to delinquent and underwater home owners - something that the current Obama loan modification program does not permit.
Partly as a result, Obama's “Home Affordable Modification Program,” or “HAMP,” has been only minimally successful in attracting the participation of borrowers in the deepest trouble - especially those so far behind and underwater that they are walking away from their houses, sending back the keys to their lenders - and ultimately losses to Fannie and Freddie.
If the revised policy helps keep larger numbers of home owners out of foreclosure and out of walkaway mode, the impact on local real estate markets and home values could be significant over the coming couple of years.
The Obama administration announced a blockbuster policy change over the holidays that didn't get a lot of press attention, but will affect the housing market for years.
The Treasury department said it is now committed to support Fannie Mae and Freddie Mac with as many billions of dollars as is necessary to get them through the next three years. There'll be no limit whatsoever anymore.
Previously the Treasury had limited its support to $200 billion apiece for the two formerly-private, now government-controlled, mortgage finance giants.
From here on, the Treasury said in its policy announcement, there will no “uncertainty about the (government's) commitment to support the firms as they continue to play a vital role in the housing market during the current crisis.”
Though some critics howled that the Obama administration is writing a blank check, the significance of the move for real estate is potentially huge, for several reasons.
Number one: Fannie and Freddie provide funding for well over half the U.S. mortgage market -- making home sales and purchases possible for hundreds of thousands of consumers.
Number two: The fact that the two companies have an explicit, full faith and credit backstop from the U.S. Treasury means that Fannie and Freddie can borrow in the capital markets at more favorable rates. Those lower costs of capital can then be passed along - at least in part - to home loan borrowers in the form of lower interest rates.
Finally, a key reason for the policy change - which also included permission for the firms to retain larger mortgage-asset portfolios - is to help Fannie and Freddie provide deeper loan modification assistance to greater numbers of seriously troubled borrowers.
Both companies are now expected to reach out and offer loan principal forgiveness to delinquent and underwater home owners - something that the current Obama loan modification program does not permit.
Partly as a result, Obama's “Home Affordable Modification Program,” or “HAMP,” has been only minimally successful in attracting the participation of borrowers in the deepest trouble - especially those so far behind and underwater that they are walking away from their houses, sending back the keys to their lenders - and ultimately losses to Fannie and Freddie.
If the revised policy helps keep larger numbers of home owners out of foreclosure and out of walkaway mode, the impact on local real estate markets and home values could be significant over the coming couple of years.
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