The latest U.S. Census Bureau data shows a decrease in the total number of moves, down from 13.2% in 2007 to 11.9% in 2008, the lowest rate since 1948. Of those moving consumers, the new Relocation.com data shows that the financial crisis has had a definite impact, with 60% more consumers now listing financial reasons as the primary reason for moving compared to last year; 41% of respondents indicated that the recession and housing crisis had a strong influence on their decision to move. Three percent of the consumers who took the survey indicated that they lost their home through foreclosure, while 13% reported that they lost their job.
The number of people who said they moved for family reasons has also risen from 18% in the 2008 survey to 28% in 2009. The numbers could reflect people moving in with family members to cut costs, a desire to be close to family members or other reasons.
“Even though a smaller total number are relocating, consumers are still on the move for jobs, better housing or family reasons,” said Sharon (Ron) Asher, chairman and founder, Relocation.com. “We are seeing more out-of-state moves from traditionally popular destinations, likely because of high foreclosure rates and diminished property values.”
A small percentage of movers were making moves for the better with five percent of those surveyed moving to a bigger, better house, while eight percent were looking for a better neighborhood to improve their lifestyle.
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RISMEDIA, May 27, 2009-The Conference Board Consumer Confidence Index, which had improved considerably in April, posted another large gain in May. The Index now stands at 54.9 (1985=100), up from 40.8 in April. The Present Situation Index increased to 28.9 from 25.5 last month. The Expectations Index rose to 72.3 from 51.0 in April. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS- one of the world’s largest custom research companies. The cutoff date for May’s preliminary results was May 19th.
Says Lynn Franco, Director of The Conference Board Consumer Research Center stated: “After two months of significant improvements, the Consumer Confidence Index is now at its highest level in eight months (Sept. 2008, 61.4).
Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first. Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us.”
Consumers’ overall assessment of current-day conditions improved again. Those claiming business conditions are “good” increased to 8.7% from 7.9%. However, those claiming conditions are “bad” increased to 45.3% from 44.9%. Consumers’ appraisal of the job market was also more favorable. Those claiming jobs are “hard to get” decreased to 44.7% from 46.6% in April, and those saying jobs are “plentiful” edged up to 5.7% from 4.9%.
Consumers’ short-term outlook improved significantly in May. Those expecting business conditions will improve over the next six months increased to 23.1% from 15.7%, while those anticipating conditions will worsen declined to 17.8% from 24.4% in April.
The employment outlook was also less pessimistic. The percentage of consumers expecting more jobs in the months ahead increased to 20.0% from 14.2%, while those anticipating fewer jobs decreased to 25.2% from 32.5%. The proportion of consumers anticipating an increase in their incomes edged up to 10.2% from 8.3%.
Today is the official start of a new policy at Fannie Mae and Freddie Mac, to only buy loans that were appraised under the Home Valuation Code of Conduct. The HVCC was the outgrowth of a lawsuit filed by New York Sate Attorney General Andrew Cuomo against Washington Mutual and was designed to “improve the reliability of home appraisals,” according to FHFA, Fannie and Freddie’s regulator.
But don’t talk to an appraiser or a mortgage broker about it, or you’ll get an earful. Most of them claim it was crammed down the collective throat of Fannie and Freddie by the very powerful Mr. Cuomo, and that it puts good solid appraisers out of business, complicates the loan process for mortgage brokers, and inevitably hurts consumers.
“One of the biggest stories here is that my appraiser, I've been using for twelve years, he just got his business ripped out from him,” says Craig Strent of Apex Home Loans in Bethesda, MD.
The HVCC requires a firewall between appraisers and those who produce loans, i.e. mortgage lenders and brokers, and that ends up being Appraisal Management Companies, middlemen essentially, that order up independent appraisals. So the appraisal fee, which would have gone wholly to the appraiser, now gets split between the AMC and the appraiser. That’s sending a lot of good appraisers right out of the business.
“Yesterday, Thursday, appraisers may have had 50 or 60 clients that they could deal with, so if they were getting undue pressure from somebody they could just tell that client no, I'm not doing any more work for you,” says Jim Amorin, of the Appraisal Institute. “Today the number of players in the field have been drastically reduced to generally these appraisal management companies, so the pressure that's going to be brought to bear on appraisers we fear is going to be as strong if not stronger than it was before, the whole thing the code of conduct was trying to address.”
