Gay Real Estate News

New home sales hit record low in January

By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – 2 hrs 42 mins ago

WASHINGTON – Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rise about 5 percent over December's pace.

While winter storms were partly to blame, home sales have fallen for three straight months despite sweeping government support. Economists were already worried that an improvement in sales in the second half of last year could falter as various government support programs are withdrawn.

"There is no doubt that January and February are going to be messy months for housing, given the severe weather conditions, but that doesn't take away from the fact that the housing sector has taken another big step back, even with the government aid," Jennifer Lee, a senior economist at BMO Capital Markets, said in a research note.

January's weakness was evident in all regions except the Midwest, where sales posted a 2.1 percent increase. Sales were down 35 percent in the Northeast, 12 percent in the West and almost 10 percent in the South.

The drop in sales pushed the median sales price down to $203.500. That was down 5.6 percent from December's median sales price of $215,600, and off 2.4 percent from year-ago prices.

New home sales for all of 2009 had fallen by almost 23 percent to 374,000, the worst year on record. The National Association of Home Builders is forecasting that sales will rise to more than 500,000 sales this year, an improvement from 2009 but still far below the boom years of 2003 through 2006 when builders clocked more than 1 million new home sales per year.

January's data will increase concerns that the housing rebound could falter in coming months as the government withdraws the support it has used to try to bolster the housing market, which stood at the epicenter of the country's overall recession, the worst downturn since the 1930s.

A $1.25 trillion program from the Federal Reserve which has held down mortgage rates is set to end March 31 and tax credits to bolster home buying are scheduled to expire at the end of April.

First-time home buyers could qualify for a credit of up to $8,000 while homeowners who have lived in their current properties for at least five years could claim a tax credit of up to $6,500 if they decided to move into another home.

Though the overall economy started growing again this past summer, economists are worried because unemployment remains high. This weakness is causing consumers to shy away from spending, especially on big-ticket items such as homes.

The Conference Board reported Tuesday that its Consumer Confidence Index fell almost 11 points to 46 in February, pushing the index down to its lowest reading since last April. At 46, the index is a long way from the 90 reading that economists generally view as depicting healthy consumer attitudes.

According to Zillow: Owners are misguided on home values

A new report from Seattle-based real-estate database Zillow.com found that half of all homeowners surveyed nationwide believe their own homes lost value last year, while 30 percent say they believe the value held steady. In reality, 65 percent of all homes lost value last year and only 7 percent maintained their value.

While Zillow’s data show a gap between perception and reality, an index the company compiles that compares a number of perceptions to reality showed homeowners were slightly more pessimistic on the whole than necessary, marking the first time the company has seen more negative sentiment than in reality.

In the Midwest, homeowners appear to be slightly more optimistic – and thus less realistic – than the nationwide average. Of those surveyed in the region, 46 percent believed their homes lost value and 31 percent told Zillow they believed value held steady. In reality, 64 percent of all homes in the Midwest declined in value, while only 7 percent held steady.

“Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule,” Zillow Chief Economist Stan Humphries said in a release.

Looking ahead, Zillow said homeowners appear optimistic about the course of home values over the next six month based on recent news of some housing market stabilization. Humphries said hopes might be too high.

“Home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year,” he said.

Pollster Harris Interactive conducted the survey for Zillow, gathering online data from 2,215 adults from Jan. 8-12. 

Top 10 Cities with Climbing Home Prices

Home prices aren’t tanking everywhere. In some cities they have bounced pretty high off the bottom, according to a report in Forbes magazine.

Altos Research examined data for every U.S. city with at least 100 homes on the market – about 8,000 cities. It identified these 10 cities as having the biggest price increases from the previous year.

