Interesting article on Boston.com reporting that in Massachusetts the average single family home price is almost 10% (9.6%) to $285,000.  Sales volume in Massachusetts is up 11.6%.

Timothy M. Warren Jr., chief executive of the Warren Group had this to say:

“We had surprising gains in January, and that’s good news for the economy and that’s good news for the housing market.  The real wild card is what will happen after mid-year.’’

Some believe the increase in pricing and volume is happening because of the tax credit that will be ending in April, as well as the artificially low interested rates.

Economic analyst will wait until at least midyear to make a more accurate assessment on the market.  Just last week the Fed raised the discounted interest rate from .5% to .75% which was shocking to some, but believed by many to be a step towards normalcy.

What do you think?

Its not all bad news out there……

“Sure, there was a lot of sound (the housing bubble grows) and fury (the bubble pops) in the last decade.  But numbers released this morning show that home prices rose by 46% between January 2000 and December 2009.  That’s way above the rate of inflation.  So odds are if you bought a house at the beginning of the decade and sold it at the end of the decade, you made money.  That’s a big deal, given how many people (who don’t wind up as anecdotes in news stories) buy a house and live in it for 10, or 20, or 30 years. ”

http://www.npr.org/blogs/money/2010/02/house_prices_rose_50_in_the_au.html?ft=1&f=93559255

This week (ending Jan 22nd) the average 30-year fixed-rate mortgage dropped to 4.99% from last week when it was at 5.06%.  30-year fixed-rate mortgages at the same time last year were 5.12%.  This is great news for potential home buyers as this 3 week in a row drop is great when paired with the Tax Credit for new home buyers that is being offered until April of 2010.

Today Barney Frank said he looks to abolish Fannie Mae and Freddie Mac saying, “The remedy here is, as I think the committee will be recommending, abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance,” said Frank, chairman of the House Financial Services Committee. “That’s the approach, rather than the piecemeal one.”

Frank, along with the rest of The Financial Services Committee, is just starting its work on the issue and plans to move slowly. The committee’s first step is to talk to groups like the Center for American Progress and the National Association of Realtors, both who have prepared documents with reccomendations for the overhaul.

David Min, an associate director for the Center for American Progress, said that whatever new structure the mortgage lenders would take, any entities receiving government backing would need to be more heavily regulated to limit risk, with greater product restrictions on mortgage-backed securities and higher capital than what Fannie and Freddie had. The Center argues that reforms should apply to both public and private markets.

You can read more on Boston.com:  Barney Frank to Abolish Fannie Mae and Freddie Mac

With home sales slowing down and with internet sales rising, it only makes sense to combine the two. Countdowntobuy.com has created and innovative way to hopefully move foreclosed homes.

The idea is relatively simply. To give the banks a fair shake the price is set just above the assessed value for 10 days, and then drops a percentage point everyday for the next 30 days.

Example:

A foreclosed home worth $500,000 goes on Countdowntobuy.com for $550,000 and it sits for 10 days. On the 11th day the price will drop 1 percentage point (of the $500,000 Estimated Market Value) to $500,000, then to $450,000, $400,000 and so on until either the 30 days expires, or a bid is higher than the days value.

Users will bid what they believe the home is worth. You can see how many bids there are, as well as a great deal of information regarding the property, but not the value of the bids.

Confused much?  Don’t worry, I was at first as well.  To us, this seems very much like Ebay, for foreclosures, just backwards.  I know that likely does not help with your

The Obama administration has embarked on a campaign to pressure mortgage companies to lower loan payments.  There are growing concerns that a $75 billon tax payer funded effort, coined Making Home Affordable, to help alleviate growing mortgage payments seems to be falling short of expectations.

Originally 3-4 million home owners were expected to be saved from foreclosure.  Edward Pinto, a consultant to the real estate finance industry who previously served as the chief credit officer for Fannie Mae says, “they’re going to be lucky if they save 1 or 1 1/2 million.”

The biggest problem with the effort seems to be the speed at which mortgage firms are making the permanent changes to loan payments.  Less than 1% of the loan modifications under Making Home Affordable have made permanent changes to the mortgages.  It is believed that the efforts under Making Home affordable are now fighting the mortgage bubble problem that was a bigger concern last year.

Many within the industry agree that many of the mortgage firms are moving slowly to change mortage loan payments as they collect lucrative fees on long term delinquency, which lowers the incentive to restructure mortgages and make payments affordable for homeowners.

Read more about the Making Home Affordable plan.

From Boston.com:

It seems the good news for first-time home buyers continues.  The Obama Administration has unveiled a plan that will help local agencies finance mortgages for first-time home buyers.

So far this year local agencies have sold about $4 billion in tax-exempt bonds which are used to finance such mortgages.  This is only 25% of what is typically sold per year.

Fannie Mae and Freddie will packages mortgages together from theses agencies and sell them as bonds to the Treasury Department.  One very important piece of this plan is that the assumed cost to the government will be zero, as any losses will be paid for by fees to the local agencies.

Although agencies only aid between 100,000 and 200,000 first time home buyers a year, every little bit helps.

Read the entire Article Here

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