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A new report by Real Capital Analytics shows the number of distressed commercial properties is plateauing and expected to continue to do so in the new year. Distressed properties — which include commercial properties that are in default, foreclosure, or repossessed by lenders — had totaled $171.6 billion in October 2011, a decrease from topping off at $191.5 billion in March 2010, according to Real Capital Analytics.

The real test of commercial propertiesis likely to be seen in 2012 and 2013, when about $300 billion in loans comes due each year,” according to a recent article in the Washington Post. 

At $41.9 billion, the office sector continues to have the largest number of distressed commercial properties. But that number has been steadily declining — about 11.8 percent less than its peak reached in October 2010. 

 More information at source: “Amount of Distressed Real Estate Could be on Way Down,” Washington Post (Dec. 26, 2011)

More news about “Commercial and Income Properties” from the El Dorado, Placer, Amador or Sacramento Counties of California regions at: www.sierraproperties.com or www.dougandbudzeller.com

Economic growth, an improving job picture, greater consumer spending, and slight improvements in the housing market are all recent indicators that 2011 is ending on a much brighter note, Fannie Mae reports in its fourth-quarter report. 

“It’s important to recognize that we’re ending 2011 on a stronger note than we’ve seen throughout the year,” Fannie Mae Chief Economist Doug Duncan said in a statement. “Unfortunately, however, our 2012 outlook is not as rosy as our forecast for the fourth quarter of 2011.”

Fannie Mae’s Economics & Mortgage Market Analysis Group predicts that despite recent improvements, the housing market will remain “subdued next year — a reflection of the winter season, an expected slowdown in economic activity, and a potential increase in distressed sales.” The nation’s fiscal problems as well as the European debt crisis are also expected to threaten the nation’s economic recovery in 2012.

Source: Fannie Mae

We hope your activity has picked up like ours has here in the Sierra Foothills regions of Placerville, El Dorado County, California.

The government isn’t doing enough to help home owners at risk of default, foreclosure, and underwater on their homes, a majority of Americans say in the Home Horizons 2012 study, a survey conducted by Yahoo! Real Estate of 1,500 current and aspiring home owners. 

Fifty-one percent of home owners say the government needs to pass more legislation to help home owners who are at risk of losing their house. About two-thirds of Americans surveyed say the government needs to offer more assistance like low-cost loans to help home owners more.

Four out of five adults polled say the 2012 presidential election will have a small or large influence on the housing market, with 43 percent predicting it will have a large impact. However, one-third of those surveyed doubt either party — Republican or Democrat — will have either a positive or negative impact on the real estate market.

“A large-scale government policy that’s going to fix all of this — no one has seen such a thing,” Stan Humphries, chief Yahoo! Study, told Yahoo! Real Estate.

Source: “Yahoo! Study: Home Owners Want Political Action,” Yahoo! Real Estate (Dec. 12, 2011)

Other information from El Dorado, Placer, Amador or Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

Rental demand and prices continue to soar, and investors are cashing in. Rents are rising at a 5.17 percent annual rate — up from last year’s 4.72 percent rate. If rents continue to grow at their current pace, they won’t be too far behind the record-high reached in 2000 of 6.18 percent, according to Axiometrics Inc.

The rental market has added about 1.4 million new renters this year, some of whom were former home owners who faced foreclosure or a short sale. Renters are increasingly showing an appetite for single-family homes owned by investors. As Realtors in the Placerville, California region we believe both renters and investors benefit.

As such, the number of investors in the market is growing. Investors make up anywhere between 20 and 40 percent of monthly existing home sales, according to home-sale data. With home prices and interest rates low, more aspiring investors are jumping in. Nearly 60 percent of investors in a recent survey by Realtor.com considered themselves newcomers to real estate investing. 

“This is a long-term investment,” says Greg Rand, CEO of OwnAmerica. “Rents are a steady return on your investment through the years, leaving you with an attractive asset when prices improve. And they will. The best profits in real estate accrue to long-term investors who take a long-term view.”

Source: “Rising Rents Improve Investors’ Return,” RISMedia (Oct. 20, 2011)

A new report argues that if banks wrote down the mortgage principal of underwater borrowers it could pump $71 billion per year into the economy and create more than 1 million jobs annually. The report, “The Win/Win Solution: How Fixing the Housing Crisis Will Create One Million Jobs,” comes from The New Bottom Line, a campaign that represents about 1,000 nationwide faith-based and community organizations. 

The campaign argues in the report that by lowering home owners’ mortgage payments by an average of more than $500 per month–or $6,500 per year–that it would free up about $6 billion dollars per month that home owners could then spend on such items as buying groceries, household necessities, school supplies, etc. 

“Home owners across the nation are struggling to pay their boom-era mortgages with their recession-era salaries and the economy is suffering for it,” according to the report. “Writing down the principals and interest rates on all underwater mortgages to market value would serve as the second stimulus that America so desperately needs, only without added costs to taxpayers.”

The group is pressing State Attorneys General, who are currently in settlement talks with the nation’s largest banks over allegations of foreclosure abuses, to stand firm on its request for principal reductions for underwater borrowers. 

 Source: “Fixing the Housing Crisis Would Create One Million Jobs Annually,” RISMedia (Aug. 21, 2011)

 Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Long-term mortgage rates have dipped to near-record lows thanks to turbulence in the financial markets, but the favorable borrowing costs are not expected to invigorate the struggling housing sector.

