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4-17-2011

Mortgage Rates Are Expected To Rise - Lock in Your Mortgage Rates Now

Now is the time to lock in historically low 30 year fixed rates mortgages. Home prices have bottomed in our market area and there are several factors that are causing interest rates to rise.

What will drive mortgage rates higher? The end of the Feds $600 Billion Quantitative Easing 2 program in June, the falling dollar and rising oil costs which will drive inflation and the proposed elimination of the GSE, government sponsored enterprises, (Fannie Mae and Freddie Mac).

Read More

March 21, 2011

Fannie Mae's Two New Guidelines Make Selling Condos More Difficult

1. Any condo project with pending litigation that names the condo homeowners association or co-op corp. or the project's sponsor or developer and that relates to safety, structural soundness, habitability or functional use remains ineligible for Fannie Mae approval.

2. Condo conversions from rental units to condos without a gut-rehab have to go thru a Project Eligibility Review Service, or PERS. The cost is $1,200 plus $30 per unit. PERS includes a reserve study to project over a 30 year period of time what the expected repair costs are likely to be to elevators, roofs, mechanical and structrual systems and the exterior and could result in reserve requirements being substantially greater than the current requirement that 10% of the budget be set aside for reserves.

March 18, 2011

How Accurate is a Zillow Zestimate

Ever wonder how accurate a Zillow Zestimate is? Per Zillow, their median error ranges from 8.3% for Norfolk County To 15.9% for Berkshire County. Their Essex County median error rate is 10.3%. If you want an accurate valuation of your home, contact us, Kathy 978-927-9199, Terry 978-927-9299.

https://www.zillow.com/howto/DataCoverageZestimateAccuracyMA.htm

March 16, 2011

Massachusetts Homestead Protection Law

(effective March 16, 2011)

Important! Mass new homestead law goes into effect today: $125,000 automatic protection and $500,000 (or more) if homeowners file Declaration Of Homestead. Everyone who owns a home should file a Declaration of Homestead. If you own a home in trust, you can now file a Declaration Of Homestead.

February 16, 2011

Why You Should Buy That Home Now

The Obama administration's proposals this morning to extricate the government from mortgage lending sounded the death knell for Freddie Mac and Fannie Mae. They weren't good news for homebuyers, either. In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.

February 17, 2011

Real estate affordability sets record in Q4

4th Quarter 2010 Housing affordability at 20 year high.

February 17, 2011

Mortgage Delinquencies Turn The Corner and are at a Two Year Low

February 12, 2010

BUY NOW! Lending will be more difficult if these reforms pass!

Housing Finance Reform: Reduced Loan Limits, Larger Down Payments, Higher FHA MIP Fees

The long-awaited report on the future of housing finance has been released by the Obama Administration.

FHA loan limits to be reduced by October 1, 2011, Downpayments to rise and Mortgage Insurance fees to rise.

February 11, 2011

Home Price Stabilization Seen in Most Metro Areas during Fourth Quarter, Sales Up

Boston Metro Area Up 4.2%

Washington, DC, February 10, 2011

Home sales rebounded in 49 states during the fourth quarter with 78 markets – just over half of the available metropolitan areas – experiencing price gains from a year ago, while most of the rest saw price weakness, according to the latest survey by the National Association of REALTORS®.

5 Outrageous Stories of Real-Life Up Houses

The stories of five home owners from around the globe who, like old Carl Fredricksen in the Disney-Pixar movie Up, just wouldn’t move out and move on.

10 Common Errors Home Owners Make When Filing Taxes

Don’t rouse the IRS or pay more taxes than necessary—know the score on each home tax deduction and credit. Read More

Feb 8, 2011

Cash Buyers Lift Housing

By S. MITRA KALITA

Jason Henry for The Wall Street Journal

Richard Stoker, with wife, Jane, is buying three Miami Beach condos.

Buyers in markets around the U.S. are snapping up homes in all-cash deals, betting that prices are at or near bottom and breathing life into some of the nation's most battered housing markets.

Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year, according to an analysis from real-estate portal Zillow.com. In the fourth quarter of 2006, they represented just 13% of deals. Meanwhile, downtown Miami prices rose 15% in 2010 from a year earlier, according to the Miami Downtown Development Authority.

The percentage of buyers in Phoenix paying cash hit 42% in 2010—more than triple the rate in 2008, according to Raymond James's equity research division.

Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008, when the trade group began tracking the measure.

Continued at: Cash Buyers

Feb 7 2011

Essex County Real Estate Foreclosures by Town, Jan 2011

Lynn, Lawrence and Haverhill had 48% of all the county's foreclosures in 2010

Feb 7, 2011

Home Equity Lending Is Back

Once every homeowner's answer to a cash shortfall, the ability to borrow against your home equity all but disappeared a few years ago right along with, well, home equity. But now, at a growing number of banks around the country, home equity loans and lines of credit are back – and so are the pitfalls that go with them.

Continued at Equity Lending Back

Feb 5, 2010

Boston, D.C., Dallas lead US in job growth

WASHINGTON — Jobs are hard to come by in every US city, but you stand a better chance of getting hired if you live in Washington, Dallas, or Boston.

Those three metropolitan areas topped the nation’s cities in jobs added in 2010.

Continued at Boston MA Job Growth

October 8, 2010

Rent vs Buy Index
TRULIA’S RENT VS. BUY INDEX REVEALS TOP 10 CITIES FOR RENTING, OWNING HOMES
Miami, Phoenix and Fresno Rank Among Most Affordable to Own vs. Rent, Renting is Cheaper than Buying in New York, Seattle and Fort Worth

http://info.trulia.com/index.php?s=43&item=99
SAN FRANCISCO, October 8, 2010 – Trulia.com (www.trulia.com), a top site for homebuyers, sellers and renters, released today results from its Rent vs. Buy Index, which tracks whether buying a home or renting is less expensive in America’s 50 largest cities, based on current market conditions.

Continued at Rent Buy Index

Home Improvement Tax Credit Expires Dec 31, 2010
http://www.marketwatch.com/story/what-you-need-to-know-about-home-improvement-tax-credits-2010-11-30

Nov. 30, 2010, 10:58 a.m. EST
What You Need to Know About Home-Improvement Tax Credits
By Mara Lemos Stein , The Wall Street Journal
As winter approaches, you may be looking for ways to cut your energy bills. The good news is that the U.S. offers tax credits for many energy-saving home improvements. The bad news: You have to act fast?some of those credits are expiring on Dec. 31. What you need to know:

What improvements are covered by the expiring credits?

Homeowners can get a tax credit for installing certain wood or pellet stoves; energy-efficient furnaces, water heaters and air-conditioning systems; insulated roofs, windows and doors; and wall and ceiling insulation. The tax credit covers 30% of the purchase costs, up to $1,500. (For a full list, check the Energy Star website at www.energystar.gov.)

Is the installation cost covered?

The cost of putting in heating and air-conditioning systems, water heaters and biomass stoves is, but installing new windows, doors, roofs and insulation isn't.

Can I use the tax credits for improvements in a vacation home?

Sorry, no. The improvements qualify for an existing home that is your primary residence, even if it is a houseboat or mobile home. But rentals, vacation homes and new construction aren't eligible.

With time short, what improvements make the most sense?

Upgrading your heating and cooling, which can be as much as 50% of the average home's energy bill. If your furnace or boiler is more than 10 years old, this may be the ideal time to replace it. All improvements must be in place and equipment in service by Dec. 31 to qualify for the tax credits.

What improvements can be done relatively cheaply?
Adding insulation. If you choose to insulate just the area where your family spends most of their waking hours, for instance, the cost will be low but your family will be much more comfortable. And often insulation is a do-it-yourself project, so you save on labor costs.

Am I going to have trouble finding a contractor on short notice?

Not only are contractors available, but many of them are using the expiring tax credits as a marketing tool, according to the National Association of the Remodeling Industry. You can find qualified contractors at the association's website, www.nari.org. Many of the contractors have the equipment and materials ready to go, and you'll be helping workers in an industry badly hit by the recession.

Will a new dishwasher get me some tax credits?

Appliances don't qualify, but appliances carrying the Energy Star seal will help reduce your energy bill. Also, many states and local utilities are offering direct rebates?no need to wait for tax returns?on some appliances. Check www.energysavers.gov to see details of programs in your state.

Might the program be reinstated for future tax years?

Legislation has been introduced to extend the tax credits, but experts say it is unlikely Congress will pass it before the end of the year.

Will I be able to handle this on my tax return without having to call on an expert?

The form is simple. Just make sure you save the manufacturer's certificate that states the equipment or service is eligible under the program. If not available with the product, the certificates can also be found on the websites of the manufacturers.

I'm subject to the alternative minimum tax. Will I still be able to qualify for this tax credit?

These credits can be used to offset the AMT, says Gary R. Price, tax partner with Sensiba San Filippo LLP, an accounting firm in the San Francisco Bay area.

Are there any tax incentives for rooftop solar-power systems?

