Real Estate News
30-Year Rates Dip Back Below 5 Percent
Freddie Mac documented a decline in mortgage rates during the week ended March 4, with 30-year fixed home loans slipping to 4.97 percent from 5.05 percent and 15-year interest averaging 4.33 percent.
Also, the Mortgage Bankers Association reported that its index of home loan applications jumped 15 percent during the week ended Feb. 26. Refinancing activity was up 17 percent, and purchase demand rose 9 percent.
Source: Kansas City Star (03/05/10)
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More Underwater Commercial Borrowers Walk
An increasing number of commercial borrowers are walking away from their loans. In most cases, mortgages on commercial property are non-recourse loans, so the lender or investor has no further claim on the borrower’s assets.
“Frankly, I am surprised that we have not seen a lot more,” said Rob Little, chief investment officer of Cornerstone Real Estate Advisers LLC.
While most borrowers attempt to work out a deal to manage the debt and remain owners in order to profit when times are better, if a property is deeply underwater, and the cost of modification is too high, “then it can make sense to walk away,” says Aaron Bryson, an analyst with Barclays Capital.
Source: Wall Street Journal, Prabha Natarajan (03/10/2010)
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Aiken Trials kicks off the Triple Crown
The 68th edition of the Aiken Trials will once again feature Thoroughbred racing’s stars of tomorrow as well as veteran campaigners looking to return to form at the racetrack this spring.
The first leg of the Aiken Triple Crown will be held Saturday, with gates opening at 10 a.m. The race card will be composed of six contests and will be conducted at the Aiken Training Track, a public training facility located on Two Notch Road. Post time for the first race is 2 p.m.
The safe, controlled and family-oriented environment attracts people of all ages, who have an opportunity to experience the excitement of Thoroughbred racing.
The day’s activities will feature a carriage parade at 1 p.m. The races will also feature a Polo Pony race sponsored by the Aiken Horse.
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Foreclosed Borrowers May Get Loans Again
Will people who currently face foreclosure or short sales or who walk away from their underwater properties ever be able to get financing to buy another home down the road?
Banks haven’t been very forthcoming on this issue. However, knowledgeable observers of the situation say that while it may take some time, the situation will right itself for most people.
Because bankrupt borrowers have eliminated their debts, they should “constitute attractive fodder for mortgage lenders,” says University of Michigan law professor John Pottow, whose specialty is bankruptcy.
As home prices and the mortgage market stabilize, lenders will be motivated to lend to people who previously had financial troubles if they look like they can pay the next time around, says Alan Riegler, a consultant with CCG Catalyst, which advises banks.
“The lender who figures out how to do more of this case-by-case stuff cost-effectively is going to end up ahead of the pack,” Riegler says.
Source: Inman News, Matt Carter (03/05/2010)
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Head of FDIC Supports Loan Write-Downs
The possibility of solving the underwater mortgage problem by writing down principal has been deemed politically impossible by the Obama administration, but some government officials see write-downs as the best long-term solution.
One of the most outspoken supporters of write-downs is Federal Deposit Insurance Chair Sheila Bair. This week, she called underwater mortgages a continuing problem and said the FDIC is “actively looking” at ways to encourage principal write-downs in the deals it does to facilitate acquisitions of failed banks.
Overall, Bair was positive about housing finance. “After three long and difficult years for housing and mortgage finance, I think we’re seeing some progress in stabilizing our housing markets,” she said.
Source: Reuters News, Karey Wutkowski (03/04/2010)
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Beige Book Reports Economy Is Improving
The Federal Reserve’s Beige Book survey of national economic conditions reported that the economy is improving.
Bad weather was blamed for slow home sales and construction in New York, Philadelphia, and Atlanta. The Fed also reported sluggish lending with banks still cautious and borrowers reluctant to take out big loans.
Home and condo sales were up in Boston, Cleveland Kansas City, Dallas, and San Francisco.
Source: Associated Press, Jeannine Aversa (03/03/2010)
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Survey Shows Frustration With HAMP
Real estate practitioners mostly gave the Obama administration’s Home Affordable Modification Program (HAMP) a thumbs-down, according to a report from Market Pulse Survey for Homes & Land.
Only 10 percent of the respondents — 51 percent of whom had been in the business for at least 10 years — believed the administration’s program had done any good. Sixty-five percent said they didn’t think the program was working; and the remaining 25 percent weren’t sure.
“Clearly respondents to our survey don’t believe this program is helping to reduce foreclosures,” says Eric Adair, business development analyst for Homes & Land.
Source: Inman News (03/03/2010)
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Lower Rates Boost Mortgage Applications
Mortgage applications rose 14.6 percent last week on a seasonally adjusted basis compared with the previous week. They were up 15.5 percent on an unadjusted basis.
Much of the increase was in refinances as rates dropped below 5 percent, although the purchase index increased 11.7 percent compared with the previous week and was just 9.8 percent lower than the same week one year ago.
“Purchase activity remains subdued, with application volumes remaining within the narrow range seen in the last few months,” said Michael Fratantoni, MBA’s vice president of research and economics.
Both 30- and 15-year fixed-rate mortgages were below 5 percent:
• 30-year fixed-rate mortgages decreased to 4.95 percent from 5.03 percent.
• 15-year fixed-rate mortgages decreased to 4.27 percent from 4.35 percent.
• 1-year ARMs decreased to 6.77 percent from 6.80 percent.
Source: Mortgage Bankers Association (03/03/2010)
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Obama Takes Licks From HAMP Critics
Congressional lawmakers on both sides of the aisle took potshots at the Obama administration’s latest efforts to fix the Home Affordable Modification Program (HAMP).
President Obama announced last week that he was allotting $1.5 billion to assist local housing finance agencies in the states with the most foreclosures: California, Florida, Nevada, Arizona, and Michigan.
Democratic Congresswoman Marcy Kaptur of Ohio said this week that the program might be “doomed to failure” and added that having the Treasury Department run the program doesn’t make sense because Treasury doesn’t have any housing expertise.
Another skeptic: Democratic U.S. Rep. Dennis Kucinich, chair of the House Oversight and Government Reform subcommittee on domestic policy. He told Treasury representatives, “You’re going to have to do more. This is a wake-up call.”
