Ray's Blog

FED KEEPS KEY INTEREST RATE UNCHANGED !!!!

Ray Kamel (RE/MAX All Stars) — Thu, 09 Aug 2007 13:34:09 -0500

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.

Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.

Although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Michael H. Moskow; William Poole; Eric Rosengren; and Kevin M. Warsh.

MORTGAGE APPLICATIONS FALL BY 3.6 PERCENT

Ray Kamel (RE/MAX All Stars) — Thu, 26 Jul 2007 17:38:59 -0500

WASHINGTON, D.C. (July 25, 2007) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 20, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 609.0, a decrease of 3.6 percent on a seasonally adjusted basis from 631.6 one week earlier. On an unadjusted basis, the Index decreased 3.5 percent compared with the previous week and was up 13.1 percent compared with the same week one year earlier.

The Refinance Index decreased 1.4 percent to 1692.9 from 1717.4 the previous week and the seasonally adjusted Purchase Index decreased 5.0 percent to 424.2 from 446.5 one week earlier. The seasonally adjusted Conventional Index decreased 3.8 percent to 892.1 from 927.2 the previous week, and the seasonally adjusted Government Index decreased 1.2 percent to 136.9 from 138.6 the previous week.

The four week moving average for the seasonally adjusted Market Index is down 0.4 percent to 621.6 from 624.0. The four week moving average is down 0.3 percent to 440.5 from 441.6 for the Purchase Index, while this average is down 0.6 percent to 1683.6 from 1693.3 for the Refinance Index.

The refinance share of mortgage activity increased to 38.5 percent of total applications from 37.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 21.0 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.59 percent from 6.61 percent, with points decreasing to 1.55 from 1.6 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.24 from 6.29 percent, with points increasing to 1.43 from 1.33 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 5.62 from 5.60 percent, with points increasing to 1.13 from 1.11 (including the origination fee) for 80 percent LTV loans.

###

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 500,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 3,000 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.

C.A.R. reports sales decrease 24.7 percent in June, median price of a home in California at $594,260, up 3.2 percent from year ago

Ray Kamel (RE/MAX All Stars) — Thu, 26 Jul 2007 17:37:00 -0500

LOS ANGELES (July 25) - Home sales decreased 24.7 percent in June in California compared with the same period a year ago, while the median price of an existing home increased 3.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

"The focus on foreclosures and subprime lending is ongoing and, coupled with higher inventories of homes for sale, is prompting many would-be buyers to play a ‘wait-and-see' role," said C.A.R. President Colleen Badagliacco. "However, well-maintained homes with curb appeal that are priced for today's market continue to sell. It's often a matter of counseling buyers and sellers to set realistic expectations on both sides of the transaction."

"First-time buyers continue to be impacted by tighter mortgage underwriting standards and the affordability challenge, which has not improved significantly despite price declines in most regions of the state," she said.

Closed escrow sales of existing, single-family detached homes in California totaled 364,280 in June at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 24.7 percent from the 483,690 sales pace recorded in June 2006.

The statewide sales figure represents what the total number of homes sold during 2007 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during June 2007 was $594,260, a 3.2 percent increase over the revised $575,850 median for June 2006, C.A.R. reported. The June 2007 median price increased 0.2 percent compared with May's revised $592,780 median price.

"With just over a 10-month supply of homes for sale on the market, we expect further softness in prices in the coming months," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The San Francisco Bay Area continues to see leaner inventory levels compared to Southern California and the state as a whole."

"Unlike the downturn we experienced in the early 1990s, the sales decline is not driven by weakening economic conditions," she said. "Both the California and U.S. economies continue to expand."

Highlights of C.A.R.'s resale housing figures for June 2007:

. C.A.R.'s Unsold Inventory Index for existing, single-family detached homes in June 2007 was 10.1 months, compared with 6.1 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 6.66 percent during June 2007, compared with 6.68 percent in June 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.68 percent in June 2007 compared with 5.71 percent in June 2006.

. The median number of days it took to sell a single-family home was 51.7 days in June 2007, compared with 45.3 days (revised) for the same period a year ago.

Regional MLS sales and price information is contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORSâ throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 28 percent, or 105 out of 375 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for June may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/index.php?id=Mzc1OTE=

. Statewide, the 10 cities and communities with the highest median home prices in California during June 2007 were: Laguna Beach, $1,700,000; Burlingame, $1,637,500; Los Altos, $1,635,000; Newport Beach, $1,615,000; Palos Verdes Estates, $1,542,000; Saratoga, $1,465,000; La Canada-Flintridge, $1,400,000; Mill Valley, $1,395,000; Manhattan Beach, $1,300,000; Hermosa Beach, $1,205,000.

. Statewide, the 10 cities and communities with the greatest median home price increases in June 2007 compared with the same period a year ago were: Menlo Park, 41.5 percent; Palos Verdes Estates, 25.9 percent; La Canada-Flintridge, 21.7 percent; Arcadia, 21.1 percent; Newport Beach, 20.1 percent; Santa Monica, 18.7 percent; Moorpark, 16.1 percent; Chino Hills, 12.6 percent; Saratoga, 11.9 percent; Los Angeles, 11.7 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (http://www.car.org/ ) is one of the largest state trade organizations in the United States, with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

June 2007 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted

	Median Price	Percent Change in Price from Prior Month	Percent Change in Price from Prior Year	Percent Change in Sales from Prior Month	Percent Change in Sales from Prior Year
	Jun-07	May-07	Jun-06	May-07	Jun-06
Statewide
Calif. (sf)	$594,260	0.2%	3.2%	-1.4%	-24.7%
Calif. (condo)	$442,670	0.7%	2.9%	0.2%	-19.9%
C.A.R. Region
Central Valley	$329,960	-0.5%	-9.1%	2.3%	-34.3%
High Desert	$306,310	-2.3%	-8.5%	1.5%	-55.1%
Los Angeles	$589,150	-0.7%	1.6%	-5.0%	-16.8%
Monterey Region	$748,770	0.8%	2.3%	0.4%	-29.1%
Monterey County	$715,000	2.9%	4.0%	-9.6%	-36.5%
Santa Cruz County	$780,000	0.1%	2.6%	9.4%	-22.4%
Northern California	$392,360	1.7%	-8.0%	-6.3%	-15.0%
Northern Wine Country	$634,480	4.0%	-0.5%	0.8%	-14.7%
Orange County	$723,860	1.4%	-0.2%	1.0%	-21.7%
Palm Springs/Lower Desert	$393,750	0.4%	5.5%	-8.2%	-37.9%
Riverside/San Bernardino	$390,230	-2.1%	-3.4%	-6.1%	-49.9%
Sacramento	$351,620	-1.3%	-8.5%	2.7%	-26.5%
San Diego	$619,180	1.1%	0.6%	3.9%	-17.5%
San Francisco Bay	$842,600	-1.3%	5.1%	-0.3%	-21.4%
San Luis Obispo	$625,000	7.8%	0.7%	22.9%	-7.9%
Santa Barbara County	$800,000	-9.2%	-5.6%	18.5%	-1.8%
Santa Barbara South Coast	$1,375,000	2.2%	6.6%	9.6%	15.2%
North Santa Barbara County	$422,000	-4.7%	-8.1%	27.8%	-2.8%
Santa Clara	$865,000	0.8%	5.5%	-1.5%	-18.0%
Ventura	$692,730	-1.0%	-2.1%	10.1%	-22.2%

na - not available

*Based on closed escrow sales of single-family, detached homes only (no condos). Reported month-to-month changes in sales activity June overstate actual changes because of the small size of individual regional samples. Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.

sf = single-family, detached home

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Median Prices By Region - Current Month vs. Year Ago

	Jun-07	May-07		Jun-06
Statewide
Calif. (sf)	$594,260	$592,780	r	$575,850	r
Calif. (condo)	$442,670	$439,603	r	$430,130	r
C.A.R. Region
Central Valley	$329,960	$331,580		$362,960
High Desert	$306,310	$313,550		$334,790
Los Angeles	$589,150	$593,570	r	$580,160
Monterey Region	$748,770	$743,180		$732,250
Monterey County	$715,000	$695,000		$687,500
Santa Cruz County	$780,000	$779,000		$760,000
Northern California	$392,360	$385,870		$426,370
Northern Wine Country	$634,480	$610,220		$637,870
Orange County	$723,860	$714,130		$725,190
Palm Springs/Lower Desert	$393,750	$392,200		$373,350
Riverside/San Bernardino	$390,230	$398,490		$403,870	r
Sacramento	$351,620	$356,100		$384,240
San Diego	$619,180	$612,370		$615,630
San Francisco Bay	$842,600	$853,910		$801,820	r
San Luis Obispo	$625,000	$579,550		$620,540
Santa Barbara County	$800,000	$880,680		$847,220	r
Santa Barbara South Coast	$1,375,000	$1,345,500	r	$1,290,000
North Santa Barbara County	$422,000	$442,860		$459,090
Santa Clara	$865,000	$858,000		$819,950
Ventura	$692,730	$699,480		$707,690

na - not available

r - revised

Source: CALIFORNIA ASSOCIATION OF REALTORS®

California Foreclosure Activity Continues to Rise

Ray Kamel (RE/MAX All Stars) — Thu, 26 Jul 2007 17:35:43 -0500

La Jolla, CA.--Lenders sent California homeowners the highest number of mortgage default notices in over a decade last quarter, the result of flat or falling prices, anemic sales and a market struggling with the excesses of the 2004-2005 home buying frenzy, a real estate information service reported.

Lenders filed 53,943 Notices of Default (NoDs) during the April-through-June period. That was up 15.4 percent from 46,760 for the previous quarter, and up 158.0 percent from 20,909 for second-quarter 2006, according to DataQuick Information Systems of La Jolla.

Last quarter's default level was the highest since 54,045 NoDs were recorded statewide in fourth-quarter 1996. Defaults peaked in first-quarter 1996 at 61,541. A low of 12,417 was reached in third-quarter 2004. An average of 34,172 NoDs have been filed quarterly since 1992, when DataQuick's NoD statistics begin.

"A lot of the loans that went bad last quarter were made at or just beyond the cycle's peak, between summer '05 and summer '06. Appreciation rates for most of that period were in the double digits and lenders let many households stretch their finances to the max, and beyond. It's that pool of 'beyond' mortgages that the market is working its way through," said Marshall Prentice, DataQuick's president.

Most of the loans that went into default last quarter were originated between July 2005 and August 2006. The median age was 16 months. Loan originations peaked in August 2005. The use of adjustable-rate mortgages for primary purchase home loans peaked at 77.8% in May 2005 and has since fallen.

Because a residence may be financed with multiple loans, last quarter's 53,943 default notices were recorded on 50,901 different residences, up 162.8 percent from 19,370 for second quarter 2006.

On primary mortgages statewide, homeowners were a median five months behind on their payments when the lender started the default process. The borrowers owed a median $11,126 on a median $342,000 mortgage.

On lines of credit, homeowners were a median eight months behind on their payments. Borrowers owed a median $3,457 on a median $67,121 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. DataQuick provides online access to property information, including default notices. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process. Due to late data availability, statistics for Alameda County are extrapolated.

The default numbers reflect wide regional differences. The second-quarter numbers were a record in Riverside, Contra Costa, Sacramento and most Central Valley counties. In Los Angeles County it was still less than half the first-quarter 1996 peak, reflecting the depth of the recession in the mid-1990s, as well as the relative strength of today's housing market.

On a loan-by-loan basis, mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties. The likelihood was highest in San Joaquin, Merced and Riverside counties.

The median price paid for a California home purchased between July 2005 and August 2006 was $460,000. Of those homes, the median price paid for those that went into default last quarter was $445,500, mostly because of low default rates at the high end.

Roughly half, 54.6 percent, of the homeowners in default emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was 88.0 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing. In selling a home, all loans must be paid off, which is not the case in the formal foreclosure process, where second mortgages and lines of credit are most often written off.

