AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Homebuyers Clueless About Mortgages, Zillow Survey Findshttp://realestate.aol.com/blog/2013/05/09/homebuyers-clueless-mortgages/http://realestate.aol.com/blog/2013/05/09/homebuyers-clueless-mortgages/http://realestate.aol.com/blog/2013/05/09/homebuyers-clueless-mortgages/#commentsFiled under: ,,

home mortgages

By Les Christie

The housing market is heating up, yet many house hunters are not prepared to take on the biggest purchases of their lives. When it comes to mortgages, homebuyers answered basic questions about terms, how to choose a lender and financing wrong nearly one-third of the time, according to an April survey of more than 1,000 current and prospective homeowners by real estate website Zillow.

Among the survey's findings, 31 percent of buyers don't think it's possible to get a mortgage for less than 5 percent down; 34 percent don't know what the term "annual percentage rate," or APR, means and 1 in 4 believe that you must close with the lender that pre-approves your mortgage.

"All too often buyers focus on negotiating a lower home price and ignore the importance of finding the right loan," said Erin Lantz, director of mortgages for Zillow. "Buyers should always shop multiple lenders and compare rates and fees and read lender reviews in order to find the best loan for their situation." One example: 34 percent of respondents believe lenders are required by law to charge the same fees to all clients for credit reports, appraisals and the like. That's wrong. Fees vary from bank to bank and can often be negotiated.

But it's hard to compare those deals if you don't understand what mortgage terms, like "annual percentage rate," mean. The APR factors into fees, upfront points, origination and underwriting fees and other costs that borrowers use to compare the actual cost of loans.

Such knowledge gaps can have long-term consequences. About 34 percent of first-time homebuyers think that they need a down payment of at least 5 percent to make a home purchase, but loans insured by the Federal Housing Administration can require as little as 3.5 percent down. And 24 percent of buyers believe the best mortgage deals are available through the banks where they currently have their savings and checking accounts, but often competing lenders can undercut those banks by large margins.

"If a homebuyer can lower their interest rate by even half a percentage point, they can not only increase their purchasing power, but save thousands of dollars over the life of the loan," said Lantz. For every $100,000 borrowed, a half percentage point lower rate would reduce payments by $28 a month on a 30-year, fixed rate loan. That adds up to more than $10,000 over 30 years. Or borrowers could choose to add that $28 savings to each monthly payment. That would shorten the term of the mortgage from 30 years to just over 27 and save $6,500 in interest paid.

Another costly mistake: Many house hunters go shopping with financing in place because it enables them to act more quickly if they see a home they want. But 26 percent of buyers believe that once they're pre-approved, they're obligated to close the deal with those loans, according to the survey. In reality, there's no obligation. If buyers see better terms available they should take them.

Existing homeowners can also be guilty of ignorance. Some 20 percent of homeowners surveyed didn't know that underwater mortgages -- those in which borrowers owe more than their homes are worth -- can be refinanced into lower rate loans.

Finally, the survey found that nearly a third of homeowners are unaware that if they go through a foreclosure or short sale, they may not have to wait the full seven years it takes for their credit score to recover and they can buy a home again. In reality, some homeowners who do short sales can obtain financing to buy another home in as little as two years.

The Consumer Financial Protection Bureau is hoping to make it easier for homebuyers with simplified mortgage forms that help them compare terms and costs and by creating new rules that will protect homeowners from getting into loans they can't afford.

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Understanding Mortgages

 

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]]>annual percentage ratefinancial protection bureaufinancinghome financinghomebuyer informationhomebuyerslendersmortgagemortgageszillowCNNMoney2013-05-09T11:59:00 00:00Obama's Pick for Housing Agency Head Faces Big Headacheshttp://realestate.aol.com/blog/2013/05/03/mel-watt-fhfa/http://realestate.aol.com/blog/2013/05/03/mel-watt-fhfa/http://realestate.aol.com/blog/2013/05/03/mel-watt-fhfa/#commentsFiled under: ,

Mel Watt, FHFA nominee, applauded by Barack Obama By James O'Toole

The next head of the Federal Housing Finance Agency will have quite the task waiting. President Obama nominated Mel Watt, a Democratic congressman from North Carolina, this week to be the next head of the FHFA. Should Watt be confirmed by the Senate, he will play a critical role in shaping the future of the U.S. housing market.
Ever since the crisis hit in 2008, the FHFA has been in control of housing finance giants Fannie Mae and Freddie Mac, which own or guarantee more than half of all outstanding mortgages in the U.S., according to the Congressional Budget Office. "This position is far more than just a regulator," said Bartlett Naylor, a financial policy expert with the advocacy group Public Citizen. "Anyone with a mortgage intersects with Fannie and Freddie and therein with what Mel Watt will be responsible for at the FHFA."

At the top of the agenda for the FHFA is the question of whether it will reduce loan balances for struggling borrowers whose mortgages are backed by Fannie and Freddie. The outgoing head of the agency, Ed DeMarco, has opposed calls from the Obama administration and progressive groups to move ahead with such reductions. DeMarco has argued that principal reductions would shortchange taxpayers and could prompt borrowers who are current on their mortgages to deliberately fall behind.

Supporters of principal reductions say they could help stabilize the housing market and give the economy a boost. A study released this week by the CBO argued that the government could actually save money through an expanded principal reduction program because it would reduce the number of defaults and foreclosures. Some 1.2 million borrowers could be eligible for some form of principal forgiveness, the CBO said.

The Obama administration has tried to help underwater borrowers -- those who owe more than their homes are worth -- through the Home Affordable Modification Program, or HAMP. But that initiative has been limited in its effectiveness over the past few years, securing principal reductions for less than 120,000 borrowers as of the end of 2012. And it limits such reductions to mortgages that aren't controlled by Fannie and Freddie.

Some on the left have questioned Watt's independence in view of the substantial campaign donations he's received over the years from banks and other financial institutions. But he has also received large contributions from unions. And his nomination had drawn support from progressives -- including Massachusetts Senator Elizabeth Warren, AFL-CIO head Richard Trumka and advocacy group MoveOn.org -- who have praised his efforts in Congress to protect consumers.

Watt's confirmation process may still be contentious. Republican senators Bob Corker and Mike Crapo expressed concern about his nomination this week, calling on the Obama administration to articulate a plan for reducing government involvement in the housing market going forward.
That will be no easy task.

Back in 2006, just 30 percent of new mortgages were backed by the government, according to Inside Mortgage Finance. But as the housing sector cratered, private capital fled the market and the government's role expanded. In 2012, more than 86 percent of new mortgages had government backing. Fannie and Freddie -- known together as the GSEs, or Government Sponsored Enterprises -- sustained massive losses as the housing market went bust, requiring taxpayer bailouts that swelled to more than $187 billion. The companies have since paid the Treasury Department nearly $60 billion in dividends as they've returned to profitability, but it's unclear when they'll be completely free of their obligations and how they'll be managed in the future.

"What are the GSEs going to look like going forward and are we ever going to wean ourselves off of public money for mortgages and have a truly robust private mortgage market?" said Richard Green, director of the Luck Center for Real Estate at the University of Southern California. "Everybody agrees that we need to do something about it, but no one can come to agreement on it, so the new director faces a pretty large challenge as he tries to fix this."