Source: The Wall Street Journal, Judith Burns, and Reuters News, Corbett B. Daly (02/25/2010)
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Pending Home Sales Down
Pending home sales are down and additional declines are expected from abnormal weather conditions, according to the National Association of REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009, when it was 80.5.
Lawrence Yun, NAR chief economist, said weather is likely to impact housing data. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” he said.
As such, abnormal swings are expected in housing data. “We will see weak near-term sales followed by a likely surge of existing-home sales in April, May, and June,” Yun said. “The real question is what happens in the second half of the year. If there is sufficient job creation, housing can become self-sustaining with stable to modestly rising home prices because inventory has been trending downward.”
Here’s a look at pending home sales numbers by region:
• Northeast: Pending home sales fell 8.7 percent to 71.3 in January, but are 20.5 percent higher than January 2009.
• Midwest: The index dropped 8.9 percent to 81.2 but is 11.8 percent above a year ago.
• South: Pending home sales slipped 2.1 percent to an index of 98.1, but the index is 18.0 percent higher than January 2009.
• West: The index dropped 13.2 percent to 102.9 but is 1.4 percent above a year ago.
— NAR
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Aiken City to discuss traffic lights, parking
Aiken City Council members will discuss two downtown traffic issues during tonight’s City Council meeting.
Council members will hear from officials from the S.C. Department of Transportation concerning recent changes to traffic signals downtown.
SCDOT will present a “Plan B” to fix issues that have stemmed from the installation of the new system a week ago. The changes are said to have been done to address safety issues when traveling through downtown; however, many drivers have complained about the congestion the system has created.
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Home, Garden Tour scheduled for March 27
The St. Thaddeus Home and Garden Tour has been set for Saturday, March 27 from 10 a.m. until 5 p.m.
This year’s tour features several of Aiken’s oldest homes and gardens, restored and renewed, as well as newer homes built in a historic setting.
Later, visitors may stop by the Heritage Market and choose from a selection of vintage linens and other spring gift ideas while they enjoy afternoon tea in the St. Thaddeus Tea Garden followed by a tour of the historic church and the churchyard.
Tickets will be available today and are $25 for individual tickets and $20 for groups of 15 or more.
They will be available in Aiken at Material Things, York Cottage Antiques, Plum Pudding and The St. Thaddeus Church Office, 129 Pendleton Street, Aiken.
For more information, contact the church office at 648-5497 or visit www.stthaddeus.org. Tickets may also be purchased from the website.
This year’s tour is held in conjunction with Aiken’s yearlong 175th anniversary celebration Celebrate Aiken. Proceeds benefit local outreach projects.
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Two art exhibits open for March
The USC Aiken Etherredge Center is home to two new art exhibits during the month of March. There will be an opening reception held on Monday from 6:30 until 8 p.m.
Columbia artist Michael Dwyer’s abstract work is on display in the upper gallery, and Louisiana artist Troy Wingard’s pastel and gold life creations are on exhibit in the lower level gallery.
Both artists were hand-selected by gallery director Anne Bliss for their unique styles. Bliss’ goal is to introduce gallery visitors to a diverse collection of works.
Dwyer, exhibition designer and preparator at the Columbia Museum of Art, comes from a family of artists and grew up with a passion for art.
“As a kid, I loved visiting my dad’s studio. I liked the spattered dishevelment, the smell of paint, and the paintings that I couldn’t fully understand, but instinctively got in the process of coming to life. I knew at an early age that this was something I wanted to pursue,” Dwyer wrote in his artist statement.
His work is abstract and comes from a belief “that in any visual art, there are abstract elements which need to function well for the work to succeed.”
Dwyer will be present to discuss his work at the opening reception.
Wingard, foundations coordinator for the Department of Visual Art at Southeastern Louisiana University, works in pastel and gold leaf to create portraits that feel like you are staring at a photograph. The subjects are so real, you can feel them staring at you from the canvas. His work has been described as “paintings and drawings that address questions centering on individualism and the shared experiences of others.”
“It has been my attempt to capture the subtle expressiveness of the human figure and reinforce the image with my own symbolism for creating not just an accurate representation of form, but an artifact that radiates with the understanding of how important and unique my experiences are to me,” said Wingard in an artist statement.
The reception is free and open to the public. The Etherredge Center is located on the USC Aiken campus.
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A visit with a Humane Education classroom
By CHRISSEY MILLER Aiken SPCA volunteer coordinator
The Aiken SPCA Humane Education program teaches kindness to animals, responsible pet ownership, and (get this!) writing and math skills, as well as character education.
The Humane Education volunteers provide an engaging experience for elementary school students. Most of the volunteers teaching the lessons have past experience as educators, so they are able to sneak in educational skills under the diversion of a well-behaved furry friend. Kids love it. Teachers love it. Animals love it. Everybody wins.
The formal program consists of seven guided classroom lessons once a month over the course of the school year. A typical lesson discusses and demonstrates topics such as safety around animals or responsible pet care, and uses writing, reading, math and character education to reinforce the lesson. The SPCA also brings Humane Education to the schools in assembly format or other occasional visits agreed upon or requested by the schools.
Last Wednesday, the SPCA visited Chukker Creek Elementary School with the Kiwanis Club’s K-Kids. Angela Boyette, a Kiwanis representative and a volunteer at the SPCA, coordinated the event. Volunteer Joan Irvine brought her four-legged pal Abby, a one-time shelter dog. Chrissey Miller, volunteer coordinator for the SPCA, presented the program to an audience of 200, wherein one student, MacKenzie Swearingen, became a “dog for a day.”
MacKenzie, er “Patches,” was then cared for by her fellow students. They gave her a collar, complete with rabies vaccine, name, microchip and dog park tags. They brushed her coat, sprayed her for fleas and ticks and gave her heartworm medicine. They even wrapped her in a bandage to signify that she had been spayed. The program encouraged audience participation, asking and answering questions, and repeating new vocabulary words such as “external parasite” and “distemper.”
The children participated in a math exercise demonstrating how one puppy could beget as many as 100 pups within 18 months if pet owners choose not to spay or neuter. Finally, the kids were given information about volunteering with parents at the SPCA and Jr. SPCA.
