In June, first-timers also accounted for 31 percent. The lowest level ever recorded in the three and a half year old survey of Realtoers was below 30 percent in March 2010.

Realtors participating in the survey blamed stringent credit requirements by lenders who have still not recovered from the Great Recession.

Nearlhy half of December sales went to repeat buyers, 21 percent went to investors, 13 percent to second home buyers, 24 percent were relocation sales and 2 percent went to foreign buyers.

NAR also released projections of 2012 existing home sales at 4.62 million, a 6.3 percent increase over 2011 and median prices at $167,300, a .7 percent rise over 2011.

In some markets with high foreclosure saturation rates, foreclosure inventories will cause temporarily price swings as inventories rise and fall, but even in these cities, in the long run, local economies will be the key.

That’s how Ingo Winzer sees the year ahead. In 1990 Winzer created Local Market Monitor because there wasn’t anything like it and developed of the National Review of Real Estate Markets, which analyzed conditions in 100 US Markets using such economic data as home values, employment growth, and population growth. More recently he created Equilibrium Home Prices, which have proved valuable in assessing real estate market risk during the last two economic cycles. He’s more interested in what makes local markets tick than broad national forecasts that may be irrelevant to local professionals, consumers and investors.

“The evidence is now pretty clear that a sustained economic recovery is underway, although housing markets won’t feel much benefit until next year. Consumers are in no particular hurry to buy a house because they don’t see home prices going up. Homeowners - as opposed to investors - would rather wait to pay a higher price than admit to their friends that they bought too soon. NO market has yet seen an increase in prices,” Winzer said in his January economic outlook.

“Local price increases of 6 percent are going to be difficult, but 3 to 4 percent are more likely. Some markets, like Atlanta, that are struggling with employment are going to have a hard time while others will do markedly better,” he told Real Estate Economy Watch.

Local Market Monitor is popular with investors who rent out their holdings because of its local data and forecasts on rents. Noting that more people today want to rent than buy, Winzer believes that many retirement and second home markets that have been flooded with foreclosures are going to take a long time–ten years or more-for prices to recover.

“In other markets where investors are active like Miami it’s not so bad because there is great demand,” he said.

Housing markets are going to continue to improve with job growth, even at just 2 percent a year, and economic growth will determine rental increases as well as home values. Overall rents are going to reflect population flows. “In a recession people tend to sit still. When things pick up, people are more willing to move to where there are jobs,” he said.

For long term investors, however, projecting rental cash flow ten or twenty years down the road is difficult even at the local level because of the sensitivity of rents to local economic conditions.

“My advice to the long term investor is to reduce risk by buying a more expensive property in a desirable neighborhood where you will be able to charge a premium rent. In lower cost properties, rents may become comparable to the monthly costs of owning a home. Renters in a lower cost property are more likely to buy than those in a higher cost property,” he advised.

Even though 60 day delinquencies ended the month of November 25 percent lower than a year ago, the 18 month trend toward fewer delinquencies ended as homeowners continued to struggle with their finances, according to Lender Processing Services, Inc.

At the same time, new problem loans - those loans seriously delinquent as of the end of November that were current six months prior - have not improved significantly in the last year. As a result, inventories of troubled loans remain significantly higher than pre-crisis levels across the board.

The November mortgage performance data also showed both new and repeat foreclosure starts dropped sharply in November, down nearly 30 percent from the month prior. As late-stage delinquencies in the pipeline still number close to 2 million, the sharp drop is more indicative of the impact of ongoing document reviews, additional state legislation and new regulatory requirements rather than a shift in trend.

The national delinquency rate rose 2.7 percent in November to 8.15 percent. States with highest percentage of non-current* loans: FL, MS, NV, NJ, IL States with the lowest percentage of non-current* loans: ND, AK, WY, SD, MT

The Institute for Luxury Home Marketing reported this week that homes in its market profile are how spending an average of 231 days on market and luxury properties in all markets it tracks were averaging 215 days on market at the end of the year, a year-long high.

