Real Estate News from the We Buy Houses Team

NEW YORK - A widely watched index released Tuesday showed home prices dropping by the sharpest rate ever in the second quarter, but the data for June suggest the severity of the housing slump may be waning.

The Standard & Poor’s/Case-Shiller U.S. National Home Price Index tumbled a record 15.4 percent during the quarter from the same period a year ago.

The monthly indices also clocked in record declines. The 20-city index fell by 15.9 percent in June compared with a year ago, the largest drop since its inception in 2000. The 10-city index plunged 17 percent, its biggest decline in its 21-year history.However, the rate of single-family home price declines slowed from May to June, a possible silver lining, the index creators said.

“While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level” said David M. Blitzer, chairman of the index committee at S&P.

Fourteen cities in the monthly index showed improvement from May to June; nine recorded positive returns.

The index’s glimmer of hope follows another surprisingly positive housing headline on Monday. Existing home sales rose in July, surpassing expectations, as buyers snatched up cheap distressed properties in the hardest hit housing markets.

Still, on a year-over-year basis, no city in the Case-Shiller 20-city index saw price gains in June, the third straight month that’s happened.

Real Estate News from the We Buy Houses Team 

Have you ever walked into a beautifully decorated model home and been captivated by it? Did you find yourself dreaming of bathing in that spa-like bathroom, cooking meals in the gourmet kitchen or curling up with a book in that luxurious reading nook? If so, then you have been the successful target of the secret weapon called staging.  

As a real estate agent, you know that staging your real estate listings will result in a faster and more profitable sale, but who can you trust to manage this important process for you.

You want the best possible price for your home, but do not want to pay more than your return to achieve this. You need expert and objective home staging guidance that comes from experience and a highly trained eye in order to compete in a buyers market. What you seek is the experience of an Accredited Staging Professional^TM (ASP^TM).

Staging can entail simple tasks like removing clutter. Clutter eats equity. Stagers aren’t maids or house-cleaners; they don’t do repairs or paint. Rather they create a neutral, harmonious, spacious, and beautiful environment. They often set tables for dinner so that a prospective buyer can envision themselves in the property having a family dinner.

Think of staging like detailing a car. A smart auto seller would detail a car before selling it to add value. That’s precisely what staging can do for a house. I think that staging helps; it makes the property stand out. In turn, good staging can determine which properties sell fast and which do not. It is no longer a market where staging helps the property sell for more. In today’s market, it enables the property to have more potential of selling at all. It’s a buyer’s market, so make your home stand out by creating a sophisticated ambiance.

While some sellers may be hesitant to spend more money on staging in a down market, this is the winning way to get a property sold; and often for a higher asking price.

Professional stagers can see your house as buyers will, and they’ll set the scene so that buyers can imagine living there. They’re likely to simplify or streamline the furniture in a room for better traffic flow and to enhance its spaciousness. They may neutralize a too-personal color scheme or add touches of color or accessories where needed. In vacant homes that feel cold and lack visual landmarks, stagers often bring in rental furniture to create warmth. This helps Buyers mentally move in and feel that when it’s time for them to move in, thy will be able to kick back and relax.

Agents and sellers can hire stagers by the hour or the room. Homeowners typically pay from $200 to $3,000 depending on the level of service required. But the pay-off in time saved and higher sales price can be nice. If all your listings looked like model homes, do you think you’d have an easier time selling them? And do you think they might command a higher selling price? Statistics show this to be true.

Buying a house is largely an emotional decision because people are not just purchasing a home; they are buying a dream … a lifestyle. If you can help them with their vision so they don’t have to rely completely on their imagination, you positively impact how they feel in the home, which will be reflected in the sales price and number of offers you receive. All human beings want comfort, excitement, prestige and love, and all these are at work in the psychology of the home purchase. Effective staging maximizes those feelings, creating an atmosphere that makes people want to linger and imagine themselves living in the space. Ultimately, staging creates a home the prospective buyer will not be able to live without.

People today have busy lives, they want to walk in and look at a home and say, “This is mine. I can move into this home without doing anything.”

Real Estate News from the We Buy Houses Team 

Here’s how a top mortgage industry economist sees conditions in the market at the moment: It’s all kind of “flat”, says Orawin, senior forecast economist for the Mortgage Bankers Association of America.

What Dr. Velz was referring to were the latest big-picture, “macro” numbers on the U.S. economy that underpin the housing market: The gross domestic product or GDP — all the goods and services generated in the national economy — registered a zero point six (0.6) growth rate in the first quarter.

No question that’s pretty anemic. But it’s better than the negative growth predictions that had been made by many Wall Street analysts.

In the latest month, manufacturing production was better than just about anybody expected — factory orders jumped by 1.4 percent in March. No big deal you say? Well maybe, but it was the first increase in factory orders we’ve seen in the last three months.

