Bargain hunting dominated the Bay Area housing market in December as -- for the first time -- the purchase of foreclosure properties accounted for more than half of all resales, DataQuick information Systems reported Wednesday.
In Santa Clara County, sales were flat in December with a year earlier but prices dropped 33.4 percent to $436,000 from $655,000.
In San Mateo County sales were down 7.1 percent to 435 from 468. The median price was down 26.8 percent to $537,000 from $755,500.
Sales patterns also reflected continued problems for buyers looking to finance purchases in the upper half of the market's price range, DataQuick reported.
A total of 6,889 new and resale houses and condos were sold in the nine- county region last month. That was up 36 percent from 5,065 for December 2007. While sales were well below the 8,807 average for all Decembers going back to 1988, they were no longer at the record low levels of late 2007 and the first half of 2008.
The median price paid for a Bay Area home was $330,000 in December. That was down 5.7 percent from $350,000 for the month before, and down 43.8 percent from $587,500 for December 2007. The median was the lowest it has been since March 2000 when it was $320,500, and 50.4 percent below the $665,000 peak of June/July 2007.
Home loans for more than $417,000, the old "jumbo" limit, used to account for more than 60 percent of the Bay Area's purchase financing.
The most active lenders to Bay Area home buyers were Countrywide, Bank of America and Wells Fargo. Homes that were foreclosed on accounted for 50 percent of December's resale activity, up from 46.8 percent in November and up from 14 percent for December a year ago. read more
January 31, 2009
January 30, 2009
Home sales soar as foreclosures drive down prices
Fully half of all existing homes sold in the Bay Area in December were foreclosures unloaded by banks at fire-sale prices. Those sales sent median prices tumbling to new lows and attracted droves of buyers, according to a real estate report released Wednesday.
"If you are OK with a little bit of work or a Class-B neighborhood rather than Class-A, you can get a smoking deal," said Stephen Bloom, a Realtor with Lawton Associates in Berkeley. "The banks understand if they want to move these things, they have to be quite aggressive on pricing. They're not fooling around anymore. They want to get them off their books."
Both investors and first-time home buyers are avidly pursuing foreclosure bargains.
Chai Chanthapak, 37, of San Ramon is one such investor.
"It is incredible what value you are getting now," Chanthapak said Wednesday as he walked through a foreclosed Oakland triplex he is in escrow to purchase for $106,000. It sold in May 2007 for $557,600.
While the Bay Area median price didn't plunge as precipitously as that, it is just over half of what it was a year ago.
The median for existing single-family homes in the nine-county region sold in December was $330,000, down 46.8 percent from a year ago, according to research firm MDA DataQuick of San Diego. For all homes, including condos and new homes, the median was also $330,000, down 46.8 percent. That was the lowest median since March 2000 and about half of the $665,000 peak reached in June and July 2007. read more
"If you are OK with a little bit of work or a Class-B neighborhood rather than Class-A, you can get a smoking deal," said Stephen Bloom, a Realtor with Lawton Associates in Berkeley. "The banks understand if they want to move these things, they have to be quite aggressive on pricing. They're not fooling around anymore. They want to get them off their books."
Both investors and first-time home buyers are avidly pursuing foreclosure bargains.
Chai Chanthapak, 37, of San Ramon is one such investor.
"It is incredible what value you are getting now," Chanthapak said Wednesday as he walked through a foreclosed Oakland triplex he is in escrow to purchase for $106,000. It sold in May 2007 for $557,600.
While the Bay Area median price didn't plunge as precipitously as that, it is just over half of what it was a year ago.
The median for existing single-family homes in the nine-county region sold in December was $330,000, down 46.8 percent from a year ago, according to research firm MDA DataQuick of San Diego. For all homes, including condos and new homes, the median was also $330,000, down 46.8 percent. That was the lowest median since March 2000 and about half of the $665,000 peak reached in June and July 2007. read more
January 29, 2009
House Urges Tighter Rules For Bailout Beneficiaries
Barney Frank chairs the House Financial Services panel.The House yesterday overwhelmingly approved a plan to place strict new requirements on banks and other financial institutions that accept government assistance under the Treasury Department's $700 billion financial rescue program.
The measure, while unlikely to become law, could strengthen lawmakers' position as they deal with the White House on the rescue program.
By a vote of 260 to 166, the House agreed to require recipients of government cash to prove they are using the money to increase lending to consumers and small businesses, limit their ability to use the money to finance mergers, and bar them from paying bonuses to their top executives until the money is repaid.
The measure also would require President Obama to dedicate at least $40 billion to help distressed homeowners avoid foreclosure, in part by creating a "safe harbor" that would protect loan servicers that modify troubled mortgages from lawsuits by investors in those mortgages.