The ILHM Luxury Composite Price this week is $1,088,665. Total inventory hit its year-long low at 24,000 properties at the end of the year. The national inventory of all homes for sale in November was 2,580,000, according to the National Association of Realtors, the lowest level of the year.

Markets where luxury homes are taking longer to sell than the national media are: Chicago (288 days); Detroit (260 days); Miami (303 days); New York (262 days); Phoenix (261 days); and Raleigh-Durham (243 days).

Home prices have declined steadily over the past three months and now trail last year by 3.9 percent, according to the latest CoreLogic Home Price Index.

This follows a decline of 3.8 percent in September 2011 compared to September 2010. Excluding distressed sales, year-over-year prices declined by 0.5 percent in October 2011 compared to October 2010 and by 2.1 percent in September 2011 compared to September 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“Home prices continue to decline in response to the weak demand for housing. While many housing statistics are basically moving sideways, prices continue to correct for a supply and demand imbalance. Looking forward, our forecasts indicate flat growth through 2013,” said Mark Fleming, chief economist for CoreLogic.

• Including distressed sales, the five states with the highest appreciation were: West Virginia (+4.8 percent), South Dakota (+3.1 percent), New York (+3.0 percent), District of Columbia (+2.4 percent) and Alaska (+2.1 percent).

• Including distressed sales, the five states with the greatest depreciation were: Nevada (-12.1 percent), Illinois (-9.4 percent), Arizona (-8.1 percent), Minnesota (-7.9 percent) and Georgia (-7.3 percent).

• Excluding distressed sales, the five states with the highest appreciation were: South Carolina (+4.6 percent), Maine (+3.1 percent), New York (+3.1 percent), Alaska (+2.9 percent) and Kansas (+2.8 percent).

• Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-8.8 percent), Arizona (-7.0 percent), Minnesota (-5.7 percent), Delaware (-3.9 percent) and Georgia (-3.6 percent).

• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to October 2011) was -32.0 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -22.4 percent.

• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 78 are showing year-over-year declines in October, two fewer than in September.

The positive news is the job creation in Texas and Austin.  Looking at August 2011, 94 percent of the total jobs shed by employers during Texas’ shorter recession have already been recovered as our economy has rebounded more quickly than the U.S. as a whole. Nationally, only 22 percent of recession-hit jobs have been recovered.  Local employers expect to hire at a healthy pace during Quarter 4 2011, according to the Manpower Employment Outlook Survey.  Among survey participants, the Austin-Round Rock, TX MSA employment outlook is the fifth best in the nation.  From October to December, 19% of the companies interviewed plan to hire more employees, while 8% expects to reduce staff. Another 71% expect to maintain their current workforce levels and 2% are not certain of their hiring plans.

Residentially, we are still slow, but better than last year. Over 17,000 single family resale homes have been sold Year to date according to MLS.  However presently there is just over 9789 listings, or 43% of what has already been sold.  Or another way to look at it, would be if no more homes were listed, at current absorptions you would go through remaining listing in just over 6 months.  This represents a very balanced resale market locally.  Should the market pick up slightly, we will see values increase.

Speaking of values, as a market we continue to see the Austin market appreciate very slowly, 1.5% to 2% annually.  The good news is that Austin turned positive last spring.  Houston this spring.  Barring a catastrophic event, with a tightening of the market values should continue to increase.

Residential rentals and construction continues to be a bright spot in Austin with continued improvement in rent, which should continue with a limited number of units coming on line this year and 2012.   Realize that this rental market is over 96% (considered at full occupancy in most markets, because of the constant turnover in rentals.) Builders will bring 250 units online this year, down from 2,860 apartments in 2010. Compared to the 9,000+ units that allowed a construction bump in 2009.  With limited Real estate funding, progress for projects has been sluggish through 2011, but renovations and demand-driven supply will pick up beyond 2011 / 12.  Asking rents are forecast to continue to climb.

