CHARLOTTE METRO REAL ESTATE TRENDS AND STATS
Bank stress test results and comments
May 21st, 2009 4:09 PM
Nearly a Quarter of Homeowners "Under Water"
More homeowners are underwater as a two-year slide in housing values continued into the first quarter, according to data service Zillow.com. About
22 percent of homeowners carry mortgage balances that are greater than their houses are worth,
the firm said. At the end of the fourth quarter, 17.6 percent of homeowners owed more than their original mortgage, up over three percent, from 14.3 percent, three months earlier.
Property values dropped 14 percent from a year earlier in the first quarter, reducing the median value of U.S. single-family homes, condominiums and cooperatives to $182,378, Zillow said. The decline has left about 20.4 million of the U.S.'s 93 million houses, condos and co-ops covered by loans higher than the properties are worth, which could lead to more bank repossessions, Zillow said.
The numbers are more drastic than those reported by First American Core Logic, whose report said the recession cut home values by $2.4 trillion last year and left more than 8.3 million U.S. mortgage holders owing more than their properties were worth. They said an additional 2.2 million borrowers would be underwater if prices decline another five percent. The U.S. market with the biggest drop in home values in the first quarter was Salinas, Calif., where the median price fell 37 percent to $301,793 from a year earlier, Zillow said.
In 85 of the markets tracked, the annualized home-value change over the past five years was negative or little changed. About 20 percent of all home transactions in the past 12 months were foreclosures, and short sales made up about 12 percent.
HUD Realeases New Single Family Lenders Guide
The Department of Housing and Urban Development has released a new handbook known as HUD 4155.2, Lender's Guide to the Single Family Mortgage Insurance Process. Included in this latest release is a chapter dedicated to property valuation and appraisal that details, among other topics, the purpose of property valuations and who is eligible to perform them; the Federal Housing Administration's policy on appraisals, appraisal reporting standards and policy on appraisal repair requirements; and the prohibition of property flipping (and the appraisers responsibility to analyze prior sales of a property).
To view the handbook in its entirety, visit
Fed's Release Stress Test Results
The results of the Federal Reserve's much-anticipated "stress tests" conducted on the nation's 19 largest banks have finally been made public after more than a week of delay. The outcome? The nation's financial giants are not out of the woods yet, but they're also not as lost in those woods as many had feared they would be. As projected by the federal government, the 19 banks tested are at a combined risk to lose up to $599 billion through the end of next year should the economy perform worse than expected. As a result, 10 of the 19 banks have been ordered to raise a combined $74.6 billion in capital to cushion themselves. Though $599 billion is still a staggering number, many industry insiders were predicting the potential for losses to be much higher.
Treasury Secretary Timothy Geithner called the results of the stress tests "reassuring." In an interview with PBS' Charlie Rose Program, Geithner stated that "There [are] very significant cushions in these institutions today, and all Americans should be confident that these institutions are going to be viable institutions going forward."
Federal Reserve Chairman Ben Bernanke also was upbeat about the results of the stress tests, referring to them as "encouraging." However, Bernanke also emphasized that banks should conduct internal stress tests to identify other potential risks, especially risks that the government's tests did not address.
"Ideally, the stress tests used in the assessment program should be part of a broader palette of internal stress tests conducted by firms," Bernanke noted last week at a Fed conference hosted by the Atlanta Fed district bank. "Indeed, we do not intend that the capital assessments should be taken as all that those firms need to do."
Bernanke's comments mirror concerns that have grown in recent months regarding the health of the commercial real estate sector. According to an article that ran in the Wall Street Journal, regulators are increasingly worried about banks exposed to commercial loans. As projected by the stress tests, losses could be up to 12 percent - or $216 billion - on commercial real estate loans by the end of next year.
The results of the Fed's tests are the culmination of weeks of investigations into the banks' lending practices, funding strategies and securities and loan portfolios. After officially announcing the stress test results, regulators set a timetable for banks that need to bolster their capital. These institutions will have until June 8 to develop a plan and until Nov. 9 to implement it.
Under the stress tests, each bank was put through two "what if" scenarios by regulators. Under the first scenario, it was assumed that the unemployment level will reach 8.8 percent in 2010 and house prices will decline by 14 percent. In the second scenario, banks were analyzed for what would happen during a worse-than-expected downturn; one where unemployment levels would hit 10.3 percent in 2010 and house prices would drop 22 percent this year
Posted by Philip Jernigan, SRA on May 21st, 2009 4:09 PM
Post a Comment
Subscribe to this blog
Leave a Comment
Characters from the image above:
Subscribe To My Blog
Characters from the image above:
Market Comment - Week of January 3rd, 2011
Market Comment - Week of October 25th, 2010
Market Comment - Week of September 13th, 2010
Pending Home Sales on an Upswing
Market Comment - Week of 4/26/2010
Rowan County Stats - 12/29/2008
Iredell Stats - 12/16/2008
Charlotte / Mecklenburg County Real Estate Statistics
Market Comment - Week of March 22nd, 2010
Market Comment - Week of March 1st, 2010
Market Comment - Week of February 1st, 2010
Market Comment - Week of January 4th, 2010
Market Comment - Week of December 28th, 2009
Market Comment - Week of December 14th, 2009
Market Comment - Week of October 19th, 2009
Poll ranks North Carolina as sixth most popular state
North Carolina - State of Real Estate - 9/2009
Market Comment - Week of August 24th, 2009
2nd Quarter Existing-Home Sales Rise in Most States, Helped by Affordable Metro Prices
Housing prices rounding a corner?
Charlotte, North Carolina - Home Price Index
Strengthening Appraiser Independence and Improving the Valuation Process
Market Comment - Week of July 27th, 2009
Home Valuation Code of Conduct Frequently Asked Questions (FAQs)
NAHB Applauds GSE Adjustments of Appraisal Guidelines
Market Comment - Week of July 13th, 2009
Report: NC Home Prices Among Most Stable in Nation
Luxury Spending Likely to Drop 10 Percent for 2009
Market Comment - Week of June 22nd, 2009
Pending Home Sales Up for Three Months in a Row
Consumer Confidence Index Increases to Highest Level in Eight Months
HVCC - FIX OR FRAUD?
CHARLOTTE #3 RANKING FOR RELOCATION IN USA
Bank stress test results and comments
Market Comment - 5/11/2009
Relocation.com Survey Shows Consumers Moving Further Due to Economy
ARTICLE: U.S. New Home Sales Will Likely Continue to Struggle
CLEVELAND COUNTY STATS - 3/18/2009
MORTGAGE RATES - 5/2009
Leading Economic Indicators
stats for Charlotte Metro area
Cleveland County Stats
5 Questions to Ask Before Remodeling
WRS Report 3/30/2009
The Price is Right
NC Business Information
Market Comment - 3/23/2009
news - 3/2009
Mecklenburg Stats - YTD 1/1/2009 to 2/28/2009
cabarrus stats - 02272009
3Q2008 for NC
Rowan County Stats
Iredell County Stats
Mecklenburg Stats 2/6/2009
York County Stats
Stats for entire CMLS for December 2008
Gaston County Real Estate Stats
Cabarrus Stats -1/2/2009
April 2010 (1)
March 2010 (2)
February 2010 (1)
January 2010 (1)
December 2009 (2)
October 2009 (2)
September 2009 (1)
August 2009 (2)
July 2009 (9)
June 2009 (2)
May 2009 (9)
April 2009 (7)
March 2009 (9)
February 2009 (3)
January 2009 (5)
December 2008 (3)
My Favorite Blogs:
Sites That Link to This Blog: