Foreclosed Home Owners Find a Way to Buy Again

Once-foreclosed home owners are slowly making a comeback in the housing market as some lenders give them a second chance at home ownership. After defaulting on their home loans or doing a short sale on their previous homes in recent years, some home owners have found a way to buy again, Reuters News reports. The Federal Housing Agency is the main way paving a comeback for these former home owners to buy again, according to Reuters’ interviews with lenders and real estate professionals. FHA loans can be an option for some who defaulted on their mortgage or did a short sale. FHA borrowers usually need a credit score of at least 620 and a 3.5 percent down payment, which are lower requirements than most conventional mortgages. "These are not mainstream programs geared for mainstream borrowers," Greg McBride, senior financial analyst at Bankrate.com, told Reuters about former home owners using FHA-backed loans to get back into home ownership. Still, home owners with mortgage defaults on their records often find its a long way to crawl back into the housing market. They must make big strides in boosting their credit scores after a foreclosure, short sale, or bankruptcy. "Most of the loans that are getting done are for people who have really rebuilt their credit," rank Donnelly, president of the Mortgage Bankers Association of Metropolitan Washington, D.C., told Reuters. "They have to prove (to the lender that) it was something like a job loss that caused this and not chronic delinquency." Lenders will take into consideration why the person lost their home previously, and they’re much more likely to try again on a borrower who lost their home due to a job loss than a borrower who walked away on their prior home even though they could still afford the mortgage payments. Source: “Back from Foreclosure to Homeownership,” Reuters News (May 16, 2012)

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Sellers More Willing to Work on Buyer Appeal

Home sellers are more willing to make changes to their home to make it more competitive in the market and more attractive to potential buyers, according to a new survey by Coldwell Banker Real Estate of 700 of its agents nationwide. So what are sellers willing to do to better their home’s presentation? The survey found: 94 percent of the agents surveyed said their sellers are removing clutter and making cosmetic updates, including minor repairs and fresh paint. 76 percent of U.S. sellers are willing to “depersonalize” their home. (60 percent of Canadian agents say their sellers are willing to depersonalize) 59 percent of say sellers are even bringing in new home decorations or furniture to help make the home more appealing. “When marketing your home, it’s important to help buyers imagine themselves living in the property. De-cluttering and de-personalizing is crucial to this process,” says Susanita de Diego, Coldwell Banker Canadian Consumer Specialist. Homes are competing for buyers so homes “presented with a minimum of clutter and distracting personal items ... will appeal to buyers and improve their chances of a successful sale.” The survey also found that American sellers are more willing to get competitive on price too. Fifty-one percent of the agents surveyed said they’ve found their home sellers more willing to price their homes competitively than compared to last year. What Buyers Want The survey also revealed what is guiding home buyers in their home search. Thirty-three percent of the real estate agents surveyed say that new or updated kitchens are the most important home feature for home buyers. Meanwhile, 14 percent say an open floor plan and 12 percent say a new or updated bathroom are the most important home buyer features today. The survey found that only 1 percent of the real estate agents say that their buyers rate entertainment rooms or finished basements as the most important home feature. The most common motivation getting buyers moving: A new baby or growing family, according to the survey. Other lifestyle factors like getting married, a divorce, or retiring also are big motivators for wanting to find a new home. Source: Coldwell Banker Real Estate

What May Delay Some Housing Markets' Recovery

The difference in how states handle foreclosures may determine how quickly their housing markets make a full recovery, according to a new report by Capital Economics. States with nonjudicial foreclosure markets — where foreclosures can be approved outside the court system — are seeing housing prices stabilize faster than states that require foreclosures to go through the court system, according to Capital Economics. The report notes that judicial foreclosure states tend to see houses linger on the market longer, which ultimately can cause prices to drop. "We think that differences in foreclosure procedures will continue to affect state-level house price trends, with nonjudicial states outperforming," Paul Diggle, property economist with Capital Economics. "After all, as foreclosure pipelines are brought down to healthier levels in nonjudicial, high burn-through states, supply conditions can more rapidly tighten to the point that they support price growth." The Federal Housing Finance Agency index recently showed that housing prices were down 2.3 percent year-over-year in the fourth quarter of 2011 and dropped 0.3 percent in the fourth quarter compared to the previous quarter in states with judicial procedures for foreclosures. In states with nonjudicial foreclosure procedures, however, home prices increased 0.3 percent quarter-over-quarter and dropped only 1.6 percent year-over-year. Economists have predicted a surge in foreclosures is coming in the next few months from the $25 billion robo-signing mortgage settlement. The foreclosure wave will pose a “much greater threat to the house price outlook in judicial states, where the foreclosure backlog is that much larger,” Diggle told HousingWire. Source: “Housing Markets Recover Faster in Nonjudicial Foreclosure States, Report Says,” HousingWire (May 18, 2012)

5 Places Where Prices Are Expected to Rise Most

Housing markets that have seen some of the biggest drop in home prices since the housing peak are now poised for recovery in the next two years, according to a new report by Fiserv. The bargains in these cities are attracting buyer attention and expected to drive up home prices in the coming year. Fiserv forecasts that the following five cities will see some of the biggest growths in home prices by the end of 2013: 1. Madera, Calif. Median home price: $125,000 2013 forecast for home prices: 21.5% increase 2. Medford, Ore. Median home price: $144,000 2013 forecast for home prices: 20.1% increase 3. Yuma, Ariz. Median home price: $105,000 2013 forecast for home prices: 16.7% increase 4. Corvallis, Ore. Median home price: $224,000 2013 forecast for home prices: 13.2% increase 5. Eugene, Ore. Median home price: $166,000 2013 forecast for home prices: 12.4% increase Find out what other cities made Fiserv’s rebounding home price list. Source: “Where Home Prices Are Rising Fastest,” CNNMoney (May 2012)

