Sticks in the Ground

HOUSING RESCUE PROGRAM DETAILS RELEASED

WASHINGTON (RISMedia, Associated Press) – President Obama unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Mortgage

Kingwood Real Estate Sales Statistics – 2004 thru 2008

As we ponder the state of the economy and what impact this turmoil is having on our financial net worth, the question “What’s happening to my house value?" has to be on our minds. I usually steer clear of generalizations, but, as a starting point I’ve put together two charts which illustrate how Kingwood home sales volume and price have been trending over the last five years. Here are the charts:

 

The number of homes sold in Kingwood started to turn down in 2007. However, the price of Kingwood homes flattened in 2008, reversing a multi-year upward trend.

The risk in sharing this “overview” is that it most likely does not accurately reflect your individual situation. Think of it as a starting point. Since there are numerous pundits discussing the future of the housing market and it’s related issues, it’s important to know where the Kingwood Real Estate Market is coming from. 

If you will be active in the Kingwood Real Estate Market during 2009, call Team Kelly and we’ll work with you to develop comprehensive information you will need to make sound individual decisions.

Visit us on the web at KingwoodTxHomesForSale.com

.....blogging from Kingwood, TX

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First Time Homebuyer’s Tax Credit ….. Do You Qualify ?

First time home buyers may qualify for a substantial tax credit when they pay their 2008 or 2009 federal income tax. Here is how it works.

First of all your home must be purchase between April 9, 2008 and July 1, 2009 and you must never have owned a home before that served AS YOUR PRINCPAL RESIDANCE. It's ok if, DURING THE LAST THREE YEARS, you owned a home which was not your principal residence ( maybe you're an investor / landlord). IF you are married, the three year rule applies to your spouse as well.

If your adjusted gross income is $75,000 or less, the tax credit is equal to 10% of the purchase price of your home to a maximum of $7,500. If your AGI exceeds $75k, the credit is reduced proportionately until it dwindles to $0.00 at the $95k AGI level. Married couples have an AGI range of $150k to $170k to work within.

Here's the kicker. You have to REPAY this tax credit. You start paying the credit back after two years. As long as you still live in the house, you have 15 years from when you start to repay the credit; that works out to be a max of $500 per year. Not all that bad. BUT, if you sell the house you must pay it back in the year of the sale.

One nice benefit if you purchase your home in 2009, you can file an amended tax return for 2008 and get your credit sooner than you would  by waiting until your 2009 filing.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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America's Housing Crisis Can Be Fixed ...

Finally I've heard a voice of reason in a sea of cluttered thought.

Dr. Mark G. Dotzour, the Chief Economist at the Real Estate Center at Texas A&M University, has published a thought provoking White Paper in which he characterizes the current housing crisis as a basic imbalance of supply and demand. He suggests decisive action by our federal government is required to deal effectively with the problem. His four pronged attack focuses on

• slowing down the rate of new construction - stop issuing building permits in depressed markets.
  
• reducing the number of foreclosures - listen to FDIC Chair Sheila Bair - simply "helping people stay in their homes" is a dangerous basis for new policy.
  
• increasing housing demand - provide incentives to investors  - adjust the capital gains rate to 0% for properties held 5+ years, reduce the depreciation schedule for purchased foreclosed homes, utilize solid mortgage underwriting standards.
  
• reducing the 30 year mortgage fixed rate  - reflect a 1.5% premium over the 10 year Treasury note rate (somewhere well below 5%) - make explicit the government guarantee of Fannie and Freddie instruments. Refinancing at these rates would provide economic stimulus for millions of American households.

Balance supply and demand, this must happen before we can expect to see normalcy in the housing market. We need to put public policy in place that gives the private sector incentives to be the solution. Allowing the government print more money WON'T WORK. 

Please read or download Dr. Dotzour's complete paper. Bold Government Can Solve America's Housing Crisis .

Visit us on the web at KingwoodTxHomesForSale.com

.....blogging from Kingwood, TX

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GOING GREEN

COLLEGE STATION (Real Estate Center) – Last week, the entire world went “green”, and the Real Estate Center was no exception. Two articles in the latest edition of the Center’s quarterly journal, Tierra Grande, take a look at the green movement’s impact on the building industry.

You may be willing to pay extra for having environmentally friendly systems and amenities installed in your new home. But how will those green components affect the value of the property. Read “Green House Values” to find out.

“What’s in YOUR Building” discusses how more and more cities are requiring commercial buildings to be built to LEED standards, and how the trend may make it more difficult for existing buildings to maintain Class-A status.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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NEW HOME SALES PLUNGE

WASHINGTON (Associated Press) – Sales of new homes dropped by 8.5 percent in March 2008 to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991, the Commerce Department reported late last week.

The median price of a home sold in March dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.

Sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent. Sales fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6 percent in the South.

