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Cash for Clunkers.. 10 things you should know

1. What’s the official definition of a clunker? A driveable car made within the last 25 years, with a fuel economy rating of no more than 18 mpg. To learn more about the combined city/highway fuel-economy of your car, check out the Car Allowance Rebate System site.

2. Here’s how the program works: you trade in your old car for cash towards the purchase of a new, more efficient one. The better the mileage of the new car, the more money you’ll get towards its purchase – either $3,500 or $4,500. Check out Jalponik’s handy chart to figure out how much you might be able to claim.  The minimum combined fuel economy of a new car purchased under the program must be at least 22 mpg, while new small trucks and SUVs have to get at least 18 mpg, and large trucks have to get 15 mpg. The old cars will be salvaged once they’re turned in.

3. Consumers should act fast. The bill provides vouchers for one million purchases, and the window of time is only fron July 1 to November 1. The bill will be revisited in the fall , and some changes may be made at that time.

4. The program will cost $4 billion. Funds will come from TARP.

5. Sorry, would-be entrepreneurs: it’s off-limits to buy an old car and “flip” it for the program – the car must have been insured by the same owner for at least one year before the trade.

6. The environmental idea behind the bill is that it takes old, inefficient vehicles off of the road. But some environmentalists are actually opposed to the bill because it takes functioning cars off of the road before their time is up, and does not permit the vouchers to go towards used vehicles, even if they are more fuel-efficient. Sen. Dianne Feinstein, who sponsored an alternate bill stated that the current version undermines fuel efficiency standards and provides “handouts for Hummers.” On the other hand, some argue that higher fuel standards would disproportionately benefit foreign cars, denying American automakers their much-needed boost.

7. The economic incentive of the bill is to jump-start drowsy auto sales. According to Bloomberg, similar programs worldwide have raised auto sales 25 percent to 40 percent in Germany, 15 percent in China and 8 percent in France.

8. Even if it’s not designed entirely the way environmentalists had hoped, there are still green benefits. Says Treehugger: “One positive effect the bill could have, though, is simply to further advance the presence of ‘fuel efficiency’ as a reward term in the skeptical American consumer market. Yes, hybrids continue to sell, but not to 99 percent of the population. The bill could, albeit in a relatively minor way, serve to advance an attitude that places importance on fuel efficiency in the future.”

9. Cash for Clunkers is expected to have a great impact on the Hispanic community. That’s why the program is getting a celebrity endorsement from Dancing With The Stars’ Cristian de la Fuente and Ugly Betty’s Angelica Vale.

10. As always, buyer beware. It doesn’t make sense to trade in your vehicle unless its value is less than or equal to what you’d get in the program. Edmunds has identified a list of cars that are guaranteed to be worth less than the value of the voucher. You can find it here (PDF). Said ABC News Consumer Correspondent Elisabeth Leamy, “From a strictly consumer standpoint, the Cash for Clunkers program is not a great deal. Yes, if you are bent on buying brand new, you will save money. But the savings are nothing compared with how well you can do by buying a used car.”

Find out all the FAQs on Cash for Clunkers from U.S. News’ Rankings and Reviews

Get the most up to date info on the national real estate market from the research department at Keller Williams

Click here

New Portland Pricing Data

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REAL ESTATE APRIL 29, 2009 Home Prices Sink Again, but Pace Is a Bit Slower

By Phil Izzo    Click to view article from Wall Street Journal

The S&P/Case-Shiller home-price index, a closely watched gauge of U.S. home prices, continued to post declines in February but the pace stopped setting records after 16 consecutive months.

Click the image for an interactive map of home-price declines. http://online.wsj.com/article/SB124092346703363431.html#articleTabs%3Dinteractive

 

 

 

 

 

 

In the 20-city index, no area experienced year-over-year price gains, the eleventh straight month that has happened. Further, none of the cities managed to avoid month-to-month declines for the fifth month in a row.

