Green Valley and Sahuarita Arizona Real Estate

The purpose of this Real Estate Blog is to keep you informed on changes in the local market, new listings and anything else Real Estate related.

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May 9, 2007, Local Resources for loans, home inspectors and more

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May 8, 2007, Links to our favorite Real Estate related sites.

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May 1, 2007, Sahuarita-Arizona The Place to live and Play.

Real Estate in Sahuarita-Arizona, we offer many properties for sale.

Apr 30, 2007, Green Valley Arizona Homes 4 Sale

Green Valley Arizona Properties 4 Sale, enjoy your retirement living in Green Valley, Az. We have the retirement community in Green Valley you are looking for.

Apr 30, 2007, Video Tour of Green Valley and Sahuarita Arizona Video Home Tours

Your Video Tour of our property listed in Green Valley and Sahuarita Arizona

Mar 14, 2007, What to Expect in the 2007 Housing Market

Unusual weather patterns and problems in the subprime lending marketplace are creating challenges in assessing housing market conditions, but a recovery is...

Mar 13, 2007, Some Subprime Lenders Face Bankruptcy

Big banks and investors that purchased subprime mortgages originated by small lenders over the last couple years are responding to an increase in defaults on the products by ordering the lenders to buy them back.

Mar 13, 2007, NAR: Fannie, Freddie Need Stronger Oversight

A strong regulatory regime that preserves the housing mission of government-sponsored enterprises will strengthen the housing finance system and emphasize the important role housing plays in the nation’s economy, the NATIONAL ASSOCIATION OF REALTORS® testified on Monday...

Mar 8, 2007, Borrowers Hit by Rising Standards, Falling Prices

More and more borrowers in markets where home prices are declining are finding themselves facing foreclosure —...

Mar 1, 2007, "Regional Data: West Has Biggest Sales..."

"Regional Data: West Has Biggest Sales..."

Feb 26, 2007, Condo Prices Dip Slightly

Metro area condominium and cooperative prices — covering changes in 58 markets — show the national median existing condo price was...

Feb 22, 2007, Buyers Responding to Incentives Part 4

While the fourth-quarter statistics provide a snapshot...

Feb 20, 2007, A Look at Long-Term Price Gains Part 3

A Look at Long-Term Price Gains

NAR President Pat Vredevoogd Combs says it’s smart to examine home price trends over...

Feb 16, 2007, Most, Least Expensive Markets Part 2

The most affordable median price for single-family homes was in...

Feb 15, 2007, 4th Quarter Marks 'Bottom of Housing Cycle' Part 1

4th Quarter Marks 'Bottom of Housing Cycle'???

Feb 13, 2007, Home Buyers See Room for Improvement

Home Buyers See Room for Improvement In a recent survey of 219 home owners, 25 percent said next time they buy a home they'll save more money for a down pament and closing costs.

In addition, 25 percent said they'd learn more about the home-buying process before they negotiate; 22 percent said they'd like to purchase a new home instead of an older one; and 21 percent said they'd choose a different neighborhood.

The survey also shed light on some areas where men and women home buyers differ: About 43 percent of women said they didn’t spend enough time shopping for their new home, while 23 percent of men said they spent too much time on the homebuying process.

The survey was conducted by telephone in mid-January for Countrywide Home Loans Inc.

– REALTOR® Magazine Online

Feb 13, 2007, 4 Minor Improvements That Bring Big Results

4 Minor Improvements That Bring Big Results Sellers who refuse to make minor repairs are likely to pay dearly for their stubbornness, says Sid Davis, author of the new book Home Makeovers That Sell.

Here are some of Davis’ suggestions for sellers who want to get the most out of the deal.

Start with the kitchen; it’s the most important room in the house for most buyers. Refacing the cabinets or sanding them and painting them white is often a worthwhile undertaking. If the flooring is in poor condition, replace that too. Update the bath. While paint and flooring help here too, sellers may find spending $200 to replace the mirror and vanity set will net them the greatest payoff. Clean the laundry room. Hire a carpenter to install built-in shelving, repaint and replace worn flooring. Upgrade the light fixtures. Scrub, scrub, scrub. Squeaky clean wows buyers, Davis says. “If people think [a home] is super neat, they'll give [the seller] the benefit of the doubt. If it's dirty, they'll assume it's ridden with hidden defects,'' he says.

