A Look Back: Trending Real Estate Stories From 2013

A Look Back: Trending Real Estate Stories From 2013. Image courtesy of MR LIGHTMAN / FreeDigitalPhotos.net

Real estate had a big year in 2013 as the housing recovery strengthened, and the public showed an increasing appetite for real estate-related news.

Realtor.com® created a “2013 Real Estate Review” Web page that highlights some of the site’s top trends, data, and stories of the year.

One article – 7 Housing Trends for 2013 – highlights housing predictions from the year, allowing you to see how close the predictions were to coming true. Many of the predictions were right on par, such as mortgage rates rising, the return of bidding wars, and soaring home prices.

The site also features a list of what’s to come with five housing predictions for 2014, including expectations for stabilizing housing inventories, the return of positive equity for more home owners, and rising mortgage rates.

Realtor.com®’s “2013 Real Estate Review” also serves as a list to help you gauge the public’s interests in real estate topics over the past year, and a resource for you to share articles with your clients. The stories cover the gamut in real estate news, from celebrity home stories and the craziest places to live, to the year’s hottest decor trends – brass was back, home technology was in demand, and storage solutions got bigger and bolder.

–Source: REALTOR(R) Magazine Daily News

Study: Professional Photos of Listings Boosts Sales

Study: Professional Photos of Listings Boosts Sales. Image courtesy of num_skyman / FreeDigitalPhotos.net

Professionally photographed homes tend to sell for more money and sell faster than homes listed with point-and-shoot cameras, according to a new study by the real estate brokerage Redfin.

The study found that homes priced between $200,000 and $1 million sold for an average of $3,400 to $11,200 more than their list prices when professionally photographed than homes with amateur photos. For homes priced between $400,000 and $499,999, the study found that homes professionally photographed sold for $11,200 more.

In an analysis of 22 markets, the Redfin study evaluated the sales success of homes shot professionally with a digital single-lens reflex camera versus homes shot with amateur, point-and-shoot cameras. The study evaluated homes priced between $200,000 and $1 million.

The study also found that homes that were professionally photographed also tended to sell faster. For instance, homes in the $400,000 range that were professionally photographed sold 21 days faster than those photographed with point-and-shoot cameras.

Source: Redfin

Falling New-Home Sales Spark Worry

Falling New-Home Sales Spark Worry. Image courtesy of Danilo Rizzuti / FreeDigitalPhotos.net

Dropping sales volumes in new-home construction has home builders worried about a possibly dismal spring looming in 2014.

“There’s some nervousness about the spring selling season,” says Jody Kahn, a senior vice president at John Burns Real Estate Consulting. “That’s partly because they’re worried [that] the lack of urgency from their prospects will continue.”

A survey of builders by John Burns Real Estate Consulting showed the second consecutive month in year-over-year declines in sales volumes for new home construction, the first decreases reported since early 2011. In October, sales of new homes fell by 8 percent year-over-year and posted a 6 percent drop in September year-over-year.

Earlier this year, the new-home market saw a rapid run-up in prices. But now, the percentage of homebuilders who are raising prices is declining, falling to 28 percent in October compared to 32 percent in September. In July, 64 percent of homebuilders had said they were raising prices.

“October was basically a crummy month for a lot of builders,” Kahn says. “Their frustration is about the government shutdown and how it probably trumped any seasonal [sales] lift that builders were hoping to see. Most did not have very good sales.”

While new-home purchases tend to drop in the fourth quarter, builders are worried that lawmakers’ indecisiveness over the federal budget and debt, as well as the fragile economy, will hamper the spring selling season early next year.

Markets where home-price appreciation is outpacing job growth and income gains are the most worrisome, analysts note. Some builders are already responding. For example, The Olson Co., a builder based in Seal Beach, Calif., has shifted the company to building less expensive housing, such as townhomes.

“I think this [slowdown] is a good wakeup call for the industry,” says Scott Laurie, chief executive of The Olson Co. “You can’t just raise prices 2 percent a month. That doesn’t work. What works is affordability.”

Source: “Weak October Sales Have Home Builders Fretting About Spring,” The Wall Street Journal (Nov. 22, 2013)

Trouble Ahead on Home Equity Loans?

Trouble Ahead on Home Equity Loans? Image courtesy of nongpimmy / FreeDigitalPhotos.net

Mortgage delinquencies are on the rise for home equity lines of credit that were taken out during the housing bubble, as well as others that are reaching the 10-year mark, Equifax data shows.

In most cases, after these loans hit the 10-year mark, borrowers must start paying not only the interest but also the principal on these loans. For many, that could mean their monthly payments could more than triple. For example, a consumer with a $30,000 home equity line of credit with a 3.25 percent initial interest rate could see their monthly payments go from $81.25 to $293.16, according to Fitch Ratings analysts.

The number of home owners missing their payments is growing, Equifax reports. Amy Crews Cutts, the chief economist of Equifax, has called the pending increase in payments on home equity lines as a “wave of disaster.”

“More than $221 billion of these loans at the largest banks will hit this mark over the next four years, about 40 percent of the home equity lines of credit now outstanding,” Reuters reports. The delinquencies will mean banks stand to lose 90 cents on the dollar for every loan that goes bad.

Analysts say that home owners who are facing a big jump in their payments may be able to refinance their main mortgage and home equity lines of credit into a new, single fixed-rate loan. Or some borrowers may find that selling their home and taking advantage of rising home prices is another way to repay their loan, analysts note.

Source: “Insight: A new wave of U.S. mortgage trouble threatens,” Reuters (Nov. 26, 2013)

Fears Brew Over Mortgage Fraud in Jumbo Loans

Fears Brew Over Mortgage Fraud in Jumbo Loans. Image courtesy of hyena reality / FreeDigitalPhotos.net

The growing popularity of jumbo loans is increasing the potential for mortgage fraud with these high-priced loans, according to Interthinx in its latest mortgage fraud risk report.

In recent months, jumbo rates, in some cases, have been lower than conforming rates, leading to them grow in popularity.

“With the rise in popularity of jumbo loans, lenders must be aware of both the credit risk and fraud risk those loans carry,” says Ashley Woodworth, Interthinx vice president of business development and corporate strategy.

“While the most significant fraud risk gap occurred in the area of employment/income, it certainly wasn’t the only area where risk was present. Occupancy fraud risk for jumbos, for example, was extremely high — more than 200 by our index versus 150 for non-jumbo loans. The risk is out there, and lenders need to be aware.”

Interthinx notes that the states most at risk for mortgage fraud are: California, Washington, D.C., Delaware, Montana, Hawaii, Florida, Alaska, Utah, Connecticut, and Nevada.

“As we predicted last quarter, the shift toward a purchase-driven mortgage market increases the risk of fraud,” says Jeff Moyer, president of Interthinx. “Our goal in issuing this report is to make lenders aware of the fraud risk trends we’ve observed in the market so that they can remain vigilant in preventing those trends from becoming widespread issues within their own organizations.”

Source: “Mortgage fraud risk rises as jumbos attract more attention,” HousingWire (Nov. 20, 2013)