Month: May 2010

30-year fixed mortgage rate falls to near record lows

By E. Scott Reckard, Los Angeles Times

May 28, 2010

The debt crisis in Europe that has unhinged global stock markets also has helped push U.S. mortgage rates back toward record lows, prompting a surge in refinancing.

 Freddie Mac reported Thursday that the average rate offered on 30-year fixed-rate home loans sank to 4.78% this week, down from 4.84% last week and not far from the record low of 4.71% set late last year.

 The rates are tracking a drop in yields on 10-year Treasury bonds, which have been pushed down by investors buying them up as a haven from the troubles in Europe.

 Last year, experts anticipated that loan rates would be rising by now, as federal housing and home-loan support programs expired, home prices stabilized and inflation became more of a concern. Then the default scare emerged over Greece and other debt-burden European countries.

 “Just when we thought we were finally experiencing [higher loan rates], we got the PIGS,” said Stew Larsen, head of mortgage operations for Bank of the West, using an acronym for Portugal, Italy, Greece and Spain.

 U.S. homeowners are applying to refinance their loans at the fastest pace in seven months, the Mortgage Bankers Assn. said this week.

 Although powerful, the surge doesn’t compare with the tidal wave of refinancing early last year after the Federal Reserve, battling the fierce recession, lowered its benchmark interest rate to near zero. But there are still plenty of homeowners with higher-rate loans who have never refinanced despite several opportunities since then.

 “Many of our customers now feel they missed a couple of other windows,” Larsen said.

 Personal-finance experts say homeowners should think carefully before refinancing, since upfront costs can be high and new mortgages extend the period of indebtedness unless borrowers substitute a shorter-term loan. But the savings can be considerable: A monthly payment of principal and interest on a $350,000 loan at 6.25% is $2,155; at 4.75% the payment is $1,826, saving nearly $4,000 a year.

 Not everyone is lucky enough to have such opportunities. Given the collapse in home prices, most borrowers who bought homes during the housing boom have little or no equity left, so they can’t refinance — a problem compounded by far tighter lending standards these days.

 “Most lenders are requiring larger down payments [or] more equity than when the loan was originally made,” said Tom Kelly, a spokesman for JPMorgan Chase & Co.

 But for people who still have equity, good jobs and solid credit ratings, the repeated opportunities over the last year to lock in long-term rates under 5% are something not seen since the 1950s.

 In contrast to the latest refinance boom, applications to buy homes plunged this month. Buyers had rushed to complete their transactions by the end of April, when federal tax credits for home buying expired. The refinance share of mortgage activity was at 72% of total applications, the Mortgage Bankers Assn. reported this week, the highest level since December 2009.

 Dean Cherry, a fire captain, and his wife, Theresa, a mortgage company executive, bought a home in San Diego in 1993. Avid water skiers, they later took out a home-equity credit line to buy land where they are installing a prefabricated vacation home in a private development that has three lakes set up for water skiing competitions.

 Although the interest rate on the credit line was low, it also was variable. To eliminate the risk of it surging when rates move higher, they combined their first mortgage and the credit line this year into a single $388,000, 15-year loan. The rate was 4.5%.

 “It was about getting me into something I could be sure about for the next 15 years,” Theresa Cherry said. “I was always worried about where the home-equity loan would go.”

 Her boss, Guild Mortgage Co. Executive Vice President Steve Hops, said he, like most people in his industry, had believed rates would go back up beginning in April.

 That was when the Federal Reserve ended its housing-support program to buy $1.25 trillion in bonds issued by Freddie Mac and other government-sponsored mortgage enterprises.

 “Who would have forecast that after the Fed stopped buying mortgage-backed securities the rates would come back down into the 4s?” Hops said.

Southern California home sales dip, median price rises from ’09

May 18, 2010 DQ News

La Jolla, CA—Southern California’s housing market leveled off last month as sales activity migrated ever-so-slightly from inland bargain areas toward entry- and mid-market neighborhoods closer to the coast. The overall median price was unchanged from the month before, but it jumped compared with April 2009’s low point, a real estate information service reported.

Sales of new and resale homes totaled 20,299 in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 0.9 percent from 20,476 in March, and down 1.0 percent from 20,514 for April 2009, according to MDA DataQuick of San Diego.

It’s possible that a significant number of sales that would otherwise have closed escrow in April were delayed until May as buyers tried to take advantage of new state tax credits effective May 1. In addition, those who rushed to sign a sales contract last month before the April 30 deadline for a federal home buyer tax credit would likely close escrow in May or June.

