Buyers Rush to Meet Tax-Credit Deadline

As the federal tax credits come to an end, home buyers everywhere are hurrying to get in under the wire.

But in California the rush has turned into something of a stampede as some would-be buyers try to qualify for both the federal credit and a $10,000 state credit that kicks in Saturday.

As one home shopper tells the Los Angeles Times, "I am looking at properties almost constantly, and it is just kind of a feeding frenzy right now.”

"The stimulus has worked," says Rick Hoffman, president of Coldwell Banker Residential Brokerage in San Diego and Temecula Valley. "Buyers are confident that we have seen the bottom of the real estate market and that we are on the way back up."

Source: Los Angeles Times, Alejandro Lazo (04/30/2010)

Housing Analyst says 'Worst Is Over'

Housing has slowed to the point where demand is again outstripping supply, says Metrostudy founder Mike Castleman.

Metrostudy, which researches the housing industry, says demand is forcing up prices in some markets, including Washington, D.C. and Indianapolis, but it remains stagnant in Houston, Naples, Fla., Charlotte, and Denver.

Overall, Metrostudy and Castleman believe the worst is over. "The good news is that builders will need to build a lot more houses than last year to keep up with demand. That will help the economy by creating jobs," Castleman says.

Source: Fortune, Shawn Tully (04/26/2010)

Dallas home prices rise 2.6% in S&P/Case-Shiller index

The Dallas housing market continued to make modest price gains in February.

Prices were up 2.6 percent in the latest Standard & Poor’s/Case-Shiller Home price index.

Nationwide prices also rose 0.6 percent in February from a year earlier – the first such annual gain since December in the closely watched housing market indicator.

But housing analysts remain cautious.

“It’s too early to say that the housing market is recovering,” S&P’s David Blitzer said in the report released Tuesday.

Despite the latest increases, analysts say there is “a risk that home prices could decline further before experiencing any sustained gains.”

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High-end home sales bolster Dallas-Fort Worth market

A surge in high-end home sales has given some Dallas-area neighborhoods a big boost this year. Pre-owned home sales jumped more than 80 percent in the Park Cities and more than 50 percent in North Dallas during the first quarter of this year from the same period in 2009.Other big increases were recorded in Westlake, which is northwest of Dallas/Fort Worth International Airport, and in northeast and northwest Dallas, according to sales data from real estate agents' Multiple Listing Service.

Overall sales in the areas The Dallas Morning News tracks quarterly increased less than 3 percent.

And in many moderately priced neighborhoods on Dallas' east and south sides, home sales this year are down from the same period in 2009, statistics from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems show.

The sizable jump in sales in affluent neighborhoods is a positive sign, analysts and property agents agree.

"We are definitely seeing a much stronger upper-end spring market – certainly heads and shoulders ahead of last spring," said David Griffin, CEO of Dallas' David Griffin & Co. Realtors. "Buyers still want outstanding value for their dollars, but they are giving themselves permission to act, which they didn't do so often last year.

"Almost every agent in our office is working multiple transactions at present – again a far cry from 2009," Griffin said.

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Is Jim Chanos Right About A China Real Estate Bubble?

JAMES CHANOS: Well, again, the perception seems to be that China will grow into this real estate problem. But there’s a problem with that argument, and that is the real estate that’s being built is not being built for the masses. This is not affordable housing for the middle-class. This is high-end condos in major urban areas and high-end office buildings.

Just to give you an idea what price ranges are like, right now construction costs in China are starting to hit $100 to $150 per square foot in some of the cities. The typical Chinese condo is 100 square meters, about 1,100 square feet. So that means a condominium with no floors, no walls and no appliances costs the average Chinese two-income couple USD$100 to $150 per square foot.

Now, you do the math. Incomes are about $3,500 per capita in China, urban areas slightly higher. A Chinese two-income couple in their 30s probably makes combined $7,000 or $8,000 a year. Even if they were making $10,000 to $15,000 a year, they couldn’t carry a $150,000 condo. This is very similar to someone making $40,000 in the U.S. at the height of our bubble and buying an $800,000 house. And we know how that ended.

Chanos, the founder of Kynikos Associates Ltd, has a terrific track-record. He makes some compelling points, especially about commercial office and retail real estate. However, I am not convinced by his bearishness about residential property, and I think he is making a mistake by looking at China as one unified real estate market. There are significant variances between cities, and I think Chanos is underestimating the poor quality of current housing (has he spent a night in local Beijing housing yet?), the pent up demand to upgrade, and the increasing urbanization of rural suburbs.

