The House Ways and Means Chairman has voted out the tax portion of the economic stimulus on a party-line vote, 24 - 13. It contains a provision that would eliminate the repayment feature of the $7500 first-time homebuyer tax credit for purchases between January 1, 2009 and June 30, 2009. An amendment that would have significantly modified the credit was offered (Heller, R-NV) but failed on a party line vote. During the course of debate on the Heller amendment, however, senior Committee member John Lewis (D-GA) offered vigorous support for extending the effective date of the credit through year-end. NAR continues to push to have the credit extended and expanded. A vote on all the parts of the economic stimulus (tax and non-tax) is expected in the House on January 28.

The Senate Finance Committee is expected to mark up its tax stimulus on Tuesday, January 27. The repayment provision will likely be included. NAR continues to beat the drums to have the credit expanded and extended.

Renters in Fannie Mae-Owned Foreclosed Properties
Eligible to Stay in Their Homes

WASHINGTON, DC — Fannie Mae (FNM/NYSE) today announced the establishment of a new National Real Estate Owned (REO) Rental Policy that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The company currently has an eviction suspension in place through the end of January which will allow for the new policy to be fully operationalized prior to the suspension concluding.

“Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing,” said Michael Williams, chief operating officer of Fannie Mae. “This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates.”

The new policy applies to renters occupying foreclosed properties at the time Fannie Mae acquires the property. Renters occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property.

While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company. The company will not require security deposits to be posted in connection with this program.

Renters in the foreclosed properties will be asked to pay market rate rent under the new leases. Rates may be determined by reviewing local comparable rents, conducting a neighborhood survey, or through other relevant indicators. Rates will also be subject to any legal rent control restrictions. The company will review each instance where the market rate may require a tenant to pay additional rent and will work to reach an equitable resolution.

On behalf of the company, property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options.

This year, our marketing programs are designed to capture more qualified consumer leads for you than ever before. We are focused and passionate about capturing more leads so that you can close more sides of business, earn more revenue and increase market share.

The steps on our golden path involve an increased investment and a stronger focus on our online advertising efforts, including:

• Best-in-breed, branded national Web site
• Online display advertising
• Search engine optimization
• Paid search marketing
• Social media
• Distributing all property listings to national Web site partners

Our online efforts begin with our branded national Web site, which is now an award-winning Web site.* It is also an important means of capturing visitors and leads. comScore, an independent third-party firm that measures the traffic of real estate franchise and real estate aggregator sites, has reported that our CENTURY 21® national Web site has been the most visited franchise real estate Web site for the past four months (Sep - Dec) of 2008! That’s right! With this trend of 4 months, we are clearly surpassing all of our major competitors - including RE/MAX! Moreover, our average visitor count for the full second half of the year is higher than RE/MAX while the number of visitors to the RE/MAX Web site has been dropping, per comScore. Now that’s a trend we want to sustain!

The combination of our Web site with our broad distribution of listings to partner aggregator sites including Trulia, Zillow and Yahoo means that your listings are being seen by more consumers who are actively in the market to buy or sell real estate. That means that we have more eyes seeing our property listings than our competitors do.

National Site Statistics - use it with your consumers to help them understand that you can help market their property as no one else can; use it with your existing agents to promote excitement in our brand; and use it with prospective agents to entice them to come to our System.

Orlando Real Estate

Interest rates that rose from their record lows the previous week slowed mortgage applications last week.

The Mortgage Bankers Association weekly mortgage applications survey declined 9.8 percent on a seasonally adjusted basis to 1,195.3 last week from 1,324.8 the previous week.

On an unadjusted basis, the index decreased 10.3 percent compared with the previous week and was down 23.1 compared to the same week a year ago.

Most of the business is still in refinances, but the refinance share of applications decreased to 83.3 percent of the total from 85.3 percent the previous week.

Interest rates were generally up:

• 30-year fixed-rate mortgages increased to 5.24 percent from 4.89 percent
• 15-year fixed-rate mortgages increased to 4.99 percent from 4.63 percent
• 1-year ARMs remained unchanged at 5.89 percent

Source: Mortgage Bankers Association (01/22/2009)

After holding fairly stable for a year, pending home sales declined in the face of job losses and an eroding economy, according to the National Association of Realtors^®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 4.0 percent to 82.3 from a downwardly revised reading of 85.7 in October, and is 5.3 percent below November 2007 when it was 86.9. The current index is the lowest since the series began in 2001.

