Nationwide 72 percent of homeowners in a recent survey by HomeGain indicated that they were satisfied with owning a home and 28 percent said they were dissatisfied. An analysis of results from a representative selection of states found that more homeowners in wealthier markets evidenced greater support for homeownership while those in more affordable markets were generally less supportive.

In New York State, the second most expensive state in the nation to buy a home, support was strongest, 77 percent. In California, fifth most expensive, support was 75 percent. Florida, twelfth most expensive state, support was 67 percent, and in Illinois, twenty-ninth most expensive, support was only 55 percent. Only Texas countered the trend. Though it ranks thirtieth in median home price, Texas homeowners supported homeownership by a 75 to 25 percent margin.

Among homeowners dissatisfied with homeownership, 64 percent said that price depreciation was the primary reason. However, depreciation seemed to have no effect on support for homeownership on a state by state basis. Some states like California in the Pacific region, where prices have fallen 10.7 percent since 2009, and homeownership support in has remained high. In Texas’ region, where support for homeownership is high at 75 percent, prices actually appreciated 2.1 percent last year. Illinois, where support for homeownership at 55 percent was lowest among all the states analyzed, its home prices have actually fared better than most regions, with only a 5 percent decline in prices over the three year period compared to the 6.1 percent national average.

“The HomeGain 2012 National Home Ownership Satisfaction survey shows in spite of declines in the values of homes nationwide, satisfaction among homeowners remains high at 72 percent, with nearly 3 of 4 home owners satisfied with home ownership.” said Louis Cammarosano, General Manager of HomeGain. “Of the 28 percent of surveyed homeowners who indicated they were unsatisfied, 63 percent cited price depreciation as the primary reason,” said Louis Cammarosano, General Manager of HomeGain.

]]> http://www.realestateeconomywatch.com/2012/01/homeownership-stronger-in-higher-priced-states/feed/ http://www.realestateeconomywatch.com/2012/01/consumers-top-the-experts-in-2012-home-price-outlook/ http://www.realestateeconomywatch.com/2012/01/consumers-top-the-experts-in-2012-home-price-outlook/#comments Tue, 10 Jan 2012 14:15:55 +0000 editor http://www.realestateeconomywatch.com/?p=4545 For the past six months, one consumer survey after another has tracked increasingly negative expectations about home prices in the year to come while some expert forecasts were more positive.  Now, Fannie Mae has turned the tables.

Fannie Mae’s December National Housing Survey found that Americans expect home prices to turn the corner and rise by an average of 0.8 percent this year, up from an expected 0.2 percent increase last month.   Such an increase, though modest, would be the first positive annual price increase since 2006.

However, Fannie’s in-house experts disagree.  They forecast that the Federal Home Finance Administration Index will fall an additional .08 percent in 2012 after falling 4.1 percent this year.

The new survey was only incrementally more positive than in the past.  Americans who say the economy is on the right track in the December survey rose by 6 percentage points over November, while the percentage who say the economy is on the wrong track dropped by 6 percentage points. On the personal finance side, for the first time since February 2011 more respondents say their financial situation will get better over the next year than say it will stay the same. In turn, the share of consumers who say their income is significantly higher than it was a year ago rose 5 percentage points since last month.

“December attitudes have rebounded from the lows seen during the debt ceiling debate and economic deterioration of Europe this past summer. There is marked improvement in consumer sentiment regarding the direction of the economy, personal finances, and future home price expectations,” said Doug Duncan, vice president and chief economist of Fannie Mae. “This improvement is in line with the modest fourth-quarter pickup in the U.S. economy. However, while December results show that more Americans think the economy is on the right track, consumer attitudes are still at depressed levels, with more than two-thirds saying that the economy is on the wrong track.”

Other key findings:

• Twenty-six percent of respondents expect home prices to increase over the next 12 months (up 4 percentage points since last month), while 18% say they expect home prices to decline (down 4 percentage points since last month). 52% say prices will stay the same.
• •Thirty-six percent of Americans say that mortgage rates will go up over the next 12 months, up 3 percentage points from November and even with October.
• Seventy-one percent of respondents say it is a good time to buy a home (up 3 percentage points since last month), and 11% percent say it is a good time to sell.
• •On average, Americans expect home rental prices to increase by 3.5 percent over the next 12 months, up from 3.2 percent in November.
• •Five percent expect a decline in home rental prices over the next 12 months (tying May 2011 as the lowest point in the past 12 months), while 43 percent of respondents believe that home rental prices will increase.
• Thirty-one percent of Americans say they would rent their next home, while 64 percent say they would buy, up 1 percentage point from last month.

