Survey Reports Interest in Purchasing Foreclosed Homes Spikes

Trulia.com, along with RealtyTrac, today released the latest results of a tracking study conducted on their behalf by Harris Interactive® showing notable gains in consumers’ willingness to buy foreclosed properties, with 55 percent of U.S. adults indicating that they are at least somewhat likely to consider purchasing a foreclosed home in the future, compared to the 47 percent of U.S. adults who indicated the same in November 2008. In the current market, U.S. adults believe foreclosed homes are an even greater bargain opportunity than before, with 40 percent expecting to pay at least 50 percent less for a foreclosed home, compared to only 31 percent of U.S. adults surveyed in November 2008. The May 2009 survey also found that 74 percent of U.S. adults familiar with President Barack Obama’s Mortgage Relief Program are at least somewhat confident it will give homeowners the incentive to renegotiate with mortgage lenders in order to prevent their homes from going into foreclosure.

While overall consumer interest in buying foreclosed homes has increased, the current wave of the study also found higher levels of negative sentiment around purchasing foreclosed properties. In November of 2008, 80 percent of U.S. adults felt that there were negative aspects to purchasing a foreclosed home. In the current survey, the number of U.S. adults concerned with negative aspects has risen to 85 percent. Among these 85 percent, 71 percent cite hidden costs as their top concern, 46 percent believe the process is risky and 31 percent are concerned that the home will lose value. Not surprisingly, consumers expect hefty discounts on foreclosed homes, with 83 percent believing they should pay at least 25 percent less for a foreclosed property, perhaps to compensate for perceived risks.

“As interest in purchasing foreclosed homes increases, competition is heating up with traditional sellers competing with bank-owned prices. Across the U.S., 24 percent of existing homes for sale on the market have seen at least one price reduction in order to stay competitive, creating a tremendous opportunity for consumers to buy homes at significantly lower prices,” said Pete Flint, co-founder and CEO of Trulia. “Competition amongst sellers, along with the newly created economic incentives, has created the most significant discounts that we’ve seen in decades, presenting opportunities for first-time home buyers and families looking to trade up to a bigger home.”

“Although consumers are aware that there may be some challenges involved in purchasing a foreclosed home, they are very interested in the bargain opportunities available in the foreclosure market. People want the best deals they can find and they are willing to go outside of their comfort zones if it means they can buy more home for less money,” said Rick Sharga, senior vice president of RealtyTrac. “Consumers who educate themselves on the opportunities available will likely be rewarded.”

Most Likely to Buy Foreclosures

• Two-thirds of U.S. adults between the ages 18-44 (66 percent) would consider purchasing a foreclosed home, compared to a little more than one-third of those ages 55 and older (38 percent). Respondents aged 45-54 fell in between, with 53 percent indicating that they would be at least somewhat likely to consider a foreclosed property.

• Current renters (68 percent) are more likely to consider purchasing a foreclosed home than current homeowners (49 percent).

• U.S. adults with children under 18 living in their household also show an increased likelihood to consider foreclosure properties, with 66 percent indicating they would be at least somewhat likely to purchase one, compared to 49 percent of those without children under 18 in the household.

January 2009 Home Price Data From LoanPerformance

LoanPerformance HPI Largest CBSAs Ranking:

