The Battle in Loan Modification

Since the beginning of the year, the Making Home Affordable Program and programs alike have been met with both progressive support and glaring criticism. Supporters believe that the loan-mod programs are ebbing the tide of mounting foreclosures, while critics question the success rate and amount of effort pur forth by banks in these programs. What is certain is that Mortgage Assistance Programs are vital to a recovery in the economy and the housing market. Real estate is Cylclical, Seasonal and Emotional.

An example of promise is the recent news of the HAMP program achieving 500,000 loan-mods ahead of schedule. Increased pressure has forced banks to speedily follow through with loan-mods with the Administration issuing progress reports periodically. Also, news of banks getting better at processing foreclosures is the silver lining in an otherwise dark cloud.

However, criticism about these programs is mounting; some banks are far behind on the amount of mortgage relief being provided while some borrowers face default even after mortgage assistance. Slow turnaround of paperwork by banks is one of the criticisms about these programs.

With foreclosures mounting and unemployment on the rise, the final outcome on these programs is yet to be seen.

Mortgage Industry Faces Looming Concerns

Heading into the 4th Quarter of this tumultuous economic year, the mortgage industry faces growing problems ahead. While news of Obama’s HAMP program reaching its 500,000 goal of helping homeowners faster than expected is promising, concerns on possible bailouts and underperforming programs continues to threaten the vision of recovery in the housing market. Mortgage Assistance Programs are needed to curtail these concerns before problems become “too big to fail.” We must always remember that Real estate is Cyclical Seasonal and Emotional.

Will the FHA Need a Taxpayer Bailout?

The question about a possible Federal Housing Administration bailout in the near future is the story circulating news desks today. F.H.A. commissioner David H. Stevens sought to dispel concerns about the mortgage giant’s looming problems.

“Absent any catastrophic home price decline, F.H.A. will not need to ask Congress and the American taxpayer for extraordinary assistance – we will not need a bailout,” Mr. Stevens said in a prepared testimony on Capitol Hill Thursday.

Providing lenders with protection against losses as the result of homeowners defaulting on their mortgage loans, the FHA now insures more than 25% of mortgages in the country, up from 3% in 2006. Critics argue that a future FHA bailout is almost inevitable, as the agency’s capital is dangerously close to dipping below the mandated level of 2%. Independent financial consultant Edward Pinto concurs,

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” Edward said. He estimates that the agency faces losses of $70 billion on loans it has already made, short of its current reserves by $40 billion.

Fed Preparing for Commercial Real Estate Mortgage Crisis?

An unpublished Federal Reserve Report leaked in a recent Wall Street Journal article reporting rising defaults in the commercial real estate sector. The unpublished report concludes that U.S. banks are slow to take losses on their commercial real estate loans. Specific servicers reported having only 11 cents in reserves for every $1 in bad loans in the second quarter.

The NuWire Investor had this to say; “I don’t know what’s worse, the banks skimping on reserves and holding off on reporting losses in hope of revival or the Fed for knowing about the problem and trying to keep it a secret. Someone at the Fed must feel the same way because the report somehow found its way to the media.”

TARP Oversight Group Says Treasury Mortgage Plan Not Effective

The TARP group indicates that the government needs to increase its efforts to help struggling homeowners in this article. There is doubt that the $50 billion loan-modification program will provide the necessary relief to all homeowners it intended at the start of the program. With rising factors of unemployment, and decreasing property values the task becomes more daunting.

Manhattan Apartment Market's Quick Rebound

It’s good to see industry analysts confirming what we predicted roughly two months ago. A recent MSNBC articleindicates a surprisingly quick rebound in the Manhattan apartment market as of late. As consumer confidence builds, stability strengthens in the market as stated in our August Manhattan Condo Report and NYC Square Footage and Median Price Differentials report.

In our August report, we projected a sales activity and property values increase in the months of July, August and September.

The recent MSNBC article indicated a sales increase of apartments and co-ops between 46 and 69 percent from the second to the third quarter, with the number of New York’s unsold apartments falling from the peaks of April. Our projections of a 4th Quarter level of stability are appearing to be valid. In the real estate market there are few trusted sources and AccuriZ has been proven to be an authoritative source consistently.

