Published: Monday, 9 Nov 2009 | 10:23 AM ET
By: Diana Olick
CNBC Real Estate Reporter

On the way down and on the way up, home prices always lag sales, but they may be beginning to catch up. A new report from Zillow.com finds home values stabilized in the third quarter of this year, as sales of new and existing homes grew.

“While 116 metropolitan areas experienced Q3 year-over-year declines in home values, only nine metropolitan areas saw accelerating year-over year home value declines,” according to the report.

That is resulting in slightly improved negative equity. Zillow finds 21 percent of single-family home owners are in a negative equity position in Q3, as compared to 23 percent at the end of Q2.

The question remains if this is a real trend or a temporary surge brought on by non-organic factors. The first-time home buyer tax credit added an additional 350,000 buyers to the housing market, according to the National Association of Realtors, and the Federal Reserve’s investment in Fannie Mae and Freddie Mac mortgages and mortgage backed securities have kept mortgage rates artificially low.

And then there’s the foreclosure quandary. Zillow estimates more than one fifth of all sales in September were foreclosure re-sales, up from 15 percent a year ago. Realtors have put that at a higher number.

But the fact is that foreclosure inventory is diminishing, thanks to more efforts to modify borrowers, which are slowing down some of the inevitable. That’s pushing prices on the low end higher, and the low end is where all the activity is. In September, the National Association of Realtors reports that nearly 70 percent of all sales were on homes priced $250,000 or lower.

Last week President Obama signed into law an extension and expansion of the home-buyer tax credit, opening it to some move-up buyers and moving the expiration date to May 1, 2010.

Most analysts say the extension will not have near the impact the initial credit did, because demand was pulled forward in advance of the first expiration date. In other words, we saw the tax credit bump over the summer, and now, as we head into the traditionally most sluggish housing season, the credit isn’t going to help much.

Top Democrats in the Senate have reached an agreement to extend the soon-to-expire $8,000 tax credit for first-time homebuyers, Senate Banking Committee Chairman Christopher Dodd said Tuesday.

“We have that. Done,” Dodd told reporters.

He declined to specify the details of the agreement.

But a Republican who has worked with Dodd cautioned that they were still negotiating on the measure, which could come up for a vote Tuesday evening as part of a package that would extend unemployment benefits.

“We’re close, we’re close but I can’t get into any details until it’s a done deal,” said Republican Senator Johnny Isakson.

The popular tax credit, which has helped lift the housing market out of its worst slump since the Great Depression, is set to expire on Nov. 30.

Dodd and Isakson want to extend the credit through June of next year and broaden it to anyone buying a primary residence, not just first-time buyers.

Senate Majority Leader Harry Reid had backed a narrower version which would extend the full credit through March and gradually phase it out through the end of 2010.

Dodd said that the deal would merge the two proposals.

The House, which would also need to approve the measure, has yet to act.

The issue is front and center for financial markets. U.S. stocks sold off and the dollar moved sharply higher on Monday after a misleading media headline said research firm ISI Group had written that the tax credit probably would not be extended when it expires Nov. 30.

A Senate vote is expected around 6 pm Tuesday on whether to take up a bill to extend insurance benefits for unemployed workers.

If Senate Majority Leader Harry Reid can get the 60 votes needed to do that, it would clear the way for further votes and he has said he would offer a tax credit extension as an amendment.

It is not clear when those votes would take place. While it is possible those votes could come later on Tuesday night, they are more likely to be pushed to later this week or next week.

The White House has raised concerns about the cost of expanding the credit. Lawrence Summers, President Barack Obama’s top economic adviser, told Reuters last week that the administration would be open to extending the existing credit but wants to see it remain focused on first-time buyers.

Simply extending the current tax credit is estimated to cost $1 billion a month.

House Speaker Nancy Pelosi appears to be waiting to take her cue from the Senate. Asked about the tax credit earlier this month, the California Democrat said “the question is, would that be just first-time homeowners or would you open it up to other purchasers of homes?”