The employment picture was also better than projected. The US economy lost 20,000 jobs in the most recent month, which is not good. But Wall Street had forecast an 80,000 job loss number — and the stock market took a nice bounce on the news of the smaller loss.

Plus, the national unemployment rate dropped to 5 percent from 5.1 percent.

On top of all this, the Federal Reserve did precisely what most analysts expected — cut the short-term federal funds rate by another quarter of a point.

Now that doesn’t translate into lower 30-year mortgage rates, but it is very welcome news for millions of people with home equity credit lines and adjustable-rate mortgages heading for payment resets.

The fed funds rate is now at 2 percent, and the prime bank rate is just 5 percent - which is outstanding — and should eventually have a stimulative effect throughout the economy.

Mortgage rates also fell slightly last week. Average thirty year rates inched downward to 6.01 percent, according to the Mortgage Bankers, and 15 year rates averaged 5.5 percent.

All in all, things could be worse. And they could be better. We are all paying horrendous gas and food prices and that psychology diminishes consumers’ appetites to buy and sell houses.

On the other hand, the underlying US economy is defying the pundits, hanging in there like a boxer who refuses to go down. Home prices and the cost of money are more affordable, and a number of local real estate markets are picking up on that combination — and improving.

Real Estate News from the We Buy Houses Team 

This is part three of a series triggered by a Maryland borrower who got a 100% stated-income loan for the purchase of his primary residence and less than one year later, he can not afford the monthly payments. He is a wage earner and his debt-to-income ratio is 75%, meaning 75% of his monthly income pays his debts. Unaware of his tax rate and with a lender who does not escrow property taxes, he has to pay income taxes, property taxes and the normal expenses of living on the remaining 25% of his income. It is time he meet with a Foreclosure Consultant.)

Though this column specifically addresses Maryland foreclosure laws, the advice is relevant to all regions.

Former Maryland Governor Robert Ehrlich signed the Maryland Protection of Homeowners in Foreclosure Act in 2006 specifically to protect homeowners facing foreclosure. This law was passed after a mother of four and wife of a state trooper, who was killed on duty, faced foreclosure. An investor told her that he would help her save her house by buying it from her at a discounted price and renting it back to her until she could buy it back from him. As soon as he bought the house, he asked her when she was moving. She incurred significant legal costs but lost her legal battle.

The law specifically creates the designation of foreclosure consultant and specifies certain types of documentation and other requirements the foreclosure consultant must adhere to. According to Edith Smith, a realtor with Keller Williams Capitol Properties, it also requires homeowners to use foreclosure consultants to determine if there is a workable solution with the lender or if the house must be sold.

According to www.marylandforeclosureconsultants.org, the Web site of the Maryland Association of Professional Foreclosure Consultants (MAPFC), “(t)he foreclosure consultant is defined not by his title or training, but by his actions. Homeowners facing foreclosure face a daily barrage of phone calls, letters, post cards, and knocks on the door from buyers who don’t know they are foreclosure consultants, individuals who call themselves foreclosure consultants but have little or no training or experience, scam artists who want to take advantage of vulnerable homeowners, and those who are trained and have experience helping homeowners facing foreclosure.  The problem, until now, is that the homeowner does not have a means of differentiating between experienced, educated, and reputable foreclosure consultants and the rest of people marketing to them.” The MAPFC now offers a six month Foreclosure Consultant certification program, with a focus on the law and ethics.

According to Smith, a foreclosure consultant would first meet with the homeowner to determine if the property can be saved through a forbearance agreement or loan modification with the lender. If the homeowner’s debt-to-income ratio is above 60%, the home must be sold. While the homeowner can work out a forbearance agreement or loan modification without the help of a foreclosure consultant, the foreclosure consultant may be able to negotiate better terms with the lender. “But if the homeowner fails to pay according to the new terms, the home goes straight into foreclosure,” cautioned Smith.

In the case of my questioner, his debt-to-income ratio is too high to qualify for a forbearance agreement or loan modification. Since there is no equity in the home, and sellers in this market generally pay seller concessions plus the standard transfer taxes and real estate commissions, the lender would have to agree to a short sale, meaning that the property will be sold for less than the amount owed.

“The bank can pursue a deficiency judgment against the home owner, meaning the homeowner would be financially responsible for the unpaid balance of the loan; it can do nothing; or it can ‘1099′ the home owner, meaning that the unpaid balance is considered as taxable income by the IRS (and reported as such by the bank),” said Smith. In the case of the questioner, he owes $454,000. The house also has a current appraisal value of $454,000. Say he accepted a purchase offer of $425,000, and on top of that paid a six percent commission to the realtors involved plus paid for three percent of the buyer’s closing costs. In that case, the bank would receive a total of $386,750 and the questioner could be pursued by the lender for a deficiency of $67,250 or have that amount reported to the IRS by the lender as taxable income.

