RealtyTrac: Fla. leads in 3Q foreclosures

MapPic_000136IRVINE, Calif. – Oct. 15, 2014 – In the third quarter, Florida once again had the highest state foreclosure rate – default notices, scheduled auctions and bank repossessions – in the nation, according to RealtyTrac’s U.S. Foreclosure Market Report.

Still, Florida foreclosures declined both month-to-month and year-to-year, at 4 percent and 17 percent respectively. One in every 153 Florida housing units had a foreclosure filing – a total of 58,589 Florida properties.

By metro area, Orlando, Atlantic City and Macon, Ga., posted the nation’s top metro foreclosure rates in the third quarter.

With one out of every 117 housing units facing a foreclosure filing in the third quarter, Orlando posted the highest foreclosure rate among metropolitan statistical areas (MSAs) with a population of 200,000 or more. Orlando saw its foreclosure rate decline 1 percent since the second quarter, but it rose 16 percent year-to-year.

In Ocala and Palm Bay-Melbourne-Titusville, third quarter foreclosure activity decreased year-to-year. However, the two cities still posted the nation’s fourth and fifth highest overall metro foreclosure rates in the third quarter.

The remaining five metro areas with top 10 foreclosure rates were all in Florida:

Miami at No. 6 (one in every 137 housing units with a foreclosure filing)
Jacksonville at No. 7 (one in every 140 housing units)
Tampa at No. 8 (one in every 148 housing units)
Lakeland at No. 9 (one in every 158 housing units)
Port St. Lucie at No. 10 (one in every 175 housing units).
Florida also remains one of the top states for the length of time it takes to complete a foreclosure, ranking second at 951 days. Only New Jersey (1,064 days) foreclosures take longer. Hawaii (937 days), New York (902 days) and Illinois (889 days) round out the top five states.

National foreclosures

Nationally, RealtyTrac reports that third quarter foreclosures were down 16 percent year-to-year but up 0.42 percent quarter-to-quarter. Looking at just September, U.S. foreclosure activity decreased on a year-over-year basis for the 48th consecutive month.

“September foreclosure activity was back to pre-housing bubble levels nationwide, in large part thanks to a continued slide in bank repossessions,” says Daren Blomquist, vice president at RealtyTrac. “However, a recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans. This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third party buyers in the coming months.”

© 2014 Florida Realtors®

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Study: Landscaping boosts home values up to 12%

20901BLACKSBURG, Va. – Oct. 15, 2014 – Upgrading a home’s landscape from average to excellent can raise its overall value by 10 percent to 12 percent, according to research from Virginia Tech.

Alex X. Niemiera with Virginia Tech’s Department of Horticulture found that a $150,000 home with no landscaping could fetch an additional $8,300 to $19,000 more once surrounded by plants that vary in color and size.

The value of landscaping differed greatly from state to state, however. For example, the change in value from a home with no landscape to well landscaped ranged from 5.5 percent in Louisiana to 11.4 percent in South Carolina. Michigan homes saw the biggest difference in landscaping appeal, with a home’s value being increased by 12.7 percent.

“The most preferred landscape included a sophisticated design with large deciduous, evergreen, and annual color plants and colored hardscape,” according to Niemiera. Adding different plant sizes to a front yard, for example, can boost curb appeal, as well as mixing fruit trees and flowers for added color.

The survey found the following landscape elements most important:

Design sophistication
Plant size
Diversity of plant material type
“Survey results showed that relatively large landscape expenditures significantly increase perceived home value and will result in a higher selling price than homes with a minimal landscape,” Niemiera writes in the paper. “Design sophistication and plant size were the landscape factors that most affected value.”

Niemiera offers one reason why a boost in landscaping can impact a home’s value: “The resulting increase in ‘curb appeal’ of the property may also help differentiate a home in a subdivision where house styles are similar and thereby attract potential buyers into a home,” he says. “This advantage is especially important in a competitive housing market.”

Source: “Does Landscaping Increase Your Homes Value?” Realty Times (Oct. 13, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Student debt costs housing $83B this year

IRVINE, Calif. – Oct. 13, 2014 – The latest John Burns Real Estate Consulting study calculates that student debt will cost the housing industry approximately $83 billion in sales this year.

