Los programas ya han beneficiado a 2,724 familias.
Por: Joanisabel González: elnuevodia.com
El gobernador Luis Fortuño ordenó la extensión de los incentivos para la compra de vivienda, iniciativa que sirvió de alivio al sector de los bienes raíces en el 2009 al promover la venta de unos $341 millones en hipotecas.
Fortuño informó de su determinación ayer, luego de una reunión con su consejo de economistas, cuando también reiteró que su administración está decidida a utilizar todas las herramientas a su alcance para impulsar la economía.
El mandatario sostuvo que la extensión del programa hasta el verano surge en respuesta al hecho de que los incentivos están dando frutos.
“Vamos a estar asegurándonos de que haya suficiente dinero para el programa de bonos, por lo menos hasta el verano”, dijo Fortuño mientras agregaba que en los meses de noviembre y diciembre se registró “un aumento significativo” en el número de casos gestionados.
De acuerdo a datos de la Administración para el Financiamiento de la Vivienda (AFV), hasta el 19 de enero, los incentivos para la compra de vivienda -que forman parte del Programa de Estímulo Criollo (PEC)- han hecho posible que unas 2,724 familias hayan adquirido un hogar.
George Joyner, a cargo de la AFV, indicó que hasta el 19 de enero, han otorgado 2,347 bonos para gastos de cierre que equivalen a $11,873,000 en fondos desembolsados por el gobierno. “Esos bonos incentivaron compraventas con un valor ascendente a $287,864,000”.
Mientras, hasta la misma fecha, la AFV había avalado 725 segundas hipotecas que, en conjunto, suponen otros $12 millones. Esos préstamos, que el consumidor utiliza para el pronto pago de la residencia, redundaron en ventas ascendentes a $122.5 millones.
Joyner explicó que tanto la cifra total de ventas como las familias beneficiadas es menor que los totales de ambos incentivos, ya que unas 348 personas utilizaron ambos programas para comprar su propiedad.
Asimismo, mencionó que los programas prácticamente comenzaron en agosto pasado debido a que la agencia tuvo que esperar por diversos asuntos técnicos como la aprobación del gobierno federal para poder dar curso a la iniciativa.
“La combinación de los dos programas está haciendo su labor”, agregó el funcionario al recalcar que las personas beneficiadas son consumidores que pueden hacer el pago de una hipoteca, pero no tienen el pronto pago o recursos para los gastos de cierre.
A fines del año pasado, el gobierno modificó los términos del programa de incentivos para permitir que familias con un ingreso de hasta $125,000 pudieran beneficiarse del estímulo gubernamental. También se elevó el precio de las propiedades hasta $300,000 y se extendió la vigencia del programa hasta marzo próximo.
Asimismo, sostuvo que pese a que se aumentaron los límites de participación, los más beneficiados han sido personas de clase media, pues el precio promedio de las viviendas adquiridas asciende a $122,000.
El programa de incentivos incluye hasta un bono de hasta 5% de los gastos de cierre y/o acceder a una segunda hipoteca, de hasta $25,000, para el pronto pago de la unidad de vivienda.
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Saturday, January 23, 2010
Extienden incentivos para compra de vivienda
6 Surprising Facts About the Buyer Tax Credit
Make sure your buyer isn't caught off guard and knows these six facts if they plan to take advantage of the expanded homebuyer tax credit.
REALTOR®Magazine
The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it. ·To qualify for the move-up tax credit, a home owner must have occupied the same
principal residence for five of the last eight years consecutively.
·Buyers can elect to claim the credit on either their 2009 or their 2010 tax
return, whichever is best for them.
·Buyers who claim the credit in 2009 can’t file electronically because the
Internal Revenue Service hasn’t put the required forms on line. The wait for a
refund is three or four months.
·The home can be a mobile home or travel trailer that is fixed to land owned or
leased by the home owner. A mobile home or travel trailer that is actually
mobile doesn’t qualify.
·The home can’t be purchased from a close relative, including a parent, spouse,
child, grandparent or grandchild.
·A buyer who earns no taxable income or doesn’t owe any federal income tax can
qualify for the tax credit and file a tax return just to claim it.