CBSA	12 Month HPI Change %
	12-Month
	Change
Riverside-San Bernardino-Ontario CA	-29.62%
Miami-Miami Beach-Kendall FL	-28.79%
Las Vegas-Paradise NV	-28.41%
Oakland-Fremont-Hayward CA	-27.73%
Cape Coral-Fort Myers FL	-27.23%
Los Angeles-Long Beach-Glendale CA	-25.14%
Phoenix-Mesa-Scottsdale AZ	-24.26%
Fort Lauderdale-Pompano Beach-Deerfield Beach FL	-23.48%
San Diego-Carlsbad-San Marcos CA	-21.99%
Orlando-Kissimmee FL	-20.96%
Tampa-St. Petersburg-Clearwater FL	-18.05%
San Francisco-San Mateo-Redwood City CA	-15.12%
Washington-Arlington-Alexandria DC-VA-MD-WV	-14.77%
Chicago-Naperville-Joliet IL	-13.12%
Portland-Vancouver-Beaverton OR-WA	-11.62%
Seattle-Bellevue-Everett WA	-11.48%
Minneapolis-St. Paul-Bloomington MN-WI	-11.10%
Honolulu HI	-10.82%
Edison-New Brunswick NJ	-9.34%
New York-White Plains-Wayne NY-NJ	-8.46%
Boston-Quincy MA	-7.25%
St. Louis MO-IL	-5.85%
Cleveland-Elyria-Mentor OH	-4.84%
Charlotte-Gastonia-Concord NC-SC	-4.38%
Atlanta-Sandy Springs-Marietta GA	-3.58%
Detroit-Livonia-Dearborn MI	-3.44%
Raleigh-Cary NC	-3.38%
Salt Lake City UT	-2.95%
Philadelphia PA	-2.85%
San Antonio TX	-1.10%
Denver-Aurora CO	0.97%
Dallas-Plano-Irving TX	1.54%
Houston-Sugar Land-Baytown TX	3.58%
Austin-Round Rock TX	3.92%

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached as of January 2009

September 2008 LoanPerformance House Price Index

12-Month Change By Top CBSAs (Core Based Statistical Areas) as of September 2008
	12-Month
	Change
Oakland-Fremont-Hayward, CA	-29.07%
Riverside-San Bernardino-Ontario, CA	-28.56%
Los Angeles-Long Beach-Glendale, CA	-28.46%
Miami-Miami Beach-Kendall, FL	-27.38%
Las Vegas-Paradise, NV	-26.20%
Cape Coral-Fort Myers, FL	-24.92%
San Diego-Carlsbad-San Marcos, CA	-24.90%
Phoenix-Mesa-Scottsdale, AZ	-24.03%
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL	-22.46%
Orlando-Kissimmee, FL	-18.24%
San Francisco-San Mateo-Redwood City, CA	-16.76%
Tampa-St. Petersburg-Clearwater, FL	-15.36%
Washington-Arlington-Alexandria, DC-VA-MD-WV	-13.14%
Honolulu, HI	-10.61%
Minneapolis-St. Paul-Bloomington, MN-WI	-9.76%
Seattle-Bellevue-Everett, WA	-9.16%
Chicago-Naperville-Joliet, IL	-8.04%
Detroit-Livonia-Dearborn, MI	-7.67%
Portland-Vancouver-Beaverton, OR-WA	-7.62%
New York-White Plains-Wayne, NY-NJ	-5.92%
Boston-Quincy, MA	-5.85%
Atlanta-Sandy Springs-Marietta, GA	-5.79%
Edison-New Brunswick, NJ	-5.75%
Cleveland-Elyria-Mentor, OH	-5.19%
St. Louis, MO-IL	-3.59%
Denver-Aurora, CO	-3.34%
Philadelphia, PA	-3.00%
Charlotte-Gastonia-Concord, NC-SC	-2.26%
Raleigh-Cary, NC	-0.49%
Salt Lake City, UT	-0.34%
Dallas-Plano-Irving, TX	2.23%
San Antonio, TX	2.73%
Houston-Sugar Land-Baytown, TX	3.53%
Austin-Round Rock, TX	4.04%

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached Series as of September 2008

Sales Of Existing U.S. Homes Fall 3.1 Percent

Existing home sales including single-family, townhomes, condominiums and co-ops – fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million units in October from a downwardly revised pace of 5.14 million in September, and are 1.6 percent below the 5.06 million-unit level in October 2007.

Lawrence Yun, NAR chief economist, said consumer hesitation is understandable. “Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” he said. “We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.”

