Index shows home prices rose for 3rd month in July

AP - In this Sept. 22, 2009 photo, builder Jean Gagnon cuts siding panels while completing a new home in ...



NEW YORK (AP) -- Home prices rose again in July, new data Tuesday showed, a trend that will help ease the foreclosure crisis and slowly rebuild the wealth of millions of American homeowners.
The new direction for home prices, which declined for 36 months before turning around in June, reflects an increase in demand from homebuyers. Home resales have climbed for four of the past five months, driven by low mortgage rates, a tax credit for new owners and low-priced foreclosures.
Sales of newly built homes are up 30 percent from the bottom, but are off about 70 percent from the peak of four years ago. Sales of previously owned homes are nearly 14 percent higher, but are still down nearly 30 percent from their peak.
The Standard & Poor's/Case-Shiller home price index of 20 major cities rose 1.2 percent from June to a reading of 143.05, according to the seasonally adjusted data. Though home prices are still 13.3 percent below July a year ago, the annual declines have slowed in all 20 cities for the sixth straight month.
"No matter how you measure it, house prices looked to have bottomed, which is the much-needed ingredient required to bake this housing market recovery," wrote Jennifer Lee, economist at BMO Capital Market.
The index has risen at an 8 percent annualized rate in the three months to July, the best performance since early 2006, noted Ian Shepherdson, chief U.S. Economist for High-Frequency Economics.
The index, however, is down about 30 percent from the peak in mid-2006 and some analysts are calling for additional price declines over the next year, though more moderate than previously forecasted. And 16 million homeowners owe more on their mortgages than their homes are worth. Those homeowners are more likely to go into foreclosure if they lose their jobs because they can't sell unless their lenders agree to take the losses.
Fannie Mae said Tuesday nearly 4.2 percent of its home loans were at least three months delinquent in July, up from 3.9 percent in June.
Home prices are now at levels not seen since the third quarter of 2003. And prices in Las Vegas, Detroit and Seattle are still falling, on a seasonally adjusted basis.
Prices in Las Vegas, one of the most speculative markets during the boom, are down more almost 55 percent from their peak. In August, almost 80 percent of home resales in Nevada were either a foreclosure or a sale below the value of the mortgage, according to a survey by the National Association of Realtors.
The Detroit housing market is reeling from layoffs in the automotive industry. Seattle, by contrast, was one of the last areas to enter the downturn so prices there have yet to hit bottom.
And there are still several risks to the national housing recovery, including rising unemployment and foreclosures and the expiration of a tax credit for first-time homebuyers.
First-time homeowners can qualify for a tax credit worth 10 percent of the purchase price, up to $8,000, but it expires at the end of November. More than a dozen bills to extend the credit have been introduced in Congress, but it's unclear if lawmakers want to continue subsidizing the real estate market.
Real estate agents and homebuilders are lobbying hard for an extension. They point to continued areas of weakness, such as foreclosures, which now are being driven by job losses, which are also weighing on the minds of consumers. The Conference Board said Tuesday that its Consumer Confidence Index dipped unexpectedly this month to 53.1 after three months of gains, down from the revised 54.5 reading in August.
Nevertheless, there are clear positive trends in the housing markets. Home prices rose in 13 metro areas for at least three straight months. The biggest gains in July were in Minneapolis, San Francisco and Chicago.
Agents in those three cities say prices are stabilizing because there are fewer foreclosures and less inventory overall. Lower priced homes are also getting multiple bids.
"Now we're seeing standard sales ticking up and foreclosure sales are way down," said real estate agent Barb Van Stensel of Keller Williams Lincoln Square.
The Case-Shiller indexes measure home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

By J.W. Elphinstone, AP Real Estate Writer
On Tuesday September 29, 2009, 2:13 pm EDT

Will the DOW JONES Hit 10K

It is interesting to see where we have come with the Dow Jones Industrial Average. To give you some insight, the DOW closed on May 26Th 1896 at 40.94. The thought back then was the DOW would never hit 300. Well it took 45 years, but the DOW closed at 381.17 on September 3 1929. At that time the new benchmark was 1,000. Right around when my grandfather celebrated his 3rd birthday (1929), I am sure they all thought that it would almost be impossible to hit 1,000. November 14Th 1972 (my brother was almost 1 year old) it did it, it hit 1,000! During the the 80's it hovered right around 2,000. It wasn't until the 90's it really did some amazing things. It went from 2,256.43 in 1989 to 10,006.78 in 1999.

Enough of the history lesson. Now here we are in 2009 and we are set to see the DOW hit 10k again. Does it mean we are healthy again, maybe not. Does it mean we are more confident as a county again, perhaps. Regardless what it means, we live in a country that is strong. Our poorest of the poor here in America are some times the richest of the rich in other countries. To put an exclamation on this point, I have a friend that lives in Russia. He is amazed that we have such big homes. In Russia, if you have a one bedroom (we in the US would consider this as a studio) we would be comfortable. Now, if you lived in a 2 bedroom (we in the US would consider this to be a 1 bedroom) we would be pretty well off. It makes me think of my Arbor Home. I live in a 3 bedroom home with a loft and just over 1800 sq. ft. of living space. In America, it is considered a modest home. Imagine how rich I look to my friend in Russia.

Just to be living in the USA makes you richer than most of the world. Enjoy this great country!

Last Days for $8k Commercial

Why You Shouldn't Buy a Foreclosed or Short Sale Home

Lately I have had people coming into Arbor Pass asking me about foreclosed or short sale homes. The above picture shows the nightmare that could happen. Not to mention, if you are banking on the $8K tax credit, don't hold your breath. You could wait up to 1 year to get your keys with a short sale. Take a good read at the below article.

Damascus man even took the kitchen sink from foreclosed home

by Nicole Dungca, The Oregonian
Monday August 24, 2009, 8:14 PM

Grigoriy Bogoslavets' kitchen once contained thousands of dollars in high-quality fixtures
DAMASCUS -- After stripping his foreclosed home of everything from the air conditioning system to the kitchen sink, Grigoriy Bogoslavets was convicted of a crime that is often witnessed but rarely reported.
The 33-year-old electrician pleaded no contest last month to aggravated theft after stealing more than $50,000 of property attached to his former Damascus home, one of the few such cases in Oregon or across the country to result in prosecution. He will be sentenced Sept. 22.
After foreclosure, the kitchen was stripped of nearly everything that could be removed, including the kitchen sink and cabinets.
Prosecutor Bryan Brock, who is handling the case for the Clackamas County district attorney's office, said he has never seen a similar indictment. Detective Jim Strovink of the Clackamas County Sheriff's Office called it a "very isolated case."
Departing homeowners' taking off with fixtures that are legally part of the house -- generally anything attached or installed -- is nothing new to real estate brokers. What's changing, especially in the nation's worst housing markets, is the recognition that such acts can be criminal.
Banks, which usually can recoup losses from insurance claims, rarely take the time and effort to report theft of home fixtures. But law enforcement officials say nearby residents, eager to preserve their own home values, are starting to turn in their former neighbors.
That's what happened in the Bogoslavets case. Neighbors tipped off police when they saw Bogoslavets return to his former home with a van after vacating the premises. Investigators discovered Bogoslavets had taken nearly everything he could remove, including the kitchen island, fireplace, bathtubs, the doorbell and electrical outlets.
In Phoenix, where average home values in some areas have dropped more than 50 percent since their 2006 high, the FBI has intervened. In April, members of the FBI's Mortgage Fraud Task Force arrested five people accused of stripping their foreclosed homes. Some of them advertised foreclosure sales on Craigslist, according to Julie Halferty, the task force supervisor.
Some local Arizona law enforcement agencies are also taking more of a hard line. The Surprise, Ariz., Police Department arrested a former homeowner who took items estimated at $20,000.
"If it's $100,000 or $15,000, it doesn't matter," Sgt. Mark Ortega said. "If we have proof that it was committed ... it's pretty simple."
In Oregon, stripping foreclosed homes down to the walls is becoming more of an issue just by virtue of increased foreclosures, said Carl Iams, the real estate broker who was assigned to the Bogoslavets' home.
Brock did not speculate on whether Oregon will see more of these arrests. But if Clackamas County law enforcement brings forward more strong cases, he said, the district attorney's office will prosecute them.
"It's a question of reporting it," Brock said. "In the past, we have not said no to these cases, we've just not had them reported."
In some cases, it can be difficult to prove a crime has occurred, such as when a homeowner removes fixtures after receiving a notice of default but before officially losing ownership to a bank or mortgage company. Under Oregon law, amenities secured to the home, such as toilets and fireplaces, are the property of the titleholder.
Bogoslavets was an exceptional case because of the amount he took, as well as his additional criminal charges. As part of a plea bargain, he pleaded no contest to four counts of first-degree aggravated theft for fraudulent dealings with an electrical contractor company. Prosecutors plan to recommend a sentence of nearly four years in prison.
Iams said he hopes that Bogoslavets' conviction will serve as a symbol for the thousands of Oregonians who could lose their homes this year.
"People knowing that criminal charges can be filed will hopefully serve as a deterrent," he said.
-- Nicole Dungca; nicoledungca@news.oregonian.com