A House Democratic aide said House leaders would likely adopt whatever language the Senate approves, which would avoid the need for negotiations to reach a compromise. Unlike the Senate, the House has already passed an extension of benefits for unemployment insurance.

Copyright 2009 Reuters

It’s scary to jump into the housing market when prices have been plunging. But waiting could end up costing you.

By James B. Stewart, SmartMoney

Passing through the Fort Myers, Fla., airport a few weeks ago, I noticed people eagerly signing up for a free bus tour of foreclosed real estate — with all properties offering water views. During the ride to my hotel, the young driver volunteered that he’d just bought his first house, paying $65,000 for a foreclosed property in nearby Cape Coral that had last sold for more than $250,000. He said he’d never expected to be able to buy anything on a driver’s salary, let alone something that nice.

Late last month, Standard & Poor’s reported that its S&P/Case-Shiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggest that real-estate prices hit a bottom some time during the second quarter and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free fall.

That means if you’ve been sitting on the fence, it’s time to act.

Trying to buy at a bottom

Ordinarily I’d never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock.

In addition to bargain prices, buyers should find plenty of homes to choose from. The inventory of unsold homes was 4.09 million units in July, up 7.3% from June, according to the National Association of Realtors.  And mortgage rates this week were at a two-month low of close to 5%.

Even the stricter appraisal process is working to the advantage of buyers. Appraisals are coming in far lower than most sellers have been expecting, forcing them to face the new reality of sharply lower prices. And with stricter standards, lenders aren’t going to let buyers borrow more than they can afford, which protects buyers and helps to keep prices down.

The flipping days are over

Unless you’re really prepared to accept the demands (and headaches) of being a landlord, I don’t recommend direct ownership of real estate as an investment. The days of buyers lining up to buy and flip Miami Beach and Las Vegas condos are mercifully gone. There are much easier ways to make money in real estate, such as buying into real-estate investment trusts or buying shares in homebuilders and other housing-related businesses, such as Home Depot (HD, news, msgs).

Historically, the mean rate of return on real estate has been around 3%, according to research from Yale economist Robert Shiller, who co-developed the Case-Shiller index. Shares in REITs and other stocks have often done much better.

Late last month, Standard & Poor’s reported that its S&P/Case-Shiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggest that real-estate prices hit a bottom some time during the second quarter and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free fall.

That means if you’ve been sitting on the fence, it’s time to act.

Trying to buy at a bottom

Ordinarily I’d never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock.

But with real-estate prices nationally now down about 30% from their 2006 peak and showing signs of turning up, the prices aren’t likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can’t imagine a better time to buy than right now.

But there’s a good reason homeownership has been such a central part of the American dream. It delivers security, pride of ownership, a sense of community and decent investment returns as a bonus.

I felt glad for my driver in Florida. He represents the other side of the foreclosure crisis. For every hardship story, and no doubt there are many, others are realizing their dreams of homeownership and getting what may well turn out to be the deals of their lives.

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Find short sales, REO, Foreclosures, Bank Owned Homes in the Santa Clarita and San Fernando Valley Today. Search MLS listings and find real estate information at www.yourvalleydreamhome.com Your Valley Dream Home. Here at REMAX, we are the #1 Real Estate Office In California.  There are many beautiful homes for sale and we would love to find you that perfect Dream Home of your very own today! We specialize in Valencia, Stevenson Ranch, Canyon Country, Newhall, Saugus, Burbank, Sherman Oaks, Studio City, Toluca Lake, Valley Villiage, Valley Glen, North Hollywood, Sylmar, Granada Hills, Northridge, North Hills, Porter Ranch, Encino, Lake Balboa, Tarzana, Reseda, Canoga Park, Winnetka, West Hills, Woodland Hills, Pasadena, Glendale, Castaic, Palmdale, santa clarita,valencia,newhall,saugus,burbank,san fernando,valley,studio city,sherman oaks,toluca lake,north hollywood,granada hills,northridge,north hills,foreclosure,short sale,reo,real estate owned,ciociolo,peralta,search,homes,www.yourvalleydreamhome.com,your valley dream home,remax

- THE SOUTHLAND REGIONAL ASSOCIATION OF REALTORS -

Sales of existing single-family homes increased compared to the prior year for the 12th consecutive month during July and resale prices continued to stabilize, the Southland Regional Association of Realtors® reported.