Source: The Miami Herald, Ellen James Martin (02/11/2007)

Feb 5, 2007, Increase in "Withdrawn" listings...

There was a pretty big jump in "Withdrawn" listings this month campared to last month. This could be an indication that sellers are waiting for the market to stablize. Some just can't afford to sell their home at current property valuations, without incurring a loss.

Feb 5, 2007, Interest Rates Continue to Move Upward

Interest Rates Continue to Move Upward Freddie Mac reports that the average 30-year fixed mortgage rate rose to 6.34 percent this week from 6.25 a week ago. Meanwhile, the average interest on a 15-year fixed loan climbed to 6.06 percent from 5.98 percent, and five-year hybrid adjustable-rate mortgages drifted up to 6.04 percent from 6 percent during that same time span.

"Interest rates moved higher following the latest upbeat economic news," says Frank Nothaft, Freddie Mac chief economist. He added that while 2006 saw measurable declines in most housing activities, it still ranked as one of the top three years for total home sales on record.

Source: The Wall Street Journal (02/02/07)

Feb 5, 2007, Price Declines?

Price Declines? Not in My Back Yard Most home owners acknowledge that a collapse in housing prices is possible — even likely — in neighborhoods, just not in their own, according to the Experian-Gallup Personal Credit Index. More than 47 percent of those surveyed say that housing prices in their area will increase in the next year.

Eighteen percent of respondents say housing prices in their area will decrease, while 33 percent say they will remain the same, according to the survey, which was conducted in November and December of 2006.

Meanwhile, those surveyed are less optimistic over the longer term. About 16 percent feel a collapse of housing prices is very likely and 31 percent say it is somewhat likely sometime within the next three years.

Expectations for a decrease in average housing prices are greatest in the West (23 percent) and the East (22 percent) — areas experiencing the sharpest run-up in prices during recent years. They are less pronounced, however, in the Midwest (16 percent) and the South (11 percent), according to the survey.

— REALTOR® Magazine Online

Jan 9, 2007, Empty Houses Lead to Lower Prices

Empty Houses Lead to Lower Prices With spring right around the corner, many housing industry experts are hoping the real estate market will see some noticeable improvements.

However, there is one snag that can potentially keep prices down — the large number of vacant homes for sale and rent.

In the third quarter of 2006, there were 5.7 million vacant housing units, accounting for a record 4.6 percent of all U.S. homes, according to the U.S. Census Bureau. The average in the 1990s was about 3.5 percent. To get this ratio back to normal, 1.3 million vacant homes would need to be occupied.

Lots of empty homes pushes home prices downward, says Credit Suisse analyst Ivy Zelman. Owners of unrented, unsold homes must pay for insurance, lawn service, taxes and, often, a mortgage.

Seeing those costs pile up can motivate an owner to sell or rent at much lower prices. When a house sells at a lower price, other would-be buyers expect lower prices as well.

Source: The Wall Street Journal, Justin Lahart (01/08/2007)

Jan 9, 2007, The Most Expensive Home of 2006

The Most Expensive Home of 2006 The most expensive house sold in 2006 was an English-style, 10,000-square-foot Alpine, N.J., mansion with guest cottages, pool, and tennis courts, according to the Institute for Luxury Home Marketing.

The price tag for the 63-acre estate five miles from Manhattan: $58 million. Advanced Photonix CEO Richard Kurtz bought this year’s top seller from Henry Clay Frick II.

In 2005, the priciest house was an ocean-front estate that sold for $70 million to Ron Perelman of Palm Beach, Fla.

The Institute for Luxury Home Marketing estimates — from not-yet-complete data — that 2006 sales of homes priced at $5 million and above were up about 11 percent over 2005. And at least 10 buyers throughout the country were willing to shell out $28 million or more for high-end residences last year.

Source: Dow Jones Business News, Amy Hoak (01/08/07)

Jan 9, 2007, What's Hot and What's Not in Home Design

What's Hot and What's Not in Home Design Mark Nash, the Chicago-based real estate broker who penned 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), has released a list of home features that remain popular among buyers and those that are no longer in vogue. His list is based on responses from more than 900 real estate professionals nationwide.

