Welcome to the "Z" Team!

How the real estate market will fare in the spring home-selling season will prove a test for housing demand and show which markets will lead a housing recovery, economists say in a recent article at USA Today. Our spring selling season is March through June and the regional Placerville market is showing an increase for housing demand.

Existing home sales and pending sales are up about 9 percent compared to the same time year ago, according to recent data by the National Association of REALTORS®.

Paul Dales of Capital Economics told USA Today that he expects the spring selling season to “be the best in four or five years” for the real estate industry.

Our housing supply of for-sale homes has dropped the most and is more balanced which should be the potential of prices gaining this year. So, we’re optimistic!

Source: “Spring Home Sales Could be Omen,” USA Today (April 2, 2012)

According to Census Bureau data, 4.4 million households had three generations or more under one roof in 2010. That is a 15 percent increase compared to two years prior.

The “double-up” phenomena is particularly pronounced among adult children, who are increasingly moving back with their parents after college to curb costs. The number of 25-to-34 year olds living with their parents jumped by more than 25 percent between 2001 and 2007, according to Census data.

The larger household sizes are causing builders to take notice and redesign floorplans to accommodate multi-generational households. Pulte Homes says it’s swapping out one of the garages in its two garage plans to allow for extra space in a home for a guest room. And Toll Brothers reports that it’s creating new floorplans to accommodate multiple generations, such as a guest suite with a kitchen added where a family room may have once been. Please provide your comments on your market trends.  

Source: “The New American Household: 3 Generations, 1 Roof,” CNNMoney (4/3/12)

Economists have been warning that a flood of foreclosures will soon be hitting the real estate market, likely this summer. Increases in foreclosures traditionally pull down nearby home prices. So should home owners be worried? What is your guess?

As of now, housing reports continue to show month-over-month drops in foreclosures. CoreLogic released a report late last week that showed completed foreclosures fell from 71,000 in January to 65,000 in February.

But as more banks look to clear a backlog of defaulting home loans from their books, economists say the public should expect a turn with foreclosures and the numbers are expected to soar in the coming months. Mark Fleming, CoreLogic’s chief economist, expects the wave to hit this summer.

However, Fleming doesn’t view the increase as a bad thing for the overall housing market. “I would like to see the pace increase, because that means we’ll be able to work off the inventory faster,” Fleming told AOL Real Estate. He says that recent improvements in the real estate market and economy may mitigate any traditional downward pressure seen on overall home prices by foreclosures.

In fact, despite an increase, Fleming still expects home prices to rise in some markets.

“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year,” Daren Blomquist, vice president of RealtyTrac, said in February.

Source: “Home Prices May Withstand Foreclosure Wave,” ”AOL Real Estate (3/30/12)

Waiting a few years to sell? Make a few changes for your desires?  Many home owners are opting to tackle improvement projects around the house, according to a new survey of 1,500 adults by American Express Spending and Saving Tracker.

Seventy percent of home owners surveyed say they intend to take on a home improvement project this year, and they plan to spend about $3,500 on sprucing up their home, according to the survey. That’s an increase of about $100 compared to last year.

The projects will primarily concentrate on the indoors, according to the survey. More than one-third of those polled say they are devoting some of that budget to home accessories, such as throw pillows, or on appliances and new furniture.

The top home project they have lined up? Painting, which 37 percent of those surveyed say they plan to do this year. Twenty-four percent said they will do landscaping projects. These could be improvements or upgrades to increase value for a future sale?

Also, more home owners this year compared to last year say they’re going the do-it-yourself route, with plans to refurbish their houses themselves rather than hiring a professional to do it. In the survey, 43 percent of owners say they’ve been inspired to tackle home projects themselves by watching design shows on television, followed by seeing in-store displays or from viewing online design and do-it-yourself Web sites.

Source: “Home Decision 2012: Improving or Moving?” American Express (3/12)

Interesting update news to share!  An improving economy is contributing to a gradual rebound in home prices across the country, according to mortgage giant Freddie Mac’s 2012 Economic Outlook report, released Wednesday. But there is still a way to go in the road to recovery for the housing market, the report noted.

“The housing market is showing some signs of shaking off the depression-like conditions that have plagued it for much of the past few years,” according to the report. “As if awakening from hibernation, housing starts and home sales moved to higher levels of activity.”

In fact, the signs have prompted Freddie Mac to revise its forecast upwards for home sales and originations. One economic contributor that’s helping to stabilize housing: The drop in the unemployment rate to 8.3 percent, its lowest level in three years, according to the report.

“A variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery … and more neighborhoods may see a stabilization in overall demand and housing values this spring,” says Frank Nothaft, Freddie Mac’s chief economist. Please proide your thoughts or comments!?!

Source: “Freddie Mac: Economic Growth Expected to Stabilize Housing Market” Dow Jones Newswires (March 28, 2012)

Two-thirds of renters — across educational and demographic levels — say they want to purchase a home in the future, according to a quarterly national housing survey of 3,000 Americans conducted by Fannie Mae. But they’re spooked about the mortgage process.

