Press Release: Cincinnati Area Real Estate February Sales update

Press Release

Cincinnati Area Board of Realtors®

The following press release was sent to the local media today at 10:20 a.m.

March 21, 2012

 

Contact:          Tom Hasselbeck, CABR President, 513-829-0044 , 513-607-3868 [cell]

Gene Snavley, CABR Exec.Vice President, 513-543-2211 [cell]

 

Home Sales Up 18.6% in February;

Year-to-Date Sales Up 15%

Local home sales in February – for the 8th consecutive month – improved over a year ago. Sales in February totaled 1,155 units, an 18.58% gain over the same month a year ago when 974 homes were sold.

“Mortgage rates remain at historical lows, the housing inventory is increasing and the mild winter were all contributing factors that helped prospective buyers to stop looking and buy,” said Tom Hasselbeck, president of the Cincinnati Area Board of Realtors. An improving job market has boosted optimism.  Favorable stock market activity also has been a plus for consumer confidence, he added.

Local mortgage rates in February averaged 3.91%.  That’s down from 5.04% a year ago.  This week, they’re at 4.05%.

Average home sale price last month was $130,087, down -9.01% from a year earlier. “This is a result of buyers continuing to take advantage of lower-priced, lender-owned and short sale property,” said Hasselbeck.  “We are, however, beginning to see increasing numbers of sellers put their homes on the market where a lender is not involved, which is a positive thing.”

Nationwide, February home sales were down 0.9% from January on a seasonally adjusted basis, but up 8.8% from February 2011.

January and February generally are the weakest sales months of the year. This year, however, the first two months have been very strong.  This is a great start to what looks to be a very positive 2012 for home sales with an improving economy.

The NAR Housing Affordability Index recently reached an all-time high of 206.1, in January.  An index of 100 means that a family with a median family income is able to afford a median priced home with a 20% down payment. The higher the index number, the greater the household can afford.  “Our current local market affordability is over 300,” said Hasselbeck. “This means that when you combine the low interest rates, higher consumer confidence and great housing values, now — more than ever — is a great time to buy,” said Hasselbeck.

 

 

 

— more on page 2 –

 

Page 2 of 2

February Home Sales

Summary of Single Family and Condominium Sales

Multiple Listing Service of Greater Cincinnati

Cincinnati Area Board of Realtors®

 

February Home Sales

                                                            Closings          Gross Volume         Average Price          

Feb. 2012                     1,155              $150,250,634              $130,087

Feb. 2011                        974              $139,254,156              $142,971

Variance        +18.58%                        +7.90%                 -9.01%

 

 

Year-to-Date Home Sales

 

                                                            Closings          Gross Volume          Average Price         

Jan-Feb. 2012                2,151             $287,684,291             $133,744

Jan-Feb. 2011                1,871             $266,514,278              $142,445

Variance         +14.97%                      +7.94%                 – 6.11%

 

 

Nationwide, February home sales were down 0.9% from January on a seasonally

adjusted basis, but up 8.8% from February 2011.

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Mortgage and Housing sales data update

Existing Home Sales Rose 5% in December:

Home sales rose in December to the highest pace in nearly a year. The gain coincides with other signs that show the troubled housing market improved at the end of last year.

The National Association of Realtors said Friday that sales increased 5 percent last month to a seasonally adjusted annual rate of 4.61 million, the best level since January 2011 and the third straight monthly increase.

Sales are increasing at a time when the market is flashing other positive signs. Mortgage rates are at record-low levels. Homebuilders have grown slightly less pessimistic because more people are saying they might be open to buying a home this year. And home construction picked up in the final quarter of last year.

The median sales price rose 2.3 percent to $164,500 in December.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) lost -91 basis points from last Friday to the prior Friday which moved mortgage rates upward.
The biggest economic surprise was the large decrease in the weekly Initial Jobless Claims data which is certainly positive for the economy, but negative for bonds.
But the real catalyst was a change in market sentiment that Greece’s bond holders were close to accepting the new terms of a “voluntary” hair cut of 60% to 70% on what they are owed. This removed some of the “fear factor” premium in bonds that have kept mortgage rates artificically low for the past 8 weeks.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

Courtesy of

Stephanie Halpin

Fairway Mortgage

New Appraisal Guidelines now in Effect!