Lawrence Yun, NAR chief economist, said a weakening was inevitable. “Mounting job losses and very weak consumer confidence deterred home buyers from signing contracts in November,” he said. “December’s housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed.”

Yun said the outlook will depend heavily on the stimulus package. “With a proper real-estate focused stimulus measure, home sales could rise more than expected, by more than 10 percent to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country. Stable home prices will, in turn, lessen foreclosure pressures and lay the foundations for a solid economic recovery as the nation’s 75 million homeowners regain confidence,” he said.

The impact of mortgage interest rates declining to near 50-year lows in December is not reflected in current data.

The PHSI in the Northeast dropped 7.2 percent to 63.2 in November and is 14.6 percent below a year ago. In the Midwest the index fell 6.7 percent to 74.2 and is 10.1 percent below November 2007. The index in the South declined 2.2 percent to 85.3 in November and is 12.7 percent below a year ago. In the West, the index was down 2.4 percent to 101.2 but remains 19.3 percent higher than November 2007.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there can’t be an economic recovery without a focus on housing. “It’s crucial for Congress and the new administration to move quickly to remove impediments and offer home buyers the incentives they need to tap into today’s historic low mortgage interest rates,” he said.

“NAR advocates expanding a $7,500 tax credit to all home buyers and eliminating the repayment feature, and permanently raising loan limits to bring down interest rates for many buyers in high-cost areas. We also need to expedite short sales and unclog the mortgage pipeline,” McMillan said.

The 30-year fixed-rate mortgage should hold fairly steady through the first half of the year and rise slightly in the second half. NAR’s housing affordability index, which looks at the relationship between home prices, mortgage interest rates and family income, is on track to match a record high set in 1972.

“The unique housing affordability conditions in today’s market underscore the opportunity in giving consumers the necessary incentives to stimulate our economy through a housing recovery,” Yun said.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for December will be released January 26; the next Pending Home Sales Index will be on February 3.  For more information, please visit: pending home sales

Mortgage rates dropped to their 11^th straight weekly decline, reaching new record lows, according to Freddie Mac.
Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week’s 5.01 percent.

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If all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales, enough to meaningfully draw down excess housing inventory, the NATIONAL ASSOCIATION OF REALTORS® says.

An evaluation of options for a home buyer tax credit by NAR shows wide ranging implications and benefits. A full credit to all buyers means an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four of those households would actually make a purchase.

Under the current $7,500 first-time home buyer tax credit, which must be repaid over 15 years, 264,000 households meet the purchase requirements. Using the same assumptions, with plans to hold their home for a median 10 years, it would mean only 66,000 additional sales.

Lawrence Yun, NAR chief economist, said NAR is advocating a tax credit for any home purchase meeting qualifying underwriting standards. “A home buyer incentive is critical to help reduce housing inventory and stabilize home prices,” he said. “The bigger the incentive, the faster housing can help pull the economy out of recession. The cost to the Treasury would be far less than the additional costs of a prolonged recession with insufficient housing stimulus.”

Analysis of other options shows that if only first-time buyers are eligible and the repayment feature is dropped, it could mean an additional 202,000 home sales. If extended to all home buyers but the repayment feature is retained, the gain would be 181,000 home sales.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said a flexible approach to the tax credit would have added benefits. “A home buyer tax credit also should be allowed to be used as a part of downpayment. This would instantly add an equity cushion for homeowners – a vested financial interest provides the foundation for sustainable homeownership, which helps improve economic stability,” he said.

NAR estimates only 25 percent of newly eligible households would become homeowners, and does not capture the effect of increased trade-up buying activity. As such, these projections may understate the full impact of a home buyer tax credit.

Source: NAR

A bill that embraces the need for righting the housing market—the first big step toward economic recovery—was introduced Friday in the U.S. House of Representatives.

