The Kallhoff Team

Tuesday, July 16, 2013

'Boomerang Buyers' Are Staging a Comeback

DAILY REAL ESTATE NEWS | TUESDAY, JULY 16, 2013

“Boomerang buyers”—former home owners who have gone through a short sale, foreclosure, or bankruptcy in the past few years and are saving up for a down payment to purchase a home again—are coming back. They're expected to flood markets in some of the hardest hit areas for short sales and foreclosures in the coming years. For example, boomerang buyers are predicted to account for nearly one in every five home sales in the metro Phoenix area this year—double the projected U.S. rate.

Rising rents and the desire to own again now that the economy is more stable are driving many boomerang buyers to re-enter the market. They also want to jump in before interest rates and home prices climb too much higher.

But how soon they can jump back in will depend on the type of loan they had as a previous home owner. For example, boomerang buyers who had FHA loans may need to wait only three years if they can prove that a hardship, such as job loss or death of a wage earner, led to their foreclosure or short sale.

Borrowers have typically been required to wait five to seven years to qualify for another loan, but mortgage giants have begun to change their rules to allow home owners who underwent a foreclosure or short sale to qualify sooner. Those who underwent a short sale will likely qualify the soonest. However, not all lenders are participating, so borrowers will need to shop around.

Freddie Mac’s wait time is usually four years following a short sale or deed-in-lieu, and seven years after a foreclosure. Fannie Mae may require a seven-year wait for a foreclosure, but only a two-year wait following a short sale as long as the borrower can provide a 20 percent down payment.

The following markets have the highest share of boomerang buyers, according to John Burns Real Estate Consulting:

Riverside-San Bernardino, Calif.: 4.1% (percentage of all U.S. boomerang buyers in 2013)
Los Angeles: 3.7%
Phoenix: 3.6%
Chicago: 2.5%
Atlanta: 2.4%
Las Vegas: 2.12%
Washington, D.C.: 2.1%

Source: “New Wave of Buyers Ready to Hit the Real Estate Market,” The Examiner (July 15, 2013) and“Phoenix housing market sees 'boomerang buyers' sooner than expected,” The Arizona Republic (July 14, 2013)

http://realtormag.realtor.org/daily-news/2013/07/16/boomerang-buyers-are-staging-comeback

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Monday, July 15, 2013

5 Cities Where Salaries Are Rising Most

DAILY REAL ESTATE NEWS | MONDAY, JULY 15, 2013

On average, U.S. employees saw a 2.5 percent rise in their wages in the past year. But in some places of the country, workers are seeing even larger increases to their pay. These are the five cities seeing the largest pay hikes:

San Francisco: a 4.3 percent pay increase in one year

San Francisco is known for its high-salary tech jobs. And those high salaries are needed: The city is among one of the most expensive in the nation in terms of cost of living—about 70 percent higher than a city such as Indianapolis, according to PayScale.

Baltimore: +3.5%

The area has added 1,600 financial services jobs in the last year and it’s known as a hub for health care jobs—being the home to Johns Hopkins and other research hotspots.

Chicago: +3.1%

Chicago offers lots of jobs centered around the financial markets, since it’s the home to the Chicago Mercantile Exchange, Chicago Board of Trade, and the Chicago Board Options Exchange.

Phoenix: +3.1%

The pick-up in the housing market has led to a big increase in construction jobs in Phoenix—more pronounced here than in other parts of the country. Phoenix is attracting more residents from California; the cost of housing there is nearly 70 percent lower than in San Francisco and 56 percent lower than in Los Angeles.

Atlanta: +3%

Atlanta serves as the headquarters for many major companies, such as Coca-Cola and Home Depot, but it also has a bustling healthcare information industry that has helped salaries grow.

Source: “Cities with the Biggest Pay Hikes,” CNNMoney (July 2013)

Read more

7 Best Midsize Cities for Job Growth

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Friday, July 12, 2013

Mortgage Rates Continue to Rise, Fed Eases Fears

DAILY REAL ESTATE NEWS | FRIDAY, JULY 12, 2013

Mortgage rates moved higher again this week as speculation continued about whether the Federal Reserve will end its future bond purchases, which have kept rates at historical lows, Freddie Mac reports in its weekly mortgage market survey. But remarks by Federal Reserve Chairman Ben Bernanke on Wednesday may indicate that the Fed won’t be ending its program immediately.

On Wednesday, Bernanke said that unemployment is still high and inflation too low. He said the Fed would not raise short-term rates until the unemployment rate reaches 6.5 percent. The jobless rate is currently 7.6 percent. The Fed has been buying $86 billion a month in government bonds to hold down long-term interest rates, which have helped mortgage rates in recent months reach all-time lows.

