Home Sales in Massachusetts up 3% in October!

Mass. home sales rose in October

The number of single-family homes that were sold in Massachusetts during October rose nearly 3 percent from a year ago, but the median-selling price for those homes dropped 5.2 percent, the Massachusetts Association of Realtors reported this morning.

According to the association, home sales were up for the fourth straight month when compared to the same months last year.

During October, 3,057 detached single-family homes were sold in Massachusetts, and the median selling price for the month was $275,000, down from $290,000 in October 2010, the association said.

As for the Bay State’s condominium market, 1,038 condos were sold in October, up 0.78 percent from the number in October 2010; condominium median selling prices in October were up 4.08 percent from the October 2010 median price to $255,00, the association said.

“The presence of a relatively better job market here in the Commonwealth combined with affordable prices and super-low interest rates continues to be the engine that is pushing sales to positive ground,” association president Laurie Cadigan said in a statement.  “Each month we experience an increase in home sales is an important step forward in the eventual recovery of the housing market here in Massachusetts.”

The Warren Group, a Boston firm that tracks local real estate activity, issued a separate report on the local housing market. Its results for the Massachusetts housing market in October were roughly in line with those of the Massachusetts Association of Realtors. One exception: Condo sales. According to the Warren Group, local condo sales dropped about 12 percent last month. The two groups use different methods to monitor real estate activity.

In a statement, Warren Group chief executive Timothy M. Warren Jr. said: “Four months of increasing sales volume is a good sign for the real estate market and an indication of improving consumer confidence. However, there is no getting around the fact that the market is still slow and sales will be lower in 2011 than either of the previous years.”

For local sales, the past two Octobers, the Warren Group noted, have been the worst on record since October 1990.

More than six years after the housing downturn began, values remain 15 percent below their peak. Foreclosures, which slowed as banks wrestled with legal problems, appear to be accelerating again. And despite record low interest rates and a variety of efforts to boost the market, few housing specialists expect any notable improvement in residential real estate activity anytime soon.

Thomas J. Percy, Esq.

Percy, Tedeschi & Associates, PC
Main Office: 4 Court Street, Taunton, MA 02780
Also offices in Stoughton, Milton, Plymouth, Fall River, New Bedford, Cranston, RI
(508) 828-1900  (800) 708-6240  FAX:(508) 828-1919

Housing market still in recovery Massachusetts’ housing downturn persists, despite attempts to reverse it

More than six years after the housing downturn began in Massachusetts, home sales are still painfully slow. Values remain 15 percent below their peak. Foreclosures, which slowed as banks wrestled with legal problems, appear to be accelerating again.

The housing market continues to defy efforts to revive it and confound analysts who expected a rebound to be long underway by now. Despite record low interest rates, multibillion-dollar mortgage modification programs, and a host of other efforts, few housing specialists expect any notable improvement in the housing market anytime soon.

Single-family home sales in Massachusetts are unlikely to top 40,000 this year, which would be the lowest number since 1991, when the epic real estate crash of the late 1980s neared its bottom. Even with that crash, a sustained recovery began after four years, and was well underway by year six.

“The housing market is almost as bad as it has ever been absent the Great Recession,’’ said Nicolas Retsinas, a real estate lecturer at Harvard Business School. “We have a situation where the tried and true methods don’t hold water.’’

Several factors are contributing to this relentless housing downturn, specialists say, including an uncertain economy that is undermining confidence and the creation of new households; a complex, lumbering foreclosure process that makes it difficult to clear distressed properties from the market; and changing attitudes about the advantages of home ownership.

The flailing economy and a still elevated unemployment rate – 7.3 percent in Massachusetts – are perhaps the major drags on housing. Young people can’t find jobs, so they are staying with parents, or sharing rentals, rather than venturing out on their own. Families, hit by unemployment or cuts in pay, are struggling to keep up with mortgages, extending foreclosures into rural and suburban areas.

Meanwhile, many potential buyers are too worried about jobs and income to take the risk and responsibility of buying a home.