Office space in Austin will continue to strengthen over the remainder of 2011 as a significant increase in employment is met with limited new construction. Employers in most sectors expanded staff levels in the first six months of the year, recouping all of the jobs lost during the recession and contributing to positive absorption during this year. Several companies l continue to expand in the second half of this year, generating additional office-space demand. Electronic Arts, for instance, will add 300 spots to its EA Sports division near the Domain, while Progressive Insurance swells operations by 100 positions in the third quarter. BazaarVoice continues to increase their staff by 250+ this year.    As in all real estate, Office building construction has slowed.  However, remodeling of existing space continues to be a strong point of this market, particularly in your ‘core’ properties.

Lack of funding, therefore building and the Austin entitlement process will continue to influence the amount of properties being permitted and built.  As a result, occupancy is projected to improve to over 80 percent by year end for the first time since 2009. The rapid economic recovery continues to generate interest in Austin office properties from local and out-of-state investors. Local buyers remain focused on finding distressed properties. Their biggest hurdle seems to be the resurgence of the market, causing ‘reluctant sellers’ that are willing to offer at discounts from prices recorded a few years ago. Again ‘core’ properties are what the quality equity and institutions are targeting. ‘B’ and ‘C’ properties, however, have traded less frequently due to a gap between buyers’ and sellers’ expectations stemming from still-high overall vacancy. Smaller properties in locations west of Interstate 35, where numerous employment hubs and desirable residential neighborhoods exist, have been the first of these assets to change hands.

Austin continues to be a tight market due to lack of real estate financing by equity or banks.  Demand continues to be strong across most Real Estate channels in Austin.  While it has improved dramatically in the rest of the state, I am not aware of another market that is as tight as we are presently.  Investors realize it, Banks realize it, and the consumer has got to realize that they have “limited opportunity in this market’.

That’s how Altos Research sees the current market picture and the bottom line is buyers are sellers are in for a constant state of flux and volatility. The rules of yesterday’s market no longer apply.

In its third Mid-Cities Report, Altos reports prices increased in 14 of the 20 markets, and inventory also increased in 12 of the 20 markets.  The list of markets with price and  inventory increases has been in flux for the past three months.

The Altos 20-City Composite National Report showed signs of a slowing market a few weeks ago. The summer price bump is over and both prices and inventory are declining at the seven-day level. The next few weeks will set the stage for a long, cold winter. There’s nothing on the immediate horizon with employment or the economy that suggests a spike in fall or winter housing market activity, Altos said.

The median price was $256,120 in July, up $7 from $256,113 in June. For comparison, the Altos national composite median price was down 0.16 percent in July, from $450,894 to $450,176. The leaders in the three-month price increases are Boulder (8.23 percent), San Antonio (4.43 percent), and Boise (3.11 percent). Only two markets had decreasing prices over three months. Naples (-2.73 percent) and Dover (-1.25 percent). Boulder had the largest one-month increase in median price, with a 3.67 percent increase.

The largest one-month increase in inventory was Boulder, with a 3.26 percent increase.  The largest one-month decrease in inventory was Naples, with a 5.32 percent decrease. Naples also had the largest three-month decrease in inventory (-10.95 percent).  Eight of the 20 markets reported a decrease in inventory and six of the 20 markets reported a decrease in median prices.  The 7-day numbers have been declining and 90-day averages in the mid-cities composite are flattening for median prices and inventory.

RE/MAX reported that after rising for two straight months, home sales fell 12.7 percent in July when compared with sales in June, following a traditional summer trend.

However, for the first time in six months, sales were higher than one year ago, up an impressive 13.1 percent from July 2010 when sales plunged following the expiration of the homebuyer tax credits.

The July 2011 RE/MAX National Housing Report, which surveyed 53 U.S. metropolitan areas, shows signs of a continuing, but uneven, recovery in the housing market.   RE/MAX blamed appraisals and lenders for the decline, noting that many lenders are already using the lower GSE and FHA loan limits set to take effect on September 30.

