Real Estate Sifter

RISMEDIA, January 29, 2010—As the U.S. economy recovers, emerging trends in demographics and consumer behavior will become major drivers of new housing opportunities, resulting in a residential market vastly different from the one that existed prior to the recession, according to Housing in America: The Next Decade, a new research paper authored by John K. McIlwain, senior resident fellow, Urban Land Institute/J. Ronald Terwilliger Chair for Housing.

In a presentation of the research to Urban Land Institute (ULI) trustees during the Institute’s Midwinter Meeting in Washington, McIlwain discussed the implications of the rising numbers of foreclosures, re-establishing a private-market residential finance system, as well as shifts in housing demand triggered by baby boomers, their children, and by immigrant households. “The old ‘normal’ will not return,” McIlwain predicted. “Over time, a new mode of metropolitan development will emerge, presenting opportunities and stiff challenges. Those who fail to understand these new trends will find themselves building what is no longer in demand.”

Despite the housing stabilization that has begun in the nation’s strongest employment markets, overall home prices will likely decline an additional 10% this year, contributing to what is already an unprecedented number of foreclosures and ‘underwater’ mortgages (loan amounts that are higher than the current value of the homes), McIlwain said. The growing number of consumers who are choosing to walk away from those mortgages suggests a fundamental change from the long-held notion of homeownership as the ultimate American Dream, he explained. This disillusionment over homeownership as a way to build wealth could persist for decades to come, as those entering the housing market will be more apt to rent longer, and to place more emphasis on buying for shelter rather than investment purposes.

Two key predictions from Housing in America for the decade ahead: home appreciation will slow considerably, to about 1-2% annually; and the current U.S. homeownership rate, now at 67% (a decline from the record high of 69% at the height of the housing boom) will fall further, to about 62%.

According to McIlwain, the lasting stability of the U.S. housing market depends on how, and when, the private home mortgage finance system is revived and how such a system might be structured. The federal government now supplies virtually all new mortgage funds through mortgage purchases or securitization. Reducing this massive support, he said, will entail revamping or replacing mortgage suppliers Fannie Mae and Freddie Mac, and tightening risk requirements for mortgage issuers to restore investor confidence in mortgage-backed securities. “Re-establishing a robust private mortgage market will require both strong market fundamentals and a reformed mortgage securitization structure that eliminates past abuses,” McIlwain said. Such reform will influence the flow of capital, affecting the volume of debt, its cost and to whom it will be available, he noted. While reform efforts are still sketchy, the end result “will have a fundamental impact on housing markets for years to come.”

The report cites 4 major U.S. demographic waves to watch in the new decade:

-Aging baby boomers (55 to 64 years old)- Although they are nearing retirement age, many will keep working out of necessity or by choice. Some will be forced to stay in their suburban homes until values recover. Those who are able to move will not choose traditional retirement locations or senior housing, opting instead for more mixed-age living environments that cater to their active lifestyles. Suburban town centers with a walkable urban “feel” will appeal to this group.

-Younger baby boomers (46 to 54 years old), now in or entering their prime earning years- This group will also face a tough time selling suburban homes, hampering the ability of these boomers to move. Because the recession has left many younger boomers with flat incomes and less home equity, their ability to purchase second homes will be greatly diminished, curbing prospects in general for the second home market. However, like their older counterparts, they will be drawn to more connected, compactly designed communities when they are able to switch houses.

-Generation Y- This tech-savvy generation has a population of about 86 million, more than the baby boomers. Gen Yers place high value on community; on places (either virtual or actual) to gather and share information, ideas and opinions. As they enter the housing market, they will be far less interested in homeownership than their parents were when they were young adults. (The recession, said McIlwain, has “tempered the interest of Gen Yers in buying their own homes and they will be renters by necessity or choice for years ahead”). Despite having small incomes, Gen Y will gravitate toward walkable, close-in communities, choosing isolated housing on outer edges only as a last resort because it is the most affordable. Green, “net zero” homes powered exclusively by alternative energy will have strong appeal to this group.

