News

13March

Housing Geared Up to Grow this Spring

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The mercury is rising and springtime is just around the corner.  Regions hit hard by winter storms are starting to thaw and analysts are predicting the housing market will do the very same in coming months.  A tight housing supply continues to keep home prices high making this undoubtedly a seller’s market.  The overall housing market for the year is positioned for continued growth.

Housing industry and home construction real estate concept as two gears or cog wheels shaped as family residential structures as an icon of neighborhood cooperation and community network connections.Demand for housing is still strong and expected to stay this way through the spring according to some analysts.  The Conference Board, a nonprofit association of businesses, found the percentage of consumers who intend to buy a home within the next six months is the highest it has been since 2000.  One reason for this rising demand is young people who are still facing a tough job market.  A housing analyst with Moody’s Analytics predicts the economy will expand enough this year to enable these young people to move out of their parent’s home.  While they may mostly rent, a decrease in vacancy rates should put upward pressure on rental prices prompting interested home buyers who currently rent to make a real estate purchase.

The rise in home prices is great news for millions of homeowners who have been underwater on their mortgage.  Rising values should encourage owners to put their property on the market, helping to ease the tight housing supply.  CoreLogic reported almost 3.5 million homeowners were lifted out of negative equity between the end of 2012 and mid 2013.  Zillow estimated even more borrowers are back above water, citing 3.9 million homeowners.  Chief Economist Stan Humphries, of Zillow stated in a recent release, “We’ve reached an important milestone as negative equity has fallen below 20 percent nationwide, which has helped free up marginally more inventory and contribute to further stabilization of the market.”

During the past year, existing home and condo sales have increased 11 percent almost topping the highest level in four years.  The National Association of Realtors (NAR) predicts sales will remain about the same during this year.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

4March

New Home Sales Reach 2008 Highs

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render of rising arrowGood news surrounding the housing market was released this week.  It looks like the effects from abnormally cold weather hasn’t kept the housing market down as formerly suspected.  January sales of new single-family homes was reported at a seasonally adjusted annual rate of 468,000 units.  This number showed a huge jump in sales, surging to a 5 ½-year high since July 2008.

Previously reported, December home sales were down 7 percent from the month prior.  This number was revised upwards from 414,000 to 427,000 sighting just above a 3 percent increase.  This revision equates to only a 4 percent drop in new home sales in December showing that the housing market might not have been hit as hard by the cold temperatures as mentioned last week.

The 9.6 percent jump in new home sales in January exceeded what economists had forecast; 400,000 units.  The Northeast, which has been bearing the brunt of the cold weather, actually recorded a 73.7 percent increase, hitting a seven month high.  The South reported a five-year high sighting a 10.4 percent rise in sales.  Sales in the Midwest dropped 17.2 percent and the West recorded an 11 percent increase.

New home sales numbers reported from the Commerce Department are based on signed contracts with the house being in any stage of construction.  Existing home sales data is provided by the National Association of Realtors (NAR) and they report once the sales contract has closed.  Given this difference, new home sales usually lead existing home sales by a month or two as it can take 30-60 days for a closing on a house to occur.  Pending home sales, which are also reported on from time-to-time in this blog, overcome the lagging effect of existing home sales and center around existing home sales where the contract has been signed but not currently closed.

Housing prices still continue to ramp up.  The Case-Shiller composite index reported a 0.8 percent increase in prices in December from the prior month, which was higher than economists predicted.  Year-over-year, the index reported a 13.4 percent rise.  Higher costs of labor and construction materials have been attributed to the increase in home prices.

As we move closer to the spring season it will be interesting what the trend in new home sales along with existing and pending home sales will be.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

13February

First Preston HT Celebrates 26th Anniversary

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HeartTree26th.v4 copyOn February 14th, the First Preston HT family of companies celebrates 26 years of business innovation and exemplary customer service. First Preston HT extends appreciation to our employees, our national network of associates, and our clients who have helped to cultivate a legacy of business success and community service.

The First Preston HT family of brands includes:  First Preston, HomeTelos, HomeTracker, BidSelect, Lender Center, HT Solutions and Outdoor Quota Solutions.  To learn more about First Preston HT, visit www.FirstPrestonHT.com.  Remember to Like us on Facebook and follow us on Twitter.

