Ada County December Market in Pictures.

 

The Deals That Aren't!

There are a number of statistics out there talking about how a higher percentage of contracted deals fail to close. And I have certainly seen it,  I avoid a lot of the problems by doing my homework and working with a good loan officer, but some of those things just can't be avoided. Like the failure of short sales to get approved, there are just too many variables out of my control. With experience and knowledge I can negotiate a lot of them but I still can hit the roadblocks of 2nd liens that will not negotiate or mortgage insures playing hard ball.

Here is a post from KCM Blog addressing some of these issues.

I have seen estimates stating that 29% of deals that go to contract and require a mortgage, don’t close. That number boggles my mind. It means that even after a buyer and seller come to terms on a sale (not an easy feat these days), 3 out of 10 transactions fall apart. What are some of the more common reasons?

• Appraisal issues – In many markets, we are still seeing declining values. Appraisers are in a difficult position, and with so many transactions (including seller’s concessions to assist buyers with closing costs) values aren’t always coming in at sales prices.


• Short Sales not being approved by the current lender – With so many sellers owing more than their home is worth, buyers’ proposals need to be sanctioned by the lender (who will be receiving less than they are owed). Some of the offers are too low, but often, the lender isn’t local and they really don’t know what the property is worth today.


• Bad pre-approvals from the loan officer – Today, loan officers who are not reviewing tax returns, analyzing bank statements, and asking for detailed explanations and documentation on credit blemishes, are truly hurting the customers. Issuing pre-approvals based on the representations of the customer is reckless and a cause for dismay later.


• A lack of transparency – Whether it’s a seller or agent not disclosing property issues, or a buyer trying to sneak things by an underwriter, too many people think they can cut corners. That is not the world we live in anymore. Everything is uncovered. Being honest in the beginning, gives you the best chance to overcome obstacles.

 

It is clear by the numbers that closing loans can be more difficult today. However, with proper planning and integrity, many of the challenges can be dealt with early and successfully. Agents documenting values of the homes, loan officers doing complete reviews of the loan profile up-front, and everyone telling the truth helps get deals to a successful conclusion and avoids horror stories.

 

Another One Bites the Dust!

I had a closing today on a bank owned house in Kuna. It took a bit longer due to some of those mortgage issues you hear about. The first thing was the underwriter for the buyer's loan in looking at the title decided that it would be considered a "flipped" house even though the bank was the seller. Didn't make much sense to me but my opinion is not what counts on these things. So a 2nd appraisal was ordered. Then the underwriter decided that there was some repairs that needed done beyond was was called for by the appraisers, it appears the buyer's agent had something to do with that. It was not the only questionable activity pulled by this agent in this transaction, but it is done and it is time to move on to the next.

Speaking of next, I just received back an accepted counter offer on a cute listing in the Boise'e north end.  So business moves on.

The PTC Index for Ada and Canyon Counties.

Here is the December PTC Index, previously I have only provided the combined Ada and Canyon Index, which I will continue to provide. But I will do the separate county's breakdowns now as well, as it really is the tale of two different markets.

The PTC Index is a monthly measurement of the vibrancy of the Treasure Valley real estate market. Based on a custom weighted algorithm, it combines nine critical measurements of the real estate market into a single, useful number: the PTC Index. To give you some perspective, when the market was at its most active point in 2005, the PTC Index average would have been 225. In January of 2010 we reached a low of 28. Though times have changed, the need for this data is greater than ever.

The PTC Index utilizes a proprietary algorithm that weighs nine key real estate variables. These variables, though widely available, have not been easily collected in a single location. The PTC Index changes that.

This months PTC Index details are below. Previous months can be viewed by selecting a date from the drop down menu below.

These numbers are for Ada and Canyon County.