The housing market and economy appear trapped in a chicken-and-egg conundrum. Traditionally, housing has led state and national economies out of recession. Lower interest rates and home prices combined with a sense of improving conditions to push buyers off the fence, boosting construction, sales of appliances and home products, and a variety of housing related services, such as landscaping.

But right now, consumers are unlikely to have the confidence to buy homes until they see the economy improve significantly, analysts said. But it’s unlikely the economy will improve until the housing market recovers.

“Housing is likely the most powerful factor dragging the economy down at the moment,’’ said Barry Bluestone, dean of the School of Public Policy & Urban Affairs at Northeastern University. “There’s a crisis of confidence at this point and many prospective home buyers are sitting on the sidelines while others cannot meet new heightened credit requirements.’

The last downturn in Massachusetts occurred between 1988 and 1992 when housing values lost nearly 17 percent, according the S&P/Case-Shiller home price indices. That’s less than the 20 percent fall experienced recently when prices hit bottom in March 2009. Since then, home values have recovered some, but are lately bouncing up and down with no clear direction.

In the 1980s crash, it took nearly 10 years, until spring 1997, for values to regain previous highs.

By 2000, Massachusetts home values started to skyrocket, nearly doubling over the next five years to a median single-family home price of $370,000, according to Warren Group, a Boston company that tracks local real estate.

But as prices outpaced incomes, home sales slowed and values tumbled. The financial crisis and deep recession that followed in 2008 accelerated the plunge, pushing thousands of Massachusetts homeowners into foreclosure.

Three years later, distressed properties continue to weigh down the housing market. Many housing advocates say state and federal governments should do more to persuade lenders to make mortgages more affordable for homeowners who have been squeezed by falling values and financial setbacks.

Following disappointing results of earlier efforts, the Federal Housing Finance Agency recently expanded a program to help homeowners refinance their loans at lower rates even if their mortgages are larger than the values of their homes.

Yet many lenders argue that policies meant to help troubled homeowners have made it harder to seize homes, put the properties on the market, and work through the huge backlog that is helping to depress prices. Troubled homeowners can live for years without paying their mortgages as they fight to avoid foreclosure.

Leading up to property seizure in Massachusetts, the average delinquent homeowner hasn’t paid the mortgage for 779 days – more than two years – according to Lender Processing Services Inc., a Florida-based company that provides mortgage services and research.

Further slowing the process are questions about ownership, prompted by the complex mortgage securitization system in which loans are bundled into securities, sold repeatedly, and divided among thousands of investors. These questions have led to challenges of foreclosure-related practices and court rulings that have clouded the titles of seized properties, making foreclosure sales even more difficult.

Tim Davis, a research consultant for the Massachusetts Housing Partnership, a nonprofit affordable housing organization, worries that these complications could keep struggling neighborhoods in trouble for years, with long vacant foreclosed homes attracting crime and vandals, and further eroding property values in these areas.

“We could have thousands of properties that have unclear titles and they could just sit there,’’ he said. “People will not want to buy properties that have been in foreclosure.’’

Also slowing housing sales are tighter lending guidelines that have prevented some buyers from qualifying for loans, said Laurie Cadigan, president of the Massachusetts Association of Realtors. Cadigan is among the many real estate agents and housing advocates who believe lenders have gone too far to correct the freewheeling policies that led to the crash.

“People who have a good job, good credit, and a strong history of making payments should not be going through what they are going through to get a loan,’’ Cadigan said.

Housing values appear to be stabilizing. But local economists worry it could be at least several more years before the market really starts to move again. Karl E. Case, cofounder of the Case-Shiller index, said the overall market will not pick up until the glut of foreclosures is cleared. He also believes the housing market and economy are linked – one won’t improve without the other.

“We are sitting on a knife edge,’’ he said. “I’m among the brainless optimists to think we could see it turn within the next couple years,’’ with prices and sales heading back up. “Then there is the possibility it could go the other way.’’

Housing to gradually improve in 2012, NAR economist says

MASSACHUSETTS SINGLE FAMILY HOME SALES UP 10% IN SEPTEMBER

There were 3,512 detached single-family homes sold in Massachusetts this September, a nearly 10 percent increase from the number sold in September 2010, the Massachusetts Association of Realtors reported this morning.

