When It Takes a Miracle
To Sell Your House
Owners, Realtors Bury Statues
Of St. Joseph to Attract Buyers;
Don't Forget to Dig Him Up
By SARA SCHAEFER MUÑOZ
October 30, 2007
Cari Luna is Jewish by heritage and Buddhist by religion. She meditates regularly. Yet when she and her husband put their Brooklyn, N.Y., house on the market this year and offers kept falling through, Ms. Luna turned to an unlikely source for help: St. Joseph.
Some choose to bury St. Joseph upside down.
The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Ms. Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph "real estate kit" online and buried the three-inch white statue in her yard.
"I wasn't sure if it would be disrespectful for me, a Jewish Buddhist, to co-opt this saint for my real-estate purposes," says Ms. Luna, a writer. She figured, "Well, could it hurt?"
With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.
Some Realtors, too, swear by the practice. Ardell DellaLoggia, a Seattle-area Realtor, buried a statue beneath the "For Sale" sign on a property that she thought was overpriced. She didn't tell the owner until after it had sold. "He was an atheist," she explains. "But he thanked me."
Existing-home sales fell 8% in September to a seasonally adjusted annual rate of 5.04 million units, the lowest level in nearly 10 years, according to the National Association of Realtors.
Some Catholic clergy are uncomfortable with the St. Joseph's trend. Read about this and track other news in the housing market at Developments, WSJ.com's new real-estate tracker.Statues of St. Joseph sold online can be as tall as 12 inches. One, made of colored resin, portrays St. Joseph cradling the baby Jesus. Yet most home sellers favor the simpler three- or four- inch replicas -- most of which are made in China and often depict St. Joseph as a carpenter.
Most statues come in a "Home Sale Kit" that is priced at around $5 and includes burial instructions and a prayer. One site, Good Fortune Online, recently added another kit with a statue of St. Jude -- known as the patron saint of hopeless causes -- "to help those with a difficult property to sell," the site says. Another site, Stjosephstatue.com, takes orders for its "Underground Real Estate Agent Kits" at 1-888-BURY-JOE.
Demand for the statues has been growing. Ron Weissman, who sells the statues at Good Fortune Online, says about six months ago he switched to online transactions because the increase in calls -- from about two a week to 25 calls a day -- was too much to handle. Richard Weigang, owner of www.catholicstore.com, says he sells about 400 statues a month, double the amount he sold a year ago.
In Catholicism, St. Joseph, a carpenter, is honored as the husband of Mary and foster father of Jesus. Representing a humble family man, he is the patron saint of home, family and house-hunting, according to the Rev. James Martin, a Jesuit priest and author of "My Life With the Saints." Popular belief holds that people who wish to enlist St. Joseph's help in selling a house should bury his replica upside-down in the yard. (Apartment dwellers are advised to put him in a potted plant.)
Methods of burying the statue vary. Instructions in one package give buyers several options, including burying it upside-down next to the "For Sale" sign, burying it three feet from the rear of the house and burying it next to the front door facing away from the home. Phil Cates, owner of stjosephstatue.com, says: "I've seen it buried in all types of places with all types of ceremonies." He says the detailed burial instructions are largely intended to prevent people from forgetting where they put their St. Joseph. (His kits advise burying it facing it away from the house, to symbolize leaving.)
Theologians say there's no official doctrine that calls for the statue's interment. The practice may have stemmed from medieval rites of land possession, in which conquerors claimed land by planting a cross or banner, says Jaime Lara, associate professor of Christian Art and Architecture at Yale Divinity School. Mr. Lara also suggests that the tradition may have gotten mixed up at some point with folklore surrounding St. Anthony. St. Anthony, known as a matchmaker, would often be held ransom, upside-down, until he found a husband for someone's daughter, he says.
Some clergy aren't sure how St. Joseph would feel about his replica ending up on its head in the dirt, and suggest displaying it somewhere in the house instead.
"I think it's much more respectful than burying the poor guy," says Msgr. Andrew Connell, the archdiocesan director of the Pontifical Society for the Propagation of the Faith in Boston. Some retailers, such as Mr. Weigang, owner of www.catholicstore.com, also encourage buyers to put the statues in the house.
"We don't advocate burying," he says. "Some of those statues are quite beautiful."
Catholic leaders also say that faith and devotion are necessary, in addition to burying a statue, otherwise the practice amounts to little more than superstition or magic. But they are also enjoying the saint's newfound popularity. "If they have a good result and they think it was St. Joseph, it might inspire them to practice more," says Msgr. Connell.
The St. Joseph "Underground Real Estate Agent Kit" from www.stjosephstatue.com
Once someone's home sells, the custom holds, the statue should be dug up and put in a place of honor in the new home. That's what Ms. Luna did after she and her husband sold their house shortly after burying St. Joseph. She put the statue in her office in their new home in Portland, Ore.
But not everyone is aware of the follow-up step. Trudy Lopez and her husband buried a statue of St. Joseph when they were trying to sell their condo, even though Ms. Lopez is Jewish and her husband is a nonpracticing Catholic. They sneaked out late at night, worried they might be breaking a condo association rule.
"And I'm thinking, 'If my family knew what I am doing, they'd die,' " she says.
Soon they got an offer, but didn't realize they were supposed to bring the statue with them to their new home.
"I'm afraid a lot of the statues won't be unearthed and someone will go over St. Joseph's feet with a lawnmower," says Father Martin
Wednesday, October 31, 2007
Monday, October 29, 2007
Housing bust takes big toll on Realtors
Housing bust takes big toll on Realtors
3,500 left real estate industry in Michigan in the last year alone.
Nathan Hurst / The Detroit News
STERLING HEIGHTS -- Thousands of Michigan real estate agents -- some with decades of experience -- are getting squeezed out of the business, casualties of one of the worst housing slumps in state history.
Agents who prospered a few years ago, when consumers' appetite for real estate seemed insatiable, now are struggling or switching careers.
Michigan agents say a lack of home buyers for the glut of houses on the market is driving them from the business. Those who do manage to move a property are realizing lower commissions as a result of dampened real estate prices.
In the last year alone, the Michigan Association of Realtors has lost 10 percent of its membership, or about 3,500 agents. Membership now stands at about 30,000, the trade group said. An untold number of agents have taken second jobs to weather the slump or have put their licenses in "escrow," basically not using them until the market turns around.
Metro Detroit has been among the regions worst hit by the housing slowdown, which started in Michigan in late 2005 and hit the rest of the nation early this year. In September, Realtors sold 3,703 homes in Metro Detroit, down from 4,184 in September last year and 4,456 the year before that, according to multiple listing service Realcomp II Ltd.
Real estate agents across the country are leaving the business as the sales downturn worsens. The National Association of Realtors is predicting a 4 percent decline in its membership by the end of 2007, from a record high of 1.4 million members at the beginning of this year.
When Metro Detroit's real estate market entered its downward slide, John Kurczak, a 17-year veteran of the industry, thought he had the tools and experience to ride out the storm.
But after watching the agency he worked at for 16 years close its doors and the number of homes he sells drop off dramatically, Kurczak, 36, is wondering just how much longer he can stand the 14-hour days and long stretches between commission checks.
"I've reinvented myself and spent countless hours trying to get ahead," said Kurczak, who is looking at job offers from other states and in other fields.
"But it's not always paying off. It's a shame -- I can spend all this money trying to market a home, but nobody's buying. I only get paid when the fat lady sings."
Strategies change
Agents still in the business said they're fighting hard to keep ahead.
Some have changed their advertising strategies in an attempt to grab the attention of scarce buyers.
Kurczak, now an agent at Keller Williams in Sterling Heights, said the transition away from his old Century 21 AAA digs in Eastpointe was a rough one. Forced to find a new professional home after the Eastpointe office was shuttered last year, Kurczak renewed his focus on developing and maintaining his own Web site, while keeping in contact with anybody and everybody who could be a sales lead.
Others, like Maureen Francis of SKBK Sotheby's Realty, in Birmingham, have started offering potential customers their own brand of real estate news analysis.
Francis, who specializes in selling luxury properties in Oakland County, started a blog, mioaklandcounty.com, with her husband, also a Realtor. She regularly updates the site with commentary on local and national real estate news and said her site has been instrumental in connecting with customers.
"It lets them get a better idea of what's going on in the market," Francis said. "It's honest and shows what kind of agent I am."
Dreams die
Being honest and tech-savvy isn't enough to stay afloat as a Realtor, Kurczak said. And with job offers coming in from other fields with companies in other states, Kurczak said his days working Metro Detroit's property market likely are numbered.
Kurczak said his current job is one that's only gotten harder as friends and even family members have fled the real estate business while he's tried to hold on.
Both of his brothers got their real estate licenses within the last year. But after seeing Kurczak struggle -- including a situation last winter in which Kurczak was dropped by a couple looking for a home after he took them on 70 private showings -- both brothers have decided to wait to get in the business until the market improves.
Sandy Covert, 33, said she wishes she had done just that.
Lured by tales of plump paychecks and the allure of a job that came with a business card and no uniform, Covert decided in November 2005 to ditch her merry-go-round of low-wage retail jobs for the world of Metro Detroit real estate.
Covert of Dearborn Heights said she did everything right -- taking licensure classes in the evening and spending lunch breaks studying economics and accounting volumes picked up from a used bookstore. She was assured by instructors and more experienced agents that there was no end to success in the real estate business, even with talk of a downturn swirling in the news.
But after thousands of dollars spent on preparation and six months working every angle of the market she could, Covert had sold only one home.
"It was a complete embarrassment," Covert said of the dilapidated structure a few blocks from her own Dearborn flat that she sold for a mere $4,500. "That was all I could sell. I tried harder at this than anything before in my life and I couldn't make it work. People don't believe what a tough business this is."
Covert was lucky, other agents said. Though she abandoned her dreams of real estate success after a year, she was able to return, albeit reluctantly, to her career in retail.
Marlene Bryant, a 52-year-old instructor at a private school in Toledo, said she stopped teaching in 2002 to try her hand at selling real estate around her hometown of Monroe. But after three years, she said she's happy to be back to her life of guaranteed work hours and a pension.
"It was like a glamorous dream job," Bryant said. "I drove a Cadillac and took people to nice places. It was great while it lasted."
Others like Kurczak, whose professional life started as a real estate agent, aren't sure what they'll do if they leave the business.
"It's not as if we're not working hard," he said. "But you can't make people buy houses, which is unfortunate. I'd be a very rich man if I sold everything there is to sell in Metro Detroit."
3,500 left real estate industry in Michigan in the last year alone.
Nathan Hurst / The Detroit News
STERLING HEIGHTS -- Thousands of Michigan real estate agents -- some with decades of experience -- are getting squeezed out of the business, casualties of one of the worst housing slumps in state history.
Agents who prospered a few years ago, when consumers' appetite for real estate seemed insatiable, now are struggling or switching careers.
Michigan agents say a lack of home buyers for the glut of houses on the market is driving them from the business. Those who do manage to move a property are realizing lower commissions as a result of dampened real estate prices.
In the last year alone, the Michigan Association of Realtors has lost 10 percent of its membership, or about 3,500 agents. Membership now stands at about 30,000, the trade group said. An untold number of agents have taken second jobs to weather the slump or have put their licenses in "escrow," basically not using them until the market turns around.
Metro Detroit has been among the regions worst hit by the housing slowdown, which started in Michigan in late 2005 and hit the rest of the nation early this year. In September, Realtors sold 3,703 homes in Metro Detroit, down from 4,184 in September last year and 4,456 the year before that, according to multiple listing service Realcomp II Ltd.
Real estate agents across the country are leaving the business as the sales downturn worsens. The National Association of Realtors is predicting a 4 percent decline in its membership by the end of 2007, from a record high of 1.4 million members at the beginning of this year.
When Metro Detroit's real estate market entered its downward slide, John Kurczak, a 17-year veteran of the industry, thought he had the tools and experience to ride out the storm.
But after watching the agency he worked at for 16 years close its doors and the number of homes he sells drop off dramatically, Kurczak, 36, is wondering just how much longer he can stand the 14-hour days and long stretches between commission checks.
"I've reinvented myself and spent countless hours trying to get ahead," said Kurczak, who is looking at job offers from other states and in other fields.
"But it's not always paying off. It's a shame -- I can spend all this money trying to market a home, but nobody's buying. I only get paid when the fat lady sings."
Strategies change
Agents still in the business said they're fighting hard to keep ahead.
Some have changed their advertising strategies in an attempt to grab the attention of scarce buyers.
Kurczak, now an agent at Keller Williams in Sterling Heights, said the transition away from his old Century 21 AAA digs in Eastpointe was a rough one. Forced to find a new professional home after the Eastpointe office was shuttered last year, Kurczak renewed his focus on developing and maintaining his own Web site, while keeping in contact with anybody and everybody who could be a sales lead.
Others, like Maureen Francis of SKBK Sotheby's Realty, in Birmingham, have started offering potential customers their own brand of real estate news analysis.
Francis, who specializes in selling luxury properties in Oakland County, started a blog, mioaklandcounty.com, with her husband, also a Realtor. She regularly updates the site with commentary on local and national real estate news and said her site has been instrumental in connecting with customers.
"It lets them get a better idea of what's going on in the market," Francis said. "It's honest and shows what kind of agent I am."
Dreams die
Being honest and tech-savvy isn't enough to stay afloat as a Realtor, Kurczak said. And with job offers coming in from other fields with companies in other states, Kurczak said his days working Metro Detroit's property market likely are numbered.
Kurczak said his current job is one that's only gotten harder as friends and even family members have fled the real estate business while he's tried to hold on.
Both of his brothers got their real estate licenses within the last year. But after seeing Kurczak struggle -- including a situation last winter in which Kurczak was dropped by a couple looking for a home after he took them on 70 private showings -- both brothers have decided to wait to get in the business until the market improves.
Sandy Covert, 33, said she wishes she had done just that.
Lured by tales of plump paychecks and the allure of a job that came with a business card and no uniform, Covert decided in November 2005 to ditch her merry-go-round of low-wage retail jobs for the world of Metro Detroit real estate.
Covert of Dearborn Heights said she did everything right -- taking licensure classes in the evening and spending lunch breaks studying economics and accounting volumes picked up from a used bookstore. She was assured by instructors and more experienced agents that there was no end to success in the real estate business, even with talk of a downturn swirling in the news.
But after thousands of dollars spent on preparation and six months working every angle of the market she could, Covert had sold only one home.
"It was a complete embarrassment," Covert said of the dilapidated structure a few blocks from her own Dearborn flat that she sold for a mere $4,500. "That was all I could sell. I tried harder at this than anything before in my life and I couldn't make it work. People don't believe what a tough business this is."
Covert was lucky, other agents said. Though she abandoned her dreams of real estate success after a year, she was able to return, albeit reluctantly, to her career in retail.
Marlene Bryant, a 52-year-old instructor at a private school in Toledo, said she stopped teaching in 2002 to try her hand at selling real estate around her hometown of Monroe. But after three years, she said she's happy to be back to her life of guaranteed work hours and a pension.
"It was like a glamorous dream job," Bryant said. "I drove a Cadillac and took people to nice places. It was great while it lasted."
Others like Kurczak, whose professional life started as a real estate agent, aren't sure what they'll do if they leave the business.
"It's not as if we're not working hard," he said. "But you can't make people buy houses, which is unfortunate. I'd be a very rich man if I sold everything there is to sell in Metro Detroit."
Friday, October 26, 2007
No end in sight for housing slump
No end in sight for housing slump
By Ron Scherer
Fri Oct 26, 4:00 AM ET
New York - Home prices are now at 2005 levels.
And, even with the falling prices, the number of unsold homes is the highest since 1999 – as far back as the data goes – suggesting to economists that more price- cutting is ahead.
One of the major implications of the continuing slide in housing is the drag on the total economy. With home sales now lower than many of the most pessimistic forecast, some economists worry that the economy could be closing the year in a weakened state.
In fact, Wall Street is now convinced that the Federal Reserve will reduce interest rates a second time this fall when the central bank convenes next week.
"Housing is clearly the big factor for the Fed," says Jeff Kleintop, chief investment strategist at LPL Financial Advisors in Boston. "The Fed will clearly be looking at that drag [housing] on the economy and the financial consequences of the pullback."
This week, evidence accumulated detailing the housing slump. Yesterday, for example, the Commerce Department revised lower new-home sales for August to the slowest pace in 11 years. September sales rose 4.8 percent compared with the slow August pace. But, new-home sales are still 23 percent below last September.
"Technically it looks like it improved but not when you look at the downward revisions which totaled 167,000 homes in June, July, and August," says Sam Bullard, an economist at Wachovia in Charlotte, N.C. "There is so much inventory out there on the market, builders will have to put out discounts to help move this inventory off their books."
Wednesday, the National Association of Realtors (NAR), reported in September that existing home sales fell by 8 percent from August's level and are down 19 percent from a year ago. Home prices fell 4.2 percent from a year ago, and inventories were equal to 10.5 months of sales.
"The market is glutted with houses," says Peter Morici, economics professor at the University of Maryland.
According to the NAR report, there were 4.4 million existing homes on the market. The weakness is extending into the condo and coop markets where September sales fell 4.3 percent from August levels.
With weak sales and rising inventories, the median home price fell to $211,700. This is down 4.2 percent from September 2006. Part of the reason for the falling price is turmoil in the mortgage market, where it has become more difficult to obtain a loan that is higher than $417,000, the cut-off for a loan to qualify for Fannie Mae or Freddie Mac coverage.
Even in some well-to-do communities, immune to the price drop until recently, prices are under pressure. That's the case in Madison, Conn., where the average sale price is down 11.2 percent from last year.
"There is downward pressure on prices, inventories have risen," says Brendan Grady, a regional vice president for Caldwell Banker.
However, Mr. Grady says the falling prices are attracting buyers to the upscale shore community. Sales this year are up 22 percent.
Falling home prices may have a larger impact on low-income families, says Andrew Jakabovics, an associate director at the Center for American Progress. "It's more likely that a low-income borrower has made a lower down payment, so when prices fall, they may have negative equity."
The implications for a buyer holding a house now worth less than when they bought it are significant. "No one will refinance the house if it's under water [below purchase price]," says Mr. Jakabovics.
Mr. Morici says home owners with negative equity in their homes will find it difficult to buy another house. "If you have to sell and there are not enough proceeds, you get a bill," he explains. "You can't walk away from it without the lenders coming after you."
Earlier this year, many investment professionals had hoped the real estate and mortgage markets would be able hop out of trouble by year-end. However, now there are doubts. On Wednesday, Merrill Lynch shocked the markets with a $8.4 billion write down.
"We just don't know how deep in we are," says Morici.
On Wednesday, an on-line poll of real-estate finance professionals attending the upcoming Asset Backed Security (ABS) East Conference in Orlando, Fla., found still more pessimism. Ninety-eight percent of the respondents see the problems in the subprime market now spreading to higher-rated mortgages, up from 85 percent in March. The ABS conference is for professionals involved in the securitization industry – where the bulk of the financial crunch has taken place.
However, "The only thing stressing is home prices; that's not so bad," says Mark Adelson of Adelson & Jacobs, a consultant to the securitization business. "The main-stream core of the mortgage business is Fannie Mae and Freddie Mac and that's fine. That is the part of the business that puts most Americans in their homes."
By Ron Scherer
Fri Oct 26, 4:00 AM ET
New York - Home prices are now at 2005 levels.
And, even with the falling prices, the number of unsold homes is the highest since 1999 – as far back as the data goes – suggesting to economists that more price- cutting is ahead.
One of the major implications of the continuing slide in housing is the drag on the total economy. With home sales now lower than many of the most pessimistic forecast, some economists worry that the economy could be closing the year in a weakened state.
In fact, Wall Street is now convinced that the Federal Reserve will reduce interest rates a second time this fall when the central bank convenes next week.
"Housing is clearly the big factor for the Fed," says Jeff Kleintop, chief investment strategist at LPL Financial Advisors in Boston. "The Fed will clearly be looking at that drag [housing] on the economy and the financial consequences of the pullback."
This week, evidence accumulated detailing the housing slump. Yesterday, for example, the Commerce Department revised lower new-home sales for August to the slowest pace in 11 years. September sales rose 4.8 percent compared with the slow August pace. But, new-home sales are still 23 percent below last September.
"Technically it looks like it improved but not when you look at the downward revisions which totaled 167,000 homes in June, July, and August," says Sam Bullard, an economist at Wachovia in Charlotte, N.C. "There is so much inventory out there on the market, builders will have to put out discounts to help move this inventory off their books."
Wednesday, the National Association of Realtors (NAR), reported in September that existing home sales fell by 8 percent from August's level and are down 19 percent from a year ago. Home prices fell 4.2 percent from a year ago, and inventories were equal to 10.5 months of sales.
"The market is glutted with houses," says Peter Morici, economics professor at the University of Maryland.
According to the NAR report, there were 4.4 million existing homes on the market. The weakness is extending into the condo and coop markets where September sales fell 4.3 percent from August levels.
With weak sales and rising inventories, the median home price fell to $211,700. This is down 4.2 percent from September 2006. Part of the reason for the falling price is turmoil in the mortgage market, where it has become more difficult to obtain a loan that is higher than $417,000, the cut-off for a loan to qualify for Fannie Mae or Freddie Mac coverage.
Even in some well-to-do communities, immune to the price drop until recently, prices are under pressure. That's the case in Madison, Conn., where the average sale price is down 11.2 percent from last year.
"There is downward pressure on prices, inventories have risen," says Brendan Grady, a regional vice president for Caldwell Banker.
However, Mr. Grady says the falling prices are attracting buyers to the upscale shore community. Sales this year are up 22 percent.
Falling home prices may have a larger impact on low-income families, says Andrew Jakabovics, an associate director at the Center for American Progress. "It's more likely that a low-income borrower has made a lower down payment, so when prices fall, they may have negative equity."
The implications for a buyer holding a house now worth less than when they bought it are significant. "No one will refinance the house if it's under water [below purchase price]," says Mr. Jakabovics.
Mr. Morici says home owners with negative equity in their homes will find it difficult to buy another house. "If you have to sell and there are not enough proceeds, you get a bill," he explains. "You can't walk away from it without the lenders coming after you."
Earlier this year, many investment professionals had hoped the real estate and mortgage markets would be able hop out of trouble by year-end. However, now there are doubts. On Wednesday, Merrill Lynch shocked the markets with a $8.4 billion write down.
"We just don't know how deep in we are," says Morici.
On Wednesday, an on-line poll of real-estate finance professionals attending the upcoming Asset Backed Security (ABS) East Conference in Orlando, Fla., found still more pessimism. Ninety-eight percent of the respondents see the problems in the subprime market now spreading to higher-rated mortgages, up from 85 percent in March. The ABS conference is for professionals involved in the securitization industry – where the bulk of the financial crunch has taken place.
However, "The only thing stressing is home prices; that's not so bad," says Mark Adelson of Adelson & Jacobs, a consultant to the securitization business. "The main-stream core of the mortgage business is Fannie Mae and Freddie Mac and that's fine. That is the part of the business that puts most Americans in their homes."
No end in sight for housing slump
No end in sight for housing slump
By Ron Scherer
Fri Oct 26, 4:00 AM ET
New York - Home prices are now at 2005 levels.
And, even with the falling prices, the number of unsold homes is the highest since 1999 – as far back as the data goes – suggesting to economists that more price- cutting is ahead.
One of the major implications of the continuing slide in housing is the drag on the total economy. With home sales now lower than many of the most pessimistic forecast, some economists worry that the economy could be closing the year in a weakened state.
In fact, Wall Street is now convinced that the Federal Reserve will reduce interest rates a second time this fall when the central bank convenes next week.
"Housing is clearly the big factor for the Fed," says Jeff Kleintop, chief investment strategist at LPL Financial Advisors in Boston. "The Fed will clearly be looking at that drag [housing] on the economy and the financial consequences of the pullback."
This week, evidence accumulated detailing the housing slump. Yesterday, for example, the Commerce Department revised lower new-home sales for August to the slowest pace in 11 years. September sales rose 4.8 percent compared with the slow August pace. But, new-home sales are still 23 percent below last September.
"Technically it looks like it improved but not when you look at the downward revisions which totaled 167,000 homes in June, July, and August," says Sam Bullard, an economist at Wachovia in Charlotte, N.C. "There is so much inventory out there on the market, builders will have to put out discounts to help move this inventory off their books."
Wednesday, the National Association of Realtors (NAR), reported in September that existing home sales fell by 8 percent from August's level and are down 19 percent from a year ago. Home prices fell 4.2 percent from a year ago, and inventories were equal to 10.5 months of sales.
"The market is glutted with houses," says Peter Morici, economics professor at the University of Maryland.
According to the NAR report, there were 4.4 million existing homes on the market. The weakness is extending into the condo and coop markets where September sales fell 4.3 percent from August levels.
With weak sales and rising inventories, the median home price fell to $211,700. This is down 4.2 percent from September 2006. Part of the reason for the falling price is turmoil in the mortgage market, where it has become more difficult to obtain a loan that is higher than $417,000, the cut-off for a loan to qualify for Fannie Mae or Freddie Mac coverage.
Even in some well-to-do communities, immune to the price drop until recently, prices are under pressure. That's the case in Madison, Conn., where the average sale price is down 11.2 percent from last year.
"There is downward pressure on prices, inventories have risen," says Brendan Grady, a regional vice president for Caldwell Banker.
However, Mr. Grady says the falling prices are attracting buyers to the upscale shore community. Sales this year are up 22 percent.
Falling home prices may have a larger impact on low-income families, says Andrew Jakabovics, an associate director at the Center for American Progress. "It's more likely that a low-income borrower has made a lower down payment, so when prices fall, they may have negative equity."
The implications for a buyer holding a house now worth less than when they bought it are significant. "No one will refinance the house if it's under water [below purchase price]," says Mr. Jakabovics.
Mr. Morici says home owners with negative equity in their homes will find it difficult to buy another house. "If you have to sell and there are not enough proceeds, you get a bill," he explains. "You can't walk away from it without the lenders coming after you."
Earlier this year, many investment professionals had hoped the real estate and mortgage markets would be able hop out of trouble by year-end. However, now there are doubts. On Wednesday, Merrill Lynch shocked the markets with a $8.4 billion write down.
"We just don't know how deep in we are," says Morici.
On Wednesday, an on-line poll of real-estate finance professionals attending the upcoming Asset Backed Security (ABS) East Conference in Orlando, Fla., found still more pessimism. Ninety-eight percent of the respondents see the problems in the subprime market now spreading to higher-rated mortgages, up from 85 percent in March. The ABS conference is for professionals involved in the securitization industry – where the bulk of the financial crunch has taken place.
However, "The only thing stressing is home prices; that's not so bad," says Mark Adelson of Adelson & Jacobs, a consultant to the securitization business. "The main-stream core of the mortgage business is Fannie Mae and Freddie Mac and that's fine. That is the part of the business that puts most Americans in their homes."
By Ron Scherer
Fri Oct 26, 4:00 AM ET
New York - Home prices are now at 2005 levels.
And, even with the falling prices, the number of unsold homes is the highest since 1999 – as far back as the data goes – suggesting to economists that more price- cutting is ahead.
One of the major implications of the continuing slide in housing is the drag on the total economy. With home sales now lower than many of the most pessimistic forecast, some economists worry that the economy could be closing the year in a weakened state.
In fact, Wall Street is now convinced that the Federal Reserve will reduce interest rates a second time this fall when the central bank convenes next week.
"Housing is clearly the big factor for the Fed," says Jeff Kleintop, chief investment strategist at LPL Financial Advisors in Boston. "The Fed will clearly be looking at that drag [housing] on the economy and the financial consequences of the pullback."
This week, evidence accumulated detailing the housing slump. Yesterday, for example, the Commerce Department revised lower new-home sales for August to the slowest pace in 11 years. September sales rose 4.8 percent compared with the slow August pace. But, new-home sales are still 23 percent below last September.
"Technically it looks like it improved but not when you look at the downward revisions which totaled 167,000 homes in June, July, and August," says Sam Bullard, an economist at Wachovia in Charlotte, N.C. "There is so much inventory out there on the market, builders will have to put out discounts to help move this inventory off their books."
Wednesday, the National Association of Realtors (NAR), reported in September that existing home sales fell by 8 percent from August's level and are down 19 percent from a year ago. Home prices fell 4.2 percent from a year ago, and inventories were equal to 10.5 months of sales.
"The market is glutted with houses," says Peter Morici, economics professor at the University of Maryland.
According to the NAR report, there were 4.4 million existing homes on the market. The weakness is extending into the condo and coop markets where September sales fell 4.3 percent from August levels.
With weak sales and rising inventories, the median home price fell to $211,700. This is down 4.2 percent from September 2006. Part of the reason for the falling price is turmoil in the mortgage market, where it has become more difficult to obtain a loan that is higher than $417,000, the cut-off for a loan to qualify for Fannie Mae or Freddie Mac coverage.
Even in some well-to-do communities, immune to the price drop until recently, prices are under pressure. That's the case in Madison, Conn., where the average sale price is down 11.2 percent from last year.
"There is downward pressure on prices, inventories have risen," says Brendan Grady, a regional vice president for Caldwell Banker.
However, Mr. Grady says the falling prices are attracting buyers to the upscale shore community. Sales this year are up 22 percent.
Falling home prices may have a larger impact on low-income families, says Andrew Jakabovics, an associate director at the Center for American Progress. "It's more likely that a low-income borrower has made a lower down payment, so when prices fall, they may have negative equity."
The implications for a buyer holding a house now worth less than when they bought it are significant. "No one will refinance the house if it's under water [below purchase price]," says Mr. Jakabovics.
Mr. Morici says home owners with negative equity in their homes will find it difficult to buy another house. "If you have to sell and there are not enough proceeds, you get a bill," he explains. "You can't walk away from it without the lenders coming after you."
Earlier this year, many investment professionals had hoped the real estate and mortgage markets would be able hop out of trouble by year-end. However, now there are doubts. On Wednesday, Merrill Lynch shocked the markets with a $8.4 billion write down.
"We just don't know how deep in we are," says Morici.
On Wednesday, an on-line poll of real-estate finance professionals attending the upcoming Asset Backed Security (ABS) East Conference in Orlando, Fla., found still more pessimism. Ninety-eight percent of the respondents see the problems in the subprime market now spreading to higher-rated mortgages, up from 85 percent in March. The ABS conference is for professionals involved in the securitization industry – where the bulk of the financial crunch has taken place.
However, "The only thing stressing is home prices; that's not so bad," says Mark Adelson of Adelson & Jacobs, a consultant to the securitization business. "The main-stream core of the mortgage business is Fannie Mae and Freddie Mac and that's fine. That is the part of the business that puts most Americans in their homes."
Tuesday, October 23, 2007
Weakest U.S. Housing Markets
Weakest U.S. Housing Markets
By Matt Woolsey, Forbes.com
Oct. 5, 2007
How much longer can real estate in already depressed areas decline in value?
At least another year.
In fact, it's reasonable to expect 8 percent to 9 percent median home-sale price decreases through 2008 in Detroit, Riverside, Calif., and Las Vegas, currently the three least stable real estate markets in the country, according to data compiled by Moody's Economy.com, a Westchester, P.A.-based research firm.
In Pictures: Weakest U.S. Housing Markets
To arrive at these findings, Moody's ran projection models based on a number of supply and demand drivers: the state of the local economy, job growth, new construction contracts, construction costs, unsold housing inventory and housing affordability; researchers also looked at figures projecting housing turnover and housing sales rates. The third model took into account the state of local credit markets, and foreclosure and delinquency projections.
Overall rankings were a weighted average of the three models, slightly favoring factors contributing to supply and demand. Data were supplied by the U.S. Census Bureau, National Association of Realtors, Equifax, a credit market tracking firm, and Moody's Economy.com.
Falling Figures
Economists generally agree that a market requires around a 2 percent annual price growth to stay neutral. That means an 8 percent or 9 percent drop in price can cause chaos. That's what those living in California, Arizona, Florida, Detroit and Las Vegas can expect. These markets are projected to post the biggest price drops in the coming year. Except for Detroit, all experienced impressive price growth during the boom, which in turn spurred a great deal of construction. When the housing market fell apart, it hurt these markets in two ways. First, they were left with high amounts of unsold inventory, which depresses prices. Second, when construction stopped so did all the housing-related job growth that came with it.
"It's very clear that in Florida, California and Nevada, many of the jobs were housing related," says Mark Zandi, chief economist at Moody's Economy.com, noting that job creation is a key component of recovery and that for these markets to address their inventory problems, "builders are going to have to slash construction, which hurts job growth."
High foreclosure rates don't help, either. Detroit, Riverside and Las Vegas are expected to lead the nation in delinquencies and foreclosures in 2008.
Las Vegas does have something of a silver lining: Its sales rate is the second fastest in the nation, according to Moody's, a sign that sellers are slashing prices to move inventory and thus tightening the unsold housing supply.
In a real bind is California, which gets hit by lending and credit problems on both the top and bottom end of the market. Riverside, Sacramento and Los Angeles all have high ARM shares and loads of sub-prime mortgages, but also have such expensive housing stock that the securitization freeze is hitting those buying in the middle of the market. In a market like Los Angeles, where the median home price is $593,000, it's increasingly difficult for buyers to get loans.
On Sept. 18, Congress voted through a bill to raise the securitization limit of government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac (who currently securitize loans below $417,000) as a way to help offset the credit problems hampering many of the aforementioned markets.
Still, don't expect the legislation to bail out speculators.
"There's a need to increase the [securitization] limit on a regional basis, but you need to keep in mind that the GSEs were created for low- and middle-income home buyers," says Rep. Lincoln Davis, D-Tenn., who sits on the House Finance Committee. "[Securitization] should continue for modest houses, but the government shouldn't be involved in luxury home buying and lending with federal money."
By Matt Woolsey, Forbes.com
Oct. 5, 2007
How much longer can real estate in already depressed areas decline in value?
At least another year.
In fact, it's reasonable to expect 8 percent to 9 percent median home-sale price decreases through 2008 in Detroit, Riverside, Calif., and Las Vegas, currently the three least stable real estate markets in the country, according to data compiled by Moody's Economy.com, a Westchester, P.A.-based research firm.
In Pictures: Weakest U.S. Housing Markets
To arrive at these findings, Moody's ran projection models based on a number of supply and demand drivers: the state of the local economy, job growth, new construction contracts, construction costs, unsold housing inventory and housing affordability; researchers also looked at figures projecting housing turnover and housing sales rates. The third model took into account the state of local credit markets, and foreclosure and delinquency projections.
Overall rankings were a weighted average of the three models, slightly favoring factors contributing to supply and demand. Data were supplied by the U.S. Census Bureau, National Association of Realtors, Equifax, a credit market tracking firm, and Moody's Economy.com.
Falling Figures
Economists generally agree that a market requires around a 2 percent annual price growth to stay neutral. That means an 8 percent or 9 percent drop in price can cause chaos. That's what those living in California, Arizona, Florida, Detroit and Las Vegas can expect. These markets are projected to post the biggest price drops in the coming year. Except for Detroit, all experienced impressive price growth during the boom, which in turn spurred a great deal of construction. When the housing market fell apart, it hurt these markets in two ways. First, they were left with high amounts of unsold inventory, which depresses prices. Second, when construction stopped so did all the housing-related job growth that came with it.
"It's very clear that in Florida, California and Nevada, many of the jobs were housing related," says Mark Zandi, chief economist at Moody's Economy.com, noting that job creation is a key component of recovery and that for these markets to address their inventory problems, "builders are going to have to slash construction, which hurts job growth."
High foreclosure rates don't help, either. Detroit, Riverside and Las Vegas are expected to lead the nation in delinquencies and foreclosures in 2008.
Las Vegas does have something of a silver lining: Its sales rate is the second fastest in the nation, according to Moody's, a sign that sellers are slashing prices to move inventory and thus tightening the unsold housing supply.
In a real bind is California, which gets hit by lending and credit problems on both the top and bottom end of the market. Riverside, Sacramento and Los Angeles all have high ARM shares and loads of sub-prime mortgages, but also have such expensive housing stock that the securitization freeze is hitting those buying in the middle of the market. In a market like Los Angeles, where the median home price is $593,000, it's increasingly difficult for buyers to get loans.
On Sept. 18, Congress voted through a bill to raise the securitization limit of government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac (who currently securitize loans below $417,000) as a way to help offset the credit problems hampering many of the aforementioned markets.
Still, don't expect the legislation to bail out speculators.
"There's a need to increase the [securitization] limit on a regional basis, but you need to keep in mind that the GSEs were created for low- and middle-income home buyers," says Rep. Lincoln Davis, D-Tenn., who sits on the House Finance Committee. "[Securitization] should continue for modest houses, but the government shouldn't be involved in luxury home buying and lending with federal money."
The quickest path to finding true foreclosure bargains
The quickest path to finding true foreclosure bargains
Monday October 15, 1:07 pm ET
By Jennifer Openshaw
Following the facts on discounts can help you find the real deals
NEW YORK (MarketWatch) -- You've heard a lot (probably too much!) about real estate market problems and especially the rapid rise in foreclosures. But as a real estate investor you're picking up big-time "bargain" signals on your antennae.
The headlines are ominous: some 243,000 foreclosures in August, up 36% from July and 115% from August 2006. There's blood in the streets.
So how do you get from "there must be bargains out there" to "how much will I save, and where are the best bargains?"
I like to guide any buying decision as much as possible with the facts. But while lots of foreclosures are out there, how good an opportunity they might be was hard to know. Until now.
For sale and on sale
RealtyTrac, the same real estate portal and analysis group that supplies monthly national foreclosure statistics, also calculates the average discount-to-value by market -- that is, how much foreclosed homes actually sold for vs. their estimated market value in their markets. So -- bingo -- you've got a good indicator of how good an opportunity you're looking at. Search on "foreclosures by state," and then click "view (state) foreclosure trends," and you'll get a nice snapshot of foreclosure filings, actual sales, average sales price and -- most of all -- the discount-to-value.
You could page through state by state to get a national picture of where the good deals are. Instead, I went to the source. RealtyTrac was kind enough to supply me with source data in a spreadsheet. I'll share the most interesting findings.
National trends
Nationwide, in the three months June through August, some 68,426 foreclosed homes sold in 2007 vs. 54,886 in 2006. The average sales price dropped from $271,000 to just over $239,000.
The discount-to-market ratio increased slightly from 76.42% to 77.68%. How do you read this ratio? It is the actual foreclosure sales price compared to the perceived market value of the home. So 77.68% means, on average, you'd get just over a 22% savings or "discount" on your foreclosure purchase. That's down from just over 23% a year ago.
The best (and worst) around the country
So, now the fun part: a state by state look at where the best deals and biggest changes are happening:
From June-August 2006 to June-August 2007, California, Nevada, Michigan, Massachusetts and Arizona showed the greatest increase in the number of foreclosure sales, while New York, New Jersey and North Carolina posted the biggest decreases among states that had 1,000 or more foreclosure sales.
But while California heads the list in sales, the discount is relatively small -- one of the five smallest in the country at only 17%. The best deals are in troubled Rust Belt or manufacturing-centric states -- Alabama, Pennsylvania, Indiana and Ohio.
States with largest discounts Average foreclosure sale price Average % of market value
Alabama $133,834 59.95
Pennsylvania 110,936 61.68
Indiana 99,255 63.50
Ohio 90,300 64.70
Missouri 144,768 67.25
States with smallest discounts Average foreclosure sale price Average % of market value
Hawaii $657,211 85.41
Washington 288,397 83.68
Virginia 338,912 83.48
Massachusetts 290,835 83.03
California 437,813 83.00
Finally, trends are interesting: Discounts are increasing in Midwestern states and in New Mexico, while decreasing some in Alaska, Iowa and Texas. This may be a sign of strengthening real estate markets in those states -- or weak market values to begin with.
State Average % of market value Discount increase (decrease)
Louisiana 74.04 15.88%
New Mexico 72.59 12.01
Minnesota 72.79 10.50
Indiana 73.52 9.82
Alabama 63.50 7.48
Alaska 82.02 (8.03)
Iowa 77.32 (5.34)
Texas 78.75 (4.82)
Kansas 74.03 (4.56)
Hawaii 85.41 (3.47)
These facts will help you know how much to pay -- and to know if foreclosures are right for you in the first place. They may also say something about which way the market in your area is likely to go. Either way, they will help you find the "real" deal.
Monday October 15, 1:07 pm ET
By Jennifer Openshaw
Following the facts on discounts can help you find the real deals
NEW YORK (MarketWatch) -- You've heard a lot (probably too much!) about real estate market problems and especially the rapid rise in foreclosures. But as a real estate investor you're picking up big-time "bargain" signals on your antennae.
The headlines are ominous: some 243,000 foreclosures in August, up 36% from July and 115% from August 2006. There's blood in the streets.
So how do you get from "there must be bargains out there" to "how much will I save, and where are the best bargains?"
I like to guide any buying decision as much as possible with the facts. But while lots of foreclosures are out there, how good an opportunity they might be was hard to know. Until now.
For sale and on sale
RealtyTrac, the same real estate portal and analysis group that supplies monthly national foreclosure statistics, also calculates the average discount-to-value by market -- that is, how much foreclosed homes actually sold for vs. their estimated market value in their markets. So -- bingo -- you've got a good indicator of how good an opportunity you're looking at. Search on "foreclosures by state," and then click "view (state) foreclosure trends," and you'll get a nice snapshot of foreclosure filings, actual sales, average sales price and -- most of all -- the discount-to-value.
You could page through state by state to get a national picture of where the good deals are. Instead, I went to the source. RealtyTrac was kind enough to supply me with source data in a spreadsheet. I'll share the most interesting findings.
National trends
Nationwide, in the three months June through August, some 68,426 foreclosed homes sold in 2007 vs. 54,886 in 2006. The average sales price dropped from $271,000 to just over $239,000.
The discount-to-market ratio increased slightly from 76.42% to 77.68%. How do you read this ratio? It is the actual foreclosure sales price compared to the perceived market value of the home. So 77.68% means, on average, you'd get just over a 22% savings or "discount" on your foreclosure purchase. That's down from just over 23% a year ago.
The best (and worst) around the country
So, now the fun part: a state by state look at where the best deals and biggest changes are happening:
From June-August 2006 to June-August 2007, California, Nevada, Michigan, Massachusetts and Arizona showed the greatest increase in the number of foreclosure sales, while New York, New Jersey and North Carolina posted the biggest decreases among states that had 1,000 or more foreclosure sales.
But while California heads the list in sales, the discount is relatively small -- one of the five smallest in the country at only 17%. The best deals are in troubled Rust Belt or manufacturing-centric states -- Alabama, Pennsylvania, Indiana and Ohio.
States with largest discounts Average foreclosure sale price Average % of market value
Alabama $133,834 59.95
Pennsylvania 110,936 61.68
Indiana 99,255 63.50
Ohio 90,300 64.70
Missouri 144,768 67.25
States with smallest discounts Average foreclosure sale price Average % of market value
Hawaii $657,211 85.41
Washington 288,397 83.68
Virginia 338,912 83.48
Massachusetts 290,835 83.03
California 437,813 83.00
Finally, trends are interesting: Discounts are increasing in Midwestern states and in New Mexico, while decreasing some in Alaska, Iowa and Texas. This may be a sign of strengthening real estate markets in those states -- or weak market values to begin with.
State Average % of market value Discount increase (decrease)
Louisiana 74.04 15.88%
New Mexico 72.59 12.01
Minnesota 72.79 10.50
Indiana 73.52 9.82
Alabama 63.50 7.48
Alaska 82.02 (8.03)
Iowa 77.32 (5.34)
Texas 78.75 (4.82)
Kansas 74.03 (4.56)
Hawaii 85.41 (3.47)
These facts will help you know how much to pay -- and to know if foreclosures are right for you in the first place. They may also say something about which way the market in your area is likely to go. Either way, they will help you find the "real" deal.
Thursday, October 11, 2007
Realtors slash sales forecast
Realtors slash sales forecast
National Association of Realtors predicts sales of existing homes will fall to 10.8 percent of last year.
Alan Zibel / Associated Press
WASHINGTON -- This year's decline in existing home sales will be steeper than previously anticipated, a trade group for real estate agents predicted Wednesday.
The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade.
The trade group's outlook for 2007 homes sales has grown more pessimistic through the year as foreclosures soared, credit market troubles developed and sales fell. Back in February, the group forecast an annual decline in existing home sales of only 0.6 percent.
In its October report, the association predicts 5.78 million existing homes will be sold in 2007, down from 6.48 million last year. Last month, the association predicted an 8.6 percent drop from a year ago.
This year's sales would be the lowest since 2002, when sales hit 5.63 million.
Sale prices for existing homes are forecast to drop 1.3 percent to a median of $219,000 this year -- a slight improvement from last month's prediction of a 1.7 percent decline. The median price refers to the point where half sold for more and half for less.
Next year, the trade group expects existing home sales to climb to 6.12 million. That is 2.4 percent lower than last month's prediction.
The picture, however, is bleaker in California, one of the states most caught up in this decade's housing boom.
The California Association of Realtors projected Wednesday that existing home sales in that state would fall 9 percent next year.
Nationwide new home sales are projected to fall to 805,000 this year, down 23 percent from 1.05 million last year, according to the national Realtors group. If that forecast is accurate, it would be the worst year since 1997, when 804,000 newly constructed homes were sold. In 2008, 752,000 new home sales are expected.
The group's senior economist, Lawrence Yun, noted that markets including Austin, Texas, Salt Lake City and Raleigh, N.C., are showing price growth and 2007's home sales will be the fifth-highest on record.
"The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains," Yun said.
National Association of Realtors predicts sales of existing homes will fall to 10.8 percent of last year.
Alan Zibel / Associated Press
WASHINGTON -- This year's decline in existing home sales will be steeper than previously anticipated, a trade group for real estate agents predicted Wednesday.
The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade.
The trade group's outlook for 2007 homes sales has grown more pessimistic through the year as foreclosures soared, credit market troubles developed and sales fell. Back in February, the group forecast an annual decline in existing home sales of only 0.6 percent.
In its October report, the association predicts 5.78 million existing homes will be sold in 2007, down from 6.48 million last year. Last month, the association predicted an 8.6 percent drop from a year ago.
This year's sales would be the lowest since 2002, when sales hit 5.63 million.
Sale prices for existing homes are forecast to drop 1.3 percent to a median of $219,000 this year -- a slight improvement from last month's prediction of a 1.7 percent decline. The median price refers to the point where half sold for more and half for less.
Next year, the trade group expects existing home sales to climb to 6.12 million. That is 2.4 percent lower than last month's prediction.
The picture, however, is bleaker in California, one of the states most caught up in this decade's housing boom.
The California Association of Realtors projected Wednesday that existing home sales in that state would fall 9 percent next year.
Nationwide new home sales are projected to fall to 805,000 this year, down 23 percent from 1.05 million last year, according to the national Realtors group. If that forecast is accurate, it would be the worst year since 1997, when 804,000 newly constructed homes were sold. In 2008, 752,000 new home sales are expected.
The group's senior economist, Lawrence Yun, noted that markets including Austin, Texas, Salt Lake City and Raleigh, N.C., are showing price growth and 2007's home sales will be the fifth-highest on record.
"The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains," Yun said.
Michigan foreclosures drop to 4th in country
Michigan ranked fourth nationally in the rate of foreclosure filings for the month of September. Nevada, Florida and California had the highest rates. Rounding out the top 10 were Arizona, Georgia, Ohio, Colorado, Texas and Indiana, a real estate information company said today.
Foreclosure filings across the United States nearly doubled last month compared with September 2006, as financially strapped homeowners already behind on mortgage payments defaulted on their loans or came closer to losing their homes to foreclosure, according to Irvine-based RealtyTrac Inc.
A total of 223,538 foreclosure filings were reported in September, up from 112,210 in the same month a year ago, the real estate company said.
The number of filings in September was down 8 percent from August's 243,947, the firm said.
Despite the sequential decline, the September figure represents the second-highest total for filings in a single month since the company began tracking monthly filings two years ago.
"August was an extraordinarily high month for foreclosure activity, so some falloff was almost predictable," said Rick Sharga, RealtyTrac's vice president for marketing.
The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.
Typically, borrowers must be 60 to 90 days past due on their mortgage payments before their lender will consider them in default, the first stage of the foreclosure process. If a homeowner can't find a way to get current on payments, the home is then often put up for auction, and if it doesn't sell, it eventually goes back to the bank.
In all, 39 states saw a decline in foreclosure filings, the firm said.
Sharga noted that there was a spike in the number of bank repossessions in August that did not occur in September.
It's likely that the sequential decline in foreclosure activity between August and September was just a blip, not a bellwether of lessening foreclosure filings.
"We don't see September as the beginning of the end in this cycle of foreclosures," Sharga said.
The foreclosure rate for the nation in September was one foreclosure filing for every 557 households, the firm said.
The U.S. housing market has seen sales decline and home prices fall or remain flat, making it harder for homeowners who can't afford to make mortgage payments to sell their homes or seek refinancing.
Many of those troubled homeowners were among those who took on adjustable-rate mortgages that are now adjusting to a higher interest rate, translating into payments they cannot afford to make.
The rising delinquencies and foreclosures this year have led the mortgage industry to tighten lending standards, further narrowing options for homeowners struggling to pay their mortgage.
Nevada reported one foreclosure filing for every 185 households, earning the state the highest foreclosure rate in the nation for the ninth month in a row. The state had 5,504 filings in September, down 11.1 percent from August and more than triple from September 2006.
Florida had one foreclosure filing for every 248 households. The state reported 33,354 foreclosure filings in September, down just less than 2 percent from August, but more than three times greater than September 2006's total.
California's foreclosure rate was one filing for every 253 households. The state reported the most foreclosure filings of any single state with 51,259, down 11 percent from August but a fourfold increase from September of last year.
Foreclosure filings across the United States nearly doubled last month compared with September 2006, as financially strapped homeowners already behind on mortgage payments defaulted on their loans or came closer to losing their homes to foreclosure, according to Irvine-based RealtyTrac Inc.
A total of 223,538 foreclosure filings were reported in September, up from 112,210 in the same month a year ago, the real estate company said.
The number of filings in September was down 8 percent from August's 243,947, the firm said.
Despite the sequential decline, the September figure represents the second-highest total for filings in a single month since the company began tracking monthly filings two years ago.
"August was an extraordinarily high month for foreclosure activity, so some falloff was almost predictable," said Rick Sharga, RealtyTrac's vice president for marketing.
The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.
Typically, borrowers must be 60 to 90 days past due on their mortgage payments before their lender will consider them in default, the first stage of the foreclosure process. If a homeowner can't find a way to get current on payments, the home is then often put up for auction, and if it doesn't sell, it eventually goes back to the bank.
In all, 39 states saw a decline in foreclosure filings, the firm said.
Sharga noted that there was a spike in the number of bank repossessions in August that did not occur in September.
It's likely that the sequential decline in foreclosure activity between August and September was just a blip, not a bellwether of lessening foreclosure filings.
"We don't see September as the beginning of the end in this cycle of foreclosures," Sharga said.
The foreclosure rate for the nation in September was one foreclosure filing for every 557 households, the firm said.
The U.S. housing market has seen sales decline and home prices fall or remain flat, making it harder for homeowners who can't afford to make mortgage payments to sell their homes or seek refinancing.
Many of those troubled homeowners were among those who took on adjustable-rate mortgages that are now adjusting to a higher interest rate, translating into payments they cannot afford to make.
The rising delinquencies and foreclosures this year have led the mortgage industry to tighten lending standards, further narrowing options for homeowners struggling to pay their mortgage.
Nevada reported one foreclosure filing for every 185 households, earning the state the highest foreclosure rate in the nation for the ninth month in a row. The state had 5,504 filings in September, down 11.1 percent from August and more than triple from September 2006.
Florida had one foreclosure filing for every 248 households. The state reported 33,354 foreclosure filings in September, down just less than 2 percent from August, but more than three times greater than September 2006's total.
California's foreclosure rate was one filing for every 253 households. The state reported the most foreclosure filings of any single state with 51,259, down 11 percent from August but a fourfold increase from September of last year.
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