That’s the bottom line from a new study of housing markets from the Research Institute for Housing America (RIHA) and the Mortgage Bankers Association by Professor Gary V. Engelhardt of Syracuse University.

Engelhardt’s thesis may explain the dramatic decline in inventories across housing markets this summer and fall as sellers have kept their homes off the market. According to the latest data from Realtor.com, listings on the nation’s largest homes for sale site were down 21.3 percent in November from a year ago.

Over the next five quarters, positive home-buying sentiment is forecast to remain around current and long-run average levels. But buyers aren’t the problem, according to Engelhardt, it’s sellers. Home-selling sentiment is forecast to remain around current and historic-low levels.

Sellers want to price their homes based on key past market values, such as the purchase price of the property, the market value at the time or the most recent refinance or second mortgage or what a comparable property sold for in the recent past.

Underwater homeowners cannot adjust their reservation prices downward much below that of the outstanding mortgage amount. Currently, about 23 percent of all homeowners with mortgages nationally are underwater. In some particularly hard-hit markets, as many as half of all homeowners with mortgages are underwater. Those are the same places with the highest incidence of past due mortgages and foreclosures.

With large declines in market values, sellers see increased value in waiting, either to initially list, or to keep, the property on the market. This may help to hold reservation prices high enough to drive a substantial wedge between buyer and seller sentiment. A poor job market with limited job mobility - a key driver of housing-market transactions - may exacerbate this.

Over time, buyer and seller sentiment will come more in line and there will be more transactions but prices will not rise as fast as volume for two reasons. First, time on the market for existing listings will fall. Second, any upward price pressure will bring forth new listings, as observed prices will begin to cross the reservation prices of sellers who have kept homes off the market. Overall, there is little reason to believe there will be substantive increases in home prices in the near term, at least until reservation and observed prices become better aligned, Englehardt said.

Things won’t get better until the negative equity picture improves. “Over the past two decades, purchase originations have tracked more selling sentiment more strongly than home-buying sentiment. This is especially the case in the current downturn. This suggests that favorable sentiment and real activity in the market will be weighed down significantly until the overhang of troubled mortgages is cleared out. Although there has been some recent progress on this, there is still a long way to go,” concluded the Syracuse economist.

The latest Rasmussen Reports national telephone survey, conducted November 27-28, found that 71 percent of American adults now believe it will take at least three years for housing prices to recover. That figure includes 20 percent who think it will take three years and 51 percent who expect it will take even longer.

In October, Rasmussen reported that homeowners were slightly less pessimistic about the short-term and long-term value of their homes than they had been in recent months but were still less confident than they were two years ago. The October 18 Rasmussen Reports national telephone survey of U.S. homeowners found that just 16 percent believe their home’s value will go up over the next year. That’s up slightly from 13 percent in September and August and is the highest level of confidence since June. Still, this finding was above 20 percent for much of 2009.

The latest Fannie Mae consumer survey also found that consumer expectations for a near term housing recovery continue be bleak. Just 19 percent of respondents expect home prices to increase over the next 12 months , while 23 percent say they expect home prices to decline (down by 2 percentage points since last month). Fifty-five percent say prices will stay the same, tying the all-time high number set last month.

Compared to consumers, experts are even more pessimistic. The most recent MacroMarkets home price expectations survey of 111 housing economists and experts found that experts believe home prices will grow at a mere 1.1 percent nominal average annual rate through 2015, far from what is needed to regain the value lost since prices peaked in 2006 or even to return to the pre-boom annual growth rate of 3.6 percent.

The increased consumer pessimism over housing comes as consumer sentiment about the economy as a whole is improving. Consumer sentiment rebounded in November from a 2-1/2-year low last month and U.S. retailers reported strong sales as the holiday shopping season got off to a positive start last week.

The Conference Board’s index of consumer attitudes jumped to 56.0 in November from 40.9 in October, hitting the highest level since July and handily topping economists’ forecasts for 44.0. However, the confidence index remains historically low and is well below its most recent high of 72.0 in February.

Just in time for the Halloween season, that’s the frightening takeaway from the latest Fannie Mae National Housing Survey, which offered few glimmers of hope and some scary realities for the housing industry.

