Here are the current market conditions for the Greenfield Wisconsin Single Family Home Real Estate Market.

There were 78 homes sold during the 4th quarter of 2009 in the City of Greenfield WI (16 more than last quarter.) I attribute this to the first time home buyers tax credit that was set to end in November but has been extended through the 2nd quarter of 2010. The monthly break down is as follows:

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• October- 34 homes sold
• November- 29 homes sold
• December- 15 homes sold

There are 102 active listings in Greenfield, WI as of 20 October 2009 (Down from 150 last quarter) of which 10 have accepted offers. There are an additional 7 homes that are in pending status meaning that they are pretty much ready to close. Homes sold in the 4th quarter 2009 were on the market, on average, 86 days, down from over 100 last quarter. Homes were selling for 95.71% of last asking price and 114.09% of assessed value which is down about 2% over last quarter. Based on the sales data for the quarter, there is currently a 4 month supply of inventory in the Greenfield, WI Market which is actually a pretty tight supply. There was a total of $13,805,550 in sales volume which translates into an average sales price of $176,994 (up $5604 from the previous quarter) for the Greenfield WI home market.

(all data collected using the Metro-MLS 1/5/10)

Here are the current conditions for the Oak Creek Wisconsin Single Family Home Real Estate Market.

There were 47 homes sold during the 4th quarter of 2009 in the City of Oak Creek, WI. The monthly break down is as follows:

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• October- 21 homes sold
• November- 20 homes sold
• December- 6 homes sold

There are 108 active listings in Oak Creek, WI as of 5 January 2010 of which 6 have accepted offers. There are an additional 8 homes that are in pending status meaning that they are pretty much ready to close. (all 3 numbers are down significantly from the previous quarter.) Homes sold in the 4th quarter 2009 were on the market, on average, 99 days, a full month less than in the 3rd quarter. Homes were selling for 96.13% of last asking price (up slightly from last quarter) and 86.68% of assessed value (also up slightly from last quarter.) Based on the sales data for the quarter, there is currently a 6.89 month supply of inventory in the Oak Creek, WI Market which is up a little over last quarter. There was a total of $9,630,880 in sales volume which translates into an average sales price of $204,912 (down about $20,000 over the past 2 quarters) for the Oak Creek, WI home market.
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(all data collected using the Metro-MLS 1/5/10)

Here are the current market conditions for the Franklin Wisconsin Single Family Home Real Estate Market.

There were 47 homes sold during the 4th quarter of 2009 in the City of Franklin WI (21 less than last quarter.) The monthly break down is as follows:

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• October – 20 homes sold
• November – 19 homes sold
• December – 8 homes sold

There are 137 active listings in Franklin, WI as of 5 January 2010 (down from 203 in the 2nd quarter and 175 in the 3rd quarter) of which 11 have accepted offers. There are an additional 13 homes that are in pending status meaning that they are pretty much ready to close. Homes sold in the 4th quarter 2009 were on the market, on average, 106 days, down from 157 from the 2nd quarter and 137 from the 3rd quarter. Homes were selling for 95.82% of last asking price and 92.94% of assessed value which are fractional changes from last quarter. Based on the sales data for the quarter, there is currently a 8-9 month supply of inventory in the Franklin, WI Market up for the first time in two quarters. There was a total of $12,025,550 in sales volume (down about 22% from last quarter) which translates into an average sales price of $255,863 (up about 35k from the previous quarter) for the Franklin WI home market.

(all data collected using the Metro-MLS 1/5/10)

Date: 2 December 2009
By: Reuters
Link:http://www.cnbc.com/id/34242187

The meltdown of the U.S. housing market is not over yet, and home prices will soon start trekking downward again as a flood of foreclosures looms, a well-known economist said Wednesday.
Mark Zandi, chief economist at at Moody’s Economy.com in West Chester, Pennsylvania, said in an interview with Reuters home prices will resume their decline by early next year as foreclosure sales pick up again. “The housing crash is not over,” he said. The U.S. housing market has suffered the worst downturn since the Great Depression, and its impact has rippled through the recession-hit economy as well as the rest of the world. A setback for the hard-hit housing market could portend problems for the U.S. economy.