1. Lexington, Mass., +36 percent
2. Bay Village, Ohio, +32 percent
3. Sunnyvale, Calif., +32 percent
4. Poway, Calif., +27 percent
5. University City, Mo., +28 percent
6. Ambler, Pa., +26 percent
7. Allison Park, Pa. , +25 percent
8. New Braunfels, Texas, +25 percent
9. Kemp, Texas, +24 percent
10. Arcadia, Calif., +24 percent

Source: Forbes

Four LGBT First Time Home Buyer Tips for Choosing the Right Realtor

Purchasing a first home is a wise financial investment, especially with today’s discounted prices, reasonable interest rates, and generous first time buyer tax incentives. But before looking at houses, savvy buyers will first spend time shopping for the right real estate agent to meet their needs.

Most inexperienced buyers see a house they like and call the brokerage or agent whose phone number is displayed on the yard sign. As a result they enter into a professional relationship to make the biggest financial decision of a lifetime, and they do so with whatever agent happens to answer the phone.

Most consumers would never follow this strategy when hiring an attorney, a financial planner, a stock broker, or even a car mechanic. But the majority of first time home buyers choose their real estate professional in this random fashion and then cross their fingers and hope that everything works out well. If they later discover that they are not getting the desired results, these buyers have to start all over from scratch.

To eliminate this kind of aggravation and minimize the chance that a change in Realtors will occur in the midst of a search for a suitable property, LGBT buyers should follow these four helpful tips.

#1

Narrow the Field

Picking a Realtor involves finding a professional whose insight and experience is appropriate to the task. Some real estate brokers, for example, are entirely involved in the sale of new construction while others are primarily focused on sales of older homes in historic neighborhoods. While one agent may be the local expert on downtown condos and lofts, another may be better informed about bungalows or houses with large fenced yards in outlying neighborhoods. Buyers should first decide what general category of property they want to purchase and then choose a real estate broker with the right specialization and focus to help them.

#2

Find a LGBT-Friendly Realtor

The potential for silent homophobia within the real estate industry still exists, and may place invisible obstacles in the path of LGBT buyers. Buyers may even have trouble getting the expert help they expect if they select an agent who may be supportive of LGBT equality but who nevertheless lacks experience and understanding of LGBT legal issues surrounding home ownership. But the careful selection of a qualified Realtor who specializes in working with LGBT buyers can solve those problems before they ever surface. To narrow down potential candidates, buyers can use free resources such as GayRealEstate.com, an online network of LGBT real estate professionals worldwide.

 

#3

Understand Realtor Roles

 

Local real estate laws dictate the roles and fiduciary responsibilities that real estate agents and brokers play, and a buyer should clarify the role of each Realtor and then keep that in mind. Within some jurisdictions, for instance, real estate professionals act as dual agents. This means that they represent both the buyer and the seller at the same time. Those agents who are legally designated as exclusive buyer agents, on the other hand, are prohibited from listing homes on behalf of sellers. They work only for buyers, and are obliged to keep the buyer’s best interests in mind throughout the entire transaction. Sometimes buyers prefer to work with an exclusive buyer agent because these Realtors are not busy trying to market and sell properties and can devote all of their attention to the buyer.

 

#4

Trust and Rapport are Essential

 

Always look for a Realtor with experience, a proven track record, and a verifiable reputation for customer service and satisfaction. But perhaps the most important attribute necessary in this kind of professional relationship is the ability to communicate and answer questions in a way that inspires confidence and trust. Without that kind of chemistry even the simplest transaction can become difficult, so buyers should trust their instincts and choose Realtors with whom they feel completely comfortable. That is one of the most compelling reasons for LGBT buyers to choose a real estate broker who is a member of a LGBT network.

Those who don’t do this preliminary research run the risk of wasting valuable time and energy, and delays in the current market can be both frustrating and costly. Housing prices in many parts of the country are rising, mortgage interest rates may creep higher over the next few months, and the crucial deadline for taking advantage of the first time homebuyer tax credit is rapidly approaching. Any unexpected postponements caused by having to switch real estate brokers in the middle of the buying process can have substantial adverse financial consequences, and most buyers cannot afford those in this harsh economy.

