Aug
30
Subprime Loans Face Big Hikes
Filed Under Housing News | Leave a Comment
Millions of homeowners around the nation are now getting the news in the mail: The interest rate on their home loans is going up, possibly to double-digit levels.
NEW YORK — A $210,000 loan balance (the average subprime amount in 2006), the additional 2.5 percentage point increase on the interest rate adds about $4,560 a year, or about $380 a month [...]
Aug
28
S&P Says Housing Prices Fell in 2Q by Steepest Rate Since Its Index Was Started in 1987
NEW YORK (AP) — The decline in home prices around the nation shows no evidence of a market recovery anytime soon, one of the architects of the index said.
Aug
27
Glut of homes hits 16-year high
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Sales slip but supply of homes on the market jumps to 9.6 months, pushing prices down for 12th straight month.
NEW YORK (CNNMoney.com) — Homeowners trying to sell last month faced the biggest glut of homes on the market in about 16 years, as declining sales and growing problems in the mortgage market helped push home prices down for the 12th straight month.
Aug
15
Is the worst over? Fortune’s Peter Gumbel offers a 10-point guide to understanding two harrowing weeks – and what’s likely to happen next.
Read the analysis at CNN Money
Aug
10
Mortgage Meltdown?
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This week, the mortgage meltdown spread to the financial markets with ebola-like speed, sparking fears that tighter credit will have a broader impact on consumers, markets and the economy.
NEW YORK (CNNMoney.com) — The outlook for the housing market looks even bleaker than it did a week ago. Last Friday we reported that foreclosures were skyrocketing, home prices falling and recovery forecasts were being scaled back.
Aug
6
Slowing Sales in Memphis
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Summary: The national housing slowdown appears to be affecting Memphis as area home sales plummeted during June as well as the first six months of the year.
The Memphis Area Association of Realtors’ Multiple Listing Service recorded 1,516 home sales in June, a 21.3 percent drop from 1,929 last year, which was a record for the month.
By Linda A. Moore
August 5, 2007
Drive anywhere in suburban Memphis and it’s hard to miss the “homes for sale” signs sprouting from rights-of-way, medians and under the flags that front new subdivisions.
Homes are for sale, but according to the Memphis Area Association of Realtors, buyers weren’t there in June, as home sales dropped by 21.3 percent from June of last year.
Experts say that decline can be attributed to a number of things, among them lenders’ skittishness in offering subprime loans, overbuilding of new houses and the ripple effect of slow sales in one area that keep buyers from moving to another.
“The people we’re getting are primarily selling homes, not
people coming in buying homes for the first time,” said Ed Haley, Arlington town superintendent. “They’ve got to sell a home to come out here. I think they’re having a problem moving their homes.”
Arlington had issued 331 home-building permits by this time last year, Haley said. By the end of July the town had issued 148.
Meantime, Bartlett officials say building permits are on track with last year.
There have been 129 permits issued through June, compared with 258 for 2006, said Kim Taylor, a planner with the city’s planning division.
That’s despite MAAR’s numbers that show a 15 percent fall for home sales in June in Bartlett.
“I would say we’re holding steady right now,” Taylor said.
The fall-off was more stark in Cordova’s 38016 and 38018 — total home sales down 36 percent, new home sales down 49 percent and existing home sales down 29 percent.
In the first six months of this year, permits for new home construction were off 45 percent from the same period last year.
Crye-Leike real estate agent Ann Maree Matthews isn’t bothered. She said 2005 and 2006 were “banner years” and the market is just correcting itself.
Cordova homes — with a vibrant commercial strip, Shelby Farms and Interstate 40 nearby — still have been in demand for clients such as David Alyea, 47.
“I personally just love the area,” said newlywed Alyea. He and his new wife bought a new home in the River Trail Crossing subdivision last August. “It’s close to shopping and the parks and all kinds of things.”
Home sales in Arlington fell by 11.1 percent, MAAR figures show.
Lakeland’s sales fell by 28.3 percent. That city doesn’t keep month-to-month building permit figures and hasn’t tallied home building permits for the year, but officials suspect fewer permits have been issued for the year.
In 2006 Lakeland issued 252 permits.
“I don’t think we’re going to be likely to equal that this year but I don’t think the numbers are going to be hugely low either,” said J. Higbee, growth management director of Lakeland.
