First-Time Buyers Show Interest; Face Tough Market

More than 4 million first-time buyers want to enter the market, but they face some tough issues as market conditions aren’t exactly favorable to new buyers.

This conclusion came from the Zillow Housing Confidence Index (ZHCI), a new calculation released by Zillow and Pulsenomics.

The ZHCI is a measure of consumer sentiment; anything over 50 indicates a positive sentiment. The current national index is 63.7. Of the 20 metros surveyed, 11 had individual confidence levels above the national average.

In 19 of the 20 large metros surveyed, more than 5.0 percent indicated they wanted to buy a home in the next year. The report notes, "Among current renters, homeownership aspirations were particularly strong, with about 10 percent of all renters nationwide saying they would like to buy within the next 12 months."

A vast majority of respondents said they were "confident or somewhat confident" they could afford a home in 2014.

If every respondent who indicated they wanted to buy a home actually purchased one, first-time home sales would total more than 4.2 million for 2014, more than double the roughly 2.1 million first-time buyers in 2013.

While this optimistic total from Zillow suggests interest is high, actually purchasing a home should prove to be a challenge in the upcoming year.

Market conditions are mixed: inventory, up 11 percent from a year ago, is still well below optimal levels, and has fallen year-over-year in 8 of 20 metros measured by the ZHCI. Mortgage rates, once a record low 3.3 percent in 2013, have risen to 4.2 percent, according to the Zillow Mortgage Marketplace.

A dearth of inventory coupled with rising mortgage rates could push homes out of a homebuyer's price range, particularly for first-time buyers.

"For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first-time homebuyers," said Zillow Chief Economist, Dr. Stan Humphries. "Even after a wrenching housing recession, this data shows that the dream of homeownership remains very much alive and well, even in those areas that were hardest hit."

He added, "But these aspirations must also contend with the current reality, and in many areas, conditions remain difficult for buyers. The market is moving toward more balance between buyers and sellers, but it is a slow and uneven process."

Areas indicated by the ZHCI with the highest interest in purchasing a new home come from metros that were hit hardest by the housing recession: Miami (67.5), Atlanta (62.9), and Las Vegas (64.1).

Each were near or above the national index of 63.7 for "Overall Housing Confidence."

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Total Foreclosures Fall; ‘Zombie Foreclosures’ Pose Challenges

Foreclosure filings are down to record lows, but a more sinister-sounding problem may be on the rise—"zombie foreclosures."

RealtyTrac released its U.S. Foreclosure Market Report for February, reporting that foreclosure filings (default notices, schedule auctions, and bank repossessions) were 112,498, down 10 percent from January and down 27 percent from the previous year.

Foreclosure filings in the month of February represent the lowest monthly total since December, 2006—a more than seven-year low.

"Cold weather and a short month certainly contributed to a seasonal drop in foreclosure activity in February, but the reality is that new activity is no longer the biggest threat to the housing market when it comes to foreclosures," said Daren Blomquist, VP at RealtyTrac.

"The biggest threat from foreclosures going forward is properties that have been lingering in the foreclosure process for years, many of them vacant with neither the distressed homeowner or the foreclosing lender taking responsibility for maintenance and upkeep of the home—or at the very least facilitating a sale to a new homeowner more likely to perform needed upkeep and maintenance," Blomquist said.

As of the first quarter of 2014, a total of 152,033 properties in the foreclosure process had been vacated by the homeowner. These “zombie foreclosures” represent 21 percent of all properties in the foreclosure process.

Owner-vacated properties have been in the foreclosure process an average of 1,031 days, nearly three years.

"One in every five homes in the foreclosure process nationwide have been vacated by the distressed homeowner, but it is closer to one in three foreclosures in some cities," Blomquist added. "These properties drag down home values in the surrounding neighborhood and contribute to a climate of uncertainty and low inventory in local housing markets."

The state with the most owner-vacated foreclosures was Florida with 54,908, representing 36 percent of the national total. Illinois (15,512), New York (10,880), New Jersey (8,595), and Ohio (7,780) rounded out the top five states for owner-vacated foreclosures.

Foreclosure starts fell back to 51,842, their lowest level since December, 2005. A total of 47,715 U.S. properties were scheduled for a future foreclosure auction in February, down 15 percent from the previous month and down 21 percent from a year ago.

Bank repossessions (REO) were 30,307 in February, up less than 1 percent from January. Year-over-year, REO properties were down 33 percent.

