Just as in 2011, in 2012 many will be trying to figure out where housing is headed.  While the housing market didn’t worsen in 2011, it also didn’t stabilize either.  This year, the story will be about local markets.  While many housing markets rose and fell together, they’re recovering at difference paces so talking about housing on a national level is not beneficial.

Making sense of the story

  • Confidence and jobs: Housing is more affordable than it has been in decades, but many would-be buyers are worried about buying today if prices are going to be lower tomorrow.  Still, others don’t want to buy a house until they have more evidence that they’re not going to get laid off or see their hours cut back.
  • Foreclosures: Banks and other mortgage investors own around 440,000 foreclosed properties, but there’s another 3.4 million loans in foreclosure or serious delinquency, according to estimates by Barclays Capital.  Because banks are faster to cut prices to unload inventory than are traditional sellers, home values can fall further as the share of distressed sales rises.
  • Rents: If low mortgage rates aren’t enough to give urgency to would-be buyers, rent hikes could accelerate buyers’ decisions to take the plunge.
  • Mortgage credit and rates: It’s still hard for many buyers to get approved for a mortgage because banks are demanding lots of documentation of borrowers’ incomes.
  • Regulation: Many analysts don’t expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012.
  • Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments.  This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency.
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Home sales in California last month were off 4.2% from October but up 4% compared with November 2010. The median home price was $244,000, up 1.7% from October and down 4.3% from a year earlier.

By Alejandro Lazo, Los Angeles TimesDecember 15, 2011

California’s housing market showed some signs of luster in November with sales picking up over the same month a year earlier, but prices declined and foreclosures remained prevalent.

Sales fell 4.2% from the prior month, though a decline from October to November is common, and compared with November 2010 they were up 4%, according to real estate research firm DataQuick. A total of 32,669 homes sold last month, about 18% below the average going back to 1988, when DataQuick’s statistics begin.

The state’s median home price was $244,000, up 1.7% from October and down 4.3% from November 2010.

“These days, buyers and sellers have to contend with two sets of problems, which sometimes play into each other and sometimes conflict with each other,” DataQuick President John Walsh said in a statement. “The first is the lousy economy and the opportunities it presents, for better or worse. The second is the dysfunctional mortgage finance system. Interest rates may be at record lows, but the types of mortgages that are available have been drastically reduced and qualifying is a true grind.”

The state’s median price — the point at which half the homes in the state sold for more and half for less — has declined year-over-year for 14 consecutive months.

The most recent low in the median price was hit in April 2009, at the height of the financial crisis. After that, the housing market began showing some strength as a tax credit mostly aimed at first-time buyers helped fuel a buying spree. The market has been weak ever since that credit expired in April 2010.

Foreclosures are a big part of that weakness, as those homes and other so-called distressed properties tend to sell at a discount. Of the previously owned homes that sold last month, about 1 in 3 were foreclosures and about 1 in 5 were short sales, in which the home is sold for less than the outstanding debt on the property.

In Southern California, sales rose 0.3% from October and 4.2% from November 2010, with 16,884 homes bought across the six-county region. The median home price for the region was $275,000 in November, up 1.9% from October but down 4.2% from November 2010.

The San Francisco Bay Area’s housing market picked up a bit of steam last month. A total of 6,317 homes were sold in the nine-county region, down 2% from October and up 3.4% from November 2010. The Bay Area’s median home price was $363,500, up 3.9% from October and down 4.3% from November 2010.

While discussions regarding finances don’t make their way to the top of the to-do list as often as they should, it’s more important than ever that couples take the time to sit down and discuss their finances and financial goals. Whether you already have a money management system in place-or you need help getting started-there’s no better time than the present. Not only will a well thought-out plan keep both of you moving in the same direction toward your goals, it will also help to open the lines of communication so that you and your partner can talk more freely about financial problems, concerns and decisions.

According to Jane Honeck, CPA and author of The Problem With Money? It’s Not About Money! offers the following money managing tips.

1. Talk, Talk, Talk. Money is still a taboo topic and we often don’t have a clear idea about how our partner thinks or feels when it comes to spending versus saving. Talking about your goals with your partner is a simple way to make sure you’re both on the same page when it comes to your finances.

2. Find Balance: Balance power around money. One person making all the decisions and having all the control when it comes to finances is often a recipe for disaster. Find ways for you both to be equally engaged in all money decisions.

3. Define Your System: Have a clearly defined money management system that covers everything from who handles the mail to who sends out the checks. Without a well thought-out plan in place, it’s more likely that things will fall through the cracks.

4. Address Problems: When problems arise, address them immediately (no secrets allowed). Avoiding the issue only makes it more toxic and drives a wedge in the relationship.

5. Perform Checkups: Schedule an annual money checkup. Things change and just like our physical health, money management needs an annual checkup to keep it healthy and relevant. Set aside time to sit down with each other and evaluate what’s working, what needs to be fixed and address any questions or concerns that either of you may have.

6. Keep the Lines of Communication Open. The most important thing to keep in mind when dealing with your finances is to continue to communicate with no blame or shame. We all have hang-ups around money, so it’s important to treat your partner with compassion when it comes to your finances.

As a Member of the Top 5 in Real Estate Network®, I, along with my team, have a wealth of real estate and home ownership information that may be of help to you. Feel free to contact our team any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

by Carla Hill

If you’ve been on the fence about homeownership, now is the time to take a leap! Don’t let the negative press deter you from one of life’s greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership can be a real joy. It’s time to get off the fence and into a home that is right for you!

By NICK TIMIRAOS

The reeling housing market has come to this: To shore it up, two Senators are preparing to introduce a bipartisan bill Thursday that would give residence visas to foreigners who spend at least $500,000 to buy houses in the U.S.

