Here is your open thread for Monday July 20th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Sniglet » Jul 20, 2009 at 6:59 am
The phenomena of lenders refusing to actually take posession of homes from owners who are delinquent on mortgages is just astounding. A few short years ago any talk of this type of bank behaviour would have been considered utter fantasy. I am simply speechless to see how things which we have previously considered to be immutable laws of the real-estate market have been turned upside down.
In any event, stories like this (i.e. with lenders refusing to posess foreclosed homes), it becomes hard to see how the real-estate market is going to recover any time in the foreseeable future. There is a growing over-hang of distressed properties, that will keep holding the market down for years to come.
It would be interesting to know how prevalent this is in the Seattle area, but this is likely impossible to know since lenders don’t report such data, and no statistics are kept.
http://blog.cleveland.com/metro/2009/07/bank_walkaways_from_foreclosed.html
Sniglet » Jul 20, 2009 at 7:08 am
I haven’t heard a lot of talk about the mortgage insurers anymore, but the little I do hear isn’t good. MGIC, for example, is still bleeding red. Does anyone know if it is easier, or harder, to get mortgage insurance these days (other than from government agencies like FHA)?
http://www.reuters.com/article/marketsNews/idINN1319502020090716?rpc=44
Kary L. Krismer » Jul 20, 2009 at 7:57 am
RE: Sniglet @ 2 – I don’t know what you mean harder to get, but it is the reason why you need more down for a conventional loan now than before.
Part of the problem for those companies is hardly anyone was using them for years. The 80/20 was used to avoid PMI. Now almost no one will give a 20, and so people have to move to either higher down with PMI or FHA. But the problem is, the PMI companies don’t have a great deal of income stream from prior transactions because no one was using them. Imagine being a health insurance company after the outbreak of a pandemic, if 80% of your insureds are new customers. It would be tough at first.
Sniglet » Jul 20, 2009 at 8:35 am
What I mean is this: what are the terms and conditions for private mortgage insurance these days, and how much has that changed from a few years ago? What kind of down-payments are required? Are the fees higher than they used to be? Are there certain types of homes, or loans, for which private insurance is simply no longer available? I have heard that particular areas have been completely black-balled by mortgage insurers, which would seem to indicate that private mortgage insurance simply isn’t available in some regions of the country.
Kary L. Krismer » Jul 20, 2009 at 8:57 am
RE: Sniglet @ 4 – I know you can get it for 15% down, not sure about 10% now. I’m pretty sure it used to be 0%, but as mentioned, most went 80/20 instead. I’ve not heard about any other limitations, but that’s a better question for a mortgage person.
Most of our buyers switched to FHA when the availability of low down conventional dried up. The biggest limitation on FHA is you can only have one at a time, so if you happen to have an existing FHA loan, you’d have to sell first. I’ve only run into that once, and it was someone who had a 20 year old mortgage where he only owed a tiny amount, but that meant he had to sell first.
The biggest restriction right now is if you own a condo that’s not FHA approved, good luck, because that limits you to buyers with significant down payments. I don’t think I’ve ever come across a house that couldn’t be FHA, or if such a beast even exists (other than based on condition–e.g. bad roof).
Joe » Jul 20, 2009 at 3:30 pm
I would love to see some content on the Seattle rental market. Any good recent stories about average rents here?
alex » Jul 21, 2009 at 12:01 pm
Sales are happening…
Every week, a couple of them get closed in my neighborhood (Woodinville/Bothell), and the closing price is typically 10-15% more than what the same house would have sold for back in January/February, when sellers were desperate.
There more I look at it, the more it seems to me that this is a bigger bounce than the seasonal “spring bounce”.
Anyone else doing this type of micro-monitoring, who can share data about their region?
What The Heck » Jul 21, 2009 at 2:54 pm
RE: alex @ 7 –
Had 3 sales in my neighborhood in Thurston County since mid June.
1 sold in 2 days with multiple offers. Led to believe they got the full asking price plus $1000
1 sold the day it hit the MLS for full price or maybe more – not sure if more than 1 offer.
1 that had been on the market for over 240 days went to pending and the owners are moving out.
Nothing available now. Listing prices were about 10-12% below peak sales prices for this hood.
Will be interesting to see what the final sales prices were when closed. All 3 were listed at or near $330,000
Lake Hills Renter » Jul 21, 2009 at 4:08 pm
I haven’t seen anything move in my Lake Hills neighborhood in many months. The same houses are still for sale, and very few have lowered their price from what I can tell. Seems to be a waiting game in a stagnant market.
Kary L. Krismer » Jul 21, 2009 at 4:24 pm
RE: Lake Hills Renter @ 9 – Assuming you mean Bellevue, there were 25 sales in the past six months where the agent listed Lake Hills as the community (note that requirement–it carries through to the other numbers). There are 15 in some stage of pending, 6 of which are short sales. Only 16 active listings, 6 of which have been on the market more than 100 days.
Interestingly, the median active is very close to the median sold, and the average active isn’t that much higher than the average sold. That’s not the case in a lot of areas.
Numbers not complied or guaranteed by NWMLS.