States with the highest foreclosure rates in February were Florida, Maryland, Nevada, New Jersey, and Illinois.

Among metros with populations of 200,000 or more, Florida held nine of the top ten metros for foreclosure rates in February. The dubious honor of leader went to the Palm Bay-Melbourne-Titusville metro, where one in every 296 housing units were in foreclosure—nearly four times the national average.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

2018 IS PREDICTED WHERE MEDIAN HOME PRICE WILL MATCH PEAK OF 2006

Should States Fast-Track Foreclosures?

A new study released by the Federal Reserve Bank of Cleveland suggests that fast-tracking foreclosures on vacant properties could provide states with substantial savings. Researchers Kyle Fee and Thomas J. Fitzpatrick used two judicial states, Ohio and Pennsylvania, to show that savings from fast-tracking could save at least $24 million annually.

The report notes, "In Ohio, the annual savings from a foreclosure fast-track is estimated to be between $24,000,000 and $129,000,000," and that savings are "an elimination of deadweight losses, rather than a shifting of costs. That is, these costs already exist and benefit no one."

Pennsylvania could have saved an estimated $24 million to $54 million.

States that require foreclosures to be conducted through the courts "have decided that protecting the rights of property owners is worth the higher cost of judicial foreclosure relative to nonjudicial foreclosure," Fee and Fitzpatrick said.

Costs are incurred when properties are left vacant, leaving them more susceptible to be vandalized and stripped of valuable items, like metal. Repairing these homes to sell is a costly endeavor, and by speeding up the foreclosure process, properties would be left vacant for smaller periods of time, resulting in less damage.

Additional concerns arise as unoccupied homes create health and safety hazards, and cause homes in neighboring areas to decrease in home value.

The report notes that the costs of vacant properties provide no value, and "these costs are born primarily by the lender through rehabilitation costs or lower sales prices."

By fast-tracking homes through the judicial process, researchers Lee and Fitzpatrick found that Ohio could have lowered its foreclosed inventory by .5 percentage points, to less than 2 percent instead of the current figure of just under 2.5 percent. Pennsylvania would have seen similar results, according to the report.

In the study, Lee and Fitzpatrick found that fast-tracking foreclosures could shave off between 8 and 43 days in Ohio, and 9 to 20 days in Pennsylvania.

However, creating legislation to hasten the judicial process is likely to be difficult.

"Crafting legislation that adequately balances the interests of creditors and homeowners while meaningfully fast-tracking foreclosures is no simple task, and would likely require the input of creditors, communities, foreclosure attorneys, and the judiciary," the report said.

For more information contact

Jerry GUsman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Thinking About Selling Your Home?

The major selling season is quickly approaching and inventory of homes for sale is at an all time low. This is actually good for hom,eowners who want to sell or that have been waiting for the home values to rise so they can sell. It's simple economics, when demand is high and supply is low IT'S A SELLER'S MARKET!

Get top dollar for your home now! Many sellers are enjoying buyers paying well over listed prices right now. Don't miss your window of opportunity to get the most for your property. Sell Now!

For more information contact

Jerry Gusman
The Gusman Group
(888) 213-4208
Jerryggroup@aol.com

Home Price Growth Slows; Could Signal Decline

  

An early look at housing data in February shows a severe slowdown in home price growth as distressed sales activity grows stronger.

Clear Capital released earlier this week its latest Home Data Index (HDI) Market Report, recording only a 1 percent gain in home prices over the quarter ending last month. That figure is down from a 2.5 percent pace of growth for the January quarter.

While many price indicators have pointed to slowdowns over the last few months, the latest trend could be the start of something worse, says Dr. Alex Villacorta, VP of research and analytics at Clear Capital.

“Our early data shows national quarterly price gains are falling at a rapid pace and suggest overall prices could dip into negative territory soon if current conditions continue,” he said.

Three out of the 15 lowest performing metro markets in the latest HDI reported slight price declines over the quarter, while the remaining 12 were mostly flat. With winter not quite over yet, near-term price declines “are not out of the question,” according to Clear Capital.

Adding to the problem is a 1.8 percentage point uptick in national REO saturation, which stood at 22.7 percent as of the end of February—further threatening price trends.