For more statistical reports on property data from public records and property valuations click here.

Could Your Real Estate Blog Be In Trouble With The FTC?

In the news industry, it is unethical for a reporter to accept gifts (monetary or material) in exchange for a favorable story. The same is now being implemented in the blogging world. According to a recent article, the FTC (Federal Trade Commission) will fine bloggers $11,000 if blog post are made in exchange for good services from vendors. So real estate bloggers beware; that next blog post or statistical reports done quid pro quo could cost you $11,000. The lines between actual news reporting and blogging are becoming more and more blurred. As the credibility and outreach of blogging increases, I expect to see more strict guidelines for us.
Read the rest of the article here.

Are You on Active Rain?

If you are a real estate agent, broker, insurance agent or anyone in between, you should be on the ActiveRain network. With over 160,000 members (and counting) ActiveRain is a hub for real estate professionals looking to engage, interact and communicate with one another, just check out my profile. I've received some great responses from some of the articles I've produced. It has certainly helped grow my network.

'The rain' has many useful features. Members can host a blog, create a group, acquire 'associations,' and is great for getting referrals. The more 'active' you are on ActiveRain, the most points you acquire, pushing you to the top of pack in your specific area. Most blog post - if directed at a particular local market - could get you to the top of Google searches as well.

But most of all, ActiveRain is a great place to meet great people and share interesting ideas. And it's FREE. So sign up today and get active!

Square Footage Matters: Largers Homes Headed for Obsolescence?

A recent article on the Wall Street Journal Blog discussed the median household income over the last decade in relation to the average square footage increase of new single family homes. While the median household income has not changed significantly over the last decade, the average square footage has increased dramatically. Square footage matters, and our Housing In Crisis report produced months ago discussed this booming trend:

The Housing in Crisis report indicated that the variance increase in the average to median sale price from 6% to 22% can be most notably attributed to building size. Property data from public records noted that during the recent construction boom, many areas of the country experienced home sizes exceeding 2,200 square feet by the end of 2008.

Essentially, homes got larger while homeowners’ pockets didn’t. Couple this with significant overbuilding and easy lending and the keys to a housing boom are in place. Now with the economy looking towards recovery, this excess of larger homes – or ”McMansions” - could suffer from a demand shortage in some areas. This also forces builders to consider new construction with smaller floor plans to accomodate buyers. Will larger home values drop to meet demand? Are we seeing a halt to larger construction for some time? These answers remain to be seen.

What is certain is that square footage matters. As the market begins correction, the basic economic laws of supply and demand should return back to balance.

Housing Market Wrap-Up

More Home Sellers Cutting Prices
How To Read Between the Lines of Real Estate
Housing Bottom – Oh Really?
Enroll into AccuriZ and Receive a Free Trial
Foreclosure Stabilize in August, but Borrowers Still Late
Housing In Crisis
Insiders at Toll Brothers Continue to Dump Shares Ahead of Reported Housing Recovery
Mortgage Assistance Program
Real Estate is Cyclical, Seasonal and Emotional

Summer Breather: Positive News leads to Increased Confidence

White pants and white shoes go in the closet after Labor Day!

And so should the commentary we have become addicted to over the last six months regarding the Real Estate Market. The rhetoric of “worse is to come” claiming the headlines should be replaced with the optimism of a full fledged recovery in 2010.

I have presented several blog posts during the past eight weeks dealing with Housing in Crisis, Mortgage Assistance Programs and most notably the Cyclical and Seasonal real estate markets. Our efforts to attain over 40 million public records covering the top 100 MSA’s has been successful, yielding positive results that analyze actual property data and sales activity, not a tracking index.

Because real estate is complex, many analysts seek a simple solution to explain the patterns of buying and selling activity. But there is no simple solution; given that location and square footage are two critical elements that affect property values.

We have received over 100 comments to our blogs which tend to agree with this. So my challenge to those who follow our posts is to join in and become more Active! Your comments do not just reach us; they reach other members who can benefit from your insight and guidance.
Opinions on the real estate market will only change when more analyses of public records and the property data associated with those records are presented and accepted by the blogosphere. This is not a small block of users that can be ignored.