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Thursday, January 21, 2010
Early Tax Deduction for Haiti Relief Passes Congress
Taxpayers will be able to deduct donations for Haiti earthquake relief on their 2009 returns instead of waiting until 2010, under a bill approved by Congress.
By: Margaret Collins: Bloomberg.com
“This legislation is an additional incentive for Americans to contribute,” Finance Committee Chairman Senator Max Baucus, a Democrat from Montana, said in a statement.
The Haiti Assistance Income Tax Incentive Act passed unanimously in the Senate today. The House unanimously adopted a similar bill yesterday. President Barack Obama will sign the measure into law, said White House spokesman Josh Earnest.
The legislation allows taxpayers to claim charitable contributions to relief efforts until March 1 as deductions on their 2009 tax returns. Taxpayers generally can deduct donations up to 50 percent of their adjusted gross income, said Eric Smith, a spokesman for the Internal Revenue Service. It may be possible to carry over contributions above that amount for up to five years, he said.
The American Red Cross has raised $25 million as of yesterday out of $137 million overall from the “Text Haiti” appeal that lets mobile-phone users make a $10 donation via text message, said spokeswoman Megan Allday in an e-mail. Those who give money by text can use a phone bill as proof of a donation.
A 7.0-magnitude earthquake struck the poorest country in the Western Hemisphere earlier this month, destroying about a third of buildings in its capital of Port-au-Prince, the city’s sea port as well as water and sewage systems. The Haitian government has buried more than 72,000 bodies and the overall death toll may be higher than 200,000, Prime Minister Jean-Max Bellerive said Jan. 19.
Congress unanimously passed similar tax deduction legislation in 2005 after the tsunami along the Indian Ocean.
“This measure encourages Americans to give to the Haitian relief effort immediately,” said Senate Majority Leader Harry Reid, a Democrat from Nevada, in a statement.
Read more!
Going Green Trims Taxes
Installing energy-efficient home improvements like windows and doors in your principal residence will qualify you for a tax credit.
By: Julian Block: RealtyTimes.com
The credit equals 30 percent of the cost, capped at a maximum of $1,500. There's another credit of 30 percent of the cost of installing renewable-energy improvements like solar water heaters and solar panels. This credit isn't capped, and the residence doesn't have to be your principal residence. For detailed information on the laundry list of items that qualify for the two credits, go to www.energytaxincentives.org.
Buy a Home and Lower Taxes
New rules that took effect on Nov. 7, 2009, extend and liberalize tax credits for homebuyers. Now there are two kinds of credits for homes costing under $800,000. One is a credit of up to $8,000 for first-time buyers of a principal residence who didn't own another principal residence during the three-year period ending on the date they purchase the new place. The other is up to $6,500 for buyers who owned a principal residence for any five consecutive years during the eight-year period that ends on the purchase date. Both credits allow buyers with higher incomes to qualify and require them to sign a binding contract by April 30, 2010, and complete the deal by June 30, 2010.
If you own more than one dwelling, principal residence or main home means the place you live most of the year, as opposed to a vacation retreat or property for which you charge rent. A principal residence is not just a conventional single-family home. It also can be a condominium, a co-op apartment, a housetrailer, a mobile home or anything else that provides all the amenities of a dwelling, such as a houseboat or yacht that has facilities for cooking, sleeping and sanitation.
Credits Versus Deductions
Most taxpayers do not understand the difference between credits and deductions. Credits lower a person's taxes dollar for dollar, making them more valuable than deductions, which merely reduce the amount of income on which taxes are figured. The distinction is critical. A deduction of $1,000 saves $350 in taxes for someone in the highest bracket of 35 percent, but only $100 for someone in the lowest bracket of 10 percent. A credit of $1,000 reduces taxes by that amount, whatever someone's bracket is.
Another difference is that credits come in two flavors, nonrefundable and refundable. Nonrefundable means credits cannot be refunded to the extent that they exceed your income tax. Put another way, credits like the one for child care provide no help after your income tax becomes zero. Refundable means credits like the recently revised one for first-time homebuyers can be refunded to the extent that they exceed your income tax. So even buyers who have no income-tax liability could receive as much as $8,000 from the IRS.