“Home owners facing foreclosure must be careful in choosing who they work with. A homeowner should never pay (anyone offering to help them) for anything in advance. … In the case of a loan forbearance agreement or loan modification, that means that no charges should be paid until the bank responds to the offer,” emphasized Smith.

Just as with appraisers and home inspectors - training, certification, and membership in an association at least provide some level of accountability that otherwise would not exist.

Real Estate News from the We Buy Houses Team

Existing-home sales in the Northeast were down nearly 12 percent last month when compared with July 2007, according to the latest figures from the National Association of Realtors. At the same time, the median sale price, or midpoint price, was $278,700, which is about 5 percent lower than the year-ago period.

The regional numbers were slightly better than the national numbers, which showed existing-home sales fell just over 13 percent from July 2007. The national median sale price fell about 7 percent, to $212,400, from a year ago.

In releasing the latest figures, NAR officials said they hope the recent federal housing bailout bill will provide the “tools” needed to help some buyers get into the market.

“We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” stated NAR president Richard F. Gaylord, a California broker. “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”

Foreclosure foresight
And did you see the story in yesterday’s Los Angeles Times reporting that FBI officials predicted a rise in mortgage fraud –- in September 2004?

The paper reported:

“It has the potential to be an epidemic,” Chris Swecker, the FBI official in charge of criminal investigations, told reporters in September 2004. But, he added reassuringly, the FBI was on the case. “We think we can prevent a problem that could have as much impact as the S&L crisis,” he said.

Well, apparently FBI investigators didn’t get additional help they requested because many of the agency’s resources were focused on fighting the war on terror. So, only about 100 agents delved into mortgage fraud. The Times reported that the agency had about 1,000 agents working on the S&L failure in the 1980s.

It was a little disconcerting to read that news the same day the Mortgage Asset Research Institute –- which sells services aimed at preventing mortgage fraud to mortgage lenders –- said that incidents of mortgage fraud reported by its subscribers were up 42 percent in the first quarter.

Florida was the state with the highest number of fraud cases and “general application misrepresentation” seemed to be the most popular type of fraud, according to MARI.

However, the report didn’t indicate whether borrowers or loan officers perpetrated the frauds.

There’s lots to think about today, like whether the “housing stimulus package,” as the NAR dubs it, will really jump-start sales, or whether the FBI could have prevented the total meltdown of the mortgage market if it had just had a few more resources? What do you think?

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Real Estate News from the We Buy Houses Team

Though home prices continued to fall in July, there are growing signs that — in some regions at least — the market may be stabilizing as lower prices lure some buyers off the sidelines. But a broad housing recovery faces stiff headwinds in the form of rising unemployment, tighter credit for borrowers and a huge inventory of unsold homes.

The widely watched Standard & Poor’s/Case-Shiller national home price index fell by a record 15.4 percent during the second quarter compared to the same period a year ago.

Still, the report offered a glimmer of hope that the slide in home prices may be easing: The rate of price drops slowed from May to June, and regional price data showed that nine of the 20 cities tracked by the index posted slight month-to-month gains.

“If you look at the year-over-year numbers they are still going down but not accelerating to the downside quite as much as they had been in a number of cities,” said David Blitzer, chairman of the index committee at Standard & Poor’s. “So we are seeing hints of bottoms.”

Other housing news this week also gave reason for cautious optimism. Sales of new homes posted an unexpected gain of 2.4 percent in July, and sales of existing homes rose 3.1 percent, more than expected.

But in both cases, the reports were mixed. Median prices for existing homes are still falling, and the number of unsold homes on the market hit an all-time high.

“The question is ‘Where is the economy going?’” said Robert Brusca, chief economist at Fact and Opinion Economics. “If the economy gets weaker, this stability we see in housing will give way and we’ll get traditionally weakness in housing that will come from the economy itself. So we have to be concerned about that.”

Even the usually optimistic White House was extremely cautious in its reaction.
“The data today paint a mixed picture, but it’s clear it will still take some time to work through the downturn in housing,” White House spokesman Tony Fratto said in Crawford, Texas, where President Bush was spending time at his ranch. “Once housing prices stabilize that will signal a return to a housing industry that can contribute to economic growth.”

Like discounted merchandise in a department store, lower home prices should eventually spur sales. Buyers who were priced out of the market during the peak of the housing boom have a better shot at homeownership as prices fall.

The national “affordability index” — which tracks incomes, mortgage rates and home prices —fell a bit in July, meaning houses became a bit less affordable, mainly due to rising mortgage rates. But overall, homes are generally more affordable than they were at the height of the boom.

The recovery in the housing market is being slowed by the availability of credit, now that lenders have substantially tightened up guidelines on approving loans. The supply of mortgage money has also been crimped as the two government-sponsored mortgage finance companies, Fannie Mae and Freddie Mac, struggle to cope with mounting losses from foreclosures.