There are a number of other schools in the Aiken area that are participating in the Humane Education program. Millbrook Elementary School recently had the SPCA in attendance for Family Enrichment Night. Last Friday, kindergartners at Mead Hall collected items for the SPCA and were visited by Shelter Dog and Shelter Kitty. Other elementary schools often kick off or close these presentations with food drives benefiting the animals at the shelter and fostering responsibility to the community in the children themselves.
The Aiken SPCA is making arrangements to meet its goal of taking the formal program into every elementary school in Aiken County. If you can help through a donation of time, money or materials, or if you are interested in bringing this program to your school, call Chrissey Miller at the Aiken SPCA at 648-6863.
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Freddie Mac Posts More Losses
Freddie Mac recorded a loss of $7.8 billion in the last three months of 2009, narrowed from a year-earlier loss of $23.9 billion; and it lost $25.7 billion for all of last year, down from a $50.1 billion loss in 2008.
Still, the mortgage financier — which received $51 billion in aid from the federal government — said for the third consecutive quarter it would not need more taxpayer assistance.
Freddie Mac is spending money on housing recovery initiatives, but losses were tied to factors such as a decline in its portfolio of mortgage investments and dividend payments that must be made to the Treasury.
Source: The Washington Post, Zachary A. Goldfarb (02/25/10)
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MBA Plan to Help Jobless Pay Mortgage
The Mortgage Bankers Association outlined a plan Wednesday that would help the unemployed pay their mortgages for up to nine months.
The MBA proposed that loan servicers reduce borrowers’ monthly payments to no more than 31 percent of their household income with the arrears added to the back-end of the mortgage.
The association asked the Treasury Department to underwrite the program by providing loans to loan servicers to cover the payments.
“Borrowers with such a precipitous drop in income can’t qualify for most loan modification programs, so we are looking for ways to allow those borrowers to keep their homes while they look for another job,” said John Courson, CEO of the association.
Source: CNNMoney.com, Tami Luhby (02/24/2010)
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Program fetes horse heroes
The yearlong Celebrate Aiken! campaign continues next Sunday with Aiken’s Horse Heroes.
The presentation will pay tribute to 10 of the 39 national champions that have been enshrined in the Aiken Thoroughbred Racing Hall of Fame and Museum. It will be held at Rye Patch from 2 to 4 p.m. The program is open to the public.
The Aiken Thoroughbred Racing Hall of Fame and Museum will also be open.
“Dogwood Stable wanted to lend its support, and with the first quarter of Celebrate Aiken! being history, horses and health and high society, it seemed perfect to highlight the horses in the Aiken Thoroughbred Racing Hall of Fame and Museum,” said Mary Jane Howell, Aiken’s Horse Heroes co-chair.
Aiken’s Horse Heroes will give people a look at the careers of the 10 equine athletes who were conditioned at the Aiken Training Track.
The presentation will provide an in-depth look at the horses and their connections through video footage, photographs and guest speakers who were either directly involved with the horse or someone who was associated with one of the featured champions.
Those attending the presentation will be able to watch footage of the selected horses that, in some cases, has been seldom seen, said Janet Harkins, Aiken’s Horse Heroes co-chair. A tent will be set up at Rye Patch for the presentation.
There will be a question-and-answer forum, and a reception will follow the event inside Rye Patch. Full Story……
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Lawn concert returns to Aiken’s Joye Cottage
The centuries-old tradition of the “lawn concert” will come to life once again during the Juilliard in Aiken Festival this year.
The festival, which runs from March 8-2, will join in the celebration of Aiken’s 175th anniversary with a concert on the lawn of Joye Cottage, 129 First Ave. The concert will be held on Wednesday, March 10, at 2 p.m. at Joye Cottage and will feature music popular during the era in which Aiken was founded. Afterward, a “tea” will be served by ladies dressed in period attire.
Returning to Aiken for this special event will be the renowned American Brass Quintet, which is celebrating its own 50th anniversary this year. Hailed as “the high priests of brass” by Newsweek magazine and “positively breathtaking” by The New York Times, the American Brass Quintet is among the elite chamber ensembles on the world stage.
The ABQ has performed in all 50 states and in countries around the globe.¬ ¬
Musicians Kevin Cobb and Raymond Mase on trumpet, David Wakefield on horn, Michael Powell on trombone and John D. Rojak on bass trombone have been in residence at Juilliard since 1978 and at the Aspen Music Festival since 1970.¬
As members of the Juilliard faculty, the ABQ players are committed to the promotion of brass chamber music through education as well as performance. In their roles as teachers, they will also present an Outreach Performance in North Augusta for area high schools and middle schools as part of the festival’s outreach program.
The concert setting will be the lawn of Joye Cottage, the former Whitney-Vanderbilt estate at the heart of Aiken’s historic Winter Colony district. With 60 rooms, Joye Cottage is the largest survivor among the many winter homes built by wealthy Northerners during the late 19th and early 20th centuries.
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Foreclosure Bargains Getting Harder to Find
Home buyers hoping to snag a really good deal on a foreclosed home are finding it increasingly difficult because supply is shrinking.
The number of foreclosures that are available for sale nationwide fell to 617,000 in December, down from 845,000 in November 2008, reports Barclays Capital.
Not only have attractive homes in popular neighborhoods already been snapped up, but also government help for distressed buyers is delaying more foreclosures.
Demand is driving up prices. Investors say typical prices have climbed from 75 percent of appraised value to 85 percent or higher when there are bidding wars.
Source: The Wall Street Journal, James R. Hagerty (02/23/2010)
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IRS Clarifies What’s Needed to Claim Tax Credit
The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.
While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.
The IRS clarification says: “In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”
For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.
Source: Washington Post (02/20/2010)
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Being a Landlord Can Be Increasingly Profitable
Despite falling rents and rising vacancies, the profitability of residential rental property is improving.
Investments in apartment complexes are generating annual returns of 7-8 percent immediately because purchase prices have declined.
Buying a rental property isn’t for everyone. It requires putting down at least 50 percent in cash because banks are reluctant to lend more. And buyers need to be able to hold the property for at least three to five years or more to give the investment time to gain value.
Local Market Monitor, which analyzes real estate investments, identifies these good and not-so-good markets for landlords:
Good Markets
* Columbus, Ohio
* Washington, D.C.
* Raleigh, N.C.
* Greenville, S.C.
* Columbia, S.C.
* Kansas City, Mo.