Yes, and they are far more generous. Federal tax credits for solar-energy, small residential wind turbines and geothermal pump systems cover 30% of all costs?installation included?with no upper limit. These are good on both primary homes and vacation homes, new construction or otherwise. And they don't expire until 2016.

Ms. Lemos Stein is a reporter for Dow Jones VentureWire in New York. She can be reached at mara.lemos-stein@dowjones.com.
Copyright ? 2010 MarketWatch, Inc. All rights reserved.
By using this site, you agree to the Terms of Service and Privacy Policy.

Higher Fannie, Freddie and FHA Loan Limits Extended
Fannie, Freddie, FHA loan limits extended
$729,750 cap in high-cost areas will remain through Sept. 30, 2011
BY INMAN NEWS, THURSDAY, SEPTEMBER 30, 2010

HTTP://WWW.INMAN.COM/NEWS/2010/09/30/FANNIE-FREDDIE-FHA-LOAN-LIMITS-EXTENDED
Congress has approved legislation extending for one year the existing loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration, allowing the loan guarantee and insurance programs to continue backing loans of up to $729,750 in markets with the highest cost of living.

"Extending the existing limits is essential to helping borrowers continue to have access to affordable long-term, fixed-rate mortgage credit in today's struggling economy," the Mortgage Bankers Association said in welcoming the move.

"The current limits have been a key component of keeping the mortgage market functioning, helping keep mortgage interest rates low for consumers who want to purchase a home or refinance an existing mortgage."

In addition to extending the loan limits through Sept. 30, 2011, HR 3081 expands the FHA's capacity to back multifamily loans, ensuring continued funding for development, renovation and mortgage refinancing to preserve affordable rental housing, the MBA said.

Congress instituted temporary increases in the $417,000 conforming loan limit in high-cost areas in 2008, allowing Fannie Mae and Freddie Mac to to buy or guarantee loans of up to 125 percent of the median home price in high-cost areas.

A sunset provision in that bill briefly brought the limit back down to 115 percent of median home price, with a cap of $625,500, on Jan. 1 2009.

The stimulus bill passed by Congress last year, H.R. 1, the American Recovery and Reinvestment Act, restored the higher limits and $729,750 cap through the end of 2010. The maximum in "normal" housing markets remains $417,000 for Fannie and Freddie and $271,050 for FHA.

HUD publishes FHA maximum mortgage loan limits at the county and metropolitan statistical area on its website. Loan limits for Fannie and Freddieare published by the Federal Housing Finance Agency.

FHA MA Loan Limits - See Table below https://entp.hud.gov/idapp/html/hicost1.cfm
Single Family Max for Essex; Middlesex; Suffolk; Norfolk = $523,750

Case Shiller Home Price Index Up For Metro Boston
http://blogs.wsj.com/economics/2010/09/28/a-look-at-case-shiller-by-metro-area-september-update-2/

Boston Metro up 0.6% from June and up 2.8% from July 2009
SEPTEMBER 28, 2010, 9:27 AM ET

A Look at Case-Shiller, by Metro Area (September Update)

By Phil Izzo
The?S&P/Case-Shiller?Composite 20 home price index, a broad gauge of U.S. home prices, posted a 3.2% increase from 2009, but the gains decelerated in the waning days of government tax credits.
Twelve cities notched month-to-month increases in July, compared to 17 cities posting gains in June. The numbers also were boosted by seasonal factors in addition to the residual effects of the tax credit. On a year-to-year basis, which eliminates some of the seasonal variations, prices were down in 10 cities while growth rates slowed in six others.
?Results during the spring months have clearly benefited from demand created by the since expired homebuyer tax credit,? said?Joshua Shapiro?at?MFR?Inc. ?Also contributing to recent firmer results is that seasonally the spring/early summer months are the most vibrant for the housing market? Therefore, looking ahead, the demand air-pocket caused by the end of the tax credit will combine with seasonally slower activity, which will create a downside double-whammy for prices.?

Housing Starts Zoom Up 10%
http://www.cnbc.com/id/39285241

Housing Starts Zoom 10.5% in Surprise Sign of Optimism
Published: Tuesday, 21 Sep 2010 | 8:35 AM ETText Size
By: Reuters
New building permits rebounded 1.8 percent to a 569,000-unit pace last month after an unrevised 4.1 percent drop in July, lifted by a 9.8 percent rise in permits for multi-family units. Analysts had expected a 560,000-unit pace in August.

The housing market has hit a soft patch following the end of a popular homebuyer tax credit in April and a survey on Monday showed sentiment among home builders remained mired at an 18-month low in September.

A combination of high unemployment and an oversupply of homes are also weighing on the sector, which was the main catalyst of the worst recession since the Great Depression.

The downturn ended in June last year, but the economic recovery has since lost momentum, sparking fears in financial markets of a renewed recession.

Residential construction in August was lifted by a 32.2 percent jump in groundbreaking activity in the volatile multi-family segment to an annual rate of 160,000 units.

Single-family starts increased 4.3 percent to a 438,000-unit pace, the highest since June.

Home completions increased 5.6 percent to a 603,000-unit pace, also the highest since June. The inventory of total houses under construction was unchanged at 444,000 units last month, while the total number of units authorized but not yet started fell 3.1 percent to a record low 87,000 units.

10 Reasons To Buy A Home - Wall Street Journal
SEPTEMBER 16, 2010, 4:33 P.M. ET

10 Reasons To Buy a Home
Enough with the doom and gloom about homeownership. Brett Arends explains why owning a home is a good thing.

http://online.wsj.com/article/SB10001424052748703376504575492023471133674.html?mod=WSJ_hps_sections_personalfinance

Enough with the doom and gloom about homeownership.

Sure, maybe there's more pain to come in the housing market. But when Time magazine starts running covers that declare "Owning a home may no longer make economic sense," it's time to say: Enough is enough. This is what "capitulation" looks like. Everyone has given up.

So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way? about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains?if any?when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension?zoning permitted?or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.

5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities?for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy?if it happens?and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed?either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.

Write to Brett Arends at brett.arends@wsj.com

MA August Unemployment Falls to 8.8%: 7th Straight Monthly Improvement
http://lmi2.detma.org/lmi/lmi_lur_b.asp?A=01&GA=000025&TF=2&Y=&Sopt=1&Dopt=TEXT

http://lmi2.detma.org/Lmi/News_release_state.asp

MASSACHUSETTS UNEMPLOYMENT RATE DROPS TO 8.8 PERCENT
7th Straight Month Of Job Growth - Private Sector Jobs Up 4,000

BOSTON - Thursday September 16, 2010 --- The Executive Office of Labor and Workforce Development reported today that preliminary August job estimates show 3,201,900 jobs in Massachusetts, an increase of 2,100 jobs. The August job growth follows a revised 15,200 jobs gain in July, previously reported as a 13,200 job gain. This marks the seventh straight month for job gains in the Commonwealth, adding 64,300 jobs since December 2009. Massachusetts is currently third in rate of job growth in the nation year-to-date based on the July preliminary estimates for all states.

The total unemployment rate dropped from 9.0 percent in July to 8.8 percent in August and remains below the9.6 percent national rate which was up over-the-month from 9.5 percent.

Nationally: Housing Hit Bottom July 2010: Locally, Bottom Was Feb, 2009
Have existing-home sales hit bottom?
Leading indicators point to 'modest gains' for fall, says PMI
BY INMAN NEWS, THURSDAY, SEPTEMBER 16, 2010.

HTTP://WWW.INMAN.COM/NEWS/2010/09/16/HAVE-EXISTING-HOME-SALES-HIT-BOTTOM

Two leading indicators -- applications for purchase mortgages and the number of homebuyers entering into contracts to purchase homes -- suggest sales of resale homes hit bottom in July and will rebound this fall, economists at mortgage insurer The PMI Group Inc. conclude.

In their latest monthly Housing and Mortgage Market Review, PMI Chief Economist David Berson and analyst Brett Soares make a case that existing-home sales will show "some modest gains" in August, September and even October.

After hitting a low in the first half of July, purchase mortgage applications have edged up slightly, the report noted, citing statistics gathered by the Mortgage Bankers Association.

Because of the time it takes to approve a loan and close a home sale, loan applications submitted in August might not show up in statistics on existing-home sales until October.

Another leading indicator, which counts the number of homebuyers who have entered into purchase contracts -- the National Association of Realtors' pending sales index -- was up 5.2 percent in July.

"This is consistent with the increase in the MBA's purchase applications, and the two of them together strongly suggest that sales have bottomed out, at least for now," PMI economists said.

A housing market index published by the National Association of Home Builders slid in August, but that's probably an indication that a rebound in new-home sales will lag sales of existing homes, the report said, with buyers likely to bargain hunt for distressed properties.

"The leading indicators of housing demand suggest that the drop in home sales is probably over and that some modest gains may be in store for the (August through October) period," the report said. "Beyond that, the underlying determinants of housing demand will have to strengthen in order for home sales to rise appreciably."

Those factors include job growth, affordability, demographics and consumer sentiment.

PMI economists think unemployment will surge during the fourth quarter to a 2010 high of 9.8 percent, before gradually falling to an average of 8.7 percent by the fourth quarter of 2011 and 8 percent in 2012.

