From the Atlanta Journal Constitution (Paul Donsky)
A Chicago company wants to rezone a 181-acre tract south of McDonough in Henry County that would allow for construction of two massive warehouse distribution centers.
The company, Alter Group, would not build until it has a customer who needs the space, Henry County officials said.
The property, just east of I-75, has become a distribution center hotbed. Whirlpool is building a warehouse facility nearby, said Bob White, executive director of the Henry County development authority.
Henry’s location is attractive, White said, because the county is close to the port of Savannah and provides easy access to Florida and other large markets in the Southeast.
In the rezoning application, Alter is seeking permission to build two buildings, each up to 1.5 million square feet. The project must be approved by Henry’s zoning review board and county commission. It’s also large enough to require a review by the Atlanta Regional Commission.
Ray Gibson, director of Henry’s planning and zoning department, said the county welcomes the new development but is also seeking to diversity its economy so it’s not so concentrated in the distribution center market.
“Once you put all your eggs in one basket, that becomes a problem economically,” he said.
Looking for a new home in Henry County or anywhere else in metro Atlanta? Call us today at 770.481.0052 to discuss financing options, or visit our website at www.peachtreemortgageservices.net.
Thursday, July 2, 2009
Wednesday, July 1, 2009
Pending Home Sales Up 4th Straight Month in May
From the Atlanta Journal Constitution
WASHINGTON — Pending home sales rose in May for the fourth straight month, spurred by low prices and a first-time homebuyers tax credit, fresh evidence that the housing sector may be recovering.
The National Association of Realtors said Wednesday that its seasonally adjusted index of pending sales increased by 0.1 percent in May to 90.7. Analysts expected no change, according to Thomson Reuters.
While the increase was small, it followed a 7.1 percent jump in the index in April.
"The pronounced increase in April and the fact that May sustained this rise does indicate that actual existing home sales are poised to rise in the coming month or two," said Joshua Shapiro, chief U.S. economist for economic forecasting firm MFR Inc., in a note to clients
.
The index, which tracks signed contracts to purchase previously occupied homes, is considered a barometer for future home sales. Typically there is a one- to two- month lag between a sales contract and a completed deal.
The index is now 6.7 percent higher than in May 2008, when it was 85. The last time it increased for four straight months was in October 2004, the NAR said.
Other recent housing indicators have been mixed. The Realtors said last week that completed home sales rose 2.4 percent from April to May, the third month-to-month increase this year.
But new home sales dipped 0.6 percent in May.
Separately, the volume of mortgage applications to purchase a home is effectively flat over the past four weeks, the Mortgage Bankers Association said Tuesday.
Still, low home prices and an $8,000 first-time homebuyers' tax credit, included in the Obama administration's stimulus package, are spurring greater interest among home buyers, the Realtors said.
On a regional basis, the pending home sales index rose 3.1 percent to 80.9 in the Northeast while also increasing 2.2 percent to 96.9 in the West. The index dropped 1.3 percent to 89.2 in the Midwest and fell 1.7 percent to 92.6 in the South.
Posted by Peachtree Mortgage Services, Inc. Visit our website at www.peachtreemortgageservices.net.
WASHINGTON — Pending home sales rose in May for the fourth straight month, spurred by low prices and a first-time homebuyers tax credit, fresh evidence that the housing sector may be recovering.
The National Association of Realtors said Wednesday that its seasonally adjusted index of pending sales increased by 0.1 percent in May to 90.7. Analysts expected no change, according to Thomson Reuters.
While the increase was small, it followed a 7.1 percent jump in the index in April.
"The pronounced increase in April and the fact that May sustained this rise does indicate that actual existing home sales are poised to rise in the coming month or two," said Joshua Shapiro, chief U.S. economist for economic forecasting firm MFR Inc., in a note to clients
.
The index, which tracks signed contracts to purchase previously occupied homes, is considered a barometer for future home sales. Typically there is a one- to two- month lag between a sales contract and a completed deal.
The index is now 6.7 percent higher than in May 2008, when it was 85. The last time it increased for four straight months was in October 2004, the NAR said.
Other recent housing indicators have been mixed. The Realtors said last week that completed home sales rose 2.4 percent from April to May, the third month-to-month increase this year.
But new home sales dipped 0.6 percent in May.
