Real Estate Website Is off to a Bubbly Start

Oh, the irony! Zillow.com, the “in” darling of real estate wbesites, just went public and its IPO shares tripled in value on the first day – at least, for a while. Founded by the same former Microsoft execs that rolled out Expedia a few years back, Zillow is best known for its “Zestimate” that uses a proprietary algorithm to appraise the value of properties, plus it has the usual listings and other market info. So, …

 

Demographics are putting a long-term curse on the future of the housing market just as much as the economy, tight credit, and the foreclosure situation. Those looking at retirement in the next decade are having to spend a greater percentage of their income on necessities due to lower income or job loss, while at the same time they have to squirrel away more of their income for retirement in light of hefty 401(k) losses and …

 
Will Political Measures Fix an Economic Problem?

With election season getting into gear, the administration is getting serious, or perhaps desperate, about “solving” the housing crisis. New initiatives and ideas are being discussed, but it’s hard to say if they have what it takes to turn the tide before November of 2012, which could end up being a referendum on the economy as a whole. The $8,000 home-buyer tax credit that ended in the spring of 2010 did jump-start sales while it …

 
Buffet Says the Dream Is still Alive

While some analysts are proclaiming that the American Dream is dead with little chance of a resurrection any time soon, Warren Buffet still believes that the dream of home ownership is still a viable option for many Americans. Buffet still lives in the same house in Omaha he bought 52 years ago for $31,500 – and that’s one of his three pieces of practical wisdom for successful ownership. First of all, forget the dream house …

 
June 29, 2011 Housing Market News Updates

Rural states are seeing a turnaround in Housing.  Full Story… They may not be buying, but people still believe in homeownership.  Full Story… Here are five ways to increase your chances of getting your mortgage approved in the current market.  Full Story… Increases in copper prices and Japanese industrial expansion bode well for U.S. housing market.  Full Story…  

 
Is the Stock Market a Window into Confidence in Housing?

The stock market enjoyed a little spike on Tuesday after a new report showed home prices rising in April, which was the first rise in nine months.  One just has to wonder if the stock market is so ravenous for good news that it’s grasping at straws and barking at shadows, or if it really sees some kind of recovery coming. The report comes from the S&P Case-Shiller home price index, which made headlines with …

 
Loan Modifications Are Better Than Foreclosures

A friend of mine who has been dealing with his bank over a loan modification request told me recently that the banking industry was starting to seem like a Marx Brother’s movie.  I thought that was high praise that our financial wizards didn’t really deserve.  At best, the banking system’s handling of shaky mortgages today is more reminiscent of the Three Stooges, and even then you might have to leave out Moe, who could probably …

 
June 27, 2011 Housing Market News Updates

It’s not a buyer’s market or a seller’s market; it’s a stable market, according to some in the know.  Full Story… Treasury undersecretary says the housing market will take time to recover.  Full Story… You can’t time the stock market, and you shouldn’t try to time the housing market either, says real estate CEO.  Full Story… Lending standards are fluxuating too much and banks are failing to approve too many mortgages, which is hampering the …

 
Shadow Inventory Looms Large over Housing Recovery

The catch phrase in the housing market lately seems to be “shadow inventory.”  It pops up more and more often in housing news articles, and it sounds very ominous.  The truth is that this scary bogeyman is quite a sinister threat, even though it’s a little hard to define and quantify – like the “real” unemployment number that includes those whose unemployment benefits have run out, those who have given up looking, and those who …

 
June 24, 2011 Housing Market News Updates

CoreLogic reports that two million homes are under water by more than 50% or $150,000, which increases the risk of more homes falling into foreclosure. Full Story… Shadow inventory declines, but still represents a five month backlog at current sales rate. Full Story… Looming indications that Hong Kong’s housing bubble may burst soon and see prices fall by 30% may be a self-fulfilling prophecy, as fear of collapse keeps home shoppers from buying at the …

 
Inevitable Forces Are Chipping Away at Housing Crisis

From time to time one has to get up out of the slimy pit of gloom, step back, and take a little wider and more detached look at the housing market. What seems to be an endless black hole, when viewed up close from the inside with a high definition 3D perspective of every gory detail, can be viewed in terms of trends and outside solutions when you turn the binoculars around. No, we can’t …

