What Does One Report
Mean?
With almost 900,000
jobs added in the previous four employment reports, the news that less than
90,000 jobs were added for the month of March came as quite a disappointment
for the markets. The question is---how much does one employment report mean? On
one hand, not much -- especially considering the fact that this report will be
subject to additional revisions in the coming month. On the other hand, if it
is indeed the start of a trend, then the markets may be right in being
concerned. The markets have recent memories of an economic recovery that has
been subjected to "stops and starts" for several years. Plus the
government budget cuts are expected to make companies cautious as they unfold
during negotiations.
Why might this one
report not become part of a trend? Two words answer this question -- "real
estate." In previous years of the recovery, real estate was not joining
the party. There is growing evidence that this real estate rebound is for real
and not only is the real estate sector contributing positively to the economic
recovery, but construction jobs are being added on a monthly basis. The real
estate data being released starting this week will be closely watched by the
markets for any slowing trend. In the absence of any slowdown in the real
estate sector, it is less likely that our one month of tepid employment growth
becomes a trend. For now a dip in interest rates provides another opportunity
for the nation to participate in the real estate rebound at bargain prices
which may not last long if prices continue to rebound.
Efforts to revamp U.S. immigration laws may bring at least one unintended benefit for the economy: The nascent housing recovery will probably get an added boost. The number of foreign-born homeowners will increase by 2.8 million in the decade ending 2020, compared with a 2.4 million gain in the previous 10 years, according to a Mortgage Bankers Association study that didn’t assess the potential impact of any new legislation. Research by a group of Hispanic real-estate agents concludes the increase could be even bigger if undocumented workers were put on a path to citizenship. Immigrants, who hold more positive views toward owning a home than native-born Americans, are increasingly likely to buy a house the longer they live in the U.S. and the more prosperous they become, the research shows. They will account for more than 50 percent of the rise in home buying in six states this decade, including California and New York, according to the report. “We’ve probably under-appreciated this powerful force that is already resident here and is so upwardly mobile that it pushes up the housing market from the bottom,” said Dowell Myers, author of the MBA study and a public policy professor at the University of Southern California in Los Angeles who studies housing demography. “There’s this incremental momentum that’s built up.” That upward mobility is evident in the MBA data showing the share of those arriving in the 1980s who became homeowners rose by about 35 percentage points over the next three decades even as the longest recession since the Great Depression took a toll. By 2020, 61 percent of Hispanic immigrants who arrived here almost 40 years earlier, along with more than 70 percent of non- Hispanic foreigners, will be homeowners. Source: Bloomberg
Home prices nationwide, which includes distressed sales, soared 10.2 percent year-over-year, according to CoreLogic’s February report. It’s the largest year-over-year increase in home prices since March 2006. It also marks the twelfth consecutive monthly increase in national home prices, according to CoreLogic’s report. When excluding distressed sales, home prices rose 10.1 percent year-over-year in February, according to CoreLogic. “Nationally, home prices improved at the best rate since mid-2006, marking a full year of annual increases and underscoring the ongoing strengthening of market fundamentals,” says Anand Nallathambi, president and CEO of CoreLogic. CoreLogic predicts that home prices -- excluding distressed sales -- will likely rise 11.4 percent year-over-year from March 2012. “The rebound in prices is heavily driven by western states,” says Mark Fleming, CoreLogic’s chief economist. “Eight of the top ten highest appreciating large markets are in California, with Phoenix and Las Vegas rounding out the list.” Source: CoreLogic
Short sales are
increasing this year, and these transactions can take up to three times longer
than a traditional transaction. A lot can go wrong in that timeframe. These are
the most common delays, according to a recent article by George “Gee” Dunsten,
a real estate broker and president of Gee Dunsten Seminars, at RISMedia.
·
Title issues: Be sure to do a title exam at the beginning in order to identify
all individuals on the deed and mortgages, and determine all lien holders.
·
Lack of communication with the lender: Lost documents and
misunderstandings commonly cause delays. Make it a habit to follow up with the
mortgage servicer twice a week to avoid unnecessary delays.
·
Delaying the start: Some short sales have not even begun until a contract to purchase
has been initiated. But this could add up to two extra months to the process.
The lender won’t even look at a buyer contract until a seller candidate for a
short sale is approved and the market value has been determined, Dunsten
writes.
·
Incomplete packages: Make sure you carefully submit all the documents completely and
accurately. Submitting incomplete packages is another common culprit of delays.
All home owner financial information will need to be kept current and forwarded
to the servicer every 30 days, Dunsten writes. Source: RISMedia
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