With college debt increasing nearly 6 percent annually, the trend will probably continue – and likely worsen – in the years to come. The researchers estimate that heavy college debt will slash real estate sales by 8 percent for 2014, and that households that pay $750 or more for college loan debt a month will be priced out of the residential real estate market entirely, forcing them to rent or find other living situations.

Another recent study found that approved borrowers had monthly college loan payments around $300. Home-loan applicants paying nearly $500 per month in student debt, however, were usually denied.

Those researchers wrote: “Using previous academic literature as a benchmark for our own complicated calculation, we then estimated that today’s purchase rate is reduced from the normal 8 percent depending on the level of student debt.”

Source: Housing Wire (10/08/14) Garrison, Trey

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Mortgage Rates will Rise – But When?

WASHINGTON – Oct. 13, 2014 – Mortgage rates have hovered around yearly lows for weeks. But with rate-hike forecasts looming, can buyers count on borrowing costs to stay low?

Many economists now predict that the average 30-year fixed-rate mortgage will reach 5 percent by the middle of the next year, according to a New York Times report. On Friday, Freddie Mac reported the 30-year fixed-rate mortgage averaged 4.12 percent.

A hike in rates will come, in part, from the Federal Reserve’s plan to stop buying mortgage-backed securities.

Economists note that a 5 percent mortgage rate is low by historical standards, but that type of increase will still reduce buying power in a home purchase. For example: A 1 percent increase in interest rates can raise a monthly mortgage payment on a typical home by more than $700 in pricier parts of the country. However, the increase would likely be much more modest in other, less expensive markets.

But even in the case of rate hikes up to 7 percent, the analysis found that homes still remain affordable overall. From 1985 to 2000, homeowners’ housing costs – including the principal and interest on a median-priced home – accounted for 22 percent of a homeowners’ median household income. However, today’s households spend about 15 percent of their median income on a median-priced home.

Source: “When Mortgage Rates Rise,” The New York Times (Sept. 25, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Industry trends to watch this fall

NEW YORK – Oct. 13, 2014 – The housing market is expected to heat up this fall, but buyers no longer see ownership as a sure path to economic independence.

Bankrate.com recently highlighted some trends to watch this fall in the nation’s real estate market:

1. An overall pick up in housing activity. Some less-than-stellar sales numbers in certain areas of the U.S. this summer were blamed on low inventories of homes for sale. However, the number of listings is increasing, which could unleash some pent-up demand among buyers.

At the end of August, housing inventory was at 2.31 million existing homes available for sale, which represents a 5.5-month supply of homes, according to the National Association of Realtors®. That’s 4.5 percent higher than a year ago.

When buyers have greater options in their home shopping, they may be more likely to finally jump off the sidelines, says Jonathan Corr, president and chief operating officer for Ellie Mae. “The housing market is going to be a function of the economy. I think we are going to see steady growth in the coming months.”

2. Buyers are more cautious. In what most housing experts still describe as a “seller’s market,” buyers seem to be getting more conservative with their spending. “They are sticking to their budgets,” says Pava Leyrer, director of training for Northern Mortgage Services in Grandville, Mich.

The past housing crisis has prompted buyers – particularly the younger generation – to be more cautious, because they’ve learned that home prices don’t always appreciate. Because of that, the younger generation views a house as a place to live, and not the great investment that their parents did, says Daren Blomquist, vice president at RealtyTrac.

Forty percent of the millennial generation believes buying a home is a safe investment with great potential, compared to about 50 percent of boomers, according to a survey by Fannie Mae National Housing Survey.

3. Mortgage rates will climb – really. Housing experts said mortgage rates would rise this year, but those forecasts have largely been wrong – so far.

However, the Mortgage Bankers Association expects the 30-year fixed-rate mortgage to start its climb to 4.5 percent by the fourth quarter, and continue to gradually climb and reach 5 percent by mid-2015. That’s prompted some lenders and real estate professionals to urge their buyers to lock in a mortgage rate now while they’re still at yearly lows.

Source: “5 Housing Trends for Fall 2014,” Bankrate.com (October 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688