Posted by: Chris Palmeri on November 11
Trillions spent on propping up banks, buying mortgages, tax credits and new programs designed to lower payments and prevent foreclosures. And yet a new survey from Move Inc., the parent of Realtor.com, says Americans are growing increasingly dissatisfied with how Washington is handling the housing mess.
The October 2009 survey found that the federal government’s approval rating by consumers on housing issues has slipped since March 2009. By a six-percent margin, Americans said they don’t think the government is doing enough to stabilize the housing market (48.2% compared to 42.2% five months ago). According to the survey, consumers still want low interest rates (31.4%) and action by the government to help homeowners prevent foreclosures (28.5%), the same two top priorities expressed by survey respondents in March.
The survey found that public participation in the programs to prevent foreclosures is much lower than anticipated. In March 2009, several days after the details of the Making Home Affordable program were announced; Move’s survey found that 17.6 percent of those interviewed said they intended to participate in the Administration’s program. Now only 8.8 percent said they actually did participate.
The number of consumers interested in investing in real estate has doubled since March. One out of eight (12.1%) homebuyers today plan to purchase a home as an investment property, compared to 5.6 percent seven months ago.
Fear of foreclosure is fading. In March 52.5 percent of all survey respondents said they were concerned that they or someone they know may face foreclosure in the next 6 to 12 months. That number dipped slightly to 45.1 percent in October.
The survey of 1,000 people was conducted the third week of October.
Posted by: Chris Palmeri on November 10
The real estate market continues to send mixed signals. Home sales are rising. They were up 11% in the third quarter from the same period last year to a 5.3 million-a-year annual pace.
The sales are coming thanks to a lot of financial incentives. Thirty year mortgage interest rates remain near record lows at 5.1%. Uncle Sam continues to write $8,000 tax credit checks to first time home buyers. “The buying conditions this year are the most favorable on record dating back to 1970,” says Lawrence Yun, chief economist for the National Association of Realtors.
Nearly one-third of those sales though are foreclosed homes trading at distressed prices. They are dragging down prices nationally. The Realtors association reported today that prices fell in 123 out of 153 cities tracked in the third quarter.
What about the thirty cities where home prices rose? They are places better known for affordability and stability than surging prices.
The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2 percent from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3 percent to $115,600, followed by Oklahoma City, at $144,100, up 9.1 percent from a year ago.
The biggest sales gain between the second and third quarters was in North Dakota, up 42.3 percent; followed by Rhode Island which rose 26.5 percent; and Pennsylvania, up 25.6 percent.
It's likely that buyers in rural areas that didn't see a tremendous surge in prices see the low interest rates and tax incentives as a good buying opportunity.
Here's the Realtors' Lawrence Yun's take.
“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”
Posted by: Prashant Gopal on November 06
The National Association of Realtors Web site has a nice Question & Answer section about the new credit
The Realtors' spokesman tells me that the new credit will start tomorrow, not today.
"We rechecked the effective date for the repeat buyer," spokesman Walt Malony said in an e-mail. "The effective date is 'after the date of enactment.'Today is date of enactment, so the fun begins tomorrow, Nov. 7."
Judging from all of your questions, tomorrow is going to be a confusing day for buyers, sellers, and the real estate agents, brokers, and attorneys advising them.
Posted by: Prashant Gopal on November 06
Update: Just spoke with somebody at Sen. Chris Dodd's office. According to the senator's banking committee staff, you can qualify for the credit even if you signed a purchase contract before today's date. The important thing is that you close on the home between today and June 30, 2010 (Your contract must be signed by April 30, 2010). Keep the questions coming, I'll try to answer as many as I can.
Dozens of you have written in with good questions about the tax credit. I'm working on finding answers, especially to one recurring question. To qualify for the $6,500 credit is it necessary to sign the purchase contract after the measure is signed into law today or can a homeowner who closes on a home after today also meet the requirements? I've asked the White House to clarify.
In the meantime, I just received a press release from CMPS Institute, a training, examination, certification and ongoing membership program for financial professionals who provide mortgage and real estate equity advice.
It clarifies a few things. Read on.
More Homebuyers Qualify for Tax Credit
Ann Arbor, MI November 6, 2009 – Congress just passed an expanded version of the $8,000 first time home buyer tax credit that was set to expire on November 30. “The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for home buyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up home buyers did not qualify.” Consider these three examples:
Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.
Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. “If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”
The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”
There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
· The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others
· If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit.)
· The credit applies even if you have co-signers on your mortgage loan
Posted by: Chris Palmeri on November 06
Move Inc., parent of Realtor.com, the online listing service for the National Association of Realtors, came out with its third quarter earnings yesterday. Sales were down 11% to $53 million. Although the company has been able to boost its cash flow through cost cutting and more efficient management, it is still a tough environment. Realtor.com depends largely on real estate agents advertising their listings on the site.
Move CEO Steven Berkowitz said the company didn’t see the usual spike in listings last Spring. Many homeowners are holding off putting their house on the market in this crummy sales year. As for the agents, Berkowitz said the company had seen a “significant decrease” in their number. Of those that are in still in business, they are spending less on marketing.
What gives Berkowitz hope is more potential home buyers coming to the site and staying longer, even its just to window shop.
“They are doing more shopping. They are doing more comparison shopping. They are spending more time looking rather than buying. It is no different than a lot of what is happening in retail in a lot of stores where the high end stores people are walking through the store and shopping but they are not buying.”
The company says it’s updating many of its service offerings, which it needs to. Realtor.com is just about the only real estate search site that doesn’t link to Google's street views so you can see what the neighborhood looks like without driving out there. Get a move on Move Inc!
