Everything’s connected…

Real Estate Outlook: Housing to Play Key Role in Election
by Carla Hill

Washington and the housing market are never far apart. Experts ranging from real estate professionals to the members of the Federal Reserve have reported that the state of the nation’s economic recovery relies heavily on a housing recovery.

According to the latest Legislative and Political Forum held at the Realtors 2012 Midyear Legislative Meetings and Trade Expo, housing will play a large part in deciding the outcome of the 2012 presidential election.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “We believe efforts that help creditworthy homebuyers obtain mortgage financing and allow more people to stay in their homes or avoid foreclosure through streamlined short sales are important for a housing and economic recovery.”

For the majority of Americans, their home is their largest asset and the foundation of their familial stability. Taking steps to ensure homeowners keep their homes helps those not only those owners but also home values across the nation.

Federal Reserve Governor Elizabeth Duke also commented on the need for a healthy real estate recovery. She noted that the health of housing is the strength of the overall recovery.

When would-be buyers are worried about job security they aren’t thinking of buying. When potential buyers can’t access credit they can’t buy homes.

“Unfortunately, some buyers who would like to purchase a home are unable to do so because they cannot obtain a mortgage,” said Duke. She said the tightening of credit standards is apparent in the credit scores of borrowers, noting that the median credit score of borrowers rose from 700 in 2006 to 760 in 2009, where it remains today.

Duke added that tight credit standards have made obtaining a mortgage particularly difficult for first-time home buyers, since they tend to be younger than other homebuyers, and have lower credit scores and fewer financial assets.

“Just as uncertainty about job prospects or house prices has likely discouraged some potential buyers from purchasing homes, it is likely that uncertainty has also affected mortgage lenders,” said Duke. “Uncertainty surrounds several key aspects of mortgage lending, including the strength of the economic recovery and the trajectory of future house prices; the costs and liabilities associated with originating and servicing mortgage loans; and the future structure of the mortgage market.”

For now housing affordability remains at an all-time high. The NAR’s composite quarterly Housing Affordability Index (HMI) rose to a record high of 205.9 in first quarter of this year. The greater this number the more households that can afford to buy.

Veissi reports, “For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” he said.

He continued, “Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers.”

Currently the index shows the median family income of $61,000 can afford a home costing $325,500, which is double the national median existing single-family home price of $158,100.

Published: May 21, 2012

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Who Aspires to be a Renter??

Who Aspires To Be a Renter?
by Bob Hunt

“No one aspires to be a renter,” proclaimed the speaker at last week’s “Rally to Protect the American Dream”, a gathering of more than 13,000 Realtors® at the Washington Monument.  Gerardo Ascencio, President of the National Association of Hispanic Real Estate Professionals,  went on to tell of his immigrant parents who brought him to America, and who worked two jobs (each) so that they could move to nicer neighborhoods and a more comfortable home.  He recounted that owning a home came late in life for his parents, later than had actually been possible.  They didn’t buy as early as they could have, because they didn’t understand how the whole process worked.  (Example:  his father through that when you finally finished paying the mortgage, then the bank got the home back.).

Ascencio was speaking to Realtors®, reminding them of the important work that they do day in and day out: helping people and showing them how they, too, can come to realize a part of the American Dream.  The rally, May 17, was the culmination of last week’s legislative advocacy efforts, during which literally thousands of Realtors® walked the halls of Congress, keeping long-standing appointments with their representatives. They were there to urge support for a variety of measures designed to strengthen the still-fragile housing market and to provide a stable financing system that will ensure access to credit for the millions of “echo boomers” who will be the entry-level buyers of the coming years.

Again and again Realtors® expressed their concerns that the pendulum of reform has swung too far.

No one argues that reform has not been needed.  Everyone agrees that loose credit standards and irresponsible – not to mention illegal – lending practices led to a devastating crisis in the housing market, one whose effects continue on today.  No one disagrees that thousands of people bought homes – many of them first homes – for which, financially, they were not remotely qualified.  Corrections were certainly needed.

But now we are seeing the effects of over-correction.  According to Gallup, the homeownership rate has dropped to 62%, the lowest in a decade.  Moreover, the number of first-time homebuyers has dropped precipitously, from 50% in 2010 to 37% in 2011.  FHA’s tightened regulations have disqualified a significant amount of the inventory normally available to first-time and low-end buyers.  Moreover, conventional lending standards have tightened beyond reason.  Federal Reserve Governor, Elizabeth Duke, told the Realtors® that only ½ of lenders will lend to those who are on the low end of Fannie Mae or Freddie Mac eligibility, even if they have a 20% down payment.  This, too, impacts entry-level buyers the most.