Home prices, as measured by the Standard & Poor’s/Case-Shiller U.S. National Home Price Index, will trough in the third quarter of 2010 after declining 38 percent, Zandi said. The index peaked in the second quarter of 2006 and hit a trough in the first quarter of 2009, a drop of about 32 percent. Home prices in many regions have been rising. That is because foreclosure sales fell over the summer and fall as mortgage servicers have tried to put stressed homeowners into the Home Affordable Modification Program and other modification plans, he said. “This lull in foreclosures sales has resulted in the price gains in the past few months,” he said. “Foreclosure sales will increase, and home prices will resume their decline by early 2010 as mortgage servicers figure out who will not qualify for a modification,” he said.

Zandi said 7.5 million foreclosure sales will have taken place between 2006 and 2011. The majority of these sales, however, have not emerged yet, with 4.8 million foreclosure sales expected between 2009 and 2011. Attractive rates and high affordability have been positives for the U.S. housing market, which has been showing signs of stabilization. Sales have surged in recent months as buyers scrambled to take advantage of the government’s first-time home buyer tax credit, which was originally set to end Nov. 30.
Last month the Omaha administration extended the $8,000 first-time home buyer tax credit, added a $6,500 credit for home owners buying a new residence, and increased income limits. Eligible borrowers must sign contracts by April 30 and close loans by June 30.

Zandi said another significant obstacle to a housing market recovery is the number of mortgages that are “underwater,” where borrowers owe more for the loan than the residence is worth. This negative equity disqualifies many homeowners from refinancing and prevents some from selling their homes. Borrowers in negative equity are also more prone to defaults and foreclosures. Zandi said about 25 percent of single-family homes with mortgages have negative equity. “With so many homeowners so deeply underwater and unemployment very high and on the rise, the foreclosure crisis will continue putting more pressure on home prices,” he said.

The U.S. Labor Department said the unemployment rate reached a 26-1/2-year high of 10.2 percent in October. November’s unemployment rate in November will be announced Friday. “Our house price outlook is dependent on two other key assumptions, including a more stable job market by early 2010 and that interest rates on fixed-rate mortgages remain well below 6 percent throughout the year,” he said. The unemployment rate will peak at 10.7 percent in the third quarter of 2010, Zandi forecast.

3 December 2009
By ALAN ZIBEL (AP)
Link: http://www.google.com/hostednews/ap/article/ALeqM5hPHFMSZDHZNqzg3uDQ1tvmGdoq4wD9CBV34G0

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WASHINGTON — The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week, pushed down by an aggressive government campaign to reduce borrowing costs. The rate, published Thursday by Freddie Mac, is the lowest since the mortgage finance company began tracking the data in 1971. The previous record of 4.78 percent was set during the week ending April 30 and matched last week. The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make home buying more affordable and prop up the housing market.

Despite the government support, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment. Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders across the country. Rates often fluctuate significantly, even within a given day, often tracking yields on long-term Treasury bonds. This week drop reflects a rush of investors into the security of government debt after concerns about financial trouble in Dubai drove investors to safe harbors. But rates climbed back later in the week, and analysts say they are likely to remain volatile. “There are no guarantees that mortgage rates are going to stay at these low levels,” said Greg McBride, senior financial analyst at Bankrate.com.

And millions of American families have not been able to take advantage of them, particularly in the areas where home prices have fallen the most. About 11 million households, or 23 percent of homeowners with a mortgage, owe more on their home loans than their house is currently worth according to First American CoreLogic, a real estate information company. That makes refinancing difficult. While the government has launched a program designed to help these “underwater” borrowers, only about 140,000 homeowners have used it so far. In Orlando, mortgage broker Chris Brown says the low rates are a boon to first-time homebuyers who can qualify for a loan. But he says he isn’t getting much business from homeowners looking to refinance. “Most of the people that could refinance probably have” done so, he said. “Rates have been artificially low for quite some time.”

The average rate on a 15-year fixed-rate mortgage fell to a record low of 4.27 percent, from 4.29 percent last week, according to Freddie Mac. Rates on five-year, adjustable-rate mortgages averaged 4.19 percent, up from 4.18 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.25 percent from 4.35 percent. The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 points for 30-year loans. The fee averaged 0.6 points for 15-year, five-year and one-year loans. Buyers and homeowners who want to refinance are picking up their phones. Mortgage applications rose 2 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday, driven by a more than 4 percent increase in purchase applications and a nearly 2 percent increase in applications to refinance existing loans.