Julian Block is an attorney and author based in Larchmont, N.Y. He has been cited as "a leading tax professional" (New York Times), "an accomplished writer on taxes" (Wall Street Journal) and "an authority on tax planning" (Financial Planning Magazine). This article is excerpted from "The Home Seller's Guide To Tax Savings." Law professor James Edward Maule of Villanova University praised the book as "An easy-to-read and well-organized explanation of the tax rules. Home sellers would be well advised to buy this book." To order it, go to www.julianblocktaxexpert.com.
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Wednesday, January 20, 2010
Housing Starts in U.S. Fell More Than Forecast, Permits Climb
Housing starts in the U.S. fell more than anticipated in December, while building permits unexpectedly jumped, signaling inclement weather may have kept builders away from worksites.
By: Bob Willis: Bloomberg.com
Work began on 557,000 houses at an annual rate, down 4 percent from November, figures from the Commerce Department showed today in Washington. Permits, a sign of future construction, climbed to the highest level in a year.
The government’s extension and expansion of a tax credit for first-time buyers may help underpin demand in the first half of 2010, giving builders reason to ramp up new projects. The gain in permits, which are less influenced by weather, indicates an unseasonably cold and wet December probably prevented some work from getting started last month, according to economists like Maury Harris.
“It’s the weather,” Harris, chief economist at UBS Securities LLC in New York, said before the report. “The deadline for the homebuyer tax credit is going to accelerate sales and building activity” in coming months.
Starts were projected to fall to a 572,000 pace last month according to the median estimate of 72 economists surveyed by Bloomberg News. Projections ranged from 495,000 to 630,000. The government revised November’s reading up to a 580,000 from the 574,000 previously estimated.
For all of 2009, builders broke ground on 553,800 houses, the fewest since records began in 1959. The annual rate was down 39 percent down from 2008’s 905,500, which was the second-lowest ever.
More Permits
The report showed building permits increased 11 percent to a 653,000 pace, the most since October 2008. Permits were forecast to fall to 580,000.
Construction of single-family houses decreased 6.9 percent to a 456,000 rate.
Work on multifamily homes, such as townhouses and apartment buildings, climbed 12 percent to an annual rate of 101,000.
Three of four regions showed a decline in starts in December, led by a 19 percent drop in the Northeast. The South showed a 3.3 percent gain.
There are still headwinds to a housing recovery. Rising foreclosures are adding to inventory and may discourage builders. A record 3 million U.S. homes will be repossessed by lenders this year as high unemployment and depressed home values leave borrowers unable to make their house payment or sell, according to a RealtyTrac Inc. forecast on Jan 14.
Last year there were 2.82 million foreclosures, the most since RealtyTrac began compiling data in 2005.
Credit Extended
President Barack Obama on Nov. 6 extended an $8,000 first- time buyer credit that was due to expire at the end of the month and expanded it to include current homeowners. The extension covers closings through June as long as contracts are signed by the end of April. Still, the measure may have pulled sales forward, depressing demand in the second half of the year.
Sales of new houses dropped 11 percent in November, the month the government’s tax credit was due to expire. A jump in purchases of existing homes pushed total sales up to a 6.895 million annual pace, the most since March 2007.
Weather may have also played a role in depressing December housing starts, economists said. Last month was the 14th coldest December and 11th wettest in 115 years of record keeping, according to the National Climatic Data Center, in Asheville, North Carolina.
Less Confidence
Confidence among U.S. homebuilders unexpectedly dropped in January to the lowest level since June, the National Association of Home Builders/Wells Fargo said yesterday.
Any sustained recovery will require gains in employment, economists said. The U.S. has lost 7.2 million jobs since the recession began, and economists surveyed by Bloomberg early this month forecast joblessness will average 10 percent this year.
KB Home, the Los Angeles-based homebuilder that sells to first-time buyers, is among homebuilders struggling. The company last week reported a pretax loss of $91 million on declining revenue for the fiscal fourth quarter that ended Nov. 30.
KB Home’s orders rose 12 percent to 1,446 from 1,296 in the year-earlier quarter, while completed sales dropped 22 percent to 3,042, according to the report. The average price declined 12 percent to $203,400.