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Mel Watt To Run Federal Housing

 

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]]>Barack Obama housingFederal Housing Finance AgencyMel WattObama housing pickCNNMoney2013-05-03T11:30:00 00:00Secret 'Pocket Listings' Return in Hot Housing Marketshttp://realestate.aol.com/blog/2013/05/02/pocket-listings/http://realestate.aol.com/blog/2013/05/02/pocket-listings/http://realestate.aol.com/blog/2013/05/02/pocket-listings/#commentsFiled under: ,

empty pocket: pocket listingsCNN Money logo

By Les Christie

The housing rebound has given new life to an old, but little-known sales practice called "pocket listings," where agents reserve homes for serious buyers only. Most homes that are put up for sale are posted on databases called multiple listing services, on which agents share information with one another in order to find buyers. There are open houses on Sunday afternoons and MLS listings posted on real estate websites.

But with pocket listings, properties are kept under wraps and brokers only show them to people they expect will put money down if the property and the price are right, said Richard Smith, CEO of Realogy, the parent company of Coldwell Banker, Century 21, Better Homes & Gardens and other real estate brokerages. Ideally, the buyer has deep pockets and is willing to pay in cash, fast.

"High-end sellers often don't want to have the world coming to their property," said Michael Izquierdo, a Los Angeles-based real estate agent and acquisitions manager for LAPocketListings.com. "When it's put on the MLS, sometimes the next morning you see people standing outside the property, hoping to talk to the sellers."

Izquierdo recently got a pocket listing for a $1.2 million home in Mar Vista, Calif., where the sellers wanted to preserve some privacy. They also hoped to heighten interest among buyers by creating an aura of exclusivity. But pocket listings aren't just for luxury clients anymore. With the number of buyers far outpacing the number of homes for sale in hot markets like Los Angeles and Manhattan, pocket listings are becoming more common among more moderately-priced homes as well, he said. He has some pocket deals where sellers are asking for as little as $500,000

When Izquierdo gets a pocket listing, he combs his client list for good fits. If he can't find one, he contacts colleagues to see if they have potential buyers. If the home is overpriced, the seller and agent will find out quickly, said Alex Clark, founder of pocketlistings.net. "I put in the email, 'Not listed on the MLS,'" he said. "If it's priced right, there's a really good chance you can sell it as a pocket listing."

If it doesn't sell, then Clark tries to convince the seller to readjust the price and list it publicly on the MLS. Some sellers, however, aren't interested in going public. They are purely using the pocket listing to fish for a "make-me-move" deal. "These are not motivated sellers. They're saying, 'Get me a good price,'" said Manhattan real estate agent Wei Min Tan.

Not everyone endorses these pocket deals, however. In New York, the practice could violate the Universal Co-Brokerage Agreement, according to Neil Garfinkel, counsel for the Real Estate Board of New York, the local trade association. Under the agreement, agents must share listings. They can only withhold listings if sellers request they do so.

In some cases, agents may try to convince sellers to use pocket listings in order to double their commissions by acting as agent for both the buyer and the seller. "That's where it starts to get into the gray area," said Garfinkel. "If an agent is putting their own economic interest ahead of the seller's, it's a violation of state law."

They may, for example, steer the deal to a buyer they represent even though another broker's buyer put in a higher bid. "Most of the time, pocket listings are done ethically and fairly," said Betty Graham, president of Coldwell Banker Previews International/NRT, Realogy's luxury brand. Nevertheless, she believes listing the property publicly increases the likelihood that a home will sell for the best price.

The National Association of Realtors does not have an official policy on pocket listings, according to spokesman Walt Molony. But most agents, like Graham, profess that sellers are almost always better off getting as many bids from as many potential buyers as possible.

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Kim Kardashian and Kanye West Put Both Of Their Houses Up For Sale

 

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]]>home sellinghousing recoveryluxury homes for salepocket listingssecret listingsCNNMoney2013-05-02T12:30:00 00:00Builders Hold Lotteries for Eager New Homebuyershttp://realestate.aol.com/blog/2013/04/30/home-lotteries/http://realestate.aol.com/blog/2013/04/30/home-lotteries/http://realestate.aol.com/blog/2013/04/30/home-lotteries/#commentsFiled under: ,



CNN Money logoBy Les Christie

Demand among homebuyers is so high in some parts of the country that builders are holding lotteries to decide who gets to purchase homes in their developments. O'Brien Homes started holding a monthly housing lottery for its 228-unit development called Fusion in Sunnyvale, Calf., after seeing throngs of prospective buyers camp out at the openings of other new condo complexes in the area. "We didn't want that," said Susie Frimel, a spokeswoman for O'Brien Homes. "We wanted our customers to be pleased with the process."

Each month, as new sections of the development came under construction, roughly 50 buyers would show up at O'Brien Homes' sales office hoping to be picked for one of the 10 or so sites available. The participants were already pre-qualified for a mortgage and had their down payment in place. After being assigned a number on a bingo ball, they crossed their fingers and waited for each ball to be plucked from the tumbler.

For each unit, the company drew a winner and a back-up, just in case the winner backed out. Lotteries are not a perfect solution, especially for the buyer who walks away empty-handed. "Some people would come back month after month," said Frimel. "It got very frustrating for them."

Related: Homes for Sale in Your Area

Adding to that frustration was that home prices rose virtually every time a new group of homes went on sale. The two-, three- and four-bedroom homes started out between $420,000 and $620,000. The last grouping went for $555,000 to $815,000, a 32 percent increase. Even with the price hikes, buyers kept returning. O'Brien started issuing returnees an extra bingo ball. If they lost for four straight months, they would get five chances the next time.

The last available home in the complex closed last week. Some customers got shut out. For Frimel, that was one of the hardest things to watch. She had gotten to know many of the regulars well. In addition to O'Brien Homes, other Bay Area builders are also using lotteries, including Shea Homes at a development in Livermore, Calif., and Shapell Homes in San Ramon, Calif.

But lotteries aren't just taking place in California. In northern Virginia, Camberley Homes held a lottery to sell two model homes in a new community called One Loudoun last week. More than a dozen people participated. In Florida, GL Homes held its first lotteries since the housing bust. In mid-April, the company sold off 11 of its model homes in Delray Beach, Fla., in its first lottery in more than five years.

"Our homes are at a price that we are willing to accept and not force customers to potentially get into a bidding war," said GL Homes division president Marcie DePlaza. "So for us, the lottery is the fairest way to determine the priority in which customers will be able to purchase our model homes."

Last weekend, more than 1,000 people showed up for a sale of lots in its Boynton Beach, Fla., community featuring homes ranging from the high $300,000s to the low $600,000s. GL Homes held a lottery, in which 75 homebuyers entered to win their first choice of lots. "We set up a big tent outside the sales office to handle the crowd," said DePlaza. "We had them write out pink index cards and we put them in a tumbler. The first winner was so excited, she was crying."

Buyers seem to prefer the lottery system to competitive bidding or trying to be the first in line when a home goes on the market. "I thought the way [GL Homes] handled it was very professional," said Neal Rosen, a math teacher who, with his wife Felicia, participated in a the lottery on April 20. "There was no rushing. They had plenty of food. And I got the lot my wife and I agonized over for three weeks."

To keep up with all of this surging demand, builders are trying to build faster, according to Glenn Kelman, founder of real estate broker Redfin. "Builders are trying to get as much inventory to market as they can," he said. After the hard times of the housing meltdown, builders are savoring the return of the buyers. "We went years without having to resort to lotteries or camping out," said DePlaza. "We're thrilled to see them back."

