Looks like the California housing market is not entirely in shambles.
Bucking a statewide trend, home prices in Union City are on the rise, surpassing Fremont and Newark.
Median home prices in Union City, located in the heart of Alameda County (right), rose for two straight months, the latest figures from the California Association of Realtors show.
Prices also increased over this time last year, the snapshot of monthly single-family, town house and condo sales showed.
- Fremont traditionally has been the most expensive market in the Tri-City area, followed by Union City, then Newark.
- In October, the median home price in Union City was $658,000 — 5.3 percent more than the same time last year and nearly $100,000 more than the state average, and a far cry from the struggles seen in Southern California or even the nearby San Francisco Bay Area.
- In September, the price was $645,000, compared with $583,000 at the same time the previous year — a 10.6 percent increase.
In comparison, the state housing market declined sharply in 2006, which the California Association of Realtors’ chief economist called a “turning point” in an October report.
“The 24 percent decline in sales from January 2005 to January 2006 was a harbinger of things to follow through the year,” Robert Kleinhenz wrote.
For 2006, annual sales are expected to decline 23 percent from the 2005 record of 624,960 homes, as California mortgage demand decreases by a significant amount, he predicted.
During the real estate downturn a decade ago, Union City’s market stayed strong longer than most because affordable prices continued to attract buyers. This is a reason Bay Area home sales are tanking while Alameda exhibits signs of life.
Fremont wasn’t quite as lucky as Union City this time around, however.
Although prices picked up in the 12 months since October 2005, they still were down by 2 percent. But that was better than the 6.9 percent drop, from $655,000 to $610,000, between September 2005 and September 2006.
In Fremont, that means less-costly California home loan payments for those looking for town houses and condos. The high volume and variety of units that Fremont has on the market means opportunities for buyers.
Meanwhile, median home prices in Newark rose slightly, just below 1 percent from $610,000 between October 2005 and 2006, far weaker than the 5 percent boost between September 2005 and 2006.
Posted by Richard Barber on Nov 30 2006 under California
As housing price appreciation continues to slow across the country, the Washington area is still posting some of the strongest gains in the nation. It’s one of the few areas where sellers - and not mortgage applicants - are in control.
A quarterly report from the Office of Federal Enterprise Housing Oversight says home prices nationwide in the third quarter were up 7.73 percent from the same quarter a year ago. However, prices rose less than 1 percent from the second quarter of this year, the smallest quarterly increase since 1998.
The Maryland housing market ranked 10th nationally for year-over-year housing price appreciation last quarter, with average prices up 13.2 percent from a year ago and 1.84 percent from the previous quarter.
D.C. ranked 13th, with prices up 11.3 percent from a year ago and 1 percent from the second quarter.
Virginia was 17th, with year-over year and quarterly gains of 9.9 percent and 0.7 percent apprecation.
National trends varied widely by region last quarter. The report says Idaho now tops all states for one-year prices gains, up 17.5 percent. In positive news for those seeking a Michigan mortgage, that region became the first state in more than six years to post year-over-year price declines, down 0.6 percent.
Quarterly housing price figures are considered a more accurate reflection of price fluctuations than monthly figures, although the OFHEO this week said October housing prices nationally were down from year-ago levels, the first decline in 13 years.
This week, mortgage rates sunk to a 10-month low. That should be great news for those considering a home loan at the moment.
But what about a month from now? Six weeks from now? Bankrate.com talked to real estate experts, recording their view on the future of interest rates.
Almost half of the panelists believed mortgage rates will remain relatively unchanged (plus or minus 2 basis points) over the next 35 to 45 days. A third think rates will fall over that period, and about one-quarter believe rates will rise.
Here are some quotes from the experts:
Long-term [home mortgage rates] have been range-bound for three months. We’re at the bottom of that range and, given that we’ve bounced higher each time we’ve touched the bottom of the range, it’s likely that long-term rates will have a tough time going lower.
Rates should continue to behave, but, with rates at the lows for the year and the reality of an ever-inverting yield curve, it appears long-term rates are priced for perfection, and any surprise would likely move rates higher.
- Bob Walters, chief economist, Quicken Loans/Rock Financial
Low [mortgage interest rates] are energizing the housing market, and the Fed will have to react.
- Dan Green, mortgage planner, Mobium Mortgage, Chicago
The Fed is in a wait-and-hold pattern. Although housing has coole
d off significantly in parts of the country the overall economy is still growing at a modest pace and the Fed still has concerns with core inflation. I believe rates will not move very far at the moment.
- JR Diaz, vice president, Statewide Bancorp, Rancho Cucamonga, Calif.
