Realtors Lower 2007-2010 Home-Sales Estimates by 14%

I like to know how many standard deviations this is wrong.  This is a BIG error.

The Realtors’ new figures also show 2008 was the worst year for home sales during the housing bust, with only 4.11 million sold, down 16% from the previous estimate of 4.91 million.

Home sales for the first 10 months of this year were also revised downward. October’s sales pace was lowered to a rate of about 4.25 million sales per year, from an original estimate, from an original level of 4.97 million.

Yun cited several reasons for the group’s sales revisions. The group’s reports were “not matching up with other housing-related data,” he said.

The Realtors group, he said, was overcompensating for sales that were not recorded through the regional and local real estate listing services from which the group gets its data. Those “multiple-listing services” have consolidated in recent years, giving them more coverage of local housing markets.

Other factors leading to the downward revision included a decline in “for sale by owner” transactions that were completed without a real estate agent, some new-home sales also being reported by real estate listing services and some sales being reported on more than one listing service.

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Home building spikes higher

Yes, but it's a minor spike, this is not 2007 again.

Home building spiked up in November to the strongest level in almost two years, as record-low mortgage rates and a surge in apartment and condo construction lifted activity.

Housing starts shot up to an annual rate of 685,000 in the month, up 9.3% from October and 24.3% higher than a year earlier. Building activity easily topped predictions of 627,000 starts economists surveyed by Briefing.com were expecting.

Building permits, a closely-watched reading that is less affected by weather than actual starts, also shot up, rising 5.7% from October and 20.7% from the year before to 681,000 homes annually.

"By historical standards, homebuilding activity is still very depressed, but at least it appears to be on an established upward trend," said Paul Diggle, property economist at Capital Economics.

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NAR: We Overcounted Home Sales for Five Years

Oops...

The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.

"All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.

"We're capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list."

This is companies like CoreLogic, DataQuick, and other have become popular.  They less juice in the game.

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Profile of today's homebuyer

 This can't be the sign of a healthy market.

What stood out to me was that home buyers are:

• Older
• Have higher incomes
• Are more likely to be married

Naturally, those who can afford to spend more are generally older and have higher incomes.  In fact, the median age for overall home buyers rose from 39 to 43.  The number of married couples buying homes rose 6 percent, while purchases by singles and unmarried couples were slightly down.

And what about new stricter mortgage standards called a Qualified Residential Mortgage (QRM)

The effect of QRM regulation would be to raise down payments to 20 percent to meet the requirements of a qualified residential mortgage.  This would disproportionately affect first-time and minority borrowers.

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Farmland prices in the Midwest soar

Surveys released by the Kansas City and Chicago Federal Reserves Tuesday find that despite a struggling U.S. housing market, agricultural land in their districts is booming. And the run-up in prices may have yet to peak, they said.

"District farmland values surged to a record high in the third quarter," the Kansas City survey said. "Cropland values rose more than 25 percent over the past year, and ranchland values increased 14 percent."

In particular, Nebraska experienced exceptionally strong gains in the Kansas City District due to bumper crops -- especially productive seasons for certain crops -- reporting a roughly 40% rise in farmland prices from one year ago.

A similar bubble occurred in the 80's, then it prices popped.

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Mortgaged homes closer to 50% underwater: Olick CNBC housing maven

From the CNBC housing maven

On US totals, if you figure average house prices use conforming loan balances, then a repeat buyer has to have roughly 10 percent down to buy in addition to the 6 percent Realtor fee to sell. Thus, the effective negative equity target would be 85%. You also have to factor in secondary financing, which most measures leave out.

Based on that, over 50 percent of all mortgaged households in the US are effectively underwater — unable to sell for enough to pay a Realtor and put a down payment on a new purchase without coming out of pocket. Because repeat buyers have always carried the market as the foundation, this is why demand has not come back. It's as if half the potential buyers in America died over a two-year period of time.

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Home-buying season the worst in at least 50 years

The home-buying season was a bust.

March through August are typically the peak buying months. But this time, Americans bought fewer new homes in that stretch than in any other six-month period since record-keeping began a half-century ago.

And sales of previously occupied homes didn't fare much better. They nearly matched 2009's total for the peak buying months. And that was the worst since 1997.

Combined, total sales this spring and summer were the weakest on records dating to 1963. The figures underscore how badly the housing market is faring and suggest that a recovery is years away.

And it's going be a rough couple of years

Nationally, prices are still falling. Prices for previously occupied homes have sunk more than 5 percent over the past year to a median of $168,300. New-home prices have fallen even further, by 7.7 percent, to $209,100.

That suggests builders and Realtors are slashing prices to compete with low-priced foreclosures and short sales. Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage.

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Homeowners who want to trade up are stuck waiting

There is a simple graph from CalculatedRisk.  Only 38% of home owners with mortgages have equity in their homes.  You can't be a trade up buyer if don't have equity that will allow you a significant down payment.

Potential move-up buyers like the Mors are largely sitting on the sidelines these days, leaving a key part of the housing market stuck in neutral. The promise of rising prices and upward mobility, once a powerful force in the American housing narrative, has been all but shattered by the downturn.

