Wednesday, July 6, 2011
Foreign Buyers Target U.S. Vacation Hotspots
Foreign home buyers have their eye on U.S. vacation areas — especially in southern Florida — and are helping to give a lift to some of these battered housing markets.
More than 30 percent of Florida’s home sales in the 12 months ending in March were to foreign buyers (compared to 10 percent in 2007), according to National Association of REALTORS® housing data. In Miami alone, about 40 percent of buyers are international, says Ronald Shuffield, president of Esslinger-Wooten-Maxwell REALTORS® in Coral Gables, Fla.
“International buyers have been the fuel for the Miami recovery," Shuffield told the USA Today.
Three of the most popular areas foreigners are searching for real estate: Miami-Fort Lauderdale, Phoenix, and Los Angeles, according to Trulia’s Web site.
And where are these foreign buyers most coming from? Canadians are mostly dominating the market share, with 23 percent of the foreign buyers coming from that country, followed by 9 percent from China, according to NAR data.
Source: “Foreign Buyers Lifting U.S. Home Sales,” USA Today (July 6, 2011)
More than 30 percent of Florida’s home sales in the 12 months ending in March were to foreign buyers (compared to 10 percent in 2007), according to National Association of REALTORS® housing data. In Miami alone, about 40 percent of buyers are international, says Ronald Shuffield, president of Esslinger-Wooten-Maxwell REALTORS® in Coral Gables, Fla.
“International buyers have been the fuel for the Miami recovery," Shuffield told the USA Today.
Three of the most popular areas foreigners are searching for real estate: Miami-Fort Lauderdale, Phoenix, and Los Angeles, according to Trulia’s Web site.
And where are these foreign buyers most coming from? Canadians are mostly dominating the market share, with 23 percent of the foreign buyers coming from that country, followed by 9 percent from China, according to NAR data.
Source: “Foreign Buyers Lifting U.S. Home Sales,” USA Today (July 6, 2011)
Latest Bill Calls for Fannie, Freddie Merger
A bill is expected to be introduced today in the House of Representatives that calls for a merger between government-sponsored enterprises Fannie Mae and Freddie Mac, The Wall Street Journal reports.
Rep. Gary Miller, R-Calif., who is introducing the bill and who is also a real estate developer and former home builder, proposes that the newly merged firm also be restructured in how it operates. It would purchase mortgages and sell them to investors as securities that are backed by the government.
Unlike other bills that have called for winding down of the GSEs and privatizing them, Miller’s bill would not seek private owners for the new entity. However, the new firm would be privately capitalized.
“Banks would pay a ‘guarantee’ fee on loans that would fund the firm's operations and maintain adequate capital. Investors would pay an additional fee to finance an insurance fund that would cover catastrophic losses,” The Wall Street Journal explains.
The new firm would be regulated by the Federal Housing Finance Agency. The FHFA would ensure the firm’s market share never exceeds 50 percent of the mortgage market.
Lawmakers continue to wrestle over the fate of the GSEs, which have cost taxpayers $138 billion since the government took them over in 2008. Earlier this year, the White House called for winding them down. A series of bills currently in Congress are attempting to shrink Fannie and Freddie’s role and privatize them.
Miller’s bill is expected to garner bipartisan support.
Source: “Bill Calls for Fannie, Freddie Merger,” The Wall Street Journal (July 5, 2011) [Log-in required.]
Rep. Gary Miller, R-Calif., who is introducing the bill and who is also a real estate developer and former home builder, proposes that the newly merged firm also be restructured in how it operates. It would purchase mortgages and sell them to investors as securities that are backed by the government.
Unlike other bills that have called for winding down of the GSEs and privatizing them, Miller’s bill would not seek private owners for the new entity. However, the new firm would be privately capitalized.
“Banks would pay a ‘guarantee’ fee on loans that would fund the firm's operations and maintain adequate capital. Investors would pay an additional fee to finance an insurance fund that would cover catastrophic losses,” The Wall Street Journal explains.
The new firm would be regulated by the Federal Housing Finance Agency. The FHFA would ensure the firm’s market share never exceeds 50 percent of the mortgage market.
Lawmakers continue to wrestle over the fate of the GSEs, which have cost taxpayers $138 billion since the government took them over in 2008. Earlier this year, the White House called for winding them down. A series of bills currently in Congress are attempting to shrink Fannie and Freddie’s role and privatize them.
Miller’s bill is expected to garner bipartisan support.
Source: “Bill Calls for Fannie, Freddie Merger,” The Wall Street Journal (July 5, 2011) [Log-in required.]
7 of 10 Renters Say Owning a Home Is a Top Priority
Most Americans still believe that owning a home is a solid financial decision, and a majority of renters aspire to home ownership as a long-term goal. According to the 2011 National Housing Pulse Surveyreleased today by the National Association of REALTORS®, 72 percent of renters surveyed said owning a home is a top priority for their future, up from 63 percent in 2010.
Seven in 10 Americans also agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home. The annual survey, which measures how affordable housing issues affect consumers, also found that more than three quarters of renters (77 percent) said they would be less likely to buy a home if they were required to put down a 20 percent down payment on the home, and a strong majority (71 percent) believe a 20 percent down payment requirement could have a negative impact on the housing market.
“Despite the economic setbacks Americans have experienced in today’s current climate, it is clear that a strong majority still believe in home ownership and aspire to own a home,” said NAR President Ron Phipps. “However, achieving the dream of home ownership will become increasingly difficult for buyers if they are required to make a 20 percent down payment, which may be a reality for many of tomorrow’s buyers if a proposed Qualified Residential Mortgage rule is adopted. That is why REALTORS® are strongly urging regulators to go back to the drawing board on the proposed rule.”