“In spite of the impact of the housing crisis on home values and home ownership rates across the country, Americans by and large still hope to become home owners,” says Doug Duncan, Fannie Mae’s chief economist. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”

Realtors ease the homebuying process of qualifying and navigating the mortgage process. Coordinating and informing buyers about financing their home is the key!   

“If potential home owners avoid the process because they believe it to be too complex, we will likely see a continued impact on home ownership rates,” Duncan says.

Source: “Fannie Mae Finds Americans Remain Committed to Homeownership,” HousingWire (3/27/12)

Fannie Mae and Freddie Mac reportedly are in talks with their regulator to allow principal write-downs in order to minimize losses and prevent foreclosures. Both firms seem to have concluded that giving homeowners a big break on their mortgages would make good financial sense in many cases.

“Principal reduction works,” says Mark Zandi, chief economist of Moody’s Analytics. “If someone gets a reduction in their principal amount, it gives them a powerful hook to really fight to try to hang on to the home and not go into foreclosure.”

The Obama administration has increased incentives to lenders for write-downs, reimbursing half of what the lender writes off in some instances. Your comments?

More information at source: “ Fannie, Freddie Press for Mortgage Write-Downs,” WBUR.org (3/23/12)

Great real estate market news to share! Mortgage rates are staying low by historical standards, despite inching slightly higher this week following a positive job report and increasing bond yields, Freddie Mac reports in its weekly mortgage market survey.

“An upbeat employment report for February caused U.S. Treasury bond yields to increase over the week, and mortgage rates followed,” says Frank Nothaft, Freddie Mac’s chief economist. “Job growth over the last six months was the strongest since 2006.”

The following is a closer look at rates for the week ending March 15:

•30-year fixed-rate mortgages: averaged 3.92 percent, with an average 0.8 point, inching up from last week’s 3.88 percent average (which was only 0.01 percent above an all-time record low). A year ago at this time, 30-year rates averaged 4.76 percent.

•15-year fixed-rate mortgages: averaged 3.16 percent, with an average 0.8 point, climbing from last week’s record reaching 3.13 percent average. Last year at this time, 15-year rates averaged 3.97 percent.

•5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.8 point, also slightly up from last week’s 2.81 percent average. Last year, 5-year ARMs averaged 3.57 percent at this time of year.

Source: Freddie Mac

Great news to share with you! The U.S. Supreme Court handed private property owners a victory yesterday with a decision allowing a couple to appeal an EPA ruling that their property contains a wetlands. Please view and provide your comments.

The court’s decision is supported by the National Association of REALTORS®, which along with other organizations submitted a friend-of-the-court brief in the case.

The ruling is on a narrow procedural issue: whether the owners have the right to appeal the EPA’s wetlands determination or wait until they first restore the property to its original state and then institute expensive and time-consuming monitoring activities? Noncompliance with the directive can subject violators to fines of up to $75,000 a day!

Lower courts have sided with the EPA, saying the agency’s compliance orders aren’t subject to judicial review. Only when the agency goes before a judge to assess a fine for noncompliance is the order reviewable by a court. But the Supreme Court in its unanimous decision said it’s appropriate to allow parties to contest agency decisions before having to first comply with the order.

NAR argued in its brief that the property owners in this case were being denied due process because the compliance procedures take years to work through and the costs are significant — all before the main question of whether the property contains a wetlands is even considered.

In this case, Mike and Chantell Sackett bought a piece of property in an already developed subdivision near Priest Lake in Idaho with sewer infrastructure already in place. After they started to prepare the property for construction of their house, they were directed by the EPA to stop and mitigate the changes they had made to the land out of a concern that the property contained a wetland — even though the property was adjacent to other developed properties and there was no water on the site at the time.

The Sacketts sought a hearing for their case to determine whether the property contained a wetlands, but EPA said that question couldn’t be decided until after they undertook the restoration and monitoring activities, or refused to do that and were levied a fine.

With the Supreme Court decision, the Sacketts can now get their day in court.

We appreciate this source from Robert Freedman, REALTOR® Magazine

Economists say the housing market is starting to heal, but many people aren’t aware of it because they’re judging a housing recovery on the wrong sign: What’s happening with home prices? Let’s consider some other points of interest!

Paul Dales at Capital Economics says higher prices won’t be the sign that the housing market is on the mend — that can be a lagging indicator — but rather an increase in overall home sales. And that’s showing signs of improvement: Existing home sales in 2011 rose to 4.26 million compared to 4.19 million in 2010. In the last six months alone, home sales have increased 13 percent.

Please provide your thoughts of this article form Fortune pointing out, “The evidence reminds us that perhaps we should change our expectations of what a housing recovery might look like, particularly following a crisis marked by record foreclosures and a financial crisis that sent the economy into one of the deepest recessions. The recovery we have been anticipating is defined more on the rate at which the glut of vacant properties comes off the market as opposed to any steady rise in prices, which some think won’t happen for another few years.”

Source:  “The One Number to Watch for a Housing Recovery,”  Fortune (3/20/12)