November 2009

Declining Inventory Sign of Stabilizing Market

An important reason that the housing market is stabilizing is the reduction in inventory. Current sales and inventories suggest that supply will decline below the pre-2006 levels by the end of 2009.

But analysts say that the stabilization of the market doesn’t mean that prices will rise anytime soon. They point to what they call “shadow inventory,” foreclosed homes that banks are holding off the markets. They predict that these homes will hit the market in spring 2010.

But overall, they are optimistic that the housing recovery is built on an improving economy and say that the market will continue to stabilize.

Source: BusinessWeek.com, James C. Cooper (11/09/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

First-Time Home Buyer Show Sets Records

HGTV says its “First-Time Home Buyers’ Hour,” which airs Monday through Friday from 8 p.m. to 9 p.m. is breaking ratings records.

The show posted a 33 percent ratings increase in the key 18- to 49-year-old segment during October.

The network attributed the rush of ratings to the first-time home buyer’s credit, which has brought younger viewers to the network.

“In this evolving housing market, HGTV will continue to offer first-time home buyers the relevant information and insights they need to prepare for the real estate plunge,” said Jim Samples, president of HGTV.

Source: HGTV (10/05/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Federal Reserve Keeping Key Interest Rates Low

The Federal Reserve announced Wednesday that it is keeping its key interest rate at or near zero and will continue to do so as long as the economy remains weak.

Analysts predicted that the Fed would leave interest rates low for at least six more months.

The Fed said that it would continue its program to buy $1.25 trillion worth of mortgage-backed securities by the end of March, a sign that it intends to continue to drive down the cost of mortgage loans.

Source: The New York Times (11/5/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

The Homebuyer Tax Credit is Extended and Expanded

The bill signed into law today by President Obama, extends an $8,000 first-time home buyers’ tax credit that was set to expire at the end of this month. The credit will apply to all house contracts entered into before April 30, 2010, and closed by June 30.  The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Purchases Covered

The $8,000 credit for first-time homebuyers has been retained.  The law also creates a new $6,500 credit for existing property owners looking to sell their home and buy another during the same period of time.  The plan allows homebuyers who have lived in their residence at least five of the last eight years to receive a $6,500 credit.  The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible.

Income Limits

Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That is up from the current $75,000 limit for individuals and $150,000 for couples. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

Goldman Sachs Group Inc. said in a research note yesterday that the credit probably spurred 200,000 home sales that otherwise wouldn’t have occurred.

“This is probably the last extension,” said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

FHA Delays Implementing Rules for Condo Loans

The Federal Housing Administration says it will implement a new approval process for condo financing on Dec. 7 – the second time the deadlines have been pushed back. The delay also brings a relaxation of new rules, according to the Mortgage Bankers Association, which has been negotiating with FHA.

Under the latest iteration of the rules, 50 percent of units in a condo project will be eligible for FHA funding and up to 100 percent will be eligible in “well-established” projects with a minimum of 10 percent reserves. Half of the units will have to be sold to owner-occupants before FHA will back any loans.

In an important move, FHA said it wouldn’t require the recertification of some 40,000 projects that have already been certified for FHA financing.

“If what the MBA says is the deal, it’s essentially a nonevent,” said mortgage banker Faramarz Moeen-Ziai.

The U.S. Department of Housing and Urban Development confirmed a delay in implementation but wouldn’t comment on the changes the MBA says FHA has agreed to.

Source: Inman News, Matt Carter (11/05/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

House Approves Home Tax Credit

WASHINGTON (MarketWatch) — The House of Representatives on Thursday approved an extension of jobless benefits and a tax credit for home buyers, sending the measure to President Barack Obama for signature.

The bill, approved unanimously by the Senate late Wednesday, extends unemployment benefits for up to 20 weeks.

It also keeps a first-time home buyer tax credit alive until next spring, and expands it to include some people who already own a house.

The vote was 403 to 12.

The bill extends jobless benefits in all states for 14 weeks, and for up to 20 weeks in states where the unemployment rate is above 8.5%.

Obama may sign the bill as early as Friday.

The U.S. unemployment rate is at a 26-year high of 9.8%, and the White House is warning that job losses will continue even as the economy recovers. The latest U.S. jobs figures are due Friday morning, and economists surveyed by MarketWatch estimate that the country lost 150,000 jobs in October. See Economic Calendar.

An $8,000 credit for first-time home buyers now set to expire this month is extended through April 30 under the bill.

The bill also allows people who have lived in a home for at least five years to claim a $6,500 credit if they purchase a new home.

