Archive for the ‘Home Statistics’ Category
Housing Crash Robs Senior Citizens
The worst housing market since the Great Depression is taking a huge toll on senior citizens in this country. The crash in housing values, especially in retirement haven’s such as Nevada, Florida, California and Arizona, is robbing these long, hard working Americans of their retirement and adequate health care.
While most people believe that seniors have no mortgage on their homes, the reality is that hundreds of thousands of retiree’s owe money on their homes. Even for those lucky enough to own their house outright, the unprecedented drop in home values means they have less equity to live on or exchange for a move to retirement housing or health care facilities.
- According to the AARP, 25.5 million people over the age of 50 have a mortgage on their home. More than 680,000 (which represents 30 percent of all distressed property) baby boomers are deliquent on their mortgage or are in the process of foreclosure.
- Many seniors have little saved, other than the equity in their homes. 36 percent of all retiree’s state that their savings and investment nest egg is less than $25,000, excluding home equity and benefit plans.
- Seniors banked on rising home prices and leveraged their primary asset through equity loans and reverse mortgages. Those that leveraged assets to afford retirement owe an average of $150,000 on their houses.
- Retirement communities and long term care facilities are suffering from the housing market, too. Seniors usually sell their homes to finance admission into senior housing facilities. Dire market conditions often mean no sale at all, or one at substantially discounted prices. Many people are left with no choice or options, forcing them to cancel plans to move to housing that fits their changing needs.
Although seniors and retiree’s are often overlooked in the news, the housing and stock market crash have taken a huge toll on their lives and well being. Most have worked all their lives to build secure nest eggs for their golden years, only to discover that half a lifetime of work and savings vanished in the blink of an eye.
Click Here to Read More from USA Today
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Sellers Should Lower Price Expectations
In light of a new wave of foreclosures and distressed property sales, home seller’s may need to lower their expectations about home asking prices.
Recent reports find that nearly one in every four current home sellers (not seller’s of bank owned property) have dropped asking prices an average of 10.6 percent from their original listing price. In dollar terms, that is equal to another $27.4 BILLION, yes BILLION, slash in the equity of US homes. Ouch!
The good news for home seller’s is that higher interest rates and a rapidly approaching deadline for an $8000 tax credit is creating urgency among buyers. A recent uptick in sales proves that homes priced aggressively are selling very fast. But, homes priced above the competition continue to sit and languish on the market for months on end. Simply put, there is great demand in the market now…at the right price. Seller’s may need to sharpen their pencils, but buyers are actively purchasing homes.
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Sales of Existing Homes Increases. Bottom in Sight
Sales for existing homes increased nearly 3 percent, on average, in April, slightly exceeding forecasts and expectations. The report offered hope that home sales were stabilizing and we may be at the bottom of the housing recession. Watch the short 1 minute video for more information about your local and national housing market.
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New Programs Help Homeowner’s Avoid Foreclosure
On Thursday, the government announced two programs that may help thousands of homeowners that are sinking in debt avoid foreclosure.
Treasury Secretary, Tim Geithner, said “Today we are announcing a new program component to help homeowners obtain modifications in areas suffering from price declines. If a modification is not possible, we are announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future.” Geithner went on to say that, “These are critical steps in stemming the foreclosure crisis and stabilizing the housing market, both of which are critical to your economic recovery”
The Program in a Nutshell:
- Foreclosure Alternatives: The program increases the odds of closing a short sale by streamlining the process and offering incentives to lenders for participation. The program is designed for homeowners who are eligible for a loan modification, but can not qualify for one. Under the new program, lenders may receive compensation up to $1000 for completing a short sale. Borrower’s may receive up to $1500 for relocation expenses. Holders of 2nd mortgages will receive up to $1000, if they agree to the terms of a short sale.
Why This New Program May Help:
- A short sale is the last step before foreclosure, and is far less costly for lenders and borrowers. Selling short is less damaging to the homeowners credit and they are less costly for banks and lenders. Survey results show that losses from short sales average 19 percent versus losses of 40 percent in the case of foreclosure.
- Currently, more than 75 percent of short sale contracts fall apart, despite sometimes heroic efforts on the part of the borrower. Lenders have for the most part been uncooperative when responding to offers on short sales, which means the properties sit vacant and pull down values in the entire area.