For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children.

As for what's "in," Nash found buyers are increasingly looking for some of the following features in homes:

Glass bathroom and kitchen tiles. His-and-her home offices complete with fiber-optic cables for Internet connectivity. Wood floors — except for those made of bamboo, which is not as durable. Extra storage space in the form of linen closets, pantries, and luggage rooms.

With a large supply of unsold homes on the market, practitioners note that buyers have become pickier and expect homes to be in move-in condition.

Source: Washington Post, Kirstin Downey (01/06/07)

Jan 4, 2007, Steps for Preventing an Epidemic of Foreclosures

Steps for Preventing an Epidemic of Foreclosures With Colorado leading the country in mortgage foreclosures for most of 2006, lawmakers in the state are looking for ways to curb practices that leave homeowners in financial ruin and neighborhoods in the grip of blight. Lawmakers in other states are looking for solutions to their foreclosure problems, too.

Experts are suggesting a number of steps to authorities to address the factors that lead to foreclosures. Among them:

Restrict risky loans, particularly 100 percent loans that are based on stated income rather than pay stubs.

Restrict deceptive and confusing advertising for loans. Particularly egregious are loans that tout rates “as low as 1 percent for fixed loans,” with the details in fine print explaining that these are one-month teaser rates.

Look at appraisers. Appraisers pushing for a valuation to meet a mortgage broker’s demand are a problem in some cases.

License and train mortgage brokers, and bar brokers with fraud and felony convictions from the business.

Educate buyers and assist them before they end up in foreclosure.

Source: The Denver Post, Greg Griffin, David Olinger, Aldo Svaldi, and Jeff Roberts (12/31/06)

Jan 4, 2007, Mortgage Applications Up Despite ...

Mortgage Applications Up Despite Rates, Holiday Mortgage applicants were busy last week despite the holiday and rising interest rates.

The Market Composite Index, a measure of mortgage loan application volume, on an adjusted basis rose 3.6 percent from the previous week, according to the Mortgage Bankers Association.

On an unadjusted basis, the index was up 6.9 percent compared with the same week a year ago.

The majority of the applicants were for home purchase loans. The Refinance Index increased by 2.2 percent, while the Purchase Index increased by 4.3 percent.

Borrowing costs on 30-year fixed-rate mortgages averaged 6.22 percent, up 0.10 percentage point from the previous week. Rates have climbed steadily for the last four weeks.

Fixed 15-year mortgage rates averaged 5.93 percent, up from 5.84 percent. Rates on one-year adjustable-rate mortgages (ARMs) decreased to 5.84 percent from 5.87 percent.

– REALTOR® Magazine Online

Dec 29, 2006, New-Home Sales Climb in November

New-Home Sales Climb in November Sales of new homes improved in November, rising 3.4 percent last month to a seasonally adjusted annual rate of 1.047 million units, according to the U.S. Department of Commerce.

Economists had been expecting a 1.1 percent gain. The government also revised results from the previous three months to reflect stronger activities.

“It looks like sales activity has truly bottomed out,” said David Seiders, chief economist for the National Association of Home Builders.

The median price of a new home sold last month rose to $251,700, up 3.2 percent from the October level and 5.8 percent higher than a year ago.

Analysts say the increases are due to rising prices in the Northeast and the West. They predicted that prices will decline in the rest of the country in the months ahead because of large builder inventories.

Source: Associated Press (12/28/06)

Dec 29, 2006, Existing-Home Sales Rise Again Part 2

Regionally, existing-home sales in the Northeast increased 6 percent to a level of 1.06 million in November, but were 4.5 percent below November 2005. The median existing-home price in the Northeast was $269,000, down 2.2 percent from a year earlier.

Existing-home sales in the West rose 0.8 percent to an annual pace of 1.32 million in November, but were 17.5 percent lower than a year earlier. The median price in the West was $351,000, down 0.8 percent from November 2005.

Existing-home sales in the Midwest were unchanged in November, holding at a level of 1.42 million, and were 9.6 percent lower than November 2005. The median price in the Midwest was $165,000, which is 3.5 percent below a year ago.

Existing-home sales in the South fell 1.6 percent to an annual sales rate of 2.47 million in November, and were 10.2 percent below a year ago. The median price in the South was $179,000, down 3.2 percent from November 2005.