“The fact that July home sales were higher than a year ago, and by such a significant amount, gives us reason for great optimism,” said Margaret Kelly, CEO of RE/MAX, LLC.  “And now that prices have risen for four of the past five months, the housing market is beginning to show definite signs of recovery.”

In the last 12 months, only January and July had Home Sales higher than the previous year.  January was up fractionally and July was up a solid 13.1% from July 2010.  Both investors and traditional home buyers became a little more skittish about the economy in July, perhaps due to the Debt Ceiling debate.  Traditionally, June sales are the highest of the year, with a slight drop in July.  Overall, sales were 12.7% lower in July than in June. However, 45 metro areas experienced more sales than in July of last year.  Some of those leading their 2010 sales numbers include:  Des Moines, IA +49.9 percent, Omaha, NE +46.8 percent,  Milwaukee, WI  +37.7 percent,  Providence, RI +32.4 percent and Wichita, KS +29.0 percent.

The July 2011 RE/MAX National Housing Report shows that Home Prices in July were just 0.18 percent lower than in June, while the year-over-year decrease of 4.6% is the smallest the survey has recorded in 6 months.  On a monthly basis, prices have now risen for four of the past five months.  There were 11 metro areas that recorded higher prices in July than in the same month last year, most notably:  Detroit +14.3 percent, Birmingham, AL +9.8 percent, Des Moines, IA +7.7 percent, Orlando, FL +5.5 percent and Pittsburgh, PA +4.4 percent.

The average Days on Market for homes sold in July was 88, down just two days from the June level. July marks the first month since September 2010 that the Days on Market figure has been below 90. The July average is identical to September 2010, when the average Days on Market was also 88. Days on Market is the average number of days from listing to receipt of a signed contract.

Perhaps due to fewer foreclosure properties coming on the market, the 53 metro areas surveyed in the July 2011 RE/MAX National Housing Report had an average Months Supply of Inventory of 7.2, which is up slightly from the 6.9 mark registered in June, but down significantly from the 9.3 mark seen in July 2010. Overall inventory continued a 13-month trend to lower levels. Inventories were 5.3% lower in July from June, and down 17.1 percent from July 2010.  The Florida markets continue to see the largest annual drop in inventory: Miami, FL -52.5%, Tampa, FL -37.3 percent, Phoenix, AZ -35.6 percent, Los Angeles, CA -32.4 percent and  Chicago, IL -26.9 percent.

“We want homeowners to be able to understand their options when facing foreclosure, and we want servicers to reach homeowners early in the process, communicate frequently and clearly, and help homeowners avoid foreclosure.” said Jeff Hayward, Senior Vice President of Fannie Mae’s National Servicing Organization.

These standards require servicers to implement consistent processes across a number of areas, and hold them accountable if they do not.

Borrower Contact. Under the new standards, servicers must achieve “quality right party contact” with borrowers. This includes building a strong customer-service relationship with homeowners, determining the reasons for their delinquency, assessing their ability to pay, and educating homeowners on the availability of foreclosure prevention options.  Fannie Mae’s borrower contact standards will increase servicer effectiveness in reaching homeowners, bring greater consistency and clarity to servicer communications with homeowners, and increase the likelihood that servicers will contact homeowners early in the default process, which is one of the most important factors in reaching a resolution that avoids a foreclosure. During the first 120 days of delinquency, homeowners will be contacted both verbally and in writing to complete a mortgage modification or other solution to remain in the home, or enter into an arrangement to exit the home without a foreclosure.

Foreclosure Timelines. Servicers must follow clear timelines for referring loans to foreclosure, setting a date of sale for foreclosed properties, and use of designated counsel, and they will face compensatory fees for timeline violations.  These standards will bring greater consistency, fairness, and efficiency to a process that has too often been characterized by inconsistency, abuse, and delay - to the detriment of mortgage investors, homeowners, and communities alike.  Once 120 days of delinquency have passed, the foreclosure process will begin.

“We hope this step will encourage any homeowner who has not yet acted to work with the servicer to pursue all options to avoid foreclosure,” said Hayward. “But even in situations where foreclosure can’t be avoided, we believe this process and this timetable will help motivate all participants toward resolutions that will ultimately stabilize neighborhoods as quickly as possible.”