 
June 22, 2011 Housing Market News Updates

Fed chief Bernanke says more loan modifications and faster foreclosures will help the housing market. Full Story… JP Morgan agrees to $150 million settlement in the federal law suit that accused them of misleading investors with risky mortgage securities. Full Story… Falling delinquency rates means fewer foreclosures will flood the market in the near future and offers a glimmer of hope for housing. Full Story… First-time buyers are still opting out of the housing market …

 
The Seeds of Recovery May Lie in the Rubble of Destruction

The troubles with the housing market are really the solution to the problem. Basic economics will tell you that supply and demand have to come into balance in order to have a healthy marketplace, and right now we have too much supply and too little demand. The correction in home prices and a big slowdown in new building are really just the medicine that the doctor ordered. Lower prices make housing more affordable, and in …

 
June 21, 2011 Housing Market News Updates

Fannie Mae trims back its forecast for housing recovery, predicting slower sales than expected and a drop in home construction, based on weak economic reports.  Full Story… The feds file $800 million law suit against J.P. Morgan and RBS over mortgage backed securities.  Full Story… Sales of existing homes fall to six-month low, and prices decline by 4.6%.  Full Story… Investors have to dig deep for cash with little credit available for housing purchases.  Full …

 
Are Banks Playing Kick the Can with Mortgage Losses?

Most of us have assumed that the slowdown in the rate at which banks are processing foreclosures is a result of last fall’s “robo-signing” scandal. The banks must just be taking more care in getting it right now. Or did that temporary stoppage simply serve to give our financial wizards an excuse to keep things moving slowly with the intention of keeping huge losses from hitting their books? Some of the more industrious writers are …

 
June 20, 2011 Housing Market News Updates

Court cases in New York, Utah, and around the country are challenging the right of intermediaries to foreclose on electronically registered mortgages, sometimes with forged documents.  Verdicts could alter the lanscape of the housing market.  Full Story… Fannie Mae Chief says job growth is key to housing market recovery.  Full Story… Newport Beach, California tops Coldwell Banker list as most expensive housing market, with an average home price of $2.5 million.  Full Story… The federal …

 
Some Localities Are Bucking The Gloomy National Trend

It might be raining in a hundred cities across the nation, but that doesn’t mean that the sun can’t shine in your hometown.  The only place that a “national housing market” really exists is in a printout of statistical data.  The fact is that each local housing market is really it’s own universe, as demonstrated by the success of several individual markets today. Take the case of Cambridge, Massachusetts.  Home prices there are down just …

 
June 17, 2011 Housing Market News Updates

The hopeful news of more home construction starts in May was dampened by yesterday’s report from the National Association of Home Builders that it is just adding to unsold inventories, as their Housing Market Index slumps 3 points to a level of just 13 on a scale of 100.  Full Story… A slow-down in foreclosures means little without an increase in the closing of new sales.  Full Story… Dean Baker, co-director of the Center for …

 
Has the Economy Gone to “L” in a Hand Basket?

Typically, the recessions we’ve seen in our lifetime slow us down for a while, and then things turn around.  The engine re-starts and we’re back up to speed, right where we left off.  Is that even possible this time?  We are used to V-shaped dips, with a steep decline followed by a rapid rise, but that’s not always the case.  In the 1990s, the Japanese economy experienced an L-shaped recovery.  That’s right: a precipitous fall …

 
June 16, 2011 Housing Market News Updates

The 10 most affordable housing markets in the U.S include many beautiful small cities all across the country.  Full Story… U.S buyers may not be buying homes, but the low prices are stimulating big sales to foreigners from the UK, Canada, Australia and Japan.  Full Story… The housing decline has now eclipsed the 31% drop in home values of the Great Depression.  Full Story… Housing construction permits for May are up 8,7% over April permits.  …