Freddie Mac reported the following national averages with mortgage rates for the week ending July 11:

30-year fixed-rate mortgages: averaged 4.51 percent, with an average 0.8 point, rising from last week’s 4.29 percent average. A year ago at this time, 30-year rates averaged 3.56 percent.
15-year fixed-rate mortgages: averaged 3.53 percent, with an average 0.8 point, increasing from last week’s 3.39 percent average. Last year at this time, 15-year rates averaged 2.86 percent.
5-year adjustable-rate mortgages: averaged 3.26 percent, with an average 0.7 point, up from 3.10 percent last week. Last year at this time, 5-year ARMs averaged 2.74 percent.
1-year ARMs: averaged 2.66 percent, with an average 0.5 point, holding steady from last week’s average. A year ago at this time, 1-year ARMs averaged 2.69 percent.

Source: Freddie Mac and “Bernanke: Economy still needs Fed stimulus,” The Associated Press (July 10, 2013)

http://realtormag.realtor.org/daily-news/2013/07/12/mortgage-rates-continue-rise-fed-eases-fears

Thursday, July 11, 2013

Soaring Insurance Rates Shock Home Owners

DAILY REAL ESTATE NEWS | THURSDAY, JULY 11, 2013

Home owners who live near areas where disasters have struck, but have not been directly impacted by them are still seeing dramatic increases in their insurance premiums.

For example, in the wake of Hurricane Sandy, unaffected residents living near the disaster zone still saw big spikes in flood insurance premiums. FEMA has reclassified the area as a high-risk flood zone. As such, some residents in the Valley Stream, Long Island area of New York are seeing their flood insurance rates soar from $400 per year to $3,400.

Home owners living out West are also reporting rising insurance premiums due to recent threats of wildfires. The rise has prompted some home owners to go without coverage.

For example, a 63-year-old Las Vegas man is refusing to evacuate his property near growing wildfires. He’s remaining in his cabin, spraying water to keep the fires from his home, which have come within about 300 feet of the property. The man says he cannot afford homeowner’s insurance because the last wildfire ended up doubling his payments.

Source: “New Flood Insurance Rates Leave Homeowners With Sticker Shock,” AOL Real Estate (July 10, 2013) and “Man Refuses to Evacuate Home on Mount Charleston,” ABC 13 News (Las Vegas) (July 10, 2013)

http://realtormag.realtor.org/daily-news/2013/07/11/soaring-insurance-rates-shock-home-owners

Tuesday, July 9, 2013

Survey: Americans Upbeat About Home Prices

DAILY REAL ESTATE NEWS | TUESDAY, JULY 09, 2013

Fifty-seven percent of Americans believe home prices will increase within the next year, an all-time high for Fannie Mae’s National Housing Survey, which was created in 2010. Meanwhile, 7 percent of those surveyed say they believe home prices will drop.

The majority of Americans — also 57 percent — believe that mortgage rates will increase as well, reaching the highest level since the survey was created.

"The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy," says Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers may recognize that today’s still favorable mortgage rates and home ownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence."

Seventy-two percent of Americans say now is a good time to purchase a home, according to the survey. The survey also found that 37 percent of Americans say now is a good time to sell, a slight fall from 40 percent in May.

Source: “Majority of Americans expect housing fundamentals to rise,” HousingWire (July 8, 2013)

Read More

5 Ways to Keep a Positive Outlook

http://realtormag.realtor.org/daily-news/2013/07/09/survey-americans-upbeat-about-home-prices

Monday, July 8, 2013

Where Cost Per Square Foot is Skyrocketing

DAILY REAL ESTATE NEWS | MONDAY, JULY 08, 2013

The list price per square foot is gaining in many areas, rising to $181 in June, according to real estate brokerage Movoto’s national housing report.

The increase in list price per square foot was the most dramatic in Sacramento, where it rose from $91 per square foot in June 2012 to $153 per square foot last month—about a 68 percent increase.

The following cities have seen the largest year-over-year increases (June 2012 to June 2013) in price per square footage:

Sacramento: $153 (a 68.1 percent year-over-year increase)
Phoenix: $126 (+44.8% year-over-year)
Oakland, Calif.: $304 (+37.6% year-over-year)
Mesa, Ariz.: $118 (+37.2% year-over-year)
Los Angeles: $435 (+28.3% year-over-year)
Long Beach, Calif.: $342 (+26.2% year-over-year)
Las Vegas: $105 (+22.1% year-over-year)
San Diego: $359 (+20.1% year-over-year)
Boston: $468 (+19.1% year-over-year)
Jacksonville, Fla.: $90 (+18.4% year-over-year)
Atlanta: $148 (+18.4% year-over-year)

The only two cities to see a decrease in price per square foot were Chicago and New Orleans, according to Movoto.

Source: “Increased inventory raises price per square foot,” HousingWire (July 2, 2013)

http://realtormag.realtor.org/daily-news/2013/07/08/where-cost-square-foot-skyrocketing