Fears of a second recession are likely overblown, the report said, although economic growth is unlikely to accelerate until the middle of next year.

Affordability is close to record highs, which should drive housing demand. And although household formation remains below average, it's been increasing at a stronger pace, the report said.

Consumers remain concerned that large inventories of vacant or distressed homes will continue to put pressure on home prices in the future, making them less willing to make the decision to buy a home today.

With nearly one in four households with mortgages owing more than their home is worth, "a large segment of potential homebuyer demand has been eliminated in this cycle," the report noted.

But faster economic growth in the second half of 2011 "should lead to a pickup in job gains and stronger household formation," Berson and Soares predicted in their report.

Next year should bring "a stronger, but still historically modest, rise in home sales," the report concluded.

In their forecast, Berson and Soares envision sales of existing homes rebounding from a projected 4.96 million this year to 5.5 million in 2011 and 5.67 million in 2012.

New-home sales are expected to total 342,000 this year, 485,000 next year and 590,000 in 2012.

The report suggests next year will be a difficult one for lenders, as the refinancing boom sparked by low rates comes to an end. Refinancings accounted for 69 percent of the $1.99 trillion in mortgages originated in 2009 and 67 percent of what's expected to be $1.55 trillion in mortgage loans funded this year.

Refinancings will probably account for 43 percent of a projected $1.32 trillion in mortgage lending in 2011, and 35 percent of the $1.43 trillion in lending envisioned in 2012.

PMI expects that purchase loan funding will jump 47 percent in 2011 -- which bodes well for the majority of Realtors whose commissions are determined by sales prices.

7 Things To Know About FHA Loads
http://rismedia.com/2010-07-03/7-things-all-borrowers-should-know-about-fha-loans/

7 Things All Borrowers Should Know About FHA Loans
Posted By susanne On July 3, 2010 @ 12:02 am In Home Buying 101,Home Owner News,Real Estate,Today's Marketplace,Today's Top Story,Today's Top Story - Consumer | Comments Disabled

[1]RISMEDIA, July 3, 2010?FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market. FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

?We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87% today,? said Christopher Gardner, founder and president of FHA Pros, LLC. ?Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe it?s time to change that.?

1. FHA loans are not only for lower-income borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans, but borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA loans are not only for first-time buyers. Many people believe FHA loans are available only to first-time home buyers, but this is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA loans are not just small loans; in fact, loan amounts can be as high as almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county though. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com [2] to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA loans are not affiliated with the section 8 housing program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA loans are often more affordable than conventional loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5%.

6. FHA-approved condo developments are more desirable to buyers. With 87% of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today?s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don?t mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not ?risky? loans, due in large part to the strict ?full documentation? requirements placed on borrowers. Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply.

7. FHA loans are assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

?Now, more than ever, buyers and sellers need to understand the options available to them when it comes time to buy a home,? continued Gardner. ?At FHA Pros we have worked with countless HOAs, attorneys and individuals to easily and efficiently navigate the historically tricky FHA-approval process.?

For more information, visit www.checkfhaapproval.com [2].

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com [3].

FHA New Housing Goalsfor 2011
FHFA Establishes New Housing Goals for Fannie Mae and Freddie Mac
Print Article
RISMEDIA, September 8, 2010?The Federal Housing Finance Agency (FHFA) has sent a final rule to the Federal Register establishing new housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2010-2011. The Housing and Economic Recovery Act of 2008 (HERA) required FHFA to establish housing goals for the Enterprises for targeted segments of the mortgage market.
In previous years, the Department of Housing and Urban Development (HUD) set overall goals that measured the combined performance of single-family and multifamily mortgages. In contrast, the new goals required by HERA target specific segments of those markets. The new goals also reflect essential conservatorship requirements to ensure the Enterprises focus on core business activities to support the mortgage market while minimizing losses on their existing mortgages.
The final rule establishes three single-family, owner-occupied home purchase mortgage goals for low-income families, very low-income families and families living in geographical areas with lower-income populations, areas with high concentrations of minority residents and federally-declared disaster areas. The latter goal also includes a specialized subgoal to ensure that the Enterprises address housing needs in lower-income and minority areas. The final rule also contains a goal for single-family, owner-occupied refinance mortgages for low-income families.
The home purchase and refinance goals are expressed as minimum goal-qualifying mortgage shares of home purchase or refinance mortgages acquired by the Enterprises. The benchmark goal levels for the low-income and very low-income home purchase goals did not change from the proposed housing goals rule, however, the final rule adjusts the low-income refinance goal downward reflecting recent market conditions.
The benchmarks for the four single-family goals are:
-27% for the low-income home purchase goal;
-8% for the very low-income family home purchase goal;
-A percentage to be set annually by FHFA for the low-income/high minority/disaster areas home purchase goal (with a subgoal of 13% to measure acquisitions in low-income/high minority areas only); and
-21% for the low-income family refinance goal. The final multifamily goals reflect the current market conditions and are lower than those proposed initially:
-Fannie Mae? s goal is to acquire mortgages that finance at least 177,750 low-income rental units and 42,750 very low-income rental units.
-Freddie Mac?s goal is to acquire mortgages that finance at least 161,250 low-income rental units and 21,000 very low-income rental units.
-The Enterprises must also report on their acquisition of mortgages involving low-income units in small (5- to 50-unit) multifamily properties.
Consistent with the FHFA proposed housing goals rule, the final rule offers two measures for goal compliance. The final rule sets a prospective or benchmark measure as well as a retrospective market-based measure to assess each Enterprise?s performance relative to the actual goals-qualifying share of the primary mortgage market. An Enterprise can satisfy a particular goal if it meets either of these measures. Previously, the Enterprises? housing goal levels were set only prospectively.
Consistent with the proposed rule, the final rule prohibits housing goals credit for purchases of mortgages in private-label securities, including commercial mortgage-backed securities. The final rule revises the counting treatment in the proposed rule for loan modifications by allowing credit under the low-income refinance goal for permanent Making Home Affordable loan modifications.
FHFA does not intend for the Enterprises to undertake economically adverse or high-risk activities in support of the goals, nor does it intend for the Enterprises? state of conservatorship to be a justification for withdrawing support from these important market segments.
As noted in the final rule, FHFA expects to take future regulatory action to address the housing goals treatment of purchases of multifamily loans that aid the conversion of properties that have affordable rents to properties that have less affordable, market rate rents. FHFA also may solicit further comments on how the housing goals can further promote sustainable homeownership and how multifamily subordinate liens can be structured to benefit low-income residents. The final rule is effective 30 days after publication in the Federal Register.
For more information, visit www.fhfa.gov.

September 2010 Unemployment 9.6%
http://online.wsj.com/article/SB10001424052748703946504575469331075476058.html?mod=WSJ_hps_LEFTTopStories

THE WALL STREET JOURNAL ECONOMYSEPTEMBER 3, 2010, 9:12 A.M. ET

Private Sector Adds 67,000 Jobs
U.S. Economy Lost 54,000 Jobs in August; Unemployment Rate Rises to 9.6%

WASHINGTON -- Job losses continued to mount in the U.S. economy last month, though at a more modest pace than expected, putting further pressure on policy makers to take action to spur growth and employment.

Nonfarm payrolls fell by 54,000 last month, matching the level of revised losses recorded the previous month, the U.S. Labor Department said Friday. The revision in July layoffs to 54,000 followed an original estimate of a 131,000 drop in payrolls.

The U.S. economy has shed jobs for three straight months, though the losses in August were about half the 110,000 predicted by economists in a Dow Jones Newswires survey.

The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, after holding at 9.5% for previous two months.

The report is likely to cause renewed debate during the long Labor Day weekend over what new steps the Federal Reserve and Congress should consider to jump-start the job market.

Last month, the Fed moved to stop any premature contraction in its balance sheet, effectively taking its foot off the brake pedal by reinvesting proceeds from any maturing mortgage securities into Treasurys.

While the central bank has held off on stepping on the gas--either by resuming asset purchases or other unconventional measures--Fed officials expressed concern during the Aug. 10 meeting about the sluggish labor market and debated potential causes.

Fed Chairman Ben Bernanke declared his readiness a week ago to pursue further moves if "unexpected developments" derail the economic expansion. The "painfully slow recovery" in the jobs market was a central policy concern, he said, given the risks it poses to consumer confidence and the broader economy.

President Barack Obama, who has pushed Congress to support more job-creating measures, plans to speak Monday at the Milwaukee Laborfest. In addition to a small business bill languishing on the Hill, the administration is coming up with new ideas to promote job growth.

The report Friday showed that private sector hiring wasn't enough to offset cutbacks in job losses in the government, which continued to let go temporary workers hired for the 2010 census.

Private-sector companies added 67,000 jobs, following an upwardly revised 107,000 gain in July.

Manufacturers shed 27,000 jobs, after adding 34,000 the previous month.

Professional and business services payrolls rose 20,000. Construction, a sector of the economy that has struggled, added 19,000 jobs, as well.

