… Last Tuesday another housing market obstacle appeared in the form of Standard & Poor’s Case-Shiller Home Price Index for March. Prices for 20 major metro areas dropped 0.8% for the month and were down 3.6% from a year ago. These numbers had some folks claiming the double dip in housing prices had arrived.

But Case-Shiller’s longer term data reveals that in their 20 measured metros, home prices are still UP 38.2% since January 2000. This shows that in real estate, you have to look at the long term picture, just like you do with your 401K. You can see a chart of the info here:

Seattle Real Estate Tyler Freed

Mortgage rates at lowest level of the year

By MSN Money partner on Thu, May 12, 2011 1:05 PM
This post comes from Amy Hoak at partner site MarketWatch.

Meanwhile, foreclosures and other distressed homes are holding home prices down in many areas.

Mortgage rates fell for the fourth week, with rates on the 30-year fixed-rate mortgage averaging 4.63%, the lowest this year, according to Freddie Mac’s weekly survey of conforming mortgage rates.

Rates on the 30-year mortgage averaged 4.71% last week and 4.93% a year ago, according to the survey.

Compare mortgage rates
Fifteen-year fixed-rate mortgages averaged 3.82% for the week ending May 12, down from 3.89% last week and 4.3% a year ago.

Rates on adjustable-rate mortgages also dropped, with the five-year Treasury-indexed hybrid adjustable-rate mortgage averaging 3.41%, down from 3.47% last week and 3.95% a year ago. And one-year Treasury-indexed ARMs averaged 3.11%, down from 3.14% last week and 4.02% a year ago. Post continues after video.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, while the five-year ARM required an average 0.6 point and the one-year ARM required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Is it time to refinance?
“Mortgage rates continued to decline this week following a mixed employment report. The economy added a healthy number of 244,000 workers in April, the most in 11 months, and the figures for March and February were revised up by 56,000 more jobs,” Frank Nothaft, vice president and chief economist of Freddie Mac, said in a news release.

“However, the unemployment rate rose to 9% from 8.8% in March and was the highest reading since January. In addition, wages grew by only 0.1%, which was below the market consensus forecast.”

For the housing market, distressed homes including foreclosures are holding home prices down in many areas, he said.

“The National Association of Realtors reported these homes sold at a 20% discount in the first quarter of this year and accounted for 39% of all existing home sales, up from 36% in the first quarter of 2010. As a result, only 22% of metropolitan areas exhibited higher median sales prices from a year ago, compared to 51% in the fourth quarter of 2010,” he said.

For the original article on MSN visit this link.

Seattle Real Estate Tyler Freed

Posted by Shawn Tully, senior editor-at-large
March 28, 2011 5:00 am

Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

A home under construction in Austin. The number of new homes in the pipeline nationwide is quite low.

From his wide-rimmed cowboy hat to his roper boots, Mike Castleman fits moviedom’s image of the lanky Texas rancher. On a recent March evening, Castleman is feeding cattle biscuits to his two pet longhorn steers, Big Buddy and Little Buddy, on his 460-acre Bar Ten Creek Ranch in Dripping Springs, a hamlet outside Austin in the Texas Hill Country. The spread is a medley of meandering streams, craggy cliffs, and centuries-old oaks. But even in this pastoral setting, his mind keeps returning to a subject he knows as well as any expert around: the housing market. “I’m a dirt-road economist who sees what’s happening on the ground, and in 35 years I’ve never seen a shortage of new construction like the one I’m seeing today,” declares Castleman, 70, now offering a biscuit to his miniature donkey Thumper. “The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses. And in most markets the price of new homes is fixin’ to rise, not fall.”

Read the rest here

Seattle Real Estate Tyler Freed

By Les Christie, staff writer February 10, 2011: 11:09 AM ET

NEW YORK (CNNMoney) — Home sales volume rose sharply in the final three months of 2010, aided by more stable prices on a year-over-year basis, a real estate industry group said Thursday.

Sales jumped 15.4% in the fourth quarter to an annual rate of 4.8 million units compared with 4.16 million a quarter earlier, the National Association of Realtors said.

Prices of single-family homes stabilized, rising 0.2% compared with 12 months earlier. The national median for homes sold during the period was $170,600.

