Foreclosures to persist!

According to authors at the Federal Reserve Bank of Cleveland, the nation’s high foreclosure rate is likely to persist. The Fed article looks at the changes in foreclosure and unemployment rates across states, noting the differences in the timing of the movements. The conjecture that the high foreclosure rate will persist is based in part on the observation that states that experienced boom-bust housing cycles in the past (Texas, Oklahoma, Massachusetts and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory. These previous boom-bust cycles “were small in comparison to the current cycle,” the article said. While the recession has left deep scars in the housing and labor markets — with the unemployment rate doubling and the foreclosure start rate roughly tripling — the timing of the movements differs over the cycle, according to the abstract, written by Timothy Dunne, a vice president at the Federal Reserve Bank of Cleveland, and Kyle Fee, a research assistant.Credit scores downAccording to FICO Inc., 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. With scores like that it's unlikely they'll be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use. FICO's latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. Before the Great Recession, scores on FICO's 300-to-850 scale weren't as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com. On the positive side, the number of consumers who have a top score of 800 or above has increased in recent years. At least in part, this reflects that more individuals have cut spending and paid down debt in response to the recession. Their ranks now stand at 17.9 percent, which is notably above the historical average of 13 percent, though down from 18.7 percent in April 2008 before the market meltdown. There's also been a notable shift in the important range of people with moderate credit, those with scores between 650 and 699. The new data shows that this group comprised 11.9 percent of scores. This is down only marginally from 12 percent in 2008, but reflects a drop of roughly 5.3 million people from its historical average of 15 percent.Olick - NYT caught with its pants downThe other way we posted an article claiming the rich were the worst defaulters. Diana Olick says it ain't so: "The data show that while one in 12 mortgages under a million dollars are delinquent, "more than one in seven homeowners with loans in excess of a million dollars are seriously delinquent." Shall I wax on about how the rich care less about their credit ratings than the not-so-rich, or how many of these luxury homes are second homes that the owners don't really need, or how rich folks don't give a hoot about their communities and see these homes purely for their investment value? Nah, I'd rather do a little math. Here's my problem with the thesis of this article: A little less than 14 percent of the loans outstanding in the U.S. are "jumbo," meaning over $417,000, according to government statistics (FHFA). The number of loans that are over $1m are even less than that. So when we're talking about rates of default, you have to factor in the share of the market that you're looking at and the bottom line numbers. Yes, the rate is higher, but it's a far smaller share of borrowers, and that makes the numbers far more volatile. Just 1.7 percent of all home sales in May were of homes over one million dollars. That just gives you an idea of how small that marketplace is. Yes, we can always find the odd celebrity that squandered away all their millions and defaulted on the loan, but I would take a big step back before I come to the conclusion that the 'rich: are more likely to default on a loan than the "unrich.'"CMBS Delinquency Rate Exceeds 8%The US commercial mortgage-backed security (CMBS) delinquency rate ticked up 17 basis points to 8.14% in June, according to Fitch Ratings. It marked the smallest increase in 11 months, and the fifth straight month of loan resolutions in excess of $1bn. Fitch noted $1.5bn of loans leaving the index helped to offset the $2bn of new delinquencies, bringing the total net increase in delinquencies to $512m of loans. Newly delinquent loans in June bore smaller average balances of $10.1m than the index's overall $13.1m average. No loans with a balance in excess of $100m became newly delinquent in June. "While delinquencies slowed for the month, this trend is not expected to continue," said Managing Director Mary MacNeill. "The number of distressed properties continues to grow, and if borrowers are unable to access capital for leasing costs or are unable to restructure their loans to a leverage level commensurate with sustainable property values, they may stop subsidizing debt service payments." Loans continue to transfer to special servicing at an elevated rate, with a net increase of $4.2bn in performing specially serviced loans in June. In total, $23bn of loans in special servicing remain less than 60 days delinquent but face an increased risk of default. The multifamily delinquency rate rose to 13.82%, from 13.65% in May, while the office delinquency rate grew to 4.84% from 4.59%. The retail delinquency rate grew 16 basis points to 6.19% from 6.03% in May, while the industrial delinquency rate grew 41 basis points to 5.48%, from 5.07% in May. The rate of delinquency in hotel loans grew a single basis point to 18.62%.

May 28, 2010 Blog

Hello everyone!
We are way behind on our blog but I will try to catch up a lot of what's going on. In the last few weeks there have been many things to do and attend in Kansas City. Although we have been swamped to the pint our staycation is late getting started we will be doing so soon.
Right now we are trying to get our few remaining contracts closed from the first time home buyer tax credit that ended on April 30th. We have some new listings on board but will post them when we have all the pictures up. Two listings I am highlighting today are part of the Sky Terrace Project in the West Plaza.
4701 Terrace http://matrix.heartlandmls.com/Matrix/display.aspx?c=AAEAAAD*****AQAAAAAAAAARAQAAAFEAAAAGAgAAAAQzNTQwBgMAAAABMQYEAAAAATEGBQAAAAExBgYAAAACMjQNAgYHAAAAAjEzDQYGCAAAAAItMQ0MBgkAAAABMQYKAAAAAjI4CgYLAAAAATENAgYMAAAABl9Ow7*DsAYNAAAAAzEyNAoGDgAAAAEyDSwL#-1R10#-1R20#R28
and 1309 W. 37th St. http://matrix.heartlandmls.com/Matrix/display.aspx?c=AAEAAAD*****AQAAAAAAAAARAQAAAFEAAAAGAgAAAAQzNTQwBgMAAAABMQYEAAAAATEGBQAAAAExBgYAAAACNzENAgYHAAAAAjEzDQYGCAAAAAItMQ0MBgkAAAABMQYKAAAAAjI4CgYLAAAAATANAgYMAAAABUnDighjBg0AAAADMTI0CgYOAAAAATINLAs)#-1R10#-1R20#R28#-1R29