H.R. 384, The TARP Reform and Accountability Act, was offered by Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee. The bill would require the Treasury Department to develop a program, outside the Troubled Asset Relief Program, to stimulate demand for home purchases and lower property inventories, by making affordable mortgages available for qualified buyers through interest rate buydowns, a priority of the NATIONAL ASSOCIATION OF REALTORS®.

The measure would amend the TARP provisions of the Emergency Economic Stabilization Act of 2008 to make significant steps to reduce foreclosures, strengthen accountability and close loopholes. The Treasury could consider the impact of areas with the highest inventories of foreclosed properties.

NAR President Charles McMillan was heartened by the legislation that would move the housing market forward.

“The bill proposed by Chairman Frank is an important first step toward launching a real estate recovery. Housing has always led this country out of economic downturns, and this bill recognizes that the key to bolstering the overall economy is creating stability in the real estate markets. With foreclosure relief, improving the Hope for Homeowners Plan, and expanding TARP to support commercial real estate loans and commercial mortgage-backed securities, this legislation will help create housing stability.”

“By directing the Treasury Department to increase the availability of affordable mortgages rates for qualified home buyers and to offer reduced rate loans designed to stimulate demand for home purchases and clear inventory of properties, Chairman Frank has responded to the most critical issues facing potential homeowners,” McMillan said.

Foreclosure relief, using the second half of the $700 billion previously authorized by Congress, would be conditioned on stipulation that $50 billion be used for foreclosure mitigation and calls for a plan to be put into action by March 15. That would allow the Treasury to begin committing the remaining TARP funds for the plan no later than April 1.

The plan would require that foreclosure assistance must apply only to owner-occupied residences. Further, the bill would provide liability protection for loan servicers who engage in loan modifications. Such servicers would have to report regularly to the Treasury.

In addition, the Treasury would be authorized to provide support for commercial real estate loans and commercial mortgage-backed securities, an NAR priority.

NAR has been urging the incoming Obama administration, as well as Congress, to address critical housing needs.

“This legislation is a great beginning, but more needs to be done. We must continue to bring potential homebuyers into the market by ensuring low mortgage interest rates, making the higher 2008 conforming loan limits permanent, and applying the $7,500 tax credit to all homebuyers and making it non-repayable,” McMillan said.

Source: NAR

Homes sales rise as affordability improves

(January 12, 2009 – Orlando, FL) Orlando’s housing marketing for the fourth month experienced a month-over-month increase in the number of home sales as buyers responded to improved affordability, according to statistics released by the Orlando Regional Realtor® Association.

“Lower interest rates and more affordable prices are attracting buyers who have been sitting on the fence about the decision to buy,” said ORRA President Les Simmonds, broker of L.G. Simmonds Real Estate Corp.

Members of ORRA were involved in the sale of 21.28 percent more homes in December of this year than last: 1,305 to 1,076. The current number of pending sales (homes that are under contract to purchase but are awaiting completion of the transaction process) dropped slightly from last month, from 3,326 to 3,265. For the past nine months, the number of homes under contract has increased month-over-month, with 109.42 percent more homes under contract in December 2008 than compared to December 2007 (1,559).

December 2008’s median sales price of $169,900 is a 2.35 percent increase over November’s median sale price of $166,000; however it is 24.49 percent below the December 2007 median sales price of $225,000. “With approximately 40 percent of the transactions involving foreclosures or short sales, the median price is being pulled down by homes sold at discounted prices,” explained Simmonds.

First-time homebuyers still have the best conditions since March 2004 to purchase a home in the Orlando area, as the first-time homebuyers affordability index in December pushed up to 101.09 percent. In addition, inventory of houses on the market is stocked with more than 6,961 homes in the average first time buyer’s price range of $145,987 or less.

Even with the increase in median price, the area’s affordability index in December continued its upward march to a record 142.16 percent. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $51,962 can qualify to purchase one of 11,806 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $241,523 or less.

The area’s average interest rate was 5.40 percent in December 2008, down from 6.00 in November and the lowest for the entire year.

Homes of all types spent an average of 109 days on the market before being sold in December 2008, and the average home sold for 92.69 percent of its listing price (a decrease from November 2008’s 92.74 percent). In December 2007 those numbers were 113 and 92.75 percent, respectively.