Sure, there remain problems in the market. Sure, appraisers are being conservative. And yes, some agents may be crossing the line. But the bottom line is this:

Positive News leads to increased confidence. Increased confidence will lead to more sales and thus all Real Estate Agents benefit. We are headed towards a housing recovery and we need to announce it. So submit a blog post or comment where you have experienced something positive in the past three months or what you see ahead.

You can make a difference!

Real Estate Mania: Bears vs. Bulls in a CIty Near You!

Main Event: Bears vs. Bulls- The Housing Market Bottom Match

Real estate is Seasonal, Cyclical and Emotional, and the emotions are running wild at the moment. Home prices are up, sales are increasing and the reports are presenting "good news".

The "mania" of real estate predicting and forecasting is beginning to pick up as the summer selling season comes to an end, with hints of promise starting to appear in the housing market. After a grueling Housing Bust that left the economy severely damaged, property data analysis statistics collected from public records now show signs of recovery.

Both the Bears and Bulls have been fighting it out, relying on the training method of the S&P/Case-Shiller Home Price Index. The Bulls are starting to swing away, indicating a sign to the return of the boom days of old. The Bears are ducking the punches citing the lagging, inadequate property data analysis in the Case-Shiller Index as a sign of caution.

The stage for the Housing Market Bottom Showdown is set, with the American public's perception of the market at stake. Leaning too far to one side could mean a repeat of the 2006 Bust. Are we to believe that we are on the verge of a turnaround, or do we still need to be patient? We will take a look at the supporting arguments from both corners, which are based on the Case-Shiller Index and determine the best judgment for the public moving into the winter months. Here's the tale of the tape.

Home Prices on the Upswing from CNNMoney.com:
Packed with quotes of "positive signs" "great news" and "booming" about the Index, the optimism is rampant. It goes on to say that an area in Los Angeles had "booming" home sales again. Looking at the 20-city index below, L.A. had 0% change from Q1.
Is that really a boom? The American public needs real facts, not fluff. The following table is extracted from CNN.money.com:

Source:S&P/Case-Shiller Home Price Index

Year-over-year, EVERY city is still negative, with 15 cities negative over 10%. The talk of "shadow inventory" further depreciating the market crept in as well.
It has been noted before that Case-Shiller Index probably over weights foreclosure sales (Reported by AccuriZ and NewsnEconomics). Foreclosure-metro areas have been more heavily weighted, dragging down the overall value of the Index. Does it seem logical that financial institutions would dump houses on the market, knowing that such actions would further deflate property values? There are duplicate and triplicate recordings of foreclosures out there; thus distorting the actual count of properties in foreclosure.

Asking the important question: Would you sell in a down market? It seems to have more common sense than the confusing and contradictory analysis of the sales data presented by Case-Shiller. Letting the market stabilize will enable mortgage servicing companies to come to terms with existing owners. The AccuriZ Mortgage Assistance Program also provides a solution to this problem.

The article ends with this quote from Mr. Shiller, "I have found that momentum matters," he said, "and this is a sudden break in [downward] momentum. The [market] psychology seems to be changing."

Advantage: BEARS- Who do we trust

It's Time to Call the Housing Bottom: 95% of Case-Shiller Markets Show Home Price Improvement from TheMortgageReports.com

Source: TheMortgageReports.com

Improved by how much? 10 of the 20 markets listed are bordering the 1% line. Considering the margin for error, 1% is a meaningless number:

The article then proceeds to list 3 reasons why the Case-Shiller Index is imperfect:
It's limited to 20 U.S. cities, representing just 9% of the U.S. population
It's on a 2-month lag, reflective of how housing was, not how it is
It ignores locality, grouping city neighborhoods into one big lump

So if it's "time to call a housing bottom," what other data is being used (besides the imperfect Index) to make this claim? Admitting that the Case-Shiller Index is imperfect is one thing, but using that same imperfect data (with no other visible sources) to create a market forecast is completely another. Many reports have economists using the skewed data of the Index to captivate headlines and bolster their own personal agendas. When not weighed against other sources of information, the Index is questionable in determining a forecast.
Real facts about property data are needed to determine the current state of the market. This article ends by pressing people to buy now with contact information for a pre-approval letter.

