Document 6503685
Transcription
Document 6503685
DECEMBER C-4 21,2007 Estate OlflST COMMINTARY Recovery for existing-home sales, not for new homes Exuting-home sales are projected to trend up in 2008, with pending home sales showing a slight nearterm rise, according to the latest forecast by the National Association of Realtors (NAR). However, a recovery for new-home sales is unlikely before 2009. Lawrence Yun, NAR chief economist, said he believes the worst part of the credit crunch has already worked its way through the data. T h e unusual mortgage disruptions that peaked in August were clearly seen in lower home sales that were finalized in September and October, so the market was underperforming," he said. "Now that mortgage conditions have improved, some postponed activity should turn up in existinghome sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels." The Pending Home Sales Index PHSI), a forward-looking indicator based on contracts signed in October, increased 0.6 percent to an index of 87.2 from an upwardly revised reading of 86.7 in September. It was the second consecutive monthly gain, but remained 18.4 percent below the October 2006 index of 106.8. "The broad trend over the coming year will be a gradual rise in existing-home sales, but because sales are exceptionally low in the final months of 2007, total Bales for 2008 will be only modestly higher than 2007," Yun aaid. The PHSI in t h e Northeast return to more normal patterns in jumped 16.0 percent in October to 2O09, perhaps rising one or two per80.6 but is 11.1 percent below a year centage points above the rate of ago. In the West, the index rose 8.4 inflation," Yun said. "Even with a modest decline in percent to 87.3 but i s 16.9 percent lower than October 2OO6. The index the national aggregate price this in the Midwest slipped 1.4 percent in year, it's important to keep in mind October to 85.5 and i s 11.7 percent that nearly two-thirds of the metro below a year ago. In the South, the areas in the U.S. are showing price index dropped 7.8 percent in October increases," he said. "The apparent to 91.6 and is 25.3 percent below disparity results from fewer sales in high-cost markets, so a change in the October 20O6. "The improvement in t h e mix of sales is dragging down the Northeast reaffirms a trend appar- national median home price." Areas showing healthy price ent for some months now that shows signs of recovery, noteworthy gains include disparate markets because that was the first region to such as Gary-Hammond, Ind.; slump, and the gain in the West indi- Binghamton, N.Y.; Corpus Christi, cates some easing of interest rates Texas; and Spokane, Wash. "We for jumbo loans," Yun said. can't emphasize enough how much "Lawmakers need to understand local conditions vary, even within a that raising the loan limits on FHA given area, so it's important for conand GSE-backed conventional loans sumers to make decisions based on will markedly improve mortgage local market conditions," Yun said. availability." New-home sales are forecast at Existing-home sales are likely to 788,000 this year and 693,000 in total 5.67 million this year, the fifth 2008, down from 1.05 million 2006; highest on record, rising to 5.70 mil- no sustained improvement i s seen lion in 2008, in contrast with 6.48 for new homes until 2009. Because million in 2006. Existing-home builders have adjusted production, prices should be down 1.9 percent to housing starts, including multifamia median of $217,600 for all of 2007, ly units, will probably total 1.36 miland then rise 0.3 percent to $218,300 lion this year and 1.16 million in in 2008. 2008, down from 1.8O million last "Home price growth in the vast year. The median new-home price is affordable midsection of America projected to drop 3 . 0 percent to will help raise the national median $239,100 for 2007, and then decline existing-home price slightly in 2008. another 0.2 percent t o $236,600 in I then expect price appreciation to 2008. How to explain the mortgage meltdown ING DIRECT There will likely be more than 1 million foreclosures this year. In many places, home prices have dropped significantly. Speculation fever has been replaced with talk of a crisis. Even President Bush has stepped in with a plan to help some troubled homeowners. In a way, though, this is a much-needed correction. We learn to swim by paddling around the wading pool — not by diving into the deep end. Today's situation isn't much different: People caught in the "deep end" — with loans they can't afford and homes in peril of foreclosure — are often those who jumped into homeownership before learning how to stay afloat financially. Here's how it happened. In the mid-1990s, the housing market grew dramatically. The creation of a secondary market for sub-prime loans made credit available to those who were historically underserved. At the same time, a roaring stock