“Home sales clearly recovered in the latter part of 2010, and are helping to absorb the inventory, including many distressed properties,” said Lawrence Yun, chief economist of the Realtors’ group.

Sales volume was particularly strong in the West region, up nearly 20% compared with the three months ended Sept. 30.

“A good portion of the sales activity in the West has been driven by investors taking advantage of discounted foreclosures, with high levels of all-cash transactions,” said Yun.

The number of sales fell nearly 20% nationally, however, compared with the same period in 2009, when the homebuyer’s tax credit was in effect.

“The tax credit clearly poached demand from the second half of 2010,” said Jonathan Miller, CEO of Miller Samuel, a New York-based appraiser. “It artificially stimulated sales in the first half and artificially lowered it in the second.”

Many housing market factors were favorable through the end of the year. Prices are very affordable for working families in most markets, interest rates are extremely low and bloated inventories offer a wide choice of properties.

The missing ingredient is a positive economic environment, specifically when it comes to hiring.

“An improving housing market and job growth will go hand in hand,” said Yun. “The housing recovery will mean faster job growth.”

He projects than a 300,000 increase in 2011 home sales will lead to the creation of about 150,000 to 200,000 jobs to the overall economy.

The survey revealed that single-family home prices held up better than those of condos. The national median for condos fell 6.4% compared with 12 months earlier, to $164,200. In some markets, condo prices have rarely been so affordable.

The median condo price in the Las Vegas metro area, for example, was just $60,700; in Phoenix, $68,900; and in Miami, $81,900. Reno, Nev., had the lowest condo prices in the nation, a median of $60,300.

As for single-family homes, Youngstown, Ohio, the old steel town struggling to find its way back into the modern economy, recorded a median of just $62,800 during the fourth quarter. That was a decline of nearly 14% from already bargain-basement prices a year earlier.

Toledo, Ohio at $74,500, Lansing, Mich. at $79,500, and South Bend, Ind. at $76,800 also recorded very low prices. Outside the Rust Belt, Ocala, Fla., was the lowest priced metro area at $80,200.

Honolulu had the highest single family home prices during the quarter, a median of $598,200. San Jose, Calif.’s median was $591,000 and San Francisco’s was $558,200.

Seattle Real Estate Tyler Freed

I saw this article this morning on Twitter from the Seattle Times

The Seattle-area housing market’s big plunge
Here’s a snapshot of the market on its way up in 2005, near its peak in 2007, and three years after the fall in 2010.

By Eric Pryne
Seattle Times business reporter

Back in 2005, houses were selling like smartphones. Prices were climbing.

In some months you could count the number of homes repossessed in each of the four counties on your fingers and toes — with a pinkie or two to spare.

Median prices peaked in 2007, but sales already had begun to tail off as the bow wave of the Great Recession slammed into Seattle. In 2010 the real-estate market still was struggling in its
backwash, a new report from the Northwest Multiple Listing Service indicates.

Sales? Down about 50 percent from five years ago.

Prices? Still falling, although not as rapidly as in 2008 and 2009.

For an excellent snapshot of the market check out the rest of the article

Seattle Real Estate Tyler Freed

The 5 best markets for 2010
It won’t be a high bar to be considered a top performer in this year’s housing market.
By Lisa Scherzer of SmartMoney

Tacoma, Wash., tops Moody’s list of cities where home prices will perform the best in 2010.

After a dour year when housing prices fell more than 12% nationwide, will 2010 bring sunnier tidings?

The short answer: only a tad in a select few places but overall, not really.

Yes, there have been pieces of good news over the past few months that have indicated a quiet, slow bottoming of real-estate prices. For instance, sales of existing homes rose 7.4% in November from the previous month, the highest rate since February 2007, according to data from the National Association of Realtors released last week. The tax incentives for homebuyers passed earlier this year along with historically low interest rates have nudged many buyers into the market.

Yet a recovery depends on several factors. At the top of the list is a turnaround in the labor market. More people going back to work would have a beneficial effect on household income and consumer confidence and would stabilize the housing market, says Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. As of November, one of out every 10 American workers is unemployed, according to the Bureau of Labor Statistics. And while that’s down slightly from October, Moody’s expects the jobless rate to peak in the third quarter next year at 10.6%.