— NAR-

Dec 29, 2006, Existing-Home Sales Rise Again Part 1

Existing-Home Sales Rise Again Existing-home sales continued to recover last month following a rise in October, with the level of sales activity suggesting a turn in the market, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales — including single-family, townhomes, condominiums, and co-ops — rose 0.6 percent to a seasonally adjusted annual rate of 6.28 million units in November, up from 6.24 million the previous month but 10.7 percent below the 7.03 million-unit pace in November 2005.

“As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007. It looks like we may have reached the low point for the current cycle in September,” says David Lereah, NAR’s chief economist. “We’ve entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down.”

Total housing inventory levels fell 1 percent at the end of November to 3.82 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.

The national median existing-home price for all housing types was $218,000 in November, which is 3.1 percent lower than November 2005 when the median price was $225,000. The median is a typical market price where half of the homes sold for more and half sold for less.

“For every 1 percent drop in home prices, we project an additional 50,000 buyers are drawn into the market,” Lereah says.

According to Freddie Mac, the national average commitment rate for a 30-year, fixed-rate mortgage was 6.24 percent in November, down from 6.36 percent in October; the rate was 6.33 percent in November 2005.

“Mortgage interest rates are the lowest they’ve been since January, and it’s the first time since August of 2005 that interest rates are lower than a year earlier,” says NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “This is increasing buying power at the same time that sellers are showing a willingness to negotiate price and terms. Combined with a plentiful supply of homes on the market, there’s a window for buyers now with conditions that we haven’t seen prior to the beginning of the housing boom in 2001.”

Single-family home sales increased 0.2 percent to a seasonally adjusted annual rate of 5.52 million in November from a pace of 5.51 million in October, but were 10.2 percent lower than the 6.15 million-unit level in November 2005. The median existing single-family home price was $217,200 in November, which is 3.6 percent lower than a year ago.

Existing condominium and cooperative housing sales rose 3.1 percent to a seasonally adjusted annual rate of 757,000 units in November from a downwardly revised 734,000 in October, but were 13.6 percent below the 876,000-unit pace in November 2005. The median existing condo price was $224,600 in November, which is unchanged from a year ago.

Continued

— NAR-

Dec 27, 2006, Single-Family Home Prices Slow...

Single-Family Home Prices Slow to 10-Year Low Single-family home prices rose in October at the lowest rate in nearly 10 years, according to a housing index released yesterday by Standard & Poor’s.

The S&P/Case-Shiller composite index showed a 2.4 percent year-over-year increase in the price of a single-family home based on prices of existing homes tracked over time in 10 metropolitan markets. That is below the 3.7 percent increase posted in September and the slowest since a 2 percent growth rate in February 1997.

Among the weakest performing markets were Detroit, Boston, Cleveland, San Diego, and San Francisco.

Source: Associated Press, Vinnee Tong (12/26/06

Dec 27, 2006, The New Rules for Real Estate: ...

The New Rules for Real Estate: Buy and Hold Property investors obtained large mortgages during the most recent housing boom in the hopes of capitalizing on rapid home-price appreciation by quickly buying and reselling, or "flipping," single-family homes and condominiums. No more.

In the current market downturn, investors are focusing their attention on small rental apartment and commercial buildings, primarily in Texas and other markets where price gains are still anticipated.

Rather than flip these properties, investors are concentrating on cash flow and generating profits over the long term. Developers, especially those in Florida and Philadelphia, are responding to market changes with deals that promise five years' worth of rental income.

Investors accounted for only 8.4 percent of home sales from January through September, according to First American LoanPerformance--down from 9.5 percent during the corresponding period in 2005. In the third quarter, the company reports a 70-percent drop in mortgages to purchase investment homes from the previous July-through-September period. Deerfield, Fla.-based real estate consultant Jack McCabe says investors have largely fled southern Florida, Phoenix, Las Vegas, San Diego, and the District of Columbia--markets where high home prices and a slowdown in sales have made property investments less feasible.

Experts report that single-family homes and condos will experience minimal appreciation during the next five years, and investors who bought during the boom either can sell at a discount or take a moderate loss by holding onto their properties while waiting for the market to pick up.