Some highlights…or low lights:

• Only one out of three consumers think that mortgage rates will go up in the next 12 months (down 12 percentage points since August).

• For the fourth month in a row, Americans expect home prices to decline over the next year. On average, Americans expect home prices to go down by 1.1 percent, the highest expected decline to date.

• Only 18 percent of respondents expect home prices to increase over the next 12 months (the lowest reported number to date in the National Housing Survey), while 25 percent say they expect home prices to decline (down by 2 percentage points since August).

• While 68 percent of Americans say it is a good time to buy a home (down 1 percentage point since last month), only 10 percent of those polled say it is a good time to sell one’s home (up by 1 percentage point since August).

• On average, Americans expect home rental prices to go up by 3.3 percent over the next year, down slightly from the expected increase of 3.5 percent observed in August.

• Despite continued consumer caution about taking on a large financial obligation to buy a home, 63 percent say they would buy their next home if they were going to move (up by 1 percentage point since August), while 32 percent of Americans say they would rent their next home (down 2 percentage points since last month).

“The September survey showed a marked deterioration in consumer expectations of home prices over the next year-their weakest outlook since monthly tracking began in June 2010,” said Doug Duncan, vice president and chief economist of Fannie Mae. “Despite a decline in negative economic headlines during September - in contrast to their ubiquity during the debt ceiling debate in August - consumers continue to demonstrate very negative attitudes. At the same time, the share of consumers expecting mortgage rates to go up dropped sharply to the lowest level we have recorded, likely influenced by the news that the Federal Reserve will attempt to keep interest rates low for years to come.”

“The lack of a sense of urgency to buy homes, given expectations for further declines in home prices and continued low mortgage rates, coupled with general pessimism regarding their own personal finances and the economy, bodes poorly for the recovery of the housing market,” Duncan stated.

With 22.5 percent of all homeowners with a mortgage underwater, only 68 percent of homeowners of all ages are still relying on their home’s value is important to their retirement plan, according to a new survey by Country Financial.

Only homeowners over 50, many of whom bought their homes before the housing boom, and those under 30 remain most confident that their homes’ values will play a very important or important role in their retirement.  Among those older than 50 who are approaching retirement, 71.7 percent see their homes’ value helping to pay for retirement.  Some 83 percent of young homeowners between 18 and 29 have hopes that the housing market will recover in time to help them in retirement, more than any other age group.

The survey also found that two out of three homeowners (68 percent) claim if they lost their job, they wouldn’t be able to make mortgage payments after nine months. That period is shorter than the current average unemployment length of nearly 10 months, according to the Bureau of Labor Statistics.

Last week CoreLogic reported that 10.9 million, or 22.5 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter of 2011, down very slightly from 22.7 percent in the first quarter. An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the second quarter. Together, negative equity and near-negative equity mortgages accounted for 27.5 percent of all residential properties with a mortgage nationwide. The new report also shows that nearly three-quarters of homeowners in negative equity situations are also paying higher, above-market interest on their mortgages. (See  Millions of Drowning Homeowners Pay Excessive Rates)

“The housing market decline and high unemployment has put a strain on everyone. Although there’s no quick fix, having a financial safety net can help. If possible, start an emergency fund to offset those unexpected life changes like unemployment,” says Keith Brannan, vice president of financial security planning. “If you’re concerned about your mortgage, seeking professional advice to reprioritize your income can help you protect your current possessions and budget for future expenses.”

The COUNTRY survey on home ownership is based on a national telephone survey of 2,264 homeowners and is compiled by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent research firm. The question as to whether owning a home was the best investment a family could make was asked of 3,000 adults. The margin of sampling error for that question is also approximately +/- 2 percentage points with a 95 percent level of confidence.

Overall satisfaction among home buyers averaged 797 on a 1,000-point scale in 2011-a decrease of six points from 2010. The decrease was primarily due to lower satisfaction with the agent/salesperson, which is the most influential aspect of buyer satisfaction with the real estate company. Agent/salesperson satisfaction averaged 814 in 2011, compared with 828 in 2010.

“Although the current real estate market-with the confluence of low home prices and historically low interest rates-creates the perception of a buyers’ market, there are still traditional barriers to purchase in place, which could be negatively affecting buyer satisfaction with their agent,” said Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates. “Agents who properly manage client expectations around the home buying process and communicate with clients about potential challenges-such as higher requirements for down payments, tighter loan standards and additional costs on top of the monthly mortgage-may be better able to keep clients satisfied.”

