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C. A. R. Newsline
September 2007
Wednesday, September 26, 2007
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
C.A.R. REPORTS AUGUST HOME SALES DECLINE 27.8 PERCENT
CONSUMER CONFIDENCE HITS LOWEST LEVEL IN TWO YEARS
NEW LEGAL ARTICLES ON SHORT SALES AVAILABLE
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C.A.R. REPORTS AUGUST HOME SALES DECLINE 27.8 PERCENTHome sales decreased 27.8 percent in August in California compared with the same period a year ago, while the statewide median price of an existing home increased 2 percent, C.A.R. reported Tuesday. "Despite the overall increase in the statewide median price, prices declined in 11 regions last month, falling 11.5 percent in the Central Valley region and 12.1 percent in Sacramento," said C.A.R. President Colleen Badagliacco. "Price softness is even more pronounced when we look at different segments of the market. For example, the statewide median price in the entry-level price range of less than $500,000 fell 5.1 percent in August to $349,360 compared with $368,210 for the same period a year ago." "While low affordability, tighter underwriting standards, and expectations of lower prices continue to pose challenges for the market, the decline in sales accelerated in August as a result of the so-called credit or liquidity crunch that began in July," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The credit crunch emerged as uncertainty about the extent of the subprime problem drove investors across the globe to turn off the tap of funds to lenders in mortgage and other credit market segments. With credit drying up, even qualified buyers were unable to receive funding for home purchases."
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CONSUMER CONFIDENCE HITS LOWEST LEVEL IN TWO YEARS
Angst over jobs and an economy struggling to ride out the recent subprime market woes have driven consumer confidence to its lowest level in two years, according to the latest Conference Board Consumer Confidence Index, which now stands at 99.8, down from 105.6 in August.
"Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern," said Lynn Franco, director of The Conference Board Consumer Research Center. "Looking ahead, little economic improvement is expected and with the holiday season around the corner this is not welcome news."
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NEW LEGAL ARTICLES ON SHORT SALES AVAILABLE
C.A.R. Member Legal Services has published several legal articles on short sales and taxation issues related to shorts sales and foreclosures for members in an effort to provide clarity on these important issues impacting the real estate industry today.
A new article on short sales, "Strategic Defense Counsel Legal Articles: Short Sales," the first of a series of articles to be published by the Strategic Defense Counsel on risk management and litigation defense issues for REALTORS®, is now available. In addition, there are two revised articles, "Taxation of Foreclosures, Deeds in Lieu of Foreclosure, and Short Sales" and "Short Sales." These articles are available under the Legal Articles area of the Legal section of C.A.R. Online.
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Fast Facts
Calif. median home price - August 07: $588.970 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region August 07: Santa Barbara So. Coast $1,262,500 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region August 07: High Desert $287.39 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 07: 24 percent (Source: C.A.R.)
Mortgage rates - week ending 9/20: 30-yr. fixed: 6.34%; Fees/points: 0.5% 15-yr. fixed: 5.98%; Fees/points: 0.5% 1-yr. adjustable: 5.65%; Fees/points: 0.6% (Source: Freddie Mac)
C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing nearly 200,000 REALTORS® statewide.
Edited by Mark Giberson
Copyright © 2007 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
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Wednesday, September 19, 2007
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
FED LOWERS INTEREST RATES TO 4.75 PERCENT
HOUSING STARTS SLIDE 2.6 PERCENT IN AUGUST
BUILDER CONFIDENCE SINKS TO LOWEST LEVEL IN 16 YEARS
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FED LOWERS INTEREST RATES TO 4.75 PERCENT
The Federal Reserve lowered key short-term interest rates yesterday for the first time in four years to 4.75 percent from 5.25 percent, hoping to promote moderate economic growth, and ease pressure linked to the mortgage credit crisis and slumping housing market. "The tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally," the policymaking Federal Open Market Committee said in a statement Tuesday. "Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."
http://www.federalreserve.gov/newsevents/press/monetary/20070918a.htm ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
HOUSING STARTS SLIDE 2.6 PERCENT IN AUGUST
The pace of new home construction declined 2.6 percent in August, down to 1,331 million units from 1.367 million in July, and 19.1 percent below August 2006 estimates at 1.731 million, according to the latest data from the U.S. Census Bureau. Building permits for privately owned housing units in August were down 5.9 percent to 1.307 million from 1.389 million in July, a 24.5 percent decline from 1.731 million units in August 2006. http://www.census.gov/const/newresconst.pdf ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
BUILDER CONFIDENCE SINKS TO LOWEST LEVEL IN 16 YEARS
Builder confidence fell to record lows not seen since 1991, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI index gauging single-family home sales slipped two points to 20 due to continued decline in consumer demand, fueled largely by the credit crisis linked to the troubled mortgage loan sector. Sales expectations for the next six months fell five points to 26, according to the HMI. Any number over 50 indicates more builders view sales conditions as good versus poor. "Builders are expressing concern that home buyers are getting spooked by the many headlines they are seeing on mortgage market issues and their continuing effects on the housing market and home prices," said NAHB President Brian Catalde. http://www.nahb.org/news_details.aspx?sectionID=148&newsID=5321&print=true ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Fast Facts
Calif. median home price - July 07: $586.030 (Source: C.A.R.) Calif. highest median home price by C.A.R. region July 07: Santa Barbara So. Coast $1,100,000(Source: C.A.R.) Calif. lowest median home price by C.A.R. region July 07: High Desert $296,220 (Source: C.A.R.) Calif. First-time Buyer Affordability Index - Second Quarter 07: 24 percent (Source: C.A.R.) Mortgage rates - week ending 9/13: 30-yr. fixed: 6.31%; Fees/points: 0.5% 15-yr. fixed: 5.97%; Fees/points: 0.4% 1-yr. adjustable: 5.66%; Fees/points: 0.8% (Source: Freddie Mac)
C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing nearly 200,000 REALTORS® statewide.