Total housing inventory at the end of October slipped 0.9 percent to 4.23 million existing homes available for sale, which represents a 10.2-month supply² at the current sales pace, up from a 10.0-month supply in September.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.20 percent in October from 6.04 percent in September; the rate was 6.38 percent in October 2007. “Mortgage interest rates have been moving up and down in a historically low range, with the fixed rate down to 6.04 percent last week,” Yun noted.

Even with the overall decline, Yun identified a number of areas with solid sales gains from a year ago, including many California and Florida markets, as seen previously, as well as Boston, Minneapolis, and Denver.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the need for professional assistance is growing. “Navigating the transaction process is easier said than done without professional assistance in today’s market,” McMillan said. “Proper valuation when many homes are being sold below replacement construction costs is very challenging – buyers remain in the driver’s seat.”

The national median existing-home price³ for all housing types was $183,300 in October, down 11.3 percent from a year ago when the median was $206,700. There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices; the median is where half of the homes sold for more and half sold for less.

Single-family home sales declined 3.3 percent to a seasonally adjusted annual rate of 4.43 million in October from a level of 4.58 million in September, but are unchanged from a 4.43 million-unit pace in October 2007. The median existing single-family home price was $181,800 in October, down 11.2 percent from a year ago.

Existing condominium and co-op sales eased by 1.8 percent to a seasonally adjusted annual rate of 550,000 units in October from 560,000 in September, and are 12.0 percent below the 625,000-unit pace a year ago. The median existing condo price⁴ was $193,000 in October, which is 13.0 percent below October 2007.

Regionally, existing-home sales in the Northeast slipped 1.2 percent to an annual pace of 830,000 in October, and are 9.8 percent lower than a year ago. The median price in the Northeast was $241,700, down 9.8 percent from October 2007.

Existing-home sales in the West eased by 1.6 percent to an annual rate of 1.21 million in October but are 37.5 percent higher than October 2007. The median price in the West was $231,400, down 27.0 percent from a year ago.

In the South, existing-home sales declined 3.2 percent to an annual pace of 1.84 million in October, and are 10.2 percent below a year ago. The median price in the South was $161,100, which is 5.8 percent lower than October 2007.

Existing-home sales in the Midwest fell 6.0 percent in October to a pace of 1.10 million and remain 9.1 percent below October 2007. The median price in the Midwest was $149,400, down 6.7 percent from a year ago.

July 2008 LoanPerformance Home Price Index

“As of July, nominal home prices declined 10.9 percent from a year ago. Our early August view of the data indicates a decline of 10.8 percent from a year ago. This continues the positive trend of no further acceleration in the pace of the rate of decline. Furthermore, in part because of the declines in house prices, our projection for pre-foreclosure and foreclosure filings through the end of 2008 is 3.2 million, an increase of just over 80 percent from a year ago.” said Mark Fleming, chief economist for First American CoreLogic. “The recent price trend is similar to the Massachusetts and Texas house price declines in the 1980s and 1990s that took approximately two years to bottom out. In both cases there was stabilization in the rate of decline before the lengthy recovery in price levels. There is reason to be cautiously optimistic because the price decline stabilization we observe in this cycle is necessary before any improvement in price levels occur,” added Fleming.

