The Allmanac
What’s Real in Real Estate


Economists at the Dallas Federal Reserve Bank say there are signals that the worst is over for the DFWhousing market. Next year looks better for builders and buyers. The decline in existing North Texas home prices has all but stopped. Median prices are actually rising. The number of homes for sale in North Texas has fallen to the lowest level in more than two years. National analysts agree that Texas is poised to see home sector gains in 2010.
Home starts in the DFW area rose by 10% in the fourth quarter, the first increase since 2006. The DFWarea has only about a three month supply of finished vacant new houses, less than half the national average. A supply of slightly under six months is considered balanced. The top economist for the National Association of Homebuilders said home starts in Texas are already 30% higher than a year ago.
December’s 1% decline in home resales for the DFW area followed a 31% increase in November. But condominium sales were up 31%from a year ago. In far north Dallas, December sales jumped 54% from a year ago, while home sales were up 56% in the Park Cities, 55% in Coppell and 48% in Colleyville.
North Texas is fifth among major U.S. markets in delinquent loans tied to commercial mortgage-backed securities -totaling $1.45 billion, including the Four Seasons Resort in Irving which has declared bankruptcy. And the 52 story Elm Place at 1401 Elm Street in downtown Dallas, formerly the First National Bank, is closing its doors. When it opened more than 40 years ago, it was the tallest building west of the Mississippi River. Foreclosures in the four county DFW area are actually down 20% from last month, the lowest for this time period in three years.

The National Association of Realtors says the current home
sales pace is 44% higher than a year ago, including detached
single family homes, townhouses, and condominiums. And
sales are up in every region of the country. For the second
month in a row, sales totals are higher in all price classes.
Unsold inventories of houses are down 16% froma year ago.

Investors are becoming active. Denver-based Dividend Capital Realty Trust has bought the 147,000 square foot Preston Sherry Plaza and the 177,000 square foot Park Place on Turtle Creek, two of the largest transactions of the year. The University of Michigan’s bellwethers survey reports consumer confidence went up 7.5% in December, affirmed also by a survey from the Conference Board. Even a pessimist has to admit that 2010 looks more positive for real estate than last year at this same time. Both the Dow Jones Industrial Average and the S&P 500 posted their best performances since 2003, with gains of 18% and 23% respectively. Notable is the rally from the dark and fearful days in March - the Dow and S&P have surged by 59% and 65%.

FannieMae’s forecast for 2010 suggests that sales of existing homes may jump another 10% over 2009 and new home sales could go 26% higher. The Treasury Department has said it is committed to Fannie Mae and Freddie Mac with as many billions of dollars
as necessary for the next three years - no limit. The two institutions provide funding for up to 60% of the U.S. mortgage market and can now borrow capital at favorable rates, hopefully to pass along lower rates to borrowers. In a recent policy change, FannieMae said it will now accept purchase offers for REO homes immediately after listing, without notifying lenders or mortgage servicers whose loan files are under review. Under its previous policy, fifteen days notice was given to find a better offer - but their inventory was moving too slowly. Bottom line for buyers and agents - look for earlier access to REO properties and quicker decisions on purchase offers. Changes in RESPA effective January 1 require lenders to fully disclose all closing costs including cost of obtaining a loan, title insurance, settlement and any other services within three days after a buyer applies for a mortgage. Both the GFE and HUD-1 Settlement statement have been revised. Economists caution that the trend in employment is improving, but meaningful job growth will take a long time. Health care has actually added 631,000 jobs since the recession began and is now the second largest source of employment in the U.S. The federal government is #1. One consideration of the proposed healthcare reform is that, if it succeeds, the government will directly or indirectly influence 30% on our entire workforce. Extension of the homebuyer tax creditmight also prompt parents to look at student housing. Some loan programs allow a “non-occupant” co-borrower.

