Real Estate

Most homeowners feel the need to turn to fixed rate or adjustable mortgages when there is a downturn in the housing market. One great thing about this option is that you will have a stable interest rate as well as monthly payment.

In the current market, however, one should put some thought into the process. The real estate market may be down, but the economy is also having serious problems. This means that we could be looking at a period where rates continue down in an effort to revive the economy. We’ve already seen the Federal Reserve Bank turn in this direction, so more cuts may be coming.

Pricing for homes gone down drastically since May all around the nation. According to the Standard & Poor’s/Case-Shiller 20-city index it has dropped by 15.8% in May a year ago -which is a record decline since it began in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that’s happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.
Home values have fallen 18.4 percent since the 20-city index’s peak in July 2006.

The construction of single family home fell in the month of June to the slowest pace that the market has seen in 17 years. The only thing that helped to give them a reprieve was a change in certain New York laws - which helped to increase apartment building.

The Commerce Department reported Thursday that construction of single-family homes dropped by 5.3 percent in June to a seasonally adjusted annual rate of 647,000 units, the weakest performance since January 1991, another period when the housing industry was going through a severe downturn.

Southern California is full of beautiful beaches, warm weather, and free homes? A San Diego developer is trying hard to clear away some of their inventory to potential home buyers by giving them a chance in a lifetime.

Michael Crews Development is giving away a row home that has been valued at $400,000 when someone purchases a 1.6 million luxury estate home that is located in the upscale city of Escondido. “We are targeting a niche market of investors who are interested in the opportunity to buy a new home for themselves and get a free rental property or second home for family members,” developer Michael Crews said in a statement.

Karl Case – the co-founder – of a home price index has said that more auctions of foreclosed properties are working to remove the inventory from the housing market and could lead to a fast recovery. “I think we’re going to see some signs of life in the next few months,” Case, an economics professor at Wellesley College in Wellesley, Massachusetts, said in an interview with Bloomberg Radio. “The market is beginning to clear somewhat. There is some good news in this.”

The Housing Industry Association is looking forward to the federal budget in hopes that it will help to increase the housing and make it more affordable for consumers. Ron Silberberg – the HIA manager – stated that the $21.7 billion will help to relieve the interest rate pressures and the infrastructure skills and investments in order to reduce the constraints that many people are facing.

“Measures aimed at boosting the supply of new housing along with desperately needed urban infrastructure will assist in pegging the gap between underlying demand and current production,” Dr Siberberg said in a statement.

The National Association of Realtors this week reported that the sales of existing homes located in the United States have increased 3% during February 1st. This has been the first increase since July of last year. The reason the increase has occurred is because the prices have been lowered.

The S&P/Case-Shiller index of twenty major markets showed that home prices fell almost two and a half percent in January. Prices were down almost eleven percent from a year before. And still another report this week showed that sales of new single-family houses fell in February. Sales were down almost two percent from January, to a thirteen-year low. The Commerce Department estimated there was a ten-month supply of newly built houses waiting to be sold.

The Treasury Department, Urban Development, and the Department of Housing are gathering this week to announce a way to help at risk borrowers who have different types of mortgages (not narrowed down to high cost mortgages and subprime loans) may be eligible for the new Project Lifeline. This project will give homeowners who are seriously overdue a 30 day suspension of a foreclosure for lenders to work out a loan that is more affordable for them.

On December 28th the Commerce Department reported that home sales have gone down a steep 9% - which was more than what people were looking for. People were hoping that the number would drop at a more decreased rate.

New-home sales dropped by 19.3% in the Northeast, 27.6% in the Midwest, and 6.4% in the South. However, sales increased by 4% in the West. Over the last 12 months, new-home sales nationwide have tumbled by 34.4%, the biggest annual slide since early 1991, and stark evidence of the painful collapse of the once high-flying housing market.
The supply of homes for sale rose to 9.3 months’ worth from 8.8 (revised from 8.5). Whereas earlier sales and price data had suggested big price cuts by homebuilders were clearing inventory, this pattern has been reversed with the November data and revisions.

We were all hoping that the housing slump would get better with time. Unfortunately it only seems to be getting worse. People are finding it hard to bring in business and some are having to shut down. Foxtons is one such place that is closing because of the slumping housing market.

The West Long Branch-based real estate company says it’s contemplating bankruptcy protection for an orderly shutdown. It will lay off 350 of its 380 workers and intends to keep 4,400 listings on the market. Senior vice president John Blomquist tells The Asbury Park Press the company no longer has the liquidity to operate as a going concern.