Phoenix, Las Vegas and San Francisco continued to lead year-over-year decliners, with drops over 30%. Cleveland posted a large month-to-month drop, as the rate of decline accelerated there. The rates of decline also accelerated in Charlotte, New York and Washington.

Dallas, Denver, Cleveland, Boston and Charlotte managed to avoid double-digit year-over-year declines, while New York moved posted a year-to-year drop over 10% for the first time. Measuring from each market’s peak, Dallas has suffered the least, down 11.1% from its peak in June 2007; while Phoenix is down 50.8% from its peak in June of 2006. All of the 20 metro areas are in double digit declines from their peaks, with seven — Detroit, Las Vegas, Los Angeles, Miami, Phoenix, San Francisco and San Diego — in excess of 40%.

“We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” said economist Joshua Shapiro of MFR Inc. “After all, in the seven years leading up to the peak in July 2006, the national 20 city home price index jumped by 155% (126 index points). So far, this index has dropped by 31% (63 index points) in the 30 months since the peak. By our estimation, the composite 20 city index is perhaps two-thirds of the way through its ultimate total decline in this cycle.”

Below, see data from the 20 metro areas Case-Shiller tracks, sortable by name, level, and year-over-year change — just click the column headers to re-sort.

(About the numbers: The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.)

Home Prices, by Metro Area 

 

Metro Area	February 2009	Change from January	Year-over-year change
Atlanta	106.65	-2.50%	-15.30%
Boston	148.77	-1.30%	-7.20%
Charlotte	118.94	-1.60%	-9.40%
Chicago	126.3	-3.40%	-17.60%
Cleveland	97.76	-5.00%	-8.50%
Dallas	112.39	-0.30%	-4.50%
Denver	120.22	-1.70%	-5.70%
Detroit	74.6	-3.80%	-23.60%
Las Vegas	121.06	-3.60%	-31.70%
Los Angeles	163.16	-2.00%	-24.10%
Miami	154.28	-3.00%	-29.50%
Minneapolis	116.39	-3.10%	-20.30%
New York	178.16	-1.60%	-10.20%
Phoenix	111.89	-4.50%	-35.20%
Portland	150.88	-1.90%	-14.40%
San Diego	146.82	-1.00%	-22.90%
San Francisco	120.39	-3.30%	-31.00%
Seattle	152.12	-1.50%	-15.40%
Tampa	145.25	-2.70%	-23.00%
Washington	168.02	-2.30%	-19.20%

Source: Standard & Poor’s and FiservData

Check out the Case Schiller March 2009 Real Estate Update

Many thought Case-Schiller was pessimistic just a few years ago. They proved to be right on the button. They are a great source of Real Estate Information that is reliable. Hopefully they will soon be reporting a market headed upright into the future. But for now, it’s a classic Buyer’s market where buyers can hardly lose. Hopefully you don’t miss out.       John  and Priscilla

CLICK HERE TO VIEW THE REPORT

April 2009 Video Newsletter

View the Keller Williams VIDEO newsletter for the month of April!!

Click here to view the Keller Williams April 2009 Video Newsletter

Foreclosures are Igniting Bidding Wars !

 Interesting aritcle on how low prices and fabulous financing can make any fence sitter get moving !!!  John DeCosta, Keller Williams, Portland Premiere,  503-702-0856

 

 

 

 

By JAMES R. HAGERTY, 4-23-2009 Wall Street Journal, Real Estate Section

Falling home prices are starting to ignite bidding wars in a few parts of the U.S. as first-time buyers compete with investors for the same foreclosed properties.

In most of the nation, the supply of unsold homes continues to swamp demand. Home prices in many markets continue to fall, and foreclosures, which slowed in late 2008 as mortgage companies delayed taking action against delinquent borrowers, are picking up again.

But real-estate brokers say multiple offers on certain homes have recently become more common in parts of California and Arizona and the Washington, D.C., and Minneapolis-St. Paul metropolitan areas.

