Underwater homeowners taking on more water

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Banks are selling more than three times as many distressed homes as builders are selling new ones, and half as many homes as the resale market. With as much as 39 percent slashed off what a similar resale home would cost, the distressed home sector is a real drag on home prices.

by Broderick Perkins
© 2011 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Here's one more nasty little statistic that will make underwater homeowners wheeze for air.

Banks are selling more homes than builders. In fact they are selling more than three times as many distressed homes as builders are selling new ones, according to a recent Hanley Wood Housing Intelligence (HWHI) report.

What's more, the banks' REO (for "real estate owned") homes are selling at deep, deep discounts, with as much as 39 percent slashed off what a similar resale home would cost, according to RadarLogic's latest housing market report.

That's good news for buyers, investors and others who have the cash or can somehow wrench a loan from tight fisted lenders.

Unfortunately, the price plunge is sending homeowners further underwater if they already owe more than their home is worth.

Some economists say the deep discounts on the large volume of distressed properties sent home prices double-dipping this year, at a pace greater then the home price crash of the Great Recession.

HWHI broke down the home sale share for the first quarter 2010 with existing homes comprising 61 percent of the market, REOs accounted for 29 percent of the market and new homes only 10 percent.

For the first quarter this year, REO sales swiped a greater share, apparently getting more resale and new home buyers to join the REO buying crowd -- existing home sales' share dropped to 60 percent, REOs increased to 32 percent and the sale of new home sales also dropped to only 9 percent.

The share of new home sales has been reduced by half since peak times, and the resale share decline by about one-fourth, thanks to the incursion by REOs, according to HWHI.

"Defaults are expected to reach new record highs this year which have buyers holding out for better deals and traditional home sellers battling lowball offers from banks," HWHI reports.

RadarLogic says homeowners suffering negative equity are stuck. Most can't or won't pay lenders the difference between their current mortgage balance and the price for another home, given the new home is likely to lose value.

Other than FHA loans, lenders are tighter than ever, requiring larger down payments and higher credit scores. First-time buyers don't have the stomach for handing over hard-earned money as equity "in an environment where home prices are widely expected to fall over the next 12 to 24 months," RadarLogic reported.

Investors with cash are more willing to take the risk, especially at the bargain basement prices they can get from the REO sector.

"The aggressive pricing on distressed properties is undercutting individual home sellers and new home builders alike, and wreaking havoc on local housing markets," HWHI grimly reported.

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© 2010 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Under the DeadlineNews Group umbrella:

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Real Estate Examiner
• National Consumer News Examiner
• National Offbeat News Examiner

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How much home can you get for $200,000?

Fresno, CA home listed for $200,000

Inventories bulging with discounted properties and historically low interest rates are sending a distinct “buyer’s market” signal to first-timers, move-up buyers and investors alike. But what can you get for the money?

by Broderick Perkins
© 2010 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Inventories bulging with discounted properties and historically low interest rates are sending a distinct “buyer’s market” signal to first-timers, move-up buyers and investors alike.

And it’s not just any buyer’s market, but one of the most affordable ever.

Knowing buyers sometimes need a little push, Move Inc.'s MortgageMatch.com went shopping, based on the median price of homes listed on Move Inc.'s Realtor.com web site.

Read "How Much Home Will $200K Buy?" to get the details.


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© 2010 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!" now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Under the DeadlineNews Group umbrella:

Perkins is managing editor of HomeAway.com's Gulf Coast Response Center.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Real Estate Examiner
• National Consumer News Examiner
• National Offbeat News Examiner

Other DeadlineNews Group Feeds are available from DeadlineNews.Com.

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Home buying secrets for the 'Average Joe'

We've gone offbeat!
Quick! Click my head!

First, do your homework before you buy. Review the prices of comparable homes in the neighborhood, which can be found on websites such as Zillow.com, PropertyShark.com, StreetEasy.com, HouseValues.com, Trulia.com and others. Keep in mind these numbers sometimes trail the market by several months. A real estate agent can provide the latest sales data.

by Broderick Perkins
© 2010 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom -
New York City attorney Edward A. Mermelstein is, well, a big shot in the Big Apple -- but he hasn't forgotten the little guy.

Co-founder of the international, multilingual (11 languages) real estate law firm Edward A. Mermelstein & Associates, he's also got an office in Moscow and offers legal services to financial and real estate institutions, including representation for international transactions, business litigation, dispute resolution and insurance matters.

Clients include international conglomerates, start-up ventures and entrepreneurs, multi-national corporations, land charitable organizations, government officials and others, but he also offers insight for the 'Average Joe' -- home buyers who need all the help they can get right now.

Mermelstein's "Home Buying Secrets for the 'Average Joe' " are a timely example of his insight for buyers.

First, do your homework before you buy. Review the prices of comparable homes in the neighborhood, which can be found on websites such as Zillow.com, PropertyShark.com, StreetEasy.com, HouseValues.com, Trulia.com and others. Keep in mind these numbers sometimes trail the market by several months. A real estate agent can provide the latest sales data.

More tips include curing your credit, bidding low, getting a 'Lucky 7' loan, getting pre-approved, considering a newly built home, inspections, appraisals, negotiating tips and more.

Get the full list of tips here: "Home buying secrets for the 'Average Joe' "


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© 2010 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
• National Consumer News Examiner
• National Real Estate Examiner

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Silicon Valley Price Fall Spreads

Silicon Valley's high-end home sales that once buoyed the median home price for many months are shrinking as California's last bastion of rising prices buckles under relentless market pressure. But more lower end homes are selling too.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - Roll back the clock about two years on Silicon Valley's housing market.

California's last major metro holdout in price increases has hit the wall -- hard.