Edited by Mark Giberson, Copyright © 2007 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
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Wednesday, September 12, 2007
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
U.S. ECONOMY WILL AVOID RECESSION, UCLA FORECASTS
VIRTUAL WORLDS INCREASING IN POPULARITY
NAR PUTS 2007 EXISTING HOME SALES AT 5.92 MILLION UNITS
C.A.R. PUBLISHES NEW ARTICLE ON TAXATION OF FORECLOSURES
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U.S. ECONOMY WILL AVOID RECESSION, UCLA FORECASTS
California's economy will limp to the brink of recession this year, thanks to a decline in jobs and the fallout from the subprime mortgage crisis, according to the latest quarterly UCLA Anderson Forecast. The forecast says that 2007 will see a peak in subprime mortgage resets but adds that mortgage defaults are expected to continue well into the first half of 2008. As a result, the housing market will continue to drag on the state's economy until early 2009, with expected job growth of less than 1 percent through Sept. 2008 and unemployment topping out at 5.9 percent by the end of next year. "California is in for at least another year of economic doldrums, with rising unemployment, weak job growth, and a slowdown in all broad indicators," said UCLA economist Ryan Ratcliff. Nationally, the U.S. economy also will just barely avoid recession and begin making a slow move toward economic recovery in 2008. UCLA's forecast calls for growth in the gross domestic product (GDP) of more than 1 percent for the fourth quarter of 2007 and first quarter of 2008, with a return to 3 percent in 2009, avoiding the traditional definition of a recession, which is two consecutive quarters of a GDP decline. UCLA's forecast also lowered predictions for U.S. housing starts for 2007 to more than 1.1 million units, but predicts a modest climb to 1.4 million units by the end of 2009. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
VIRTUAL WORLDS INCREASING IN POPULARITY
A growing number of companies are embracing the applications of "virtual worlds" as a way to connect with employees and customers, and create a stronger presence in the marketplace, according to a new report titled "Crafting a Strategy for Virtual Worlds: Eight Questions to Ask," by The Conference Board. As these 3-D worlds grow in popularity, there is a need to make sure their content and oversight keep pace with business protocol and consumer demand. The report breaks out the key questions that need to be addressed when setting up a virtual world, including determining the purpose of the site; whether to engage in "v-commerce"; and how to effectively manage the site. "Although virtual worlds appear to mimic the real world, this is an illusion," said Edward M. Roche, author of the report. "For the business community, choosing the right virtual world to use is a crucial decision." http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3205 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NAR PUTS 2007 EXISTING HOME SALES AT 5.92 MILLION UNITS
The latest housing forecast by the NATIONAL ASSOCIATION OF REALTORS® puts sales of existing homes for 2007 at 5.92 million units, down from 6.48 million in 2006. NAR is predicting a modest recovery in 2008 with projected sales of existing homes of 6.27 million. NAR is also projecting a 1.7 percent decline in the median existing home price for 2007 to $218,200, but is forecasting a 2.2 percent increase in 2008 to $223,000.
dampen_home_sales.html
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C.A.R. PUBLISHES NEW ARTICLE ON TAXATION OF FORECLOSURES
In an effort to help real estate professionals keep up-to-date with the latest tax and income implications for clients entering into a foreclosure or a short sale transaction, C.A.R.'S Member Legal Services has published a new legal article, "Taxation of Foreclosures, Deeds in Lieu of Foreclosure, and Short Sales." The article, available on the "What's New" and Legal Articles area of the Legal section of C.A.R. Online, supersedes the C.A.R. legal article, "How Foreclosures and Short Sales are Taxed," and discusses the income tax consequences to the borrower in the event of foreclosure, the event the borrower simply transfers title to the lender (deed in lieu of foreclosure), and if the borrower sells the property to another in a short sale in which a lender accepts less than the balance due on the loan as payment in full.
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Fast Facts
C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing nearly 200,000 REALTORS® statewide.