- The new program may provide a much needed boost to the current Making a Home Affordable program. Despite good intentions, the program has only helped 55,000 homeowner’s modify their loans. In comparison, there were 342,000 foreclosure filings in the month of April, alone.
Stop The Sinking Feeling. If you are struggling to pay your mortgage or you are falling behind on your payments…CALL YOUR LENDER TODAY!! Don’t procrastinate, the problem will only become larger if you wait. You may also waste valuable time in stopping a foreclosure on your property, which is the worst case scenario for borrower and lender alike.
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Don’t be Duped by Real Estate Loan Scams
In a bad economy, housing con’s, scams and fraud are on the rise. The increase in real estate related scams is up so much this year that the Obama administration is involved, and promises “We will shut down fraudulent companies more quickly”.
Here are some of the most common scams seen in the housing industry and tips about how to protect yourself and your family.
Promise to Stall or Halt Foreclosure
Foreclosure scammers are the worst of the worst. Like vultures, they swope down to pick at the flesh and bones of weak and vulnerable. These companies promise to stall, avert or stop the foreclosure process. Many families which are facing the loss of their homes interupt their “pitch” as an answered prayer. Don’t Fall for It.
Homeowner’s can identify these companies because they always ask for an upfront fee for their service. In addition to losing thousands of dollars to these con men, the victims also waste precious time in working with their lenders, which means that this scam can actually speed up the foreclosure process.
Homeowner’s are advised to check with the Better Business Bureau, their lender and the Hope Now organization, before doing business with any company promising the stop a Foreclosure.
Loan Modificiation
The state of California issued permits to real estate agents for loan modifications. The state now has almost 600 Realtors, so far, that can collect upfront fee’s for negotiating loan modifications and short sales with lenders on behalf of the homeowner.
We have heard reports that some of these companies charge $2500-$3000 to negotiate with lenders, saying they provide more service and expertise than overworked non-profits do.
Consumers should ALWAYS be on High Alert if they are ask to pay upfront fee’s to anyone, especially when the service provider can not guarantee results. There are a lot of starving real estate agents out there, so beware and always verify credentials before paying for any upfront service.
Where to go for Real Help.
- Homeowner Preservation Foundation. 1-888-995-4673
- Hope Now Website Link
- Making Home Affordable. gov Website Link
- Your Lender
- Beware: Don’t be fooled into working with companies because they have official sounding names and copy cat websites. The government recently shut down 5 companies and issued warning letters to 71 others who are operating under names that sound legit, but aren’t.
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Condo and Homeowner Associations in Trouble
Foreclosures and loan delinquency’s wreck havoc on the budgets of Homeowner’s Associations (HOA’s) across the country.
Many condominium communities are glutted with nonpaying units that swamp their operating budgets, force cutbacks on promised services and increase monthly dues for owners who are paying their mortgage and association dues.
Crisis In Florida:
In Florida, the land of the condo dweller, things are spinning out of control for HOA’s and property owners. As a result, Florida constituents are turning to legislators for an help they can provide.
Under the current system in Florida and other states, lenders can avoid paying homeowner’s fee’s until they foreclose and become the owner of the unit. Lenders face a continuing avalanche of foreclosures and loan defaults, which means that up to 2 or more years can pass before the property transfer gets through the court system.
During the lengthy legal process, homeowners often continue living in the units, using the ammenities and facilities for free. Some even rent the units for income, after they have stopped making payments on the property. Many associations are forced to cover the costs of water, cable, laundry, lawn and pool maintenance and garbage collection for paying and non-paying owner’s alike. To make up for the added expenses, paying unit owner’s have to foot the bill or the entire association goes down.
And, things get even more complicated. Some banks stall on taking title to units because they have a cap that limits the amount of past-due fee’s they have to repay to 6 months or 1 percent of the original loan amount. Some luxury condo associations report that some units have as much as $50,000 in unpaid fee’s by the time the bank takes ownership.
Downward Spiral:
Lenders are also denying financing for financially unstable buildings, which essentially means the property can not be sold, even if a buyer is found. In January, mortgage giant Fannie Mae said it would no longer fund loans in buildings if more than 15 percent of the units were 30 or more days past due with their association fee’s.
