Weekly News Briefs Roundup
For the week of Sept. 22-26, 2008

Editor’s note: The following is a collection of news briefs that were published by Inman News from Monday, Sept. 22, to Friday, Sept. 26.

Editor’s note: The following is a collection of news briefs that were published by Inman News from Monday, Sept. 22, to Friday, Sept. 26.

Friday, Sept. 26, 2008

Home-price declines hit London
Global real estate brief

A BBC News report today revealed home prices in London fell 3.2 percent in August, the first monthly drop since the government-run Land Registry began publishing its figures in 2000.

Prices sank in England and Wales by 1.9 percent last month, with the average property now costing 174,493 pounds, or approximately $321,495, which is some 8,320 pounds less than a year ago.

Adding to the distress are tanking home sales, which, according to the latest Registry figures in June, plummeted 56 percent from a year earlier to slightly more than 54,000.

BBC News interviewed Seema Shah at Capital Economics who said "house-price falls are gathering momentum. With transactions less than half of their level a year ago, coupled with the fact that the outlook for the economy is steadily deteriorating, the speed of this housing market correction still has the potential to step up a gear."


‘Swift’ economic recovery post-election?
Inman Community brief

Editor’s note: The following is a reader comment on the Sept. 19 Inman News column, "Mark this day: The worst is over."
"One candidate took a lot of grief from his opponents this week and these developments certainly didn’t help. You seem to be saying (in a different way) what he has said — that our economy is fundamentally sound. I happen to agree, as do many others. The phenomenon of "consumer confidence" is the only thing keeping our economy from rebounding and lurching forward. I happen to believe that as soon as the presidential election is over (regardless of who wins), our economic recovery will be swift and unprecedented. We need to consider our own optimism for just a moment. It holds the key to our future and the ability to lift us from even our deepest funk."
–Shannon Ziccardi


Thursday, Sept. 25, 2008

Some question bailout in wake of HR 3221
Inman Community brief

Editor’s note: The following is a reader comment on the Sept. 24 Inman News column, "Federal plan ‘a disaster in the making.’ "

"Why aren’t we just using the legislation that was previously passed? The Housing and Economic Recovery Act would allow banks to "dump" their bad mortgages by accepting short payoffs from FHA refinances. All that is missing from that legislation is giving a carrot to the mortgage holders of increased tax breaks for accepting less than 100 cents on the dollar as full satisfaction of the loans, and their ability to participate in the payment of the homeowner upon sale of the house of all or part of the ‘profits.’

"This seems to me to be the most reasonable path to follow (and it should include primary residences as well as investment properties, except that the payback of profits on investment properties should be higher). This gets rid of toxic loans from the system, replacing them with realistic loans. It keeps the foreclosure rate down, without giving a full bailout to anyone. Yes, it will cost taxpayers, since there would be less tax revenues paid for a few years by banks and lenders (but, then again, how much do they pay in taxes anyway?)"
Peter J. Pike


Mortgage rates climb past 6%
Real estate brief

Market uncertainty over the state of the economy helped push interest rates for some mortgages back up above 6 percent this week, Freddie Mac said in releasing its weekly rate survey.

The 30-year fixed-rate mortgage (FRM) averaged 6.09 percent with an average 0.7 point for the week ending Sept. 25, up from 5.78 percent a week ago but well below the 6.63 percent peak for the year seen in July. A year ago, lenders were charging 6.42 percent for 30-year FRMs.

The 15-year FRM averaged 5.77 percent with an average 0.6 point, up from 5.35 percent last week but down from 6.09 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.02 percent with an average 0.6 point, up from 5.67 percent last week but down from 6.15 percent a year ago.

One-year Treasury-indexed ARMs averaged 5.16 percent with an average 0.5 point, up from 5.03 percent last week but down from 5.6 percent a year ago.

"Mortgage rates followed Treasury bond yields higher this week amid market uncertainty over the current state of the economy," said Frank Nothaft, Freddie Mac vice president and chief economist. Yields on 10-year Treasurys are up about 0.3 percentage points from last Thursday, Nothaft said, and rates on 30-year fixed-rate loans moved up by about the same amount.

The Mortgage Bankers Association reported similar interest-rate increases Wednesday and said an index measuring mortgage application volume showed demand for mortgages fell 10.6 percent during the week ending Sept. 19 (see story).


New-home sales tank
Real estate brief

August sales of new single-family homes fell dramatically from a year ago while the median price dipped at a more modest pace, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

At a seasonally adjusted annual rate of 460,000 units, new-home sales were approximately 11.5 percent below July’s rate and some 34.5 percent below the 702,000-unit pace in August 2007.

The median price of new houses sold in August — $221,900 — dropped 6.1 percent from $236,500 a year ago.

According to the data, the seasonally adjusted estimate of new houses for sale at the end of August was 408,000, which represents a supply of 10.9 months at the current sales rate.

