Chris Carlson
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The First Quarter 2012 Virginia Home Sales Report has been released and brings good news for the Commonwealth! Several long-term trends indicate that Virginia’s housing market is continuing to stabilize.
As shown above, the pace of home sales in the first quarter of 2012 marked an improvement over both the first quarter of 2011 and 2010.
The housing market is showing signs of life -has the economic recovery begun?
Recent economic factors are indicating that the housing market is finally starting to recover. With this being said, it seems that the home prices in Virginia Beach and surrounding areas are holding steady at rock bottom and have nowhere to go but back up. With home prices this low, many economists are wondering why the economy is not going crazy with home purchases, but there are many other factors that come into play.
One such factor is that of the credit and mortgage markets. With all of the reform that has been happening in the last several years, the ability to get a home loan has become extremely difficult. This means that less people are able to qualify for home loans, which is the biggest reason why these incredibly cheap homes are not selling like hot cakes. While the economy is showing signs that recovery has begun, it will never get back to how it was unless home loans are easier to obtain by home buyers. Without these homes being purchased, they are toxic assets that are sitting on the books of big banks that need to unload them.
Investors are loving the current market as they are able to buy foreclosure properties left and right, but mainstream Americans need to be able to purchase these homes in order for America to fully recover economically. While the housing market is picking up in some areas of the country, there are still areas that are going down such as Las Vegas and Detroit. These areas need some type of government intervention to keep the home prices from sliding more than they already have. Home owners are taking the brunt of this bad housing market as they have lost thousands of dollars and are upside down in their houses due to situations completely out of their control. For people in these kinds of situations, there are loan modification processes that can be taken in order to lower your mortgage payment, but they are extremely complex and many buyers end up foreclosing due to bad service with this modification loans.
As you can see, the housing market is showing some signs of life. With easier lending practices and better modification processes, the housing market can wake back up and really start to help this country get back on its feet.
For additional information on the market conditions in Virginia Beach and surrounding area - log on to www.HRRealtyPros.com or log on to www.HRForeclosureList.com for a complete list of available bank owned foreclosures, short sales and other types of distressed properties.
The National Association of Realtors is predicting existing-home sales will jump 7 to 10 percent in 2012 to the highest level in five years, based on an "uneven but higher sales pattern" so far this year.
Pending home sales fell a seasonally adjusted 0.5 percent from January to February, which was up 9.2 percent from the same time a year ago, NAR said today in releasing its latest Pending Home Sales Index.
Last week, NAR reported a similar trend for existing-home sales, which were down 0.9 percent from January to February, but up 8.8 percent from a year ago.
Mortgage lenders remain cautious in terms of credit quality, down payments, and valuations, as evidenced by the findings outlined in the new Origination Insight Report generated by Ellie Mae.
The company found that the average credit score for loans approved by lenders and closed is steadily rising, while acceptable loan-to-value (LTV) ratios are declining.
Ellie Mae’s report series tracks the current lending environment for refinance and purchase mortgages and provides metrics on the kinds of loans getting done and on the challenges consumers and lenders are facing. The company intends to issue the report monthly.
Ellie Mae’s inaugural Origination Insight Report discusses changes in mortgage lending activity over the month of February 2012, as compared to the company’s historical data from the prior six months.
The average credit score on loans that closed was 750 in February, up from 740 six months before. Meanwhile, the average loan-to-value (LTV) ratio was 76 percent, a decrease of 3 percent from August 2011.
The average FICO score for borrowers who were denied a loan in February was 699, according to Ellie Mae’s analysis. The average LTV of denials was 83 percent.
“If you look at the full report on our website, you’ll see the impact of the higher underwriting requirements for refinance that were in place in February,” said Jonathan Corr, COO for Ellie Mae.
“Last month, if your FICO score was below 720 or you had a down payment or equity of less than 25 percent, there
was a good chance that your refinance application for a conventional loan was denied or you were offered a significantly less attractive interest rate, Corr explained.
He also noted that borrowers denied a mortgage refinancing during the month had a front-end debt-to-income (DTI) ratio – which is calculated as total housing payment divided by total gross income – of 27 percent and a back-end DTI – measured as all monthly debt, including the mortgage, divided by gross income – of 43 percent.
Those borrowers that were approved for a loan and closed in February demonstrated a front-end/back-end DTI of 23/34.
Ellie Mae also offered up a snapshot of the types of mortgage loans closed in February. Sixty-seven percent were refinances and 33 percent were for the purchase of a home.
The Federal Housing Administration (FHA) garnered 25 percent of the new market share in February, while conventional loans made up 67 percent of the month’s closings.
The timeline from application to closing for the average loan was 44 days in February and 43 for a refinance, up 10 percent and 16 percent, respectively, over where the industry was six months ago. Corr says these timeframes track with the increases in demand seen at the end of 2011.
To get a meaningful view of lender “pull-through,” Ellie Mae reviewed loan applications initiated within the previous 90 days to calculate a closing rate and found that nearly 48 percent of all applications closed. There was a higher percentage of purchase mortgages closing (60%) than refinances (42%).
In 2011, the total volume of mortgages that ran through Ellie Mae’s Encompass 360 mortgage management software was approximately two million loan applications, or 20 percent of all U.S. mortgage originations. The company’s Origination Insight Report mines its data from a sampling of approximately 33 percent of all applications initiated on the Encompass origination platform.
Given the size of this sample and Ellie Mae’s market share, the company believes the Origination Insight Report is “a strong proxy of the underwriting standards that are being employed by lenders across the country.”
Check out our newest version of the Home Buyer's Guide. Have fun! Flash is required.
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Standard & Poor’s reported Tuesday that it’s closely watched Case-Shiller index declined in January for the fifth straight month. But according to John Burns Real Estate Consulting (JBREC), that’s stale news and doesn’t reflect what’s actually happening in the market right now. In fact, the independent research company says home prices are rising. JBREC conducted its own analysis of home prices in 97 markets and found that over the January-to-March period prices are up in 90 of them, with an average increase of 1.1 percent.
Most states have what is called a "Buyer's Agent" which is a real estate agent hired by you, the BUYER, to help find the right home at the best price. A Seller's Agent or Listing Agent is a real estate agent hired by the SELLER to market and sell their home.
The main goal of a Seller’s Agent is to sell the seller’s home at the HIGHEST POSSIBLE PRICE.
Some uninformed Buyers choose to ask the Seller’s Agent to represent them, BUT before you do that, keep in mind that the Seller’s Agent automatically has a conflict of interest – how can they get the highest possible price for their seller client and at the same time get the reasonable price for you?
NOT POSSIBLE. Some agents may offer dual representation or designated representation options with the same broker but your best option as a buyer is to give us a call as we are Buyer's agents. The best news? It doesn't cost you a dime for our services and we'll show you how to negotiate the best deal and protect your best interest at the same time.
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Happy house hunting!
Displaying blog entries 1-10 of 194
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