News reports have been packed with stories about declining home values, but a recent government report shows that the situation is not nearly so dire as some reports make it sound.

Despite big loses in some areas of the country, the majority of markets continue to show growth in home value over the last five years.

According to the third-quarter survey released by the Federal Housing Finance Agency, out of 292 metropolitan markets, 273 showed positive net home values in the last five years. Only 19 percent were negative.

While home values declined 4 percent on average in the last year, values were up nearly 29 percent over the past five years.

According to the Federal Housing Finance Agency, markets that gained the most over the last five years were:

Honolulu: up 78.7 percent
Virginia Beach: 72.6 percent
Flagstaff, Ariz.: 66.5 percent
Bellingham, Wash.: 65.6 percent
Wilmington, N.C.: 62.1 percent
Baltimore: 60.6 percent

Source: The Washington Post Writers Group, Kenneth R. Harney, (12/06/08)

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas.

Brokers Seeing Declining Inventory, More Pending Sales

RISMEDIA, Dec. 22, 2008-In comparison to six months ago, over half of member brokers responding to a recent Leading Real Estate Companies of the World® “Housing Beat” survey are reporting one bit of good news with declining housing inventory in their markets. And while only nine percent are seeing an increase in closings, 26% are experiencing more pending sales (homes under contract but not yet closed), although many of those contracts are for foreclosure properties.

Meanwhile, nearly a third of brokers are seeing more open house and website activity, and 54% are seeing much more flexibility from banks in responding to short sale inquiries.

An unusually high figure of nearly 90% of brokers are experiencing more activity with first-time buyers, with only 22% reporting the same for “move-up” buyers and 14% for high-end buyers. In many markets, there are rising sales to investors who are taking advantage of opportunities by buying at bargain-basement prices.

Some 72% of LeadingRE respondents believe that the original allocation of government funds to provide credit relief to banks was necessary, although most qualified their responses with a strong tone of frustration by noting that the disposition of the funds has been poorly managed with minimal favorable impact on local markets.

As always, real estate is very local, so comments on markets run the gamut, from those who believe the housing market will begin rebounding in the third quarter of 2009, to those who believe that will not occur until late 2010. While sales are down across the board, there are a number of cities which still have not seen any significant price depreciation. And in areas where prices are down, most brokers believe it is a natural correction that must be allowed to run its course and that real estate professionals who best serve their clients are being very realistic when properly valuing properties.

Based on demographics of the large Gen X and Gen Y populations, coupled with rising pent-up demand of buyers who are remaining on the sidelines due to fears of more housing woes to come, many brokers believe that there is strong light at the end of this proverbial tunnel, and that those who take advantage of the buying opportunities that currently exist will be the beneficiaries in years to come.

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas.

RISMEDIA, Dec. 23, 2008-HOPE NOW, the private sector alliance of mortgage servicers, counselors, and investors that has been working aggressively to prevent foreclosures and keep homeowners in their homes, has announced that it expects to double the number of foreclosures prevented in 2009 by enhancing and expanding its very successful 2008 efforts.

HOPE NOW’s success is evident from the total 2008 results it can now project based on the actual 11-month data it is reporting now:

- A projected total of approximately 2.2 million foreclosure preventions

- Almost 950,000 mortgage modifications

- More than 20,000 homeowners helped at 29 workshops held across the United States
- More than 1 million total calls from homeowners to the Hope Hotline.

- An average of more than 7,000 calls per day to the Hope Hotline that was available 24 hours a day, 7 days a week, and 365 days a year.

- 2.9 million letters sent to at-risk homeowners

- An 18% response rate to the letters sent by HOPE NOW to at-risk homeowners, 6 times more than the typical response rate servicers receive when they send their own mailings.

In addition to these numerical achievements, in 2008 HOPE NOW also accomplished two important procedural milestones that have greatly expedited the foreclosure prevention process:

- In June, HOPE NOW members agreed to a set of guidelines that, among other things, committed servicers to a much faster and simplified foreclosure prevention process. The guidelines also established the first-ever agreement for dealing with second liens, which until then had been a major sticking point in the foreclosure prevention process.