On a year-to-year basis, the median selling price for single-family Massachusetts homes in September was $294,950, up 1.7 percent, the association said.

As for condos, 1,277 units were sold in Massachusetts during September, an increase of nearly 9 percent. The median selling price was $272,000, up 5.4 percent from a year ago, the association said.

In this case, year-to-year comparisons may not present a full picture. When the housing market stalled around 2008, the federal government responded in part by offering temporary tax credits to many home buyers. Last summer, home sales slowed dramatically following the expiration of that federal home buyers’ tax credit, which earlier in 2010 gave people motivation to buy.

The Warren Group, a Boston firm that tracks real estate data, also issued a monthly report on the local housing market.

In a statement, Warren Group chief executive Timothy M. Warren Jr. said: “It’s encouraging to see another month of sales increases. However, sales volume remains low because we are comparing to a period last year when sales dropped off after the tax credits expired. At this rate, it is almost certain that 2011 sales volume will be one of the slowest years in recent memory.”

In a statement of her own, Massachusetts Association of Realtors president Laurie Cadigan commented on the finding of the group’s monthly housing report.

“Sales activity continued to go in a positive direction in September as qualified buyers were able to take advantage of these super-low interest rates,” Cadigan said. “The slight increase in median sales prices showed that sellers priced, and in some cases re-priced, their homes where buyers felt they could get good value with many who made offers at or near asking price.” 

Thomas J. Percy, Esq.

Percy, Tedeschi & Associates, PC

Main Office: 4 Court Street, Taunton, MA 02780

Also offices in Stoughton, Milton, Plymouth, Fall River, New Bedford, Cranston, RI
(508) 828-1900  (800) 708-6240  FAX:(508) 828-1919

Troubled homeowners get a lifeline

In the government’s latest attempt to address the ailing housing market, President Obama will announce changes to a federal program Monday that will make it easier for struggling homeowners to refinance to today’s near-record low rates.

Under the new program, homeowners who owe more on their homes than they are worth will be able to refinance no matter how much they are underwater, as long as they are current on their payments.

The revamped Home Affordable Refinance Program (HARP) will also streamline the refinancing process, doing away with certain types of appraisals and underwriting requirements, and reducing or eliminating fees that prevented homeowners from refinancing in the past.

More than 890,000 homeowners have already refinanced under the HARP program, which is available to borrowers with loans backed by Fannie Mae and Freddie Mac that were originated before May 31, 2009. But hundreds of thousands more could not qualify — mainly because of the previous 125% loan-to-value limit on the program or because banks would not take on the risk.

“We know there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said Edward DeMarco, acting director for the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac.

Currently, about 11 million borrowers are underwater on their mortgages, with about 4.7 million of those loans meeting or exceeding the 125% loan-to-value limit, according to CoreLogic, a financial analytics company.

Yet, lifting the loan-to-value restriction may still only help a limited number of borrowers, according to Jaret Seiberg, an analyst for MF Global Inc.’s Washington Research Group, which analyzes public policy for institutional investors.

The problem: Mortgage holders still must be current on their payments for the past six months — with no more than one missed payment in the past 12 months –and they must be able to qualify for a new loan.  However, Seiberg believes, the changes should allow banks to refinance loans without worrying that Fannie Mae (FMNA) and Freddie Mac (FMCC, Fortune 500) will force them to repurchase the loans if the borrower defaults.In the past, banks have been reluctant to refinance loans because they didn’t want to take on that liability, explained Shaun Donovan, the Secretary of the U.S. Department of Housing and Urban Development. By doing away with that liability, more lenders will compete to refinance the loans, which he believes will make them more affordable for borrowers.That should help remove one of the biggest barriers to refinancing through HARP, said Gene Sperling, Director of the National Economic Council.                                                                                                                                                           Fannie and Freddie will also reduce the fees they have charged in the past in order to enable borrowers to better afford the new loans.  Among the fees that may be reduced or eliminated are those for loan level price adjustments. Borrowers may not be penalized for less-than-perfect credit scores, for example.  Fees will also be waived for some underwater borrowers who refinance into 20-year or other, shorter-term loans. By doing so, it could help homeowners get above water faster.

