Standard & Poors signals double dip in housing

U.S. home prices fell in March for the eighth straight month, confirming the beleaguered housing market has entered a double-dip recession.

Home prices in 20 major U.S. cities declined 0.8% in March on a non-seasonally adjusted basis, according to the Case-Shiller home-price index. The S&P/Case-Shiller index is based on a three-month moving average of home prices. So the March data reflect price data for January, February and March. This makes the index less volatile than other house-price gauges.

How each of the 20 cities fared over the past year:

Minneapolis, down 10%
Phoenix, down 8.4%
Chicago, down 7.6%
Portland, OR, down 7.6%
Seattle, down 7.5%
Tampa,down 6.9%
Charlotte, down 6.8%
Cleveland, down 6.3%
Miami, down 6.1%
Las Vegas, down 5.3%
Atlanta, down 5.2%
San Francisco, down 5.1%
San Diego, down 4.0%
Denver, down 3.8%
New York, down 3.4%
Boston, down 2.7%
Dallas, down 2.5%
Los Angeles, down 1.7%
Detroit, down 0.9%
Washington D.C., up 4.3%

U.S. home purchases by foreigners surge $16 billion

Total residential international sales in the U.S. for the year ending March 2011 equaled $82 billion, up from $66 billion in 2010.

The U.S. has always been a desirable place for foreign buyers to own property. U.S. homes are generally less expensive than comparable foreign properties, homes in this country are viewed as a secure investment, and the U.S. market offers rental opportunities and long-term appreciation potential.

Foreign buyers are primarily interested in three factors when deciding where to buy in the U.S.: proximity to their home country, convenience of air transportation, climate and location. Generally, the East Coast attracts European buyers. The West Coast remains popular for Asian purchasers. Mexican buyers are traditionally attracted to the Southwestern markets. Florida is most popular among South Americans, Europeans and Canadians.

Recent international buyers came from 70 different countries, up from 53 countries in 2010. For the fourth consecutive year, Canada was the top country of origin, with 23 percent of sales to foreigners. China was second most popular, with nine percent of international sales this year. Tied for third were Mexico, the U.K. and India. Argentina and Brazil combined reported an increase in foreign sales with five percent, up from two percent in 2010. The top five countries of origin accounted for 53 percent of international transactions in 2011.

The average price paid by an international buyer was $315,000 compared to the overall U.S. average of $218,000. However, 45 percent of international purchases were under $200,000. Sixty-one percent of foreign buyers purchased a single-family home while 36 percent bought a condo/apartment or townhouse.

In addition, 62 percent of international purchases were reported as being all cash. This percentage is significantly higher than all-cash purchases for domestic buyers, mostly due to the differences in international credit reporting standards.

Florida had 31 percent of total international transactions this year, the most of any state. California had 12 percent, Texas had nine percent, and Arizona rounded out the top four with six percent of international transactions.

Opportunity calling! Buy Foreclosures Now!

Homes are selling at steep discounts, especially bank-owned homes that have been taken in foreclosures. The average Bank owned property cost about 35% less than comparable properties. Also weighing on market prices are short sales, meaning homes where the selling price is less than what is owed by the borrowers. These sold at an average 9% discount.

There were 158,000 deals involving distressed properties nationwide during the first quarter of 2011, but that was less than half the nearly 350,000 deals during the same period two years earlier. So now, there's a three-year inventory of homes in foreclosure for sale, a whole 1.9 million distressed properties.

*Las Vegas has so many foreclosures that 53% of all the homes sold in Nevada are in some stage of foreclosure.

*Foreclosures represent 45% of sales in California and Arizona, and 28% of all existing home sales during the first three months of 2011.

*In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.

Ouch! Time to Buy!

RENTS UP!

A growing number of Americans can't afford a home or don't want to own one. Permits for single-family home construction are on pace for their lowest annual level on records dating to 1960.

From the 1940s until 2007, homes appreciated an average of nearly 5 percent a year, adjusted for inflation. In the past four years, the median price of a single-family home has sunk 37 percent, by $57,500, to its lowest since 2002.

Before the housing bust, mortgage rates were so low it was often cheaper to buy than rent. That was true a decade ago in more than half the 54 biggest metro areas, according to Moody's Analytics. Today, by contrast, it's cheaper to rent in about 72 percent of metro areas.