Added to all that, it has been noted, the FHFA bulk-sale “REO to rental” program has the effect of removing a significant portion of the inventory that would have been available to low-end and entry-level buyers.

Nobody has said “conspiracy”, but the overall effect of these diverse trends points to a housing market much more conducive to renting than to buying.  And too few in government seem to be upset about that.  When confronted with complaints about the REO bulk-sale program, Mark Stegman, Counselor to the Secretary of the Treasury for Housing, told the Realtors® that there is nothing wrong with being a renter.

And, of course, no one said there was anything wrong with it.  It just isn’t what people aspire to.  It isn’t part of the dream.

One of the more interesting speakers to address the Realtors® last week was Democrat strategist and pollster Celinda Lake.  Ms. Lake observed that “Voters see homeownership as fundamental to the American Dream,” and they see that dream disappearing.  59% said that they think the next generation will be worse off.  And what about the housing crisis?  74% say that home ownership is worth the risks.  Even 63% of those whose homes were underwater agreed with that.  68% of those who do not currently own a home, want to.

With Congressional approval ratings hovering around 14%, Ms. Lake observed that the sentiment for home ownership far outweighs that for Congress.  She encouraged the Realtors® to take their pro-ownership message to the Hill.  They did.  Enthusiastically.

Bob Hunt is a director of the California Association of Realtors® and is the author of Real Estate the Ethical Way.  His email address is scbhunt@aol.com

Published: May 22, 2012

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Some pretty cool news!!

Keller Williams Realty, Inc. Ranked in America’s Top 10 Workplaces
AUSTIN, TEXAS (May 16, 2012) – Keller Williams Realty, Inc. announced today it has been recognized as one of America’s Top 10 Workplaces, according to the first annual National Top Workplaces list compiled by Workplace Dynamics.
“Our culture is our strongest asset and the reason that so many people want to be with us,” Mary Tennant, COO of Keller Williams Realty shares. “Imagine what it would be like to work in a culture every day with people that you feel love, kindness, caring and humor with. Imagine working in an environment where there is a passion for every single person to succeed at the highest level.”
“If this award proves anything, it’s that we only succeed when our associates do,” added Mark Willis, CEO. “We are proud to be in business with the best who are lifting us up each day and proud to be fulfilling our mission of building careers worth having, businesses worth owning and lives worth living.”
The list of National Top Workplaces is based solely on employee feedback surveyed from 805 companies of more than 1,000 employees, which included over half a million survey responses. According to survey results, Keller Williams’ ranking was based on its overall culture and high levels of organizational health including training, benefits, compensation, and work-life balance. “Put simply, the most successful companies appear to be the ones that employees believe in,” said Doug Claffey, CEO at WorkplaceDynamics.
For more information and the full list of the Workplace Dynamics Nation’s Top Workplaces, please visit http://topworkplaces.com/stories/americas-top10-workplaces.
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Selling the Pared-Down Life