But intentionally choosing the right Realtor can greatly enhance the first time home buying experience. This makes it easier to locate homes faster, negotiate from a more informed position, and ensure a smooth and flawless closing.

To find real estate professionals devoted to serving the LGBT community, visit www.GayRealEstate.com, or call toll free 1-888-420-MOVE (6683). The site is home to the largest online network of LGBT Realtors in the world.

 

Home prices gain for seventh straight month

MIAMI - Home prices edged up in December, the seventh straight monthly gain and another sign the U.S. housing market continues its bumpy recovery.

The trend is important to the nation's economic recovery. For most Americans, their home is their largest asset, so as values climb homeowners feel wealthier and more comfortable spending. And, for homeowners who currently owe more on their mortgages than their properties are worth, rising prices will rebuild equity.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday rose 0.3 percent from November to December, to a seasonally adjusted reading of 145.87. The index was off about 3 percent from December last year, nearly matching analysts' estimates.

The index is now up more than 3 percent from its bottom in May, but still 30 percent below its May 2006 peak.

Home sales data for January, out later this week, are also expected to show gains over year-end levels as buyers took advantage of low interest rates and temporary tax credits.

Anna Piretti, an economist at BNP Paribas, said the price increases are "further evidence that conditions in the house market continue to stabilize."

"While conditions remain challenging in Florida, house price conditions appear to be improving in the Western states, with gains recorded in California, Nevada and Arizona," Piretti wrote in a research report.

Only five of 20 cities in the index showed declines from November to December. Los Angeles and Phoenix posted the largest price increases. Prices dipped in key markets like Miami, New York and Chicago.

In Denver, prices rose for the 10th month in a row, while San Francisco saw its eighth monthly gain.

Buying activity in the San Francisco area is heaviest among homes priced $600,000 and below, said Doug Sager, an agent with ZIP Realty. More listings are receiving multiple offers above the asking price, with sellers preferring all-cash buyers to those who need financing.

"People are realizing the bottom is creeping away" in San Francisco, Sager said.

But there are still obstacles that could derail the recovery.

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Consumers’ confidence plummets in February

First, consumer confidence took a surprisingly sharp fall in February amid rising job worries, ending three straight months of improvement

Also, roughly 5 percent of homeowners with a mortgage are in foreclosure, the Mortgage Bankers Association reported last week. As those deeply discounted homes hit the market, they will keep pushing down prices.

And, some economists fear that demand and prices will fall after two federal tax credits expire in April.

"Prices have stabilized and are starting to rise, but forces that will bring them back down are growing," wrote Patrick Newport, an economist with IHS Global Insight.

Michelle Meyer, an economist with Barclay's Capital Research, said prices could fall about 5 percent from current levels.

"The most likely outcome is that it will take years to work through the glut of foreclosures, keeping home prices bouncing around the bottom for quite some time," Meyer wrote in a research report.

Nevertheless, prices have risen for three straight months in Charlotte, North Carolina, which did not see a big price bubble during the housing boom. The busiest price range is for homes under $350,000, said Lyn Kessie, president-elect of the Charlotte Regional Realtors Association.

"Homes are selling a little bit faster, if they are priced right," Kessie said. "If we can increase employment, that will help a lot."

The Case-Shiller indexes measure home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

 

The boy who cried housing recovery!

NEW YORK (CNNMoney.com) -- Lowe's reported a better-than-expected profit for the fourth quarter on Monday, and the nation's second-largest home-improvement retailer indicated that 2010 would be a better year for the housing market.

It's tempting to dismiss more good news about the housing market as simply another head fake -- "The boy who cried housing recovery!"

But it might be finally time to say the market is slowly but surely getting better.

Just don't get too excited about the news. Lowe's said it now expects sales to be up 4% to 6% this year. Wall Street had been expecting a 3% jump. In a statement, Lowe's (LOW, Fortune 500) CEO Robert Niblock added that "the worst of the economic cycle is likely behind us."

