TOM PLANT'S HOUSTON REAL ESTATE BLOG

Mortgage applications to purchase homes increased 7.4 percent last week on a seasonally adjusted basis compared to the previous week. This was the highest level since October 2009, according to the Mortgage Bankers Association’s weekly report.

On an unadjusted basis, purchase applications rose 8.5 percent compared with the previous week and were up 2.4 percent from the same week a year ago. The increase was driven by applications to purchase homes using government-guaranteed loans. About half of all sales were backed by the government, particularly the Federal Housing Administration, the MBA said.

“Purchase activity continues to increase as we approach the end of the home buyer tax credit program,” said Michael Fratantoni, MBA’s vice president of research and economics.

The increase came despite rising interest rates:

30-year fixed-rate mortgages increased to 5.08 percent from 5.04 percent.
15-year fixed-rate mortgages increased to 4.38 percent from 4.34 percent.
1-year ARMs increased to 7.03 percent from 6.95 percent.

Source: Mortgage Bankers Association (04/28/2010)

As the home buyer tax credits near their end, analysts are concluding that the program was both expensive and successful.

The Treasury Department estimates that the credits helped 1.8 million people buy homes, but critics reply that two-thirds of the $12.6 billion in credits spent through the end of February went to people who would have purchased a home anyway.

Sen. Johnny Isakson, a Republican from Georgia, who worked as a real estate practitioner for 30 years and pushed through the 2010 extension and expansion of the program, says: “It’s true that a lot of people who got the credit might have bought without it, but they might have bought in 2012 or 2013. This got them to buy in 2009 and 2010, when we needed to shore things up.”

Economist Mark Zandi at Moody’s Economy.com agrees. “The tax credit helped to stanch the price declines, which had substantial benefit for the entire economy,” he says. “The home is still the largest asset on most people’s balance sheet, so when prices are falling, nothing works for most families. But now people can take a deep breath and think clearly again.”

Source: The New York Times, David Kocieniewski (04/26/2010)

Housing has slowed to the point where demand is again outstripping supply, says Metrostudy founder Mike Castleman.

Metrostudy, which researches the housing industry, says demand is forcing up prices in some markets, including Washington, D.C. and Indianapolis, but it remains stagnant in Houston, Naples, Fla., Charlotte, and Denver.

Overall, Metrostudy and Castleman believe the worst is over. “The good news is that builders will need to build a lot more houses than last year to keep up with demand. That will help the economy by creating jobs,” Castleman says.

Source: Fortune, Shawn Tully (04/26/2010)

The jumbo mortgage market is taking small steps toward normalcy.

In the first few months of 2010, Wells Fargo, Bank of America, and U.S. Bank have become more aggressive in originating jumbo mortgages, says A.W. Pickel, president of LeaderOne Financial, a mortgage lender in Overland Park, Kan. “If you underwrite carefully and cautiously, a jumbo loan is a very good money maker for a bank,” he says.

Last week, Redwood Trust Inc. announced plans to sell mortgage-backed securities based on high-quality jumbo loans, one of the first private firms to do so since 2008.

If the program is successful, it could lead to more investors taking the leap and a loosening of the jumbo market, says Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association.

Source: MarketWatch, Amy Hoak (04/26/2010)

Single family home sales in Houston for the First Quarter 2010 were even with the same period last year. Sales of homes priced under $350,000 were down 3% and sales of homes priced above $350,000 increased 36%.

Many of Houston’s upper end neighborhoods showed strong signs of recovery. However, Tanglewood has yet to experience increased demand. In the First Quarter of 2010 there were 7 homes sold in Tanglewood, one more than in 2009. In the important more than $1 million category, 4 homes were sold, one fewer than 2009. At the sales rate of the First Quarter, it will take 3 years to clear the Tanglewood inventory of homes priced more than $1 million.

Detailed statistics are:

Based upon information from the Houston Association of Realtors® or its MLS for the periodJanuary 1,2009 to March 31, 2010.

Sales of single family homes Inside Loop 610 increased 21.7% in the First Quarter. As I have indicated, the increase was not consistent for all neighborhoods.

The City of Bellaire TX straddles Loop 610 with a portion of the city Inside the Loop and the majority outside. Single family home sales in Bellaire increased 47% compared to 2009. While this is very significant, sales still have not returned to a rate we would consider “healthy”. It would require a year to sell all of the homes at the increased rate experienced during the First Quarter. It is significant that sales of homes over $1 million increased from 6 to 10.

Detailed statistics are:

HOUSTON SINGLE FAMILY HOME SALES

FIRST QUARTER COMPARISON 2009 AND 2010 – NUMBER OF HOMES

Current Listings as of April 1, 2010

Based upon information from the Houston Association of Realtors® or its MLS for the period January 1,2009 to March 31, 2010.

OPTION PENDING – Tom D Plant represents the Buyer

Rare find! Freestanding patio home with first floor living, elevator ready closets* and gated front yard. Kitchen with granite counters and stainless steel appliances – overlooking dining room and yard. Second floor has huge master suite and gameroom. Two bedrooms on third floor. Located mere blocks from cafes on Westheimer and shopping in River Oaks Shopping Center. No HOA fees*! *=Per Seller

LIST PRICE: $364,900

A classic Southgate area home with recent* updates.This spacious and well cared for home has 3 bedrooms,2.5 baths and wood floors throughout.The first floor living spaces are light and bright and are well suited for both formal and informal entertaining.The large 7,200 sf** lot provides a generous fully fenced backyard.The 2,253 sf** size does not include the bonus room located above the detached garage.The location with easy access to Medical Center,Rice U,Rice Village *=per seller **=per HCAD

2316 WORDSWORTH                                                                                                                              OPEN 3:00 to 5:00

List Price $639,000

This light and bright home was 2003 Bellaire Showcase Home*.The gourmet kitchen,warm family room,formal room,formal dining room and custom swimming pool invite both formal and informal entertaining.This beautiful and sophisticated home also is a comfortable family retreat.The generous master bedroom is complemented by three additional bedrooms nestled around a large gameroom.This home must be seen to be truly appreciated. *per seller

4611 BRAEBURN                                                                                                                                                     OPEN 12:00 to 2:00

List Price: $1,149,000

The 30-year fixed mortgage rate stayed flat this week, averaging 5.07 percent to remain near historically low levels, reported Freddie Mac.

Here’s how other rates performed:

• 15-year fixed loans fell to 4.39 percent from 4.4 percent last week.
• Five-year hybrid adjustable-rate mortgage averaged 4.03 percent, down from 4.08 percent.
• One-year ARMs rose to 4.22 percent from 4.13 percent last week.

Source: Wall Street Journal, Nathan Becker (04/23/10)