The Founder of TreeHugger and His Apartment of the Future

Published: May 16, 2012

IT may be that the house of the future is an apartment — at 420 square feet, a very small apartment — in a century-old tenement building on Sullivan Street. Shiny and white, it has movable walls that allow it to morph from one room into six, as well as expandable furniture and filtered, or “country,” air, as the owner, Graham Hill, put it recently while showing off the apartment’s convertible tricks like a modern-day Bernadette Castro, dressed neatly in a black merino wool polo shirt, black pants and black Vans. Multimedia Slide Show The Apartment as Multipurpose Laboratory . Follow Home on Twitter Connect with us at @NYTimesHome for articles and slide shows on interior design and life at home. . This laboratory, as Mr. Hill calls it, for small-space, sustainable and — it must be stressed — high-end living is the first tangible product from his fledgling company, LifeEdited. It comes with an awkward manifesto that nonetheless manages to gather an armful of social and economic trends and philosophies, including happiness research, the booming field of collaborative consumption (which uses new technology to share resources like cars, toys and books, on the Zipcar model) and data on the proven efficiencies of cities. This is a medley of new-old systems that will be familiar to habitués of recent TED conferences, where Mr. Hill has been a featured speaker, and to frequenters of the self-help section of bookstores and even old-school urbanists and Buckminster Fuller fans. “Design your life to include more money, health and happiness with less stuff, space and energy,” as the manifesto reads, is both a mouthful and a paradox for an enterprise that hopes to be in the business of selling, well, lots of stuff, in much the same way the come-ons of the latest miracle diet promise weight loss if you gorge on all your favorite foods. Yet Mr. Hill, the 41-year-old founder of TreeHugger, a Web site that made environmentalism attractive and aspirational by promoting a global, modern vision of sustainable design (think architectural chicken coops, green roofs and “ethical” condoms), has shown that he can profit from his own very sincere idealism and good taste. After all, he sold the site in 2007 to Discovery Communications, the company that owns the Discovery Channel, for $10 million. Mr. Hill, who is Canadian, is trained as an architect and a product designer. TreeHugger, which went live in 2004, was his second Internet venture. His first, a Web design company, was sold in 1998 for $10 million as well, clearly his lucky number. “Graham is a rare breed, a pragmatic idealist,” said his friend Nick Denton, founder of Gawker media. It was Mr. Denton who offered up Gawker’s blogging platform as a template for organizing TreeHugger in its infancy. In return, Mr. Hill gave him a piece of the business. “He’s shied away from tokenism and from empty idealism,” Mr. Denton added. “I think it’s kind of cool for Graham to come up with a sustainable way of living in cities instead of showing million-dollar solar panels on houses in the Napa Valley, which is not the way most people live.” “It’s always been about bobos in paradise, hasn’t it?” he continued, referring to the TreeHugger demographic, now primed to be customers for LifeEdited. “Those wealthy urban types yearning to get in touch with themselves and the planet, and who are actually rather more effective than their hippie ancestors. I always liked the name TreeHugger, which was like taking a word like ‘queer’ that’s been used as an insult and reclaiming it. It’s postmodern-ironic, but not so ironic as to be devoid of principle.” Sort of like Mr. Hill, whom Mr. Denton described as “this Maui-New York surfing-TED person spewing carbon into the environment, even though he pays for it,” referring to the way Mr. Hill mitigates the impact of his constant air travel by buying carbon offsets. “I always joke that my footprint is lighter than his, because the only place I travel is from my apartment to my office.” Indeed, the kite-surfing, skateboarding Mr. Hill has been mostly camping for the last decade, running his business out of a series of hotel rooms and small apartments in cities like Buenos Aires, Bangkok and Barcelona, Spain, to name just a few, as well as from a trailer on the Baja, a garage in Maui and even a bunk on Plastiki, the boat-mission made from 12,500 plastic bottles and captained by David de Rothschild, the banking-heir environmentalist. It was these experiences, Mr. Hill will tell you, which required culling his stuff to fit into one small rolling suitcase, that made him seize on the notion of “small” as a business plan. “Small is sexy,” he says in his six-minute TED talk. A YouTube hit, with 1.3 million views as of this week, it also includes these aphorisms: “Transfer ownership to access,” “Own as little as possible so you don’t have to store too much” and “Editing is the skill of this century: editing space, media consumption, friends.” Mr. Hill is certainly not the first to trumpet the benefits of a pared-down life. There’s a straight line from Buckminster Fuller to Sarah Susanka, the architect and author of “The Not So Big House,” published in 1998 at the height of the country’s McMansion expansion, and to the Tiny House folks, the D.I.Y. builders of microhouses. There are the clutter people and the simplicity people and authors like Dave Bruno, who wrote a book about editing his possessions down to 100 things. Barbara Flanagan, an architect, product designer and writer, did Mr. Bruno two better, with her 2008 book, “Flanagan’s Smart Home: The 98 Essentials for Starting Out, Starting Over, Scaling Back.” Still, “one of the things the TEDsters embrace is not that the idea needs to be new, but the idea needs to be heard,” said Katrina Heron, a former editor in chief of Wired magazine who is now an editor at large at Newsweek and The Daily Beast, describing the hyper-voluble idea mavens who flock to the TED conference and others. It’s easy to make fun of those who would conflate consumption with environmentalism, but this is the poignant place we find ourselves as a capitalist country in the 21st century. In 2009 and 2010, Mr. Hill bought two apartments in a tenement building on Sullivan Street: a 420-square-foot cube for $287,000 and a 350-square-foot cube for $280,000. He camped in the smaller one, and held a competition to design the larger space, with a brief that included the need to seat 12 at a dinner table and have guests sleep over, among other efficiencies. There were more than 300 entries, and Catalin Sandu, a Romanian architecture student