NAR President Moe Veissi praises new help for struggling homeowners. The Federal Housing Finance Agency on Tuesday announced measures to make “short sales” of underwater homes easier for homeowners, including extending help to people who have financial difficulties but haven’t missed mortgage payments.
“The National Composite rose by 6.9% in the second quarter alone, and is up 1.2% from the same quarter of 2011. The 10- and 20-City Composites closely mimic these results; the 10-City was up 5.8% over the quarter and the 20-City was up 6.0%. The two Composites also entered positive territory on an annual basis, up 0.1% and 0.5%, respectively.
All 20 cities studied by S&P Dow Jones reported positive price gains for the second consecutive month in a row. Only Charlotte and Dallas saw a deceleration in annual gains during June, while 18 of 20 metro areas posted better price returns over last year.
“There were only six cities – Atlanta, Chicago, Las Vegas, Los Angeles, New York and San Diego – where the annual rates of change were still negative,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
“We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change. The market may have finally turned around.”
“The combined positive news coming from both monthly and annual rates of change in home prices bode well for the housing market,” said David Blitzer, chairman of the S&P’s index committee.
Jonathan Basile, an economist with Credit Suisse, said improving home prices should boost home sales further in the coming months.
“Persistent news of rising house prices should start convincing prospective home sellers that it’s not just a buyers’ market,” Basile said. “And when Americans become more comfortable with selling their home, they also become more comfortable with buying another one.”
It must be getting pretty comfortable in those ivory towers for these guys to finally mention that there could be a recovery. Case, Shiller, and Blitzer never talk about sales counts, which are better indicators of things to come.
Once the summer push is over in about 30 days, we should start seeing the sales counts drop off dramatically around San Diego – there’s not enough well-priced inventory left to sell.
Could buyers who just listen to these soundbites rush out in a panic and go pay more than they should? Maybe, but I doubt it – not after waiting this long.
I don’t agree with his assertion that ‘improving home prices should boost home sales further in the coming months.” Improving prices make sellers want to wait until they go higher – especially those potential sellers who are underwater.
Consumers around San Diego County are probably scratching their heads in response to a new report from the Bureau of Labor Statistics showing the region’s rate of inflation is among the lowest in the nation.
The report shows that the Consumer Price Index, which measures changes in retail prices across a broad range of products and services, rose by 1.3 percent over the first six months of 2012 and has advanced just 1.7 percent during the past 12 months.
San Diego has the third lowest rate of inflation among the 27 metropolitan regions in the United States tracked by the Bureau of Labor Statistics.
The Southern California region is facing a another wave of foreclosures with many San Diego borrowers underwater on option ARM and Alt-A loans that are scheduled to reset soon, according to San Diego real estate investment firm Blue Sky Capital.
Blue Sky Capital said it has been tracking properties in San Diego County and many of those with adjustable rates will not be able to afford larger monthly payments when their loans reset. The REIT says more than 36% of San Diego mortgages are currently underwater.
“While these option ARM and alt-A loans exist throughout the county, areas like Carmel Valley are filled with them. During our tracking of distressed properties in the county we found many homes in areas like Carmel Valley were purchased with zero, or a small amount down, so there is very little equity in theses properties,” said Chris Williams, CEO of Blue Sky Capital. “Carmel Valley, just north of the city of San Diego, has a median income of $90,000 and while higher end families have been able to withstand the initial housing meltdown, things are about to change. We will see more housing distress in Carmel Valley, and as a result, more foreclosures and short sales.”
Many homes in the area remain in negative equity, cutting down on the inventory of for-sale homes, Blue Sky Capital said. The result of this trend is higher prices since limited inventory pushes prices higher.
“You could say the positive of this negative equity is that it helps drive home prices up, as underwater homeowners delay as long as possible putting their home on the market which creates a supply constriction. But it’s only temporary and not a real sign,” said Williams. “These situations are unsustainable and certainly short lived. Strategic defaults, foreclosures and property value declines have to happen for the market to reset and clear itself of the toxicity from the greatest mortgage mess of this century.”
