Distressed and Repossessed Homes- Gordon County Real Estate

Distressed and Repossessed Homes- Gordon County Real Estate

A big part of existing home sales in the U.S. for August 2010 was accounted for byrepossessed properties and distressed residences. According to the National Association of Realtors, the market for existing residential properties posted increased sales for the month with an estimated 7.6% rise compared with previous month's data.

With the number of bank owned homes for sale reaching record levels in the country, the rise in existing residential sales is a welcome sight for builders, realtors and other members of the real estate industry. However, sales activity for the month is still below desirable levels, with August 2010 sales representing a decline of 19% when compared with August 2009.

Although the rise in existing home sales is seen as a positive development, majority of consumers are still worried about the status of the housing market, particularly with home prices remaining low, distressed properties continuing to rise and job losses not showing any sign of improvement.

Analysts have stated that despite some major areas gaining ground in terms of home prices, the continuous expansion of listings of houses at auctions and the overall economic downturn are making buyers, sellers and ordinary Americans worried about the status of the housing market and the economy in general.

According to housing market observers, concerns about the market are justified despite the rise in existing home sales, particularly when a big part of these sales was accounted for by foreclosures and repossessed properties. August numbers showed that 34% of the total sales are for distressed residences, representing a 2% increase from a month ago.

Meanwhile, prices of homes also remain at record lows, with the average price for an existing dwelling pegged at $178,600 during the month in focus. This is considerably lower than the July average price for similar dwellings which was $204,000. One good thing about all these is that majority of analysts agreed that sales numbers will not be getting any worse in the coming months.

According to them, the home selling market has reached bottom and is climbing out of it, although in a very slow pace. However, they also reveal that the recovery of the housing market will depend, not just on the number of repossessed properties and foreclosures, but also on the performance of the labor market.

Real Estate Market Update

Homes For Sale in Calhoun GA- Real Estate Market Update

Mike Ramirez Realtor Calhoun GA 100% Financing available H.R.5017

Housing market highlights over the last week include; positive news from the National Association of Realtors, an update on interest rates, and mortgage application volume. Additionally, we discuss an update on the halting of foreclosures by some banks and ending with thoughts on due-diligence.

Realtors: Pending Home Sales Rise

The National Association of Realtors reported that pending home sales increased for the second month in a row. The index rose 4.3% to 82.3% from a downwardly revised July. NAR chief economist, Lawrence Yun discussed home affordability being responsible for the rise saying, “Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market”. Despite the increases over the last 2 months the Pending Home Sales Index is still 20.1% below August, 2009.

I agree with Lawrence Yun, home affordability is overshadowing the economy in home buying decisions for many. While job growth is the ultimate confidence booster for many, the rise 2 consecutive months is a good sign. Further, we may see a small boost in pending home sales resulting from FHA guideline changes (see mortgage applications below).

Interest Rates Drop Further

After rising for 2 weeks, then stabilizing, Freddie Mac reported a new record low for interest rates. The 30-year fixed rate dropped to 4.27%, marking the second consecutive decline. The 15-year rate declined to a new low of 3.72%. A year ago, the 30-year was at 4.87% and the 15-year at 4.33%.

With core inflation staying very low, rates have been drifting back down over the last 2 weeks. This along with home values double-dipping in many markets is causing home affordability to increase. It seems impossible that rates can continue to decline but the last 2 weeks has proven otherwise. The Federal Reserve is now considering combating the economy with an inflation strategy. That may signal the end to perpetually low rates.

Mortgage Applications: Purchases Soar

This week the Mortgage Bankers Association reported that its Purchase Index soared9.3% from the prior week, lead by a 17.2% increase in FHA applications. Conventional applications increased 3.6%. This data is for the survey ending October 1^st. Refinances declined to 78.9% of total mortgage applications a drop from 80.7% the prior week.

Purchase applications spiked because borrowers rushed to get applications in before the October 4^th FHA deadline when new requirements took effect. These new FHA requirements pertain to increased down payment and credit score requirements. I anticipate that refinances will grow against purchases after the last 2 weeks of rate declines. Despite the volume of refinances in recent weeks it seems many people out there still have the ability to refinance.

Foreclosure Mess UPDATE

Bank of America extended its foreclosure suspension nationwide, while Ally Financial, JP Morgan Chase, and others suspended in 23 states. The freeze is temporary but leaving many wondering whether the suspensions will impact home prices positively or at least slow the potential upcoming declines. Wells Fargo and HSBC have since communicated that it will not be suspending foreclosures, while other banks such as PNC have admitted to communicating with their lawyers over the issue.

