Great News!

Yes-I’m talking great real estate news!

By: Bill Hitchcock

I thought it would be interesting to compare each month’s sales to it’s corresponding month from the year before. What I discovered was that as of October 30, three months this year have had the same amount of sales as in 2007. (OK-I fudged a little bit. August 2007 sold 117 homes and in 2008 it was 116)

How significant is this?? Very significant!!. Sales have been on the decline along the Crystal Coast ever since the spike year of 2005. This is the first time that any month, let alone 3 months have not been in decline when compared to the same month the year prior. This is highly significant!

The only way the Crystal Coast real estate market has been able to chip away at the glut of inventory has been  to reduce the amount of new inventory coming on the market. Trust me-That isn’t the real estate broker’s doings for they still have a “list and sell, list and sell” mentality. It is the market place righting itself.

Fortunately in 2008 every month has seen a decline of new inventory coming on the market

Probably by now some of you are wondering if I really am a real estate broker with all of the above “stuff” I have been writing about. But the reality of the situation is  inventory has been at historic highs, sales at historic lows and new on market have outpaced sales by 3 to 1.

Now, finally in 2008 we have had positive sales and new inventory on market have waned greatly. These two aspects created something I haven’t seen in years and is the very thing we have desperately needed-A decline in over-all inventory.

This past September (and for the very first time!) showed over-all inventory less than the year before. A-Men! In fact, right now at this very moment we have almost exactly the same amount of inventory on market as we did the first day of the year! Say it again: A-Men!

Are we out of the woods yet? No. Are the signs of improvement a fluke, some unaccountable phenom? No to that too. As my father use to say, “It takes a long time to turn a battleship around in the water” Which was a strange thing for him to say because he was in the Air Force-But the point he was making is clear. It takes time for things to turn around. Especially big things like real estate markets.

In my opinion (and I stress, “opinion”) we will see strong signs of improvement at the end of 1rst. Qtr. of 2009 and blossoming during the 2nd Qtr. Just be forewarned-Winter time along the coast of NC is slow. It always has been and it always will be. But don’t let the normal ebb of the area fool you into thinking that improvements are not underway.

Bill Hitchcock

Crystal Coast Real Estate Television

http://www.crystalcoastrealestatetv.com

Hitchcock Realty

http://www.hitchcockrealty.net

Bill Hitchcock

http://www.billhitchcock.net

How a few bad loans create absolute havoc

By: Bill Hitchcock

As I talked about in an earlier post, “98.3% of all loans are current! Only 0.12% had foreclosure initiated. Of the foreclosures initiated almost half found an equitable solution through mitigation.

So how do a few bad loans create such havoc?

It starts off with a borrower who should have never accepted a loan. Primary lenders (Banks and Mortgage Brokers) who were being backed by secondary lenders (Fannie and Freddie) issued sub-prime loans to these unqualified borrowers.

These sub-prime loans were bundled together and sold as mortgage backed securities. These securities were sold using on a, “mark to market” basis-which a kind of an on the spot valuation and sold to the highest bidder.

To “hedge their bets” sellers were issuing unregulated insurance policies (Credit default swap) to the buyer against default.

So-You have borrowers who should have never gotten a loan and they default. These defaulted loans had been bundled into securities and sold on the open market. These defaulted mortgages were revalued, re-priced and inflated up. Insurance policies were sold guaranteeing against default.

Obviously this is a simplified and condensed explanation. I wish I had the time and the resources to discuss Freddie Mac and Fannie Mae and the social engineering behind it all. But there are four fingers in this blame game and all four need to be pointing at each other equally. The fingers are the borrower, the government, the primary lender and Wall Street.

Bill Hitchcock of Crystal Coast Real Estate Television gives a complete and comprehensive report on the real estate market along the Crystal Coast of North Carolina. Complete analysis of the findings from September and all of the 3rd Quarter.
This information can be found no where else!

Crystal Coast Real Estate Television: http://www.crystalcoastrealestatetv.com
Bill Hitchcock: http://www.billhitchcock.net
Hitchcock Realty: http://www.hitchcockrealty.net

Homeowner Attitude

Fannie Mae National Housing Survey

I hope it isn’t just me-But I find the results of the Fannie Mae housing survey absolutely fascinating. The sentiment and attitudes are very telling and ever changing. His a brief look at some of the results

June 3, 1996
Americans still optimistic about home-buying climate, more willing to sacrifice for homeownership; but nearly half are anxious over job security.

June 23, 1997
The image of American cities is on the rebound, with medium- to small-sized cities outpacing large cities as a desirable place to own a home.

July 16, 1998
Perceived barriers to homeownership at all-time low; renters desire to own a home stronger than at any time in the 1990s; 7-in-10 baby boomers are either empty nesters or soon will be, holding profound implications for mortgage finance, home remodeling, and real estate industries.

July 26, 1999
Half of American adults misunderstand the effect of bad credit on their ability to qualify for a mortgage, even as other barriers to homeownership continue to decline; recent buyers, refinancers say they had “no difficulty” getting through the mortgage process.

October 4, 2000
Half of Americans expect most mortgages to be originated over the Internet in next five years, despite persistent doubts about Internet security; other barriers to homeownership continue to crumble, more Americans now consider homeownership possible.