"The move-up market is a conveyor belt, and everyone moves up a rung, but that has kind of gotten gummed up during the housing recession," said Stan Humphries, chief economist of the real estate website Zillow.

Although there is no way to precisely to track move-up buyers, such shoppers often are looking in the $300,000-to-$800,000 price range, according to San Diego real estate research firm DataQuick.

And it help out my argument

Lower-cost starter homes, which bore the worst of the subprime mortgage fallout and often are in less established neighborhoods, made up the bulk of sales since prices began falling four years ago. First-time buyers are competing with investors who pay cash to scoop up properties on the cheap to renovate and resell them for profit or hold on to them for rental income.

Finding the money to go upscale is another problem.

Many first-time buyers have been able to finance their purchases with government-guaranteed mortgages allowing for very small down payments. But requirements for these loans are more stringent for repeat buyers. In addition, banks' lending criteria have tightened significantly since the boom years, real estate agents and economists said, and so-called jumbo and adjustable-rate loans remain difficult to secure.

The loss of home equity also is keeping homeowners tied to their properties, economists said. More than 1 in 5 Americans with mortgages on their properties owe more than their homes are worth, according to Santa Ana research firm CoreLogic.

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June Existing-Home Sales Slip on 300% increase of Contract Cancellations

This is National Association of Realtors, so there is always a positive spin.

Existing-home sales eased in June as contract cancellations spiked unexpectedly, although prices were up slightly, according to the National Association of Realtors®.

Sales gains in the Midwest and South were offset by declines in the Northeast and West. Single-family home sales were stable while the condo sector weakened.

Total existing-home sales¹, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June from 4.81 million in May, and remain 8.8 percent below the 5.23 million unit level in June 2010, which was the scheduled closing deadline for the home buyer tax credit.

Lawrence Yun, NAR chief economist, said this is an uneven recovery. “Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month,” he said. “The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year.”

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Bloomberg: Housing Recovery Stymied by Government

This is good article that explains the current status and lending and homebuyer. The article points out that the government forcing stricter standards on lending, however these standard are just returning to pre-bubble underwriting norm.

Fannie Mae and Freddie Mac, seized by the U.S. during the closing months of the Bush administration in 2008, have tightened more than a dozen mortgage qualifications since then, including those for down payments and credit scores. The restrictions come after the government handed out $16.2 billion in homebuyer tax credits to pump up demand and the Federal Reserve bought more than $1 trillion of mortgage bonds to lower borrowing costs.

The Fed on June 22 lowered its estimate for 2011 economic growth to a range of 2.7 percent to 2.9 percent from the 3.1 percent to 3.3 percent it projected in April, citing the residential real estate market as a factor. Housing is “a big reason that the current recovery is less vigorous than we would like,” Chairman Ben S. Bernanke said in a speech last month.

“The government is working at cross-purposes,” said Doug Bandow, a senior fellow at the Cato Institute, a libertarian policy-research center in Washington. “There’s been a desperate attempt to reinflate housing by throwing money at the problem. The worst time to tighten lending is after doing that.”

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Pimco’s Simon: There Was Never a Housing Recovery

Please read the article this guy is a housing bear.  I've seen some bad predictions, but his are the some of the most negative.  I think his predictions are well founded, he helped his firm avoid the problems in the housing downturn, before it happened.

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Private Mortgage Insurance (PMI) is in financial trouble.

This is a long article, but a friend wanted me to post it.  It's states that the current big three companies that exclusive underwrite PMI are in trouble.  However, it say if other companies will replacement them if no longer could write insurance.

The next domino likely to topple is the so-called private-mortgage-insurance industry, which permits buyers to purchase homes without making a full 20% down payment. Private mortgage insurance covers the first 25% of a mortgage's value against default, plus accrued interest. Some $700 billion of U.S. mortgages carry such insurance, with most of it owned by Fannie Mae and Freddie Mac and backed by the federal government.

The most at risk are the three companies that specialize almost exclusively in the coverage: MGIC Investment (NYSE: MTG - News), Radian Group (NYSE: RDN - News) and PMI Group (NYSE: PMI - News). The other chief participants in the industry—Genworth, United Guaranty and Republic Mortgage Insurance—have the distinct advantage of having corporate parents with diversified business lines and more financial resources with which to buttress their businesses

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Case-Shiller Index up slightly in April

It's still down compared to April 2010.   I think you saw a slight uptick in April compared to March due 1) lower mortgage rates 2) the middle of the buying season.

Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

Prices rose in 13 of the 20 cities tracked by the Standard & Poor's/Case-Shiller home-price index, according to the April report released Tuesday. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent. It marked the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

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One in 10 NYC mortgages in serious delinquency

Is this going to foreshadow what is going to happen to the beach, westside, and south Orange County areas of California?

One of every 10 New York City mortgages were 90 days delinquent or in foreclosure as of the end of the first quarter, according to a study released by the New York Federal Reserve.