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5 Costly Mistakes First-Time Buyers Make

Buying a first home can be a daunting experience. Here are five common and costly mistakes that novice home buyers make:

1. Ignoring the costs of having a low credit score. Lower-score borrowers pay thousands of dollars in increased interest rates over the life of the loan.
2. Muddying the waters by shopping for other things before closing. Lenders continue to check credit scores right up until the time of closing. Too much shopping could cause the lender to take back the loan.
3. Scrimping on an inspection. Being surprised by the need for expensive repairs can be financially devastating.
4. Buying without contingencies. Buyers should give themselves an out if the inspection turns up problems or the bank raises the interest rates.
5. No money for insurance. Insurance can be surprisingly pricey. Buyers who don’t budget for it can face a nasty surprise.

Source: CNNMoney.com, Les Christie (04/19/2010)

Home Sales Rise on Tax Credit, Favorable Market

Buyers responding to the home buyer tax credit and favorable affordability conditions boosted existing-home sales in March, marking the beginning of an expected spring surge, according to the National Association of REALTORS®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million units in March from 5.01 million in February, and are 16.1 percent above the 4.61 million-unit level in March 2009.

Lawrence Yun, NAR chief economist, said it is encouraging to see a broad home sales recovery in nearly every part of the country, with two important underlying trends. “Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running,” he said. “The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps $1 trillion in largely middle-class housing wealth that may have been wiped out without the housing stimulus measure.”

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Homebuilders starting to snap up lots

With home starts in North Texas up by more than 50 percent so far this year, builders and developers are jumping to buy land and lots.

Several purchases have been announced this week.

Toll Brothers, the Pennsylvania-based luxury homebuilder, said Wednesday that it has bought 171 home sites in Colleyville, one of its largest land purchases here in 15 years.

“This reflects how interested we are in securing luxury sites in the Metroplex area to boost the future growth of the company,” Toll’s Rob Paul, president of the Dallas division, said in a statement.

Toll Brothers already has 10 home communities in the Dallas-Fort Worth area.

Its latest acquistion is in the Reserve at Colleyville, a community developed by a real estate firm founded by baseball star Rafael Palmeiro.

On Tuesday, New York-based Wheelock Street Capital announced it was teaming up with McGuyer Homebuilders Inc. of Houston to buy and develop land and lots in eight Texas home communities.

The $15 million equity investment in the partnership includes purchase of property in a Collin County residential project called the Trails of Melissa.

“The formation of this venture will allow us to take advantage of some of the great opportunities we are seeing in our markets right now,” builder Frank McGuyer said in the announcement of his new partnership with Wheelock. “We expect this to be the first of many key acquisitions.”

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Mortgage Rates Dip in December, Stay Above 5 Percent

Conventional mortgage interest rates dropped in December, according to the Federal Housing Finance Agency (FHFA).

The average interest rate for a 30-year fixed-rate mortgage (FRM) of $417,000 or less was 5.05% in December, down from 5.09% in November. The average interest rate on 15-year, FRM of $417,000 or less was 4.54%, down from 4.63% in November.

The average rate for all mortgages was 4.92% in December, down from 5% in November, while the effective interest rate, which reflects the amortization of initial fees and charges, was 5.01% in December, down from 5.09% in November.

The FHFA calculates rates from its monthly interest rate survey of purchase mortgages, these results reflecting loans closed from December 24-31. Since the interest rate is determined 30 to 45 days before the loan is closed, the FHFA’s report depicts market conditions in mid- to late-November.

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Mortgage Applications Fall Sharply

Applications for mortgages to purchase properties declined 10.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the weekly mortgage applications survey released by the Mortgage Bankers Association.

On an unadjusted basis, the purchase index was down 10.5 percent compared to the previous week and fell 17.5 percent compared to the same week a year ago.

Application volume was affected by the rising cost of FHA mortgage insurance premiums, the bankers said. Applications for conventional mortgages also were down, driven by an increase in rates, said Mike Fratantoni, the association’s vice president of research and economics.

Overall, applications for both purchases and refinances decreased 9.6 percent on a seasonally adjusted basis. Interest rates actually decreased compared to the previous week:

• 30-year fixed-rate mortgages decreased to 5.17 percent from 5.31 percent.
• 15-year fixed-rate mortgages decreased to 4.45 percent from 4.54 percent.
• 1-year ARMs decreased to 7.02 percent from 7.03 percent.

Source: Mortgage Bankers Association (04/14/2010)

First-Time Buyers: Transition Was Stressful

Eight-seven percent of first-time home buyers changed their lifestyles because of unexpected expenditures related to buying a home, according to a new survey by BBVA Compass, the nation’s 15^th largest commercial bank.

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• 51 percent said that the monthly expense of owning a home was more than they calculated.
• 70 percent said that the unexpected expenditures leveled out over time.
• 33 percent said they paid for these unexpected expenditures with a mixture of cash and credit.
• 92 percent say having additional time before their first payment due date would have been helpful.

Source: BBVA (04/13/2010)

Dallas-Fort Worth home sales rise 11 percent

The North Texas home market took a turn for the better in March.

Sales of pre-owned homes rose 11 percent from March 2009. And condo sales soared by more than 30 percent.