The heavy pace of foreclosures has also been a major force pushing home prices lower, as lenders aggressively price their backlogs of repossessed real estate, hoping to unload them before prices fall further. Once the pace of foreclosures begins leveling off, the pressure on prices will ease.

“I anticipate seeing price support probably sometime in the first or second quarter of next year when the foreclosure market stabilizes back to more normal numbers,” Damian Kassab, CEO of Warren Bank in Clinton, Mich., said on CNBC.

Foreclosure filings continued to rise in July — up 8 percent from June and 55 percent higher than last July. Last month, the White House signed housing legislation designed to head off foreclosures by allowing an estimated 400,000 homeowners swap their mortgages for more affordable loans.

But homeowners can only participate if their lender agrees to take a loss on the loan. Even if the plan works as intended, some 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage’s value by the end of next year, according to estimates by Moody’s Economy.com.

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A Foreclosure is an attempt by the lender to seize the property of the mortgagee in default to his payments. The reason could be your financial shortfall that will force you to face foreclosure. It is a true fact that when people face foreclosure, many of the companies claiming to assist them do nothing. As the number of foreclosures has risen so has the number of foreclosure scams.

Foreclosures are on the rise everywhere because of the mortgage companies that are so generous in lending. This has made easier for people to buy a home or property. Many people buy property with a hope that they would make more money later and afford to pay of their debts. But, unfortunately they fail to make payments and finally face foreclosure.

Do you think it is difficult to stop foreclosure? Not at all. If you are really looking out for a solution to stop foreclosure then you must act immediately. If you ignore this it is sure that you cannot resolve foreclosure at early stages. Find a solution that will give a new perspective to your life.

It is very unfortunate when you lose your home to foreclosure. Finding out the best possible method to save your home or property from foreclosure is the first thing you need to concentrate on. You can always contact your lender and come out with a solution to your situation. Turn to a foreclosure counselor for assistance. You can follow the strategies provided by them. You can refer books that gives vital information which will help you to know the inside secrets of foreclosures. If you are prepared in advance, you will greatly improve your chances of surviving from foreclosure.

Internet has provided the opportunity to aid you in foreclosure. You can find many websites that offer foreclosure solutions at ease. Know your options that you need and get educated about foreclosure.

Sometimes, foreclosure can happen to anybody without any fault of their own. Find the right solution to resolve foreclosure by taking immediate action. Develop the ability to make timely decisions and save your home and property. Take necessary steps immediately when trouble arises. You can always attempt to survive a foreclosure instead of predicting your future. You need to act quickly before you suffer the devastating effects of foreclosure to save your property. Negotiate reasonable foreclosure help plan and avoid foreclosure at an early stage.

Among Maricopa County cities, Tolleson led with the largest percentage increase in foreclosures and pre-foreclosures during the first half of this year compared with the same period in 2007.

Foreclosures in Tolleson were more than 600 percent higher while more than 300 percent more foreclosure notices were handed out. There were 352 foreclosures in Tolleson from January through June, compared with 46 for the same time last year.

After Tolleson, Litchfield Park had the next-highest percentage increase in foreclosures, and Queen Creek had the second-highest percentage increase in foreclosure notices.

In sheer numbers, Phoenix had the most foreclosures in the first half of this year, with 5,872, compared with 926 for the same months in 2007.

Television celebrity Ed McMahon has finally found a buyer for his multimillion-dollar Beverly Hills mansion, avoiding a foreclosure that would have made him among the most high-profile victims of the U.S. housing slump.The buyer of the six-bedroom, five-bathroom home was not disclosed, but McMahon spokesman Howard Bragman said on Friday it was not billionaire Donald Trump. The New York developer had said last week he was in discussions to buy the house and lease it back to McMahon after widespread publicity about the celebrity’s default on his $4.8 million mortgage.

“It’s a confidential deal, and the buyer wants anonymity, but I can tell you it is not Mr. Trump — and it’s not John McCain,” Bragman said, joking about the Republican presidential hopeful’s admission this week that he did not know how many houses he and his wife own.

McMahon, 85, famous for his “Heeeeeeere’s Johnny” introduction to “The Tonight Show” star Johnny Carson for 30 years and for hosting the TV talent show “Star Search,” has been trying to sell the house, valued at $5.75 million in June, for about two years.

His mortgage lenders filed notice of default in February, when McMahon was about $644,000 in arrears. He has blamed his financial problems on having broken his neck about 18 months ago, preventing him from working.

McMahon’s foreclosure problems highlighted the extent of the U.S. housing downturn and credit squeeze that has seen hundreds of thousands of less affluent Americans lose their homes.

According to figures from property tracking company RealtyTrac, one on every 464 U.S. households received a foreclosure filing in July — a 55 percent increase from July 2007.

Those waiting for the lagging housing market to rebound were disappointed yesterday, as MDA DataQuick reported that 2,004 San Diego County homes went into foreclosure in July, a 9 percent increase over the previous month and a spike of nearly 213 percent over last year.

