KeNo's Housing and Economic Portal: Friday September 10 Housing and Economic stories

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TOP STORIES:

Widespread Fear Freezes Housing Market - (www.nytimes.com) You have to wonder sometimes what they’re smoking over there at the National Association of Realtors. On Tuesday, the self-proclaimed “voice for real estate” released its “existing home sales” figures for July. They were gruesome. Sales were down 27 percent from the previous month, and down 26 percent from a year ago. Annualized, the July sales figures would translate into fewer than 3.9 million homes sold this year — a staggeringly low figure. (The record high occurred in 2005, when more than seven million houses were sold.) The months-to-sale number was depressingly high; the Realtors group reported that it now takes more than a year to sell a typical house, compared with six months in a normal market. The amount of inventory is high. Lest we forget, these awful numbers are coming out at a time when the financial incentive to buy could hardly be stronger: the fixed rate on a 30-year mortgage is at an incredibly low 4.36 percent, according to an authoritative survey conducted by Freddie Mac. Yet here was Lawrence Yun, the association’s chief economist, trying to turn lemons into lemonade: “Given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs,” he said in a news release.

CA Central Valley awash in worthless houses - (www.centralvalleybusinesstimes.com) Mortgages exceed home values across the Central Valley, with more than six out of ten homes in Stockton, for example, underwater, according to new reports Thursday from real estate information company CoreLogic Inc. of Santa Ana. While Stockton is the deepest underwater market reported by CoreLogic, it has plenty of company.

• In Modesto, 59.6 percent, or 58,892, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.9 percent, or 4,875, were in near negative equity in Modesto.

• In Stockton, 62.4 percent, or 80,505, of all residential properties with a mortgage were in negative equity for second quarter 2010. That’s nearly three times the national average. An additional 4.1 percent, or 5,257 homes, were in near negative equity in Stockton.

• In Fresno, 46.8 percent, or 71,850, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.6 percent, or 6,985, were in near negative equity in Fresno.

Devalued Houses Anchor Prospective Job Seekers - (www.npr.org) With unemployment high and jobs scarce, work is hard enough to find. But in today's economy, there's an even bigger barrier for some: their home. Many people can't afford to sell their homes; as many as one-third of homeowners owe more than their home is now worth, and there are few buyers. Americans who once expected mobility now find themselves grounded, with their careers and lives fixed in place. They can't move to better job markets without taking a huge financial hit. Among them are Melissa Brooks and her husband. They had planned to move from Lansing, Mich., to Atlanta, to be closer to family and more available jobs. But for the past year — even at a steep discount — their home hasn't found a buyer. "Everything's kind of just centered around selling this house here in Michigan," Brooks says. It has complicated her life. On the one hand, she has enrolled her child in school in Lansing. But Brooks herself, a teacher, is keeping her career on hold in case they can move — she's not looking for a job, nor is she pursuing her graduate studies. She's also kept the house on the market, which is now a short sale — meaning it's listed for less than what they owe on the mortgage.

Iowa: Foreclosure rate hits record level - (www.thonline.com) Foreclosures in Iowa hit a record in the second quarter as homeowners continued struggling to make mortgage payments during a sluggish job market, but at least one mortgage banking official sees signs of hope. A report from the Mortgage Bankers Association shows Iowa's foreclosure rate rose to 2.82 percent in the second quarter, up from 2.49 percent a year earlier and 2.77 percent in the first quarter. The nation's foreclosure rate was 4.57 percent in the second quarter. But Dan Vessely, of Iowa Bankers Mortgage Corp., said he sees a sign of hope. Although 6.3 percent of Iowa borrowers were 30 days or more late in making their house payments in the second quarter, loans that were seriously delinquent -- 90 days or more past due -- dipped, Vessely said.

Mauis foreclosure picture not pretty - (www.mauinews.com) The foreclosure picture for Maui is "not pretty at all" with nearly a thousand single-family homes and condominiums currently pending foreclosure - nearly double the number from a year ago - said the executive director of a non-profit housing organization Thursday. Another survey showed Kihei leading the state in new foreclosures last month, with 110. This gloomy financial scene, including short sales and a willingness by some financial institutions to dispose of properties at a loss, continues to drive down housing prices. Still, with little new home construction, these listings are supplying the inventory that has brought a kind of normalcy to the real estate market, according to those involved in Maui housing and foreclosures. The lower prices are great for buyers but not for others with adjustable rate or exotic mortgages tied to rising home values. Many have lost their homes because of lost jobs or reduced hours; others are seeking advice on loan modifications and short sales. The foreclosure situation has not yet turned a corner on Maui, said John Andersen, executive director of Na Hale O Maui, a nonprofit organization that converts foreclosed properties into affordable housing.