- In November, HOPE NOW worked with Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency to create the Streamlined Modification Program (SMP), a much faster modification approval process for the most at-risk homeowners that went into effect December 15.

“No one did more to prevent foreclosures in 2008 than HOPE NOW,” said Faith Schwartz, HOPE NOW’s executive director. “But, because there’s more to do, in 2009 HOPE NOW is going to substantially expand its already successful efforts to make it even easier for at-risk homeowners to avoid foreclosure.”

HOPE NOW’s 2009 plans include:

- An expected doubling of the number of modifications from the already high 2008 level. This will result an increased capacity of servicers to handle modification requests, the streamlined modification program, and the commitment by major institutions to modify loans on purchased portfolios. Depending on unemployment and other economic conditions, this could increase the number of modifications to 2 million or more next year.

- At least 30 additional homeowner workshops

- At least a 50% increase in the number of homeowners who attend workshops

- Additional innovative ways to provide counseling and other assistance to homeowners such as phone-a-thons

- A major Web-based initiative that will supplement the existing ability of homeowners to begin the foreclosure prevention process through the Hope Hotline

- A very important and extremely visible enhancement to HOPE NOW’s existing efforts to reach at-risk homeowners that by itself could double or triple the number of homeowners helped by HOPE NOW

- Significantly enhanced loan-level data that will help the industry further analyze trends and make necessary adjustments to help prevent foreclosures and provide policymakers with important additional information.

“HOPE NOW deserves a great deal of credit for the nearly 3 million foreclosures it will have prevented by the end of 2008,” said Steve Bartlett, president and CEO of the Financial Services Roundtable. “The weak U.S. economy will present additional problems in 2009 and HOPE NOW’s success this year will be the solid foundation needed to meet those challenges,” he said.

“The mortgage lending industry has shown enormous flexibility and commitment in the face of this past year’s constantly changing economic outlook,” said John Courson, chief operating officer of the Mortgage Bankers Association. “The plans HOPE NOW has for 2009 demonstrate clearly that the whole mortgage lending industry will continue to serve the needs of homeowners no matter what the situation,” he added.

Colleen Hernandez, president and executive director of the Homeownership Preservation Foundation, which owns and operates the Hope Hotline, said that the 2008 results prove that phone counseling of homeowners is extremely effective. “The Hope Hotline was the only mortgage counseling service that was available to homeowners this year whenever they wanted or needed to call,” she said. “That level and quality of service will be needed even more in 2009.”

November Foreclosure Prevention Results

HOPE NOW also announced that the mortgage industry prevented 208,000 foreclosures in November 2008 and a total of 651,000 in September, October, and November. This is the highest three-month total since HOPE NOW began to compile data in July 2007.

The November results, which are a slight change from the 225,000 foreclosure preventions completed in October, is the result of the five fewer working days in that month. The number of foreclosure preventions per day was greater in November than it was in October.

Approximately 2 million foreclosures have been prevented by the mortgage lending industry in the first 11 months of 2008, 25% more than the approximately 1.5 million prevented in all of 2007. If the current trend continues, in 2008 the mortgage lending industry will prevent approximately 2.2 million foreclosures, 45% more than in 2007.

November was the third consecutive month that total modifications exceeded 100,000. Since HOPE NOW began to compile data, over 1 million modifications have been completed, including a projected 950,000 in 2008.

Over the past three months, the number of modifications has increased by almost 29%, while the number of payment plans has increased by almost 6%. This increasing reliance on modifications rather than payment plans is expected to continue as economic conditions warrant.

The HOPE NOW November data also shows:

- For the first time, HOPE NOW members and the broader mortgage lending industry prevented more than 200,000 foreclosures in three consecutive months.

- Almost 30% of the homeowners with prime loans who received workouts in November received modifications.

- Nearly 62% of the homeowners with subprime loans who received workouts in November received modifications.

- The number of foreclosures started in November was 16,000 less than the number started in October.

 
- For the sixth month in a row, the number of foreclosure starts for prime loans exceeded those for subprime.

For more information, visit www.hopenow.com.