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Contingencies for Homebuyers

 

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]]>bidding warsbuying a homehome lotterieshomebuilderslotteriesOBrien HomesCNNMoney2013-04-30T11:00:00 00:00Behind the Foreclosure Surge in New York, New Jerseyhttp://realestate.aol.com/blog/2013/04/15/foreclosure-new-york-new-jersey/http://realestate.aol.com/blog/2013/04/15/foreclosure-new-york-new-jersey/http://realestate.aol.com/blog/2013/04/15/foreclosure-new-york-new-jersey/#commentsFiled under: ,

Foreclosure surge: a for sale sign outside a foreclosed homeFortune logo

By Nin-Hai Tseng

Just as many of us believe we've seen the worst of the housing market's collapse, two unlikely states are only now getting hit with a wave of foreclosures: New York and New Jersey. The region was largely spared when home prices disastrously tumbled in 2007. New York and New Jersey, with some of the nation's priciest homes and highest property tax rates, saw nowhere near as many foreclosures during the Great Recession as most of the rest of the country. But that has changed.

Next to Florida, New York and New Jersey have the highest share of homes undergoing foreclosure relative to all homes with mortgages, according to a report by CoreLogic. In February, Florida had the highest share at 9.9 percent, followed by New Jersey at 7.2 percent, and New York at 5 percent. This might come as a surprise, given that household finances in the two states have generally fared better than the rest of the country in recent years. But while there are fewer mortgages in New York and New Jersey entering foreclosure every month than nationally, more of them have been getting stuck in the process. That's because the two states use a judicial foreclosure process, which generally requires that foreclosures go through a state court.

Related: Foreclosures for Sale in Your Area

Between 2010 and 2012, the share of mortgages entering foreclosure each month was 0.24 percent in upstate New York, 0.36 percent in downstate New York and 0.40 percent in northern New Jersey -- all lower than the national average of 0.42 percent, according to a recent report by the Federal Reserve of New York. This is a good thing, but since foreclosures take longer to process, it also slows down the region's housing recovery. On average, it takes 503 days to complete a foreclosure in New York and 481 days in New Jersey, markedly higher than 318 days nationwide, according to the Fed.

This says less about the strength of the recovery than the unintended consequences of New York and New Jersey's foreclosure laws. While the regulations certainly protect homeowners, they also hamper the housing market's healing process. The longer a home is in foreclosure, the greater the potential for it to deteriorate and for its price to decline, the Fed notes. There's little, if any, incentive for homeowners to maintain or improve their homes once they start the foreclosure process. As a result, the homes tend to deteriorate more rapidly than otherwise similar homes.

Home prices in New York and New Jersey have stabilized, but the Fed expects foreclosures to continue dragging down prices in the coming months. True, the housing markets in these two states are already pricier than most of the rest of the country. And keeping them lower would make homes more affordable, which isn't so bad for buyers. It does, however, mean the residual effects of the Great Recession may linger longer.

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]]>foreclosureshome priceshousing crisishousing recoveryjudicial foreclosurenew jersey foreclosuresnew york foreclosuresCNNMoney2013-04-15T15:45:00 00:00Foreclosures Returning to Pre-Housing Bust Levelshttp://realestate.aol.com/blog/2013/04/11/foreclosure-levels-pre-housing-bust/http://realestate.aol.com/blog/2013/04/11/foreclosure-levels-pre-housing-bust/http://realestate.aol.com/blog/2013/04/11/foreclosure-levels-pre-housing-bust/#commentsFiled under: ,



By Les Christie

The number of homes lost to foreclosure is closing in on levels not seen since before the housing meltdown. Foreclosure filings -- including notices of default, scheduled auctions and bank repossessions -- during the first quarter fell 23 percent from a year earlier, the lowest level since the second quarter of 2007. Last month, banks repossessed just under 44,000 homes, within striking distance of the pre-housing bust monthly average. At the height of the housing meltdown in September 2010, repossessions topped 100,000 a month.

"We're getting back to normal and will be there by next year," said Daren Blomquist, vice president at RealtyTrac. For the past couple of years, foreclosures have been on the decline as homeowners seek alternatives like short sales, in which they sell their home for less than what they owe and the bank agrees to forgive the difference. The deals are preferred by the banks over foreclosures and have less of a negative impact on consumers' credit scores.

But now even the need to turn to short sales is waning. These deals accounted for 10 percent of sales in February versus 14 percent a year earlier, according to the National Association of Realtors. Government initiatives, like the Home Affordable Modification Program and Home Affordable Refinance Program, have helped millions of borrowers avoid foreclosure. And last spring, under a $25 billion settlement deal with state and federal officials, the nation's largest mortgage lenders agreed to help struggling borrowers by lowering their mortgage rates, reducing their principal and other fixes. While there are still pockets of heavy foreclosure activity, the landscape of foreclosures is starting to look a lot like it did in the pre-bust years, said Blomquist.

A larger percentage of the nation's foreclosure activity is now occurring in areas suffering from severe economic problems, such as "Rust Belt" cities like Rockford, Ill., and Chicago, not in the recently-developed, mid-to-upper class neighborhoods of California, Florida and Arizona that were hit hardest when the housing bubble burst, he said. And many of the people who lose their homes now are dealing with a layoff or personal issue, such as a divorce, illness or death in the family. While during the housing bust, many people were forced to default because of plunging home prices and unaffordable mortgage terms.

"The biggest chunk of bank repossessions were in newer homes," said Blomquist. "That's now shifting back toward older, lower-value homes that are more likely to be in poor condition." Now the newer homes that were in distress are either being bought up in short sales or regaining some value as home prices rise so they don't reach the bank repossession stage. Beaten-up older places in blighted communities are not as attractive to buyers and more easily go all the way through the foreclosure process.

Still, there are some states that are still struggling with a backlog of foreclosures like Florida, Illinois and Georgia, all states where courts oversee foreclosures. Florida had more than twice as many bank repossessions as any other state in March -- nearly 7,600. Illinois, with more than 3,500, was second and Georgia, with 3,350, was third. With prices expected to continue to rise -- they were up more than 8 percent year-over-year in January -- the number of short sales should continue to fall, and so should foreclosures, according to Blomquist.

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]]>foreclosure levelsforeclosureshousing recoveryCNNMoney2013-04-11T10:00:00 00:00Housing Is Back! Best Moves for Homebuyershttp://realestate.aol.com/blog/2013/04/09/best-moves-for-homebuyers/http://realestate.aol.com/blog/2013/04/09/best-moves-for-homebuyers/http://realestate.aol.com/blog/2013/04/09/best-moves-for-homebuyers/#commentsFiled under: ,



By Beth Braverman

Real estate has finally started to bounce back across the country -- even roar back in some places. Low mortgage rates and pent-up demand have coaxed buyers back into the market, and homeowners who list their houses are seeing more traffic. That quaint relic of the bubble, the bidding war, has even started to re-emerge in some cities. Consider the mounting evidence that the long national real estate nightmare is over: During the past year, home prices increased in 92 of the country's 100 largest metropolitan areas, according to data provider CoreLogic, with prices rising as high as 23 percent in Phoenix and 17 percent in San Francisco. Sales volume rose in 69 of the top 100 markets, and 35 of those showed double-digit gains.

Yet while most economists agree that the bottom is behind us and the five-year outlook for housing is on solid footing, the shorter term is shakier. "2013 and 2014 are going to be transition years," says Mark Fleming, CoreLogic's chief economist. "The market's improving, but it's not totally healed."

Related: Find Homes for Sale in Your Area

Thinking about buying a home? For the first time in more than half a decade, the economics of the market are working against you in most places. Inventory is tight, and bidding wars are back in some parts of the country. To snag your dream home, you'll have to pay up and contend with continuing strict loan requirements. The bright side: Despite rising prices and mortgage rates that are edging upward, buying a home is still cheaper than renting in the majority of the top 100 markets.