The July tally of mortgage failures was a record since DataQuick began tracking foreclosures in 1988. It was the county’s 40th consecutive month of year-over-year increases in both foreclosures and notices of default, the start of the foreclosure process.

Default notices totaled 3,006 last month, a drop of 2.5 percent from June, but an increase of 81 percent from a year earlier. Alan Gin, economist for the Burnham-Moores Center for Real Estate at the University of San Diego, said it is too soon to know whether the small monthly drop foreshadows an improvement in the marketplace.

“We need to see many more months before we can say it’s a trend,” Gin said. “Prices are going down. A lot of people find it easier to walk away from their mortgages than fighting to stay in the house.”

A weakened economy and tight credit are preventing more buyers from entering the housing market, said Mark Goldman, a real estate finance instructor at San Diego State University.

“Foreclosures roar on,” Goldman said. “What will turn real estate around is the ability of people to pay more for their houses. That won’t happen for a while. The middle class is losing ground at an unprecedented rate.”

Around the county, the foreclosure problem “continues to be felt most acutely in certain inland neighborhoods in South, East and North County,” DataQuick analyst Andrew LePage said.

Ranked by foreclosures per 1,000 homes, the communities with the most default activity in July were southeast Chula Vista, Paradise Hills, northeast Chula Vista, east Escondido, San Ysidro and the 91913 ZIP code, which includes much of Eastlake and Otay Ranch.

Economists say the larger-than-expected rise in July U.S. existing home sales doesn’t necessarily point towards stabilization, since more than a third of the sales are related to foreclosures. They also note that a record high inventory level will put downward pressure on prices going forward.The annualized pace of sales in the National Association of Realtors index rose 3.1% to 5.00 million units in July, following June’s revised sales pace of 4.85 million. Since July 2007, existing home sales have declined by 13.2%.

Ian Shepherdson, chief U.S. economist at HFE, said it’s “hard to avoid the conclusion that sales have bottomed out,” but he said it’s likely that sales have increased from homes in foreclosure rather than a pickup in the regular sales market.

“Any real improvement is still a long way off,” he added.

Total housing inventories rose to a record-high 11.2-month supply in July, up from the 11.1-month supply in June.

Lawrence Yun, NAR chief economist, said home prices in some regions may be at a bottom. “Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time,” he said.

Other economists were less optimistic, however.

Paul Ashworth, senior U.S. economist at Capital Economics, said that “while a stabilization in sales might normally be considered a positive development for home values, the surge in distressed sales suggests that the downward pressure on house prices is only getting stronger.”

He noted that industry estimates suggest up to 40% of current sales are related to homes in foreclosure.

John Ryding and Conrad DeQuadros from RDQ added, “Over the next few quarters, foreclosure sales are likely to comprise an increasing proportion of home sales, which should put further downward pressure on home prices.”

Single-family unit sales rose 3.1% to a pace of 4.39 million, down from a rate of 4.26 million in the previous month. The supply of single-family homes dropped to 10.6 months from 11.0 months in the prior report.

On the trading floor take, Sirren Hajj of Calyon Cr?dit Agricole CIB said the market reaction was muted.

“Fundamentals in the housing market remain weak as oversupply, falling prices, and tighter lending standards continue to weigh on home sales,” he added, saying stabilization won’t take place “until well into 2009.”

The national median existing home price fell to $212,400 in July, down from the June figure of $215,100 and marking a 7.1% year-over-year decline.

According to Freddie Mac, the national average for a 30-year fixed-rate mortgage rose to 6.43% in July from 6.32% in June; the rate was 6.70% in July 2007.

Interest rates are often considered the biggest factor in the economy to influence existing home sales. It’s said that a percentage point increase in mortgage rates can reduce the pace of sales by 250,000.

Regionally, existing home sales moved up in three of the four regions. Sales in the West jumped 9.7% in July, while sales in the Northeast rose 5.9% to an annual pace of 900,000. Sales in the Midwest increased 0.9% to an annual rate of 1.12 million, while in the South, existing home sales slipped 0.5% to an annual pace of 1.85 million.

NEW YORK: Roc-A-Fella Records company co-founder Damon Dash and his wife are in jeopardy of losing two of their Manhattan apartments after apparently failing to pay their hefty mortgages.

The bank holding the mortgages says in a court filing Dash and Rachel Roy owe $7.3 million on the properties and it has begun foreclosure proceedings.

Eastern Savings Bank says Dash and Roy were supposed to make monthly payments of $78,500.

Efforts to contact Dash’s lawyer and publicist by phone and e-mail have been unsuccessful.

Dash is the estranged business partner of rapper Jay-Z.

For every home that sold in the first half of the year, 10 more would-be sellers in the Baltimore metro area were wishing, waiting, hoping.