Commentary by James Crumbaugh III

RISMEDIA, Dec. 10, 2008-I’m always accused of being overly optimistic about the real estate market. You have to understand that after 35 + years in the business, everything is just a cycle to me and when we go through a cycle like we’ve been going through, then my thoughts become “How long will the cycle last?”

RISMEDIA, Dec. 11, 2008-RealtyTrac®, an online marketplace for foreclosure properties, released its November 2008 U.S. Foreclosure Market ReportTM, which shows foreclosure filings - default notices, auction sale notices and bank repossessions - were reported on 259,085 U.S. properties during the month, a 7 percent decrease from the previous month but still up 28 percent from November 2007. The report also shows one in every 488 U.S. housing units received a foreclosure filing in November.

According to the company, RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

“Foreclosure activity in November hit the lowest level we’ve seen since June thanks in part to recently enacted laws that have extended the foreclosure process in some states, along with more aggressive loan modification programs and self-imposed holiday foreclosure moratoriums introduced by some lenders,” said James J. Saccacio, chief executive officer of RealtyTrac. “There are several indications, however, that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months.

“Delinquencies on loans not yet in the foreclosure process jumped to nearly 7 percent in the third quarter, a record high, according to the Mortgage Bankers Association,” Saccacio continued. “And more than half of the homeowners who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again, according to the U.S. Office of Thrift Supervision. Many of these delinquencies could turn into foreclosures next year.”

Nevada, Florida, Arizona post top state foreclosure rates

Nevada foreclosure activity in November decreased nearly 4 percent from the previous month, but the state maintained the nation’s No. 1 foreclosure rate, with one in every 76 housing units receiving a foreclosure filing during the month - more than six times the national average. Foreclosure filings were reported on 13,962 Nevada properties, up 109 percent from November 2007.

Florida foreclosure activity in November was also down from the previous month, but the state’s foreclosure rate moved up to the No. 2 spot thanks to an even bigger monthly decrease in Arizona. One in every 173 Florida housing units received a foreclosure filing during the month, nearly three times the national average.

With one in every 198 housing units receiving a foreclosure filing, Arizona posted the nation’s third highest foreclosure rate in November despite a nearly 25 percent decrease in foreclosure activity from the previous month. Foreclosure filings were reported on 13,136 Arizona properties during the month, up nearly 128 percent from November 2008.

Other states with foreclosure rates ranking among the top 10 were California, Michigan, Georgia, Ohio, Colorado, Utah and Idaho.

California, Florida, Michigan post highest foreclosure totals

Foreclosure filings were reported on 60,491 California properties in November, the most of any state and a 6 percent increase from the previous month following two consecutive monthly decreases. The state’s foreclosure activity was up 51 percent from November 2007, and one in every 218 housing units received a foreclosure filing during the month - more than twice the national average.

Despite a 9% decrease in foreclosure activity from the previous month, Florida continued to post the nation’s second highest number of properties with foreclosure filings - 49,190. The state’s foreclosure activity was still up 68 percent from November 2007.

Michigan foreclosure activity in November increased 28 percent from the previous month, giving the state 14,594 properties with foreclosure filings during the month - the nation’s third highest state total. Michigan’s foreclosure activity was up 27 percent from November 2007, and the state’s foreclosure rate ranked fifth highest in the nation for the month.

Nevada, Arizona, Ohio, Georgia, Illinois, Texas and Virginia also reported foreclosure totals that were among the nation’s 10 highest.

California and Florida cities account for nine of Top 10 metro foreclosure rates

With one in every 59 housing units receiving a foreclosure filing in November, Cape Coral-Fort Myers, Fla., posted the highest metropolitan foreclosure rate among the 230 metro areas tracked in the report. Two other Florida cities ranked among the top 10 in terms of foreclosure rate: Fort Lauderdale at No. 7, with one in every 117 housing units receiving a foreclosure filing; and Port Lucie-Fort Pierce at No. 8, with one in every 118 housing units receiving a foreclosure filing.

Las Vegas was the only city not in Florida or California with a foreclosure rate that ranked among the top 10. One in every 61 Las Vegas housing units received a foreclosure filing in November, the second highest metro foreclosure rate.

