Q2 Housing Market Reports for Jacksonville Areas

18 09 2011

National Association of Realtors released the 2011 Second Quarter Report for Jacksonville areas. The report evaluates factors affecting home prices, such as job market statistics, foreclosure rates, inventory, and debt-to-income and mortgage-servicing-cost-to-income ratios. See Local Market Report 2nd Quarter 2011.

Jacksonville Home Sales Rebound in August

16 09 2011

Prices and volume of home and condominium sales in Jacksonville rebounded in August, and the Northeast Florida Association of Realtors says that means market recovery is under way.

NEFAR’s latest statistics, which cover single-family home and condominium sales in Clay, Duval, Putnam and parts of St. Johns and Nassau counties, brought news of strengthening across the board in the regional real estate market – year-over-year improvements in sales, pending sales, median price and inventories.

Over the longer term, a review of NEFAR data suggests that the Jacksonville real estate market hit bottom earlier this year and is beginning to recover.

“August was a month of numerous positive indicators, sending a clear signal that we are on the path to a stabilized market with recovery now in progress,” NEFAR President Dane Leslie said in a news release.

The number of closed sales in the Jacksonville metro area edged up 1.5 percent over August 2010 to 1,441.

Pending sales, or sales that had not yet closed, spiked 24.4 percent to 1,744 year-over-year.

Most notably, there was recovery in median sales prices, which have trended downward in recent years. The median sales price was $138,000, 2.2 percent above $135,000 in August 2010. The average sales price also was up to $180,823, which was 6.6 percent over the $169,658 level of last August, NEFAR said.

Also in the positive news was the fact that overall sales were less weighted by “lender-mediated” or “distressed” sales – foreclosure, bank-owned and houses sold for less than their mortgaged amounts, or short sales. Distressed sales accounted for about 43 percent of all sales in August; in August 2010, they accounted for 51 percent of all sales.

New listings fell 21 percent from 2,924 in August 2010 to 2,319 this August. Inventories fell as well, another positive sign, NEFAR noted. About 11,167 properties were available for sale in August 2011 as compared to 16,464 in August 2010 – a 32 percent difference.

There are other indications of a recovery. The percentage of distressed sales has fallen steadily from a peak of 60 percent in February. Likewise, the median price of sales in the metropolitan area has slowly risen since bottoming out at $115,900 in February.

Source: Jacksonville.com

Freddie Mac Offers New Loan Modification Option

15 09 2011

Freddie Mac borrowers ineligible for participation in the Home Affordable Modification Program or previously in default on a HAMP or other loan workout will be able to take advantage of a new option that reduces mortgage principle and monthly payments by at least 10 percent each.

Under a Standard Modification, loans will have the interest rate set at 5 percent and the amortization period extended to 40 years from the time of the workout; lenders will receive cash incentives of up to $1,600 per home owner approved.

The Standard Modification replaces Freddie Mac’s Debt Coverage Ratio loan modification, which is now being referred to as a Classic Modification.

Source: “Freddie Offers New Loan Mod Option,” NASDAQ (09/13/11)

Drop in Loan Limits Has Many Concerned

12 09 2011

In less than a month, Fannie Mae and Freddie Mac will scale back the size of loans they buy from lenders, which some industry groups are saying will hurt home sales and could further dampen a housing market recovery. The drop in the conforming loan limit may make it more difficult for some buyers to purchase homes in expensive markets, housing experts say.

The current loan limits are set to expire Oct. 1. If an extension isn’t granted, the maximum mortgage amount in high-cost areas will drop from $729,750 to $625,500 (although that limit will vary throughout the country).

Some banks, such as Bank of America, have already stopped taking new applications for jumbo loans at the current rate so that they can process the ones already in the pipeline in time for the Oct. 1 deadline.

The drop in the conforming loan limit is expected to impact 2 percent of homes nationwide, but will have a much greater effect in some areas. For example, some analysts say 10 percent of the housing market in New York will be affected.

Pamela Liebman, CEO of New York real estate company the Corcoran Group, told USA Today that the new loan requirements will “put a lot of buyers out of the market.”

Meanwhile, lobbying efforts are continuing, as several industry groups, including the National Association of REALTORS®, are urging Congress to act quickly on a two-year extension to maintain the GSE loan limit at $729,750.

Source: “Coming Loan Changes Could Squeeze High-Priced Home Markets,” USA Today (Sept. 6, 2011)

Obama Announces Mortgage Refinancing Plan

12 09 2011

President Obama vowed to help more Americans refinance their mortgages during his speech to a joint session of Congress on 9/8/11.

“To help responsible home owners, we’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,” Obama said during his speech. Such a move would “put more than $2,000 a year in a family’s pocketbook and give a lift to an economy still burdened by the drop in housing prices,” he added.

Obama’s speech provided no specifics about the refinancing plan. He used the speech mostly to preview his American Jobs Act, a bill that would include tax cuts for small businesses, extend unemployment benefits, and provide other aid that would set out to help workers and spur more jobs.

Some critics said Obama’s speech did not contain enough to help the ailing housing market.

“That’s not the bold stroke that I want,” Mark Vitner, a senior economist at Wells Fargo, told HousingWire after the speech. “It’s not just refinance; we want people to be able to sell their homes.”

Some housing advocates said more needs to be done to address the massive number of foreclosures plaguing many housing markets.

“To get the economy moving forward, we simply must address the millions of people in danger of losing their homes to foreclosure,” adds Orson Aguilar, executive director of research group The Greenlining Institute. “This massive shadow inventory is a dead weight on the housing market and the whole economy, and we can’t ignore it.”

Some housing advocates praised the president’s refinancing proposal, saying it will help underwater home owners lock in record low rates and lower their monthly mortgage bill.

Source: “Obama Pushes Infrastructure Bank, Pledges Housing Fix,” American Banker (Sept. 8, 2011) and “Obama’s Job Plan Doesn’t Do Enough for Housing, Critics Say,” HousingWire (Sept. 8, 2011)

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