This Market is Going Nowhere
|Although prices have been rising nicely since the beginning of the year, most of this is due to high end homes being bid up by the insta-aires from the recent IPOs.The bottom end of the market is being squeezed by investors out-bidding home-buying families, and the middle of the market is going nowhere because they are still underwater.The market will continue in this vein for at least the next couple of years, unless we see some drastic principal reductions.
The recent court case against the big five lenders: Bank of America, Wells Fargo, Chase, Citigroup and Ally Financial, requiring them to provide principal reductions, may quick start the market.
What should I do if I think I may qualify for a principal reduction or refinanced mortgage? Contact your lender/servicer and ask them to review your case.
If I take the money, what rights do I give up? Individual borrowers do not give up any right to sue.
As part of this deal, state attorneys general gave up the right to sue the mortgage servicers for foreclosure abuses arising out of the robo-signing scandal. However, they reserve the right to sue — or press charges for criminal behavior — if they uncover improper acts when the loans were originated or when they were securitized.
When will the new rules and bank policies be put into place? Most of them have already become part of bank policies.
When will homeowners find out if they’re eligible for a principal reduction or refinancing? The banks have said they expect to get started very quickly. The first step will be to identify borrowers who qualify for the deal.
AUGUST MARKET STATISTICS
Sales of single-family, re-sale homes took a dip last month, dropping 4.9% year-over-year.
Home inventory was off 34.4% from last August.
The median price for homes rose 14.4% year-over-year. This pushed the sales price to list price ratio to 101.8%. The median price has been higher than the year before for the past seven months. The sales price to list price ratio has been over 100% for the past six months.
The average price for homes was up 13.5% year-over-year. The average price has been higher than the year before for the past ten months in a row.
Pending home sales turned around for the first time since last November and were down 3% .
for homes dropped 2.3 points to +2.
has been on the up-swing the past seven months. It gained 1.2 points to +2.
momentum by using a 12-month moving average to eliminate seasonality. By comparing this year’s 12-month moving average to last year’s, we get a percentage showing market momentum.
The median price for condos jumped 41.7% year-over-year and is now at its highest price since July 2008.
Condo inventory was down 79.6% from last July.
This is an extraordinarily tough market for buyers. It’s important to be calm and realistic. If you don’t know what to do or where to begin, give me a call and let’s discuss your situation and your options.