Bernanke is still warning about inflation, but the bond market only wants to see signs of a slowing economy.
- Greg McBride, senior financial analyst, Bankrate.com
Rates keep dropping week after week as the housing sector weakens and inventories rise for everything from trucks to condos.
– Holden Lewis, senior reporter, Bankrate.com
An elaborate New York mortgage fraud ring duped homebuyers and lenders by falsifying documents and overstating property values, causing credit problems and fiscal distress for many people who bought homes in minority neighborhoods, Eliot Spitzer said Wednesday.
The New York Attorney General and Governor-Elect (pictured) sued 11 people over the scheme, which took place in Brooklyn and lasted from 2002 until early this year. The mortgage fraud hurt dozens of borrowers and lenders alike, the lawsuit filed with the state supreme court in Manhattan asserts.
Four defendants agreed to settle out of court paying nearly $1.8 million to help compensate the victims, and by accepting increased oversight of, or restrictions on, their activities by state financial regulators. Spitzer is seeking fines, restitution and other penalties from the other defendants, Reuters reports.
“The perpetrators of this scam promised minority home buyers an opportunity to climb the economic ladder. In reality, the defendants profited handsomely while their victims saw their financial security impaired or even ruined,” Spitzer said.
Steve Cohn, a lawyer representing Isaac Katz, one of the defendants who settled, declined to comment. According to the complaint, Katz and Yoel Silberstein, a co-defendant, bought properties at foreclosure sales or “distressed” prices in Brooklyn’s Bedford-Stuyvesant, Bushwick, Crown Heights, East Flatbush and East New York neighborhoods, hoping to “flip” them for quick profits.
Spitzer said defendant Amenophis Alleyne of Plainfield, N.J., would receive finder’s fees for encouraging African-American buyers with good credit, including some friends and family, to buy the properties.
Alleyne, who is black, assured them that they could buy a home with no down payment, and that rental income from tenants would cover their mortgage payments.
Thereafter, mortgage brokers Saks and Welz would induce banks to make loans by exaggerating borrowers’ assets, while real estate appraisers Erik Johnson of Ronkonkoma, N.Y., and Jeffery Richardson of Brooklyn would exaggerate property values by at least $50,000, Spitzer said.
Finally, Brooklyn lawyers Devon Clarke, Benzion Frankel, Joseph Treff and Rephoel Weitzner, who handled the closings, would misrepresent the actual sales prices on deeds, tax records and other New York mortgage documents, Spitzer said.
Spitzer said that as a result of the scheme, many buyers ended up with bad credit home loans carrying rates they could not afford and soon ended up in default or foreclosure.
Moreover, Spitzer said the scheme artificially raised home prices in the area, making it harder to buy and sell, and defrauded lenders who made the bad loans.
While many experts report an increase in New York mortgage activity throughout the state, a new study shows problems for those with existing home loans.
Here are the finding from PropertyShark.com, a real estate data site, in its quarterly new residential foreclosure report covering New York City.
- Number of New Foreclosure Auctions: There were 425 new residential foreclosures in New York City (five boroughs), an overall decrease (-21%) in new foreclosures in the current quarter from the second quarter of 2006 (538 foreclosures).
- Foreclosure Auctions per Household: Of the five boroughs, Staten Island had the highest rate of foreclosure auctions per household in Q3 2006, about twice the rate of Brooklyn and over 10 times the rate of Manhattan.
- Average Lien Amounts: Manhattan had the highest average lien per property in foreclosure at $330,728. The Bronx had the lowest average lien at $226,995.
- Foreclosure Auctions by Neighborhood: In NYC, 17 of the top 20 zip codes for foreclosures were in Queens and Brooklyn.
- Lis Pendens (Pre-Foreclosures): The number of residential pre-foreclosures in NYC for the quarter (1468) dropped 10.92% from the second quarter of 2006 (1648), but increased 20.33% from the third quarter of 2005 (1220).
“The decrease in new foreclosure auctions in New York City since the second quarter of 2006 is definitely counter to popular perception of the housing market, but foreclosures are just one factor in determining the economic state of real estate,” stated Ryan Slack, chief executive officer, PropertyShark.com.
“Comparing NYC Lis Pendens in Q3 2005 and Q3 2006, we see an increase in defaults [on mortgage loans] across all boroughs; this may be indicative of a future increase in foreclosure rates City-wide.”
It’s clear that Massachusetts mortgage demand continues to lag far behind 2005 levels, but two reports issued yesterday come to different conclusions about the housing market’s future.