New Appraisal Standards Effective September 1 for Fannie Mae and Freddie Mac

It’s finally happened: You’ve found the perfect home for your clients. Their financing is in place. But then…despite the comparables….the appraisal comes back low, threatening to ruin the whole deal.

To help make appraisals more consistent and accurate, and prevent situations like this in the future, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to develop the Uniform Appraisal Dataset (UAD). The UAD will (1) define what fields are required for an appraisal submission and (2) standardize both responses and definitions for certain fields.

Here are just a few of the items impacted by the new appraisal standards:

 

  • Days on the Market: Days on market is now defined as the total number of continuous days. If a property is taken off the market and then relisted, the appraiser will have to count all of the days it has been listed.
  • Offering Price: The original offering price and history of all price changes must be reported.
  • Property Style: Appraisers must use appropriate architectural design indicators such as “Colonial,” “Farmhouse,” etc. Descriptions such as 1 story, 2 stories, etc are no longer acceptable.
  • Condition of the Subject Property: An overall condition rating must be assigned from the predefined condition categories provided.
  • Quality of Construction: The appraiser must rate the  quality of construction of the subject property and all comps using a  list of 6 predefined quality levels.

 

The UAD appraisal standards are required for all appraisals conducted on or after  September 1, 2011 for conventional loans sold to Fannie Mae and Freddie Mac.

To read FAQs about the UAD appraisal standards, visit  https://www.efanniemae.com/sf/lqi/umdp/pdf/uadfaqs.pdf.

Courtesy of

Kris Cooper REMAX Preferred Group via Realtor/Lender Committee Cincinnati Area Board of Realtors

June 2011 Cincinnati Home sales report

Home Sales Reach 1,781 in June;

Median Sale Price Inches Up 1.5%

 

Thanks to continued low mortgage interest rates and overall housing affordability, there were 1,781 home buyers last month in the local area.

 

That’s down 17% from a year ago, but at that time there was a $6,500 to $8,000 federal income tax credit for qualified home buyers.  That boosted sales in June 2010.

 

Pete Kopf, president of the Cincinnati Area Board of Realtors, said “Considering there is no home tax credit this year and a 9% unemployment rate, we think that having 1,781 home buyers last month is a testament to the belief that home ownership is a good thing in the public’s minds.”

 

The average home sale price last month was $166,303, only a 3% dip from a year ago.  The median sale price actually rose by 1.5%, to $132,000.  The median price is the mid-point in the overall price range of sales.

 

Mortgage rates have held below 5% this year.  They averaged 4.59% in June, compared to 4.78% a year earlier.  Lower rates and attractively-priced inventory help home affordability, due to lower monthly mortgage payments.

 

Another advantage for home owners, as usual, is the deductibility of mortgage interest and property taxes from their taxable income.  That means they pay less in federal income taxes.  Renters don’t get that advantage.  A homeowner also realizes – eventually – that their house will be fully paid for, which is great for retirement planning.  Renters never have a residence that is paid for, which could be a detriment to retirement years.

 

“Smart buying is going on today — 1,781 home buyers proved that just last month,” said Kopf.  “With home affordability at a record high (dating back to 1970), the smart trend of home buying will continue.”