What’s your home worth?
Another factor is the backlog in foreclosures, which are dragging down values and adding to the housing supply. “By all accounts, that backlog is at a historic high,” says Gabriel. “It suggests that many more homes will be sold on a distressed basis either via foreclosure or short sale.”

RealtyTrac, an online marketplace of foreclosure listings, estimates 3.2 million households will have received a foreclosure notice in 2009, up from 2.3 million in 2008. The firm projects that number could approach 4 million in 2010. “We do think 2010 will probably represent the peak, and in 2011 [foreclosures] will start to go down at least marginally,” says Rick Sharga, senior vice president at RealtyTrac. Why the acceleration next year? First, says Sharga, there have been enormous delays in processing this year. Many homes that would have gone into foreclosure in 2009 won’t actually enter and complete the process until 2010.

Seattle and Redmond: Meet our Towns

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Second, a big wave of option adjustable-rate mortgages (ARMs) will reset next year. (These are a somewhat obscure category of ARMs that were popular during the real-estate boom, which allowed borrowers to make a range of monthly payments. The options include a partial-interest payment that adds the unpaid interest to the loan’s balance. On many of the loans, balances have risen while values of the underlying properties have plummeted.) “The number of loans that will adjust starts to go up significantly in the middle of next year. A lot of those loans are underwater … and owners will be really hard-pressed to avoid going into foreclosure,” Sharga says.

Home prices, of course, are variable and depend on many factors, each of which is difficult to predict. Still, average home prices will drop by 7.9% nationwide in 2010, according to Moody’s Economy.com. In the few areas where there could be positive price growth, the projected increase is modest. “These areas will essentially be flat next year,” says Steve Cochrane, managing director at Moody’s Economy.com.

The top 5 cities for home prices

Tacoma, Wash. (+2.44%)
Memphis, Tenn. (+0.99%)
Pittsburgh (+0.89%)
Charleston, S.C. (+0.18%)
Seattle (-0.50%)
These five markets are culled from data on Moody’s Economy.com and based on the largest 100 metro areas.

These pockets of the country share a few important characteristics. One is that they are starting with a limited supply of housing stock. Another is that throughout most of the decade, prices basically stayed in sync with household income, says Cochrane.

There are other factors, too. Pittsburgh, for example, along with western Pennsylvania, is late in the traditional business cycle, and “our variations tend to be smaller,” says Robert Strauss, a professor of economics and public policy at Carnegie Mellon University in Pittsburgh. The economy has managed to stay fairly stable mostly because over the past several decades it transformed from a center of manufacturing to one of education and health care with a bit of financial services and technology.

Smaller areas across the Southeast are expected to fare well in 2010 primarily because they fared relatively decently during the housing crisis, says Jeannine Cataldi, a senior economist at IHS Global Insight. “They didn’t have such a big run-up, and they have a diverse economic base that enabled them to stay stable,” she says. Home prices in Charleston didn’t get out of line with household incomes; also, Boeing is investing in a fairly large manufacturing plant there, which could create some potential for income and job growth, says Cochrane.

As for Memphis, the city’s largest employer is FedEx. Transportation services is one of the early industries to turn around as the economy recovers, says Cochrane, and that should support the area’s housing market.

The economies of Tacoma and Seattle — which are neighboring cities — were “much stronger for much longer than much of the rest of the country,” says Cochrane. Software giant Microsoft, based in Redmond, Wash., a Seattle suburb, was one reason the area remained stable. (Microsoft is the publisher of MSN Real Estate.) Another was Boeing, which builds commercial airplanes in Seattle.

Going forward, Seattle’s position as a key hub of trans-Pacific trade should be a plus for the economy. Orders are increasing for commercial aircraft and it should see some rising demand for tech products, Cochrane says. The outlook for 2010 for the two Washington cities “is for fairly stable, moderate economic growth,” he says.

Seattle Real Estate Tyler Freed

Fannie, Freddie prove too big for government to shirk
The government’s Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is to make sure the housing market doesn’t deteriorate further, but it will cost taxpayers much more.

By ALAN ZIBEL

The Associated Press

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AP

These file photos show Freddie Mac’s headquarters in McLean, Va., and Fannie Mae’s headquarters in Washington, D.C. The Treasury Department has pledged unlimited aid to the mortgage giants to prevent the housing market from deteriorating further.