Check these out and see what you think
For those of you who missed it we were able to see Venice at the Kansas City Repertory Theater which was fantastic! You don't have to trust us here is the Time Magazine review which named it the best musical of 2010. It's incredible what is happening in Kansas City theater right now.

http://www.time.com/time/arts/article/0,8599,1989375,00.html

There is also a new theater venue called the Living Room in the space formally called the Pearl which was jewelry designer Robin Nichols showroom. Here is the article from the Kansas City Star: http://www.kansascity.com/2010/05/22/1959787/new-crossroads-theater-space-has.html

I actually attended the opening of On An Average Day and it was great! So if you are looking for something to do check this space out and help them get this new venue up and going.

I hope you all have a fantastic holiday weekend! I am not even going to try to post all the activities going on but most of you have already figured out what all you are doing.

Monday, Memorial Day also kicks off the activities associated with the upcoming Pride weekend. Here is a link to their site which has all the activities and performers for the week. If you want tickets to the Aids Quilt Dinner on Thursday you can pick them up at blo salon in Westport. http://www.gaypridekc.com/

One last bit of business: Interest rates on FHA 30 year fixed are at 4.75% with no points and interest rates on Conventional 30 year fixed are at 5.125%. For more information go to www.816loans.com

Watch for next weeks post

April 30, 2010 Blog

Hello,

This weeks Blogger is Robert McCain.


Well today is the deadline for first time home buyers to have their new home under contract to qualify for the first time home buyers tax credit. So I hope all of you first time home buyers were or are able to get the "i's" dotted and the "t's" crossed by midnight tonight. Even though the federal tax credit is over MHDC has funding again. Thankfully the state legislature in Missouri found a way to fund this program that provides 3% of the 3.5% required down payment needed for a FHA loan. If you are still in the market give us a call and we can walk you through the details.

On to the fun stuff. Last Saturday was Aids Walk and the crowd was out. Here are a few pictures. Some of us are on a team called Project Walkway and we managed to raise $5,400 which is small compared to some of the other teams, but we were thrilled none the less because we went over our goal. This included the Queen Clash event at Flex and several beer busts and silent auctions at Outabounds. One of these pictures features the cast of Pride and Joy and I was in charge of the hair for the show which would have been a nightmare on the prep night if I didn't have Joe Denny's help. For the last time Missy Koonces hair is not a wig! Pride and Joy was another fund raiser for Aids Walk that was a huge success. Luckily the rain held out until the very end of the walk

Pride and Joy Cast at the start of the walk

Right after Aids Walk was the Mill Creek Auction which was all the buzz in the Plaza condo market for a few weeks. Even though they were only showing 25 to auction we were told numerous times if the auction was going well they would bring on more units. Well by the time the auction was over all units were sold and were sold at better than expected prices. All condo owners in the area should be thrilled because this provides us with some long awaited good news when trying to comp out your condo through appraisals.

Thanks to one of my hair clients recomendation we tried out Balsano's Gelato Cafe for breakfast. We were running ahead of schedule and thought WOW! we have time to sit down for breakfast in the middle of the week. So we gave it a shot and it was wonderful. On a sunny day with the doors open you can sit inside or out and just enjoy the great food (I recomend the quiche) and the wonderful surroundings the Plaza provides. Balsano's address is 428 Ward Parkway.

The menu _____________Service with a smile from Matt and Tom

This weekend is another event packed weekend. Starting tonight is the Brookside Art Anual which is one of the top ten ranked art fairs in the country. Tomorrow night is DIFFA. Of course during the day on Saturday and Sunday you can catch us at one of our open houses.

Our Kansas City Blog Starts Today!!!

Hello Everyone!

It's our first blog on Kansas City and it's market! We are the if team at Chartwell Realty and hopefully we can find some fun things to blog about and keep you posted! This week the blogger is Robert McCain.

We are about to start our second Staycation summer and we think it's going to be a blast. What we do is have our friends and clients (we find a few things ourselves) tell us which touristy things they like to do and we go check it out and tell everyone about it.

Along the way we will also be blogging about the real estate market, what's going on, and whatever else may come to mind.

We are a team of 7 so if we end up taking turns on the blogging you may get a more well rounded picture of our city and how we don't all realize how much there is to do. So here we go!

The big news today we had in the real estate world is that Kansas City is no longer a soft market. We have proof of 4 appraisals where the seller had only been in their house a couple of years and they actually got appraisals above what they paid for their home. I know that's big cheer from us and hopefully a lot of you as well. So if any of you are looking to make a move our office number is 816-877-8249. Not a push though just a reminder.

This weekend we will have Robert Lewis Stevenson and Roanoke Plaza Open from 1-4 so please stop by. On Sunday I will be holding open 1512 NE Auburn out in Lee's Summit from 1-4.

Don't forget this Saturday morning is Aids Walk 2010. It begins at Theis Park in front of the Nelson at 9am. If you haven't donated yet I am definitely taking donations!!! Please, I kept forgetting to tell people. Even if you are not participating definitely come down to the park and participate in the festivities.