California accounted for the remainder of the top 10 metro foreclosure rates. Merced was at No. 3, with one in every 76 housing units receiving a foreclosure filing; Modesto was at No. 4, with one in every 93 housing units receiving a foreclosure filing; Stockton was at No. 5, with one in every 94 housing units receiving a foreclosure filing; Riverside-San Bernardino was at No. 6, with one in every 107 housing units receiving a foreclosure filing; Bakersfield was at No. 9, with one in every 129 housing units receiving a foreclosure filing; and Vallejo-Fairfield was at No. 10, with one in every 133 housing units receiving a foreclosure filing.

The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the month - broken out by type of filing at the state and national level. Data is also available at the individual county level. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default - Notice of Default (NOD) and Lis Pendens (LIS); Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month or quarter, only the most recent filing is counted in the report. The report also checks if the same type of document was filed against a property in a previous month or quarter. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.

House Prices Must Return to Trend Levels to Stabilize Market

The report, “The Key to Stabilizing House Prices: Bring Them Down,” notes that prices are still hugely out of line with trend levels in bubble markets and calls for Fannie Mae and Freddie Mac to restrict the buying of mortgages in these areas. This would lead to fewer loans being issued in these markets and prices would quickly adjust to normal levels.

“Most policy analysts failed the public by missing the housing bubble,” said report author and CEPR Co-Director Dean Baker. “By simply limiting the flow of capital into bubble-inflated markets, the GSEs have the opportunity to bring stability back to the housing market by helping prices return to trend levels.”

The report, which draws on data from the Case- Shiller Index, emphasizes that house prices used in mortgage appraisals should be based on rental values to avoid over-valuation. The fact that real house prices exploded by 80% from 1996 to 2006 while rents increased by only 4% over the same time period points to a degree of speculation and the fact that prices still have further to fall before the bubble deflates.

If Fannie and Freddie no longer supported the purchases of homes at bubble-inflated prices, there would be a quick price decline of 20 to 30% in the most over-valued markets. After this drop, homebuyers need be less fearful of further price declines, both boosting demand and reducing vacancy rates. At the same time, the consequent flow of loans into non-bubble markets would help prevent a downward price spiral in these areas and avert the risk of overshooting on the negative side.

“A rapid return to trend levels is significant for homeowners in that it gives them a sense of how their home equity figures into their real wealth and how they have to adjust their consumption and saving decisions,” said Baker. “This is even more important for the huge cohort of baby boomers rapidly approaching retirement who may find that they have little or no wealth to support them in retirement beyond Social Security.”

For those faced with foreclosure due in part to falling home prices, the best solution is one that amends the rules on foreclose to give homeowners the right to rent their home at the market rate. This would have the dual effect of keeping families in their houses and give bankers an incentive to renegotiate terms by making foreclosure an even less attractive option.

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas.

RISMEDIA, Dec. 5, 2008-IHS Global Insight, a leading company for economic and financial analysis and forecasting, today released the third-quarter 2008 update of the U.S. housing valuation analysis, House Prices in America, showing that single-family U.S. home prices fell at a faster pace across a wide area of the country - after moderating earlier in the year - and are now 6.5% below their 2007 peak. House prices fell at a 6.9% annualized pace, affecting 241 of the 330 analyzed metropolitan areas, up from 150 metro areas in the second-quarter 2008. For the United States as a whole, the housing market is now slightly undervalued. When weighted by market value, the nation is 3.8% undervalued; when weighted by housing units, it is 5.7% undervalued.

While the contraction in residential real estate value is national in scope, it is most severe in the Southeast and Southwest, areas which were among the most overvalued in the country three years ago. According to the third-quarter analysis, extreme overvaluation is now “essentially nonexistent” - only three metro areas met the definition of extreme overvaluation, down from a peak of 52 metro areas in 2005. Only the Pacific Northwest remains overvalued.

