• Northeast: the index rose 9.0 percent to 77.7 in February and is 18.9 percent higher than February 2009.

• Midwest: jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago.

• South: increased 9.2 percent to an index of 107.0, and the index is 17.5 percent higher than February 2009.

• West: the index fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.

Source: NAR

I found these articles and thought people looking at real estate could make use of the information.

Wall Street Journal

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Take a look at this article from the Record Searchlight. It confirms what I have been telling my clients for the last 6 months. The market has declined about as far as I think it will. We will be bouncing up and down for a while but I believe the trend will eventually turn upward. With interest rates at historic lows (around 5%) the prices are even better. A 1% increase in the interest rate is equivalent to about a $20,000 price increase. Now is the time to be buying in my opinion.

"Shasta County home values have hit the bottom, economist David Gallo told a gathering of community leaders Wednesday in Redding - an opinion borne out by median sales prices, which were up for the third straight month.

"Don't you already see some signs of that in Redding?" Gallo said of a housing recovery during a two-hour presentation at the McConnell Foundation. "I think if mortgage rates and points remain at current levels, we can expect to see rising home values within a year."

Gallo's forecast is based in part on the trend line of inflation-adjusted home values in Shasta County that he's tracked since 1999. The actual median value of homes in Shasta County has never dipped below the trend line - until recently.

"I've concluded housing prices have bottomed out," Gallo said.

Gallo's prediction came as statistics released this week by DataQuick Information Systems show the median sales price of a home in Shasta County in August rose for the third month in a row. The median is the price where half the homes sold for more and the other half for less.

DataQuick reported that the median sales price in August was $201,250, up from $190,000 in July. The median sales price in August 2008 was $225,000.

Home values in Shasta County bottomed out for the year in March when the median sales price plunged to $177,000.

The median sales price in Shasta County peaked in March 2006, when it reached $300,000.

But while values are up, home sales in Shasta County in August dipped to 148, down from 180 in July, and were at their lowest level since April, when there were 131 closed escrows.

It's a sign that the area's housing market is still somewhat volatile.

Told of Gallo's forecast, two north state real estate agents said values have stabilized in some price ranges, namely for homes priced below $250,000, where multiple offers aren't uncommon."

The Obama administration yesterday released its long-awaited plan to stem foreclosures. It's organized into three categories:

1.) Help for home owners making their payments but at risk of default and foreclosure.

Home owners with a Fannie Mae or Freddie Mac loan would be eligible to refinance as long as their mortgage doesn't exceed 105 percent of the home's current market value. Currently owners need to have at least 20 percent equity. Potential impact: 4-5 million households.

2.) Help for home owners already in default and in need of loan modification.

For lenders that voluntarily agree to lower a borrower's payment so that it makes up no more than 38 percent of the borrower's income, the government would share the cost of lowering the mortgage burden to 31 percent of income. Incentives to lenders to participate include a $1,000 payment.

Borrowers can receive up to $1,000 as an incentive to stay current on their new mortgage. Still in the works is a proposed provision that would allow bankruptcy judges to require loan modification (known as a cramdown) as part of a household's restructuring. That provision requires legislation by Congress. Estimated potential impact: 3-4 million households.

3.) Doubled resources to Fannie Mae and Freddie Mac.

To encourage investors to buy the secondary market companies' mortgage-backed securities, the government explicitly backstops them to up to $400 billion, twice the current amount.

The plan does not provide help to investors or to home owners who are in trouble with a second home, nor does it apply to homeowners whose mortgage is part of a private-label mortgage security that is not backed by Fannie Mae or Freddie Mac.

"The administration's proposed plan, combined with provisions like the $8,000 first-time home buyer tax credit in the just-enacted American Recovery and Reinvestment Act, will help minimize foreclosures, shrink housing inventory, stabilize home values, and move the country closer to an economic recovery," says NAR President Charles McMillan.

Source: REALTOR® Magazine Online

Mortgage rates across the board fell this week, a welcoming sign to potential buyers and home owners looking to refinance.

The 30-year fixed-rate mortgage averaged 5.04 percent this week, a drop from last week's 5.16 percent. Last year at this time, the 30-year rate averaged 6.04 percent, Freddie Mac reports.

Freddie Mac reported the following for other rates for the week:

• 15-year mortgage rates: averaged 4.68 percent, down from last week's 4.81 percent. Last year at this time: 5.64 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 5.04 percent this week, a drop from last week's 5.23 percent. Last year at this time: 5.37 percent
• 1-year ARMs: averaged 4.8 percent, down from last week's 4.94 percent. Last year at this time: 4.98 percent

"Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation," says Frank Nothaft, Freddie Mac's chief economist.

Source: Freddie Mac(02/19/09)

The use of mortgages insured by the Federal Housing Administration is soaring in the Capital Region, growth that comes as many home buyers are struggling to qualify for more traditional loans. Many lenders, skittish as foreclosure and default rates rise, have discontinued mortgages for borrowers with less-than-perfect credit or little saved for a down payment.

Credit standards for FHA loans, by contrast, are more relaxed. And while many loans now require that borrowers put 20% down, FHA loans mandate just 3.5%.

“Most of the programs with minimal down payments have all gone away,” said Lisa Fortin, a senior mortgage consultant at First Priority Mortgage, a RealtyUSA subsidiary in Clifton Park. “FHA is pretty much the only product still available.”

First Priority says FHA loans grew from about 8% of mortgages it originated in 2007 to about 40% today. Other brokers and lenders in the Capital Region report similar upticks.

