U.S. Home values declined an average of 8.4 percent in the first three periods of 2008, down $2 trillion in total value, according to Zillow.com Real Estate Market Report, released this week.

Thirty of the 163 metropolitan statistical areas covered by Zillow, either showed gains in the median value of homes in the area or values stabilized.

Here are the 10 areas where values increased and declined the most.

Places Where Values Increased the Most
Ithaca, N.Y., 5.6%
State College, Pa., 4%
Jacksonville, N.C., 3.9%
Winston-Salem, N.C., 3.4%
Bay City, Mi., 3.2%
Rochester, N.Y. 3.1%
Greenville, S. C., 2.8%
Anderson, S.C. 2.7%
Burlington, N.C., 2.6%
Spartanburg, S.C., 2.0%

Places Where Values Decreased the Most
Las Vegas-Paradise, Nev., -24.6%
Bakersfield, Calif., -24.9%
Madera, Calif., -26.2%
Gainesville, Ga., -26.4%
Riverside-San Bernardino-Ontario, Calif., -30.4%
Modesto, Calif., -31%
Salinas, Calif., -32.4%
Merced, Calif., -32.5%
Vallejo-Fairfield, Calif., -33.2%
Stockton, Calif., -35.5%

Source: Zillow.com (12/15/08)

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2009 is likely to be a year of continuing adjustment to a changing real estate marketplace. Prepare yourself and your business with these predictions from HGTV’s FrontDoor.com Web site.

Sellers will continue to face falling home values in the new year because they’ll be competing with banks and builders who are slashing prices to sell off the still-huge inventory of foreclosures and new homes.
The Obama administration will act on its plan to crack down on abusive lending practices.
Mortgage holders in danger of losing their homes will receive more assistance from a variety of programs since the Senate’s Joint Economic Committee has predicted two million foreclosures in 2009.
Banks’ restructuring should bring increasing calm, making loan modifications and short sales easier to obtain. Eventually this will lead to a decrease in the number of bank-owned properties on the market.
Mortgage applications will continue to receive a comprehensive review, requiring borrowers to provide extensive income and debt documentation. Those with the best credit will get the best rates.
The foreclosure crisis has created wiser consumers, with a deeper understanding of real estate, mortgages, and credit enabling better decision-making going forward.
Green is good with increasing numbers of buyers opting for smaller homes that are within walking distance of school and work.
Buyers and sellers will be more and more tech savvy, relying on tools like video, webcasts, and mobile search. Consumers and practitioners will benefit from being ahead of the curve.
Prices will be low as will interest rates, creating great buying opportunities, and likely, inspiring reluctant buyers to make their move.
The recession will end and buyers will regain confidence in the market.

Source: Frontdoor.com (12/03/2008)

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Financial mogul Sam Zell, beleaguered owner of the Tribune Co., which declared Chapter 11 bankruptcy last week, told an Israeli business conference Sunday that the U.S. real estate market will be in recovery by spring 2009.

Zell pointed out that the U.S. population is growing and with fewer than 600,000 building starts in 2008, a million fewer than any of the last 10 years, demand for housing will rise.

Zell blamed the current crisis – at least in part – on ill-considered decisions.

“We are living through our first Blackberry recession where, literally, information is instantly disseminated around the world and people, in effect, respond to it, perhaps, often without any particular caution or attention,” he said.

Source: Reuters News, Ori Lewis (12/14/2008)

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If you’re thinking about buying a house at a foreclosure auction, here’s some advice from experienced auction buyers.

Pay cash. Most auctions require you to close in fewer than 30 days. That’s not enough time to get a bank loan. Hard-money loans are an option, but the going rate is 15 percent plus points, and refinancing right away is probably not an option.

Check the place out. Most auction companies working for banks will let you get in with an inspector a week or so before the sale.

Get a separate appraisal. A knowledgeable appraiser can keep you from getting caught up in the frenzy and paying too much.

Look for short sales. Instead of buying at a foreclosure auction, negotiate a short sale prior to foreclosure. Buying short takes patience, but you are likely to get a very good deal.

Source: Fortune, David Whitford (12/22/2008)

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Freddie Mac reports a decline in the 30-year fixed mortgage rate to 5.47 percent during the week ended Dec. 11 from 5.53 percent last week and 6.11 percent a year ago.

Some lenders are locking in even lower rates as they build on momentum started when the Federal Reserve announced plans last month to purchase a substantial number of mortgage-backed securities. HSH Associates and Inside Mortgage Finance are reporting interest on 30-year fixed loans at 5.33 percent and 5.09 percent, respectively.

Freddie Mac chief economist Frank Nothaft says mortgage rates also were driven downward by the recession and rising unemployment.

Source: The Washington Post, Dina ElBoghdady (12/12/08)

While resetting rates are causing some foreclosures, falling home prices are also playing a big part in the real estate malaise.

Home owners who owe thousands more on their homes than they are currently worth find themselves unable to refinance and unable to sell at a price that will come close to covering what they owe on the mortgage.

However, according to ZipRealty, a real estate tracking firm that aggregates multiple listing service data, the decline may be reaching bottom with inventories starting to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally, ZipRealty says.

The following are the top 10 cities where prices have fallen the most in the last year, according to ZipRealty.