In the home-buyer segment, RE/MAX ranked highest with a score of 805. Following RE/MAX in the rankings were Coldwell Banker (802) and Better Homes & Gardens (801). Coldwell Banker performed particularly well in the agent/salesperson factor while Better Homes & Gardens performed well in the variety of additional services factor.

Among home sellers, satisfaction improved substantially to an average of 779 in 2011 from 742 in 2010. The greatest gain occurred in the marketing factor, which has increased by 62 points in 2011.

In 2011, the variety of additional services and office factors have increased in importance to overall satisfaction, while the importance of the agent/salesperson and marketing factors have declined. According to Howland, many real estate companies have made cutbacks in additional services and offices during recent years, and the increasing importance of these areas reflects that sellers may be missing these amenities, which provides an opportunity for companies to improve satisfaction.

Among home sellers, RE/MAX ranked highest with a score of 791 and performed particularly well in the agent/salesperson and office factors.  Following RE/MAX in the rankings were Prudential (786) and Century 21 (785). Century 21 performed particularly well in the variety of additional services factor.

The study findings also found

• Recommendations and referrals play a key role for both buyers and sellers in choosing an agent and real estate company. In 2011, six in 10 buyers and sellers say their agent asked for a referral or recommendation-up from 47 percent in 2010.
• The average number of homes that buyers were shown prior to making a purchase is 9.0 in 2011, down notably from 17.5 in 2010.
• The average number of home showings in 2011 is 8.6, on average, prior to sale, down considerably from an average of 12.1 showings in 2010.
• In 2011, just 58 percent of sellers indicate using a website listing to market their home, compared with 82 percent in 2010.

The index rose 14 percent year-over-year - and for the seventeenth straight month - to 98.0, the highest March number in the index aside from March 2006. Residential remodels in March were up month-over-month 2.9 points (3 percent) from the February value of 95.1, and up year-over-year 12.0 points from the March 2010 value of 86.0.

All regions except the Midwest posted year-over-year and month-over-month gains. The West posted the largest gains, up 18.5 points (22 percent) year-over-year and up 5.4 points (6 pecent) month-over-month. The Midwest saw significant drops, down 15.3 points (20 percent) year-over-year and 3.3 points (5 percent) month-over-month, perhaps due to a colder winter. The Northeast gained 2.7 points (4 percent) year-over-year and 4.5 points (8 percent) month-over-month, and the South improved 7.8 points (10 percent) year-over-year and 7 points (9 percent) month-over-month.

“The winter of 2010/2011 was one of the worst on record. The economy is continuing to struggle and gas prices have soared, however, consumers in March still continued spending on renovations and home improvements as they drove the remodeling industry to yet another month of solid gains compared to a year ago,” said Joe Emison, Vice President of Research and Development at BuildFax. “Significant improvements in the West continue to drive activity nationally to the best year in remodeling since 2006. Even though the Midwest saw a drop this winter, early data shows that remodeling in all regions will continue to prove out the economic recovery in 2011.”

BuildFax has created a proprietary property intelligence engine that contains building and permitting information from 4,000+ cities and counties throughout the country.  The BuildFax database currently covers over 60 percent of the U.S. commercial and residential building stock with 6 billion data points.

Homeowners who used a real estate professional to sell their homes reported a 50 percent better closing rate than those who went it alone, according to a new consumer survey by HomeGain.

Fifty-nine percent of home owners that used a real estate professional to sell their home were successful vs. 39 percent of for-sale-by-owners, reflecting a 50 percent higher closing rate for those home sellers using a professional.Eighty-one percent of homeowners that used a professional to try and sell their homes said they would use a professional again for their real estate needs.

HomeGain found that 17 percent of potential sellers would try to sell their homes on their own, a significantly higher number than the 9 percent market share for FSBOs reported in the National Association of Realtors’ 2010 Profile of Home Buyers and Sellers. 

FSBO rates as measured by the NAR Profile over the years has fallen from 14 percent of sales in 2003 to 9 percent last year.  However, the HomeGain data may not represent a rise in actual FSBO transactions.  The NAR study measures actual transactions after they close, while HomeGain surveyed the intentions of homeowners who had not yet put their homes on the market.

