Fed, Treasury Announce Plan to Jumpstart Lending
The Federal Reserve and Treasury Department on Tuesday unveiled hundreds of billions more in money they are pumping into the struggling U.S. economy, trying to jumpstart lending by the nation’s banks for mortgages and consumer debt.
Together, the programs from the Federal Reserve and the New York Fed aim to dump $800 billion in additional funds into the struggling U.S. economy, more than Congress approved in October for a bailout of the nation’s banks and Wall Street firms.
The NATIONAL ASSOCIATION OF REALTORS® said the actions will free up money on main street and lower long-term interest rates, which in turn will boost home sales.
“This is great news for home buyers and sellers and we applaud the Fed for taking this historic step,” said NAR President Charles McMillan. “Housing recovery is the key to economic recovery in this country and it always has been.” (Read the full NAR statement.)
Under the plan, the Federal Reserve announced it will purchase up to $500 billion in mortgage-backed securities that have been backed by Fannie Mae, Freddie Mac, and closely held Ginnie Mae, the three government-sponsored mortgage finance firms set up to promote homeownership. It will also buy another $100 billion in direct debt issued by those firms.
“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” said the statement from the Fed.
By putting money in the hands of holders of consumer and mortgage loan securities, the government hopes more money will flow to consumers than has occurred so far in previous bailout plans.
The moves came as the Commerce Department announced that gross domestic product, the broad measure of the nation’s economy, fell at an annual rate of 0.5% in the third quarter, the biggest drop in economic activity in seven years. Economists believe that the economy is likely to continue to contract in the current quarter and into early next year.
Source: Chris Isidore, CNNMoney.com (11/25/08), NAR
FHA, VA Loans Surge in October
The Mortgage Bankers Association reports that FHA, VA, and other government-insured loans accounted for about 33 percent of home loan applications in October, up from 10 percent a year ago.
Government-insured loans secured their biggest share of applications since February 1991 because they have lower down-payment criteria, more relaxed underwriting standards, and also had a higher loan limit for high-cost areas this year, the MBA notes.
Applications for government-insured loans surged 113.6 percent from a year ago in October, while applications for conventional loans fell 49.7 percent.
Refinancings from conventional loans to FHA-insured loans rocketed 144.3 percent from a year ago.
Investors Bulk Up on Foreclosures
Entrepreneurs are rushing to cash in on the foreclosure market, buying packages of foreclosed homes at steep discounts. Web sites are emerging to fulfull demand.
- ReoLynx.com allows investors to view more than 1,000 homes listed on the site, build a portfolio, and make a bid.
- VerifiedREOs.com and BulkrREO.com both sell packages of properties assembled by sellers.
Finding the properties is the first step, but closing on these deals are proving to be the biggest challenge because financially strapped banks aren’t willing to lend or sell REO homes at sub-basement prices.
“We have shied away from selling in bulk” because buyers are looking for steep discounts, said Ronald Faris, president of Ocwan Financial Corp., a mortgage servicer with a large portfolio of foreclosed homes.
Source: The Wall Street Journal, Rhonda L. Rundle (11/26/2008)
Cities Where Most Homes Are Mortgage-Free
Amid the subprime mortgage disaster, it’s easy to forget that a lot of people own their homes outright. In fact, a full one-third of U.S. homeowners don’t have a mortgage to worry about.
According to an analysis of census information by USA Today, there are 123 areas of the country where 40 percent or more of home owners don’t have a mortgage.
Many of those areas also never had any sort of boom in prices, either because they are in declining areas that have suffered job losses and dwindling population or because they are thriving retirement communities.
Cities with the highest percentage of owner-occupied properties that are mortgage free:
- Bluefield, W. Va.: 57 percent
- Sebring, Fla.: 56 percent
- Odessa, Texas: 54 percent
- McAllen-Edinburg-Mission, Texas: 54 percent
- Weirton, W.Va.-Steubenville, Ohio: 53 percent
Source: USA Today, Haya El Nasser and Paul Overberg (11/21/2008)
Read the article here.
Home Sales Rise in Military Towns
Homes near military bases are escaping a slowdown in sales due to the wars in Iraq and Afghanistan.
For instance, home prices in Clarksville, Tenn., the nearest residential area to Fort Campbell, Ky., rose 6 percent in the second quarter of 2008, compared to the previous year, while average home prices in the U.S. fell a record 4.8 percent during the same time period.