July 19, 2001
Growth in lending to credit-impaired borrowers has given rise to two mortgage processes in America — one that leads borrowers with stronger credit histories feeling more confident and satisfied than ever and a second in which families with credit problems can nevertheless obtain mortgages, but at higher prices, with less confidence and general dissatisfaction about the mortgage process.

September 4, 2002
Fannie Mae’s 11th annual National Housing Survey of American attitudes about homeownership finds that Americans rate homeownership as the best investment they can make — far ahead of 401Ks, retirement accounts, and stocks. Despite the recent recession, many Americans have actually seen their net worth increase due to an increase in their home’s value.

April 14, 2004
The 2003 National Housing Survey shows that, while most Americans view homeownership as a safe investment with a lot of potential, four critical “gaps” must be addressed in order to reach the underserved and close the minority homeownership gap, including an information gap, an affordability gap, a credit gap, and an overall confidence gap.

Bill Hitchcock delivers a news style report of all the pertinent facts of the Crystal Coast real estate market place. This is a must see for anyone involved with or interested in real estate.

This segment originally aired on September 29, 2008 on the television program, “Crystal Coast Real Estate Television” (http://www.crystalcoastrealestatetv.com)

Fannie, Freddie & Foreclosures: The untold truth

The Reality you don’t hear from the news or congress

By: Bill Hitchcock

Bill Hitchcock

98.3% of all loans are current! Only 0.12% had foreclosure initiated. Of the foreclosures initiated almost half found an equitable solution through mitigation..

Foreclosures are not a national problem. They have been isolated in location and minute in numbers in comparison to the over-all lending picture. Unfortunately, It is systemic in that the consequences of foreclosures are trying to be absorbed and circulated throughout the entire country.

The “Research Institute for Housing America” sent out a press release on September 5 stating, “Only eight states had rates of foreclosure starts that were above the national average: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana, and Ohio. The remaining 42 states plus the District of Columbia were below the national average.

 “California and Florida alone accounted for 39 percent of all of the foreclosures started in the country during the second quarter and 73 percent of the increase in foreclosures between the first and second quarters.” Added Jay Brinkmann, Mortgage Bankers Associations Chief Economist and Senior Vice President for Research and Economics.

Foreclosures are not a national problem.

The “Office of Federal Housing Enterprise Oversight’ just released a very revealing report titled, “Federal Housing Finance Agency Mortgage Metrics Report Disclosure and Analysis of Fannie Mae and Freddie Mac  Mortgage Loan Data for Full-Year 2007 and First Quarter 2008”

The report focuses on the delinquencies, loss mitigation actions, and foreclosure data reported by more than 3,000 approved servicers.

Here are some of the highlights from that report

Total Loans, Debt Load & FICO Score: As of March 31, 2008, a total of 30.4 million first lien residential mortgages with total outstanding balances of $4.4 trillion had been serviced for Fannie Mae and Freddie Mac. The combined portfolios had a weighted average FICO score of 722 at origination.

Delinquent Mortgages: As of March 31, 2008, 30.1 million of the total loans serviced (98.83 percent) were current or less than 60 days delinquent. The proportion of 60-plus-days delinquent mortgages in the total portfolios was 1.17 percent. A mere 0.12 percent of mortgages in the Freddie Mac and Fannie Mae mortgage portfolios had foreclosure initiated.

*Of all the loans that Freddie Mac and Fannie Mae service 98.3% were current or less than 60 days delinquent and only 0.12% had foreclosure initiated.

Loss Mitigation: Loss Mitigation actions attempt to work out an equitable solution to avoid foreclosure. Solutions include (but not necessarily limited to) forbearance plans, short sales, assumptions,  payment plans, loan modifications, and charge-offs in lieu of foreclosure.

Prime loans in foreclosure: 47.1 percent in 2007 to 44.1 percent in the first quarter of 2008 went into loss mitigation proceedings. 92.4 percent of 2007 loss mitigation actions and 90.3 percent of loss mitigation actions in the first quarter of 2008 allowed prime borrowers to avoid foreclosure and retain the property.

Nonprime loans in foreclosure: The loss mitigation performance ratio for nonprime mortgages increased from 59.6 percent in 2007 to 60.1 percent during the first quarter of 2008.

96.4 percent of 2007 loss mitigation actions and 96.6 percent of loss mitigation actions during the first quarter of 2008 allowed nonprime borrowers to avoid foreclosure and retain the property.

Up to 60% of the folks who were in foreclosure, as high as 96% of them were able to come to an equitable conclusion and avoid foreclosure

Foreclosures have been concentrated in a few geographic areas, the actual number of foreclosures is infinitesimally small in comparison to all loans serviced by Freddie Mac and Fannie Mae and a significant number of the foreclosures initiated were resolved through mitigation.

All information was derived from the Research Institute for Housing America and the Office of Federal Housing Enterprise Oversight.ro

Bill Hitchcock owns the real estate brokerage firm Hitchcock Realty (http://www.hitchcockrealty.net) in Morehead City, NC and is Executive Producer of the television program, “Crystal Coast Real Estate Television” (http://www.crystalcoastrealestatetv.com)