Total government employment, which includes state and local jobs, fell 121,000. The declines were a result not just of the letting go of 114,000 census workers, but also job cuts by state governments facing budget pressures.

In a positive sign, the report showed 42% of unemployed Americans were out of work for more than six months in August, down from 45% in July. It becomes harder to find a job as time goes by, as skills are lost and employers may view long periods of unemployment with suspicion.

An indication of slack in the market, and thus potential inflation pressures, moved slightly higher. Average hourly earnings of all employees increased by $0.06 to $22.66 in August. The average workweek was unchanged at 34.2 hours.

11 Rules Your Kids Didn't Learn In School - From Bill Gates
Bill Gates speech:
11 rules your kids did not and will not learn in school
by Kent Summers on Wednesday, May 26, 2010 at 8:34am

Rule 1: Life is not fair - get used to it!

Rule 2: The world doesn't care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself.

Rule 3: You will NOT make $60,000 a year right out of high school. You won't be a vice-president with a car phone until you earn both.

Rule 4: If you think your teacher is tough, wait till you get a boss.

Rule 5: Flipping burgers is not beneath your dignity. Your Grandparents had a different word for burger flipping: they called it opportunity.

Rule 6: If you mess up, it's not your parents' fault, so don't whine about your mistakes, learn from them.

Rule 7: Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you thought you were. So before you save the rain forest from the parasites of your parent's generation, try delousing the closet in your own room.

Rule 8: Your school may have done away with winners and losers, but life HAS NOT. In some schools, they have abolished failing grades and they'll give you as MANY TIMES as you want to get the right answer. This doesn't bear the slightest resemblance to ANYTHING in real life.

Rule 9: Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you FIND YOURSELF. Do that on your own time.

Rule 10: Television is NOT real life. In real life people actually have to leave the coffee shop and go to jobs.

Rule 11: Be nice to nerds. Chances are you'll end up working for one.

Closing For Home Buyer Tax Credit Extended To Sep 30, 2010 & Flood Insurance Extended
http://www.inman.com/news/2010/07/2/obama-signs-tax-credit-flood-insurance-extensions-law
extensions into law
Closing deadline for homebuyer tax credits pushed to Sept. 30
BY INMAN NEWS, FRIDAY, JULY 2, 2010.
Inman News

President Obama today signed into law bills extending the closing deadline for claiming the federal homebuyer tax credit and temporarily reinstating the National Flood Insurance Program.

HR 5623, the Homebuyer Assistance and Improvement Act of 2010, gives homebuyers who were under contract by April 30 until Sept. 30 to close their home purchase and claim the federal homebuyer tax credit, if they meet other eligibility requirements.

Real estate and lending industry groups said thousands of homebuyers would have missed the original closing deadline of June 30 because they were waiting for bank approval of short sales, or coping with other delays caused by third parties handling their closings (see story).

HR 5569, the National Flood Insurance Program Extension Act of 2010, retroactively reinstates the National Flood Insurance program, which expired May 31, until Sept. 30.

The Senate passed both bills by unanimous voice vote Wednesday, after plans to use a bill extending unemployment insurance to extend both deadlines were complicated by disagreements over deficit spending.

The bill to extend unemployment benefits, HR 4213, fell two votes short in the Senate Wednesday of the 60 votes needed to end debate, and no further action on the bill is expected until lawmakers return from the the July 4 recess.

Changing US Demographics
U.S. Nears Racial Milestone

http://online.wsj.com/article/SB10001424052748704312104575298512006681060.html?KEYWORDS=nears+racial+milestone

By CONOR DOUGHERTY

Whites are on the verge of becoming a minority among newborn children in the U.S., marking a demographic shift that is already reshaping the nation's politics and economy.

Jeremy Igo for The Wall Street Journal
Korean immigrant publisher Ki-Hyun Chun, center, works Thursday on the Asian Herald in Charlotte, N.C., where the nonwhite population has risen.

The Census reported Thursday that nonwhite minorities accounted for 48.6% of the children born in the U.S. between July 2008 and July 2009, gaining ground from 46.8% two years earlier. The trajectory suggests that minority births will soon eclipse births of whites of European ancestry.

"The question is just when," said Kenneth Johnson, senior demographer at the Carsey Institute at the University of New Hampshire. He guesses the demographic milestone will be crossed in the next few years, and could happen as early as 2011.

America's changing face has transformed race relations from the traditional divide of black and white to a more complex mix of race, language and religion. There are new strains on schools and social services, while immigration has emerged as one of the nation's most contentious issues?as evidenced by Arizona's recent law that makes illegal immigration a state crime.

A number of forces are pushing the U.S. toward a "majority minority" future. The median age of the white population is older than that of nonwhites, and thus a larger share of minority women are in prime child-bearing years. In addition, white women are having fewer children than nonwhites, while the growth in mixed marriages has led to more multiracial births.

The recession has slowed the transformation by reducing immigration. It also has made people of all races less willing to start families. But births among nonwhites slowed less than those among whites between July 2008 and July 2009. Among the Hispanic population, there were roughly nine births for every one death, compared with a roughly one-to-one ratio for whites.

Minorities made up 35% of the U.S. population between July 2008 and July 2009, up from 31% in 2000, the Census said. While immigration is a touchy political issue, it is not the driving factor behind the nation's growing diversity. Hispanics, for instance, accounted for 54.7% of the total population increase between July 2008 and July 2009, but about two-thirds of that gain came from births.

Charlotte, N.C., and surrounding Mecklenburg County offer a microcosm of the diversifying nation. A statue of Mahatma Gandhi stands in front of the historic county courthouse, a gift from the Charlotte Asian Heritage Association. Food Lion, a supermarket chain in the Southeast, spent the past year adding thousands of Hispanic food items to 19 Charlotte area stores. In 1990, 70.3% of the county was white. Today, it is 54.6%, and Mecklenburg County's youngest whites are a minority among their peers.

Ki-Hyun Chun, a Korean immigrant, started a small immigrant-focused accounting firm in the 1970s. Today, in addition to his firm, he runs an Asian library with 130,000 books and a three-language Asian newspaper out of his building on the edge of downtown Charlotte.

The shifting mix has "changed our definition of diversity," said Ann Clark, chief academic officer of the Charlotte-Mecklenburg school district. The district, for example, used to put its teachers through training to overcome racial biases that usually cut along black-and-white lines. Now, the district focuses more on reaching kids who live in poverty or don't speak English at home. It has hired four full-time translators and started a program to educate teachers about poverty.

Esselito Solano, a 31-year-old who owns a company that makes stone kitchen counters, said he felt like an outsider when he emigrated to the U.S. from the Philippines in the mid-1980s. He remembers being perplexed when an elementary-school teacher made him throw away the remainders of his cafeteria lunch instead of bringing it home, a wasteful move in his native country.

Today, his young daughters are growing up as part of a nonwhite majority. In 2006, the most recent data available, 43% of the babies born in Mecklenburg County were non-Hispanic whites, according to health statistics. "They're not going to have a hard time blending in," said Mr. Solano.

Charlotte's business and social institutions also reflect the change. The Charlotte Chamber of Commerce has expanded minority membership via a program that gives discounts to several racial and ethnic chambers. In 2007, the NAACP of North Carolina formed a coalition called Historic Thousands on Jones Street People's Assembly, which is made up of 93 North Carolina advocacy groups that represent various races and ethnicities. "With this changing demographic, we had to operate in coalition," said Rev. William Barber, president of the NAACP of North Carolina.

America has long been on a path toward becoming a more diverse nation, and several states, including California and Texas, are already "majority minority." But in the past decade or so, the dual forces of assimilation and the housing boom have pushed diversity beyond gateway cities into the suburbs and across states that hadn't traditionally attracted immigrants.

Philip Maung started off in a gateway city, immigrating to Los Angeles from Burma (now Myanmar) in 1989. He moved to Charlotte in 1997 to start Hissho Sushi, now a 400-store company that sells sushi out of kiosks in airports and grocery stores. The company's 50,000-square-foot headquarters has offices, warehousing and a chilled room where a dozen employees begin rolling sushi at 3:30 a.m. "In a bigger city like New York or L.A., I wouldn't have had a shot," said Mr. Maung.

Although he has achieved the American dream, Mr. Maung said he wanted his two boys, both born in Charlotte, to understand where he came from. Two years ago, he sent the kids back to Asia to spend time learning Chinese and living in the developing world. "They'll come back with their eyes open," he said.

Write to Conor Dougherty at conor.dougherty@wsj.com

Economists See Economic Growth of 3% Thru 2011
Economists Expect Slow U.S. Growth

http://online.wsj.com/article/SB10001424052748703890904575296403144025366.html?KEYWORDS=economists+expect+slow

By PHIL IZZO

Economists surveyed by The Wall Street Journal are sticking with their forecasts for slow but steady growth in the U.S. economy through the middle of 2011 despite recent turmoil in European debt markets.

But their outlook is clouded by growing worries about Europe and the vitality of the U.S. job market.

On average, the 53 respondents to the Journal's monthly survey still expect the U.S. economy to grow about 3% in the second half of the year and to continue at that pace into 2011. That means adding jobs so gradually that unemployment, now at 9.7%, will be at a still-elevated 8.6% by the end of December 2011.