Incentives and Compensatory Fees. Fannie Mae will provide incentives for servicers to complete loan workouts earlier in a homeowner’s delinquency, and charge compensatory fees when servicers fail to make quality right party contact.  Incentives and fees will be based on clear benchmarks.  These steps are intended to help improve servicer performance and hold servicers accountable for their effectiveness in assisting homeowners. Compensatory fees remain a possibility for servicers who do not process foreclosures in a timely manner.

Between January 1, 2009 and March 31, 2011, Fannie Mae helped over 500,000 struggling homeowners avoid foreclosure.  Implementation of the new servicing standards will speed further progress and ensure greater clarity for servicers on how to work with homeowners.

While slashing funds for disability, elderly, homelessness and Native American housing programs, Congress has doubled the funding for a USDA housing program that may cost the government $4 billion in defaulting loans because over a third of the government-guaranteed rural home loans in its portfolio may be ineligible for the program.

On April 15, President signed into law the continuing resolution to fund the government that, despite concern over the deficit, included increased funding for the USDA’s Rural Development Service’s Section 502 single family guaranteed loan program from $12 to $24 billion annually for the current year as well as the next Federal fiscal year.   

In January, an inspector general’s report discovered that the government may have given out more than $4 billion in stimulus housing loans to ineligible borrowers.  An IG’s audit found that among 100 randomly selected government-guaranteed rural home loans across the country, 28 loans lenders had not fully complied with federal regulations in determining borrower eligibility.

The audit report found borrowers with annual income over the program’s limits, borrowers with questionable ability to repay the loan, borrowers who didn’t need the government loan guarantee and borrowers who purchased homes with swimming pools, which is strictly prohibited by the program’s rules. Some borrowers had debt-to-income ratios that were too high because lenders accepted unstable or inconsistent earnings or used only recent earnings. Several borrowers were, or had been, delinquent on their loans. One was over 180 days delinquent. Another had defaulted and the lender had filed a loss claim.  USDA officials agreed that 10 of the 28 borrowers were ineligible.

Although the auditors looked at only a tiny sample of the 133,053 loan guarantees made in 2009, they estimated that tens of thousands might have been done improperly and warned that a wave of defaults might be looming.

Analysts said the problems echoed those exposed earlier in the mortgage crisis, with banks seemingly eager to collect fees for loans in which they retained little or no risk.  The findings of the audit have raised concerns that the program, which features 90 percent government guarantees, could lead to widespread defaults.

“In a couple years, when these loans are going bad, everybody’s going to say, ‘Oh me, oh my, how did this happen?’ ” Christopher Whalen, managing director of Institutional Risk Analytics, a bank rating and consulting firm, told the New York Times. “There’s no surprises here.”

 Founded in 1949 to spur home sales and development in rural areas, the US Department of Agriculture’s popular direct and guaranteed rural housing loans today are one of the few places in America you can get a mortgage with no money down at competitive rates.   

Borrowers don’t have to be lower income; in fact they can make slightly more than the median.  Nor do they have to buy in rural area.  They can live relatively close to a major urban area like Loudon County, VA, Half Moon Bay, CA or parts of Westchester County, NY.  Or, in a popular resort community like Naples, FL, Aspen or Vail, CO, or Cape Cod, MA.  To qualify for the government guaranteed loans, borrowers can earn up to 115 percent of the median income for the area.

In recent years, Congress has rushed through legislation to increase funding for the program when it has run out of money part way through the year.

The value of USDA-backed loans has soared, from $3.7 billion in 2007 to about $16.8 billion last year. 

With strong support among both housing and farm state interests, the 100 percent increase in the troubled USDA program sailed through untouched even as other housing programs, including support for low income disabled and elderly renters and grants for Native American housing, homeless assistance and public housing were cut in the final congressional negotiations.  A companion direct loan program, which is limited to lower income home buyers, was not increased.