California housing market bounces back in February after slow start to year

LOS ANGELES (March 16) – Slowing home price appreciation and improving inventory combined to boost California’s housing market in February as existing home sales and median home prices increased from both the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
 
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 368,160 units in February, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  Sales in February were up 4.7 percent from a revised 351,480 in January and up 2.4 percent from a revised 359,600 in February 2014.  The year-over-year increase was the largest observed since December 2012. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the February pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

“While February’s statewide improvement in the housing market was moderate, it’s an encouraging sign, nevertheless, as we head into the spring home-buying season,” said C.A.R. President Chris Kutzkey.  “On the supply side, housing inventory improved overall with active listings growing at a faster pace of 5.3 percent when compared to last February.  Regionally, both active listings in Southern California and Central Valley increased moderately from last year, while housing supply declined 10 percent in the Bay Area.”
 
The median price of an existing, single-family detached California home was essentially flat from January’s median price, inching up from $426,660 in January to $428,970 in February. February’s median price was 5.5 percent higher than the revised $406,460 recorded in February 2014.  While the statewide median home price is higher than a year ago, the rate of increase has narrowed significantly since early 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.
“The California housing market regained some traction in February as sales activity improved on a year-over-year basis for the second time in three months,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “At the state level, the market is moving in the right direction as the growth of sales continues its upward trend and home prices start stabilizing.  At the regional level, however, the San Francisco Bay Area continued to be hampered by constrained inventory and low housing affordability.”
Other key facts from C.A.R.’s February 2015 resale housing report include:
• The available supply of existing, single-family detached homes for sale statewide in February was unchanged from the 5 months reported in January. The index was 4.7 months in February 2014.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A six- to seven-month supply is considered typical in a normal market.
• The median number of days it took to sell a single-family home shortened in February, down from a 52.4 days in January to 47 days in February but up from 40.1 days in February 2014.
• According to C.A.R.’s newest housing market indicator measuring sales-to-list price ratio*, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is keeping sales prices in line with original asking prices.  The statewide measure suggests that homes are selling at a median of 97.7 percent of the list price, down slightly from a ratio of 98.2 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 104.2 percent.

• The average California price per square foot** for an existing single-family home was $210 in February 2015, an increase of 2.5 percent from the previous month and a 4.1 percent increase from February 2014.  Price per square foot at the state level has been showing an upward trend since early 2012, and has been rising on a year-over-year basis for 37 consecutive months.  In recent months, however, the growth rate in price per square foot has slowed down significantly as home prices leveled off.  San Francisco County had the highest price per square foot in February at $754/sq. ft., followed by San Mateo ($689/sq. ft.), and Santa Clara ($552/sq. ft.).  The three counties with the lowest price per square foot in February were Siskiyou ($102/sq. ft.), Tehama ($107/sq. ft.), and Madera ($110/sq. ft.).
• Mortgage rates edged up in February, with the 30-year, fixed-mortgage interest rate averaging 3.71 percent, up from 3.67 percent in January but down from 4.3 percent in February 2014, according to Freddie Mac.  Adjustable-mortgage interest rates also rose in February, averaging 2.43 percent, up from 2.38 percent in January but down from 2.54 percent in February 2014.

Good Starts for 2012

Washington, DC, December 29, 2011
Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain.
The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the home buyer tax credit. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who have been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage,” he said.

“November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead,” Yun added.

Pending home sales are not affected by the recently published Re-benchmarking of existing-home sales because the index uses a different methodology based directly on contract signings, and is adjusted for seasonality.

The PHSI in the Northeast rose 8.1 percent to 77.1 in November but is 0.3 percent below November 2010. In the Midwest the index increased 3.3 percent to 91.6 in November and is 9.5 percent above a year ago. Pending home sales in the South rose 4.3 percent in November to an index of 103.8 and remain 8.7 percent above November 2010. In the West the index surged 14.9 percent to 121.2 in November and is 2.9 percent higher than a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Author: National Association of Realtors

Low Mortgage Rates to Hang Around Next Year

Mortgage rates are expected to remain very low at least through mid-2012, while housing activity improves slightly, according to Freddie Mac’s economic and housing outlook released Wednesday.
The outlook also projects fewer single-family home-loan originations but more multifamily lending in 2012. The rental market is likely to lead growth in the lending industry, though parts of the country will also benefit from increased activity in the single-family home market.

High unemployment and a glut of foreclosed properties have depressed the housing market in recent years, despite extremely low interest rates that have made borrowing more attractive.
“While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,” said Frank Nothaft, Freddie Mac’s chief economist. “All told, next year will be another bumpy ride.”

Job growth must accelerate beyond the average monthly payroll gains of 130,000 seen this year through November for the unemployment to decrease significantly. Even then, the mortgage company predicted the unemployment rate will remain above 8% in 2012.
Freddie Mac predicts the U.S. economy will grow by about 2.5% next year.