A homeowner who has a $200,000 balance on their 30-year mortgage with a 6.5% rate and a home value of $160,000, for example, currently makes payments of $1,264 a month.

If they refinance into a 20-year fixed-rate loan at 4.25%, it will reduce their monthly payments to $1,238 and slash their loan balance to $160,000 in just five-and-a-half years. If they refinance to a 30-year loan at 4.5%, their monthly payments will be quite a lot lower, $1,013, but it will take 10 years to reach $160,000.

“It’s an opportunity for borrowers to improve their household balance sheets by repaying their mortgages much quicker,” said DeMarco.

IF THE FORECLOSURE WAS DONE WRONG IN MASSACHUSETTS, THE BUYER DOESN’T OWN THE HOME!!!

The highest court in Massachusetts ruled that a homeowner who bought a foreclosure that hadn’t been properly conducted by the foreclosing bank in 2006 didn’t have legal ownership of the property.

30-year mortgage rates fall below 4% for first time!!!!!!!

Mortgage rates have never been cheaper, with the 30-year rate falling below 4% for the first time in history.

The interest rate on a 30-year fixed-rate loan fell to 3.94% this week, the lowest rate since mortgage giant Freddie Mac (FMCC, Fortune 500) began tracking it. Meanwhile, the average for a 15-year fixed-rate mortgage also hit a record, falling to 3.26%.

“Average 30-year conventional fixed mortgage rates fell below 4% for the first time in history this week following a sharp drop in 10-year Treasuries early in the week as concerns over a global recession grew,” said Freddie’s chief economist, Frank Nothaft.

Yields on the benchmark 10-year U.S. Treasury bond, which mortgage rates closely track, have been under 2% this week, closing as low as 1.78%.  The dirt-cheap mortgage rates can result in considerable savings for homeowners. Compared with just three months ago, when the 30-year was at 4.60%, borrowers today can save about $40 a month per $100,000 borrowed. That comes to a savings of nearly $14,000 for every $100,000 borrowed over the life of the 30-year loan.

The low rates have done little to boost home buying, however, according to the Mortgage Bankers Association. Their weekly survey of mortgage applications reported a drop in all loans of more than 4%. Purchase loan applications were almost flat and refinance applications fell more than 5%.

Big mortgages: Harder to get and more expensive

“Potential borrowers largely remained on the sidelines, seemingly unimpressed by the lowest (by any measure) mortgage rates since the 1940s,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.

Some industry insiders remain unimpressed by the relentlessly falling cost of mortgage borrowing.

“Record low rates, blah, blah, blah: We’ve already heard this,” said Keith Gumbinger of HSH Associates, a mortgage information provider. “Other than the price of money, nothing else has happened.”

Given the nation’s faltering recovery, the turmoil in Europe and the struggling housing market, the downward trend in mortgage rates is natural, according to Gumbinger.

“The lowest mortgage rates come at the bleakest periods,” he said.  

How Long Until I Get Foreclosed Upon? Five Years??????????????

As the foreclosure backlog continues to build up, delinquent borrowers are spending even more time in their homes without making mortgage payments.

Once borrowers start missing payments, they spend an average of a year and nine months, or 611 days, in foreclosure before banks repossess their homes, according to LPS Mortgage Monitor. That’s more than twice as long as three years ago, when the average was 251 days. Earlier his year, the average was 523 days.

“The number of defaults in the pipeline has been huge and we had more problem loans than ever before,” said Herb Belcher, who supervises analytics for Lender Processing Services (LPS), which provides mortgage industry information and analytics to big banks.

With so many bad loans, servicers have had to prioritize which ones they can deal with and which ones to push aside.

Squatter nation: five years with no mortgage payment

“It’s like your boat has all these holes in it and is taking in water. You have to plug up the worst holes first,” said Belcher.