26November

Loan Limits Announcement Good News for Real Estate Professionals and Homebuyers

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Team ApplauseOn November 26th, The Federal Housing Finance Agency (FHFA) announced conforming loan limits for 2014. According to a press release,  Fannie Mae and Freddie Mac conforming limits will remain at $417,000 for one- unit properties in most areas of the nation. For high-cost markets, one-unit property loans will remain capped at a maximum of $625,500.

FHFA’s earlier announcement signaling their intention to lower loan limits, ignited a firestorm of protests from the National Association of Realtors (NAR) and the California Association of Realtors (CAR) among others. CAR President Kevin Brown expressed his organization’s concern that “lowering the loan limits would have reversed the housing recovery;” in a press release from CAR he applauded the decision of Congressional lawmakers to make permanent the current loan limits of $417,000 for most markets  and $625,500 for high-cost markets.

“The 2014 loan limits are higher than 2013 HERA limits in several counties,” according to the National Mortgage Professional.  For a list of loan limits for one-unit to four-unit properties for your county, review the FHFA news release. The link  to the list is in paragraph #5.

For details on how the loan limits were calculated see pages 2-3 of the FHFA release.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Remember to Like us on Facebook and  Follow us on Twitter.

Source:

Federal Housing Finance Agency Press Release

California Association of Realtors Press Release

31October

Construction Spending and Home Prices Take Off

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construction spendingHomebuilder sentiment was recently reported to be weakening, but U.S. spending on construction isn’t being held back by this news.   During the month of August, construction spending almost hit a 4-1/2 year high due to increases from both the private and public arenas, according to the Commerce Department.  The increase was .6 percent when compared to the month of July.  July’s figures were revised to a number more than double the original estimate.  These positive numbers show that there’s hope for growth in the third quarter this year.

Some may think this data seems a little dated, as we are nearing the end of October.  The government shutdown delayed the original release of this data, scheduled for October 1st.  The private sector of construction spending increased by 1.2 percent to a five-year high leading the market to believe higher interest rates have not lowered builder confidence, nor has it slowed activity as previously assumed.

With lots of money being spent on building new homes (increasing supply) theory would imply prices would start to cool, but this has not been the case.  Home prices have jumped more than 12 percent from a year ago making the affordability of buying a home more difficult.  Household income growth, up only 3 percent year-over-year, has not kept up with the rise in home prices.  Lawrence Yun, chief economist for the National Association of REALTORS® wrote in the September Sales report, “Affordability has fallen to a five-year low, as home price increases easily outpaced income growth.  Expected rising mortgage interest rates will further lower affordability in upcoming months.”

For home buyers this could be a challenging environment.  First time buyers tend to purchase lower-priced homes.  If income growth is not keeping pace with home prices, they could get priced out of the market and be forced to put off their home purchase for the time being. The glimmer of hope in this situation is that fixed mortgage rates have dropped to a four month low (30-year fixed rate is 4.13 percent this week).  This helps take a little pressure off the increasing home prices in regards to home affordability.  In the long term if incomes don’t keep pace with home prices, construction spending may start to decline due to a lack of demand.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

29October

Equity Crowdfunding | Finally Small Investors May Get a Piece of the Action

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“Crowdfunding is rapidly changing the real-estate investment market, offering developers new ways to finance projects, small investors a way in, and the socially conscious an avenue to support their local communities.” – Forbes

Housing-MovementOn Wednesday, October 23rd a unanimous vote of the five-member Securities and Exchange Commission (SEC) made headline news. The vote advanced a proposal which could re-define who gets to invest in “ground-floor” business opportunities. It could radically change how start-ups raise capital. The proposal has the potential to unlock billions of investment capital allowing investors to consolidate revenue to fund real estate portfolios or new products and ideas.

The proposed rules were introduced to support the implementation of Title III of the Jumpstart Our Business Startup (JOBS) Act. The intent of the legislation and proposed structure is to allow smaller companies to gather capital from a broader spectrum of investors, avoiding the need for high cost Initial Public Offerings (IPOs), or the pursuit of millionaire private investors.

Imagine a virtual Shark Tank, but with a lot more sharks. Instead of being limited to small panels of mega-millionaires, entrepreneurs could appeal to a virtual audience of mainstream backers, each investing blocks of capital in exchange for equity.

For the first time since the 1933 Securities Act, the proposal (if finalized) would open equity investment opportunities allowing  small investors to purchase a stake in promising start-ups. Currently such equity shares are reserved for “accredited investors” with a verifiable net worth of $1 million or earnings of $200,000/year for the most recent three years.

The SEC proposal created a structure (funding portals) for the new brand of financing and established limits for crowdfunding investors. Funding portals, will act as intermediaries linking business owners with investors online.

A company would be allowed raise a maximum of $1 million via crowdfunding per year.  Within a 12 month period investors would be bound by the following limits:

  • If annual income is less than $100,000 the limit is the greater of $2000 or 5% of annual income or net worth.
  • If annual income equals or exceeds $100,000 the limit is the greater of 10% of income or net worth. Securities purchased via crowdfunding would be capped at $100,000/year.

A major SEC concern is the potential for fraud. Many are worried that non-accredited investors may be less sophisticated and more vulnerable to deceptive offerings by scam artists.

The SEC has implemented a 90 day comment period to field questions and feedback on the proposed structure. Afterward, the Commission will review input and make a decision regarding implementation. Click here to register a comment with the SEC.

For information on effective ways to manage institutional and individual real estate portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter .

17October

Boomerang Buyers | The Next Big Wave?

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ID-10076536Are “boomerang buyers” the missing link needed to accelerate the housing recovery? How many are eligible to purchase sooner as a result of recent changes to FHA guidelines and are they even interested in owning a home again? Could this impact the profitability model of reo-to-rental investors?

If interest rates remain low, the stage may be set to see a new wave of homebuyers take center stage. It is estimated that new FHA guidelines made it possible for 2.5 million former homeowners to re-enter the market two years earlier than expected. Often referred to as boomerang buyers the 2.5 million new prospective shoppers are former home owners who experienced foreclosure, short sale, or deed-in-lieu agreements between September 2010 and August 2012.

The August 15th,  FHA Mortgagee Letter 2013-26, entitled, “Back to Work—Extenuating Circumstances,”  made it possible to shorten the required waiting period for former  FHA borrowers from 3 years to as little as 12 months, given certain circumstances.

On October 4th, Fannie Mae issued a major “Desktop Underwriter” upgrade announcement which will take effect November 16th. The change may allow short sale (“preforeclosure sale”) participants to re-enter the market after just two years instead of seven. Many borrowers who underwent preforeclosure sales discovered afterward that credit bureaus recorded both a preforeclosure and a foreclosure sale; imposing a seven-year penalty (standard for foreclosures) instead of appropriately applying a 2 year wait. This correction alone may create an additional wave of eligible buyers sooner than expected. During the housing crisis, 4.8 million home-owners forfeited homes due to foreclosure and 2.2 million opted for short sales, as reported by RealtyTrac and cited by CNN Money.

Many of the 7 million former owners who underwent foreclosure, short sale or deeds-in-lieu early in the housing crisis, have already rebuilt their credit and their finances and are eligible to re-enter the market even under the former guidelines.

The question is will boomerang buyers re-enter the market or remain renters?  So far this year one in ten homebuyers is a boomerang buyer. And that was prior to FHA and Fannie Mae announcements.   According to research firm John Burns Real Estate Consulting, the pace has doubled since last year. According to the 2013 National Association of Realtors (NAR) National Housing Pulse Survey 51% of renters say that “eventually owning a home is one of their highest personal priorities.” Eighty percent of Americans believe that buying is a sound decision.

Boise, Idaho Broker Mike Edgar coaches boomerang buyers back to eligibility. He consulted with more than a dozen such buyers in 2012 and expects  twofold growth this year.

The news from FHA and Fannie Mae could be the spark that millions of former owners hoped for and the lift the housing recovery needs.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter .

15October

Yellen and the Future of the Housing Market

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The United States Federal ReserveLast week was a quiet week for reported economic data due to the government shutdown.  Leaders on Capitol Hill are still in negations to hopefully pass a bill both sides can agree to before the looming date of October 17th (the date the U.S. would default on some of its obligations).  President Barak Obama announced last Wednesday his nomination of Janet Yellen as the next chairman of the Federal Reserve.  If confirmed by the Senate, she will replace Bernanke on February 1st of next year.  Bernanke has been known for his low interest rates and easy money policies.  How will the housing market respond to Yellen as the next chairman?

A Yellen-led Fed would remain very dovish on monetary policy. Dovish advisors, like Bernanke, prefer low interest rates in hopes of spurring consumer spending and borrowing; thus, leading to economic growth (in theory).  The effects of inflation resulting from this type of policy are believed to have very little impact in theory (in theory).  Increased borrowing in terms of home loans would help to boost the housing market as homebuyers could lock in lower rates.

The housing market has responded very positively to the low interest rates which began when QE1 was initiated.  Yellen would likely keep rates low for some time.  She has articulated the case for upholding a highly accommodative monetary policy, as far out as late 2015.  “She’s even more of a dove than Bernanke is, but there’s nobody who can say she’s not credentialed because of the range of experience she’s got,” said J. Alfred Broaddus, a former president of the Federal Reserve Bank of Richmond.

While many people don’t support the dovish philosophy, in the short term housing and housing stocks are in a position to benefit from it.  According to recent housing statistics, it appears the growth in housing has been slowing and Yellen might be able to get it moving in the right direction again if she utilizes a robust QE-program.  Having this foresight about the future of the Fed has helped stocks to bounce back as they assume status-quo will continue during the transition of chairmen and beyond.

Several economists believe the long term effects of this policy will not go unnoticed, but housing and the stock markets aren’t concerned with long term repercussions at the moment.  Instead they continue to drink the Kool-Aid and enjoy the gains.  If tapering is far out in the future under Yellen’s direction, demand for housing would likely increase due to prolonged low rates.  An increased supply of construction jobs and building supplies would be necessary to meet demand for home building.  If the market’s supply can’t keep pace with demand as recently experienced, home prices could continue to climb.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

12August

Buyer Select News: Important Training for Nashville 1A NLBs

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Man with Telescope overlooking cities TopMarketsAttention 1-A Neighborhood Listing Brokers, Nashville, TN Area:

In the near future, HUD will be implementing a “Buyer Select” closing agent program in the Nashville, TN Area.  All buyers, whose contracts are executed on or after August 19, 2013 (tentatively), will select their own closing entity.

To introduce this program to the industry, HomeTelos will provide an overview of the Buyer Select Program to industry partners that are involved in the sale of HUD Homes.

Please register for this mandatory Buyer Select Closing Agent training webinar at https://attendee.gotowebinar.com/register/6384383887041386496 (No Longer Active Link)

Event Name: BUYER SELECT CLOSING AGENT PROGRAM EXPANDING IN NASHVILLE, TN AREA

Event Duration: Join us for a webinar on Tuesday, August 13, 2013 3:00PM- 4:00PM CDT

Event Description: The new “Buyer Select Settlement Agent” program will be introduced and an overview of the process will be provided.

Registration: The following is the registration link to register for the webinar: https://attendee.gotowebinar.com/register/6384383887041386496 (No Longer Active Link)   . The date/times for the Listing and Selling Broker webinars have changed. Participants, who had already registered, automatically received notice of the change through GoToWebinar notifications.

Register early as space is limited.

After registering, you will receive confirmation e-mail containing information about joining the webinar.

Please don’t forget to mute your phone, once you are on the call.  The code to mute and to unmute your phone is *6.  Also be sure to be on time as the virtual door will close once the meeting gets underway and late comers will not be allowed access to the call.

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9August

Buyer Select News: Key Training for Missouri NLBs

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HomeTelos Missouri Neighborhood Listing Brokers: Buyer Select Training

Man with Telescope overlooking cities TopMarketsEffective August 23, 2013, HUD will be implementing a Buyer Select closing agent program in Missouri.  All buyers whose contracts are executed on or after August 23, 2013, will now select their own closing entity.

To introduce this program to the industry, HomeTelos will provide an overview of the Buyer Select Program to industry partners that are involved in the sale of HUD Homes.

HomeTelos Missouri Neighborhood Listing Brokers, please join us for this mandatory Buyer Select Closing Agent training webinar.

Event Name: BUYER SELECT CLOSING AGENT PROGRAM EXPANDING IN MISSOURI

Event Duration: Join us for a webinar on Tuesday, August 13, 2013 11:00 AM – 12:00 PM CDT

Event Description: The new “Buyer Select Settlement Agent” program will be introduced and an overview of the process will be provided.

Registration: The following is the registration link to register for the webinar:

https://attendee.gotowebinar.com/register/7604727444662029824 (No Longer Active Link)

Register early as space is limited.

After registering, you will receive a confirmation e-mail containing information about joining the webinar.

Please don’t forget to mute your phone, once you are on the call.  The code to mute and to unmute your phone is *6.  Also be sure to be on time as the virtual door will close once the meeting gets underway and late comers will not be allowed access to the call.

View System Requirements