 
The Case for Strategic Default

It sounds like a very unethical, and perhaps even immoral thing to do – just walk away from your mortgage even though you could continue to pay if you wanted to.  It’s called “Strategic Default,” and it’s been on the rise in recent months as housing values continue to erode and home equity disappears or becomes negative.  My initial thought was to write a diatribe against this practice, but the more I researched it the …

 
June 14, 2011 Housing Market News Updates

You can’t avoid the sting of the housing crisis by staying out of the market: Rapidly rising rents are putting the pinch on renters too.  Full Story… Credit Suisse White Paper is bullish on the commercial real estate market, as macro indicators bode well for recovery in that sector.  Full Story… Sales are down, but prices are up, says William Raveis, real estate and mortgage company CEO, disputing claims of second dip.  Full Story… Clear …

 
From the Housing Wasteland, All Roads Lead to the Abyss

The American housing market is officially at the North Pole.  Not only is the market a frozen ice-covered tundra, but no matter which direction you look, everything is going South.  Take a look at these numbers compiled from the Home Buying Institute and Total Mortgage: • The average value of a home has now dropped 33 percent since the slide began in 2006.  That’s five consecutive years of declining home values, which is unprecedented. (Ain’t it …

 
June 13, 2011 Housing Market News Updates

RealtyPartner CEO sees all the makings of even worse times for the housing market.  Full Story… It’s a buyer’s market, but nobody’s buying.  Full Story… The housing crisis is on such new ground that there is no historical basis for forecasting what will happen next.  Full Story… More people with top credit scores are choosing to walk away from their mortgages, as the rate of  “strategic default” is poised to double this year.  Full Story…

 
Is it Better to Sell and Buy, or Stay and Renovate?

Contractors and interior designers are reporting that more people are upgrading their present homes and staying in them longer. Many homeowners find it a better financial choice to remodel and renovate rather than trying to sell in this market and trade up to a new home that will lose value. The choice is not an easy one, and there are some factors to consider before deciding which route is best for you. The first thing …

 
Will China Be Next to See a Housing Crash and Economic Slide?

If you think our government is spending a lot of money, take a look at China.  Their so-called “growth model of the future” that the whole world is touting as the inevitable culmination of a civilized economy that we all must emulate is built on a rapidly expanding real estate market.  Sound familiar? The difference is that the government is doing all of the building – on spec.  It’s not only the dozens of billion-dollar …

 
June 10, 2011 Housing Market News Updates

Fed Vice Chairman says it will be a “long, drawn out recovery for the housing market.  Full Story… Governmnet subsidies poorest buyers into investing in the the most rapidly decling low end of the housing market.  Full Story… Robert Shiller, of Standard & Poor’s/Case-Shiller home price index, says it’s possible housing prices could fall another 25% over the next five years – if we follow the Japanese model, which saw housing values tumble for 15 …

 
Wandering Thoughts on a Meandering Market…

It has long been said that the minute you drive a new car off the lot it loses thousands of dollars in value.  (Okay, when I was a kid the price of a car was only a couple thousand dollars, so they lost a few hundred in value then.) Nevertheless, people still continue to buy new cars, and they just accept that aspect of the market.  Homes have always been different.  We keep them longer, …

 
June 8, 2011 Housing Market News Updates

A burgeoning rental market is the one bright spot in a decaying housing outlook.  Full Story… With buyers waiting on the sidelines, lack of demand continues to foil housing recovery.  Full Story… Distressed housing market drags down revenues to cities, like Murrieta case study.  Full Story… With home prices at an unbelievable 11.2 times family income, Vancouver real estate is poised for a precipitous tumble.  Full Story…

 
What Makes a Mortgage a Good Risk, Anyway?

