“It’s not the level of mortgage rates — that’s not what’s holding back the housing market,” said Conrad DeQuadros, senior economist at RDQ Economics. “It’s the excess supply of homes, the backlog of foreclosures. Those aren’t issues that can be addressed with monetary policy.” This leaves the President and lawmakers to fix the problem. The President took a step in the direction of helping the housing market by announcing a revamp of the Home Affordable Refinance Program. HARP will now be open to a larger number of troubled borrowers who owe more on their homes than those homes are worth. But the program’s potential effectiveness remains unknown. Congressional action on housing — or on any job-creating measure — has been minimal thus far this session, but making even minor progress on solving the foreclosure crisis, as opposed to minor progress on trade agreements or tax reform, might provide greater results in the end. Growth in home construction has in the past been a sure route to recovery. “The jobs it produces in manufacturing, lumber and all the other areas related to home building usually can help kickstart a recovery,” writes Danielle Kurtzleben, a data reporter for U.S. News and World Report. “Indeed, one reason that the public sector has been hemorrhaging jobs, particularly at the local level, is a reduction in property tax revenue. Though it would be a slow process, boosting the housing market — moving homes through the foreclosure process and boosting home values — would eventually help government again add the jobs it has shed.” (www.usnews.com)
U.S. News and World Report (10/28/11); Danielle Kurtzleben

California home buyers now pay 29 cents on the dollar for a typical house in the Sacramento region compared to buyers in San Francisco, which could have a big impact on Sacramento’s housing market and economy in the not-too-distant future. The last time the spread between Bay Area median prices and Sacramento median prices grew so big was a decade ago, just before tens of thousands of Bay Area transplants arrived in Sacramento, turning a healthy housing market into a bona fide boom. However, “it’s a different market now,” said Suzanne O’Keefe, a Sacramento State economics professor. “Everyone is more cautious. The housing market isn’t going to rebound quickly because people move from the Bay Area.” O’Keefe and others note that the local job market is stalled; cheap housing is available everywhere; and many Bay Area residents already cashed out home equity during the boom. Just as key, Bay Area home prices are less expensive than they have been in years. A San Francisco condo worth $1 million in 2005 would sell today for about $840,000.” Even so, many expect Bay Area transplants to increase in number, helping to put a floor on falling home prices. Today’s median home price in the Sacramento region is about $185,000, according to date from Wells Fargo and NAHB. In San Francisco-Marin-San Mateo, it’s $630,000. In the San Jose area, it’s $454,000. (www.sacbee.com)
Sacramento Bee (10/16/11); Philip Reese and Rick Daysog

Millions of Americans have become frozen in place, researchers say, unable to sell their homes and unsure they would find jobs elsewhere anyway. An analysis of new data from the Census Bureau and the Internal Revenue Service by the Carsey Institute at the University of New Hampshire confirms earlier census assessments of a migration slowdown, but also offers a deeper, state-by-state look at the impact of this shift, which upends, however temporarily, a migration over decades from the snowy North to the sunny South. Researchers found that migration into formerly booming states like Arizona, Florida and Nevada began to slow as soon as the recession hit and continued to shrink even into 2010, when many demographers expected it to level off. At the same time, Massachusetts, New York and California, which had been hemorrhaging people for years, and continued to do so in the three years before the financial collapse, suddenly saw the domestic migration loss shrink by as much as 90%. Mobility always tends to slow in times of economic hardship, and there has been a gradual decline in American mobility for decades. But census numbers released earlier this year showed that domestic migration in 2010 had plummeted substantially since the recession began and reached the lowest level since the government began tracking it in the 1940s. (www.nytimes.com)
New York Times (10/27/11); Jennifer Medina and Sabrina Tavernise

Many home owners are installing the frequently lampooned Murphy bed rather than renovating or moving to a bigger home. The beds, which swing up into a wall for vertical storage, help home offices serve as bedrooms and vice versa. The growing interest in Murphy beds comes as Americans are building smaller homes and making fewer changes to their existing homes. The size of the average single-family home in 2010 was about 2,400 square feet, down about 5% from 2007, according to the U.S. Census. Remodeling activity is down so far this year, continuing a trend of about the past five years, according to data from NAHB. “People have invested in staying in the homes that they’re in,” says Ginny Snook Scott, vice president of sales and marketing for California Closets, the home organization chain that is a unit of FirstService Corp. Online inquiries for wall beds have doubled in the past 18 months, she says. (www.wsj.com)
Wall Street Journal (10/20/11); Elizabeth Holmes and Maya Pope-Chappell

With mortgage rates so low, interest in “no-closing-cost” loans has increased, said Jason Auerbach, a divisional manager for First Choice Loan Services in Manhattan. Under these loans, if borrowers agree to accept a mortgage interest rate from a quarter to a full percentage point higher than they would ordinarily qualify for, they receive credit toward their closing costs. The credit usually covers only fees charged by the mortgage broker or bank, like the loan origination fee, the underwriting expense and the appraisal, according to Neil Diamond, a mortgage broker in Commack, N.Y. That generally leaves title insurance, mortgage-recording taxes, insurance and escrowed taxes to cover, he said. A rule of thumb is that for every one-eighth of a point increase in the interest rate, borrowers receive a credit worth half a percent of the principal amount, said Auerbach. On a $400,000 30-year mortgage with a 4.125% base rate, the first one-eighth of a point increase would yield a $2,000 credit and so would the second, but the credit for the third would drop to about $400, he said, noting that some lenders set a 5.25% ceiling on rates. Nationwide, total closing costs on a $200,000 mortgage average $4,070, according to a recent survey from Bankrate.com. That represents an 8.8% increase over last year, and reflects higher lender fees. (www.nytimes.com)
New York Times (10/27/11); Vickie Elmer

“Aging in place” modifications are the fastest growing segment of the home remodeling industry, says NAHB, and help make homes easier to sell at a time when people aged 45 to 64 make up more than a quarter of the U.S. population. Adding a bathroom on the main living level is a smart strategy to appeal to older adults, as is a new bath. A macerating toilet system is a good way to lower the cost of adding a bath, says Otis Dardy, owner of Dardy Construction in Conyers, Ga. Dardy recently used macerating, or up flush, technology to install a full bathroom in a home that lacked below-floor plumbing drainage. With conventional plumbing fixtures, Dardy would have had to dig through concrete, creating a costly and time-consuming mess. Instead, he used Saniflo up flush technology, which allows you to add plumbing to any room in your home, even the basement, without having to break up the floor. Macerating plumbing systems pump waste and water from a toilet — as well as a sink, shower, wet bar, even a washing machine — upward through small diameter piping.  (www.jsonline.com)
Milwaukee Journal Sentinel (11/28/11); American Research Associates