Click on the chart below for more details

Where Housing Is Headed

See changes in the housing markets in 28 major metro areas.

Early Signs of a Turnaround?

Some home buyers are bidding against each other on foreclosures:

• The action is confined to certain markets, including parts of California, Arizona and the Washington, D.C., and Minneapolis-St. Paul metro areas.
• Many markets, including South Florida and New York City, remain glutted.
• The supply of bank-owned homes is expected to grow over the next few months.

MORE

• Homeowners Refinance in Droves
• Real Time Econ: Why Some Home Prices Are Up

Tamby Leonard of Santa Ana, Calif., southeast of Los Angeles, says she has been outbid four times since January when trying to buy a home for her family of five. The more appealing bank-owned homes in her price range, around $300,000, tend to be sold quickly to investors who can pay cash. The market for homes in the Santa Ana area in that price range is “blazing hot,” says Ed Mixon of Altera Real Estate, Ms. Leonard’s agent.

On Wednesday, the Federal Housing Finance Agency reported that home prices nationwide rose a seasonally adjusted 0.7% in February from January, led by gains on the West Coast. When compared with a year earlier, however, home prices were down 6.5%.

Bidding wars — common during the housing boom — had all but disappeared soon after the market peaked about three years ago. Even now, they remain the exception rather than the rule.

The Wall Street Journal’s quarterly survey of 28 major metro areas shows that there is still a glut of homes available in most markets. But the glut has shrunk, and some areas are running into shortages of moderately priced homes in middle-class neighborhoods.

Many housing economists expect the market to bottom out gradually over the next couple of years, with some parts of the country stabilizing well before others. California and Washington, D.C., for instance, are likely to recover faster than South Florida, which has an immense glut of vacant condominiums, and the New York City area, which has been hurt by Wall Street’s collapse, says Kenneth Rosen, chairman of the Fisher Center for Real Estate at the University of California, Berkeley.

Across the nation, there is still a tug of war between bullish and bearish forces. On the bullish side, falling prices and the lowest mortgage rates since the 1950s have made homes far more affordable, luring shoppers like Ms. Leonard, who has been renting for years. Adding to the attraction, the U.S. government is offering tax credits for certain people who buy homes before Dec. 1. The credit — equal to 10% of the purchase price, up to a maximum of $8,000 — is available to buyers who haven’t owned any other primary residence in the U.S. during the three years before the date of purchase.

On the bearish side, rising unemployment has knocked many people out of the housing market and made those who still have jobs skittish. Even those with secure jobs who want to buy can’t always get loans on attractive terms because of today’s tightened credit standards.

Associated Press

A foreclosure sign sits outside a home for sale in Phoenix.

In addition, the supply of bank-owned homes is expected to grow over the next few months because many mortgage companies have ended moratoriums during which they refrained from proceeding with foreclosures.

The moratoriums artificially reduced the supply of foreclosed homes listed for sale, says Chad Neel, president of LPS Asset Management Solutions Inc. in Westminster, Colo., which sells such properties for banks. Now “there’s a flood about to come on the market,” Mr. Neel says. Foreclosures are likely to weigh on the market for years as courts and mortgage companies struggle to catch up with huge backlogs of unresolved cases.

Foreclosures, though far above normal levels in most of the country, are heavily concentrated in a few states, including California, Arizona, Nevada, Florida and Michigan. In areas with large numbers of bank-owned homes, buyers are mainly concentrating on those properties. That leaves ordinary homes languishing as owners generally refuse to slash prices enough to compete with banks.

In the Sacramento, Calif., metro area, about two-thirds of all March sales were foreclosures, says Michael Lyon, chief executive of Lyon Real Estate. The supply of foreclosed homes currently listed for sale is enough to last only about a month at the recent sales pace, he calculates. But there are plenty of homes listed for sale that aren’t bank-owned, enough to last more than eight months.