April’s year-over-year changes in sales volume ranged from a decline of 12.3 percent in San Bernardino County to an 11.6 percent increase in Orange County. Condo resales rose 16.9 percent. The Southland’s 1.0 percent decline in overall sales was the first year-over-year drop in almost two years.

“The market’s still taking baby steps on a long road to recovery, trying to find its footing. It’s unclear which of today’s sales characteristics are part of a new reality, and which are still temporary turbulence. The mortgage market, especially for larger home loans, is definitely dysfunctional. Obviously things would be different if the job picture were brighter,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $285,000 last month, the same as in March, and up 15.4 percent from $247,000 for April 2009, which was the low point of the current cycle. The median peaked at $505,000 in mid 2007. The median’s peak-to-trough drop was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Similarly, April’s year-over-year gain in the median sale price was partly a reflection of more sales occurring in costlier coastal markets, and fewer in the lower-cost inland areas. A year ago, the two most affordable counties – Riverside and San Bernardino – accounted for 37 percent of total sales, while last month they represented 33.8 percent.

Last month 19.3 percent of all sales were for $500,000 or more, compared with 14.8 percent a year ago. Viewed a different way, zip codes in the top one-third of the Southland housing market, based on historical prices, accounted for 28.6 percent of existing single-family house sales last month, compared with 23.2 percent a year ago. Over the past decade, those high-end areas have contributed a monthly average of 33.4 percent of all sales.

High-end sales would be stronger, and the overall market recovery more robust, if two key forms of financing were easier to obtain: Adjustable-rate (ARMs) and “jumbo” loans. Both have become much more difficult to obtain since the August 2007 credit crisis.

While 44.4 percent of all Southland purchase mortgages since 2000 have been ARMs, it was 5.7 percent last month, up from 4.9 percent in March and up from 1.9 percent in April last year.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 16.1 percent of last month’s purchase lending, up from 15.9 percent in March and from 11.1 percent in April 2009. Before the credit crisis, jumbos accounted for 40 percent of the market.

While financing restraints have hampered high-end activity, the more affordable housing markets have seen sales taper off in recent months as the inventory of deeply discounted foreclosures has dwindled.

Foreclosure resales accounted for 36.4 percent of the resale market last month, down from a revised 38.3 percent in March, and down from 53.5 percent a year ago. The all-time high was February 2009 at 56.7 percent.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 38.5 percent of all mortgages used to purchase homes in April.

Absentee buyers – mostly investors and some second-home purchasers – bought 22.5 percent of the homes sold in April, paying a median $201,000. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 27.7 percent of April sales, paying a median $200,000. In March cash sales were a revised 27.9 percent. The 23-year monthly average for Southland homes purchased with cash is 14.0 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.4 percent, while a year ago it was 1.3 percent. Last month it varied from as little as 2.7 percent in Riverside County to as much as 3.8 percent in Los Angeles County.

MDA 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.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,238 last month, up from $1,220 for March, and up from $1,038 for April a year ago. Adjusted for inflation, current payments are 44.6 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 54.6 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average, MDA DataQuick reported.

  Sales Volume Median Price
All homes Apr-09 Apr-10 %Chng Apr-09 Apr-10 %Chng
Los Angeles     6,425  6,688   4.1%    $300,000   $329,500     9.8%
Orange          2,391  2,669  11.6%    $380,000   $430,000    13.20%
Riverside       4,469  4,117  -7.9%    $180,000   $195,000     8.3%
San Bernardino  3,130  2,744  -12.3%    $138,500   $150,000     8.3%
San Diego       3,375  3,292  -2.5%    $290,000   $325,250    12.20%
Ventura           724   789   9.0%    $340,000   $382,000    12.40%
SoCal          20,514 20,299  -1.0%    $247,000   $285,000    15.40%

http://www.dqnews.com/Articles/2010/News/California/Southern-CA/RRSCA100518.aspx

Southern California housing market holds its ground

Wholesale prices dip, new home construction rises

By Alejandro Lazo, Los Angeles Times

May 19, 2010

Southern California’s housing market held its ground in April, data released Tuesday show, with prices rebounding off their year-earlier lows but sales slipping for the first time in nearly two years as the number of fast-selling foreclosure properties dwindled considerably.

The median price for all Southland houses, town homes and condominiums sold last month was $285,000, a 15.4% increase from the April 2009 bottom, when foreclosures accounted for more than half the resale market. But the closely watched median — the price at which half the homes sold for more money and half for less — was unchanged from March, according to San Diego-based MDA DataQuick.

