One piece of good news coming out of the Great Recession is the increasing affordability of housing.

The typical U.S. family earning the nation’s median income of $64,000 a year could afford to buy 70.1 percent of all homes sold in the United States during the third quarter, according to a report from the National Association of Home Builders and Wells Fargo. The report relied on the government standard of spending no more than 28 percent on housing. In the same quarter of 2008, only 56.1 percent qualified.

The five most affordable areas are:

* Indianapolis
* Youngstown, Ohio
* Detroit
* Warren, Mich.
* Grand Rapids, Mich.

The five least-affordable areas are:

* New York City
* San Francisco
* Honolulu
* Santa Ana, Calif.
* Nassau and Suffolk, Long Island, N.Y.

Source: CNNMoney.com, Les Christie (11/19/2009)

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According to Zillow.com home prices seem to be stabilizing but about 21% of homeowners are underwater on their homes.

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It often is difficult for homeowners to objectively value their homes, which often reflects their sense of personal style. However, by consulting with a REALTOR®, using online resources, investigating neighborhood trends, and soliciting the opinion of friends, homeowners can arrive at a reasonably accurate appraisal.

• REALTORS® and real estate appraisers are the best sources of information on current market conditions. Consumers should begin the home valuation process by consulting with their REALTOR® or a local real estate appraiser. REALTORS® can provide homeowners with a list of homes that recently have sold in the area, and use that data to help determine the most accurate and competitive price for the home.

• Homeowners also can contact their local tax assessor’s or county clerk’s office, many of which post real estate transactions on their Web site. The records will indicate what properties have recently sold in the neighborhood and the respective sales prices. Consumers should look for homes that have sold within the last six months for a more accurate picture of current market conditions.

• Online sites such as Zillow.com and Trulia.com also provide free online home value estimators. Consumers should be aware though that these sites derive some of their information from public records, including tax appraisals, and are subject to error.

To read the full story from the New York Times please CLICK HERE

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Fannie Mae last week announced a new Deed for Lease™ program. The new program allows borrowers to voluntarily transfer their property back to the lender and then lease back the house at market rate. The lease period is for up to 12 months, with month-to-month contract extensions after that period. The program is designed for borrowers who do not qualify for or have not been able to obtain other loan-workout solutions, such as loan modifications.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance also may be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31 percent of their gross income.

Homeowners thinking of participating in the Deed for Lease™ program should visit Fannie Mae’s loan look-up Web site at http://loanlookup.fanniemae.com/loanlookup/ to see whether their loan is owned or guaranteed by Fannie. Mortgages backed by the Federal Housing Administration and other government agencies are not eligible for the Deed for Lease ™ program.

To read the full story, please click here.

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A Marin Housing Authority program that makes it possible for low-income residents to buy homes in Marin is continuing to struggle, even though it recently won an 18-month court battle with the banking giant HSBC for possession of a Sausalito condominium.
The court fight kept the condominium in the below-market-rate program. But it cost the Marin County redevelopment agency about $390,000, nearly a quarter of the agency’s yearly tax revenue. County supervisors, who serve as the agency’s board of directors, approved the expenditure.

“There was a concern that a precedent would be set, that we would lose one of our homes to a bank and it would encourage other banks to be more aggressive. We would really be putting our stock of affordable housing at risk,” said Leelee Thomas, a Marin County planner who oversees the county’s affordable housing efforts.

To date, the owners of more than 15 of the 315 homes in the program have experienced financial difficulties that required the housing authority to consider repurchasing the homes. In a number of cases, the owners took out second mortgages in violation of the program’s rules, then defaulted.

Participants in the below-market-rate housing program sign agreements giving the Marin Housing Authority the right to repurchase the homes at a restricted price, far below the market, if the participants violate the terms of the program, default or over-encumber the property with loans. To read the full story from the Marin IJ CLICK HERE

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The House today and the Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they’ve lived in their home for five of the past eight years. Home prices are capped at $800,000.

The legislation in both houses was included in a bill to extend unemployment benefits and is expected to be signed by President Obama shortly.

“REALTORS® appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners,” says NAR President Charles McMillan. “As the leading advocate of housing and real estate issues, we urge President Obama to sign this legislation into law quickly to keep the momentum going in the fragile recovery of the nation’s housing market.”

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.

For more information on the credit CLICK HERE

Source: The Associated Press (11/5/2009)

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The Federal Reserve announced Wednesday that it is keeping its key interest rate at or near zero and will continue to do so as long as the economy remains weak.

Analysts predicted that the Fed would leave interest rates low for at least six more months.

The Fed said that it would continue its program to buy $1.25 trillion worth of mortgage-backed securities by the end of March, a sign that it intends to continue to drive down the cost of mortgage loans.

Source: The New York Times (11/5/2009)

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The second season of the Bay Area’s crackdown on wood burning began on Sunday . The rule will be in place from Nov. through Feb. 28 and outlaws the use of wood-burning devices including fireplaces, pellet stoves, wood stoves and outdoor fire pits on “Spare the Air” days.

Last winter the Bay Area Air Quality Management District launched a zero-tolerance policy for wood smoke on “Spare the Air” days, when weather conditions make it likely that smoke will hang in the air and cause particulate pollution, making it hard for some people to breathe.
On bad-air nights during the winter, smoke from 1.4 million fireplaces and wood stoves in the Bay Area accounts for a third of the air pollution outpacing cars, which account for 23 percent of the pollution.

A violation of the ban can vary from a warning the first time and is subject to a $400.00 fine for repeated violations.
There are expected to be between 15 and 20 Spare the Air alerts during the season and
the rule applies to the nine-county Bay Area region, which serves a population of about 7 million people.

For more information go to http://www.sparetheair.org

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The NATIONAL ASSOCIATION OF REALTORS® thanked Congress for speedy action in passing a congressional resolution yesterday that would extend the current higher Fannie Mae, Freddie Mac, and FHA loan limits through 2010. The present loan limits would expire at the end of 2009 and revert to previous lower limits.

“NAR commends both houses of Congress for their quick action in continuing these higher limits during a time for recovery in the housing market and national economy. The higher limits, along with the home buyer tax credit extension, are necessary to keep the markets moving at this critical time,” said NAR President Charles McMillan.

“Home sales have shown significant movement upwards in the past six months and reduced inventory in some segments of the housing market, but not in all. Home purchases in the middle-income and higher brackets have not moved much, and those markets must improve before we can experience a fully sustained housing recovery. These higher loan limits will help motivate qualified home buyers to purchase in those markets,” McMillan said.

The resolution would extend the present conventional loan limits for Fannie and Freddie through the 2010 calendar year at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The floor for FHA is $271,050; the floor for Fannie Mae and Freddie Mac conforming loan limits is $417,000.

The resolution now goes to President Obama, and he is expected to sign it today or Saturday to avoid a government shutdown.

Source: NAR (10/30/2009)

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It seems likely that the U.S. Senate will approve a deal to extend the First-Time Homebuyer Tax Credit, but the devil is in the details.

Florida Democrat Sen. Bill Nelson told reporters traveling to Florida with President Obama on Monday that he thought that the extension would be approved, but both senators and representatives are among those who think that there should be some fiscal offset for the cost of the extension. Spending any more money on the stimulus effort also could stir up a hornets’ nest in some circles.

The proposal in the Senate that appears to have the most likelihood of passage would extend the $8,000 credit through March 31, then its value would drop by $2,000 for each of the subsequent three quarters of 2010. This plan was offered by Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus, a Montana Democrat.

Source: Associated Press, Andrew Taylor (10/26/2009) and The Wall Street Journal, John D. McKinnon (10/27/2009)

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