"Jobs are key for demand growth," said Michael Carey of Cr?dit Agricole CIB. "The European sovereign-debt crisis could negatively impact growth through financial conditions."

The risk of contagion from Europe and other uncertainties led the forecasters to push back until February 2011 the moment at which they expect the Federal Reserve to raise interest rates.

A month earlier, they anticipated a Fed move before the end of this year.

Twenty-four of the economists, a plurality, said the biggest downside risk to their forecast for the U.S. economy for the second half was ripple effects from the European government-debt crisis, which has spread beyond Greece and raised doubts about everything from the viability of the euro to the strength of the European banks.

An additional 11 said the biggest downside risk was disappointing job growth in the U.S.

In the U.S., the pace of job growth is key to the speed of the recovery.

Twenty-two economists, a plurality of respondents, said the one development that could lead growth to exceed their forecasts in the second half is a pickup in hiring.

3:24
A WSJ economic survey shows economists forecasting slow but steady growth in the U.S. through the mid-2011 despite recent turmoil in European debt markets. But their outlook is clouded by growing worries about Europe and the vitality of the U.S. job market. WSJ's David Wessel joins the News Hub to discuss.

About the Survey

The Wall Street Journal surveys a group of 57 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared. For prior installments of the surveys, see: WSJ.com/Economist.

Twelve others cited accelerated consumer spending, which is tied to the job market.

On average, they expect the U.S. to add about 2.2 million jobs over the next 12 months, substantially less than a third of the jobs lost since the onset of the recession in December 2007.

Federal Reserve Chairman Ben Bernanke offered guarded reassurances about the economy in testimony to the House Budget Committee Wednesday, saying a new recession is unlikely and that the Fed still expects the U.S. economy to grow at a 3.5% annual rate in the months ahead. Still, his tone was notably cautious, given the headwinds facing Europe and recent turmoil in financial markets.

"Forecasting is very difficult and I make no promises in any particular direction," he said, "but it appears to us that the recovery has made an important transition from being supported primarily by inventory dynamics and by fiscal policy toward a recovery being led more by private final demand." Still, he added, a double-dip recession couldn't be "entirely ruled out." The economists in the survey put the odds of a double-dip recession at just 19%.

The economists?most of whom are American?see a 75% chance, on average, that Greece will be unable to pay its debts as promised and will either default or restructure them, despite the rescue package offered by other European countries and the International Monetary Fund.

And the forecasters put 1-in-3 odds on the euro zone eventually splintering, undoing an experiment in which 16 sovereign nations share a common currency.

The forecasters give the Fed much higher grades, an average of 80 out of 100, than they do the European Central Bank, which has lost some of its credibility in recent weeks over its response to turmoil in European debt markets.

The economists give it a grade of 68. The Bank of England and Bank of Japan came in at 70 and 63, respectively.

Meanwhile, the Fed's roundup of regional economic conditions in May, prepared for the central bank's June 22-23 policy meeting and released Wednesday, found that the economy continued to improve across the country, but many of the Fed's 12 regional banks described the pace of growth as modest. Based on conversations with local businesses, the Fed banks said consumer spending is strengthening, though consumers tend to be buying necessities rather than big-ticket discretionary items. Tourism activity improved across the country, except for cancellations in areas affected by the Gulf oil spill. "The potential exists for a much greater impact, although contacts are quite uncertain as to the ultimate effects," the Fed said.

District-by-District Summaries

The Fed found that the job market is improving, particularly in manufacturing. The Boston and Dallas Fed banks noted a pickup in temporary hiring. Overall, manufacturing, services outside of finance and transportation "continued to gradually improve," the Fed said. But commercial real-estate activity was weak, despite a modest increase in lending in some parts of the country. "Commercial and industrial lending by banks remained weak in most Districts, although Philadelphia, Chicago, Dallas, and San Francisco noted business-loan demand was firming, the Fed noted.

The economists' prescriptions for policy makers depend heavily on their diagnosis of the current risks.

By a nearly 2-1 count, the larger number of economists, many of whom cited concerns about issues facing the euro zone, said developed nations need to pay more attention to deficits. "Fiscal issues are the No. 1 risk to the recovery/expansion," said Paul Ballew of Nationwide.

The smaller group of economists, who said the labor market is the biggest challenge, said governments in developed countries are worrying too much about deficits and not enough about supporting growth with fiscal policy.

"Fiscal tightening would snatch defeat from the jaws of victory," said David Resler of Nomura Securities International Inc.

Spending more or cutting taxes to promote job growth expands the deficit, but reducing government support before a recovery has become self-sustaining could hold back the labor market.

?Jon Hilsenrath contributed to this article.
Write to Phil Izzo at philip.izzo@wsj.com

New home sales soar 15% in April 2010
http://money.cnn.com/2010/05/26/news/economy/new_home_sales/

New home sales soar 15% in April

By Hibah Yousuf, staff reporterMay 26, 2010: 11:05 AM ET

NEW YORK (CNNMoney.com) -- New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month.

New home sales climbed 14.8% to a seasonally adjusted rate of 504,000 last month, up from an upwardly revised 439,000 in March, the Census Bureau reported on Wednesday. Sales year-over-year were up 47.8%.

A consensus of economists surveyed by Briefing.com had expected April sales to rise to an annual rate of 425,000.

April was the second straight month of increases. In March new home sales snapped a four-month losing streak and surged at the fastest single-month rate in 47 years as homebuyers snatched up properties ahead of the looming deadline for the tax credit.

The homebuyer tax credit, which expired April 30, boosted sales since buyers had to sign contracts by the end of last month. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.

The credit also pushed existing home sales higher during the month, according to a real estate industry report released earlier this week.

"We got two solid increases in March and April," said Mark Vitner, senior economist at Wells Fargo. "We may see sales fall to a record low in the aftermath of the tax credit program, but any fallback should be short-lived."

That's because even with the jump, the current annual rate of new home sales is still historically low. Vitner said about 700,000 homes are sold annually in a stable economy.

"A true recovery in the housing market won't get underway until we see solid gains in employment and income," Vitner said.

Although last month employers added the most jobs since March 2006, Vitner said the labor market has a long way to go as it recovers the 8.4 million jobs that were lost in 2008 and 2009 and long-term unemployment sits at severe highs.

"The job market is getting a little bit better, but it's still abysmal, he said.

Price and inventory: The government report showed that the median price of new homes sold in April was $198,400, down almost 10% from March from April 2009.

Vitner said the drop in price is because first-time home buyers, who typically spend less than repeat buyers, represented a larger portion of overall buyers last month.

An estimated 211,000 new homes were for sale at the end of April. At the current sales pace, the government expects it will take five months to sell through that inventory. That's down from March, when there were 6.7 months of inventory on the market.

Sales by region: Sales rose the most in in the Midwest, where they spiked by more than 30%; the West welcomed a 21.7% climb. Sales in the South rose more than 10%, and they were flat in the Northeast.

Bay State Construction Permits Surge In April 2010
http://www.bankerandtradesman.com/news138517.html
Bay State Construction Permits Surge In April 5/26/2010
New home construction permits in Massachusetts spiked in April from the same month a year earlier, according to numbers from the U.S. Census Bureau.

Cities and towns in the Bay State issued 714 permits in April, up from 399 in April 2009. That's also up from March, when 532 permits were issued.

There were 479 permits issued for single-family homes in April, compared to 319 in April 2009.
Nationwide, there were 56,330 permits in April, a sharp increase from the 46,536 permits a year earlier.

Banker and Tradesmen: April MA Sales Surge From Year Prior: Homes Up 46%, Condos Up 56%
Bay State Home, Condo Sales Surge By Double-Digit Percentages In April
Median Home Prices Climb For Fifth Straight Month
http://www.bankerandtradesman.com/news138481.html
The Warren Group May 25, 2010
Tune In
To listen to The Warren Group CEO Timothy Warren Jr. discuss the increase in sales activity in the Bay State, clickhere.
Single-family home sales in Massachusetts spiked 45.8 percent in April compared to the same month a year ago, while condominiums sales soared 55.7 percent, according to The Warren Group, publisher of Banker & Tradesman.
Prices for both single-family homes and condos also climbed in April.
"The surge in sales activity continued in April. Single-family home sales have increased year-over-year for 10 straight months and median home prices have been on the rise for five months," said Timothy M. Warren Jr., CEO of The Warren Group. "There is more confidence about a turnaround in the housing market, but concerns remain about foreclosure activity and unemployment, which are still high."
Single-family home sales shot up 46 percent to 3,980 from 2,730 in April 2009. It was the most sales for the month of April in five years. Year-to-date sales are up 26.1 percent to 11,286 from 8,953.

The median price for single-family homes sold in April rose 7.1 percent to $285,000 from $266,125 a year ago. The median selling price for the first four months of the year was $280,000, 8.1 percent higher than the $259,000 median price recorded during the same period in 2009.

Statewide condominium sales jumped 56 percent to 1,831 from 1,176 in April 2009. A total of 5,278 condo sale transactions were recorded in the first four months of the year, a 32.6 percent increase from 3,981 the prior year.

