American families have gotten pretty creative in coming up with ways to trim the budget on vacations. So here’s a vacation idea that could save the whole country money. HomeAway, a company that arranges vacation stays in private homes, crunched the numbers and came up with this fun factoid: If the First Family rented out the White House when they go on their seven weeks of vacation every year, it would add almost $4 million to the nation’s coffers.

HomeAway, the online marketplace for vacation rentals, asked owners who use the service what they would charge vacationers to rent the 55,000-square-foot White House’s 132 rooms. The answer: $551,000 per week.

While we suspect those sun-seeking Brits would still prefer Florida to Washington, D.C., in January, we do admire the chutzpah behind the idea. Of course there would be some issues to sort out: Would the Secret Service bodyguards be included? Could we use the pool?

Vacation rentals in private homes are holding their own in this economy, as many tourists see them as a way to reduce travel expenses. Having a kitchen to cook in and enough space for multiple families to share the rental fee all helps keep spending in check. More than two-thirds of owners of summer rental homes reported occupancy rates of 76 percent or higher. These owners charged an average weekly rental rate of $1,685, or $241 per night, to book an entire home. By comparison, according to HomeAway, the average occupancy rate for U.S. hotels from June to August was approximately 68 percent, with an average rate of $102 per room.

We assume that at a half-mil a week, the White House rental includes daily linen service, free Wi-Fi and complimentary valet parking. Just one question: Will the Obamas kennel the dog or would we have to walk him?

See a larger version here at the Coldwell Banker site.

Here’s what we know so far:

1. The program will now be available regardless of how “upside down” the homeowner is.
2. Borrowing requirements will be simplified, primarily focused on verifying that the homeowners:
   1. have made their last six payments
   2. have no more than one missed payment in the last year and
   3. have a job or another source of income.
3. The refinance program is limited to homes backed by FNMA or FMAC, commonly referred to as “conforming” loans, which includes most fixed rate mortgages that aren’t FHA, VA, or “jumbo.”
4. The loans must have been made before June, 2009.
5. FNMA and FMAC fees will be reduced for all program participants.
6. Homeowners who shorten their loans to amortize over 15 or 20 years, and  possibly 10 years, will have all FNMA or FMAC fees waived.

That last item is part of a push by the government to encourage homeowners to refinance into loans that pay down principal, or amortize, more rapidly.  That allows upside down  homeowners to get to a point where they actually have equity in their homes faster, especially helpful in our current stagnant housing market.

The program is not as aggressive as many market analysts had hoped, but it is certainly a step in the right direction.

Details of the program will continue to emerge, with some banks hoping to be ready to take applications sometime before the new year.  If you or someone you know has a fixed mortgage that was originated before June, 2009, this program is well worth looking into.

Click here for more details from a Wall Street Journal Article

Real estate news and views from around the globe that make you go, “Really?”

A look at some of the coverage from today’s National Association of Realtors conference in Anaheim …

• Gradual Recovery for Housing and the Economy Expected in 2012 — MarketWatch
• Housing to gradually improve in 2012, NAR economist says — Housing Wire
• A sliver of good news in housing numbers — Lake Forester
• Will Florida housing prices rebound soon? — Sarasota Herald Tribune
• NAR Economist Gives U.S. Housing Predictions for 2012; Miami Lone Standout for … — World Property Channel
• Realtors‘ survey shows buyer and seller profiles — Sarasota Herald Tribune

One of the key reasons real estate agents and others often cite for buying a home now is that historically low mortgage rates won’t last forever.

And they’re right.

But if a recent UCLA Anderson Forecast is to be believed, low rates will last for another two years.

The forecast, issued earlier this month, predicts that U.S. effective mortgage rates will continue to hover just above the ridiculously low rate of 4% through 2013.

The effective rate was 4.4% for 2011 so far, the forecast states. On Thursday, Freddie Mac reported rates at 3.99%, below 4% for just the second time since 1971.

