Many Americans Face ‘Megacommutes’

Many Americans Face ‘Megacommutes’. Image courtesy of Dundee Photographics / FreeDigitalPhotos.net

About 600,000 Americans travel more than 90 minutes each way—more than 50 miles—to get from home to work each day, according to a new U.S. Census Bureau report.

Megacommutes are known for being worst in New York, Los Angeles, San Francisco, Washington, D.C., and New Orleans. Megacommuters tend to be male, older, married, and paid higher than the average worker, according to Census data.

Nearly 11 million people have what’s considered just “long commutes” from home to work, averaging just over an hour each way, according to the report. New York averaged the most “long commuters,” followed by Maryland and New Jersey.

Source: “600,000 Americans Have ‘Megacommutes’ of Over 90 Minutes,” CNNMoney (March 6, 2013)

Are Foreclosures a Better Buy Than Short Sales?

Are Foreclosures a Better Buy Than Short Sales? Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Consumers may find buying a bank-owned home better than buying a short sale. Increasing REO inventory, deeper discounts, and shorter times to close can make foreclosures a more attractive option to home buyers, according to new data from RealtyTrac.

The average sales price of a bank-owned home is at least 30 percent below the average sales price of a non-distressed home, according to RealtyTrac’s analysis.

RealtyTrac identified some of the following best markets to buy bank-owned homes:

Cleveland

Average REO sales price: $57,782

Percent below average non-distressed sales price: 56 percent

Dayton, Ohio

Average REO sales price: $50,579

Percent below average non-distressed sales price: 57

Charlotte, N.C.

Average REO sales price: $111,260

Percent below average non-distressed sales price: 43

Columbus, Ohio

Average REO sales price: $87,994

Percent below average non-distressed sales price: 48

Palm Bay, Fla.

Average REO sales price: $87,018

Percent below average non-distressed sales price: 39

Winston-Salem, N.C.

Average REO sales price: $72,356

Percent below average non-distressed sales price: 49

Daytona Beach, Fla.

Average REO sales price: $88,012

Percent below average non-distressed sales price: 33

Source: RealtyTrac

Best Crime Prevention? Add Housing, Report Says

Best Crime Prevention? Add Housing, Report Says. Image courtesy of dream designs / FreeDigitalPhotos.net

A new study suggests that adding residential neighborhoods can lower crime rates. Changes to zoning in Los Angeles — in areas that also then saw new development — were linked with a reduction in crime in surrounding neighborhoods, according to a new study by RAND Corp. The study found that residential parcels added to commercial areas particularly can help lower crime rates than in areas with just large commercial blocks.

About 180 neighborhoods that saw zoning changes between 2006 and 2010 saw their crime rates dip by about 7 percent compared to other neighborhoods.

“Our findings suggest that land-use law may be a promising means of reducing crime — one that may, in theory, lead to a host of positive developments,” the study’s authors told The Wall Street Journal. The results of the study were recently published in the University of Pennsylvania Law Review.

Source: “Zoning Changes Take Bite Out of Crime, Study Says,” The Wall Street Journal (March 6, 2013)

Housing Looking Good Despite Economic Headwinds

Housing Looking Good Despite Economic Headwinds. Image courtesy of phanlop88 / FreeDigitalPhotos.net

The number of consumers who believe home prices will increase over the next year rose to record highs, according to Fannie Mae’s February 2013 National Housing Survey, which polled more than 1,000 Americans to assess their attitudes toward housing. Forty-eight percent of consumers surveyed say they believe home prices will rise in the next 12 months, and 10 percent of consumers say they believe home prices will inch down, a survey low.

Overall, the survey showed that consumers are optimistic about the housing recovery, but that optimism isn’t carrying over to the direction of the overall economy or household finances.

“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell.”

Among some of the survey’s other findings:

• 25 percent of those surveyed say they believe it’s a good time to sell a house, also the highest level ever recorded in the survey’s history.
• 41 percent say they expect their personal financial situation to improve over the next two months — a drop of 2 percentage points from January.
• 31 percent say they have significantly higher household expenses than a year ago.
• 38 percent of respondents say the economy is on the right track.

Source: Fannie Mae

Jumbo Mortgage Comeback Helps Lift Luxury Sales.