In West Sacramento, a buyer represented by Cherie Hunt of Prudential California Realty recently competed against two other bidders for a three-bedroom home built in 2001. Ms. Hunt’s buyer won by agreeing to pay about $220,000, or nearly $10,000 above the asking price. But that’s still way down from $405,000, the price at which the same home sold in 2005.

“I have 20 buyers looking desperately,” says Ms. Hunt.

Frank Borges LLosa, owner of FranklyRealty.com, a real-estate brokerage in Arlington, Va., is advising clients that banks favor all-cash bids or offers from people who seem certain to qualify for financing. Sellers may well choose the offer least likely to fall through rather than the highest bid, he says. He and other brokers say banks appear to be deliberately setting asking prices low in some cases to provoke bidding battles.

“There are a lot of buyers who think they can lowball,” says Connie Vaughn, an agent at ZipRealty in the Los Angeles area. But in some cases mortgage companies already have cut asking prices enough to generate multiple bids. One of her clients recently prevailed over more than 30 other bidders by offering about $86,000 — or $20,000 above the asking price — for a four-bedroom house in Adelanto, Calif., that had sold for $200,000 in 2004.

A mortgage company recently slashed the asking price on a two-family home in Norwich, Conn., to $73,900 from $144,900. That price cut prompted five offers that the company is now considering, says Linda Davis of Re/Max Realty Group, the listing agent. She says the price cut was unusually steep but adds, “At some point, [banks] just decide to let it go.”

That’s encouraging, says Ronald Peltier, chief executive of HomeServices of America Inc. in Minneapolis, which owns real-estate brokerages in 19 states. “We do need to flush out the distressed inventory,” he says, before the rest of the market can stabilize.

One positive trend is affordability. A family earning the national median pretax income of $52,800 a year needs to spend 25% of that income to buy a median-priced home, down from 44% in mid-2006, according to John Burns, a real-estate consultant in Irvine, Calif. For the Los Angeles metro area, that ratio has dropped to 45% from 102%. In Phoenix, it is down to 19% from 46%.

Among the markets Mr. Burns expects to recover earliest are the metro areas of Washington, D.C.; San Antonio; Raleigh, N.C.; Denver; Sacramento; and San Diego.

Write to James R. Hagerty at bob.hagerty@wsj.com

 

 

 

 

 

REAL ESTATE APRIL 23, 2009 Homeowners Rush to Refinance at Boom-Era Levels

By SUDEEP REDDY from the Wall Street Journal

With mortgage rates at historic lows, homeowners eager to lower their payments are rushing to refinance in numbers reminiscent of this decade’s real-estate boom.

The Mortgage Bankers Association said Wednesday that mortgage-refinance applications rose to almost triple their level a year ago. The average contract interest rate for 30-year, fixed-rate mortgages stood at 4.73%, down from more than 6% a year earlier. About 80% of all mortgage applications are for refinancing.

Wells Fargo & Co. was the latest bank to attribute improved results to its mortgage business. The banking titan, which on Wednesday reported a 52% jump in first-quarter profit, said it wrote $101 billion of mortgage loans in the quarter — the most since 2003 — as interest rates declined. The San Francisco-based bank said it added 5,000 people to its mortgage division to handle the rush of activity, which is expected to continue into the current quarter. (Please see related article on page.)

But not every application is turning into savings on a mortgage. Some homeowners looking to refinance are walking away as they find high fees offsetting the benefits. Others end up turning their adjustable-rate mortgages into fixed-rate loans.

Many homeowners are finding that their homes have declined too much in value to qualify for refinancing. The Federal Housing Finance Agency said Wednesday its home-price index was down 6.5% in February from a year earlier, though it posted a surprising 0.7% monthly increase.

The government has rolled out a series of programs in recent months to lower mortgage rates and boost the struggling housing market. The Federal Reserve in November announced plans to buy mortgage-backed securities, while the Obama administration has rolled out programs to encourage strapped homeowners to refinance.