In Fayetteville, N.C., next door to Fort Bragg, the average price for an existing home was up 5.2 percent from a year earlier.
In Minot, N.D., where Minot Air Base, is located, average home prices rose 6 percent in the second quarter, In August, they were 10 percent higher compared to prices in August 2007.
The Veterans Administration says use of its home loan program has increased 34 percent in the last 12 months.
Source: The Associated Press, Kristin M. Hall (11/12/0 
Read the article here.
Fed, Treasury Announce Plan to Jumpstart Lending
The Federal Reserve and Treasury Department on Tuesday unveiled hundreds of billions more in money they are pumping into the struggling U.S. economy, trying to jumpstart lending by the nation’s banks for mortgages and consumer debt.
Together, the programs from the Federal Reserve and the New York Fed aim to dump $800 billion in additional funds into the struggling U.S. economy, more than Congress approved in October for a bailout of the nation’s banks and Wall Street firms.
The NATIONAL ASSOCIATION OF REALTORS® said the actions will free up money on main street and lower long-term interest rates, which in turn will boost home sales.
“This is great news for home buyers and sellers and we applaud the Fed for taking this historic step,” said NAR President Charles McMillan. “Housing recovery is the key to economic recovery in this country and it always has been.” (Read the full NAR statement.)
Under the plan, the Federal Reserve announced it will purchase up to $500 billion in mortgage-backed securities that have been backed by Fannie Mae, Freddie Mac, and closely held Ginnie Mae, the three government-sponsored mortgage finance firms set up to promote homeownership. It will also buy another $100 billion in direct debt issued by those firms.
“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” said the statement from the Fed.
By putting money in the hands of holders of consumer and mortgage loan securities, the government hopes more money will flow to consumers than has occurred so far in previous bailout plans.
The moves came as the Commerce Department announced that gross domestic product, the broad measure of the nation’s economy, fell at an annual rate of 0.5% in the third quarter, the biggest drop in economic activity in seven years. Economists believe that the economy is likely to continue to contract in the current quarter and into early next year.
Source: Chris Isidore, CNNMoney.com (11/25/08), NAR
Read the article here.
Affordable Places to Weather the Economic Storm
Well-priced housing, proximity to cities, and job growth make for good places to live during challenging economic times.
To come up with a list of locations that are safe havens in the economic storm, Forbes Magazine examined property tax and job growth information from the U.S. Census Bureau, and it asked Moody’s Economy.com to provide a housing affordability index.
The result was a list of small cities, most of them just outside of larger cities, that are good places to find work, live comfortably, and ride out the economic downturn.
Here are Forbes’ top 10 places to live and work in recessionary times:
- Madison County, Ala. (Huntsville)
- Pulaski County, Ark. (Little Rock)
- Adams County, Colo. (Denver)
- Hamilton County, Ohio (Cincinnati)
- Greenville County, S.C. (Greenville)
- Jefferson Parish, La. (New Orleans)
- Polk County, Iowa (Des Moines)
- Mobile County, Ala. (Mobile)
- Montgomery County, Texas (Houston)
- Johnson County, Kan. (Kansas City)
Source: Forbes, Helen Coster (11/12/2008)
Read the article here.
740 Sundance Ct
740 Sundance Ct, Prosper, TX 75078
Property Features
Situated on over an acre of wooded creek, this beautiful new construction home is one of the showcase homes in Whispering Farms. Old world elegance abounds in this home, with hardwood floors, gorgeous fixtures, and designer wall finishes. There is a second bedroom downstairs with a full bathroom, as well as, a rich wood-paneled study with fireplace, and a master bedroom with fabulous appointments. In fact, all the bedrooms in this home have their own bathroom with travertine counters and floors! Upstairs is a media room with wet bar. There’s even an ELEVATOR in the house. Includes 4-car gated motor court.
Watch the virtual tour of this magnificent property! Click here.
Room Dimensions:
- Kitchen – 18×21
- Living Room 1 – 31×21
- Living Room 2 – 18×20
- Living Room 3 – 20×16
- Formal Dining Room – 16×14
- Master Bedroom – 16×21
- Bedroom 2- 14×11
- Bedroom 3- 18×14
- Bedroom 4- 16×12
- Bedroom 5- 15×12
- Study – 14×15
- Utility – 10×8
- Media Room – 15×12
Schools:
District: Prosper ISD
Elementary: PROSPER
Middle: PROSPER
High: PROSPER
Home Prices Rise in Some Metros, Buyers More Active in Other Areas
WASHINGTON, November 18, 2008
Four out of five metropolitan areas recorded lower home prices in the third quarter from a year earlier, while existing-home sales fell in 32 states from the second quarter, according to the latest quarterly survey by the National Association of Realtors®.
