Sales of vacation homes rise!

NAR: Vacation-home sales rise

By AndreaBrambila

Created 2010-03-31 11:47

Sales of new and previously owned vacation homes rose last year, while investment-home sales dropped, according to a survey report [2] by the National Association of Realtors.
NAR's 2010 Investment and Vacation Home Buyers Survey includes responses from residents in 1,930 randomly selected households who bought residential real estate in 2009. The association conducted the survey in March 2010 and controlled for age and income.
Vacation-home sales increased 7.9 percent to 553,000 in 2009 from 513,000 in 2008 [3], the report said. The market share for vacation homes rose to 10 percent, from 9 percent in 2008.
At the same time, investment-home sales declined 15.9 percent, to 940,000 last year from 1.12 million in 2008, the report said. The market share for such homes fell to 17 percent, from 21 percent in 2008.
"The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat. Investment buyers primarily seek rental income," said Lawrence Yun, the association's chief economist, in a statement [4].
Sales of primary residences grew by 7.1 percent, to 4.04 million in 2009 from 3.77 million in 2008, the report said. With that increase, the share for second homes overall dipped to 27 percent in 2009, compared with 30 percent in 2008.
"First-time buyers were at record levels in 2009, with fewer sales of second homes," Yun said.
A quarter of vacation-home buyers plan to rent out their homes to others, compared to 59 percent of investment-home buyers. Only 19 percent of investment-home buyers hope to use the property as a family retreat. Slightly more investors (18 percent) than vacation-home buyers (13 percent) bought the property for a relative or friend to use.
According to the U.S. Census, the national vacancy rates in fourth-quarter 2009 were an estimated 10.7 percent for rental housing and an estimated 2.7 percent for homeowner housing. While the homeowner rate was not statistically different from the fourth quarter of 2008, the rental vacancy rate was 10.1 percent higher.
"The rental market is soft due to the economy, and investors realize it is much higher risk to secure occupancy in their rental property than in prior years,"said Alexis Eldorrado, managing broker of Eldorrado Chicago Real Estate.

About 8 percent of investment-home buyers vs. 26 percent of vacation-home buyers said they plan to use the property as a primary residence in the future, the report said.
The median home price for a primary residence fell 5.6 percent last year to $185,000, and the median price for investment properties also fell, by 2.8 percent to $105,000. About 15 percent of buyers paid all cash for their primary residences, and this was unchanged from 2008. All-cash buyers made up 48 percent of investment-home buyers, according to the latest survey, up from 42 percent in 2008.
Meanwhile, the median price for vacation homes rose 12.7 percent to $169,000, and 29 percent paid in cash. Even with a rise in vacation-home prices, some Realtors say their clients think now is a good time to buy.
"Ultimately (a vacation home) has been a dream for many, and with the sudden shift in market prices due to the economy, many people realize it is a good time to buy. People are buying today at prices from 10-12 years ago," Eldorrado said.
Regionally, half of vacation homes sold in 2009 were in the South, 21 percent in the West, 17 percent in the Midwest and 12 percent in the Northeast, the report said.
"I would say that (NAR's) data is pretty close to being spot on, with a couple of exceptions," said James Crumbaugh, CEO of Allison James Estate and Homes, which does business in 11 states and deals mostly in waterfront properties, beachfront condos, golf course communities and planned resort communities.
Those exceptions are Florida and California -- both areas whose prices Yun said have become especially attractive for buyers over the past year.
"In Southwest Florida, normally 70 percent of our business is in vacation homes or second homes. Most of these buyers plan on eventually retiring in Southwest Florida. However, the investors have (been) buying up the fire sales among these properties for the last year or so, and I would guess that close to 50 percent of these sales are now investor sales," Crumbaugh said.
"Prices are going up, and as a result the investors have determined that the bottom has passed. We are actually starting to see an inventory problem on the horizon for Southern California and Southwest Florida, so prices should continue to climb," he added.
Loren Sanders, a Realtor at Windermere Exclusive Properties in San Diego County, Calif., has seen a rise in both vacation home purchases and investment purchases. Distressed properties have played a key part in encouraging investment purchases, he said.
"The buy, fix and flip people are making good money, which draws more players."

