Real Estate Outlook: More Markets Show Measurable ImprovementTopic: Investments
Markets across the nation are showing signs of movement and improvement. The latest report from the Mortgage Bankers Association shows that mortgage applications were up for the last week, this after a slow two week end to 2011.
Applications were up 4.5 percent from the week earlier. And refinance activity decreased by over one percent, dropping to an 80.8 percent share of the market.
Additionally, the latest NAHB First American Improving Markets Index (IMI) shows that 76 markets are meeting their criteria for six straight months of improvements in housing permits, employment, and housing prices. This is almost double the amount of markets seen on the list for December (41).
"The fact that the list of improving housing markets nearly doubled this month shows that a significant, positive trend is developing, and is even more relevant when you consider the expanding geographic distribution of the list – which now includes 31 states and the District of Columbia," noted NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "This trend could be even stronger if not for the numerous impediments that continue to slow a housing and economic recovery, including overly restrictive lending policies and the growing inventory of distressed properties in certain markets."
It isn’t just one region boasting improvement either. Thirty-one states and the District of Columbia were represented on this growing list.
Some states do continue to do better than others, thanks in part of strong energy markets. This includes the state of Texas, which had three cities listed for the month of January. Florida, Michigan, Tennessee, Iowa, Indiana, also had three areas on the list this month. You can find the complete list and look for your city by visiting nahb.org/imi.
"The substantial gain in the number of improving housing markets in January shows that more consumers are looking favorably at a home purchase in light of today’s historically low interest rates and attractive prices, particularly in areas where job growth has picked up," added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
These improving markets should ready themselves for what could be a series of hits in the coming year. Realty Trac is reporting that while foreclosure activity was down every month last year through November (one out of every 579 households is in foreclosure, down 30 percent from 2010), these numbers could have been artificially low due to delays in processing.
The Federal Reserve’s Sarah Bloom Raskin recently addressed these issues to the Association of American Law Schools at their annual meeting. She touched on the dramatic impact of foreclosures and how "the longer it takes for mortgage servicers to make the operational adjustments necessary to fix their sloppy and deceptive practices, the costlier and more difficult it becomes for them to sort them out and correct them."
She noted that "this wave of foreclosures is one of the factors hindering a rapid recovery in the economy. Traditionally, the housing sector, buoyed by low interest rates and pent-up demand, has played an important role in propelling economic recoveries. The increase in housing sales and construction often is accompanied by purchases of complementary goods, like furniture and appliances, which magnify the effect of the housing recovery."
While delays in foreclosed homes hitting the market will continue to affect pricing and sellers, Realty Trac points out that they will mean lots of opportunity for investors.
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RE: A CEO of a large investment bank cmmiots massive fraud, enriching himself in the process. In this backwards country, the CEO uses his influence and connections to become the Secretary of the Treasury, where he then demands a blank check to bail out his former employer whose misdeeds have bankrupted the company. He also engineers a no prosecution policy, as if that were at all necessary anyway. He then works with the equally corrupt head of the country's central bank to dump these bad investments on the general public. And the corrupt Congress mandates that fraudulent accounting practices be enforced, lest the truth become too visible.In what backwards banana republic could such outrageous practices occur? Bolivia? No. Ecuador? No. Brazil? Heavens no. Give up? The answer: It is the United States of America.
By :RE: I think we are all in the business of fdiinng quickie, easy solutions. They are the best. Printing is easy. No biggie. Just print and you are done. The hard part is what Scotsman is proposing. On top of this he requires people to watch the spending and really uncool stuff like this. Printing is easier. Out of cash go get it from the printing press. And then you can relax more and take in the sun rays. You do not have to worry or think too much.There is no alternative to EURO and USD. Basically all people have to be happy with the printing. They can also relax knowing that they hold the right currencies.who is printing? I thought we had gigantic debts? which one is it this week?by the way probably no president have ever done more to cut money from the budget than obama. he's cut probably almost ten trillion.
Treasury is terrified of a flood of new frsocloruees. I believe that is why the Treasury issued a directive last week extending the trial modification period to at least the end of January.There are several possible options:More short sales. Short sale activity is already increasing, and the Treasury introduced the Foreclosure Alternatives Program to help with short sales and Deed-in-Lieu of Foreclosure transactions. However servicers are very afraid of short sale fraud (non-arm length transactions), and short sales are also distressed properties pushing down prices something Treasury is desperately trying to avoid.Encouraging servicers to write down principal. This would be very expensive, and if paid for by taxpayers it would be very unpopular because it would appear to favor speculators over the prudent.Converting homeowners to renters. This is something Dean Baker suggested, and is kind of a Single Family Public Housing program. This would avoid the flood of frsocloruees, and the banks could sell the homes over several years.None of these programs is especially attractive, so I expect more delays and can kicking that will keep frsocloruees elevated for years. I've felt all along that HAMP was just a delaying tactic. By restricting supply, the program has pushed up house prices a little and that has helped the banks raise capital. Now that the capital raises are over, maybe it is time to just accept the consequences and let house prices fall to market clearing levels.-excerpt from HAMP Seen Hurting Housing from Calculated Risk . Reply
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