1. Sacramento, Calif.: – 18.5 percent
2. Las Vegas: – 17.2 percent
3. San Diego: – 17.1 percent
4. Tampa, Fla.: – 11.7 percent
5. Los Angeles: – 10.7 percent
6. Miami: – 10.6 percent
7. Phoenix: – 9.5 percent
8. Jacksonville, Fla.: – 8.7 percent
9. Detroit: – 7.7 percent
10. Atlanta: – 7.1 percent

Source: Forbes, Matt Woolsey (02/12/08)

Long-term mortgage rates remain in a downward pattern, registering the third consecutive week of decline.

According to Freddie Mac’s numbers, average interest on 30-year fixed loans settled the week at 5.69 percent—the lowest level since July 2005. Other rate declines include:

• 15-year fixed mortgages slipped to 5.21 percent from 5.43 percent a week ago.
• 5-year adjustable-rate average retreated to 5.4 percent from 5.63 percent.
• 1-year ARMs fell to 5.26 percent from 5.37 percent..

Observers generally agree that borrowing costs will remain at or near 6 percent for 2008 unless a U.S. recession surfaces—in which case they expect rates to decline further.

Source: Baltimore Sun (01/18/08)

Here are the Farmers Insurance Group’s top-five most secure places to live in all three size categories.

Most Secure Places to Live: Large Metro Areas (500,000 or more residents)

• San Jose-Sunnyvale-Santa Clara, Calif.
• Boise City-Nampa, Idaho
• Bethesda-Gaithersburg-Frederick, Md.
• San Francisco-San Mateo-Redwood City, Calif.
• Oxnard-Thousand Oaks- Ventura, Calif.

- Pet showers. The kitchen or work sink is out for the dog bath. Dedicated dog showers are an emerging trend. Be it in a mud or utility room, garage corner or basement, dog lovers want a place to clean their favored pooch after a visit to the neighborhood dog park. Common dog showers feature a 3′ x 3′ shower base, surrounded by ceramic tile 4′ up the wall. Pet showers are all about the convenience for Fido to step in, and eliminate the master’s need to lift.

 Single-family existing-home sales were stable in October while the condo sector was down, says the NATIONAL ASSOCIATION of REALTORS®. Lingering effects of the credit crunch were a drag on sales, but the mortgage situation has improved significantly.

Total existing-home sales — including single-family, townhomes, condominiums and co-ops — eased by 1.2 percent to a seasonally adjusted annual rate of 4.97 million units in October from a downwardly revised level of 5.03 million in September. Existing-home sales are 20.7 percent below the 6.27 million-unit pace in September 2006.

Lawrence Yun, NAR chief economist, expected the sluggish performance.

“As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated,” he says. “We continue to see the biggest impact in high-cost markets that rely on jumbo loans.”

Mortgage availability has improved with much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases, Yun adds.

“A trend away from subprime mortgages to FHA loans, which often carry much lower interest rates, is a positive development for consumers and the housing market going forward,” Yun notes. “Still, it will take some time for the change to yield a measurably higher closed sales volume in the aftermath of the subprime collapse. In the near term, we expect home sales to remain fairly stable.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.38 percent in October, unchanged from September; the rate was 6.36 percent in October 2006. Last week, Freddie Mac reported the 30-year fixed rate fell to 6.2 percent.

Median Price Falls Over the Year

The national median existing-home price for all housing types was $207,800 in October, down 5.1 percent from October 2006 when the median was $218,900. But there is a downward distortion from the temporary problems with jumbo loans that slowed sales in high-price markets, and that dragged down the national median.

NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., emphasized that all real estate is local.

“Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data,” he says. “Broadly speaking, home prices in most areas are up modestly or fairly stable. Areas with population or job growth are seeing the strongest home price gains.”

Healthy Price Gains in Some Markets

Among the many metro areas showing healthy price gains are Charlotte, N.C.; San Francisco; Albuquerque, N.M.; and Green Bay, Wis.

Other NAR housing statistics include:

• Total housing inventory: rose 1.9 percent at the end of October to 4.45 million existing homes available for sale, which represents a 10.8-month supply at the current sales pace. That’s up from a downwardly revised 10.4-month supply in September.

• Single-family home sales: unchanged from September at the seasonally adjusted annual rate of 4.37 million in October, and are 20.8 percent below 5.52 million-unit level in October 2006. The median existing single-family home price was $205,700 in October, down 6.3 percent from a year ago.

• Existing condominium and co-op sales: fell 9.1 percent to a seasonally adjusted annual rate of 600,000 units in October from 660,000 in September, but are 20.2 percent below the 752,000-unit pace in October 2006. The median existing condo price was $223,500 in October, up 4.9 percent from a year ago.

Regional Sales

Here’s how existing-home sales across the country fared:

• Northeast: unchanged at an annual pace of 900,000 in October, and are 12.6 percent below October 2006. Median price: $258,700, up 1.3 percent from a year ago.

• South: unchanged in October, at an annual rate of 2.03 million, but are 19.4 percent below a year ago. Median price: $171,400, down 6.7 percent from October 2006.

• Midwest: slipped 1.7 percent to an annual rate of 1.18 million in October, and are 16.9 percent below October 2006. Median price: $164,000, down 1.6 percent from a year ago.

• West: fell 4.4 percent in October to a level of 870,000, and are 33.1 percent below a year ago. Median price: $318,200, which is 6.9 percent lower than October 2006.