How can we cure the housing problem when the medicine is so hard to swallow? The debate is heating up on the “QRM” proposal to help prevent another mortgage meltdown. In order for a mortgage to be categorized as a “Qualified Residential Mortgage” it would be subject to stringent rules, including a 20 percent down payment and a monthly payment that is less than one-third of the borrowers income. This, presumably, would make the loan …

 
June 7, 2011 Housing Market News Updates

The Wall Street Journal says it’s time to buy.  Full Story… Homebuilders’ stocks falter amid reports of weak job growth.  Full Story… On closer analysis, Case-Shiller 20-city double-dip report may focus on most volatile areas, with national trend being much more modest.  Full Story… Goldman Sachs says that the Senate investigation, which concludes that the financial giant made billions of dollars by betting against the housing market, is misleading. Full Story…

 
Harvard Reports More Gloom for Housing

The only thing getting worse press than Anthony Weiner these days is (what else?) the housing market. Harvard’s Joint Center for Housing Studies has just released its State of the Nation’s Housing report, and guess what?  It’s not good. The study reveals a lot of things we already knew – that the housing crash and subsequent decline of the economy has “…drained household wealth, ruined the credit standing of many borrowers and devastated communities with …

 
June 6, 2011 Housing Market News Updates

The Congressioanl Budget Office (CBO) say the bailout of Fannie Mae and Freddie Mac has really cost taxpayers $317 billion – not $130 billion as reported by the Obama Administration.  Full Story… Low prices and low interest rates are not bringing in the buyers, as the homeownership rate continues to decline.  Full Story… Anxiety is high for those who have to sell in this market, as no bottom seems to be in sight.  Full Story… …

 
Is It Time to Throw the Fox out of the Henhouse?

Is it possible that some members of Congress are finally looking deep enough behind the disease in the housing market to see some of the root causes? Maybe so. Rep. Marcy Kaptur, a Democrat from Ohio, is introducing a bill (H.R. 1489) that would bring back some parts of the Glass-Steagall Act that was repealed in 1998. You might recall that last week I was bemoaning the fact that, since the late 90s, the slick …

 
June 3, 2011 Housing Market News Updates

• The U.S. housing market is not ready to rebound; it will fall another 10 percent. Full Story… • Proposal to regulate mrtgage standards would be a fatal blow to the residential real estate market. Full Story… • A once-in-a-lifetime five-year housing bust has brought bargain prices and low interest rates, making this a historically opportune time to buy. Full story… • Wells Fargo chief sees a decline in the number of past due mortgages …

 
A Bad Market Can Still Yield Safe Deals…with Right Strategy

Sometimes you just have to get away from the fray and raucous noise of the of the media freak show surrounding the housing market and take a cool, rational look at things from a whole different perspective. After all, housing is an important part of everyone’s lives – but every dismal report and scary news story doesn’t necessarily affect you personally. So…is this a good time to get into the housing market? The answer really depends more …

 
Housing Slide Brings Panic, Not Level Heads

The fallout from Tuesday’s announcement that housing values have reached a new low has been, well, fast and furious. Home values are still declining sharply, and the 20-city report confirms that the housing market is indeed in a double-dip recession.  The Dow was expected to grow cautious on the news, but the 280 point single-day drop indicated more fear for the broader economy than most anticipated. Bank and financial stocks got hammered even worse. You might …

 
More of the Same Won’t Cure Housing Hangover

As the news just keeps on getting bleaker, the blame game is swinging into full gear. Some are calling it a failure of capitalism, others blame greed, while still others put the cause squarely on the shoulders of the government. For me, everything points to moral hazard. Moral hazard simply means that there is no need for accountability, as if you had free insurance on everything. If you fail, you will get bailed out. So, …

 
Homeownership Declines as Prices Continue to Fall

It is universally expected that today’s housing index report will confirm the double-dip recession in the housing market when housing prices officially fall below the bottom of March, 2009. It seems that the government’s zeal to give more people the American Dream of homeownership has backfired, leading the nation instead from Generation X and Y to “Generation Rent.” The falling prices are a sign of falling homeownership, which will soon dip to levels of the …

 
Foreclosures Provide the Bargains; Rising Rents & Interest Could Spark the Sales

Whenever I start thinking that the housing market can’t go any lower, I read the day’s news on foreclosure sales and remind myself that the real bottom, in terms of home values, lies at the bottom of the glut of bank-owned properties. RealtyTrak reported yesterday that 28 percent of U.S. homes sold in the first three months of 2011 were in foreclosure or already owned by the bank, and the price of these homes was …

 
May 26, 2011 Housing Market News Updates

National Association of Realtors president Ron Phillips fights to keep FHA down payment levels at 3.5%.  Full Story… Strong demand for single-family rental properties propel investor confidence.  Full Story… Foreclosures still represent 28% of home sales in the U.S.  Full Story… Five major banks facing $17billion in civil lawsuits overforeclosure practices.  Full Story…

 
Bankrupt the Economy, or Increase Foreclosure Rate?

