Source: The Wall Street Journal, June Fletcher (03/19/2010)

Shadow Inventory Unlikely to Hurt Market
Nearly 5 million houses and condos, of which the mortgages are delinquent, will go through foreclosure over the next few years, a new study by John Burns Real Estate Consulting Inc. concludes.

This represents more than half of the 7.7 million households now behind on their mortgage payments. The situation is worst in Arizona, California, Florida, and Nevada. Burns calculates that there is an inventory equivalent to 27 months of sales in Orlando, 24 months in Miami, and 18 months in Las Vegas.

Consulting firm CEO John Burns says there is strong investor demand for these properties, so as long as employment continues to recover and interest rates remain moderate, these sales won’t have much impact on overall prices.

Buyer Sues Over Secondhand Smoke
A lawsuit over secondhand smoke that goes to trial today in Boston will decide whether the real estate practitioner who represented the now-unhappy buyer is liable for damages over smoke that is wafting from a neighboring apartment.

While secondhand smoke has been a target of many lawsuits, a suit that alleges that the real estate professional representing the buyer can be held liable for failing to inform her that there could be secondhand smoke is a first in Massachusetts and, possibly, anywhere.

Real Estate Associate Joseph DeAngelo and Gibson Sotheby’s International Realty, with whom he’s associated, deny that Alyssa Burrage, who suffers from asthma, asked any questions about smoke in the condo before she purchased it.

“DeAngelo never made any misrepresentations, or any representations at all, concerning the source of the alleged smoke smell,’’ DeAngelo’s lawyer, Jay S. Gregory of Boston, said in the filing.

The smoker, who lives in the apartment below, and the condominium association were also sued and settled to avoid a trial.

Richard Daynard, chairman of Northeastern University’s Tobacco Products Liability Project, which tracks secondhand smoke litigation nationally, said the outcome of this suit could have broad repercussions.

Two changes expected to make a big difference are: Lenders will be required to collect two pay stubs at the start of the process, and borrowers will be required to give the Internal Revenue Service permission to provide their most recent tax returns.

Participating mortgage service companies will be required to acknowledge that they have received a borrower’s application within 10 days and approve or deny the application within 30 days. Borrowers will still be required to make three months of trial payments before the modification is made permanent.

Treasury officials are also reportedly devising a plan to give unemployed borrowers a break on payments – probably for six months – but because the details aren’t decided, the announcement won’t be made this week.

Source: The Associated Press, Alan Zibel (01/27/2010)

This week, average interest on 30-year mortgages was 4.99 percent, compared to 5.06 percent last week and 5.16 percent a year ago.

Rates on 15-year fixed loans also followed bond yields lower, averaging 4.40 percent, compared to 4.45 percent last week; and adjustable-rate mortgages also fell this week.

Source: Los Angeles Times, E. Scott Reckard (01/22/10)

Sellers Should List Homes Early
Selling a home in the dead of winter might seem ill-advised, particularly considering the state of the economy, but some experts think that making the decision to wait until spring to list the property could be a mistake.

Government incentives will likely have a big impact in 2010, with many buyers determined to sign a contract before the April 30 tax credit deadline.

“This year, we’re anticipating sales will peak earlier,” says Nicole Hall, editor in chief of Lendingtree.com, an online mortgage comparison service. “The best time to get your house on the market will be February or early March, and maybe even earlier if you want to avoid competition.”

Traffic on real estate Web sites begins to rise right after the New Year, says Ken Shuman, spokesman for real estate Web site Trulia.com.

Source: Forbes.com, Francesca Levy (12/24/2009)

December 2009 Bainbridge Island home sales were 161% of sales for the same month last year and 140% of total for Dec. 2007. Kingston soared way ahead of the past couple of years and Poulsbo sold 2.5 times as many as in Dec. 2008, despite the inventory being half that of last year. Suquamish sold homes were double over last year’s count and Indianola is flat. Call me at 206.755.5139 to discuss this data, your purchasing power with regard to a new home, or for an analysis of your current home’s value.