 |
Whether purchasing or refinancing a home, we'll offer you sound and unbiased information.
Get national and regional topics like California's refinance market,
and calculators to evaluate your own mortgage.
|
L thought this looks like a sign of the times, and I had to agree. If you have MLS access, check out #2895409. It looks like the granite countertop business isn’t what it used to be:
$200,000.00 PRICE REDUCTION !GREAT LOCATION/ GOOD INCOME BUSINESS. HIGHLY POTENTIAL GROWTH GRANITE COUNTERTOP AND CABINET RETAIL AND WHOLESALE STORE. THIS SALE INCLUDES ALL BUSINESS FIXTURE, INVENTORY, EQUIPMENTS, OFFICE FURNITURE AND COMPUTERS. BIG SHOWROOM . CLOSE ON SUNDAY. EASY TO RUN. WILL TRAIN
Moody’s is saying what we’ve been saying for awhile- Arizona is in a recession: [Thanks L!]
The Phoenix and Tucson metropolitan areas, as well as the state of Arizona, are in a recession, economists at Moody’s Economy.com have declared.
The company first concluded several weeks ago that Arizona was in a recession and, in a separate report released Thursday, said that metro Phoenix is "firmly" in one.
Industries are shedding jobs, the housing market remains tumultuous, the mortgage-delinquency rate is rising faster than the national rate and credit conditions aren’t likely to improve in the near term, says the Phoenix report written by Rebecca Seweryn, a senior economist with Moody’s in West Chester, Pa.
According to data released by the Greater Las Vegas Association of Realtors, the median price of single family homes in Las Vegas fell 22.7% in April, from $305,000 in April 2007 to $235,875 in April 2008. Prices haven’t been this low since February 2004, when the median price was $220,000.
Hurricane Katrina was the costliest and one of the five deadliest hurricanes in the history of the United States.[1] It was the sixth-strongest Atlantic hurricane ever recorded and the third-strongest hurricane on record that made landfall in the United States.
In spite of the devastation, there were no "hurricane prevention" bills. Congress recognized that while the emergency response could be improved, hurricanes cannot be prevented.
We are now facing a devastating storm in the housing market. Unlike Katrina, this storm cannot be considered an "act of God". Mistakes by government, lenders, buyers and builders caused it- but it cannot be legislated away. Housing will not be "rescued", but Congress continues to try:
WASHINGTON (Reuters) - The U.S. House of Representatives is due on Wednesday to begin debating a housing rescue package that could see the government buy up $15 billion of abandoned homes and help an estimated half million homeowners facing foreclosure.
The sweeping bill would offer fresh spending, tax credits and a new government guarantee on many risky loans to bolster the national housing market.
If the government buys $15 billion dollars worth of abandoned homes, it will take them off of the balance sheet of banks, but it won’t fill them with homeowners. Values will continue to decline in areas filled with nuisance housing. The values will fall on the surrounding properties, increasing the chance of foreclosure for the neighbors of unwanted houses.
Thankfully, the president is threatening to veto this legislation:
Blanche Evans, editor of Realty Times says:
Stop listening to the media. Go buy a home.
Her logic?
Why buy a house now? You’ve been getting bad information. Here’s why.
The financial press is worried that they might have gone too far — paralyzing the nation into recession by piling on housing. So they’re finally beginning to question the indexes where they get their data, and whether the news is really as bad as it seems. Slowly but surely, headlines are changing from ‘Don’t Buy A Home Now’ to ‘Is It Time To Buy?’
We said it here first on Realty Times — that consumers aren’t getting the full story. Indexes [sic] can be misleading because of the locations, prices, types of housing, and rates of increase they track.
Actually, I think we at Doom were criticizing the indices [In particular those of the National Association of Realtors] before Realty Times was- they didn’t seem to object to the flaws during the boom markets. They are correct however, that the indexes are not without their limitations. Evans states:
Finally, one brave journalist is writing that Case-Shiller is flawed.
In his story "Home-price data has its flaws,"Chris Plummer of MarketWatch slammed both Shiller’s Index and the Associated Press for being "Grim Reapers."
For the first time, S&P Index Committee Chairman David Blitzer "acknowledged his organization’s overall and metro-market readings paint an incomplete picture."
No kidding. The Index covers only 20 markets, heavily weighted to the most volatile metros in the nation.
That Case-Shiller looks at 20 markets is not a news flash to those of us who actually look at the data every month. The Case-Shiller folks have never made claims to the contrary. It would be virtually impossible to track every sale, every month- so sampling is necessary. [The Marketwatch article also criticizes the National Association of Realtor’s numbers too, but Evans fails to mention that.]
Evans uses this fact to try and discredit Case-Shiller findings:
"The glaring discrepancy in this case is that 17 of the 20 metro areas posted record annual declines, and yet 78 percent of the 330 metropolitan regions that the NAR tracks reported price increases … ."
Case-Shiller uses a different methodology than the NAR. According to Standard and Poors:
The S&P/Case-Shiller Metro Area Home Price Indices use the “repeat sales method” of index calculation – an approach that is widely recognized as the premier methodology for indexing housing prices – which uses data on properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit.
The NAR however, tracks median price- which even their chief economist criticizes:
The NAR reported last week that U.S median home prices fell 7.7% in March from a year ago. The decline resulted largely from a market anomaly — a steep decline in costlier home sales due to tighter lending standards and high jumbo-mortgage rates, coupled with a foreclosure-driven spike in cheaper homes."If there are a lot more homes sold on the low end and fewer on the high end, the median price is bound to drop dramatically," NAR Chief Economist Lawrence Yun said. "In normal times, a median price would reflect typical homeowner equity changes, but these are not normal times. The jumbo (mortgage) market is frozen and the buying activity is more concentrated in lower-value homes."