According to the analysis, the overhang of unsold properties trending downward during the third quarter, and demand picking up slightly, the accelerated pace of depreciation likely reflects financing conditions that became increasingly stringent and expensive during this period. Recent policy responses, from the Federal Reserve in particular, to purchase mortgage-backed securities are not likely to have a significant impact until next year.

Home prices fell more than 10% in the third quarter in nine central California communities. The Central Valley communities of Merced, Stockton, and Modesto have seen property values fall to less than half their 2005 value. Twenty-nine metro areas in California, Florida, and Nevada - at one time among the most overvalued - have seen price declines in excess of 30%. Similar steep price drops are also occurring in Michigan, northeast Ohio, the southern metro areas from Charlotte to Atlanta, as well as in New England.

The incidence of extreme overvaluation has become negligible; only Atlantic City, New Jersey; Bend, Oregon; and St. George, Utah met the criteria. Overvalued markets are mainly located in the Pacific Northwest, extending to Utah. Southern metro areas from Mississippi to Texas remain generally undervalued.

Jeannine Cataldi, senior economist and manager of IHS Global Insight’s Regional Real Estate Service, added, “Weak economic conditions and wary consumers continue to hold the housing market back. Although many areas are seeing home sales increase, it is largely due to foreclosure homes being snapped up at significantly discounted prices. As the inventory of these homes is removed from the market, prices will remain on a downward path.”

James Diffley, group managing director of IHS Global Insight’s Regional Services Group, said, “With no end in sight to the downward spiral of house prices, it is likely that long anticipated market correction will now overshoot fundamental valuations on the downside.”
The House Prices in America study, a joint effort by IHS Global Insight and National City Corporation, examines the top 330 U.S. real estate markets, representing 78% of all existing housing units and 86% of all related real estate value, to determine what home prices should be, accounting for differences in population density, relative income levels, interest rates, and historically observed market premiums or discounts. Markets with valuation premiums above 35% were deemed at risk for price corrections based on the typical degree of overvaluation that preceded the 79 known local market price declines observed since 1985.

House Prices in America combines a statistical model originally developed by Richard DeKaser, chief economist at National City Corporation (www.nationalcity.com/housevaluation) with data largely developed at IHS Global Insight.

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas.

RISMEDIA, Nov. 28, 2008-One in four baby boom generation households (26%) expects to move from their current home in the future, with the majority looking for a single-level home that is more comfortable or convenient, according to a new survey prepared for AARP.

Echoing past surveys, most boomers (79%) say they would like to stay in their current home for as long as possible. Some - less than 10% — said they would like to stay in their current home but don’t think they will be able to do so.

Many of those who expect to move said they will be looking for a better house, a better climate or a home that is closer to family and friends. More than half of those boomers (age 45-64) planning to move expect to look for a home that’s all on one level (59%). About half said they will look for a newer home (50%) or a smaller home (49%).

The poll conducted by Opinion Research Corporation for AARP was released to coincide with the announcement of the 2008 Livable Communities Awards from AARP and the National Association of Home Builders (NAHB) honoring innovative thinking in the field of home and community design.

Older boomers are significantly more likely than younger boomers to think that they will move into a single level home (68% vs. 54% of those planning to move), but age is not the only factor that affects expectations. Boomer men are more likely than women to believe they will move into a newer home (61% vs. 42%) or move into a home in a warmer or better climate (41% vs. 25%) Boomer women are more likely than men to think they will move into a smaller home (54% v. 41%).

“While boomers will reflect the patterns of earlier generations and mostly age in place,” said Elinor Ginzler, senior vice president of AARP, “the sheer number of boomers will increase demand for a whole variety of home and community options. The 2008 Livable Communities Award winners offer some great examples of appealing, user-friendly design.” The number of persons age 65 and older is expected grow to 70 million by 2030.

“The winners of the 2008 Livable Communities Awards have clearly taken note of the increasing demand for more accessible, livable homes and communities, and are on the leading edge of change,” said Sandy Dunn, Chairman of the Board of NAHB and a home builder from Point Pleasant, W.Va. “The trend-setting homes and communities we honor with the 2008 Livable Communities Awards meet the demands of both today and tomorrow’s homeowners by combining easy living with inviting design.”

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas.