$7500 Tax Credit for First-Time Homebuyers

25 08 2008

There has been a lot of discussion about the Omnibus Housing Bill by a vote of 272 to 152.

Key bill provisions:

– Raises FHA required investment to 3.5 percent from current 3 percent
– Abolishes seller funded down payment assistance on FHA loans credit approved on or after October 15, 2008
– Abolishes FHA risk based pricing for case numbers ordered on or after October 15, 2008
– Streamlines FHA condo approval provisions
– Provides $7500 tax credit for first time homebuyers on homes purchased between April 9, 2008 and July 1, 2009
– New regulator for Fannie and Freddie with much broader authority
– FHA and Fannie/Freddie loan limit would change to lesser of 115% of median home price or $625,000 when the current temporary limits expire at the end of the calendar year. Fannie/Freddie floor would remain at $417,000 and FHA floor would remain at current floor.

The bill will go on to the Senate and should receive a vote this week where it would be anticipated for easy passage and go on to the President for signature. The President has lifted his threat of veto so it should become law in the next few days.

It should be noted that Speaker Nancy Pelosi, Financial Services Committee Chairman Barney Frank, and Financial Services Committee Member Maxine Waters said on the House floor today that they intend to introduce stand alone legislation to reinstate both the seller funded down payment assistance programs and the FHA risk based pricing in time to NOT have them stopped in October even though this bill does away with both.





First Coast Homes Leading Recovery?

16 08 2008

Home prices are rebounding. According to figures released Thursday by the Florida Association of Realtors, the median price of existing Jacksonville-area homes rose for sales between April and June. That’s good news.

The median sales price of single-family homes sold by Realtors was $191,700, which was 3.5 percent higher than the $185,300 posted for the first three months of the year. The report is one of many used by analysts to track the state of the housing market and forecast whether falling home prices have bottomed out.

“Across the state, we’re seeing positive signs,” Florida Association of Realtors President Chuck Bonfiglio said. He said prices “appear to be reaching equilibrium in many areas.”

Wayne Archer, director of the University of Florida’s Bergstrom Center for Real Estate Studies, said spring 2009 could see an upward trend in the state’s real estate market.

“I would expect that Jacksonville might quietly lead the recovery,” he said. “Jacksonville did not have the same price run-up that South and Central Florida did and as a result did not get caught up in the hysteria.”

The median is the price at which half the home sold for more, and half for less. Compared to the second quarter of 2007, the median price was down by 8 percent, and Realtors handled 24 percent fewer sales.

Ray Rodriguez, owner of Real Estate Strategy Center of Northeast Florida, said his own tracking of single-family home sale prices also showed improvement for the second quarter. He said the impact of more foreclosed homes being sold could weigh down prices in the future, but prices appear to have stabilized.

“Going forward, maybe a moderate recovery, but not a drastic downturn,” he said.

Statewide, the median sales price for existing single-family homes was $203,000 compared with $202,300 in the first quarter of the year. Compared to the second quarter of 2007, the sale price was 16 percent less.

Source: The Florida Times-Union





First Coast Homes Leading Recovery?

15 08 2008

Home prices are rebounding. According to figures released Thursday by the Florida Association of Realtors, the median price of existing Jacksonville-area homes rose for sales between April and June. That’s good news.

The median sales price of single-family homes sold by Realtors was $191,700, which was 3.5 percent higher than the $185,300 posted for the first three months of the year. The report is one of many used by analysts to track the state of the housing market and forecast whether falling home prices have bottomed out.

“Across the state, we’re seeing positive signs,” Florida Association of Realtors President Chuck Bonfiglio said. He said prices “appear to be reaching equilibrium in many areas.”

Wayne Archer, director of the University of Florida’s Bergstrom Center for Real Estate Studies, said spring 2009 could see an upward trend in the state’s real estate market.

“I would expect that Jacksonville might quietly lead the recovery,” he said. “Jacksonville did not have the same price run-up that South and Central Florida did and as a result did not get caught up in the hysteria.”

The median is the price at which half the home sold for more, and half for less. Compared to the second quarter of 2007, the median price was down by 8 percent, and Realtors handled 24 percent fewer sales.

Ray Rodriguez, owner of Real Estate Strategy Center of Northeast Florida, said his own tracking of single-family home sale prices also showed improvement for the second quarter. He said the impact of more foreclosed homes being sold could weigh down prices in the future, but prices appear to have stabilized.