Consequently, Case-Shiller vs. the NAR’s figures is hardly an "apples to apples" comparison. In addition, in many markets tracked by the NAR, a shortage of new buyers and fewer sales can skew the median upward. It is possible for prices in general to be falling, and yet have the median rise. The fact that the results are different does not in fact mean that the NAR’s results are better.
Evans laments:
We received an interesting question from a reader in Florida. I thought perhaps some of our Florida Doomers might be able to answer her question:
I recently did a refinance on my home. Getting a good loan was difficult since I do not have much in verifiable income, but in assetsI have more than enough to cover the loan. The reasons for not touching this money rather than refinancing is that most of it is in an irrevocable trust and the rest in invested in where it draws more than twice as much as the interest on the loan. Obviously, there are a lot more reasons for this option, but my question has to do with what happens after the closing.
The last time I had a closing, the laws in Florida were different, and after all the papers were signed, checks were handed over to me right than and there. Some made out to me, others to the creditors.
I have been informed that in Florida, it now take at least 3 days from the signing until checks are issued. Meanwhile I have received my insurance papers stating the new lender as the lien holder, but to this day, I have received no funds, and none of my creditors have either. Is there a legal amount of time in which they have to turn over the funds? The closing was approximately a month ago and I feel like I am getting the run around. First they told me that had to verify that that I had access to the funds in the trust since that is my main source of income. They asked for this AFTER the closing papers were signed, and I told them they already had everything they needed. There is a paper trail showing how the money is leaving one account and going into another. I actually even gave them copies of the Last Will and Testament that set up this trust.
Is this normal, or am I getting a run around, and if so, who do I go to with complaints against the company? I am getting extremely frustrated at this point, and it is really hard to take it out over the phone.
I hope I don’t regret this. I rarely weigh in on any of the presidential candidates, as I’m not completely happy with any of them. This comment from presidential hopeful Barak Obama however, was simply too silly to ignore:
Obama made a "surprise" stop in North Bend, Indiana Thursday at the local VFW, and was asked a question:
As Obama got ready to leave the VFW hall, another man piped up and asked about the downturn in the housing market, and credit problems a lot of people are experiencing.
Obama says he would negotiate between lenders and borrowers to establish fixed-rate mortgages for people with so-called "subprime mortgages," whose rates are skyrocketing.
"Once people feel confident about the housing market, credit is going to start flowing," Obama said.
"What do you think is the first step to making that happen?" said the man who asked the question.
"Electing me as president," Obama replied, smiling.
The best thing I’ve read this week comes from CBS News this morning:
In the midst of the subprime crisis, there’s an important question that analysts and policymakers have neglected: Did so many people need to own homes in the first place? The dream of home ownership has long been part of the American experience, but, as the federal government steps in to artificially support borrowers and lenders with tax credits that encourage more spending or with public spending that keeps over-indebted borrowers in unaffordable homes, we ought to consider whether it’s time to wake up from that dream.
Indeed, we ought to consider what role the federal government has played in creating this mess. By stimulating home ownership while failing to account for the reasons home ownership is valuable to society, Washington has simply sought to buy our votes with our own debt. As the subprime crisis accelerates and threatens to spread through prime and near-prime markets, policymakers face a watershed moment. To keep us from an economic nightmare, they need to replace the dream of home ownership with policies that actually increase wealth — not just the illusion of it.
Even rich guys are walking away from their underwater properties these days:
[Thanks L!]
Former U.S. baseball star Jose Canseco said on Thursday he had lost his California mansion to foreclosure — one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis.
Canseco, 43, one of the most flamboyant U.S. baseball players until his retirement from the major leagues in 2001, told the celebrity TV show "Inside Edition" that it did not make financial sense to keep his 7,300 square-foot (678.2 sq-metro) home in the Los Angeles suburb of Encino.
"Inside Edition" said it had foreclosure documents showing Canseco owed a bank more than $2.5 million on the house.
"I’ve been out of the game for about eight or nine years and obviously this issue with the foreclosure on my home," he told "Inside Edition."
"I do have a judgment on my home and it to me is very strange because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else," he said.
Maybe this could be the start of a new HGTV series: "Foreclosures Of The Rich And Famous"!
Remember how we were told that raising the conforming limits would help higher priced markets? It doesn’t seem to be working: [Thanks G!]
The New York Times reported on Wednesday that there are real problems with the jumbo mortgage aspect of housing rescue.
Several months ago Congress, in an attempt to loosen up credit in costly markets, raised the loan limit on loans which could be backed by government-sponsored housing finance agencies such as the Federal Housing Administration from $417,000 to amounts up to $730,000, depending on location. The change was intended to reduce rates for more borrowers (jumbo loans have always carried a higher rate than conventional loans, i.e., those below the loan ceiling) and to stimulate lending. The goal was not aimed at helping subprime borrowers but was aimed at credit-worthy borrowers with acceptable down payments who wanted to refinance or purchase a home in expensive housing markets like San Francisco or New York. It was thought that helping thousands of borrowers access billions in new loans would stimulate the housing market, spur consumer spending and possibly avoid or at least reduce the effects of a recession.
Instead, Matt Richtel, reporting in the Times says the effort to make it easier to get jumbo mortgages has yielded frustration and disillusionment. Since the rules took effect April 1, many borrowers and their mortgage brokers say the new loans are either not available or the rates are far higher than they expected.
Richtel quotes the president of one mortgage corporation as saying that the program "is so much of a failure that it’s really unbelievable..Like coming up with a vaccine to a terrible disease, and then not giving it to people, or making it too expensive."