Don't Waste Time With a Low-Ball Offer

Yes, home prices are still way down from their highs, but the days when you could scoop up a house for 20% less than the list price are long gone. The typical home sells for pretty close to what the owners asked for, and even in shaky markets, sellers have gotten more realistic about pricing. The median sales-to-list-price ratio in Detroit, for example, is 98 percent; the national number is 97 percent. (To find the figure for your market, go to zillow.com/local-info and click on "More metrics.")

Here's how to figure out how much to offer initially: In places where homes are still selling below list price but deals are being made in less than two months, come in no more than 2% to 3% below the asking price, says Michael Murphree, a realtor in Birmingham, Ala. Where homes are selling above the listing price, make your first offer the asking price.

Be the Winner in a Bidding War

In January and February, 73percent of agents with broker Redfin said their clients' offers faced rival bids, up from 56% who said so in the fall of 2011. You win bidding wars, of course, by raising your price; it also helps to have few contingencies and to move quickly, since today's sellers don't want multiple go-rounds. "You have to give your best offer," says Dallas real estate agent Mary Beth Harrison. "Step up to the plate or walk away."

Be flexible about closing too: Quick deals -- the median time on the market for homes is 71 days, down from 99 a year ago -- have left many sellers scrambling for alternative housing. Leave the closing date blank on your contract for the seller to fill in, or negotiate a leaseback if the seller needs to stay put for a while.

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]]>bidding warsbuying a homehomebuyer tipshousing markethousing recoverymaking an offer on a homeCNNMoney2013-04-09T12:15:00 00:00The Home Bidding Wars Are Back!http://realestate.aol.com/blog/2013/04/05/home-bidding-wars/http://realestate.aol.com/blog/2013/04/05/home-bidding-wars/http://realestate.aol.com/blog/2013/04/05/home-bidding-wars/#commentsFiled under:



By Les Christie

The bidding wars are back. Seemingly overnight, many of the nation's major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters. In March, 75% of agents with broker Redfin said their clients' offers were countered by rival bids, up from 56% who said so in late 2011. The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.

"The only question is not whether a new listing will get multiple bids but how many it will get," said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.

In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England. "The brokers stopped taking names after the number of bidders reached 250," she said. The winning bidder offered $2 million for both units.

Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin's CEO. Many homeowners are still underwater, owing more on their mortgages than their homes are worth, and they want to wait until selling becomes profitable again. By doing so, they can avoid short sales, which carry big hits on credit scores, 85 to 160 points, according to FICO.

"Many people have been holding on for a profit, and they're just now getting their heads above water," said Kelman. Those who want to sell and buy a new home are encountering a market where it's difficult to find a new place of their own, said Vogt.

Over the past few months, Jackie and Cliff Kaufman have bid on four different homes in St. Petersburg, Fla., including one short sale and a foreclosure. The pair, who have two adult children and run an online jewelry business, said they bid $5,000 more than the $495,000 asking price on the first home they had their eye on and never heard back from the seller's agent. They were later told the house sold for nearly $550,000.

Next, they bid on a short sale listed for $600,000. This time, they came in $10,000 above the asking price and, again, they were beaten out. The house was only on the market for two days.
The third attempt to make an offer on a bank-owned property was also met with silence. "It was very frustrating," said Jackie Kaufman. "We felt we were always on the outside of the loop and that people who won the homes had the inside track."

By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price. They were lucky. Inventories of homes for sale continue to shrink. In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. While the number of homes for sale should rise with the onset of the spring selling season, housing inventory is expected to remain low, pushing prices higher.

And new home construction, especially in markets hit hard by the housing bust, is still moving forward at a snail's pace, since the cost to build the homes is often more than what the property ends up selling for, said Jeff Culbertson, president of Coldwell Banker's Southern California operations. Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman. "With buyers out in force and sellers cautious, the market is in an awkward 'tweener' phase," he said.

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]]>bidding warshome priceshome saleshousing markethousing recoveryCNNMoney2013-04-05T14:00:00 00:00Tom Roeser Buys Up Town's Foreclosure Stock to Keep It Thrivinghttp://realestate.aol.com/blog/2013/04/02/tom-roeser-carpentersville-foreclosures/http://realestate.aol.com/blog/2013/04/02/tom-roeser-carpentersville-foreclosures/http://realestate.aol.com/blog/2013/04/02/tom-roeser-carpentersville-foreclosures/#commentsFiled under:



By Les Christie

Tom Roeser is on a one-man mission to save Carpentersville, Ill., from falling into the fate of so many post-industrial Midwestern towns, where neighborhoods have become littered with vacant, foreclosed homes. Over the past several years, the 60-year-old president and co-owner of the town's largest employer, a maker of switches and communications gear called Otto Engineering, has bought 193 foreclosed homes, completely rehabilitated them and is either selling or renting them at a discount to local residents.

Roeser's crusade to save this small Northeastern Illinois town started in 2005, soon after a townhouse condominium complex located about two miles from his factory was hit hard by foreclosures and started spawning crime -- graffiti, gang tagging, property destruction. The Morningside neighborhood where the complex was located looked unkempt and depressed, and property values were plunging.

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"It really was neglected," said Roeser. "I went to the town, the county; I went to Habitat for Humanity; I told them that we needed to do something about this neighborhood. I couldn't get help from anybody." So Roeser proceeded to buy 69 of the foreclosed condos in the complex himself. Most of the homes he's bought at auction for less than $30,000, then fixed up. Today, he rents out a renovated 800-square-foot, two-bedroom apartment for $675 a month, about $200 below market value.

Related: Find Foreclosures for Sale in Your Area

By 2008, Roeser saw benefits in buying distressed, single-family homes in other parts of Carpentersville. Not only would he be curbing foreclosures and crime in his community, but he didn't want his customers, which include such big outfits as Motorola, John Deere and the U.S. military, to get turned off when they came to visit. "I couldn't afford for Carpentersville to become Detroit," he said.

There were plenty of distressed homes for Roeser to choose from. Carpentersville was hit hard by the Great Recession. The unemployment rate peaked at 12.5% in January 2010 as many local businesses closed. The foreclosures soon followed. Last year, the area was one of the hardest hit in the country, with 1,042 homes receiving some sort of default filing, according to RealtyTrac. That's a lot in a city with only 9,000 homes.

Roeser's company has at least $10 million invested in the homes right now. "I take the worst houses you can see and tear them completely apart and rebuild them," he said. Typically, he buys a foreclosure for around $40,000 and puts $100,000 to $120,000 into rehabbing it and getting it market ready, including real estate commissions, holding costs and taxes. He then sells the place through Homes by Otto for about $160,000. He does not expect to profit. "The plumbers make money, the electricians make money, everybody makes money and the people get a new home at cost," he said. "I come out of it whole."


Related: Everything You Need to Know About Investing in Real Estate

On his rentals at the Morningside complex, Roeser figures he will break even when he eventually sells the condos, but he's waiting until he can buy up enough -- or all -- of the units and can renovate the complex's exterior first. Roeser also provides financing for buyers with low credit scores and gives $10,000 discounts for returning war veterans.

Scott Camp and his wife, Amanda, who bought a home from Roeser in June 2011, said they have had no problems so far. Roeser replaced everything in their three-bedroom, two-bath home, from the electrical, heating and plumbing systems to the roof, windows, wood flooring, cabinets and appliances. Currently, Roeser is selling a few dozen homes, ranging from a three-bedroom, 1,000-square-foot ranch for about $119,000 to a 1,500-square-foot house with three bedrooms and a full basement for $189,000 -- both considerably cheaper than new homes in nearby towns, which sell for $200,000 and up.

Many of the properties Roeser rehabs are either rented or sold to one of the 500 employees who work at Otto Engineering or to one of their family members or friends. In exchange for the deal, Roeser requests one thing: keep the exterior looking good. In his opinion, keeping up appearances can boost the morale of the whole community. So far, Roeser's plan seems to be working, said Carpentersville village president Ed Ritter.