A report from the National Association of Realtors Wednesday revealed August sales of existing homes were off 10.7 percent from a year ago to 4.91 million units (seasonally adjusted), while the median home price declined 9.5 percent to $203,100. The supply of existing homes for sale at the end of August was reportedly 10.4 months.


Fewer new homes expected in California
Real estate brief

The combination of declining new-home production and the hardship of trying to sell off existing inventory has led California home-building analysts to lower their construction forecast for 2008.

The Construction Industry Research Board (CIRB) says it is now projecting a total of 70,000 housing units for 2008, down from the 75,000 units projected last month, with only 74,000 units projected for 2009.

According to CIRB’s statistics, a total 4,484 single-family and multifamily permits were pulled in August statewide, down 21 percent from July and 61 percent from a year ago.

Robert Rivinius, president and CEO of the California Building Industry Association, said in a press statement that the low construction forecasts for 2008 and 2009 could lead to increased prices once the market turns around.

"When the inventory of foreclosed and unsold homes has been absorbed, California could face a shortage of new homes to buy, possibly leading to increased prices due to normal supply and demand," Rivinius said. "Now is a good time to look at ways to ease regulations, reduce impact fees, and streamline the entitlement process so that builders will be able to build homes faster and we might be able to save some of the affordability gains we’ve seen this past year."


California sales rise as prices fall
Real estate brief

Sales of resale homes in California jumped 56.7 percent year-over-year in August while the median price slipped 40.5 percent, the California Association of Realtors reported today. Nationally, resale home sales and prices dropped about 10 percent year-over-year in August, the National Association of Realtors reported.

"Although the month-to-month decline in the median price was the smallest in a year, it’s still premature to say that the median price has begun to stabilize," said Leslie Appleton-Young, chief economist for the California association, in a statement.

"While sales appear to have turned the corner, the median will experience additional downward pressure as we move into the off-peak season in the coming months, and will continue to face pressure from distressed sales. Sales are just one of the variables that must fall into place before we see real improvement in the market," she said.

The California trade group’s Unsold Inventory Index for single-family detached homes in August was 6.7 months, compared with 10.6 months in August 2007. The index indicates the amount of time it would take to deplete the supply of homes for sale given that month’s sales rate. The median number of days it took to sell a single-family resale home in the state was 47.3 days in August 2008, compared with 54.7 days for the same month last year.


Wednesday, Sept. 24, 2008

OFHEO: U.S. home prices slid in July
Real estate brief

U.S. home prices were down 5.3 percent in July compared to a year ago, and fell 0.6 percent from the month before, according to a monthly government price index.

That compares with a 5 percent annual decline and no month-to-month decline in June, according to the Office of Federal Housing Enterprise Oversight (OFHEO).

OFHEO’s monthly index tracks only sales of homes relying on loans that are purchased or guaranteed by Fannie Mae and Freddie Mac, and may understate price declines and appreciation in some markets because it excludes mortgages too large or risky for Fannie and Freddie.

The index showed monthly price declines in all nine U.S. Census Divisions, with prices falling hardest in the mid-Atlantic division (New York, New Jersey and Pennsylvania) and least in the West North Central Division (North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri).

The index puts the cumulative decline in U.S. housing prices at 5.8 percent since an April 2007 peak.


NAR: Sales, prices sink in August
Real estate brief

Sales and prices of existing homes in August fell approximately 10 percent from a year ago, as total for-sale inventory declined by 128,000 units, according to data released today by the National Association of Realtors.

The seasonally adjusted sales rate, which includes single-family, townhomes, condominiums and co-ops, sank to 4.91 million units last month — a 2.2 percent drop from 5.02 million in July and 10.7 percent lower than the 5.5 million in August 2007.

The national median existing-home price for all housing types was $203,100 in August, down 9.5 percent from $224,400 a year ago.

While total housing inventory at the end of August (4.26 million units) was 2.9 percent lower than a year ago (4.38 million units), the supply of homes for sale actually rose during the period from 9.6 months to 10.4 months, indicating longer days on market.

By region, existing-home sales fell sharpest in the South (-15.1 percent) compared to a year ago, followed by the Northeast (-15 percent) and Midwest (-12.3 percent). Sales in the West gained 4.9 percent over their year-earlier numbers.

Prices declined greatest in the West (down 23.9 percent to $251,600) compared to a year ago, followed by the Midwest (down 5.6 percent to $168,000), Northeast (down 3.8 percent to $271,000), and South (down 3.4 percent to $176,500).

"The highest concentration of foreclosures is in the West, which is weighing down the median price because many buyers are taking advantage of deeply discounted prices," Lawrence Yun, NAR’s chief economist, said in a statement.

FHA limits ‘buy and bail’ purchases
Real estate brief

Not wanting to be involved in financing "buy and bail" home purchases, the Federal Housing Administration will no longer count rental income when home buyers choose to vacate, rather than sell, their principal residence.