Source: Wall Street Journal, Ruth Simon (12/24/06)

Dec 22, 2006, Who's to Blame for the Foreclosure Problem?

Who's to Blame for the Foreclosure Problem? Mortgage servicers that collect and record monthly payments and manage insurance and tax payments are getting part of the blame for the onslaught of foreclosures.

"Predatory servicing has attracted little attention, yet in many respects it's more vicious [than predatory lending], and the adverse consequences are more far-ranging," says Jack M. Guttentag, professor of finance emeritus at the University of Pennsylvania's Wharton School.

Predatory practices include failing to credit payments and prematurely initiating foreclosure proceedings. These actions can send struggling home buyers over the edge.

"In the subprime market, it's a huge deal because they're already in a loan that is very expensive. If you live paycheck to paycheck, the penalties of delinquency sink you deeper," says Alfred Ripley, legal counsel for consumer and housing affairs at the North Carolina Justice Center in Raleigh, a nonprofit that helps low-income families statewide.

Source: BusinessWeek, Mara Der Hovanesian (12/22/06)

Dec 20, 2006, Consumers Confident Part 2

Marginal Influence

When asked about the influence of the news media on their decisions of when to buy a home, only 19 percent of the respondents said it played an important role; 23 percent indicated that it had some importance on their decision; and 7 percent said it played a minor role. A full 48 percent said it had no influence whatsoever.

Sixty-one percent of the survey participants rated the media as “sometimes trustworthy” as a source of information on the housing market; 5 percent said that it’s “always trustworthy.” Twenty percent said it’s “seldom trustworthy”; 8 percent said it’s "seldom trustworthy.”

Personal Motivations

Rather than media assessments of the market, personal considerations guide purchase decisions. "When people are actually thinking about buying a home, they’re driven by the details of how it’ll impact their family budget and lifestyle and contribute to their long-term wealth, and that gives them a much closer perspective on the market than what can be conveyed in news coverage," he says.

When asked to rate the importance of factors that might affect their decision to purchase a specific home, 80 percent said price was the most significant factor. Other considerations included:

Potential for the new home to appreciate in value, 71 percent The prospect of selling their current home at a fair price, 70 percent The level of mortgage interest rates, 69 percent Personal life changes 60 percent

The NATIONAL ASSOCIATION OF REALTORS®, too, is touting historically low interest rates as a good reason to buy in an ad campaign it ran in November in The Wall Street Journal, USA Today, and The New York Times, among other major national newspapers.

“Right now may actually be one of the best times to buy a home,” says the campaign, which includes an extensive broadcast component.

Unlike in past periods of cooler sales, NAR says, the national economy is solid, interest rates remain historically low, jobs are being created, demographic trends point to continued strong housing demand, and there’s plenty of inventory for buyers to choose from.

— By Camilla McLaughlin for REALTOR® Magazine Online

Dec 20, 2006, Consumers Confident... Part 1

Consumers Confident in Housing Despite Media Although real estate is receiving more coverage than ever — often negative — a recent survey shows that real estate headlines actually influence only a small percentage of home owners.

Not only do Americans remain highly confident about the nation’s housing prospects, a majority also say their decisions regarding a purchase is based on factors such a price or personal motivations.

A survey of 2,000 homeowners conducted by the National Association of Homebuilders shows that more than four out of five home owners expect the value of their home to appreciate over the next five years and nearly seven out of 10 call a home their most valuable investment.

Only 13 percent felt their home would fall in value, while 4 percent expected no change. Fully 81 percent of home owners surveyed believe the value of their homes will rise over the next five years.

“Although the majority of the households we polled indicated that they found the media a reliable source of information on the housing market, what they read in the newspaper, saw on television, or heard on the radio was no substitute for actually shopping the market,” said Thomas Riehle, a partner in RT Strategies, which conducted the research for NAHB.

This will be continued in a future series.

— By Camilla McLaughlin for REALTOR® Magazine Online

Dec 20, 2006, Massive Fallout Seen From...

Massive Fallout Seen From Subprime Lender Abuses More than two million subprime mortgage loans that lenders made during the boom years are in foreclosure, putting at risk $164 billion in wealth accumulation, the Center for Responsible Lending says in a study.

