I'm an optimist. I look for silver linings whenever there is a dark cloud. My optimism has gotten me through many a dark day. I've been positive about the end of the housing crisis, and I've found many articles that suggest that the end is in sight.
Uh oh. Here are some articles that suggest that maybe our positivism was premature or even misplaced.
CNN reports that some prognosticators who were looking at indices of new construction that have been projecting the end, have been artificially supported by companies not even involved in building.
Further, new reports are coming out that new construction, nationally, have dropped again after having seen gains during the past 12 months.
But there is a silver lining again in this last Wall Street Journal article. This article does state that building permits are the highest they've been in 3.5 years, and that new construction of multi-family homes are up over 21%. Could these be the harbingers we're looking for?
Earlier this week, it was reported that a multi-billion dollar settlement appears to have been reached between some of the biggest mortgage lenders in the country and most states. Forty states are involved, including the state of Idaho. This settlement is an agreement for the big banks to allow states to protect consumers in the case that borrowers are mistreated. This is great news for the everyday borrower. It may lead to more mortgage lending and may infuse the economy with fresh cash.
Unfortunately, in this same report it suggests there are 10 states that haven't yet agreed to participate in this settlement. Some of the states not participating are Florida, New York, and California. With the big banks who have been targeted (Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally) and the states not participating, it's been said that still 50% of the mortgages completed are not under protection from this settlement. This is unnerving.
Word this morning is that California and New York will join the other 40 states, pushing the settlement to $26 billion in the foreclosure settlement. This is yet another indicator that we may have seen the worst of the housing market crisis, and this might be a tactic that helps push our economy upward.
Assuming Congressional approval, those homeowners who are underwater (meaning they owe more on their home loan than the home is worth) will get some federal assistance in their mortgage. Or at least pledges President Obama during his State of the Union address last night.
Considering how many folks bought homes during the period of 2005 to 2008, there's going to be a fair amount of people who are underwater. This certainly comes as a welcome reprieve.
With all of these pieces of good news, maybe we'll will the economy to get better.
What with all the recent positive news on the home-lending front, we should all be Optimists! More good news from the industry telling us that mortgage rates are hitting all-time lows!
I was in a house this past week conducting an appraisal for a borrower trying to get a refinance. He told me that he was working on getting a 15-year loan at the ridiculously low rate of 2.875! My jaw about hit the floor!
You would almost be making money on a rate like that!
While I'm not a big proponent of government influence on people's lives, the Feds have called for "forceful action to aid the real estate market", which I approve.
Often, however, government throws out common sense when they try to make corrections to national policy. I'm hopeful that this isn't going to be one of those times.
In more good news, nationwide in 2011 saw the lowest number of foreclosures in 4 years. Tempering that good news, is the suggestion that 2012 will pick up again, as lenders were working through bottlenecks in some local markets.
Yes!! More reasons to be optimistic!
There are companies out there that believe that we may have hit bottom and will experience positive results in 2012.
This article mentions that while home prices have dropped to 2001 levels, that we should start seeing some positive movement in pricing during this year. While it may take longer to pricing to hit positive numbers in many regions, one of the hardest hit in recent years (Florida) has started to see increased demand in some segments.
Isn't this reason enough to keep our heads up and to think positively?
Yes. Yes it is.
Anyway, per my research, market values throughout most of the Treasure Valley are continuing to slide, as of the end of the 4th quarter of 2011. The good news is that in most areas, the trend has flattened--meaning, instead of the double-digit declines we've been seeing for the past couple of years, the declines are now just in the single-digits. While this means it's not yet time to rejoice, it is cause for feelings of hope.
Giving us more feelings of hope is the feds' decision to keep interest rates low for the next few months, encourage more lending and buying for residential homes.
I'm ready to have some hope.
Aaah! Spring has arrived in SW Idaho!
The snow's have melted from the valleys, and the rains come and go. The May flowers are proving that we had enough April showers. Grass is all green again, and kids are getting out of school.
This is a great time for real estate professionals in SW Idaho. This is the time that normally houses really begin to sell, and properties are getting listed.
The economic news is getting better too. The Idaho Statesman reported that the Idaho jobless rate dropped for the first time in 4 years and is hoping that we've seen the worst of the economy.
I'm keeping a positive attitude that we'll see things get better all over.
Like everywhere (it seems) in the US, the single-family residential (SFR) market in southwestern Idaho (particularly in Canyon and Ada counties) has been suffering for some time. However, we have reason to hope right now.
But first, let's look at our recent history. While the rest of the nation's housing began to suffer in 2004 and 2005, southwestern Idaho actually grew at unprecedented rates. Some parts of Meridian, Eagle, and Boise (Ada County) and in Nampa, Middleton, and Caldwell (Canyon County) saw annualized average and median sales prices increase from 2005 to 2006 by more than 20%--in some cases actually increasing by as much as 2.5% per month!
Of course, the piper had to be paid. Starting in 2007, prices started to fall, with the worst hit in the SFR market in SW Idaho in 2009. In most parts of Canyon and Ada counties, the annualized decline in prices from 2008 to 2009 were in double digits, hitting 20% in some places.
But this is where the hope is. Since the end of 2009, while prices are continuing to slide, they are no longer in double-digit freefall. My research shows that throughout most of Canyon and Ada counties, the annualized decline in 2010 was in single digits, and in some cases only 6%. The early returns for 2011 still show falling prices, though.
I'm hopeful that we're near the bottom of pricing for SFR properties. There is still quite an inventory of distressed (short sales and foreclosures) properties to go through, as reported by local news articles. Unfortunately still, other counties in SW Idaho still have more pain to experience in their housing.
Nevertheless, hope spring eternal. Right?! Anyway, I've got my fingers crossed.
The appraisal business in southwest Idaho is still confounding. Typically, the summertime is an excellent time to buy and sell single-family residential (SFR) properties. With the inventory levels we have experienced over the past several years, with historically low interest rates, and with some of the lowest sales prices we've seen in years, one would expect the SFR market to be skyrocketing. Well, it's healthy and moving in a positive direction, but it's nothing like I expected it to be this summer.
Perhaps the pipeline is just filling. During the months of June and July (thus far), refinancing has been the bigger driver in the appraisal assignments that I've seen come my way. I haven't compared notes with my colleague/competitor appraisers for a couple of weeks so I'm not sure what they're experiencing, so perhaps I'm on an island.
I would be surprised, however, if we don't see a large volume of sales/refinancing activity before the summer is over. That's what I'm counting on anyway.