The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press. All told, Nearly 38 million households are renters.

The number of completed apartments averaged about 250,000 a year before the boom. They fell to 54,000 last year and will probably number around the same this year. But then the number will likely double to about 100,000 in 2012 and hit 250,000 by 2013 or 2014, according to the CoStar Group, a research firm. The lag is due to the time it takes for an apartment building to be completed: an average of 14 months.

Looks like demand is going to push rents up for a while.

Mortgage Rate Trend Index

Fixed mortgage rates fell this week to the lowest point of the year, offering incentive for homeowners to save money by refinancing their loans. Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.61 percent. That’s down from 4.63 percent and the lowest level since mid-December.

Don’t expect much change in mortgage rates over the short term. 44% of experts polled this week by Bankrate.com Only 17% expect further declines, however, with 37% predicting an increase.

The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.80 percent. That marked the lowest point since late November. Rates track the yield on the 10-year Treasury note, which fell to the lowest level of the year this week. The number of borrowers looking to refinance is now at the highest level since the second week of December, according to the Mortgage Bankers Association. Refinancing though, is only at half the level it reached in the fall of last year when mortgage rates fell to record lows. The rate on the 30-year home loan hit a four-decade low of 4.17 percent in November. The 15-year mortgage rate reached 3.57 percent that same month, the lowest level on records dating back to 1991.

Weak Housing Market Still

Here's a news flash for ya.  Fewer people bought previously occupied homes in April, the National Association of Realtors said Thursday. Sales fell to a seasonally adjusted annual rate of 5.05 million units, far below the 6 million homes a year that economists consider a healthy market.

Finding buyers for high-end homes is about to become a tad harder

On 9/30/2011, the lending limits for Fannie Mae (FNMA), Freddie Mac (FHLMC) and FHA are scheduled to be cut. The idea behind the change is to get federal taxpayers out of the business of subsidizing home sales in high-priced areas. What that means for Key West is that the availability of mortgages for high end homes is going to drop in a few months. That is of course unless some in Congress are successful in their push to extend the limits.

The biggest change in limits will come from the areas that have the highest home values. These are pretty significant drops. There are 88 counties across the country that will see their mortgage limit cut by more than $100,000. In Monroe County, FL the current FHA maximum loan limit of $729,750 (for a single family home) will drop $201,000 (28%) to 528,750. For example: The down payment requirements on an $800,000 home will increase from approximately $70,000 (just under 9%) up dramatically to over $270,000 down (just under 34%.

Well, there's always seller financing?

Zillow says Key West Home Prices / Values UP?

According to the Zillow Home Value Index, Key West was one of only two regions in the area to show a gain in home prices and home values year over year in the last report of March 2011. The other being Chokoloskee based on limited sales data.

Does the move indicate a turnaround or is it a dead cat bounce as they say in the stock market? Stay tuned.

Region    Y-o-Y change      

Monroe   Y-o-Y change -3.2 % 

Big Coppitt Key  Y-o-Y change -3.2 % 

Big Pine Key   Y-o-Y change -7.7 %  

Chokoloskee   Y-o-Y change +5.4 %

Islamorada   Y-o-Y change -4.7 % 

Key Colony Beach   Y-o-Y change -3.8 %  

Key Largo   Y-o-Y change -14.2 % 

Key West   Y-o-Y change +7.0 %  

Marathon   Y-o-Y change -7.1 % 

Summerland Key   Y-o-Y change -3.5 % 

Tavernier   Y-o-Y change -4.2 %  

Banks propose billions to close foreclosure probe

Major banks are willing to pay to settle claims by federal and state officials of improper mortgage foreclosure practices, offering as much as $5 billion be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes.


The banks' offer comes as mortgage companies and state and federal officials continue their efforts to strike a settlement of investigations sparked by allegations of "robo-signing" and other questionable foreclosure practices that came to light last fall.

Housing Market Indicators

Florida existing home sales: +12% (month-to-previous-year comparison) 


Florida existing condo sales: +24% (month-to-previous-year comparison)


Florida existing home median price: $126,300


Florida existing condo median price: $84,300


Florida consumer confidence: 72


National existing home sales: +3.7% (month-to-previous-month comparison; all housing types) 


National existing home median price $159,600


National (Freddie Mac) mortgage rate  4.78% (all housing types)