Military Veterans earn one-year Federal Tax Credit Extension

Military personnel, members of the Foreign Service, and employees of the intelligence community have an extra year, through June 2011, to buy a principal residence in the U.S. and claim the federal tax credit. The deadline for entering a binding contract is April 30, 2011; the deadline to close a purchase is June 30, 2011. The extension applies to any individual (and, if married, the individual's spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31,2008, and ending before May 1, 2010. All other home buyers must be under contract by April 30, 2010 and close by June 30, 2010 to qualify for the federal tax credit.

Federal & State Combined Tax Credits$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME Californians have a brief window of opportunity to r

$18,000 IN COMBINED HOME BUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state home buyer tax credits. To take advantage of both tax credits, a first-time home buyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time home buyers may use the same time frames to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time home buyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a home buyer may receive up to $10,000 in tax credits as a first-time home buyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

Source California Association of Realtors

New rule affects homeowners in foreclosure avoidance program

The new procedure, to be adopted by servicer's by June 1, would require three documents upfront: a formal application including a description of the hardship created by the mortgage; proof of income, which would mean at least two pay stubs or the most recent profit and loss statement for self-employed borrowers; and a form authorizing the IRS to release tax data to the servicer.

If a borrower makes three payments at the modified rate, the modification will automatically be made permanent. The changes should help borrowers better understand the process and their chance of getting a loan modified.

Lenders are being encouraged to cut loan balances to avoid losing even more money on foreclosures. The government should use its control of Fannie Mae and Freddie Mac to start writing down the principle on mortgages owned or insured by them and also request, that the private sector do the same.

The program was designed to provide billions of dollars in subsidies to encourage lenders to forestall foreclosures by reducing mortgage payments to 31% of the borrowers household income.

To obtain the subsidies, servicer's must take a series of steps to reach an affordable payment: reduce the interest rate, extend the loans term to 40 years and suspend payments on part of the amount owed. A permanent reduction of the loan balance is optional.

If the loan owner comes out ahead with a modification, the servicer is required to make it. By documenting the borrowers financial situation before offering a trial modification, servicers can make this calculation upfront and inform borrowers whether they qualify

News Release by Fannie Mae

News Release, Fannie Mae

January 28, 2010

Fannie Mae Announces 3.5 % Seller Assistance on HomePath Properties

Incentive Part of Ongoing Effort to Stabilize Neighborhoods

WASHINGTON, DC - Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath property will receive up to 3.5 % of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010

"Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help," said Terry Edwards, Executive Vice President of Credit Portfolio Management. "Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home."

Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3% down.

Fannie Mae Resource Center
1-800-732-6643

FHA lifts 90-Day waiting period

Starting Feb. 1 housing regulators will suspend for one year a 90-Day waiting period on property resales that it says has put FHA borrowers at a disadvantage in bidding on foreclosed properties.

The waiting period on FHA financing of resales was implemented in 2003 to protect the Federal Housing Administration's mortgage insurance program from the impacts of home flipping.

The policy did not apply to properties repossessed by Fannie Mae, Freddie Mac, or state and federally chartered financial institutions. In 2008, FHA lifted the 90-Day waiting period on resales of all bank-owned (REO) properties.

Now, although many other conditions still apply, the waiting period is being lifted on all resales including properties purchased and rehabbed by private investors.

Research shows that acquiring, rehabilitating and reselling properties to prospective homeowners often takes less than 90 days, the Department of Housing and Urban Development (HUD) said in announcing the change.

Some sellers of foreclosed properties have been reluctant to enter into contracts from potential FHA buyers because of the cost of holding a property for 90 days, and the risks that a vacant property would be vandalized, HUD said.

Lifting the waiting period "will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities," HUD said.

Lenders must have supporting documentation or a second appraisal if the sales price of a property increases by more than 20% from the seller's acquisition cost, HUD said in publishing the waiver requirements. The waiver does not apply t the Home Equity Conversion Mortgage (HECM) for purchase program

Inman News, 1/19/10

Energy-Efficient Rebate, by CAR

Energy-Efficient Rebates

The government is expected to unveil a new program in the next couple of months that, if approved, may reimburse homeowners for up to half the cost of making their homes more efficient. Through the program, homeowners will receive the largest return from simple upgrades like caulking windows, adding insulation, and changing incandescent light bulbs to those that are more energy-efficient.

To determine which energy-efficiency upgrades are best for their house, homeowners should obtain a home energy audit. Homeowners are advised to hire a contractor licensed by the Building Performance Institute or the Residential Energy Services Network. These contractors have been trained to first test a home to determine the amount of energy it is losing, then make suggestions on renovations.

"Beyond The Headlines" by CAR

What’s ahead for home prices?