Notices of Default
houses and condos

County/Region	2006Q2	2007Q2	%Chg
Los Angeles	4,586	10,393	126.6%
Orange	1,255	2,984	137.8%
San Diego	1,778	4,383	146.5%
Riverside	2,287	6,648	190.7%
San Bernardino	1,839	5,141	179.6%
Ventura	452	1,059	134.3%
SoCal*	12,271	30,828	151.2%
San Francisco	127	257	102.4%
Alameda	649	1,612	148.4%
Contra Costa	725	2,316	219.4%
Santa Clara	530	1,275	140.6%
San Mateo	222	463	108.6%
Marin	58	118	103.4%
Solano	350	1,065	204.3%
Sonoma	202	462	128.7%
Napa	47	128	172.3%
Bay Area	2,910	7,696	164.5%
Santa Cruz	73	155	112.3%
Santa Barbara	147	434	195.2%
San Luis Obisp	79	208	163.3%
Monterey	128	483	277.3%
Coast	427	1,280	199.8%
Sacramento	1,352	3,840	184.0%
San Joaquin	604	1,983	228.3%
Placer	276	627	127.2%
Kern	549	1,593	190.2%
Fresno	590	1,380	133.9%
Madera	92	215	133.7%
Merced	214	642	200.0%
Tulare	258	428	65.9%
Yolo	77	232	201.3%
El Dorado	86	222	158.1%
Stanislaus	407	1,286	216.0%
Kings	50	75	50.0%
San Benito	33	122	269.7%
Yuba	45	171	280.0%
Colusa	14	39	178.6%
Sutter	56	109	94.6%
Central Valley	4,703	12,964	175.7%
Mountains*	155	328	111.6%
North Calif*	443	847	91.2%
Statewide	20,909	53,943	158.0%
* includes additional counties

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 17,408 during the second quarter. That is the highest number in DataQuick�s statistics, which go back to 1988. That was up 57.8 percent from 11,032 for the previous quarter, and up 799.2 percent from 1,936 for last year�s second quarter. The prior peak of foreclosure sales was 15,418 in third-quarter 1996, the low was 637 in the second quarter of 2005.

There are 8.4 million houses and condos in the state.

While foreclosures tugged property values down by almost 10 percent in some areas eleven years ago, their effect in most markets today is still negligible. However, the continued rise in NoDs means that the number of homes lost to foreclosure will continue to increase in the second half of this year. Foreclosure levels are already high in certain Inland Empire and Central Valley markets, where the worst-hit neighborhoods might already be seeing property values eroded somewhat by foreclosures, DataQuick reported.

Recorded Trustees Deeds
houses and condos

County/Region	2006Q2	2007Q2	%Chg
Los Angeles	287	2,581	799.3%
Orange	110	821	646.4%
San Diego	292	1,714	487.0%
Riverside	281	2,509	792.9%
San Bernardino	137	1,489	986.9%
Ventura	37	316	754.1%
SoCal Total*	1,152	9,504	725.0%
San Francisco	9	49	444.4%
Alameda	69	480	595.7%
Contra Costa	62	778	1154.8%
Santa Clara	38	256	573.7%
San Mateo	17	97	470.6%
Marin	6	25	316.7%
Solano	36	324	800.0%
Sonoma	18	163	805.6%
Napa	3	34	1033.3%
Bay Area Total	258	2,206	755.0%
Santa Cruz	13	46	253.8%
Santa Barbara	16	137	756.3%
San Luis Obispo	4	52	1200.0%
Monterey	8	154	1825.0%
Coast Total	41	389	848.8%
Sacramento	175	1,662	849.7%
San Joaquin	64	785	1126.6%
Placer	29	220	658.6%
Kern	25	533	2032.0%
Fresno	40	402	905.0%
Madera	6	55	816.7%
Merced	7	240	3328.6%
Tulare	17	142	735.3%
Yolo	1	103	10200.0%
El Dorado	4	89	2125.0%
Stanislaus	36	522	1350.0%
Kings	7	27	285.7%
San Benito	5	38	660.0%
Yuba	4	84	2000.0%
Sutter	10	57	470.0%
Central Valley Total*	430	4,969	1055.6%
Mountains*	8	90	1025.0%
North Calif*	47	250	431.9%
Statewide	1,936	17,408	799.2%
* includes additional counties

Source: DataQuick Information Systems

REALTORS Score Victory in Senate Appropriations Committee

Ray Kamel (RE/MAX All Stars) — Sun, 15 Jul 2007 03:16:41 -0500

WASHINGTON --The United States Senate Committee on Appropriations adopted an amendment to the FY2008 Financial Services and General Government Appropriations Bill that permanently prohibits national bank conglomerates from engaging in real estate brokerage and property management.

"Today's action in the Senate was a great team effort," said NAR Senior Vice-President of Government Affairs Jerry Giovaniello. "REALTORS across the country, state and local association staff and our NAR staff in Washington, DC joined forces to achieve this victory." "Our long-time REALTOR Champions in the U.S. Senate, including Senators Hillary Clinton (D-NY), Richard Durbin (D-IL), Wayne Allard (R-CO) and Richard Shelby (R-AL) were instrumental in passing the amendment," , Giovaniello said. "New champions on the Banking Issue, particularly Majority Leader Harry Reid (D-NV) and Senator Chris Dodd (D-CT), were very involved in passing this amendment.

Earlier this summer, the House of Representatives passed their version of the legislation containing a one-year moratorium. The two bills will go to conference in September to develop the final bill.also who to work out a final bill.

NAR Hails Bank Regulator Statement on Subprime Mortgage Lending

Ray Kamel (RE/MAX All Stars) — Sun, 15 Jul 2007 03:15:55 -0500

WASHINGTON, June 29, 2007 - The National Association of Realtors® welcomes today's statement issued by the federal regulators of banks, thrifts and credit unions that prescribes strong underwriting and consumer protection standards in connection with certain subprime adjustable rate mortgages (ARMs). Those mortgages can impose an unaffordable "payment shock" on borrowers when the interest rate resets. They include "2/28" mortgages that have a two-year "teaser rate" that adjusts as often as every six months based on a high margin.

Until recently, escalating home prices have masked problems with such mortgages since families have been able to refinance into another subprime mortgage with low initial rates, but incur another round of high costs and fees. NAR urges lenders to act promptly to help borrowers at risk of losing their homes and, at the same time, minimize the loss to the lender.

"NAR has long been concerned about abusive lending by some irresponsible lenders. In response, NAR has adopted strong policies urging Congress and the federal regulators to set high standards to prevent abusive lending with strong underwriting and other pro-consumer lending standards," said NAR President Pat V. Combs, vice president of Coldwell Banker-AJS-Schmidt in Grand Rapids, Mich.

"Starting with its first consumer mortgage education brochure in 2005, NAR has worked to do its share to educate consumers about how to avoid predatory lending and find fair and affordable mortgages. For families that now find themselves trapped in an abusive loan, we recently published our newest brochure called ‘Learn How to Avoid Foreclosure and Keep Your Home.' To help families avoid predatory lenders altogether, last fall we released a brochure on ‘How to Avoid Predatory Lending,'" Combs said.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

U.S. LEADING INDEX SUGGESTS SLOW ECONOMIC GROWTH

Ray Kamel (RE/MAX All Stars) — Thu, 12 Jul 2007 04:22:12 -0500

The Conference Board announced today that the U.S. leading index increased 0.3 percent, the coincident index increased 0.2 percent and the lagging index increased 0.2 percent in May.

The May increase in the leading index reverses its April decline. And April's large decrease was revised up slightly due to data revisions in housing permits and manufacturers' new orders components. The leading index grew 0.3 percent from November to May (a 0.6 percent annual rate). In May, unemployment insurance claims (inverted) and stock prices made the largest positive contributions, followed by housing permits.
The coincident index increased again in May. From November to May, the coincident index rose by 0.8 percent (a 1.6 percent annual rate). In May, employment made the largest contribution to the index. The coincident index grew at an average annual rate of about 2.5 percent in 2006, but in recent months, its growth has been fluctuating in the 1.5 to 2.0 percent range (annual rate).
Following an essentially flat period in the second half of 2006, the leading index picked up somewhat in December, but this was followed by two consecutive declines. The leading index is still at the same level as in January 2007, and it is 0.3 percent above its May 2006 level. At the same time, real GDP grew only at a 0.6 percent annual rate in the first quarter of 2007, following a 2.5 percent rate in the fourth quarter of 2006. The recent performance of the leading index has been mixed with increases offsetting decreases and the number of components rising roughly equaling the number falling. The current behavior of the composite indexes suggests that economic growth is likely to continue, albeit at a slow pace, in the near term.

LEADING INDICATORS. Five of the ten indicators that make up the leading index increased in May. The positive contributors - beginning with the largest positive contributor - were average weekly initial claims for unemployment insurance (inverted), stock prices, building permits, index of consumer expectations, and vendor performance. The negative contributors - beginning with the largest negative contributor - were real money supply*, average weekly manufacturing hours and interest rate spread. The manufacturers' new orders for consumer goods and materials* and manufacturers' new orders for nondefense capital goods* held steady in May.

The leading index now stands at 138 (1996=100). Based on revised data, this index decreased 0.3 percent in April and increased 0.6 percent in March. During the six-month span through May, the leading index increased 0.3 percent, with four out of ten components advancing (diffusion index, six-month span equals forty five percent).

COINCIDENT INDICATORS. Three of the four indicators that make up the coincident index increased in May. The positive contributors to the index - beginning with the largest positive contributor - were employees on nonagricultural payrolls, personal income less transfer payments*, and manufacturing and trade sales*. The negative contributor was industrial production.

The coincident index now stands at 124 (1996=100). This index increased 0.1 percent in April and increased 0.2 percent in March. During the six-month period through May, the coincident index increased 0.8 percent.

LAGGING INDICATORS. The lagging index stands at 128.6 (1996=100) in May, with three of the seven components advancing. The positive contributors to the index - beginning with the largest positive contributor - were commercial and industrial loans outstanding*, average duration of unemployment (inverted) and ratio of consumer installment credit to personal income*. The negative contributors - beginning with the largest negative contributor - were change in CPI for services and change in labor cost per unit of output*. The ratio of manufacturing and trade inventories to sales* and average prime rate charged by banks* held steady in May. Based on revised data, the lagging index increased 0.2 percent in April and decreased 0.1 percent in March.

DATA AVAILABILITY AND NOTES.

The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on June 20, 2007. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure used to deflate the money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, the consumer price index, and the personal consumption expenditure used to deflate commercial and industrial loans outstanding.

The procedure used to estimate the current month's personal consumption expenditure deflator (used in the calculation of real money supply and commercial and industrial loans outstanding) now incorporates the current month's consumer price index when it is available before the release of the U.S. Leading Economic Indicators.

Effective with the September 18, 2003 release, the method for calculating manufacturers' new orders for consumer goods and materials (A0M008) and manufacturers' new orders for nondefense capital goods (A0M027) has been revised. Both series are now constructed by deflating nominal aggregate new orders data instead of aggregating deflated industry level new orders data. Both the new and the old methods utilize appropriate producer price indices. This simplification remedies several issues raised by the recent conversion of industry data to the North American Classification System (NAICS), as well as several other issues, e.g. the treatment of semiconductor orders. While this simplification caused a slight shift in the levels of both new orders series, the growth rates were essentially the same. As a result, this simplification had no significant effect on the leading index.

Home Prices Expected to Recover in 2008 As Inventories Decline

Ray Kamel (RE/MAX All Stars) — Thu, 12 Jul 2007 04:20:31 -0500

WASHINGTON, July 11, 2007 - Home prices are expected to recover in 2008 with existing-home sales picking up late this year and new-home sales rising early next year, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR senior economist, said a good buyers' market has evolved. "Buyers now have an overwhelming advantage given the wide selection of homes available in many markets," he said. "But with profit margins coming under pressure, homebuilders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state."

Existing-home sales are expected to total 6.11 million this year and 6.37 million in 2008, down from 6.48 million last year. New-home sales are projected at 865,000 in 2007 and 878,000 next year, compared with 1.05 million in 2006. Housing starts, including multifamily units, are forecast at 1.43 million units this year and 1.44 million in 2008, down from 1.80 million last year.

Existing-home prices are likely to rise 1.8 percent to a median of $222,700 in 2008 after a 1.4 percent decline this year to $218,800. The median new-home price should rise 2.2 percent to $245,400 next year following a 2.6 percent drop in 2007 to $240,100.

"Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," Yun said. "Local conditions vary considerably, but with historically low mortgage interest rates this summer and sustained job gains, it could be a good time for first-time buyers with a long-term view to test the housing waters."

The 30-year fixed-rate mortgage is estimated to average 6.7 percent during the second half of this year, and fluctuate around 6.6 percent in 2008.

Growth in the U.S. gross domestic product (GDP) will probably be 2.0 percent in 2007, compared with a 3.3 percent growth rate last year; GDP is forecast to grow 2.8 percent in 2008.