KB Home is “not going to make money in the first quarter” and plans to “restore profitability” in the second half of 2010, Chief Executive Officer Jeffrey Mezger said Jan. 12 in a conference call with analysts and investors.
Read more!
New Tax Credits Benefit Both First Time Buyers and Current Homeowners
Closing deadline extended to June 30, repeat buyers offered up to $6,500
By: Annalisa Burgos: FrontDoor.com (Originally posted 11.03.09)
First time homebuyers aren't the only ones who can claim a tax credit when they purchase a home. Now current homeowners can take advantage of the tax break too, if they qualify.
President Barack Obama signed into law a $24 billion economic stimulus bill on Friday, which includes an extension and expansion of the popular first time homebuyer tax credit. It was set to expire on Nov. 30. Prospective buyers now have until June 30, 2010, to close on their purchase and will need to submit documentation with their tax returns to claim the credit. The new program is estimated to cost $11 billion. Here are the details:
FIRST TIME BUYERS
Credit: Equal to 10 percent of the home's purchase price, up to $8,000
Who Qualifies: •Those who haven't owned property in the last three years
•Those with income up to $225,000 for couples and $125,000 for individuals
(credit phases out for people who make more than these amounts)
•Must be at least 18 years of age to claim credit
•Purchase price must be $800,000 or less
Deadlines: •Have until April 30, 2010, to enter into contract for a home purchase
•Have until June 30, 2010, to close on the purchase
CURRENT HOMEOWNERS
Credit: Equal to 10 percent of the home's purchase price, up to $6,500
Who Qualifies: •Those who have owned and lived in their principal residence for at least five
Deadlines:
consecutive years during the past eight years
•Those with income up to $225,000 for couples and $125,000 for individuals
(credit phases out for people who make more than these amounts)
•Must be at least 18 years of age to claim credit
•Purchase price must be $800,000 or less •Have until April 30, 2010, to enter into contract for a home purchase
In addition, buyers have another year to take advantage of the higher loan limit for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac - set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost housing markets. The limit in normal markets will remain $271,050 for FHA and $417,000 for Fannie Mae and Freddie Mac.
•Have until June 30, 2010, to close on the purchase
What this all means is that many more buyers qualify for a tax credit. So what are you waiting for? If you're even remotely considering buying a home, now's the time to do it. Don't let the first time buyers have all the fun.
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Tuesday, January 19, 2010
Real Estate Outlook: Strong Sales Predicted
Will housing outperform the overall economy in 2010 as we pull out of the Great Recession?
By: Kenneth R. Harney: RealtyTimes.com
Nothing is absolute in the predictions business, but there are solid indications that, yes, housing is likely to rebound more energetically than the overall economy.
Here's why: Even the most bearish Wall Street analysts now concede that home sales are up in many areas from year-earlier levels - sometimes by extraordinary percentages.
For example, MDA DataQuick reports that sales in the greater Phoenix market in November were 62 percent higher than the year before.
Prices either have bottomed out in dozens of these markets or are close to it. That's because the distressed sales component of local volume - short sales, REOs and foreclosures - has been declining slowly but steadily.
In his latest forecast, Jay Brinkmann, chief economist for the Mortgage Bankers Association, says both existing and new home sales will be higher in 2010 than in 2009 - and 2009 was better than 2008.
No question that a key part of the energy in housing will be the direct result of stimulus efforts by the federal government - especially the two tax credit programs - that will push sales and even pricing through mid year.
The overall economy, on the other hand, according to Brinkmann, is likely only to grow slowly in the first half of 2010, and not really warm up until the second half.
The heavy anchor dragging on national economic growth - and on housing demand - will continue to be unemployment. Brinkmann says that "the time of job destruction is over" in this cycle - that is, the number of new layoffs and new unemployment insurance claims filings are trending down.
But we haven't yet moved into the next phase nationwide - that of "job creation," which may not begin until later in the year, he says, and may be a long, slow process.
The National Association of Realtors' chief economist, Lawrence Yun, sees a strong sales year ahead - up 20 percent over 2009. In some markets, he also expects to see a return to modest and sustained price increases - anywhere from two to five percent on average.