The Senate does not have plans to consider the bill, but Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said he still pressed forward with it because the House vote "gives me, frankly, more authority" to insist that Obama voluntarily enact some of its provisions. And if the Obama administration decides to seek funds beyond the $700 billion already approved by Congress, Frank said, "this will tell them what they need to do to get it." read more
January 28, 2009
Aiding home buyers
When Congress passed the First-Time Home Buyer Tax Credit, the intent was to provide an additional financial resource for buyers to utilize. It was based on the idea that the available funding would encourage increased home purchases, and as a result, provide a stimulus for the housing market and economy, while helping stabilize home prices.
Unfortunately, waiting is a part of receiving the finances as it’s disbursed with the filer’s tax return. For many, that down-time might not be an option, as most first-time home buyers need assistance with the down payment and closing costs.
Recognizing the potential problem, the Missouri Housing Development Commission has created a program that will allow those buyers to receive their funds now, through a loan program administered by certified lenders that work with the commission.
“The tax credit has not been a huge incentive to buy homes,” Kathryn Watts, MHDC government affairs liaison, said. “We’ve tried to create a product to bridge that gap.”
Under the commission’s program, MHDC makes a second mortgage to the home buyer at the time of closing worth up to 6 percent of the home purchase price, or a maximum of $6,750. The money can then be used to cover the down payment and closing costs.
“It will then actually encourage first-time home buyers to purchase a home,” Watts said.
MHDC’s second mortgage is paired with a 30-year, fixed rate mortgage for the purchase of the home, with the financing through a MHDC lender. The home buyer can then file for federal tax credit and use the credit refund to pay off the advance loan and satisfy the second mortgage.
Watts noted that the commission expects people who utilize the advance loan program to pay off the interest-free loan when the tax credit is received with their income tax refund. If, however, the borrower does not do that, then the loan will incur interest and the borrower will have to repay the loan’s principal, plus the interest earned, over a 10-year period.
MHDC’s program began Jan. 14 and Watts said that a few people have already applied to take advantage of the special offer, the first of its kind in the nation.
On the federal side of the program, the tax credit functions as an interest-free loan, and because of that, it must be repaid to the government over a period of 15 years. Payments are deducted from the taxpayer’s tax return each year, at a rate proportionate the loan amount.
For example, if the maximum credit of $7,500 was granted, then the taxpayer would repay the loan at a rate of $500 per year, according to the Internal Revenue Service. Therefore, if the tax return was going to be $2,000, the taxpayer would only receive $1,500. Payments do not start until two years after the credit is claimed, meaning a person who claimed the credit in 2008 wouldn’t begin repayment until 2010.
Single taxpayers with incomes up to $75,000 and married taxpayers with incomes up to $150,000 qualify for the federal credit. read more
Unfortunately, waiting is a part of receiving the finances as it’s disbursed with the filer’s tax return. For many, that down-time might not be an option, as most first-time home buyers need assistance with the down payment and closing costs.
Recognizing the potential problem, the Missouri Housing Development Commission has created a program that will allow those buyers to receive their funds now, through a loan program administered by certified lenders that work with the commission.
“The tax credit has not been a huge incentive to buy homes,” Kathryn Watts, MHDC government affairs liaison, said. “We’ve tried to create a product to bridge that gap.”
Under the commission’s program, MHDC makes a second mortgage to the home buyer at the time of closing worth up to 6 percent of the home purchase price, or a maximum of $6,750. The money can then be used to cover the down payment and closing costs.
“It will then actually encourage first-time home buyers to purchase a home,” Watts said.
MHDC’s second mortgage is paired with a 30-year, fixed rate mortgage for the purchase of the home, with the financing through a MHDC lender. The home buyer can then file for federal tax credit and use the credit refund to pay off the advance loan and satisfy the second mortgage.
Watts noted that the commission expects people who utilize the advance loan program to pay off the interest-free loan when the tax credit is received with their income tax refund. If, however, the borrower does not do that, then the loan will incur interest and the borrower will have to repay the loan’s principal, plus the interest earned, over a 10-year period.
MHDC’s program began Jan. 14 and Watts said that a few people have already applied to take advantage of the special offer, the first of its kind in the nation.
On the federal side of the program, the tax credit functions as an interest-free loan, and because of that, it must be repaid to the government over a period of 15 years. Payments are deducted from the taxpayer’s tax return each year, at a rate proportionate the loan amount.