* Oklahoma City, Okla.
* Fort Worth, Texas
* El Paso, Texas
Bad Markets
* Detroit
* Cleveland
* Wilmington, Del.
* Dayton, Ohio
* Orlando
* Tampa-St. Petersburg
* Boise, Idaho
* Stockton, Calif.
* Las Vegas
* Phoenix
Source: The Wall Street Journal, M.P. McQueen (02/20/2010)
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HUD Clarifies Listing of Charges
Flat-fee disclosures combined with commissions and listed on the HUD-1 sheet get government approval in an unofficial clarification by the U.S. Department of Housing and Urban Development.
HUD attorney Helen Kanovsky explained the procedures affecting real estate practitioner commissions in a recent letter to one of the lawyers involved in an ongoing class-action lawsuit involving commissions.
Kanovsky said that the commissions and flat fees could be combined on a single line of the HUD-1 settlement sheet as long as they are spelled out in the listing agreement or the buyer’s broker agreement.
Lawyers involved in the class-action suit advise that to avoid confusion – and lawsuits – practitioners should define the commission as equal to “X” percent of the sales price plus “Y” dollars.
Kanovsky warned that if the total real estate broker fees on the HUD-1 are greater than the amount in the real estate listing agreement or the buyer’s broker agreement. HUD might review the excess charge to determine whether additional services were provided.
“Any charge for which no or nominal services are performed or for which duplicative fees are charged would violate RESPA,” she wrote.
Also, administrative fee charges without a contractual relationship with the buyer, might violate RESPA, according to Kanovsky.
Source: Inman News, Matt Carter (02/25/2010)
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Free spay, neuter program begins
Eight area veterinary offices have agreed to spay and neuter animals for free.
Applications are available now for Stomp Out Strays, a new initiative that seeks to drastically reduce the problem of animal overpopulation in Aiken County. Aiken County Animal Shelter and veterinary office staff believe the large amount of dogs and cats roaming the county as strays can be directly attributed to pet owners failing to sterilize their pets.
Unwanted litters can find their way to the County Shelter and may be euthanized if they are not adopted.
The shelter has a spay/neuter voucher program, but, because of its popularity, vouchers are being rationed to 25 a month in hopes the money allocated will last to the end of the fiscal year. Stomp Out Strays ensures that qualified households that did not get a voucher can still have their pet fixed at no cost.
Veterinarian Charlie Timmerman with Aiken Veterinarian Clinic said people have already picked up applications at the office.
“The stray population is getting out of control,” he said. “The Aiken SPCA, the County shelter and vets can’t solve it on their own. The public has to get involved. It’s going to take a group effort. We’ll give it a year and see if we can make a dent.”
Aiken County Animal Control Chief Enforcement Officer Bobby Arthurs said now residents have no more excuses.
The Aiken SPCA, which is also dedicated to minimizing the large population of unwanted animals, has volunteered to provide transportation to those who are not otherwise able to make a trip to the vet’s office.
“What the vets are doing is absolutely wonderful,” Arthurs said. “We are so grateful we have concerned people who are stepping up to help us.”
Households eligible for Stomp Out Strays must meet an annual income equal to or less than what is indicated on the application for the amount of people in the family. For instance, a household of three with a total yearly income equal to or less than $38,450 is qualified to have their pet fixed for free.
Arthurs still encourages residents to apply for vouchers at the Aiken County Animal Shelter.
Applications for vouchers and Stomp Out Strays are available at the shelter, 411 Wire Road, and at the eight participating veterinary offices.
Aiken Animal Hospital 648-4401
Ark Animal Hospital 648-4245
Aiken Veterinary Clinic 648-6886
Hammond Hills Animal Hospital 279-4090
Martintown Animal Hospital 278-1930
Palmetto Vet Calls 645-6556
Silver Bluff Animal Hospital 642-9053
Veterinary Services 648-5489
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New-Home Sales Hit Record Low
Sales of new homes declined 11 percent in January from December to the lowest level since the U.S. began keeping records in 1963, according to a report from the U.S. Commerce Department released Wednesday.
Sales dropped to an annual pace of 309,000 with the median price falling to $203,500 in January, the lowest since December 2003. At the current sales rate, there is a 9.1 months’ inventory of new homes.
New home purchases are 6 percent of the housing market.
“New-home sales may be at rock-bottom levels, but it looks like the housing correction is not over yet,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., said before the report. “Everyone who was going to buy for the tax credit has already purchased a new home.”
Meanwhile Toll Brothers Inc., the largest U.S. luxury-home builder, narrowed its losses as new orders doubled. “The housing market took several years to recover, following the downturn of the late 1980s and early 1990s,” Chief Executive Officer Robert Toll said in the statement. “We expect this recovery to follow a similar pattern.”
Source: Bloomberg, Bob Willis (02/24/2010)
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Treasury Proposes Plan to Help Borrowers
The U.S. Treasury Department is considering a plan to improve the chance that distressed home owners will get help from federal programs.
Among other things, Treasury proposes to give borrowers 30 days to respond when they are denied a loan modification under the Home Affordable Modification Program (HAMP). During that time, the lender couldn’t auction off the property or even put it up for sale.
The proposal would demand that lenders consider all requests and even contact all borrowers who are 60 days delinquent to determine if they qualify for HAMP. Their contact efforts would have to include multiple telephone and written notices. Lenders would also be required to certify in writing that the borrower isn’t eligible.
Lenders say these guidelines would further slow the foreclosure process past the year that it takes now.
A Treasury spokesperson says the guidelines are only in the proposal stage and haven’t been approved.
Source: The Wall Street Journal, James R. Hagerty, and Associated Press, Alan Zibel (02/22/2010
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Fraud Didn’t Cause Housing Meltdown
The financial crisis was the result of home buyers’ rational reactions to misaligned incentives – not fraud, argues Todd Zywicki, a George Mason University law professor and a Mercatus Center senior scholar.
Zywicki, who has studied the financial meltdown, argues that taking out a risky bank loan looks like a foolish choice today, but at the height of the housing boom was actually a smart decision for many people.
He says the crisis began when the Federal Reserve pushed interest rates to extreme lows from 2001 to 2004, making adjustable rate loans very attractive. It wasn’t until the Fed pushed rates back up that people walked away from their loans.