12-Month Change By Top CBSAs (Core Based Statistical Areas) as of July 2008
	12-Month
	Change
Los Angeles-Long Beach-Glendale, CA	-27.95%
Oakland-Fremont-Hayward, CA	-27.28%
Riverside-San Bernardino-Ontario, CA	-26.93%
Miami-Miami Beach-Kendall, FL	-25.95%
Las Vegas-Paradise, NV	-25.13%
San Diego-Carlsbad-San Marcos, CA	-23.24%
Cape Coral-Fort Myers, FL	-23.12%
Phoenix-Mesa-Scottsdale, AZ	-22.95%
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL	-20.97%
Orlando-Kissimmee, FL	-18.02%
Tampa-St. Petersburg-Clearwater, FL	-15.82%
San Francisco-San Mateo-Redwood City, CA	-13.59%
Washington-Arlington-Alexandria, DC-VA-MD-WV	-13.58%
Cleveland-Elyria-Mentor, OH	-11.27%
St. Louis, MO-IL	-10.31%
Minneapolis-St. Paul-Bloomington, MN-WI	-9.09%
New York-White Plains-Wayne, NY-NJ	-7.68%
Boston-Quincy, MA	-7.49%
Atlanta-Sandy Springs-Marietta, GA	-6.93%
Seattle-Bellevue-Everett, WA	-6.90%
Honolulu, HI	-6.73%
Detroit-Livonia-Dearborn, MI	-6.59%
Chicago-Naperville-Joliet, IL	-6.42%
Edison-New Brunswick, NJ	-6.15%
Portland-Vancouver-Beaverton, OR-WA	-4.40%
Philadelphia, PA	-3.78%
Denver-Aurora, CO	-2.21%
Charlotte-Gastonia-Concord, NC-SC	-0.74%
Salt Lake City, UT	1.37%
Raleigh-Cary, NC	1.49%
Dallas-Plano-Irving, TX	2.17%
San Antonio, TX	3.53%
Houston-Sugar Land-Baytown, TX	4.12%
Austin-Round Rock, TX	4.15%

Source: First American CoreLogic, LoanPerformance HPI, Single Family Detached Series as of July 2008

Allstate To Refund 700,000 Texas Homeowner Accounts

Texas customers of Allstate Insurance will get $71 million in refunds, credits and rate reductions for homeowner policies in a settlement that resolves legal disputes with the state over the rates dating to 2004.

The settlement involving Allstate Texas Lloyd’s customers was announced by Texas insurance officials Monday.

Allstate will refund almost $37 million for new and renewal policies written between Dec. 1, 2004-April 23, 2006, a period when the state said its rates were too high.

Allstate also will reduce homeowners rates for Allstate Texas Lloyd’s customers by 3 percent statewide for new and renewal policies written for one year beginning June 2. And it will credit or refund policy holders 3 percent between Aug. 20, 2007 and June 1.

The company agreed not to increase homeowner premiums from June 2 to June 1, 2009, barring extraordinary circumstances.

The Texas Department of Insurance estimates as many as 700,000 policy holders will be affected by the settlement. Allstate is Texas’ second-largest writer of homeowner policies and covers nearly 15 percent of the market.

Former policyholders eligible for refunds will receive checks from Allstate. Current eligible policyholders will receive refunds through policies or company checks. All refunds are to be credited no later than Nov. 1.

“This agreement with the Texas Department of Insurance helps create clarity and consistency in how we work together,” said Rich Crist, Allstate’s Texas Field vice president. Crist said he hoped the settlement led to a more competitive marketplace.

Allstate said the settlement agreement doesn’t include policies issued by Allstate Fire and Casualty Insurance Co.

Source: Houston Chronicle

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Nehemiah Wins Judgment Decision In Lawsuit Against HUD

The following statement is in response to the decision by the United States District Court for the Eastern District of California to rule against the U.S. Department of Housing and Urban Development (HUD) rule to ban private downpayment assistance as proposed in the “Standards for Mortgagor’s Investment in Mortgaged Property” regulation published October 1, 2007.

“We are thrilled with the Court’s decision to support low-to-moderate income families across the country by ruling against HUD’s attempt to ban private downpayment assistance. This is a major and conclusive judgment, leaving no uncertainty that downpayment assistance is a life line to the families that Nehemiah serves. It is heartening to see that the Court’s arguments echo our sentiments and concerns. This decision preserves access and supports the use of sensible and reasonable approaches to homeownership for millions of working class families. The Nehemiah Program has granted more than $1 billion in gifts in the past decade, helping more than 250,000 American families achieve the American dream. It is a privilege to continue providing a helping hand to America’s underserved families by building both safer communities and financial strength through homeownership. As we have said before, we look forward to working with HUD to support deserving families across the country.”

- Scott Syphax, President and CEO of Nehemiah Corporation of America, the largest and oldest private downpayment assistance provider.