The unemployment rate is likely to average 4.6 percent in 2007, unchanged from last year. Inflation, as measured by the Consumer Price Index, is projected at 2.6 percent in 2007, down from 3.2 percent last year. Inflation-adjusted disposable personal income should rise 3.0 percent this year, up from a 2.6 percent gain in 2006.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

FED HOLDS FUNDS RATE AT 5.25 PERCENT

Ray Kamel (RE/MAX All Stars) — Wed, 04 Jul 2007 05:23:35 -0500

Citing moderate economic growth during the first six months of the year, the Federal Reserve's Open Market Committee last week decided to leave its short-term interest rate at 5.25 percent, where it has stood since June 2006. The federal funds target rate is the interest rate charged by banks when they borrow funds "overnight" from each other. While the federal funds rate has no direct impact on other rates, such as those for mortgages, it can alter them indirectly.

In a prepared statement, the Fed acknowledged that while readings on core inflation have improved in recent months, risk remains that inflation will fail to moderate in the coming months as expected. "A sustained moderation in inflation pressures has yet to be convincingly demonstrated," according to the statement

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector. The economy seems likely to continue to expand at a moderate pace over coming quarters.

In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.

TIGHTER LENDING STANDARDS CONTINUE TO IMPACT HOUSING ACTIVITY

Ray Kamel (RE/MAX All Stars) — Wed, 04 Jul 2007 05:22:29 -0500

Per CAR:

Pending Homes Sales Index Declines While Some Regions Are Up

WASHINGTON, July 03, 2007 -

Pending home sales, a forward-looking indicator, shows existing-home sales may ease but should stay fairly close to present levels in the months ahead, according to the National Association of Realtors®.

The Pending Home Sales Index*, based on contracts signed in May, rose in the West and Northeast but fell in the Midwest and South. The national index stood at 97.7 in May, down 3.5 percent from a downwardly revised April index of 101.2, and is 13.3 percent lower than May 2006 when the reading was 112.7. In April, the index was 10.4 percent lower than a year earlier.

Lawrence Yun, NAR senior economist, stressed that housing activity continues to be impacted by tighter lending criteria and a lack of buyer confidence. "Some transactions are being postponed from mortgage market disruptions," he said. "But better supervised lending will put housing in a fundamentally healthier state over the long term.

"Mortgage purchase applications are trending up, with some of the rise due to buyers reapplying for alternatives to subprime financing. Nonetheless, home sales should stay close to present levels in the months ahead given an accumulating pent-up demand," Yun said.

The pent-up demand results from slow household formation, which is significantly below levels that would be expected in a period of job creation and economic growth. "As consumer confidence improves, home sales will rise," he said.

The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Annual changes in the index are more closely related to actual market performance than are month-to-month comparisons. As the relatively new index matures and seasonal adjustment factors are refined, the month-to-month comparisons will become more meaningful.

The PHSI in the West rose 5.6 percent in May to 95.4 but was 13.7 percent below a year ago. In the Northeast, the index increased 3.8 percent from April to 93.1 but is 9.6 percent lower than May 2006. The index in the South fell 7.6 percent in May to 107.2 and was 15.4 percent below a year ago. In the Midwest, the index dropped 8.9 percent in May to 89.4 and was 11.7 percent below May 2006.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

HOUSING STARTS, CONSTRUCTION SPENDING DECLINE IN MAY

Ray Kamel (RE/MAX All Stars) — Wed, 04 Jul 2007 05:21:05 -0500

A table listing housing starts by type and by metro area is available on the CBIA Web site. Need a local contact? See our list of local BIA/HBA media contacts in your area. SACRAMENTO - Total housing starts in California in May increased by a little over 2 percent compared to April's level, the California Building Industry Association announced today. According to housing permit data supplied by the Construction Industry Research Board, single-family housing starts in May stayed relatively level around the state while multifamily homes saw a strong boost in permits being pulled. However, production for both single-family and multifamily units is still well behind starts recorded during the same period one year ago. In May, permits were pulled for 7,164 single-family homes statewide, down just 2.5 percent from the previous month but down 40 percent from May 2006, while multifamily housing starts - condos and apartments - totaled 3,574, up 14 percent from the previous month and down 2 percent compared to May 2006. Overall for the month, builders pulled permits for 10,738 homes, condos and apartments, according to statistics compiled by the Burbank-based CIRB. During the first five months of the year, production began on 54,277 homes and apartments, nearly 29 percent less than last year's total. When compared to the first five months of 2006, single-family housing permits were down 33 percent. CBIA Chief Economist Alan Nevin said that the Riverside/San Bernardino metropolitan area continues to account for about 50 percent of the decline this year in single-family housing production, while the production in the rest of the state was relatively stable. In the multi-family sector, permit activity was down 19 percent during the first five months of the year. "The only downturns of major proportions were in Riverside/San Bernardino and the San Francisco/Oakland area. Those two areas accounted for 50 percent of the multi-family permit decline," said Nevin, noting that multi-family permit activity in most other areas generally matched production levels through May 2006. "Overall, we see evidence of returning stability to the new residential sector and anticipate that stability to be maintained throughout the balance of the year," Nevin said, attributing the stability to a far-lower level of production than what was seen in the recent boom as builders have become more cautious about constructing new homes in large volumes. "Statewide, the number of new projects has dwindled, a situation that will most certainly cause an imbalance between supply and demand when the market returns to a more elevated level of demand," he said. Lower production statewide is not good news for prospective homebuyers struggling to buy their first home, as Nevin emphasized that the demand for the homes on the market today is not the same as the state's chronic need for new housing to accommodate its growing population. CBIA President and CEO Robert Rivinius added that the industry needs to build well over 200,000 new homes, condos and apartments a year to meet the need for housing. "While it's great to see some increase and stability in production, California still needs between 220,000 and 240,000 new homes and apartments each year. Unfortunately, ever-rising fees and constraints put on new housing production makes it nearly impossible to reach those levels," Rivinius said. "What's even more pressing is the need for housing in the entry-level market. Unless major reforms are enacted soon, it's doubtful we'll meet that need in the near future."

SEVEN CALIFORNIA CITIES AMONG NATION'S FASTEST GROWING

Ray Kamel (RE/MAX All Stars) — Wed, 04 Jul 2007 05:19:59 -0500

Phoenix has become the nation's fifth most populous city, according to U.S. Census Bureau population estimates released today. As of July 1, 2006, this desert metropolis had a population of 1.5 million.

New York continued to be the nation's most populous city, with 8.2 million residents. This was more than twice the population of Los Angeles, which ranked second at 3.8 million. (See Table 1 Excel | PDF.)

The estimates reveal that Phoenix moved into fifth place ahead of Philadelphia, the latest evidence of a decades-long population shift. Nearly a century ago, in 1910, each of the 10 most populous cities was within roughly 500 miles of the Canadian border. The 2006 estimates show that seven of the top 10 - and three of the top five - are in states that border Mexico.

Only three of the top 10 from 1910 remained on the list in 2006: New York, Chicago and Philadelphia. Conversely, three of the current top 10 cities (Phoenix; San Jose, Calif.; and San Diego) were not even among the 100 most populous in 1910, while three more (Dallas, Houston and San Antonio) had populations of less than 100,000. (See fact sheet. [PDF])

The estimates also reveal that many of the nation's fastest-growing cities are suburbs. North Las Vegas, Nev., a suburb of Las Vegas, had the nation's fastest growth rate among large cities (100,000 or more population) between July 1, 2005, and July 1, 2006. North Las Vegas' population increased 11.9 percent during the period, to 197,567. It was joined on the list of the 10 fastest-growing cities by three in the Dallas metro area: McKinney (ranking second), Grand Prairie (sixth) and Denton (ninth). In the same vicinity, Fort Worth just missed the list, ranking 11th.

Florida and Arizona each had two cities among the 10 fastest growing: Port St. Lucie (third) and Cape Coral (fourth) in Florida; and Gilbert (fifth) and Peoria (seventh) in Arizona, both near Phoenix. North Carolina (Cary, near Raleigh) and California (Lancaster, near Los Angeles) each contributed one city to the list. (See Table 2 Excel | PDF.) California had seven cities among the 25 fastest growing, leading all states.

Phoenix had the largest population increase of any city between 2005 and 2006, adding more than 43,000 residents to reach 1.5 million. However, Texas dominated the list of the 10 highest numerical gainers, with San Antonio, Fort Worth, Houston, Austin and Dallas each making the top 10. North Las Vegas; Miami; Charlotte, N.C.; and San Jose, Calif., rounded out the list of the 10 biggest numerical gainers. (See Table 3 Excel | PDF.) Overall, eight Texas cities were among the 25 biggest numerical gainers to lead all states.

New Orleans had by far the largest population loss among all cities with populations of at least 100,000 people. The city lost slightly more than half of its pre-Hurricane Katrina population. It fell from 452,170 on July 1, 2005, to 223,388 one year later - a loss of 50.6 percent. To put the size of this loss into perspective, Hialeah, Fla., which experienced the second-highest rate of loss over the period, saw its population decline by 1.6 percent.
(See Table 4 Excel | PDF.)

For more information about the geographic areas for which the Census Bureau produces population estimates, see <http://www.census.gov/popest/geographic>.

-X-

These estimates are based on Census 2000 population counts - updated using information on building permits and other estimates of change.

Facing foreclosure? 9 options

Ray Kamel (RE/MAX All Stars) — Wed, 06 Jun 2007 21:23:21 -0500

Real estate markets are slowing. Interest rates are ticking up. And the phones are ringing at ByDesign, a Los Angeles-based credit counselor, as homeowners start to panic about not being able to make their mortgage payments.

"The number of people asking for appointments to talk about foreclosure is definitely up," said Susan Ulaga, the nonprofit service's senior vice president of counseling. Rising rates "are really putting a crunch" on homeowners with adjustable-rate loans.

Nearly a quarter of the nation's mortgages have rates scheduled to reset this year or next, which means higher payments for millions of homeowners. How many will default isn't known, but the Mortgage Bankers Association, which tracks delinquencies and foreclosures, expects a "modest" uptick in both by the end of the year.

If you're in danger of falling behind on your mortgage, or if you're already delinquent, it's important to know what's ahead and what your options are. Usually, the faster you move, the more choices you'll have about your financial future.

The timeline

30 days: Your troubles actually start as soon as you miss a single payment. Lenders may not contact you until you've skipped a second payment, but most will report the first late payment and every subsequent delinquency to the credit bureaus. Even a single late payment can devastate your credit score, the three-digit number that lenders use to help gauge your creditworthiness. Each subsequent "late" further decreases your score, making it more difficult and expensive to get a loan or a refinance that might help your situation. In addition, lenders typically tack on late fees of 5% or so for each missed payment.

90 days to one year: Eventually, if the payments aren't made, the lender will file a "notice of default" with a local courthouse and send you a letter saying that the foreclosure process will start unless you make good the missing payments.

How quickly the notice is filed depends on the individual lender. Some hold off if you contact them to work out a payment plan or otherwise explain your situation. Others are more aggressive and start the process as soon as possible to try to protect their investment.

"They may do it as early as 90 days, or as late as a year," explained Anthony Hsieh, president of LendingTree.com. "It really depends on the lender's temperament."

Usually, this notice means that the amount you owe has shot up as well, since the lender typically adds substantial fees to cover its legal costs.

The notice of default "is a big threshold," Hsieh said. "Once you get into that state, it's a whole different world. Your options are fewer."

The notice of default is generally picked up by the credit bureaus, further depressing your credit score and making refinancing the loan extremely difficult.

(In addition, the notice tips off scam artists that you're in trouble and may be vulnerable to various "equity skimming" schemes. One common ploy: The scam artist promises to take over your payments, but instead rents out your house and keeps the rent payments as pure profit. The home goes into foreclosure, your credit is trashed and you've lost any equity you had in the home.)

90 days more: Borrowers typically have 90 days from the notice of default to make up the deficit before the lender sends out a "notice of sale," which sets a sale date for the house (typically within the next 15 to 30 days).

Some lenders will allow you to keep your original loan if you can make up the missing payments plus any late fees and legal charges. Others will insist you refinance with another lender. You can also halt the foreclosure, at least temporarily, by filing a lawsuit or filing for bankruptcy. For either legal option to work, you'll have to be able to come up with a payment plan to fix the deficit.