Since the market peaked a year ago, prices are down 11.5 percent, according to the Bay Area Market Newsletter, produced by Creekside Realty broker, Richard Calhoun from San Jose.

Silicon Valley's median price on single-family homes in closed sales is back where it was two years ago and a whopping $100,000 less than it was when the market peaked a year ago, Calhoun reported.

The region's April median price for single-family homes came in at $768,000. Two years ago it was $775,000. That median price peaked at about $868,000 a year ago.

For condos, the median price came in at about $496,000 in April this year. Two years ago it was $500,000.

The market's overall price decline indicates the high-end sectors is feeling the pinch. Starter home prices have been declining for nearly a year, but stronger high-end home sales had helped buoy the median price.

Robert Aldana of LetsTalkRealEstate.com says another factor pushing down the median price is a growing share of lower-end homes being sold to investors and first-time buyers looking to cash in on foreclosures, short sales and generally cheaper priced homes.

Sales in general, however, remain flat at levels not seen in 10 years.

Calhoun said the 1,124 homes sold in April is the third lowest April home sales level since 1998.

Silicon Valley is nearly a full-blown buyer's market where sellers get an average of only 98 percent of their asking price, compared to more than 100 percent during April in 2006 and April 2007.

That, along with stiff lending requirements thwarting buyers, increasing foreclosures and other market conditions, is pushing prices down.

Zillow.com recently reported half of home buyers who purchased in 2006 owe more than their homes are worth. The darker the red, in the graph above, the more homeowners are in the dark with upside down mortgages.

Zillow.com also said in about a quarter of the region, the less-populated areas of the northwest, where home prices are higher, home prices are down no more than 3 percent. In the other, greater, more heavily populated areas in the region, where homes are cheaper, some home prices are down by 20 percent or more. The deeper the blue, in the graph above, the deeper the price declines.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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Reverse Migration Favoring Buyers

A reverse migration shift is taking the pricing pressure off some markets and that could give more buyers an incentive to get off the fence. Here's how to cash in on the shift.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - Reverse migration patterns are stacking the deck in buyers' favor in some housing markets.

A spillover effect from hot markets, a half decade ago, spread sellers' joy to more affordable areas outside big boom markets, but they also created affordability issues for buyers who were forced to seek housing further and further from job centers.

California sent buyers to Nevada and other Western states; Washington, D.C. sent buyers as far out as West Virginia, for example. New England buyers moved inland. The South boomed.

Now, based on U.S. Census figures, a reversal of that pattern is leaving behind sufficient inventories to allow those areas to maintain a supply of affordable homes and their status as more balanced or "normal" markets.

If only there was a supply of money to finance even affordable housing these days. The Federal Reserve's recent announcement that it is prepared to lower benchmark rates again, later this month, gives some hope.

Meanwhile, "the D.C. region has, in short, become a microcosm of the nation's reaction to the housing bust. Like in Nevada and Arizona, the market for the region's suburban buyers is drying up due to the credit crunch, and construction and in-migration is stalling," according to Brookings Institution's "Housing Bust Shatters State Migration Patterns".

For buyers "normal" means they don't hold all the cards, but the deck is stacked in their favor.

Here's how to get a winning hand without bluffing.

• Learn the game. Obtaining general knowledge about the home-buying process and the real estate market is a relatively easy task. A glut of information available on the Internet, from free real estate industry-sponsored seminars and workshops and through a vast library of real estate guide books can give you a real edge.

• Check the table. Real estate markets are local. That means so is a buyers' market. It can be designated by a small community, larger region or greater geographic area. A buyers' market is typically spotty occurring in some neighborhoods and not others or first in one area and then spreading to others. In any event, a buyers' market tends to include high inventories, slow appreciation, flat or falling prices and more sellers than buyers. The area might also suffer from general economic distress. Part of your homework should include learning the boundaries of your buyers' market. The larger the area, the greater your bargaining power.

• Don't deal from the bottom of the deck. In a buyers' market, buyers who don't educate themselves about prices and markets tend to low-ball sellers and ask for too many concessions. Even in a buyers' market, that will only alienate the seller, especially those less motivated with top-value homes. The seller will simply look elsewhere for a more reasonable buyer.

• Don't give away your hand. Paying sellers' market prices in a buyers' market is a common mistake buyers make, especially at the onset of a buyers' market. The mistake could leave you with a home that immediately loses value. Home buyers should make the same price checks a seller makes to price it right -- get comparables, track sale prices in your shopping area, use the local newspaper, online listing and for sale sites and other sources, to keep tabs on asking prices. Also visit open houses. Use a real estate agent schooled in the history of market trends and statistics.

• Play smart. Buy the least expensive house on the best block. Buy into the least expensive neighborhood in the best community. Buy into the least expensive city in the best region. The cheapest home in a neighborhood, community or region in transition will give you the greatest return on your investment, especially when the market rebounds.

• Play with a full deck. Don't let a false sense of power overcome you. Even motivated sellers aren't going to wait around for your money to show up. Get your credit report checked and in order. Get your loan preapproved. Lock in your mortgage rate. Don't shop for a home without them.

• Play for keeps. Buy because you need a home, not because it's a buyers' market. Buy with plans to stay put for a while and enjoy the appreciation end of your investment. It's also a keepers' market.

"We're at the beginning of a leveling off of migration between unaffordable and affordable America. As with the broader economy, we don't know how much longer it will last," Brookings reported.

Related stories "Affordable Housing Markets Get Boom Spillover," "Americans Migrating For Cheaper Housing," and "Where'd Everybody Go?" are all available in DeadlineNews.Com's "Boom and Bust" National Housing Market section.

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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