"It's been quite a catalyst," said Ritter. "Every neighborhood in which he has bought and rehabbed homes seems to prosper. Other homeowners see what he has done and improve their own homes." Crime has gone down, too, according to deputy police chief Michael Kilbourne. Incidents are less common and there are fewer broken windows and smashed fences, less trash and graffiti, he said.

Roeser, who is married with one daughter in California and has a stepson who lives in the area, has found rebuilding Carpentersville so rewarding that he's expanding his sites even further. Up next: A plan to rehab storefronts and other commercial buildings in downtown East Dundee, right next to Carpentersville.

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]]>Carpentersville Illinoisforeclosureshousing busthousing markethousing recoveryTom RoeserCNNMoney2013-04-02T15:00:00 00:00Rent or Buy? Which is Better In These 10 Major Citieshttp://realestate.aol.com/blog/2013/03/29/rent-buy-cities/http://realestate.aol.com/blog/2013/03/29/rent-buy-cities/http://realestate.aol.com/blog/2013/03/29/rent-buy-cities/#commentsFiled under:

Rent or buy: Seattle

CNN Money logoBy Les Christie

Figuring out whether it's better to buy or rent rests on three main factors: where you live, how long you plan to stay and how home prices compare to rents in the area. Real estate website Trulia analyzed data from 100 major metro areas to help determine that last factor.

While markets vary wildly, prices are so reasonable and interest rates so low that buying is the better option in most major U.S. cities, said Jed Kolko, Trulia's chief economist. Nationwide, home buyers who remain in their homes for three years will save an average of 19 percent over renting. If they hold onto their homes for 7 years, the savings advantage grows to 44 percent.

That means all of the initial transaction costs of buying -- the broker's commission, title insurance, legal fees and other closing costs -- will be offset by benefits, like tax write-offs and price appreciation. And those costs will become cheaper than the total costs of renting, which include insurance and agent commissions.

But the math is changing. Home prices rose 7 percent year-over-year last month while rents went up only 3.2 percent, according to Trulia. "Buying is still cheaper than renting but the gap is closing," said Kolko.

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How To Choose Between Renting and Buying A Home

 

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]]>buy or rentbuying a homehome priceshousing markethousing recoveryrent pricesCNNMoney2013-03-29T17:30:00 00:00Home Shopping: Should You Buy New?http://realestate.aol.com/blog/2013/03/27/buying-new-home/http://realestate.aol.com/blog/2013/03/27/buying-new-home/http://realestate.aol.com/blog/2013/03/27/buying-new-home/#commentsFiled under:



By Amanda Gengler

It's official: After years of little activity, homebuilders are dusting off their jackhammers. Last year, housing permits hit their highest level since 2008, according to the Census Bureau, and new-home sales grew 20% from the prior year. "Builders are more optimistic than they have been for several years," says Patrick Newport, an economist at IHS Global Insight.

An untouched abode offers advantages, of course, such as a sleek modern layout and few repairs. Buying an existing home, however, may allow you to seal the deal faster and can offer better short-term price appreciation. These head-to-head comparisons can help you decide which choice better fits your priorities.

Related: New Homes for Sale In Your Area

Sales Price
Winner: Draw

All else being equal, new structures typically command 10% to 15% premiums over similar existing places. You're unlikely to be making an equal comparison, however. "In most of the country the lots in the best locations are already gone," says David Brown, a Dallas-based housing consultant for Metrostudy. The newest homes are often built farther from centrally located areas and may have smaller yards than their older counterparts, so they can wind up costing less. What you won't find in either place is the lavish incentives tossed to buyers during the bust; those have largely disappeared, says Brown.

When you're visiting prospective homes, check the numbers on both the lot size and the layout.
A spacious existing home that's overflowing with the current owners' stuff can look cramped, whereas builders use lots of tricks, such as putting in full beds instead of kings or queens and removing interior doors, to make a new home's space seem larger than it really is.

Speed of Transaction
Winner: Existing

Most builders today are selling new homes from models, says Jody Kahn of John Burns Real Estate Consulting in Portsmouth, N.H. Once you agree to buy, the actual construction begins. The upside: There are still lots of ways to personalize the home, such as adding extra storage or creating an office. But the finished product probably won't be ready for six to nine months, which can be tough for those who need to move in soon.

Timing the purchase is also a challenge when you're looking at a waiting period. List your current pad when you agree to the new home and you risk selling too early; wait until your moving date nears and you could be stuck covering two mortgages until you find a buyer and close the deal, says Michael Corbett, author of Before You Buy. Ask an agent how fast homes in your area are selling and, if necessary, discuss strategies to get yours sold more quickly.

Cost of Ownership
Winner: New

After a few decades, roofs get leaky and boilers go bust. You'll spend an average of $18,000 on a new roof, according to Remodeling magazine, and $3,000 for a furnace. New homes also carry lower utility bills. Energy use per house has fallen over the past decade in part thanks to changes to building energy codes, which call for more insulation and tighter sealing, and should fall further in new homes as more states adopt the latest 2012 codes. "New construction on average is 30% to 40% more efficient than existing homes," says Indiana energy consultant John Milligan.

Read the rest of this story on CNNMoney.

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Pros and Cons of Buying a New Construction Home

 

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]]>buying a homebuying new homenew homesnew homes for saleCNNMoney2013-03-27T12:00:00 00:00Why Renters Are Still Driving America's Building Boomhttp://realestate.aol.com/blog/2013/03/20/renters-home-building-boom/http://realestate.aol.com/blog/2013/03/20/renters-home-building-boom/http://realestate.aol.com/blog/2013/03/20/renters-home-building-boom/#commentsFiled under:





By Nin-Hai Tseng

As America's housing market slowly heals, good news is pouring in from homebuilders: They're building more; they're hiring more workers; they're building bigger houses. Still, some things haven't changed: Renters (as opposed to buyers) are still driving the rebound of the residential construction industry.

Construction of single-family homes rose to a nearly five-year high in February, the Commerce Department reported Tuesday. Single-family home building, which made up about 66% of housing starts last month, rose 0.5% to a rate of 618,000 units -- the highest level since June 2008. This follows a 31.5% rise in single-family construction in the last year.

Although this might suggest buyers are driving homebuilding again, renters are still playing an unusually large role in the home construction industry -- a trend that's lasted since 2007 when the housing market collapsed. Construction of multi-family homes, typically destined for the rental market, make up about 33% of all residential construction today. That's markedly higher than the average of nearly 20% over the past two decades.

A few reasons have brought about the rise of the rental class: Following the financial crisis, record foreclosures displaced millions of families from single-family homes to apartments. While recovery of the housing market looks to be gaining traction, high unemployment and tighter lending standards are still keeping many from owning a home. Homeownership is still slipping, while vacancies for residential rentals have risen.

Tighter lending standards at banks aren't just hitting homebuyers. Builders are feeling it, too, especially smaller firms that typically specialize in building single-family homes, says Robert Denk, chief economist at the National Association of Homebuilders. Builders of apartment complexes, typically larger firms, usually access financing for their projects through capital markets.

To be sure, the rental class won't likely rise forever as conditions grow ripe for a revival of single-family homes, experts say. Even though home prices are rising, it's still cheaper to buy than rent in many cities as mortgage rates stay ultra low. Nationwide, buying a home between December and February was 44% cheaper than renting, down slightly from 46% in 2012, according to Trulia's Rent vs. Buy report released Wednesday.