Your options

Lenders today typically offer a variety of solutions for people who have fallen behind on their mortgages. Among them:

Temporarily reducing or waiving payments.

Setting up short-term repayment plans to help you make up the deficit.

Adding the unpaid balance to the principal of your loan and increasing your payments slightly to cover the extra amount.

•· If you have certain types of loans, you may have even more options. If you have a mortgage insured by the Federal Housing Administration, for example, you may qualify for an interest-free (and payment-free) loan to get your mortgage current. The money doesn't need to be paid back until you pay off the mortgage or sell the house.

•· If you can work out a solution with the lender quickly enough, you can contain or even avoid serious damage to your credit. That's among the reasons housing experts typically urge you to call your lender as soon as you know you'll have trouble making a payment.

•· This is good advice, but trickier than it may seem at first, for two reasons:

•· Lenders can make it tough to get to the right people. The folks you want to talk to are in the "loss mitigation" department. But many lenders don't routinely route borrowers to that department until they've missed several payments. Until then, you might be dealing with the lender's collections department, which typically offers one option: Pay up now. If you're serious about keeping your home, you may have to really push to get to right people.

•· "The loss mitigation department (is) where the options are really going to open up," ByDesign's Ulaga said.

•· You have to be able to make the payments. If you agree to a lender's "workout" or "loan modification" solution and then fail to make the agreed-upon payments, you'll be in a world of hurt. At best, you'll have "a lot fewer options the second time around," Ulaga said. More likely, Hsieh said, the lender will simply accelerate the foreclosure process.

•· This can be a big problem if the financial crisis that caused you to fall behind isn't over. If you don't know where you're going to get the money to make the payments, trying to work out a solution with your lender will be tough.

•· "If you're honest like that, (lenders) are not going to want to work with you," said New Jersey bankruptcy attorney John Amorison. "If you're dishonest, you breach the agreement."

•· That's no reason to hide from your lender or ignore its letters, Hsieh said. Even if you can't work out an agreement, keeping in contact is usually the right choice: "At least you know where you stand."

•· Filing a lawsuit or bankruptcy carries similar risk: If you don't have the money to make the payments, the foreclosure can proceed, and you may have further damaged your credit score.

•· 9 steps to getting out of this mess

•· So what to do? First, you'll need to take a hard, clear-eyed look at your financial situation. To that end:

•· Make a budget. Sketch out a spending plan for the next several months, including expected income and expenses. See what costs you can trim to free up as much money as possible for home payments. You may need to pay the minimums, or even less, on other debts. In certain very limited circumstances -- such as when you are absolutely sure your financial hardship will be short-lived -- it may make sense to skip payments on some bills so you can pay your mortgage. Read "How to not pay your bills" to learn about the consequences that may follow. Another option: borrowing money from friends or family, or tapping retirement funds. Do the latter only if you're convinced you can make future payments; you don't want to drain your retirement funds if you're only going to end up losing the house.

•· Consider getting help. Legitimate credit counseling services, those associated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies, typically have housing counselors that can help you evaluate your options. Or you can find a housing counseling agency approved by the Housing and Urban Development Department by calling (800) 569-4287. If you have a Veterans Administration loan, you can call (800) 827-1000 to get a referral to a financial counselor.

•· Check your refinance options. If you have equity in your home, your credit rating is relatively intact and your lender hasn't yet filed a notice of default, you may be able to get another loan with more affordable payments. An experienced mortgage broker, preferably one affiliated with the National Association of Mortgage Brokers, can let you know your options. Be cautious about jumping into another risky loan, though: adjustable, interest-only or "option" mortgages might just put off the day of reckoning and you could find yourself facing even higher payments down the road.

•· Be realistic. Many times, Amorison said, people struggle to hang on to a house that they simply can't afford when they'd be far better off without it.

•· "People are just too tied to their homes," Amorison said. "It's just property."

•· That may seem harsh, but it's far better to sell a home while you still have equity and some semblance of a credit score than to have it taken away in foreclosure.

•· Get organized. If you are going to try for a loan modification, you'll need to prepare a small mound of documentation. The lender will specify what it wants, but typically you'll need to supply the details of your financial situation, a budget, documentation of your hardship (a letter from your doctor explaining an income-reducing illness, for example, or your layoff notice from your employer) and a "hardship letter" that outlines, in heart-rending detail, the circumstances that led you to fall behind and the improved prospects that will allow you to get your financial life back on track.

•· You may also want (or be required) to provide a market analysis of your house, Ulaga said, to document how much equity you have in your home. A real estate agent can typically prepare this for free in exchange for the chance of winning your business should you decide to sell.

•· Leaving home

•· If a loan modification or refinance isn't possible or feasible, your options come down to these:

•· Sell the house. If you have enough equity in your home to allow you to pay off your mortgage in full, after deducting any real estate agent commissions, then a quick sale is usually your best option. You'll preserve what's left of your credit score and your equity, leaving you in a much better position should you want to buy another home in the future.

•· Top of Form

•· Bottom of Form

•· Offer a deed in lieu of foreclosure. If you can't sell the house for what you owe, but you're not deeply "upside down" on your mortgage, this may be an option: you propose handing over the deed to your home and your lender agrees to release you from your mortgage. This usually keeps you from having to pay any deficit that might be owed on the property, while the lender avoids further legal costs related to a foreclosure.

•· Lenders can't be forced to accept a deed, however. Typically, lenders require that the borrower make "a really good effort" to sell the home first, Ulaga said, and show that their delinquency was due to "unavoidable hardship" before they'll agree to a deed in lieu of foreclosure.

•· Negotiate a short sale. If you owe substantially more on your home than it's worth, you may be able to get the lender to accept less than it is owed by negotiating a "short sale." You essentially sell the house for whatever you can get, and the lender agrees to accept the proceeds and not go after you for the deficit.

•· A short sale can further damage your credit scores, often showing up as a "settlement" that indicates you paid less than you owed. You may also face an IRS bill on the unpaid debt, which is generally considered income to you. A skilled negotiator may be able to avoid these consequences or at least minimize them, so you may want to consider getting an experienced attorney's help.

•· Allow the foreclosure to proceed. This is generally the worst choice. In some states and in some circumstances, the lender can even go after you in court for any deficit between what the house eventually sells for and what you owe. An attorney or housing counselor can let you know if that's a possibility.

•· Even if the worst happens, though, the damage to your financial life needn't be permanent. If your situation improves, you may be able to get another mortgage, at a reasonable interest rate, within a few years. For more details, check out "Bounce back fast after bankruptcy" for suggestions on how to rebuild your credit after financial disaster.

Article for informational purposes author:By Liz Pulliam Weston

Pending Home Sales Index Shows Market May Be Stabilizing

Ray Kamel (RE/MAX All Stars) — Wed, 06 Jun 2007 21:09:53 -0500

WASHINGTON, June 01, 2007 - per NAR

A forward-looking indicator based on pending home sales shows the housing market could edge down but appears to be in the process of leveling out, according to the National Association of Realtors®.

The Pending Home Sales Index*, based on contracts signed in April, stood at 101.4, down 3.2 percent from an upwardly revised March reading of 104.8, and is 10.2 percent lower than April 2006 when it registered 112.9. The revised March index was 10.0 percent below a year earlier.

Lawrence Yun, NAR senior economist, said the current index appears to be a fair representation of overall housing market conditions. "It looks like we may be leaving a period of market disruptions, and for the past two months the pending home sales index has been similar in year-ago comparisons, which means home sales might ease but should be fairly stable in the months ahead," he said.

"In April, existing-home sales declined in part because some subprime lenders went out of business and disrupted the market, but the impact appears to be diminishing and mortgage applications have risen in the last month," Yun said. "This tells us that some borrowers who originally planned to finance with subprime mortgages are finding suitable loans in the conventional market, which will help to stabilize home sales."

"On the other hand, psychological factors seem to be holding buyers back as they look for clear signs that the market has bottomed - that varies from one area to another."

The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

The PHSI in the Midwest rose 2.3 percent in April to 98.1 but was 4.4 percent below a year ago. The index in the South increased 0.7 percent from March to 116.0, but was 10.4 percent below April 2006. The index in the West fell 10.2 percent in April to 91.4 and was 11.7 percent lower than a year ago. In the Northeast, the index dropped 10.4 percent from March to 89.3 and was 15.4 percent below April 2006.

* The Pending Home Sales Index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

The forecast will be revised June 6, and existing-home sales for May will be released June 25. The next Pending Home Sales Index will be on July 3.

C.A.R. reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago

Ray Kamel (RE/MAX All Stars) — Thu, 31 May 2007 23:07:57 -0500

LOS ANGELES (May 25) - Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

"April sales fell in part because of tighter credit standards and growing concerns about the impact of subprime loans on the market, " said C.A.R. President Colleen Badagliacco. "Throughout the state inventory levels have increased to their highest levels in recent years, giving buyers more time to view a greater variety of homes and sellers who set realistic prices an edge in the market."

Closed escrow sales of existing, single-family detached homes in California totaled 373,280 in April at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 27.8 percent from the 516,960 sales pace recorded in April 2006.

The statewide sales figure represents what the total number of homes sold during 2007 would be if sales maintained the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during April 2007 was $597,640, a 6.2 percent increase over the revised $562,820 median for April 2006, C.A.R. reported. The April 2007 median price increased 2.1 percent compared with March's revised $585,460 median price.

"Although the median price of a home in California continues to rise, this reflects the fall-off in sales in the lower-priced markets of the state where new home inventories and foreclosures are competing with the existing home market," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Fewer sales from these regions coupled with modest gains in some of the stronger coastal markets are pushing the median price for the state up slightly."

Highlights of C.A.R.'s resale housing figures for April 2007:

. C.A.R.'s Unsold Inventory Index for existing, single-family detached homes in April 2007 was 10 months, compared with 5.7 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 6.18 percent during April 2007, compared with 6.51 percent in April 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.45 percent in April 2007 compared with 5.62 percent in April 2006.

. The median number of days it took to sell a single-family home was 53.5 days in April 2007, compared with 42.5 days (revised) for the same period a year ago.

Regional MLS sales and price information is contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 35.3 percent, or 128 out of 363 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

. Statewide, the 10 cities and communities with the highest median home prices in California during April 2007 were: Manhattan Beach, $1,850,000; Los Altos, $1,710,000; Saratoga, $1,550,000; Burlingame, $1,500,000; Laguna Beach, $1,457,500; Newport Beach, $1,400,000; Los Gatos, $1,200,000; Santa Barbara, $1,200,000; Palos Verdes Estates, $1,180,000; Mill Valley, $1,112,500; Rancho Palos Verdes, $1,109,000.

. Statewide, the 10 cities and communities with the greatest median home price increases in April 2007 compared with the same period a year ago were: La Habra, 55.1 percent; Laguna Niguel, 26.2 percent; Los Gatos, 20 percent; Los Angeles, 19.8 percent; Moorpark, 18.7 percent; Dana Point, 18.2 percent; San Juan Capistrano, 17.1 percent; Redwood City, 15.3 percent; Ridgecrest, 13.9 percent; Walnut Creek, 13.6 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (http://www.car.org/) is one of the largest state trade organizations in the United States, with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

April 2007 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted

	Median Price	Percent Change in Price from Prior Month	Percent Change in Price from Prior Year	Percent Change in Sales from Prior Month	Percent Change in Sales from Prior Year
	Apr-07	Mar-07	Apr-06	Mar-07	Apr-06
Statewide
Calif. (sf)	$597,640	2.1%	6.2%	-13.3%	-27.8%
Calif. (condo)	$439,850	1.4%	1.8%	-12.3%	-19.4%
C.A.R. Region
Central Valley	$335,090	1.1%	-4.5%	-15.6%	-36.1%
High Desert	$317,420	-1.1%	-5.2%	-19.8%	-51.3%
Los Angeles	$596,310	2.0%	5.1%	-16.3%	-18.8%
Monterey Region	$787,950	8.0%	12.0%	-18.0%	-30.5%
Monterey County	$765,000	14.3%	12.8%	-27.2%	-36.1%
Santa Cruz County	$777,500	3.5%	4.5%	-8.1%	-24.9%
Northern California	$398,260	1.7%	-3.4%	-8.6%	-4.8%
Northern Wine Country	$608,970	1.2%	-4.7%	-14.2%	-17.8%
Orange County	$747,260	5.7%	2.5%	-25.8%	-28.9%
Palm Sprgs/Lwr Desert	$377,830	-3.1%	-1.8%	-12.0%	-38.1%
Riverside/S. Bernardino	$401,670	1.9%	1.5%	-21.0%	-44.6%
Sacramento	$361,850	-0.3%	-3.3%	-15.7%	-27.6%
San Diego	$610,970	0.8%	1.6%	-2.3%	-12.9%
San Francisco Bay	$843,710	7.4%	9.3%	-7.7%	-18.6%
San Luis Obispo	$607,140	10.3%	1.3%	-16.2%	-4.8%
Santa Barbara County	$809,210	-6.7%	4.9%	-4.2%	20.5%
S. Barbara So. Coast	$1,475,000	22.9%	18.0%	-11.1%	22.2%
No. S. Barbara County	$406,520	-0.2%	-10.8%	2.9%	10.9%
Santa Clara	$868,410	4.6%	12.1%	-0.4%	-16.9%
Ventura	$691,710	2.8%	1.5%	-12.4%	-20.8%

na - not available

*Based on closed escrow sales of single family, detached homes only (no condos). Reported month to month changes in sales activity may overstate actual changes because of the small size of individual regional samples. Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.