But UCLA projects that mortgage interest rates won’t get much higher over the next two years: The forecast predicts that rates will average 4% in 2012 and 4.5% in 2013.

The forecast then projects a steep rise in mortgage rates in 2014, with interest averaging 7.3% from 2015 through 2017.

The forecast was included in the same report that predicted that median home prices will increase 35% over the next six years in Orange County and nearly 53% in California.

Freddie Mac reported that the average interest rate for a 30-year fixed-rate home loan has been below 4.5% only since late July, dipping to 3.9% in late October. Thirty-year rates have averaged close to 9% for the past 42 years, and close to 6% in the past decade.

In addition, Yun told reporters at the NAR annual conference in Anaheim that he now pegs the probability of a new recession at 10% to 15% — down from his estimate six months ago of a 30% probability of renewed recession.

Although he believes the U.S. economy would “be teetering on a recession” if the Euro debt crisis expands, he said he doubts that will happen and predicted that the crisis will be contained in Italy.

“The market has been tough, but there are some developing positive signs,” Yun told a mid-day news conference at the Anaheim Convention Center. “As a result, there will be a recovery occurring next year, and it will continue in 2013 and 2014. It is not a great robust expansion. … But it is a moderate recovery.”

Yun also forecast that rents will rise for the next five years.

Specifically, Yun said:

• U.S. home prices will rise 2% to 3% next year, 3% in 2013 and 4% in 2014.
• Existing home sales will increase 4% to 5% in 2012. This year’s sales are projected to be up 1% to 4.96 million housing units.
• Rent will increase 3% in 2012 and 3.5% in 2013 and 2014.

Yun noted that people buy a home today will see some price appreciation in future years. But the recovery will be too slow for people who bought homes at the peak of the market bubble and may not see prices back to what they paid for 10 years or more.

“It will be quite a long time for people who bought right at the peak to gain recovery,” he said.

Yun noted that distressed properties – foreclosed homes and underwater homes – now make up a third of all housing transactions in the U.S. That will remain unchanged next year, and will be only slightly better in 2013, he said.

“Distressed property sales will be with us for the next two years. The question is, will the buyers be there to sop up sales?” he said.

Also speaking Friday was Richard Peach, senior vice president at the Federal Reserve Board of New York, who was less optimistic about prospects for housing.

Citing a host of economic data from income ratios and savings rates to bond yield spreads, Peach concluded that the U.S. economy continues to operate well below its potential. He said also that the bulk of foreclosures and mortgage defaults lie ahead.

“I’m not as sanguine about the future prospects of home prices,” Peach said.

(Update: Post revised to include comments from Yun’s 11:45 a.m. news conference.)

Source: Lanser Orange County Register

In 2001, Thomas served as president of the California Association of Realtors and has been a board member of the state association since 1985. At the national level, he has been a NAR board member since 1995, serving as the organization’s Western regional vice president and chairing numerous committees.

He formerly headed a 13-office chain of real estate offices under the RE/MAX brand, then later became an independent broker at the helm of Altera Real Estate. The company filed for bankruptcy reorganization in January, and Thomas now is broker-owner of Evergreen Realty in Villa Park.

With NAR holding its annual conference in Anaheim, we asked him for his take on the housing industry …

Us: It’s been six years since this housing slump began, and there are projections that there are several more years of sluggish sales and prices. What’s the mood among Realtors as they gather in Anaheim?

Gary: The mood is very upbeat as the members are anticipating the market stabilizing and the beginning of a slow recovery.

Us: What’s the biggest impediment to recovery right now: tight credit, high numbers of foreclosures and short sales, consumer fears about losing their jobs, etc?

Gary: We need jobs in order to get a recovery to gain momentum.  That will begin to alleviate the other impediments over time.

Us: Here in Orange County, we have seen many offices closed and lots of people leaving the business. There’s been a lot of restructuring and change. (Most recently, we learned that Gen. William Lyon’s giving up 80% of the shares in his namesake homebuilding business.) What has been the slump’s biggest impact on the industry? How will the industry be changed after the dust settles?