-Immigrants- Already 40 million strong, the total population of legal and illegal immigrants in the U.S. has an even greater impact when the children and grandchildren are included as a factor. The tendency of immigrants to cluster, and to live in multi-generational households, suggests that they would prefer larger homes if they could afford them and if the homes were in neighborhoods with a strong sense of community.

All of these groups have some characteristics that reflect a desire to live in more pedestrian-friendly, transit-oriented, mixed-use environments that de-emphasize auto dependency, whether the location is urban or suburban, McIlwain noted. Among the majors factors driving urbanization: 1) growth of two-person households and single households without children (among both baby boomers and Generation Y); 2) a halt to baby boomer migration to the suburbs; 3) the likelihood of Generation Y to rent rather than own; and 4) public policies encouraging compact development.

Economic and land constraints make it impossible for urban infill development to accommodate all the housing demand represented by all the demographic groups, McIlwain said. As a result, suburban development “must adapt or it will be obsolete,” he concluded. “The suburban century is over. This is the urban century.”

For more information, visit www.uli.org.

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RISMEDIA, January 29, 2010—While some of the “hottest” real estate markets in the country- those where homes are selling most above their list prices- continue to be distressed areas dominated by heavily discounted prices, Q4 2009 revealed some notable exceptions. In two higher priced zip codes in California’s Berkeley and the Los Angeles suburb of Tarzana, and three zip codes in the greater Dallas-Fort Worth area not dominated by distressed listings, homes sold on average well above asking price in Q4, according to ZipRealty’s quarterly Home Hunter Report.

These are just some of the highlights revealed by ZipRealty’s recently released report which identifies where home sellers are fetching the highest offers compared to their asking prices among 33 markets the brokerage serves.

Highlights from the ZipRealty Q4 2009 Home Hunter Report, which also identifies which cities nationwide are most highly searched online, include:

-Phoenix was 2009’s most popular city in the country for online home hunters, according to the volume of the total number of home searches on www.ZipRealty.com throughout the year.

-Homes in Berkeley’s 94703 zip code sold for an average of 107.86% of list price in Q4. The average home sale price for the zip code was $538,626 for the same period. Homes in the Tarzana district of Los Angeles’ 91356 zip code sold for an average of 107.30% of list price in Q4, with an average sale price of $653,722 for the same period. In Q3 2009, homes in the Tarzana zip code had commanded only 93.55% of list price.

-Texas claimed three of the country’s “hottest” markets in Q4 for the first time. Homes in Fort Worth’s 76135 zip code sold for an average of 134.65% of asking price in Q4, while homes in the upscale Dallas bedroom community of Rowlett (75089) commanded on average 110.81% of asking price. Zip code 76001 in Arlington, Fort Worth’s largest suburb, also entered the top ten list this quarter.

-All of the five remaining cities on the Top 10 “Hottest Markets” list are also located in California, including: Sacramento (95832); San Lorenzo (94580); Oakland (94621); Palmdale (93591); and San Bernardino (92405).

On the cold end of the spectrum, Florida zip codes continue to dominate those areas selling at a discount, where sellers are accepting on average 70 to 85 cents on the dollar. Florida zip codes selling most below asking price based on sales-to-list price ratio include: Deland (32720); Orlando (32827); Largo (33773); Delray Beach (33483); Naples (34102); Miami’s Coral Gables (33134); and Boca Raton (33496). Zip codes 75203 in Dallas, 19132 in Philadelphia and 60022 in Glencoe, Ill., join the Florida zip codes as the country’s coldest.

“For more than a year now we’ve been seeing distressed areas with heavily discounted properties dominate the ‘hot’ markets where homes fetch more than the asking price, and it’s a great sign that we’re now starting to see higher-priced areas going over asking price, too,” said Leslie Tyler, vice president and chief home hunter for ZipRealty. “These hot micro-markets across California and Dallas-Fort Worth point to the continued stabilization happening in different areas nationwide.”