sf = single family, detached home

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Median Prices By Region - Current Month vs. Year Ago

	Apr-07	Mar-07		Apr-06
Statewide
Calif. (sf)	$597,640	$585,460	r	$562,820	r
Calif. (condo)	$439,850	$433,940	r	$432,200	r
C.A.R. Region
Central Valley	$335,090	$331,450		$350,760
High Desert	$317,420	$320,830		$334,860
Los Angeles	$596,310	$584,530	r	$567,480
Monterey Region	$787,950	$729,840		$703,570
Monterey County	$765,000	$669,000		$678,000
Santa Cruz County	$777,500	$751,000		$744,000
Northern California	$398,260	$391,460		$412,110
Northern Wine Country	$608,970	$601,560		$638,680
Orange County	$747,260	$706,650		$729,370
Palm Sprgs/Lwr Desert	$377,830	$389,760		$384,730
Riverside/S. Bernardino	$401,670	$394,370		$395,760	r
Sacramento	$361,850	$363,000		$374,360
San Diego	$610,970	$605,950		$601,070
San Francisco Bay	$843,710	$785,380		$772,110	r
San Luis Obispo	$607,140	$550,400		$599,360
Santa Barbara County	$809,210	$867,650		$771,740
S. Barbara So. Coast	$1,475,000	$1,200,000		$1,250,000	r
No. S. Barbara County	$406,520	$407,140		$455,560
Santa Clara	$868,410	$830,000		$775,000
Ventura	$691,710	$672,550		$681,190

na - not available
r - revised
Source: CALIFORNIA ASSOCIATION OF REALTORS®

Total Housing Starts Drop 24 Percent in April Big declines in four key areas account for most of the fall-off

Ray Kamel (RE/MAX All Stars) — Thu, 31 May 2007 23:06:30 -0500

A table listing housing starts by type and by metro area is available on the CBIA Web site. Need a local contact? See our list of local BIA/HBA media contacts in your area. SACRAMENTO - Total housing starts in California in April dipped well below production levels in March, falling 24 percent, the California Building Industry Association announced today. Construction on both single-family and multifamily homes lagged behind last month's production levels and also trailed when compared to the same period one year ago. In April, permits were pulled for 7,174 single-family homes statewide, down nearly 11 percent from the previous month and down 37 percent from April 2006, while multifamily housing starts - condos and apartments - totaled 3,181, down 42 percent from the previous month and down nearly 10 percent when compared to April 2006. Overall for the month, builders pulled permits for 10,355 homes, condos and apartments, according to statistics compiled by the Burbank-based Construction Industry Research Board. During the first four months of the year, production began on 43,418 homes and apartments, 28 percent less than last year's total. CBIA Chief Economist Alan Nevin said that about 50 percent of the decline this year in single-family housing production comes from the Riverside/San Bernardino and Sacramento markets, where commuters from nearby major markets are feeling the pain from high gas prices. "In the multifamily sector, total permits were down 22 percent during the first four months of the year, but 68 percent of the decline was in Los Angeles County and the Bay Area," Nevin said. "It's important to note that most of the state is modestly lagging behind 2006, with the big declines limited to a few select areas." Lower production statewide is not good news for prospective homebuyers struggling to buy their first home, as Nevin emphasized that the demand for the homes on the market today is not the same as the state's chronic need for new housing to accommodate its growing population. CBIA President and CEO Robert Rivinius added that the industry needs to build well over 200,000 new homes, condos and apartments a year to meet the need for housing. "While California needs new homes in all price ranges, the need is greatest in the entry-level market. With ever-rising fees and constraints put on new production, it's nearly impossible to meet the need in that market," Rivinius said. "The state needs between 220,000 and 240,000 new homes and apartments just to keep pace with the steady population growth of some 500,000 people a year. Unless we see some major reforms soon, it does not appear that we will reach those production levels anytime soon, which is extremely unfortunate."

Court of Appeal rules against attorney David Barry, says claims against C.A.R. were “fatally defective”

Ray Kamel (RE/MAX All Stars) — Wed, 23 May 2007 20:58:42 -0500

Case moving forward to discovery and litigation phases

LOS ANGELES (May 23) - The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today announced that the Court of Appeal, Fourth Appellate District, Division One has again ruled in favor of C.A.R. in its malicious prosecution complaint against attorney David Barry and plaintiff Arleen Freeman.

"Here, any reasonable attorney would have recognized the claims asserted in Freeman III were fatally defective on a whole host of grounds," said Presiding Justice Benke of the Court of Appeal, Fourth Appellate District, Division One in the unpublished opinion. "No reasonable attorney, conversant on any level with the holding in Freeman II, would construe these cases as in any manner supporting the notion that prior litigation conduct, including discovery abuses, itself amounts to a restraint on trade."

"In the end, it is the volume of fatal defects in the claims asserted in Freeman III which bring it within that narrow class of cases which all reasonable lawyers would agree lack merit," Justice Benke ruled. "From this circumstance a reasonable trier of fact could infer the principal purpose of Freeman III was to consume C.A.R. resources that might otherwise be available to other antitrust defendants or compel a settlement from all the defendants, including C.A.R. This inference of a collateral purpose would of course be supported by the complete lack of merit in Freeman III. Here, however, there is a great deal more which suggests malice towards C.A.R."

"C.A.R. was able to show a probability of success on each element of its malicious prosecution claim," Benke concluded.

C.A.R. filed the malicious prosecution action against Arleen Freeman and her attorney David Barry in September 2005. Barry filed a motion to strike C.A.R.'s malicious prosecution complaint, which the San Diego Superior Court denied in February 2006, agreeing with C.A.R.'s position that no reasonable attorney could think there could be another lawsuit on the same matter that had already been dismissed by the Federal District Court and the Federal Court of Appeals. The February 2006 court decision found that no reasonable attorney would file this suit and that C.A.R. demonstrated sufficient evidence of malice to go forward with the case against Barry.

In 1997, Freeman sued C.A.R. in federal court, lost on summary judgment, and a U.S. Court of Appeals upheld C.A.R.'s dismissal. Despite these clear rulings, Freeman re-filed against C.A.R. in the same federal court again and also sued the attorneys in the case. The U.S. Ninth Circuit Court of Appeal upheld all of the district court's dismissals in C.A.R.'s favor for the second time.

Barry has brought more than a dozen legal actions against C.A.R. and organized real estate for more than two decades, yet in these cases his clients have never obtained a judgment against associations of REALTORS® except in one case on a narrow legal issue pursuant to a settlement to avoid the costs of trial.

"The court's ruling is a solid win that puts C.A.R. in a very favorable position for the next phase of the litigation: discovery and then trial," said C.A.R. President Colleen Badagliacco. "We are very pleased with these results.

"Lawyers are required to have some legal basis for pressing a suit," she said. "State law prohibits malicious prosecution such as when litigants re-file the same matter against the same defendants, causing the defendants to incur attorneys' fees and costs to get it dismissed. At some point, litigation is supposed to be conclusive."

"The case against both Arleen Freeman and David Barry and Barry and Associates will now proceed," Badagliacco said. "We expect to continue to prevail."

The court's decision is available online at http://www.courtinfo.ca.gov/opinions/nonpub/D048441.PDF.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (http://www.car.org/) is one of the largest state trade organizations in the United States, with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. reports entry-level housing affordability at 25 percent in California

Ray Kamel (RE/MAX All Stars) — Wed, 23 May 2007 20:55:44 -0500

LOS ANGELES (May 17) The percentage of households who could afford to buy an entry-level home in California stood at 25 percent in the first quarter of 2007, compared with 26 percent for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.'s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $480,670 in California in the first quarter of 2007 was $96,910, based on an adjustable interest rate of 6.3 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,230 for the first quarter of 2007.

At 44 percent, the High Desert region was the most affordable in the state, followed by the Sacramento region at 43 percent. Santa Barbara was the least affordable region in the state at 12 percent, followed by the Monterey region at 19 percent.

Quarterly FTB-HAI historical data from 2003 - 2007 is available on C.A.R. Online at http://www.car.org/index.php?id=MzY0ODU.

Leading the way...® in real estate news and information for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (http://www.car.org/) is one of the largest state trade organizations in the United States, with nearly 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. FIRST-TIME BUYER HOUSING AFFORDABILITY INDEX *

	Q1 2007	Q4 2006		Q1 2006
California	25	25		26
California - Condos	38	37		36
United States	64	62	r	63	r
C.A.R. REGION
Central Valley	41	39	r	38	r
High Desert	44	41		41
Los Angeles County	20	19		21
Monterey Region	19	19	r	19
Northern California	37	37		32
Northern Wine Country	24	24		22	r
Orange County	25	24		23
Palm Sprgs/Lwr Desert	32	33	r	30
Riverside/SBernardino	36	34	r	35	r
Sacramento County	43	41		40	r
San Diego County	23	23		22	r
San Francisco Bay	24	25	r	25	r
San Luis Obispo County	21	22		18
Santa Barbara Area	12	19		13	r
Santa Clara County	27	29	r	29	r
Southern California	25	25	r	26	r
Ventura County	26	26	r	25	r
COUNTY
Alameda	25	25	r	25	r
Contra Costa	19	26		21	r
Fresno	44	42	r	41	r
Marin	21	22	r	21	r
Merced	46	41	r	37	r
Riverside	35	34	r	33	r
San Bernardino	39	36		39
San Francisco	18	19		20	r
San Joaquin	38	34	r	34	r
San Mateo	19	20	r	20	r
Santa Cruz	20	21	r	21
Sonoma	26	25	r	24
Stanislaus	40	37	r	37	r

* -- percentage of California households that can afford to purchase a median-priced home
Source: CALIFORNIA ASSOCIATION OF REALTORS®

	Housing Affordability Index	First-Time Buyer Median Price Q1 2007	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
California	25	$480,670	$3,230	$96,910
California - Condos	38	$363,210	$2,440	$73,230
United States	64	$180,460	$1,210	$36,380
C.A.R. REGION
Central Valley	41	$284,800	$1,910	$57,420
High Desert	44	$271,430	$1,820	$54,730
Los Angeles County	20	$501,390	$3,370	$101,090
Monterey Region	19	$604,970	$4,070	$121,980
Northern California	37	$332,140	$2,230	$66,970
Northern Wine Country	24	$504,950	$3,390	$101,810
Orange County	25	$592,660	$3,980	$119,490
Palm Sprgs/Lwr Desert	32	$320,120	$2,150	$64,540
Riverside/SBernardino	36	$343,770	$2,310	$69,310
Sacramento County	43	$310,670	$2,090	$62,640
San Diego County	23	$505,890	$3,400	$102,000
San Francisco Bay	24	$635,910	$4,270	$128,210
San Luis Obispo County	21	$480,280	$3,230	$96,830
Santa Barbara Area	12	$702,580	$4,720	$141,660
Santa Clara County	27	$669,800	$4,500	$135,050
Southern California	25	$474,960	$3,190	$95,760
Ventura County	26	$571,860	$3,840	$115,300
COUNTY
Alameda	25	$569,230	$3,830	$114,770
Contra Costa	19	$700,690	$4,710	$141,270
Fresno	44	$242,290	$1,630	$48,850
Marin	21	$839,010	$5,640	$169,160
Merced	46	$235,220	$1,580	$47,420
Riverside	35	$354,340	$2,380	$71,440
San Bernardino	39	$315,960	$2,120	$63,710
San Francisco	18	$704,230	$4,730	$141,990
San Joaquin	38	$323,530	$2,170	$65,230
San Mateo	19	$748,000	$5,030	$150,810
Santa Cruz	20	$626,450	$4,210	$126,310
Sonoma	26	$500,400	$3,360	$100,890
Stanislaus	40	$298,030	$2,000	$60,090

Source: CALIFORNIA ASSOCIATION OF REALTORS®

FORECLOSURE ACTIVITY DIPS 1 PERCENT IN APRIL

Ray Kamel (RE/MAX All Stars) — Thu, 17 May 2007 03:04:51 -0500

Foreclosure Filings Still Up 62 Percent From April 2006

IRVINE, Calif. - May 15, 2007 - RealtyTrac®, today released its April 2007 U.S. Foreclosure Market Report, which shows a total of 147,708 foreclosure filings - default notices, auction sale notices and bank repossessions - were reported during the month, down about 1 percent from the previous month but up 62 percent from April 2006. The report also shows a national foreclosure rate of one foreclosure filing for every 783 U.S. households during the month.