now employed by Mr. Hill, won for his transformer-style apartment, in a crowd-sourced selection process promoted by the TreeHugger site. Friday was Mr. Hill’s first night in his new apartment, and he slept well, having arrived on the red-eye after a weekend of boar hunting in Texas followed by four days in Las Vegas, where he was pitching an investment in LifeEdited to Tony Hsieh, the billionaire chief executive of Zappos, the online shoe company. It was his second visit there: he and Mr. Hsieh met at this year’s TED conference, and Mr. Hsieh drove him back to Las Vegas on his Happiness bus. Mr. Hsieh runs his business like a summer camp with its own songs and bonding rituals that are either horrifying or invigorating, depending on your personality. He is the author of a motivational book, “Delivering Happiness: A Path to Profits, Passion and Purpose,” and is much taken with the work of the Harvard economist Edward Glaeser, whose writings promote cities as incubators of creativity and profit and who proposes an ideal density-to-productivity ratio of 100 people per acre. (Mr. Hsieh looks for books with any variation of the word “happy” in their titles, he said, and Mr. Glaeser’s best seller, “Triumph of the City,” has the subhead “How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier.”) Armed with these ideas, as well as a passion for a Las Vegas bar called the Downtown Cocktail Room, Mr. Hsieh is investing $350 million in the area surrounding the bar to build a corporate campus for Zappos, as well as mixed-use developments that will incorporate a LifeEdited apartment building created by Mr. Hill and his new team, which includes Mr. Sandu and Guerin Glass, an architecture firm in the Dumbo section of Brooklyn. This is where LifeEdited gets really interesting: Mr. Hill’s group has proposed apartment buildings designed around large, open courtyards with units ranging from 300 to 600 square feet. It is quite something to promote studio-apartment living in a state that has so much housing stock available at such a steep discount. (Nevada still leads the country in foreclosures.) Later this month, Mr. Hsieh will try it out for himself, when he comes to New York to stay in the LifeEdited apartment. “It sounds great in a TED talk,” Mr. Hsieh said. “But it’s one of those things you just have to see.” Mr. Hill, whose possessions run to athletic gear and vitamins, has domesticated the apartment with objects belonging to his girlfriend, Kumara Sawyers, a massage therapist and yoga instructor. He chose a globe, an antique camera, an antler and a potted plant, along with a few books like Mr. Glaeser’s. There were also products bought to illustrate LifeEdited principles, like a heavy fork that was supposed to do double duty as a knife (“a knork,” Mr. Hill said) but didn’t work very well. In the closets, there is a tiny wardrobe of merino wool, which Mr. Hill said needs less washing than other fabrics. The showstoppers were the Murphy bed and the expandable dining table, designed by Resource Furniture, a Manhattan maker of convertible furniture that is now a LifeEdited sponsor. The movable wall was pretty neat, too. But Mr. Hill fretted over what he saw as the fussiness of the white surfaces. “LifeEdited is about having less to worry about, and I’m already worried about a couple of things,” he said. “We need to make things that are cheaper and tougher, with more patina, that can handle wear and tear. That moving wall is too expensive.” (Its hardware cost about $4,850, and was produced by a maker of library stacks.) “How can we build a cost-efficient wall that’s safe and works well?” he continued. “It’s all too expensive, but it’s also a lab. I’m used to that with TreeHugger. We had expensive stuff at the beginning. There’s a role, and a good role I think, to be played by early adopters and people with money. Which helps get things out there, and gets the volume up so prices can come down.” All in, the renovation of the apartment cost about $365,000, $50,000 of which went toward the accelerated deadline Mr. Hill gave his builders. Since a goal is to offer LifeEdited apartments that save people “significant money,” Mr. Hill suggested this calculus as a way of taking the sting out of the Sullivan Street price tag. He added up the square footage of the “rooms” created by the apartment — kitchen, bathroom, living room, dining room, office, master bedroom and guest bedroom — to 1,100 square feet. “Looked at this way,” he wrote in an e-mail, “you’re getting the functionality of an apartment almost triple the size. Granted, you can only use one space at a time and this requires a transformation but still …” SULLIVAN STREET is a special ecosystem, a micro-neighborhood of century-old brick tenement buildings and hipsterish cafes like Local, which serves farm-to-table sandwiches and has built a mini-park in a parking space out front. The “remarkably well-preserved examples of turn-of-the-century Italian immigrant life in New York City,” as Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, said recently, are the reason he is working to get the area, south of Washington Square Park and known as the South Village, designated a historic district. And the building on Sullivan Street, where Mr. Hill is working out his ecotopia and brand laboratory, “is not your standard tenement,” Mr. Berman said. “It is a very interesting place, a model tenement built in 1911 by a fraternal organization of Italian immigrants for the explicit purpose of creating housing that was more humane, cleaner, airier and brighter than the surrounding tenements, which were built to cram as many people as possible in there as the law would allow.” There are ironies here, of course, not the least of which is the idea of turning working-class housing into luxury apartments for moneyed, childless global nomads like Mr. Hill. On Saturday, one of Mr. Hill’s neighbors, Angela D’Arcangelo, stopped by to inspect the finished construction. She said she was turning 102 in June and that she had lived in the building since she was 6. She peered through the door. “Very nice,” she said finally. Could Mr. Hill imagine living here as long as Ms. D’Arcangelo had? He looked horrified. “I don’t think in decades,” he said. This article has been revised to reflect the following correction: Correction: May 17, 2012 An earlier version of this article misidentified Catalin Sandu, an architecture student, as Hungarian. He is Romanian. This article has been revised to reflect the following correction: Correction: May 17, 2012 An earlier version of this article misstated the location of Guerin Glass, an architecture firm. It is not in Manhattan.

