Economic recovery is still a few months away, say economists surveyed by USA Today, but two-thirds of them think existing-home sales have bottomed out.
Both housing and automotive markets “have the potential to generate some quite large percentage increases,” says Bill Cheney, chief economist at MFC Global Investment.
Overall, economists say unemployment won’t peak until the first half of next year and credit markets will remain tight.
"I think (the recovery) is going to be anemic," says Allen Sinai, chief economist at Decision Economics. "I don't think consumers have the wherewithal to buy a lot of cars and a lot of houses."
Source: USA Today, Paul Davidson; Barbara Hansen (07/27/2009)
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Friday, July 31, 2009
Monday, July 27, 2009
Housing Experts: Now Is a Perfect Time to Buy
Don’t forget to remind potential buyers of something that is obvious to real estate professionals: Now is the time to buy, but that opportunity may be slipping away.
For people who have a job and money, a dream house is within reach, writes Marc Roth, founder of Home Warranty of America and a columnist for BusinessWeek.
He points out that mortgage rates remain low, prices are still at historic lows, and the government is offering incentives for first-time homebuyers.
He also adds that the inventory of homes to buy is still large, but it is shrinking. According to the NATIONAL ASSOCIATION OF REALTORS®, the housing inventory peaked in November 2008 at an 11-month supply. At the end of May 2009, it had fallen to a 9.6-month supply.
Roth says anyone who dallies will miss a good opportunity to buy a first home at a terrific price or go shopping for a move-up property that is a great buy.
Source: BusinessWeek.com, Marc Roth (11/17/2009)
For people who have a job and money, a dream house is within reach, writes Marc Roth, founder of Home Warranty of America and a columnist for BusinessWeek.
He points out that mortgage rates remain low, prices are still at historic lows, and the government is offering incentives for first-time homebuyers.
He also adds that the inventory of homes to buy is still large, but it is shrinking. According to the NATIONAL ASSOCIATION OF REALTORS®, the housing inventory peaked in November 2008 at an 11-month supply. At the end of May 2009, it had fallen to a 9.6-month supply.
Roth says anyone who dallies will miss a good opportunity to buy a first home at a terrific price or go shopping for a move-up property that is a great buy.
Source: BusinessWeek.com, Marc Roth (11/17/2009)
Wednesday, July 22, 2009
Rent plan may keep people in homes
TAMPA, Fla. – July 22, 2009 – Losing your home to foreclosure may no longer mean you have to leave.
Congress and the Obama administration are considering a controversial plan that would allow homeowners to rent their foreclosed home for at least five years. The proposal is setting the real estate community abuzz.
“It’s clear that the modification plans have not been as successful as Congress had hoped,” said Dean Baker, co-director of the Center for Economics and Policy Research. “We need something that will make more of an impact.”
The program could reshape Florida’s real estate market and the overall economy. Experts disagree on whether the effects would be positive or negative. One thing everyone agrees on is this: Florida doesn’t need any more vacant homes.
The Sunshine State’s foreclosure rate remains the third highest in the nation. During the first six months of the year, foreclosure filings jumped 50 percent from the same period last year. One in every 33 households received a default notice, auction notice or bank repossession.
Details of the rental plan are sketchy, but the idea is gaining momentum, according to U.S. Treasury Assistant Secretary Herbert Allison. He told the Senate Banking Committee last week that the proposal was being considered for homeowners whose mortgages did not qualify for modification programs to make them affordable.
Some versions of the plan involve lenders selling foreclosed homes to approved professional landlords. In other versions, the lenders would sell to private investors or keep the home and hire a management firm to handle the rental arrangement.
The rent would be determined by the market-rate rent in the area, determined by a professional appraiser.
Jack Rodriguez, president of the Greater Tampa Association of Realtors, said the plan would “tinker with the free-market enterprise.”
“I know where Congress is coming from,” he said. “But my gut tells me investors would shy away from this, and banks will end up stuck in the real estate market.”
Baker, who first proposed the plan two years ago, said it has evolved and continues to be tweaked. Even though people who take advantage of the plan would still lose their homes, Baker said, the plan could keep that from happening to others.
“The lender would have more of an incentive to work something out through a modification because the home would be worth less,” Baker said.
Under the plan, the lender still could sell the home but, Baker said, “The homeowner would come with the home.”
The homeowner, turned renter, would be allowed to stay until the lease runs out, which could last as long as 10 years.
One potential problem, however, is that many homeowners who lose their properties aren’t interested in staying as renters, according to William Apgar, senior mortgage advisor for the Department of Housing an Urban Development.