Demand for rentals is also expected to soften over time as recovery of the overall housing market, which is closely tied to the wealth of most Americans, is expected to lead to a broader recovery of the economy, says Ruijue Peng, chief research officer at CoStar, a firm that tracks commercial real estate. But for the next three to five years, builders will likely pander more to renters rather than buyers, Peng says.

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]]>homebuildershousing boomhousing recoveryrentersCNNMoney2013-03-20T17:00:00 00:00Fastest Growing Boomtowns in Americahttp://realestate.aol.com/blog/2013/03/19/fastest-growing-boomtowns/http://realestate.aol.com/blog/2013/03/19/fastest-growing-boomtowns/http://realestate.aol.com/blog/2013/03/19/fastest-growing-boomtowns/#commentsFiled under:

Fastest growing boomtown: Williston, N.D.

CNN Money logoBy Les Christie

You've likely never heard of some of the fastest-growing boomtowns in America -- areas that started out so tiny but are gaining attention and growing in population fast. Rising oil and gas prices have brought big oil, plenty of workers and lots of housing headaches to these boomtowns. Finding affordable housing in these areas can be difficult: In the tiny town of Williston, N.D. -- which is the fastest-growing boomtown in America -- you'll find rental prices as high as New York City. Click through the gallery below to see the boomtowns growing at an astounding rate.

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]]>Andrews TX real estateboomtownsDickinson ND real estateElk City OK real estateElko NV real estatefastest growing boomtownsMidland TX real estateVernal UT real estateWilliston real estateCNNMoney2013-03-19T12:00:00 00:00Where Homebuyers Love Mirrored Closets, Roman Tubshttp://realestate.aol.com/blog/2013/03/19/home-features-homebuyers-want/http://realestate.aol.com/blog/2013/03/19/home-features-homebuyers-want/http://realestate.aol.com/blog/2013/03/19/home-features-homebuyers-want/#commentsFiled under:

A kitchen island is a popular home feature.

By Les Christie

Roman tub. Whole Foods. Mirrored closet doors. Home sellers in different parts of the country are highlighting some pretty unusual features and amenities in their listings in order to spark interest from local buyers. In some cities, such terms turn up 10 times more often than in other parts of the country, according to data compiled by real estate website Trulia.

In Hawaii, "lanai" -- an open-sided porch that might be called a veranda or portico elsewhere -- is a big selling point for those seeking to enjoy the trade winds off the Pacific, for example. Less explicable is the popularity of "stone walls" in Fairfield County, Conn. True, the region's bedrock is good for building walls, but this part of New England is hardly unique for the quality and quantity of its rocks -- just ask any Yankee farmer harvesting a bumper crop of granite.

Whether these phrases make immediate sense or not, calculating how often they appear in listings helps sellers and real estate agents better understand how a local housing market works, said Jed Kolko, Trulia's chief economist. "Sellers especially need to know, not just market trends like pricing, but what features buyers are focused on," he said.

In Ventura and Orange counties in California, for example, the popularity of "mirrored closet doors" isn't because local residents are especially narcissistic. More likely, said Kolko, there is big demand for homes that were built in an era when that feature became popular. The same type of trend may explain why "kitchen island" appears in so many Phoenix listings. That became a hot amenity during the housing boom, when many of Phoenix's homes were built. Meanwhile, in San Francisco, listings tout proximity to Whole Foods, the national grocery chain.

One explanation: Close to a third of the area's residents don't have cars, forcing many residents to grocery shop on foot. That would make it a big advantage to be close to a favorite market, especially when the trip home could mean toting heavy bags up the steep San Francisco streets, said Kolko. "Coffered ceiling" comes up quite frequently in Houston. A coffer is a sunken panel, usually square, that is used as a decoration, and is also known as a caisson or lacunaria. The coffers, which are a sort of dropped ceiling, can serve as a convenient place to route an air conditioning duct, said Kolko. Or they can add a touch of luxury -- without breaking the bank.

Many amenities that homebuyers are looking for are weather-related. In Palm Bay, Fla., frequent hurricanes have made "storm shutters" a major listing point. In tornado-prone Omaha, Neb., listings tout "steel siding," while "heated garages" seem to matter most to residents of frosty Milwaukee. "Glass-block windows" -- known for both their insulation and security -- are popular in Buffalo, N.Y. Other locally popular terms include "hearth room" in Memphis, Tenn., "Roman tub" in West Palm Beach, Fla., "pole barn" in Grand Rapids, Mich., and "solar screen" in Fort Worth, Texas.

Then, there's the "mother-in-law apartment," which is more popular in Salt Lake City than anyplace else. Could it be because Utah families tend to be big and tight-knit? The state has the largest average family size in the nation, according to the Census Bureau. "With bigger families there, I'm not surprised to see that term be common in listings," said Kolko.

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How to Identify the Most Desirable Home Features

 

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]]>home featuresweird home featureswhat homebuyers wantCNNMoney2013-03-19T08:00:00 00:00Boomerang Buyers Return to Market After Foreclosurehttp://realestate.aol.com/blog/2013/03/11/boomerang-buyers-return-to-market-after-foreclosure/http://realestate.aol.com/blog/2013/03/11/boomerang-buyers-return-to-market-after-foreclosure/http://realestate.aol.com/blog/2013/03/11/boomerang-buyers-return-to-market-after-foreclosure/#commentsFiled under: ,,

Boomerang homebuyers Susan, Dave Edwards

By Les Christie

Borrowers who lost homes to foreclosure during the housing bust are starting to buy again. Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another 2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back -- and they are looking for a new place to call home.

Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan's severe arthritis made it impossible for her to work her medical device sales job. The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home's value had plunged 40 percent below the $325,000 mortgage balance.

"We were living under such pressure," she said. "We looked at the numbers and knew we had to default." After the foreclosure, Susan's credit score had taken a 70-point hit; Dave's score fell even further. By paying all of the bills on time, they nursed their credit scores back to health. And in December, two years after they lost their old home, the couple was able to buy a new home with a loan backed by the Veteran's Administration. VA-insured loans can be obtained just two years after a foreclosure, according to the Mike Frueh, director of the VA's Loan Guaranty Program.

The new house is a lot like the Edwards' old one, with one big improvement: The mortgage payment is $1,150 a month -- roughly half the amount they used to pay. "[After bankruptcy], foreclosure is one of the things that hits your credit score the hardest," said Anthony Sprauve, a spokesman for FICO. Foreclosures and short sales usually knock about 85 to 160 points off a credit score. Scores suffer less if you pay at least the minimum on all your other bills on time and only allow your mortgage payments to go unpaid, said Jon Maddux, the CEO of YouWalkAway.com, which offers advice to defaulting mortgage borrowers.

Once the damage is done, it can take three to seven years for a score to fully recover. But some lenders are willing to work with borrowers earlier than that. Mortgage giants Fannie Mae and Freddie Mac, for example, require defaulters to wait five years -- and have a minimum credit score of 680 and put 10 percent down -- before they can purchase a home again. If they don't meet that criteria, the wait is seven years, at which point the foreclosure is expunged from a person's credit report.

If defaulters show that extenuating circumstances caused the foreclosure -- such as a health issue that prevented them from working, a layoff, a divorce or other one-time event -- the wait may be reduced to three years. The Federal Housing Administration allows banks to issue FHA-insured loans to borrowers three years after a foreclosure or a short sale in which the borrower was in default.

Read the rest of this story on CNNMoney.