“Since the market fallout in 2006, home prices have dramatically declined during sustained periods of rising distressed sale activity,” Villacorta explained. “Over the last two years, however, rising distressed sales have been offset by investor demand, which is not guaranteed to be present in 2014.”

He added:  “Though it is not unusual to see rising distressed activity over the winter months, the current housing picture gives reason to be concerned. If we don’t see a correction come spring, the housing market may be in for a long year.”

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

California Economy Makes Progress

The Wells Fargo Economics Group released its California Economic Outlook for February, 2014. The report noted that while recovery has been slow in the past, "[T]he state has methodically made progress working through a number of major impediments, most notably the overhang of foreclosures and distressed homes left over from the housing bust."

The outlook cites a California Association of Realtors (CAR) report that shows sales of existing homes fell 13.8 percent in January from a year earlier, largely from a decline of foreclosure inventory. The report notes, "The median price of an existing home rose 22.1 percent in January to $410,990."

Homes are taking a little bit longer to sell than a year ago—44.3 days on the market. The group said, "These trends, however, reflect more of a normalization of the housing market."

In January, California home prices increased 20.3 percent from a year ago, according to a report fromCoreLogic.

The sluggishness of the for-sale market has created a new and growing segment of rental homes, according to the outlook. The difficulty of qualifying for a mortgage and affordability issues of new homes are driving people to rent in metropolitan areas closer to where they work.

Consequently, the Wells Fargo report comments, "Residential construction has also been slow to recover. Activity has improved, but much of the action has been in apartments, which helped pull multifamily permits up 24.9 percent over the past year on a 12-month moving average basis."

Vacancy rates are just 3.1 percent in the Bay Area.

The Bay Area, particularly San Francisco, continues to see home prices that are well above their prerecession peak. Prices are up 19.1 percent from a year ago, and home inventories are falling.

However, rising prices have put off some buyers, "Home sales declined in the Bay area, with San Francisco and Napa posting the largest losses," the outlook said.

Michael Wolf, an Economist at Wells Fargo, thinks many of the trends in California, and specifically the San Francisco, could transfer to the nation.

"I think a number of trends we are seeing in California are also evident throughout the nation. One is the strength of high-tech industries in San Francisco and San Jose. Other areas with a large concentration of high-tech employers are also leaders of economic growth in their respective states (e.g. Austin, Raleigh and Seattle)," Wolf said in an email to DS News.

Wolf continued, "Existing home sales have been relatively weak recently, though the drop seems to be particularly severe in California. Nationwide, some of this may be able to be blamed on the weather, but in general the housing market recovery was bound to  moderate from some of the breakneck speeds we were seeing earlier in the recovery."

Unemployment figures play a part in California's recent housing climate. Unemployment fell 1.4 percentage points, with unemployment at 8.3 percent for the end of the year.

The report notes that job and income growth will continue to strengthen further, and the pace of home price appreciation will moderate

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

Selling Your Home Without A Realtor......

Here are Top 10 Reasons Why You Should Hire A Professional Realtor And NOT Sell Your House Without One!

 

1.  Pricing ~ The most important step is pricing your house properly. If you charge too little, then you'll always wonder if you lost money on the deal. If your price is too high you won't get consumers or other Realtors to see it. The longer it stays

on the market, the more consumers might wonder what's wrong with it? 

 

 

2. Understanding The Market ~ You need to understand the Real Estate market, especially your own neighborhood ~ A Professional Licensed Realtor should have years of experience with laws, contracts, forms and negotiations. Your Realtor can give you up-to-date information on what is happening in the marketplace, and the price, financing, terms and condition of the competing properties. These are key factors in getting your property sold at the best price.

 

3. Availability ~ You have to be willing to be available to show the house at different hours of the day to make sure everyone that may be interested in it will get to see it ~ If you hire a Realtor, they will schedule the appointments, and show it on your behalf and you won't miss any showings.

 

3. Generating Traffic ~ How can you generate traffic for your house and be able to get the word out about it?  ~ An experienced Realtor will not only list your home on MLS, but will have other resources and marketing strategies for increased exposure for your house!

 

4. Criticism ~ Can you be patient and understanding with criticism? ~ You will need to be able to handle all different types of personalities and be able to keep your "cool" under pressure, even with non-qualified buyers. You need to have patience and the right temperament for criticism, questions, and repeat showings, and can you pre-approve a buyer? Remember that buyers are not looking to be your friend.