“We are in the worst foreclosure crisis in modern American history,” Michael Calhoun, the organization’s president, said at a press conference in late December to release the findings.

The study found that, thanks to aggressive tactics by subprime lenders who prey disproportionately on minority households unfamiliar with the financing system but eager to build wealth through homeownership, one in five households with a subprime loan now face losing that home.

“We are talking about unwinding much of a generation’s effort to secure a place in the middle class,” said Calhoun.

One of the biggest problem loans has been what the mortgage industry calls the “exploding ARM,” a loan that after a short low-rate fixed period adjusts upward without regard to the direction in which interest rate indexes are moving. Thus, even if interest rates are heading down these borrowers can face monthly mortgage payment increases, typically in the 30-40 percent range.

Real estate professionals can be in a position to help keep borrowers from getting locked into bad loans, but since the lion’s share of these loans are refinancings, real estate professionals typically don’t have a chance to intervene, said Keith Corbett of the Center for Responsible Lending. “The gatekeeper to the subprime market is the mortgage broker, making recommendations to borrowers, and mortgage brokers are among the least regulated participant in the marketplace,” he said.

Trapped borrowers is a problem NAR had been trying to address with its new series of brochures that practitioners can give to customers warning them to look carefully at all financing options before making a decision.

“We’re encouraging borrowers to contact their real estate professional right away,” said NATIONAL ASSOCIATION OF REALTORS® President Patricia Vredevoogd Combs, who spoke at the press conference. “Borrowers still have an opportunity to salvage their situation by marketing their loan [to an investor]—that is, if they’re not upside down already."

NAR published the brochures in partnership with the Center for Responsible Lending but didn’t participate in CRL’s subprime foreclosure study. You can read the study and access NAR’s brochures online.

— REALTOR® Magazine Online

Dec 19, 2006, Home Builders' Confidence Wanes...

Home Builders' Confidence Wanes Home builder sentiment declined compared to last month, with builder operating margins sliding 723 basis points to an average of 7.8 percent.

The National Association of Home Builders/Wells Fargo index of builder confidence fell to 32 in December, down from 33 in November, according to the association. A reading below 50 means most respondents view conditions as poor.

In a troubling trend, more buyers are walking away after paying nonrefundable deposits: Builders' third quarter cancellation rates topped 42 percent, according to Deutsche Bank. It's more than twice the historical norm.

Wachovia economist Phillip Neuhart blamed this on speculators who, in an unfavorable climate, dropped plans to buy and flip new homes for profit. In response, builders reined in construction and slowed land buys, but still faced inventory creep from cancellations. They responded by cutting prices and offering incentives, which drove down operating margins.

Earlier in the month, some builders expressed hope that the industry was climbing out of its slump, but Neuhart expressed doubt.

"The word 'bottom' to me means that we're coming back up, and we really don't see it that way," Neuhart says. "We might be in a trough, but we could be in that trough for some time."

Source: Investors Business Daily, Jose Gose (12/18/06

Dec 19, 2006, Tax Tips to Help You Save...

Tax Tips to Help You Save Money In-between holiday parties, self-employed real estate professionals should find time to review their finances and examine their tax liability before the end of the year while there's still time to save money.

The following are some things you can do to limit the share you have to give Uncle Sam, advises Gregg Wind, a certified public accountant with Wind Bremer Hockenberg LLP in Los Angeles.

Pay bills now. If it was a very good year but you think 2007 might be worse, accelerate deduction into 2006 by paying the mortgage and other tax-deductible payments early. Pay bills later. Conversely, if 2007 promises to be a banner year, much better than 2006, hold off paying tax-deductible payments. Pay state taxes now. If you calculate that you’ll owe state income taxes for 2006, make the payment by Dec. 31, so you’ll be able to deduct it on the return that you file next year. Were Your Quarterlies Right? Make a final estimate and catch up or you may owe a penalty. Buy a car or purchase office equipment. Whatever you buy has to be put into service by Dec. 31 of this year to be deductible, but you don’t have to pay for it right away. The maximum you can spend and deduct in one year is $108,000.

