Home Sales up in September

In the month of September, homes sales in California were up 6.7 percent. Those looking for bargains were purchasing foreclosures while the median home price fell. In September, the median home price was $249,000.

Homebuyers were buying up foreclosures making sales go up 6.7 percent. Sales figures on the other hand, were still below average for the month of September for the Bay Area and southern California. DataQuick, a real estate information service home in San Diego revealed that home sales were lower than the figure seen in August, which is down 6.2 percent with a total of homes sold at 35,404 in September.

The median home price in September for September was $249,000, which is down 6 percent from what was seen in 2010 and the same as was seen in August of 2011. This is the 12th continuous year over year decrease in the median price. This means that many of the homes sold for half or less than what the home was worth.

DataQuick president, John Walsh stated the number of potential home buyers was growing but the demand is not seen in the numbers yet.

He stated, “Empty-nesters want something smaller, growing families want something bigger,” and went on to say, “People still die, they get married, retire — all of this generates demand. And only a fraction of that demand is being met in today’s market.”

A large amount of the homes that sold in September were foreclosures along with short sales in which the bank sold the home for less than the mortgage. The figures show that more than half of the homes that sold in California in the month of September were foreclosures or short sales.

The figures showed around 33.8 percent were foreclosures down from the 34.3 percent seen in August and 35.6 percent seen in September 2010. Reports showed 18.7 percent were short sales, which is up from the figure seen in August of 17.5 percent and 15.6 seen in September of 2010.

Home sales in southern California were up 0.3 percent from September 2010 but were down from the 7.7 percent seen in August of 2011 bringing the figure to 18,149. The median price for southern California fell 5.2 percent from 201o to $280,000 and only up 0.4 percent over the August figures.

The Bay Area saw home sales increase 6.6 percent from 2010 but down from the figure seen in August to 6,749. The median price for the area decreased 7.6 percent from 2010 and was also down from the month of August to 365,000.


Help for underwater homeowners

This week, a housing regulator reported changes to a government refinancing program that may help a million homeowners from the estimated 11 million that are underwater in their mortgage. These homeowners owe more on their homes than their homes are actually worth.

The Federal Housing Finance Agency that oversees mortgage sources Freddie Mac and Fannie Mae stated they were easing the terms of the 2 year old Home Affordable Refinance Program that aids borrowers who have kept up with their mortgage payments but have not been able to refinance due to drops in home values.

In order to help these borrowers, FHFA stated it would lose the cap that stops any owners if their mortgage is more than 125% of the value of the property from participating in HARP. HARP is a program backed by Freddie Mac and Fannie Mae.

FHFA’s acting director, Edward DeMarco stated, “Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

One lawmaker after talking with DeMarco in October stated that the expanded program could aid between 600,000 to one million borrowers, but went on to say that it is only a small fraction of the around 11 million homeowners that are underwater.

President Barack Obama is likely to endorse the initiative during a speech in Las Vegas. The president will use the trip to raise money for his re-election campaign as well.

The White House is not certain just how many homeowners the program can help, but Gene Sperling, White House economist states it is too early to tell how many homeowners would “benefit from the changes announced today or could be announced in the future.”

The New York Times stated the new initiative as a part of a program that the president would be announcing to help address the nation’s economy while Republicans are reluctant to pass his jobs plan.

This is the latest attempt of the White House to deal with a major factor that is slowing the economy – the housing market – and is also added to the political liabilities for Obama’s re-election bid, which is also jeopardized by high unemployment in the United States.

Previous federal programs to stop or slow down foreclosures have failed.

To encourage banks to get on board in the program, FHFA is remodeling it to protect lenders so they do not have to buy back HARP loans if underwriting problems are found later. Lenders will only need to verify that the borrowers have made six of the last mortgage payments. The new rules also eliminate the need for appraisals in the majority of cases.

FHFA stated that the government-controlled Fannie Mae and Freddie Mac would waive specific fees for borrowers that refinance into loans with a shorter term, like 15 years, intending to encourage homeowners to pay down the amount they owe in a shorter time period.

One of the Obama administrations in the hopes of helping with foreclosure efforts, HARP was announced in March 2009, which was thought, would help around 5 million borrowers. At this time, only around 894,000 borrowers have used the program to refinance their loans.

FHFA announced it would extend the program until Dec. 31, 2013. The program is limited to loans that were guaranteed prior to June of 2009 via Fannie Mae and Freddie Mac.

New York Fed president William Dudley during a speech at Fordham University’s Gabelli School of Business in New York stated, “Breaking this vicious cycle is one of the most pressing issues facing policy makers.”