Foreclosures Contribute to Rental Boom

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

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Recovery Requires “Stable Home Prices”

For a recovery in the housing market to take hold, Fed Chairman Ben Bernanke said home prices need to stabilize, more loan modifications need to take place, and the foreclosure process needs to speed up.

Bernanke said that the high number of foreclosures for sale needs to be cleared from the market so prices can stabilize and “give people confidence that they can buy and not be buying into a falling market,” he said, during his second news conference of the year.

Bernanke also said banks need to help home owners who face foreclosure by modifying their mortgages and lowering their monthly payments. Or if modifications can’t be justified, he says banks need to speed up their foreclosure process.

“The housing sector is very important to the overall recovery, so we pay a lot of attention to that,” Bernanke told reporters at the press conference.

Bernanke said the Fed has lowered its economic forecast, expecting the economy to grow at a slower pace than originally projected and for problems to persist into the next year. High unemployment, he noted, continues to be a significant factor not only weighing down the economy but also stalling the housing recovery.

More details at source: “Bernanke Says That Economic Problems Likely Depressed Housing, May Persist into Next Year,” The Associated Press (June 22, 2011) and “Bernanke Says Home Price Stabilization Necessary to Woo Buyers,” HousingWire (June 22, 2011) 

Some of us even in the Placerville, California region have suggested some of these points for 2+ years!

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Study Reveals “Fastest Growing Real Estate Clients”

Minorities and immigrants will drive growth in housing demand in coming years, a new study reveals. Within the next 15 years, researchers say they expect this population segment to drive demand for condominiums, smaller starter homes, and first trade-up homes.

Also, this growing demographic is expected to represent a rapidly growing segment of the middle and middle-upper markets for housing, finds a new report, “The State of Hispanic Homeownership,” by the National Association of Hispanic Real Estate Professionals.

“The Latin boom has been forecasted for years but we are now seeing the front edge of it and it has the potential to help the nation’s housing system get back on track if we can create a safe credit environment for new buyers to get into the market,” says Carmen Mercado, NAHREP president.

Hispanics make up the largest minority group in the country and represent a significant portion of the 26 to 46 age group most involved in home sales.

Plus, Hispanics tend to value home ownership more than other demographics. For example, according to a recent study, 57 percent of Hispanics say they consider owning a home a symbol of success compared to 33 percent of all Americans.

Source: “NAHREP Report: Latinos, First-time Homebuyers Are Key to Housing Recovery,” RISMedia (June 20, 2011) 

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

 

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3 Banks Penalized for “Loan Modification Failings”

Three major banks have lost federal mortgage modification incentives in delivering a foreclosure relief program until they make big changes to improve their practices.

Obama administration officials have told Bank of America, JPMorgan Chase & Co., and Wells Fargo & Co. that they must make “substantial improvements” to the way they administer the Home Affordable Modification Program, and they will not receive any more federal money from the program until they do so. For example, officials noted that banks need substantial improvement in correctly evaluating borrowers’ incomes, which is a critical component for determining eligibility for the program. Some of the banks also need to improve how they identify and contact borrowers for the program.

Last month, the banks received $24 million in payments through HAMP, but no more payments will be made until servicers improve their performance, officials warned.

Full article at source: “3 Big Banks Lose Mortgage Modification Incentives,” Los Angeles Times (June 10, 2011) 

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

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