The median condo price climbed 5.5 percent to $253,000 in April from $239,900 during the same month in 2009. The year-to-date median condo price rose 8.7 percent to $246,250 from $226,500.

Economy To Grow in 2010 and 2011
WALL STREET JOURNAL, MAY 23, 2010
Economists See Solid U.S. Growth
By?LUCA DI LEO
WALL STREET JOURNAL, MAY 23, 2010
http://online.wsj.com/article/SB10001424052748704167704575258620270541194.html?mod=WSJ_economy_LeftTopHighlights

The U.S. economy should expand at a solid pace this year and next as consumers increase spending, confident the recession is behind them, a panel of economists said in a survey released Monday.

The 46 economists surveyed in the National Association for Business Economics report between April 27 and May 7 predicted U.S. gross domestic product would expand by 3.2% in 2010 and 2011.

That is a touch higher than the 3.1% growth predicted for both years in the last survey, released Feb. 10.

"Although risks involving Europe have recently escalated, the outlook in this country has improved in most respects," said NABE President Lynn Reaser, chief economist at Point Loma Nazarene University.

"Growth prospects are stronger, unemployment and inflation are lower, and worries relating to consumer retrenchment and domestic financial headwinds have diminished," she said.

Stung by the worst recession since the 1930s, Americans were thriftier in 2009. But consumer spending, which accounts for more than two-thirds of U.S. GDP, drove the economy's growth in the first quarter of 2010. That should help compensate for fading support from the government later this year.

The U.S. savings rate should average 3.4% this year, the economists predicted, down from a 4.6% forecast three months ago.

Spending will be helped by a gradually improving labor market. Employment gains are expected to remain robust through 2011, except for a slowdown in job creation in the July-September period, when those working on the 2010 decennial Census count will lose their temporary jobs.

The economists surveyed expect the unemployment rate to fall from 9.9% in April to 9.4% at the end of this year and to 8.5% by the end of 2011.

The economy in April added jobs at the fastest pace in four years, with strong employment gains in the private sector.

Personal spending and income data for April, due for release on Friday, are expected to show that the turnaround in employment is starting to support incomes, according to analysts surveyed by Dow Jones Newswires.

Business investment also will drive the economy's expansion, according to the NABE survey, with spending on equipment and software buoyed by higher profits. Small companies, which are still finding it hard to get loans following the financial crisis, are expected to benefit from some easing of credit conditions.

The panelists expect inflation to remain low for longer than in the previous survey. As a result, they see the Federal Reserve's benchmark lending rate rising to just 0.5% at the end of 2010, compared with a February prediction that it would increase to 0.75% in the final quarter of this year. The Fed funds rate at which banks lend to each other overnight currently stands between zero and 0.25%.

The NABE forecasts are slightly less optimistic than predictions made by Federal Reserve officials at their last meeting. Fed officials said after the April 27-28 meeting that the economy should grow by about 3.5% this year and 4% in 2011, with the jobless rate falling to 8.3% at the end of next year.

On a more negative note, the strength of the housing rebound was downgraded in the latest NABE survey. Economists no longer expect the sector to outpace the overall economy.

U.S. home construction posted a bigger-than-expected gain in April thanks to the extension of a tax credit, but the plunge in permits suggested the housing sector would remain a weak spot in the economy.

Almost half of those surveyed believed Greece would default on its debt over the next year. (The survey ended a few days before European governments announced a $1 trillion debt-stabilization fund to prevent the Greek crisis from spreading.)

But the impact on the U.S. economy was still seen as limited by NABE panelists.

Not everyone agrees with this conclusion. Fed governor Daniel Tarullo warned last week that Europe's debt crisis posed serious risks to the U.S. economy because it could hurt U.S. exports and bank lending, as well as revive stress in global financial markets.

Write to?Luca Di Leo at?luca.dileo@dowjones.com

Interest Rates At Near 50 Year Low: 4.86%
Wall STREE JOURNAL, MAY 24, 2010
Mortgage Rates Decline
Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5%
By NICK TIMIRAOS
http://online.wsj.com/article/SB10001424052748704904604575262713807080890.html?mod=WSJ_Real+Estate_LeftTopNews

The financial turmoil in Europe is providing an unexpected windfall for American home buyers, as international money seeking a safe haven is flowing into the U.S., pushing domestic mortgage rates to the lowest levels of the year and back near 50-year lows.

The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve's $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market.

Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.

Refinance business "exploded" last week, says Jeff Lazerson, chief executive of Mortgage Grader, a brokerage in Laguna Niguel, Calif. "It's schizophrenic. We all had this expectation of higher interest rates and no more refinances." He says he helped a borrower lock in a 30-year loan with a 4.25% fixed rate last week, the lowest in his 24 years in the business.

Rates on 30-year mortgages averaged 4.84% last week, according to a survey by mortgage-insurance titan Freddie Mac. Rates were quoted late Friday at 4.86%, the lowest since December 2009, according to a survey by financial publisher HSH Associates, and down from a high of 5.27% for the week ended April 9. Rates on 15-year mortgages averaged 4.24% last week?the lowest since Freddie began its survey in 1991.

Economists largely attribute the decline in mortgage rates to the European debt crisis and new concerns about the global economy, which unleashed a massive wave of cash into U.S. bonds from investors around the world.

This buying pushed down yields on Treasury bonds. Because mortgage rates are closely pegged to yields on 10-year Treasury notes, which fell to 3.2% Friday, the decline in Treasurys pulled down mortgage yields. Typically, mortgage yields remain around 1.5 percentage points above yields on 10-year Treasury notes.

Falling mortgage rates can give a powerful lift to the housing market. A general rule of thumb holds that every one percentage point decline in mortgage rates is the equivalent of roughly a 10% reduction in the home price for the buyer.So, if the current rates hold, say economists, that could help stabilize prices and allow current homeowners to sell existing homes without substantial price cuts.

It isn't clear how much home-buying the lower rates will spur. Demand had fallen in recent weeks after buyers raced to close sales ahead of last month's expiration of an $8,000 federal tax credit for home purchases. Applications for new-purchase loans hit a 13-year low in the week ending May 14, according to the Mortgage Bankers Association.

Borrowers do face roadblocks. Underwriting standards are their strictest in a decade, and record numbers of borrowers are "underwater," owing more to the bank than their homes are worth. That has excluded large swaths of borrowers from getting loans at the new lower rates.

Still, lower rates could widen the pool of people who qualify for a mortgage, while others may find they qualify for a slightly larger loan. "They can buy the place with the extra bedroom or the swimming pool," says Jay Brinkmann, chief economist at the Mortgage Bankers Association.

Falling rates have encouraged some Americans to consider refinancing their existing mortgages to save money. A one-percentage-point decline in mortgage rates can cut $250 off the monthly payment on a $400,000 30-year fixed-rate mortgage, giving consumers cash they can use to spend.

Richard Hunsinger plans to refinance two loans on his Potomac, Md., home into a new 15-year mortgage this week with a 4.37% rate. The 55-year-old dentist is worried that interest rates will eventually rise sharply, boosting the payment on his home-equity line of credit. His first mortgage, also a 15-year loan, currently has a fixed rate of 5.25%. And while the rate on his $240,000 home-equity loan is just 3.25%, it has risen as high as 8% in the past.

Rates "can't stay low forever," says Dr. Hunsinger. If they go up over the next year, "this will look like a really bright decision."

By historical standards, rates are incredibly low. Until 2003, rates on 30-year fixed-rate loans hadn't dipped below 5% since the 1960s. Rates fell to similar points throughout much of the past year as the government was helping to hold down costs for borrowers.

Nearly half of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 5.75% or higher and could reduce their rates by a full percentage point if they refinanced at current rates, according to investment bank Credit Suisse.

Many of those borrowers may have tried to refinance last year, only to find that they couldn't qualify. When rates fell to similar lows in 2003, refinance activity hit a record $2.9 trillion, compared to $1.2 trillion last year, according to Inside Mortgage Finance, a trade publication.

Now, more private investors are coming into the market for loans, offering better prices for securities containing mortgages with low rates than they were one year ago. That could lead banks and brokers to cut upfront origination fees, and borrowers who are able to refinance could find it cheaper to do so than last year.

"I'm calling people back and saying, 'Now it's worth it,'" says Michael Menatian, a mortgage banker in West Hartford, Conn.

?Prabha Natarajan contributed to this article
Write to Nick Timiraos at nick.timiraos@wsj.com

FHA Suspends Anti Flipper Rules For 1 Year - Some Limitations
Investors find flaws in FHA anti-flipping rules
Restrictions on resale price, same-day closings irk some
BY STEVE BERGSMAN, FRIDAY, MAY 14, 2010. Inman News
http://www.inman.com/buyers-sellers/columnists/stevebergsman/investors-find-flaws-in-fha-anti-flipping-rules

In February, the Federal Housing Administration suspended for one year a regulation designed to hold back "flippers," or investors who acquire single-family homes and then put them back into the market very quickly, often within 90 days.
One would think this would be party time for flippers -- and it is! -- but there are some caveats within the rule suspension that still limit completely unabashed flipping.
At least the handcuffs are off and that's welcome news.
As Paul Barrow, the fellow behind thePrivateMarket.com, extolled, "This will be music to investor's ears everywhere! We no longer have to wait and plan to hold for 91 days to contract and sell, fix and flip projects to first-time homebuyers."
A little history first.