Will higher interest rates put a big dent in these projections? Many economists are forecasting 30 year rates in the upper 5 percent range later in the year.
Those higher rates won't help - but last week they headed in the opposite direction. Thirty year fixed rates averaged 5.1 percent and 15 year rates were half a point below that - both down slightly from the week before, according to the Mortgage Bankers' national survey.
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Friday, January 15, 2010
Mortgage Rate Inches Back Toward 5%
Mortgage rates mostly fell in the past week, with 30-year fixed-rate mortgages edging toward 5%, according to a survey by Freddie Mac.
By: NATHAN BECKER: WSJ.com
Chief Economist Frank Nothaft noted home sales, especially for lower-priced homes, have improved as the economy gets better. Also, "with fixed mortgage rates staying near a record low, many homeowners are taking the opportunity to refinance."
The 30-year fixed rate averaged 5.06% for the week ended Thursday, down from last week's 5.09%, according to Freddie's Primary Mortgage Market Survey. A year earlier, the rate was 4.96%. The 15-year fixed-rate mortgage rate fell to 4.45% from 4.5% and 4.65%, respectively.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.32% this week, down from last week's 4.44% and the prior year's 5.25%. One-year Treasury-indexed adjustable-rate mortgages rose to 4.39% from 4.31%; the year-earlier average was 4.89%.
Meanwhile, mortgage applications rose a seasonally adjusted 14.3% during the week ending Jan. 8, compared with the week before, the Mortgage Bankers Association said earlier this week.
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Thursday, January 14, 2010
What Home Sellers Don't Tell Buyers
As buyers ease back into the battered real-estate market, they're often hitting a stumbling block: fibbing by home sellers.
By: M.P. MCQUEEN: WSJ.com
Eager to unload their abodes, some sellers exaggerate the size of their lots or their houses. Others minimize their property-tax or utility bills, conveniently forget about pests, or downplay flooding problems or noise.
Real-estate experts say that while such misrepresentations aren't new, the tough market of the past few years has made buyers more wary, partly because they can't expect rising home prices to bail them out of costly mistakes. As a result, deals are taking longer, and more of them are falling apart as buyers find properties sometimes aren't all they're supposed to be.
More than 30 states have disclosure laws requiring sellers to tell prospective buyers and agents about leaky roofs and other problems, according to the National Association of Realtors. But there's often a gray area involving the disclosure of problems the seller may not know about, such as a long-ago flood or hidden mold.
States are also increasingly passing laws requiring homeowners to disclose environmental issues, such as the presence of radon gas, a contaminant linked to lung cancer, and underground fuel tanks. In California, the checklist of required disclosures is so long that a cottage industry has sprung up of firms that help sellers prepare the forms.
Given the complexity of disclosure laws, it's not surprising that potential buyers don't hear about every problem in a house. Besides the issue of fibbing, sellers may genuinely not know about problems. And even if they do, the laws generally don't apply to bank-owned homes transferred in foreclosures, which now constitute a larger share of sales.
Buyers need to do their own due diligence and not rely exclusively on what sellers and agents say. They should hire an independent home inspector or home-inspection engineer, one not referred by the seller—and be aware that real-estate agents typically represent the seller.
Here are some of the common misrepresentations and white lies that buyers may hear as they shop for a house, according to real-estate experts and state regulators:
• "This house is on two acres." Disputes about property dimensions—how many square feet in a house or condo, or its exact boundaries—are common. Sometimes buyers don't learn the exact dimensions until the lender's appraisal.
Listing agents usually accept a seller's word on property dimensions, says Diane Saatchi, a senior vice president at Saunders & Associates, a real-estate firm in Bridgehampton, N.Y. "We tell everyone to verify," she says. Smaller dimensions also can cause an appraisal to come in lower than the agreed-upon purchase price. Low appraisals are a leading cause of ruined deals in today's market. A properly worded appraisal contingency in the purchase contract would allow you to scuttle the deal or find other financing if the appraisal comes in low, says New York real-estate attorney Michael Xylas.
