Monday, August 27, 2012
Merriam-Webster Has Added The Word To Its Newest Edition
Earlier this month, Merriam-Webster, publisher of the Collegiate Dictionary, announced the list of new entries it’s adding this year.
Photo via Huffington Post.
In addition to the new meaning of “underwater” included this year, the new entries (and their definitions as written by Merriam-Webster) include:
- underwater — adj (1672) ... 3: having, relating to, or being a mortgage loan for which more is owed than the property securing the loan is worth
- man cave — n (1992): a room or space (as in a basement) designed according to the taste of the man of the house to be used as his personal area for hobbies and leisure activities
- bucket list — n (2006): a list of things that one has not done before but wants to do before dying
- game changer — n (1993): a newly introduced element or factor that changes an existing situation or activity in a significant way
- toxic — adj (1664) ... 4: relating to or being an asset that has lost so much value that it cannot be sold on the market
In other words: “Adding a man cave is on my bucket list, but right now my home is so underwater it’s nearly toxic; until there’s a real game changer in the market, I’m stuck watching TV in the den.”
For a slideshow of more of the new words, such as “aha moment,” “flexitarian,” and “earworm,” check out this post on Huffington Post.
Thursday, August 23, 2012
House Prices: An Important Update
Back in February, we posted a blog (seen below) explaining that there would be a ‘window of opportunity’ for sellers to sell at a better price than they could after some distressed properties entered the market this summer. The concept was correct as prices have stabilized and, in some markets, are actually showing mild appreciation.
However, we underestimated the time it would take for the banks to work through the processes that would bring this distressed inventory to market. We are now extending this window of opportunity through the rest of this year as we believe foreclosures and short sales will increase more dramatically as we begin 2013.
To continue reading this article, and be refreshed on the article posted back in February, click on this link House Prices: An Important Update.
Monday, August 20, 2012
Proposed regulation would apply to “high-risk” mortgages only
Last week, federal regulators proposed rules that would require an actual physical inspection of the property before an appraisal could be submitted. This would prevent appraisals made on the fly purely on a cursory inspection of the home’s exterior and coming in too high.
Regulators ready to crack down on fraudulent home flipping
Although recent consumer consensus seems to be that appraisals are coming in too low and impeding home sales, the new regulation is aimed primarily at preventing fraudulent home flipping. By making higher-rate (“high-risk”) mortgages subject to an additional appraisal, regulators hope to minimize home-flipping cases where the appraisal of the property after improvements is too high and allows the flipper to sell at an unfounded price.
High-risk mortgage defined as 1.5 percentage points or more above average
The proposed regulations would apply only to loans where the interest rate is at least one and half percentage points more than the market average. While the regulations seem restrictive, they in fact apply only to a very small portion of the mortgage market. In 2010, loans meeting this criteria comprised just 3.2% of the mortgages written.
Thursday, August 16, 2012
“This time next year, there could be a 10% price appreciation. I would not be surprised to see that.”
“Excess inventories are the mortal enemy of prices…I’m looking for another 20% decline and that is what it would take to bring them back to the long-term averages.”
Once and For All, Which Way Are Home Prices Headed?
Monday, August 13, 2012
Pending home sales down 1.4%
Month over month, contracts to purchase existing homes declined 1.4%, the second month-over-month drop in three months. The year-over-year trend, however, is in its fourteenth month of consecutive gains — demonstrated by the 80 metropolitan areas that made this month’s “Improving Markets Index,” which is compiled by the National Association of Homebuilders and First American.
Limited listings may be behind the decline
The chief economist of the National Association of Realtors (NAR), Lawrence Yun, commented that “buyer interest remains strong but fewer home listings mean fewer contract signing opportunities.” Single-family homes on the market in June went down 3% from their levels in May and a whopping 24% from June of last year, the biggest year-over-year decrease in more than 30 years. Slow processing of distressed properties along with homeowners unwilling to sell their home when the current value is so much less than what they paid are the primary causes.
Supply and demand pressures helping stabilize the market
As inventories go down, the low home prices and record-breaking low mortgage rates continue to drive demand, which means that many listings — those priced appropriately for the current market condition — are receiving multiple offers, allowing sellers more choice picking a buyer and the terms of the sale.