Housing Market Spring Recovery: Dead on Arrival?

Market analysts are dialing back on their expectations for the housing sector this year following reports of continued sluggishness in what should have been the start of a busier season.
In a report issued earlier this week, Fitch Ratings announced it is tapering its forecast for 2014 in acknowledgement of what has so far been a “subpar spring selling season.”
Sales of both new and existing homes in March fell short of expectations, dashing optimistic projections of a rebound following the end of an unusually harsh winter. Housing starts also disappointed as homebuilders remain concerned about the shape of the market.
Looking past spring, Fitch’s report focuses on expected growth throughout the rest of the year, with housing starts and new home sales forecast to see percentage gains in the mid-teens. Average median new home prices, meanwhile, are expected to rise about 3.5 percent, a substantial moderation from growth over the past two years, which was largely seen as unsustainable.
However, even with early numbers coming up short, with two months left in the season, some commentators are saying it’s too early to write off spring as a disappointment just yet—including Bob Curran and Robert Rulla, directors and homebuilding analysts at Fitch.
“The biggest message that we put out was that we do see so far ... that [spring data] is disappointing relative to expectations,” Curran said. “[I]t was a very good spring last year, so the comparisons are kind of tough.”
Over the coming months, Curran says he expects to see more favorable year-over-year comparisons.
Furthermore, while data released so far might not be stacking up well against forecasts, Rulla sees little reason to be skeptical about summer projections: “There’s a little bit more caution given what transpired the first three months of the year, but we think that there’s still going to be growth in the overall housing market in 2014.”
As far as March’s low sales numbers are concerned, one thing to keep in mind is that inventory remains limited across the country and is especially weak in certain areas.
“Interpreting low sales volume in March as bearish—we think that’s misguided,” said Mike Simonsen, co-founder and CEO of real estate data firm Altos Research. “It doesn’t tell you anything about the actual demand for those homes. You can’t tell how many people want to buy homes by how many are sold.”
By Altos’ measure, the housing cycle is set to peak at the end of June before falling off into the fall and winter, as it does every year. Using that “map,” Simonsen says the company has good visibility on what the year as a whole should look like and predicts a 10 percent increase—an optimistic outlook compared to most others.
Meanwhile, at Clear Capital, the company is terming the latest slowdown in price changes “the new normal.”
“Even though we’ll see improved housing metrics across the board this summer, it won’t be the banner year that 2013 was,” said Dr. Alex Villacorta, VP of research and analytics for the company’s Data Division. “I think it’ll be more measured, [and] I think it’ll be more localized ... it may not show up in the national housing metrics numbers, but it certainly will be in certain markets.”
For the near future, Villacorta says the numbers to watch will be those in the mid-tier housing segment, where the most housing activity traditionally takes place. That happens to be a particularly weak area, though he believes even a small boost in the next month or two will help put the market back on more stable footing compared to the year’s early months.
“I think just seeing the signs of activity may turn the tides of confidence in consumers,” he said. “Probably in about 45 days, we’ll know what’s happening in spring fully.”

How Often Were Homes Sold For More Than The Asking Price?

Have you been waiting for the home values to rise so you can sell? Well;, don't miss your window of opportunity. Although values have risen significantly, there is a lack of inventory of homes for sale spurring bidding wars. It's a sellers market......DON'T MISS IT!!!

For more information conbtact
Jerry Gusman
The Gusman Group
(888) 213-4208
Jerryggroup@aoo.com

Jerry Gusman, The Gusman Group voted among Top Listing Agents In Southern California

Jerry Gusman, The Gusman Group voted among Top Listing Agents In Southern California and Inland Empire by Real Estate Network Corporation.. With Offices in Rancho Cucamonga, The Gusman Group since 2011 has helped many distressed homeowners through out Southern California from National City in San Diego County to Homeowners in Half Moon Bay in Northern California. " Successfully helping these distressed homeowners was really an uplifting experience" says Gusman.

Gusman explains that the key to selling a property in today's market is exposure. "You can sell any property, in any condition and at any price....you just have to expose the property to as many potential buyers as possible" states Gusman. Gusman believes that "it's all about marketing!" "That's the difference" he says " we don't just list your home WE Market, We make a plan". Each property is different so each property has to be marketed different. Today's market is web driven and a prominant web marketing plan is essential to your selling success. Data has shown that over 90% of home buyers utilize the internet far before contacting a real estate agent.