Phoenix Dominates Nation’s Most Popular Cities for Home Hunters in 2009
According to ZipRealty, the Phoenix area was by far the most popular for homebuyers in all of 2009, according to the volume of the total number of home searches on www.ZipRealty.com throughout the year. Areas where home prices have dropped significantly since 2007, including Phoenix, Southern Florida and Las Vegas, generated the most home hunter interest throughout the year. The most popular cities for home searches in all of 2009 were:

1. Phoenix
2. Scottsdale (Phoenix metro)
3. Orlando
4. Summerlin (Las Vegas community)
5. Chandler (Phoenix metro)
6. Mesa (Phoenix metro)
7. Gilbert (Phoenix metro)
8. Henderson – Green Valley (Las Vegas metro)
9. Atlanta
10. Kissimmee (Orlando metro)

“We’ve seen incredible buyer interest throughout 2009 in homes perceived as bargains in the Phoenix area from across the country, and even from ’snow-birds’ looking for winter retreats from Canada,” Tyler explained. “Meanwhile, buyers and sellers in Southern Florida still seem to be waiting for the bottom of the market.”

For more information, visit www.ziprealty.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, January 29, 2010—Fueled by a recovery in the second half of 2009, statewide sales of existing single-family homes in New York State rebounded from a double-digit deficit in the first half of the year to finish only 3.2% behind the 2008 total. According to preliminary existing single-family sales data accumulated by the New York State Association of Realtors®, 77,176 homes were sold statewide during 2009.

“As 2009 progressed, the combination of the federal first-time home buyer tax credit, historically low mortgage rates and moderating prices resulted in New Yorkers gaining confidence about it being a good time to buy a home in the Empire State,” said Duncan R. MacKenzie, NYSAR chief executive officer. “In the first half of 2009, many would be buyers remained on the sidelines due to reports of the so-called ‘national’ housing market collapse and the overarching economic uncertainty.”

“Once New Yorkers came to understand that all housing markets are local and that their local market could not be painted with the same brush as severely depressed markets in other locales, there was a renewed interest in homeownership across our state,” MacKenzie said. “The fact that sales were 20% higher in the 2009 fourth quarter compared to the 2008 provides clear evidence of buyers returning to the market as does the similar increase in December sales from a year ago.”

“The federal home buyer tax credit and the SONYMA Tax Credit Advance Loan program to help buyers capitalize on the credit were crucial to the current recovery,” MacKenzie said. “With the extension and expansion of the tax credit, we expect the housing market to build on the current recovery into 2010, especially during the early spring as buyers try to meet the April 30 purchase contract deadline to qualify for the federal tax credit.”

New York Realtors sold 77,176 existing single-family homes in New York State in 2009, a 3.2% decrease from the 2008 total of 79,689. The fourth quarter 2009 sales total of 22,626 represents a nearly 21% increase from the 2008 fourth quarter total of 18,789. December 2009 sales increased by 21% compared to December 2008 to reach 7,119.

The 2009 annual statewide median sales price was $199,999, down 6.6% from a year ago due to the sluggish start to the year. However, both the fourth quarter 2009 ($210,000) and December 2009 ($222,000) posted median sales price growth.

For more information, visit www.nysar.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, January 29, 2010—The Federal Housing Administration’s Mortgagee Review Board (MRB) immediately and permanently withdrew the FHA approval of Premium Capital Funding, LLC, a Jericho, New York-based lender doing business as TopDot Mortgage. This action prevents TopDot from participating in FHA programs and seeks a monetary penalty of $674,000.

In addition, the Government National Mortgage Association (Ginnie Mae) is defaulting and terminating TopDot as an issuer in its Mortgage-Backed Securities (MBS) program and is ending the company’s ability to continue to service Ginnie Mae securities. Servicing of TopDot’s $181.2 million dollar Ginnie Mae portfolio will be transferred to LoanCare Servicing Center, Inc.

The MRB and Ginnie Mae took these actions based upon TopDot’s numerous and egregious violations of FHA requirements, including failure to document borrowers’ income, evaluate borrowers’ creditworthiness, and approving loans with grossly excessive debt-to-income ratios without compensating factors to justify approval.

“This lender demonstrated a pattern of utter disregard for how we do business and its behavior not only put the FHA insurance fund at risk, but placed their own customers at greater risk of foreclosure,” said FHA Commissioner David Stevens. “FHA approval is a privilege that we entrust to the most responsible lenders. If any lender violates that trust, the MRB will take action to protect borrowers, the FHA insurance fund and FHA programs.”