RealtyTrac publishes the largest and most comprehensive national database of pre-foreclosure and foreclosure properties, with over 900,000 properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal's Real Estate Journal.

"After hitting a two-year high in March, U.S. foreclosure activity slipped slightly lower in April," said James J. Saccacio, chief executive officer of RealtyTrac. "Last year foreclosure activity subsided somewhat during the spring and summer months, thanks in part to increased interest from buyers. Whether the decrease in April is the beginning of a similar trend this year remains to be seen, but we expect foreclosure activity to at least stay above last year's levels for the remainder of 2007, fueled by a combustible mix of risky loans taken out in the last few years - many in the subprime market - and slowing home price appreciation."

Nevada, Colorado, Connecticut post top foreclosure rates
Nevada reported 3,737 foreclosure filings during April, a foreclosure rate of one foreclosure filing for every 232 households - highest among the 50 states for the fourth month in a row and more than three times the national average. The state's foreclosure activity decreased 21 percent from the previous month but was up more than 200 percent from April 2006.

Colorado's foreclosure rate of one foreclosure filing for every 314 households was second highest among the states despite a 7 percent decrease in foreclosure activity from the previous month. The state reported 5,826 foreclosure filings during April, the eighth most of any state and a 57 percent increase from April 2006.

Connecticut's foreclosure rate leapfrogged to third highest among the states in April. The state reported 4,207 foreclosure filings during the month, a foreclosure rate of one foreclosure filing for every 329 households - more than twice the national average. Connecticut's dramatic increase is due in part to more rigorous data collection activities implemented by RealtyTrac in the state during April.

Other states with foreclosure rates ranking among the nations 10 highest in April were California, Ohio, Georgia, Florida, Arizona, Illinois and Michigan.

California, Florida, Ohio document largest foreclosure totals
With 30,505 foreclosure filings reported in April, California documented the largest foreclosure total of any state for the fourth month in a row. The state's foreclosure activity decreased about 3 percent from the previous month but was up more than 200 percent from April 2006, resulting in a foreclosure rate of one foreclosure filing for every 400 households - fourth highest among the states and nearly twice the national average.

Florida reported 14,318 foreclosure filings in April, the second largest state total and a foreclosure rate of one foreclosure filing for every 510 households - seventh highest among the states and 1.5 times the national average. The state's foreclosure activity increased less than 1 percent from the previous month and was up nearly 72 percent from April 2006.

Ohio's foreclosure activity surged in April, up 39 percent from the previous month and up 135 percent from April 2006, pushing the state's foreclosure total to third largest in the nation. The state reported 11,431 foreclosure filings during the month, a foreclosure rate of one foreclosure filing for every 418 households - 1.9 times the national average.

Other states with foreclosure totals among the nation's 10 highest in April were Texas, Illinois, Georgia, Michigan, Colorado, Connecticut and Arizona.

Top metro foreclosure rates
For the second month in a row, six out of the 10 cities with the nation's highest metro foreclosure rates were located in California. Stockton, Calif., again registered the nation's highest metro foreclosure rate, one foreclosure filing for every 131 households - nearly six times the national average. Other California cities with foreclosure rates in the top 10 included Vallejo-Fairfield at No. 2, Riverside-San Bernardino at No. 4, Modesto at No. 6, Sacramento at No. 7, and Merced at No. 8.

Two Colorado cities registered foreclosure rates among the top 10: Greeley ranked No. 3, with one foreclosure filing for every 165 households; and Denver ranked No. 10, with one foreclosure filing for every 236 households.

Other cities with foreclosure rates among the top 10 were Las Vegas - No. 5 with one foreclosure filing for every 179 households - and Akron, Ohio - No. 9 with one foreclosure filing for every 216 households.

The RealtyTrac Monthly U.S. Foreclosure Market Report provides the total number of foreclosure filings - both nationwide and by state - over the preceding month. Data is also available at the individual county level. RealtyTrac's report includes documents filed in all three phases of foreclosure: Default - Notice of Default (NOD) and Lis Pendens (LIS); Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank).

U.S. Foreclosure Market Statistics by State - April 2007

Rate Rank	State Name	NODs	NTSs	NFSs	LISs	REOs	Total	1 for every #HH	%Change from Mar 2007	%Change from Apr 2006
--	United States	47,171	49,795	7,388	21,085	22,269	147,708	783	-0.97	62.02
29	Alabama	2	365	0	0	532	899	2,184	11.54	244.44*
31	Alaska	0	80	0	0	7	87	2,358	-11.22	3.57
8	Arizona	0	8	3,489	5	627	4,129	530	-7.75	142.74
14	Arkansas	14	1,161	0	0	87	1,262	930	149.90	65.18
4	California	24,305	4,200	0	0	2,000	30,505	400	-2.96	245.12
2	Colorado	37	4,787	0	0	1,002	5,826	314	-7.04	57.20
3	Connecticut	3,674	164	0	0	369	4,207	329	177.32*	198.79*
45	Delaware	3	4	0	0	25	32	10,721	-77.62	88.24*
	DC	0	6	0	0	0	6	45,808	20.00	-53.85
7	Florida	0	31	2,424	11,207	656	14,318	510	0.10	71.47
6	Georgia	1	5,251	0	0	1,899	7,151	433	5.64	38.85
44	Hawaii	4	56	0	0	6	66	6,978	1.54	43.48
20	Idaho	214	199	0	0	11	424	1,240	19.44	123.16
9	Illinois	0	114	742	6,819	623	8,298	589	6.13	28.63
11	Indiana	1,296	1,909	0	0	806	4,011	630	-7.41	-6.92
38	Iowa	20	253	0	0	162	435	2,833	-25.00	136.41*
37	Kansas	126	279	0	0	0	405	2,785	-9.40	-7.11
33	Kentucky	97	412	0	0	184	693	2,526	-1.00	15.69
39	Louisiana	11	508	0	0	35	554	3,399	-4.32	583.95*
42	Maine	14	95	0	0	4	113	5,769	73.85	769.23*
28	Maryland	487	503	0	0	55	1,045	2,050	8.29	144.73
18	Mass.	1,486	662	0	0	0	2,148	1,221	-38.58	273.57*
10	Michigan	1,423	3,847	0	0	1,606	6,876	614	-20.14	30.50
32	Minnesota	84	578	0	0	172	834	2,480	3.22	82.49
48	Mississippi	1	83	0	0	1	85	14,927	-9.57	93.18*
17	Missouri	822	866	0	0	588	2,276	1,071	-8.74	127.83*
40	Montana	0	104	0	0	7	111	3,712	-5.13	48.00
34	Nebraska	4	223	0	0	46	273	2,632	-23.53	137.39*
1	Nevada	2,263	956	0	0	518	3,737	232	-21.13	224.39
21	New Hampshire	0	345	0	0	66	411	1,331	257.39	3,325.00*
16	New Jersey	2,560	396	0	4	162	3,122	1,060	-34.69	61.34
36	New Mexico	204	44	0	0	34	282	2,768	-13.50	-59.89
25	New York	0	18	733	3,050	298	4,099	1,874	10.46	-2.78
19	North Carolina	1,959	141	0	0	757	2,857	1,232	-11.85	54.68
49	North Dakota	1	2	0	0	9	12	24,139	-50.00	140.00
5	Ohio	2,941	4,945	0	0	3,545	11,431	418	39.03	135.21
22	Oklahoma	407	472	0	0	219	1,098	1,361	-3.51	-5.02
26	Oregon	514	191	0	0	31	736	1,978	-1.47	-19.30
30	Pennsylvania	302	1,825	0	0	263	2,390	2,197	-18.18	-1.57
24	Rhode Island	1	269	0	0	0	270	1,629	-14.56	143.24*
43	South Carolina	15	101	0	0	176	292	6,002	-14.12	-57.31
47	South Dakota	0	26	0	0	0	26	12,431	-18.75	-18.75
13	Tennessee	762	1,777	0	0	858	3,397	722	6.89	30.00
12	Texas	41	8,008	0	0	3,375	11,424	705	-10.44	-17.39
15	Utah	211	523	0	0	74	808	951	27.04	-43.02
50	Vermont	0	1	0	0	0	1	294,382	0.00	-66.67
27	Virginia	379	920	0	0	156	1,455	1,984	38.05	394.90
23	Washington	13	1,623	0	0	120	1,756	1,396	1.15	7.20
41	West Virginia	0	175	0	0	0	175	4,826	84.21	250.00
35	Wisconsin	473	281	0	0	86	840	2,741	1.57	21.92
46	Wyoming	0	8	0	0	12	20	11,193	100.00	11.11

SIGNS OF MODERATION IN INFLATION ALLOWS MORTGAGE RATES TO EDGE LOWER FOR FIRST TIME IN SIX WEEKS

Ray Kamel (RE/MAX All Stars) — Tue, 24 Apr 2007 00:33:48 -0500

McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.17 percent with an average 0.5 point for the week ending April 19, 2007, down from last week when it averaged 6.22 percent. Last year at this time, the 30-year FRM averaged 6.53 percent.

The 15-year FRM this week averaged 5.89 percent with an average 0.5 point, down slightly from last week when it averaged 5.90 percent. A year ago, the 15-year FRM averaged 6.17 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.92 percent this week, with an average 0.6 point, down slightly from last week when it averaged 5.93 percent. A year ago, the 5-year ARM averaged 6.16 percent.

One-year Treasury-indexed ARMs averaged 5.45 percent this week with an average 0.7 point, also down slightly from last week when it averaged 5.47 percent. At this time last year, the 1-year ARM averaged 5.63 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Mortgage rates slipped following the latest reports of moderation in inflation rates from the core producer price and consumer price indexes," said Frank Nothaft, Freddie Mac vice president and chief economist. "Excluding food and energy, the core inflation rate for consumer prices rose 2.5 percent year-over-year, the smallest annual growth since May 2006. This helped calm markets and brought mortgage rates down.

"The low mortgage rates that have prevailed so far in 2007 may have a stabilizing effect on the housing sector. Both housing starts and new permits for March came in above expectations, but February's housing starts numbers were revised downward. Because of weather-induced fluctuations in housing statistics, we will have to see what the numbers show later in the Spring to gauge whether the March readings are indeed a signal of market turnaround."

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than four million renters in America.

