Foreclosures Climb in 75% of Metro Areas

During the first six months of the year, major metropolitan areas in states like in Florida, California, and Nevada saw drastic hikes in their foreclosure rates. According to CNN Money, unemployment has replaced bad mortgages as the leading cause of these foreclosures.

RealtyTrac, an online marketer of foreclosed homes, said that California, Florida, Arizona and Nevada continue to lead the nation in the rate of foreclosures. Las Vegas was the worst-hit city.

But now unemployment has replaced toxic mortgages as the leading cause of foreclosures throughout the country, according to spokesman Rick Sharga.

"Las Vegas has seamlessly shifted from having a high level of foreclosures due to bad loans," said Sharga, "to defaults caused by a high level of unemployment." Some 14.5% of its work force was idle in June, up 2.1 points from last June.

Las Vegas had one filing for every 15 households in the metro area. The second highest rate was in Cape Coral/Fort Myers, Fla., with one for every 20 households. Two California cities, Modesto and Merced, tied for third with one filing for every 22 households.

Continue reading at CNN Money.com…

Three Signs Housing's Getting Weaker

Towards the end of 2009 there were reports suggesting the housing marketing was improving. However, as this new article from NPR.org points out, new statistics are suggesting a weakening real estate market once again. Listed below are their top three signs that the housing market is getting weaker.

1. Sales of previously-owned homes fell by 2.2 percent in May, the National Association of Realtors said today. Economists were predicting that sales would rise, driven by the tail end of the homebuyer tax credit.

2. Home builders' confidence in the housing market fell this month, according to a monthly survey of the industry.

3. Home prices have been falling this year, according to the Case-Shiller index.

To qualify for the home-buyer tax credit, people had to sign a contract by April 30 and close by June 30. Programs like this often encourage people who are planning to buy a home to hurry up and do it before the program ends. In that way, they sometimes steal home-buyers from future months.

In a note this morning, Ian Shepherdson of High Frequency Economics argued that this phenomenon will lead to more weakness in the housing market in the coming months.

Continue reading at NPR.org…

Real Estate's New Problem: Not Enough Homes

From CNNMoney.com:

Can it be possible? Despite the housing bust and high foreclosure rates, in some areas real estate agents are complaining that they don't have enough homes to sell.

There is currently an eight-month supply of homes on the market -- meaning that, at the current sales pace, it would take eight months to run through the backlog.

That's still a lot compared to the six-month supply that is expected in a normal market, but it is much better than it was. In March, there were nearly 2% fewer homes on the market than there were a year ago, and 21.7% fewer than the record of 4.6 million in July 2008.

In some areas, supplies are even bidding-war tight. In Denver, for example, supply has fallen to 5.7 months from 6.2. In Phoenix it has declined to 4.5 from 5.2; and in San Francisco inventory has halved, to 3.2 months from 6.5 last March.

In California, almost all cities have a short supply of single-family homes. That's especially true in the lower-priced categories, according to Leslie Appleton-Young, chief economist for the California Association of Realtors.

Tax credit end not deterring US homebuyers

While the homebuyer’s tax credit certainly gave the real estate market a jump, according to a new survey, the end of the credit may not be an end to increased sales. Consumer confidence in the housing market has increased along with home prices, which as this Reuters article explains, are both a good sign for the future of real estate.

Among consumers shopping for homes, 65 percent said the end of the tax credits will have little or no effect on their interest in purchasing a home, according to the survey, which was conducted by Prudential Real Estate and Relocation Services, part of Prudential Financial (PRU.N).

But 90 percent of the consumers believe that the tax credits have helped both first-time home buyers and the U.S. housing market overall.

Eligible borrowers must sign contracts by April 30 and close on their loans by June 30 to qualify for the tax credits, which include $8,000 for first-time buyers and $6,500 for home owners buying a new residence.

Consumers remain unsure about the direction of the housing market, but are optimistic about real estate values, with 46 percent expecting prices in their area to increase over the next year. Just 12 percent expect prices to decline, the survey found.

Sales of New Homes Soar With Help of Tax Credit

According to Christine Hauser of the New York Times, the housing industry in this country is showing improvement largely because of the federal homebuyer tax credit. On Friday the Commerce Department announced that sales of new homes rose in March to their highest levels since last summer.

Over all, the sales of new single-family houses in March were up nearly 27 percent at a seasonally adjusted annual rate of 411,000 units, the Commerce Department reported. The increase, which was against a revised rate of 324,000 for February, exceeded expectations.

“In simple terms, housing is a bargain again, and buyers are responding,” Michael D. Larson, a real estate and interest rate analyst at Weiss Research, wrote in a research note. “That is unambiguously good news for the market going forward.”

On Thursday, the National Association of Realtors said that sales of previously owned homes had also exceeded expectations, rising 6.8 percent. The monthly rise in sales of new homes was the biggest since April 1963, when it was 31.2 percent, Mr. Larson said.

Economists said the figures suggested that buyers were taking advantage of an $8,000 government tax credit that was scheduled to expire at the end of the month.

But there were other factors beside the tax credit, like an increase in builder optimism and housing starts, that helped push sales higher. Mr. Larson said he expected to see continual improvement in construction activity.

Continue reading at NY Times.com…

No More Taxes on Short Sales, Foreclosures

According to SF Gate.com, Arnold Schwarzenegger has finally decided to provide relief to California homeowners. Currently, there is a law that requires Californians to pay income taxes on canceled or forgiven debt resulting from a short sale or foreclosure.

The state law runs counter to a federal law that exempts many homeowners from federal taxes on canceled mortgage debt. It's unfair and given the bleak housing market, it's also unseemly. It needs to be changed.

In 2009, the Legislature passed a bill that would have aligned the state with the federal tax exemption. It would have also aligned the state with a few other federal tax provisions. Schwarzenegger supported the mortgage tax realignment but not the other provisions. So he vetoed it.

Last month, he vetoed SBX832, another bill that contained the mortgage tax exemption. This bill contained two other sensible tax provisions - a state tax exemption on government stimulus grants for energy companies pursuing renewable sources of power, and a 20 percent penalty for Californians who are caught cheating on their taxes. Business groups opposed the penalty for tax cheats, and the bill barely squeaked through the Senate. The governor decided to veto that one, too.

The third time has been the charm - and right before Tax Day. Last week, legislators passed SB401, which simply brings the state into line with the federal government on this mortgage tax exemption. The governor is going to sign it and the state is going to allow taxpayers to use the provision in their taxes for this year.

Property Tax Rebellion Brewing After Real Estate Collapse

From ABC News.com:

Never judge a house by its tax bill. That's the lesson Don Newby, 65, is learning.

The construction manager from Gibbsboro, N.J., is paying boom-era property taxes on a home that has lost 20 percent of its value in the past three years. He blames the Gibbsboro tax authorities, which haven't reassessed property values in the town since 2003.

"That's absurd," says Newby, who pays $14,000 a year in taxes on a four-bedroom, bi-level modern house in the New Jersey township that's not far from Philadelphia. Newby, who was unemployed for a year following the economic collapse, claims the government is intentionally delaying new assessments to benefit from the lag as long as possible.

"When you watch how property values have come down, it appears I could save almost $2,000 in taxes."

Costly Lag in Assessing Property Values

Americans around the country are grumbling that local tax assessors haven't caught up with the real estate downturn, leaving homeowners with unfairly high property taxes. Many disgruntled homeowners including Newby are challenging authorities, either by appealing their tax bills or mobilizing groups to push for tax reforms.