We’ve been hearing an awful lot of political banter about raising the debt ceiling in recent weeks, but now we’re starting to see some articles, all spawned by a report from the Center for American Progress, telling us that failure to raise the debt ceiling will “torpedo the housing market” and result in “economic pain and a high foreclosure rate.” Possible, I suppose – but continuing to borrow boatloads of money could sink the whole …

 
Easier Short Sales Could Speed Up Recovery

Treasury Secretary, Timothy Geitner, told Politico yesterday that the recovery of the housing market has “several more years to go.” Confirmation of what is obvious to most observers still begs the question of how we can fix it faster. Some insiders are pointing more and more to short sales – selling the home for less than the mortgage balance owed to the lender – as a good way to reduce the growing inventory of foreclosed …

 
Housing Is Stalling U.S. and World Economic Recovery

The U.S. housing market – once the crown jewel of the economy in those glorious bubble years – is now holding back the recovery of the broader economic picture, both domestically and globally. Bloomberg is reporting today that the yield on 10-year Treasuries is already within 5 basis points (five hundredths of one percent) of the year’s low, and that was before the government released a report forecasting a continued and difficult struggle for the …

 
Positive Indicators Don’t Abound…But They Do Exist!

I was looking for a ray of sunshine in the housing market to start off the week – no easy task – and I may have found it. While the national ivory tower gurus are still focused on foreclosures and declining values, some of the local realtors who are actually in the trenches battling the monsters see signs of hope. Of course, every locality and region is different, but you can still look for these …

 
Housing Values Down… Property Taxes Up

It seems counter-intuitive at first, but as our homes become worth less and less the property taxes we are required to pay keep increasing. Housing prices have been decreasing at a rate of 18 percent a year since 2006, according to Fox Business, but during the same period property taxes have been going up at a rate of 7 percent a year.  And the 2010 census shows that revenues from property taxes increased from $365 …

 
Cost of Living Higher for Renters

So, here’s the dilemma for millions of Americans: The general economic crisis has left them with no cash for a down payment, and bouts of unemployment or job insecurity have left them with poor credit and an uncertain income. Those are the main reasons people give for being shy of the housing and mortgage markets – but families still need somewhere to live. The problem is that it is generally much more expensive to rent …

 
Is the Housing Crisis Changing America?

The lengthy housing market downturn combined with a severe credit crunch may change the complexion of the housing market, the economy, and the state of the American middle class for decades to come. The first symptom of this is the huge fall-off in first time buyers. It doesn’t take a mathematical genius to figure out that people who sell one house and buy another do nothing to reduce the inventory of homes on the market; …

 
Fannie Pushing to Increase Loan Quality

You can sleep well. Fannie Mae is undertaking a push toward better quality loans! Well, let’s not break out the champagne quite yet, as it might take a while longer to completely restore America’s confidence in the quasi “private” agency that (together with Freddie Mac) buys up about 90% of America’s mortgages on the secondary market. After all, it was just a few months ago that they relaxed their lending standards to included applicants with …

 
Housing Market in a Double-Dip Recession

A double dip is great for ice cream cones and pool parties, but it’s not so good for recessions. We’ve been hearing the term kicked around for a few years now, and last week one big property valuation outsourcing firm, Clear Capital, reported that the U.S. housing market was officially in double-dip territory. The broader economy may or may not follow suit, but a second wave of steep declines in home prices indicates that the …

 
Housing Market Confusion: Recovering or Declining?

Whether you open a newspaper, magazine, or turn on the TV news it’s hard to avoid the mixed signals and just plain contradictory headlines regarding the state of the housing market that greet us daily. One guru tells us that there’s nothing but roses from now on while the next expert is spewing gloom and doom that he sees lasting into the next decade. So, what’s the truth – and what difference does it make …