Another concern is that the AMC’s may hire appraisers who don’t know the particular neighborhood where the house is, and may use the lowest bidders, again, putting good local appraisers, who know their market best, out of business.
But the biggest issue is something Dana, a mortgage broker, cites in a blast to the RealtyCheck:
Based on Attorney General Cuomo’s website, the appraisal fraud in the mortgage industry was due to the practices used by some of the country’s largest banks pressuring appraisers to artificially inflate the value of homes.
Why is it that some of the largest banks in the country are allowed to have partial ownership in the Appraisal Management Companies ?? Isn’t this once again the fox watching the hen house??
Interestingly, as I wrote earlier, the HVCC arose out of a 2007 lawsuit against First American Corp. and its subsidiary, eAppraiseIT, whose largest client was Washington Mutual. It charged eAppriaseIT with conspiring with WaMu to “inflate real estate appraisals.”
If the whole idea is to get the appraisal system out of the banking/lending system, then why is it that First American Corp., still has joint venture appraisal management companies with: JP Morgan Chase (Quantrix), Citigroup (Finiti), Wells Fargo (Rels), making First American one of the largest Appraisal Management Companies in the nation? Oh, and there’s currently a class action lawsuit against Rels, claiming it rigged the appraisal process for Wells Fargo.
A press release from Attorney General Cuomo’s office, from March of 2008, states: Lenders will be prohibited from using “in-house” staff appraisers to conduct initial appraisals and Lenders will be prohibited from using appraisal management companies that they own or control.
I contacted Fannie Mae, Attorney General Cuomo’s office and the FHFA for comment, but nobody wanted to talk. FHFA Director James Lockhart gave me a statement, which, interestingly, hammers home the need to rid the system of fraudulent appraisals, but never actually, in words, directly supports the HVCC.
RISMEDIA, May 26, 2009-With the unemployment rate climbing as the national economy sags, more people are searching for communities that offer greater economic opportunity and a better standard of living. To help, Relocation.com, one of the leading online consumer resources for moving services, has compiled its list of “Best Cities for a Fresh Start.”
Unlike many lists that focus solely on the economy, Relocation.com took a wide-ranging look at factors that would appeal to someone looking for a fresh start: city ‘popularity’ based on consumer requests for moving quotes to move to that city; economic-growth prospects; home affordability; and the strength of a community as reflected by volunteerism rates.
Top 20 cities you should consider if you are looking for a fresh start:
1. Austin, Texas2. Dallas-Forth Worth, Texas3. Charlotte, North Carolina4. Denver, Colorado5. Columbus, Ohio (tie)5. Indianapolis, Indiana (tie)7. Washington, D.C.-Baltimore, Maryland8. Atlanta, Georgia9. Oklahoma City, Oklahoma10. Houston, Texas (tie)10. Les Vegas, Nevada (tie)10. Seattle, Washington (tie)13. Minneapolis-St. Paul, Minnesota (tie)13. Raleigh-Durham, North Carolina (tie)15. San Antonio, Texas16. Portland, Oregon17. Cincinnati, Ohio18. Pittsburgh, Pennsylvania19. Memphis, Tennessee20. Cleveland, Ohio
RISMEDIA, May 13, 2009-Staging your home before listing it on the market is a crucial step that many homeowners often overlook. While the competition continues to be fierce in today’s market, homeowners must take the necessary steps in order to make their home stand out from the others. The International Association of Home Staging Professionals (IAHSPR) offers 5 home staging tips to help you compete in today’s market:
1. Home staging is not just for houses for sale. Home staging continues to cross over into many service areas that have nothing to do with selling a house. Traditional home staging involves working with sellers to prepare houses for sale, but today’s successful Accredited Staging Professionals have a multi-faceted business that allows them to serve clients with staging to live, help organize offices with staging to work, and provide event staging for a myriad of events from parties to large corporate parties. Home stagers also provide staging to live services for those remaining in their homes to help them refresh their interiors with simple solutions. Since much of what a home stager provides is the vision and organizational skills and ability to carry out that vision to fruition, their talents are being demanded by many parallel industries.
2. Home staging helps foreclosure, REO and short sale properties sell. With the increase of foreclosure, REO, and short sale properties in many markets throughout the United States, the need for presentation of these properties as a product that can sell is imperative. As professional home stagers continue to develop relationships with banks and investors, the services they offer of being able to visually package and market a property will continue to gain value. Banks and Investors need to invest money up front to stage and sell a house versus letting it languish on the market and lose tens of thousands of dollars per property.