Even more encouraging for the market, median home sales prices increased by 6 percent from a year ago.

The upbeat home market data may signal that the worst of the local housing market downturn is in the rearview mirror. But analysts and economists stress that the spike in sales is partly due to a federal tax credit for homebuyers, which expires at the end of April. That temporary incentive could have artificially inflated sales.

"Certainly, the expanded tax credit ... has been an incentive to buy now," said Dr. Bernard Weinstein, a Southern Methodist University economist. "We may see lower sales in the second quarter as buyers have shifted typical spring buying."

Analysts also point out that the March results are being compared with a period a year ago when housing was at its lowest point. So, the gains are from a low base.

Real estate agents sold 6,036 pre-owned single-family homes in March, according to the latest statistics from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems. It was the strongest single month for sales since last October.

The median price of pre-owned homes sold last month was $144,900. That's the best price since last summer.

And in one peek at the future, the report indicates that the surge is likely to continue, at least for the short term. Pending pre-owned home sales in the North Texas market – which includes 24 counties – were up 22 percent at the end of March.

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Report: 23 percent of Dallas-area home in January sales were distressed properties

About 23 percent of Dallas-Fort Worth area home sales in January were distressed properties.

But that’s low compared to most other major housing markets, a new industry report shows.

Sales of previously foreclosed houses and other distressed properties accounted for 29 percent of U.S. home sales in January, First American CoreLogic said Thursday. That’s down slightly from a record high 32 percent in April 2009.

In the Dallas Fort Worth area, about 23 percent of home sales at the start of 2010 were distressed properties, slightly lower than a year earlier. Only Houston and New York had a lower share of distressed homes being sold, the First American CoreLogic study found.

Looking at the 25 largest U.S. home markets, Riverside, Calif., had the biggest share of distressed home sales – 62 percent – followed by Las Vegas, 59 percent, and Sacramento, 58 percent.

Distressed home sales – particularly short sales where a lender agrees to sell a troubled property at a discount – frequently are not counted in real estate agents’ sales data that is based on multiple listing services.

But foreclosure sales can have a big impact on real estate values and dominate the market in some neighborhoods.

First American CoreLogic estimates that nationwide foreclosure and short sale homes in January sold an average 35 percent less than non-distressed properties.

The discount rates are highest in markets what have a majority of distressed property sales.

First American CoreLogic gets its data from public records and information from mortgages.

Source: By STEVE BROWN / The Dallas Morning News

Fannie Survey Finds Home Owners Are Skeptical

The housing crisis has changed how Americans view homeownership, according to a survey of public attitudes by Fannie Mae.

The number of people who view homeownership as a safe investment declined from 83 percent in 2003 to 70 percent in 2009. In addition:

• 48 percent of those surveyed said banks should foreclose on people who don’t pay their mortgages. 53 percent blamed borrowers – instead of banks – for taking out bigger loans than they could afford.

• 15 percent of respondents said it is acceptable for borrowers who are underwater to walk away.

Source: The Washington Post, Renae Merle (04/06/2010)

Investors to Pick Up Slack in Mortgage Backs

The Federal Reserve ends its purchase of mortgage securities this week and private investors are expected to step in.

The change probably won’t push mortgage rates up very much. Analysts expect they will rise less than a quarter of a percentage point in the next three months. That gain would increase a monthly payment on a $250,000 mortgage by $30.

In a statement released March 12, Freddie Mac predicted that mortgage rates would average 5.2 percent on a 30-year fixed loan after the Fed stops buying. Fannie Mae put the rate slightly higher at 5.13 percent.

Source: Bloomberg, Kathleen M. Howley (03/30/2010)

Dallas-area home prices rose 4 percent in January

Prices of pre-owned homes in the Dallas area are continuing to bounce back from last year's declines.

Dallas-area home prices are rebounding, including high-end properties. This house in Highland Park is listed for sale at $1.099 million. " onclick="return clickedImage(this);" onmouseover=" this.style.cursor='hand'" width="175" height="103">

MICHAEL AINSWORTH/DMN

Dallas-area home prices are rebounding, including high-end properties. This house in Highland Park is listed for sale at $1.099 million.

Local housing values rose in January by more than 4 percent from a year ago in the latest Standard & Poor's/Case-Shiller Home Price Index.

The increase is the largest since residential values began rising again in North Texas in November, according to the closely watched home price measure.

And it was the third consecutive month that the index recorded year-over-year price gains.

The Dallas area had the third-largest year-over-year home price increase in January of the 20 cities Case-Shiller tracks.

San Francisco prices rose 9 percent, and San Diego prices were up 5.9 percent. Both of those markets suffered steep declines in prices in the last two years, while Dallas had a modest dip.

Nationwide, prices were down 0.7 percent from a year ago in the latest report. But home values rose in nine major markets that Case-Shiller follows.

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