Great News for Distressed Properties!!

As the housing market heals, foreclosure inventory is depleting quickly, CoreLogic reported Thursday.

In July, about 949,000 homes were in some stage of foreclosure, down 32 percent from 1.4 million a year ago. Foreclosure inventory also showed a 4.4 percent decline from June. Year-to-date, foreclosure inventory is down by 20 percent.
Currently, about 2.4 percent of homes with a mortgage are in foreclosure inventory, the lowest level since March 2009.
In addition to shrinking foreclosure inventory, CoreLogic also reported steep declines in completed foreclosures and serious delinquencies.
According to the data provider’s estimate, about 49,000 properties were lost to foreclosure in July, down 25 percent from 65,000 in July 2012.

From June to July, completed foreclosures fell by 8.6 percent from 53,000 in the prior month.
At 5.4 percent, the serious delinquency rate decreased to the lowest level since December 2008, according to CoreLogic. The rate represents fewer than 2.2 million mortgages.
“Continued strength in the housing market will contribute to our outlook for ongoing improvement in the stock of distressed assets through the end of this year,” said Mark Fleming, chief economist for CoreLogic.
According to CoreLogic, the decreases were apparent across the country, with every state reporting an annual decline in foreclosures.
“Not surprisingly, non-judicial states have come the farthest the fastest in reducing shadow inventory and lowering delinquency rates,” noted Anand Nallathambi, president and CEO of CoreLogic.
Florida took the lead again as the state with the highest number of completed foreclosures. Over the last 12 months, about 110,000 homes were lost to foreclosure in Florida. California followed with 65,000 completed foreclosures. Other states in the top five were Michigan (61,000), Texas (45,000), and Georgia (41,000).
Florida also held the highest percentage of homes in foreclosure inventory, at 8.1 percent. New Jersey’s foreclosure inventory rate of 5.9 percent put it at second, with New York (4.7 percent), Connecticut (4.0 percent), and Maine (4.0 percent) filling out the top five.
However, in 36 states, foreclosure inventory sits below the national rate of 2.4 percent.

Mobile technology dominates home buying process, REALTOR® survey finds

LOS ANGELES (July 17) – Demonstrating the proliferation of mobile technology into nearly every facet of our lives, more than eight out of 10 home buyers are accessing home information on their smart phones and computer tablets, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 Survey of California Home Buyers.”

“With more and more consumers using mobile devices and mobile technology, such as apps and social media platforms, buyers are increasingly using their smartphones and computer tablets to view comparable house prices, search for properties, take photos, and create videos of homes and amenities, as well as research communities and real estate agents,” said C.A.R. President Don Faught.  “As a result, home buyers today are more informed and have a greater sense of control over what could be a daunting process.”

The survey found 85 percent of buyers used a mobile device during the home buying process, with the majority of buyers (70 percent) accessing the Internet from their smart phones and 15 percent accessing it from their tablets. 

While the majority of buyers (61 percent) found their home through an agent, the percentage who found their home online more than doubled from 16 percent in 2012 to a record high of 37 percent in 2013.

Almost one-third (30 percent) of buyers rated Realtor.com as the most useful website, followed closely by Zillow at 28 percent.  Broker and agent websites were also helpful in the home buying process as buyers increasingly seek local expertise and information.

The use of social media in the home buying process continued to increase, with three-quarters of buyers now using it, compared to 52 percent who used social media in 2011.  Buyers primarily used social media for buying tips and suggestions from friends (43 percent), neighborhood information (42 percent), and to view their agents’ Facebook pages (41 percent).  The use of social media as a form of communication is expected to grow, with 91 percent of buyers saying they are receptive to receiving information about the home buying process from their agent via social media.

The survey also found that buyers spent nearly six months considering a purchase before contacting an agent, nearly twice as long as last year. They took more time investigating homes and neighborhoods before contacting an agent, spending just over seven months on researching, compared to about 1.5 months last year. Additionally, buyers spent nearly 10 weeks looking for a home with their agent, a week longer than last year. More than eight out of 10 buyers (85 percent) made offers on other homes, and one-third said they settled for the best option given the limited supply of houses.