Typically one of the slower months in real estate, December 2011 resulted in numbers that held steady since the month prior. Notably, distressed properties, which include short sales and REO (real estate-owned) properties, plummeted by 10% down to 2,837 from 3,140 from November. Notices of default also saw a decline of 5% from the month prior from 412 to 391 filings. Additionally, days on market made a drop valley-wide from 80 to 75 days. Financial bonds held steady while new homes sales ticked up slightly, and existing home sales dropped, each by 2.5%. Refinances held steady at 793 while the average Treasure Valley sales price dropped by 5% from $146,492 to $138,907.

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December 2011

Building Permits	132
New Home Sales	79
Existing Home Sales	600
Refinance	793
Average Sales Price	138907
Financial-Bond Market(10-yr Treasury)	1.98
Days on Market	75.5
Distressed(Short Sales and REO)	2837
Notices of Default	391
PTC Index	120

Ada County

December 2011

Building Permits	116
New Home Sales	72
Existing Home Sales	397
Refinance	658
Average Sales Price	181307
Financial-Bond Market(10-yr Treasury)	1.98
Days on Market	86
Notices of Default	223

Canyon County

December 2011

Building Permits	16
New Home Sales	7
Existing Home Sales	203
Refinance	135
Average Sales Price	96507
Financial-Bond Market(10-yr Treasury)	1.98
Days on Market	65
Notices of Default	168

Courtesy of Pioneer Title Company

I'm Bullish On Boise-Ada County Real Estate

Another KCM Blog post. Nationally and locally-IT IS TIME TO BUY!

Another Bear Turns Bullish on Real Estate

Two weeks ago, we posted When the Prophet Says Buy – BUY! In that post, we explained that a major bear on housing, John R. Talbott, is now bullish on the real estate market. Last week, another bear turned bull.

Chris Thornberg, a former UCLA economist and a founding principal of Beacon Economics, was very skeptical of the housing market in 2007. However, in an article by the Orange County Register on January 13^th, he is quoted as saying that now is:

“…a great time to buy a home…If you’ve been thinking about buying a condo in Vegas or buying a condo in Miami, buy now.”

We started off 2012 with two of the biggest bears on housing converting to bulls and telling us to BUY NOW! It might just be time to buy!!

 

 

Real Estate 2012: Many Positive Outlooks

There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Whenever we write a post like this, we unleash the hordes of critics who say we are again wearing rose colored glasses or are puppets being controlled by the National Association of Realtors (NAR) and other industry groups.

It is for that reason we will not be covering the projections of those groups. Instead, we want to share the beliefs of other organizations.

Washington Post:

“Housing Market and Economy Showing Encouraging Signs.”

The Wall Street Journal:

“From Bottom Up, Signs of Housing Recovery”

USA Today:

“Housing Outlook is More Upbeat”

CoreLogic:

“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”

Freddie Mac:

“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”

Fannie Mae:

“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”

 

Mortgage Rates Continue Trend of Record-Breaking Lows

^[1]Freddie Mac recently released the results of its Primary Mortgage Market Survey®, showing mortgage rates easing to new all-time record lows for all products covered in the survey helping to keep homebuyer affordability high. The average for the 30-year fixed mortgage rate has been below 4.00 percent for six consecutive weeks.

The survey concluded that the 30-year fixed-rate mortgage averaged 3.89 percent, with an average 0.7 point for the week ending January 12, 2012, down from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.

The 15-year FRM this week averaged 3.16 percent with an average 0.8 point, down from last week when it averaged 3.23 percent. A year ago at this time, the 15-year FRM averaged 4.08 percent.

Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.72 percent.

Results showed that the 1-year Treasury-indexed ARM averaged 2.76 percent this week with an average 0.6 point, down from last week when it averaged 2.80 percent. At this time last year, the 1-year ARM averaged 3.23 percent.

“Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market,” says Frank Nothaft, the vice president and chief economist of Freddie Mac. “Although the economy added 1.6 million jobs in 2011, which was the most since 2006, the unemployment rate remained historically elevated.”