Advantage: BEARS- Incomplete data means caution

Why It's Hard to Tell If Price Gains Represent a ‘Turning Point' from Wall Street Journal (WSJ.com): First, the article states that Mr. Shiller noted the recent index "may be turning point." In next sentence Mr. Shiller is quoted saying, "It really is too soon to call this as a turning point." Wait... what?

Later, Mr. Shiller expresses "great reluctance" in forecasting market prices. But this is exactly what transpires as economists make predictions solely based on the Case-Shiller report.
For example, later in the article housing economist Thomas Lawler notes that "the price index should keep gaining in the coming months" in the next paragraph. Based on what? What are we supposed to believe? The reason why it's ‘hard to tell' is because everyone has a different interpretation without providing the facts.

It ends with this quote from Lawler, "Indeed, the [index] is almost certain to continue increase over the next few months. After that, who knows?" said Mr. Lawler.

Advantage: BEARS: Too confusing to pinpoint.

Housing Market: Looking Better, But Still Troubled from Time.com: Using more than just the Case-Shiller Index, this article notes looking "behind the headline" to see that the "sector is still fragile." It looks deeper into the property data to see that the low- and mid-tier homes are doing better than more-expensive homes. Once again we see that Square Footage Matters! (Reported by AccuriZ). In a recent Manhattan Condo report we predicted stabilization by Q4, based on square footage;

Source: AccurZ.com

Also, noting that data on new-home sales like the Index are "notoriously imprecise and volatile," the article states that "new home-sales are best looked at over five or six months." So what is the real benefit of these Indexes?
The Time.com report even stated that the margin of error on one particular Index was plus or minus 13.4%. With that said who really benefits from this information?
The article ends with, "We're now moving forward, and even though it looks like we're doing that in a positive way, there could still be more plot twists ahead."

Advantage: BEARS

So how do they match up for the American public? When the match is based on one specific source of data that has been historically ineffective, no one wins. The Bulls emotions are high right now, but as the emotional sector dies down - and foreclosures, unemployment and a housing oversupply (in the AccuriZ Housing In Crisis report) start to do damage in the later rounds - the Bears' perspective might take control.

Again, Real Estate is Cyclical, Seasonal and Emotional.
Time and Patience are the elements that work to everyone's benefit. While things are looking better, we still have some time to heal. Incomplete data analyses that rely on public records and outdated property data from certain regions of the country have little impact other than stirring up the emotional sector of the market. A level of confidence needs to be balanced with a level of cautiousness, as quarterly reports and month-to-month gains are not enough to be deciding factors in a market forecast.

Latest News on Housing Market: Not a Surprise

The latest news on property data and Home Prices should not come as a surprise and we should not begin celebrating an end to the crisis. In our article Cyclical, Seasonal and Emotional, we discussed the three critical phases of real estate selling patterns that have attributed to the housing bust.

The latest news and public records indicate that these critical phases are performing to historical levels. That is, the summer seasonal market is showing a correction to the cyclical change that began in 2007. Now the million dollar question is, will the fall seasonal market (which affects Florida, Arizona and Nevada) continue to show recovery or will the markets pause until the next “Selling Season in 2010?”

Our report: Housing in Crisis (published in March 2009) addressed the broader issue of excess housing. Again, there is good news on this front. The excess housing is being absorbed at an annualized rate of about 1 million units. Having a glut of 5 million units at the end of 2008, this means we have another three to four years before the overall markets start to recover.
Housing Recovery is the focal point here. We predict that the Northeast will continue to show stability, with modest corrections in local markets from 3% to 5% through the end of 2010. The Midwest remains strong and will experience similar stability. In the five biggest areas where excess housing still dictates selling patterns, we are predicting that Arizona will recover sooner than sections of Florida and Vegas.