Sales for the region fell 1% in April compared with a year earlier — the first decline in 22 months — indicating that the Southland’s supply of cheaper, bank-owned properties is tightening when compared with last year’s glut. The month-to-month drop was almost the same, 0.9% compared with March.

“The market’s still taking baby steps on a long road to recovery, trying to find its footing,” MDA DataQuick President John Walsh said. “It’s unclear which of today’s sales characteristics are part of a new reality and which are still temporary turbulence.”

Some of the sales slowdown may be attributable to buyers delaying their closings until May 1 or after to take advantage of a state tax credit of up to $10,000 for first-time buyers and those purchasing new homes.

Also, any last-minute rush of buyers motivated by the expiring federal tax credit last month isn’t likely to be fully captured in April’s data. Many of those deals are likely to close this month or next, particularly if buyers timed their purchases to claim both the federal and state incentives.

Many experts worry that the housing market could take another fall in coming months because a slew of government programs intended to support it have expired, the jobs picture remains cloudy and the private mortgage market is still in disarray. A much-feared flood of foreclosure properties, if it materializes, could also send values falling again.

But the expiration of the federal tax credits — which offered up to $8,000 for first-time purchases and $6,500 for repeat buyers — has presented the most immediate concern. Nationally, sales plummeted for three months beginning last December after a surge of buyers rushed to close deals before an initial November deadline for the credit. Congress expanded and extended the credit before the deadline, but sales nationally didn’t pick up again until March.

“Everybody out there on the planet expects a [second] drop off the cliff,” said Cameron Findlay, chief economist at LendingTree.com.

The Southland saw a surge of people signing contracts for homes in April, according to data from the California Assn. of Realtors. Sales contracts for single-family homes in Los Angeles were up 27% in April from the same month last year. Contracts signed in April were up 9% in Anaheim, 33% in Santa Ana, 25% in San Diego and 14% in Santa Monica. To qualify for the federal credit, eligible buyers must close their deals by June 30.

Working in favor of a continued recovery are more-affordable prices and low interest rates.

Sales are also steadily shifting away from the far-flung developments of the Inland Empire, which were ravaged by a high number of foreclosures after the housing market tanked, and are picking up in areas closer to major centers of employment.

Riverside and San Bernardino, the two most affordable counties in the region, for instance, accounted for 33.8% of all sales in April compared with 37% in the same month one year earlier, DataQuick said.

Also, 19.3% of all sales were for $500,000 or more, compared with 14.8% a year earlier, and ZIP Codes in the top one-third of the region’s housing market according to a historical analysis of prices by DataQuick accounted for 28.6% of existing single-family house sales last month, compared with 23.2% a year earlier.

“The DataQuick numbers are consistent with near-record-low mortgage interest rates, near-record-low house prices and ample evidence of an economy that is on the rebound,” said Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. “We are seeing increasing signals of normalization of the housing market as sales spread to more prosperous regions.”

Foreclosures have also dropped off considerably as a part of the resale market, accounting for 36.4% of sales in April compared with 53.5% a year earlier and an all-time high of 56.7% in February 2009.

A total of 20,299 properties sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That represented a decline of 0.9% from the 20,476 sold in March and a 1% decrease from the 20,514 that sold in April 2009.

“We have a very good housing environment, and that is the good news, that there has been some recovery,” said Gerd-Ulf Krueger, principal economist of Housingecon.com. “The question is: Is that sustainable moving forward?”

Separately, a mixed report released by the federal government Tuesday cast doubt on the prospects for new construction as U.S. housing starts gained in April but the number of permits for new buildings fell.

Starts in April hit a seasonally adjusted annual pace of 672,000, 5.8% above the revised March estimate of 635,000 and 40.9% above the revised April 2009 rate of 477,000, the Commerce Department said. Meanwhile, building permits in April were at a seasonally adjusted annual rate of 606,000, an 11.5% decline from the revised March rate of 685,000, but 15.9% above the revised April 2009 estimate of 523,000.

“On balance, this was a disappointing report because of the drop in single-family permits, the report’s key item,” said Patrick Newport, U.S. economist for consultancy IHS Global Insight. “The drop is probably payback from the tax credit that expired April 30. Permits taken out in March and earlier stand a good chance of being completed by June 30, the date that the closing papers must be signed. Permits taken out in April stand less of a chance.”

Advantage Title Debuts Title365 Mobile iPhone App

Advantage Title’s new Title365 Mobile™ app for iPhone® with GPS-enabled technology* empowers you with the unprecedented ability to visually locate properties on your mobile and get instant access to nationwide property information.  Customize a search, revisit viewed properties or locate the Title365 office nearest you – all while on the go.