"We utilize the web and other traditional real estate marketing techniques succh as Open Houses and mailers to generate maximum exposure. With maximum exposure eventually you will secure the right buyer." says Gusman. "Sellers cannot secure this kind of exposure on thier own, they just do not have the tools to do so,  
For sale by owner sellers are leaving substancial money on the table" Gusman added.

It is this kind of aggressiveness and attitude that has awarded Jerry Gusman and The Gusman Group the recognition given. For more information contact The Gusman Group.

California Home Sales Jump Higher in March

The California Association of Realtors (CAR) reported 367,000 closed escrow sales of existing single-family detached homes, seasonally adjusted at an annualized rate. March marked the fifth straight month with sales below the 400,000 level, and the eighth month of declining sales on a year-over-year basis.

According to the group, "The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the March pace throughout the year."

Sales increased from February by 1.4 percent, but were down 12.3 percent from March 2013.

"While the demand for housing was up from February, the market is taking a hit from lower housing affordability compared to a year ago, which led to a decline in home sales from last year," said CAR president, Kevin Brown. "Moreover, concerns over tighter lending standards and increased borrowing costs are also contributing factors to the sluggish market as they both negatively impact the bottom line of home buyers who obtain financing through mortgages."

Home prices jumped upward as well, reversing a February decline to land on a 7.7 percent increase for March. March's price was 14.9 percent higher than prices from March 2013. Prices have increased on a year-over-year basis for two full years, with 21 straight months of double-digit annual gains.

Housing inventory tightened in March, with the available supply of existing, single-family homes for sale slipping to four months.

"While housing inventory has loosened since last year, it’s still below what’s considered typical in a normal market," said CAR VP and Chief Economist, Leslie Appleton-Young. "Many of the listings continue to be priced above what the market will bear and are not moving. As such, even with improved home prices over the past year, new listings are lagging because would-be sellers who have limited options on where to move are hesitant to put their properties on the market."

Low inventory means its a sellers market. Get top dollar for your home today!!

For More Information Contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Top 5 Markets For Increased Median Home Prices

Current Housing Market ‘Far from Bubble Territory’ Where Will The Real Estate Market Go Next?

Despite major gains in home values, particularly in California, market strategists from Pro Teck Valuation Services say there is no bubble on the horizon.

On Monday, Pro Teck released its March Home Value Forecast, which ranks the hottest and coolest metro markets in the country. California claimed nine of the top 10 slots (Nassau County-Suffolk County, New York, was the other), while Florida claimed seven of the bottom 10 areas for home value appreciation.

And though California has shown impressive gains in valuation recently—a trait that often makes California the subject of “new bubble” talk—Pro Teck CEO Tom O’Grady said he does not foresee trouble over the next five years.

“The Los Angeles metro area has appreciated 48 percent over the past five years,” O’Grady said. “It’s an impressive run, but far from bubble territory.” The reason he’s not anticipating a bubble is because Pro Teck’s data has shown that bubbles don’t happen until a market appreciates 150 percent or more for five straight years.

And he doesn’t see it happening through 2019, even in the strongest market going, Los Angeles.

“Our forecast for the next five years still shows that home prices in the Los Angeles market will see a steady uptick, but no bubble and will remain below their 2006 peak,” he said.

This month’s forecast shows a median home price of $449,300 in the L.A. market, which is still well below its peak of $551,500 in the fourth quarter of 2006.  If interest rates rise to 6 percent by 2019, the report states, median home prices should still only appreciate to $503,900 by the end of 2019.

One of the primary drivers of the appreciation in the California metros, O’Grady said, is the limited inventory of homes, which often leads to bidding wars. “All nine metros have four or less months of remaining inventory,” he said.

As for the bottom 10, all metros that made Pro Teck’s list of poorly performing areas have two common threads—high foreclosure ratios and high months of remaining inventory, O’Grady says.

“The good news is that there are many positive trends, including the decrease in the number of active sales in the majority of the markets.”

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

What Adds Value To A Home?

The concept of what adds “value” to a home is, at best, subjective.

One buyer may place a high value on a pool while another may see that as a reason to eliminate the home from consideration. Price and cost does not always equal value, and there can be any number of reasons why that’s the case.

The most common reasons reinforce a basic truth found in all real estate: This is not an exact science, and a number of variables — especially the motivations and desires of buyers and sellers — can be very difficult to account for. While data analysis provides a benchmark for value trends in an area, that data must be blended with the variables present in each situation.

“Value in use” has a number of real estate-specific definitions. It also has a much simpler real-world residential application — does the home suit a specific requirement of the present owner or buyer?