WASHINGTON — The government’s Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is aimed at making sure the housing market doesn’t take another turn for the worse and cause the economic recovery to unravel.

This insurance policy taken out by the Treasury Department will help keep mortgage rates low, and may wind up being a gift of sorts to struggling homeowners and banks. But there’s a catch: the housing crisis is likely to cost taxpayers much more.

The Obama administration’s latest lifeline to Fannie and Freddie will cover unlimited losses through 2012, lifting an earlier cap of $400 billion. It also eases restrictions on the size of the companies’ investment portfolios.

That’s a reversal of the Bush administration’s September 2008 plan to shrink the size of the companies’ holdings of mortgage-backed securities.

The action, which needed no congressional approval, could position Fannie and Freddie to be more aggressive in dealing with the housing crisis, perhaps taking troubled mortgage investments off banks’ books.

“They’ve cleared the decks to use Fannie and Freddie as a vessel for whatever they want,” says Edward Pinto, a housing consultant who served as Fannie’s chief credit officer in the late 1980s.

Treasury could also lean harder on Fannie and Freddie to help troubled homeowners avoid foreclosures — and by extension the banks and other investors who own their mortgages. Many experts say an existing $75 billion government program to prevent foreclosures isn’t working fast enough, threatening the emerging signs of home-price stability in many cities.

Boosting the firepower of Fannie and Freddie, which finance three quarters of all new mortgages, also should help keep rates on home loans low as the Federal Reserve starts dialing back its separate $1.25 trillion program aimed at doing just that.

That’s good news for the banking industry, which has benefited this year from homeowners refinancing their mortgages, says Jason O’Donnell, senior research analyst at Boenning & Scattergood. “This is an initiative that spreads far beyond just Fannie Mae and Freddie Mac,” he says.

But the trade-off is the Treasury will have to cover much more than the $111 billion in losses at Fannie and Freddie it already has funded. Barclays Capital predicts the losses will range from $230 billion to $300 billion.

Vital money source

Both companies provide vital funding for home loans, buying mortgages from lenders, pooling them into bonds and selling them to investors with a guarantee against default.

While they historically backed loans to relatively safe buyers, they dramatically lowered their standards during the housing boom, and those loans are defaulting in higher numbers.

If the administration does lean on Fannie and Freddie to expand its foreclosure-prevention program, it would be pricey. If Fannie and Freddie were, hypothetically, to start forgiving a quarter of borrowers’ mortgage debt, that would cost $125 billion more to help about 2.5 million to 3 million borrowers, estimates Barclays analyst Ajay Rajadhyaksha.

The Treasury Department says its only motivation is to make sure investors remain confident Fannie and Freddie can keep doing their jobs of buying the bulk of mortgages made in the U.S. and turning them into investments.

“These measures bring broad benefits to American homeowners and our economy,” says Andrew Williams, a Treasury spokesman.

Fannie and Freddie must persuade everyone from the Chinese central bank to individual investors that it is still safe to buy their debt securities, which they sell partly through weekly auctions. The two companies have sold $2.7 trillion in debt this year, according to Credit Suisse calculations.

Still, by making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress, infuriating Republicans on Capitol Hill.

The Treasury Department gave Fannie and Freddie a bigger lifeline “without any involvement, notice (or) dialogue with Congress,” says Rep. Scott Garrett, R-N.J., a member of the House Financial Services committee, who called Wednesday for an investigation into the actions.

Fannie Mae was born in 1938 in the aftermath of the Great Depression. It was privatized 30 years later to limit budget deficits during the Vietnam War. In 1970, the government created a rival, Freddie Mac.

After the housing market started to unravel in 2006, mortgage defaults soared, and the companies’ losses mounted. By summer 2008, the companies weren’t able to raise money, and their shares plunged.

The Bush administration’s hand was forced. It wound up taking over the pair a week before the collapse of investment bank Lehman Brothers.

The government now has a 79.9 percent stake in each company, the maximum amount possible to still keep the companies off the federal budget.

Up against the wall

Bush administration officials envisioned Fannie and Freddie would ultimately be able to scale back their mortgage holdings by 10 percent a year, starting next year.

But the housing market remains shaky, with 11 out of 20 major cities showing price declines in October. Private investors remain wary of U.S. mortgage investments.

So Obama officials decided last week to give Fannie and Freddie more leeway, effectively allowing them to build up their portfolios next year, then start cutting back in 2011.