Separately, the volume of mortgage applications to purchase a home is effectively flat over the past four weeks, the Mortgage Bankers Association said Tuesday.
Still, low home prices and an $8,000 first-time homebuyers' tax credit, included in the Obama administration's stimulus package, are spurring greater interest among home buyers, the Realtors said.
On a regional basis, the pending home sales index rose 3.1 percent to 80.9 in the Northeast while also increasing 2.2 percent to 96.9 in the West. The index dropped 1.3 percent to 89.2 in the Midwest and fell 1.7 percent to 92.6 in the South.
Posted by Peachtree Mortgage Services, Inc. Visit our website at www.peachtreemortgageservices.net.
Tuesday, June 30, 2009
Clayton Commission Weighs Tax Hike
From the Atlanta Journal Constitution (Steve Visser)
Clayton County commissioners are considering raising property taxes above the rate that recently prompted a revolt in Gwinnett.
Commission Chairman Eldrin Bell said the commission will have to raise property taxes by a 2.9 millage rate boost — putting the county’s rate at 31.9 for the county and school board portions — and one of the highest rates in the region — if it is going to avoid furloughing county workers, including police and firefighters. Last week, the commission said it didn’t support furloughs when it was facing a roomful of angry county employees and their supporters.
“I think the public will go along with it,” Bell said. “Local government can’t cut its way out of this budget crisis and give the public the services they desire.”
But the tax hike would mean that Clayton, currently about even with low-tax Cobb County, would edge out Gwinnett for the second highest tax rate in the metro area. Only high-tax Atlanta , which passed a three mill hike to end furloughs Monday will surpass it.
The Atlanta hike means its residents will pay a 42-mill rate, which combines the city, county and school board share of the property taxes.
Commissioners in Gwinnett County, which has a 31.8 total millage rate, balked at raising its taxes by additional three mills earlier this month.
Clayton Commissioner Wole Ralph said he would support some sort of tax hike but he stopped short of saying he would support a 2.9 millage increase. He said he thought the residents would go a long with a hike as long as commissioners could show they getting better services — especially in public safety. He noted the public approved a Special Local Option Sales Tax for public safety last year.
“I’m not sure how much the increase is going to be,” he said. “The issue will be whether we privatize some of the services out, fully fund the departments in regards to staffing or do some furloughs that aren’t related to public safety.”
Posted by Peachtree Mortgage Services, Inc. Visit our website at www.peachtreemortgageservices.net, or call us today at 770.481.0052.
Clayton County commissioners are considering raising property taxes above the rate that recently prompted a revolt in Gwinnett.
Commission Chairman Eldrin Bell said the commission will have to raise property taxes by a 2.9 millage rate boost — putting the county’s rate at 31.9 for the county and school board portions — and one of the highest rates in the region — if it is going to avoid furloughing county workers, including police and firefighters. Last week, the commission said it didn’t support furloughs when it was facing a roomful of angry county employees and their supporters.
“I think the public will go along with it,” Bell said. “Local government can’t cut its way out of this budget crisis and give the public the services they desire.”
But the tax hike would mean that Clayton, currently about even with low-tax Cobb County, would edge out Gwinnett for the second highest tax rate in the metro area. Only high-tax Atlanta , which passed a three mill hike to end furloughs Monday will surpass it.
The Atlanta hike means its residents will pay a 42-mill rate, which combines the city, county and school board share of the property taxes.
Commissioners in Gwinnett County, which has a 31.8 total millage rate, balked at raising its taxes by additional three mills earlier this month.
Clayton Commissioner Wole Ralph said he would support some sort of tax hike but he stopped short of saying he would support a 2.9 millage increase. He said he thought the residents would go a long with a hike as long as commissioners could show they getting better services — especially in public safety. He noted the public approved a Special Local Option Sales Tax for public safety last year.
“I’m not sure how much the increase is going to be,” he said. “The issue will be whether we privatize some of the services out, fully fund the departments in regards to staffing or do some furloughs that aren’t related to public safety.”
Posted by Peachtree Mortgage Services, Inc. Visit our website at www.peachtreemortgageservices.net, or call us today at 770.481.0052.
Monday, June 29, 2009
Belmont Hills Shopping Center Demolition Project Under Way
From the Marietta Daily Journal (Ashley Hungerford)
SMYRNA - Demolition has begun at Belmont Hills Shopping Center.