TOPWRAP-A year after Lehman, Bernanke says recession likely over

* Bernanke says U.S. recession likely over
* U.S. retail data lifts stocks, pressures bonds
* Banks of England and Canada say recovery to be slow (Updates with U.S. markets' closes; details of Lehman Brothers anniversary)
By Caroline Valetkevitch
NEW YORK, Sept 15 (Reuters) - A year after the Lehman Brothers collapse, Federal Reserve chief Ben Bernanke said on Tuesday the recession was likely over, while data supported hopes that recovery from the worst downturn in decades was advancing.
But Bernanke said the recovery would be slow and it would take time to create jobs. Similar warnings came from the Bank of Canada and Bank of England, whose governor also said the bank could cut the interest rate it pays on commercial banks' deposits. For more see [ID:nN1523355].
The comments came exactly one year after the collapse of Lehman Brothers investment bank, an event that set off the U.S. economy's worst recession since the 1930s and helped spark a global financial crisis.
"Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time," Bernanke said after addressing a Brookings Institution conference. Fed officials meet next week to review their policy options.
The U.S. Commerce Department said retail sales climbed 2.7 percent in August after declining 0.2 percent in July. It was the biggest monthly advance since January 2006 and well above expectations on Wall Street for a 2 percent increase.
"Retail sales show the recovery is here. This wasn't just autos, it wasn't just gasoline. This was the U.S. consumer getting out of their foxhole," said T.J. Marta, market strategist at Marta on the Markets in Scotch Plains, New Jersey. "This is indisputably a good number."
Readings on manufacturing in the New York region and on national producer prices also came in stronger than expected.
Stocks in Europe and the United States rose after the retail data, with the benchmark Standard & Poor's 500 index .SPX gaining 0.3 percent to end at 1,052.63, while U.S. Treasuries prices US10YT=RR fell, pulling benchmark yields back from two-month lows.
The S&P is up about 55 percent since hitting 12-year lows in early March, but investors have been eager to see more definitive signs that the economy is getting better.
In its monthly report, the Organization of Petroleum Exporting Countries, which left its world oil demand forecast for 2010 unchanged, also said a recovery will be slow and gradual, even though evidence shows the world economy should be improving.
Crude oil prices in New York CLV9 rose $2.07 to $70.93 a barrel.
In Germany, the ZEW survey showed a smaller-than-expected improvement in the country's investor morale.
The ZEW's expectations index for Germany rose to 57.7 from 56.1 in August, reaching its highest since April 2006, although economists had expected a bigger rise.
Adding to the mostly upbeat comments on the economy in the United States, President Barack Obama told autoworkers the U.S. economy was on the mend. [ID:nN1549500]
Even with signs of economic improvement, the rising U.S. unemployment rate has remained a top worry and autoworkers have been among the hardest hit by layoffs.
The Bank of Canada's deputy governor, meanwhile, said a smooth economic recovery in Canada is not yet assured and that the strength of the Canadian dollar is one factor that could derail a comeback. (Reporting by Reuters reporters worldwide; Editing by Dan Grebler)