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]]>boomerang buyersforeclosuresmortgage defaultsshort salesCNNMoney2013-03-11T10:00:00 00:00Hong Kong Clamps Down On Quirky Property Buyshttp://realestate.aol.com/blog/2013/03/08/hong-kong-real-estate/http://realestate.aol.com/blog/2013/03/08/hong-kong-real-estate/http://realestate.aol.com/blog/2013/03/08/hong-kong-real-estate/#commentsFiled under:

Hong Kong property signs

CNN Money logo

By Pamela Boykoff

Would you pay hundreds of thousands of dollars for a parking space? How about $113,000 for a roof? A hotel room in the boonies for $424,000? Virtually every piece of privately-owned concrete is up for grabs in Hong Kong as the city's overheated property market continues to swell, driven by low interest rates, limited supply and waves of cash from mainland China. Prices for residential property in Hong Kong have more than doubled since hitting a recession-era low in December 2008, according to brokerage CLSA.

The sharp increase has sparked fears of an asset bubble. In December, the International Monetary Fund warned of the possibility of a "sharp price correction" in the market. The government tried to cool the market in October, but prices have continued to edge higher. The government action may also have unnerved some investors, who pushed into less regulated alternative property investments like parking spaces and roof decks.

Now Hong Kong is clamping down on some of the quirkier trends that have popped up in the city's distorted property market, announcing a series of measures that include higher taxes and tighter mortgage requirements on specialized transactions. The crackdown includes tighter regulations on the sale of parking spots, which can demand hundreds of thousands of dollars each if the location is right.

Jacinto Tong runs a large property investment company in Hong Kong, and has 300 parking spaces in his portfolio. Tong doesn't re-sell his spaces, but he does rent them out. He says the business is not for everyone. "If you buy a car parking space for investment, this is something strange," Tong said.

Hong Kong investor Ka-Kwun Pang has taken a different route, snapping up one of 360 suites that recently came up for sale in the Apex Horizon, an extended-stay hotel owned by one of the city's largest developers. The first such sale of its kind in Hong Kong, the hotel units went quickly. Pang paid $424,000 for a 661-square-foot suite which rents by the month. He said he expects "good returns" and believes the rent will be higher than for a traditional property because of the perks offered by a hotel. He was also able to take advantage of a loophole in Hong Kong property regulations that exempted this type of transaction from stamp duties, a government tax paid on most property purchases.

Hong Kong's government closed that loophole last week. Authorities also doubled the stamp duty on most transactions and extended it to commercial and industrial properties. They've also warned that they'll deal harshly with those seeking to manipulate the system. In another economy, the central bank could raise interest rates in an effort to cool the market. But that's something the Hong Kong Monetary Authority can't do because the city's currency, the Hong Kong dollar, is pegged to the U.S. dollar.

The result is that despite a buoyant economy and rate of inflation around 3 percent, flexible-rate mortgages in Hong Kong are available at rates near 2 percent. Combined with strong demand from mainland Chinese buyers, Hong Kong authorities see a recipe for trouble. "Interest rates have been artificially maintained at extremely low levels, and we see huge volumes of liquidity flow into emerging markets like Hong Kong," Norman Chan, the chief executive of the Hong Kong Monetary Authority, said in a statement last week. Chan fears that a return to normal interest rates in the U.S. could have serious consequences for Hong Kong families.

But history suggests the government's actions might not be enough to bring down prices in the meantime. This week, in yet another sign of overheating, a local television show featured a building rooftop that has been listed for sale. The property does not include any indoor space -- just the rooftop. Dubbed a "balcony farm" in advertisements, the 533-square-foot space sold for $10,000 dollars in 2004 and is now on the market for $113,000, according to the program. It is illegal to build a residence on such a roof, but some residents are not deterred by the rule.

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Factbox: Asia's Capitals of Runaway Real Estate

 

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]]>Hong KongHong Kong housing marketHong Kong real estateHong Kong weird property buysCNNMoney2013-03-08T10:30:00 00:00600,000 Americans Have 'Megacommutes' of Over 90 Minuteshttp://realestate.aol.com/blog/2013/03/06/megacommuters/http://realestate.aol.com/blog/2013/03/06/megacommuters/http://realestate.aol.com/blog/2013/03/06/megacommuters/#commentsFiled under: ,





By Steve Hargreaves

Think your commute is bad? Try being one of the 600,000 Americans who travel more than 90 minutes each way over a distance of at least 50 miles to get to work. Dubbed "megacommutes," these trips are concentrated mostly around large cities -- especially New York, Los Angeles, San Francisco, Washington, D.C., and New Orleans -- according to a new U.S. Census Bureau report.

Just under 1 percent of full-time workers make that kind of trek. The average "megacommuter" is more likely to be male, older, married and higher-paid than the average worker. They're also more likely to leave for the office before 6 a.m. Just over 8 percent of full-time workers -- almost 11 million people -- had merely "long commutes" that took over an hour each way in 2011, according to the report.

New York had the highest percentage of people making these long commutes, at 16 percent of its workers. Next came Maryland and New Jersey, at about 15 percent each. Of those long commuters, 61 percent made the trip alone in a car or truck. Twenty-three percent took public transit, 13 percent carpooled and 3 percent rode a bike. Just because a commute is long doesn't mean it's bad, though. Many of the places with the longest commutes are also areas where residents can take the bus or train instead of driving.

Related: Homes for Sale That Are Closer to Your Job

"In some places, people are trading minutes for comfort or less stress," said Brian McKenzie, a commuting analyst at the Census Bureau. For commuters in general, 80 percent drove, 10 percent carpooled and another 5 percent each took either public transit or rode a bike. The average commute time for all full-time American workers was 25.5 minutes each way.

Despite anecdotal reports of people traveling farther from home to find work during and after the recession, both the average commute time and the number of people traveling 60 miles or more has stayed relatively stable over the last 10 years, the Census data shows. That's consistent with other research that has found declining congestion on American roadways over the past few years.

See more on CNNMoney:
10 Worst Cities for Driving
Consumer Reports' Top Car Picks
Why America's Middle Class is Losing Ground

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Many Americans Travel 90 Minutes to Work Everyday

 

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]]>commuterslong commutelos angeles commutesmegacommutersnew orleans commutenew york commutesan francisco commuteCNNMoney2013-03-06T11:30:00 00:00Struggling Homeowners Turned to Short Sales in 2012http://realestate.aol.com/blog/2013/02/28/short-sales-increase-2012/http://realestate.aol.com/blog/2013/02/28/short-sales-increase-2012/http://realestate.aol.com/blog/2013/02/28/short-sales-increase-2012/#commentsFiled under: ,

Short sale signCNN Money logo

By Les Christie

Struggling homeowners increasingly turned to short sales to get out from under mortgage debt last year. There were nearly three times as many short sales as there were sales of foreclosed homes in 2012, according to RealtyTrac. Foreclosures accounted for 11 percent of all sales, down from 13 percent a year before. Meanwhile, short sales rose 5 percent year-over-year, accounting for 32 percent of all home deals.

"We're seeing fewer of the most disruptive sales, the [bank-owned foreclosures], hitting the market, but there are still a lot of distressed property sales," said Daren Blomquist, spokesman for RealtyTrac. "They're shifting to short sales, though." In a short sale, homeowners sell at a price that is less than what they owe the bank, and the bank agrees to absorb the loss. Typically, a seller has to demonstrate some kind of financial hardship before the bank will approve the deal -- and forgive the unpaid debt. The bank then sells the house, typically at a better price than it would have gotten had the home gone into foreclosure.

During the fourth quarter, the average discount on a foreclosure was a whopping 39 percent, while the average short sale sold for 23 percent below market, RealtyTrac found. The biggest spike in short sales last year occurred during the second half of the year. Fueling the increase was the National Mortgage Settlement, an agreement between the government and the nation's five biggest mortgage lenders which was finalized last February.