Back in 2003, the FHA decided to no longer approve loans on properties that were resold within 90 days of original purchase. In those halcyon days, the FHA feared flipping homes was causing prices in individual neighborhoods to unnaturally boom. Of course, back then everything was booming, and flippers -- they prefer to call themselves investors -- wondered why they were being singled out.
Flippers have historically been mischaracterized and demonized, says JP Moses, founder of REI tips, or www.reitips.com. He is also a self-proclaimed flipper and his website was created as a nexus for those in the business.
There are a small number of bad apples in this industry as there are in any industry, but they shouldn't soil what is essentially a good, efficient and legal business. Unfortunately, they do.

"I feel strongly that the real estate investor has become kind of a scapegoat," he says. "Realtors have lobbyists working on their behalf and multimillion-dollar budgets dedicated to enhancing their image. Investors don't have anything like that."
So how did Moses feel about the FHA reversing course?
"It's hilarious to me," he exclaims. "The FHA is admitting the 90-day seasoning has hindered neighborhood redevelopment. Thank you, and in today's economy that is a positive step, but why not listen to what you are saying and just eliminate the rule altogether? It's not doing anyone any good."
In Moses' view, flippers are among the few groups of active investors at the forefront of redeveloping communities hard hit by waves of foreclosures and abandonment. That's because they buy the REOs, rehab the properties and then put the homes back on the market as quickly as possible.
"Who else is going to buy the flood of REOs, especially the ones in bad shape?" asks Moses.
The rationale behind the FHA's change of heart -- albeit temporary -- was that the agency concluded that acquiring, rehabilitating and reselling of REO properties often takes less than 90 days and prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers.

That's because buyers must consider holding costs and risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
"This will translate to lower holding costs, more projects and higher-quality inventory for buyers because if we are able to sell a property then we can buy another property faster," says Barrow. "It will turn ugly houses into residences first-time homebuyers want to purchase."
Barrow is an investor, and his company, Private Market Real Estate in Denver, offers opportunities for others to invest in flip or rental opportunities.
"Even if we finished a remodel in four or five weeks," says Barrow, "we had to let the property sit. That slows down the sale and the next acquisition. It also clogs up the market at a time when there is so much demand."

So while this is all well and good for investors, it's not without some minor limitations.
The 20 percent rule. If your resale is higher than 20 percent of your acquisition price, you'll have to pony up some extra proof that the price was justified. "Most of the time investors are able to add more than 20 percent value to the property from the time they buy it," says Barrow, "so there are some extra hoops you have to jump through." In other words, if you buy a house for $100,000 and try to sell it for $125,000, the house is subject to additional underwriting guidelines, which is like a double appraisal.

Title hold. Since a seller must hold property, that still means no simultaneous closings. "You can theoretically close on your purchase Monday, go into contract with your FHA buyer on Tuesday, and hopefully close with them in 30 days," says Moses, "but you still can't do back-to-back, same-day closes to an FHA end-buyer.
Short-term funding. Investors still need to come up with short-term funding of the 30- to 60-day variety if they want to buy, fund and then sell to an FHA end-buyer.
Previous flips. Basically, the subject property should not display a pattern of prior flipping activity, says Moses. If a property has been, for example, wholesaled in the last 12 months, the FHA may flag the deal and disapprove.
Moses calls himself a wholesale flipper, as differentiated from a retail flipper. The uniqueness being that the retail flipper buys a house, fixes it up, and eventually sells to the end user.

A wholesale flipper is the person who sniffs a deal out and quickly resells to a rehabber or landlord without doing any work on the property. Wholesale flippers get a much smaller commission.

The FHA changes don't matter much to the wholesale flipper, because he or she can't flip a house to an FHA buyer, says Moses. "So, the rule doesn't affect my business too much, but it will definitely be a boon to retail flippers."
Steve Bergsman is a freelance writer in Arizona and author of several books, including "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."

Millions Of Lost Jobs Likely Won't Return
Millions of jobs that were cut won't likely return
http://www.usatoday.com/money/economy/2010-05-13-jobs-gone_N.htm

By Christopher S. Rugaber, AP Economics Writer
WASHINGTON ? Fewer construction workers will be needed. Don't expect as many interior designers or advertising copywriters, either. Retailers will get by with leaner staffs.
The economy is strengthening. But millions of jobs lost in the recession could be gone for good.
And unlike in past recessions, jobs in the beleaguered manufacturing sector aren't the only ones likely lost forever. What sets the Great Recession apart is the variety of jobs that may not return.
CURRENT: New claims for unemployment insurance inch down
JOBS OUTLOOK: Latest data for all states, 384 metros
JOB HUNT: Today's job seekers add 'social' to networking
RECOVERY WATCH: Tracking the economy

That helps explain why economists think it will take at least five years for the economy to regain the 8.2 million jobs wiped out by the recession, longer than in any other recovery since World War II.

It means that even as the economy strengthens, more Americans could face years out of work. Already, the percentage of the labor force unemployed for six months or longer is 4.3%. That's the highest rate on records dating to 1948.
Behind the trend are the cutbacks businesses made in the recession to make up for a loss of customers. To sustain earnings, they became more productive: They found ways to produce the same level of goods or services with fewer workers. Automation, global competition and technological efficiencies helped solidify the trend.
Diminished home equity and investment accounts have made shoppers more cautious, too. And their frugality could endure well into the recovery. That's why fewer retail workers, among others, will likely be needed.

Among those whose former jobs may be gone for good are:
? Julie Weber of Milwaukee, who designed office cubicles for nearly seven years. She lost her job about a year ago. Since then, she's been able to find only part-time work outside her field. Interior design was hammered by the real estate downturn. "My hope for getting back into the industry is not very high," says Weber, 29.

? Erik Proulx, 38, a former advertising copywriter in Boston, who finds more companies are turning to social media and viral marketing and are less drawn to agencies that focus on traditional TV and print ad campaigns. Proulx was laid off in October 2008 the third time an employer had cut his position or had closed. He no longer wants to rejoin the industry. Proulx has started a blog to help other unemployed ad professionals network.

Louis DiFilippo, 30, who decided to study information technology after losing his job managing a gourmet food store in Washington, D.C. After six months of unemployment, he embraced a career with more stability. He now works on computer network security for the Navy. "I'm much happier now," he said.
More than one-third of chief financial officers at 620 big companies surveyed in March by Duke University and CFO magazine said they didn't expect to restore their payrolls to pre-recession levels for at least three years. Nearly all cited higher productivity and tepid consumer spending.

"Companies have just figured out, 'We didn't want to fire people ... but now that they're gone, we've realized that we can get by without them,'" said John Graham, a Duke finance professor who directed the survey.

Productivity grew at an annual rate of 6.3% in the year ending in March, the Labor Department said this month. It was the largest increase in 48 years, though most economists think that pace isn't sustainable.

In the long run, more productive workers raise standards of living: Companies can pay more without inflating prices. But in the short run, high productivity delays hiring.

U.S. employers did add 290,000 jobs in April. The unemployment rate rose to 9.9%, though, because 805,000 people without jobs poured into the labor force to seek work.

Three industries, in particular, where many jobs may not be coming back are retailing, manufacturing and advertising.
Retailers have lost 1.2 million jobs, or 7.5% of retail jobs that existed before the recession, according to Labor Department data. Circuit City and Linens & Things have collapsed. Starbucks closed nearly 800 U.S. stores. Robert Yerex, an economist at Kronos, a work force management company, estimates 20% of those jobs are never coming back.

Manufacturing has shed 2.1 million jobs, or 16% of its total, since the recession began. Goodyear Tire & Rubber and Boeing laid off a combined 15,700 people during the recession. General Motors eliminated 65,000 through buyouts and layoffs. And as Americans buy fewer cars and homes, more than 1 million jobs in the auto, steel, furniture and other manufacturing industries won't return, according to estimates by Moody's Analytics.
Advertising and PR agencies have lost 65,000 jobs, or about 14% of the pre-recession total. Moody's Analytics estimates those industries will lose even more within five years.

In addition, a consolidated airline industry has shed layers of jobs that won't likely return. Delta Air Lines earlier this year spread out departure times for flights from its Cincinnati hub, rather than bunching them at peak travel times. That way, it could operate from one concourse rather than two, said Kent Landers, a spokesman. The change allowed Delta to cut more than 700 baggage handling and other ground services jobs.

More than half the 15.3 million people out of work in April said they regard their layoff as permanent, the Labor Department said. That's the highest proportion on records dating to 1967. In previous recessions, workers often endured only temporary layoffs: Their employers would recall them once business picked up.
Caterpillar has resumed hiring after laying off 19,000 full-time workers during the recession, thanks to rising demand for its construction and mining equipment. But most of the new jobs will be overseas. Of the 9,000 hires CEO Jim Owens said Caterpillar plans to make this year, only 3,000 will be in the U.S.