“Going forward, maybe a moderate recovery, but not a drastic downturn,” he said.

Statewide, the median sales price for existing single-family homes was $203,000 compared with $202,300 in the first quarter of the year. Compared to the second quarter of 2007, the sale price was 16 percent less.

Source: The Florida Times-Union





Silver lining seen in prices

14 08 2008

The following article by Kevin Turner in The Florida Times-Union indicates a rebound in housing.

A UNF economist said a 1 percent jump in local inflation last month hides good news: It could mean a turnaround is coming to the city’s ailing housing market.

Jacksonville’s local consumer price index rose, after seasonal adjustments, by 1.01 percent in July, from 107.97 to 108.98. That brings the local inflation rate for 2008 to an above-normal 2.95 percent, said Paul Mason, an economist with the University of North Florida and coordinator of the Local Economic Indicators Project.

“What now appears to be a legitimate recovery in the housing market in Jacksonville fueled a large portion of the [inflationary] leap,” Mason said.

The July jump follows a modest June increase of 0.1 percent and declines in April and May, LEIP data indicates. Jacksonville’s normal inflation rate is from 1.5 to 2 percent, he said.

A measure of how much a property owner’s primary residence would cost to rent primarily drove the CPI increase, he said. It was led by increases in condominium prices, he said.

“Normally, a jump of inflation in that high an amount would be very disconcerting, but when the gist is a growing recovery in the housing market, it’s not as bad as it appears on the surface,” he said.

Ray Rodriguez, owner of the Real Estate Strategy Center of North Florida Inc., said Wednesday he thinks the condominium price increase could be coming from as few sources as one – such as leases converting to sales in the Peninsula building on the Southbank.

“If you have more expensive units being closed, that’s going to spike the price up,” he said.

Joe Farinacci, North Florida market manager for housing market research firm Metrostudy, said the increase could be the continuation of an ongoing trend. According to a Florida Association of Realtors study, the prices of condominiums in Jacksonville went up by 5 percent from June 2007 to June 2008, although 9 percent fewer units were sold during that time.

Other local price increases included personal care, up 8.9 percent; and clothing for women and girls, up 7.3 percent. Prices of meat, poultry and eggs dipped 5.5 percent; recreational product prices decreased 4.6 percent; and prices of new cars were down 4.2 percent, according to the report.

Jacksonville’s 2.95 percent inflation rate is still better for the first seven months of 2008 than the 5.5 percent estimated national rate through June, Mason said. The Bureau of Labor Statistics was scheduled to release the national CPI statistics for July today, according to its Web site.

Source: Florida Times-Union





Silver lining seen in prices

13 08 2008

The following article by Kevin Turner in The Florida Times-Union indicates a rebound in housing.

A UNF economist said a 1 percent jump in local inflation last month hides good news: It could mean a turnaround is coming to the city’s ailing housing market.

Jacksonville’s local consumer price index rose, after seasonal adjustments, by 1.01 percent in July, from 107.97 to 108.98. That brings the local inflation rate for 2008 to an above-normal 2.95 percent, said Paul Mason, an economist with the University of North Florida and coordinator of the Local Economic Indicators Project.

“What now appears to be a legitimate recovery in the housing market in Jacksonville fueled a large portion of the [inflationary] leap,” Mason said.

The July jump follows a modest June increase of 0.1 percent and declines in April and May, LEIP data indicates. Jacksonville’s normal inflation rate is from 1.5 to 2 percent, he said.

A measure of how much a property owner’s primary residence would cost to rent primarily drove the CPI increase, he said. It was led by increases in condominium prices, he said.

“Normally, a jump of inflation in that high an amount would be very disconcerting, but when the gist is a growing recovery in the housing market, it’s not as bad as it appears on the surface,” he said.

Ray Rodriguez, owner of the Real Estate Strategy Center of North Florida Inc., said Wednesday he thinks the condominium price increase could be coming from as few sources as one – such as leases converting to sales in the Peninsula building on the Southbank.

“If you have more expensive units being closed, that’s going to spike the price up,” he said.

Joe Farinacci, North Florida market manager for housing market research firm Metrostudy, said the increase could be the continuation of an ongoing trend. According to a Florida Association of Realtors study, the prices of condominiums in Jacksonville went up by 5 percent from June 2007 to June 2008, although 9 percent fewer units were sold during that time.

