Tuesday, January 29, 2013

Stylish, Attractive New Listing in Northwest Boise

I love the angles and arches of the natural light filled home, nestled on the end of a quiet cul-de-sac off Hill/Castle roads, close to, and with views of the foothills.

For more details go to: LowesFlatFee.com  or contact me roger@lowesflatfee.com.

Monday, January 28, 2013

5 Reasons To List Your Home NOW

You may have heard the truism that "All Real Estate is Local."  Although the following comes from a national blog, it is spot on for our market.  And speaking of listing your home, I provide all the service without all the cost!

Points About PointsMany homeowners are waiting until the Spring ‘buying season’ to list their homes for sale. Here are five reasons why that might not make sense this year:

1.) Demand Is High

Homes are selling at a pace not seen since 2007. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that annual sales in 2012 increased 9.2% over 2011. There are buyers out there right now and they are serious about purchasing.

2.) Supply Is Low

The monthly supply of houses for sale is at its lowest point (4.4 months) since May of 2005. The current month’s supply is down 21.6% from the same time last year. Historically, inventory increases dramatically in the spring. Selling now when demand is high and supply is low may garner you your best price.

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative to many purchasers.

4.) Interest Rates Are Projected to Inch Up

The Mortgage Bankers’ Association has projected mortgage interest rates will inch up approximately one full point in 2013. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) Timelines Will Be Shorter

The dramatic increase in transactions caused many challenges to the process of buying or selling a home in 2012. We waited for inspections, dealt with last minute appraisals and prayed that the bank didn’t ask for ‘just one more piece of paper’ before issuing a commitment on the mortgage. There are fewer transactions this time of year. That means that timetables on each component of the home buying process will be friendlier for those involved in transactions over the next 90 days.

These are five good reasons why you should consider listing your house today instead of waiting.


Saturday, January 26, 2013



Short Sale Process Cut in Half or More, Freddie Mac Says


Short sales are getting much shorter, Freddie Mac says. The mortgage giant launched a Freddie Mac Standard Short Sale program on Nov. 1 that sought to speed up the short sale process and make it easier and more transparent.

"We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent," as a result of the changes, writes Tracy Mooney, Freddie Mac’s EVP in a recent blog post.

Among the changes that took effect Nov. 1, 2012:

  • Mortgage servicers have 30 days to make a decision on a short sale once they receive an application. If they need to negotiate with a third party, they have 30 additional days. A final decision on the short sale must be made within 60 days.

  • Mortgage servicers are required to acknowledge they received the short sale application within three days of submission. Servicers must provide weekly status updates if they end up needing more time to review the application past the initial 30-day period.

  • Mortgage servicers have authority now to approve short sales when qualifying financial hardships for home owners who are past due or current on their mortgage payments.

  • Mortgage servicers are also now able to approve short sales without seeking a separate review by the mortgage insurance company.

  • Following a short sale, home owners may be able to qualify for up to $3,000 in relocation assistance.

Source: “The Shorter Short Sale: Long on Borrower Benefits,” Freddie Mac Executive Perspectives


Friday, January 25, 2013

Top Ten Questions Regarding Qualified Residential Mortgages

I wrote yesterday about the Qualified Residential Mortgage guidelines that are being written, here some additional information.

From the Wall Street Journal

Regulators issued new mortgage rules on Thursday designed to prevent a return to lending practices that cratered the housing market and brought the financial system to its knees during the past decade. Here’s a look at some frequently asked questions:

What is a qualified mortgage? Congress amended federal lending laws in 2010 to give greater legal rights to borrowers who get mortgages they can’t afford. The new law, part of the Dodd-Frank financial-regulation overhaul, said if banks made a qualified mortgage—one that meets certain easy-to-identify criteria—regulators and courts would presume that lenders had reason to assume a borrower could repay.

When do the new rules take effect? In one year.

What is the Consumer Financial Protection Bureau’s role? Congress left it to the agency to spell out the definition of a qualified mortgage.

Do qualified mortgages have a minimum down payment or credit score requirement? No. Instead, the rules focus primarily on documenting a borrower’s ability to make monthly payments.