The latest news on the housing market is not a surpirse. Recovery and Stability are the focal points and we should start to see signs of this in the upcoming months.
No one should be surprised when the next Housing Index comes out in September which will show a further strengthening of the market and continued adjustment in housing values in an upward trend. Our report Median Sales Price published in March of 2009 indicated that the overall Median Sales Price would move upward to $215,000 to $220,000 by year end. The current median sale price as reported by the Commerce Department is a $210,000, an increase of over 5% from the low of $201,400 early this year.

New Solutions, New Rules for Real Estate

Agents and Brokers, new rules and solutions are apparent in Real Estate. The news about Lenders and the appraisal industry has recently captured headlines. Trust in the appraisal is an issue for everyone involved. But providing the Appraiser with statistical reports on property data from a third party source is a strong selling point to your client. You have the right to do so, and the appraiser must accept it. Here’s how.


1. Provide a list of sales in the area that have occurred for the past 18 months acquired from property data and public records (yes the banks want the last 6 months, but this is a guideline, not actual law). Sales data and property data can be acquired HERE.


2. Investigate each sale and write up what you can about the sale and its property data. Larger, better condition; foreclosed, poor condition etc. The appraiser MUST make and explain adjustments, so if you point them out and the appraiser ignores them then you have recourse.


3. Calculate the Sale Price Per Square Foot. It’s a simple calculation: sale price divided by house square footage. And check the square footage because public records can be outdated and incorrect. Providing this information allows you to examine the local market and property data based on a common denominator and express a level of knowledge about the market.


Why do you do this?


The appraiser, MUST ACCEPT the property data under USPAP and the appraiser must then add it to their appraisal file as a source record. Also, the property owner is entitled to a copy of the report.


This information should be presented to the appraiser with a letter stating that this research is provided from public record sources reflecting the property data listed by the local assessor. What this does for the borrower, seller or buyer is create a trail that information was provided. If the property data is not used, the appraiser then must explain why.


Appraisers are not the bad guys; but the less experienced ones are just looking to get in and out as quickly as possible. They’re focused on filling out the form versus doing the analysis.
In my 25 years of appraising, I have seen this pattern repeat itself over and over. Fees do not reflect the actual analysis that should be completed and appraisers tend to be cheap. As more companies provide statistical reports that the appraisers can use more than once, some of these issues will be resolved.


Unfortunately the issue of Bad Appraisals is a problem that should have been resolved 20 years ago with FIRREA, but it was left unregulated with few State Appraisal Boards putting the teeth into enforcement.


Let us know how we can help you provide the reports for your clients. Third party reports and validation, which are easily accessible and verified on the Internet, cannot be dismissed as the broker or real estate agent trying to influence the appraiser. We just need to adjust to the new way of conducting business.


Please provide us with your feedback on this matter! We want to know what the public thinks about this!

Single Family Housing Starts: Dog Days of Summer

As we all sit inside our air conditioned offices wondering what will be the next “big” news regarding real estate, the Commerce Department released its estimate of New Single Family Home Construction today.

Stop! We can be happy with this news or we can take it in stride. Every article that I have read, the author comes from a point of strength in that there is some unique data set that only they have access to. There never appears to be any common sense applied and invariably there are always quotes from interested “economic advisors”. The latest news is a classic example.
581,000 new single family homes were built in 2009, according to public records. Now that is a dismal number compared to the hay day of 2005/2006 when over 2 million homes were being built (See Housing In Crisis Report). But is this really a bad number? Every year in the United States, each market replaces existing inventory with new inventory because older homes need to be rebuilt and because of natural disasters. There also is the market for individual, non development homes that are built to meet unique demands of property owners. So 581,000 is actually good number.

But let’s not forget that over 3.5 million vacant housing units that were newly built remain in the market. Let’s not forget that Supply and Demand need to be in balance for a healthy real estate economy to exist. And let’s not forget that supply is reduced by people buying homes and presently this is occurring through natural population growth. So with the national population growing at about 4 million people annually, we will only see about 1 million of the excess inventory absorbed annually. This means three more years before true market levels begin to appear.

Of course in areas where overdevelopment was held in check, the housing markets are already in full recovery. But for areas in Florida, Nevada and Arizona, recovery may be five years away.
Let us know what you think, what you are experiencing in your communities and what you think about the housing recovery!