Lowe's top rival Home Depot (HD, Fortune 500) reports its fourth-quarter results on Tuesday morning. So analysts will be eager to hear if Home Depot CEO Frank Blake shares Niblock's optimism.

Still, even before we find out about Home Depot's outlook, it's worth noting that other companies with ties to the housing market are also starting to show signs of a turnaround.

Several top homebuilders, including Lennar (LEN), D.R. Horton (DHI, Fortune 500) and KB Home (KBH), reported surprise fourth-quarter profits after years of red ink.

To be sure, much of the profits were a result of a change in tax law that benefited the builders. But several of the builders also said that new-home orders were improving. That's a good sign.

With that in mind, The SPDR S&P Homebuilders (XHB) exchange-traded fund, which tracks 26 companies in the housing sector, is up more than 6% this year. By way of comparison, the S&P 500 is flat.

Despite its name, the ETF does much more than track homebuilders. Home Depot and Lowe's are both in the fund, as are retailers Bed Bath & Beyond (BBBY, Fortune 500) and Wiliams-Sonoma (WSM), and fiberglass maker Owens Corning (OC, Fortune 500).

So is the worst for this group finally past? Probably. But that doesn't mean a robust recovery for housing is in the cards just yet. That may also mean that housing stocks could be ahead of themselves.

Stephen Carl, head equity trader with The Williams Capital Group, an investment bank in New York, points out that the better results for many housing companies is simply a reflection of them "pulling out of a morass."

"Housing numbers are going to get incrementally better but the recovery is going to be a slow mountain to climb. It will take some time and extend over quarters or years," Carl said.

Ted Parrish, co-manager of the Henssler Equity fund, also said it may be too soon to bet on a big, rapid rebound in housing.

 

The government will report new-home sales figures for January on Wednesday. Economists are expecting a 4% increase in the month to 355,000 new sales. But that would follow a nearly 8% drop in December.

"New-home sales are pretty anemic still. I'm not expecting robust growth for a couple of years," Parrish said.

He worries that new home sales will remain soft, especially after the first-time homebuyer tax credit expires in April. What's more, mortgage rates may begin to steadily rise later this year as the Federal Reserve begins to unwind its portfolio of mortgage-backed securities and consider interest rate hikes.

Parrish owns Lowe's in his fund but said that the reason he likes it is because it is less dependent on builders than Home Depot. He also said Lowe's could do better in a sluggish housing market because people are more apt to make repairs to the home they're in than look to buy a new one.

Along those lines, Lowe's Niblock also pointed out Monday that "consumers are gaining the confidence to take on more discretionary projects." That's not the same thing as consumers gaining confidence to buy a house.

Experts think it's also important to note that even when sales are improving, it may not necessarily be a sign of strength in the housing market. Alan Rosenbaum, CEO of GuardHill Financial, a mortgage bank based in New York, said rising sales may be simply a reflection of the glut of existing homes on the market.

"Reports about housing sales are conflicting right now, but the numbers are skewed because of foreclosures on the market. There are transactions taking place at fire sale prices," Rosenbaum said.

And housing prices will remain the biggest factor that determines whether the recovery is legitimate or not. According to the National Association for Business Economics, there is good news and bad news on that front.

The economists surveyed by NABE for its most recent outlook, released Monday, indicated that "the housing market rebound is considered ongoing and sustainable," and estimated that home prices would rise 1.6% this year and another 2.6% in 2011.

NABE called the price rebound "an important watershed for the economy" but pointed out that "such increases would barely keep up with inflation."

Of course, any improvement in the housing market should be cheered. Just don't mistake recovery for a renaissance.

Foreclosure Bargains Getting Harder to Find

Home buyers hoping to snag a really good deal on a foreclosed home are finding it increasingly difficult because supply is shrinking.

The number of foreclosures that are available for sale nationwide fell to 617,000 in December, down from 845,000 in November 2008, reports Barclays Capital.