Gary: Everyone is a lot more fiscally conservative.

The realization that in today’s environment and technology, the bricks and mortar are not as important in today’s business.

Us: Have you begun to formulate your goals as 2013 NAR president?

Gary: It is too early to have specifics for 2013, but what I would like to see is some finality to the rules, regulations and proposed laws that affect our industry.

With that we can adjust to what will become the new norm for our business.

Us: You’ve had your own share of knocks in this housing slump, have you not, including problems with bankruptcy and legal disputes over the past few years. Some have questioned your leadership. How has all this affected you as you prepare for your own year as NAR president?

Gary: Like many others, due to the economy, I have been forced to reorganize my company into one office.

This office was always in a separate corporation, and has been successfully rebranded and growing. I am in the process of settling all of the problems with the old firm through the appropriate channels, bankruptcy where necessary.

This will give me the time in order to serve NAR.  This also gives me an insider’s view and empathy for what many of our members and customers have been and will face.

I remain passionate about this great industry and look forward to serving.

Us: You seem optimistic about prospects for a stabilized (if not robust) market. Yet it seems government has been reluctant to give housing more of a hand. Are you disappointed that Congress and the White House aren’t doing more?

Gary:  We are disappointed with both the Administration as well as Congress.  There seems to me more dialogue and rhetoric about the need to fix the housing market if we are to see the economy improve.

Southern California home sales dropped last month from August, as they normally do, and eked out a tiny gain from a year earlier as bargain hunting below $300,000 remained relatively strong. Home prices continued their sideways-to-downward slide, with the region’s median sale price falling below the year-ago level for the seventh consecutive month, a real estate information service reported.

A total of 18,149 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in September. That was down 7.7 percent from 19,654 in August and up 0.3 percent from 18,091 in September 2010, according to San Diego-based DataQuick.

It’s normal for home sales to drop between August and September, partly because many home buyers try to close their deals before school starts in late summer. On average, sales have fallen 8.3 percent between August and September since 1988, when DataQuick’s statistics begin.

September sales have varied from a low of 12,455 in 2007 to a high of 37,771 in 2003. Last month’s sales were 25.3 percent below the September average of 24,310 transactions since 1988.

“Last month’s Southland sales weren’t great but, like some other economic indicators of late, they came in a bit higher than some might have expected. Holding steady with a year ago isn’t so bad when you consider the hits the housing market has taken in recent months, including a big psychological blow from a tanking stock market in early August. Part of what’s keeping demand afloat is improved affordability thanks to ultra-low mortgage rates and lower home prices. We’ll have to wait and see what impact the lower conforming loan limits, which took effect recently, will have in some of the higher-priced markets,” said John Walsh, DataQuick president.

The median price paid for all new and resale Southland houses and condos purchased last month was $280,000. That was up 0.4 percent from $279,000 in August but down 5.2 percent from $295,500 in September 2010.

The regional median has declined year-over-year for the past seven months – since March. The last time any one of the six Southland counties posted an annual gain in its median sale price was in January, when San Bernardino logged a 1.0 percent year-over-year increase.

Last month’s median was 13.4 percent higher than the median’s low point in the current real estate cycle – $247,000 in April 2009 – but was 44.6 percent lower than the peak $505,000 median in mid 2007. The peak-to-trough drop was due to a decline in home values and a shift in sales toward lower-cost homes, especially inland foreclosures.

Today’s median price is also undermined by the Southland’s extraordinarily weak new-home market. Sales of newly built homes, which typically sell for more than resale homes, totaled 1,056 last month, down 24.9 percent from a year ago and the lowest for the month of September in DataQuick’s records back to 1988.