The National Association of Realtors reported that sales of existing homes also fell in March, dropping by 2 percent, with prices declining on a year-over-year basis by 7.7 percent.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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Houston Property Sales Continue to Slide in February

Sixth consecutive monthly decline is tempered by notable increases in average and median single-family home prices

HOUSTON —
Total property sales for February 2008 registered 5,266, which represents a 10.2 percent drop compared to February 2007; it’s an improvement over last month’s 17.2 percent fall. Properties sold during the month totaled just over $1 billion compared to $1.1 billion in sales one year earlier, a 7.9 percent decline. The average price of a single-family home (existing and new construction) rose 5.6 percent last month, representing the biggest increase since last August. The median price of a single-family home increased 3.1 percent. The number of available homes (active listings) at the end of February was 51,308 properties, a 12.8 percent increase over February 2007. The figure was up 599 properties from January 2008, reflecting the continuing sales slowdown.

Single-Family Homes Update
The average sales price for single-family homes (existing and new construction) was $206,140 in February, up 5.6 percent versus the same period last year when it was $195,148. The overall median price of single-family homes in February was $151,430 compared to the national single-family median price of $201,100, according to statistics released by the National Association of REALTORS®.

Additionally, total sales of single-family homes in Houston in February came in at 4,431, which was 10.2 percent lower than February 2007 but a slight improvement over last month’s 12 percent decline.

Improved year-over-year sales activity continued to be observed in Houston’s low- and high-end single-family home markets, with increases of 11.1 percent among homes priced below $80,000 and 11.0 percent among homes priced above $500,000.

In February 2008, existing single-family home sales totaled 3,646, which was a 10.0 percent drop from February 2007. At $141,500, the median sales price for existing homes in the Houston area was up 1.8 percent compared to the same period last year. The average sales price of $190,553 for the month represented an increase of 5.0 percent from last year’s level

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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Big Changes in Mortgage Insurance Requirements

According to sources in the mortgage brokerage business, I have learned that effective immediately, Mortgage Insurance providers such as Mortgage Guaranty Insurance Corporation and AIG United Guaranty (two of the largest in the industry) will no longer offer mortgage insurance (PMI) for borrowers seeking 100% financing. This is a huge change. Without the mortgage insurance (PMI) the 100% financing product will no longer be available to borrowers. Most 2nd lenders have pulled out of the 80/20 loan business too. This means that borrowers are going to have to be prepared to make a down payment when doing a purchase contract. 

These Mortgage Insurance providers have also increased their requirements for borrowers doing 97% financing (3% down payment); if the borrower does not have at least a 680 mid credit score they will not qualify for mortgage insurance. For borrowers whose mid credit score is below 620 there will be no mortgage insurance available, no matter if they put 10% or 15% down.

These changes pertain to Fannie Mae/Freddie Mac loans, not FHA.

Mortgage backed securities continue to have problems on Wall Street. Mortgages on clients with less than 20% equity in their property are some of the “least attractive” in the market. For that reason Lenders & Mortgage Insurers continue to increase the guidelines on these types of loans to make them more “attractive” to investors.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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HOUSING HIGHS AND LOWS

WASHINGTON (Associated Press) – News from Washington, D.C., yesterday had its highs and lows, and, no matter how you looked at it, it spelled bad news for the national housing market.

Foreclosures Hit Record High
The Mortgage Bankers Association said the proportion of all mortgages nationwide that fell into foreclosure shot up to a record 0.83 percent in fourth quarter 2007. That surpassed the previous high of 0.78 percent set in the previous quarter.

Record Low for Home Equity
The Federal Reserve reported that homeowner equity actually slipped below 50 percent in second quarter 2007 and fell to just below 48 percent in the fourth quarter. This marks the first time since the Fed started tracking the data in 1945 that the amount of debt tied up in American homes has exceeded the equity homeowners have built.

Economy.com estimates that 8.8 million homeowners — about 10 percent of homes — will have zero or negative equity by the end of March. About 13.8 million households will be "upside down" if prices fall 20 percent from their peak.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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BERNANKE URGES LOWERING MORTGAGE AMOUNTS

WASHINGTON (Bloomberg) – In what he called a "vigorous response" to the national housing crisis, Federal Reserve Chairman Ben Bernanke last week urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting.

"Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done," Bernanke said in a speech to bankers in Orlando March 4th. "Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure."

Bernanke's call goes beyond the stance of the Bush administration and previous Fed comments, indicating that he sees housing as a serious threat to the economy that can't be addressed by fiscal or monetary policy alone. The Fed's Feb. 27 report to Congress called for lenders to "pursue prudent loan workouts" through means such as modifying mortgage terms and deferring payments.

The number of U.S. homeowners entering foreclosure rose 75 percent in 2007, with more than 1 percent in some stage of foreclosure during the year, according to RealtyTrac Inc.. For the year, more than 2.2 million default notices, auction notices and bank repossessions were reported on about 1.3 million properties.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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