Smyrna city officials issued five demolition permits to Halpern Enterprises for the first stage of demolition. The permits are for four buildings on the back of the main shopping center. The fifth permit was for the closed Burger King building.
Demolition, which began Thursday, will continue until early 2010.
City Councilman Teri Anulewicz, whose district includes the shopping center, said this phase of the development has been a long time coming.
"Citizens will now be able to see tangible evidence that the project is moving forward," she said. "This will be a big boost to everyone in Smyrna."
Halpern Enterprises owns the 48-acre property at the corner of Atlanta and Windy Hill roads. It plans to demolish the entire shopping center and replace it with a mixed-use project featuring 127,000 square feet of retail and office space and 900 residential units, from luxury rentals to single-family houses to senior living.
Halpern Enterprises plans to start construction of phase one in early 2010, with the first buildings being completed by 2011.
City officials view the redevelopment of this corner as a vital piece in redeveloping the northern entrance into the city. Once a premiere shopping center, most of the Belmont Hills storefronts are now empty.
The first phase will be several of the mixed-use buildings, retail space and restaurants closest to the corner of Atlanta and Windy Hill roads. This phase includes the independent senior living units and luxury rentals. The remainder of the project will be built as market conditions permit, owner Jack Halpern told the City Council in January.
The city helped Halpern Enterprises secure a new type of financing after a Georgia Supreme Court decision regarding tax allocation districts affected the companies pursuit of a TAD subsidy for the project. In May 2008, Smyrna and the county agreed to finance $23.5 million of the $250 million mixed-use project through a tax-increment financing. A TIF is similar to a TAD subsidy, except that no bonds are issued and the developer does not get any of the money in advance.
The developer pays for the improvements up front and is repaid with any additional tax revenue generated by the development. In this form of financing, the developer assumes the risk.
Posted by Peachtree Mortgage Services, Inc. Buying a new home in Smyrna or anywhere else in metro Atlanta? Call us today at 770.481.0052, or visit our website at www.peachtreemortgageservices.net.
SMYRNA - Demolition has begun at Belmont Hills Shopping Center.
Smyrna city officials issued five demolition permits to Halpern Enterprises for the first stage of demolition. The permits are for four buildings on the back of the main shopping center. The fifth permit was for the closed Burger King building.
Demolition, which began Thursday, will continue until early 2010.
City Councilman Teri Anulewicz, whose district includes the shopping center, said this phase of the development has been a long time coming.
"Citizens will now be able to see tangible evidence that the project is moving forward," she said. "This will be a big boost to everyone in Smyrna."
Halpern Enterprises owns the 48-acre property at the corner of Atlanta and Windy Hill roads. It plans to demolish the entire shopping center and replace it with a mixed-use project featuring 127,000 square feet of retail and office space and 900 residential units, from luxury rentals to single-family houses to senior living.
Halpern Enterprises plans to start construction of phase one in early 2010, with the first buildings being completed by 2011.
City officials view the redevelopment of this corner as a vital piece in redeveloping the northern entrance into the city. Once a premiere shopping center, most of the Belmont Hills storefronts are now empty.
The first phase will be several of the mixed-use buildings, retail space and restaurants closest to the corner of Atlanta and Windy Hill roads. This phase includes the independent senior living units and luxury rentals. The remainder of the project will be built as market conditions permit, owner Jack Halpern told the City Council in January.
The city helped Halpern Enterprises secure a new type of financing after a Georgia Supreme Court decision regarding tax allocation districts affected the companies pursuit of a TAD subsidy for the project. In May 2008, Smyrna and the county agreed to finance $23.5 million of the $250 million mixed-use project through a tax-increment financing. A TIF is similar to a TAD subsidy, except that no bonds are issued and the developer does not get any of the money in advance.
The developer pays for the improvements up front and is repaid with any additional tax revenue generated by the development. In this form of financing, the developer assumes the risk.
Posted by Peachtree Mortgage Services, Inc. Buying a new home in Smyrna or anywhere else in metro Atlanta? Call us today at 770.481.0052, or visit our website at www.peachtreemortgageservices.net.
Friday, June 26, 2009
SunTrust Plans Stock Offering to Meet Fed's Mandate
From the Atlanta Journal-Constitution (Paul Donsky)
Under the gun to satisfy a government mandate to shore up its capital base, SunTrust said Monday it plans to raise $1.4 billion through a common stock offering.