California remains ahead of the nation in market recovery with many first-time home buyers entering the market due to affordable home prices, low mortgage rates, and first-time home buyer tax credits from the state and federal governments. However, credit still is tight and unemployment remains high, which could hinder a full market recovery until 2011.

KEEP THIS IN MIND
• Home sales in California hit bottom more than two years, and the median home price of an existing, single-family home reached its trough in February, according to data collected by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). In November, the state’s median home price rose in year to-year comparisons for the first time since August 2007.

• C.A.R.’s closely watched "2010 California Housing Market Forecast,” projects that the median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 in 2009.

• Some economists are forecasting another surge of foreclosures in 2010. However, C.A.R.’s
economists expect that foreclosures will remain flat this year compared with 2009. In 2008, many lenders flooded the market with foreclosures, and as a result, the state’s median price declined by historic levels. By comparison, in 2009, lenders listed properties for sale at a more measured pace, which helped moderate another home price decline.

• Government efforts to maintain a low interest rate environment have stabilized the market. However, a mortgage analyst at a financial publishing company predicts that rates likely will rise to 5.5 percent by mid-2010 and close the year at 5.75 percent to 6 percent.

Uncle Sam's New Guide to Mortgage Shopping
Federal rules that take effect Friday, Jan. 1, mandate a standard, three-page Good Faith Estimate that urges consumers to shop around for the best loan and helps them compare lenders offerings. The rules are an update of the Real Estate Settlement Procedures Act, a 1974 law known as RESPA.

MAKING SENSE OF THE STORY FOR CONSUMERS

• Although Good Faith Estimates have been in use for many years, there never has been a standard form required of all lenders. Under the new rules, lenders and mortgage brokers are required to give consumers the standard estimate forms within 3 days of receiving a loan application.
• The Good Faith Estimate form requires lenders to combine all of the bank's fees into one "origination charge," enabling consumers to compare one lenders fees with others. Lenders are prohibited from increasing the origination fee from the estimate. Some additional charges, including title services and recording charges, can increase by as much as a combined 10 percent. Estimates for other charges, such as homeowners insurance and other services provided by third parties selected by the borrower, are not subject to such limits.
• A finance professor emeritus at the University of Pennsylvania's Wharton School recommends that borrowers focus on two items as they shop: The interest and the "adjusted origination charge," which includes any points paid to lower the rate.
• Another change includes the HUD1 form used by settlement firms in closings. The new HUD1 includes a comparison of the estimated and final costs, as well as a summary of the loan terms.

The Wall Street Journal

News brought to you by California Association of Realtors

LENDERS TO HALT FORECLOSURE EVICTIONS OVER THE HOLIDAYS

Fannie Mae and Freddie Mac will suspend foreclosure evictions from December 19, 2009 through January 3, 2010. To help struggling families over the holidays, both owner-occupants and tenants living in properties foreclosed upon by Fannie Mae will not be evicted. Freddie Mac's suspension of evictions will be limited to properties up to four units.

In a similar move, Citigroup Inc. will suspend foreclosure sales and evictions for 30 days through January 17, 2010 for loans it owns. Citigroup's foreclosure moratorium, however, does not extend to loans it services on behalf of other investors. Given these developments, other lenders may follow suit, so check with the lender if appropriate.

For release:Friday, Oct. 23, 2009C.A.R. calls for swift adoption of Dodd-Lieberman-Isakson amendment to extend home buyer tax credit LOS ANGELES (Oct. 23) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today called for the U.S. Senate to swiftly adopt the Dodd-Lieberman-Isakson amendment, which would extend and amplify the hugely successful first-time home buyer tax credit until June 30, 2010. “The success of the home buyer tax credit and its positive impact on the real estate market is clear,” said C.A.R. President James Liptak. “According to our research, nearly 40 percent of first-time buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered. This underscores the significance of the federal tax credit to the housing market’s recovery in California.“The Dodd-Lieberman-Isakson amendment would expand the credit by removing the first-time buyer requirement and instead would apply to all home buyers,” he said. “The amendment also would increase the qualifying income limits to $150,000 for single buyers and $300,000 for those filing joint income tax returns.“We urge Senators Feinstein and Boxer to demonstrate their support for home buyers in California and quickly adopt the Dodd-Lieberman-Isakson amendment,” Liptak said.Under additional provisions in the Dodd-Lieberman-Isakson amendment, taxpayers would be able to claim the credit on purchases completed in 2010 on their 2009 income tax returns. The amendment maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

For release:Friday, Oct. 30, 2009Extension of conforming loan limits through 2010 earns praise from C.A.R.LOS ANGELES (Oct. 30) –The U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $625,500 in high-cost areas to $729,750 and extending the limits through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.“There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California’s housing market over the last year,” said C.A.R. President James Liptak. “C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent.”The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.