 

 

5. Answering Concerns Properly ~ Can you be available to answer questions by phone, email, text, meet-ups and be sure you are answering them correctly? ~ Buyers may not respect your time and may want immediate answers to their concerns. By you answering any of their concerns in the wrong manner, can squash the deal!

 

 

6. Will You Be Pushing Buyers Away ~ If you sell your house on your on your own, buyers will be looking for a deal from you. If a Realtor was listing your home, you can expect to get the highest true market value for it ~ Some sellers may believe their home is worth more and will remove many potential buyers because it's not priced competitively. 

 

7. Relocation Buyers ~ If you don't use a Realtor, how are you going to attract out of state buyers? You might be eliminating a whole group of buyers that will never see your house because relocation buyers won't know about it.

 

8. Professional Networking ~ Realtors network with other professionals in the industry, many who can  provide services that you may need.  Realtors can give you a list of references with whom they have worked and provide background information to help you make a wise selection, besides networking with other Realtors who will be showing your house.

 

9. Contracts ~ Another important function of a Realtor is to make sure that all the paperwork is handled correctly.Do you want to get through all the stress of listing and selling your house or condo and then find out something that could have been avoided but is now a deal-breaker?

 

10. Closing ~ Can you closethe sale of your home without being overwhelmed?  Your Realtor should be with you throughout the entire process and is the best person to objectively help you resolve any unforeseen issues and move the transaction to closing!

 

 

Selling without an agent is a challenge.  Remember, a good Realtor will work with you through every step of the home buying process to save both your time and your money.  Real Estate transactions involve one of the biggest financial investments most people experience in their lifetime so shouldn't you have the best possible advantage in selling your house?

CFPB Reform Bill Passes in the House

Some changes may be on the horizon for the Consumer Financial Protection Bureau (CFPB). The U.S. House of Representatives passed H.R. 3193, The Consumer Financial Freedom and Washington Accountability Act, which would bring more "accountability and transparency" to the CFPB, according to Representative Sean Duffy (R-Wisc), the bill's sponsor.

The bill passed the House, 232-182.

H.R.3193 is a collection of bills that aims to bring more oversight to the CFPB.

Included in the bill are provisions to replace the CFPB director with a five-member commission, appointed by the president and confirmed by the Senate. The bill would also align the CFPB’s governance with other, similarly-charged government agencies that protect consumers and investors.

Rep. Duffy said in a press release, "This is the right thing to do. Let's empower Congress and the American people. Let's reform the CFPB and actually make it work."

Additionally, the bill would separate the CFPB into a stand-alone agency, rather than a bureau within the Federal Reserve System.

The bill, "Prohibits the CFPB from using a consumer's private, personal financial information without the consumer's knowledge and consent. The CFPB is currently engaged in a massive, multi-million dollar data collection effort of consumers' financial information," according to a press release issued from Rep. Duffy's office.

The bill now heads to the Senate for consideration.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

New Homes Grow Larger – But Who’s Buying Them?

According to a report issued by the National Association of Home Builders (NAHB), the average size of a new home is increasing, and the population of buyers may be the main reason for the average home's expanding size.

Data culled from the Census Bureau and presented at NAHB's International Builder's Show in Las Vegas showed some interesting trends in new home production.

"The average home size has continued to rise for the past four years, from 2,362 square feet in 2009 to 2,679 square feet in 2013," said Rose Quint, NAHB AVP for survey research.

Homes with four bedrooms have increased from 34 percent in 2009 to 48 percent last year. 60 percent of new homes are two-story, and the percentage of homes with three-plus garages has climbed to 22 percent last year.

What's spurring the increased size of new home production in the United States? More qualified buyers who have higher credit scores and more income are pushing homes out and up.

"It requires a high credit score and a nice income to qualify for a mortgage," said Quint, who noted that the spread between the average Experian credit score of all U.S. consumers and the average home borrower's score has risen from 33 points in the early 2000's to 58 points in 2013.

More qualified buyers typically bring a higher median income, and rising sales prices and lackluster new home production nudge buyers toward larger homes.

The average sales price of new homes has risen from $248,000 in 2009 to $318,000 in 2013.

The median income of new-home buyers has steadily climbed from $91,768 in 2005 to $107,607 in 2011, and the number of new-home sales has dramatically declined from 1.28 million to 306,000 during the same period.

"There are not as many people who have the income that can qualify for a new home," Quint said.

For More information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com