Some Builders Have A Deal For Potential Buyers: Price Protection Guarantees

As the housing slump drags on, some builders have a deal for potential buyers: Sign a contract, and if the cost of comparable homes drops before closing, you get the lower price.

Companies including KB Home and Ryland Group hope such “price protection” guarantees will lessen consumers’ paralyzing fears about buying real estate whose value is falling and get them to the dotted line, bring in much-needed cash and reduce high cancellation rates.

Los Angeles-based KB Home, one of the country’s biggest builders, is preparing to roll out its program in 35 markets nationwide this month. Ryland, which only recently offered price protection for the first time and now gives it to any buyer who asks, is looking to reiterate its value in the marketplace, said Eric Elder, senior vice president of marketing and communications. “If that value changes,” he added, “we’ll share that risk.”

It is a strategy shift for the ailing industry — one market barometer has its stock prices down 50% in the last year — which initially resisted price cuts as the market softened. Builders first offered freebies like granite countertops, tropical vacations or discounted closing costs. Then, in September, Hovnanian Enterprises Inc. held a national “Deal of the Century” bonanza offering discounts into the six figures, a move other builders quickly copied, even though it can drag down a neighborhood’s value and incense earlier buyers.

Dramatic price reductions, however, haven’t been enough. As the residential market continues to deteriorate, more buyers are having trouble securing mortgages and selling existing homes, whose inventories are near all-time highs. Dire price predictions have also spooked consumers: Wachovia Corp. forecasts nationwide home values could fall as much as 20% this year. The resulting barrage of chilling headlines has left builders fighting to reassure customers that now is, in fact, a safe time to buy.

“In this market, where everybody’s kind of hypersensitive, anything to alleviate the fear factor and the concern about eroding equity, that is a wonderful idea,” said Kelly Cobb, a North Carolina broker with Fonville Morisey.

The guarantees cover the base price and exact floor plan, and can include existing inventory, already heavily discounted, though those deals generally close quickly, leaving less time for prices to fall. Determining a specific reduction is a process that blends art and science, Mr. Elder said, and varies by community. Moreover, the protection ends at closing, so longer-term price declines could still leave buyers owing more than the house is worth.

There is also risk for builders, and no assurances this will work: Last year, behemoth Lennar Corp. tested it in Florida, one of the states hardest hit by the downturn, but stopped.

Even after price tags are trimmed, buyers could still decide to walk away, keeping cancellation rates elevated. And if prices decline during construction, companies could see gross margins, which hit 25% during the boom and have plummeted to razor-thin levels, further stressed. “Depending on how much lower prices could go down, it could mean moving from a profit to a loss or a deeper loss,” said Robert Curran, Fitch Ratings’ lead home-building analyst.

Some industry watchers think the offers mean builders don’t expect further significant price erosion.

By Dawn Wotapka From The Wall Street Journal Online

SAWS Special Service Fees Effective Jan. 1, 2008

Special Service Fees Approved

San Antonio City Council recently approved the implementation of new San Antonio Water System special service fees. These new fees will become effective Jan. 1, 2008.

Many of these fees have not been updated in nearly a decade and fall short of covering the actual costs of the services provided. Increasing the fees will help make sure SAWS ratepayers do not subsidize the cost of services they do not use.

While most of the fees are industrial and commercial in nature, the meter trip fee and account deposit fee will affect some residential customers as well.

Among the fee adjustments are:

• Account-Related Fees, which cover costs for itemized statements and account deposits required to manage delinquent bills.
• Meter-Related Fees, which cover costs for special, non-routine trip requests to turn on and turn off meters.
• Industrial-Related Fees, which cover costs for industrial water discharge permits; discharge sample collection, analysis and laboratory testing; and liquid waste hauling permits.
• Development-Related Fees, which cover costs for lift station use and maintenance, fire flow testing, fire hydrant meter flow rates, well inspections, and right-of-way encroachment processing.

View a Summary of Special Service Fee Schedule.