The majority of single-family homes (182) that changed hands in December 2008 were sold in the $200,000 - $250,000 price range. On the far ends of the scale, 15 homes were sold for $1 million or more in December while 43 homes sold for less than $50,000 (a price category that saw an increased number of sales nearly every month in 2008).

Inventory

There are currently 22,524 homes available for purchase through the MLS. Inventory decreased by 1,884 homes from November, which means that 1,884 more homes left the market (either through sales or expired listings) than entered the market. Compared to last year, the December 2008 inventory level is 7.30 percent lower than it was in December 2007 (24,298).

The December 2008 inventory level reflects a 17.26-month supply at the current pace of sales, a nice drop from the 21.99-month supply recorded in November. By year’s end, inventory months-of-supply had declined 23.60 percent since December 2007.

There are 16,420 single-family homes currently listed in the MLS, a number that is 1,908 (10.41 percent) less than this time last year. As usual, most (2,445) are listed in the $200,000 - $250,000 price range. Condos currently make up 4,136 offerings in the MLS, while duplexes/town homes/villas make up the remaining 1,968. Most condos (413) are priced at $100,000 - $120,000. The majority of duplexes/town homes/villas (293) are listed in the $120,000 - $140,000 price category.

Condos and Town Homes/Duplexes/Villas

The sales of condos in the Orlando area increased by 42.71 percent: A total of 137 condos changed hands in December of 2008 compared to 96 in December 2007.

In December, the most (31) condos in a single price category that changed hands were in the $1 - $50,000 price category, yet again the greatest number of sales in the lowest price category for the year. Another 21 condos sold for $50,000 - $60,000; altogether, 93 of the 137 condos that sold in December did so for less than $100,000.

Orlando homebuyers purchased 117 duplexes, town homes, and villas in December 2008, which is a 6.40 percent decrease from December 2007 when 125 of these alternative housing types were purchased. The majority (26) of duplexes, town homes, and villas sold in December 2008 fell into the $160,000 - $180,000 price category.

MSA Numbers

Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in December were up by 27.56 percent when compared to December of last year. Throughout the entire MSA, 1,643 homes were sold in December 2008 compared with 1,288 in December 2007.

Seminole County’s December 2008 sales decreased 9.06 percent over that of December 2007 (271 to 298), while Orange County’s sales increased 42.34 percent (827 to 581). Lake County saw a 8.73 percent improvement in the number of sales in December 2008 compared to December 2007 (249 to 229), and Osceola County experienced its second-highest percentage increase of the year: 64.44 percent (296 to 180).

2008 Recap

Sales in 2008 were down by 11.97 percent over 2007. A total of 14,740 homes were sold in 2008 compared to 16,744 the previous year.

From a year-long perspective, the 2008 cumulative median price fell 18.27 percent to $200,000 over 2007’s $245,000. Throughout 2008, the majority of single-family homes that changed hands each month were sold in the $200,000 - $250,000 price range. In total, 20.79 percent (2,504) of all single-family home sales fell into that price range.

Condo sales fell 32.04 percent, with 1,436 condos sold in all of 2008 compared to 2,113 sold in all of 2007. The majority (200 or 13.93 percent) of sold condos fell into the $100,000 - $120,000 category. For the entire year, duplex, town home, and villa sales were down 10.00 percent.

By year’s end in 2008, 17,972 homes were sold in the Orlando MSA while 20,051 homes were sold by year’s end in 2007 (a 10.37 percent decline). For comparison, the MSA’s 2007 year-to-date sales were 39.7 percent below the 2006 year-to-date tally.

Each county’s year-end sales comparisons are as follows:

Lake: 5.43 percent below 2007 (2,976 homes sold to date in 2008 compared to 3,147 in 2007);
Orange: 10.60 percent below 2007 (8,839 homes sold to date in 2008 compared to 9,887 in 2007);
Osceola: 3.58 percent above 2007 (2,809 homes sold to date in 2008 compared to 2,712 in 2007); and
Seminole: 22.23 percent below 2007 (3,348 sold to date in 2008 compared to 4,305 in 2007).