Despite The Big Price Drop, Making The Choice To Sell
A report from the Huffington Post. “Foreclosure starts have begun to edge up in some of the nation’s hottest housing markets. Nearly a quarter of the nation’s large metro areas saw upticks in foreclosure starts, the point when banks take the first step to foreclose on a delinquent home loan, in the third quarter of this year. That included a surprising number of some of the hottest inland housing markets, such as Denver, Austin, Dallas, Nashville and Columbus, Ohio. For some of the high-flying real estate markets in cities like Denver and Austin, the rare increases may be early warning signs of trouble to come if credit gets too loose, said Daren Blomquist, a vice president at ATTOM Data Solutions, which tracks foreclosure starts.”
“There’s a tendency for banks to lend too much when prices are rising and resale value is harder to predict, but ‘in a rising market, they’re going to be OK anyway,’ said James Gaines, chief economist at Texas A&M University’s Real Estate Center. The highest rates of foreclosure in Austin, Dallas, Denver, Nashville and Columbus are for mortgages that started in 2014, Blomquist said. That looser credit, meant to entice first-time buyers to the market, has added instability to the housing market because homeowners have less incentive to weather hard times and keep paying the mortgage, he said.”
“‘With lower down payments, the borrower has less skin in the game, and that’s just inherently more risky,’ he said. ‘It can take a few years for the chickens to come home to roost, and I think that’s what’s starting to happen.’”
From Kenneth Harney. “Here’s an important question for anyone hoping to buy a home next year but who isn’t quite confident about qualifying for a mortgage: Is it true that lenders have eased up on certain key requirements, making it simpler for first-time buyers and others who can’t pass all the strict tests to get approved? The good news answer is yes. A recent survey of banks and mortgage companies by giant investor Fannie Mae found that a record number of lenders report that they have relaxed at least some requirements for mortgage clients.”
“Debt-to-income changes top the list. Under previous rules, your total monthly debt load could not exceed 45 percent of your monthly household gross income. Under the new rules, your total monthly debt can now go to 50 percent. With Federal Housing Administration (FHA) loans, you can push it even higher — 55 percent or 56 percent — provided that other aspects of your application are strong.”
From Bizwest on Colorado. “If you’ve been tracking headlines on the business pages in recent months, perhaps you were caught off guard by the news that home prices declined in some Front Range communities. After all, isn’t the market still blazing hot? And haven’t Fort Collins and Greeley and Boulder and Denver been experiencing some of the fastest appreciating housing prices around the country?”
“The standard for a ‘balanced’ housing market is six months of inventory. Locally, the inventory for homes priced at $400,000 or less is at a fraction of that six-month standard. Fort Collins is at 1.89 months, Greeley at 2.47 months, and Loveland at 1.75 months. But if you look at homes priced at $700,000 or more, the inventory is ample — nine months in Fort Collins, 9.38 months in Greeley, and 6.97 months in Loveland.”
From ABC 30 in California. “For sale, signs are popping up in the Bay Area as many fire victims are forced to sell after the devastating fires in wine country earlier this year. There are empty lots where homes once stood across Santa Rosa. Officials with the North Bay Association of Realtors say they are going up for about 160,000 dollars instead of 500,000.”
“And despite the big price drop, many fire victims are making it the hard choice to sell what they once called home. Officials expect more people to put up their lots for sale but they say it is still too early to tell exactly how housing values will be impacted. But there is concern more victims will find themselves priced out.”