Fed survey shows US recession may be over

US: Federal Reserve survey shows worst recession since 1930s may be over

WASHINGTON (AP) -- Economic activity is stabilizing or improving in most of the U.S., according to a new government survey, adding to evidence that the worst recession since the 1930s is over.
The Federal Reserve's snapshot of economic conditions backs predictions by Fed Chairman Ben Bernanke and most other analysts that the economy has started to grow again in the current quarter.
In the survey released Wednesday, all but one of the Fed's 12 regions indicated that economic activity was "stable," showed "signs of stabilization" or had "firmed." The one exception was the St. Louis region, which continued to report that the pace of decline in economic activity appeared to be "moderating."
Looking ahead, businesses in most Fed regions said they were "cautiously positive" about the economic outlook.
The assessments of businesses on the front lines of the economy was brighter than those they provided for the Fed report in late July. At that time, most regions said the recession was easing its grip and some of them reported signs that activity was leveling off.
In Wednesday's survey, the Dallas region indicated that economic activity had "firmed." The Fed regions of Boston, Cleveland, Philadelphia, Richmond and San Francisco mentioned "signs of improvement." The Atlanta, Chicago, Kansas City, Minneapolis and New York regions described activity as "stable or showing signs of stabilization."
Analysts predict the economy is growing in the current July-September quarter at anywhere between 3 and 4 percent.
Most of that growth should come from more spending from businesses, which had slashed investments -- often by double-digits -- during the recession.
Consumer spending, however, is expected to turn up only because of the binge-buying of automobiles generated by the short-lived Cash for Clunkers program. Buyers were given cash rebates to trade in less efficient gas guzzlers.
The Fed's survey found that the majority of regions did report that the government's clunkers program "boosted traffic and sales." But aside from brisk businesses at auto dealerships, other merchants struggled. Consumer spending remained "soft" in most Fed regions.
Manufacturers in most regions, meanwhile, reported "modest" improvements. The San Francisco region said orders rose for semiconductors and other information technology products. Richmond, Atlanta, Chicago and Minneapolis reported increases or planned increases in automobile production. Several regions noted more production for pharmaceutical products.
Although the ailing residential real-estate market is still weak, it also flashed signs of improvements. The Fed regions of Chicago, Richmond, Boston and San Francisco observed an "uptick in sales." Most regions said buyer demand remained stronger at the low end of the housing market, although Philadelphia did note an "upturn in sales at the high end of the market."
The Boston, Cleveland, Dallas, Kansas City, Richmond and New York regions credited the first-time home buyer tax incentive with spurring sales. Most regions reported downward pressure on home prices, although Dallas and New York said that prices were "firming."
The commercial real-estate market, however, continued to drag. Demand for space remained weak and construction fell again in all regions.
On the jobs front, employment conditions "remained weak" in all the Fed regions.
The nation's unemployment rate climbed to a 26-year high of 9.7 percent in August. It is expected to top 10 percent this year.
Many economists predict that rising unemployment will keep consumers cautious. For the budding recovery to be durable, businesses will have to step up spending and investment, analysts say.
The Fed's survey found that staffing firms in Atlanta, Dallas, Richmond, Cleveland, Philadelphia, Boston, New York and Chicago did report a "slight pickup" in demand for temporary workers. That's an encouraging sign because employers will usually boost use of temp workers before they hire new employees.
Still, several regions noted businesses and local governments were imposing wage freezes or cutting compensation in some cases. With the labor market weak, employers aren't expected to be generous with wages, a force that will keep inflation low, the Fed report said. Expectations for a lethargic recovery also likely will prevent companies from jacking up prices, keeping inflation subdued, the report suggested.

By Jeannine Aversa, AP Economics Writer
On Wednesday September 9, 2009, 3:07 pm EDT

July pending home sales rise to 2-year high

Pending US home sales rise for sixth straight month in July to highest level since June 2007

WASHINGTON (AP) -- A gauge of future U.S. home sales rose more than expected in July to the highest level in over two years as first-time buyers rushed to take advantage of a tax credit that expires this fall.
The report showed the housing market is rebounding faster than expected from its historic bust. Low prices and the looming expiration on Nov. 30 of a first-time homebuyers' tax credit of up to $8,000 have spurred sales. Prices in much of the U.S. have begun to rise from the depths of the slump.
"The overall trend toward stabilization is undeniable at this point," wrote Mike Larson, real estate analyst at Weiss Research.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 percent to 97.6. It was the sixth straight increase, and 12 percent higher the same month last year.
Economists surveyed by Thomson Reuters had expected the index to edge up to only 96.5.
The index of pending home sales indicates how sales completed this month and next will turn out. Typically, there is a one- to two-month lag between a contract and a final deal. But delays in getting mortgages approved and appraisals completed have recently lengthened the time it takes to close a deal in many cases.
Analysts predict sales will drop off when the tax credit expires, or if mortgage rates rise from near-record lows. Foreclosures also continue to rise, and banks are forced to sell those properties at deep discounts, pushing prices down.
A 12 percent jump in sales contracts in the West and a 3 percent increase in the South drove July's overall increase. Sales fell in the Northeast and Midwest.
The Realtors group projects that around 2 million first-time buyers will take advantage of the credit this year, and says it is spurring 350,000 additional sales that wouldn't have happened otherwise.
Nationally, home prices in the second quarter posted their first quarterly increase in three years, according to the Standard & Poor's/Case-Shiller national index released last week. Prices are growing in some parts of the country, but "beware a rise in supply as frustrated would-be sellers see their chance," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
While home prices are still 30 percent below the mid-2006 peak, their new direction should bring relief to lenders, homeowners and buyers alike.
Falling property values have wiped out $4 trillion in homeowners' equity, and thousands have walked away from homes that are worth far less than their mortgage balance. But now, with prices stabilizing, many buyers who had been staying out of the market are coming off the sidelines.

By Alan Zibel, AP Real Estate Writer On Tuesday September 1, 2009, 11:51 am EDT