market gave people the assets to purchase more expensive We must accept homes. that not everyone is When the dot-com bubble investors sought ready for bomeown- burst, refuge from volatile stocks ership. by pumping money into real estate. In short, the booming stock market that launched the housing bubble inflated it even more when stocks plummeted. Also during that time, to stem a crisis of consumer confidence, the Federal Reserve began a series of interest rate cuts that cheapened credit. Within a few years, the homeownership rate hit an alltime high. Constant for more than 20 years around 64 percent, homeownership soared from 1995 to 2006 — hitting nearly 70 percent. This rise was mostly due to people who dove into the deep end. Before the mass-merchandizing of sub-prime lending, and seemingly cheap credit, many of these buyWESTFIELD — Harvey earned membership in the ers CRANFORD — ERA would never have qualified for a conventional mortTekel, branch manager of President's Club and is rec- gage. Meeker Realty Co. has Weichert, Realtors ognized in the top 1 percent named Virginia Garcia the Some took out oversized loans without understanding Westfield Office, announced of the company's 18,500 how office's Sales Associate of much debt they were assuming and how much their sales associates. that sales associates were the Month for October interest and payments could change. Others dove in recognized for their indusJim Euwer led the office with fullrates 2007. knowledge — gambling on a superheated martry successes in the month in units. Euwer is a mem"Virginia is an invaluket to boost their home's value, so that they'd be able to of November. ber of Weichert's Sales and able contributor to our handle high-priced loans by refinancing later at lower Kerry McDevitt led the Marketed Clubs. office," said Vita Zoltak, rates. Others hoped to make money by "flipping" their The Westfield office led office in sales and volume. owner of ERA Meeker properties. McDevitt is a member of the region in resales, resale Realty Co. This award is a For a few years, it seemed to work. In much of the Weichert's Sales and marketed listings, resale testimony to the quality of revenue units and resale country, prices steadily increased. Homes — traditionally Marketed Cluba. her commitment to cusviewed as places to live and long-term financial commitKathleen Gwaldis led dollar volume. tomer satisfaction as well These top-producing real ments — became short-term investments. the office in listings. a i a reflection of her profesBuyers, who were already deep in mortgage, datffcypt in Gwaldis also led the estate professional^ c*lf be sionalism and commitment out at Weichert's even deeper by using their homes as ATMs, cashing Weichert region in resale reached to offering her clients outJ marketed listings. A mem- Westfield Office at (908)the equity created by the real-estate appreciation. standing real estate guidVIRGINIA GARCIA But many of these borrowers weren't in a position to ber of Weichert's Sales and 654-7777. The office i s ance. She strives to meet keep up with their loans if the housing market cooled. the specific needs of both Professional (ASP) designa- Marketed Clubs, Gwaldis located at 185 Elm St. When it did, they faced the prospect of owing more than homebuyers and sellers." tion. their homes' retail value, or of coping with a mortgage Specializing in new and ERA Franchise Systems that would soon reset to a much higher monthly payment. resale residential real is a global leader in resiMany people who got in over their heads are hurting. estate, Garcia is a member dential real estate industry WESTFIELD — Kim "While providing exem- So are the companies holding the securities backed by of the National and New for 30 years in developing Jersey Associations of consumer oriented prod- Gibson has been named the plary customer service, these loans — for the same reasons. Realtors as well as the ucts and services. Each sales associate of the these sales associates have To prevent a similar crisis from happening again, Greater Eastern Union ERA office is independently month for October at the acquired top-notch negoti- some common sense is needed. To begin, we must accept Westfield office of ating skills to ensure their that not everyone is ready for homeownership. County Board of Realtors. owned and operated. Prudential New Jersey client satisfaction." said This year Garcia has Garcia can be reached at In the past, young people entering the work force typWilliam O. Keleher, Jr., ically rented for a while to establish good credit and save earned the Sales Associate ERA Meeker Realtor Co., Properties. The award is presented chairman and CEO offor a down payment. Mortgages were harder to get, but of the Month award four located at 124 South Ave. times and achieved the East in Cranford, at (908)monthly to honor outstand- Prudential New Jersey they were solid. ing