In the next phase of the crisis, Zywicki says, the availability of foreclosed properties pushed down home prices, which led to more home owners walking away from their properties. Now in the current phase of the decline, unemployment has led to even more foreclosures.
Zywicki writes: “The problem isn’t consumer gullibility or ignorance. Borrowers have shown they understand, and act on, the incentives they face all too well.”
Source: The Wall Street Journal, Todd Zywicki (02/19/2010)
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Could the Tax Credit Be Extended Again?
The pressure is increasing on Congress to renew the homebuyer tax credits for a third time.
The first $7,500 tax credit was passed in 2008 and required first-time buyers to repay the credit over 15 years. A few months later in 2009, Congress expanded the credit to a maximum of $8,000 that didn’t have to be paid back.
At the end of last year, Congress extended the benefit again until April 30 with an extra two months on top of that to close. A new credit of $6,500 was added for move-up buyers, too.
Now representatives of the housing industry are lobbying for another extension. Some experts, including Mark Zandi, chief economist at Moody’s Economy.com, who supported the earlier credits, think the time has come to let it go.
“It’s worn out its benefit,” he says. “If you extend it again, it isn’t going to do much, and what you’re doing is providing a tax break to folks who bought anyway.”
Source: The Wall Street Journal, Nick Timiraos (02/22/2010)
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Short Sales Rise in Popularity, Survey Finds
Short sales accounted for 15.9 percent of home purchases in January, according to a survey by Campbell Surveys for Inside Mortgage Finance.
Before January, the peak in short sales had been 15.1 percent in October. They declined substantially in November, probably because of the number of first-time home buyers hoping to use the tax-credit that required them to close by December 1.
While short sales take a long time to close, they typically sell for only 91 percent of listing price, making them a popular option for bargain-hunting buyers who aren’t in a hurry, the survey said.
Source: Inman News (02/23/2010)
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30-Year Mortgage Rate Tops 5 %
Average rates for conventional 30-year mortgages went up to 5.05 percent this week from 4.93 percent a week earlier, according to Freddie Mac. Interest on 30-year fixed loans had been below 5 percent for the past three weeks, close to the all-time low of 4.71 percent set in December.
The 15-year fixed rate also rose this week, with jumping to 4.40 percent from 4.33 percent.
Source: Columbus (Ohio) Dispatch (02/26/10)
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Bankers: The End of Foreclosure Crisis is Near
The Mortgage Bankers Association is seeing signs that the foreclosure crisis is ending.
“The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” says Jay Brinkmann, MBA’s chief economist, in a published statement.
Brinkmann said that normally there is a large spike in short-term mortgage delinquencies at the end of the year because of high heating bills and holiday expenditures. This year, there was not only no spike, but the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent.
Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said.
“[This] gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.
Source: Mortgage Bankers Association (02/19/2010)
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Organizers prep for Aiken Trials
The thrill and excitement of Thoroughbred racing and the start of the Aiken Triple Crown is less than three weeks away. The 68th edition of the Aiken Trials will once again take center stage at the Aiken Training Track on March 13.
The trials are composed of six races, including contests for 2-year-olds, older horses and polo ponies.
The Aiken Trials is being sponsored by the Aiken Thoroughbred Racing Hall of Fame and Museum, AllStar Rents, Aiken Land Conservancy, Atlantic Broadband, Boots, Bridles and Britches, Vista Bank, Aiken Horse, Meybohm Realtors and the AB Beverage Co. Inc.
“Our sponsors are in place, and we have a nice television advertisement that we’re getting ready to run on Comcast and Atlantic Broadband,” said Bernadette Clayton, Aiken Trials committee. “WKSX-FM will be doing a ticket giveaway.”
There are still a few opportunities available to advertise in the Aiken Trials program, Clayton said.
A few patron spots for the Aiken Trials are still available, she said.
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Report to Reveal Appraisal Fees By County
The monthly Appraisal Fee Reference reports issued by a la mode Inc. list median appraisal fees for 3,000-plus counties and districts in the United States, Puerto Rico and Guam.
The goal is to help lenders satisfy FHA guidelines dictating that appraisers be paid “reasonable and customary” fees. It also aims to help them comply with updated Real Estate Settlement and Procedures Act rules governing changes to estimated costs.
Source: Inman News (02/22/10)
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Fed: Interest Rates to Remain Low
Investors breathed a sigh of relief Wednesday when Federal Reserve Chair Ben Bernanke told Congress that interest rates are likely to remain low for an extended period. The economy, he said, “still requires support for recovery.”
Investors see these low rates as a boon to a recovery of employment and business.
Bernanke’s announcement also took the edge off the news Wednesday that housing sales hit a new low in January.
“Even though nothing he said was particularly new, it was just enough to calm the ruffled feathers that were out there,” said Jim McDonald, chief investment strategist at Northern Trust in Chicago.
Source: The Associated Press, Tim Paradis (02/24/2010)
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2010: The Year of the First-Time Buyer?
According to the Chinese calendar, 2010 is the Year of the Tiger. But in real estate, 2010 may come to be known as the “Year of the First-Time Home Buyer.”
Mark Zandi, chief economist at Moody’s Economy.com, says there will be 1.84 million homes sold to first-time home buyers in 2010, compared with 1.73 million in 2009.
These buyers will invariably make some mistakes that they will come to regret a few years down the road, some experts say, including failing to use a real estate professional to help them manage the transaction.
Real estate professionals have the time and the knowledge to sift through thousands of listings, creating market analyses to judge pricing and other key features, points out Ray Boss Jr., a practitioner with RE/MAX Realty Group in Maryland.
“I would want someone who is going to look out for my interests first and foremost,” says Boss. “Someone who knows the contracts, who has experience negotiating, and who can walk me through the entire process smoothly — step by step — and make sure I get the house that’s right for me.”
Source: U.S. News & World Report, Kimberly Castro (02/18/2010)
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Commercial Loans Jeopardize Banks
The Congressional Oversight Panel reported Wednesday that commercial real estate loan failures could jeopardize bank stability.
The panel said most of the bad loans were made at the height of the real estate bubble and are concentrated at smaller banks, which make 40 percent of all small business loans.
“We haven’t seen the worst of the problems yet in terms of loan defaults. This is a large issue for a major portion of the banks out there,” said Matthew Anderson, a partner at research firm Foresight Analytics, which provided data for the report.
