Entries in Housing (22)


Most County Housing Markets Worse Off over Last Four Years, Says RealtyTrac

iStockPhoto/Thinkstock(NEW YORK) -- While housing prices are on the rise, foreclosure and real estate research firm RealtyTrac reported that 65 percent of 919 county housing markets are worse off than they were four years ago, based mostly on factors including average sales price and foreclosure inventory.

With the 2012 Election Day just two weeks away, both Republicans and Democrats are grabbing at data to show that the economy has improved or worsened.

Housing data from S&P/Case-Shiller index and the National Association of Realtors show a rise in the average price of a home. Last week, the association showed sales fell 1.7 percent in September compared with a month earlier, but were up 11 percent over a year ago.

In the latest RealtyTrac report, the company compared data from the second quarters of 2008, the near-end of President George W. Bush's administration, and 2012 under President Obama. During the last four years, foreclosure inventory peaked in 2010 at 2.2 million, but has declined to 1.5 million.

Here are 10 counties that RealtyTrac noted are worse off and five counties that are better off compared to four years ago.

Cook County, Ill.
Average sales price: -17 percent
Foreclosure Inventory: 37 percent

King County, Wash.
Average sales price: -16 percent
Foreclosure Inventory: 62 percent

Salt Lake County, Utah
Average sales price: -36 percent
Foreclosure Inventory: 49 percent

Pima County, Ariz.
Average sales price: -31 percent
Foreclosure Inventory: 17 percent

Honolulu County, Hawaii
Average sales price: -20 percent
Foreclosure Inventory: 650 percent

Du Page County, Ill.
Average sales price: -18 percent
Foreclosure Inventory: 65 percent

Gwinnett County, Ga.
Average sales price: -19 percent
Foreclosure Inventory: 24 percent

Montgomery County, Pa.
Average sales price: -7 percent
Foreclosure Inventory: 77 percent


Snohomish County, Wash.
Average sales price: -16 percent
Foreclosure Inventory: 94 percent

Lake County, Ill.
Average sales price: -22 percent
Foreclosure Inventory: 78 percent

Orange County, Calif.
Average sales price: 2 percent
Foreclosure Inventory: -38 percent

New York County, N.Y.
Average sales price: 29 percent
Foreclosure Inventory: -12 percent

Middlesex County, Mass.
Average sales price: 10 percent
Foreclosure Inventory: -10 percent

Cuyahoga County, Ohio
Average sales price: 13 percent
Foreclosure Inventory: -44 percent

Fairfax County, Va.
Average sales price: 7 percent
Foreclosure Inventory: 60 percent

Copyright 2012 ABC News Radio


President Obama Preps for Debate Amid Nevada’s Housing Woes and New Criticisms of Housing Program

BRENDAN SMIALOWSKI/AFP/Getty Images(LAS VEGAS) -- One in 402 homes in Nevada is in foreclosure, according to RealtyTrac, making this the fifth-hardest-hit state in the country.

As the Los Angeles Times' Kathleen Hennessey notes Tuesday the Obama campaign “has set up its ‘debate camp’ in something of a metaphor for the nation’s economic woes -- and the president’s challenges.” Down the road from the resort are “empty storefronts at a ‘village’ of boutiques and restaurants. Surrounding the hotel where the president is huddling with advisors are scores of recently built condos and homes, each a worth a fraction of its value a few years ago.”

In the last few weeks, previous criticisms of the Obama administration’s housing program from Neil Barofsky, the former Special Inspector General for the Troubled Asset Relief Program, have been amplified by similarly harsh words in a new book from Sheila Bair, former chair of the Federal Deposit Insurance Corporation.

Barofsky Tuesday told ABC News that the “administration’s housing programs have been an abject failure in all but one aspect, protecting the big banks.”

Bair, a former Senate Republican staffer, recalls in Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself how she stood with President Obama in Arizona at the beginning of his presidency when he promised one of his new programs “will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure.”

Bair writes “the president was masterful in announcing the program, though I cringed as he threw out what I considered to be wildly inflated numbers on the programs’ impact. Even with our own, more aggressive proposal, we had estimated the number of successful modifications at 2.1 million tops.”