SUMMARY OF SURVEY RESULTS

Fixed-Rate Mortgages
Average Conventional 30-Year Commitment Rate Fees & Points Average Conventional 15-Year Commitment Rate Fees & Points
US 6.17 0.5 5.89 0.5
Northeast 6.24 0.2 5.95 0.2
Southeast 6.12 0.6 5.84 0.7
N. Central 6.22 0.3 5.94 0.3
Southwest 6.17 0.5 5.92 0.5
West 6.12 0.7 5.85 0.8

Five/One-Year Adjustable-Rate Mortgages
First Commitment Rate Fees & Points Margin
US 5.92 0.6 2.77
Northeast 5.99 0.4 2.78
Southeast 5.86 0.8 2.76
N. Central 5.97 0.4 2.76
Southwest 5.91 0.7 2.77
West 5.88 0.8 2.77

One-Year Adjustable-Rate Mortgages
First Commitment Rate Fees & Points Margin
US 5.45 0.7 2.77
Northeast 5.63 0.6 2.76
Southeast 5.45 0.9 2.78
N. Central 5.40 0.4 2.75
Southwest 5.29 0.8 2.79
West 5.38 0.7 2.78

Freddie Mac defines its regions as follows:
Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, PR, ME, NH, VT, MA, RI, CT, VI
Southeast: NC, SC, TN, KY, GA, AL, FL, MS
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU
Freddie Mac's Primary Mortgage Market Survey (PMMS) is for informational purposes only and Freddie Mac is not responsible for business decisions made based on the reported results of the PMMS. Freddie Mac may change the methodology used to conduct the PMMS survey at any time and without notice.
DEFINITIONS
Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.
ARM Index - is the One-year Treasury
Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.
Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.
Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.
Weighted Averages for the Primary Mortgage Market Survey have been adjusted as of October 26, 2006. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under Home Mortgage Disclosure Act (HMDA) for 2005. The weights are listed in the table below.
Freddie Mac Region PMMS Weights
Northeast 24.5
Southeast 18.6
North Central 15.4
Southwest 10.4
West 31.0

Fixed-Rate Mortgages
US	6.17	0.5	5.89	0.5
Northeast	6.24	0.2	5.95	0.2
Southeast	6.12	0.6	5.84	0.7
N. Central	6.22	0.3	5.94	0.3
Southwest	6.17	0.5	5.92	0.5
West	6.12	0.7	5.85	0.8

Five/One-Year Adjustable-Rate Mortgages
US	5.92	0.6	2.77
Northeast	5.99	0.4	2.78
Southeast	5.86	0.8	2.76
N. Central	5.97	0.4	2.76
Southwest	5.91	0.7	2.77
West	5.88	0.8	2.77

One-Year Adjustable-Rate Mortgages
US	5.45	0.7	2.77
Northeast	5.63	0.6	2.76
Southeast	5.45	0.9	2.78
N. Central	5.40	0.4	2.75
Southwest	5.29	0.8	2.79
West	5.38	0.7	2.78

Freddie Mac Region	PMMS Weights
Northeast	24.5
Southeast	18.6
North Central	15.4
Southwest	10.4
West	31.0

PRIMARY MORTGAGE MARKET SURVEY RESULTS
April 19, 2007

30-Year Fixed Rate Mortgages
US NE SE NC SW W
Average 6.17 6.24 6.12 6.22 6.17 6.12
Fees & Points 0.5 0.2 0.6 0.3 0.5 0.7

15-Year Fixed Rate Mortgages
US NE SE NC SW W
Average 5.89 5.95 5.84 5.94 5.92 5.85
Fees & Points 0.5 0.2 0.7 0.3 0.5 0.8

5/1-Year Adjustable Rate Mortgages
US NE SE NC SW W
Average 5.92 5.99 5.86 5.97 5.91 5.88
Fees & Points 0.6 0.4 0.8 0.4 0.7 0.8

1-Year Adjustable Rate Mortgages
US NE SE NC SW W
Average 5.45 5.63 5.45 5.40 5.29 5.38
Fees & Points 0.7 0.6 0.9 0.4 0.8 0.7

The National Mortgage Rate Snapshot
One Year Ago One Week Ago
30-YR 15-YR 5/1-YR 1-YR ARM 30-YR 15-YR 5/1-YR 1-YR ARM
Average 6.53 6.17 6.16 5.63 6.22 5.90 5.93 5.47
Fees & Points 0.6 0.5 0.8 0.9 0.4 0.4 0.5 0.5

30-Year Fixed Rate Mortgages
Average	6.17	6.24	6.12	6.22	6.17	6.12
Fees & Points	0.5	0.2	0.6	0.3	0.5	0.7

15-Year Fixed Rate Mortgages
Average	5.89	5.95	5.84	5.94	5.92	5.85
Fees & Points	0.5	0.2	0.7	0.3	0.5	0.8

5/1-Year Adjustable Rate Mortgages
Average	5.92	5.99	5.86	5.97	5.91	5.88
Fees & Points	0.6	0.4	0.8	0.4	0.7	0.8

1-Year Adjustable Rate Mortgages
Average	5.45	5.63	5.45	5.40	5.29	5.38
Fees & Points	0.7	0.6	0.9	0.4	0.8	0.7

The National Mortgage Rate Snapshot
Average	6.53	6.17	6.16	5.63	6.22	5.90	5.93	5.47
Fees & Points	0.6	0.5	0.8	0.9	0.4	0.4	0.5	0.5

Should you move or remodel?

Ray Kamel (RE/MAX All Stars) — Thu, 19 Apr 2007 01:00:11 -0500

It happens suddenly, over a cup of coffee and the morning newspaper, or perhaps as you make your way across the obstacle course of clutter that was once your living room. Your house doesn't fit your needs, and you can't deny it anymore.

It's time to make a hard decision, one potentially worth thousands of dollars. Should you move, or should you remodel? Dan Fritschen, the author of "Remodel or Move," says the typical family faces this decision several times in life. The first milestone tends to be when children arrive. "The standard American lifestyle is to buy a starter house, but when kids come along that starter house may not be big enough anymore," Fritschen says.

Children become teens, and shared accommodations soon feel more like an invasion of privacy than a slumber party. Within a few years a third challenge hits: college. As children move away for school or into their own apartments, the large, teenager-friendly house suddenly feels too big. It may be time to downsize or perhaps convert Junior's bedroom into that hobby utopia you'd always dreamed about.

Finally, families often face the prospect of becoming caretakers for an aging relative, or perhaps a spouse falls ill and the home needs to become more accessible. Time for yet another change.

Should I stay or go?

The problem is that there is no single motive for each choice and precious little reliable professional help in making that decision. "Contractors won't give you an unbiased opinion because they want the work," Fritschen says. "Real estate agents have a financial stake in you moving. They aren't paid to help you make decisions."

Housing economist Robert Sheehan, the president of Regis J. Sheehan and Associates in Woodbridge, Va., says the best place for a family to start its evaluation is with the physical layout of its existing property. Many communities put limits on how big a house can be in relation to its plot of land.

"A number of homes are already being built to the dimensions of what can be done," Sheehan says. If your house is as large as it can be, planning an addition would be out of the question -- you will need to work within your existing footprint or move. On the other hand, just because you are able to expand your home doesn't mean it's a good financial move.

First, get a cost estimate. Then figure how much that work would add to your home's value. Finally, compare your new value with comparable home prices in your neighborhood. "In some neighborhoods, you just won't get your investment back," Sheehan says.

Home values are falling across the country now, too. Homeowners should tread with extreme caution if they own one of the most expensive houses on the block. "You don't want to create a white elephant," says Ilyce Glink, a syndicated financial columnist. "White elephants are worthless. You have to look out and say 'I don't want to put $300,000 into a house if in five years the house won't be worth $250,000.' "

Fritschen agrees. "Almost without exception, if you have a viable neighborhood and if you are bringing your home up to or slightly above neighborhood standards, from the financial side, you almost can't go wrong by renovating," he says. "On the other hand, if you already have the biggest, nicest house in the neighborhood, then to go in and change that house has some drawbacks. You won't get it back on resale."

That's because neighborhoods support only so much expense for a particular house. If homebuyers want to spend $500,000 on a house, they will spend it in a neighborhood filled with other $500,000 or even $1 million homes, rather than $250,000 homes, Fritschen says.

The worst-case scenario would be doing a renovation and ending up with a home worth less than you put in plus an outstanding mortgage balance, and then being forced to move because of a job change or other life event. "It really depends on where your market is. You might not get your investment back," Sheehan says.

When to remodel

Expensive as it is to remodel, it is tempting to think moving is the safest bet. But that can be far from true.

"In moving, there is no payback. It is a pure expense," Fritschen says. "You end up writing an average of $40,000 in checks, and no matter where you move, that money is gone. It doesn't increase your net worth -- it is just gone."

People often underestimate the true costs of buying a new home. Real estate commissions, financing charges, moving costs, utility deposits and other unexpected bills pile up. Then there's the tax shock: "A lot of places don't necessarily reset your property tax every year for every homeowner," Fritschen says. "When you move, it may go up dramatically. That may still be a consideration when you remodel, but generally not as much."

Comparatively, a remodeled home could appreciate by $100,000 or even $150,000, depending on what changes the owner makes, offsetting the expense of sprucing things up. The remodel could end up being financially neutral even after borrowing a huge sum to pay for renovations. Even if renovating makes sense, ask if you are financially ready to lay out the amount of cash required to do the work. A $100,000 addition might increase the value of your home dollar for dollar, but if you can't afford that cash upfront, you will never get the job off the ground.

One way to ensure you keep your remodeling job in touch with reality is to consult the annual list published by Remodeling magazine and the National Association of Realtors. The list evaluates how much return you can expect from a given home improvement. Some jobs, such as regular maintenance, better siding and minor bathroom renovations, for instance, return more than 80 cents in value for every dollar spent. Others, such as adding a sunroom or a pool, return less than 60 cents on the dollar, or worse. "Anything beyond what you will get back through appreciation is a true expense," Fritschen says.

The difference is a question of land value versus structure value. "Land appreciates the most, the house not as much," Fritschen says. So staying on your existing property and improving the home itself could mean a substantial tax savings compared with moving to a new home where the taxable value could increase.

A decision to remodel or move comes down partly to emotions and partly to finances. "One of the first things you should ask yourself is if you really like the location your house is in right now," Fritschen says. Consider your neighborhood, the schools and whether your home is average or below cost for neighborhood.

"If you like all of those aspects, then it is likely you can remodel and keep the things you like and improve on the things you might not like so much, size, amenities, things like that," Fritschen says.

But even if you are in love with an area and you would certainly get your money back, columnist Glink says, it might not make sense for some people to commit to a potentially life-changing remodel. "You really need to be honest with yourself," she says. "Do you want to go through the mess and headache of a remodel? You have to realize, things will go wrong. It will cost more than you thought. It will be a nightmare. And then when it is done, it will be beautiful."

When to move

Even with the increase in home value that a renovation can deliver, there are some things you just can't renovate away. "Look at land size, location, schools, neighborhoods filled with ugly houses and no trees, those are things you can't change readily," Fritschen says. If those are the issues you want remedied, then a move might make the most sense. "If you've always dreamed about living at the top of a hill, there is nothing you can do to change your flat street," Fritschen says.

Hating your neighborhood might not be the only reason you would want to go house hunting. "Say your house was built in the 1950s and they used lead paint. Does your state law require you to strip the paint? Do you have to move out while the work is ongoing? What if you have asbestos insulation? These are things you might not want to touch," Glink says.

Moving isn't all that much easier than remodeling, but it is quicker. "Remember, you have to pack up. You have to unpack," Fritschen says. "Selling a home is also invasive. But we have all moved before, so we are more comfortable with that transaction. You just need to weigh what you would hate less."

Sheehan conducted a study in 1998 commissioned by The Wall Street Journal that showed that maintaining a typical home more than 30 years often costs more than four times the original purchase price. A daunting figure, but Sheehan warns that maintenance alone is no reason to move. "The repair costs may be deferred in a new home, but you have to remember that a bigger house takes more upkeep, and you may not be getting the benefit you think you are by moving," Sheehan says.

If you are moving to an existing home, rather than new construction, not only will it be bigger, it will also likely have the same maintenance issues your old house did but on a larger scale. "It may even cost you even more," Sheehan says.

The emotional bottom line

With some financial decisions it makes sense to remove yourself emotionally and just do a cost analysis. Yet financial planner Ray Ferrara, the president and CEO of ProVise Management Group in Clearwater, Fla., says that a house is a different matter.

"A home, while an investment, is really about lifestyle first and an investment second," he says. "The decision of moving versus remodeling is: Does your current home, if remodeled, make you happy? If your home, even if remodeled, doesn't meet your needs, and if you can afford something else, then move."

Ferrara says many of his middle-age clients decide that moving makes more sense, even at a cost, because they are now in a position in their lives to pay a premium for happiness. "In your 20s or 30s you can't buy the home you want and are forced to buy something that might be smaller and less glamorous than you would like," he says. "But most of us come home seven days a week. And if you come in and say, 'I love this place,' then there is a lot you can overlook. But if you walk in and say 'I hate this place,' then move."

The best thing to do often is to take a close look at what is getting under your skin, and if you can get a few more years out of the home with a remodel, that could be your best bet, Fritschen says. "I encourage people to step back and see the big picture rather than looking at any one thing," he says. "Don't say, 'Oh, my kitchen needs to be updated, I want to move.' "

Housing starts rose 0.8 percent in March

Ray Kamel (RE/MAX All Stars) — Wed, 18 Apr 2007 00:51:07 -0500

WASHINGTON (Reuters) - The pace of U.S. home construction rose 0.8 percent in March to a rate that beat analysts' predictions but the rise was well below the previous month's increase and the rate was sharply off the year-ago figure, a government report showed on Tuesday.