The program could have an unintended consequence, Rodriguez said. Lenders would feel pressure to shed properties to avoid becoming a landlord. Investors, who would have to give up some property rights, would low-ball lenders. The result could drag down housing prices even more. (The median sales price in the Tampa, St. Petersburg, Clearwater area was $141,100 in May, down 20 percent from $176,100 in May 2008, according to the Florida Association of Realtors.) Others think the plan is a win-win for everyone involved.
Don Burnham, a real estate investor in the Tampa area and co-founder of the Wealth Restoration Institute LLC, said the plan could be a hit.
Investors, he said, would want to buy the homes because they will know they have a long-term tenant and a steady revenue source. Lenders will like the plan, he said, because they’ll be able to find buyers faster. Homeowners would be happy because they’ll have a secure lease and not have to foot the bill to move.
Mike Larson, a real estate analyst with Weiss Research in Jupiter, said the plan is one of several the Obama administration is hoping will keep more homes from becoming vacant.
“We don’t yet know fully how the plan would work,” he said. “But if you have a warm body in the house who will keep it from going into disrepair and keep the lawn mowed, that will be at least somewhat helpful.”
Copyright © 2009 Tampa Tribune, Fla., Shannon Behnken. Distributed by McClatchy-Tribune Information Services.
Congress and the Obama administration are considering a controversial plan that would allow homeowners to rent their foreclosed home for at least five years. The proposal is setting the real estate community abuzz.
“It’s clear that the modification plans have not been as successful as Congress had hoped,” said Dean Baker, co-director of the Center for Economics and Policy Research. “We need something that will make more of an impact.”
The program could reshape Florida’s real estate market and the overall economy. Experts disagree on whether the effects would be positive or negative. One thing everyone agrees on is this: Florida doesn’t need any more vacant homes.
The Sunshine State’s foreclosure rate remains the third highest in the nation. During the first six months of the year, foreclosure filings jumped 50 percent from the same period last year. One in every 33 households received a default notice, auction notice or bank repossession.
Details of the rental plan are sketchy, but the idea is gaining momentum, according to U.S. Treasury Assistant Secretary Herbert Allison. He told the Senate Banking Committee last week that the proposal was being considered for homeowners whose mortgages did not qualify for modification programs to make them affordable.
Some versions of the plan involve lenders selling foreclosed homes to approved professional landlords. In other versions, the lenders would sell to private investors or keep the home and hire a management firm to handle the rental arrangement.
The rent would be determined by the market-rate rent in the area, determined by a professional appraiser.
Jack Rodriguez, president of the Greater Tampa Association of Realtors, said the plan would “tinker with the free-market enterprise.”
“I know where Congress is coming from,” he said. “But my gut tells me investors would shy away from this, and banks will end up stuck in the real estate market.”
Baker, who first proposed the plan two years ago, said it has evolved and continues to be tweaked. Even though people who take advantage of the plan would still lose their homes, Baker said, the plan could keep that from happening to others.
“The lender would have more of an incentive to work something out through a modification because the home would be worth less,” Baker said.
Under the plan, the lender still could sell the home but, Baker said, “The homeowner would come with the home.”
The homeowner, turned renter, would be allowed to stay until the lease runs out, which could last as long as 10 years.
One potential problem, however, is that many homeowners who lose their properties aren’t interested in staying as renters, according to William Apgar, senior mortgage advisor for the Department of Housing an Urban Development.
The program could have an unintended consequence, Rodriguez said. Lenders would feel pressure to shed properties to avoid becoming a landlord. Investors, who would have to give up some property rights, would low-ball lenders. The result could drag down housing prices even more. (The median sales price in the Tampa, St. Petersburg, Clearwater area was $141,100 in May, down 20 percent from $176,100 in May 2008, according to the Florida Association of Realtors.) Others think the plan is a win-win for everyone involved.
Don Burnham, a real estate investor in the Tampa area and co-founder of the Wealth Restoration Institute LLC, said the plan could be a hit.
Investors, he said, would want to buy the homes because they will know they have a long-term tenant and a steady revenue source. Lenders will like the plan, he said, because they’ll be able to find buyers faster. Homeowners would be happy because they’ll have a secure lease and not have to foot the bill to move.
Mike Larson, a real estate analyst with Weiss Research in Jupiter, said the plan is one of several the Obama administration is hoping will keep more homes from becoming vacant.
“We don’t yet know fully how the plan would work,” he said. “But if you have a warm body in the house who will keep it from going into disrepair and keep the lawn mowed, that will be at least somewhat helpful.”
Copyright © 2009 Tampa Tribune, Fla., Shannon Behnken. Distributed by McClatchy-Tribune Information Services.
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