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The all-American characters of Gary and Elaine have wormed their way into households aplenty thanks to the ingenuity of Molly Erdman, whose Catalog Living blog points to styling curiosities within catalogs. Here now, Erdman does the same for shelter magazine photos.
At the end of a long day, nothing relaxes Martin more than soaking in a hot tub and considering the repair possibilities of lawn mowers.Photo by Victoria Pearson/Country Living Home prices in Atlanta were up 10 percent in December from a year ago, but a year ago they were down 17 percent year-over-year, on the S&P/Case Shiller Index. What changed? Investors. As Atlanta's foreclosure rate soared, investors, no longer finding the big bargains out West, began moving into Atlanta and snatching up distressed properties at a brisk pace.
"Market prices have to go higher to provide incentives for more new houses to be built," said Aaron Edelheit, CEO of Atlanta-based The American Home, a company that invests in distressed properties and turns them into rentals. "I believe we are on the cusp of a massive housing shortage in many parts of the country due to the historic lack of residential investment in the last five years. This summer, I expect the housing market to be 'blue flame' hot."
(Read More: What Tops Home Buyers' Wish List Now)
Prices today are rising fast because supplies of homes for sale are so low. Both new and existing homes are running near four month supplies.
For new homes, builders just aren't able to start fast enough, due to labor and land restraints.
For existing homes, there are fewer distressed properties for sale, a segment that has driven the market into recovery, and organic homeowners are either unwilling to list their homes for fear of selling at the bottom, or unable to list because they are still underwater on their mortgages.
(Read More: Foreclosures Fall Due to New Laws)
"Taking new and existing homes together, the relationship between the months' supply of unsold homes and house prices points to an acceleration in the pace of house prices gains in the year ahead," said Paul Diggle of Capital Economics.
Buyer traffic is strong, supply of homes for sale is low, and yet home prices continue to defy the usual formula, falling again in March. Prices usually rise as supply shrinks, but demand is still too low to make those historical “norms” compute, not to mention that the type of supply available is largely distressed. Foreclosures and short sales (when the home is sold for less than the value of the mortgage) accounted for 47.7 percent of sales, in a three month running average measured by Campbell/Inside Mortgage Finance. That’s the 25th month in a row that distressed sales have topped 40 percent of the market. “With nearly half of the market being distressed, we’re a long way from a return to a normal market,” said Thomas Popik, research director at Campbell Surveys. “Agents responding to our survey say that homeowners with well-maintained properties in good locations are very reluctant to list at today’s prices. That’s why inventory is low—and also why forced REO and short sales are such a big proportion of the remaining market.” Home prices for non-distressed properties fell 5.7 percent in March year-over-year, according to the survey. Prices for “damaged” REO (bank-owned properties) fell 5.7 percent and for move-in ready REO fell 2.5 percent during the same period. The real sticker shock is in short sales. Prices of those homes fell 14.3 percent from March of 2011. Short sales have been ramping up of late, as banks attempt to comply with the so-called “robo-signing” mortgage settlement. Those are part of the losses the banks are required to take in the $25 billion deal. Over the past six months, short sales have moved from 17.8 percent of all sales to 19.9 percent, according to the Campbell/IMF survey. They now represent the number one segment for distressed properties. That share is likely to grow, as the conservator of Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA), last week announced it was directing the two mortgage giants to “develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure.” It includes a requirement that mortgage servicers review and respond to short sale requests within thirty days. Lengthy timelines have long been the biggest complaint in the short sale sector. Fannie Mae and Freddie Mac hold hundreds of thousands of distressed loans, and accelerating the process will surely move the numbers up quickly, although the rules don’t go into effect until June 1. The FHFA is requiring the two make final decisions on these sales within 60 days. Previously, short sales could take up to a year and even beyond, with buyers often dropping out in frustration. “This could put short-term downward pressure on home prices, as short sales by their nature occur more quickly than foreclosures,” writes Jaret Seiberg, analyst at Guggenheim Partners. “That could raise questions about the status of the housing recovery, which could be negative for those with housing exposure. That would include homebuilders, mortgage lenders and mortgage insurers.” On the plus side, short sales tend to sell at higher prices than foreclosures. It appear, however, that regardless of the FHFA edict, banks are already ramping up the short sales. Some began doing so in the aftermath of the robo-signing scandal, as foreclosures stalled. Even now, foreclosures falling as short sales rise. The good news is that sales of distressed properties are rising, but the headlines will likely focus more on the falling prices, than the much-needed clearing of these homes.Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
