Good morning. There is much to talk about on this Tuesday morning, so let’s get right to it:
Banks prefer short sales to foreclosures
A great article in the San Diego Daily Transcript talked about how banks are preferring to allow homeowners to short sell their home rather than have to take the home back as a foreclosure. It is faster and much less costly to the bank. This is why, according to RealtyTrac’s 2012 U.S. Foreclosure and Short Sales Report, short sales of California properties not in the foreclosure process increased 16% from the previous quarter and were up 20% from the third quarter of 2011. These sales accounted for an estimated 14% of all residential sales.
However, the expiration of the Mortgage Forgiveness Debt Relief Act that was passed a few years ago could change that. Normally the amount of debt that is forgiven in a short sale is taxable income. The Act took that away, making it more “affordable” for a homeowner to short sell their home. That Act is set to expire at the end of the year – which is coming up fast. It may or may not be extended. We’ll have to watch and see – and we will be sure to report the news if and when it is.
Both measures of foreclosure numbers are down in S.D. County
Both Notices of Default (the first step in the foreclosure process) and Trustee Deeds (the final step) were down in November compared to October as well as to November 2011. Notices of Default fell 24.2% from October to November and 53.1% from last year to this year. Trustee Deeds were down 12.3% from October and 44.1% from last November. These figures are according to the San Diego County Assessor’s Office.
More evidence of rising prices
Another article in the San Diego Daily Transcript talked about this month’s CoreLogic report on home prices in the U.S. The report said that national home prices rose 6.3% in October compared to last year. In San Diego, the increase was 3.9%. Home prices rose in 45 measured cities throughout the U.S.
Cheaper to rent now than 5 years ago
The San Diego County Apartment Association reported that rents throughout the County – for 1 bedroom as well as 2 bedroom apartments – is down from last year as well as from 5 years ago. However, the expectation is for rents to rise next year due to the improving economy and households “undoubling” – families who moved in together during the Great Recession will be splitting up.
Conforming Fannie and Freddie loan limits remain unchanged in 2013
The Federal Housing Finance Agency (FHFA) announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. In high-cost areas such as California, the loan limit is $625,000 for one-unit properties. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA) and are calculated each year.
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