 | | | | |  | | Foreclosures, Cash Deals Push Home Sales Higher | | | by Julio E Vega on
| by The Associated Press
The Associated Press - February 23, 2011
More people bought previously occupied homes in January. But sales surged on a rising number of foreclosures and all-cash deals, and not first-time homebuyers.
The rising number of distressed sales forced home prices down to their lowest level in nearly nine years, a troubling sign for the struggling housing sector.
Sales of previously occupied homes rose slightly last month to a seasonally adjusted annual rate of 5.36 million, the National Association of Realtors said Wednesday. That's up 2.7 percent from 5.22 million in December.
Still, the pace is far below the 6 million homes per year that economists say represents a healthy market. And the number of first-time home-buyers shrunk to 29 percent of the market the lowest percentage of the market in nearly two years. A more healthy level of first-time home-buyers is about 40 percent, according to the trade group.
Investors Buy With Cash
Foreclosures represented 37 percent of sales in January. And all-cash transactions accounted for 32 percent of home sales — double the rate from two years ago when the trade group began tracking these deals. In places like Las Vegas and Miami, cash deals represent half of all sales.
One reason cash sales are rising is that a growing number of purchases are being made by investors, the Realtors group said.
Millions of foreclosures have forced down home prices and more are expected this year. The median price of a home sold in January was $158,800. That's a decrease of 3.7 percent from a year ago and the lowest point since April 2002.
"Home prices continue to languish," said Steven Wood, chief economist for Insight Economics. "Any recovery will be difficult to sustain given the still-large supplies of homes for sale and distressed properties."
A major barrier for first-time home-buyers is tighter lending standards adopted since the housing bubble burst. These have made mortgage loans tougher to acquire. Banks are also requiring buyers put down a larger down payment. During the housing boom, buyers could purchase a home with little or no money down.
And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further. High unemployment is also deterring buyers. Job growth, while expected to pick up this year, will not likely raise home sales to healthier levels.
With mortgage rates rising, mortgage applications have been volatile and are now near their lowest levels in 15 years. Economists say it could take years for home sales to return to healthy levels.
Home Sales Data Inflated?
Last year, home sales fell to 4.9 million, the lowest level in 13 years. And even that number, some say, was overstated.
CoreLogic, a real-estate data firm in Santa Ana, Calif., said it has found that 3.3 million homes were sold last year compared to the trade group's 4.9 million figure. It has suggested the National Association of Realtors is inflating its numbers to make it appear that more homes had been sold.
The Realtors group, which has produced the monthly report on the number of existing homes sold since 1968 and acts as the chief advocate and lobbying arm for real estate agents, says it is reviewing its 2010 yearly estimate.
One obstacle to a housing recovery is the glut of unsold homes on the market. Those numbers fell to 3.38 million units in January. It would take 7.6 months to clear them off the market at the January sales pace. Most analysts say a six-month supply represents a healthy supply of homes.
'Shadow Inventory' Looms
Analysts said the situation is much worse when the "shadow inventory" of homes is taken into account. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale.
For January, sales were up in three of the four regions of the country led by an 7.9 percent rise in the West. Sales were up 3.6 percent in the South, 1.8 percent in the Midwest and down 4.6 percent in the Northeast.
The January increase was driven by a 2.4 percent rise in sales of single-family homes which pushed activity in this area to an annual rate of 4.69 million units. Sales of condominiums were up 4.7 percent to a rate of 670,000 units
[Copyright 2011 The Associated Press]
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| | | | | | | Short Sale Transaction a Tall Order | | | by Jevega@vgainvestments.com on
| Realty Times Article Mailer
Sent by: Admin at Jevega@vgainvestments.com.
Key word in short sales is "get the right team" !
Short Sale Transaction a Tall Order
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A short sale could be a better deal than bankruptcy or foreclosure, but it can also sap your time, wither your credit score and well, cost you money.
Read the Full Story At:
http://realtytimes.com/rtpages/20100218_shortsale.htm
Sender's IP Address: 24.34.79.65
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| | | | | | | Florida Court Decision Could Impact Builders and Bank Foreclosure Processes | | | by Jevega@vgainvestments.com on
| Realty Times Article Mailer
Sent by: Admin at Jevega@vgainvestments.com.
Even more problems for banks. Now they are being forced to foreclose expediciously increasing their already high REO inventory.
Florida Court Decision Could Impact Builders and Bank Foreclosure Processes
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A ground-breaking South Florida court decision has paved the way to a legal solution for condominium and homeowners associations to address the under-reported but highly commonplace practice of banks stalling their foreclosures.
Read the Full Story At:
http://realtytimes.com/rtpages/20100217_floridacourt.htm
Sender's IP Address: 24.34.79.65
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| | | | | | | FW: Industry Insider - HUD Waives FHA Rule on Flipping | | | by Julio E. Vega on
| HUD Waives FHA Rule on Flipping
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In an effort to expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties, HUD has announced a temporary waiver of the 90-day flipping rule. The waiver takes effect February 1, 2010, and lasts for one year, unless otherwise extended or withdrawn by HUD.
The waiver is limited to those sales that meet the following conditions:
1. All transactions must be arms-length, with no identity of interest between the buyer and seller or any other parties participating in the sales transaction, including:
.Seller must hold title
.LLCs, Corporations and trusts must be established in accordance with state and federal law
.No evidence of previous flipping within 12 months
.Evidence that property was marketed openly, such as via MLS, auction, FSBO
.The waiver is limited to forward mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program
2.If the sales price of the property is 20% or more above the seller's
acquisition cost, the waiver will apply only if the lender meets the
following conditions:
.Significant work has been done to the home (documented by a second appraisal verifying that legitimate repairs and rehabilitation have been done to substantiate an increase of more than 20%); or,
.In cases where no work has been done, the appraiser must provide explanation to support the increase since the prior transfer; and,
.A property inspection must be provided to the buyer prior to closing. (The lender may charge the borrower for the inspection.) The inspector does not need to be FHA approved, but must have no interest in the property, must not receive compensation other than from the lender and may not be involved with the repairs recommended from inspection.
The complete text of the waiver - including what the inspection must include - is available on the HUD website at:
http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf
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