A total of 745 homes closed escrow, up 3.9 percent from a year ago, but down 3.9 percent from the June tally – breaking a string of five consecutive month-to-month gains in sales. The 203 condominiums that sold last month were only two transactions below a year ago, but 14 percent below the total reported this June.

“There simply are not enough properties listed for sale to satisfy demand,” said Ana Maria Colon, president of the Southland Regional Association of Realtors®. “Virtually every property listed under $500,000 is seeing multiple offers, sometimes totaling dozens of competing bids that drive the purchase price above the list price,” she said. “The winner often comes in with an all-cash offer.”

The Association reported a total of 3,278 active listings at the end of July – down 52.8 percent from the 6,950 listings of July 2008. At the current pace of sales, that represents a mere 3.5-month supply compared to the 7.5-month supply of July 2008. A five- to six-month inventory reflects a balanced market.

“Inventory is down by half from a year ago, which is why sales have slowed on a month-to-month basis,” said Jim Link, the Association’s chief executive officer. “Still, increased activity in higher price ranges is encouraging and we’re seeing further evidence that prices have hit bottom and that the market is stabilizing.”

The median price of the 745 single-family homes sold last month was $400,000, up 6.7 percent from the June median, but down 8.0 percent compared to July 2008.

It was the first single-digit decline and the smallest drop since the median started falling in October 2007. Only two price declines have been smaller: the 3.3 percent and 6.3 percent drops posted when the price slide began in October and November 2 007, respectively.

Single-family prices started firmed up since hitting the low point of $339,900 this February.

The condo median price of $228,000 was down 18.6 percent from a year ago and up 0.9 percent from this June. It was the third consecutive month-to-month increase since the condo median hit its low water mark of $185,000 in May. While still hefty, the 18.6 percent annual drop marked the first time the decline had been below 20 percent since February 2008.

Pending escrows – a measure of future resale activity – continued to post positive numbers, but much lower than in recent months, further supporting the contention that the lack of listings is impeding recovery.

There were 1,259 open escrows at the end of July, up 10.3 percent from the 1,141 pending escrows reported in 2008.

That was the smallest percentage gain so far this year. While sales typically wane as summer draws to an end, July’s increase is dramatically lower than the 20-60 percent increases in pending activity seen virtually every month since January.

“Prices are reasonable, interest rates are favorable and everyone wants to take advantage of the current tax rebate,” Colon said. “The new challenge to buyers and their Realtors is to figure out how to be first at a new listing and how to make their offer stand out in the crowd.”

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Find short sales, REO, Foreclosures, Bank Owned Homes in the Santa Clarita and San Fernando Valley Today. Search MLS listings and find real estate information at www.yourvalleydreamhome.com Your Valley Dream Home. Here at REMAX, we are the #1 Real Estate Office In California.  There are many beautiful homes for sale and we would love to find you that perfect Dream Home of your very own today! We specialize in Valencia, Stevenson Ranch, Canyon Country, Newhall, Saugus, Burbank, Sherman Oaks, Studio City, Toluca Lake, Valley Villiage, Valley Glen, North Hollywood, Sylmar, Granada Hills, Northridge, North Hills, Porter Ranch, Encino, Lake Balboa, Tarzana, Reseda, Canoga Park, Winnetka, West Hills, Woodland Hills, Pasadena, Glendale, Castaic, Palmdale, santa clarita,valencia,newhall,saugus,burbank,san fernando,valley,studio city,sherman oaks,toluca lake,north hollywood,granada hills,northridge,north hills,foreclosure,short sale,reo,real estate owned,ciociolo,peralta,search,homes,www.yourvalleydreamhome.com,your valley dream home,remax

- THE SOUTHLAND REGIONAL ASSOCIATION OF REALTORS -

Single-family homes sales during July in the Santa Clarita Valley held even with activity reported a year ago and gained 16.3 percent over this June, the Southland Regional Association of Realtors® reported.

