News

Let’s look at President Obama’s mortgage refinance plan. Its goals are to allow a lot more home owners to refinance at today’s lower rates, and thus pump more money into local economies. It will also reduce foreclosures, which might help bolster property values — not to mention allowing people to stay in their homes. 

Essentially, the plan the President outlined will allow any borrower, not just those with Fannie or Freddie loans, to refinance through the FHA if they meet the qualifications.

It’s estimated to save a typical borrower $3,000 a year — three grand being pumped back into local economies.

So, what’s a guy gotta do to qualify?

VAR’s legislative package this year comes from three main sources:

• findings and work products of the Professionalism Workgroup,
• issues remaining from previous legislative sessions, and
• new issues brought to the attention of VAR by local Realtor associations.

VAR will sponsor 8 bills in the 2012 Session – some of these may change, and some might be combined with others during the process.  We will use these broad topic headings for clarity.

The Virginia Association of Realtors is pleased to announce the addition of commercial forms to its Forms Center! Through a licensing agreement with Central Virginia Regional MLS, VAR will now provide the following forms:

• Commercial Purchase Agreement – Form 700;
• Commercial Listing Agreement – Form 710;
• Commercial Letter of Intent for Purchase – Form 720; and
• Commercial Letter of Intent for Lease – Form 730.

We offer these forms as a resource that will improve basic commercial deals by providing you a template for structuring and moving forward in these transactions.

A couple of interesting pieces Out There about housing inventory. Keep in mind as you read them, of course, that so much about inventory is estimates; take it all with a grain of salt.

First there’s good ol’ “shadow inventory,” aka the foreclosure pipeline: homes that are not on the market yet, but are in or near foreclosure and thus will soon be available. There is much hand-wringing about how this lurking wave of distressed property will affect the rest of the market.

We’ve released the 4^th Quarter 2011 Virginia Home Sales Report, and for the second consecutive quarter there has been an increase in the annualized pace of home sales in Virginia.

Despite the improvement in the long-term sales pace, as shown above, median home prices have continued to decline in most regions of the state.

The increases in the pace of home sales have all taken place in price ranges under $200,000 – pictured above – with higher price ranges showing anywhere from a 3% to 24% decline over the past year.

Foreclosures have declined over the past quarter in almost all regions of the state — with foreclosures in Virginia declining 26% overall.  The most significant decreases in foreclosures took place in Southwest Virginia and the Central Valley region.

In his State of the Union address, President Obama called for a significant new law to help struggling homeowners reduce their debt load.

He asked for new legislation that would give all homeowners who are current on their mortgages — not just those whose loans are backed by Fannie and Freddie — the opportunity to refinance at record low mortgage rates. (“No more red tape. No more runaround from the banks.”)

Right now, because home values have plummeted and so many people have lost income, refinancing may be impossible. A new law would remove the roadblock … at least for borrowers who are current.

As we conclude 2011 and head into 2012, Virginia’s housing market will likely continue to stabilize, due to factors like low interest rates, rising residential rental rates, and an improving household balance sheet based on increases in household saving habits.

“We are encouraged by the overall numbers shown in the fourth quarter. The pace of home sales is picking up and without artificial stimulus proving that people are taking advantage of low interest rates and low home prices. This upcoming year is an optimistic one for real estate; one in which we hope to see stronger signs of recovery and stabilization,” said Virginia Association of REALTORS® President Trish Szego.

Highlights:

Worthwhile reading from today’s Washington Post op-ed page, “Why the Federal Reserve slept before the housing crisis.” Unlike the typical blame-the-people-whose-politics-I-disagree-with piece, this one points to a much more mundane explanation of why, in 2006, the Fed apparently ignored all the signs of a major problem.

Principal reduction is back (still?) in the news. Here’s a quick update.

The basic idea is that, as part of a workout package with homeowners, lenders would reduce the principal owned along with or instead of the interest rate. But it’s not simply a matter of homeowners asking for a handout. (One way to think of it is a short sale — to the same owners.)

More and more economists are saying that, if we want out of the housing crisis, principal reduction has to be on the table. (Here’s one. Here’s another.)