What kind of loans won’t be qualified mortgages? Certain product types are excluded, including interest-only loans that don’t require principal payments, and loans where the principal balance rises over time. Beyond that, banks must verify a borrower’s income, credit, and employment. Borrowers who take out jumbo mortgages, or those too expensive for government backing, can have no more than 43% of total debt as a share of their pretax income.

Will lending standards get tighter, looser, or stay the same? It’s too soon to tell and there are diverse opinions on this point. David Stevens, the chief executive of the Mortgage Bankers Association, said the debt-to-income requirements for jumbo mortgages could tighten standards for those loans, which have already become much harder to get. “It will restrict credit on the margin over the current environment and that’s something we cannot afford,” he said.
Associated Press
Mark Zandi, chief economist at Moody’s Analytics, has said that the rules are likely to lock in today’s stringent credit standards.

Mark Zandi, chief economist at Moody’s Analytics, has said that the rules are likely to lock in today’s stringent income-verification and credit standards. That would keep in place a lending regime that many top policy makers, from Federal Reserve Chairman Ben Bernanke to Treasury Secretary Timothy Geithner, have said may be too tight.

Others say the rules should provide certainty that lenders have been craving and encourage them to ease their standards, though non-qualified mortgages could carry higher costs for borrowers. The new rules should help convince private mortgage investors “that it’s safe to come back in the water,” said John Taylor, chief executive of the National Community Reinvestment Coalition.

Will banks make loans that aren’t qualified mortgages? Lenders can make loans not considered qualified mortgages, but most say they won’t, at least initially, given the legal liability Fannie Mae FNMA 0.00% and Freddie Mac FMCC 0.00% are also unlikely to bundle such loans into securities.

Still, Mr. Taylor says that over time, a market should develop for non-qualified mortgages. “Where there’s money to be made, and where it’s clear that something illegal or predatory is not occurring, there will be a market for it because there will be a better rate of return,” he said.

Will certain loans become harder to get? Yes. Many exotic mortgages that proliferated during the subprime heyday have disappeared; they are now less likely to come back. Lenders also may be more reluctant to make other loans that have been popular in more expensive housing markets and among affluent borrowers, such as interest-only mortgages.

Whether such loans will be securitized may depend on how ratings agencies interpret the potential costs of the new rules.

Are there certain lenders that will be at a disadvantage because of the rules?Most qualified mortgages will have a 3% cap on the amount of fees and origination costs that lenders can charge. Mortgage brokers are concerned that the way in which that rule is implemented could hurt their business model.

In addition, mortgage units run by home builders and real-estate brokerages could be hit because any costs from affiliated services that they offer—say, title insurance or legal settlement services—would count towards that 3% cap. If borrowers get those services from third parties that aren’t owned by the brokerage, then the costs don’t count towards the cap. Builders often encourage buyers to use their affiliated services, saying they’re more convenient. But consumer advocates have long worried that the practices are anticompetitive and can lead them to pay higher fees.

What happens if a borrower decides his loan is unaffordable? Borrowers can sue the lender or the investor for damages. Banks that prove they met the qualified mortgage definition will have a greater shield from liability for loans that carry a prime rate, and a smaller shield on high-cost loans, which are typically made to subprime borrowers.


Thursday, January 24, 2013

Another Reason to BUY NOW-Will 20% become minimum down?

In addition to the good housing prices and the record low interest rates we see due to a troublesome cloud on the horizon another reason to purchase soon.  It is called the Qualified Residential Mortgage, which essentially will be new guidelines regarding mortgages.

Keep on reading for more:

Will 20% Soon Be the Minimum Down Payment on a Home?

Posted: 23 Jan 2013 04:00 AM PST


Increased CostSeveral government agencies are reviewing data to determine what will be the minimum down payment required under the new Qualified Residential Mortgage (QRM) guidelines scheduled to be revealed in the next few months. In the original Mortgage Market Note issued by the FHFA, it was suggested that loan-to-value (the percentage of the overall purchase price which was being borrowed) was a major factor in determining if a loan would default:
“For most origination years, requirements for borrower credit score and loan-to-value ratio are the factors that most reduce the ever-90-day delinquency rate of mortgages acquired by the Enterprises that would have met the proposed QRM standards.”