sales professionals in Properties. "Their dedicaAccredited Staging 272-2570, ext. 37. Lenders who offered zero-down home loans and loweach of the company's 25 tion and enthusiasm has cost, rates to "cram" buyers into homes that offices statewide who set them apart and they are they introductory couldn't otherwise afford were irresponsible. But so t h e highest appreciated by their clients were the borrowers who Email usyour news! [email protected] demonstrate cast caution to the wind and level of professionalism. throughout the buying or either overpaid for a house, or bought into a house or selling process." locale beyond their means. Information on home Further, lenders should hold and manage the loans buying and selling in the they create. When lenders sell off the loans they write to Mortgage Fruduct Advertisement area, access to all real investors, they have every incentive to "move as much M O K K i . U . K ( ; i ll)i Information provided by INFOTRAK National Data Services estate related services, and paper" as possible — as long as they're not the ones holdRatci M of 11/14/0? details about a career in ing worthless paper at the end of the day. hllp://ii j.com/morf ^ajicci'iiti real estate are available by Put another way, the "mortgage meltdown" should contacting Prudential New teach both borrowers and lenders to behave more rationJersey Properties' Westfield ally. APR Lack Rate A M Ltwfc office at 215 North Ave. The author is the head of lending services for ING American Enterprise Bank or FL 877-247-7107 West or (908) 232-5664. DIRECT. 30-yr Fixed 6.125 0.000 6.I4K 30 Sales associates recognized V Garcia is associate of the month at ERA Meeker at Weichert in Westfield Gibson earns praise at PNJP 15-yr Fixed 5.750 0.00O 5.787 30 30-yr Jumbo 7.000 0.000 7.040 30 30-yr FHA 6.250 0.000 6.275 30 5 STAR National Lender raled by Consumers. FDIC Insured Bank wwiv.ucbn.com Now is the time to turn that adjustable rate loan into a low-interest fixed-rate loan. 4655 Salisbury Rd. Sti- 100. Jacksonville. FL National Average Mortgage Rates This Week Product Last Week 30 yr Fixed 5.K43 5.652 15 yr Fixed 5.4 5 8 5.206 5/1 ARM 5.759 5.601 30 yr Juinbo 6.718 6.605 15 yr Jumbo 6.304 6.227 5/1 ARM Jumbo 5.806 5.778 Index Key Financial Indexes This Week Last Week 1-yrT-Bill 3.170 3.250 10-yrT-Bill 3.970 3.940 Prime Rote 7.250 7.500 II"1 District COF 4.233 4.233 6 Month LtBOR 4.910 4.910 Key Rate Trends 2007 Award-winning • ERA Statewide Realty IIMS been recognised ai the Leader4! Circle Award winner for the paat 12 years. Put our talent and market experience to work for you! Call ua today for more information. 6.750 NEWLY PRICED!! Great price on this 4 bedroom Cape with upgraded kitchen floor and counters, 1st floor Master Bedroom and hardwood floors throughout. Fenced yard with patio and storage shed. Don't delay, see it today!! 5.750 4.750 3.750 1/3 http://nj.com/mortgagecenter 3/3 5/3 > > 7/3 9/3 11/3 Get current rate* Mortgage calculators > Ftad local leaden > Mortgage Help Center Kales bated on S 175,000 limn for single family htmic Jumbo rale?* (loans over S417.0<)Ol bastd nn S4SU,tKH> loan. A l l rales arc tx'licvtfd ti» be accurate but cannot be guaranteed ond art? subject In change wilhc>ul nt>tiLe Minimum dmxn payment rcquirrmenls and other reslrictinns may apply. Closing costs rtiay vary. To Jctcrminc estimated closing LO'Jt-'.. click nn "i e t V in the "Current Rales" secium (if the mortgage guide websue and ctiniuct each company for details- Companies pay u Tec lo he in this tiuiik'. I'ts points, which include origination and ditcuunt Ices. APR - annual percentage rale nnd is calculated hv euth company - includes ctnli in i>htain loan and pniiile inonyugc insurance i f requited- 1 ock ' rale link period. ARM (adjustable rale mortiuittc) rales arc subject Hi change ulicr initial penoj The (iluucchtci L'i"inty 1 irncv, llridgcinri'Millvitle New. s and Today's. Sunbeam and nj.com receive these rules than a third party and do not unnunly their utcuracy None uf the above rales constitute an ofTer. Please contact each lender for details- Companies in Ihis guide are !:cjtial Housing Opportunity lenders Copyright ;(K)7 INFDTRAK National Dula Services T o he i n c l u d e d i n ( h i s Service £ ^ Ciiirii* mil 781-276-171 1 ERA STATEWIDE REALTY FOUR CONVENIENT LOCATIONS TO SERVE YOUR REAL ESTATE NEEDS ERA Cranford Hitlsborough Delran Remington 777 Walnut Ave. 284 US Hwy 206 South, Suite B 9006 Route 130 110 Main Street 90*-709-M00 MM07-S2M S5642UM50 9M-7S8-MM VISIT US ONLINE AT: WWW.ERASTATEWIDE.COM "Highest Overall Satisfaction for First Tim. Time Home Buyers Among Notional Full Service Real Estate Firms." J.D. Pimcr and A w v i w t i , 2(1 l l Hume Buyi-r/Stllcr Saiisfai.'liit.i Slud> " Study kiM:iJ un rvspnnies fn>n> • t . W hiimc liuyers and wMlcrv SrmJy tuntiuciL'd lor CViiilarn t'MTTnir;ilinn hv J n F \ m a and A«^ivi:irw