The move is a disappointment for Atlanta-based SunTrust, which just two weeks ago said it planned to sell shares over time on the open market, which the company hoped would fetch higher prices than a single stock offering, minimizing the impact on existing shareholders.
But SunTrust pulled the plug on that strategy after raising $260 million, far short of the bank’s initial $1.25 billion goal. The stock offering announced Monday will likely be completed in a day, analysts said, but will come at a cost as institutional investors demand a discounted price.
In a news release, SunTrust said the stock sale plan accelerates the company’s effort to meet the capital-raising target.
Some analysts criticized the company for not holding a large stock offering in early May, when the government announced that SunTrust and nine other banks had to raise capital in order to cover potential losses should the economy worsen.
At the time, SunTrust stock traded at more than $20 per share. On Monday, the company’s stock opened at about $13.
SunTrust hoped share prices would keep rising, but “events have not gone their way in the last two weeks,” said Jeff Davis, an analyst at Howe Barnes who follows SunTrust stock.
SunTrust announced the stock sale less than a week before a June 8 deadline to give the government a detailed plan to boost its capital buffer by $2.2 billion. In addition to the stock sale, the bank — struggling with soured real estate loans — plans to raise $300 million by selling securities and other assets.
The stock sale will dilute the holdings of existing shareholders, shrinking dividend payments and eroding earnings per share. That could weaken the company in the eyes of investors and cause SunTrust to find a merger partner, Davis said.
“Companies have to earn the right to remain independent, and how they do that is earn more money than their peer or have better earnings per share than peers,” he said.
Another analyst, Chris Marinac of FIG Partners in Atlanta, said the capital-raising plan puts the company on solid footing to weather the current economic storm and emerge in shape to make new loans and even make acquisitions.
Posted by Peachtree Mortgage Services, Inc. Call us today at 770.481.0052, or visit our website at www.peachtreemortgageservices.net.
Under the gun to satisfy a government mandate to shore up its capital base, SunTrust said Monday it plans to raise $1.4 billion through a common stock offering.
The move is a disappointment for Atlanta-based SunTrust, which just two weeks ago said it planned to sell shares over time on the open market, which the company hoped would fetch higher prices than a single stock offering, minimizing the impact on existing shareholders.
But SunTrust pulled the plug on that strategy after raising $260 million, far short of the bank’s initial $1.25 billion goal. The stock offering announced Monday will likely be completed in a day, analysts said, but will come at a cost as institutional investors demand a discounted price.
In a news release, SunTrust said the stock sale plan accelerates the company’s effort to meet the capital-raising target.
Some analysts criticized the company for not holding a large stock offering in early May, when the government announced that SunTrust and nine other banks had to raise capital in order to cover potential losses should the economy worsen.
At the time, SunTrust stock traded at more than $20 per share. On Monday, the company’s stock opened at about $13.
SunTrust hoped share prices would keep rising, but “events have not gone their way in the last two weeks,” said Jeff Davis, an analyst at Howe Barnes who follows SunTrust stock.
SunTrust announced the stock sale less than a week before a June 8 deadline to give the government a detailed plan to boost its capital buffer by $2.2 billion. In addition to the stock sale, the bank — struggling with soured real estate loans — plans to raise $300 million by selling securities and other assets.
The stock sale will dilute the holdings of existing shareholders, shrinking dividend payments and eroding earnings per share. That could weaken the company in the eyes of investors and cause SunTrust to find a merger partner, Davis said.
“Companies have to earn the right to remain independent, and how they do that is earn more money than their peer or have better earnings per share than peers,” he said.
Another analyst, Chris Marinac of FIG Partners in Atlanta, said the capital-raising plan puts the company on solid footing to weather the current economic storm and emerge in shape to make new loans and even make acquisitions.
Posted by Peachtree Mortgage Services, Inc. Call us today at 770.481.0052, or visit our website at www.peachtreemortgageservices.net.
Thursday, June 25, 2009
Empty Buildings Under Guard
From the Atlanta Journal-Constitution (Gertha Coffee)
Squatters beware. Just because a property is vacant doesn’t mean it’s not being watched.
Take Edens & Avant. The Columbia, S.C., developer owns 140 properties from Boston to Miami, including 14 in the Atlanta area. Properties are centered around grocery-anchored tenants, such as the Publix shopping center in Toco Hills, Lenox Marketplace and Merchant’s Walk in East Cobb. Even when one is vacant, the developer operates “business as usual.”