Government officials have pushed to lower mortgage payments in part to help consumers avoid foreclosures, which are pushing down home prices and banks’ balance sheets, and to support the overall economy. The mortgage-refinancing fees are also supporting the troubled banking sector, boosting profits when banks need the added income the most.

For Mary Shaffran and her family, refinancing the mortgage will translate into more room in the budget for new furniture, summer camp for her 9-year-old son and a vacation they had been unsure about.

After her closing Thursday, Ms. Shaffran expects to save about $320 a month after fees are incorporated, bringing the mortgage on her four-bedroom home in Fairfax, Va., down to about $2,100 a month.

“I’ll actually feel like I can go shopping again,” said Ms. Shaffran, 42, who works for a nonprofit public-health association. “It will allow us to begin investing again.”

Their rate dropped almost a percentage point to 4.625%, but it took some work as their bank records were reviewed. “They’re really scrutinizing whether you really have enough money to do this,” Ms. Shaffran said.

Most applicants are facing long delays with banks overwhelmed by the rush of business.

“It’s taking forever,” said Carrie Staples, Ms. Shaffran’s mortgage broker. The underwriting for a refinancing takes 12 to 16 business days. Earlier this decade, when lenders pumped out mortgages, the wait time rarely would stretch past 72 hours, she said.

“Some places would underwrite within 24 hours of receipt,” Ms. Staples said, “but not now.”

When Alan Lattanner tried in early January to refinance his condominium in Truckee, Calif., he didn’t expect the process to ultimately take nearly three months. He said he had never missed a payment and had a credit score above 800 — the top tier.

“It was a very frustrating delay,” said Mr. Lattanner, 60. “I had refinanced several times in the past very quickly, and they were drive-by appraisals in those days. Now they do a much more detailed appraisal. They just seemed to ignore any past relationship. It was just, ‘Take a number, stand in line.’”

Mr. Lattanner, a commodities trader, was finally approved a few weeks ago for a new mortgage at 4.625%, saving him about 20% — or $250 a month — from his prior mortgage. His bank didn’t charge him any fees, but he said he exchanged “dozens and dozens of emails back and forth” to seal the deal. “I can’t say they were terribly unreasonable, but the requirements were much tougher.”

Mr. Lattanner plans to save the money. Many other consumers are likely to do the same thing as the job market restrains incomes and investment opportunities remain uncertain.

Any boost to consumer spending is likely to be small. Even if about $1.5 trillion of mortgages are refinanced in the next year, with an average reset of about one percentage point, that would amount to just $15 billion a year, a tiny share of overall consumer spending.

Consumers today are also less likely to be able to tap their home equity for cash.

J.P. Morgan Chase & Co. economist Michael Feroli said the benefits from refinancing are clear — from higher incomes to fewer foreclosures — but they are not large enough to be a major driver for the overall economy. “We know it helps,” he said. “The sign is right but it’s hard…to really get thrilled about what that means for the economy.”

Write to Sudeep Reddy at sudeep.reddy@wsj.com

The Clock is ticking on First Time Purschasers $8,000 Credit, December 1, 2009 Deadline

 Only homes purchased between January 1, 2009 and before December 1, 2009 will qualify

First time home buyers opportunity

 

· Tax credit does not have to be repaid unless sold within 3 years of purchase

 

· Tax credit is equal to 10% of the homes purchase price up to a maximum of $8,000. 

· Single tax payers with incomes up to $75,000. and married couples with incomes up to $150,000. qualify for the full tax credit

 

· All principal residences are eligible

 

· First time home buyers are eligible (including purchaser and the spouse of the purchaser) that have not owned a principal residence for 3 years previous to purchase

 

· The tax credit does not need to be paid back to the government unless the property is sold within 3 years, at which point the entire amount of the credit will be recaptured

 

 To find out more, visit: www.federalhousingtaxcredit.com

 

Click this link to view the video from The Wall Street Journal