Home buyers seeking to rent out their existing home and buy another with an FHA-backed mortgage must now demonstrate they have sufficient income to pay both mortgages. The FHA won’t allow lenders to count rental income for the home being vacated unless borrowers have a 25 percent equity stake or can prove they are relocating for employment and obtain a one-year lease on the home being vacated.

The new rules are intended to prevent the practice known as "buy and bail," where the buyer purchases a more affordable dwelling with the intention to cease making payments on the previous mortgage, FHA said in a letter spelling out the new guidance for lenders.

Because FHA will insure principal residences only, and not income properties, the property being vacated by definition could not have an FHA-insured mortgage. But if the property ended up in foreclosure, it might have an impact on the value of nearby homes with FHA-guaranteed mortgages, the administration said in justifying its actions.

The new rules took effect Sept. 19, and are temporary pending a determination whether a permanent rule change is needed. The rules apply only to a principal residence being vacated in favor of another principal residence, and not to existing rental properties disclosed on the loan application and confirmed by tax returns, FHA said.


Mortgage applications tank as rates soar

Real estate brief

Mortgage applications plummeted 10.6 percent during the week ending Sept. 19 as jitters in financial markets produced a spike in interest rates.

The Mortgage Bankers Association said the average rate for 30-year fixed-rate mortgages increased to 6.08 percent, up from 5.82 percent the previous week, with points remaining at 1.13 (including the origination fee) for 80 percent loan-to value ratio loans.

The average rate for 15-year fixed-rate mortgages increased to 5.84 percent, up from 5.54 percent, with points increasing to 1.17 from 1.12 for 80 percent LTV loans.

The average rate for one-year ARMs increased to 7.01 percent, up from 6.95 percent, with points decreasing to 0.33 from 0.34 for 80 percent LTV loans.

The MBA’s Weekly Mortgage Applications Survey registered a decrease of 10.6 percent on a seasonally adjusted basis. On an unadjusted basis, the index decreased 11.1 percent compared with the previous week and was down 9.3 percent compared with the same week one year earlier.

The index showed an 11.2 percent decline in applications for refinancings, and a 10 percent decrease in applications for purchase loans from one week earlier. Applications for conventional loans decreased 10.4 percent, while the Government Purchase Index (largely FHA loans) decreased 8.9 percent.


Tuesday, Sept. 23, 2008

Millions spend 50% of income on housing
Real estate brief

Nearly 15 percent of U.S. homeowners who had a mortgage on their home in 2007 spent at least half of their income on housing costs, according to an Associated Press report today.

The data, released by the U.S. Census Bureau, found that the number of homeowners included in this category — some 7.5 million — is up from 7.1 million in 2006.

According to the report, the government and many lenders consider homeowners to be financially burdened when they spend 30 percent or more of their income on housing costs, a definition that now covers approximately 38 percent of American homeowners with a mortgage, or 19 million owners.

An analysis of Census data by the Joint Center for Housing Studies at Harvard University found that of the top 13 metro areas where the most mortgage holders spend more than 30 percent of their income on housing, nearly all were in California and Florida — only one was in Las Vegas.

Greatest share of mortgage holders spending 30 percent-plus on housing

1. Miami-Fort Lauderdale-Miami Beach, 58 percent
2. Stockton, Calif., 57 percent
3. Riverside-San Bernardino-Ontario, Calif., 55 percent
4. Cape Coral-Fort Myers, Fla., 55 percent
5. Los Angeles-Long Beach-Santa Ana, Calif., 54 percent
6. Modesto, Calif., 54 percent
7. San Diego-Carlsbad-San Marcos, Calif., 53 percent
8. San Francisco-Oakland-Fremont, Calif., 53 percent
9. Sarasota-Bradenton-Venice, Fla., 52 percent
10. Oxnard-Thousand Oaks-Ventura, Calif., 52 percent
11. San Jose-Sunnyvale-Santa Clara, Calif., 51 percent
12. Las Vegas-Paradise, Nev., 51 percent
13. Sacramento-Arden-Arcade-Roseville, Calif., 50 percent


Monday, Sept. 22, 2008

Obeo partners with Xpressdocs

Real estate technology brief

Obeo, which provides virtual home tours for real estate agents and home builders, has partnered with Xpressdocs to launch a new marketing and print center for Obeo customers.

According to a press release, "the program will allow customers to customize templates with Obeo photos and text, receive instant online proofs, and print hundreds of high-quality property flyers, postcards, business cards and marketing pieces. With flexible mailing options also available, customers can store and edit mailing lists online and receive their printed marketing materials the very next day."

Andy Evans, Obeo’s founder and director of product strategy, in the press release said, "One of the best things about this new program is that customers can import all their Obeo photos directly into the marketing center, so they won’t need to download and re-upload them into a third-party Web site."

Information compiled by Lai Saetern, Inman News.


What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription