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Friday, July 10, 2009
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11 comments:
RE: question about HAP from yesterday
The guidelines for HAP have been revised to also include:
Military personnel with PCS orders who are unable to sell their homes
Wounded warriors required to relocate for medical reasons, and
Surviving spouses of fallen service members
Who Is Now Eligible?
Permanent reassignment requires move of more than 50 miles.
Reassignment ordered between 1 February 2006 and 30 September 2012 (or earlier date designated by Secretary of Defense).
Property purchased (or contract to purchase signed) before 1 July 2006.
Property sold by owner between 1 July 2006 and 30 September 2012, or earlier date designated by Sec. Def.
Property was the primary residence of the owner
Owner has not previously received these benefit payments.
What Does This Mean?
Essentially the DoD will reimburse up to 95% of any loss on the sale of your home, provided the home was originally purchased before July 1, 2006. The DoD MAY also elect to purchase your home from you for up to 90% of it’s current value.
Unfortunately DoD has not yet released the detailed compensation guidelines, so they will not be approving any applications just yet. They are, however, recommending that any Military Personnel who may be eligible should submit their applications ASAP. Applications received now will be held until guidelines are released.
So basically, if you are active duty and bought before July 1 2006 and can only sell for a loss, the gov't will eat 90-95% of the loss. But there is no structure to the expanded program yet, so everyone is still in limbo.
I wonder if the program will be expanded? Our friends who PCSed here in 2007 bought for $429K, and their house is now worth just over $200K, due to falling values and some undisclosed, expensive structural issues. Will the gov't really say that everyone should have known there was a housing bubble as of July 1, 2006?
Geez, where is everyone ;) ?
Quick glances at PWC and my favorite zips for June:
Prices down about 16% from last year, sale activity dramatically (about 20%) down from last year, DOM down dramatically from last year (most places U/C in less than 30 days). Median sale price up very slightly from May ($195K, up from $190K).
So YOY price declines have decreased significantly, but as CRT has said several times, that had to happen this summer, after last summer's 50% YOY declines.
Something we all know: properties that are priced properly are going U/C quickly, and since more people are pricing properly and supply is down, the "Avg Sale Price as a
percentage of Avg List Price" is about 93% now, after dipping into the 80% zone the past couple of years.
Most significant? Obvious slowing of activity from May. Appraisal rules? Higher interest rates? Increasing unemployment? Seasonal slowdown (though I thought that took place later in the summer)? All of it together?
Tabitha,
Re: your military post
I think I would have to know a little more, specifically about former guidelines. Was there always a time limit? Is this a new policy or a continuation of an old policy?
My FIL would rent out their family home when called overseas in the 50's and 60's. There wasn't a thought of just selling it.
I did hear from a plumber that there were a number of speculators in the military. They thought buying would be best because of rising prices. They were afraid of being priced out if they rented. But I'm sure the rents won't cover the 2005-2006 mortgage as it would have back in the day.
Re: June sales
I thought they looked anemic last month and even soggier this month. They're not horrible, but there's been a pronounced slowdown in the number of sales in Price William, for example.
Re: Where everyone is. Probably hanging out with golf clubs or at the beach :-)
We don't often get September weather in July! The kids are off to the park and I'm going to the Expo Center for a curriculum fair.
Accidental landlords and shadow inventory? This house was listed almost 2 years ago and withdrawn without a sale. It's back, and I believe asking $50k more than it's final listing price last time.
Shamrock-
Yeah there are definitely a lot of accidental landlords. I was looking at renting a place on craigslist and I looked up info on a lot of the houses and over half of them were people that bought in 05-06.
As to the house you showed franklymls says that it is listed 20K cheaper than when they took it of the market a year ago. Either way it does give a little evidence of shadow inventory.
my best signal for shadow inventory is go look at
realtytrac, there are all sorts of NOD's thrown and
they sit there month after month never entering into the supply.
I think the banks are terrified to let these all out on the market at once at a market clearing price.
pat,
re: your shadow inventory.
What tier and areas do you think this represents? Did you see the wsj article yesterday? How do I get into one of those investor groups?
When I brought my kids to the pediatrician yesterday, he went on and on about his own accidental landlord situation. Seems he bought his new house in 2007 (knifecatcher on his own admission) without being able to sell his first house in Sterling, which he has rented since, but rent only covers interest ("that's OK, because my principal payments are just my money in the bank"), and the 2007 assessment of $489K is now $220K ("for a 4BR/3BA house!"). He wants capital gains taxes taken off home sales, and a federal law that requires everyone current on their mortgage to be offered a 30yr mortgage at 5% fixed for whatever their balance is now, to stay with the current servicer. Said he's writing to Congress.
My past two landlords were accidental. Both need to sell next spring to avoid capital gains (though I doubt there will be any). Both expect the market to have turned around spectacularly. And another house that tried to sell on my old culdesac when the owners bought a new house before selling their old one had renters, who are now gone, so the house is for rent again, and I take some delight in the situation, because the owners were mean middle-aged folks who loved their lawn more than anything and hated my kids for existing at all.
Tabitha: Thank you for the info on HAP. This particular condo has 4 above price offers on it (the list price was what the buyers paid for it with a VA loan in 2006), so I am not going to submit an offer. It is a very good building, so I knew it was a longshot to get it even at list. However, I may see HAP again in my buys, so it is good to have more insight. By the time I see another property using HAP, there may be more market experience with timing.
Tabitha,
He wants capital gains taxes taken off home sales, and a federal law that requires everyone current on their mortgage to be offered a 30yr mortgage at 5% fixed for whatever their balance is now, to stay with the current servicer. Said he's writing to Congress.
Ask your pediatrician if he would be okay with Congress offering everyone a Medicare type plan. If he said he did not think Congress should force doctors to take the smaller reimbursements they get from Medicare as opposed to private insurers then ask him why he thinks Congress should force banks to accept a less profitable mortgage contract.
I don't know if anyone already posted this but it is worth a look:
Motley Fool "The New Subprime"
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