Other local price increases included personal care, up 8.9 percent; and clothing for women and girls, up 7.3 percent. Prices of meat, poultry and eggs dipped 5.5 percent; recreational product prices decreased 4.6 percent; and prices of new cars were down 4.2 percent, according to the report.

Jacksonville’s 2.95 percent inflation rate is still better for the first seven months of 2008 than the 5.5 percent estimated national rate through June, Mason said. The Bureau of Labor Statistics was scheduled to release the national CPI statistics for July today, according to its Web site.

Source: Florida Times-Union





End to U.S. Housing Market Meltdown in Sight?

13 08 2008

The United States is still suffering the worst housing market downturn since the Great Depression, but a slew of factors suggest the worst may soon be over.

Among the strongest signs that the the hard-hit sector could be recovering, home prices in many regions of the country are now falling at a slower rate, after two years of declines, and in some areas prices have actually risen.

The battered housing market is critical to the U.S. economy, with impact from the construction industry to the sale of appliances and furniture. After hurting growth in recent quarters, an improvement in the housing market could portend a turnaround for the world’s largest economy, which many say is either on the brink of a recession or already in one.

“Anybody who tells you they know when the housing market will bottom is delusional, but anybody who denies there are some positives out there that could make the housing market bottom fairly soon is equally delusional,” said Karl Case, the co-developer of a widely watched gauge of the housing industry and an economics professor at Wellesley College in Massachusetts.

The Standard and Poor’s S&P/Case-Shiller Home Price Indices, which Case co-developed, has shown a slowdown in the fall-off in home prices in recent months.

Other data also show signs of a bottom in house prices.

New housing starts fell to 975,000 in April from a peak of 2.27 million in January 2006. In the past 35 years, in the three other times that starts fell from more than 2 million to under 1 million, housing market activity rebounded within a quarter, Case said.

Residential construction as a percentage of real gross domestic product, however, is below the historical bottom, Case noted.

Case, whose research has focused on real estate markets and prices for over 20 years, said certain regions of the country now look similar to when they bottomed in past down cycles.

A bottom in the battered U.S. housing market may emerge first in California, one of the states hardest hit by foreclosures and where home prices are dropping to a point where the cost of a mortgage and taxes equals rent.

“The key is to try is to get some stability in the price of homes, which appears to be happening in California,” said veteran banking analyst Charles Peabody, of Portales Partners in New York And as goes California, the most populous state, so goes the rest of the United States, according to Peabody.”California is the linchpin and so if the region flattens, that changes everything,” Case said.

SIGNS OF IMPROVEMENT

Among the signs of a turn in the housing market, on a year-over-year basis, the S&P/Case-Shiller 20-City Composite Index was down 15.8 percent in May, but on a month-over-month basis home prices only fell 0.9 percent, the smallest monthly drop since September 2007.

And while on a year-over-year basis all 20 metro areas surveyed reported a decline in home prices, on a month-over-month basis home prices actually increased in eight metro areas in April and in seven metro areas in May. In March, only two metro areas showed prices rising month-over-month.

In a separate index published on Tuesday by Integrated Asset Services, the IAS360 House Price Index, home prices rose 1.1 percent on a national level in June from May.

In addition, U.S. home sales contracts signed in June unexpectedly rose across the country to their highest level since October. The National Association of Realtors said last week its Pending Home Sales Index, which is based on contracts signed in June, was up 5.3 percent to 89.0 from a downwardly revised 84.5 in May.

“The data came in much better than we were expecting and much better than the market was expecting,” said Michelle Meyer, an economist at Lehman Brothers in New York. “I think a lot of the increase has to do with foreclosure sales, which are selling at a quicker pace and have a faster turnaround time.”

Meyer said foreclosure sales, which have dragged overall home prices down, should help shave off what is widely considered one of the top problems facing the market: an unwieldy supply of homes for sale.

“Housing market data is certainly showing early signs of stabilization on the activity side and home price side,” said Torsten Slok, senior economist at Deutsche Bank in New York. “We are not at the end of tunnel yet, but more indicators are starting to look as if we are at least getting closer to it.”

