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This has been a year of real estate contrasts: While many consumers have taken advantage of historic buying opportunities and the market has seen a gradual stabilization of sales and prices, other challenges facing the nation have led some to question the value of home ownership for families, communities, and the country.

“People are passionate about the American dream of home ownership, and this passion underscores how important home ownership is to our nation,” says National Association of REALTORS^Ò President Ron Phipps. “Owning a home has long-standing government support in this country because home ownership benefits individuals and families, strengthens our communities, and is integral to our economy. As we begin a new year, REALTORS^® remain committed to ensuring that our public policies promote responsible, sustainable home ownership for all of our futures.” 

Full article at: http://www.realtor.org/rmodaily.nsf/pages/News2010122702?OpenDocument

Americans—both current homeowners and renters—still strongly aspire to own a home and to maintain homeownership, despite a slow recovering housing market, according to a study released by Fannie Mae.  However, demographic trends combined with financial caution among consumers are contributing to an increased willingness to rent. 

More than half (51 percent) of current homeowners and renters say that the housing crisis has not affected their overall willingness to buy a home, according to the study. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying.

Overall, according to Fannie Mae’s National Housing Survey third quarter results, one-third of Americans (33 percent) would be more likely to rent their next home than buy, up from 30 percent in January 2010. Among renters, 59 percent said they would continue to rent in their next move, compared with 54 percent in January 2010.

More information at: http://fanniemae.com/newsreleases/2010/5247.jhtml;jsessionid=44W3AER04RFVDJ2FQSHSFGQ

Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:

1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings — known as the “seriously delinquent rate” — generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.

Source: Freddie Mac (12/09/2010)

The U.S. thrift industry continued to stabilize in the third quarter of 2010, the Office of Thrift Supervision (OTS) reported recently. 

The industry posted profits of $1.77 billion, marking the fifth consecutive quarter of profitability after losses from the fourth quarter of 2007 through the first half of 2009.  Third quarter 2010 profits were up from $1.49 billion in the previous quarter and from $1.24 billion in the third quarter of 2009.

However, the number of problem thrifts remained high, troubled assets increased slightly and provisions for loan losses remained elevated, demonstrating that thrifts continued to face pressures from delinquent loans and economic forces, such as high unemployment and weakness in the markets for housing and commercial real estate. 

“The performance of our nation’s thrift industry in the third quarter was mixed,” observed OTS Acting Director John E. Bowman.  “The industry’s profitability was encouraging, but other indicators reminded us that economic stresses – particularly from unemployment – continued to take a toll.” 

Thrift managers prepared for future pressures by adding $2.12 billion to loan loss provisions in the third quarter and maintaining strong capital. 

More details, as well as charts and selected indicators, are available on the OTS website at:  www.ots.treas.gov

Understanding the tenets of title insurance is especially important considering the turmoil in the real estate industry.

Title insurance is intended to protect the insured from improper titling, including defects in foreclosure proceedings, forgery, or impersonation or cases in which no title is legally conveyed. Other defects are partial, such as a neighboring fence or garage encroaching on the insured person’s property.

The title insurance industry recently set down strict guidelines for when and if they will insure a title to a property on which there has been a foreclosure.

The buyer should be equally vigilant, insisting on a 60-year search and paying for an as well as the lender’s policy that the bank will demand.

Source: Washington Post, Harvey S. Jacobs (11/27/2010)

C.A.R. is launching Home Payment Protection Program (HPPP), a program similar to the successful C.A.R.H.A.F. Mortgage Protection Program that pays a home buyer’s mortgage if he or she is laid off. 

The Home Payment Protection Program is offered by REALTORS® to sellers at the time of listing as an added incentive to prospective buyers.  The program is paid for by the seller and is completely optional. 

The program covers both first-time and repeat- buyers for 12 months from escrow closing and provides up to six mortgage payments up to $1,000 or $1,500, depending on the coverage level the seller chooses.  A seller can choose to pay $200 for six mortgage payments up to $1,000 or $275 for six mortgage payments up to $1,500. 

“C.A.R.’s Home Payment Protection Program is a win-win benefit for both buyers and sellers,” said C.A.R. President Beth L. Peerce.  “By offering the Home Payment Protection Program as an added incentive to buyers, sellers have an additional way of differentiating their home from others and can sell their home more quickly, while prospective buyers who are feeling uncertain about their employment situation have an added layer of security,” she said.

It’s not high interest rates preventing a housing recovery. The interest rates, currently around 4.25 percent, are historically low. What’s slowing down the housing market recovery is a weak economic recovery with little job creation. And according to the National Association of Realtors, NAR, the government agencies Fannie Mae and Freddie Mac are part of the problem in preventing a recovery. 

The California Association of Realtors has reported that nearly half of all opened escrows are failing to close. Lender turn-downs are primary reasons. The number has been so significant that “pending sales” are no longer considered an accurate indication of future closings.    

Golder sent a message from Realtors across the country, “The Federal Housing Administration, Fannie Mae and Freddie Mac, have a mission to provide mortgage liquidity to qualified home buyers, including low-and moderate-income families and first-time buyers. That mission is being impaired by unnecessarily restrictive limits on the availability of credit and these extremely tight policies are significantly delaying a housing market and economic recovery.”

Hanley-Wood’s ProSalesOnline.com identifies seven trends that the magazine’s editors believe will have the biggest impact on housing in 2011.

1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million “Echo Boomers” who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the “Sandwich Generation” – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.

Source: ProSalesOnline.com (October 2010)

There’s some encouraging news on the housing front. The latest figures from real estate research firm RealtyTrac show double-digit decreases in California home foreclosures.

According to RealtyTrac, 66,475 California properties received a foreclosure filing in October. 

“That’s the lowest monthly total we’ve seen in California actually going all the way back to November of 2008. So we did hit that milestone.” 

RealtyTrac’s Daren Blomquist says October foreclosures were down nearly 12% from the previous month and 22% from October of last year. 

Blomquist says statewide numbers have been on a downward trend for nearly a year as banks work through a backlog of foreclosed properties. But he says the decrease will likely slow as we head into the winter when foreclosures historically rise. 

“It is the slow season for real estate so there are people who can’t sell and may end up in foreclosure.”

Despite posting month-over-month and year-over-year decreases in foreclosures, Modesto and Stockton remained among the top 5 metro areas in the country with the highest foreclosure rates. 

 Blog by: Steve Milne

The California State Department of Real Estate (DRE), whose mission is to safeguard and promote the public interests in real estate matters, is involved in an ongoing process of updating its web site www.dre.ca.gov to ensure consumers and real estate professionals have access to critical and essential information to successfully navigate through the challenges of today’s real estate market.

 “The landscape in the real estate market has changed dramatically over the past five years and providing important and current information is critical for consumers to make sound and informed decisions,” stated Real Estate Commissioner Jeff Davi. “The DRE’s web site gives consumers the tools they need to avoid scams, check out the license status of real estate agents and brokers, and learn about new laws and regulations,” added Davi. 

Full article at:  http://www.businesswire.com/news/home/20101105006268/en/Real-Estate-Matters-California-Department-Real-Estate