There are a myriad of simple examples: a master on the main, an in-law suite, a single-story home or a handicapped-accessible floor plan. Occasionally, a setting or locational appeal can be the impetus — views, lot appeal, schools or proximity to mass transit. Quality of construction and design, craftsmanship and similar upgrades can also increase appeal.

There’s no shortage of people willing to “pay more” to live in a desirable school district, or for a home with certain design features. The question of what a home is “worth” really has two answers — what the data indicates, and what role it serves for the person who lives in it, whether it’s the present owner or the buyer.

The challenge comes when trying to reconcile the hard data that appraisers rely on with those intangible or specific appealing features a buyer values. This is often the basis for appraisal issues, especially in a lending environment with hyper-underwriting processes.

There are homes with full-sized indoor batting cages, racquetball and basketball courts, bowling alleys and even shooting ranges."

Challenging an appraisal in a situation like this can be difficult; underwriters don’t typically like to think outside of the box. In some cases, this can also undermine the confidence of the buyer if potential appraisal problems are not detailed to a buyer or seller.

While a home may contain highly desirable features, the problem of functional obsolescence due to overimprovement may be a genuine concern. There can be instances of properties with features so unique that their cost is not close to supported by the local data.

While some buyers or occupants may still find a home like this appealing, they might be considered “white elephants” because they are so uniquely equipped. That could become a headache for both sides when it’s time to sell.

Most place a high value on garages. A two-car garage is nice. For some, space for three or four cars is better still. But what about six?

What about a garage equipped with a lift system that allows for cars to be stacked in a garage? Or a garage with a “pit” that allows access to work on vehicles from below? Is a cavernous garage that’s tall enough to accommodate an RV or fishing boat worth the expense?

For select buyers, these might be “must-haves.” For others, they may be features that cannot be justified with a higher price.

Outdoor improvements like pools and barbecues routinely enhance appeal, especially in warmer markets. How much will the market recognize pool features like gunite and pebbletech instead of vinyl? What about hot tubs, waterfalls and vanishing edge designs? What’s more desireable: salt water or chlorine?

Will the market pay more for a fully equipped outdoor kitchen with high-end appliances, media and audio systems, and fire pits or fireplaces featuring real stone or brick?

What about uniquely designed and constructed walks, walls and landscaping? Does something like this, especially if a community has a pool and recreational facilities, return the cost of installation and maintenance when offered for sale?

Another example seen more and more is the trend toward athletic equipment in homes, in some cases rivaling what’s found at professional gyms and training facilities. There are homes with full-sized indoor batting cages, complete with pitching machines and netting, homes with racquetball and basketball courts, bowling alleys and even shooting ranges.

Indoor pools are not nearly as unique as they once were, nor are full-sized gyms with professional-grade equipment. While many buyers might enjoy a gym or target shooting, how many want them in their home, and are willing to pay extra for them?

Some homes serve a general purpose for a limited time. Others serve a specific role that may last for many years.

Real estate is a highly personal business and there are an infinite number of variables at play. But answering the question of “Does this home work for me?” is the most important one to control.

That answer — the “value in use” to the occupant — may not be supported by the market data. Which is why an understanding of these terms is so important when making sound real estate decisions.

For more information contact
Jerry Gusman, The Gusman Group
(888) 213-4208
Jerryggroup@aol.com

FHA facing political pressure to bring back ‘spot’ condo loans!

Good news for Realtors, lenders and condominium unit owners who’ve been frustrated by FHA’s prohibition of “spot loans” in developments that haven’t obtained certification: The agency is now seriously exploring how to relax its ban and bring them back.

Officials are mum on the details and timing, but they confirmed to me on Friday that reviving this key financing option is now under active study. The main reason: FHA is under growing political and trade group pressure — NAR and the Community Associations Institute especially — to do so.

Spot loans are important for sellers whose condo associations’ boards of directors have chosen not to apply to FHA for approval of the entire development. Under current rules, without FHA certification of the project as a whole – based on evaluations of the association’s financial accounts, reserves, insurance, renter-to-owner ratio and a long list of other factors – no unit in the development is eligible for an FHA mortgage.

The ban hits moderate income, first-time and minority buyers hard, given the agency’s unique role in assisting them attain homeownership.

Spot loans also are crucial for existing unit owners who want to obtain a reverse mortgage to tap their equity. FHA’s home equity conversion mortgage (HECM) program dominates the reverse mortgage field and accounts for an estimated 90 to 95 percent of all volume. Without access to FHA, seniors who live in a non-certified condo project are cut off from a major potential source of needed cash to pay bills and support their retirement years.

