No one is believing in the “recovery”. This will impact housing sales.
By Alex Kowalski – Aug 23, 2012 6:45 AM PTConsumer Comfort in U.S. Slumps to Lowest Level Since January
Aug. 23 (Bloomberg) — Neil MacKinnon, global macro strategist at VTB Capital, discusses the global economy and investor sentiment. He talks with Guy Johnson on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)
Higher gasoline prices are taking a bigger chunk out of Americans’ paychecks, and an increase in food prices caused by a drought in parts of the country may further hurt finances. In addition, job growth hasn’t proceeded fast enough to bring theunemployment rate below 8 percent, indicating incomes may fail to keep pace with escalating expenses.
“Rising food and gas prices have stoked a bout of discomfort among a broad section of the American public,” saidJoseph Brusuelas, a senior economist at Bloomberg LP in New York. “The pain has been especially evident down the income ladder in households that will bear the disproportionate burden of adjustment to higher prices. The result will likely be a net slowing in discretionary spending.”
Readings below minus 40 put the comfort gauge “in the zone associated with deep economic discontent,” according to Gary Langer, president of New York-based Langer Research Associates, which compiles the index for Bloomberg. The index has lost 16 points since peaking this year in April.
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Proprietary OC Housing News home purchase analysis
5821 WALNUT CREEK Rd Yorba Linda, CA 92886
$550,000 …….. Asking Price
$550,000 ………. Purchase Price
8/24/2012 ………. Purchase Date
$0 ………. Gross Gain (Loss)
($44,000) ………… Commissions and Costs at 8%
============================================
($44,000) ………. Net Gain (Loss)
============================================
0.0% ………. Gross Percent Change
-8.0% ………. Net Percent Change
0.0% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$550,000 …….. Asking Price
$110,000 ………… 20% Down Conventional
3.60% …………. Mortgage Interest Rate
30 ……………… Number of Years
$440,000 …….. Mortgage
$101,211 ………. Income Requirement
$2,000 ………… Monthly Mortgage Payment
$477 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$138 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$2,615 ………. Monthly Cash Outlays
($314) ………. Tax Savings
($680) ………. Equity Hidden in Payment
$128 ………….. Lost Income to Down Payment
$158 ………….. Maintenance and Replacement Reserves
============================================
$1,906 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$7,000 ………… Furnishing and Move In at 1% + $1,500
$7,000 ………… Closing Costs at 1% + $1,500
$4,400 ………… Interest Points
$110,000 ………… Down Payment
============================================
$128,400 ………. Total Cash Costs
$29,200 ………. Emergency Cash Reserves
============================================
$157,600 ………. Total Savings Needed
The property above is available for sale on the MLS.
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Cost of Ownership Analysis
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$698,500 20301 VIA OPORTO |
0.42 miles 3 bd / 2.5 ba 1,850 Sq. Ft. |
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$560,000 19711 RIDGEWOOD Pl |
0.43 miles 4 bd / 2.5 ba 2,200 Sq. Ft. |
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$699,950 5363 VIA MORENA |
0.51 miles 3 bd / 3 ba 2,050 Sq. Ft. |
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$740,000 5445 VIA RENE |
0.52 miles 3 bd / 2.75 ba 2,050 Sq. Ft. |
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$639,000 5292 LYNRIDGE Dr |
0.6 miles 4 bd / 2.5 ba 2,134 Sq. Ft. |
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$719,900 20633 CIRCULO Vis |
0.76 miles 3 bd / 2 ba 1,633 Sq. Ft. |
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$680,000 20766 COTTONWOOD Rd |
1.01 miles 4 bd / 3 ba 2,238 Sq. Ft. |
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$845,000 5132 OHIO St |
1.14 miles 3 bd / 1.75 ba 2,157 Sq. Ft. |
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$785,000 5530 PASEO TORTUGA |
1.14 miles 4 bd / 2 ba 2,104 Sq. Ft. |
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$499,900 5841 VIA SANTANA |
1.17 miles 3 bd / 2 ba 1,573 Sq. Ft. |
Once banks stopped foreclosing, everyone in Florida stopped paying.
Does Florida Have A ‘Culture Of Delinquency’?
Not all of the “sand states” are equal when it comes to the share of borrowers who are behind on their mortgage loans.
A new report out Thursday from real estate services provider Zillow found that while Florida is not the worst state for negative equity, the Sunshine State’s borrowers have disproportionately high delinquency rates on their loans.
In Miami-Ft. Lauderdale, 43.7% of borrowers are underwater, while 24.9% of them have missed at least three months of payments. In Tampa, where 46.6% are underwater, 17.6% haven’t made payments for three months. In Orlando, it’s 51.9% underwater and 18.2% delinquent.
Compare that with Phoenix, where 51.6% of borrowers are underwater, but only 8% are seriously delinquent, or Atlanta, where 54.4% are underwater, but only 7.8% are seriously delinquent. Even lowly Las Vegas, where a whopping 68.5% of borrowers owe more than their home is worth, only 13.6% are 90-days delinquent. (Zillow’s delinquency figures — which come from credit rating firm TransUnion – jibe with the Mortgage Bankers Association’s figures.) So what is it about Florida? Why are so many more of the state’s borrowers delinquent on their home loans when fewer of them are underwater?
Part of the answer could lie in foreclosure timelines. Florida is the only one of the four notorious “sand states” (the others are California, Nevada and Arizona) that has an exclusively court-based foreclosure process, and the state’s courts have been jammed with thousands of cases. As a result, the foreclosure process is taking longer than ever – an average of 861 days in April – from start to finish.
So even if Florida has a similar rate of default to that of most other states, defaulters stay delinquent longer, so at any given time, there are more of them.
“There are a lot of people hanging out in that pipeline,” says Stan Humphries, Zillow’s chief economist.
Borrowers could also be encouraged to default by others whom defaulting has benefited – if you can live two and a half years rent-free, before they kick you out, why not, right?
“If you’ve been around people who’ve defaulted, you’re much more likely to default yourself,” Mr. Humphires said.
The report contained some good news overall: The number of underwater homeowners fell to 15.3 million, or 30.9% of U.S. homeowners with a mortgage, from 15.7 million, or 31.4%, in the first quarter of the year. That means 400,000 fewer people owe more than the value of their homes.
That’s great news for those homeowners whose household balance sheets are on the mend. It means they will likely have better access to credit (you can’t take out a home equity loan if you don’t have any equity), and multiple studies have found that underwater mortgages are a leading cause of strategic default, which is generally bad for communities.