U.S. Home Prices Post Gains

17 12 2009

U.S. home prices rose 1.4 percent for the quarter ending Nov. 27, 2009, according to Clear Capital, a real estate asset valuation firm. All four regions of the country posted modest gains — 2.3 percent in the Midwest, 1.5 percent in the West, 1.0 percent in the South and 0.9 percent in the Northeast.

Detroit and Cleveland led the country with the highest quarterly home price gains at 14.1 percent and 12.8 percent, respectively. Meanwhile, home price increases of 13.4 percent over the past two rolling quarters in Atlanta indicate that prices may have bottomed out in that metro area.

U.S. Home Values Stabilizing

17 12 2009

U.S. home values remained unchanged in October from the previous month, and they were 5.7 percent lower than a year ago, reports Zillow, the Web-based home listing and valuation service. That marks the lowest level of annual depreciation since December 2007.

The Zillow Home Value Index was $190,600 at the end of October, down 20.4 percent from its peak value of $239,500 in June 2006. Seven out of 10 U.S. homes have lost value since October 2008, and 27 percent of the homes sold in October sold for a loss relative to their purchase price. Overall, U.S. homes lost $489 billion in value during the first 11 months of this year, significantly less than the $3.6 trillion lost during 2008, according to the recent Zillow Real Estate Market Reports.

Las Vegas, Detroit, Riverside, Calif., Phoenix and Miami suffered the most depreciation in October, while Boston, Los Angeles, San Diego and San Francisco posted the largest monthly gains.

U.S. Housing Permits Climb 8.9% to Highest Level in a Year

17 12 2009

Builders in November broke ground on more U.S. homes, a sign the recovery in homebuilding may carry through into 2010.

The report on housing starts showed building permits increased to a 584,000 pace, the highest level since November 2008, from 551,000 the prior month, said the Commerce Department today in Washington. Permits were forecast to rise to 570,000.

Construction of single-family houses, which accounted for 84 percent of the industry last month, increased 2.1 percent to a 482,000 rate.

Work on multifamily homes, such as townhouses and apartment buildings, jumped 67 percent to an annual rate of 92,000.

All four regions showed a gain in starts in November, led by a 16 percent increase in the Northeast. Work began on 12 percent more homes in the South, 3 percent in the Midwest and 1.9 percent in the West.

Government tax credits, lower home prices and borrowing costs near record lows may boost sales and construction in coming months. Federal Reserve policy makers today are forecast to reiterate a pledge to keep rates low for “an extended period” to sustain the recovery and lower a jobless rate that economists project will average 10 percent in 2010.

Source: Bloomberg

Jacksonville Ranks 84 In Best Bang For Buck List

10 12 2009

Forbes has released it’s Best Bang for the Buck list for 2010, and Jacksonville Florida made the top 100.

A solid housing market, relatively stable employment and enviable cost of living makes the Jacksonville area one of the country’s top places to live.

Overall, the city ranked 84.

On the real estate tax rank, Jacksonville came in at 30, and in housing affordablility, the city ranked 42.

For the home price forecast, the city ranked at 95.  And the job forecast didn’t help the overall ranking either, coming in at 87.

Source: Forbes.com

Mortgage Delinquencies to Improve by Year-End 2010

8 12 2009

National mortgage loan delinquencies — borrowers with loans that are 60 days or more past due — will drop by nearly 3 percent by the end of 2010, according to the annual credit forecast by TransUnion. The projected decrease would reverse a trend in which mortgage delinquencies posted year-over-year increases of 54 percent between 2006 and 2007, 53 percent between 2007 and 2008, and 43 percent between 2008 and 2009.

Ezra Becker of TransUnion’s financial services group says delinquencies will decrease gradually due to expected improvements in unemployment rates and housing values. “We expect this change to be driven in part through the continued conservative approach lenders are taking to new loan underwriting, as many of the existing mortgages in the market work their way out of the system and off the books of lending institutions,” Becker says.

By the end of 2010, Florida is projected to have the highest mortgage delinquency rate at 16.86 percent, followed by Nevada at 16.14 percent, while North Dakota (1.43 percent), South Dakota (2.20 percent) and Nebraska (2.35 percent) are forecast to have the lowest delinquency rates.

FAQ: Homebuyer Tax Credits

2 12 2009

USA TODAY published this article about homebuyer’s tax credit FAQ:

If you’re in the market for a home, the world is your oyster. Interest rates are at record lows. Housing prices in many parts of the country are still depressed. And you may be eligible for a generous tax break, even if the home you buy isn’t your first.

On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.

A lot of people are interested in taking advantage of this tax break, but the expanded credit also has whipped up a lot of confusion. Here are some answers to frequently asked questions:

Q: How do I qualify for the $6,500 credit?

A: This credit is available for homebuyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time homebuyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn’t require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.

Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?

A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.

Q: Does the home I buy have to be more expensive than the one I own now?

A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there’s no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.

If you are planning to move up, keep in mind that you can’t claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn’t slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 – and that refers to the purchase price, not the assessed value or the amount of your mortgage – you are ineligible for the credit, period.

The $800,000 cap also applies to first-time homebuyers, but only those who purchase a home after Nov. 6. First-time homebuyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.

Q: I’m an existing homeowner, and would like to build a new home. Can I claim the credit?

A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn’t habitable by June 30, you won’t be able to claim the credit, he says.

Q: I bought a home in 2008 and claimed the old $7,500 first-time homebuyers credit, which must be repaid over 15 years. Did the new law change that rule?

A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.

The $8,000 first-time homebuyer credit, available for homes purchased after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don’t have to repay that money, either, as long as they meet the three-year requirement.

Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time homebuyer credit?

A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between “related parties,” Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.

Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?

A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.

NAR: Pending Home Sales Rise

2 12 2009

Pending home sales rose sharply in October, marking the ninth straight month of increases, according to the National Association of Realtors.

NAR’s pending home sales index tracks deals in which a contract has been signed but that has not gone through closing. An index of 100 equals the average level of contract activity in 2001.

October’s index was 114.1, up from 110 in September. It was 32 percent from October 2008, when it stood at 86.6.

The index for the Southeast was 115.4, up 5.4 percent from September and up 32 percent from a year ago.

Lawrence Yun, chief economist for NAR, said the increases reflect a market that is returning to normal.

“Keep in mind that housing has been underperforming over most of the past year,” said Yun. “Based on the demographics of our growing population, existing home sales should be in the range of 5.5 to 6 million annually, but we were well below the 5 million mark before the home buyer tax credit stimulus.”

Source:  National Association of Realtors

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