High-Distress Markets Continue to Lead Recovery

Rising home sales and declining foreclosure sales have driven the highest quarterly price increase since the national housing recovery began, according to the latestFNC Residential Price Index.

Prices rose 2.5 percent during the third quarter, according to FNC., which observed prices in the 100 largest metro areas in the country. The company found that national home prices have risen 11 percent since the beginning of the recovery, a timestamp that FNC considers to be the start of 2012.

“Continuing to lead in the recovery are the markets in high distress during the 2008-2009 mortgage crisis,” FNCnoted in a statement to the press.

Phoenix posted the highest cumulative price gain since the start of the recovery—a 46.2 percent increase.

The rest of the top five gains were recorded in Las Vegas (38.3 percent), Riverside, California (23.5 percent), Los Angeles (22.7 percent), and Orlando, Florida (20.5 percent).

The FNC 100-MSA index recorded a 0.5 percent price gain over the month of September.

Prices increased 6.2 percent from September last year to September this year and 5.7 percent from the third quarter of 2012 to the third quarter of 2013, according toFNC.

FNC reported 27 of the 30 metro areas in the FNC 30-MSAindex experienced rising prices over the month of September.

Miami and Riverside, California, topped the index with price gains of 2 percent over the month. They were followed closely by Baltimore and Charlotte, North Carolina, both of which posted increases of 1.9 percent.

The three cities to register price declines in September were St. Louis (-1.3 percent), New York (-0.6 percent), and Denver (-0.3 percent).

Both Denver and St. Louis experienced a rise in foreclosure sales in September, which FNC deemed as the culprit in both cities’ September price declines.

In St. Louis foreclosure sales made up almost 30 percent of September home sales, according to FNC.

 

Housing’s ‘Perfect Storm’ Puts Homeownership out of Reach for Some

Steady gains in home prices and rising mortgage rates across the United States contributed to weakening housing affordability in the year’s third quarter.

According to the Housing Opportunity Index (HOI) published by the National Association of Home Builders(NAHB) and Wells Fargo, 64.5 percent of new and existing homes from the start of July through the end of September were considered affordable to families earning the national median income of $64,400. That share is down from 69.3 percent in the second quarter, marking the biggest HOIdecline since Q2 2004.

NAHB chairman Rick Judson said the third quarter’s drop was the result of a “‘perfect storm’ scenario.”

“With markets across the country recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor,” Judson said.

David Crowe, chief economist for NAHB, added that the decline may have been amplified by the current lending environment.

“Some of the decline in the affordability index could be the result of a loss in some more modest priced homes as tight underwriting standards have limited the purchases by moderate income families,” he said. “While affordability has come down from the peak in early 2012, the index still means a family earning a median income can afford 65 percent of homes recently sold.”

Indianapolis-Carmel, Indiana, and Syracuse, New York, tied as the country’s most affordable major housing markets, with 93.3 percent of transactions fitting into those areas’ median household income ($65,100 and $65,800, respectively).

Another Indiana market claimed the most affordable title among smaller metros: Kokomo, where 96.9 percent of home sales were affordable for the median income of $60,100.

At the other end of the scale, California’s San Francisco-San Mateo-Redwood City metro held the spot for least affordable major market for the fourth quarter in a row. In that market, only 16 percent of homes sold in the third quarter were affordable to families earning the median income of $101,200.

Among smaller markets, the five least affordable metros last quarter were all located in the Golden State. Santa Cruz-Watsonville was declared the least affordable, with 20.3 percent of sales being considered affordable for a household earning the median income of $73,800.

JPMorgan Strikes Deal with Mortgage Investors

JPMorgan Chase & Co. has reached a $4.5 billion agreement with 21 institutional investors to settle mortgage repurchase and servicing claims on 330 residential mortgage-backed securities (RMBS).

JPMorgan will make a binding offer to the trustees of theRMBS trusts issued by J.P. Morgan, Bear Stearns, and Chase. The group of investors support the arrangement, according to the Houston-based law firm representing the group, Gibbs & Bruns LLP, and have asked the trustees to accept JPMorgan’s offer.

JPMorgan called the settlement “another important step” in its efforts to resolve legacy RMBS matters and said it believes it is “appropriately reserved for this and any remaining RMBS litigation matters.”

The trustees have until January 15, 2014, to accept the offer, which may be extended pursuant to the terms of the offer for an additional 60 days. The offer includes the following key terms:

1. Payment by JPMorgan of $4.5 billion in cash to the trusts to settle mortgage repurchase and servicing claims;

2. Implementation of certain servicing changes to mortgage loans in the trusts;

3. Reimbursement to the trustees for expenses associated with their evaluation of the offer;

4. A release of all repurchase and servicing claims that have been or could have been asserted by the 330 trusts; and,

5. Continuation of a previously agreed tolling and forbearance agreement among JPMorgan and the trustees to permit the trustees to evaluate the proposed settlement.

The institutional investors who are parties to the agreement include:

– AEGON USA Investment Management
– Bayerische Landesbank
– BlackRock Financial Managemet
– Cascade Investment
– Fannie Mae
– Federal Home Loan Bank of Atlanta
– Freddie Mac
– Goldman Sachs Asset Management
– ING Investment Management Co.
– ING Investment Management
– Invesco Advisers
– Kore Advisors
– Landesbank Baden-Wuerttemberg
– Metropolitan Life Insurance Company
– Pacific Investment Management Company
– Sealink Funding Limited
– Teachers Insurance and Annuity Association of America
– The Prudential Insurance Company of America
– The TCW Group
– Thrivent Financial for Lutherans
– Western Asset Management Company

Pursuant to the agreement, the institutional investors have requested that the trustees accept the settlement.

They also agreed to use their reasonable best efforts to obtain court approval of the settlement if the trustees elect to seek a judicial instruction concerning their decision to accept the settlement. JPMorgan also agreed to pay the investors’ attorneys’ fees.

A Gift For You!

Taste the finest thin crust pizza this side of Naples when you dine at Angelo’s on 8th! This month, receive $10 off your order of $20 or more.

As you know, I greatly appreciate how you’ve supported my business over the years.

If you can think of anyone who could use my help, please email me and let me know. Have a great time!

PS – Feel free to forward to your close friends or family members

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