“We keep our vacancies well-maintained,” said Joe Edens III, Edens & Avant property manager. “We are routinely on the properties and have security where appropriate. We keep our properties clean.”
Maintenance is especially important because vacancies can be more expensive to insure than occupied property, experts say. Premiums and deductibles are higher and policies more restrictive because of greater susceptibility to damage, said David Cohen, senior director of real estate for California-based Fireman’s Fund Insurance Co. “On an unoccupied building, you may see a surcharge of 20 to 25 percent.”
His company recently paid $3 million for a claim because a valve in a restroom broke and leaked for four days before being noticed. “It went from the ceiling to the ground floor and did a lot of damage,” he said.
And while vacant property is not as valuable to owners as buildings with rent-paying tenants, “the cost to rebuild or replace has not necessarily decreased,” said Tim Ehrhart, real estate segment manager of the Chubb Group of Insurance Cos. in New Jersey.
The insurance industry has seen a double-digit increase in damages to vacant properties due to theft, fire and frozen pipes over the past year, he said.
“It could be a situation where kids come in and are playing around and get injured,” he said. “Or trespassers come in, set a fire to cook or get warm and the building burns down.”
Rates are based on loss experience and typically are adjusted when policies are renewed, said Dave Colmans, executive director for the Georgia Insurance Information Service, a trade association for property and casualty companies that do business in Georgia.
“Risk goes up substantially when you start losing tenants, especially lots of tenants,” Colmans said. “It’s a significant concern for property owners ….You could start getting into a situation where insurers might not want to take the risk at all.”
Office vacancies reached 17 percent in first quarter 2009 in metro Atlanta; industrial stood at 17.6 percent and retail nearly 10 percent, according to Jones Lang LaSalle, a real estate services firm.
Posted by Peachtree Mortgage Services, Inc. Buying a new home in metro Atlanta or anywhere else in the state of Georgia? Call us today at 770.481.0052, or visit our website at www.peachtreemortgageservices.net.
Squatters beware. Just because a property is vacant doesn’t mean it’s not being watched.
Take Edens & Avant. The Columbia, S.C., developer owns 140 properties from Boston to Miami, including 14 in the Atlanta area. Properties are centered around grocery-anchored tenants, such as the Publix shopping center in Toco Hills, Lenox Marketplace and Merchant’s Walk in East Cobb. Even when one is vacant, the developer operates “business as usual.”
“We keep our vacancies well-maintained,” said Joe Edens III, Edens & Avant property manager. “We are routinely on the properties and have security where appropriate. We keep our properties clean.”
Maintenance is especially important because vacancies can be more expensive to insure than occupied property, experts say. Premiums and deductibles are higher and policies more restrictive because of greater susceptibility to damage, said David Cohen, senior director of real estate for California-based Fireman’s Fund Insurance Co. “On an unoccupied building, you may see a surcharge of 20 to 25 percent.”
His company recently paid $3 million for a claim because a valve in a restroom broke and leaked for four days before being noticed. “It went from the ceiling to the ground floor and did a lot of damage,” he said.
And while vacant property is not as valuable to owners as buildings with rent-paying tenants, “the cost to rebuild or replace has not necessarily decreased,” said Tim Ehrhart, real estate segment manager of the Chubb Group of Insurance Cos. in New Jersey.
The insurance industry has seen a double-digit increase in damages to vacant properties due to theft, fire and frozen pipes over the past year, he said.
“It could be a situation where kids come in and are playing around and get injured,” he said. “Or trespassers come in, set a fire to cook or get warm and the building burns down.”
Rates are based on loss experience and typically are adjusted when policies are renewed, said Dave Colmans, executive director for the Georgia Insurance Information Service, a trade association for property and casualty companies that do business in Georgia.
“Risk goes up substantially when you start losing tenants, especially lots of tenants,” Colmans said. “It’s a significant concern for property owners ….You could start getting into a situation where insurers might not want to take the risk at all.”
Office vacancies reached 17 percent in first quarter 2009 in metro Atlanta; industrial stood at 17.6 percent and retail nearly 10 percent, according to Jones Lang LaSalle, a real estate services firm.
