We’re don’t seem to have that warm & fuzzy feeling about the housing market anymore..

WASHINGTON – Sept. 9, 2014 – Americans’ attitudes toward the housing market continued to soften in August. Fannie Mae’s August 2014 National Housing Survey seems to suggest that housing activity may resume its modest recovery in 2015 after some pullback this year.

Despite ongoing improvements in the labor market, consumers’ views on personal income over the past 12 months appear to be more bearish. In addition, the share of consumers who said now is a good time to buy a home dipped for the second consecutive month. It fell six percentage points since June (to 64 percent) and ties the all-time survey low.

“The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The deterioration … reflects a shift away from record home purchase affordability without enough momentum” from an uptick in attitudes about personal finances.

Survey highlights

• The average 12-month home price change expectation fell to 2.1 percent.

• The share of respondents who say home prices will go up in the next 12 months held steady at 42 percent. The share who say down increased to 9 percent.

• The share of respondents who say mortgage rates will go up in the next 12 months fell four percentage points to 50 percent.

• Those who say it’s a good time to buy a house fell to 64 percent, matching the all-time low.

• Those who say it is a good time to sell decreased to 38 percent.

• The average 12-month rental price change expectation rose to 4.1 percent.

• The percentage of respondents who expect home rental prices to go up in the next 12 months increased to 53 percent.

• The share of respondents who think it would be easy to get a home mortgage today increased by one percentage point.

• The share who say they would buy if they were going to move fell to 64 percent, while the share who would rent increased to 32 percent – the narrowest gap in over a year.

© 2014 Florida Association of Realtors® All rights reserved. Reprinted with permission of the Florida Association of Realtors®.

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Home buyers bringing their stash of cash to the table..

Over half of Fla.’s June sales were all-cash

ORLANDO, Fla. – Sept. 10, 2014 – Over half of Florida’s June property sales (50.9 percent) were all-cash transactions, according to CoreLogic, an Irvine, California-based financial data company. Second-place Alabama had 48 percent all-cash sales.

In a comparison of large U.S. cities, Cape Coral-Fort Myers led the nation in all-cash sales at 61.2 percent, and four other Sunshine State cities followed it: West Palm Beach-Boca Raton-Delray Beach (60.6 percent), North Port-Sarasota-Bradenton (59.8 percent), Miami-Miami Beach-Kendall (58.7 percent) and Fort Lauderdale-Pompano Beach-Deerfield Beach (58.5 percent).

Other states rounding out the top spots for all cash sales are New York (44.6 percent), Kentucky (40.1 percent) and Nevada (40 percent).

Nationally, however, all-cash sales made up 33 percent of all transactions – the lowest percentage since September 2008, according to CoreLogic. The share of all-cash sales has fallen year-to-year since January 2013.

Before the housing meltdown, cash sales historically made up about 25 percent of all transactions. They reached their peak (46.2 percent) in January 2011.

The Washington, D.C. area had the lowest cash sales nationally at 15.6 percent.

© 2014 Florida Association of Realtors® All rights reserved. Reprinted with permission of the Florida Association of Realtors®.

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How do you see home buying? Most don’t have the down payment..

Survey: Consumer views on home buying

DES MOINES, Iowa – Sept. 15, 2014 – More than two-thirds of Americans (68 percent) feel that it’s a good time to buy a home – but many won’t try because they think tighter mortgage rules have made them ineligible for a loan.

After the recession ended, the U.S. tightened lending rules to keep a similar meltdown from happening again. But stories about tighter requirements have led some creditworthy buyers to think they cannot get a loan, according to the “How America Views Homeownership” survey by Ipsos Public Affairs for Wells Fargo & Company.

“Our survey found Americans still view homeownership as an achievement to be proud of,” says Franklin Codel, head of Wells Fargo Home Mortgage Production.

But “our survey also suggests we have an opportunity as lenders, nonprofit agencies and real estate agents to better inform Americans about credit ratings, mortgage costs and housing affordability,” he adds.

Financial foundation

The “How America Views Homeownership” nationwide survey of 2,017 adults also revealed many Americans report that their financial houses are in order, which improves their ability to buy a home. For example:

  • 82 percent of respondents said that they understand how to manage their personal finances; the same proportion, 82 percent, agreed that they generally do not spend beyond their means
  • 63 percent of respondents have a “rainy day fund,” including more than half of the millennial respondents, ages 18-34
  • 27 percent said that they tend to spend their money and not think twice about it

Home buying: What consumers know

  • 74 percent of the survey respondents “know and understand” the financial process of buying a home, but other answers suggest they may not understand all their options.
  • 30 percent believe only individuals with high incomes can obtain a mortgage.
  • 64 percent believe they must have a “very good” credit score to buy a home.
  • While 64 percent said that they’re knowledgeable about downpayments; nearly half (44 percent) think they need a 20 percent downpayment.
  • When asked to list the biggest barriers to homeownership, a lack of downpayment funds ranked first, especially for respondents aged 18-34.
  • Nearly half (44 percent) know nothing or very little about the closing costs required.
  • About half feel they don’t have access to homes that fit their financial needs.