Most common is an FHA loan:
• Allows non-occupant co-borrower (on loan or title) or co-signer (on loan but not title)
• Minimum downpayment 3.5%
• Qualification based on combined income and debts of borrower and co-borrower
• Co-borrower may not have an interest in the transaction (seller, builder, agent).
• IRS says a child first time borrower is entitled to the tax credit even if a parent co-signs the loan.
www.alliebethallman.com
The Premier Firm in Residential Real Estate &ASSOCIATES
The

University Park has modified requirements for fence construction and trash insets:
• In rear, side and front yards, fence heights may now reach eight feet.
• Minimum size of a trash inset has been changed from three feet deep by eight feet in length to
three feet deep by five feet in length.
Another constant issue for University Park residents is foliage trimming:
• Limbs, shrubs, foliage must be trimmed flush with sidewalk edges and cut to provide eight feet
minimum clearance above sidewalks.
• For alleys, clearance is a minimum fourteen feet above curb line and fifteen feet above alleys.
No vegetation over eight inches high is permitted within one foot of alley pavement

Reminder: Daylight Savings is THIS Sunday, November 1. Set clocks back one hour.

Here is the latest on Tax Credit

Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain.

The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years.
The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real-estate market a bigger boost while preventing real-estate investors from benefiting.

Many property experts have cited the credit as a reason for signs of recovery in the housing market in recent months. But that recovery was somewhat undercut by the September drop in new-home sales reported Wednesday.

The credit would be extended from its current expiration date of Dec. 1 to all contracts entered into by April 30, and closed before July 1. It is expected that income limits on people claiming the credit would be increased to $125,000 for singles and $250,000 for couples, from the current $75,000 and $150,000, aides said. The credit phases out for people making more than those amounts.

While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. Senate Majority Leader Harry Reid (D., Nev.) hopes to add it to a bill currently on the Senate floor to extend federal unemployment insurance benefits. But agreement on that hasn't been finalized.

While Senate Republicans are likely to support the measure, House Democrats have raised concerns that it carries a high cost to the government. The Internal Revenue Service is examining the program for alleged abuse.

Write to Corey Boles at corey.boles@dowjones.com and John D. McKinnon at john.mckinnon@wsj.com

Printed in The Wall Street Journal, page A4 Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

Thank you to Dean Miller, Vice President Mortgage Banking, Patriot Bank Mortgage in Dallas for this up to the minute information.
5430 LBJ Freeway #1485
Dallas, TX 75240972-770-2636 Office
214-725-9925 Cell
972-770-2639 Fax
dmiller@patriotbankusa.com

Existing Home Sales Surge

There were few major surprises in the economic news this week, and little change in the stock market. While there was a great deal of daily volatility, mortgage rates ended the week nearly unchanged.
A flood of housing market data was released during the week, and most of it reflected improvement in the sector. The biggest unexpected news came from the September Existing Home Sales report, which jumped 9% from August to the highest level since July 2007. Inventories of unsold existing homes dropped sharply to a 7.8-month supply from a 9.3-month supply in August. This marked the lowest inventory levels in two and one-half years. September Housing Starts remained at depressed levels, which removes pressure on future inventory levels. Building Permits, a leading indicator, also held at low levels. In short, home sales improved, while inventory levels moved lower with a relatively light supply of new homes in coming months. If there is a note of caution, though, it's that much of the activity has been spurred by exceptionally low mortgage rates and the first-time homebuyer tax credit, and the future is uncertain on both fronts. The Fed is scaling back its purchases of mortgage-backed securities, which might push mortgage rates gradually higher, and lawmakers are currently debating whether to extend the first-time homebuyer tax credit.
The Mortgage Bankers Association (MBA) also released its forecasts for this year and next. According to the MBA projections, purchase originations will decline slightly in 2009, but will then increase by 12% in 2010. Similarly, the MBA forecasts that existing home sales will rise by 11% in 2010. The chief economist of the MBA suggested that the timing of the economic recovery and the level of mortgage rates are the biggest variables influencing the results for 2010.

Early Voting Ends Friday...GO VOTE

Attached is the guide that will tell you EVERYTHING that you will be voting on. This is a BIG election and will impact the TEXAS CONSTITUTION! Big Deal! Please go vote and make sure your friends & family vote, too!!

PS - Be careful because this vote has a few items where no means yes and yes means no.

"We encourage all Texans to participate in the constitutional election of November 3. Early voting beings Monday, with 11 propositions for voters to consider.

The propositions cover a range of issues, including curbing eminent domain abuse and controlling Texas' property tax appraisal system. Other propositions fix errors that have crept into the constitution, allow for new debt, or provide the legislature with the authority to spend money."

I attached a League of Women Voters voting guide for your reference.

Here are two links that provide additional information about the proposed amendments