Posted by Peachtree Mortgage Services, Inc. Buying a new home in metro Atlanta or anywhere else in the state of Georgia? Call us today at 770.481.0052, or visit our website at www.peachtreemortgageservices.net.
Wednesday, June 24, 2009
Home Sales Stabilizing; Weak Recovery Seen
By ALAN ZIBEL, AP Real Estate Writer
WASHINGTON — Nationwide home sales may have finally hit bottom, new data shows, but a host of thorny problems are hindering any recovery.
Sales of previously occupied homes rose by 2.4 percent from April to May — the third monthly increase this year — but the results missed analysts' expectations.
Home sellers are still competing against a growing number of bargain-priced foreclosures, buyers are paying higher mortgage rates and new rules for property appraisers are delaying or scuttling many deals.
"We have just been flooded with e-mails, telephone calls on the appraisal problems," said Lawrence Yun, the Realtors' chief economist.
The National Association of Realtors said Tuesday that home sales rose to a seasonally adjusted annual pace of 4.77 million, up from a downwardly revised rate of 4.66 million in April.
About one in three homes sold last month was a foreclosure or distressed sale, dragging down the median price to $173,000 — 16.8 percent below a year ago.
The size of the price drop, however, reflects a crush of first-time buyers and investors snapping up bargain-priced homes. A government home price index also released Tuesday showed home prices were flat between March and April. That index, however, only measures the values of homes with government-backed loans, so it underestimates the weakness at the top end of the market and doesn't include many foreclosures.
Marlene Rossi had to shaved 26 percent off her original listing price of $719,000 to sell her four-bedroom colonial in Congers, N.Y., on the west side of the Hudson River. She first listed the house in September 2007, thinking it would take only six months to sell. She finally accepted an offer this month for $530,000.
Rossi, 59, and her husband now have to rethink their retirement plans. Rossi is a nanny and her husband works in a golf pro shop and also as an umpire for baseball games.
Instead of being able to buy a condominium without a mortgage, she said, "we will only be able to put a down payment on it and we will still have to work."
The bursting of the housing bubble helped push the U.S. economy into the worst financial crisis in seven decades. Now the economy is hobbling the recovery of the real estate market.
Corporate layoffs are forcing more cash-strapped homeowners to miss their monthly mortgage payments. Unemployment, currently at 9.4 percent, isn't expected to peak until mid-2010 and foreclosures should crest about six months after.
"We're in the bottom of the seventh-inning" of the housing crisis, said Mark Zandi, chief economist at Moody's Economy.com.
But there's still a risk the housing bust could go into extra innings.
Interest rates, for example, have climbed back from their all-time lows this spring. The average rate on a 30-year, fixed-rate mortgage was 5.38 percent last week, according to Freddie Mac.
Mindful of the negative trends, Patrick Newport, an economist with IHS Global insight, says home sales could fall another 9 percent from last month's levels. "Things are going to get a little bit worse," he said.
Nevertheless, there are other signs the market is turning around. The number of unsold homes fell 3.5 percent in May. That means there's a 9.6 month supply at the current sales pace, compared with 6 months or fewer in a normal market.
The inventory figures, however, don't reflect the large number of houses being held off the market by owners who are reluctant to sell while prices are falling.
Meanwhile, another complication has emerged in recent months: New rules designed to tackle conflicts of interests in the property appraisal process have caused many transactions to fall apart or be delayed.
Responding to widespread complaints about inflated appraisals during the real estate boom, New York Attorney General Cuomo reached a pact last year with mortgage companies Fannie Mae and Freddie Mac on a new code of conduct for the industry.
Since the rules took effect May 1, real estate agents and mortgage brokers say a number of appraisals are coming in surprisingly low. And now the National Association of Realtors is pressing regulators to put an 18-month hold on the code, arguing in a letter Monday to regulators that it the code is "hampering the housing market's recovery."
Chris Heller, agent-owner of Keller Williams Realty in northern San Diego, estimated that in recent weeks problems with the appraisal process have caused about a third of his transactions to fall apart.
While the new rules are not ideal, appraisers are not to blame for a market where prices are falling rapidly, said Bill Garber, director of governmental relations at the Appraisal Institute. He defended the industry, saying, "The appraisers only report what's going on in the market."
__
AP Real Estate Writers J.W. Elphinstone and Alex Veiga contributed to this report.