The note then made the following proposal:
“An LTV ratio qualified residential mortgage must meet a minimum LTV ratio that varies according to the purpose for which the mortgage was originated. For home purchase mortgages, rate and term refinances, and cash-out refinances, the LTV ratios are 80, 75, and 70 percent, respectively.”

Basically, the original note suggested that a 20% down payment should be the new guideline. We realize that there has been much debate on this issue since and that the minimum down payment required under the new QRM guidelines will probably be less than 20%. However, we can’t know for sure.

Bloomberg reported last week:
“The six regulators drafting the separate QRM rule, including the Department of Housing and Urban Development, the Office of the Comptroller of the Currency and the Securities and Exchange Commission, must decide whether to include such a requirement — and whether to make it less than the 20 percent they originally proposed.”

Will it be more difficult to qualify for a mortgage after the new QRM rules are announced? Probably

As David Stevens, President of the Mortgage Bankers Association said during a speech in Washington on Jan. 16:
“I have consistently warned of the regulatory tidal wave to come and it’s finally upon us. These changes will impact business operations and the future of mortgage access for years to come.”


Wednesday, January 23, 2013

Southwest Idaho Vacancy Report

I have a few buyers currently looking for rental property, with our low vacancy rates combined with still low purchase prices and super low interest rates, this may be the time for you to look as well!  Just call or email me today.

Following courtesy of Park Place Property Management

4th Quarter Southwest Idaho
Chapter of NARPM Vacancy Report

January 24, 2013
The fourth quarter Southwest Idaho Chapter of NARPM's Vacancy Report is out! We are seeing many changes in our data as well as having over 22% more units sampled! With the increase of sample size, our data and results are more accurate than ever before.

We are still seeing a steady 3% vacancy rate for the Ada and Canyon counties, although we did see a drop in rent prices for both counties as well. We saw just about a 3% drop in rent prices that affected both single-family and multifamily homes. We are still seeing a high demand for single family homes and expect rent prices to hover or increase for the next quarter. Ada and Canyon counties are still considerably better than the national average in all areas surveyed.

Sunday, January 20, 2013

2013 Predictions for Real Estate Nationally

10 Predictions for Housing in 2013


The new year could be the best year in real estate in years, but the housing recovery still remains fragile and challenges remain, says Dave Liniger, RE/MAX co-founder and chairman.

Liniger recently offered up some of his predictions for the new year:

  1. More buyers and sellers return to the housing market.

  2. Home sales increase 6-7 percent while home prices increase 3-4 percent.

  3. Inventory of for-sale homes will hit bottom.

  4. Higher-priced listings begin to sell more.

  5. The number of distressed properties continues to drop.

  6. The shadow inventory continues to fall.

  7. Short sales rise, reaching a peak.

  8. Mortgage rates rise slightly by year's end from record lows.

  9. Lending remains constrained for home buyers.

  10. Home affordability remains at record highs.


Saturday, January 19, 2013

Buyers messing up a loan approval.

I just noticed this article from the daily real estate news from Realtor magazine.  I have seen buyers do each of these mistakes, so it certainly bears reprinting.
  • Making a big purchase:  Avoid making major purchases, like buying a new car or furniture, until after they close on the home. Big purchases could change the buyer’s debt-to-income ratio that the lender used to approve the buyer’s home loan and could throw the approval into jeopardy.

  • Opening new credit: Now isn’t the time to open up any new credit cards.

  • Missing any payments: Home buyers need to be extra vigilant about paying all their bills on time, even if they’re disputing one.

  • Cashing out: Avoid any transfers of large sums of money between your bank accounts or making any undocumented deposits — both of which could send up “red flags” to your buyer's lender.
  • Friday, January 18, 2013

    Housing turning the Corner

    We have certainly see the housing in the Treasure Valley turn the corner, and HUD is reporting that nationally housing has turned the corner as well.

    The housing market has shown signs of “bottoming out nationally and clearly turning a corner,” according to the Obama Administration’s December Housing Scorecard.

    Home values are inching up while home sales remain strong. Some home price indexes are showing values up 5.6 percent and 4.3 percent from year ago levels, according to the Scorecard.