Many people were not surprised when suspensions started as it has been rumored for quite some time that foreclosure processes were flawed. The question remains how home values will be affected. Bank of America was increasing its foreclosures significantly this year leaving some thinking that home values could be impacted. With JP Morgan Chase and Ally only halting in 23 states, it’s more likely that values will be buoyed little if at all by these banks’ move. If anything the impact will likely be more competition by investors with a few less homes per market to big on. I’m expecting more banks to announce they’re temporarily halting as well.

Waiting on the “Fat Pitches”

I had a good conversation with an investor recently about waiting on the “fat pitches” on investment property offerings. The problem with many investment property sales is the extremely low barrier of entry into the industry. Many people are offering deals on investment properties backed more by hype then by a track record. Also many markets are being touted as “go-to” markets when risks remain high. For example if you knew that REO makes up 66% of all real estate activity in Atlanta, would that cause you to think twice about evaluating property there? It should. Waiting on the “fat pitch” is, of course, a baseball term suggesting not to swing at everything you see. Knowing the current housing crisis isn’t going away tomorrow should cause you to spend considerable time on due-diligence. But at the same time not missing the opportunity to lock in low rates and low prices. It becomes a happy medium of being a skeptic and not waiting too long at the same time.

Calhoun Ga Foreclosures and Real Estate Sales and Solutions- Mike Ramirez REALTOR

Exit Flipper McDaniel Realty is the top production and fastest growing firm in Calhoun GA. I specialize in Foreclosure sales helping buyers and sellers invest in real estate in Gordon countyCalhoun GA including Adairsville, Resaca, Sugarvalley, Plainville, Ranger and surrounding North and Northwest GA .(770)547-3450

100% USDA RURAL DEVELOPMENT LOAN- Northwest GA

100% USDA Rural Housing Program Extended

The continued availability of government guaranteed mortgages for rural homebuyers was virtually assured yesterday when the House Financial Services Committee voted to approve H.R. 5017. The unanimous vote will send the Rural Housing Preservation and Stabilization Act of 2010 to the full House of Representatives where sources said it was fast tracked for a vote as early as next week.

If passed, the bill will correct the Section 502 Single Family Housing Guaranteed Loan Program to make it self-funding. Section 502 assists homebuyers living in rural areas to obtain affordable mortgages guaranteed by the Department of Agriculture (USDA). These loan guarantees have become enormously popular during the financial crisis and consumer demand has tripled the annual number of loans that are typically issued each year. The program is set to exhaust its available funds within days. Under the new legislation, lenders will pay up to a 4 percent premium for the guarantee at the time the loan is initiated which will enable the financing of the program to move from a combination of government funding and industry fees to a self-sustaining initiative. The bill authorizes the department to guarantee up to $30 billion in loans in FY 2010.

In order to qualify for the program an applicant must have good credit and reliable and adequate income sufficient to sustain mortgage payments. The average guarantee in 2009 was for a $112,000 mortgage.

In an announcement of the bill's passage the Committee said that the program provides a vital source of mortgage credit for people living in rural communities where low and moderate-income residents often have fewer credit options than households in urban areas. The USDA program aims to fill that void and lower the costs of homeownership by giving rural areas access to a home loan guarantee program.

The bill was sponsored by Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. He said of the bill, "Since its creation in 1987, USDA's affordable rural home loan guarantee program has helped hundreds of thousands of families to realize the American dream of homeownership, including many in Northeastern Pennsylvania. As a result of the unprecedented demand, the program is now unfortunately running out of money. At no cost to taxpayers, my bill will preserve the access of millions of families living in America's heartland to needed USDA loan guarantees, so that they can continue to buy homes with affordable mortgages. Without action, too many families in rural America will have no options for getting home loans. We cannot allow that to happen."

Calhoun Ga Foreclosures and Real Estate Sales and Solutions- Mike Ramirez REALTOR

Exit Flipper McDaniel Realty is the top production and fastest growing firm in Calhoun GA. I specialize in Foreclosure sales helping buyers and sellers invest in real estate in Gordon county Calhoun GA including Adairsville, Resaca, Sugarvalley, Plainville, Ranger and surrounding North and Northwest GA .(770)547-3450