With credit and economic woes weighing on buyers, that figure is twice as high as normal. And it’s night and day compared with the peak of the buying frenzy three years ago.

Sales dropped substantially in all but a handful of communities in the metro area, according to a Baltimore Sun analysis of ZIP code data for the first six months of the year vs. the corresponding period last year. The number of homes changing hands in the city and five surrounding counties hit its lowest point since at least 2000, as far back as records for January through June go.

Sellers are feeling the squeeze. Average sale prices fell in three-quarters of the region’s ZIP codes. Half showed price declines of at least 5 percent.

Rob Hruz Jr., a local real estate investor and appraiser, took a hit on a property in Baltimore’s Northwood neighborhood. After rehabbing it inside and out - adding a four-car parking pad, among other amenities - he had to drop his asking price of $199,000 more than 10 percent to sell.

“I’m breaking even,” said Hruz, who worked with a partner on that deal, scheduled to close at the end of the month. “When we bought it, we were going to make twenty to thirty thousand dollars.”

A clear picture on where home values stand - let alone where they’re headed - is proving elusive. Averages are being skewed, both down and up, by the sharp change in the types of homes selling this year. High-end homes are languishing on the market in many parts of the Baltimore suburbs now while less expensive homes find buyers. The reverse is true in the city, which has seen an unusually large drop in sales of homes under $250,000 - a result economists blame on the subprime lending implosion.

The bottom line, at least, isn’t hard to see, said Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic and policy consulting firm. “This housing market remains in bad shape,” he said.

On the other hand, it could be worse. Las Vegas has 17 homes on the market for every one that sells rather than Baltimore’s 10, said Kenneth Wenhold, Mid-Atlantic regional director for the real estate information firm Metrostudy. South Florida has 27. Both are among the slump’s hardest-hit areas.

The Baltimore Sun analysis used sales data for Baltimore City and the counties of Anne Arundel, Baltimore, Carroll, Harford and Howard from Metropolitan Regional Information Systems Inc., which runs the local multiple listing service. To cut down on apples-to-oranges comparisons, the analysis does not include ZIP codes with fewer than 10 sales.

The numbers show a sharp change since the peak of buying three years ago. Sales have dropped by at least half in one out of three communities in the metro area. Average sale prices are down in one out of five communities compared with 2005.

Moody’s Economy.com believes more drops are coming. Chief economist Mark Zandi - whose figures show prices declining 5 percent in the metro area since the start of 2007 - expects prices to fall 14 percent more by the time the local market bottoms out, probably at the end of next year. That’s not as sharp a loss as he sees for the nation overall. But he warns that the pain will likely take months longer to play out here.

“Home sales in the area are down more than in many other parts of the country because sellers are hanging tough,” Zandi said. “But ultimately I think they’re going to have to give up and start cutting price.”

That spells trouble for people who bought within the last few years and are trying to sell now. Already, close to 10 million U.S. homeowners - almost 20 percent of those with mortgages - owe more than their homes are worth, according to Economy.com. An increasing number of local residents are trying to do “short sales,” in which their lenders let the homes go for less than the mortgage but forgive the difference in hopes of avoiding a more costly foreclosure.

“Right now, the short sales and foreclosures are a large part of our inventory,” said Cathy Werner, president of the Greater Baltimore Board of Realtors and broker of ReMax American Dream.

How large is hard to say. Investment bank Barclays Capital estimated last month that 10 percent of home sales in Maryland are foreclosures, up from 1 1/2 percent a year ago. But that doesn’t include people trying to sell to avoid foreclosure.

As distress sales mount, prices are further pressured, economists warn. These transactions are also far more complicated for both buyer and seller.

“When you go to a bank and say, ‘I’m listing a property for a [borrower in trouble], they basically say, ‘Well, send us the offers - we can’t say what we’ll accept,’” said Keith L. Cross, a Century 21 Downtown agent who has represented people trying to sell and buy via short sale. “I’ve never experienced getting a counteroffer from a bank, either. They either say yes or no. If it’s no, you have to play guesswork and figure out what they will take.”

That’s bad for sellers, even those who aren’t having mortgage troubles. More homes on the market means more homeowners competing for buyers.

Christine McDonough and her husband, David, think they got a better deal on the four-bedroom Colonial in Baldwin they bought last month in the $400,000s than they would have two years ago - perhaps $30,000 to $50,000 better. Transplants from Florida, they rented for those two years in Baltimore to get to know the market.

Henrique Fernandes fell in love with the three-story red house with large rooms and an expansive backyard. The Cape Verdean immigrant envisioned his children running outside to play and his extended family celebrating holidays together.

It didn’t matter that the home sits on Hendry Street, a narrow avenue in Dorchester with boarded-up buildings, a neighborhood that has become notorious as the epicenter of Boston’s foreclosure crisis.

