Category: Marketing (page 35 of 191)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

From The New York Post:

The latest numbers suggest we’re finally at the beginning of the end of the housing correction — no thanks to Washington.

Last Thursday’s numbers from Realtytrac seemed like bad news. In August, foreclosure auctions hit their second-highest monthly total in the report’s history: 147,003, up 9 percent over the month before and up 2 percent over August last year. That’s 7 percent below the peak month, March of this year.

And the immediate precursor to foreclosure sales — bank repossessions — hit their all-time high in August: 95,364, up just 3 percent over July but 25 percent over August 2009. That makes the ninth straight month repos have increased on a year-over-year basis. But foreclosure is a pipeline — and those numbers are the outflow end of it.

On the inflow end, things are slower. August saw 96,469 default or foreclosure notices go out, a 1 percent drop from July and a 30 percent fall from August 2009. And that marks the seventh straight month new foreclosures have fallen on a year-over-year basis. This trend — increased “outflow” and slightly reduced “inflow” foreclosure activity — means that lenders and loan servicers are 1) giving up on modifying mortgages when the borrower can’t pay, and instead repossessing homes and auctioning them off, but also 2) trying to manage the foreclosure pipeline to minimize the downward pressure on home prices.

Why isn’t this bad news? For starters, a multiyear tidal wave of foreclosure sales has been inevitable ever since the housing bubble burst: Too many people had mortgages they couldn’t afford to pay, mortgages with a face value higher than the home’s new market price. There’s never been any way for prices to start heading back up until they first find their bottom — which won’t happen until those bad mortgages are cleared away.

President Obama’s $75 billion mortgage-modification program was always going to be a huge failure — you just can’t keep people in homes they can’t afford — but now the markets are admitting it.

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Urban savant Joel Kotkin in Forbes magazine:

What we are going through now is not a sea change but a correction from insane government and business practices. The rise in homeownership from 44% in 1944 to nearly 70% at the height of the bubble reflected a great social democratic achievement. But by the mid-2000s government attempts to expand ownership–eagerly embraced by Wall Street speculators–brought in buyers who would have historically been disqualified.

In some markets, prices exploded as people moved up too quickly into ever more expensive housing. Housing inflation was further exacerbated by “smart growth” policies, which limited new home construction in suburban areas and instead promoted dense, “transit oriented” housing with limited market appeal and economic logic.

Rather than artificially constraining supply and protecting irresponsible borrowers, we should let nature take its course. Home values need to readjust historic balance between incomes and prices. Over the past 60 years, notes demographer Wendell Cox, it took two to three years or less of median household income to purchase a median-priced home. At the peak of the boom, that ratio had ballooned to 4.6.

The disequilibrium was the worst in regions like Los Angeles, Las Vegas, San Bernardino-Riverside and Miami. At the peak of the bubble, between 2006 and 2008, according to the National Homebuilders Association- Wells Fargo “Housing Opportunity Index,” barely 2% of families with a median income households in Los Angeles could afford to buy a median priced home; even in the traditionally affordable Riverside area, the number was roughly 7%. In Miami, barely 10% could afford such a purchase; in Las Vegas, often seen as one of the cheaper markets, only 15%.

What a difference a market correction makes. The affordability number for Los Angeles is now 34%, 17 times better than two years ago, while Riverside is now near 70%. Miami’s affordability picture has improved to over 60% while in Las Vegas, it’s back over 80%.

These lower prices–not Wall Street or federal gimmickry–will lure new buyers to the places that some new urbanists have predicted will be “the next slums.” Already there’s evidence in places like Miami of a renewed interest in Read more