Housing Market News: Still Cyclical, Seasonal and Emotional

There are conflicting reports on the housing market today. According to news sources and public reocrds, the median sales price nationwide is down close to 16% from a year ago, to $174,100. Simultaneously, there are reports about existing home sales being up close to 4% from the last quarter. All the while, foreclosures are up 7% from the last quarter. But there is one fact about the housing market that arises out of all of these reports: Real Esate is Cyclical, Seasonal and Emotional.

Cyclical Cycles: Run about 15 years in length with the current cycle beginning in late 2006.
Seasonal Changes: Occur every year and follow a fairly consistent pattern.
Emotional Changes: Fear of the unknown is the worst element of any financial market. That is what we’ve experienced for the past nine months.

For property data, real estate reports and market trends, CLICK HERE.

Manhattan Condo Market Projected to Stabilize in 4th Quarter

The Manhattan Condominium Market is about to “shock the skeptics”. There have been numerous reports published by noted “Manhattan Experts”, but a recent article in Crain’s Business week begs of the question “Who is manipulating What and Why? (See the NYC Square Footage Report) (See our repsonse to the Crain's Business Report)

Has a “Shadow” fallen on the NYC condo market, or is it just another game of smoke and mirrors? We thank the New York City Department of Finance for releasing public records, enabling those who have the desire to do the actual analysis, assuming one has the ability to do so. The Department of Finance has provided a rolling sales history since 2003. This represents all property data and sales in New York City; not listings, not possible listings and not sales that didn’t close or the seller backed out. But Real Sales data!

DoF also provides access to the Assessment Rolls for Class I, II, III and IV Properties. From this Assessment Roll we can find out how many properties exist in each borough and when the property was built. An individual with some basic computer skills can than run a query to append the sales file with the Assessment file.

Once completed, a further level of skill is required; not a lot of skill, but just a little. Invalid sales should be stripped out of the analysis. An invalid sale would be a property that transferred for less than $1,000 dollars. As a seasoned valuation analyst, I would actually go an additional step and remove all sales that sold for under a $125 per square foot in Manhattan. The simple fact is that such sales would not be representative of the market and do not come close to representing the actual cost of construction.

So common sense prevails. In the end, a valid set of sales is available for analysis. The table below indicates that the average and median sales price for condos is declining at a rate of about 8% for the first six months of 2009. This is much lower than some reports have indicated, but HOLD ON.. there's more.

The chart above considers the rolling average of sales from July 2008 to July 2009. We have applied this data to adjust for the over correction in the markets and the seasonal affect of winter sales. Based on the trend line, we are projecting that for the months of July, August and September sales activity will increase and property values will adjust upward. Furthermore, the 4th Quarter – which usually shows weaker activity and valuation – will indicate a level of stability.

In short, when you analyze data with a known common factor such as “Square Footage”, manipulation of the data is difficult. Combine this with an open policy of NYC to provide data free for analysis when it used to cost over $20,000, analyst can now openly check one another.
There is a true check and balance and the latest reports about the Manhattan market are misleading.

NYC doesn't have Shadow Inventory, just Smart Investors

The current building supply in New York City is in balance. (In response to Crain’s NY Business, “Shadow Units Cast Pall”)

According to the public records of the US Census, there were 3.328 million Housing Units for NYC in 2008. Of this, 61,000 rental units were held vacant and 26,500 owner occupied units held vacant. The total number of units held vacant in NYC is 2.6% of the total housing units based ib property data. This is well below the National Average of 13.8%. (See the Housing In Crisis report for more details).

Remember that Real Estate is three things: Cyclical, Seasonal and Emotional. Population growth is over 390,000 people since 2000. This represents over 43,750 individuals per year or 16,203 New Households per year. Growth in Housing Units from 2000 to 2008 consisted of 29,006 new Class I Structures for a total of 53,567 new housing units. Class II and Class IV properties increased by 3,472 for Walk-up and Elevator Apartments accounting for over 97,583 new housing units and there were 26,699 new condominiums built. All told, this property development can accommodate a population of 461,167 individuals with an average Household Size of 2.7.