Not only have attractive homes in popular neighborhoods already been snapped up, but also government help for distressed buyers is delaying more foreclosures.

Demand is driving up prices. Investors say typical prices have climbed from 75 percent of appraised value to 85 percent or higher when there are bidding wars.

Source: The Wall Street Journal

Foreclosures drop in January - but don't get excited

NEW YORK (CNNMoney.com) -- First, the good news: Foreclosure filings dropped nearly 10% between December and January.

That's a total of 315,716 notices compared to 349,519 in December, according to RealtyTrac, which issues a monthly report on foreclosure activity.

Now, the bad news: Filings rose 15% compared to a year ago, and the number of people who actually had their homes repossessed jumped 31% to 87,648.

That year-over-year increase in bank repossessions is what Rick Sharga, a spokesman for RealtyTrac, finds most troubling. "A lot of properties that had been stalled in foreclosure are now going all the way through to auction," he said.

The repossession numbers for January indicate to Sharga that the nation will probably set a new record for homes lost this year. All that needs to happen is for repossession numbers to stay flat the rest of the year.

And the drop in filings might -- or might not -- be actual good news. The numbers followed a familiar theme: December foreclosure statistics tend to spike as households cope with increased spending preceding the holidays and end of year financial pressures.

Talkback: Did you buy a foreclosure?

"January foreclosure numbers are exhibiting a pattern very similar to a year ago," said James Saccacio, RealtyTrac's CEO. "If history repeats itself, we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan-modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works."

Most industry observers also expect home prices to decline further this year before they stabilize. That will push more homeowners underwater -- meaning they owe more on their mortgages than their homes are worth -- making them less likely or able to pay off their mortgage loans.

Sharga does not think the problem is going away anytime soon. "We've settled into a plateau," he said, "with 11 straight months of 300,000-plus filings. I don't see that changing the rest of the year."

Worst-hit places

Foreclosure filings dropped 18% year-over-year in Nevada, but it still remained the nation's leading foreclosure state with one household in every 95 receiving at least one filing during the month.

Foreclosure plauge: Where it's spreading

Arizona was the second-worst performer, with a rate of one household for every 129 receiving a filing. Florida and California followed with one in every 187 households.

California, by far the nation's most populated state, had the highest volume of filings, with 71,817. Florida was second, with 47,069.

The least affected state was South Dakota, which had a total of only 14 foreclosure filings during the month, one household in nearly 26,000. Vermont also maintained a nearly pristine record with just one household in every 20,841 getting hit.

America's most overvalued cities

The hardest hit metropolitan area in January was Las Vegas, with a rate of one for every 82 households. Phoenix was next, with one in every 102.

The next six hardest-hit metro areas all are located in California, led by number three Modesto and Stockton, both with one in every 107. Two Florida places made the top 10 list: Cape Coral-Ft. Myers (one in 121) and Orlando (one in 143).

15 Best Retirement Cities

Boomers are willing to move farther than previous generations when they retire, and they are choosing places unlike stereotypical retirement hotspots, says Tom Brokaw in his report on Boomer retirement, airing on CNBC, Thursday, March 4 at 9 p.m. ET.

The top places listed by AARP and explored on the show are:

 

• Loveland/Fort Collins, Colo.
• Las Cruces, N.M
• Rehoboth Beach, Del.
• Portland, Ore.
• Greenville, S.C.
• Sarasota, Florida
• Ann Arbor, Mich.
• Tucson, Ariz.
• Montpelier, Vt.
• Honolulu
• Santa Fe, N.M
• Atlanta
• Charleston, S.C
• Northampton, Mass.
• San Diego, Calif.

Source: CNBC

Homebuyers finding that cash really is king

 

LOS ANGELES - Melissa Hughett and her husband set out to buy their first home in the best buyer's market in years, confident they would land a deal within a few months.

The couple put offers on several homes, but lost them all to rivals who weren't offering more money — just a lot more cash.