 We’re driven by the challenges of our customers.  And we push ahead to help you win.  That’s why we developed a mobile window into Title365.

 Available free through Apple’s iPhone App Store or iTunes Store, Advantage Title’s Title365 Mobile app leverages the latest technology available to deliver location-aware convenience and visual accuracy as you retrieve complete, real-property details, sales comparables, transaction history, plat maps, tax data and other information.

Out in the field with clients and need reliable, accurate information about a property?  Perhaps you just fielded a call for transaction history or tax data critical to closing a transaction on time.  Now you not only can access it anywhere, anytime right on your iPhone, you can see it and share it immediately, too.

 Get what you need in an instant:

  • Search real-time property information using iPhone’s built-in GPS or perform a custom search by owner, address or parcel number.1
  • View ownership and tax information, sales comparables, transaction history and more.
  • See where you are in relation to other properties and easily retrieve information for those properties as well.
  • Share information with clients and colleagues.
  • Retrieve driving directions to pinpointed properties.
  • Save your favorite properties for easy retrieval.
  • Access default map types, zoom level preferences and one-touch access login/logout capabilities.
  • Find the Advantage Title location nearest you, one-touch calling, retrieve and share office information, get directions and more.

Fore more information, visit http://title365.com/iPhone or speak with your Advantage Title Account Manager.

Click the App Store link below to download Title365 Mobile now.

http://itunes.apple.com/us/app/title365-mobile/id368572878?mt=8

 *GPS Functionality only available on 3G or higher models.
1 A Title365 account is required to access property information.  Contact your Account Manager.
Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. iPhone is a trademark of Apple Inc.

Median home prices up in first quarter

Associated Press

May 11, 2010, LA Times

WASHINGTON — Home prices rose in nearly 60 percent of U.S. cities in the first quarter of this year, as the housing market started to stabilize thanks to billions of dollars in federal spending.

The National Association of Realtors says the median sales price for previously occupied homes rose in 91 out of 152 metropolitan areas tracked in the January-March quarter versus a year ago. There were double-digit price increases in 29 cities.

That’s a sharp improvement from the fourth quarter of last year, when prices rose in about 40 percent of cities. The national median price was $166,100, or 0.7 percent below the first quarter of last year.

Sales of foreclosures and other distressed properties made up 36 percent of all sales in the first quarter.

The largest percentage price increase was in Saginaw, Mich., where the median price doubled to nearly $61,000. Prices in Akron, Ohio were up 95 percent to about $95,000. Prices in Cleveland were up 54 percent to $106,400.

The largest price decline was in Orlando, Fla., where they dropped 15 percent to nearly $132,000. Prices in Ocala, Fla., fell 14.5 percent to a median of nearly $93,000. Prices in Cumberland, Md., fell 14.4 percent to $98,300.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

http://www.latimes.com/business/la-fi-home-sales-20100512,0,7438762.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29

Choppy seas ahead for housing?

By JONATHAN LANSNER, OC Register

2010-05-07  

Housing sales may be improving, but recent news hints that it may not be smooth sailing.

One reason your real estate pals might be smiling these days: Buyers spent a total of nearly $1.4 billion in March on broker-listed Orange County homes, the highest volume amount in eight months.

New figures from the Southern California Multiple Listing Service show broker-controlled sales up 22.6 percent in the first quarter of the year, driven by higher sales and increased home prices. Highlights of the report: 

• Orange County home sales generated $3.4 billion in total revenue during the first three months of the year, up $618 million, or 22.6 percent from the first quarter of 2009.

 •In March, revenue was up 26.5 percent from the previous March. Last month’s sales generated the most revenue since July.

 •First-quarter home sales were up 6.2 percent to 6,022 homes. In March alone, sales were up 10.3 percent to 2,468 homes sold.

 •The average home price in the first quarter was $556,450, up, 15.4 percent from the first quarter of 2009.

 •The average price for a detached house was $717,171, up 20 percent; the average price for a condo and other attached home was $329,096, up 9.8 percent.

 •In March, the average home price was $563,476, up 14.7 percent.

 •Although first quarter revenues were up from the past two years, they still were down 41.5 percent from the first quarter of 2005, when revenue had peaked at more than $5.7 billion.