How to Learn More About a Home
If you want to know more about a home's history of property damage, you can ask the seller to provide you with a copy of his or her C.L.U.E., or Comprehensive Loss Underwriting Exchange report from LexisNexis at www.choicetrust.com. A Home Seller's Disclosure report lists claims for property losses, such as fire damage, from the last 5 years as reported by insurance companies at the stated address, but doesn't disclose personal information such as the homeowner's social security number or date of birth. The seller's disclosure report can tell you about problems that might affect the availability or price of homeowners insurance, including claims for fire or hail damage. It costs $19.50, but homeowners also can obtain a free annual personal property report, which lists a 7-year history of losses associated with both the property and the individual, under the federal fair credit act. No claims in the last 7 years will produce a clean report.
A similar loss report, called A-PLUS, is available from the Insurance Services Office, Inc. or 800-627-3487.
• "We don't have pests." A basic home inspection generally doesn't include a peek inside walls or underground for termites and mold, which are among the top complaints. Inspections for mold and radon gas also generally aren't included; usually buyers must order these inspections separately. Other inside-the-wall problems include faulty wiring and old plumbing, which also may require specialists.
James Holtzman, a financial adviser at Legend Financial Advisors Inc. in Pittsburgh, says sellers of the 1901 house he bought in August 2006 said its electrical wiring was completely upgraded, yet an electrical inspection revealed only one of three floors had been totally upgraded. The seller then knocked $6,000 off the sales price before they went to contract so Mr. Holtzman, 35 years old, could pay for the necessary work.
• "This place never floods." Even arid states such as Arizona and New Mexico have occasional flash floods, and water and drainage problems aren't always obvious. June Walbert, 52, a certified financial planner at USAA, a financial-services company, says her San Antonio house received a clean bill of health from a home inspector before she bought it six years ago. But 10 days after she moved in, the sewer backed up, flooding the house, and she had to fork over $2,800 for repairs. "It was a rude surprise," says Ms. Walbert, who adds she asked her home inspector and the seller for compensation, but didn't get it.
Bill Richardson, outgoing president of the American Society of Home Inspectors, says a general home inspection wouldn't catch that unless the sewer line was visible from the basement or water backed up into sinks and tubs or toilets.
• "Taxes and maintenance costs are low." Home buyers often gripe about tax and utilities bills that are higher than sellers said they were. Homeowner association and condo dues and assessments are also common complaints. Sometimes sellers simply underestimate the bills, or forget to include recent or expected increases, agents and brokers say. Taxes can also be deceptively low because of unrecorded improvements like decks and finished basements. Ask to see recent bills, and check with the tax assessor's office for up-to-date information.
• "This is a quiet neighborhood." Sellers may play down distractions that could drive you crazy, such as barking dogs or idling buses. A charming park by day could be a teen hangout at night. Your best bet is to view a property at different times of the day. "I can't tell you how many times in my career buyers didn't go there in the night time, even though I told them to. You spend more time in the house at night than during the day," says Ms. Saatchi, the New York real-estate agent. Talk to neighbors and peruse the local newspapers and blogs to get a feel for a place, and check with police for crime.
• "There's going to be a golf course, a pool and a party room." Builders of many developments that broke ground during the housing boom ran out of money before the project was completed. Many homeowner and condo associations also are strapped because of delinquencies and defaults. Some states require upfront disclosures about this, but you should also ask neighbors, not just sellers, about any promised facilities. Also, check titles to be sure that specific parking spaces, storage units or other facilities are included in a property sale.
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Monday, January 11, 2010
December Delivers Higher Home, Condo Prices
Sales volume drops, stoking concern over strength of rebound.
By: DAVID HALDANE: Los Angeles Business Journal Online
Home prices in Los Angeles County bounced back in December, the first month since the housing bust that the median price for both homes and condos was higher than the year before.
The median price of a home was $348,000, up from $339,000 in November and $345,000 the year before, according to data supplied to the Business Journal by HomeData of Hicksville, N.Y. The median price of condos was $315,000, up from $305,000 in November and $310,000 in December 2008.
But there are signs that the road to recovery may be a rocky one.
The number of homes sold dropped by about 7 percent from November, but it was 30 percent higher than November 2008.