A total of 235 homes closed escrow, down two sales or 0.8 percent from a year ago, but up 33 sales from this June. The 237 sales were the second highest monthly figure since the low point of this market of 99 sales was reported in January 2008.

Condo sales increased 3.5 percent compared to a year ago. A total of 88 condos changed owners, up three sales from a year ago and off a single transaction from the 89 closed escrows reported this June. Condo resales also have been gaining momentum since the low-water mark of 31 transactions in January 2008.

“Realtors report increased buyer interest across the board, although homes priced under $500,000 are the ones seeing the most activity and multiple bids,” said Nancy Starczyk, president of the Association’s Santa Clarita Valley Division. “Inventory is half of what is was in 2008 while the pool of prospective buyers continues to expand as financing becomes more available.”

Starczyk and Jim Link, the Association’s chief executive officer, said buyers are willing to compete for favorably priced homes, especially with interest rates still low and the availability of a federal and state tax rebate.

“The primary factor limiting sales right now is the lack of homes listed for sale,” Link said. “It’s more difficult to qualify for a home loan today, yet the somewhat improved availability of loans becomes moot if you can’t find a home to buy.”

The active inventory continues to plummet with the 807 listings available at the end of the month off 54.6 percent from the 1,778 listings of July 2008.

At the current pace of sales, the activity inventory represents a mere 2.5-month supply. A year ago the supply at the then current pace of sales was 5.5 months. A balanced market occurs when there is a 5- to 6-month supply.

“The competition in the lower price ranges and steadily emerging sales in higher priced properties have the effect of firming up the median price,” Starczyk said. “There’s still uncertainty out there, but prices appear to have bottomed out.”

The median price of the 235 homes that sold last month in the Santa Clarita Valley was $410,000, down 7.0 percent from a year ago and equal to the median reported in June.

The median has been above $400,000 in all but one month since the low point for this cycle of $385,000 was reported in December 2008.

Price declines from the prior year have been getting smaller with July being the second consecutive month the decline was in single-digit territory after 16 months of double-digit drops with the largest being 27.0 percent in December 2008.

The 88 condos that changed owners last month had a median price of $218,900, down 23.2 percent from a year ago and off 5.8 percent from the June 2009 median.

The median has been steadily rising since the record low median of $205,000 was posted this January.

Pending escrows – a measure of future resale activity – increased 11.0 percent from a year ago. There were 425 open escrows at the end of July; a year ago there were 385

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Find short sales, REO, Foreclosures, Bank Owned Homes in the Santa Clarita and San Fernando Valley Today. Search MLS listings and find real estate information at www.yourvalleydreamhome.com Your Valley Dream Home. Here at REMAX, we are the #1 Real Estate Office In California.  There are many beautiful homes for sale and we would love to find you that perfect Dream Home of your very own today! We specialize in Valencia, Stevenson Ranch, Canyon Country, Newhall, Saugus, Burbank, Sherman Oaks, Studio City, Toluca Lake, Valley Villiage, Valley Glen, North Hollywood, Sylmar, Granada Hills, Northridge, North Hills, Porter Ranch, Encino, Lake Balboa, Tarzana, Reseda, Canoga Park, Winnetka, West Hills, Woodland Hills, Pasadena, Glendale, Castaic, Palmdale, santa clarita,valencia,newhall,saugus,burbank,san fernando,valley,studio city,sherman oaks,toluca lake,north hollywood,granada hills,northridge,north hills,foreclosure,short sale,reo,real estate owned,ciociolo,peralta,search,homes,www.yourvalleydreamhome.com,your valley dream home,remax

The volume of home re-sales has been on the upswing for four consecutive months.

The economy shed 247,000 jobs in July, less than expected and lowest total of losses since last August. Unemployment rate inches down to 9.4%.