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January 2015

News In Brief

January 2015 - NWREporter

    • Fannie Mae and Freddie Mac recently announced that first-time home buyers can now qualify for loans with down payments as low as 3 percent. Housing analysts say that will expand credit for qualified home shoppers who may have been sidelined the last few years because of higher down payment requirements. Freddie Mac launched Home Possible Mortgage, a conventional mortgage with a 3 percent down payment requirement geared to low-and-moderate income borrowers. It's a conforming conventional mortgage with a maximum loan-to-value ratio of 97 percent. To qualify, first-time home buyers are required to participate in a borrower education program. With Fannie Mae's 3 percent down payment offering, borrowers must still meet standard eligibility requirements, including underwriting, income documentation, and risk management standards. Any buyer can take advantage of Fannie's loans as long as at least one co-borrower is a first time buyer, and the loans will require private mortgage insurance.
    • In a recent editorial as reported by Tom Kelly, The New York Times blasted those who warn of a new foreclosure crisis stemming from the recent loosening of credit standards for cash-strapped borrowers. The editorial board said that the oft-cited misconception that many who lost their homes in the foreclosure crisis were not ready to be homeowners in the first place is harmful to low-income people and the housing market in general. "The notion that borrowers brought foreclosure on themselves ignores evidence to the contrary," the board wrote. "The notion that low- and moderate-income borrowers cannot sustain homeownership is further undermined by evidence showing that the key to success is not a hefty down payment or even perfect credit, but rather carefully underwritten, 30-year fixed-rate loans that can be paid off in stable monthly increments." The paper instead blamed predatory lending and rampant unemployment for the foreclosure waves, and credited inadequate foreclosure relief programs with failing to stem the tide. It urged lawmakers to center reforms on banks, rather than borrowers: "For politicians and regulators, the lesson of the housing bust is that curbing financial recklessness, predation and discrimination will create the conditions for sound homeownership. The lesson is not to deny lower- and moderate-income families the tools they need to become successful homeowners."
    • Zumper, a national apartment rental site, recently released its November 2014 rent report, naming the following top 10 priciest rental markets in the U.S. The median rent for a one-bedroom apartment is listed for each city:
      1. San Francisco: $3,350
      2. New York: $3,000
      3. Boston: $2,330
      4. Washington, D.C.: $2,050
      5. Chicago: $1,750
      6. Miami: $1,700
      7. Los Angeles: $1,690
      8. Seattle: $1,610
      9. San Diego: $1,400
      10. Philadelphia: $1,400

    Denver likely will make the list soon, as renters increasingly face hefty rental costs there. Denver is the fastest-rising rental market, according to the report, with prices for one-bedroom apartments there surging 9.6 percent.

    • Real estate agents and brokers subscribing to Zillow and Trulia premium services spent more than $33 million in the latest quarter to secure new leads, but a new survey revealed that brokers view leads that their agents already have in their address books as being far more valuable as reported by Tom Kelly in mynorthwest.com. "A real estate agent's best lead is organic," said Renwick Congdon, chief executive officer of Bellevue-based Imprev, a real estate technology company that conducted the study. "It comes directly from his or her sphere of influence, company or personal website, and through local marketing, such as yard signs, flyers, and open houses." The 2014 Imprev Thought Leader survey asked which leads were most valuable to more than 270 broker-owners and top executives at leading franchises and independent brokerage firms that were responsible for nearly half of all U.S. residential real estate transactions last year. Eighty-six percent of those responding said organic leads from an agent's sphere of influence-past clients, and referrals-offer exceptional value (based on quality of the lead or return on investment), compared to only 8 percent citing Zillow, 7 percent citing Realtor.com, 5 percent citing Craigslist and 4 percent citing Trulia. "Real estate leaders are telling us their agents already have the gold-they just need to mine it," Congdon said. "The nurturing of organic leads from capture to transaction is crucial, and an area that I believe is not adequately embraced by the typical real estate agent." The Imprev Thought Leader Survey showed that organic lead sources dominated the list of most-valuable lead sources: An agent's sphere of influence ranked first, followed by the broker's website, with 32 percent of the real estate leaders rating the quality or ROI as exceptionally valuable; in third place was local marketing, (flyers, walk-ins, signs, open houses) with 27 percent.