Many Real Estate Agents including myself have seen a surge of offers lately on our listings. Several factors have led to a decrease in the available housing inventory including loan modifications offered, a change in loan servicer strategy on properties in default (hold and rent vs. foreclose), and the availability of revised refinance programs such as HARP 2.0 that are allowing less REO properties to sell at Auction or even hit the market at all.
Many of the buyers that are writing offers on inventory that is under the $200,000.00 mark are cash investors in the current market. Many stock and pension fund managers have shifted to a model where assets are being liquidated to invest in Real Estate to guarantee better returns than their current non-performing investments are yielding. This leads to a surplus of cash buyers willing to offer more than list price on a limited inventory of homes-having an upward trend on home values in that price range. This also makes it MUCH harder for first time homebuyers (that need to secure financing in order to purchase their first home) beat out the cash buyers to get into contract.
It is an interesting market to say the least. Some of my buyers are having great success while others are struggling to find homes. Most of our sellers are enjoying a quick turnaround and making more money than they planned on. Sometimes as quick as seven days from offer acceptance and being paid in cash.
What are your thoughts on our local market? To see the article about the national Housing Scorecard and its reflection of the status on our national market, please read the article below.
December Housing Scorecard Points to Improving Home Equity and Prices
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the December edition of the Obama Administration’s Housing Scorecard. The Scorecard is a summary of housing data from various sources such as the S&P/Case-Shiller house price indices, the National Association of Realtors®existing home sales report, Census data, and RealtyTrac foreclosure information. Most of the information has already been covered by MND.
The report pointed to a number of positives for the housing market. For example, Home prices showed large annual gains for the 12 months ending October 2012. Based on Case-Shiller data, house prices have increased much faster than predicted and are now running about 25 points higher than futures on the Case-Shiller Index.
Theequity Americans have in their homes continues to rise and is nearing $8 trillion. This is still well below the nearly $14 million in equity that existed before the housing downturn but is nearly $2 trillion above the trough it reached in the first quarter of 2009.
Mortgage aid has been extended to nearly 6 million homeowners through various programs since 2009. This includes loan modifications and other forms of assistance provided through the Making Home Affordable Program, HOPE Now, and FHA modification programs. The home preservation programs have reached nearly twice as many homeowners as have been foreclosed.
The Scorecard includes by reference the monthly report on the Making Home Affordable Program which includes subsidiary programs Home Affordable Modification Program (HAMP), the Second Lien Modification Program (2MP), the Home Affordable Foreclosure Alternative Program (HAFA), and the Principal Reduction Alternative (PRA). The current report covers information through October.
Through October there had been 1.96 million HAMP trial modifications started with 21,816 of them initiated since the previous report. Over the life of the program 1.12 million of these trials have been converted to permanent modifications and about 68,000 homeowners remain in trial status.
HAFA which assists homeowners to exit homeownership without going through foreclosure has now completed 85,881 transactions, 5,618 since the last report. Of the total, 83,741 of the transactions have been short sales; the remaining numbers were deeds in lieu of foreclosure.
Nearly 102,000 second lien modifications have been completed through 2MP. About a quarter of these modifications (25,078 full) resulted in a full extinguishment of the second lien at an average cost of $61,850.
Since the HAMP program underwent substantial revisions to the modification process and HAMP ramped up supervision of participating servicers in June 2010 the conversion rate of trial modifications to permanent modifications has risen to 87 percent from the 44 percent average pre- program changes. All major servicers now have at least an 81 percent conversion rate and the length of an average trial is 3.5 months.
“As the December housing scorecard indicates, our housing market is continuing to show important signs of recovery – with the FHFA and Case-Shiller housing price indices up 5.6% and 4.3%, respectively, from one year ago,” said HUD Senior Advisor on Housing Finance Michael Berman.
“The Administration’s programs to prevent foreclosure have helped millions of families stay in their homes and prompted critical changes in the way the mortgage industry assists struggling homeowners, which have helped our country recover faster from an unprecedented housing crisis,” said Treasury Assistant Secretary for Financial Stability Tim Massad.