Housing market helped by low mortgage rates but hurt by high inventory

SACRAMENTO, CA – April 16, 2008 - According to a widely watched indicator of the health of America’s residential real estate market, the Standard & Poor’s Case-Shiller National Home Price Index, homes for sale in the United States fell more than 10% in value from June 30, 2006 to December 31, 2007.

Federal attempts to jump start the housing market

The Federal Reserve and Congress are attempting to jump start the housing market with low interest rates and legislative rescue proposals, but many market watchers say that time will be the only real cure.  The Federal Government is attempting to increase the size of the loans that Freddie Mac and Fannie Mae may purchase from mortgage issuers in order to allow these lenders a way to free up capital and re-lend it to other prospective home buyers.

According to Freddie Mac the average rate for a 30 year home mortgage loan is 5.88%.  A year ago the figure was 6.22%. Despite these attempts to help the housing sector there are reportedly 4.5 million homes for sale in the US in March of 2008.  This large inventory of homes for sale has roots in the large numbers of foreclosure houses that are owned by banks as real estate owned (REO).

Focus on California real estate

In California alone, according to RealtyTrac (see http://www.RealtyTrac.com), the number of homes in some stage of foreclosure proceedings increased more than 20% in March.  This figure represents approximately 65,000 houses or 1 in each 200 homes.

Another company that counsels homeowners facing foreclosure, TheHomeBuyingCenter.com (see http://www.TheHomeBuyingCenter.com), reported that they are receiving hundreds of requests for assistance every week from homeowners who are looking for a way to sell their house quickly.  Company president Patrick McGilvray said, “we help homeowners and home buyers nationwide who want to buy or sell a home by providing them with access to real estate investors eager to buy houses in their area as well as a complete range of real estate services such as agent referrals, foreclosure homes for buyers, and corporate relocation services.”

McGilvray commented that the central valley cities of California such as Stockton, Modesto, and Sacramento are still reeling under the strain of falling home prices.  He said that this is the result of unrealistic house prices that went to ‘absurd’ levels primarily because of the easy availability of adjustable rate mortgages and generally unrealistic housing prices that were not supported by people’s incomes.  “There is, unfortunately, more pain ahead for American homeowners, but we’re a strong country and will get through it.”

SACRAMENTO, Calif –OBSNews.com- April 8, 2008 – In the Sacramento Valley cities of Sacramento, Stockton, and Modesto many first time homebuyers are buying houses fast not from builders or homeowners, but rather from banks and other lenders who have foreclosed on a house. The Central Valley of California is one of the places hardest hit by foreclosures in the wake of the collapse of the US housing bubble, and consequently there are many thousands of homes for sale in the local real estate markets in the region.

For prospective home buyers looking to find a great deal on real estate in the Sacramento area the ticket can be a house that has been taken back by the lender.

“We help people buy and sell houses in our backyard and all across the nation. Many people come to our site because they want to buy a foreclosure house or sell their house to a real estate investor,” said Patrick McGilvray, J.D., president of Sacramento-based www.TheHomeBuyingCenter.com. “There are some important things to watch out for though when buying or selling houses in this kind of market. It’s important to have experts on your team who know the local market and can help you avoid some pitfalls.”

The subprime mortgage crisis is nearing its end say some experts but mortgages are still hard to come by for borrowers who don’t have great credit scores. But, for credit worthy borrowers now is a great time to buy.

SACRAMENTO, CA –OBSNews.com April 8, 2008 - People looking to buy or sell real estate in Sacramento, California and across the nation are looking for deals and banks and other lenders are often the place to look. Bank owned homes, also known as REOs are coming on the market in record numbers and prospective homebuyers are sometimes having to bid higher on properties just to buy a house. This is reminiscent of the housing market in California’s Central Valley years ago.

Real estate investors are buying houses again in the Sacramento Valley because prices have fallen significantly from their peak in 2006. While many prospective homebuyers are having trouble qualifying for loans there is still an increase in home sales in many parts of the region.

“One of the greatest things about our company is that we’re a nationwide network of real estate investors who still say, “we buy houses” but we’re also a resource for home buyers who want great deals on foreclosure houses either from investors directly or from banks,” said Patrick McGilvray, president of Sacramento real estate solutions company, www.TheHomeBuyingCenter.com. Our investors across the nation report that in many areas they feel prices have hit bottom and they are actively buying to hold or to resell to first time homebuyers.

The housing market may, as a whole, have somewhat further to fall in terms of average house prices, but there is considerable good news for buyers who want to find discounted houses to buy for the long term. The key in this market, say real estate experts like McGilvray, is to get prequalified for a loan, preferably a government FHA loan or other type loan that has a fixed interest rate. Once that step has been taken there are plenty of deals for the savvy buyer.

While safer than buying a foreclosed house off the courthouse steps, bank-owned properties don’t come without risks.'’This is not an armchair or couch potato job. This is a big time commitment. If you want to beat the bank, you need people on your side,'’ said Ralph Roberts, founder of a Detroit-area brokerage Ralph Roberts Realty, and co-author of the book Foreclosure Investing for Dummies.

A few tips from the pro:

Hire a real estate agent: She can help determine if the property is a good deal for the neighborhood given what nearby houses are selling for and she can help put together your offer.

Have a real estate attorney on hand: You’ll need a professional to wade through the sales contract and state-specific regulations. For example, some states — including foreclosure-ridden Michigan — have a redemption period that allows the original owner to satisfy his debt and take back the home during a specified period after a foreclosure.

Get a home inspection: Most lenders won’t do repairs themselves but may give a little on the price.

Ask for a warranty deed: It guarantees that the lender is passing a clear title onto you. If you receive a quick claim or specialty warranty deed, look up public records to see if there are any outstanding building code violations or liens, such as federal and state tax liens, on the property.

Get title insurance: This is to protect yourself. Remember, title insurance only covers what you paid for the property, so increase it if you put money into the house for renovations.

Get pre-approval for a mortgage before putting in an offer: Often, the lender is willing to arrange financing, but it’s not required. Roberts prefers borrowing to an all-cash deal. ‘’That way you have another pair of eyes, your lender, examining the property,'’ he said.

Buy A Foreclosure from TheHomeBuyingCenter.com

Help is available for residents who are in danger of losing their homes to foreclosure, according to a group of community leaders and elected officials working together to curb the number of home foreclosures in Fairfield County.The number of foreclosures has increased more than sevenfold since 1995, when 110 foreclosures were reported in Fairfield County. The number could top 1,000 in 2008, according to local social service providers.

The rising tide of foreclosures in Fairfield County is spurring one area group to take action to prevent more people from losing their homes. However, its members say they need others in the community to mobilize in support of that effort.

“It’s a community problem so it should be a community response,” said Sherry Orlando, who serves as executive director of the United Way of Fairfield County.

She also is a member of the Fairfield County Housing Coalition, which is committed to assisting individuals and families who become homeless or are at risk of becoming homeless.

The coalition recently joined with the state treasurer’s office to establish the Save Our Homes Task Force to help leverage local resources for troubled homeowners and identify viable solutions to the foreclosure crisis.

The task force’s first meeting is set for 9 a.m. Thursday.

The home foreclosure crisis is “something that we need to look at,” said Donna Fox-Moore, housing director for Lancaster-Fairfield Community Action.”

This is our opportunity to look at this on the local level, and we are trying to bring (together) leaders and people in the community who are concerned about this issue at this meeting.”

SOH is the brainchild of Ohio Treasurer Richard Cordray, who formed the task force in neighboring Franklin County about three years ago while still serving as county treasurer.

“There was an up-tick in the number of taxpayers who were behind on their property taxes,” said Cordray, who estimates the number of home foreclosures in Franklin County increased 50 to 100 percent during his tenure as county treasurer.

Similar task forces now exist in about half of the state’s 88 counties.

The Federal Reserve System on Tuesday said it was offering online maps that illustrate subprime and near-prime mortgage loan conditions across the United States, and show “existing and potential foreclosure hotspots”.

The maps, available at www.newyorkfed.org/mortgagemaps/, display regional variation in the condition of securitized, owner-occupied subprime and Alt-A mortgage loans.

“This may assist community groups which can mobilize resources to bring financial counseling and other resources to at-risk homeowners,” the Fed said in a statement. “Policymakers can also use the maps and data to develop plans to lessen the direct and spillover impacts that delinquencies and foreclosures may have on local economies.”

The maps allow Internet users to search state, counties and most zip codes for information such as foreclosures per 1,000 housing units, share of loans that are more than 90 days past due, the share of adjustable rate mortgages with an initial reset in the next 12 months and share of loans with low credit scores or high loan-to-value ratios.