Spot loans can directly affect selling prices of condos. Unit owners frequently lose money when buyers need to use low down payment FHA financing but the project is ineligible. Seth Task, a realty team leader with Berkshire Hathaway Home Services Professional Realty in Solon, Ohio, told me one of his clients recently had to sell her unit for $10,000 below the initial list price solely because of FHA’s spot loan prohibition.

Qualified buyers with good credit submitted a contract close to the $149,900 list price, said Task, but the offer had to be turned down because of the FHA spot loan prohibition. The seller ultimately signed an all-cash contract “in the upper $130,000s,” according to Task, who is vice chair of NAR’s federal financing and housing policy committee.

From 1996 to 2010, FHA permitted spot loans in condo projects, but did not have adequate management, monitoring and quality control measures in place."

From 1996 to 2010, FHA permitted spot loans in condo projects, but did not have adequate management, monitoring and quality control measures in place. Eric Boucher, an FHA condo approvals specialist with ReadySetLoan Condo Team LLC in South Windsor, Conn., says the inevitable result was that some developers and loan officers took advantage and obtained FHA-insured loans on units in projects that did not meet even minimal standards. Sometimes the loans were secured by structures that didn’t even qualify as legal dwelling units.

In one particularly egregious example, said Boucher, a motel in Florida that was converted to a condominium received FHA spot loans on every unit the building, even though not one had a kitchen.

But because FHA lacked the administrative capacity to carefully review and process loan package submissions and track spot loan endorsements project by project, the loans were all approved. Fraud and misuse of the program became significant enough problems that when FHA revamped its condo activities in 2010 and instituted a rigorous certification process to identify eligible developments, it banned spot loans outright.

Though certification is controversial and thousands of condo boards have declined to apply, FHA officials say they now have much better oversight and management controls in place. They also note that in any resumption of spot loans, much stricter standards would be in place for a unit to qualify, along with much more intensive monitoring.

An attendee as a recent FHA-sponsored private roundtable for condo professionals quoted a senior official say saying that any new version “won’t be your father’s spot loan program.”

Philip J. Sutcliffe, a principal in Project Support Services I LLC, a condominium financing expert in Lansdale, Pa., says that if FHA brings back spot loans — which he finds troubling, given the potential for abuse — he would recommend that the underlying non-certified projects get the same level of rigorous review that certified projects do.

That would severely cut down on the speed and add to the expense of approving a spot loan, but would at least provide a responsible option for sellers and buyers that currently does not exist.

THe Past few years condo owners have been struggling trying to sell thier home. Studies show that potential buyers use an FHA loan over 65% of the time. Since most condo complexes are no longer FHA approved due to newer qualifications and guidelines set a few years ago. Condo owners have not been able to sell. This will change that for all condo owners.... Help may be on it's way!

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

Jerryggroup@aol.com

Foreclosure Sales to Play ‘Diminishing Role’ in 2014

Distressed properties have decreased to start off 2014, according to a new report from LoanLove.com. Following an anticipated marked decrease in distressed properties, the report found that U.S. foreclosure filings in February dropped to the lowest level experienced in over seven years.

Foreclosure filings in February dropped 10 percent lower than the previous month, and have followed a downward trend since peaking at 1.05 million in 2010.

The report commented that while lower foreclosures rates indicate a slowly recovering housing industry, home values will likely appreciate and help build equity faster in the long term but housing will still be less affordable for the near term.

"Distressed properties are still contributing to the national supply of available homes, but foreclosure filings are clearly falling," the report said. "Improvements in the economy have meant fewer homeowners losing their homes and more lenders agreeing to short sales."

February saw a reported 112,498 foreclosure filings, which include default notices, repossessions, and auctions. The month's data represented a 27 percent drop from the previous year, and the lowest point since December, 2006.

The report found that so-called "zombie" foreclosures (homes that have been vacated by homeowners), which topped out earlier this year at 152,000, remained relatively flat compared with the third quarter of 2013.

The company projects that foreclosure sales are "likely to play a diminishing role in the housing market in 2014, with continued year-over-year decreases on the horizon."

"However, for some prospective home owners and real estate investors, the foreclosure and short sale market will continue to offer some opportunities, as it did prior to the bursting of the housing market bubble," the report said.

Despite national foreclosure figures hitting historic lows, 10 states saw foreclosures increases last year: Maine, Maryland, Arkansas, Vermont, New Jersey, New York, Connecticut, Delaware, Washington, and Pennsylvania.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com