“I see a beautiful thing that has been mistreated,” Fernandes said about the two-family house, which he bought in April and is renovating down to the studs. “We determine what is going to be better for us. It is good people who make the neighborhood.”

As devastating as it has been for families who have lost their homes, the foreclosure epidemic has presented an unusual opportunity for a small but growing group of buyers previously priced out of Boston’s real estate market. Fernandes, for example, got his building for $271,500, just two years after the prior owner agreed to pay $540,000 for it.

Immigrants and other property pioneers have long been a force in reviving downtrodden neighborhoods. But their purchases of foreclosed and abandoned properties are particularly crucial now because these new homeowners are key to stabilizing neighborhoods racked by the mortgage crisis.

Government agencies and nonprofits are revving up rescue plans, but housing specialists say private buyers - new homeowners - are critical to reviving neighborhoods, because they have so much invested in their property.

“It is the quickest way to get this mess cleared up,” said Karl Case, an economics professor at Wellesley College and cofounder of the S&P Case-Shiller home price index. “You need people to buy the property and fix it up and move back. It’s the way the market works its wonders.”

Purchases of foreclosed homes in Boston jumped to 193 during the first six months of this year, from 37 during the same period last year, according to a real estate data provider, the Warren Group.

Statewide, there were 2,181 sales in the first half, nearly five times the number in the year-earlier period.

Warren Group analysts said the increase may be overstated because their data had not always tracked the sale of homes that lenders had seized from prior owners.

Added Case: “More people are buying than I had noticed. That’s a good thing.”

Some of these properties have been bought by investors. Housing activists worry about speculators flipping homes without investing in the neighborhoods. But outside owners can also help.

“If they fix it and maintain it and contribute to the quality of life of the neighborhood, that is fine,” said David Price, executive director of Nuestra Comunidad Development Corporation, a nonprofit community developer in Roxbury. “We need more investment in the neighborhood, and it is important it happen fast. . . . Hopefully this is a sign we are now at the bottom and people are starting to buy.”

A Dorchester real estate attorney, Nina Nguyen, has seen two types of buyers: investors and first-time homebuyers. “Savvy real estate investors have money and now it is a great opportunity for them to buy,” Nguyen said.

Atria Horton was not going to let a troubled neighborhood scare her away from buying her first home. The 50-year-old nursing assistant and foster mother visited 250 properties before choosing her three-bedroom house on Dacia Street, another Roxbury neighborhood plagued with abandoned homes. Horton said the house required less work than others she visited. It wasn’t in foreclosure, but the house was close to being seized by the lender. The previous owner had died, with two loans on the property for $124,000.

Last year, she bought the house for $162,914 after completing a first-time homebuyer class run by the city. She had help buying it, too, with a small loan from a state housing agency, in addition to the $142,000 she borrowed from a lender.

“This is what I’ve been working for all my life. And it’s mine,” Horton said.

A few blocks away on Balfour Street, Jose Cruz paid $255,000 in cash for a three-decker in April and invested $175,000 in rehabbing the apartments. He rented the units and says neighbors have congratulated him for his work. “The whole neighborhood is going to be better,” Cruz said.

The building’s previous owner bought it for $400,000 in December 2006 and financed the entire amount with two mortgages - a so-called 80/20 loan package that was popular during the boom years and is considered responsible for many foreclosures.

Those kinds of mortgages are now much harder to get. And while some buyers are borrowing the full value of the property - or more - they’re getting homes at much cheaper prices than the prior owners paid.

Hendry Street has been the site of an intensive effort by the city. Last week, the Menino administration chose a developer to purchase and rehabilitate four foreclosed three-deckers on the street. City officials have also been trying to get private buyers to move into the neighborhood, by organizing a trolley tour in May and holding a seminar to help potential owners learn about the benefits and risks of buying foreclosed properties.

The city is also helping buyers once they have moved into the homes. Fernandes, for example, is in line for money to remove lead paint and do other work. He hopes to have the home ready for his family this fall, with his sister and her family renting the other unit.

Mayor Thomas M. Menino was encouraged by the amount of work the new buyers are putting into these homes. “These guys should get awards for what they are doing,” he said while touring Hendry Street recently. “This is sweat equity.”

One of “these guys” is Luis Rodriguez, who bought a three-unit property for $164,900 in April. Not two years earlier, the previous owner paid $446,500.

For four months, Rodriguez has been working 12-hour days renovating the units himself. Rodriguez, 61, is proud of his work and plans to live in one of the units or sell to someone who will.

“The house is going to be nice and neat and beautiful,” he said.

The Cape Coral-Fort Myers, Fla., area recorded the highest foreclosure rate in the country in July, according to the monthly RealtyTrac report that monitors 230 metropolitan areas.

One in every 64 households in that Florida metro area received a foreclosure filing during the month, more than seven times the national average, the report said.

The national average in July was one foreclosure filing in every 464 households, RealtyTrac said.