 

— more on page 2 —

 

 

 

Page 2 of 2

June Home Sales

 

 

 

 

Summary of Single Family and Condominium Sales

Multiple Listing Service of Greater Cincinnati

Cincinnati Area Board of Realtors®

 

June Home Sales

                                                            Closings          Gross Volume         Average Price          

June 2011                     1,781              $296,185,643              $166,303

June 2010                     2,156              $369,717,348              $171,483

Variance          -17.39%                     -19.89%                  -3.02%

 

 

Year-to-Date Home Sales

 

                                                            Closings          Gross Volume          Average Price         

Jan-June 2011                8,222          $1,218,105,744             $148,152

Jan-June 2010                9,559          $1,503,391,725             $157,275

Variance          -13.99%                     -18.98%                  -5.80%

 

 

Nationwide, June home sales were down 0.8% from May on a seasonally

adjusted basis, and down 8.8% from June 2010.  Sales surged in May and

June of 2010 in response to the home buyer tax credit.

Criteria for buying a home after a short sale

Below are the waiting periods for borrowers who want to buy a home after they have had a short sale. These are conventional only, not FHA.

1. The new loan will be at 80% LTV or less – Must wait 2 years from SS settlement date.

2. The new loan will be at 80.01% LTV or Higher – Must wait 5 years from SS settlement date.

If you have any questions, please contact
Chris Johnstone
Home Loans Manager, Retail Mortgage Sales
Bank of America
christopher.johnstone@bankofamerica.com
513-582-2154

Mortgage Rates: Update

Critical Week for interest rates and we will keep you up to minute informed!

Minimum Credit score FHA 620

*4.375%

30 Year Fixed Rate

Normal Closing costs

*4.50%

30 Year Fixed Rate

$250 Closing Cost Special

*4.50%

No PMI with 15% down

30 Year Fixed Rate

Normal Closing costs

*3.0%

5 Year ARM

Normal Closing costs

*3.25%

5 Year ARM

$250 Closing Cost Special

*3.50%

15 Year Fixed Rate

Normal Closing costs

*3.75%

15 Year Fixed Rate

$350 Closing Cost Special

*4.25%

FHA/VA 30 Year Fixed

0 Points

Courtesy
TR Wise

Bill Calls for Extending Loan Limits

Courtesy of Realtor Magazine

Bill Calls for Extending Loan Limits

Daily Real Estate News | Monday, July 18, 2011

A bill introduced late last week calls for extending the current conforming loan limits on government-backed mortgages at Fannie Mae and Freddie Mac for another two years.

The bill, introduced by Rep. John Campbell, R-Calif., and Rep. Gary Ackerman, D-N.Y., would allow the government-sponsored enterprises and the Federal Housing Administration to guarantee or buy mortgages worth up to $729,750 in many neighborhoods.

The current loan limits are set to expire Oct. 1. If an extension isn’t granted, the maximum mortgage amount in high-cost areas will drop from $729,750 to $625,500 (however, that limit will vary throughout the country).

“With the economy remaining fragile and the housing sector still struggling to recover, now is not the time to make the cost of mortgages more expensive,” Ackerman said.

The National Association of Home Builders has said it fears more than 17 million homes nationwide will become ineligible for more affordable federal funding if the loan limit expires. However, last week, Federal Reserve Chairman Ben Bernanke saidhe was confident that the private market, including investors and insurers, would fill the void if the conforming loan limits expired — although likely at a higher cost to borrowers.

Source:“Lawmakers Introduce Bipartisan Bill to Extend Conforming Loan Limits,” HousingWire (July 15, 2011)

Read more:

Mortgage Caps Are Just Part of the Problem

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Spike in Distressed Property Sales Is A Healthy Sign, Says Moody’s

Spike in Distressed Property Sales Is A Healthy Sign, Says Moody’s

May 25, 2011 10:14 AM, By Matt Hudgins, NREI Contributing Writer

An index of U.S. commercial real estate prices fell to a cyclical low in March that was down 47% from the peak in October 2007. So why should investors be happy?

The Moody’s/REAL National All Property Price Index measures price changes on completed sales of apartment, office, industrial and retail properties. A 4.2% decline in the index since February stems in part from a surge in transaction volume among distressed properties, which accounted for more than 30% of March sales.

Click chart to enlarge

Mushrooming trading of distressed assets means that investors and lenders are realizing losses on their distressed assets on a massive scale. Experts say that process is painful, but those price corrections must occur in order for the nation’s commercial real estate market to regain its footing and for overstretched property owners to de-lever and bring cash flows into positive territory.