Mary Kinney, Ginnie Mae’s executive vice president, said “Ginnie Mae’s requirements are in place to protect the borrower and the American taxpayer. Both Ginnie Mae and FHA are working aggressively to ensure that borrowers are not harmed by the misdeeds of lenders. These lenders are on notice that they must strictly adhere to Ginnie Mae and FHA regulations to maintain their status within HUD programs.”

While TopDot may appeal FHA’s withdrawal by submitting a written request for a hearing before an Administrative Law Judge within 30 days, the filing of an appeal does not delay these actions. A complaint seeking civil money penalties will be served on TopDot in due course and the company will have the opportunity to contest the imposition of the penalties before an Administrative Law Judge.

The U.S. Department of Housing and Urban Development (HUD) is also continuing to evaluate the conduct of individuals who participated in TopDot’s violations of FHA requirements and will move quickly to take appropriate action against those individuals.

For more information, visit www.hud.gov.

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RISMEDIA, January 29, 2010—Searching for a room with a view? Chase International’s newest property listing, Secret Cove, offers stunning Lake Tahoe views from virtually every room.

Perched on the dramatic aquamarine shoreline at the juncture of Lakeshore and Highway 28, the 7,130-square foot Ira Rodman built custom home was built in 1999. Unassuming from the road, this extremely private, craftsman-inspired residence is artfully oriented to take full advantage of its dramatic lakeside vantage point. Dramatic lakeside views offer a unique perspective on Lake Tahoe.

With Lake Tahoe serving as the glittering aquamarine backdrop, the home’s main level living area features a great room setting with a massive stone fireplace. The dining room includes a spacious table with seating for 12 under a distinctive custom chandelier that depicts colorful Western imagery by Utah artist Peter Fillerup of Wild West Design. From its hickory flooring to its massive trestle wood beams, Rodman’s signature craftsmanship is evident throughout. The kitchen features high-end Viking appliances and striking custom built knotty pine with furniture finish cabinetry.

Elegant outside living is always just a French door away in this home that has decks, patios and balconies extending from the kitchen, executive office, lower entertainment room and lower floor bedroom suite.

The master floor includes a spa suite and executive office with a handsome fireplace and beautiful private deck. Also on this floor are a wine room and a large home theater complete with hand-carved moldings and hand-painted ceiling depicting the Tahoe night sky. Additionally, there is a powder room and laundry room on this floor.

The guest floor features two bedroom suites and a game room with walk out patio. The home’s four bathrooms and two powder rooms are accented with artistic custom tile work. The master bath shower has colorful stylized fish, while a delightful cowboy rowboat theme can be found in the fireplace guestroom bath.

From the tile work that graces the kitchen and bathrooms to the cast bronze custom chandelier, this residence embraces creative vision at every turn.

Photo courtesy of Eric Jarvis

For more information, visit www.chaseinternational.com.

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RISMEDIA, January 29, 2010—Better Homes and Gardens Rand Realty announced that it has acquired Lucille Ritacco Real Estate, strengthening Rand’s network in Westchester County with a longtime leading brokerage in the New Rochelle area.

The acquisition brings 38 licensed real estate professionals in New Rochelle to Better Homes and Gardens Rand Realty. Lucille Ritacco, who established Lucille Ritacco Real Estate in 1974 and serves as its broker/owner, will join Better Homes and Gardens Rand Realty as an associate broker.

“I am especially excited to be joining forces with Lucille and her team,” said Greg Rand, managing partner with Better Homes and Gardens Rand Realty. “They are exactly the kind of professionals who can take our technology and innovative marketing and bring it to the marketplace with their enormous local credibility and goodwill. It’s the best of both worlds.”

As part of the transaction, the Lucille Ritacco Real Estate office at 1315 North Avenue in New Rochelle will become a Better Homes and Gardens Rand Realty office. The acquisition brings the number of Rand offices in Westchester to 8, and 24 overall in the Greater Hudson Valley.

“The Rands are on the cutting edge in the real estate industry and I am really looking forward to working with them to benefit the community,” said Ritacco. “With 36 years of real estate experience in the New Rochelle area, I feel I can help Rand become an even greater force in the southern Westchester real estate market.”