Posted by Peachtree Mortgage Services, Inc. Call us at 770.481.0052, or visit our website at www.peachtreemortgageservices.net for assistance with the purchase of your new metro Atlanta home.
___
WASHINGTON — Nationwide home sales may have finally hit bottom, new data shows, but a host of thorny problems are hindering any recovery.
Sales of previously occupied homes rose by 2.4 percent from April to May — the third monthly increase this year — but the results missed analysts' expectations.
Home sellers are still competing against a growing number of bargain-priced foreclosures, buyers are paying higher mortgage rates and new rules for property appraisers are delaying or scuttling many deals.
"We have just been flooded with e-mails, telephone calls on the appraisal problems," said Lawrence Yun, the Realtors' chief economist.
The National Association of Realtors said Tuesday that home sales rose to a seasonally adjusted annual pace of 4.77 million, up from a downwardly revised rate of 4.66 million in April.
About one in three homes sold last month was a foreclosure or distressed sale, dragging down the median price to $173,000 — 16.8 percent below a year ago.
The size of the price drop, however, reflects a crush of first-time buyers and investors snapping up bargain-priced homes. A government home price index also released Tuesday showed home prices were flat between March and April. That index, however, only measures the values of homes with government-backed loans, so it underestimates the weakness at the top end of the market and doesn't include many foreclosures.
Marlene Rossi had to shaved 26 percent off her original listing price of $719,000 to sell her four-bedroom colonial in Congers, N.Y., on the west side of the Hudson River. She first listed the house in September 2007, thinking it would take only six months to sell. She finally accepted an offer this month for $530,000.
Rossi, 59, and her husband now have to rethink their retirement plans. Rossi is a nanny and her husband works in a golf pro shop and also as an umpire for baseball games.
Instead of being able to buy a condominium without a mortgage, she said, "we will only be able to put a down payment on it and we will still have to work."
The bursting of the housing bubble helped push the U.S. economy into the worst financial crisis in seven decades. Now the economy is hobbling the recovery of the real estate market.
Corporate layoffs are forcing more cash-strapped homeowners to miss their monthly mortgage payments. Unemployment, currently at 9.4 percent, isn't expected to peak until mid-2010 and foreclosures should crest about six months after.
"We're in the bottom of the seventh-inning" of the housing crisis, said Mark Zandi, chief economist at Moody's Economy.com.
But there's still a risk the housing bust could go into extra innings.
Interest rates, for example, have climbed back from their all-time lows this spring. The average rate on a 30-year, fixed-rate mortgage was 5.38 percent last week, according to Freddie Mac.
Mindful of the negative trends, Patrick Newport, an economist with IHS Global insight, says home sales could fall another 9 percent from last month's levels. "Things are going to get a little bit worse," he said.
Nevertheless, there are other signs the market is turning around. The number of unsold homes fell 3.5 percent in May. That means there's a 9.6 month supply at the current sales pace, compared with 6 months or fewer in a normal market.
The inventory figures, however, don't reflect the large number of houses being held off the market by owners who are reluctant to sell while prices are falling.
Meanwhile, another complication has emerged in recent months: New rules designed to tackle conflicts of interests in the property appraisal process have caused many transactions to fall apart or be delayed.
Responding to widespread complaints about inflated appraisals during the real estate boom, New York Attorney General Cuomo reached a pact last year with mortgage companies Fannie Mae and Freddie Mac on a new code of conduct for the industry.
Since the rules took effect May 1, real estate agents and mortgage brokers say a number of appraisals are coming in surprisingly low. And now the National Association of Realtors is pressing regulators to put an 18-month hold on the code, arguing in a letter Monday to regulators that it the code is "hampering the housing market's recovery."
Chris Heller, agent-owner of Keller Williams Realty in northern San Diego, estimated that in recent weeks problems with the appraisal process have caused about a third of his transactions to fall apart.
While the new rules are not ideal, appraisers are not to blame for a market where prices are falling rapidly, said Bill Garber, director of governmental relations at the Appraisal Institute. He defended the industry, saying, "The appraisers only report what's going on in the market."
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AP Real Estate Writers J.W. Elphinstone and Alex Veiga contributed to this report.
Posted by Peachtree Mortgage Services, Inc. Call us at 770.481.0052, or visit our website at www.peachtreemortgageservices.net for assistance with the purchase of your new metro Atlanta home.
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