That plan, known as HAMP -- the Home Affordable Modification Program -- has failed to reach its goal of 3 to 4 million modified loans.

In fact, notes Barofsky, it “has reached only a little more than one-fifth of its goal with more failed modifications (more than one million) than successful ones (825,000).”

Bair writes that “HAMP was a program designed to look good in a press release, not to fix the housing market.” Referring to former National Economic Council director Larry Summers and Treasury Secretary Tim Geithner, Bair writes that “Larry and Tim didn’t seem to care about the political beating the president took on the hundreds of billions of dollars thrown at the big-bank bailouts and AIG bonuses, but when it came to home owners, it was a very different story. I don’t think helping home owners was ever a priority for them.”

HAMP was, she writes, “doomed to failure. ... What’s more, it cheated borrowers. Because Treasury wanted to demonstrate quickly that huge numbers of borrowers were being modified, it let borrowers enter into ‘trial modifications’ whereby they would start making reduced payments pending completion of all of their paperwork. But many of the borrowers could not provide all of the extensive documentation required by the program, so they would be put into foreclosure even though they had been making timely payments for months!”

Barofsky adds that the Obama administration “also missed a remarkable opportunity to spend more than 250 billion in authorized and obligated TARP dollars (without a single additional vote from Congress) to rescue struggling homeowners and help kick start a housing recovery, and instead chose to let the money sit on the sidelines. If they had only treated the foreclosure and housing crisis with the same ferocity and dedication that they did the banking crisis, we would almost certainly be facing a far better looking economy today.”

You can read more on the Nevada housing crisis HERE and PBS recently profiled Las Vegas casino maintenance man Albert Decall, who paid $395,000 (with $100,000 down payment) for his home, only to see his home value plummet to less than half of what it was worth. Working with lenders through the HAMP program, he saved his house.

Copyright 2012 ABC News Radio


San Francisco Proposes Tiniest Apartments FRANCISCO) -- If you've already been storing your extra shoes in your oven because your studio apartment is too small to live in, just take this into consideration.

In San Francisco, the minimum size for a residence is already a pint-sized 290 square feet. But on Tuesday, San Francisco's Board of Supervisors will be proposing changes to the city's building code to allow for "shoebox homes," literally.

Some of them would only have 150 feet of living space, 220 when you factor in the bathroom, kitchen and closet. That is even smaller than the 275- to 300-square-foot apartment size recently proposed by Mayor Michael Bloomberg for New York. Proponents of the idea are in favor of its affordability, but opponents are understandably fearful of uncomfortable "shoebox" style living.

The new mini-apartments are being proposed to accommodate residents who can no longer afford to live there because of all the growth in the tech sector.

The micro-units will probably go for $1,200 to 1,700 a month," Supervisor Scott Wiener, who drafted the legislation, told the Los Angeles Times. Wiener also noted that smaller units will not only allow for cheaper housing options, but more of them. The average San Francisco studio apartment goes for $2,075, according to the real estate service RealFacts.

Boston and New York are other cities where residents have been forced to get creative with their tiny living spaces. The New York Times reported Friday about several people who live in studio apartments smaller than Mayor Bloomberg's minimum square footage that say "the experience can be liberating. If you downsize your stuff along with your expectations of square footage, you really can do more with less."

It seems the smaller the space you have to work with, the bigger your imagination and creativity becomes to accommodate it.

Copyright 2012 ABC News Radio


George Lucas' California Housing Proposal to Become Reality

Chip Somodevilla/Getty Images(MARIN COUNTY, Calif.) -- A defiant George Lucas showed his Indiana Jones-caliber feistiness when the filmmaker ended nearly 25 years of neighborhood opposition to a California studio by announcing the land would instead be used to build low-income housing.

Lucas has been trying for decades to build a state-of-the art film studio on his Grady Ranch in Marin County, Calif., but his well-to-do neighbors have blocked his plans at every step of the way. In an official statement released by his production company, Lucasfilm Ltd., he said, "enough is enough."