Even in Fayette County, where MAAR reports 51 homes sold in June, compared with 37 in June 2006, a 37.8 percent increase, industry experts note that subdivision development has stalled.
Meanwhile, Collierville, which saw a 4.2 percent drop in home sales for June, has experienced a substantial drop in new home construction this year, issuing 166 new home construction permits through June, compared with 322 for all of 2006.
Of last year’s permits, the vast majority — 297 — were issued the first six months of 2006. Only 25 were issued the last half of the year.
However, town leaders have said a number of developments making their way through the planning process will generate more residential construction in the near future.
Germantown may be the exception to what is happening elsewhere.
“I haven’t seen a slowdown,” said Germantown city planner Wade Morgan. “We’re a different market. It may be a little longer before we see an impact. I think it would impact more starter homes.”
Generally new homes being built in Germantown are selling for between $400,000 to $800,000.
The county issues building permits for Germantown in which a property owner has up to two years to build. Those records weren’t immediately available.
Germantown is the only city in the county that issues “foundation permits.” In 2006, 112 homes in Germantown were under construction. In 2007, through June 30, 49 homes were under construction. If those numbers continue, Morgan said there might be a slight decline by year’s end.
Still, home sales in Germantown for June saw a 27.6 percent decline.
In Millington, where sales for June dropped by 27.6 percent, new home permits have slumped from last year.
Don Berge’s MarketGraphics Research Group reports through June 2007, Millington issued nine permits. Last year for the same months, the city had 35.
Millington logged a 29.4 percent fall in home sales, according to MAAR.
In Tipton County, even with June home sales down 17.1 percent, officials say growth keeps rolling along.
“As far as anything goes with us, we haven’t slowed down a bit,” said William Veazey, county director of planning.
Atoka, a hotspot for new housing in Tipton County, building permits this year stood at 97 through June, on pace with the 100 recorded for the same months last year.
Brighton listed 25 permits through June, up from 11 for the same period in 2006.
The Covington area had 23 for the first half of 2007, compared with 49 last year.
In the Munford area, 49 permits were pulled through June, up from 43 for the same months last year.
Mason issued 14 permits through June, up from four for those months in 2006, according to MarketGraphics.
Buyers from other areas, like Cordova, where sales were down by 38.2 percent, can’t divest themselves of the homes they own to buy homes they want, said Myles Leifer, broker with Re/Max Associates and president of the Fayette County Chamber of Commerce.
“Most of the people who come out to Oakland, conservatively about 80 percent, come from Shelby County,” Leifer said. “If they can’t sell their home there, how can they move here?”
With builders unable to get started on new houses, there are lots of empty subdivisions.
“What I see in a lot of subdivisions, is you drive in, see five houses, one will be the model and four will be spec homes,” Leifer said.
Builder Barry Duke, president of Creekside Homes, has more than 100 lots for sale in eight subdivisions in Fayette County and Lakeland.
“We’ve seen a dramatic slowdown in the last two or three months but a pickup in the last two or three weeks,” Duke said.
Duke noted that slow resales and the prohibitions placed on subprime mortgages are all contributing factors to the decline.
“Interest rates are still good, so that’s not a deal breaker,” Duke said. “Probably people’s ability to get the loans may be one of the problems.”
Or, it could be that people are happy living where they are.
“People have bought so many houses over the last six years, it could possibly be they’re bought out,” Leifer said. “A lot of people bought the homes that they want and they’re just not ready to buy again.”
Even with the declines, it’s a cyclical business, Duke said.
“It will take a year or so to shrink those inventories that everybody has got now, but I think it will shrink,” he said.
And as home sales retreat, the residential real estate market for 2007 is still not a bust.
“We’ll either be at 2005 levels or 2004 levels,” said Neil Hubbard, MAAR president. “We’re looking at probably the second or third best year ever with half the year behind us.”
– Linda A. Moore
Reporter Pamela Perkins contributed to this story.
Copyright 2007, commercialappeal.com – Memphis, TN. All Rights Reserved.
Aug
4
A grim forecast has economists wondering how far the collapse will spread to the rest of the economy
NEW YORK (CNNMoney.com) — The outlook for the housing market looks bleaker than ever. Foreclosures are skyrocketing. Home prices continue to fall. And forecasts for a recovery keep getting pushed back.