Bank of America Home Loan Forgiveness

Wednesday, March 24, 2010, 2:45pm EDT  |  Modified: Thursday, March 25, 2010, 7:49am

BofA to offer home-loan forgiveness

Charlotte Business Journal - by Adam O’Daniel Staff Writer

Bank of America Corp. launched a program Wednesday that will offer mortgage-principal forgiveness worth about $3 billion to 45,000 borrowers.
The program will be used with other bank and federal efforts to help struggling homeowners, such as the Home Affordable Modification Program and National Homeownership Retention Program.
Only borrowers already eligible for loan modifications will be considered for the new program. And BofA says it will contact borrowers with the offer because only a limited group of customers will be eligible. The program is intended to serve borrowers who owe at least 120 percent of their home’s value and are more than 60 days past due on mortgage payments.
Any forgiveness will depend on the borrower making on-time payments for up to five years. If the home’s value rises, the amount of principal forgiven may be reduced.
Bank of America Home Loans President Barbara Desoer says the purpose of offering principal forgiveness is to modify distressed mortgages at a better rate and to balance the interests of customers and investors.
“Many homeowners who owe considerably more on their mortgages than their homes are worth are reluctant to accept a solution that addresses only the amount of the payment without an accompanying reduction in the balance due on the loan,” Desoer said. “We believe by first addressing the significant underwater condition of some NHRP-eligible loans, the rates of customer acceptance of HAMP trial modifications and conversions to permanent modifications on those loans will be improved, and the homeowners will be more motivated to make payments.”
Desoer says the new policy “recognizes and addresses the interests of mortgage investors by ensuring that forgiveness is tied to the homeowner’s performance, reducing the probability of a future default under the modified terms, and adjusting the total amount to be forgiven in light of any gains in property values that might occur in an economic recovery.”
Here’s how the new policy works:
•BofA will contact eligible borrowers. No action is needed by customers.
•Borrowers must be underwater on their mortgage by at least 20 percent and be 60 days past due on payments.
•BofA will offer interest-free forbearance for principal loan amounts above the home’s value.
•That forbearance amount will be forgiven at a rate of 20 percent of its initial balance each year for three years.
•After three years, the loan will be reevaluated. Loans still exceeding the home’s value will continue to receive forgiveness. If the home’s value has increased during the three-year period, and the borrower is no longer underwater, then no more principal will be forgiven.
•Borrowers must make on-time payments to remain in the program.
BofA says principal reduction will be the first consideration in a loan modification. Then the bank will consider reducing interest rates if further assistance is needed.
Desoer says Charlotte-based BofA (NYSE:BAC) becomes the first major mortgage servicer to implement such a program. She says the program is needed because many underwater borrowers are reluctant to accept loan modifications unless a principal reduction is offered. But in trials, she says 30 percent of borrowers who declined a loan modification changed their mind when principal reduction was offered.
The new policy is far from a silver bullet for the housing crisis. Only 45,000 borrowers at BofA are estimated to be eligible — about 1.5 million borrowers are 60 days or more delinquent on payments, bank officials say.
Still, improving the rate of loan modifications is an important step for BofA because distressed homeowners who can’t agree to terms of a modification often end up in foreclosure.
“Modifications are better than foreclosures,” says Jack Schakett, credit-loss mitigation strategies executive at BofA.
Customers seeking more information should click here.

Beat IRS at its own game | Real Estate and Technology News for Agents, Brokers and Investors | Inman News

Beat IRS at its own game | Real Estate and Technology News for Agents, Brokers and Investors | Inman News

Posted using ShareThis

What effect will the FCC broadband plan have on mobile marketing? - Mobile Marketer - Associations

What effect will the FCC broadband plan have on mobile marketing? - Mobile Marketer - Associations

What effect will the FCC broadband plan have on mobile marketing?

By Giselle Tsirulnik

March 18, 2010

Mobile industry heavyweights weigh in on the FCC broadband plan

The Federal Communications Commission has submitted a National Broadband Plan to Congress and the ambitious agenda holds quite some promise for mobile marketing and commerce.

The National Broadband Plan’s aim is to connect all corners of the nation while transforming the economy and society with the communications network of the future – a robust, affordable Internet.