    “As the December housing scorecard indicates, our housing market is continuing to show important signs of recovery,” says Michael Berman, a HUD senior adviser.

    Home inventories are falling, reaching a 4.8-month supply in December compared to November’s 5.3-month supply.

    Americans are continuing to see the amount of equity in their homes increase. American home equity grew to $8 trillion in December but is still below the nearly $14 trillion in equity reached prior to the recession.

    More than 6 million mortgage modifications and other kinds of housing assistance have taken place between April 2009 and November 2012, helping more home owners stay in their homes, according to the administration.

    The housing scorecard is a comprehensive report on the national housing market, released every month by the U.S. Department of Housing and Urban Development and the U.S. Department of Treasury.

    To view the complete Housing Scorecard, visit www.hud.gov/scorecard.


    Thursday, January 17, 2013

    The QM Announcement and What It Means to Real Estate

    Locking Your Loan400For over a year, we have been reporting on the impact that the new regulations being created for the Qualified Mortgage (QM) and the Qualified Residential Mortgage (QRM) would have on the housing market. Last week, the Consumer Finance Financial Protection Bureau (CFPB) announced its rules for a qualified mortgage. Let’s take a look at what it will mean to housing.

    Let’s Begin with ‘Simplified’ Definitions

    The idea of a QM is to assure the “ability to pay” — what standards a bank must follow to make sure a borrower has the ability to make the mortgage payments before offering a loan. An over-simplified explanation would be “the things a bank can’t do”.

    The idea at the center of QRM is to determine the standards that a buyer must meet before getting a mortgage. An over-simplified explanation would be “the things a buyer must do”.

    What Happened Last Week?

    The CFPB issued their QM rules which will be effective January 10, 2014. The rules determine the limits on the loan types which can be offered by banks, the fee structures which can be charged by banks and other such issues. (For more details, you can download the 7 page summary or the 804 page full document issued by the CFPB).

    The biggest news impacting a potential mortgage applicant is that the allowable back-end-debt ratio was set at 43% which is more lenient than the discussed 36% limit. The back-end-ratio is explained by Investopedia as:
    “A ratio that indicates what portion of a person’s monthly income goes toward paying debts. Total monthly debt includes expenses such as mortgage payments (made up of PITI), credit-card payments, child support and other loan payments. Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.”

    This will result I more buyers still being able to qualify for a mortgage.

    What DID NOT Happen Last Week?

    The QRM rules were NOT released. The QRM rules will be set by several different Federal agencies, such as the FDIC, Federal Reserve Board, FHFA, HUD, and OCC. These rules will be announced later this year and may include:

    • A maximum “front-end” monthly debt-to-income ratio (which looks at only the consumer’s mortgage payment relative to income, but not at other debts) of 28 percent;

    • A possible 20 percent down payment requirement in the case of a purchase transaction

    • New minimum FICO scores established

    These QRM rules will also have a big impact on future lending. We will try our best to keep you abreast of any updates.


    Tuesday, January 15, 2013

    Ada County 2012 Real Estate Report

    Sales in December 2012 were 500 in Ada County, an increase of 2.8% compared to December 2011.   Year-to-date sales are 6,974; 10% over 2011 totals.

    Dollar volume for December was up 34% to $106Mil. For the year we are at $1.4Billion!

    New homes sold in December increased 51% over new homes sold in December of 2011!!…and are up 65% YTD.  However…sales of existing homes were down 6% in December and are up only 1.3% for the year.  This becomes more worrisome as inventory continues to try to find a new low number.

    Historically, December sales decrease by 2% from November. December 2012 sales decreased by 11% from November 2012.

    Of our total sales in December… 24% were distressed (120 total sales)….unchanged from November 2012. In December 2011, 47% of our sales were distressed.  In January 56% of distressed properties were REOs and 44% were short sales.  In December the ratio was 76% short sales (91 total sales) and 24% REOs (29 total sales).

    In September 2012 our REO activity fell to 29% of distressed sales (lowest in several years).  October REO activity increased to 42% of distressed sales and then fell back to 37% in November and now ends the year at its lowest number in the last 5 years.

    This is nine consecutive months with short sales being the larger percentage of distressed properties sold.