House lawmakers voted after the Labor Department reported Thursday morning that the number of people filing initial claims for state jobless benefits dropped by 20,000 to a seasonally adjusted 512,000 in the latest week. It was the first decline in two weeks and the fewest initial claims since early January. See full story.

But the jobless claims figures don’t point toward quick job-creation, analysts say.

“If the pace of decline from the peak is maintained, we are still some five months away from claims reaching the level that will signal net job growth,” wrote RDQ Economics economists.

The bill also includes a tax provision allowing small businesses to write off losses they incurred during the recessio

By Robert Schroeder, MarketWatch

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Single Life Rules in the Big Apple

The majority of Manhattan residents—50.3 percent—live alone, according to the latest U.S. Census Bureau statistics. New York first passed the 50 percent mark in 2007.

High-paying jobs, the expense of raising a family, longer-lived widows and widowers, and an appreciation of the single lifestyle are the factors making Manhattan a singles community, says William Helmreich, deputy chairman of City College’s sociology department.

There were 376,916 single households in Manhattan in 2008, making studios and one-bedrooms the most popular rentals, says Stu Greenberg, owner of Fireside Realty in Manhattan.

But Manhattan is no singles paradise, particularly for women. There are 212,000 single female households compared with 165,000 single male households.

Source: New York Post, Chuck Bennett (10/30/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Senate Approves Tax Credit Extension, Expansion

The Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they’ve lived in their home for five of the past eight years. Home prices are capped at $800,000.

The legislation was included in a bill to extend unemployment benefits and is expected to be passed by the House today or tomorrow. President Obama is expected to sign the legislation when it’s sent to his desk.

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Facts Getting Lost in FHA Safety Debate

“Nobody has asked to come in and look at our balance sheet, to go through our finances, which I’ve offered to everybody.”—FHA Commissioner David Stevens

News reports raising concerns that FHA might be the next major financial institution requiring a government infusion are based on misinformed comparisons with what happened in the subprime market, FHA Commissioner David Stevens said in an exclusive interview with REALTOR® Magazine this week.

At their peak, subprime lenders commanded 40 percent of the residential mortgage market by making low-downpayment, no-document, interest-only, and other types of exotic loans to high-risk borrowers, investors, and speculators, a market that FHA sat out entirely, says Stevens.

Today, it’s FHA that commands 40 percent of the market, but that’s where the comparison ends. The agency makes 30-year, fixed-rate, fully documented loans only for households buying their primary residence. For each loan, the agency maintains capital reserves for the full 30 years of the loan rather than for the 1-2 years required of banks.

Today, the agency has more than $30 billion in reserves, including a fully funded loan-loss reserve. All the talk in the media about reserves dipping below a 2-percent required threshold is about a secondary account that’s above and beyond the agency’s primary reserve. Those two accounts together represent more than 4 percent of assets, he says.

An actuarial audit of FHA finances due out in a few weeks from a non-governmental auditor is expected to find that FHA has sufficient capital to cover all forecasted losses, even assuming further declines in home prices, says Stevens.

“What concerns me, and I think should concern all REALTORS®, is . . . non-fact-based [criticism] from people who jump to conclusions without looking at data [and] create an environment where we’ll be forced to make corrections where they are not required and can hurt this housing recovery.”

Stevens sat down with the magazine for a 30-minute interview that covered the agency’s new appraisal policy and an upcoming mortgagee letter that’s expected to make condo financing more attractive as well as the agency’s credit health. He also talked about the improvements to the agency’s processing that makes it comparable to conventional lenders in terms of processing speed and paperwork requirements.

Remainder of Article and Aduio from Interview

Robert Freedman ·- Senior Editor, REALTOR® Magazine (October 22, 2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Refinancing Fuels Loan Activity

Loan applications rose 8.2 percent last week on a seasonally adjusted basis compared to the previous week, according to the Mortgage Bankers Association weekly survey.

Most of the increase was in refinances, which rose 14.5 percent, while purchases decreased 1.8 percent. On an unadjusted basis, the purchase index decreased 3 percent compared with the previous week and was down 3.4 percent compared to the same week a year ago.

Mortgage rates declined overall:

* 30-year fixed-rate mortgages decreased to 4.97 percent from 5.04 percent.
* 15-year fixed-rate mortgages decreased to 4.33 percent from 4.53 percent.
* 1-year ARMs increased to 6.83 percent from 6.79 percent.

Source: Mortgage Bankers Association (11/04/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

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