housing market: In Many Cities it’s Cheaper to Buy than Rent
- 03/19/11 11:14 AM
As home prices continue to decline, in many cities it’s cheaper to buy than rent. A recent study done by Deutsche Bank shows that for the first time in more than 2 decades, buying a home costs less than renting, especially for those purchasing in large metropolitan areas. And while it’s unlikely that the news will trigger a surge in homebuying, it confirms one more advantage of owning for those considering a home purchase.
Today’s housing market is unlike any we’ve experienced in decades, with many buyers remaining on the sidelines waiting to see if the market would stabilize. … (38 comments)
housing market: Is Now A Good Time To Invest In A Home?
- 03/06/11 08:21 AM
With the economy continuing its struggle and the housing market lacking stability, is now a good time to invest in a home? While the past decade saw many reap huge benefits from the sale of their homes, the answer to the question is: a qualified maybe. Housing in general isn’t a great investment, but the realities of today’s market give us reason to believe that a properly researched purchase, could provide a hedge against inflation over the next few years. Unless you are purchasing as an investor—not the subject of this post—houses should be purchased for shelter, for pride of … (12 comments)
housing market: Foreclosed Homes Will Offer Even Greater Bargains in 2011
- 02/24/11 09:00 AM
With the average foreclosed home in 2010 selling at a 28% discount from traditional sales, and with banks preparing to increase their sales of distressed properties, foreclosed homes will offer even greater bargains in 2011. Continuing sluggishness in the housing market, combined with high levels of inventory, should provide great buying opportunities for those looking to purchase a home.
Last year’s moratoriums and delays caused by the “robo-signing” crisis caused banks to slow the processing of foreclosures, resulting in a glut of REO inventory that lenders are now ready to move. And now that many of those foreclosure issues have … (10 comments)
housing market: Will The New Fannie/Freddie Rules Affect Home Ownership?
- 02/11/11 07:20 AM
Today I received an email from a subscriber to The Housing Guru, asking: “How will the new Fannie/Freddie rules affect home ownership?” The writer planned to purchase a home in the next 3 to 5 years and wanted to know if the mortgage process would get easier or more difficult because of the changes being discussed.
My response was based both upon recent news stories as well as statements from Treasury, which lead me to believe that the government has no plans to make the mortgage process easier for homebuyers. I believe the opposite is true. As the … (12 comments)
housing market: How Aging Baby Boomers Will Impact the Housing Market
- 02/02/11 01:49 PM
Recent articles have described how aging baby boomers will impact the housing market; and with numbers that may reach as high as 77 million, the results could be significant. Boomers made their presence felt during the past decade as “adult communities” spread across the country, and many builders profited as thousands of active adults sought environments that matched their lifestyles.
Now, however, and partly as a result of the recession, those needs and desires are changing. Retiring boomers are looking for places that are affordable, low maintenance, and with amenities that will assist those with age-related health issues. A presentation … (8 comments)
housing market: New Data Indicates Further Declines in Home-Ownership Rate
- 01/31/11 12:26 PM
Recent data from the Census Bureau reported a significant drop in the rate of home ownership, falling from its peak of 69.2% to 66.9% in the 4th quarter of 2010; and some experts have predicted that ownership rates could fall as low as 62%.
While continued high unemployment and an uncertain economy continue to have a significant negative impact upon the housing market, new regulations being proposed for the restructuring of the mortgage market are also likely to further weaken home sales. Tightening of mortgage requirements, combined with calls for higher down-payments, while seen as long-term stabilizing factors, … (33 comments)
housing market: Can Congress Really "Fix" Housing?
- 01/29/11 08:47 AM
Can Congress Really "Fix" Housing? There has been lots of discussion recently about the proposed housing “fix” that may come as Fannie Mae and Freddie Mac are restructured. Some would like to see the two mortgage giants privatized without any government involvement, while others want to continue the GSEs as originally structured.
Regardless of the route chosen, the fix won’t be simple, nor will it come quickly. When housing collapsed, many looked to the mortgage market as the source for housing’s problems. And while a tightening of lending restrictions would have helped avoid some of the crisis; our problems … (6 comments)
housing market: Have Home Prices Finally Reached Bottom?
- 01/25/11 07:17 AM
An article on Bloomberg reports that Karl Case, co-founder of the S&P/Case-Schiller Home Price Index, has stated that housing is now “bouncing along the bottom.” According to S&P/CS, home prices in November fell by 1.6% over those of 2009; however, many expect recent positive economic news to entice more into the housing market, helping to stabilize prices.
I believe the key to stabilization is whether or not the market experiences a continued reduction in inventory as reflected in December’s fall to 8.1 months of supply. Should the backlog of foreclosures cause inventory levels to rise once more, as some … (8 comments)
housing market: Was the December Sales Surge an Aberration or a Trend?
- 01/24/11 07:56 AM
New numbers reported on CNBC call into question whether the December sales surge of 12.3% was the beginning of an upwards trend for housing or just an aberration, fed by the delays created by the robo-signing controversy and the subsequent reviewing of foreclosure documents. An article from Diana Olick reports that distressed sales may have comprised as much as 47% of all home sales in December. And while an increase in sales is welcome, if half is comprised of foreclosures and short sales, especially those previously delayed, then, it may not be indicative of a new and sustainable trend.
… (6 comments)
housing market: Some Good and Bad News on the Mortgage Interest Deduction
- 01/23/11 06:22 AM
Much has been said recently about the possibility of eliminating or modifying the amount of mortgage interest homeowners can deduct from their taxable income; however, new information has come to light that may alter the picture. Here’s some good and bad news on the mortgage interest deduction.