In the third quarter, 28 out of 152 metropolitan statistical areas ¹ showed increases in median existing single-family home prices from the same quarter in 2007; four were unchanged and 120 metros experienced declines. NAR’s track of metro area home prices dates back to 1979.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said price comparisons in many areas are like apples and oranges. “A very large proportion of distressed home sales are taking place at discounted prices compared to more normal conditions a year ago,” McMillan said. “It’s very challenging to understand proper valuation, given the differences between distressed sales and a larger share of traditional homes in sound condition. Under these circumstances, it’s extremely important for consumers to be armed with the professional expertise Realtors offer.”
Distressed sales – foreclosures and short sales – accounted for 35 to 40 percent of transactions in the third quarter, pulling down the national median existing single-family price to $200,500, which is 9.0 percent lower than the third quarter of 2007. A year ago, when there were significantly fewer distressed transactions, the median price was $220,300. The median price is where half of the homes sold for more and half sold for less.
Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate² of 5.04 million units in the third quarter, up 2.6 percent from 4.91 million units in the second quarter, but remain 7.7 percent below the 5.46 million-unit pace in the third quarter of 2007.
Lawrence Yun, NAR chief economist, said conditions continue to range widely. “A pattern of sharply higher sales in areas with large price declines is well established,” Yun said. “Affordability conditions have consistently been a major factor in driving sales. Historically during recessions, buyers have responded to incentives and it’s important for government to keep that in the forefront of stimulus decisions.”
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 6.32 percent in the third quarter from 6.09 percent in the second quarter; the rate was 6.55 percent in the third quarter of 2007. Last week, Freddie Mac reported the 30-year fixed fell to 6.14 percent.
The largest sales gain during the third quarter was in Arizona, up 28.3 percent from the second quarter, followed by California which rose 28.1 percent and Nevada, up 26.2 percent.
The steepest declines in single-family home prices in the third quarter were in three California markets: the Riverside-San Bernardino-Ontario area, where the median price of $227,200 dropped 39.4 percent from a year ago, followed by Sacramento-Arden-Arcade-Roseville at $212,000, down 36.8 percent from the third quarter of 2007, and San Diego-Carlsbad-San Marcos, where the price dropped 36.0 percent to $377,300. “These areas have seen some of the strongest sales gains with some reports of multiple bidding,” Yun said.
The largest single-family home price increase in the third quarter was in the Elmira, N.Y., area, where the median price of $105,000 rose 12.5 percent from a year ago. Next was Decatur, Ill., at $93,400, up 8.7 percent from the third quarter of 2007, followed by the Bloomington-Normal, Ill., area, where the third-quarter median price increased 8.1 percent to $168,400.
The typical seller purchased their home six years ago and is experiencing net equity gains. The national increase in value since the third quarter of 2002 is 18.3 percent, which is a median gain of $31,000. Even with the current downward price distortion, 90 percent of metro areas are showing six-year price gains.
Median third-quarter metro area single-family home prices ranged from an affordable $65,800 in the Saginaw-Saginaw Township North area of Michigan to $650,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area was San Francisco-Oakland-Fremont, at $615,700, followed by Honolulu at $615,000.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $74,300, and South Bend-Mishawaka, Ind., at $88,000.
In the condo sector, metro area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existing-condo price was $210,800 in the third quarter, down 7.1 percent from $227,000 in the third quarter of 2007. Sixteen metros showed annual increases in the median condo price and 41 areas had price declines.
The strongest condo price increases were in the Dallas-Fort Worth-Arlington area, where the third quarter price of $149,900 rose 11.1 percent from a year earlier, followed by Bismarck, N.D., at $148,000, up 11.0 percent, and the Houston-Baytown-Sugar Land area, where the median condo price of $134,100 rose 8.1 percent from the third quarter of 2007.
Metro area median existing-condo prices in the third quarter ranged from $112,600 in the Greensboro-High Point, N.C., area to $456,300 in the San Francisco-Oakland-Fremont area. The second most expensive condo market reported was the New York-Wayne-White Plains area of New York and New Jersey at $324,000, followed by Honolulu at $322,000.