Source: MarketWatch, Josh Lipton (02/17/2010)
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Foreclosure Prevention Has Aided 116,000
The federal foreclosure prevention program has helped about 12 percent of borrowers who applied for help since the plans were announced a year ago, the Treasury Department says.
About 1 million borrowers initiated the application process, and as of January, about 116,000 home owners–12 percent–had their loans modified. But administration officials say another 76,000 applications have been approved and are awaiting signatures.
Another 830,500 home owners are currently in a trial modification review period during which banks make sure payments are feasible for the borrower and ensure the qualifications of the assistance program are met.
For those who qualify, the Home Affordable Modification Program brings monthly loan payments down to 31 percent of home owners’ pre-tax income.
Nearly 60,500 people have been denied permanent modifications.
Source: CNNMoney, Tami Luhby (02/17/2010) and USA TODAY, Stephanie Armour (02/17/2010)
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‘Affordable’ Housing Less Attractive Now
Affordable housing projects all over the country have been a tough sell the last couple of years. Some of the reasons include hard-to-get mortgages and a dwindling difference in prices between affordable units and market-rate properties with no restrictions on resale.
The problem is particularly acute in Far Rockaway, N.Y., where New York City housing officials and developers are frustrated by slow sales of existing units, which prevents the remainder of the project from being built.
City-subsidized housing in Far Rockaway and in various other parts of the city selling for $250,000 to $350,000 is sitting on the market for as long as 18 months, even though prices have been cut as much as 30 percent.
City Housing commissioner Rafael E. Cestero said when the projects were planned, these units ”were deeply affordable” compared with what was then on the market. ”We had no idea what was going to happen,” he said.
Source: The New York Times, Cara Buckley (02/19/2010)
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NAR Resource to Reduce Short Sale Stress
According to the most recent REALTORS® Confidence Index, buyers continue to be discouraged with the extended short sale process, which frequently results in foreclosures that could have been prevented.
New resources from the National Association of REALTORS® aim to help REALTORS® and consumers successfully navigate the short sale process to help more home owners avoid foreclosure.
“Our members report that short sales are often riddled with delays and red tape,” said NAR President Vicki Cox Golder. “NAR has worked tirelessly to provide REALTORS® with the resources they need to navigate short sale transactions, as well as provide guidance on helpful government programs designed for home owners facing the process.”
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Navigating the parkways of downtown Aiken to get easier
“We are going to keep it simple,” said Frommer about the change to the downtown traffic system.
Aiken Public Safety officers and S.C. Department of Transportation officials will start the changeover from the old system to the new one, beginning Sunday.
The lights on Park Avenue from Laurens Street to York Street will be the first ones completed, said Capt. Wendell Hall.
From 1 to 4 p.m. Sunday, residents who want to attempt to navigate the roads using the system can do so.
A number of other downtown intersections will be signaled in a similar manner, but police and road crews hope to first work out any kinks on Park Avenue.
“The other intersections will join the system, but determining how quickly that will happen is dependent on how well Sunday goes,” Hall said.
Public Safety will be downtown during the changeover to answer questions.
“This system is supposed to be much simpler for drivers,” Hall said. “… Especially in the circles and squares.”There won’t be any further need for the “circles go, squares no” mnemonic device that has helped drivers navigate downtown intersections for decades.
“If it’s red, stop,” Frommer said. “If it’s green, go.”
The intersections will be marked with signs where there may be some doubt. There are “no right on red” signs. The traffic signals operate on a camera system that changes the light based on the traffic volume. The cameras replace coils or “loops” in the road that for years have been used to sense and detect vehicles and operate the switching equipment.
The cameras now will record the image of a car as it pulls into the frame and adjust the light cycle accordingly.
The devices are not being used to ticket drivers, Frommer said.
“That’s not what this is designed for,” he added.
Aiken Public Safety is giving drivers a 30-day grace period to learn the new syst
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Construction Up Along With Builder Confidence
Construction of new homes rose to an annual rate of 591,000 in January, up 2.8 percent from December when the revised rate was 575,000, the Commerce Department announced Wednesday.
Meanwhile, the monthly home builder confidence scale rose two points in February to 17.
The National Association of Home Builders Chair Bob Jones said, “Builders are slightly more optimistic that the housing recovery is finally beginning to take root.”
Builder confidence was highest in the Northeast and the South, weaker in the West and lowest in the Midwest.
Source: The Wall Street Journal, Meena Thiruvengadam (02/16/2010) and CNN, Blake Ellis (02/17/2010)
Vacant Lots Become Hot Property
Vacant residential lots are looking better and better to real estate investors.
The cost of a finished, ready to build lot, can cost a developer about 25 percent of the finished home price. There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare. Investor groups are snapping them up, figuring that the time will come soon when they will be in demand.
“The country needs 1.2 million new units for the next 10 years just because of population growth,” says Scott Clark, president of American Development Partners, which has bought thousands of vacant lots all over the West. “[U.S. builders] built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand. We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant.”
Source: Inman News, Steve Bergsman (02/12/2010)
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Home Price Reductions Level Off
The share of homes on the market with price reductions declined to an average of 21 percent as of Feb. 1, according to Trulia.com, which has been tracking the information since April 2009.
This is a significant decrease compared to November 2009, when 26 percent of homes had at least one price reduction
The total dollar amount cut from home prices dropped to $22.6 billion as of Feb. 1, down from $28.1 billion in November, a 19 percent decrease.
The average discount for price-reduced homes is holding steady at 11 percent off the original listing price.
Here are the cities with the largest decrease in listings with price reductions between last November and this month, according to Trulia.
* San Francisco, -46
* Oakland, Calif., -43
* Sacramento, -42
* San Jose, -40
* Indianapolis, -39
* Seattle, -37
* San Diego, -33
* New York, -33
Source: Trulia.com (02/16/2010)
Zoning change would affect horse manure storage
Members of the Equine Committee unanimously agreed Tuesday to recommend to City Council that the zoning ordinance be changed to say that manure containers must be placed 15 feet from the right-of-way and 25 feet away from property lines.
The current ordinance reads, “The premises must be maintained by keeping manure piles in covered containers at least 50 feet away from any dwelling or any pool, patio or other recreational structure or an adjoining lot and at least 25 feet from any property lines.”
