Main Street Realty of New Jersey

Higher Power Home Sales

2008-11-09T18:09:00.001-05:00

HIGHER POWER HOME SALES
(Article from Action News Channel 6)
It's a tradition that some argue dates back centuries. Some faithful claim that burying a Saint Joseph statue in your yard, while trying to sell your house, will bring a quicker sale of their property.
Is this just a hoax or a divine intervention?
"O.K. Saint Joe we got another one for the road," said Pat Ciervo with Main Street Realty.
Pat Ciervo has been selling real estate for decades. But, it's only been in the last few years that he has turned to his faith to help sell houses.
"When all else fails we look for a divine intervention," he added.
Ciervo has been seeking the guidance of Saint Joseph.
The husband of Mary, foster father to Jesus and the patron saint of carpentry.
But, Saint Joseph, a real estate agent?
"We have written testimony that has been proven that it helps sell real estate," he said.
Ciervo has already buried a few dozen statues in the front yards of clients seeking a higher power to get their home sold.
And, he said, it's worked every time.
"It makes you wonder it does make you think," added Ciervo.
"We've put a lot of work and time into this house," said homeowner Bob Garber.
Bob Garber has had his house on the market since last October. He's praying for a little divine intervention to get it sold.
"I've heard from a lot of people that you should put a Saint Joseph statue in your house," said Garber.
Tony Onorato said he planted a St. Joe's statue but also admits there's one other factor that may have contributed to the quick sale.
"I got a new realtor too so I'm not sure if it's the new realtor or St. Joe's but I think the combination worked," said Onorato.
Daniel Castonguay with Abbott Church Supply says the devotion to Saint Joseph varies with the real estate market.
As home sales plummet, sales of Saint Joseph statues skyrocket.
Last year at this time, he was selling about 40-50 statues a month. Today --
"Around eight hundred!" said Castonguay.
"Some of them are kind of desperate and are at the point where they'll try anything," he added.
But how did the devotion to Saint Joseph, real estate agent, start?
One theory goes that Saint Theresa used to use the Saint Joseph statue to acquire land for properties she wanted to build for certain monasteries.
But, no one is quite sure if that's the true story.
Cardinal Justin Rigali believes Saint Joseph can help, as long as the faithful are praying and honoring his legacy.
"To put his statue in the ground thinking that it has a power in itself, it doesn't. It's just a statue," said Cardinal Rigali.
As for Ciervo, he's keeping the faith that burying the statue helps Bob Garber sell his home.
"He really works," said Ciervo.Main Street Realty - Home Sales New Jersey - All your real estate needs. Serving Camden, Cumberland, Burlington, Gloucester and Salem Counties. www.mainstrealty.com 856-858-2200. Broker Pat Ciervo

Mortgage Rate News & Analysis

2008-11-07T08:25:00.000-05:00

U.S. mortgage interest rates yoyo-ed wildly during the latest month, following similar trends on Wall Street and in consumer confidence measures. According to data from Freddie Mac, rates on 30-year fixed rate mortgages began at 6.10 percent, excluding points during the week ended October 2, and then fell to 5.94 percent the following week. From there the rate skyrocketed up 52 basis points to 6.46 percent during the week ended October 16, the fastest weekly increase in more than 20 years. The rate then dropped to 6.04 percent, before bouncing back up to 6.46 percent by the end of the month.
Highly Influential Factors
Federal Reserve Actions - The Federal Reserve made an emergency 0.5 percent cut to its target rate on October 8, lowering the federal funds rate to 1.5 percent, its lowest level in more than four years. The decision was part of global financial effort, including five other central banks, to infuse the world's economy with more liquidity. Then, on October 29, at the Fed's regularly schedule meeting, it voted to further crop the rate to 1.0 percent in light of continued weakness in the business and consumer spending.
Consumer Spending - During the third quarter of 2008, the consumer spending contracted at rate of 3.1 percent, the first time the measure has fallen since the fourth quarter of 1991. Consumer spending typically accounts for about two-thirds of all national economic activity.
Moderately Influential Factors
GDP - Results for the third quarter were released at the end of October, showing a 0.3 percent decrease in gross domestic product, and a dramatic drop from the 2.8 percent growth rate in the second quarter. The traditional definition of a recession is two consecutive quarters of shrinking GDP, which has not yet occurred in the current financial crisis.
Consumer Confidence - The Conference Board reported that consumer confidence dropped to a record-breaking low in October, with its index falling to 38.0 from 61.4 in September.
Unemployment - The number of claims for new unemployment benefits grew from 463,000 during the week ended October 11, to 479,000 for each of the following weeks. The 4-week moving average was slightly lower at 475,500. To date, roughly 750,000 jobs have been cut during 2008.
Which Way Will Rates Move in November?
Most economists and industry heads are predicting continued stormy weather ahead for the financial markets as well as for consumer incomes and spending. For instance, Lynn Franco, director of the Conference Board Consumer Research Center commented this month, "The impact of the financial crisis over the last several weeks has clearly taken a toll on consumers' confidence...Looking ahead, consumers are extremely pessimistic, and a significantly larger proportion than last month foresees business and labor market conditions worsening. Their earnings outlook, as well as inflation outlook, is also more pessimistic, and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season."
Because businesses and individuals are increasingly feeling the pinch of tightened credit markets and constricted disposable income, the pressure on mortgage backed securities investors has also been to sell, forcing mortgage rates higher. Unfortunately, with little positive economic indicators expected soon, mortgage interest rates may continue on their upward climb into November.