The problem has reached a crisis point for many HOA’s that are struggling to cover basic utilites such as water and electricity. If they raise fee’s on paying owners for the shortfalls, they risk pushing even more residents into delinquency. Most owners are already upside down on the property and they simply can not afford a higher payment.
Renting out units could offset loses, but rentals are usually prohibited or they are limited to a very small percentage of the number of units in the complex. Furthermore, lenders such as Fannie Mae also deny funding for buildings that are less than 51 percent owner occupied. So, raising money with rent income does not appear to be a viable solution, nor does it maintain the quality of life for the paying residents.
The housing crisis has uncovered many problems that we have never encountered before, but the number of failing HOA’s is an imminent crisis. Unfortunately, it isn’t simple
and if solving it isn’t done correctly, more permanent damage may occur.
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Sellers and Realtors Disagree on Home Pricing
Results from a study just released by HomeGain revealed an ongoing ’tug of war’ between home sellers and real estate agents. According to the survey, 50 percent of homeowners said their houses should be priced 10-20 percent higher than agents have recommended. Conversely, 60 percent of real estate agents reported that prospective buyers are telling them that home asking prices are still too high.
One thing we can learn from this study is that one of these groups is certainly wrong. Either home owners are unrealistic about what their houses are worth or agents are too pessimistic about what the home will sell for.
On one hand, agent’s have more knowledge about the market than the average home seller does and they do talk with buyer’s every day. Yet, real estate agents have an incentive to push prices lower. The lower the price, the faster the sale, the quicker they can ring the cash register and move on to the next deal. So, what should a home seller do???
- Ask 3 real estate agents what they would list your home for. Ask questions and understand the reasoning behind their different price recommendations.
- Know your competition. Check out every house that is for sale in your area, price and size range. Visit Open Houses to verify the condition and ammenities being offered by the competition. Use InfoTubes and InfoBoxes on for sale signs to gain helpful insight about homes for sale in your neighborhood. Explore property MLS listings on Realtor.com.
- Visit New Home Subdivisions. All things being equal, most buyers would chose a new home over a pre-owned home, if everything was equal. Find out how builders are pricing new homes that are similar to yours. Keep in mind that builders also offer thousands of dollars in incentives or special financing, and they include these things in their asking prices. Try to learn everything you can from the builder and deduct the incentives and specials that you can’t match from their asking price to get a realistic look.
- Visit your county property tax database. Most counties provide sales and comparable home information online. Your local taxing department is the final authority about what homes actually sold for.
Remember that homes are selling every day, if they are priced right. While seller’s want to hold out for the best offer, agents want to make quick sales. The real truth about asking versus selling prices lies somewhere in between, so home seller’s need to check their facts, first.
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First-Time Buyers Dominate Housing Market
Mega real estate website, Realtor.com (owned by Move Inc), released survey results which showed that 54 percent of the people planning to purchase a home this year are first-time home buyers. This is good news for home sellers because first-time buyers do not have another property they have to sell.
In a press release statement, Steve Berkowitz, CEO of Move, Inc had more encouraging news. “It’s not all doom and gloom” said Berkowitz. “We found Americans are optimistic about homeownership despite concerns.” He blamed the surge in first time buyer interest on the housing crash…”has created significant demand for homeownership especially among first-time buyers,” Berkowitz continued.
Home seller’s, builders and real estate agents can use this information to their advantage when marketing property. For example, half (50%) of the first time buyer’s polled had not heard about the $8000 tax credit, so be sure to make them aware of it. Every little bit of information helps, as most first timers are scared about timing.
Some more interesting facts about marketing to First-Time Buyer is:
- Most prefer more space, or more house for the dollar, over all other amenities. Be sure to price your home to be the best house for the money.
- Other options that appeal to first time homeowners are energy saving features, such as energy star appliances, insulation, home improvements and upgrades; a bigger yard or outdoor entertaining area; updated amenities. Emphasize the features in your home that address these popular “wish list” items.
- A better location was also on the wish list for first timers. If your property is located in a convenient, safe and social area of the city, be sure to let them know what is nearby. You may want to visit walkscore.com and post your walkscore rating on your advertising.
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Good news for Sellers. Housing Sales Increase.
Sales of existing homes rose to their highest levels since 2003. Watch the short video from CNBC for a synopsis of the latest housing numbers from across the nation.