Assistant City Manager Richard Pearce said the committee has been meeting about the issue for several months.
The matter came up for discussion after a resident made a complaint to City officials about the vicinity of a neighbor’s manure container from the street. After investigating the complaint, City officials learned that the ordinance was not being adhered to.
The zoning ordinance also requires property owners to have manure removed from paddocks and stables at least twice a week to prevent the accumulation of flies and odors. All manure containers are required to be emptied at least once a week.
In considering the change, the committee looked at setback codes for animal waste in other areas such as Lexington County, Beaufort, Florence, Rock Hill and Camden.
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Camellia Club will show off blooms at tea
Celebrate the beauty of camellias in a tradition of days gone by.
The Edgefield Camellia Club will host its third annual Camellia Tea on Thursday, Feb. 25 from 3 to 5 p.m.
“The tea is a revival of a very old custom in the town in which we proudly showed off our camellia blooms to many and varied friends because Edgefield in the 1940s and 1950s was a noted area of interest in the C. Japonica,” said Hal Irish, who does publicity for the club. “This is the third tea put on by the Edgefield Camellia Club, and we hope that this becomes a modern tradition for the town.”
The tea is free and open to the public; no tickets are required. There will be food and drinks including coffee and tea prepared and donated by members of the Edgefield Camellia Club.
The treats will be served in the “grand manner of the ’40s and ’50s on china plates and glass cups and saucers with linen napkins.”
Last year’s tea had more than 250 camellia blooms on display, creating an outstanding display and delighting attendees.
“Previous teas have attracted people from all parts of the state and beyond and featured over 225 camellia blooms,” Irish said.
The tea will be held at the Edgefield Historical Society’s headquarters located on Magnolia Drive in downtown Edgefield.
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SPCA store gets ready for move
Volunteers are packing up the bric-a-brac to move the Aiken SPCA Thrift Store to larger quarters.
The store’s final day at its present location on Park Avenue will be Saturday, and the doors will open to the public at its new location, 404 Richland Ave. E., on Monday, March 1. The new store at the corner of Richland Avenue and Union Street, which formerly housed the Amish Heirloom Furniture, will give the SPCA twice the space of its previous location, according to SPCA Executive Director Gary Willoughby.
“We started off with just one side of the store, I think about 10 years ago, and outgrew that and took over the second side in January of 2007; it’s a little over 2,000 square feet,” Willoughby said. “I’ve been looking for a new location for almost a year because we’ve gotten a lot more donations and we’ve really outgrown it. The Board of Directors wanted us to stay as close to downtown as possible, and I wanted a larger overall space and dedicated parking.”
Among the new building’s other pluses are double doors at the front and back, enabling easier access for delivery of large furniture and appliances, and a dressing room space, Willoughby said. There will also be a pet adoption area with shelter cats there full-time and weekend dog adoptions, and an information table with plans for the new SPCA shelter at the store, to emphasize the thrift store’s connection to animal welfare.
“One thing that worked out for us is that this building is owned by Lee Boylston, who owns Holley Heating and Air. He’s been a big supporter of ours for a long time now, so it’s a good fit for both of us,” he said.
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Try out Animal Shelter website
Friends of the Aiken County Animal Shelter (FOTAS) now has its own website, and it’s up and running.
Feb. 14 was the official launch date for www.fotasaiken.org, which allows users to check on a number of things pertaining to the shelter, such as animal adoptions and fostering, volunteer opportunities, news and upcoming events.
As of Wednesday, the website’s hit counter was at nearly 1,200.
Lorrie Sullivan, who created the website, got involved when a FOTAS member contacted her about donating a number of leather dog leads, which Sullivan makes by hand.
“The shelter was one of those places I tried to avoid because it’s heartbreaking and I have a house full as it is,” she said. “I knew if I went there, I’d bring something home.”
But when Sullivan was at the shelter to drop off the leads, she realized a need.
“I decided I could do a website and clerical work from home. I am not a professional website designer, but I felt comfortable enough to say I could do it,” she said.
Users visiting the website can learn more about volunteer opportunities – either by walking and socializing animals kept at the shelter, performing clerical work and participating in community outreach events – post to the message board and check out what is coming up by viewing the events calendar. For instance, the shelter is offering a “Two Fur One” adoption special in which animal lovers can adopt two pets for the price of one – typically $70 – or adopt one animal for half price.
There is also a donation page on which users can enter in their credit card information and make a charitable donation to help further the FOTAS mission of improving the quality of life for shelter animals and reducing the euthanasia rate by promoting successful pet adoptions and helping to prevent unwanted and abused cats and dogs.
“The website is growing into something that’s exciting,” Sullivan said.
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Tour will explore Aiken’s historic downtown
Celebrate Aiken will hold the 175th Anniversary Walking Tour of Historic Downtown Aiken on Feb. 27 from 10 a.m. to 4 p.m.
There is no charge for the tour, and no tickets are required; advance reservations are unavailable and unnecessary.
Thirteen downtown locations have been selected for the special event that commemorates the founding of Aiken.
The self-guided walking tour will begin at Aiken Preparatory School, headquarters for the tour. The school is located at 619 Barnwell Ave. Parking and a tour brochure, including a tour map, will be available. City tour buses will also be available to shuttle people between the sites.
Site docents at each location will elaborate on the history of each property. For easy identification, Celebrate Aiken signs with yellow balloons will identify each site. Some sites are not handicap accessible.
At the end of the tour, the Aiken Choral Society will perform at Rose Hill Estate at 4:15 p.m. Cocktails and food will be available for purchase at the Rose Hill Estate into the evening.
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A Much-Needed Road Map for Short Sales
As lenders adopt new federal guidelines, short sales should become less frustrating for all.
The short-sales process, often agonizingly long, may not speed up overnight, but there’s reason to believe that better days are ahead. The federal government’s long-awaited guidelines for standardizing short sales were released at the end of 2009, and although they don’t take effect until April, mortgage servicers have the option of implementing them early.
The short sales guidelines are part of the government’s new known as HAFA, which is an add-on to the Obama Administration’s more wide-reaching Home Affordable Modification Program launched in early 2009. The idea is that if borrowers are eligible for the modification program but are unable to work out a plan to stay in their home, they—and their lenders—have a well-mapped route for executing a short sale or a deed in lieu of foreclosure.