Other affordable condo markets include the Indianapolis area at $113,500 and the Cincinnati-Middletown area of Ohio, Kentucky and Indiana, at $117,300 in the third quarter.
Regionally, existing-home sales in the West rose 13.1 percent in the third quarter to an annual rate of 1.15 million and are 12.4 percent above a year ago.
The median existing single-family home price in the West was $266,300 in the third quarter, which is 21.4 percent below the third quarter of 2007. The only reported metro price increase in the West was in Farmington, N.M., at $193,600, up 1.7 percent from a year ago.
In the Midwest, existing-home sales rose 2.7 percent in the third quarter to a pace of 1.15 million but remain 10.6 percent below a year ago.
The median existing single-family home price in the Midwest declined 5.5 percent to $159,900 in the third quarter from the same period in 2007. After Decatur and Bloomington-Normal, the next strongest metro price increase in the Midwest was in the Wichita, Kan., area, where the median price of $125,300 was 5.5 percent higher than a year ago, followed by Champaign-Urbana, Ill., at $146,400, up 2.7 percent.
In the South, existing-home sales slipped 1.4 percent in the third quarter to an annual rate of 1.87 million and are 13.8 percent lower than the same period in 2007.
The median existing single-family home price in the South was $174,200 in the third quarter, down 3.7 percent from a year earlier. The strongest price increase in the South was in the Tulsa, Okla., area, at $139,800, up 5.1 percent from a year ago, followed by Amarillo, Texas, with a 4.2 percent gain to $128,300, and the New Orleans-Metairie-Kenner area of Louisiana at $166,800, up 4.1 percent.
In the Northeast, existing-home sales declined 1.6 percent in the third quarter to a level of 863,000 units and are 11.7 percent below a year ago.
The median existing single-family home price in the Northeast fell 6.5 percent to $267,700 in the third quarter from the same period in 2007. After Elmira, the strongest price increase in the Northeast was in the Trenton-Ewing, N.J., area, at $342,500, up 4.2 percent from the third quarter of 2007, followed by Buffalo-Niagara Falls, N.Y., with a median price of $114,200, up 3.0 percent.
# # #
Data tables for both metro area home prices and state existing-home sales are posted at:
http://www.realtor.org/research/research/metroprice. For areas not covered in the tables, contact your local association of Realtors®.
¹Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. A list of counties included in MSA definitions is available at:
http://www.census.gov/population/estimates/metro-city/0312msa.txt
Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.
NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series was launched at the beginning of 2006, with several years of historic data.
Because there is a concentration of condos in high-cost metro areas, the national median condo price sometimes is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional area will be included in the condo price report.
²The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. NAR began tracking the state sales series in 1981.
Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.
Fourth quarter metro area home price and state resale data will be released February 12.
Read the article here.
Realtors® Tell Congress Increased Housing Demand Will Stabilize the Market
WASHINGTON, November 18, 2008
In a statement to the House Financial Services Committee today, the National Association of Realtors® recommended a four-point plan to stimulate home sales and stabilize housing valuations.
“The only way to overcome today’s economic turmoil is to motivate and encourage worried or cautious housing consumers to enter the marketplace,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Stabilizing the housing market will lead to a quicker and greater economic recovery. Our goal is to ensure there is a healthy market and sufficient capital to support mortgage lending to qualified borrowers.”
NAR developed the plan for consideration by the current lame-duck session of Congress, and for the 111th Congress and the new administration. The four-point plan’s principles are consumer-driven to help foster a housing recovery to support an economic rebound. The plan calls for eliminating the repayment of the first-time home buyer tax credit that was passed in the February stimulus bill, and to expand the tax credit to include all home buyers. The plan also recommends making the increased FHA and conventional loan limits permanent to stimulate home sales and stabilize prices. In addition, the plan urges that the Troubled Asset Relief Program be put back on track by targeting the funds for mortgage relief through a mortgage interest rate buy-down. Finally, the plan recommends finalizing legislation to prohibit banks from entering into the business of real estate brokerage and property management.
“The federal government must ensure there is sufficient capital to support mortgage lending not only in strong markets but also in tumultuous ones,” said McMillan. “Realtors® are frustrated with the current mortgage lending environment that places a variety of barriers on families who wish to buy a home, impeding sales and price stabilization. We look forward to working with the Congress and the new administration to transition out of current instabilities and move toward strong and stable financial and housing markets.”
Read the article here.
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