“Mobile is essential to the future of broadband,” said an FCC spokesman. “Increasingly, Americans access the Internet from devices they carry around with them wherever they go.

“Carriers report massive increases in data usage over the past several years and industry analysts expect this trend to accelerate,” he said. “If we are not prepared, we will face a shortage of spectrum, the ‘oxygen’ of mobile broadband.

“In order to ensure that mobile grows into the next great platform for innovation in America, the Broadband Plan recommends making 500 megahertz of spectrum newly available over the next 10 years and 300 megahertz in five years.”

According the FCC, if we do not take these steps, we put ourselves at risk of limiting the potential of mobile broadband.

On the other hand, if we take proactive steps now, we will ensure that America is the home of the world’s best mobile broadband networks in the decade to come and will protect the country’s global competiveness.

A looming shortage of wireless spectrum could impede U.S. innovation and leadership in popular wireless mobile broadband services.

More useful applications, devices and content are needed to create value for consumers.

And the nation has failed to harness broadband’s power to transform delivery of government services, health care, education, public safety, energy conservation, economic development and other national priorities.

The broadband plan would have big impacts on mobile marketing and commerce as well.

“Negatively speaking I would say that having more allowance for media will decrease the mobile Internet search engine indexing reliability – in other words Google, Bing and Yahoo mobile search engines will not be able to interpret the true video, sound and image relevance; leaving perhaps the best search results out of the list,” said Phil Robinson, marketing and PR executive at Piri Ltd, Manchester, Britain.

But every cloud has a silver lining.

“Positively speaking the faster broadband would increase the mobile Web site delivery time to users, making mobile Internet media more diverse and deliverable,” Mr. Robinson said. “So, mobile marketers can offer videos and media as part of their mobile site promotions and content.”

The plan’s goal is to ensure that the U.S. is leading the world in mobile innovation by making 500 megahertz of spectrum newly available for licensed and unlicensed use.

This will bring affordable broadband to rural communities, schools, libraries and vulnerable populations and give marketers a whole new target market.

Retailers will also benefit from the broadband plan.

“Upgrading the grid to provide faster and more reliable internet access is a great thing for consumers, online businesses and investors,” said Tim Schulz, senior product manager and general manager of mobile commerce and application platforms at Magento. “Online-retail players will especially benefit from this since the sector is already expected to double to $250 billion over the next four years.

“The impact on the mobile market will be more nuanced though,” he said. “Since mobile browsers can’t yet take advantage of native features within each device until technologies like HTML5 mature, we predict an even sharper rise in the importance of mobile apps to drive mobile commerce.

“These new proposals from the FCC will play well into this strategy since faster speeds mean more smartphone adoption – and more smartphones create a larger market for mobile apps.”

The plan was mandated by the American Recovery and Reinvestment Act in February 2009 and was produced by an FCC task force that set new precedents for government openness, transparency and rigor.

Information for the plan was gathered in 36 public workshops, 9 field hearing and 31 public notices that produced 75,000 pages of public comments.

The debate went online with 131 blog posts that triggered 1,489 comments; 181 ideas on Idea Scale garnering 6,100 votes; 69,500 views on YouTube; and 335,000 Twitter followers.

The task force augmented this voluminous record with independent research and data-gathering.

“The change will be profound,” said Jamus Driscoll, vice president of marketing at Demandware, Woburn, MA. “Just as shopping on personal and work computers accelerated as broadband availability increased, so too will mobile commerce.

However, there are characteristics to mobile that make it likely to be adopted at rates exponentially higher than its PC-predecessor.

According to Morgan Stanley research, adoption of mobile Internet outpaces that of the PC by a factor of eight.

“What this means is that in a few year’s time, we won’t be called the ‘mobile’ Web, it will just be the Web,” Mr. Driscoll said.

“The other opportunity with mobile is that unlike the PC, the mobile device combines the Web—which brings with it virtually unlimited choices in data and applications—with context of the user’s location and preferences delivered into a device that is seen by the user as personal connection to themselves," he said.

“The possibilities just in the world of commerce are endless."

'March Newsletter from The Burchfield Group'

'March Newsletter from The Burchfield Group'