Source: The Associated Press, Joyce M. Rosenberg (12/13/06)

Dec 18, 2006, Home Prices Drop 20 Percent in Some Markets

Home Prices Drop 20 Percent in Some Markets Home prices are "really down much more" than recent economic reports suggest, says Wells Fargo & Co. Chief Executive Officer Richard Kovacevich.

The U.S. housing market hasn't bottomed yet because generous builder incentives continue to prop up sales and prices. "It's pretty ugly at the moment," Kovacevich told Bloomberg News last week.

He estimates, based on internal data, that about 20 percent of the 375 metropolitan statistical areas in the country are experiencing 20 percent declines in home prices.

But Kovacevich believes next year is going to be better. "There's no way that the housing market is going to be bad if you have 4.4 percent unemployment, 6 percent mortgages, and the economy is growing at 3 percent," he says.

Source: Bloomberg News (12/17/06)

Dec 18, 2006, Real Estate Rebound?

Real Estate Rebound Expected in 2007 Doug Duncan, chief economist for the Mortgage Bankers Association, expects the 30-year mortgage rate to hover around 6.5 percent for the remainder of the year, but climb to 6.8 percent by the end of 2008.

Duncan is "optimistic about a rebound" in the housing market next year, citing still-low long-term interest rates, robust capital expenditures, and rising equity prices, among other factors.

Meanwhile, the NATIONAL ASSOCIATION OF REALTORS® expects existing-home sales to slip to just above 6.4 million in 2007 from an estimated 6.47 million this year. But a pullback in construction will spark an 8.7-percent decline in new-home sales to 975,000 from 1.07 million over the same time span.

The median resale price will likely edge up 1.7 percent to $227,500 next year, and the median new-home price is forecasted to climb 1.3 percent to $241,400.

Source: Inman News, Matt Carter (12/18/06)

Dec 15, 2006, Bargain Hunters ...

Bargain Hunters Eye Home Builders' Stock Investors are rushing to buy the stocks of home builders, most of which dropped like a rock over the last few months and are now appearing — to many analysts — to be a bargain.

The Standard & Poor's Supercomposite Homebuilder Index rose 17.5 percent in the month ending Dec. 6, making it the biggest gain of all 147 S&P groups.

Home builder stocks are rising well ahead of an actual upturn in housing prices because investors don't want to miss the rally.

Source: BusinessWeek, Peter Coy (12/13/2006)

Dec 15, 2006, 30-Year Mortgage Rates Rise Slightly...

30-Year Mortgage Rates Rise Slightly Rates on 30-year mortgages increased for the first time in about a month, rising slightly to an average of 6.12 percent this week from 6.11 percent a week ago. However, they remain close to the 2006 low of 6.10 percent reached during the week ending Jan. 19.

Freddie Mac chief economist Frank Nothaft says the small change was the result of mixed signals from recent data on job growth, retail sales, wage growth, and consumer sentiment. The Federal Reserve held interest rates steady once again this week; and many experts believe the central bank will continue to do so through May or June of next year, with hopes of achieving a soft landing.

Nothaft says he does not think a moderate rise in mortgage rates in the months to come would prevent a rebound in the housing market.

Source: Contra Costa Times (Calif.), Martin Crutsinger (12/15/06)

Dec 14, 2006, Foreclosures Expected to Increase...

Foreclosures Expected to Increase Late payments and foreclosures are likely to grow as another wave of adjustable-rate mortgages reset at higher interest rates, the Mortgage Bankers Association warned yesterday.

Almost 14 percent of sub-prime borrowers with ARMs were behind on their payments last quarter, the highest rate since the start of 2003.

That figure is all but sure to rise next year, when at least $1.2 trillion in ARMs will reset to higher rates. About half that amount is expected to be refinanced into lower-rate fixed or adjustable loans, the association calculates.

Bankers don’t think this will turn into a financial crisis.

“Only 7 percent of all loans out there are sub-prime adjustable loans. We’re talking about a 12 percent delinquency rate on 7 percent of all home mortgages and the foreclosure rate is much lower than that,” says Doug Duncan, MBA’s chief economist.

Others see a problem for the already economically beleaguered segments of the population. “This is really going to hurt the people that experience these delinquencies and foreclosures more-so than the aggregate economy,” says Matthew Moore, economic strategist at Banc of America Securities.

Source: Reuters, Lynn Adler (12/13/06)