    Pending sales at the end of December were 786; down 7% from November. In general pending sales in May are the highest of the year; and June the second highest.  The percentage of pending sales in distress was unchanged from November, totaling 29% overall. There has been very little fluctuation in this number since May 2012 when we first went below 30%. A year ago we were averaging close to 50% of pendings in distress; but have decreased steadily since January.  Of Pending sales in distress, short sales outnumbered REO’s 1.6 to 1.

    At the end of December, we had 13% more sales pending than at the end of December 2011.

    December median home price was $177,971; up 21% from December 2011. Median home price is up 29% since January of this year and above $170,000 for eight months running.  We continue to outpace our national recovery; according to NAR’s most recent report.

    New Homes median price for December was $236,470; up 5% from November 2011.

    The number of houses available at the end of December decreased 7% from November. At the end of December our total active inventory was 1,750 homes; the lowest since February 2001 (when sales were 450 houses and median price was $131,000). This is 13% less than last year at this time.

    At the same time, the percentage of distressed active listings decreased 2% to 24%. This reverses the trend of the last two months in which the percentage rose from 23% to 26%. We have been hovering between 33% and 36% for the last year. We remain well below the 40% levels set last spring….when we were on the increase.

    With an inventory increasing and the percentage of distressed inventory holding steady; median home price will continue to strengthen well into 2013.

    Of our Distressed Inventory 88% is Short Sales (369 homes) and only 12% is REO (50 homes); unchanged from last month.

    Available inventory declined in all price points; except for a net gain of eleven houses in the $160,000 to $200,000 price range and a gain of sixteen homes in the $250,000 to $300,000 price range.

    In Ada County we now have less than 3.3 months of inventory on hand.

    The price category in shortest supply is <$159,999 where we have 2.3 months. All price points up to $400,000 have less than 4 month’s supply. We have benefited for nearly two years from inventory levels much lower than national average.

    Multiple offers are much more prevalent; now becoming the norm.

    Based on December sold data, our most desirable price point is $120,000 to $160,000 which was 28% of total sales. The next largest price point sold is $160,000 to $200,000 at 18% of all sales.

    And with that, we say goodbye to our best year since 2007.  It sure was fun to have such great increases; improvements in all key categories.

    Thanks to Marc Lebowitz of the Ada County Association of Realtors.

    Copy of Your Deed-BUY IT NOW

    In a world of never ending scams, it appears one is targeting new home buyers stating they need to buy a copy of their "grant deed" for $83, unless you are late then they will charge you an additional $35.

    You do not need a copy of your deed, it is on file at the county recorder's office. And by the way most of our deeds will be warranty deeds not grant. If you would like a copy you can get them directly from the county recorder's office for $1.

    Evidently this scam solicitation has become so prolific it has prompted the Canyon County Assessor to post this on their website:  “Property owners do not need to have a copy of their deeds, which are on file at the Recorder’s Office. Uncertified copies may be downloaded and viewed by using the official Recorders Search on the county website. Hard copies can be (purchased) at the Recorder’s Office. Cost is $1 per page.”

    I will warn all my new buyers at the closing table.

    Wednesday, January 9, 2013

    Shadow Inventory, Is it REAL?

    I spoken of shadow inventory before, and I stated that I did not feel it much of a threat here in Idaho. Due in part to Idaho being a statutory foreclosure state.  I am seeing that nationwide the fears of a looming shadow inventory is diminishing as well.

    Shadow Inventory Threat Wanes


    The number of homes in “shadow inventory” dropped from 2.6 million in October 2011 to 2.3 million in October 2012, according to a new report from CoreLogic.

    Shadow inventory refers to the supply of homes that are in foreclosure or have seriously delinquent mortgages but are not yet on the market.

    Many housing experts once predicted that the shadow inventory would cause overall inventories to skyrocket and place downward pressure on home prices. Yet an increase in short sales and loan modifications have helped to lessen the impact, analysts say.

    "The size of the shadow inventory continues to shrink from peak levels in terms of numbers of units and the dollars they represent," says Anand Nallathambi, president of CoreLogic. "We expect a gradual and progressive contraction in the shadow inventory in 2013 as investors continue to snap up foreclosed and REO properties and the broader recovery in housing market fundamentals takes hold."

