A Housing Market Bottom?
Video interview with HUD Secretary (Bloomberg News) .. Has Housing Hit Bottom?
Former Federal Reserve Chairman Alan Greenspan said housing may be near a recovery and financial markets should continue improving.
Dr. Stan Humphries, Zillow’s vice president of data and analytics, said in a statement: “The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year.
While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward, with three out of four homeowners believing that their own homes’ prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well.
Most homeowners — 74 percent — believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home’s housing slide.” San Diego home listings
One in Five Homeowners Owe More Than Their Home’s Value
It’s estimated 20 percent of single-family homeowners, or 15.4 million, owe more on their mortgage than the current value of their homes. According to Moody’s this number is up from 13.6 million homeowners at the end of last year.
Another new Obama administration plan was just announced to try to help the foreclosure hurricane. This new plan focuses on encouraging short sales.
The earlier plans to deal with this crises from the Obama administration, have now been shown to have had only a marginal effect. It would seem that all the government intervention only creates lots of optimistic press and little actual relief.
The exception to my above opinion, is the Mortgage Forgiveness Debt Relief Act of 2007. This law states that the difference between the original mortgage and the amount for which a home sells at a short sale (i.e., the amount of debt forgiven by the bank) is no longer considered taxable income by the IRS.
Perhaps, just perhaps, the government should not meddle in the foreclosure process. After all, the reality and cure to this housing problem is the fact that home prices need to fall to a level at which all the excess inventory will be absorbed.
In my opinion, though well intentioned, the majority of goverment mortgage assistance/foreclosure moritoriums are only extending the natural cure time and provide little actual long term solutions. San Diego real estate
California Home Foreclosures at Record Highs
California home foreclosures
California foreclosure activity stayed at record highs in April, according to a report released today by RealtyTrac. The report showed California had the highest total for home foreclosures (96,560).
“Total foreclosure activity in April ended up slightly above the previous month, once again hitting a record-high level,” James Saccacio, CEO of RealtyTrac, said in a statement.
One should keep in mind that California has enacted two laws extending the foreclosure process. The standard foreclosure process in California was 90 days plus a 21 day advertising period. California’s first new law added approx. 30 days to this process. Then, just a few months ago, California passed a second law extending the home foreclosure by an additional 90 days. These two California laws combined, add four months to the standard foreclosure process.
It’s my personal opinion that these California laws extending the foreclosure process are in reality, also extending the length of the real estate malaise. The basic foreclosure process is a proven method of moving real estate from non-payment into strong hands.
No lender starts the foreclosure process after the first missed mortgage payment. Yes, the process usually starts after three/six months of missed payments. So, combine these facts with the new extended California foreclosure process and I would say the vast majority of homeowners in foreclosure are getting to live mortgage payment free, for over a year, in California.
Plus, and it’s a big plus, the California mortgage extensions are hurting home owners associations. Most homeowners in trouble with their mortgage payments are also not paying their homeowner monthly dues. In California many HOA monthly dues are $200 or more per month. Now with the additional four months added to the forclosure process, who is picking up the additional $800+ in lost monthly dues? The answer here is quite clear. These lost dues are being paid by the other homeowners in the association. If associations are currently depleating their reserves to cover these lost dues, at some point, the association will have to pass a special assesment or hike the dues for all homeowners. San Diego Real estate agents
San Diego Home Prices Take A Huge Fall
San Diego home values
National Association of Realtors just reported San Diego County home prices dropped 29.6 percent in the first quarter of 2009 vs. the first quarter of 2008. The report showed the resale median price for San Diego single-family homes was $323,200 vs. $459,000 in the first quarter of last year.
According to the National Association of Realtors figures, San Diego is down 46.3 percent from 2006, compared with a national decline of 23.8 percent over the same period. One should keep in mind, that I and many other San Diego Realtors feel the top of our real estate market was the summer of 2005.
Some good news from this report was that real estate sales more than doubled in Nevada, rose 81 percent in California and grew 50 percent in Arizona. Increasing real estate sales may be the first sign that a bottom to falling real estate home values is in sight. downtown San Diego real estate
San Diego Real Estate Foreclosure … When is Bankruptcy the Best Option?
In San Diego it seems that home mortgage payments are the number one reason for the huge increase in bankruptcy fillings. Is bankruptcy right for you? There is no pat, general answer here. It is always best to consult with your legal/tax adviser when facing financial hardship. In the video below, various government agencies are shown that may be able to assist you.
Please, keep in mind, almost all home mortgage lenders would rather try to work out a plan to keep you in your San Diego home rather than having to foreclose on it. In most cases, it is best to first contact your home mortgage lender before walking away from your San Diego home.
San Diego Real Estate Market … Is This The Bottom?
As in any market, falling prices and increasing volume is not a bullish signal! I have no doubt the problems in the real estate market are deep but, things do seem to be thawing a bit.
Keep in mind, with thousands of homes on the sell side, who is going to power the much heralded rebound in prices? It could be a very long wait. Plus, more real estate problems lie ahead, such as rising yields on Treasuries, which will push mortgage rates higher, hurting any rebound in real estate sales.
Everyone compares this economic downturn to the 1930s. A better paralell is the 1870s when the railroad boom and bust caused cash shortages accross the country. It was also the point when the United States overtook England as the dominant country in the world. England didn't die, it just faded in power. That is what is happening to the US today while China is moving up. The difference is that the English government didn't pile on a bunch of debt to enslave the next several generations to the bankers like the US government has.