Under the terms of the deal, the banks receive credit toward the settlement when they approve short sales for distressed homeowners. Of the $45 billion in consumer relief that lenders have reported under that agreement, $19 billion has gone toward forgiving debt in short sales, according to the latest report from the Office of Mortgage Settlement Oversight. Many underwater homeowners were also scrambling to unload their properties before the Mortgage Forgiveness Debt Relief Act was set to expire Dec. 31. Had the act been allowed to lapse, homeowners would have had to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.

The growing number of short sales helped buoy the housing market and push distressed home prices higher last year. During the fourth quarter, for example, homes that were either bank-owned or in foreclosure sold for an average of $171,704, an increase of 4 percent from a year earlier. In Arizona, prices were 22 percent higher in the fourth quarter compared with late 2011. In Nevada, prices jumped 21 percent; and in California -- where short sales comprised more than a third of all sales -- they increased 14 percent, RealtyTrac reported.

See more on CNNMoney:
Foreclosures: 100 Hardest-Hit Neighborhoods
Million-Dollar Forelcosures
10 Great Foreclosure Deals

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All About Home Short Sales

 

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]]>foreclosuresRealtyTracshort salesshort sales 2012underwater mortgagesCNNMoney2013-02-28T13:01:00 00:00Zombie Foreclosures: Borrowers Hit With Debts That Won't Diehttp://realestate.aol.com/blog/2013/02/20/zombie-foreclosures/http://realestate.aol.com/blog/2013/02/20/zombie-foreclosures/http://realestate.aol.com/blog/2013/02/20/zombie-foreclosures/#commentsFiled under: ,

Foreclosure limbo: foreclosure lawn sign

By Les Christie

Borrowers are discovering that their foreclosed homes are coming back to haunt them -- long after they have moved out. In these so-called zombie foreclosures, borrowers move out of their homes after their bank schedules a foreclosure auction only to find out months or years later that the auction never took place or the bank never transferred the deed to the house. That means the borrower still technically owns the home, leaving them on the hook for property taxes, fees and for homeowners' association dues.

Since the housing bubble first burst seven years ago, almost 2 million properties have started the foreclosure process but never completed it, according to RealtyTrac. In half of those cases, the homeowner is fighting to stay in the home. But there are close to 1 million properties that are in some sort of foreclosure limbo. While no one knows the exact number, it's estimated that tens of thousands of those properties could be zombie foreclosures.

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Many of these homes are in low-income communities where foreclosures are so difficult to sell that lenders sometimes delay taking possession of the property to save on taxes and other costs that then stay under the borrower's name. Those debts can then go unpaid for years because the borrower is unaware they owe them, further slamming their credit score and making life after foreclosure even harder.

"The most frustrating part is that I can't move on," said Rose Nathan, a 37-year-old office manager. Nathan lost her South Bend, Ind., home in January 2009, after working out a deal with CitiMortgage to voluntarily walk away in a "deed in lieu of foreclosure."

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"On Christmas Eve, the bank called and told me a sheriff's sale was coming and I had to move out right away," she said. "So that's what I did -- seven days after New Year's." She sold her belongings and moved to Hawaii. Nearly two years later, she received a property tax bill from the City of South Bend for $5,000. The bank had never taken possession of the house. Citi told her attorney, Judith Fox, that the holdup was due to a lien on the home that they were never told about. Nathan said she knew of no liens at the time of the transaction. Upon doing a title search, Fox found no evidence of a lien until well after the bank agreed to the deed-in-lieu deal.

Meanwhile, the unpaid debt has crushed Nathan's credit score. The deed-in-lieu alone lowered her score by 80 to 120 points, but the unpaid debt meant her credit kept taking a hit. Eventually, her credit card companies cut her off, even though she said she was making her payments. Her auto loan now carries a 25% rate. Her car insurance premiums have skyrocketed. She can only afford a one-bedroom apartment where she lives with her three kids. And forget about buying another home. "Nobody will give me a mortgage," she said. Citi declined to comment on the case. Nathan said she has since paid off the lien with the hope that Citi will take the deed on the home.

Read the rest of this story on CNNMoney.

See more on CNNMoney:
Million-Dollar Foreclosures
Big Money Betting Big on Housing
America's Best Places to Live

Foreclosure Explained


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]]>bank foreclosuresbank-owned homesforeclosure auctionsforeclosuresmortgage debtzombie foreclosuresCNNMoney2013-02-20T10:30:00 00:00My Home Was a Former Meth Labhttp://realestate.aol.com/blog/2013/02/12/living-in-meth-lab-home/http://realestate.aol.com/blog/2013/02/12/living-in-meth-lab-home/http://realestate.aol.com/blog/2013/02/12/living-in-meth-lab-home/#commentsFiled under: ,,



Do you live near a meth lab? Click on the map above to see which counties have the largest number of contaminated sites.



By Les Christie

Call it crystal, crank or ice -- you don't want to live in a house where methamphetamine was cooked up. Many Americans, however, unwittingly purchase homes or rent apartments contaminated with the drug's poisonous residue. There have been nearly 84,000 meth lab seizures since 2004, according to the Drug Enforcement Administration. But only a fraction of meth labs -- as few as 5 percent -- get discovered by authorities, according to Mark Woodward, a spokesman for the Oklahoma Bureau of Narcotics and Dangerous Drugs Control.

"Millions of people live in properties that were used as meth labs," said Joseph Mazzuca, who co-founded Meth Lab Cleanup in Athol, Idaho, with his wife, Julie. Last year, his company booked more than 1,500 jobs inspecting and decontaminating homes. Jonathan Hankins, 32, thought that he and his wife, Beth, got a terrific deal last June on a starter home in Klamath Falls, Ore. They paid just $36,000 for a two-bedroom fixer-upper that had been repossessed in a foreclosure.

More from CNNMoney: Do You Live Near a Meth Lab?

"We only lived there three weeks," said Hankins. "We started to experience symptoms." They got dry mouth, headaches and nosebleeds. Their 2-year-old son, Ezra, got mouth sores so severe that he couldn't drink. After neighbors told Hankins that the house had been a meth lab, he bought a test kit for $50. It showed meth residue at about 80 times the state's legal limit for acceptable levels of meth residue in a home after it has been cleaned.

The family moved out, and the health problems cleared up after a few weeks. But their financial problems persisted. The couple is still paying the mortgage on the house and rent on a new one, and they lost furniture and other belongings that became contaminated.

More from CNNMoney: How to Spot a Meth Lab

Hankins' lawyer told him to walk away from the mortgage, but he doesn't want to ruin his credit. Even if they pay to clean up the house, it would be difficult to recoup any money by selling it. Straightforward decontamination jobs can cost $5,000 to $10,000, according to Mazzuca. Surfaces must be rinsed with special detergents, rooms stripped of carpeting and other materials and meth residue must be sucked off of walls and other hidden surfaces.

Hankins is petitioning mortgage giant Freddie Mac, which sold him his home, to test all homes it sells for meth contamination, and he is speaking with the company about covering his costs. A Freddie spokesman, Brad German, said the company did not know the Hankins' home was contaminated. He said Freddie relies on local real estate agents to follow all state disclosure laws. "We encourage buyers to do any test they want," said German. "Hankins didn't test and bought the house as-is."

Read the rest of this story on CNNMoney.

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See more on CNNMoney: Inside a Meth Lab Cleanup

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Fleeing Passenger Leads Cops to Basement Meth Lab

 

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]]>Beth Hankins meth labJonathan Hankins meth labKlamath Falls Oregonliving in a meth labliving in a meth lab homemeth labmeth lab homesmeth labsCNNMoney2013-02-12T12:45:00 00:00