Many economists say eventually, companies won't be able to squeeze any more work out of their employees. That would force employers to step up hiring.
But Janet Yellen, president of the Federal Reserve Bank of San Francisco, cautions that this won't happen anytime soon. She believes corporate America remains in the early stages of a drive for greater efficiencies.
"We may be in store for ... high productivity growth for some time," she said in a speech this year. "If so, the rate of job creation will be frustratingly slow."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Areas With Highest and Lowest Underwater Homes
Top 10 areas with lowest, highest rate of underwater homes
CoreLogic: National negative equity levels flat at 24% year-over-year
BY INMAN NEWS, TUESDAY, MAY 11, 2010.
http://www.inman.com/news/2010/05/11/top-10-areas-with-lowest-highest-rate-underwater-homes

The number of homes where borrowers owe more on the mortgage than the house is worth has dropped to about 11.2 million in the first quarter, according to a report by business information company CoreLogic.
That's down from 11.3 million at the same time last year, though homes with negative equity (aka "underwater" or "upside down" homes) made up 24 percent of all residences with mortgages both quarters. That share goes up to 28 percent when those with less than 5 percent equity (2.3 million borrowers) are added.

"The two most important triggers of default, negative equity and unemployment, have stabilized over the last six months," said Mark Fleming, CoreLogic's chief economist, in a statement. "As house prices grow again and borrowers pay down their mortgage debt, negative equity levels will begin to diminish. The typical underwater borrower is likely to regain their lost equity over the next five to seven years."
The report was based on data from 47 million mortgaged properties, accounting for more than 85 percent of all mortgages in the country, the company said. A property's estimated current value (per First American CoreLogic's Automated Valuation Models) was subtracted from outstanding mortgage debt (from public records) to obtain a property's equity level.
Not enough data was available to include equity levels in Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia and Wyoming, the company reported.

The U.S. negative equity rate: 23.7 percent (11.3 million out of 47.7 million mortgages)
Top 10 states with the highest negative equity rates:
1. Nevada: 69.9 percent (418,543 out of 599,128)
2. Arizona: 51.2 percent (690,578 out of 1.3 million)
3. Florida: 47. 7 percent (2.2 million out of 4.5 million)
4. Michigan: 38.6 percent (533,249 out of 1.4 million)
5. California: 34.1 percent (2.3 million out of 6.9 million)
6. Georgia 28.7 percent (457,652 out of 1.6 million)
7. Idaho: 23.7 percent (57,093 out of 240,613)
8. Virginia: 23.6 percent (293,825 out of 1.2 million)
9. Maryland: 22.8 percent (309,568 out of 1.4 million)
10. Utah: 21.1 percent (99,030 out of 470,205)
Note: California also has the highest negative equity rate by volume of all the states covered.

Top 10 states with lowest negative equity rates:
1. Oklahoma: 5.9 percent (23,724 out of 402,187)
2. New York: 7 percent (127,765 out of 1.8 million)
3. Montana 7.3 percent (8,048 out of 109,940)
4. Pennsylvania: 7.4 percent (132,307 out of 1.8 million)
5. North Dakota: 8 percent (3,603 out of 45,310)
6. Kentucky: 8.8 percent (23,800 out of 270,671)
7. Alabama: 9.1 percent (30,384 out of 334,535)
8. Iowa: 9.1 percent (28,618 out of 314,963)
9. Nebraska 9.4 percent (20,650 out of 219,821)
10. Hawaii: 9.8 percent (22,594 out of 230,246)
Note: North Dakota also has the lowest negative equity rate by volume of all the states covered.

Top 10 metro areas with the highest negative equity rates:
1. Las Vegas-Paradise, Nev.: 74.7 percent
2. Phoenix-Mesa-Glendale, Ariz.: 57.5 percent
3. Orlando-Kissimmee-Sanford, Fla.: 55.1 percent
4. Riverside-San Bernardino-Ontario, Calif.: 53.5 percent
5. Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.: 53.1 percent
6. Miami-Miami Beach-Kendall, Fla.: 50.4 percent
7. Tampa-St. Petersburg-Clearwater, Fla.: 48.1 percent
8. Detroit-Livonia-Dearborn, Mich.: 46.8 percent
9. West Palm Beach-Boca Raton-Boynton Beach, Fla.: 45.3 percent
10. Sacramento-Arden-Arcade-Roseville, Calif.: 44.8 percent
Note: The Phoenix metro area also has the highest negative equity rate by volume of all the metro areas covered.

Top 10 metro areas with the lowest negative equity rates:
1. Nassau-Suffolk, N.Y.: 5.4 percent
2. Pittsburgh, Pa.: 5.9 percent
3. Philadelphia, Pa.: 7.5 percent
4. Hartford-West Hartford-East Hartford, Conn.: 9.9 percent
5. Austin-Round Rock-San Marcos, Texas: 9.9 percent
6. San Francisco-San Mateo-Redwood City, Calif.: 9.9 percent
7. San Antonio-New Braunfels, Texas: 10.4 percent
8. New York-White Plains-Wayne, N.Y.-N.J.: 11 percent
9. Cambridge-Newton-Framingham, Mass.: 11.5 percent
10. Nashville-Davidson-Murfreesboro-Franklin, Tenn.: 11.5 percent
Note: Pittsburgh also has the lowest negative equity rate by volume of all the metro areas covered.
***
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NAR Mid Year Convention Real Estate Forecasts May 14, 2010
Economist: Expect home-price weakness to persist
Home sales expected to bounce back to normal by 2012
BY MATT CARTER, FRIDAY, MAY 14, 2010.
Inman News
http://www.inman.com/news/2010/05/14/economist-expect-home-price-weakness-persist

WASHINGTON -- With the economy on the mend, home sales could bounce back to their historical levels by 2012, although the bulging foreclosure pipeline is likely to keep prices in check, economist Mark Zandi of Moody's Analytics told Realtors holding their annual midyear meeting in the nation's capital.
Zandi said he expects sales of new and existing homes to grow from between 5.5 million and 6 million this year to between 6 million and 6.5 million next year, and hit about 7 million in 2012.
That would put home sales back on their historic trend line. But Zandi said that when it comes to home prices, "the coast is not quite clear."

With the foreclosure pipeline full -- Moody's estimates that 4.3 million out of approximately 50 milllion first mortgages are in foreclosure or overdue by 90 days or more -- Zandi expects further price weakness for the next six to 12 months and no real price growth through 2012.
Although loan modifications could help about half of homeowners facing foreclosure avoid losing their homes, another 9 million homeowners are underwater by more than 20 percent, he said, making them more likely to consider a "strategic default."

Strategic defaults, or defaults by homeowners who are able to make their mortgage payments but choose not, will constitute a fourth wave of foreclosures, Zandi said.

The first wave of foreclosures, in 2006, often involved house flippers who got into trouble when prices stopped rising. Subprime borrowers facing interest-rate resets dominated the second wave in 2007, which was followed in 2008 by foreclosures among the unemployed and borrowers with negative equity.
There are already about 9.5 million vacant homes -- about 1.5 million more than would be expected by historical trends -- and it could take two years to work off that inventory, Zandi estimated.

That assumes that builders keep putting up homes at a slower-than-usual pace of 600,000 homes a year, while new household formation produces demand for 1.35 million homes a year, a difference of 750,000.
While builders could very well pick up the pace of construction, Zandi expects demand will rise even faster -- a view echoed by National Association of Realtors Chief Economist Lawrence Yun.
Yun said that with housing starts so far below historical norms, there's a chance that there will be housing shortages. Home prices could rise 2 to 3 percent this year and even more steeply after that because of the constraints on supply, he said.

While that might seem like a nice problem to have, Yun said abrupt price appreciation would not be good for businesses because some buyers will be priced out of the market.
Sales of distressed homes are expected to account for between 30 and 40 percent of transactions for the rest of the year, Yun said. But the European debt crisis could lead to additional stress tests for U.S. banks, which would hurt jumbo and second-home lending, he said.

Zandi said the structured finance market, which channeled money into home lending before the financial crisis, remains "completely dormant." Fannie Mae, Freddie Mac and the Federal Housing Administration are standing behind 95 percent of loans, he noted.
"It's not healthy for our economy to be reliant on the government for mortgage credit," Zandi said. Nor is the rising ratio of federal debt to gross domestic product, which could eventually drive up interest rates and derail his optimistic economic projections, he said.

Zandi expects GDP, which fell 2.5 percent last year -- the worst showing since 1933 -- should grow by 3 percent this year, 4 percent in 2011, and 5 percent in 2012.
But it may be 2014 before enough jobs are created to make up for the 9 million lost during the financial crisis, he said.

Businesses must create 125,000 a month just to keep up with the growing size of the nation's work force, he said -- a "break-even" pace he expects can be sustained this year. Next year, Zandi expects about 250,000 jobs will be created each month, a figure he said should grow to 300,000 in 2012.?
***
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