“The lengthier consideration time and home search illustrates the impact of low housing inventory and increasing home prices,” said Faught.  “These factors caused buyers to weigh their options more carefully before making their home purchase.”
           
Additional findings from C.A.R.’s “2013 Survey of California Home Buyers” include:

• Buyer optimism about the future direction of home prices continued to grow, with the majority of buyers (60 percent) believing prices will go up in five years and 36 percent seeing prices rise in one year, up from 41 percent and 25 percent, respectively, last year.
• Buyers cited price decreases (38 percent), favorable prices/financing (12 percent), and the desire for a better location (10 percent) as top reasons for purchasing a home.
• Reflecting the prevalence of tight lending standards, buyers experienced extreme challenges in obtaining financing.  On a scale of one to 10, with 10 being extremely difficult, buyers rated their difficulty in obtaining financing at 8.6 on average, the highest in the survey’s history.
• Higher down payments are the market norm these days, with buyers putting an average of 25 percent down on their home purchase.  The average down payment has been greater than the traditional 20 percent since 2009.
• Ninety-one percent of buyers obtained a fixed-rate loan, up from 84 percent in 2011, reflecting low rates and the desire for certainty as the market gets back to basics.

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The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHAloan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through a recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond the borrower’s control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30, 2016.

House flipping heats up in the High End Market

If house flippers flooding all ranks of the real estate market eight years ago was the sign of the impending market downturn, then what does it mean that investors are embracing high-end flipping today?
Reuters this week ran a story that looked at a growing trend in the flipping of high-end homes. “Flipping” is the term we give when someone buys a house at a low price, usually invests a bit – or a lot – of money in remodeling, then sells for a nice profit.
Flipping was once a street sport where you’d find just about anyone regardless of investing or real estate experience partaking in markets across the U.S. But it faded out pretty quickly when the downturn hit the housing market.
Even Jeff Lewis, star of Bravo’s “Flipping Out” has since pivoted to a design services model.
It’s back – but in a different form. And it could mean better things for the market rather than being an ominous sign for rampant speculation and decline.
This time, what Reuters reports is more flipping with luxury homes. According to Reuters, the number of flipped homes valued at $1 million or more has risen nearly 40% nationwide since 2011. It’s important to note that RealtyTrac defines a flip as a home that’s been purchased and sold within six months.
RealtyTrac cites a few specific markets where high-end flipping is rampant. Luxury house flipping was up 867% in Orlando between 2011 and 2012, and increased 456% in Phoenix. To get a deeper sense of what these percentages mean, the number of flipped high-end homes in Orlando went from 3 to 29 during this time, from 27 to 150 properties in Phoenix, and from 10 to 73 properties in Las Vegas.
What’s driving this activity?
Well, as one source tells Reuters, the opportunity in flipping at the low end has all but dried up. And despite more risk with more dollars at the high end, the investments have paid off handsomely for those investors who know what they’re doing.
I like to look at it as another example of why real estate is never just one story. With so many markets each centering on different local economies and so many different levels of each of those markets – low to high end – it’s almost impossible to make blanket statements about the state of housing.
But it’s easy to see how the growth in investment at the high end is a positive overall. If nothing else, the confidence investors must have going into these high-end deals is a wonderful strength that eventually will help strengthen overall confidence in the greater housing market.
Gino Blefari & LPF Team