Analysts viewed the rising prices as further evidence that the real estate market is rebounding, though some characterized the upswing as a temporary respite before it once again recedes.
Last week, analysts were alarmed when the National Association of Realtors reported that the number of pending home sales across the United States dropped 16 percent from October to November. L.A.’s November sales volume dipped by 1.6 percent.
The market had softened until President Obama extended a tax credit through April 30.
“What we’re seeing today is not due to fundamentals but to government intervention in the economy,” said Christopher Thornberg, principle analyst for Beacon Economics, a West L.A. consulting firm specializing in real estate.
Thornberg said the tax credit and other government policies aimed at encouraging low mortgage rates, including financing from the Federal Housing Administration, were propping up the market. In addition, he added, the rate of foreclosures has been artificially slowed by federal pressure on banks to allow upside-down homeowners to modify their loans.
How it all turns out, Thornburg said, will become more apparent over the next several months.
“We have a big excess supply of units that have to be burned off when foreclosures start going on the market,” he said. “If that wipes out demand, it will push prices down.”
Nonetheless, Thornberg said that the historic lows of mortgage interest rates are an advantage for buyers.
That point of view is shared by many in the real estate business.
“I’m feeling very optimistic,” Betty Graham, president of Coldwell Banker Residential Brokerage in Los Angeles, said of December’s price hike. “I think it shows that we’re moving in the right direction.”
Graham said her company is doing brisk business, especially at the market’s upper end. And while obtaining financing is still difficult, many customers are tapping other sources – such as stock holdings – to pay for homes.
“They’re tired of waiting,” she said. “The buyers out there really want to steal something; but bottom fishers looking for desperate sellers may find disappointment in this market because there isn’t a deep need to sell.”
In other words, she said, when homeowners put their houses on the market they can usually hold out for their price.
One place that is occurring, Graham said, is in Malibu, where – after weak sales for the last two years – an agent recently sold three homes priced at more than $6 million each.
HomeData figures show that seven homes in Malibu were sold in December at a median price of $1.2 million.
Another area where sales were booming was Beverly Hills, Graham said.
“One of my top agents had her best fourth quarter in 30 years,” she said. “And she’s been selling real estate in Beverly Hills the whole time.”
HomeData reported that 15 homes were sold in Beverly Hills’ 90210 ZIP code in December at a median price of $1.9 million.
“This was better than most Decembers,” Graham said. “I go out to these offices and can almost touch the feeling of optimism.”
But she quickly noted that it’s not overly exuberant optimism.
“The recovery is going to be a little anemic,” she acknowledged. “Any hope of it being something else is naïve.”
A case in point, she said, is the San Fernando Valley, where sales have been flat for several months.
“I can’t really say why,” she said, “but I believe that their time will come.”
Twenty-one homes were sold in each of Woodland Hills’ two ZIP codes in December at a median price of $660,000 in 91364 and $559,000 in 91367.
Read more!
New Rules Help Borrowers at Closing
Plenty of home buyers have found themselves at the closing table, ready to sign the myriad documents that will officially make them new homeowners-only to get nasty sticker shock.
By: LISA SCHERZER: WSJ.com
What was originally supposed to cost them, say, $2,500 in closing costs, has turned into $3,000.
The Good Faith Estimate (GFE), a tally of the fees associated with a mortgage loan due at closing, is exactly that – an estimate. Often these costs, which are provided by mortgage brokers and lenders to borrowers within three days of getting a loan application, escalate by closing time.
But on Jan. 1, new federal rules adopted by the Department of Housing and Urban Development took effect, mandating the use of a redesigned, simplified Good Faith Estimate form. The idea behind the revision: to avoid those closing-table surprises.
The main change is how lenders communicate fee information to borrowers. Under the old system, there was no standardized format. "Fees were communicated in multiple ways, which adds to the confusion when comparing costs," says Keith Gumbinger, a vice president at HSH Associates, which tracks the mortgage market. Under the new rules, lenders will all be required to use the same form for their Good Faith Estimates – a three-page document issued by HUD.