Housing legislation signed into law last month offers a tax credit to first-time home buyers and aims to ward off some foreclosures. It also shores up Fannie Mae and Freddie Mac , which own or guarantee nearly half of the entire, $12 trillion U.S. mortgage market.

“When you are fighting a war, you need as many soldiers as possible,” Case said. (Additional Reporting by Jim Christie and Al Yoon; Editing by Leslie Adler)

Source: Reuter





End to U.S. Housing Market Meltdown in Sight?

12 08 2008

The United States is still suffering the worst housing market downturn since the Great Depression, but a slew of factors suggest the worst may soon be over.

Among the strongest signs that the the hard-hit sector could be recovering, home prices in many regions of the country are now falling at a slower rate, after two years of declines, and in some areas prices have actually risen.

The battered housing market is critical to the U.S. economy, with impact from the construction industry to the sale of appliances and furniture. After hurting growth in recent quarters, an improvement in the housing market could portend a turnaround for the world’s largest economy, which many say is either on the brink of a recession or already in one.

“Anybody who tells you they know when the housing market will bottom is delusional, but anybody who denies there are some positives out there that could make the housing market bottom fairly soon is equally delusional,” said Karl Case, the co-developer of a widely watched gauge of the housing industry and an economics professor at Wellesley College in Massachusetts.

The Standard and Poor’s S&P;/Case-Shiller Home Price Indices, which Case co-developed, has shown a slowdown in the fall-off in home prices in recent months.

Other data also show signs of a bottom in house prices.

New housing starts fell to 975,000 in April from a peak of 2.27 million in January 2006. In the past 35 years, in the three other times that starts fell from more than 2 million to under 1 million, housing market activity rebounded within a quarter, Case said.

Residential construction as a percentage of real gross domestic product, however, is below the historical bottom, Case noted.

Case, whose research has focused on real estate markets and prices for over 20 years, said certain regions of the country now look similar to when they bottomed in past down cycles.

A bottom in the battered U.S. housing market may emerge first in California, one of the states hardest hit by foreclosures and where home prices are dropping to a point where the cost of a mortgage and taxes equals rent.

“The key is to try is to get some stability in the price of homes, which appears to be happening in California,” said veteran banking analyst Charles Peabody, of Portales Partners in New York And as goes California, the most populous state, so goes the rest of the United States, according to Peabody.”California is the linchpin and so if the region flattens, that changes everything,” Case said.

SIGNS OF IMPROVEMENT

Among the signs of a turn in the housing market, on a year-over-year basis, the S&P;/Case-Shiller 20-City Composite Index was down 15.8 percent in May, but on a month-over-month basis home prices only fell 0.9 percent, the smallest monthly drop since September 2007.

And while on a year-over-year basis all 20 metro areas surveyed reported a decline in home prices, on a month-over-month basis home prices actually increased in eight metro areas in April and in seven metro areas in May. In March, only two metro areas showed prices rising month-over-month.

In a separate index published on Tuesday by Integrated Asset Services, the IAS360 House Price Index, home prices rose 1.1 percent on a national level in June from May.

In addition, U.S. home sales contracts signed in June unexpectedly rose across the country to their highest level since October. The National Association of Realtors said last week its Pending Home Sales Index, which is based on contracts signed in June, was up 5.3 percent to 89.0 from a downwardly revised 84.5 in May.

“The data came in much better than we were expecting and much better than the market was expecting,” said Michelle Meyer, an economist at Lehman Brothers in New York. “I think a lot of the increase has to do with foreclosure sales, which are selling at a quicker pace and have a faster turnaround time.”

Meyer said foreclosure sales, which have dragged overall home prices down, should help shave off what is widely considered one of the top problems facing the market: an unwieldy supply of homes for sale.

“Housing market data is certainly showing early signs of stabilization on the activity side and home price side,” said Torsten Slok, senior economist at Deutsche Bank in New York. “We are not at the end of tunnel yet, but more indicators are starting to look as if we are at least getting closer to it.”

Housing legislation signed into law last month offers a tax credit to first-time home buyers and aims to ward off some foreclosures. It also shores up Fannie Mae and Freddie Mac , which own or guarantee nearly half of the entire, $12 trillion U.S. mortgage market.

“When you are fighting a war, you need as many soldiers as possible,” Case said. (Additional Reporting by Jim Christie and Al Yoon; Editing by Leslie Adler)

Source: Reuter








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