Wall Street Journal
Rising rents, coupled with slumping home prices and interest rates near record-lows, are boosting demand for homes at entry-level prices.
Making sense of the story
- Increased buying activity from investors and second-home purchases may be factors behind the recent pickup in home sales, but real estate agents say they are fielding more calls from anxious tenants complaining about rising rents.
- Average apartment rents rose by 2.7 percent last year, while the national vacancy rate dropped below 5 percent for the first time since 2001, according to a quarterly survey released Wednesday by REIS Inc., a real estate research firm.
- The largest rent increases came in San Francisco and San Jose, Calif., which saw increases of 5.9 percent and 4.9 percent, respectively. Such increases are one reason why industry analysts believe 2012 will be the first year since 2005 when the share of apartment renters that moves out to buy a house increases from the previous year.
- Historically, the cost to rent an apartment has been about 10 percent lower than the after-tax cost of owning a home. That rental discount began to fall in 2010 and disappeared entirely last year, according to analysts at Deutsche Bank who track housing costs. By the end of 2011, the bank’s research found that the cost to rent an apartment was about 15 percent higher than the cost to own a home.
- It isn’t always easy for home buyers to make it to the closing table though. Lending and appraisal standards remain tight, keeping many would-be buyers out of the market. And aspiring buyers are competing with savvy investors who have turned buying and reselling foreclosed homes into a business.
Read the full story
http://online.wsj.com/article/SB10001424052702304750404577322011443831768.html?mod=WSJ_RealEstate_LeftTopNews
San Diego Union-Tribune
State officials have noticed an emerging scam: Callers say they will help homeowners apply for Keep Your Home California benefits for fees of up to $900. The calls are happening statewide. Applying for the program is free.
Read the full story:
http://www.utsandiego.com/news/2012/mar/07/new-housing-scheme-emerges-california/
The Los Angeles Times
The Standard & Poor’s/Case Shiller index of 20 American cities fell 1.1 percent from November to December and 4 percent from December 2010.
Read the full story
http://www.latimes.com/business/money/la-fi-mo-home-prices-20120228,0,1131448.story
Calif. median home price: January 2012: $268,280 (Source: C.A.R.)
Calif. highest median home price by region/county January 2012: Marin, $694,440 (Source: C.A.R.)
Calif. lowest median home price by region/county January 2012: Tehama, $110,000 (Source: C.A.R.)
Calif. Pending Home Sales Index: January 2012: 102.4, an increase from the revised 93.1 recorded in January 2011
Calif. Traditional Housing Affordability Index: Fourth quarter 2011: 55 percent (Source: C.A.R.)
Mortgage rates: Week ending 2/23/2012 30-yr. fixed: 3.95% fees/points: 0.8% 15-yr. fixed: 3.19 fees/points: 0.8% 1-yr. adjustable: 2.73% Fees/points: 0.6% (Source: Freddie Mac)
- Some borrowers who have sold their homes through short sales may be eager to buy another home while interest rates are still low. However, these borrowers should be aware of the downside of trying to purchase a home right away.
- While banks are starting to lend again to those who have worked to polish their tarnished credit, and once-wary investors are starting to show renewed interest in sub-prime mortgage bonds, buyers who simply can’t wait will have to pay high interest rates and likely a down payment of at least 30 percent.
- Working with a private lender is one option, but borrowers should first check to make sure that the lender is licensed to provide mortgages by searching the Nationwide Mortgage Licensing System & Registry.
Borrowers who kept their mortgage payments current until the closing of the short sale also may be able to get a Federal Housing Administration loan. If the mortgage was in default though, an FHA loan is not possible for three years.