More on the Good Faith Estimate
Developments: Uncle Sam's New Guide to Mortgage Shopping (12.30.09 Post)
There are also new rules capping increases in costs that are disclosed on the Good Faith Estimate and guidelines so that fees listed on the initial GFE reflect the actual cost at settlement. "Those fees on the GFE at the beginning of the process will be the same on HUD-1 form [final settlement statement] at the end of the process," says Mr. Gumbinger.
The new GFE guidelines are certainly better than the old ones and will reduce closing costs modestly – but there are still some kinks in the process, namely opportunistic pricing, says Jack Guttentag, professor of finance emeritus at the Wharton School who also operates a web site that offers free mortgage information.
That means that two different borrowers can go to the same lender but get two different estimates. The lender can size up the first one as a sophisticate, the other as a dupe, and charge the latter more than the former – just because he thinks he can get away with it. "There's no ready way a disclosure statement can prevent that," Mr. Guttentag says.
Prospective buyers should also be aware that while overall costs associated with closing on a home may come down as a result of the new GFE, they might have to pay up down the line in other ways. It will cost lenders to comply with the new regulations: they have to buy new software, print new documents, train loan originators to fill out the new forms properly. "They will be built into fees, so eventually consumers will pay" for these overhead costs, says Mr. Gumbinger.
So will the new good faith estimate make borrowers savvier about shopping around for a loan? Some are doubtful. "The forms are still pretty complicated," says Richard Vetstein, a real estate attorney with Vetstein Law Group in Framingham, Mass. "Even for me – a real estate attorney – it took several hours to go through the forms and all the changes, and figure out what's going on."
Here, a summary of the types of charges you can expect to see on your Good Faith Estimate.
1. Fees that cannot change from the original GFE to final settlement. These include the lender's origination and underwriting charges, and the credit or "points" based on the specific interest rate chosen.
2. Fees that can increase up to 10% at settlement. These include services required and recommended by the lender. If the borrower selects a third-party provider (for title services, title insurance and recording charges) from the lender's approved list, the fees cannot increase by more than 10% from the upfront estimate to the final.
3. Fees that can change without limit. These include charges from service providers (for title insurance) chosen by the borrower, but not recommended by the lender. This category also includes things like daily interest charges, homeowner's insurance, as well as flood and pest insurance, if necessary. It encourages borrowers to do their own shopping. "It prevents the worst abuses of price escalation on third-party charges for service providers selected by the lender," says Mr. Guttentag.
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Sunday, January 10, 2010
Venice condos have juicy past - and views
By: Dinah Eng: latimes.com
This contemporary condominium on the Venice boardwalk offers up-close ocean views through floor-to-ceiling glass walls and a rooftop deck that overlooks the beach.
The building's two units can be bought separately or together.
"I love the mix of this beach community," says Frank Murphy, a Venice developer who lived in the building when it was a juice bar with apartments above. "You've got everyone from the wealthy and famous to the homeless, with every demographic you can think of here. I purchased this with the idea of making it into a condo."
Jim Gelfat, an architect with Equinox Architecture Inc. in Culver City, has created a four-level home with exposed concrete walls and floors in most of the rooms, giving the building an urban, minimalist feel. Stenciled siding by artists Randy West and Nancy Monk wraps around the exterior in a blue wave pattern.
The lower Unit B has a living room/dining area with a fireplace, and a half-bath with storage space. The kitchen features white Caesarstone counters, Jenn-Air stainless-steel appliances - including stove, refrigerator and dishwasher -- and an open-frame, steel-beam ceiling.
The bottom floor of the unit is semi-subterranean, with windows that look up to the boardwalk. Each of the two bedrooms on this level has a bathroom. The master bathroom has a double shower with two shower heads and pebbled river rock flooring.
Unit A, on the upper floors, is slightly larger, featuring three bedrooms, a media room, den, two bathrooms and two half-baths. A private rooftop deck - with electrical, gas and water outlets - is designed for outdoor entertaining, with a panoramic view of the ocean from Point Dume to the Palos Verdes Peninsula.
The rooms in the rear are connected by a glass-enclosed walkway to the living room, which features a cantilevered window in the middle of the front glass wall. When the window is open, the sounds of the boardwalk and view create the illusion of being able to walk right out onto the beach.
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