Smart Real Estate News & Commentary by Chris McLaughlin December 12, 2011
Forward this e-mail to your friends!
Then they can subscribe directly at the following link:
http://www.smartrealestatenews.com/
*** Join Chris’ Facebook Fan Page–>
http://www.mclaughlinchris.com
*** Follow Chris on Twitter–>
http://www.twitter.com/mclaughlinchris
************************************************************
NAR – housing and jobs are voters’ main concerns
A recent survey by Houselogic.com, the consumer website from the National Association of Realtors (NAR), finds that jobs and the housing market will be two of the most important issues for voters in the 2012 election. Nearly one-third of respondents said housing will be the top issue on their mind when they head to the polls next November. Respondents were asked “What issue area will have the greatest impact on your vote in 2012?” National security, healthcare, and energy/environment trailed housing and unemployment by wide margins. With unemployment still high, it is easy to see why so many Americans are concerned about the job market. However, employment and the housing market are inextricably linked because economic growth and job creation cannot occur without a housing recovery.
Housing accounts for more than 15% of the US. Gross Domestic Product – it’s a key driver of the national economy. Home sales generate jobs. NAR estimates that for every two homes sold, one job is created. New spending on homebuilding products, furniture, and other residential investments also have a significant economic impact. Some recent indicators show that the economy might be starting to rebound, with pending home sales rising strongly in October, according to NAR’s Pending Home Sales Index. However, any changes to current programs or incentives must not jeopardize a housing and economic recovery. Unemployment, consumer confidence and consumer spending will not rebound until a number of issues are addressed.
Shopping strong into December
For the week ending Dec. 9, consumers spent $5.9 billion online, up 15% from the same period a year earlier, according to comScore, which tracks Internet activity. E-commerce spending for the first 39 days of the 2011 holiday season reached $24.6 billion, also up 15% versus the corresponding days last year, comScore added. Earlier in the season, the day that has become known as ”Cyber Monday” saw a record $1.25 billion spent online in the United States, up 22% from last year. Other early season shopping days were also strong, with “Black Friday” e-commerce sales jumping 26% from a year ago. That sparked concern that sales could weaken later in the season, but so far that has not happened, comScore Chairman Gian Fulgoni said on Sunday. “These highlights represent another very positive sign for the holiday shopping season, as the week following ‘Cyber Week’ often experiences relative softness in spending momentum due to retailers pulling back on their promotional activity,” he said.
BOA develops rental program
Bank of America is looking at a new program to rent a home back to the borrower after foreclosure. “There are programs that we are quite interested in,” said Ron Sturzenegger, who leads the bank’s legacy asset servicing division. “We are talking with investors that would come in and buy these houses and would lease them back to who would now be the now tenant.” In February, BOA formed the division to handle the servicing for delinquent mortgages, loans no longer being written, and to sort out outstanding representation and warranty claims. Currently, more than 35,000 employees at the bank are sorting through 1.1 million loans 60 days delinquent or worse, according to its third-quarter financial statement. The Federal Housing Finance Agency (FHFA) is working on an REO rental program for Fannie Mae and Freddie Mac. It received more than 4,000 ideas on how to do it. But private banks own $50.4 billion worth of REO properties, too, according to the Federal Deposit Insurance Corp., and millions of these homes are sitting vacant. Sturzenegger described how their idea would work.
“We are looking at programs where you can capture somebody before the REO process and offer a deed-for-lease. We would go to the customer and say, ‘We’ll do a short sale. Will you be interested in leasing your property back? We’re still going to sell the property. You will no longer be the owner. But you can be a tenant now in that same property and save you from moving on,’” he said. Sturzenegger stressed the bank would still sell the REO as before in areas where there is a market for them and they can still get reasonable bids. But some areas are so saturated with inventory, there isn’t enough investor or homebuyer demand and properties can sit for years uninhabited. Rick Sharga, the executive vice president at Carrington Mortgage Holdings, said in an interview that many firms, including Carrington are preparing to participate. “We already have the infrastructure and assets in place to participate effectively,” he said. “Everyone is waiting on final direction from the FHFA.” Sturzenegger stressed the private program at BOA is in its infancy. “It’s in the very early stages,” he said.
US stocks down
US. stocks fell Monday after Moody’s Investors Service said last week’s European fiscal pact will not deter it from reconsidering the credit ratings of all European Union nations. The Dow Jones industrial average fell 170 points in the first hour of trading. The euro weakened against the dollar and the yields on Italian and Spanish government bonds rose as investors became more nervous about holding the debt of those countries. European stock indexes fell broadly. Moody’s said that last week’s summit of European leaders produced “few new measures” and that Europe’s financial crisis remains in a “critical and volatile stage.” The 17 nations that use the shared currency and the region in general remains “prone to further shocks and the cohesion of the euro under continued threat,” Moody’s said. As a result, the agency said it would still review the creditworthiness of European countries in the first three months of 2012. The warning from the credit rating agency deflated optimism about last week’s pact, which called for tougher fiscal discipline in countries the euro and greater oversight of national budgets by a central authority.
Hot markets to cool
Top real estate markets in the United States are beginning to cool down, according to Clear Capital, a provider of housing data and valuation services. The markets are still growing and improving, its latest report finds, but not at the rates seen in recent memory. “Even though as a whole, this group hasn’t experienced returns this low since June 2011, each of the 15 markets continued to post quarterly gains,” the Clear Capital report states. “The overall performance of the group has stabilized and tightened, with only 3.1% separating the highest performing market, Washington, D.C., from the 15th place market, Cleveland.” Four Florida markets — Orlando, Tampa, Jacksonville and Miami — continue to keep their positions among the highest performing markets quarter-over-quarter, rebounding from the steep drops and high levels of foreclosures they experienced over the past two years, the report states. According to Clear Capital, Orlando and Miami also show strong year-over-year performance, topping the list with 5.9% and 5.4% growth respectively. “The strong upward price movement for these Florida markets has correlated with a 12% drop in REO saturation over the last year at the state level,” the report says. “The growth in Florida’s MSAs must be described in proper perspective against the state’s precipitous -59.1% drop in prices from peak values in 2006 to today.” Atlanta is now the market feeling the most acute drop in housing. The city is down nearly 20% year-over-year and the REO saturation rate is reaching 43%, second only to Las Vegas and Detroit.
See you at the top!
Chris McLaughlin
**************
Copyright Loss Mitigation Institute LLC 2011.
All Rights Reserved.
http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches
http://www.smartrealestatenews.com
(subscribe to this newsletter)
*************************************************
About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 150 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!
* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Join my Facebook Fan Page: http://www.mclaughlinchris.com