Edited by Mark Giberson
Copyright © 2007 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
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Wednesday, September 05, 2007
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
C.A.R. URGES SWIFT PASSAGE OF GSE AND CONFORMING LOAN LIMIT REFORM BILL
CONSTRUCTION SPENDING FALLS 0.4 PERCENT IN JULY
INDUSTRY LEADERS HEADLINE TECH TUESDAY EVENTS
PENDING HOME SALES INDEX DOWN 12.2 PERCENT IN JULY
EXPO PCalif. median home price - July 07: $586.030 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region July 07: Santa Barbara So. Coast $1,100,000(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region July 07: High Desert $296,220 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 07: 24 percent (Source: C.A.R.)
Mortgage rates - week ending 9/06: 30-yr. fixed: 6.46%; Fees/points: 0.5% 15-yr. fixed: 6.15%; Fees/points: 0.5% 1-yr. adjustable: 5.74%; Fees/points: 0.6% (Source: Freddie Mac)
ANELISTS ZOOM IN ON HOUSING AND THE ECONOMY
LONG-TERM MORTGAGE RATES COME DOWN SLIGHTLY
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C.A.R. URGES SWIFT PASSAGE OF GSE AND CONFORMING LOAN LIMIT REFORM BILL
C.A.R. is pushing for swift passage of a bill in the Senate calling for increases in loan limits to match median home prices in California and other high-cost areas and the creation of a new regulator to oversee Government Sponsored Enterprises (GSEs), such as Fannie Mae and Freddie Mac.
Vigorous support helped push the measure, HR 1427, through the House in May, but it has since stalled in the Senate. The bill would raise the current maximum size of a conforming mortgage loan from $417,000 to a capped amount at 150 percent of the national limit or $625,500, allowing low- and moderate-income home buyers in high-cost areas better access to low-cost, low-rate fixed mortgages.
C.A.R. President Colleen Badagliacco was recently quoted in a "San Jose Mercury News" story on the issue, saying that a loan of $417,000 "may buy a mansion in Des Moines but it doesn't buy anything in San Jose." http://www.car.org/index.php?id=Mzc2NDQ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CONSTRUCTION SPENDING FALLS 0.4 PERCENT IN JULY
U.S. construction spending fell 0.4 percent in July compared with June, the sharpest decline since January, the Commerce Department said Tuesday. Spending dropped to a seasonally adjusted annual rate of $1,169.1 billion, not the flat showing analysts had predicted for the month. Total residential construction spending in July was down 1.4 percent at $541.9 billion compared with June at $549.7 billion, and $642.2 billion in July 2006. Residential construction figures account for the building industry's worst slump in 16 years and reflect a continued slowdown of construction plans as builders focus on moving stagnant inventories. http://www.census.gov/const/C30/release.pdf ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PENDING HOME SALES INDEX DOWN 12.2 PERCENT IN JULY
Tighter lending practices in the mortgage sector resulted in a 12.2 percent decline in July compared with June in the number of pending home sales contracts, according to the NATIONAL ASSOCIATION OF REALTORS® Pending Home Sales Index. NAR's index, a leading indicator of future existing home sales, shows a reading of 89.9 in July compared with 102.4 in June. The July index is down 16.1 percent from July 2006 when the reading stood at 107.1. "These temporary problems are primarily with jumbo loans, and there are continuing issues for subprime borrowers," said Lawrence Yun, NAR's senior economist. http://www.realtor.org/press_room/news_releases/2007/phs_july07_falls_mortgage_ tightening.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
LONG-TERM MORTGAGE RATES COME DOWN SLIGHTLY
Freddie Mac's Primary Mortgage Market Survey® (PMMS®) shows the 30-year fixed-rate mortgage averaged 6.45 percent for the week ending Aug. 30, down from the previous week when it stood at an average of 6.52 percent. The 30-year FRM averaged 6.44 percent during the same period in 2006.
"Interest rates on conforming long-term fixed-rate mortgages declined slightly, while rates on one-year adjustable rate mortgages increased by about a quarter of a percent," said Frank Nothaft, Freddie Mac vice president and chief economist. "The increase in ARM rates is consistent with movement of the yields on short-term Treasury securities, which have exhibited higher volatility recently due to market uncertainties."
The 15-year fixed-rate mortgage for the week averaged 6.12 percent compared with the previous week at 6.18 percent, and 6.14 percent for the same period a year ago.
http://www.freddiemac.com/dlink/html/PMMS/display/PMMSOutputWk.jsp?week=35&ending=20070830~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Fast Facts
Calif. median home price - June 07: $594,260(Source: C.A.R.) Calif. highest median home price by C.A.R. region June 07: Santa Barbara So. Coast $1,375,000 (Source: C.A.R.) Calif. lowest median home price by C.A.R. region June 07: High Desert $306,310 (Source: C.A.R.) Calif. First-time Buyer Affordability Index - Second Quarter 07: 24 percent (Source: C.A.R.) Mortgage rates - week ending 8/31: 30-yr. fixed: 6.45%; Fees/points: 0.5% 15-yr. fixed: 6.12%; Fees/points: 0.5% 1-yr. adjustable: 5.84%; Fees/points: 0.8% (Source: Freddie Mac) C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing nearly 200,000 REALTORS® statewide. Edited by Mark Giberson Copyright © 2007 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
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