The NY Fed studied data on roughly 483,000 mortgages. The ratio of seriously delinquent loans did vary by borough. In Manhattan for instance, one in 50 mortgages were in serious delinquency. But in Brooklyn and the Bronx, one in eight loans fell into serious trouble.

New York, a judicial foreclosure state, experienced a backlog of roughly 80,000 foreclosure cases. Each property a bank repossessed in March spent an average 900 days in the system. An October rule change for banking attorneys kept the caseload from ballooning to as high as 100,000 by the end of the summer. By March, though, with the rule in place for about six months, the courts whittled the backlog down to 74,000.

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Some area residents learning the hard way: Pay homeowner's association or else

Tom and Patrice Sherhag's foreclosure began with a missed quarterly HOA payment of $75 in October.

The assessment due to the Palmetto Pines Homeowners Association in unincorporated Boca Raton grew to $318 by the end of November, a charge that by then included a $25 late fee, a $35 "processing fee," 18 percent interest and $175 in attorneys' fees.

In January, the association filed a lien for the original $75 on the Sherhags' home and despite subsequent checks written for hundreds of dollars, snowballing court and attorneys costs have since upped the final bill to an estimated $4,605.

The actual debt owed the association: $80.25.

While homeowners associations are wielding foreclosures more often as a way to collect from delinquent owners, South Florida attorneys said it's still unusual for that kind of court action to be initiated on a minor debt.

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May new home sales fall 2.1%

New home sales have problematic, since 2008.  With so much inventory in on the market, it will be long time before new home sales grow.

Sales of new single-family homes fell 2.1% in May to 319,000 units from a revised figure of 326,000 units the previous month.

The May rate is 13.5% above 281,000 a year earlier, the Census Bureau and Department of Housing and Urban Development concluded in their latest report. Sales continue to climb after reaching the lowest level ever in February.

Analysts with Econoday said May sales figures are not as bad as previously forecasted, adding "supply in terms of months dipped slightly to 6.2 months from 6.3 in April and 6.9 in March." A survey by Econoday produced a consensus estimate of 305,000 new homes sales for May with a range of estimates from 288,000 to 345,000.

"Bumping along the very bottom is a good description for the new home sales market and for the residential market in general, which, of course, is bad news for homebuilders, construction workers and Realtors but may be good news for bargain-hunting buyers who are creditworthy or cash rich," Econoday analysts said Thursday.

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U.S. Existing-Home Sales Hit Six-Month Low

Another horrible report in the selling season of homes.

Sales of existing U.S. homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy.

Purchases of existing homes fell 3.8 percent to a 4.81 million annual pace last month, in line with the 4.8 million median estimate in a Bloomberg News survey of economists, data from the National Association of Realtors showed today in Washington. The median sales price declined from a year earlier and 31 percent of transactions were of distressed dwellings.

Another sign of tight credit?

Of all purchases, cash transactions accounted for about 30 percent, NAR chief economist Lawrence Yun said in a news conference today as the figures were released. The Realtors group began tracking the monthly figure in August 2008, and the share on a yearly basis before that was around 10 percent, Yun has said.

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California to suffer housing shift, UCLA forecasters say

Please Note: UCLA has been very wrong in the past.  That's why they don't reprint their past prognostications.

The state's population is also skewing younger, meaning there will be more demand for urban rental units and less demand for suburban cul-de-sacs, according to the quarterly economic forecast released Wednesday by UCLA's Anderson School of Business.

"The incremental demand for housing is moving more into multifamily housing," said Jerry Nickelsburg, senior economist with the forecast. "Many of the younger generation have been buffeted by the boom and bust in the housing market, and see value in living closer to work."

That's bad news for the state economy, however, for two reasons. One is that construction of multifamily homes requires less labor than construction of single-family homes. Second, areas such as the Inland Empire and Central Valley that were hit hardest by the housing bust won't get a construction boom to help pull them out of the economic doldrums.

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US Housing Crisis Is Now Worse Than Great Depression

I think to be fair, before the Great Depression was a unprecedented housing bubble.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

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no housing recovery before 2015: RealityTrac

Their are finally people in the Real Estate Industry starting to come to terms on what is happening in the housing market.  Again 2015 prediction is the optimal outlook.

It will take at least another year to work through the glut of REO inventory in the market and yet to come to market, according to Rick Sharga, senior vice president of RealtyTrac.

Speaking at HousingWire's 2011 REO Expo in Fort Worth, Texas, Sharga said the housing market is years away from full recovery, and he expects 2012 and 2013 to look similar to this year as the industry grapples with levels of distressed properties never seen before.

 And what the lending industry can do help housing return to a normal market.

Sharga believes lenders and servicers can mitigate the number of foreclosures through potentially extending teaser rates, possibly pushing loan maturities to 40 years, and maybe even principal reductions.

He said many of these homeowners face the tough decision of whether or not to strategically default on their mortgage, as they owe more than the home is worth.

"There is an abundance of uncertainty in the market, as many people are waiting for the other show to drop," Sharga said.

A note on principal reduction.  If the bank is only the mortgage servicer and not the owner of the Note, then they are probably not authorized to do a principal reduction on the mortgage.

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