Jumbo Mortgage Comeback Helps Lift Luxury Sales. Image courtesy of Salvatore Vuono / FreeDigitalPhotos.net

The revival in the luxury real estate market is being fueled by growth in jumbo mortgages, Reuters reports. Jumbo loans typically are more than $417,000.

“Jumbo loans are returning to the mortgage market after almost disappearing entirely in the wake of the credit crisis of 2008 and the real estate meltdown,” Reuters reports. “Most lenders stopped making new jumbo loans when the private secondary market dried up in the credit crunch.”

But now jumbo loans are coming back. Lenders are reserving jumbo loan approvals to qualified borrowers, and some reportedly are even offering these “once-pricey jumbo loans at interest rates that are barely higher than conventional mortgages,” Reuters reports.

“The jumbo market may fare better than the overall mortgage market in 2013,” says Guy Cecala, publisher of Inside Mortgage Finance.

But while jumbo loan volume was about $200 billion last year, it’s still far below the $348 billion in jumbo loans issued in 2007. Cecala predicts that 2013 volume of jumbo loans will reach about $220 billion.

Source: “Jumbo Home Loans Are Back, But Far Below 2007 Levels,” Reuters (Feb. 26, 2013)

Economist Makes Bold Statement on Home Prices.

Economist Makes Bold Statement on Home Prices. Image courtesy of ddpavumba / FreeDigitalPhotos.net

Home values could surge 35 percent without stretching housing affordability, Raj Dosaj, vice president of the home price index at LPS Applied Analytics, said during a recent webinar hosted by HousingWire.

Dosaj says that the increase in home prices could be less than that if mortgage rates rise, which he says they are predicted to do.

“During the peak of the housing run-up, affordability was stretched as the market sold off,” Dosaj said. “As home prices dropped, affordability dropped.”

Industry reports are showing home prices rebounding and rising across the country.

“There are definite signs that there’s room for growth,” said Dosaj. “Things are generally looking good for the housing market.”

Source: “LPS: Home prices could skyrocket 35% without affecting affordability,” HousingWire (Feb. 28, 2013)

January Pending Home Sales Up in All Regions.

January Pending Home Sales Up in All Regions. Image courtesy of ddpavumba / FreeDigitalPhotos.net

Pending home sales rose in January, and have been above year-ago levels for the past 21 months, according to the National Association of REALTORS®. There were healthy monthly gains in all regions but the West, which, despite being constrained by limited inventory, still improved slightly.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.5 percent to 105.9 in January from a downwardly revised 101.3 in December and is 9.5 percent above January 2012, when it was 96.7. The data reflect contracts but not closings.

The January index of Pending Home Sales is the highest reading since April 2010, when it hit 110.9, just before the deadline for the home buyer tax credit. Aside from spikes induced by the tax credits, the last time there was a higher reading was in February 2007 when it reached 107.9.

Lawrence Yun, NAR chief economist, said inventory is the key to this year’s housing market. “Favorable affordability conditions and job growth have unleashed a pent-up demand. Most areas are drawing down housing inventory, which has shifted the supply-demand balance to sellers in much of the country. It’s also why we’re experiencing the strongest price growth in more than seven years,” he said.

“Over the near term, rising contract activity means higher home sales, but total sales for the year are expected to rise less than in 2012, while home prices are projected to rise more strongly because of inventory shortages,” Yun said.

The PHSI in the Northeast rose 8.2 percent to 84.8 in January and is 10.5 percent higher than January 2012. In the Midwest, the index increased 4.5 percent to 105.0 in January and is 17.7 percent above a year ago. Pending home sales in the South rose 5.9 percent to an index of 119.3 in January and are 11.3 percent higher January 2012. In the West, the index edged up 0.1 percent in January to 102.1 but is 1.5 percent below a year ago.

Yun expects approximately 5.0 million existing-home sales this year. However, price growth could exceed a 7 percent gain projected for 2013 if inventory supplies remain low. Previously, NAR had expected 5.1 million existing-home sales in 2013, while prices were forecast to rise 5.5 to 6.0 percent.

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

Also released today are annual data revisions. Each February, NAR Research incorporates a review of seasonal activity factors and fine-tunes historic data for the past three years based on the most recent findings. There are no changes to unadjusted or annual data.