Welcome to the Market Matters Advisory, your weekly guide to responding to the market.

February 7, 2008




  CNNMoney.com

Foreclosures up 75 percent in 2007

The number of households in foreclosure who lost their home soared in 2007 to about 405,000 households. For the year, total filings-which include default notices, auction sale notices and bank repossessions-grew 75 percent, according toRealtyTrac, an online seller of foreclosure properties.

"There are parts of the country where we're seeing many more bank repossessions," said Rick Sharga, a spokesman for RealtyTrac. "People are flat out losing their homes."

MAKING SENSE OF THE STORY FORCONSUMERS

• While these numbers on the surface might sound alarming, a little perspective is in order. Foreclosures were lower prior to last year, and that causes the numbers to appear to be soaring only whenlooked at purely in terms of percentage gains.
• RealtyTrac reports defaults on loans, not on properties, so one household that defaults on a primary loan and an equity line will be counted as two defaults, even though both loans were for the same house. This could artificially inflate foreclosure statistics.
• A foreclosure filing includes default notices, auction sale notices and bank repossessions. One home may fall into each of these categories as it movesthrough the long foreclosure process. RealtyTrac counts each step along the way separately. This also skews foreclosure statistics.
• The overwhelming majority of homes are not in danger of foreclosure. If slightly more than 1 percent of U.S. homes were in some stage of foreclosure last year, then 99 percent of homes were not. Although some of the hardest hit communities with high concentrations of defaults are suffering, those communities do not reflect California overall.
• There are tremendous differences between counties and cities as well as neighborhoods in the same town-all the more reason consumers need a REALTOR® who is a local community expert.
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To read the full story,click here. 


  Business Week

Housing meltdown: Why home prices could drop 25 percent more on average before the market finally hits bottom.

"This is a historic turning point," said Yale economist Robert J. Shiller.

MAKING SENSE OF THE STORY FOR CONSUMERS

• A house is not a stock. It's always been first and foremost a place to live, to raise a family or to retire. Even when prices were falling, home buyers who pursued a buy and hold strategy--retaining the property at least five years--have almost always come out ahead in the long-run. Historically, the value of single-family homes in California has increased about 9 percent a year.
• Mortgage interest rates have declined rapidly since the Fed began a series of successive interest rate reductions in January, which bodes well for a quicker turn around.
• The credit crunch was one of the prime factors contributing to the decline in median homeprices; the market should begin to stabilize as that problem eases.
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To read the full story, click here.

  USA Today

An Open Door for First-Time Home Buyers

Even in today's market, homeowners needn't have a stratospheric down payment and the squeakiest of credit histories to get into a house.

MAKING SENSE OF THE STORY FOR CONSUMERS

• Clients who don't have 20 percent to put down will find a 10 percent down payment isoften acceptable with good credit.
• Loans for 100 percent of the purchase price are extremely rare but are still available for a conforming loan of $417,000 or less and for consumers with a credit score of 700 or higher.
• Congress is considering loosening rules on the Federal Housing Administration's mortgage-insurance program, which gives buyers with imperfect credit better odds of approval.
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To read the full story, click here.

In other news:

  Palm Springs Desert Sun

Survey: Mortgage help out there, but not many know 


  Sacramento Bee

Lien times hit Elk Grove: Lawsuits jolt new subdivision's residents


  Hollister Free LanceSaving homes 



Tips on upcoming news stories, especially those that warrant a closer look.

  Los Angeles Business Journal

"The Los Angeles Business Journal" is examining unsold inventory and time on market trends in Los Angeles County. The story is scheduled to run Monday, Feb. 11.

For a link, click here.

Here's what to tell consumers.

• · Over the long-run, the median home price of an existing single-family home in California has increased about 9 percent a year since 1969, according to the CALIFORNIA ASSOCIATION OF REALTORS®. 
• · The Mortgage Bankers Association in Washington said Wednesday that its index of total mortgage applications rose 3 percent last week to its highest level since March 2004, and applications were up 73 percent from a year earlier. This could be a sign that potential buyers are regaining confidence in the market.
• · Homeowners accumulate significantly more wealth than renters. According to the most recent Federal Reserve Survey of Consumer Finances, the median net wealth of a renter household is $4,800, while the median net wealth of a homeowner household is $171,700.