With rock-bottom home prices and tighter lending standards in place, homebuyers with ample bank accounts are coming off the sidelines.
Have a couple hundred thousand dollars burning a hole in your pocket? Now may be the time for a visit to your real-estate agent.
Investors and bargain-hunting home seekers are betting that home prices have bottomed out, giving depressed housing markets like Miami-Fort Lauderdale and Phoenix a shot in the arm, The Wall Street Journal reports.
According to the National Association of Realtors, 28% of home sales last year were cash transactions. That’s double the 14% of cash sales recorded in October 2008, when NAR first tracked that data.
Zillow reports that more than half the sales in the Miami-Fort Lauderdale area last year were cash transactions. The flush buyers helped Miami prices rise 15% year over year.
Forty-two percent of buyers in Phoenix paid cash in 2010, according to Raymond James’ equity research division. That’s more than triple the percentage of 2008.
The difficulty of getting a loan in today’s economic climate has fueled cash purchases.
With these tips, you can greet spring with far fewer volatile organic compounds — or potentially dangerous, gaseous chemicals — around the house.
Last week, that groundhog in Pennsylvania predicted an early spring for 2011. For our friends in Chicago and its vicinity, it was yet another reminder that yes, that deep dish of snow on the ground and the salted-car-gunk slush in the streets may now be permanent parts of the landscape.
For the rest of us, Punxsutawney Phil's shadow aversion means warmer weather is coming — and with it, spring cleaning and the rekindling of many household projects. Perhaps this is the year you upgrade your living-room walls from butterscotch to honeysuckle.
- MSN Lifestyle: Strange but true paint names
Better yet: Perhaps this the year your spring home projects use fewer volatile organic compounds, potentially unhealthy chemicals emitted as gases from certain solids and liquids.
As U.S. News and World Report notes, there are a few quick ways to reduce your VOC emissions indoors, especially if someone in your household is prone to allergies. Here's how to start.
The mortgage crisis and a surge in foreclosures have wiped out more homeowners than were gained during the boom.
How bad is the housing bust? Bad enough to have completely obliterated all gains in homeownership made during the housing boom, according to the Census Bureau.
A Wall Street Journal story reports that the mortgage crisis and rising foreclosures have wiped out more homeowners than were created from 2000 to 2007. Homeowners made up 66.5% of Americans at the end of 2010, the lowest rate since the end of 1998.
In 2004, the ownership rate had surged to 69.2%, and pretty much stayed there until the recession stole our homes and our American Dream.
And the ownership rate may fall even further, according to some industry experts. From the WSJ:
That "shows how big the bubble was and how catastrophic the bursting has been," said Paul Dales, senior U.S. economist with Capital Economics. "We have pretty much reversed all of the increases in the homeowner rate generated by the housing boom."
With snow piling up and bitter cold lasting for weeks, one of the biggest dangers to your home is ice dams.
If you live in any part of the U.S. crippled by the most recent winter storms, you may be lucky to have power and be reading this right now. Huge accumulations of snow, power outages and canceled flights have disrupted the lives of millions of Americans. (Bing:Find out the latest information on storm-related flight cancellations)
And the severe winter blast has left homeowners, pedestrians and buildings themselves unusually vulnerable to the dangers of ice and snow buildup, the Wall Street Journal reports.
There's a growing risk of injury from falling material, like the chunk of ice that dropped from a tree and caused Mark D'Ambrosio of Abbington, Mass., to be hospitalized briefly with a head wound that required three staples. From the WSJ:
"I've been in this house 13 years and never seen anything like what's happening this winter," says D'Ambrosio, 39.
In many parts of the U.S., this winter is unlike any winter we've seen, and the biggest risk for most homes is ice dams.
What's an ice dam? From the WSJ:
These often form when an underinsulated home's heat escapes through the attic, warms the roof and melts snow. As water runs down the roof, it can refreeze into an icy dam along the overhang, which is cooler — much like a bridge.
If the dam gets big enough, it can then block water from running off the roof and force it to back up under shingles, triggering leaks and other damage. Icicles are one symptom of dams forming.
The California house where the actress died is spared foreclosure and is off the auction block.