“It’s important for prospective homebuyers … to ask lenders and real estate agents questions about available options, such as downpayment assistance or FHA loan programs or VA loans for veterans,” says Codel. “Ninety-five percent of survey respondents said they want to own a home if they don’t already.”

© 2014 Florida Association of Realtors® All rights reserved. Reprinted with permission of the Florida Association of Realtors®.

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Flipping may not be the get rich quick scheme it once was..

Home flipping drops below 5% of 2Q sales

IRVINE, Calif. – Aug. 22, 2014 – RealtyTrac’s Q2 2014 U.S. Home Flipping Report finds that home flips – a same-home re-sale in less than 12 months – dropped below 5 percent.

In the second quarter, 4.6 percent of all U.S. single-family home sales were flips, down from 5.9 percent the previous quarter and 6.2 percent year-to-year. Nationwide, nearly 31,000 single-family homes were flipped in the second quarter of 2014.

Florida flips surpassed the national average. Statewide, RealtyTrac found that 6.5 percent of sales were flips, a drop from 8.2 percent the previous quarter. One year earlier, 8.5 percent of home sales were flips.

Nationwide, investors averaged a gross profit of more than $46,000 per flip in the second quarter – a 21 percent gross return on the initial investment. That’s down, however from 24 percent in the first quarter and 31 percent year-to-year. The one-year-earlier number, the second quarter of 2013, was flipping’s peak since the recession.

In Florida, the average gross profit on a flip was $40,962 in the second quarter, but investors made a higher profit percentage: 29.6 percent.

“Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013,” says Daren Blomquist, vice president at RealtyTrac. “Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to.”

Other findings

  • Flips completed in 2Q took an average 187 days to complete, up from an average 164 days in the previous quarter and 135 days year-to-year.
  • More high-end homes are being flipped. Homes with a flipped sale price of $750,000 or higher represented 4.10 percent of all homes flipped during the quarter, up 21 percent from a year ago. Homes with a flipped price of $400,000 to $750,000 represented 12.66 percent of all flips, up 10 percent from a year ago. Meanwhile, flips on homes priced below $400,000 declined year-to-year.
  • High-end homes also returned the highest profit: Those with a flipped sale price between $750,000 and $1 million yielded a 41 percent average gross return on investment. Homes in the $50,000 to $100,000 range had the second best return at 37 percent, followed by homes above $1 million at 35 percent.
  • Miami was one of the top three metro areas for flipping and the only one that saw an increase year-to-year. Metro areas with the most flips were Phoenix (1,438 flips), Los Angeles (1,371 flips) and Miami (1,290 flips).
  • Daytona Beach was a top market for flipping profitability. Markets with the best return on flips in the second quarter included Pittsburgh (106 percent), New Orleans (76 percent), Baltimore (73 percent), Virginia Beach, Va. (66 percent) and Daytona Beach, Fla. (63 percent).
  • Metros with the highest dollar amount of average gross profit on home flips included San Jose, Washington, D.C., San Diego, Los Angeles and Seattle, all of which had an average gross profit of more than $100,000 per flip.

© 2014 Florida Association of Realtors® All rights reserved. Reprinted with permission of the Florida Association of Realtors®.

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UF reports a new high for consumer confidence

Fla. consumer confidence at new post-recession high

GAINESVILLE, Fla. – July 30, 2014 – Consumer confidence among Floridians rose two points in July to 84, hitting another post-recession high for a second consecutive month, according to a new University of Florida (UF) survey.

“While an index of 84 is not historically high, it does reflect far more optimism than we have seen over the past year,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.

Florida consumers haven’t been this confident since April 2007 – before the housing market began to unravel. UF’s Consumer Sentiment Index peaked at 98 in January 2004. The index is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is 2; the highest is 150.

“Overall, we are quite a bit behind where we would typically be this far out from the end of a recession – but we had a lot further to go in this recovery,” McCarty says.

Two of the five components used in the survey showed an uptick in confidence in the national economy since June. Survey-takers’ trust in the economy’s performance over the next year rose four points to 84, while their expectations for the country’s economic health over the next five years went up seven points to 85.

Floridians also remain optimistic about whether this is a good time to buy major household items, such as a refrigerator, maintaining a post-recession high of 94 since last month.

Respondents, however, were slightly pessimistic about their own personal finances. Their perception of being better off financially now than a year ago fell two points to 74 after reaching a post-recession high of 76 in June. Meanwhile, their expectations of enjoying improved finances a year from now fell one point to 82.

Floridians’ increasing optimism is happening despite mixed economic signals, McCarty says. For example, although the state’s employment situation continues to improve, with the unemployment level declining one-tenth of a percent to 6.2 in July, some question the quality of the new jobs, particularly in the service sector, and “construction employment has made solid gains but is still far below the level it was prior to the recession,” McCarty said.

