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Chappaqua Real Estate

Fear Motivates First-Time Homebuyers | Chappaqua NY Real Estate

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Worried about predictions of rising mortgage rates, additional increases in home prices and new costs for FHA borrowers, first-time homebuyers are kicking off the spring buying market in years, despite skimpy inventories and late winter weather across much of the nation.

According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, first-time buyers accounted for 34.5 percent of home purchase transactions in February based on a three-month moving average, the second monthly increase for first-time homebuyers.

First-time homebuyer traffic surged in February. The HousingPulse Homebuyer Traffic Diffusion Index for first-time homebuyers, an indicator of future home purchases, hit a four-year survey high of 66.4% in February. Any score above 50 percent with the index reflects an increase in home shopping traffic.

“First-time homebuyers are the wildcard in the upcoming spring-summer homebuying season,” said Thomas Popik, research director for Campbell Surveys. “We see strong first-time homebuyer traffic, but it’s still not clear that the traffic will translate into increased purchases, because first-time homebuyers are dependent on low-downpayment financing, such as FHA mortgages, and announced FHA program changes will take effect this spring.”

In the April to June timeframe, FHA will be increasing its Monthly Insurance Premium and require payment of the MIP for the full term of the loan.

While first-time homebuyers represented the fastest growing category of home purchasers between January and February, purchases by current homeowners saw the biggest drop fell from 44.3 percent to 42.5 percent. That was the lowest market share for current homeowners recorded by the HousingPulse survey since last June.

The Campbell/Inside Mortgage Finance findings are similar to data released by Realtor.com last week that suggests buyers are getting an early start this year (See Early Bird Buyers Try to Beat Tight Inventories).

via realestateeconomywatch.com

State Laws will Extend Foreclosure Pain by 30 Months or More | Chappaqua NY Real Estate

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The 23 states that require court orders to foreclose and other states that have enacted legislation that delays foreclosure processing will take twice as long as the rest of the nation to clear backlogged foreclosure inventories at their current rate.

The foreclosure inventory in judicial states remains three times that of non-judicial states and pipeline ratios — the rate at which states are currently working through their existing backlog of loans either in foreclosure or serious delinquency — are almost twice as high in judicial states than non-judicial states, according to the Lender Processing Services’ January Mortgage Monitor.

“On average, at today’s rate of foreclosure sales, it will take 62 months to clear the inventory in judicial states as compared to 32 months in non-judicial states. A few judicial states — New York and New Jersey in particular — have such extreme backlogs that their problem-loan pipelines would take decades to clear if nothing were to change,” said LPS Applied Analytics Senior Vice President Herb Blecher.

Blecher said certain non-judicial states, such as Massachusetts and Nevada, have recently enacted ‘judicial-like’ legislative and/or legal actions which have greatly extended their pipeline ratios. Nevada’s ‘time to clear’ has extended from 27 months in January 2012 to 57 months as of January 2013. The change in Massachusetts has been even more pronounced. Since June of last year, its pipeline ratio has gone from 75 to 171 months.

“As California’s recently enacted Homeowner’s Bill of Rights is closely modeled on the Nevada legislation, we’ll be watching that state closely over the coming months to gauge its impact, as well,” Blecher said.

The January data also showed that, despite an overall national trend of improvement, new problem loan rates remain high in states with large numbers of “underwater” borrowers. So-called “sand states,” such as Nevada, Florida and Arizona, are still seeing high levels of negative equity (45, 36 and 24 percent of borrowers are underwater, respectively), and each of those states is experiencing higher-than-average levels of new problem loans. Additionally — and further underscoring the differences seen between judicial and non-judicial states — new problem loan rates in non-judicial states declined slightly over the last six months, while increasing almost 20 percent in judicial states.

States with highest percentage of non-current loans are Florida, Mississippi, New Jersey, Nevada and New York.

via realestateeconomywatch.com

4 musts when hiring a home improvement contractor | Chappaqua Real Estate

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Q: I’m now getting estimates to add a front porch to my house. What is the standard way to check on the licensing and insurance of the contractor, and the standard method of payment, such as certain percentage paid upfront or at the finish? –Connie D.

A: There are actually a couple of steps that I recommend to anyone looking to hire a contractor:

1. Know specifically what you want to have done. The more information you have available for the contractor, the better.

2. Try to get personal referrals, rather than relying on the phone book. If you have a friend or a relative who had some work done on their home that they were pleased with, that’s a great starting point. You can get some honest feedback about the contractor’s skill level, price, scheduling, level of cooperation, and much more. There are a lot of contractors out there to choose from, and, like most businesses, they succeed or fail mostly by their reputation, so a good referral is very helpful.

via inman.com

Foreclosure Discounts are All Over the Map | Chappaqua Real Estate

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The low prices that make foreclosures attractive to investors also make foreclosures toxic to communities and homeowners. The discount between “normal” priced homes and the prices paid for properties than have been through the foreclosure process can spell the difference between profit and loss to an investor at the same time that they drive real estate values into the ground.

As the Foreclosure Era enters its final years, the differences in foreclosure discounts vary widely across the nation, presenting opportunities to investors and wreaking havoc on homeowners simultaneously. With regional and local conditions playing a greater role than ever in shaping foreclosure supply and demand, the differences between local foreclosure discounts may be increasing to the surprise residents who rely upon reports of “national” average discounts.

FNC, one of the top sources of pricing data used by appraisers, calculated at national average discount of 12.2 percent at the end of 2012 versus 13.4 percent a year earlier. The National Association of Realtors said foreclosures sold for an average discount of 20 percent below market value in January. At the height of the mortgage crisis (2008 and 2009), foreclosed homes were typically sold at 25 percent below their estimated market value, said NAR.

Despite the progress in national average discounts, in a number of markets today foreclosures are worse now than they have ever been. A certain tier of markets, largely in the East and Midwest, are seeing discounts reach levels far below the 12.2 percent cited by FNC or the 20 percent from NAR. In real estate, where there is no national marketplace, the use of national averages sometimes can mask very different local realities.

Several factors, which differ by market, are keeping foreclosure discounts high in some markets. These include large inventories from the continued slow processing of foreclosure due to state laws; higher default and lower rents resulting from unemployment and economic fragility; less than ideal conditions for single family rentals, including low cap rates; overcapacity; and a disproportionate number of unsold damaged foreclosures (See Damaged Foreclosures Beckon Bargain-hunters); and less investor demand compared to the West and Florida, where a culture of small investors has developed and large hedge funds are active.

via realestateeconomywatch.com