The 8,000-square-foot house, which the actress left to her mother, Sharon Murphy, after her death, was set for auction on Jan. 31. A spokesman for Murphy’s mother tells Reuters that “two bonafide offers” have come in on the house, which was originally listed for $7.25 million last March. The current asking price is $4.99 million.
- Bing Cube: View pics of Brittany Murphy
"The trustee sale has been postponed and the seller is currently in negotiation with several parties regarding potential sale," a statement released on behalf of Sharon Murphy reads.
The percentage of borrowers selecting cash-in refis was the highest on record in the fourth quarter of 2010, Freddie Mac says. Why? And how do you know if a cash-in refi is right for you?
Nearly half of all homeowners who refinanced in the fourth quarter of 2010 chose to do so by paying more cash upfront, Freddie Mac reported on Monday. Instead of bucking conventional investment wisdom with these cash-in refis, however, they may be simply navigating the market — albeit in record numbers.
The 46% of borrowers selecting cash-in refis — in which they pay down more of their principal to refinance into a mortgage for a smaller amount — is the largest percentage since Freddie Mac started its recordkeeping in 1985. It's also up from the then-record 33% that Freddie Mac reported for the same period in 2009.
Meanwhile, cash-out refinances — in which borrowers take on a bigger new loan to free up more money short-term — comprised only 16% of refis in the fourth quarter, a record low. Since 1985, the average share for cash-out refis has been 62%, Freddie Mac says.
This is a complete flip from 2006, when skyrocketing home values turned many houses into ever-fattening piggy banks. It made sense for some borrowers to trade the risk of a new, bigger, longer loan for some spending money. Heck, they could.
Today, paying down a mortgage quicker isn't just a more popular option. For many homeowners, it's their only option.
The economic crisis has hit religions hard, with a steep increase in the number of denominations facing foreclosure and bankruptcy.
Homeowners and investors aren't the only ones who overspent on real estate and then got knocked back to reality when the economy tanked. Many churches borrowed too much or built too big during boom times and are now struggling to make ends meet through the collection plate.
Nearly 200 churches have been foreclosed on by banks since 2008, according to real-estate services firm CoStar Group Inc. That number, reported by The Wall Street Journal, is a steep rise from the eight foreclosures during the previous two years. And there were virtually no foreclosures in the decades before.
"'Churches are the next wave in this economic crisis,' says the Rev. Jesse L. Jackson Sr., president and founder of the Rainbow PUSH Coalition, a nonprofit civil-rights group, who works with pastors around the country to help churches negotiate better terms with their bankers."
The Orlando Sentinel reports on the Mission Road Church of God in Christ, which filed for bankruptcy in December with assets of less than $100,000 and debt as high as $20 million. (Bing: What is a debt-asset ratio?) That church's pastor took out mortgages of $4.9 million on his Pine Hills church and $770,500 on his parsonage in 2004, according to bankruptcy records. The records show the church's income declined by more than half in only two years — from $764,990 in 2008 to $303,849 in 2010.
Church congregations were part of the same society that wanted supersized houses and the easy loans that made it possible to buy them, said John Farina, associate professor of religious studies at George Mason University in Fairfax, Va. In the competitive marketplace of religion, bigger was better, and the way to get bigger was to offer members more for their weekly contributions.
A modest bump in the number of homes that went under contract indicates that people are still planning to buy homes.
Pending home sales were up 2% in December, marking the fifth increase in six months, according to the National Association of Realtors.
December's gain was lower than the 3.5% increase seen in November, and especially modest compared with the 10.4% increase in October, but the number indicates that people are still buying homes. Pending home sales reflect the number of homes that are under contract during a month. Closing usually occurs within two months.
Lawrence Yun, NAR chief economist, says modest gains in the labor market and economy are creating a more favorable backdrop for buyers and allowing them to take advantage of an affordable housing market. He says he expects the favorable conditions to continue.
"Mortgage rates should rise only modestly in the months ahead, so we’ll continue to see a favorable environment for buyers with good credit,” Yun said.
The 2% increase brought the Pending Home Sale Index to 93.7; an index of 100 corresponds to the average level of contract activity in 2001 and is considered to be a healthy level.