Foreclosure Market Easing

The prognosis is in: The housing market is picking up steam. There's no turning back. Sales volume and prices ticked up on a national level at the end of the summer, with existing home sales up 9.3% in August compared to a year ago, and median prices up 9.5% from a year ago. All of this leads to a logical question: What about all those foreclosures economists and experts have warned about? Shadow inventory? Are there threats to the recovery that could crop up and throw us off course? The good news is the foreclosure market is easing. Foreclosure inventory was down to its lowest level in August since April 2010. The 57,000 foreclosures completed in August puts the total number of homes that have foreclosed since September 2008 at 3.8 million, according to CoreLogic's latest report. Granted, that's a lot of foreclosures in the overall housing fallout, and there is still a lot of foreclosure activity out there, depending on your market. But if the housing market were a hospital patient I think the doctors would say the foreclosure condition is improving – perhaps no longer life-threatening. The five states with the highest number of completed foreclosures for the 12 months ending in August were: California (110,000), Florida (92,000), Michigan (62,000), Texas (58,000) and Georgia (55,000), according to CoreLogic. The five states combined account for 48.1% of all completed foreclosures nationally – which indicates the problem is still generally contained within certain markets. Meanwhile, the states with the lowest number of completed foreclosures for the 12 months ending in August were: South Dakota (25), District of Columbia (113), Hawaii (435), North Dakota (564) and Maine (612). The continued downward movement in the foreclosure market is a good indicator that the recovery is picking up speed. The higher concentration of foreclosures in the five states noted above could continue to dampen or slow the recovery in those states, but again it really depends on the local market. For instance, California is ranked the top state for foreclosures over the last 12 months, but some of our local Bay Area markets aren't seeing much of that at all. The main thing to watch is the overall trend, which is definitely sloping down. Thankfully, the shadow inventory problem that many were worried about these past few years seems to have deflated more gradually than initially thought so we didn't see a second flood of foreclosures all hit the market at the same time at the national level. It will take some time, still, before foreclosures are completely out of the housing recovery vernacular. But things are looking good. We just have to charge ahead and make sure the systems in place for markets where foreclosures are still rampant are efficient enough to keep moving. Demand for these homes doesn't seem to be a problem. LPF Team Gino Blefari CEO Intero Real Estate

Housing Recovery?

The housing recovery in California is expected to continue through to 2013, but the market won't be fully "corrected" until as far off as 2017, according to the California Housing Market Forecast released by the CAR.  As most of you know the Bay Area is a very special place.  While the rest of the country has been recovering I think it is more accurate to say the Bay Area housing market has exploded over the last 18 to 24 month.  Most listings are selling with multiple offers and WAY over list price.   In some markets we have seen prices increase by as much as 20 to 30 percent in just the last 18 months…many areas are seeing prices at ALL TIME HIGHS.  Remember however, the housing market in the Bay Area is like the weather and varies widely depending on where you are.  If you want to know what is going on in your market feel free to ping me an email, send me a text or give me a call. 

• Homes sales and prices are expected to keep rising, but lower-than-normal inventory levels and underwater mortgages are key hindrances to a faster recovery, according to Leslie Appleton-Young, chief economist with the CALIFORNIA ASSOCIATION OF REALTORS®.
• Home sales are forecasted to rise 1.3 percent to 530,000 units next year, based on the projected tally of 523,300 units this year. That's a slower growth than that of 2011 to 2012, which is roughly 5 percent.

• The momentum in prices also is expected to carry through to 2013, a result of pent-up demand for a limited housing supply. The median price could rise 5.7 percent to $335,000 in 2013. That's lower than the projected price growth from 2011 to 2012, an estimated 11 percent. The state has a 3.2 months' worth of housing inventory, significantly lower than the 16 months'-plus supply of saw roughly four years ago.

• “Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” said Appleton-Young in the report.

• Appleton-Young says what underwater borrowers throughout the state will do -- be it selling or holding -- will have a big effect on next year's housing recovery.

• Other things to watch next year that will have a bearing on the housing market include: policies related to the state,local and federal governments; and housing and monetary policies, Appleton-Young said.

Mortgage Debt Forgivness Act

Not All Sunsets are Beautiful

In 2007, the Mortgage Debt Relief Act was passed in an attempt to help the millions of homeowners who, due to the housing crisis and economic crash, suddenly found themselves in danger of losing their home to foreclosure.

The act has helped many distressed homeowners find solutions to avoid foreclosure and opened up options to them that were previously unavailable. 

The Mortgage Debt Relief Act, however, was only intended to be a temporary solution and is now set to expire at the end of 2012. There is a bill in Congress that would extend it, but it is unclear if it will pass. For distressed homeowners, this means that time is limited to take advantage of this program. 

Time is running out. But there is still a chance to change your financial direction and avoid foreclosure. Learn more at www.ShortSellingNews.com