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Housing Starts Post New Gains, Signs of Healing

Builders broke ground on more homes last month as housing starts jumped 2.6 percent nationwide in April over March, the Commerce Department reported this week. The single-family sector saw a 3 percent increase in housing starts in April, while multifamily construction projects saw a 3.2 percent rise. "April's increase in housing production comes on top of strong upward revisions to the previous month's data, and is an encouraging sign that we are returning to a gradual, upward trend that should continue in the year ahead as builders respond to improving demand for new homes in certain markets," Barry Rutenberg, chairman of the National Association of Home Builders, said in a statement. "Unfortunately, overly restrictive lending conditions for builders and buyers are slowing the pace of this trend considerably." Regionally, housing starts were mixed. The Midwest and South saw some of the biggest gains in housing starts in April, with the South surging 11.6 percent and 6.7 percent in the Midwest. Meanwhile, the Northeast saw housing starts in April drop 20.7 percent, and by 8.1 percent in the West. While the new-home sector has seen recent gains, the rate of production is still half of what is considered healthy for a normal market. Housing permits — a future gauge of home building — dropped 7 percent in April, mostly attributed to a slide in multifamily permits, which dropped 20.8 percent last month. Meanwhile, single-family permits increased 1.9 percent in April. Last month, building permits posted a three-and-a-half-year high mostly from a surge in permits for apartment construction. Source: National Association of Home Builders and “Housing Starts, Industrial Production Both Rise in April,” Associated Press (May 16, 2012)

Commercial Real Estate Follows Economy Into Recovery

In his remarks yesterday at the Commercial Business Trends Forum during the Midyear Legislative Meetings & Trade Expo in Washington, D.C., NAR Chief Economist Lawrence Yun sounded a cautiously optimistic note regarding the state of the commercial real estate market. That’s because the commercial sector is so closely tied to the overall economy, which has been looking up over the past year in many respects. Specifically, the stock market has regained nearly all the losses it took in late 2008 and early 2009, Yun said. Also, corporations are sitting on large cash reserves, and are now looking for ways to invest that productively. "The commercial market follows the broader economy with a lag time of 12 to 24 months," he explained. "Statistically, we're out of the recession. The economy's been improving since late 2009, almost three years of uninterrupted growth. Now, consumers are opening up their wallets and beginning to spend more." Commercial real estate should pick up even more as businesses continue to grow and hire, Yun said. However, a few significant challenges remain. The possibility of a default by Greece, as well as the states of Illinois and California, looms over the financial markets. Additionally, while the jobs picture has improved somewhat, the unemployment rate will remain high for the foreseeable future. Within commercial real estate, financing also remains a problem. Last year was a tough one to obtain commercial mortgages, and so far 2012 has been too, particularly for smaller-scale companies, Yun said. "Bigger players have gotten bigger, smaller players have gotten shut out," he explained. In his rundown of commercial subsectors, Yun said multifamily and office are bright spots, with rising leasing costs and falling vacancies, and New York and Washington, D.C. are the strongest markets, respectively, for those categories. Industrial and retail are improving as well, but the turnaround in those areas has been slower. — Brian Summerfield, REALTOR® Magazine

REALTORS® Dubbed ‘Conscience of the Industry’

Steps to nowhere are scattered throughout the Lower Ninth Ward of New Orleans — steps that once led to homes. But since the catastrophe of Hurricane Katrina, little rebuilding has been accomplished, says James Perry, director of the Greater New Orleans Fair Housing Center, which he greatly attributes to both systemic and individual cases of housing discrimination. In his Equal Opportunity-Cultural Diversity Forum presentation Tuesday at the NAR Midyear Legislative Meetings & Trade Expo in Washington, D.C., Perry discussed examples of actions and policies that disenfranchised African-American citizens who lived in the most devastated areas of New Orleans. In one such case, private individuals in nearby communities and states posted online housing ads inviting “white only” displaced residents of New Orleans to share private homes or rent rooms — blatantly disregarding the Fair Housing Act. And an ordinance established by the neighboring St. Bernard Parish prohibited property owners in the predominantly white community from renting single-family homes to anyone other than blood relatives. The parish later required property owners to obtain a permit to rent, the granting of which was at the discretion of the parish, as well as placed zoning limits on multifamily housing and, most recently, a moratorium on the construction of new apartments. Litigation accusing St. Bernard Parish of Fair Housing violations has been ongoing for more than six years. John Trasvina, HUD’s assistant secretary for Fair Housing and Equal Opportunity and another presenter at the forum, has intimate involvement in the case, having filed a housing discrimination complaint against the parish as well. In 2005, Hurricane Katrina changed everything for the residents of New Orleans. But if there is a beacon of hope, it’s that housing inequalities, accessibility obstacles, and systemic flaws are starting to be recognized, Perry says. Last year, HUD charged more Fair Housing cases than ever before. But Trasvina says the agency is working to tackle discrimination issues by addressing systemic problems rather than always taking them on a case-by-case basis. HUD is working more closely with counties and municipalities to provide data and analysis in order to isolate housing obstacles and outline ways jurisdictions can use HUD funds to break down barriers. Trasvina called on REALTORS® to increase community participation, and serve as a housing advocate and resource. “NAR has become the conscience of the industry and a true partner,” he said. “REALTORS® are the most important asset, friend, and partner in the fair housing movement,” Perry added — Erica Christoffer, REALTOR® Magazine