"The level of bitterness and anger expressed by the homeowners in Lucas Valley has convinced us that, even if we were to spend more time and acquire the necessary approvals, we would not be able to maintain a constructive relationship with our neighbors," Lucas said in the statement.

"We love working and living in Marin, but the residents of Lucas Valley have fought this project for 25 years, and enough is enough," he wrote.

He said that "movies are waiting to be made" so he needs to take his project elsewhere.

"We have several opportunities to build the production stages in communities that see us as a creative asset, not as an evil empire, and if we are to stay on schedule we must act on those opportunities," Lucas wrote.

But he saved the zinger for the last paragraph of the two-page statement.

"We plan to sell the Grady property expecting that the land will revert back to its original use for residential housing," he wrote. "We hope we will be able to find a developer who will be interested in low income housing since it is scarce in Marin. If everyone feels that housing is less impactful on the land, then we are hoping that people who need it the most will benefit."

Lucas' move to make the upscale neighborhood affordable-housing friendly raised questions about whether he's attempting to exact revenge on his stubborn neighbors or even whether he's bluffing about a plan that's not real.

Thomas Peters, president and CEO of the Marin Community Foundation, can vouch for the plan's seriousness. The foundation is one of the largest in the country for investing money in philanthropic projects, so Peters immediately put a call into Lucasfilm after reading the statement.

"Was this just an edgy comment or does it have something to it? I was pleasantly surprised that Mr. Lucas and his top company folks responded immediately that he was quite sincere about it," Peters said.

Peters has known Lucas, 68, for more than 20 years and Lucas has now made the land exclusively available to the foundation for development.

"[The proposal] was entirely focused on that positive outcome. It was not, as many people have speculated, 'This is how I'll show them,'" Peters said. "[Lucas] doesn't need, and doesn't have, any energy whatsoever for looking over his shoulder.

"He was passing a little frustration, as well he should after ... years of back and forth, but the fact of the matter is that he's done with that proposal. That's a set decision," he said. "The good news, depending on people's perspectives, is we'll get this done and we intend to do it here. He's also a guy that gets things done. We're going to do this."

The land in question is about 1,000 acres of "gorgeous, roaming land filled with oaks, eucalyptus trees and creeks," Peters said. Like Lucas' other two ranches, he builds on 3 percent of the land and preserves the rest.

That leaves the foundation with about 200 acres for the proposed housing project, which he says is more than enough. Early plans are looking at building about 300 apartments and condos on the land, most likely for senior citizens in need. Peters estimates the project will take about two years to complete.

"[Lucas has] been an extraordinarily good steward of the land and neighbor and planner and job creator," Peters said. "Most communities would bend over backwards to welcome him."

Lucas' projects in the county have created hundreds of jobs and brought in hundreds of millions of dollars in revenue, Peters said.

Copyright 2012 ABC News Radio


US Consumer Financial Protection Bureau to Propose New Mortgage Rules

iStockphoto/Thinkstock(WASHINGTON) -- Even the most sophisticated home buyer can find mortgages daunting. And that’s precisely why the U.S. Consumer Financial Protection Bureau is planning to propose new rules that will simplify things like mortgage points and fees, and bring greater transparency to the mortgage origination loan market, the agency said in a statement this week.

These rules, which the CFPB expects to propose this summer and finalize by January 2013, would make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal.

“Mortgages today often come with so many different types of fees and points that it can be hard to compare offers,” bureau director Richard Cordray said in the statement. “We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.”

The agency, created by the Dodd-Frank Act of 2010, is considering proposals that would, among other things, require lenders to offer consumers a no-discount-point loan option, which means homebuyers can compare competing offers from various lenders. Brokerage firms and creditors would no longer be allowed to charge origination fees (known as “points”) that vary with the size of the loan. Instead, brokerage firms and creditors would only be allowed to charge flat origination fees.

In addition to regulating origination points and fees, the CFPB will also propose regulations on what kind of qualifications and compensation are necessary for mortgage originators, which includes mortgage brokers and loan officers.

An overview of the rules under consideration can be found here.