The meltdown of the U.S. housing finance system resulted from overly optimistic views on home prices as opposed to a type of gross negligence in the mortgage industry, a new Federal Reserve Bank of Boston report concluded.
The report attacks several common assumptions about the cause of the recent financial crisis, including the popular notion that mortgage finance firms, and insiders in the business, are primarily to blame for the housing fallout.
Instead, a collective euphoria over the rise in home prices and the false expectation of constant price increases led to the mortgage industry and borrowers miscalculating the risks.
“If both groups believed house prices would continue to rise rapidly for the foreseeable future, then it is not surprising to find borrowers stretching to buy the biggest houses they could and investors lining up to give them the money,” wrote the report’s authors Christopher Foote, Kristopher Gerardi and Paul Willen. “Rising house prices generate large capital gains for home purchasers. They also raise the value of the collateral backing mortgages, and thus reduce or eliminate credit losses for lenders.”
The group attacks the idea that payment shocks on adjustable-rate mortgages created an atmosphere of extreme default. The report analyzes ARMs originated in 2005 and 2006. The 2006 loans experienced a less severe payment shock than the 2005 group, but ended up with a much higher delinquency rate, killing the idea that payment hikes alone on ARMs caused the problem.
84% of foreclosed borrowers, for example, were overdue on payments equal to when the mortgage first originated.
The authors go on to claim there was little substantive change or innovation in the mortgage markets in the 2000s. Government policy toward mortgages did not change as much as theorized in reports about the market fallout. The report says investors knew the risks, but like many buyers, based their short-term and long-term calculations on overly optimistic home-price growth.
I am trying to sell my house at the moment in a particularly hot local housing market. The market isn’t the only thing that is hot. So is my agent. It turns out that her attractiveness could be very good news in terms of the price the house is sold for, but bad news in terms of how long it is on the market.
Research published last month finds that the personal characteristics of real estate agents matter to house prices and the length of time a house is on the market, even after controlling for the quality of the house.
In their analysis the researchers control for age of the property, size of the house, number of bedrooms, number of bathrooms, location of the home and, as controls for quality, whether or not the house has hardwood flooring, brick siding and granite countertops.
It turns out having a male agent is bad for the selling price of a house. Both male listing agents (those acting on behalf of the seller) and male selling agents (those acting on behalf of the buyer) are associated with lower house prices than their female counterparts. The gender of the agent, however, has no effect on how long a house is on the market.
Being attractive, for both listing and selling agents, is associated with higher final sale price for a house, with the effect on house prices of having an attractive listing agent is about twice as large as that of an attractive selling agent.
Where homeowners lose out on having an attractive listing agent, however, is in having their house on the market for longer. The attractiveness of the selling agent has no effect on length of time on the market (which makes sense since, presumably, the characteristics of the buyer’s agent only matter when the house is finally sold).
Attractive agents don’t necessarily earn more annually than less attractive agents. The houses they sell go for a higher price, but they sell fewer houses than do less attractive agents (presumably because each house is on the market for longer).
The study also finds that non-white listing agents are associated with lower final prices and both non-white listing agents and selling agents are associated with longer times on the market.
The authors argue that this evidence of higher house prices and longer time on market for attractive agents is suggestive of two theories. Either attractive agents use their physical beauty to compensate for low productivity (i.e., they don’t actually work that hard to sell the house because their attractiveness helps get a higher price). Or they use their beauty to attract better listings that command higher prices but are no better (or worse) at selling them than other agents.
The authors of this paper side with the second explanation – that agents don’t actually use their beauty to sell properties more successfully, but rather are better at attracting listings that they can sell for higher prices.
If my agent read this piece I suspect that she would think to herself: I wonder if anyone has every done a study on the relationship between having an economist as a client and the length of time a house spends on the market? I have to admit to feeling a bit badly about how analytical I have been about the whole thing. The good news is, though, that the combination of being patient (which I am) and being attractive (which she is) appears to be a winner. Here’s hoping!
An excerpt from an article of dubious quality from thelatimes – thanks daytrip!
Foreign clients bought $41 billion worth of stateside houses and apartments during the 12-month period that ended in March 2011, according to the latest tally by the National Assn. of Realtors. That’s roughly the same as the previous year.