3. Home staging becomes greener. In The International Association of Home Staging Professionals we see a trend towards eco-friendly home staging continuing as a viable market niche. Home stagers have specific inventory they can provide that is “green” to help a seller, builder or investor that wants to put their “green” foot forward and achieve their goal of marketing a product that truly has the environment at heart. There are even inventory lines devoted to providing a truly eco-friendly product created from recycled materials that any individual, builder or organization that states they are truly ecologically conscious should be focused on including with any home staging services they receive.
4. Home staging captivates mainstream media. There are currently no less than eight shows on HGTV devoted to the process of preparing a house for sale, and this trend will continue as long as the public finds value in learning what to do both inside and outside their home when getting ready to put it on the market. The key is that although many of the shows provide entertainment quality, what they miss is the ability for a viewer to truly be objective in their own house. Home stagers that can independently assess a house’s strength’s and weaknesses, and provide a concise and effective plan of action, will continue to be in demand.
5. Education and professional associations will become more important for screening qualified home stagers. With the influx of many people providing home staging services, we see a need for qualification of skills and education in order to weed out those that have not set up their businesses with professional standards.
Mortgage bond prices remained unchanged for the week keeping mortgage interest rates steady. Trading remained volatile with rates improving the first portion of week. However, some of the data came in surprisingly better than expected Thursday and Friday which caused mortgage bond prices to fall and rates to rise. The labor cost component of the productivity report along with the Fed Chairman's concerns about the possibility of future inflation caused some steep price declines the latter portion of the week. Unfortunately this eroded most the improvements from Monday and Tuesday. For the week, interest rates finished near unchanged.The consumer and producer price data will be the most significant economic events this week. Trade and retail sales data may also result in some mortgage interest rate volatility.
Market Conditions
There is a Chinese proverb that states, "May you live in interesting times." It is often argued that the word interesting is meant to be a synonym for turbulent or dangerous. This phrase hits the bull's-eye given the current state of the financial markets.While stocks and bonds are swinging around wildly there is some good news. Interest rates for conforming and FHA/VA loans are still historically low by many standards.However, low rates are not a given considering the escalating inflation fears that reemerged recently. Oil prices rose most of last week and Fed Chairman Bernanke expressed concerns about "how to wind down the federal balance sheet" and "avoid inflation." When a Fed official mentions inflation it is generally not positive for bonds. Inflation, real or perceived, erodes the value of bonds causing bond prices to fall and rates to rise. The last thing the economy needs now is rising mortgage interest rates. If inflation emerges that very well may happen despite the continued Fed efforts to keep rates low. With so much uncertainty, a cautious approach to float lock decisions, especially heading into the inflation data this week, would be wise.
Despite some signs of relief in the U.S. housing market, most economists foresee continued challenges for new home sales over the coming months.
After unexpectedly rising 4.7% in February to 337k, economists expect new home sales in the U.S. to remain unchanged on the month in March. New home sales reached a record low of 322k in January, according to the Department of Commerce.
"Sales of new homes will likely continue to struggle during the first half of 2009 as employment, economic concerns and mortgage market troubles outweigh the improvements in overall affordability we have seen," economists from Wachovia noted.
They added that a decline in completions and general building activity will result in less supply coming into the market, and that inventories could return to the "equilibrium" levels seen in the late 1990s by this summer.
Economists at Desjardins, meanwhile, said that despite the impressive rebound in February, the inventory of homes in the market remains high while the fall in prices does not appear to be slowing. In February, the median house price fell to $200,900, down from $206,800 in January. Annually, prices have fallen 18.1%.
"Yet, we can find some relief in the fact that homebuilder sentiment seems to be edging up from the nadir recently reached, and consumer confidence indexes associated with the purchase of a new home are doing slightly better than the indexes covering the purchase of an existing home," the Desjardins economists noted.
On the more optimistic side, HFE chief U.S. economist Ian Shepherdson is looking for sales to jump to 375k, while calling for a drop in inventories and prices.
"We think record low mortgage rates will prompt something of an upturn in sales; that's certainly the message from the NAHB survey," he said.
Last week, the National Association of Home Builders released a survey showing that confidence amongst home builders rose to its highest level since October.
The new home sales data will be released by the Department of Commerce at 10 a.m. EDT.
By Stephen Huebl and edited by Sarah Sussman©CEP News Ltd. 2009
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