The Commerce Department said housing starts set an annual pace of 1.518 million units in March compared with a 1.506 million unit pace in February. Economists had forecast March housing starts to drop to a 1.495 million unit pace from February's originally reported 1.525 million units.

Building permits, which signal future construction plans, also rose 0.8 percent to a 1.544 million unit pace. Economists were expecting building permits to register a 1.510 million unit pace, down from the 1.532 million in February.

Last month's permits figure was off 25.9 percent from the March 2006 pace of 2.085 million units.

Meanwhile, housing completions were off 25.9 percent in March from a year ago at a 1.632 million unit pace -- the biggest percentage decline since June 1982.

The middling housing data comes a day after a private survey of homebuilders showed that they took a gloomy view of the market in April.

The National Association of Homebuilders/Wells Fargo Housing Market Index dropped to 33 this month from 36 in March. That was the second consecutive monthly fall and its lowest since December when it also came in at 33.

Readings below 50 indicate more builders view market conditions as poor rather than favorable.

Landscaping works wonders for privacy, beauty

Ray Kamel (RE/MAX All Stars) — Wed, 18 Apr 2007 00:49:26 -0500

In their unique book, "Outside the Not So Big House; Creating the Landscape of Home," best-seller author Sarah Susanka and noted landscape designer Julie Moir Messervy team up to show landscape ideas for "completing" modest-sized homes. Along the way, they share the benefits of sound landscape techniques to create enjoyable outdoor spaces that are both attractive and practical.

A special feature is the authors explain how they created the landscaping, often to meet the special requests of the homeowners. In other homes, Susanka and Messervy share how they combine landscape methods to accomplish a goal.

My favorite is "blurring the boundary," where Susanka's home architecture is blended with Messervy's landscape design.

As usual with the beautiful Taunton Press books, the color photos make this "coffee table"-quality book come to life to illustrate the thoughts of the authors. Photographer Grey Crawford did a superb job of showing what is explained in the text.

Unfortunately, not much attention is paid to the unique, interestingly designed homes that could have been the topic of an accompanying book. Frankly, the homes shown only from the outside look as interesting as their landscaping.

Most of the homes, and their landscaping, appear to be several years old so the landscaping has "matured" and is virtually full-grown. What makes the narrative explanation so valuable is that the authors share what they tried to accomplish to blend landscaping with the house.

To give the reader a perspective, each house shown includes a landscape design plan that reveals the overall yard landscaping in relation to the house. Both old and new houses are shown, often with updated landscaping to bring out the strong points of the older houses.

Although emphasis is on homes located on larger parcels, many houses shown are on city sidewalks with attractive landscaping used to accomplish specific goals, such as privacy. However, usually the backyards are shown, where landscaping adds special benefits, like a joining of the house to the outdoors.

This is one of the very few home design books to emphasize the importance of landscaping to enhance a home's atmosphere both inside and outside. Most of the homes are not brand-new, showing what can be done with modest-sized older houses to make them more attractive with landscape techniques.

Chapter topics include: "Playing Up the Corners"; "The Attraction of Opposites"; "Variation on a Theme"; "The World Behind the Walls"; "A Landscape of Stone"; "Good Fences"; "Rooms Inside and Out"; "Garden of Earthly Delights"; "Three Cabins in a Forest"; "At Home on the Range"; and "A Cottage in the City." The Appendix includes a house-by-house list of the architects and landscape designers.

Just as every house is unique, the premise of this book is that home landscaping should also be special to bring out the residence's best features (or hide its drawbacks). The authors share what their goals were and in most cases they appear to have used effective landscaping to bring out the best features of each home. On my scale of one to 10, this outstanding new book rates a solid 10.

The following column from Bruss' "Best of" collection first appeared Sunday, March 12, 2006.

Mortgage defaults in California near decade high

Ray Kamel (RE/MAX All Stars) — Tue, 17 Apr 2007 01:26:31 -0500

REUTERS: The number of mortgage default notices sent to California homeowners last quarter rose to its highest in nearly 10 years as home prices stagnated and rates on adjustable loans pushed higher, a report released on Monday said.

Mortgage lenders filed 46,760 notices of default from January through March, marking an increase of 23.1 percent from the previous quarter and 148 percent from the year-earlier period, according to a report by DataQuick Information Systems, a real estate information service.

The first quarter's default level was the highest for the most populous U.S. state since the second quarter of 1997. It came amid a sharp rise in defaults on mortgages held by subprime borrowers, or borrowers with blemished credit, across the United States.

The low introductory interest rates on the their mortgages have been expiring, replaced by much higher rates that have made monthly mortgage payments too expensive for many households to maintain. Additionally, their options for refinancing their mortgages have been limited because home prices in many markets have been largely flat or slipping.

Many analysts say a surge of foreclosures is in the making and that it will weigh an already sluggish housing market and may slow the broader economy.

"Defaults tend to happen after a certain length of time and today's activity reflects a peak in the number of home loans made back in the summer of 2005. Additionally, the loans being made back then were riskier because of the subprime activity, as well as higher appreciation rates. It's easier to make a loan when the security for that loan is going up in value, than when values are flat," said Marshall Prentice, president of DataQuick.

RISKIEST LOANS INLAND

Most mortgages in California that went into default in the first quarter were originated between April 2005 and May 2006 and their median age was 15 months.

According to DataQuick, mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties, three affluent coastal markets with a tight supply of housing that has helped prevent home prices from slipping.

The likelihood of default was highest in inland Sacramento, Riverside and San Joaquin counties, where prospective first-time home buyers rushed in during the housing boom in search of relatively affordable housing.

Squeezed from pricey coastal markets, many Californians moved to such interior areas and used adjustable-rate mortgages to purchase houses in scores of new-home developments. They now are facing higher interest rates on their loans and rising mortgage payments while home values in those markets decline.

"It's hard for me to say whether or not the damage is done in those areas," said economist Alan Gin of the University of San Diego's Burnham-Moores Center for Real Estate.

"It probably won't be until 2008 before we seen some improvement," Gin said, referring to California's default trend. "I anticipate the Federal Reserve will cut interest rates in late 2007 and into 2008, and I expect that will help give some support to the housing market."

By Jim Christie -Copyright © 2007 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Ways Realtors Can Cut Taxes and Save Real Money

Ray Kamel (RE/MAX All Stars) — Tue, 17 Apr 2007 01:22:01 -0500

Looking for a valuable, tax-favored way to help minimize your current and future taxes, as well as build real wealth for your entire family?

You may need to super charge your retirement plans.

Retirement plans are one of the best legal tax savings strategies for most self-employed real estate agents, and a real estate agency of any size can help provide these valuable benefits to themselves and to their employees, while at the same time reducing their total tax bill.

Real estate agency owners can establish tax favored benefit programs for themselves and all of their employees, including family members who they have hired to work full or part-time.

Retirement plans for your real estate agency: If you are a self-employed real estate agent, even if you only get 1099's, even if it is only a side line business, you can establish multiple types of retirement plans within the same company. You are allowed to make tax deductible contributions to your retirement accounts through your business as a tax deductible expense. You can set up these plans, in addition to receiving retirement benefits, such as (401k Plans, Pension Plans, 403b Plans, 457 Plans) from your other employers.

If the self-employed person is at least 50 years of age, they can put away as much as $50,000 of combined contributions in just one type of plan. If you company is set up as a real estate team, you could feasible shield as a $100,000 in retirement accounts. Do you know how much retirement savings that would grow to, before you had to start taking qualified withdrawals? The retirement account balance could easily be rolled over into a special type of IRA to purchase real estate as an investment in their IRA.

Now you can start picking up some of those rental properties, you know will be good cash flowers, or have the potential for substantial appreciation. There are companies now that will lend your commission on the sale of the property, which you can use as the closing costs to purchase these properties. By using your existing IRA funds to purchase the properties, all of the earnings will be growing tax-deferred inside your IRA, just like your current retirement savings plans do as well.

If your income is much larger and more consistent, you could set and fund a pension plan defined benefit plan for yourself and all of your employees that could feasible give you a pension of up to $180,000 a year, per person. This is in addition to any other qualified benefits that your company has adopted for its employees.

If your real estate agency is larger and you have employees who are not related, there are additional planning options for you and your company to consider. Before implementing any of these strategies, please consult a tax professional.

Even if your real estate agency does not currently have a 401(k), Keogh or other qualified plan that had been established by the end of 2006, you still have time to set up a simplified employee pension (SEP) plan to be included on your 2006 income tax return. If you do some planning right now, you will not have to make the contribution until the extended due date of your 2006 income tax return. That means you do not have to deposit the funds until October 15th, 2007. By adopting this strategy, you could save as much as $3,000 in taxes, while at the same time putting away $9,200 into a tax-deferred retirement.

There was some good new for Realtor's 401(k) plans in 2006, a new type of retirement plan has became available, the new "Roth 401(k) Plan." Just like your Roth IRA, you use after-tax dollars to make the contributions, but at much larger contribution amounts and no income phase out limit. This gives to the 401(k) plan, the same tax treatment as the five year old Roth IRA. Essentially, employees will be able to designate their elective deferrals as an after-tax contribution and when the funds are finally withdraw, they will be completely tax-free.

The new "Roth 401(k)" retirement plan looks more attractive for Realtors who do need to touch the retirement accounts for many years -- spouses, children, and grand children are some possible planning options.

While the funds contributed to the Roth 401(k) are taken out after-tax, they are taxed at today's lower marginal tax rates. Under certain conditions, this can be very beneficial to a Realtor, if they expect to be in a higher tax bracket at their anticipated date of withdrawal.

Thus, a business may want to adopt the Roth 401(k) plan as part of its regular 401(k) plan. The Roth 401(k) plan works just like your current 401(k) plan any of your elective deferral contributions are made just like your normal contributions. Employees of the real estate agency, can contribute their elective deferral ($20,500 for 2007 if you age 50 or older) to their Roth 401(k), just like they would normally contribute under a traditional 401(k) plan. The key difference between a Roth 401(k) and a traditional 401(k) plan is that the employee will pay taxes on the current contribution, but when the play is qualified will never have to pay taxes on the growth or the withdrawals. These funds could grow until withdrawn 50 years later, completely tax-free.

Employers may also allow their employees to establish and make contributions to separate IRA accounts within the employer's qualified plan.

As IRA accounts, these accounts will not be subject to the complex rules that apply to most qualified plans, greatly simplifying their administration to the employer.

The IRA may be either set-up as regular or Roth IRA. The new law also allows for increases in the contribution limit for IRAs to $4,000 in 2007 and $5,000 in 2008, plus if you are age 50 or older, you may be able to contribute an additional $1,000 catch-up contribution, if you qualify.

You still have time to set up a retirement account for your 2006 Tax Year and save taxes while doing it. Contributions that are made to your SEP IRA retirement account can be deducted on your 2006 Income Tax Return as a dollar-for-dollar income deduction, even though they do not have to be paid until almost the end of 2007. Now is the best time to start planning for next year's taxes and set up some of these accounts for your business.

Fixed-Rate Mortgages
	Average Conventional 30-Year Commitment Rate	Fees & Points	Average Conventional 15-Year Commitment Rate	Fees & Points
US	6.17	0.5	5.89	0.5
Northeast	6.24	0.2	5.95	0.2
Southeast	6.12	0.6	5.84	0.7
N. Central	6.22	0.3	5.94	0.3
Southwest	6.17	0.5	5.92	0.5
West	6.12	0.7	5.85	0.8

Five/One-Year Adjustable-Rate Mortgages
	First Commitment Rate	Fees & Points	Margin
US	5.92	0.6	2.77
Northeast	5.99	0.4	2.78
Southeast	5.86	0.8	2.76
N. Central	5.97	0.4	2.76
Southwest	5.91	0.7	2.77
West	5.88	0.8	2.77

The National Mortgage Rate Snapshot
	One Year Ago				One Week Ago
	30-YR	15-YR	5/1-YR	1-YR ARM	30-YR	15-YR	5/1-YR	1-YR ARM
Average	6.53	6.17	6.16	5.63	6.22	5.90	5.93	5.47
Fees & Points	0.6	0.5	0.8	0.9	0.4	0.4	0.5	0.5