The provision is part of a larger package of immigration measures, co-authored by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah), designed to spur more foreign investment in the U.S.

Foreigners have accounted for a growing share of home purchases in South Florida, Southern California, Arizona and other hard-hit markets. Chinese and Canadian buyers, among others, are taking advantage not only of big declines in U.S. home prices and reduced competition from Americans but also of favorable foreign exchange rates.

To fuel this demand, the proposed measure would offer visas to any foreigner making a cash investment of at least $500,000 on residential real-estate—a single-family house, condo or townhouse. Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out.

The measure would complement existing visa programs that allow foreigners to enter the U.S. if they invest in new businesses that create jobs. Backers believe the initiative would help soak up an excess supply of inventory when many would-be American home buyers are holding back because they’re concerned about their jobs or because they would have to take a big loss to sell their current house.

“This is a way to create more demand without costing the federal government a nickel,” Sen. Schumer said in an interview.

International buyers accounted for around $82 billion in U.S. residential real-estate sales for the year ending in March, up from $66 billion during the previous year period, according to data from the National Association of Realtors. Foreign buyers accounted for at least 5.5% of all home sales in Miami and 4.3% of Phoenix home sales during the month of July, according to MDA DataQuick.

Foreigners immigrating to the U.S. with the new visa wouldn’t be able to work here unless they obtained a regular work visa through the normal process. They’d be allowed to bring a spouse and any children under the age of 18 but they wouldn’t be able to stay in the country legally on the new visa once they sold their properties.

The provision would create visas that are separate from current programs so as to not displace anyone waiting for other visas. There would be no cap on the home-buyer visa program.

Over the past year, Canadians accounted for one quarter of foreign home buyers, and buyers from China, Mexico, Great Britain, and India accounted for another quarter, according to the National Association of Realtors. For buyers from some countries, restrictive immigration rules are “a deterrent to purchase here, for sure,” says Sally Daley, a real-estate agent in Vero Beach, Fla. She estimates that around one-third of her sales this year have gone to foreigners, an all-time high.

“Without them, we would be stagnant,” says Ms. Daley. “They’re hiring contractors, buying furniture, and they’re also helping the market correct by getting inventory whittled down.”

In March, Harry Morrison, a Canadian from Lakefield, Ontario, bought a four-bedroom vacation home in a gated community in Vero Beach. “House prices were going down, and the exchange rate was quite favorable,” said Mr. Morrison, who first bought a home there from Ms. Daley four years ago.

While a special visa would allow Canadian buyers like Mr. Morrison to spend more time in the U.S., he said he isn’t sure “what other benefit a visa would give me.”

The idea has some high-profile supporters, including Warren Buffett, who this summer floated the idea of encouraging more “rich immigrants” to buy homes. “If you wanted to change your immigration policy so that you let 500,000 families in but they have to have a significant net worth and everything, you’d solve things very quickly,” Mr. Buffett said in an August interview with PBS’s Charlie Rose.

The measure could also help turn around buyer psychology, said mortgage-bond pioneer Lewis Ranieri. He said the program represented “triage” for a housing market that needs more fixes, even modest ones.

But other industry executives greeted the proposal with skepticism. Foreign buyers “don’t need an incentive” to buy homes, said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands. “We have a lot of Americans who are willing to buy. We just have to fix the economy.”

The measure may have a more targeted effect in exclusive markets like San Marino, Calif., that have become popular with foreigners. Easier immigration rules could be “tremendous” because of the difficulty many Chinese buyers have in obtaining visas, says Maggie Navarro, a local real-estate agent.

Ms. Navarro recently sold a home for $1.67 million, around 8% above the asking price, to a Chinese national who works in the mining industry. She says nearly every listing she’s put on the market in San Marino “has had at least one full price cash offer from a buyer from mainland China.”

Bargain hunters snap up foreclosures, and the median home price continues to fall.

California home sales picked up in September from the same month last year as prices came down.

Sales were up 6.7% as bargain hunters paying cash snapped up foreclosures. Sales figures remained below the average for September in Southern California and the Bay Area, according to DataQuick, a real estate information service based in San Diego. As is typical, sales were lower than in August, down 6.2%, for a total of 35,404 homes sold last month.

Homes in more walkable neighborhoods are worth more than similar homes in less-walkable neighborhoods, according to an analysis from CEOs for Cities. The report, prepared by Joseph Cortwright, is called “Walking the Walk: How Walkability Raises Housing Values in U.S. Cities.” Cortwright analyzed data from 94,000 real estate transactions in 15 major markets, using data provided by ZipRealty.

According to Cortwright’s fi ndings, houses with above-average levels of walkability command a premium of about $4,000 to $34,000 over houses with just average levels of walkability in the typical metropolitan areas studied.  Just a one-point increase in walkability increased value from $700 to $3,000, depending on the market. Gains were larger in denser, urban areas such as Chicago and San Francisco and smaller in less dense markets such as Tucson and Fresno.

In 13 of the 15 markets, higher levels of walkability were directly linked to high home values. Those areas are: Arlington, Va.; Austin, Texas; Charlotte, N.C.; Chicago; Dallas; San Francisco, Sacramento, Fresno, and Stockton, Calif; Jacksonville, Fla.; Phoenix and Tucson, Ariz; and Seattle. The exceptions were Las Vegas, where walkability was correlated with lower housing values, and Bakersfi eld, Calif., where there was no statistically signifi cant connection between walkability and housing values.

Walk Score measures the number of typical consumer destinations within walking
distance of a house, with scores ranging from 0 (car dependent) to 100 (most walkable). By the Walk Score measure, walkability is a direct function of how many destinations are located within a short distance. The Walk Score algorithm then assigns a “walk score” from 0 to 100. Walk scores above 70 indicate neighborhoods where one can get by without a car.