Real Estate News Archive May 8-14 2006Here is the real estate news making headlines across the state and country in May 8th to 14th, 2006.
May 12th, 2006
Home Sales in April
Numbers are starting to come in for April's home sales...
San Diego County, CALIFORNIA
In San Diego County, home sales in April dropped 30.7% compared to same month a year ago.
The number of homes on the market increased 75% over last year's level to 18,225.
The overall median home price for the county in April was $505,000, down from the all-time high of $518,000 set in November 2005.
Houses are sitting on the market for an average 62 days, compared to 50 days it took to sell houses a year ago, while condos are sitting for 64 days, compared to 47 days they took to sell in April 2005.
Broward County, FLORIDA:
In Broward County, Florida, 8,838 single-family homes were available in April 2006, more than triple the 2,327 homes on the market for the same month the year before.
Single-family home sales were at 746 in April, down 1,093 homes for the same month a year ago.
The median sales price for single-family homes was, at $354,300, up 4%t from $340,000 in April 2005.
The April 2006 condo-townhouse inventory stood at 11,490, more than quadruple the 2,492 units available in April 2005.
The median sale price for condo-townhouses in April was $210,000, up 18% from $178,000 the same month the year before.
Sales of existing single-family house in the Rochester area were up about 2% through April compared to the same four months in 2005, according to new data released by the Greater Rochester Association of Realtors this morning.
The average sale price of existing homes also rose by more than 2 percent to $128,013, compared to the same time last year. The median sale price jumped about 3 percent as well to $105,000.
For April, the number of houses sold was down 0.6% from March, but up 0.5% from April 2005.
The Nashville area reported a 3.3 % increase in sales in April 2006 compared to the same month a year ago.
Sales in the North Texas area decreased 13% in April 2006 compared to April 2005.
May 11th, 2006
Mortgage Rates Fall to 3 month Low
Despite the fact that the Federal Reserve just raised short-term interest rates for the 16th consecutive time yesterday to 5.0%, it had no effect on long tern interest rates.
In fact, according to Freddie Mac both the 30 year fixed and adjustable mortgages fell this week, with the 30 year fixed from 6.59 to 6.58%.
"Less-than-expected job growth in April helped mortgage rates to level off this week." says Freddie Mac (NYSE: FRE) chief economist Frank Nothaft. "However, next week's release of the April consumer and producer price indexes may lift mortgage rates higher if the figures show an acceleration in inflation."
Even with the small decline this week, 30-year mortgages are still almost % higher than they were a year ago. A separate report from the Mortgage Bankers Association shows mortgage applications fell nearly 6 percent last week as higher rates slow home buying and refinancing.
May 10th, 2006
Federal Reserve Raises Interest Rate to 5 Year High
The Federal Reserved raised short term interest rates today, to a 5 year high of 5%.
That has been expected for a while.
What people are talking now is whether the Fed will raise interest rates again at its next meeting in June.
No one knows and there was no clear signal from the Fed. So will they or won't they?
It all depends...
If surging energy prices should spark broader inflation, the Fed could opt to bump up rates again. If, on the other hand, the economy should show signs of slowing more than anticipated, the Fed may pause in the rate increase.
"The Federal Reserve doesn't want to be viewed as being behind the curve in fighting inflation. At the same time, the other misstep they desperately want to avoid is to continue to hike rates just as business activity begins to downshift," said Bernard Baumohl, executive director of the Economic Outlook Group, a consulting firm.
May 9th, 2006
Think Taxes are high in the USA?
Maybe so, but taxes in the US are not nothing compared to some of these other countries.
According to a report by the Organization for Economic Cooperation and Development, U.S only placed 19th out of 30 countries when looking at income taxes and employees' Social Security tax.
In Belgium, a single worker with an average wage paid about 42% of it to the tax man in 2005, with about 28% going to income tax and 14% to the country's Social Security system.
In Germany, workers paid about 42% and in Denmark, an average worker pays 41%.
In the U.S., a worker earning an average wage paid about 24% to income tax and Social Security combined.
What Warren Buffett Thinks of the Real Estate Market
At this weekend's annual meeting of Warren Buffett's Berkshire Hathaway, he and the company's chairman, Charles Munger, had their annual question and answer session with their shareholders.
Here's what Warren Buffett had to say about the real estate market:
On the real estate bubble
Buffett: "What we see in our residential brokerage business [HomeServices of America, the nation's second-largest realtor] is a slowdown everyplace, most dramatically in the formerly hottest markets. [Buffett singled out Dade and Broward counties in Florida as an area that has experienced a rise in unsold inventory and a stagnation in price.] The day traders of the Internet moved into trading condos, and that kind a speculation can produce a market that can move in a big way. You can get real discontinuities. We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."On mortgage financing
Munger: "There is a lot of ridiculous credit being extended in the U.S. housing sector."
Buffett: "Dumb lending always has its consequences. It's like a disease that doesn't manifest itself for a few weeks, like an epidemic that doesn't show up until it's too late to stop it Any developer will build anything he can borrow against. If you look at the 10Ks that are getting filed [by banks] and compare them just against last year's 10Ks, and look at their balances of 'interest accrued but not paid,' you'll see some very interesting statistics [implying that many homeowners are no longer able to service their current debt]."
May 8th 2006
Exposing Unethical Real Estate Agents and Mortgage Brokers
Does this scenario sound familiar to you?
A couple gets preapproved for a mortgage. They work with a real estate agent that shows them homes beyond the price range that they can afford.
When they point out to the agent that those homes are beyond their price range, the agent recommends them to another mortgage broker that can make the deal "work".
The couple is then financed into an "exotic" mortgage (i.e. ARM, Interest-only, or Pay-Option-ARM) and the transaction is settled.
Everyone seems happy in the beginning. BUT the only winners in the transaction are the dealmakers who pocket the higher commissions from the sale of the house and the mortgage.
In the long term, it is homebuyers that pay the huge price. When the clauses in their mortgage contract kick in, their monthly payments will increase beyond what they can afford.
They then either have to make the horrible choice of selling their home or being foreclosed upon.
"Las Vegas is about to experience a tsunami of foreclosures which is turning the American Dream into the American Nightmare for many homeowners," said Harj Gill, Mortgage Reduction Expert, Consumer Advocate, Bestselling Author, and Founder & CEO of American Mortgage Educators.
Unfortunately, the tragedy does not stop in Las Vegas.
Mortgage Brokers all over the country have put millions of people into the types of mortgages that were not best for their clients, but gave the mortgage brokers themselves the highest commissions and were easy to close rather than what was best for borrowers.
According to the latest FDIC data 49.5% of borrowers now have an exotic mortgage and are at risk of losing their homes as interest rates continue to rise.
"This is a travesty and everyday tens of thousands of people are still being put at risk by unscrupulous real estate agents and mortgage brokers," said Gill.
To help consumers find the most ethical professionals in their city, Gill is inviting all consumers that have suffered at the hands of these so-called professionals to go to his website www.MortgageFreeUSA.com and fill out the Consumer Complaint Form.
All legitimate complaints will then be posted online and the serious breaches will be reported to the appropriate authorities.
"The honest ones have nothing to fear but it's about time the bad apples are put out of business," said Gill.
Lesson: Be wary of real estate agents and companies that make you work with "their" mortgage brokers or loan agents. Understand your loan options and say "NO" when they try to sell you those risky mortgages.