That’s because about half of all U.S. home owners do not qualify for rock-bottom financing. In order to get the best rates, Inside Mortgage Finance publisher Guy Cecala says consumers must have solid credit. They also must own a home that is valued 20 percent above what is owed on it, he says, but residential depreciation has made this an impossibility for many borrowers.

Helping homeowners like these to refinance and line their pockets with some extra cash would go a long way toward buoying the economy, according to some, but government intervention may be necessary. Columbia Business School housing economist Chris Mayer and colleague Glenn Hubbard have come up with a proposal that Mayer says would help 25 million households shave hundreds of dollars each month off their mortgage payments.

“This would be a big positive effect on the economy in terms of consumer spending,” Mayer explains. “And it would reduce the incentive for people to walk away from their mortgages.”

Mayer says millions of home loans already have a government guarantee because they’re backed by Fannie Mae and Freddie Mac. “We should reduce the risk of those mortgages by extending a guarantee to a new mortgage that somebody would get at a lower interest rate,” he suggests. Martin Barnes, chief economist at investment firm BCA Research, also likes the idea of a national refinancing initiative. “If you’re going to do something about housing,” he speculates, “you should make it available to everyone.”

 Source: Low Rates Alone Not Seen Reviving Housing Market, NPR (8/15/11) 

Other articles relating to this in the Sacramento and Placerville, California regions at: www.sierraproperties.com

A new study by the American Economic Review (AER) identifies a correlation between lower divorce rates and home price declines. According to Census data, the divorce rate fell to 46 percent in 2009 from 50 percent in 1996.

Essentially, AER says couples are more likely to divorce when equity gains make it possible for them to put money down on separate homes. But a decrease in residential values and the high cost of divorce proceedings have prompted some couples to stay together.

AER says these findings should be taken into consideration as lawmakers push changes in housing policy. “Given the high level of current interest in policy to shore up housing markets, it is worth better understanding the broader consequences of such policy,” the report concluded.

Source: “Divorce Rates Decline Alongside Home Prices,” Realty Times, Carla Hill (July 15, 2011)

 Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Mortgage servicers who have delayed the foreclosure process for delinquent borrowers may now get fined. Fannie Mae announced it will retroactively fine mortgage servicers for failing to process severely aged loans in foreclosure, HousingWire reports.

Fannie Mae would not disclose the amount of the fees, but the fees are to be “based on the outstanding principal balance of the mortgage loan, the applicable pass-through rate, the length of the delay, and any additional costs,” HousingWire reports.

The government-sponsored enterprise updated its time frames for mortgage servicers for navigating the foreclosure process last August.

“A compensatory fee not only compensates Fannie Mae for damages but also emphasizes the importance placed on a particular aspect of the servicer’s performance,” according to guidance for Fannie Mae from its regulator, the Federal Housing Finance Agency. “In some cases, a compensatory fee will relate to the action the servicer took, or failed to take, in handling a specific mortgage loan. At other times, the compensatory fee reflects the impact of the servicer’s performance deficiencies on Fannie Mae’s cash flow.”

Source: “Fannie Mae to Retroactively Charge Mortgage Servicers for Foreclosure Delays,” HousingWire (June 28, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Foreclosed home owners are contributing to a boom in the rental market. Nearly half of property managers recently surveyed — or 47 percent — say they’re seeing an increase in applicants moving to rental units from foreclosed properties.

But foreclosed home owners may not find big deals in the rental market. As vacancies shrink, many property managers say they have increased prices on their rental units in the last year, according to a new survey of 1,252 property managers across the country by TransUnion, which provides rental screening solutions to both large property management companies and independent landlords.

“The majority of respondents said that they are not having problems finding residents even with the increases,” says Mike Mauseth, vice president in TransUnion’s rental screening business unit.

Rentals are in high demand: Nearly 90 percent of survey respondents report having a 10 percent or less vacancy rate.

Despite the boom in the rental market, property managers say that “finding reliable tenants at an optimal price point is paramount for this industry,” Mauseth says. “A reliable tenant ensures property managers are both solvent and profitable. Conversely, an unreliable tenant can cost property managers thousands of dollars in lost rent and property damages.”

Source: “TransUnion National Rental Survey Finds Large Property Managers Able to Raise Rates and Attract Reliable Tenants,” TransUnion (June 24, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

A sluggish housing market has caused millions of home owners to lose their home to foreclosure, short sale, or deed in lieu of foreclosure. But once these former home owners get a better handle on their credit, how long do they have to sit on the sidelines until they can secure future financing to buy a home again?

Fannie Mae and Freddie Mac have a three-year waiting period following a foreclosure, and a two-year wait following a short sale, deed in lieu, or discharge or dismissal of bankruptcy. However, if borrowers can justify that the circumstance for the foreclosure or bankruptcy occurred because of an illness or job loss — or other “extenuating circumstance” — that may help reduce their wait. But with no such extenuating circumstances, these former home owners may have to wait longer, even up to seven years following a foreclosure or four years after bankruptcy, the article notes.

For loans insured by the Federal Housing Administration, borrowers with perfect credit afterwards also will, in general, have to wait three years after a foreclosure and two years after a bankruptcy is discharged, The New York Times notes.

Following a short sale, borrowers will have to wait three years to secure another FHA loan — however, there are plenty of exceptions. Borrowers will have to wait three years if they were in default at the time of the short sale and had no extenuating circumstances. However, if the borrowers were on time with all their payments a year prior to the short sale, they may have no wait at all and might even qualify for an FHA loan immediately.

Source: “The Post-Foreclosure Wait,” The New York Times (June 23, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:www.sierraproperties.com