Record-high stock market prices in June were good news for both the employed population and retirees with equity investments. The state’s housing prices were also up last month at $185,000 for the median price of a single-family home. McCarty says a few signs suggest housing may slow, but “economists are waiting to see if the decline is noise or part of a trend.”

Floridians also might be upbeat because the federal government continues to control inflation. In addition, gas prices in Florida have fallen since June and have been headed down since April.

“Given the current trends here in Florida, our expectation is that consumer sentiment will continue to rise slightly in the short run,” McCarty predicts. Potential negative factors are mostly external, such as a rise in short-term interest rates in the fall, the effect on consumers from escalation of conflicts in the Middle East and Ukraine, or a significant correction in the stock market.

Conducted from July 1-24, the study reflects the responses of 410 individuals, representing a demographic cross-section of Florida.

Details of the July survey can be found on UF’s Bureau of Economic and Business Research website.

© 2014 Florida Association of Realtors® All rights reserved. Reprinted with permission of the Florida Association of Realtors®.

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50% of Floridians could jump into the housing market soon

20% of Fla. home shoppers could enter the market soon

CHICAGO – July 30, 2014 – A conducted by Pollara survey and released by BMO Harris Bank found that 68 percent of Florida homeowners believe the value of their home will go up over the next 12 months, and 13 percent expect the value of their home to go down.

Over the past year, 61 percent of Floridians felt their home’s value had increased, and 24 percent thought it had gone down.

“Market prices overall continue to indicate that we are in a recovery, and this was reflected in our survey results with buyer optimism,” says Sheila Blom, head of Florida mortgage sales for BMO Harris Bank. “We’ve seen this reinforced by an increase in home buying activity this year.”

Florida homebuyers

  • 30% of those planning to buy say market activity caused them to delay a purchase
  •  One fifth say current market activity will likely cause them to buy a new home sooner than they otherwise would

Floridians mortgage attitudes

  • 63 percent expect rates to go up; 45 percent expect a small increase, and 18 percent anticipate a large increase
  • 12 percent believe that rates will decrease over the next five years
  • A quarter believe rates will stay the same

“Housing affordability remains historically very attractive, despite rising home prices and borrowing costs coming off their lows. As a result, there continues to be decent demand for homes, assisted from firming household formation,” says Michael Gregory, head of U.S. economics, BMO Capital Markets. “Although overall U.S. housing activity is experiencing slower momentum than we saw earlier in the recovery, positive developments such as the recent down-drift in mortgage rates and solid job numbers should give an added boost to housing.”

At the national level

  • 59 percent of Americans believe the value of their home will rise in the next 12 months, and the same proportion say it has risen over the last year
  • 29 percent of potential homebuyers say they’ve sped up their timeline
  • 29 percent says market changes have caused them to delay or give up
  • 59 percent of current owners with a mortgage say they expect interest rates to rise over the next five years

Survey results come from an online sample of 2,500 Americans, including 250 from the Florida, conducted between April 1st and 7th, 2014. The margin of error for a probability sample of 2,500 is +/- 1.96 percent for the national numbers and +/- 6.2 percent for Florida results.

© 2014 Florida Association of Realtors® All rights reserved. Reprinted with permission of the Florida Association of Realtors®.

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Bank of America stuck with sour loans..

Countrywide Acquisition Still Haunts BofA

Bank of America is getting stuck with another bill: loans that turned sour during the housing crisis stemming from its acquisition of Countrywide Financial, the Los Angeles Times reports.

Bank of America has been ordered by a New York judge to pay nearly $1.3 billion in penalties in a civil fraud case centering around a mortgage program that Countrywide had nicknamed “the hustle.” The short-lived program had fast-tracked the processing of mortgage applications from August 2007 through May 2008.

Shortly after, Bank of America had acquired Countrywide, the nation’s largest home lender at the time. BofA officials say the bank never oversaw the program and deny any wrongdoing in the matter.

The government had originally sought $2.1 billion in the case, but a judge granted only half of that after a jury decided in a monthlong trial that Countrywide and one of its former executives were liable for selling thousands of bad loans to Fannie Mae and Freddie Mac.

“It was, from start to finish, the vehicle for a brazen fraud by the defendants, driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole,” wrote U.S. District Judge Jed Rakoff.

Bank of America, like many other lenders, is facing court cases and settlements over loans that went bad from the housing crisis. In March, the bank agreed to pay $5.8 billion to settle toxic mortgage securities, with most of the bonds stemming from Countrywide.

Bank of America officials say they may appeal the court’s latest decision.

“We believe that this figure simply bears no relation to a limited Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company,” according to BofA officials.

Source: “BofA Ordered to Pay $1.3 Billion Over Countrywide Lending Program,” Los Angeles Times (July 30, 2014)

© 2014 National Association of Realtors® All rights reserved. Reprinted with permission of the National Association of Realtors®.

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