Copyright 2012 ABC News Radio


Obama Claims Credit for Refinancing Surge; Critics Doubt Policies’ Role, Impact

Official White House Photo by Pete Souza(RENO, Nev.) -- After two days with his same-sex marriage position in the spotlight, President Obama Friday sought to shift focus back to the economy, visiting a neighborhood hit hard by the housing crisis, to claim success at helping struggling homeowners and call on Congress to do more.

Standing in the driveway of a home whose owners had recently refinanced their underwater mortgage, Obama credited rule changes for government-backed loans that he imposed six months ago with allowing more Americans to benefit from historically low interest rates.

“Since I’ve made this announcement, refinancing applications have gone up by 50 percent nationwide and 230 percent here in Nevada alone.  That’s the good news,” Obama said. “People are taking advantage of this. That’s what we want to see.”

He also called on Congress to enact legislation that would allow more homeowners, not just those with government-backed loans, to refinance.

“I’m calling on Congress to give every responsible homeowner a chance to save an average of $3,000 a year by refinancing their mortgage,” Obama said. “It’s a simple idea, it makes great sense, and I know it will have an impact.”

Obama met with homeowners Val and Paul Keller before his remarks.  The couple had previously not been able to refinance their $168,000 mortgage, which they’d held for 14 years, despite keeping up with monthly payments.

Thanks to changes implemented by the administration six months ago, the Kellers were able to refinance last year, saving them $240 a month.

“The reason the Kellers were able to refinance is because the only thing that we could do without congressional action was to give opportunities for refinancing for folks with a government-backed loan, an FHA-backed loan,” he said. “But in order to expand that opportunity -- we want to include everybody, people whose mortgages aren’t government-backed -- we’ve got to have Congress move.”

But while Obama sought to claim credit for a surge in refinancing, it’s unclear how much of the influx in applications is directly attributable to his policy changes, which applied only to a select group of homeowners, versus average Americans just trying to take advantage of lower rates.

Moreover, as his critics note, it’s unclear whether the majority of those applications have been approved by lenders and therefore have resulted in savings for homeowners.

“How many people in Nevada fit the profile of the Kellers that actually got help and are a success story?” questioned U.S. Rep. Mark Amodei, R-Nev., who is a supporter of Mitt Romney.

“So to come in here and ask people to ignore that and say, I’m going to sit in the home of some folks that it’s actually helped, is like, Hey, congratulations for finding some of those folks,” he said on a conference call with reporters.

“But if you think the answer is a continued government refinancing deal to the ignorance of the economy and western Nevada, I quite simply disagree with your philosophy and I’m talking to the president here,” he said.

Neither the administration nor the Mortgage Bankers Association, which tracks the data, could say how many homeowners have been able to refinance under the new rules implemented in October. And experts conceded that more applications do not necessarily translate to lower rates.

In October, during a visit to Las Vegas, Obama announced a series of administrative changes spearheaded by the Federal Housing Finance Agency that have allowed select homeowners whose mortgages are backed by Fannie Mae and Freddie Mac, who have good credit and no late payments in the last six months to refinance without getting a new appraisal or full credit check.

The FHFA estimated at the time that the initiative could help thousands of homeowners.

The administration says the costs and “red tape” to refinancing remain prohibitively high, particularly for non-government-backed mortgages, and is now pushing legislation to expand the reforms to the broader housing market as part of its “to do list” for Congress.

Copyright 2012 ABC News Radio


US Home Ownership Falls to 15-Year Low

Hemera Technologies/Thinkstock(WASHINGTON) -- The number of American households that own their home is down to a level last seen in early 1997. The Census Bureau said Monday that the homeownership rate fell to 65.4 percent at the end of March, down from a peak of 69.2 percent in mid-2004.
Compared to the end of last year, the homeownership rate fell in all four U.S. regions: Northeast, Midwest, South and West. The biggest decline was in the Northeast, which slipped 1.2 percentage points to 62.5 percent, according to the Census report.
Since the recession started in December 2007, African-American households have seen the biggest drop in home ownership, down 4.6 percentage points to 43.1 percent.
Copyright 2012 ABC News Radio


Increased Bidding Wars a Sign of Growing Demand for Housing

Stockbyte/Thinkstock(NEW YORK) -- The worst may well be over for the housing market, especially in much of the country where foreclosures have not been as widespread. Even bidding wars are back in some areas, according to The Wall Street Journal.