For more information, visit www.randrealty.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

RISMEDIA, January 29, 2010—Even in a year when the real estate industry continued to feel the effects of a recession, RE/MAX International, Inc. sold 630 franchises worldwide, while extending its global presence into eight new countries, the company has announced. In North America, several former competitors joined the RE/MAX Network, bringing with them more than 650 individual sales associates.

“We continue to sell franchises in this economy, because RE/MAX offers the best value in the marketplace,” said Vinnie Tracey, President, RE/MAX International Inc. “By joining RE/MAX, our new franchisees and our former competitors know they’re getting the power of a world-class brand, and all the cutting edge technology and training that comes with it.”

A closer look at RE/MAX international franchise sales in 2009 shows explosive growth in several regions; southwest Germany increased 200%, Portugal grew 100%, and Israel was up 45%. With the addition of eight new countries, including the Bahamas, Brazil, Colombia, Ecuador, Jamaica, Morocco, Peru, and Uruguay, RE/MAX continues to have an international presence greater than any of its competitors. RE/MAX experienced additional success in the U.S., selling 21 new franchises in California, a state with one of the most challenging real estate markets. There was also impressive growth in other regions. The number of new offices in New England and southeast Michigan increased by 100%, in Georgia by 80%, and in the Mountains States region, franchise sales were up 40%.

“Achieving this type of growth despite a recession is the true test of any company,” said Tracey. “And the fact that RE/MAX continues to exceed expectations and surpass the competition is the reason we’re still going strong, after 37 years.”

Conversions from competing real estate companies to RE/MAX are also increasing. A conversion in Denver allowed Prestige Real Estate Group, a major independent brokerage with 250 agents, to merge with RE/MAX Professionals, creating the third-largest real estate firm in Colorado. With significant economic and real estate improvements in 2010, RE/MAX is looking forward to another successful year of franchise sales around the globe.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

RISMEDIA, January 29, 2010—In an effort to keep more families from losing their homes, NCLR (National Council of La Raza), one of the largest national Hispanic civil rights and advocacy organizations in the United States, and Freddie Mac announced their partnership on a program that will provide personalized credit counseling free of charge to Hispanic homeowners who are more than 90 days behind with their mortgage payments.

“NCLR’s partnership with Freddie Mac on this program means that distressed minority homeowners can access effective, personalized housing counseling from trusted community organizations. This effort will strengthen our ability to replicate best practices and succeed in helping more Latino families stay in their homes,” said Janet Murguía, NCLR president and CEO.

According to the organization, the Borrower Help program consists of pilot programs in Phoenix, Chicago, the District of Columbia, and the Riverside/San Bernardino, California area, as well as a nationwide phone campaign that offer struggling minority homeowners the opportunity to review their credit status and options with trained, bilingual housing counselors from nonprofit organizations. Southwest Housing Solutions in Detroit and New Economics for Women in Los Angeles—community-based organizations that are members of the NCLR Homeownership Network (NHN)—are providing families with counseling through this program.

“NCLR is a trusted and tested organization with a track record for helping borrowers regain their financial footing and avoid unnecessary foreclosure,” said Dwight Robinson, senior vice president for Corporate Relations and Housing Outreach at Freddie Mac. “As part of Freddie Mac’s Borrower Help Network, NCLR will provide our delinquent borrowers with a strong and reliable guide to navigate the workout process.”

Freddie Mac is partnering with 13 nonprofit organizations in the Borrower Help Network and Borrower Help Center. The program’s goal is to reach people who may be reluctant to communicate with lenders and help them find a viable way to keep their homes by providing access to third-party counselors who can take a holistic approach to their credit picture. By working with trusted nonprofit organizations, Freddie Mac offers an alternative—one that borrowers may feel more comfortable with—to speaking directly with the lender when they are facing financial difficulties.

“An estimated 400,000 Latino families lost their homes to foreclosure in 2009,” said Murguía. “As foreclosure rates continue to grow, it is important for the Latino community and our nation that we create more innovative programs to help people keep their homes. The Borrower Help program offers a fresh approach to homeowner credit counseling.”

For more information, visit www.nclr.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.