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Home Prices Rise in Half of U.S. Cities as Markets Stabilize



Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized.

The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains.

     May 7 (Bloomberg) — Michelle Meyer, a senior economist at Bank of America Merrill Lynch, talks about the U.S. economy and real estate market.     She speaks with Tom Keene on Bloomberg Television’s “Surveillance Midday.” (Source: Bloomberg)

The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.

“The housing market is still depressed but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview today. “We’re on the mend but it’s still something that will take two or three years before we’re back to normal.”

The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.

The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan; 16.9 percent in Palm Bay, Florida; and 16.6 percent in Erie, Pennsylvania.

Biggest Declines

Kingston, New York, had the biggest decline, with the median selling price tumbling 22 percent in the quarter. It was followed by Stamford, Connecticut, with an 18 percent decline; Mobile, Alabama, at 14.7 percent; and Atlanta at 12 percent.

The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier.

Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist.

‘Broad Shortages’

“We have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges,” Yun said in the report.“This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”

Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.

Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington-based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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What First Quarter Statistics Say about the Future of Texas Real Estate Markets




The Texas real estate market gained positive momentum in the first quarter of 2012, according to the 2012-Q1 edition of the Texas Quarterly Housing Report issued recently by the Texas Association of REALTORS®. The volume of single-family home sales in Texas was 12 percent higher than the same quarter of 2011 and the median price increased by almost three percent over the same time frame.

“The watchword for Texas real estate in 2011 was ‘consistency,’ in both sales volume and price. That allowed us to emerge from last year with stable sales volumes and strong property values,” said Joe Stewart, chairman of the Texas Association of REALTORS®. “Now, in 2012’s first-quarter results, we see a strong increase in sales volume and a meaningful increase in the median price. That indicates positive momentum for the year ahead.”

For the period of January through March 2012, the volume of single-family home sales in Texas was 45,502, which is 12 percent more than the same quarter in 2011. The median price for Texas homes during the quarter was $147,100, which is 2.7 percent more than 2011-Q1.

Jim Gaines, Ph.D., an economist with the Real Estate Center at Texas A&M University, expanded on the report: “We believe several factors are driving the strong performance of the first quarter, including continued job growth in Texas and some increased access to credit for homebuyers. Most of all, we’re starting to see a shift in Texans’ attitudes toward real estate. Essentially, buyers and sellers have higher expectations for the market, so they’re beginning to take action and we’re starting to see the impacts.”

Looking ahead, the “months inventory” calculation can provide insight into future demand for homes and that figure decreased from 7.6 months in 2011-Q1 to 6.0 months in the first quarter of this year. “Months inventory” is an indicator of the balance between demand for homes and supply in the market and the Real Estate Center at Texas A&M University cites 6.5 months of inventory as a balanced market.

Gaines continued, “In Texas, our inventory of homes for sale has been decreasing for about six months now. That’s due in part to the fact that some homeowners who don’t have to sell have chosen to wait for prices to improve before selling their homes. In addition, the slower processing of foreclosures and fewer distressed properties may reduce the number of listings. However, a decrease of more than 20 percent in the inventory of homes compared to the same quarter last year is significant and may be an indication of price increases in the future.”

Chairman Stewart concluded, “If all the indicators play out as we expect, the Texas real estate market is in for a busy spring and summer.”

The Texas Quarterly Housing Report is issued four times per year by the Texas Association of Realtors with multiple listing service data compiled and analyzed by the Real Estate Center at Texas A&M. To view the report for 2012-Q1 in its entirety, click here.

About the Texas Quarterly Housing Report Data for the Texas Quarterly Housing Report is analyzed by the Real Estate Center at Texas A&M University using statistics compiled from 47 multiple listing services in markets throughout Texas. The report includes data for single-family home sales over the course of one quarter and is scheduled for release by the Texas Association of Realtors on the following dates each year: Feb. 1, May 1, Aug. 1 and Nov. 1.

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End of Housing Crisis?


01/24/2012 By: Krista Franks Brock

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

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