    Source: “'Shadow Inventory' Threat Continues to Recede, CoreLogic Says,” AOL Real Estate (Jan. 2, 2012)


    Monday, January 7, 2013

    The KCM Blog - 5 Real Estate Trends to Look For in 2013

    Crystal BallPredicting trends during volatile economic times in American is no easy task. However, we are going to give it our best shot. We strongly believe these are the five real estate items we should keep an eye on in 2013:

    Demand for Housing Will Continue to Surge

    The housing market has turned the corner and there is no reason to believe that buyer demand will not maintain momentum throughout 2013. Household formations shot up to boom-time levels in 2012 and are projected to increase at even a faster rate over the next twelve months. A lack of inventory will be more of a challenge to sales increases than will a lack of demand.

    Generations X and Y Will Prove They Believe in Homeownership

    Contrary to what many have hypothesized over the last few years, young adults (18-35 year olds) are just as committed to homeownership as previous generations. Recent studies have shown:

    • 43% already own a home

    • 72% see homeownership as part of their personal American Dream

    • 93% of those currently renting plan to buy a home

    This, along with the increase in household formations mentioned above, makes us believe that 2013 will be the year that many of these young adults will jump into homeownership.

    Prices Will Continue to Increase

    Pricing of any item is determined by supply and demand. Demand for housing will remain strong throughout 2013. At the same time, the supply of homes ready for is shrinking in many parts of the country. Outside of a few states that still have challenges with large inventories of distressed properties (NY, NJ, CT, IL for example), prices will appreciate nicely.

    Even in the areas that are still dealing with high percentages of foreclosures and short sales, prices will not tumble dramatically. The increase in demand will absorb much of this inventory. In these areas, prices will either flatten or perhaps soften to a small degree.

    Move-Up Sellers Will Return in Great Numbers

    Perhaps what many will find as the biggest surprise of 2013 will be the return of the ‘move-up’ seller. Over the last several years negative equity has prevented many of these sellers from moving up to the house of their dreams. However, with prices recovering, more and more of these sellers will realize that now may be their greatest opportunity to make the move to a lifestyle they always wanted.

    With home prices expected to increase and more stringent mortgage qualifications (QR and QRM) scheduled to be announced this year, we believe that the first half of the year will bring many of these sellers/buyers to the market.


    Saturday, January 5, 2013

    The KCM Blog - The 5 Biggest Real Estate Stories of 2012

    iStock_000004578878Small[1]At KCM, we concentrate on the trends that impact the housing market. Here are what we believe were the biggest stories of 2012.

    Housing Was a Tailwind not a Headwind to the National Economy

    Over the last several years, many experts claimed that the housing market would not recover until the overall economy recovered. Others, including us here at KCM, believed the exact opposite – the overall economy would not recover until housing recovered. This past year, housing has been one of the only bright spots in an otherwise lethargic economic recovery.

    The Fed Remained Committed to Historically Low Mortgage Rates

    At the end of 2011, 30-year mortgage rates were at 3.95%. Many, including us, believed that rates had only one way to go – UP! We were wrong. Mr. Bernanke and the Fed continued policies which supported keeping rates at historical lows. This resulted in rates dropping to below 3.4% by year’s end.

    Demand Remained Strong throughout the Year

    Home sales numbers continued to increase throughout the year suggesting that the country’s belief in homeownership still remains strong. Even the last Existing Homes Sales Report of the year from the National Association of Realtors revealed that home sales were up 5.9% from the previous month and 14.5% from the same time last year.

    Inventory Began Shrinking

    Housing inventory is at its lowest level (4.8 months) since September of 2005. This represents 22.5% decrease as compared to the same time last year. Shadow Inventory, the inventory of distressed properties coming to market, is also shrinking. This is for two reasons:

    1. we are clearing more foreclosures and short sales

    2. less families are falling behind in their mortgage payments

    Prices First Stabilized and then Increased

    Perhaps the biggest story of 2012 is that home values turned the corner and headed upward. By the end of the year, home values were up 10.1% compared to the end of 2011.