Defining the QRM rule is important because it will determine the types of mortgages that will generally be available to borrowers in the future. As currently proposed, borrowers with less than 20 percent down will have to choose between higher fees and rates today — up to 3 percentage points more — or a delay of between nine and 14 years while they save up the necessary down payment.
More than half — 51 percent — of self-described “working class” home owners as well as younger non-college graduates (51 percent), African Americans (57 percent), and Hispanic Americans (50 percent) who currently own their homes reported that a 20 percent down payment would have prevented them from becoming home owners.
Pulse surveys for the past eight years have consistently reported that having enough money for a down payment and closing costs are top obstacles that make housing unaffordable for Americans. Eighty-two percent of respondents cited these as the top obstacle, followed by having confidence in one’s job security.
The survey also found respondents were adamantly against eliminating the mortgage interest deduction (MID). Two-thirds of Americans oppose eliminating the tax benefit, while 73 percent believe eliminating the MID will have a negative impact on the housing market as well as the overall economy.
“The MID facilitates home ownership by reducing the carrying costs of owning a home, and it makes a real difference to hard-working American families,” Phipps said. “Home ownership offers not only social benefits, but also long-term value for families, communities and the nation’s economy. We need to make sure that any changes to current programs or incentives don’t jeopardize our collective futures.”
When asked why home ownership matters to them, respondents cited stability and safety as the top reason. Long-term economic reasons such as building equity followed closely behind. On a local level, respondents said neighbors falling behind on their mortgages and the drop in home values were top concerns. Foreclosures also continue to remain a large concern, with almost half of those surveyed citing the issue as a problem in their area.
Source: NAR
Daily Real Estate News | July 6, 2011
Seven in 10 Americans also agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home. The annual survey, which measures how affordable housing issues affect consumers, also found that more than three quarters of renters (77 percent) said they would be less likely to buy a home if they were required to put down a 20 percent down payment on the home, and a strong majority (71 percent) believe a 20 percent down payment requirement could have a negative impact on the housing market.
“Despite the economic setbacks Americans have experienced in today’s current climate, it is clear that a strong majority still believe in home ownership and aspire to own a home,” said NAR President Ron Phipps. “However, achieving the dream of home ownership will become increasingly difficult for buyers if they are required to make a 20 percent down payment, which may be a reality for many of tomorrow’s buyers if a proposed Qualified Residential Mortgage rule is adopted. That is why REALTORS® are strongly urging regulators to go back to the drawing board on the proposed rule.”
Defining the QRM rule is important because it will determine the types of mortgages that will generally be available to borrowers in the future. As currently proposed, borrowers with less than 20 percent down will have to choose between higher fees and rates today — up to 3 percentage points more — or a delay of between nine and 14 years while they save up the necessary down payment.
More than half — 51 percent — of self-described “working class” home owners as well as younger non-college graduates (51 percent), African Americans (57 percent), and Hispanic Americans (50 percent) who currently own their homes reported that a 20 percent down payment would have prevented them from becoming home owners.
Pulse surveys for the past eight years have consistently reported that having enough money for a down payment and closing costs are top obstacles that make housing unaffordable for Americans. Eighty-two percent of respondents cited these as the top obstacle, followed by having confidence in one’s job security.
The survey also found respondents were adamantly against eliminating the mortgage interest deduction (MID). Two-thirds of Americans oppose eliminating the tax benefit, while 73 percent believe eliminating the MID will have a negative impact on the housing market as well as the overall economy.
“The MID facilitates home ownership by reducing the carrying costs of owning a home, and it makes a real difference to hard-working American families,” Phipps said. “Home ownership offers not only social benefits, but also long-term value for families, communities and the nation’s economy. We need to make sure that any changes to current programs or incentives don’t jeopardize our collective futures.”
When asked why home ownership matters to them, respondents cited stability and safety as the top reason. Long-term economic reasons such as building equity followed closely behind. On a local level, respondents said neighbors falling behind on their mortgages and the drop in home values were top concerns. Foreclosures also continue to remain a large concern, with almost half of those surveyed citing the issue as a problem in their area.
Source: NAR
Daily Real Estate News | July 6, 2011
Tuesday, July 5, 2011
Is this great news???
It seems the downward cycle in home prices broke in April after eight consecutive months of decline, according to a survey released Tuesday says CNN Money.
Home prices rose 0.7% compared with March, although they fell 0.1% when adjusted for the strong spring selling season. Prices were down 4% year-over-year. "In a welcome shift from recent months, this month is better than last April's numbers beat March," said David Blitzer, S&P's spokesman, in a statement. "However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the spring-summer home buying season."
David Blitzer said "It is much too early to tell if this is a turning point or simply due to some warmer weather,"
Any hint of good news in the troubled housing market will likely bring cheer to the industry, and there are some signs that market conditions are not quite as dire as some of the other statistics may indicate. Foreclosures, for example have been falling.
That has translated in a decline of 16% in the sales volume of distressed properties this year, while volume of non-distressed sales rose 11%, according to Joseph LaVorgna, chief economist for Deutsche Bank.
That's good news because much of the price drop over the past year can be blamed on severe price slashing for homes in foreclosure, as Federal Reserve chairman Ben Bernanke pointed out in a press conference last Wednesday. Prices for homes sold by regular sellers have held up much better.
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