Not to be a spoilsport, but, we did note this cautionary analysis in the latest Orange County home inventory report from Steve Thomas at Altera Real Estate. He writes: “Agents in the trenches are stating that there are more overpriced, unrealistic sellers placing their homes on the market. Prior to the start of the year I forecasted that the discretionary seller would return; however, if more and more homes are placed on the market at unrealistic values, the inventory will continue to rise. This rise in inventory could dampen demand. This is a trend that we will have to continue to watch”

And the economists at mortgage insurer PMI Group, while noting that Orange County is no longer among the riskiest U.S. home markets — barely, did paint a worrisome picture in it analysis of the final quarter of 2009 …

•Local home prices have a 99.8 percent chance of price declines in the coming two years. That is down from 99.9 percent in the third quarter (tops in the U.S.)

•This time, Orange County — by a whisker — missed joining the “riskiest” clan of seven cities at 99.9 percent.

•Orange County’s market is still jittery, as PMI found home-price volatility of 29.9 percentage points over five years vs. an average of 19 points for the top 50 U.S. markets.,

•Blame the price tumble. In a year, the fortunes of Orange County’s housing prices swung negative 23.38 percentage points in a year vs. a negative 6.78 average among the Top 50.

•Orange County’s affordability index ran 2 percent above its 1995 benchmark level vs. 2 percent below in Q3 and vs. 31.7 percent above for the Top 50.

•Unemployment in Orange County ran 5.3 percentage points higher than its five-year trends at year’s end vs. 4.6 points above for the top 50 average.

PMI concludes this about the nation’s largest markets: “Although the Risk Index does not measure the magnitude of future declines, the forecast does provide encouraging signs for moderating probabilities of price declines for the remainder of 2010 and into 2011 among these largest MSAs.”

RIPTIDE MARKETS

We are still puzzled about the true direction of the beach-town housing markets. Ponder these two sets of stats:

•The latest Orange County home inventory report from Thomas at Altera says that as of April 29, the “hardest” market to sell a home in, based on inventory of homes for sale vs. new escrows opened, is Newport Beach. It’s got a “market time” at 8.9 months to theoretically sell all for-sale homes at the current buying pace. Laguna Beach, Corona del Mar and Seal Beach were also in the Top 5 “hardest” to sell markets.

•However, DataQuick says in the month ended in mid-April, 455 homes sold in Orange County beach cities’ 17 ZIP codes. That is a jump of 39 percent from a year ago — seemingly a sign homes are moving. Median selling price? $773,000 in these 17 ZIPs. And the median of the beach ZIPs price change was a gain of 12.8 percent vs. a year ago.

HOT READINGS

The Lansner on Real Estate blog’s most-popular postings in April:

1. A $10 million castle in …. Corona?

2. This Irvine home again tops most-viewed list

3. Selling Orange County mansion? Wait 3 years!

4. Tustin base project called worthless

5. $129,850 income needed to buy Orange County home

Pending home sales rise 5.3% in March

The improvement was attributed to the expiring home buyer tax credit. The National Assn. of Realtors’ sales contract index showed increases of 12.7% in the South and 1.9% in the West.

By Ruth Mantell

May 5, 2010, La Times

WASHINGTON — Supported by a tax credit, a pending home sales index rose a seasonally adjusted 5.3% in March and was up 21.1% compared with a year earlier, the National Assn. of Realtors said Tuesday.

The index tracks sales contracts on existing homes and is considered a good indicator of actual sales, which are recorded a month or two later at closing.

For March, sales contracts rose 12.7% in the South, 1.9% in the West and 1.2% in the Midwest. Contracts declined 3.3% in the Northeast from a month earlier.

“Clearly the home buyer tax credit has helped stabilize the market,” said Lawrence Yun, chief economist for the real estate lobbying group, in a statement. “In the months immediately following the expiration of the tax credit, we expect measurably lower sales.”

In order to qualify for the extended and expanded home buyer tax credit, a sales contract must have been signed by April 30 and the sale must close by June 30. Analysts expect the tax credit will also support contract signings in April.

In February, the pending home sales index rose 8.3%, compared with an earlier estimate of an 8.2% gain.

The strong results in February and March probably reflect an increase in demand before the credit expires, according to an analysis from Barclays Capital Research.

“Looking ahead, the strength in pending home sales (which tend to lead closed sales by a month or two) supports our view that existing home sales will rebound over the spring, also buoyed by the forthcoming expiration of the tax credit,” according to Barclays.

Yun added that home sales will probably “become self-sustaining” in the second half of this year and into 2011 if jobs are added “at a respectable pace” and as buyers see stabilizing values.

Mantell writes for MarketWatch.com / McClatchy.

http://www.latimes.com/business/la-fi-home-sales-20100505,0,7504300.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29