For example, if the maximum credit of $7,500 was granted, then the taxpayer would repay the loan at a rate of $500 per year, according to the Internal Revenue Service. Therefore, if the tax return was going to be $2,000, the taxpayer would only receive $1,500. Payments do not start until two years after the credit is claimed, meaning a person who claimed the credit in 2008 wouldn’t begin repayment until 2010.
Single taxpayers with incomes up to $75,000 and married taxpayers with incomes up to $150,000 qualify for the federal credit. read more
January 27, 2009
New Government Legislation Helps Reverse Mortgages Fill the Void Left by the Credit Crunch
Seniors Can Now Purchase a Home Independent of Credit or Income Requirements With a Reverse Mortgage; Golden Gateway Financial Launches Reverse Mortgage for Purchase Calculator
New government housing rules for 2009 include a number of changes to reverse mortgage regulations. One of the more compelling changes for older Americans is the ability to now use a reverse mortgage for purchase, which is the right to purchase a home and use a reverse mortgage to pay for a portion of the purchase price. This change will help seniors save time and money while avoiding the challenges associated with securing a forward mortgage in today's worsening economic climate.
Reverse mortgages offer a number of advantages over traditional forward mortgage products for those 62-years or older that are considering purchasing a home. Borrowers purchasing with a reverse mortgage are not subject to income or credit thresholds; the only requirements are that they live in the home as their primary residence, maintain it properly and pay all applicable taxes. Plus, seniors do not make monthly loan payments when using a reverse mortgage to acquire a new home. This makes a reverse mortgage for purchase an attractive way to downsize during retirement or make a long-planned move to a new location.
"This legislation provides seniors with an incredibly powerful tool because it simplifies two transactions into one and allows them to move into a new home without the burden of monthly payments," said Eric Bachman, founder and CEO of Golden Gateway Financial. "Even borrowers with impressive credit and income are finding it hard to secure a forward mortgage and take advantage of the current real estate market. Using a reverse mortgage will also help seniors stay liquid when downsizing." read more
New government housing rules for 2009 include a number of changes to reverse mortgage regulations. One of the more compelling changes for older Americans is the ability to now use a reverse mortgage for purchase, which is the right to purchase a home and use a reverse mortgage to pay for a portion of the purchase price. This change will help seniors save time and money while avoiding the challenges associated with securing a forward mortgage in today's worsening economic climate.
Reverse mortgages offer a number of advantages over traditional forward mortgage products for those 62-years or older that are considering purchasing a home. Borrowers purchasing with a reverse mortgage are not subject to income or credit thresholds; the only requirements are that they live in the home as their primary residence, maintain it properly and pay all applicable taxes. Plus, seniors do not make monthly loan payments when using a reverse mortgage to acquire a new home. This makes a reverse mortgage for purchase an attractive way to downsize during retirement or make a long-planned move to a new location.
"This legislation provides seniors with an incredibly powerful tool because it simplifies two transactions into one and allows them to move into a new home without the burden of monthly payments," said Eric Bachman, founder and CEO of Golden Gateway Financial. "Even borrowers with impressive credit and income are finding it hard to secure a forward mortgage and take advantage of the current real estate market. Using a reverse mortgage will also help seniors stay liquid when downsizing." read more
January 26, 2009
Buying A New Home? You Better Be Careful
Just in case you needed one more thing to worry about, a recent article published in the New York Times should have you thinking twice about buying a home in a new subdivision. The article is titled, “Banks Foreclose on Builders With Perfect Records.” The article talks about how banks are starting to do such things as call for extra collateral from builders—even if they have never missed a payment—essentially dooming them to failure. If you have purchased or are planning to purchase a home in a new subdivision that has not yet been completed, this could be horrible news for you.
Builders rely heavily on credit to function, and now that credit is being restricted even for the best borrowers, builders are in serious trouble. According to the New York Times article, already we have seen more than 20,000 builders nationwide go out of business. Before the carnage is finished, the total will likely swell to more than 50,000, according to Ivy Zelman, a housing analyst quoted in the article. That total would represent more than half of all U.S. builders. So why exactly should new home buyers be worried?
When you purchase a home in a new subdivision, part of the purchase price is based on community features and factors. The subdivision might have a nice park for the kids, or just great, overall family appeal. These are things that sell people on wanting to move into that particular neighborhood. The problem in new subdivisions is that typically people buy homes before the community is finished. If the builder were to go out of business, it is possible that the community might not be finished for a long time, if ever. Not only is it possible that early homebuyers might not ever see the clubhouse that they were promised, or that neighborhood park, but they may also be forced to look at partially built, rotting homes for a few years. In case you didn’t connect the dots already, that means that resell values of existing homes in those communities are likely to plummet. read more
Subscribe to:
Posts (Atom)