This does not consider the temporary housing for college students and foreign workers. Nor does it accurately reflect that most condominium units are owned with a population size less than 2. If one considers the unique trends of Manhattan, the current building supply in New York City, as stated above, is in balance.

New York City does not have a Shadow Inventory, just smart investors. Why sell when the housing market is weak? Hold on a year and get at least 10% more for your property. We are confusing a smart investor/developer with a property owner who panics. When you can rent and wait out the market, that is smart. Developers, unlike banks, know that dumping product drops values.

Where did all of the common sense go? Sales activity is down because unless you need to sell, you sit tight. Determining current housing market values based on reduced sales activity is not only misleading, but just flat our irresponsible.

For more information regarding the housing market, property searches and real estate reports, CLICK HERE.

Freddie Mac's Outlook Cautious About Seasonal Home Sales

After releasing a report on positive 2nd Quarter gains - with some gains attributed to the slight uptick in home sales - Freddie Mac remains cautious of the housing market. Remember that real estate is three things: Cyclical, Seasonal and Emotional.

“While we are seeing some early signs pointing to a housing recovery — including a modest uptick in house prices in some markets — our outlook remains cautious due to rising foreclosures, growing unemployment, tight lending standards and buyers’ reluctance to re-enter the market,” Interim CEO John Koskinen said.

What are your predictions for Fall home sales? Will we continue to see improvements in the housing market? Or will there be some declines as the spring/summer season comes to a close?
For more information regarding Real Estate Reports and the Mortgage Assistance Program, visit AccuriZ HERE.

Square Footage Matters! Home Sizes Scaled Down for Frugal First-Time Buyers

Taking note of the current economic downturn, some builders are modifying their plans to suit the budgets of the demanding first-time buyer market; Homes are being built smaller with fewer frills.

One of the most notable trends during the recent housing boom was the rapid increase in square footage of new homes. The increase was an important factor in the variance of average to median sale price growing from 6% to 22%, as stated in the Housing in Crisis Report.

“Since 1960 the median house size has increased from around 1,400 square feet to 1,769. During the recent construction boom, many areas of the country experienced development with homes exceeding 2,200 square feet, with additional improvements such as garages, central air conditioning and two or more bathrooms.”

As the economy works towards recovery, borrowers – especially first-time buyers capitalizing off of the 8,000 tax credit incentive – are reluctant to spend more than what is necessary. Public records and builders’ statistics from this Bloomberg.com article show smaller homes involved in a large percentage of transactions and median prices declining due to a smaller average in size.

Square Footage Matters.

Staten Island Square Footage and Median Price Differentials

A new AccuriZ report titled “Square Footage and Median Price Differentials,” highlights the sales activity of New York City and the differnces between median sale price and price per square foot. Below is an excerpt from the Staten Island section of the report. To see the full Staten Island report, as well as the additional boroughs, CLICK HERE.

Real Estate is like a set of Russian Nesting Dolls. Analysts tend to focus on the entire market, with minimal effort given to the underlying components. As you examine various segments of the markets, different pattern emerge. Generally in real estate there are three rules: Location, Location and Location. And in the current market, if you do not have to sell you don’t.

It is comprised of three elements: Cyclical, Seasonal and Emotional. . The present market comprises of all three, which is extremely rare.

Staten Island is experiencing the slowest value decline of all of the Boroughs at -5.17%. In complete opposite of the other Boroughs, Staten Island is experiencing a greater decline in the Single Family market, but showing increases in two to three family units, as well as properties with a residential unit and commercial unit.

US Home Prices Show 5% Quarterly Growth

News media outlets are busy today with the news of US Home Prices showing a 5% quarterly growth.

Great news for the Real Estate Market, AccuriZ knows and understands that Real Estate is three things: Cyclical, Seasonal and Emotional…

(From HousingWire.com) All regions saw quarterly gains as of July, with the Midwest soaring 11.2%, the South rising 5.3%, the Northeast posting a 2.4% increase and the West gaining 1.1%, according to Clear Capital.

Can this be a sign of potential ‘green shoots’ in the housing market, or can this be attributed to seasonality? Public records of property data tend to show a slight uptick in activty durng the summer months. It will be interesting to see what happens come fall.