By: Thomas Content of the Journal Sentinel

Date: Nov. 19, 2009

Source: Milwaukee Journal Sentinel 20 November 09

Link: http://www.jsonline.com/business/70478967.html

Some fear foreclosure pace could accelerate

One of every nine homeowners in Wisconsin was behind on mortgage payments or in foreclosure at the end of September – a record level that industry observers said Thursday is likely to rise. The state continues to fare better than the nation, however, as delinquencies or foreclosures now account for one of every seven loans across the country, the Mortgage Bankers Association said in its quarterly report. The report found more than 11% of Wisconsin loans and more than 14% of national loans were either in foreclosure or delinquent at the end of the quarter, with both rates up sharply from the same time last year. It was a record-high figure for the ninth straight quarter. The data suggest the housing market and the broader recovery will remain under pressure from the surge in home-loan defaults, especially as unemployment keeps rising. Lost jobs are the main reason homeowners are falling behind on their mortgages.

After three years of plunging prices, the housing market started to rebound this summer. That lifted hopes for the overall economy. But analysts say there are too many foreclosed homes that have yet to be dumped on the market, and they expect further price declines. The outlook is grim, as job losses and adjustable-rate mortgages resetting at higher rates pack a one-two punch for homeowners getting behind on mortgage payments. “The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve,” said Jay Brinkmann, chief economist at the Mortgage Bankers Association. “First, it is unlikely the employment picture will get better until sometime next year, and even then jobs will increase at a very slow pace. “Perhaps more importantly, there is no reason to expect that, when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates.”

Foreclosure rates are rising in Wisconsin, which ranks 17th in the nation in foreclosures started during the third quarter. By contrast, Wisconsin ranked 36th in the nation in delinquencies. “What happened is Wisconsin was lagging the nation as a whole, and now it’s starting to pick up and really accelerate,” said bankruptcy and foreclosure lawyer David Liebowitz of Lakelaw in Kenosha.

Subprime loans a concern

An increase in foreclosures had been forecast earlier this year by Milwaukee Mayor Tom Barrett, even after the county posted a 77% jump in foreclosures in 2008 compared with 2007. A sizable number of mortgages with adjustable rates are resetting in 2010, which could mean the trends will persist. Catey Doyle, chief staff attorney with the Legal Aid Society in Milwaukee, said statewide foreclosures could hit 30,000 this year, up from 24,500 last year. Of particular concern in Wisconsin are subprime loans, higher-interest mortgages sold to people with shakier credit histories. The MBA analysis found that 27.4% of Wisconsin subprime loans were delinquent, slightly higher than the national rate of 26.7%. Wisconsin ranked 10th in the nation in the percentage of home loans that have gone to foreclosure.

Doyle said she’s surprised to see how many subprime loans have been made in recent years across the state – and not just in Milwaukee. She said she analyzed several days of foreclosures across the state and was surprised to see that three of four problem loans across the state involved subprime loans. “We’re seeing a lot of bad mortgages that have adjustable-rate mortgages that have just hit the point where homeowners finally are not able to make the payments,” she said. “We’re also seeing an increase in people who have had a period of unemployment. They’re either unemployed now, or were for a time, and may be re-employed but at a much lower income level.”

The delinquency rate in Wisconsin for loans on residential properties stood at 7.66% at the end of the third quarter, up from 6.86% three months earlier, according to data released Thursday by the Mortgage Bankers Association. It’s up from 5.59% this time last year.

Crisis worse elsewhere

But Wisconsin continues to fare better than the nation as a whole and most nearby states in keeping current on house payments. Nationally, the delinquency rate on residential properties was 9.94%, up from 8.86% in the second quarter. Wisconsin has been consistent in not seeing the serious effects of the foreclosure crisis, which has hit hardest in Florida, California, Arizona and Nevada. Those states “have a disproportionate share of the mortgage problems,” accounting for 43% of all foreclosures started in the third quarter, the MBA’s Brinkmann said.