Without this change, Fannie and Freddie would be forced to start selling mortgages from its portfolio early next year, just as the Federal Reserve begins to retreat from that market. That would push up mortgage rates and threaten the housing recovery.

Now they will be able to hold a combined $1.62 trillion in mortgage investments by the end of next year, compared with $1.36 trillion under the old rules. The result: Fannie and Freddie will have an additional $260 billion to invest next year, Credit Suisse calculates.

“They didn’t want Fannie and Freddie to be out there selling mortgages when the future of housing is uncertain,” says Credit Suisse mortgage strategist Mahesh Swaminathan.

Associated Press reporter Sara Lepro contributed.

Seattle Real Estate Tyler Freed

Mortgage rates still below 5 percent
Mortgage rates rose this week but still remained below 5 percent, Freddie Mac said Thursday.

The Associated Press

McLEAN, Va. —
Mortgage rates rose this week but still remained below 5 percent, Freddie Mac said Thursday.

The average fixed rate on 30-year mortgages was 4.81 percent, up from a record-low 4.71 percent last week. Last year at this time, the average fixed rate for 30-year mortgages was 5.47 percent.

The Federal Reserve has kept rates around 5 percent this year by purchasing $1.25 trillion in mortgage-backed securities in an effort to make home buying more affordable and bolster the housing market.

Low rates are leading more homeowners to call their brokers. Mortgage applications to buy a home rose 4 percent last week, while refinance applications jumped 11 percent from the prior week, the Mortgage Bankers Association said.

Freddie Mac collects mortgage rates each week from lenders around the country. Rates often fluctuate, even within a given day.

The average rate on a 15-year fixed mortgage rose to 4.32 percent, from a record low of 4.27 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 4.26 percent, up from last week’s 4.19 percent. Rates on one-year, adjustable-rate mortgages were 4.24 percent, down from 4.25 percent.

The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 point for 30-year and one-year loans. The fee averaged 0.6 point for 15-year loans and 0.5 point for five-year mortgages.

Seattle Real Estate Tyler Freed

Realtors predict fate of home prices in 2010
Realtors believe that home prices are stabilizing and will continue to do so in 2010, according to a recent HomeGain survey.
Hannah Schroder, HousingZone Contributing Editor
December 11, 2009
HousingZone
Realtors believe that home prices are stabilizing and will continue to do so in 2010, according to a recent HomeGain survey of nearly 1,000 U.S. real estate agents and brokers. The majority also believe the first-time home buyer tax credit is spurring sales and is contributing factor to home prices stabilizing.

What does this mean for the housing market?
• Sellers are still a tough bunch as they continue to disagree with realtors, even more than before—the percentage of homeowners that believe that their homes should be listed 10-20 percent higher than what their realtors recommend continues to rise (41 percent in Q4 survey), as does the percent of home sellers that believe their homes are worth more than their realtor’s recommended listing price (76 percent in Q4 survey).

• While sellers think home prices are heading up, buyers think home prices are heading down. Realtors must educate both parties toward meeting in the middle.

• The first time homebuyers credit has and will spur sales. Twenty-one percent of realtors said half of their transactions involved a first time homebuyer. However, realtors question whether that spike will continue once the credit expires later next year and additional inventory hits the market.

• Home trends continue to vary by market—home buyers and sellers are more likely to see an increase in housing values in the West and a decrease in the Southeast.

© 2009, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Seattle Real Estate Tyler Freed

Home prices in 20 U.S. cities rise for fourth month

The Standard & Poor’s/Case-Shiller home price index, which tracks prices in 20 major metropolitan markets, rose 0.3 percent in September, compared with the previous month. Prices rose in 11 areas.

By The Associated Press

A housing report showed home prices improved for the fourth straight month in September, providing further evidence of a modestly improving housing market.

The Standard & Poor’s/Case-Shiller home price index, which tracks prices in 20 major metropolitan markets, rose 0.3 percent in September, compared with the previous month. Prices rose in 11 areas.

The home price report comes a day after an upbeat report on existing home sales in October helped stocks snap a three-day losing streak. The National Association of Realtors said October home sales rose more than 10 percent, easily topping the 1.4 percent increase predicted by economists.

Seattle Real Estate Tyler Freed