With all of the frustration many realtors and consumers are feeling over the low inventory levels this year it is important to remember we still have a lot of good news happening in the real estate world. The California Association of Realtors sent out a news release Monday that showed renewed confidence in the housing industry among consumers, which began on a lower note at the start of the year. Citing a Fannie Mae survey, C.A.R. noted that 68% of those surveyed believe now is a good time to buy, and over half believe things will continue to improve in the housing markets this year. Interestingly, around a quarter of respondents said their household income has increased "significantly" this year.
In California, the news about distressed homes was especially good. In January 2009, 69.5% of all homes sold in California were established as distressed, which includes short sales and real estate-owned (REOs) properties. This January, the number had shrunk to 15.6%. The main reason for this is vastly improved home prices lifting the market value of many underwater homes and, as a result, many homeowners have gained significant equity in their homes (thus resulting in fewer short sales and foreclosures). Even more remarkable, California’s median home price has soared more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014.
I was also glad to read that on Tuesday leaders of the U.S. Senate Banking Committee outlined clearly the bi-partisan plans for legislation to wind down government-owned mortgage financiers Fannie Mae and Freddie Mac that have long been promised. Lawmakers from both parties want to revamp the $10 trillion mortgage market to make it less likely taxpayers will ever be put on the hook again like they were after the housing crash. Under the proposal, Fannie Mae and Freddie Mac would be wound down and replaced with a new government "re-insurer" called the Federal Mortgage Insurance Corp., which would only provide assistance after private creditors had taken a hit. The entity would be financed by fees on lenders who want the government backstop and be modeled after the FDIC, so...we'll see how that goes. But it is a positive step in the right direction.
In California, the news about distressed homes was especially good. In January 2009, 69.5% of all homes sold in California were established as distressed, which includes short sales and real estate-owned (REOs) properties. This January, the number had shrunk to 15.6%. The main reason for this is vastly improved home prices lifting the market value of many underwater homes and, as a result, many homeowners have gained significant equity in their homes (thus resulting in fewer short sales and foreclosures). Even more remarkable, California’s median home price has soared more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014.
I was also glad to read that on Tuesday leaders of the U.S. Senate Banking Committee outlined clearly the bi-partisan plans for legislation to wind down government-owned mortgage financiers Fannie Mae and Freddie Mac that have long been promised. Lawmakers from both parties want to revamp the $10 trillion mortgage market to make it less likely taxpayers will ever be put on the hook again like they were after the housing crash. Under the proposal, Fannie Mae and Freddie Mac would be wound down and replaced with a new government "re-insurer" called the Federal Mortgage Insurance Corp., which would only provide assistance after private creditors had taken a hit. The entity would be financed by fees on lenders who want the government backstop and be modeled after the FDIC, so...we'll see how that goes. But it is a positive step in the right direction.
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