Shame on the Republican candidates for president. Shame on them for showing up at debate specifically targeting the U.S. economy with not one credible, rational, even reputable notion of what to do about the nation's housing mess. It baffles the mind that this sector of the economy, responsible for about 18 percent of the nation's gross domestic product, is in freefall, and yet eight potential new leaders of this nation not only don't understand the problem but don't have a clue what to do about it. My favorite, and I write this with as much sarcasm as a computer keyboard will afford, is the argument that the Dodd-Frank financial reform bill is to blame for housing's current despair. Foreclosures, falling home prices, negative equity, nil consumer confidence, record low home building...yep, gotta be Dodd-Frank. "If the Republican House next week would repeal Dodd-Frank and allow us to put pressure on the Senate to repeal Dodd-Frank, you would see the housing market start to improve overnight," Speaker Newt Gingrich told the crowd in Michigan last night. His reasoning is that, "It kills small banks, it kills small business." Increased regulation has certainly made the life of a banker today tougher, but the fact that there was zero regulation ten years ago allowed and encouraged reckless behavior on Wall Street. It created the supremely negligent subprime mortgage trading bonanza that brought down big banks, little banks and homeowners alike...and threatened to take down the entire U.S. economy. Were we to do nothing to change that? And Mr. Gingrich, if I may, how would repealing Dodd-Frank suddenly help the 4 million borrowers behind on their mortgages today and the 2.2 million in the foreclosure process today keep their homes? How would it put a bottom on home prices? Do you honestly believe that it would suddenly open the mortgage markets wide, allow banks to somehow fix all the troubled loans on their books and fuel a gigantic lending spree that would ignite home buying and selling again like the good old days? Is that even what we want?? Let me just finish with Mr. Gingrich's last note, "The banks are actually profiting more by foreclosing than encouraging short sales." That's just flat out wrong. To begin with what bank has ever profited from a foreclosure OR a short sale?
Industry sources tell me that a short sale nets the bank on average 20 percent more than a foreclosure. Short sales speed up the time frame for disposal of the property as well, as foreclosures can take years to process. During that time, foreclosed borrowers can destroy the property, flushing cement down the toilet and stealing everything in the home that is and isn't nailed down. In a short sale, the homeowner lives in the home until the deal is done, and because they are not getting a huge hit to their credit and being kicked out by a sheriff's deputy, they generally don't destroy the house. In a short sale, the bank knows exactly what it's getting, unlike in a foreclosure when the bank has to take back the house in some unknown condition, market it and re-sell it at an unknown distressed price. 'Nuff said. My second favorite argument is that it's all Fannie and Freddie's fault, and if we take them down, housing comes back in a flash. "For these geniuses to give 10 of their top executives bonuses at $12 million and then have the guts to come to the American people and say, 'Give us another $13 billion to bail us out just for the quarter,' that's lunacy," Rep. Michelle Bachmann argued on CNBC last night. "We need to put them back into bankruptcy and get them out of business. They're destroying the housing market." No question, Fannie Mae and Freddie Mac are bleeding money, costing the taxpayers billions already and potentially billions more in the near future. Something needs to be done to change that, but "bankrupting" Fannie and Freddie would take down the U.S. economy as we know it, and it boggles the mind that a person running for president wouldn't understand that. She in fact noted that Fannie and Freddie support the bulk of the mortgage market. That's true. Without them there would be no lending. Does she think the private market would just come running back in and give the nation's beleaguered borrowers 3.99 percent 30-year fixeds across the board? Come on. Only Herman Cain seemed to get that. He argued that we need to fix unemployment first with his various proposals. "Okay. After I did those three things that I outlined, then deal with Fannie Mae and Freddie Mac. You don't start solving a problem right in the middle of it. So we've got to do that first," he reasoned. Fixing unemployment was the only housing plan the candidates could offer. When CNBC's Maria Bartiromo asked Governor Mitt Romney, "Not one of your 59 points in your economic plan mentions or addresses housing. Can you tell us why?" He responded, "Yes, because it's not a housing plan. It's a jobs plan." I don't love that answer, but at least I can respect it. "Our friends in Washington today, they say, 'Oh, if we've got a problem in housing, let's let government play a bigger role.' That's the wrong way to go. Let markets work. Help people get back to work. Let them buy homes. You'll see home prices come back up if we allow this market to