The bottlenecks are particularly severe in judicial states where the foreclosures are processed through the courts, he said. In non-judicial states, where trustees handle the cases, the average foreclosure is six months shorter.

Fannie Mae and Freddie Mac, which account for the majority of all mortgage lending these days, have been actively lobbying their industry partners — the servicers and attorneys who handle the foreclosure process — to either quickly get paperwork filed and push defaults through the system or put borrowers into a foreclosure prevention program, said Belcher.   The industry has gotten better at dealing with the deluge; it has hired staff and refined procedures to improve efficiency. But a return to more normal processing times will take time given the enormous backlog.                                                                                 Fannie Mae ignored foreclosure abuses   There were more than 4 million homes either in foreclosure or 90 days or more late with payments in August. Many of the new delinquencies are actually repeats: About 75% of the borrowers who fell a month behind in payments in August had missed payments before and then caught up – only to fall behind again.  On the plus side, the percentage of new seriously delinquent loans (90 days or more behind on payments) whose borrowers were up-to-date on payments just six months earlier has dropped to 1.4% from a peak of 2.9% in early 2009.  Many of those borrowers suffered through severe financial reversals, such as a job loss. Foreclosure and unemployment rates generally move in lockstep with each other.

No recovery in home prices until 2020?

That’s what the nation’s bankers are predicting in a survey just released by FICO.

Nearly half  – or 49 percent – of risk management officers surveyed at banks across the country don’t see home prices climbing back to 2007 levels for nearly another decade.

By comparison, just 21 percent thought prices would rebound before the decade ends.
An even larger number – 73 percent – are banking on foreclosures being a major problem for at least another five years. About half, 46 percent expect mortgage delinquencies, the first step towards an eventual foreclosure, to rise over the next six months.

OK, I haven’t exactly been breathlessly following FICO’s surveys, so I guess I missed this, but the bankers are apparently feeling markedly sour as of late after a burst of relative optimism early this year.

So what does this mean for Massachusetts, and in particular, for the Greater Boston market?

The real estate downturn has been spotty in the Boston area, with some towns hit hard even has others, especially upscale suburbs, not seeing all that much of a decline in prices from the bubble years

Yet treading water is a far different than a return of boom times, and even if prices have been stubborn on the way down, sales have been in the dumps for years now.

So are we looking at a lost decade, even here in the Boston area?

Maybe, and it’s hardly without precedent. Home prices stabilized after a steep dive in the late 1980s, but it took another decade, the 1990s, before prices were ready to start moving up again.

Beyond 495, we could be looking at even tougher decade ahead, with continued declines in home prices that mirror the grimmer real estate reality the rest of the country has been grappling with.

Mass. home sales rise 15 percent!

The number of Massachusetts single-family homes sold in August rose 15 percent from the same month a year ago, and condo sales also increased, the first time this year both property types posted an increase during the same month, the Warren Group reported this morning.

But the Warren Group, a Boston firm that tracks real estate data and publishes Banker & Tradesman, cautioned against over-reacting to the monthly snapshot of the local housing market. For much of 2010, a federal tax credit was in effect that looked to give home buyers an incentive to jump into the market. That credit has since expired.

“On the surface, the August numbers appear to be very strong,” Cory S. Hopkins, managing editor of Banker & Tradesman, said in a statement. “But we’re comparing sales volume to a month last year when buyers were retreating after the tax credits expired.”

Last month, 4,203 single-family homes were sold in Massachusetts, a 15 percent increase from August 2010, said the Warren Group, which added that the median price of single-family homes fell 3.4 percent to $305,700 on a year-to-year comparison basis.

In August 2011, condominium sales statewide increased 5.8 percent, the first time this year that condo sales rose from a year ago, the Warren Group said; the median condo price was down 2 percent in August to $292,500.

The Massachusetts Association of Realtors also issued its monthly report today on local housing activity. While it uses a different method to track the market, its findings were roughly similar to those of the Warren Group’s.

The association said that August sales rose for the second straight month on a year-to-year basis as median prices were down for the third straight month.