The delinquency rate excludes loans in the process of foreclosure. The percentage of loans in Wisconsin on which foreclosure was started during the quarter rose 3 basis points to 1.06%, while the percentage of loans in the foreclosure process at the end of the quarter increased 8 basis points to 3.65%. The rates were not seasonally adjusted. Mortgage delinquency rates normally rise between the second and third quarter of the year because of a variety of seasonal factors, according to the association. “There are options out there to help them, but at times what we see is that people don’t contact us until it’s too late, and sometimes they don’t return our repeated phone calls to let them know they’re late on their mortgage and we want to talk to them,” said Kurt Bauer, chief executive of the Wisconsin Bankers Association. “They may be embarrassed and don’t think that there are any options available.”

Source: cnbc.com

Date: 30 November 2009

Link: http://www.cnbc.com/id/34207654

Should homeowners who are behind in their mortgage be allowed to just walk way from the payments? A University of Arizona law professor suggests that maybe they should. While not recommending that homeowners forgo their responsibilities, Professor Brent White told CNBC Monday that there is a different set of rules for the business community and homeowners. “There’s a double standard when it comes to banks and homeowners,” said White. “Businesses often walk away from bad contracts, but homeowners can’t. The banks need to modify bad loans.” White recently issued an academic paper saying that he’s surprised that more of the 15 million US homeowners who have underwater mortgages—or mortgages that are worth more than the value of the house— are still continuing to pay. White said he was not advocating what homeowners should do, but raising a key issue—that homeowners need to think what’s best for them.

Somewhat predictably, those within the real estate industry are not endorsing White’s point of view. “It’s not a responsible thing to do (not pay a mortgage),” National Association of Realtors spokesman Walter Maloney said. “He’s making assumptions about property values that are not correct. Values are starting to stabilize. More important, it’s not ethical to walk away from the mortgage.” But White, in his paper, is throwing ethics right out of the equation. He says, people are too worried about the feelings of shame and embarrassment of a possible foreclosure and “ignore the powerful financial reasons for doing so.” White attacks the banks in his thesis for “being slow to modify troubled mortgages and reluctant to reduce principal debts” with falling housing prices. He says homeowners have to think about themselves and what’s do right for them. And White says the penalties for skipping mortgage payments are “not as bad as people think.” He says that “if you stay current with other creditors, one can have a good credit rating within two years. Most individuals should be able to plan in advance for a few years of limited credit.”

But having a bad credit rating even just for a couple of years, should not be a goal, says Diane Saatchi, vice president of Corcoran Realty, in East Hampton, New York. “I grew up knowing your most valuable asset is your credit rating,” Saatchi says. “It’s foolish to deliberately make credit rating worse. If you can’t or won’t make the payments, get in touch with lender, and work it out.” In his paper, White laid out his strategy for the non-payment program: homeowners would buy the items they’ll need, like a car or even another house, over a couple of years just before they stop making mortgage payments and are eventually forced out of the home. But that’s not much of a plan says Greg McBride, senior analyst at Bankrate.com. “Buying a home is long term investment, it’s not a get rich quick scheme,” says McBride. “If you can make the payments you should, unless there’s a major event, like a job loss or transfer that makes things worse. If that happens, you can negotiate with the bank.”

While White’s ideas are mostly considered extreme within the housing industry, there is an alternative to stopping mortgage payments if you want leave a house that is “underwater’, says Johnny Martinelli Broker owner of Levy Mart Real Estate in Norman, Oklahoma. “It’s called deed in lieu,” says Martinelli. “Say your house is worth $140,000 and the mortgage is valued at $200,000. You could go to the bank and say here’s the deed. If the bank agrees, they would take over the house. But you would have to claim the difference of the $60,000 on your tax returns. That’s considered income. Of course, you have to find another place to live.” The tax rules can vary at times, due to recent changes in guidelines. Martinelli says this type of deal is better than a foreclosure and wouldn’t hurt a homeowner’s credit rating as much. Advantages to a lender include a reduction in the time and cost of a repossession, which can take months. Not all banks might accept such an offer, but there are some that do, says Martinelli.

Most analysts agree that if a homeowner can pay the loan, do so even if the value has dropped. If the owner can’t afford the payments, go to the lender to try and work out a lower payment. Not all lenders will, but experts advise trying. There’s also a short sale if the house must be sold. That’s where the mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the homeowner. The homeowner sells the property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Whatever action a homeowner is contemplating, they should think long and hard before doing something that could be short sited says Diane Saatchi. “Blaming the bank is a losing proposition and could have long term consequences,” Saatchi says “Don’t think by not paying your mortgage you’re able to get ahead financially. It’s a risky idea and not worth it.”