Six California metro areas were among the top 10 communities in foreclosure filings. Las Vegas also made the top 10 list — fifth — along with Fort Lauderdale, ninth, and Phoenix, 10th.

The accompanying map shows foreclosure frequency by county across the country. Red counties have one foreclosure action for every 10 to 250 households. Dark blue counties have one foreclosure for every 10,000 to 99,999 households.

In a state-by-state breakdown, Nevada reported the highest foreclosure activity in July.

Missouri, with one foreclosure action in 747 households, was ranked 18th. Kansas was 37th, with one foreclosure in 1,784 households. Among metro areas, Kansas City was 85th, at one in 570 households.

Real Estate News From the We Buy Houses

Are you having trouble keeping up with your mortgage payments?

Have you received a notice from your lender asking you to contact them?

The Department of Housing and Urban Development, or HUD, has 10 tips you can follow to avoid losing your house:

1. Don’t ignore the problem: The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem: Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender: Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights: Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws in your state.

5. Understand foreclosure prevention options: Valuable information about foreclosure prevention options can be found on the Internet at http://www.hud.gov.

6. Contact a HUD-approved housing counselor: The U.S. Department of Housing and Urban Development funds free or low-cost housing counseling nationwide. Find a HUD-approved housing counselor near by calling 800-569-4287.

7. Prioritize your spending: After health care, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses — cable TV, memberships, entertainment — that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.

8. Use your assets: Do you have assets — a second car, jewelry, a whole life insurance policy — that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies: You don’t need to pay fees for foreclosure prevention help — use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. They will charge you a fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.

10. Don’t lose your house to foreclosure recovery scams: If any firm claims it can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home. Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD-approved housing counselor.

written by Patrick McGilvray 

The epidemic of American homes being lost to the foreclosure process has been wreaking havoc in countless families across the nation as well as innumerable boardrooms and investment funds around the world.

CHARLOTTE, NC – The epidemic of American homes being lost to the foreclosure process has been wreaking havoc in countless families across the nation as well as innumerable boardrooms and investment funds around the world.

The homes being lost to foreclosure are one link in a large global chain of credit and investments. The pain is widespread, and many experts predict that it will get worse to the tune of billions to trillions of dollars of lost investment value.

But, for a few opportunistic home buyers and investors who buy houses for a living for rental purposes or for ‘flipping’ purposes, the time for bargains is near. In many parts of the country the homes being sold by foreclosing mortgage lenders and banks are being liquidated at rock-bottom prices.

From Denver, Colorado to the Central Valley of California, to Tampa, Florida, investors across the country are reporting that they are actively buying houses that are facing foreclosure or have been repossessed in foreclosure proceedings already. The best part, according to some of these investors, is that they are immediately able to rent these houses out for less than the costs to pay a new mortgage, taxes, and insurance.
Many real estate experts have long said that the market will be approaching its bottom when the cost to buy a house and cover the costs of ownership is significantly less than what a renter would pay on a monthly basis. In such a scenario an investor can earn a positive monthly cash flow by renting a property for more than the monthly expenses.

One foreclosure expert, Patrick McGilvray, president of Sacramento, California based www.TheHomeBuyingCenter.com, reported that the professional home investors as well as families looking to buy a home that he works with are excited about the discount buying situations this market is starting to present them. “For many people who sat on the sidelines as the market went to insane price levels, now is the time for them to enjoy bargain house buying opportunities. There are many American families who are experiencing tremendous financial and emotional pain that will likely last for years or decades, and their pain, tragically, is partly what has made this a historic real estate buyers’ market.”

Other experts are concerned that we are still somewhere in the middle of the housing crisis and that one to three more years of falling home prices could be in store for the United States housing sector. They point to the pending wave of mortgage resets for “option-ARMs.” These option arms were quite prevalent in California, Florida, Arizona, and Nevada during the housing run up which ended in 2006. Many of these mortgages allowed homeowners to pay interest only at a very low rate for a number of years, with resets occurring at large numbers in 2010 and 2011.

Real Estate News From the We Buy Houses

TAMPA, FL — The number of Florida foreclosures in July added up to a third place finish nationwide, according to a report released Wednesday by the research firm RealtyTrac.

Previously, Florida ranked fourth nationwide in foreclosures.  Nevada led the nation in July in the number one spot.  California was ranked second.

According to RealtyTrac, one in every 186 residential properties in Florida received a foreclosure filing in July.  By comparison, one out of every 106 residential properties in Nevada received a notice.  In California, one out of every 182 properties received a filing.

On a percentage basis, Florida foreclosure activity increased 14 percent from June to July, and was up 139 percent from July 2007.

Nationwide, 272,171 properties received foreclosure notices in July - eight percent higher than June and 55 percent higher than July 2007.

Arizona followed Florida with a 4th place ranking.  Ohio was ranked 5th.