“Importantly, we’ve now set a post-peak low in the all-property index simultaneously with a post-peak high in distress transactions,” observes Tad Philipp, director of commercial real estate research at Moody’s Investors Service, which publishes the index.

In other words, the decline in the all-property index doesn’t necessarily mean commercial real estate values are dropping. The recent dip is more a reflection of the larger proportion of transactions involving distressed assets, which bring down the average. Indeed, in primary markets where distress represents only a small fraction of transaction volume, asset values are well into a recovery cycle.

Primary price leaders

“The commercial real estate world in the five or six primary markets is as active as it has ever been in terms of desire for the properties and pricing, the backdrop being that interest rates are low,” says Bill Collins, an executive managing director who oversees the capital markets group at Cassidy Turley in Washington, D.C.

With risk-averse investors focused on a handful of gateway markets that include places like New York City, San Francisco and the nation’s capital, competitive bidding has been pushing up transaction prices in those metros for some time, Collins says.

“You’ve got a lot of capital looking to be placed,” says Collins. “The fact that there’s only 60% leverage available and 40% equity required to close a deal really doesn’t matter; people don’t need to stretch their dollars because they have this accruing pool of dollars they need to place.”

Indeed, Moody’s researchers found that average prices in the primary markets already show marked improvement. An index of non-distressed, trophy properties — those valued at $10 million or more and located in one of six major U.S. markets — in March showed property prices have risen 26.7% from a trough in December 2009.

(The six cities covered in the index are Boston, Chicago, Los Angeles, New York, San Francisco and Washington.)

In fact, pricing gains are evident among trophy assets even when distressed transactions are included in the calculation. A separate Moody’s index measuring trophy property sales including distressed deals indicates that prices have risen 22.9% since that index bottomed in July 2009. “This is consistent with liquidity in the commercial real estate sector first returning to prime assets in capital-attracting cities,” says Philipp.

Crank up the volume

A recent pick-up in transaction volume is a sign that the U.S. commercial real estate market is on the mend, because moving distressed properties through the system sets the stage for recovery, according to Moody’s.

In March, there were 182 repeat-sales transactions totaling nearly $2.5 billion, a significant increase over February’s $1.26 billion volume and 115 repeat sales. March had the second-highest number of repeat-sale transactions since 2008, the total only exceeded by that of December 2010, which benefitted from being the end of the year.

Moody’s uses repeat sales, or multiple sales of the same property over time, to calculate price changes in its indices. Looking at the larger transaction spectrum, sales of U.S. commercial real estate valued at $5 million or more totaled more than $28 billion in the first quarter of 2011, up 77% from $15.9 billion one year earlier, according to Real Capital Analytics.

Moody’s national indices showed declining prices across property types in the first quarter. Industrial recorded the largest decline, falling 7.7% from the previous quarter to a post-peak low. Office was down 7.1% from the previous quarter but was up 1.9% from its low in the third quarter of 2009.

Apartments were down 4.7% from the fourth quarter of 2010, but were up 14.1% from that sector’s low in the third quarter of 2009. Retail was down 4.5% from the previous quarter but up 9.4% from a bottom in the second quarter of 2010.

Investors can expect the all-property price index to “bounce along the bottom” until more distressed assets move through the market, Philipp predicts.

On a positive note, the special servicers that handle distressed conduit loans in commercial mortgage-backed securities (CMBS) are resolving those debts at a rate about equal to the pace of CMBS debts falling into delinquency. That is resulting in a fairly stable delinquency rate, which stands at 9.22%.

Taken together with swelling transaction volume, the commercial real estate industry appears to be making progress in dealing with distress, says Philipp. “The resolution process for this transaction cycle appears to be well under way.”

February Sales, Local Cincinnati MLS- Feb 2011

Click to enlarge doc

Housing Trends Update: Feb 2011

HousingTrendsUpdate_Feb11

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