In fact, HomeGain found that 24 percent of FSBO sellers eventually enlisted the aid of a real estate professional to help sell their homes.   Only 71 percent of FSBO sellers who managed to sell their homes on their own said they would try and sell their home on their own again.

“It is especially striking that homeowners fare significantly better in selling their homes using a real estate professional than selling on their own.” said Louis Cammarosano, General Manager of HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”

Law experts believe LGBT who suffer discrimination may remain silent because they have little or no legal recourse in many local jurisdictions. While there is no national assessment of discrimination based on sexual orientation, a 2007 report by Michigan’s Fair Housing Centers disclosed nearly 30 percent of same-sex couples were treated differently when attempting to buy or rent a home.

Realtors applaud HUD’s move.  Sheila Bell, a Realtor in Cincinnati,  believes NAR played a pivotal role in HUD’s decision. “I don’t believe in coincidence, the timing is too close,” she said.  ”Empirical evidence and anecdotal proof notwithstanding, nobody can argue the supposition that there is discrimination on the basis of sexual orientation.”  Bell is president elect of the Real Estate Educators Assn. and has a 25-year track record working with civil rights in real estate.

“This is a fundamental issue of fairness,” said HUD Secretary Shaun Donovan.  “We have a responsibility to make certain that public programs are open to all Americans.  With this proposed rule, we will make clear that a person’s eligibility for federal housing programs is, and should be, based on their need and not on their sexual orientation or gender identity.”

HUD is seeking public comment on a number of proposed areas including:

• Prohibiting lenders from using sexual orientation or gender identity as a basis to determine a borrower’s eligibility for FHA-insured mortgage financing.  FHA’s current regulations provide that a mortgage lender’s determination of the adequacy of a borrower’s income “shall be made in a uniform manner without regard to” specified prohibited grounds.  The proposed rule would add actual or perceived sexual orientation and gender identity to the prohibited grounds to ensure FHA-approved lenders do not deny or otherwise alter the terms of mortgages on the basis of irrelevant criteria.
• Clarifying that all otherwise eligible families, regardless of marital status, sexual orientation, or gender identity, have the opportunity to participate in HUD programs.  In the majority of HUD’s rental and homeownership programs the term “family” already has a broad scope, and includes a single person and families with or without children.  HUD’s proposed rule clarifies that families, otherwise eligible for HUD programs, may not be excluded because one or more members of the family may be an LGBT individual, have an LGBT relationship, or be perceived to be such an individual or in such relationship.
• Prohibiting owners and operators of HUD-assisted housing, or housing whose financing is insured by HUD, from inquiring about the sexual orientation or gender identity of an applicant for, or occupant of, the dwelling, whether renter- or owner-occupied.  HUD is proposing to institute this policy in its rental assistance and homeownership programs, which include the Federal Housing Administration (FHA) mortgage insurance programs, community development programs, and public and assisted housing programs.

Anti-gay groups chimed in with dissent, tying pedophilia with homosexuality. American Family Association spokesman Bryan Fisher responded to the HUD proposal with a litany of charges:

There are two more reasons why this is a perfectly bad idea … One, many young boys living in HUD housing are already in troubled domestic situations, many with no father presence in the home. The last thing they need is suddenly to be living next door to two males modeling a sexually abnormal lifestyle. Role models matter immensely to young boys, and they don’t need any more adults around them setting bad examples. They’ve already been exposed to enough of that.

The last thing in the world young males in troubled home settings need is to be put in a situation where there is a heightened chance they will be sexually molested by their next door neighbors. These HUD housing projects will become hunting grounds with easy prey for homosexual pedophiles.

American Family Assn. appears on the Southern Poverty Law Center (SPLC) hate list. SPLC debunks 10 anti gay myths:

1. Homosexuals molest children at far higher rates than heterosexuals.
2. Same-sex parents harm children.
3. People become homosexual because they were sexually abused as children or there was a deficiency in sex-role modeling by their parents.
4. Homosexuals don’t live nearly as long as heterosexuals.
5. Homosexuals controlled the Nazi Party and helped to orchestrate the Holocaust.
6. Hate crime laws will lead to the jailing of pastors who criticize homosexuality and the legalization of practices like bestiality and necrophilia.
7. Allowing homosexuals to serve openly would damage the armed forces.
8. Homosexuals are more prone to be mentally ill and to abuse drugs and alcohol. (see also here and here)
9. No one is born a homosexual.
10. Gay people can choose to leave homosexuality.

View the proposed rule here.