First-Time Home Buyers Find Themselves Creditworthy
Yakima, Wash. Is among the nation’s top cities where bank loans to consumers actually grew last year, according to a recent study by Moody’s Economy.com and Equifax Inc. That means that banks here — unlike in many Nevada, Florida and California cities where the housing market collapsed — feel the local economy is safe enough to lend more money to people. For those looking to take out mortgages to buy homes, that’s good news. “We’re seeing an upswing,” said Nick Marquez, a real estate broker who credits Yakima’s agriculture-based economy for his increased clientele. “Being in a smaller community where people know people, you’re going to run into somebody you already know and have a lot more smart choices made.” The only places where consumer-loan growth was higher than in Yakima were Huntsville and Mobile, Ala.; and McAllen and Brownsville, Texas, according to the study of 207 cities. In Yakima, consumer loans grew by 10.69% in the fourth quarter last year from a year earlier, compared to just 2.65% nationwide. Yakima brokers, who recognize that the housing market tends to pick up in springtime, say homes between $75,000 and $175,000 are selling within weeks. An $8,000 federal tax credit for first-time home buyers included in this year’s stimulus package helps, too, said Marquez. (www.yakima-herald.com)
Yakima Herald-Republic (4/12/09); Melissa Sanchez
[Return to top]
Ten Cities Where Americans Are Relocating
Despite the overall economic slowdown, some parts of the country keep on moving ahead, attracting more and more newcomers — even if it’s at a slower pace than in more sound economic times. These places still offer a semblance of stability, as well as great weather, cultural life and, in many cases, affordability. To determine the fastest growing metro areas in the country, 2008 population estimates for metropolitan statistical areas with a population over 1 million, released on March 19 by the U.S. Census Bureau, were compared on a percentage basis with data for the previous year. The top three areas are Raleigh, N.C., which jumped 4.29% to nearly 1.9 million; Austin, Texas, with a 3.77% increase to almost 1.7 million; and Charlotte, N.C., which moved up 3.36% to 1.7 million. All these areas’ increases were smaller in 2008 than they were in 2007. A slight slowdown is not necessarily a bad thing, according to William Frey, a demographer at the Brookings Institute. “Part of the story here is the rapid rise in growth in the middle of the decade,” he says. “That growth was unnatural.” The in-migration that happened in the middle of this decade had a lot to do with the housing boom. When that ended, so did crazy population balloons. Most of the top 10 growth cities are headquarters for a diverse range of companies. When it comes down to it, a buzzing business community is a metro area’s most important characteristic, says Sean Safford, a professor at the University of Chicago. “Perception is driven by the vibrancy of the companies in an area,” he said. (www.forbes.com)
Forbes (3/30/09); Lauren Sherman
[Return to top]
Job Migration to Suburbs: An Unstoppable Flow?
It’s easy to find jobs moving to the suburbs in places like metropolitan Detroit, Los Angeles, Philadelphia, Dallas and Chicago. Employers, eager to establish leafy campuses in the suburbs in a bid to reduce commute times, are only adding to local traffic congestion, and the trend is probably immune to the ups and downs of the economy, concludes a study released on April 6 by the Brookings Institute — “Job Sprawl Revisited: The Changing Geography of Metropolitan Employment.“ Jobs leaving the cities include professions such as finance and insurance, which have long been concentrated in city centers. The report’s author, Elizabeth Kneebone, believes that states and cities should use some of the billions of dollars in federal stimulus money flowing their way to reverse some of these trends. “Instead of treating transportation decisions and housing as separate policy areas, leaders can start to link up these agendas because they really are related,” says Kneebone. But changing the job-sprawl trend will be difficult, she says, based on metro data she examined between 1998 and 2006 — a period that experienced a boom, a bust and then a slow recovery. “Throughout all these changing economic circumstances, these trends of jobs moving out of the urban core persisted,” she says. “Though we are facing job losses right now, what that might mean is it could slow these trends in some regions, but the current recession on its own is not likely to reverse the trends.” Of the 98 metro areas Kneebone studied, 95 saw some kind of job shift away from the urban core, though the number of jobs increased in all metro areas. Within the study, only 21% of employees worked within three miles of downtown, while 45% worked more than 10 miles from the city center. More than half of the major metro areas (53%) saw rapid job sprawl from 1998 to 2006. The largest increases in jobs outside of the central business district were Phoenix; Memphis, Tenn.; Jacksonville, Fla.; Orlando; and Austin, Texas. The top five metro areas for the share of jobs located at least 10 miles from the city center were: Detroit (77.4%), Chicago (68.7%), Dallas (66.9%), Los Angeles (65.6%) and Philadelphia (63.7%). (www.csmonitor.com)