Home Sales Pace (Oct 08)

2008-11-07T08:13:00.000-05:00

Home Sales Pace
Sales of existing U.S. homes rose in September, according to the National Association of Realtors, by 5.5 percent to a seasonally adjusted rate of 5.18 million units, up from 4.91 million units in August. That sales pace was also up 1.4 percent from September 2007 figures. Median home prices, however, fell by 9.0 percent to $191,600 during the same period, from $210,500 last year.
The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc to smooth out the trends. The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.
Sales Pace by Region
September's sales jump was led by an enormous increase in the Western sales pace. The West experienced a 16.8 percent rise to an annual rate of 1.25 million units compared with 1.07 million in August. That also puts sales up 34.4 percent on an annual basis.
The Midwest and South saw only minor growth in comparison with the West, while the Northeast saw a decrease in sales in September.
Sales in the Midwest rose to 1.19 million units, 4.4 percent higher than the 1.14 million housing transactions in August.
The South had 1.9 million sales in September, an increase of 2.2 percent from 1.86 million the previous month.
Finally, in the Northeast, sales of existing homes dropped 1.2 percent to 840,000 units, from 850,000 units in August.
Home PricesThe median home price, the point at which half of all homes are sold for more and half are sold for less, decreased in September, as a rise in home values in the West that was more than compensated for by price declines in the other three regions.
The median price in the Northeast dropped to $246,800 from $271,000 in August. The price has declined 5.4 percent in the last year.
The median price in the Midwest fell to $152,500 from $168,000 the month before and decreased by 7.9 percent since September 2007.
In the South, the median home price was down to $167,200 from $176,500 the previous month and 4.1 percent from one year earlier.
The median price in the West rose to $253,600 in September, up from $253,600, but the current price is still 18.5 percent below the going rate at the same time last year.
Inventory
The number of existing homes for sale in the U.S. continued to shrink in September, contracting to 4.27 million units, a decrease of 1.6 percent from August. The supply of homes available at the end of September represents a 9.9 month stock at the current sales pace; the August pace reflected a 10.6 month supply.
Next Report
Data for October existing home sales, prices, and inventory will be available at the end of November

One in Five Homeowners in "Underwater" Mortgages

2008-11-07T07:59:00.000-05:00

One of the harshest realities of the current mortgage market crisis is that millions of American homeowners have seen the value of their home decline dramatically, leaving them "underwater" on their mortgages. In fact, the latest study from First American CoreLogic found that 7.63 million mortgage borrowers now owe more on their home loans than their houses are worth.
That accounts for 18 percent, or almost one in five American homeowners with negative equity. The CoreLogic report suggests that if prices continue to fall even by 5 percent, another 2.1 million mortgages will also be underwater.
Hardest Hit Areas
The study, which covered 43 states and Washington, D.C., reported that most of those with negative equity loans (64 percent) are concentrated in just seven states: Arizona, California, Florida, Georgia, Michigan, Nevada, and Ohio. Nevada led the nation in per capita underwater loans with 47.8 percent. That means roughly half of all Nevada homeowners owe more than their homes are worth! Others in the top five were Michigan with 38.6 percent, Arizona and Florida with 29.2 percent, and California with 27.4 percent.
How It Happened
During the first half of this decade, prices in a few key areas, like California, Arizona, Nevada, and Florida started to skyrocket. In order to break into the market, borrowers made use of risky home loan packages like adjustable rate mortgages, no-doc "liar loans," and zero-down payment mortgages. These borrowers had little or no equity going into their home purchases.
In other areas, like the rust belt including Michigan and Ohio, failing economies and industries pushed homeowners to tap into their existing home equity to pay bills and cover costs when breadwinners were laid off.
Then the bubble popped. Foreclosure rates went through the roof, home sales tanked, inventory piled up, and home prices plummeted. A recent S&P/Case-Shiller Home Price survey showed that on average, U.S. home prices dropped 16.6 in August 2008 from the previous year. And with some states like Nevada experiencing a whopping 30 percent decline in prices in the past year, it is easy to see how borrowers got in over their heads.
What's The Big Deal?
So millions of homeowners owe more than their homes are worth. So what?
"Being underwater leaves homeowners vulnerable to foreclosure," said Mark Fleming, CoreLogic's chief economist. "Being underwater doesn't necessarily mean that you can't pay your bills but it's a necessary condition of default."
For those who can still make their monthly payments, there is no immediate danger, unless they need to sell. Selling with negative equity is virtually impossible as it means, the seller will still owe his mortgage company money for a home he no longer owns.
Then of course, there are those who were having trouble making their payments in the first place. They can't sell and they can't refinance into better loans. As soon as their interest rates reset and they are unable to make their payments, with no equity to tap into, most borrowers end up losing their homes to foreclosure.
A number of government initiatives are aimed at reducing foreclosure rates and helping homeowners get back on top of their mortgages, but they are not able to save everyone. Moreover, with prices expected to fall between 5 and 10 percent before bottoming out next year, the country may soon face a one in four rate of homeowners swimming underwater in mortgage debt