The newspaper reports that in markets across the country, more and more buyers are competing for the same properties.  But the bidding wars are not an indication of surging sales, WSJ says, but rather the result of supply shortages. This could be a sign that demand for housing is picking up.

As for home builders, shares for Pulte shot up 10 percent after the company reported an increase in permits to build homes.

Copyright 2012 ABC News Radio


New Home Construction Up Slightly in January

Brand X Pictures/Thinkstock(WASHINGTON) -- In another encouraging sign for the economy, construction of new homes increased modestly last month, up 1.5 percent to an annual rate of 699,000, according to data released Thursday by the U.S. Commerce Department.

“This is a good report,” David Crowe, chief economist at the National Association of Home Builders, told ABC News. “We're approaching 700,000 housing units per year.  That's something we haven't seen for several years.”

Crowe said January’s numbers are in line with December’s revised figures. “There was a broad-based improvement if you take both of the months together. And I think that's basically due to continued improvement in consumer attitude towards the future economy and in employment,” Crowe said.

And the jobs market continues to show signs of improvement. A separate government report issued Thursday showed claims for unemployment benefits are at their lowest level in almost four years.

“This is indicative of what we're going to see in 2012,” Crowe said, “which is a slow recovery.  This isn't going to be a fast or quick or igniting housing recovery.”

Warmer weather during the month of January may have contributed to the slight rise in new home construction, Bloomberg News reported.

Copyright 2012 ABC News Radio


Fed Clueless to Looming Crisis in '06, Transcripts Show

Federal Reserve Chairman Ben Bernanke. Alex Wong/Getty Images(WASHINGTON) -- Newly released transcripts of Federal Reserve board meetings show that even as disaster loomed for the U.S. economy in 2006 because of inflated housing prices, the board remained largely clueless.

In January, as the Fed met to give a rousing send-off to its retiring long-time chairman, Alan Greenspan, Janet Yellen, then president of the Federal Reserve Bank of San Francisco, struggled to find the right encomium with which to send him on his way.

Unhappily for her in retrospect, she found it:

"It is fitting," intoned Yellen, "for "Chairman Greenspan to leave office with the economy in such solid shape. … The situation you are handing off to your successor is a lot like a tennis racquet with a gigantic sweet spot."

A year later, of course, that spot's sweetness had so soured that the U.S. financial system teetered on the brink of collapse. The transcripts document how slow was the Board to appreciate the significance of events going on around them.

At its June meeting, then president of the Federal Reserve Bank of Atlanta George C. Guynn described to fellow members the lengths to which builders were going in order to cram buyers into houses. As the transcript makes plain, his comments were met with amusement:

"We are getting reports that builders are now making concessions and providing upgrades, such as marble countertops and other extras, and in one case even throwing in a free Mini Cooper to sweeten the deal [laughter]."

The idea that widespread securitization of iffy mortgages might bring down the whole economy or result in the loss of 8 million jobs was given short shrift, though some members, including Susan Bies, expressed misgivings over what she called the mortgage sector's "growing ingenuity."

At the same June meeting, the president of the Federal Reserve Bank in Dallas compared the economy to a BMW Z4 roadster that, though it might have downshifted, was still zipping along nicely: "We don't see as sharp a correction in the second quarter and looking forward. We are, however, concerned about inflation."

That same attitude prevailed even after the housing sector had begun to waiver and housing prices to fall. Timothy Geithner, then president of the Federal Reserve Bank of New York, said at the Board's September meeting, "We just don't see troubling signs yet of collateral damage, and we are not expecting much," adding later, in December, that he thought "The fundamentals of the expansion going forward still look good."

Chairman Ben Bernanke, Greenspan's successor, sounded a somewhat more cautious note, saying he did not have "quite as much confidence as some people around the table that there will be no spillover effect."

Copyright 2012 ABC News Radio

ABC News Radio