The Warren Group, a provider of real estate and financial data throughout New England, showed a 6.9 percent drop in the median price of a single-family home, from $335,000 in October 2005 to $312,000 in October 2006, the Lowell Sun reports.
The Warren Group also showed single-family home sales down 14.9 percent from a year ago, while condo sales plummeted 19.5 percent in the same time period. CEO Timothy Warren Jr. said the Massachusetts housing market in still in the midst of a pronounced slowdown, but predicted that the market would stabilize late next year.
However, the Massachusetts Association of Realtors (MAR) believes the market has already stabilized, and buyers are out en force.
“With mortgage rates back down around 6 percent, the economy is growing again, and sellers have adjusted their prices to more realistic levels, making for terrific buying conditions,” said MAR President David Wluka.
That doesn’t mean Massachusetts mortgage costs are going to be cheap. MAR pegged the median price of a detached single-family home at $341,000 in October, just 2 percent below last October’s median price of $347,950. Condo prices were down 3.7 percent to $261,250.
According to MAR, the state’s once-scalding real estate market peaked in the summer of 2005, and year-over-year comparisons are now reflecting normal market conditions. Despite optimism, the association still reported sluggish sales. Single-family home sales slid 16.5 percent year-over-year, with 3,239 sold last month; condo sales fell 17.6 percent to 1,464 units.
The data was somewhat better than the numbers released last month: Before Massachusetts home loan costs tumbled for several consecutive weeks, sales of single-family homes fell 23.8 percent from September 2005, while condo sales fell 28.1 percent.
It appears 2006 will be remembered as a down year in the housing market. For the first 10 months of the year, Massachusetts single-family home sales are down 15.1 percent, and median prices are down 4.4 percent to $329,900, compared with the same 10 months in 2005. Condominium sales have fallen by 13.6 percent during the first 10 months, with the median sale price down 1.1 percent to $276,000.
Wluka said there is light at the end of the tunnel:
“For the better part of this year buyers having been waiting out the market, expecting a major correction. Now that prices have stabilized, buyers have started to move forward, making for a much busier market in recent weeks.”
If you’ve been waiting around, hoping to take advantage of lowered prices before applying for a Michigan mortgage, you’re in luck.
You’ve watched the sting of massive job and income cuts, making Metro Detroiters nervous about their futures. Then you saw the fear and caution, which kept home buyers on the sidelines and created an oversupply of homes that can sit months, even years, on the market.
As The Detroit News notes, you’ve witnessed the reasons why the region’s housing market is favoring buyers so extensively.
Now, comes home price deflation, the worst in the nation, according to a survey released this week by the National Association of Realtors. The median home price in Metro Detroit sank to $154,100 in the third quarter, down 10.5 percent from $172,100 at the same time last year. It was the largest percentage drop of U.S. cities.
“The overall feeling in Michigan is everybody’s knees are knocking a little bit,” said Nancy Warson, a Livonia Realtor.
While prices are down, at least one top mortgage broker predicts the market may be ready to rebound.
“We’re ready to turn around,” said Pat Vredevoogd Combs, National Association of Realtors president and a Grand Rapids Realtor. “What we’re seeing, we think, is that it’s bottoming out.”
The steep decline in home prices can be blamed on major losses in jobs and income in Metro Detroit, said Dana Johnson, chief economist at Comerica Bank.
Would-be homeseller Brian Kurtz knows such uncertainty well. The financial planner from Troy has dropped the price on his Sterling Heights colonial by $36,600 to $259,900 and is now paying $4,000 per month for two mortgages.
“It’s like trying to sell ice cubes to Eskimos,” said Kurtz, whose home has been on the market since August 2005.
Warson, with Real Estate One, said buyers are just not out there. One of Warson’s clients in South Lyon, who is selling their house for about $500,000, has had only one potential buyer look at it in seven months.
Those kinds of waits are reflected in the sales within the Michigan housing market, which are down 17.2 percent in the third quarter. Those kinds of waits also can quickly force down home prices, as sellers often drastically cut their asking prices so they can snag a buyer.
In a state where the jobless rate has soared above the national average, buyers are wary of getting into long-term financial commitments, Warson said. Current homeowners, such as empty nesters, are also reluctant to move or downsize, fearing they’ll take a loss on their home.
“Some are scared about their job, some are scared (because) they don’t know where the market is and they would prefer to buy at the very, very bottom, so they’re holding out - and nobody knows where the bottom is,” Warson said.
Posted by Jed Moss on Nov 30 2006 under Michigan
The Maryland Association of Realtors wants affordable housing to be a top priority for Maryland’s new legislature and governor - and it is hoping the state’s homeowners and aspiring homeowners will help.