But add in the $41 billion spent by immigrants who moved here within the last two years and individuals with visas of more than six months, and the total is $82 billion worth of U.S. residential real estate taken off the market by international buyers, up from $66 billion the year before.
The demand for American real estate is so strong that last fall, the Realtors association launched an international version of its listing website. Now, the 4.4 million properties displayed on Realtor.com can be viewed more easily by buyers from practically any place in the world, and in almost a dozen languages.
In the 1980s, when investors from Japan and other countries were buying large amounts of commercial real estate, including such iconic properties as the Pebble Beach golf club and Rockefeller Center in New York, there was fear in some quarters that the U.S. was for sale to foreigners.
There’s no such outcry this time around, if only because the foreign share of the domestic housing market is but a small sliver of a $1.07-trillion pie. And in markets where foreign buyers are most active, their pesos, pounds and rupees are being welcomed with open arms because they are helping unclog the logjam of unsold and foreclosed houses, a jam-up many believe must be cleared before residential real estate can regain its equilibrium.
“At a time when there are a lot of homes on the market and an overhang of distressed properties, an active foreign demand relieves these worries,” says Michael Fratantoni, vice president of research at the Mortgage Bankers Assn.
While most states have some international buyers, the Realtors group says foreigners are buying largely in four states — Florida, California, Texas and Arizona. Of those, only Texas is not being held back by a glut of unsold inventory.
More recent data square with the association’s findings. According to DataQuick, nearly 55% of all U.S. residential real estate sales to foreigners from May to November last year were in Florida, and more than 17% were in Arizona. Nearly 6% were in California, and close to 5% were in Nevada, another state hit hard by the housing downturn.
According to an analysis of Internet searches of U.S. real estate by foreigners in last year’s fourth quarter by Point2, a real estate technology company, Florida holds the most interest, followed by Arizona, Nevada and California.
None of this is terribly surprising. Not only are housing prices languishing in these spots, but most people prefer warmer climates. What may be surprising, though, is that many foreign buyers are not coming to the U.S. from that far away.
While the Realtors counted buyers from more than 70 countries, Canada accounted for nearly a fourth of all international sales, followed by China at 9% and India, Mexico and Britain each with a 7% share. Together, these five countries accounted for 53% of the transactions.
Canadians have always been big investors in American real estate, especially in warmer climates. But Saul Klein of Vancouver, Canada, firm Point2 says interest is also keen among Canadians in states such as Michigan, which is close to home. Michigan has been hit particularly hard by the downturn and, therefore, offers “very attractive” investment opportunities, Klein says.
But pure investment isn’t necessarily the main driver of the decision to buy houses in America, even if the buyers expect to use them only on vacations with family and friends. Rather, it’s foreign buyers’ desire to protect their money from the ravages of their own economies.
Even though the value of the U.S. dollar isn’t what it once was, most foreigners believe the U.S. is the “best place in the world” to park their money, says Faith Xenos of Singer Xenos, a Coral Gables, Fla., wealth management firm that works with Brazilian clients. “There is a certain allure and prestige to being a U.S. investor. So when people do well, they put their money in American real estate or a Swiss bank account,” Xenos says.
Most foreign purchases are in cash, if only because the long-term, big-ticket borrowing arrangements common in this country are, well, foreign to foreigners.
Stephen Davis, an immigration lawyer in Jacksonville, Fla., says foreigners can buy homes in the United States under several visa programs. But to grease the wheels a bit further, Sens. Charles E. Schumer, a New York Democrat, and Mike Lee, a Utah Republican, have introduced legislation that would grant three-year visas to those who spend at least $500,000 in cash on at least one house.
Noting the strong desire to own homes in places where the inventory of properties for sale is currently bloated, Schumer said of the measure: “This is a way of letting them live here and solving our housing crisis.”
Mortgage rates moved up significantly last week. Will rates continue to rise? Expect mortgage rates to go up this week closer to 3.1%. Freddie Mac will release the 30-year fixed mortgage rate tomorrow morning. Stay tuned.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!