"Each time somebody came in and put $100,000 down in cash and scooped up the property or they had enough money to pay for the whole property in cash," said Hughett, 30. "It's agonizing."

Would-be homebuyers, armed only with financing, are competing with real estate investors with the means to pay for a home in cash. Often, the all-cash buyers are edging out everyone else, leaving many frustrated at a time when lower prices and tax incentives favor buyers.

The market scuffle is happening primarily over heavily discounted foreclosed homes and other properties typically under $300,000, or even well below $100,000 in some markets. These homes are attractive to investors seeking a good return and first-time buyers looking for an affordable home.

The trend is most pronounced in areas of California, Florida, Arizona, Nevada and elsewhere where home prices have dropped sharply and foreclosures make up a large slice of homes for sales in many metro areas. In Las Vegas and Phoenix, for example, foreclosures accounted for more than half of all home resales in December, according to MDA DataQuick.

Although getting financing for heavily damaged foreclosures can be difficult, there's still a healthy competition. Ultimately, cash is king.

"Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge," said Jed Smith, a researcher for the National Association of Realtors. "The investor may actually pay less, but it's cash, right now."

Across the country, some 22 percent of all previously owned homes sold in December were purchased entirely with cash, up from 16 percent a year earlier. That's the highest level since March and April, when all-cash purchases made up 30 percent of sales, according to a survey by the trade association.

That rate jumps even higher in metro areas where foreclosures have driven home prices down sharply.

In Las Vegas, all-cash transactions accounted for nearly 46 percent of all sales in December, up from 33 percent a year earlier, according to MDA DataQuick. In Miami, they were 54 percent of sales, an 8 percent increase. While in Southern California, they accounted for a quarter of sales, an increase of 2 percent.

"I've never seen so many cash transactions in my career as I have in this market," said Stephanie Vitacco, a Coldwell Banker agent in Woodland Hills, Calif., with 20 years in the business.

Making matters worse, the inventory of homes for sale is down in many markets. That's due in part to banks delaying the foreclosure process as troubled homeowners are evaluated for loan modification assistance. It has all made the competition for the most affordable properties even fiercer.

Many of the cash buyers are groups of people who have pooled their money to buy foreclosures and flip them or turn them into rentals. Another large segment consists of homeowners looking for a vacation property. It's possible that some cash buyers will turn around and take out a mortgage later.

Sellers favor all-cash or cash-heavy deals because it speeds up the closing process and makes it more likely the transaction won't fall through. One common concern when a loan is necessary is that the property appraisal could come in too low for the bank to approve the deal. It's a pitfall that's become more common as home values have fallen.

"Even if the offers are comparable, a seller will go with all cash all of the time," said James Joseph, who owns Century 21 and Coldwell Banker real estate offices in Southern California. "They don't have to worry about an appraisal."

Hoping to circumvent competition from investors, Hughett approached family friends about buying their three-bedroom, two-bath house for $340,000. The owners had yet to put the home for sale.

"That's the only way we can get in," said Hughett. This way she and her husband are sure there won't be another buyer "coming in and dropping a large amount of cash."

Homebuyers who can't afford to pay cash are at a disadvantage. But experts say there are some steps homebuyers can take to boost the chances:

• Get a financing prequalification letter from a lender for an amount that's 20 percent higher than the price they're offering the seller.
• Come up with a large down payment in the 20 percent range.
• Look for HUD properties. Only noninvestors are allowed to make offers on HUD properties during the first five days that they hit the market. That gives buyers a head start over investors or those looking for second homes.
• Ask a real estate agent to get a list of recently repossessed properties being prepared for sale. It can take several weeks before these homes hit the market. That's because the bank's agent can't officially advertise the home until it's ready to be sold. But agents can ask for details on these foreclosures and get their clients ready to pounce.
• Write a letter to the seller or bank handling a foreclosure sale and make a case for why they should sell you the property — anything to make you stand out as a potential buyer.