The focus for many buyers continues to be on the region’s most affordable resale homes, often located in areas hit hardest by distressed property sales and price declines. Compared with a year earlier, September home sales fell in the middle and upper price ranges but rose 5.6 percent in the below-$300,000 market. Sales of homes priced $300,000 to $800,000 fell 9.3 percent year-over-year, while sales over $800,000 fell 10.4 percent from September 2010.

Many of the sub-$300,000 deals were distressed properties, which accounted for more than half of the Southland resale market last month. Nearly one out of three homes resold last month was a foreclosure, while close to one in five was a “short sale.”

Foreclosure resales – properties foreclosed on in the prior 12 months – made up 32.3 percent of the Southland resale market in September, down from 32.4 percent in August and 33.6 percent a year earlier. Last month’s figure was the lowest since January 2008, when foreclosure resales were 28.6 percent. They peaked at 56.7 percent in February 2009.

Short sales, where the sale price fell short of what was owed on the property, made up an estimated 18.5 percent of Southland resales last month. That was up from 17.5 percent in August and 16.1 percent a year ago. Two years ago the estimate was 15.3 percent.

Tight credit conditions didn’t let up last month, meaning demand continues to be constrained in mid- to high-end markets that had long relied on adjustable-rate and “jumbo” home loans.

Last month adjustable-rate mortgages (ARMs) accounted for 7.4 percent of all Southland home purchase loans, down from 8.7 percent in August but up from 5.5 percent a year ago. The average monthly ARM rate over the past decade is about 37 percent.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 17.8 percent of last month’s purchase lending, up from 17.2 percent in August but down from 18.1 percent a year earlier. In the current cycle, jumbos fell in early 2009 to less than 10 percent of the Southland purchase market. In the months leading up to the credit crunch that struck in August 2007, jumbos accounted for 40 percent of the purchase loan market.

In lower-cost Southland markets, much of the activity continues to be fueled by government-insured FHA loans, a popular low-down-payment choice among first-time homebuyers. FHA loans accounted for 32.5 percent of purchase mortgages in September, up slightly from 31.8 percent in August but down from 34.8 percent a year earlier.

Meanwhile, many buyers continue to skip a home loan and use cash.

Southland buyers paying cash accounted for 28.5 percent of total September home sales, paying a median $210,000. Last month’s cash buyer level was down slightly from 29.1 percent in August but up from 26.2 percent a year earlier. Cash purchases hit a high of 32.3 percent of sales this February, while the 10-year monthly average is about 14 percent. Cash purchases are where there was no indication in the public record that a corresponding purchase loan was recorded.

Last month 52.9 percent of those paying cash were absentee buyers, meaning they were investors or second-home buyers.

All absentee buyers – those using cash or a mortgage – purchased 24.3 percent of the Southland homes sold in September, paying a median $202,000. Absentee buyers made up 24.8 percent of sales in August and 21.4 percent in September 2010. The absentee share of the market peaked this February at 26.4 percent. Over the last 10 years, absentee buyers purchased a monthly average of 16.7 percent of all homes sold.

Nearly 59 percent of absentee buyers paid cash in September.

Last month 19.8 percent of all sales were for $500,000 or more, down from 20.1 percent in August and down from 21.6 percent a year earlier. The low point for $500,000-plus sales in this cycle was in January 2009, when only 13.8 percent of sales were above that price threshold. Over the past 10 years, a monthly average of 27.5 percent of homes sold for $500,000-plus.

An alternative method of tracking sales by price segment suggests mid- to high-end activity now accounts for a fairly normal share of total sales compared with recent history. Southland zip codes in the top one-third of the housing market, based on historical prices, accounted for 37.1 percent of total sales last month, compared with a 10-year monthly average of 36.8 percent. Last month’s figure was down slightly from 37.2 percent in August but up from 36.0 percent a year ago. These higher-cost zips codes’ contribution to overall sales hit a low of 26.8 percent in January 2009.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,084 last month, down from $1,101 in August and down from $1,177 in September 2010. Adjusted for inflation, current payments are 53.4 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.9 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last few years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

 
Source: DQNews.com