An article in the LA Times reports that estimates released by the Joint Committee on Taxation show that the deduction will produce revenue losses significantly less ($88 billion over the next 3 years) than previously estimated; and the reason is both good and bad news. It seems that declining home prices and … (36 comments)
Although the recession has been declared officially over, most realize that the commonly used criteria for determining the end of this recession are severely flawed, and have little impact upon the attitudes of consumers and potential homebuyers. While the recession may have ended, we’ve now entered The Great Correction, a process that began 4 years ago. With millions of unemployed, millions more facing foreclosure, and with little prospect of a quick turn-around, what can those in real estate related businesses do to avoid adding to the malaise? And more importantly, what can … (35 comments)
housing market: Please Help--What's Working in Your Market?
- 01/21/11 11:49 AM
I was recently asked to speak to a group of local real estate professionals about my views of housing in the coming decade and how I think agents should prepare in order to adapt to current and projected market conditions. And while I plan on sharing my ideas and observations, I am limited to what I know; and today’s housing market demands more than the ideas of one person. I want to tap the COLLECTIVE GENIUS of the most talented and productive real estate professionals in the U.S.—and, of course, the very best spend time here on Active Rain.
Please … (19 comments)
housing market: New Homes Are Getting Smaller
- 01/18/11 09:29 AM
An article on RESMedia reports that new homes are getting smaller, as builders plan to reduce the size of the average home to 2150 square feet within the next four years, a change of about 350 square feet from homes of just 4 years ago. The majority of currently active builders (another area that has seen a dramatic reduction in size) say they plan to build smaller homes in the coming years.
While many of the changes reflect the current economy, they’re also a response to the evolving needs and desires of today’s buyer. Changing demographics and consumer interests … (10 comments)
housing market: NAHB: Single Family Housing Starts Will Increase 21% in 2011
- 01/12/11 01:00 PM
According to the chief economist for the National Association of Home Builders, NAHB, Single family housing starts will increase 21% in 2011. And while such an increase seems dramatic, it’s far less than needed to begin rebuilding either the residential construction industry or the jobs that should accompany new construction. Of course any improvement would be welcome, but last year’s output of only 474,000 homes was less than half of that of a moderate year and only about one-quarter of that of the boom years.
And it’s likely that the NAHB is being overly optimistic as the predictions of … (6 comments)
housing market: November Home Prices Are Down 5% Year-Over-Year
- 01/11/11 12:57 PM
CoreLogic, a real estate data and analytics company, has recently issued a report indicating that November home prices are down 5% year-over-year, and prices appear to be continuing their fall. And although price declines this time of year are normal, the news isn’t good for a housing market unable to find stabilization.
Some of the highlights from the report are:
Excluding distressed sales, the five states with the greatest depreciation were: Idaho (-10.42%), Alabama (-7.82%), Arizona (-7.81%), Nevada (-6.13%) and Washington (-6.05%).
Excluding distressed sales, the five states with the highest appreciation were: Wyoming (+6.47%), North Dakota … (7 comments)
housing market: New Fees From Fannie Mae No Help for Housing Market
- 01/09/11 01:29 PM
In a December memo to its lenders, Fannie Mae announced a Christmas gift to homebuyers in the form of significantly higher fees. An article in the LA Times reports how buyers with somewhat lower credit scores and less than 20% down could see fees of more than $8,000, an increase of $1,500 over those of 2010.
The new fees are just another way the GSE is seeking to recover from the billions in past and expected future losses. And while the new charges may seem justified in light of the serious underestimating of risks associated with the collapse … (7 comments)
housing market: Shadow Inventory Remains a Substantial Risk to the Housing Market
- 01/04/11 12:43 AM
An article on MarketWatch describes how the “shadow inventory” remains a substantial risk to the housing market. The article reports that S&P analysts have observed that it is taking longer for the housing market to absorb foreclosed homes than first anticipated, and that the number of foreclosures “may be a drag on prices for a few more years.”
The glut of foreclosures is projected to hit cities such as New York particular hard, where it could take as long as 10 years for the market to return to “normal.” And while other areas will clear much faster, foreclosures will place … (8 comments)
housing market: I Wish I Could Restore My Home’s Value
- 12/31/10 08:20 AM
I wish the economy were better, and I wish I could restore my home’s value. If only wishing could make it so, if only wishing could restore our economy. If just by thinking a few happy thoughts and ignoring the realities of the most serious recession in decades, we could bring the housing market back, bring financial stability to the markets, stop the declines in employment; we could all live happily ever after. But remaking our economy isn’t as easy as wishful or positive thinking.
And while we like to point fingers at our government, to irresponsible homeowners, to … (13 comments)
housing market: What to Expect From Home Prices in 2011
- 12/28/10 07:02 AM
Recent news from the housing market has been less than optimistic, and nervous sellers as well as potential buyers both want to know what to expect from home prices in 2011. And the news for the first group isn’t good. Home prices in most areas will likely continue to fall throughout most of the coming year; and the reason for falling prices is as simple as supply and demand.
Most areas have far too many homes on the market for the number of potential buyers. And a backlog of foreclosures created by the recent scandal over “robo-signing” and improperly … (72 comments)
housing market: Year over Year Increase in Existing Home Inventory
- 12/22/10 06:07 AM
Year over Year Increase in Existing Home Inventory A couple of informative graphs on Calculated Risk help to provide a picture of why many experts are still bearish about the housing market. With existing inventory 5.4% above and sales below those of 2009, the graphs help us gain a better understanding of where we are and where we need to be in order to stabilize housing.
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