The association has formed the League of Maryland Homeowners, which it hopes will be a grassroots group that helps educate the public and government about obstacles to home ownership.
The association has sent letters to its 34,000 members asking them to encourage clients who are concerned about home affordability in Maryland to join the group, says President Ilene Kessler.
The league’s newly launched website includes an open letter to Governor-elect Martin O’Malley, urging him to take action to mitigate the rising cost of homes for those seeking a Maryland mortgage. Priorities for the league will coalesce more after the legislative session starts in January, Kessler says, but some of its early suggestions include:
- A state income tax credit of up to $5,000 for first-time home buyers, and a tax credit for employers who provide or match employees’ down payments and rental security deposits.
- Better coordination among state agencies overseeing transportation, development and economic planning to ensure that people have opportunities to live near their work.
- Waiving certain fees for developments that incorporate work force housing.
- More funding for existing state work force housing initiatives, such as help with bad credit mortgages.
The association’s housing affordability index shows that recently the average cost for a typical starter home in Maryland was $260,000. Factors pushing up home prices include high demand, a strong economy and a restricted supply of houses, Kessler says.
That’s a problem for real estate agents, Kessler says, because “housing is a feeding chain. You start out at one level and you move up. Without an entry level, there is no feeding chain” - and no homebuyers for Realtors to serve.
Applications for home mortgages fell last week across the U.S., in large part due to the number of business days being truncated by the U.S. Thanksgiving holiday, an industry group said on Wednesday.
The seasonally adjusted index of total home mortgage applications declined by 3.9 percent in the week ending November 24 to 599, its lowest level since October, according to the Mortgage Bankers Association. The four-week moving average for the applications index rose by 1.1 percent to 622.8.
Mortgage applications were pulled down by a drop in home loan refinancing. The MBA’s measure of applications strictly for mortgage refinancing dropped a more significant 9.6 percent to 1,749.6, the group said.
Meanwhile, its overall index of applications earmarked for home loans rose for a third week out of the past four, climbing 1.3 percent to 406.7.
According to MSN Money, many noted U.S. economists say such data suggest the worst of the year’s housing market slump has turned the corner. The index had dropped to 375.6, the lowest level in the current downturn, from around 500 a year earlier.
The pace of existing home sales unexpectedly rose in October to a 6.24 million-unit annual rate as lower prices continue to tempt buyers, the National Association of Realtors said on Tuesday. The median home prices declined 3.5 percent from October 2005, marking the largest year-on-year decline since the Realtors began keeping records in 1968.
Long-term, 30-year fixed-rate mortgage rates last week were unchanged at 6.13 percent, the lowest level since January, according to the group.
According to the Lansing State Journal, the Greater Lansing (Mich.) housing market has taken a 1-2 punch in the media this month:
- First, came a story out of USA Today that the area was among the bottom 10 in the nation, as judged by declines in median house prices.
- Then came an LSJ report on the unfortunate fact that housing starts are way down, with building permits for new single-family homes in the area falling 25 percent from the same time last year.
It’s troubling news, and more than enough to spur local officials to consider what role they can play in priming the pump for this struggling segment of the Michigan real estate market. The role may end up being quite limited. But that doesn’t mean area officials can’t be creative.
It isn’t a failure of local policy that has sapped the housing market. The economy still struggles, thanks to the ongoing retrenchment of the U.S. auto industry. Any type of small-scale local incentive wasn’t going to alter that downward trend and make Michigan mortgage payments easier to handle for hundreds of thousands of residents.
But the fact still remains that the mid-Michigan economy, by such measures as unemployment rates, is healthier than other parts of the state. The fact is that the area benefits from a solid base of jobs in government, manufacturing and Michigan State University.
Area leaders are supposed to be chewing over a new analysis of the local economy and economic development. This report, though quite pointed in its assessment of some shortcomings, still refers to Michigan as a “diamond in the rough.”
The housing market could garner a similar tag with proper marketing. Prices in the region are moderate, even bargains. As the region gears up to attract new business investments, and the U.S. economy strengthens, it should be part of the recruitment pitch that the housing dollar goes long here.
Beyond the sales pitch, the focus should be on incentives:
- Could communities do anything with some small property tax rebates?
- What more can be done for incentives to rehab older homes?
- Can affordable housing be created for lower- and middle-income residents who would otherwise leave the area and hamper the economy further?
It’s tough to read you’re at the bottom in any list, but Greater Lansing still has some good facts to counterbalance its bad ones. Hopefully, they’ll be utilized.
Posted by Richard Barber on Nov 30 2006 under Michigan