Christian Science Monitor (4/6/09); Ron Scherer
[Return to top]
Disclosing Energy Efficiency
Secretary of Housing and Urban Development Shaun Donovan said his agency is in the early stages of discussions with federal energy officials to develop “a relatively simple scoring system for housing that would allow you to understand what you’re buying and at the same time allow lenders to underwrite that into their mortgage. Ultimately, if your energy bills are going to be lower, there ought to be some [mortgage] benefits to that.” The system might also factor in transportation costs to employment centers in some way, he said, because “most people don’t realize that the average American spends over 50% of their income on a combination of housing and transportation.” Even with lower prices for houses in the far-flung suburbs, “their transportation costs are huge,” he said, and metropolitan sprawl itself represents a massive energy-consumption inefficiency.” Mortgage terms — such as higher loan amounts for buyers to make energy-conserving improvements or lower mortgage rates for energy-efficient homes — “can be a very powerful tool” in residential energy conservation, he said, and the booming Federal Housing Administration insurance program would be a good place to start. “If in the long run there’s a cost of $5,000 to upgrade a house that will produce $10,000 in savings over time for utilities, the perfect tool to realize those savings is a mortgage,” he said. Although Fannie Mae, Freddie Mac and the FHA all have had versions of “energy-efficient mortgages” on the books for years, their programs have been poorly marketed and little used. Donovan wants to revive and improve the whole concept. (www.washingtonpost.com)
Washington Post (4/11/09); Kenneth R. Harney
[Return to top]
Reverse Mortgage Variation Is Aimed at Seniors Looking to Downsize
A form of federally insured reverse mortgage authorized in the Housing and Economic Recovery Act of 2008, the Home Equity Conversion Mortgage (HECM) for Purchase is aimed largely at persons 62 years or older who want to move down the housing ladder. The idea is to allow them to sell their current residence and use a reverse mortgage to buy a new one, all in a single transaction that eliminates the need for two sets of expensive closing costs. Under the loan, the lender pays an amount based on the age of the youngest borrower, the value and location of the home and current interest rates. The proceeds can be taken in a lump sum to pay for a new house; as a line of credit to be tapped as needed; in monthly installments; or in any combination of the three. Interest and mortgage-insurance premiums accrue on the borrowed amount, but no payments are necessary until the borrower sells the home, moves out or passes away. The borrower will never owe more than the value of the property. If the property is worth more than what is owed when the borrower leaves, they or their heirs will receive the difference. If it is worth less, the lender eats the difference. The home must be a primary residence, and cooperatives, second homes, vacation properties and some manufactured houses are not eligible. The amount that can be borrowed is limited to $625,500 until the end of this year, when it falls back to $417,000 unless Congress decides otherwise. (www.latimes.com)
Los Angeles Times (4/12/09); Lew Sichelman
[Return to top]
AARP Study Looks at Benefits of Aging in Place
An AARP study comparing persons living in a universal design home with others in traditional settings found significant cost differences for health care. Those in universal design settings paid less than half the amount paid by those living in regular designs. The study pointed to savings by “undergoing less physical decline.” For example, by providing at least one no-step entry to homes, the likelihood of falls and injuries is reduced and there is a safer exit during a fire or other emergency. “Seniors and boomers are so active now that some of the activities are clearly putting stress on their bodies,” said Susan Mack, a California-based occupational therapist. “I’ve got people who are getting hip and knee replacements in their 60s and people in their 40s getting their knees scoped. This did not happen with previous generations because they didn’t live as long nor did they put this stress on their bones so soon. If you’ve got a sports injury, do you want to come home to a house that is fraught with hazards and barriers? These are not just designs and ideas for the frail elderly. We are also providing solutions for people who never thought they were going to get old — at least not this quickly.” (http://www.inman.com/)
Inman News (4/9/09); Tom Kelly
[Return to top]
|