work," argued Romney. There are plenty of analysts who agree that the market needs to work itself out, as painful as that may be to average Americans, many of whom are in line to lose their homes. Until the foreclosure mess runs its course, and all those homes are filled with borrowers who can afford them, home prices will not recover, plain and simple, goes the argument. I'm not saying here that the Obama Administration has done anything particular stellar to stimulate a housing recovery. A small refinance program for underwater borrowers isn't the cure-all, and forcing banks to write down mortgage principal is not politically nor technically feasible. But without some plan, this crisis could go on for a decade, like it did in Japan, as President Clinton noted recently in an interview on MSNBC's Morning Joe. I'm not saying I have the answer, the great plan to fix our nation's housing crisis. But I'm not running for president. Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
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I am reporting on the Washington, D.C. and Baltimore metro area housing markets in addition to our NYC metro area and Miami research – for RealEstate Business Intelligence (RBI), the research, analytics arm of MRIS, the largest MLS in the country. It is released 10 days after the close of each period, about 3 weeks before the NAR pending home sale index covering the same period.
Here’s a snippet from the just released April 2011 RBI Pending Home Sales Index [Washington, D.C. Metro Area] report:
…April buyers and sellers in the Washington, D.C. metro area signed 5,170 purchase contracts, the second highest April since 2006. The total was second only to the April 2010 surge in activity related to the final days of the federal homebuyer tax credit. Pending sales in April fell to 5,170, 4.8% short of the heavy volume reached in March, partly a result of last monthÕs release of pent-up demand accumulated during the post-tax credit expiration lull in the second half of 2010. The April 2011 median sales price was $334,000, nominally below $335,000 reached in same month last year and 4.4% above $320,000 in March. The month over month increase was consistent with seasonal patterns…
RBI Pending Home Sales Index™ [Washington, D.C. Metro Area]
Paul J. Richards | AFP | Getty ImagesHome prices fell 6.7 percent in February year over year, according to a new report from CoreLogic. That numbers includes distressed sales, that is, sales of foreclosed properties or short sales, where the bank agrees to let the homeowner sell for less than the value of the mortgage. If you take those sales out, however, home prices were basically flat. "When you remove distressed properties from the equation, we're seeing a significantly reduced pace of depreciation and greater stability in many markets," notes CoreLogic's [CLGX Loading... () 
] chief economist Mark Flemming. "Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared." Distressed sales, though, still make up more than a third of all home sales, according to the National Association of Realtors, and that number is likely to rise at least in the near future. The banks have slowed the process of foreclosure, and that has reduced the number of bank owned properties hitting the market lately, but it's a whole different story with short sales. 
"Absolutely we can see on the ground, it's just happening," says Robert Cruz, a real estate broker just south of San Francisco who deals primarily in short sales. "The banks are asking us to go out and engage the borrower, find the borrowers who have defaulted or re-defaulted and list the properties before they have to foreclose." Short sales used to be a long, tedious process with a very low success rate. "Short sales used to be a waste of time," Cruz remembers. "Now it's totally changed." Much of that is due to banks streamlining the process and a new government incentive program, but much of it is coming from the banks themselves. Cruz says in the first quarter of this year his firm's short sale closings were up at least 60 percent, thanks to the banks and servicers being far more aggressive in pursuing them; not only are they pursuing them, but they are paying for them. While the government's Home Affordable Foreclosure Alternative Program offers borrowers $3000 in "relocation assistance" after successful short sales, Cruz says some of the banks are paying borrowers up to $25,000. He says the banks know the sellers are more savvy today and know they can live rent free for at least a year before a bank takes possession of the home in foreclosure. $3000 isn't much incentive to move quickly; $25,000 is. "It's a sea change," adds Cruz. So why am I telling you all this? Because if short sales continue to increase at this rate, even just this year, that's going to push the home price numbers down even further. Sure, if you take out the short sales, the numbers will look better, but those big headline numbers generally include short sales, and that will further erode confidence. More short sales will also force organic sellers and home builders to try to compete with lower prices. Short sales may be better for the banks and better for borrowers' credit scores, but they will take their toll on the greater market. Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
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The 4Q 2010 Long Island Market Overview that I author for Prudential Douglas Elliman was released yesterday.
Other reports we prepare can be found here.
The 4Q 2010 data and a series of charts are updated with the 4Q 2010 data.
Press coverage can be found here.
Since the neighborhood data is too thin to build a reliable trend line, we have grouped neighborhoods by logical regions based on housing stock.
An excerpt
…There were 4,252 sales in the fourth quarter, 28.4% below 5,935 in the prior year quarter and 2.1% below 4,343 in the prior quarter. The sharp decline from the same period last year was due primarily to the federal homebuyer tax credit in place in the second half of 2009. The intention of the program was to increase the number of sales for first time buyers in 2009. As a result, comparison with the prior year quarter was a period that saw the highest number of sales of the last four years. Despite the decrease in sales after the expiration of the expanded federal tax credit in April 2010, listing inventory fell 3.6% to 18,742 from 19,450 in the prior year quarter and fell 13.5% from 21,670 in the prior quarter. This prior quarter inventory drop was seasonal and consistent with the 7-year 14.6% average third to fourth quarter inventory decline over the same period…
4Q 2010 Long Island Market Overview [Miller Samuel]
Long Island housing market chart gallery [Miller Samuel]
Long Island custom data tables [Miller Samuel]
Paul J. Richards | AFP | Getty ImagesAs more and more homeowners dipped underwater on their mortgages last year and didn't qualify for loan modifications, the Obama Administration launched a program to help them out.The Home Affordable Foreclosure Alternative program, a last resort, includes incentives to lenders to do more short sales. That's when the lender allows the home to be sold for less than the value of the loan; the lender takes a financial loss, but avoids a far more costly foreclosure. Borrowers also get cash incentives to leave. There are close to 11 million underwater borrower, with that number rising has home prices dip again. The program wasn't doing so well by the end of the year and had come under quite the criticism from the industry for being too complicated and too strict. Here's how the Treasury explains it: "While HAFA has been widely credited with streamlining the short sale process by setting clear timelines, documentation requirements and procedures, feedback from various stakeholders including servicers, housing counselors, realtors and others supported that additional enhancements could be made to further streamline short sale transactions, to the benefit of homeowners." A recent report from the folks who oversee the TARP (the Congressional Oversight Panel) said that the Treasury has spent just $4.3 million on HAFA for 661 short sales. So Treasury, last week, decided to change the rules a bit: HAFA no longer requires that servicers verify the borrowers finances HAFA no longer requires servicers to determine if the borrowers monthly payment is higher than a 31 percent debt-to-income ratio. HAFA no longer requires second-lien holders to agree to accept 6 percent of the unpaid principal balance owed them, up to $6,000. Servicers now decide who gets paid how much, with a cap still at $6000. HAFA now requires borrowers seeking a short sale get an answer/agreement within 30 days. The last one is a no-brainer, as delays have scuttled far too many deals that could have benefited both borrowers and lenders. I'm less thrilled with the verification of borrowers' finances and DTI ratio. If you don't have to verify anything about the borrower, other than a so-called, "hardship affidavit," then that opens the program up to all kinds of scams by borrowers who don't need to sell their home but just want to get out from under a bad investment. They may be delinquent on their loans by choice, not by necessity. I'm sure the folks who had no problem lying on their mortgage applications would also have no problem fabricating some kind of "hardship." As for the second lien issue, that's just a big bad can o' worms that needs far stricter guidance, not more lenient guidance. Second lien-holders, many of whom are the major banks/servicers themselves, have been the fundamental roadblock to short sales so far. Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_OlickReal Estate Foreclosure Short Sale Course Reveals from beginning to end how to short sale a property. Often Advertised. Rarely Delivered.