    Friday, January 4, 2013

    Mortgage Debt Tax Relief Passed

    As a great benefit to anyone needing to short sale or otherwise being foreclosed on the congress has extended the mortgage debt tax relief act for another year.  If you are thinking you may need to participate in a short sale, I would suggest you call me and get started today. These things can sometimes take a very long time and you never know if it will be extended again.

    A tax break for forgiven mortgage debt that was set to expire Dec. 31 was extended by lawmakers when they dodged the “fiscal cliff” this week.

    The tax break, which has been extended to the end of 2013, allows home owners facing short sales, reduced loan principals, or foreclosures to avoid paying taxes on any debt still owed to the bank. Otherwise, the debt would have been taxed by the IRS as income.

    The tax break first took effect in 2007.

    Home owners had rushed to complete short sales before the end of the year out of fear that the tax break would not be extended.

    In Florida, short sales have sold on average for about $103,000 less than what the home owner owed. As such, a typical home seller in that state in, say, the 25 percent tax bracket who completed a short sale in 2013 would have been faced with a $25,725 tax bill if the extension had expired.


    Are Foreclosures Increasing or Decreasing?

    Recent headlines have created tremendous confusion regarding the foreclosure situation in the country. Let’s give an example. Which of these two headlines are accurate?

    Foreclosure Starts Plunge to 71-Month Low

    Foreclosures Increase for the First Time Since 2010

    The challenge is that both headlines are 100% accurate. How can foreclosures have increased for the first time in two years and, at the same time, be at a six year low? Each headline was reporting on a different measurement. Below are the explanations for each of the measurements as per RealtyTrac’s most recent Mortgage Foreclosure Report.

    Foreclosure Starts

    Foreclosure starts are the first steps taken by the bank after the borrower becomes delinquent on their mortgage payments (default notices or scheduled foreclosure auctions, depending on the state). They were filed for the first time on 77,494 U.S. properties in November. This was:

    • Down 13% from the previous month

    • Down 28% from November 2011

    • At the lowest level since December 2006

    Foreclosures (Bank Repossessions)

    This is when the lender completes the foreclosure process and repossesses the property. This occurred on 59,134 U.S. properties in November. This was:

    • An 11 percent increase from the previous month

    • A 5% increase from November 2011

    • The first year-over-year increase in bank repossessions since October 2010, when the practice of robo-signing foreclosure documents came to light and caused a sharp slowdown in foreclosure activity in the following months

    In the report, Daren Blomquist, vice president at RealtyTrac, explained:
    “The drop in overall foreclosure activity in November was caused largely by a 71-month low in foreclosure starts for the month, more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble bursting six years ago. But foreclosures are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago — and much longer in some cases.”

    We hope this brings some clarity to the situation.


    Thursday, January 3, 2013

    Ada County Market Report...Looking Good!

    Our sales continue to be stronger than forecast, with inventory levels still declining and median price recovery third strongest in the country!

    Wednesday, January 2, 2013

    Housing: Year End Reports Reveal Market Coming Back

    Housing MarketEvery year-end housing report revealed that the real estate market is recovering quite nicely. Here is a quick synopsis of each:

    Existing Home Sales Report

    • Total existing-home sales rose 5.9 percent in November over last month

    • Sales are 14.5 percent higher than November 2011

    • Sales are at the highest level since November 2009

    • The national median existing-home price was $180,600 in November, up 10.1 percent from November 2011

    • Total housing inventory at the end of November fell to a 4.8-month supply; it was 5.3 months in October, and is the lowest housing supply since September of 2005 when it was 4.6 months

    Pending Sales Report

    • Pending home sales increased in November for the third straight month and reached the highest level in two-and-a-half years

    • The index is at the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit

    • With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007

    • On a year-over-year basis, pending home sales have risen for 19 consecutive months

    New Home Sales Report

    • Sales of new homes rose 4.4% in November to a two-and-a-half-year high

    • This is the highest level since April 2010, when a temporary tax credit boosted demand.

    • Sales are now 15.3% higher compared to one year ago

    Case Shiller Home Price Index

    • Home prices rose 4.3% in the 12 months ending in October

    • In nineteen of the 20 cities covered, annual returns in October were higher than September