And national numbers show the same trend: The U.S. Department of Housing and Urban Development says FHA loans accounted for just 3.7% of all home loans in its 2006 fiscal year, when subprime and other mortgage products for lower-income buyers were widely available.

But by September, with the credit crunch taking hold, the percentage of home loans backed by the FHA was 21.1%, according to HUD. (September is the most recent month for which the agency has data.)

In raw numbers, the FHA backed 141,000 mortgages in September, about three time the number of a year earlier.

Observers say FHA loans have largely shed the stigma they once had as a loan of last resort for those with lower incomes or shaky credit.

Also, said Sandra Nardoci, president of the Greater Capital Association of Realtors Inc. and an agent at Prudential manor Homes in Latham, the FHA program “used to be a lot more cumbersome than it is today.”

In a sense, the rising popularity of FHA loans during a widespread economic crisis is apt, because the program was created during the Great Depression in an attempt to boost stagnant real estate markets.

Today, the loans are available for as much as $292,100 in most of the Capital Region, or $373,950 for a two-unit property. Borrowers must also take out mortgage insurance-money that helps fund the program.

The FHA does not originate the loans. Instead, it insures them against default, making them a safer bet for lenders.

The loans, which are also available for refinancing, are widely used by first-time borrowers, including many who are now eager to take advantage of the drop in real estate prices in recent months.

“People who get into these mortgages are thrilled to death,” said First Priority’s Fortin. “It’s a great way to get into a home.”

FHA loans do have drawbacks, including the mortgage insurance requirement and interest rates that are generally higher than those available for other loans.

“It’s not the cheapest product out there,” said Therese Raco, an Albany-based administrative vice president at M&T Bank, where FHA loans now account for about 35% of Capital Region mortgages.

“But it’s an option if you’re not qualifying for other loans,” Raco added. “It’s an avenue for home ownership.”

On the rise

Loans backed by the Federal Housing Administration are growing in popularity because of the credit crunch. Use of the loans grew rapidly as other types of mortgage credit became more difficult to obtain.

Time period FHA loan market share

Fiscal year 2006 3.7%
Oct. 2007 6.4%
Jan. 2008 7.9%
April 2008 13%
July 2008 17.1%
Sept. 2008 21.1%

Source: U.S. Department of Housing and Urban Development

Copyright © 2009, Albany Times Union, N.Y.
Distributed by McClatchy-Tribune Information Services.

By Jerry W. Jackson

RISMEDIA, January 16, 2009-(MCT)-Every day, more people slip into the foreclosure whirlpool and spiral downward toward the day they may have to leave their home. What should you do if you are on the verge of getting a foreclosure notice?

First and foremost, industry specialists say, you should resist the natural human tendency to freeze up. Face the issue head on and prepare for days and weeks of making phone calls and corresponding with people who may be able to help.
“Don’t assume it’s too late to act,” said Ralph Roberts, a consumer advocate in Michigan and co-author of Foreclosure Self-Defense for Dummies. “As long as you are residing in the home, you probably have some opportunity to keep your home.”

Roberts, a Realtor who lost his home to foreclosure back in the 1970s, said people facing foreclosure have more avenues to pursue than they might realize-certainly more than the typical “pay up or move out” that many people think is their only choice.

Potential solutions include:

- Negotiating a modification of the loan.
- Refinancing the loan.
- Listing the home through an agent for a possible “short sale.”
- Selling the home to an investor on your own.
- Declaring bankruptcy.

Short sales-in which the lender agrees to take less than is owed on the home, writing off some or all of the loss to avoid the expense of a foreclosure-typically are handled by real estate agents, which at least takes some of the pressure off of a harried homeowner. Many professional real estate agents are working more short sales these days and have buyers lined up looking for bargains, though the process can be slow and frustrating.

“The banks are just not moving fast enough. They are sitting on these, and it’s outrageous. Something’s got to be done about that” at the national level, said Ernst Urbainczyk, a veteran agent with Keller Williams Heritage Realty in Lake Mary, Fla. Lenders may also reject short-sale offers, sometimes leaving the seller with little or no time to prevent the foreclosure.

Matthew Englett of Kaufman Englett & Lynd, an Altamonte Springs, Fla., law firm that specializes in foreclosure defense, real estate litigation and bankruptcy, said there are usually several different defenses a borrower can take to dispute a foreclosure, including “wrongful or misleading conduct on behalf of the lender or its agents.”

As the case moves forward, the law firm negotiates with the lender to try to get it to modify the mortgage with a lower interest rate and loan amount.

“In many cases, that would mean the principal would have to be reduced,” Englett said. The law firm charges a flat fee ranging from $1,750 to $2,500 for its foreclosure-defense cases.

© 2009, The Orlando Sentinel (Fla.).
Distributed by McClatchy-Tribune Information Services.

WASHINGTON, December 09, 2008

Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors^®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September, and is 1.0 percent below October 2007 when it was 89.8.

Lawrence Yun, NAR chief economist, said a review of the past year is instructive. “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” he said. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”

Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets, Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas. ²

The PHSI in the South jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago. In the Northeast the index rose 0.6 percent to 68.1 but is 14.1 percent below October 2007. The index in the Midwest declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago. In the West, the index fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he’s hopeful about considerations by the U.S. Treasury. “Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan said. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”

Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year – lifted by a home sales recovery. “Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he said.

Looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.

New-home sales for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.

“Price projections are challenging in an environment with so many variables and divergent local conditions,” Yun said. “The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration.”

The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6.0 percent by the end of 2009, and average 6.2 percent in 2010. NAR’s housing affordability index is likely to remain quite favorable, averaging 138 in 2009.

The unemployment rate is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009. Inflation, as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.