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Citigroup to Ease Foreclosure Process
Citigroup announced Thursday that it will let delinquent home owners who don’t qualify for any federal relief program stay in their homes for six months as long as they turn over the keys and leave the property in good condition when the grace period expires.
The bank estimates that more than 20,000 borrowers in hard-hit states like Michigan, Ohio, Florida, Illinois, Texas, and New Jersey could be eligible.
Citigroup is hoping its plan will prevent borrowers from damaging their homes before they depart, which will save the bank significant repair dollars. The program also allows the company to bypass the slow-moving foreclosure process and gives the bank more control over when it puts properties on the market.
Source: The Washington Post, Renae Merle (02/11/2010)
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Fed Plans to Pull Back Money
Federal Reserve Chair Ben Bernanke released a formal proposal Wednesday to collect the trillions of dollars that the Federal Reserve has spent to prop up the economy.
Bernanke emphasized that the economy still needs the support of easy money, but he warned that the Fed will soon have to “tighten financial conditions” and raise interest rates. He didn’t specify how much, although he offered some reassurance that the increase won’t be dramatic immediately.
In his report, Bernanke said the Fed plans to sell securities while simultaneously offering to rebuy them at some point.
He also said the Fed plans to sell the equivalent of certificates of deposit to banks and financial firms and take a piece of the banks’ reserves in return.
The release of Bernanke’s proposal initially rattled the stock market but later stocks crept up again.
Source: CNNMoney.com, Jennifer Liberto (02/10/2010)
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Luxury Homes in Foreclosure Go to Auction
An increasing number of homes with multi-million dollar price tags are going into foreclosure and that’s driving desperate owners to sell at auction.
In 2009, 18,817 properties worth at least $1 million faced foreclosure. That’s up 162 percent from 2008, reported foreclosure marketer RealtyTrac.
Prices of $1 million-plus properties are down about 25 percent since 2007 with an increasing number of desperate home owners choosing auction sales over waiting for years for the right buyer to come along.
“Any home owner selling in this economy is on the market because they have to be,” says John Brian Losh, CEO of LuxuryRealEstate.com, a Web site that specializes in high-end properties. “If they’re frustrated and they can’t figure out why they haven’t gotten any offers, they might think an auction will generate some interest.”
Source: Forbes, Francesca Levy (02/11/2010)
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Foreclosure Rate Dipped in January
U.S. foreclosures declined 10 percent in January compared to December, but were still up 15 percent year over year, foreclosure marketer RealtyTrac reported Thursday.
RealtyTrac CEO James Saccacio predicted an increase on the horizon: “January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January, then a surge in foreclosures over the next few months.”
States with the top 10 foreclosure rates are:
1. Nevada
2. Arizona
3. California
4. Florida
5. Utah
6. Idaho
7. Michigan
8. Illinois
9. Oregon
10. Georgia
Six states account for nearly 60 percent of the national total: California, Florida, Arizona, Illinois and Michigan.
Source: RealtyTrac (02/11/2010)
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Art show to feature equine, sports theme
Equine and sporting artwork from artists throughout the country will be on display for the Aiken County chapter of the American Red Cross’ Sporting Life Art Show and Sale.
The event will be held at the Aiken Center for the Arts on Friday and Saturday from 10 a.m. to 6:30 p.m.
The event is free to attend. The proceeds from the show will benefit the local Red Cross.
Suzanne Jackson, executive director of the Aiken County Red Cross, said the Aiken Center for the Arts and Beresford Gallery in Unionville, Pa., and Saratoga Springs, N.Y., have partnered with the Red Cross to put together the event.
“This show is very important to the Red Cross to support local disaster preparedness,” Jackson said.
Elizabeth Beer with Beresford Gallery of Unionville, Pa., said the two-day show will feature sculptures, bronzes, wall hangings, oil paintings, watercolors, pastels and some photography. There will also be several works from international artists, as well as those who are well established or developing.
“We tried to bring good pieces that are well priced,” she said.
Janet Harkins, the co-chairman of the event, said the show will offer a good representation of Aiken’s equestrian and sporting interests in the works being displayed.
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Re-enactment teaches about local history
More than 500 pounds of black powder will be fired in Aiken this upcoming weekend.
The battle will rage as Confederate and Union troops clash in the re-enactment of a defining moment in the Civil War for Aiken: The Battle of Aiken.
The actual battle culminated on York Street at the present location of First Baptist Church of Aiken. The re-enactment of the Battle of Aiken is now held at Confederate Park and has become the largest living history event in the Southeast.
“The Civil War was fought for some of the same problems we have now. We do this to educate and teach to perpetuate education to young people,” said living historian Wayne Jones, Confederate Calvary Major General James Ewell Brown also called J.E.B. Stuart. “If I can educate one young person, I’ve carried it to the next generation.”
The entire day on Friday is dedicated to education with local students spending the day learning about the Civil War through living history. This year, they are expecting to host more than 2,000 students.
Throughout the weekend, the event includes activities from learning how cannons are fired, discovering what life was like during the Civil War, a chance to look at hospital techniques, learn about the role of women and see period weaponry in action.
On Sunday, a church service will be held at 11 a.m. Crafts during the event include period art, woodcrafts, replica swords, muskets, iron working, blacksmithing, women’s clothing, uniforms and music.
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Move-up Buyers Face Hurdles
Home owners are finding it difficult to take advantage of the move-up tax credit, which is one more handicap slowing the housing market.
Move-up buyers represented 53 percent of the 2009 market, down from an average of 60 percent in previous years, according to the NATIONAL ASSOCIATION of REALTORS®. While many would like to take advantage of the tax credit, a significant number are unable to sell their current residences and/or get financing for a trade up.
Even young professionals with good salaries can’t make the leap, says Janice Leis, an associate with Coldwell Banker Boca Raton, Fla. “A lot of people think it will be great, and then they look into it and find out they won’t get it,” Leis says. “It’s like false advertising. They get out with their hopes up, and they get their hopes dashed.”
“It’s a real problem,” adds Mark Zandi, chief economist at Moody’s Economy.com. “For a well-functioning market, you have to have that trade-up buyer.”
Source: USA Today, Stephanie Armour (02/10/2010)
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