Source: cnbc.com

Date: 18 November 2009

Link: http://www.cnbc.com/id/34018204/

If you already took advantage of the government’s tax credit for first-time homebuyers—or are planning to do it anytime soon—you’ll probably agree with this prediction: Sales of existing homes will peak in the final quarter of 2009, then begin a year-long slide, which is likely to be a sharp one, according to some estimates. “Most of it [the tax credit] is simply shifting sales from one period to another,” says Global Insight economist Patrick Newport. “It doesn’t get rid of the fundamental problem; there’s still a glut of houses.” Newport, for instance, expects single-family home sales to hit an annual rate of 5.88 million units in the fourth quarter (vs. 5.30 in the third quarter). Thereafter, sales will fall to 5.65 million in the first quarter and average just 4.75 million in the second half of the year. “We expect a little stall in 2010,” says David Crowe, chief economist at the National Association of Home Builders. “I agree, you do advance demand, so you steal it for the future.” The builders’ group has a similar forecast, with sales peaking at 5.60 million units in the first quarter and bottoming at 4.50 million in the third quarter, for a 2010 average of 5.15 million. That’s marginally above the 2008 rate of 4.91 million.

The accuracy of those forecast depends—like many things about the economy these days—on the job market, whose recovery is looking a bit delayed, based on historical patterns. Some proponents of the tax credit, as well its recent expansion to repeat buyers and extension from the end of November through that of April, assumed it would prompt some people to purchase sooner than they originally intended, but those purchases would later be replaced by another group of buyers who were no longer concerned about job security. “The economy and the job market didn’t pick up as people expected in ‘09 and as a consequence that is rolling it in 2010,” says Crowe. There’s even some doubt that the $6500 credit for repeat buyers will make much of a difference. The original credit did not have the expected trickle-down effect on new homes. “I don’t know if the expansion is really going to get anyone else into the market, if you think about what the transaction costs,” says Andrew Jakobovics, associate director for housing and economics at the Center for American Progress. “The people who are going to take advantage of it were going to move anyway.” And by most analysis, that’s unlikely to be enough.

Most economists see the jobless rate—now 10.3 percent—peaking around 11 percent sometime in early to mid 2010 and then creeping down to around 10 percent by the end of the year. That’s too high to make much of a dent in the current glut. Inventory levels are now at an 8-9-month supply–Down from the 10-11-month levels of early 2009, but still above the 6-7-month goal. “At the end of 2010, you’re still going to have that glut,” says Newport. Another casualty of the job market is household creation, which has meant a steady stream of buyers in the past, helping keep inventories at a healthy level. In 2008, for the first time in years, household creation fell—and sharply, too. At the same time, the number of young adults living at home and average marriage ages increased. More recently, there has been a flattening. “A lot of the new households will be renters or stay renters,” says Jakabovics. Given such headwinds, you might think it difficult to find optimists on housing, but they are loud and strong. “I believe there is this pent up demand,” says the group’s chief economist Lawrence Yun. “It is just a question of bringing buyers into the market and absorbing the inventory.”

The NAR admits shifting demand has been a minor factor, but says fundamentals are improving, such that 2010 will bring the first increase in homes price in years. “One thing that has been a drag will no longer be in place–that buyers expect prices to decline,” says Yun. “Inventory will be brought down to a level consistent with home values growing modestly.” NAR expects house prices to rise 4 percent in 2010 with sales hitting 5.7 million units, slightly above the 2007 rate. About 15 percent of sales will be the result of the tax credit, which requires a contract by the end of April and closing by the end of June. Fannie Mae is predicting sales of around 5 million and a price decline of just under 2-percent.) The NAR forecasts may be difficult to hit given that home foreclosures and mortgage delinquencies are at or near record highs Richard Smith, CEO of the national real estate company Realogy, is not as optimistic about price appreciation, but he does see something of “a perfect scenario” for the market.

Smith, whose company’s brands include Coldwell Banker and Century 21, says any change in employment, even sentiment, will help sales in general, while a snapback in new household creation will mean the traditional supply of new buyers. Historically low interest rates—which may creep up a full percent over the next 14 months—will still be low enough to keep home affordability high. “There have been times in the past three or four years you could be very cynical about housing,” says Smith. “This is not one of them.“