Broker price opinions contributing to downward spiral?

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WASHINGTON – April 2, 2007 – The National Community Reinvestment Coalition and real estate appraisal associations testified before the House Subcommittee on Financial Institutions and Consumer Credit on March 11, saying that broker price opinions (BPOs) are hurting property values nationwide.

More realty practitioners have been doing BPOs due to an increase in foreclosures and short sales, and they insist their estimates are accurate due to their comprehensive knowledge of the local market. However, some groups say agents low-ball BPOs in order to expedite sales; and they insist that this tactic pushes down neighborhood residential values because appraisers must take both recent listing prices and closed sales prices into consideration when valuing properties.

Those who testified at the subcommittee hearing want Congress to prohibit the use of BPOs as substitutes for appraisals in transactions involving distressed properties, noting that 23 states make it illegal for agents to sell BPOs.

The National Association of Realtors® plans to release a statement on the issue in May.

Source: Chicago Daily Herald (03/27/09) Harney, Ken

Hopeful signs emerge at end of ugly quarter

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CHICAGO (AP) – April 2, 2009 – Even with a promising finish, the best thing that can be said about the first quarter is it’s over. Even a dramatic rise in March wasn’t enough to prevent the market from falling for the sixth consecutive quarter.

Despite intensive government efforts to stem the decline, the U.S. recession deepened in the first three months of 2009, unemployment surged to a 25-year high and consumer confidence hit an all-time low. And the Standard & Poor’s 500 index ended the quarter down 11.7 percent from the start of the year.

“It was a terrible quarter,” said Alan Skrainka, chief market strategist for St. Louis-based investment Edward Jones. “All indications are the economy dropped just as much in the first quarter as in the fourth quarter of last year.”

Yet whether or not the slump deepens, there may be some comfort in the statistical likelihood that the downturn is closer to the end than the beginning. The recession that began in December 2007 was 15 months old at quarter’s end, a month shy of the postwar-record recessions of 1974 and 1981. What’s more, April 9 will mark 18 months since the start of the bear market.

“The passage of time is important,” said Art Hogan, chief market analyst at Jefferies & Co. in Boston. “We’ve gotten through 15 to 18 months of this down cycle, and that’s been something that doesn’t get enough attention.”

There are other hopeful signs.

The Associated Press asked three market strategists to review the first quarter and provide their outlooks. Here are some highlights:

Economy

The consensus of economy-watchers can be summed up by the baseball fan’s byword, “Wait ‘til next year.”

The experts don’t expect any meaningful recovery this year. Liz Ann Sonders, chief investment strategist for brokerage Charles Schwab & Co., thinks the recession will end in the third quarter. But putting the brakes on the downturn isn’t the same as hitting the accelerator.

Similarly, Hogan doesn’t see actual growth in the gross domestic product, the broadest measure of the nation’s economy, until the first half of 2010.

Nevertheless, they were heartened by the fact that the onslaught of negative economic news slowed a bit toward the quarter’s end.

Glimmers of hope that emerged amid the gloom: Orders for costly manufactured goods and new-home sales both registered unexpected gains in February, and retail sales dipped less than expected. Consumer spending turned back up in January and February.

“The outlook for the economy is getting better,” said Hogan. “That’s the first quarter we can say that in quite some time. It certainly wasn’t the case in the third and fourth quarters of last year.”

Some economic indicators such as income and industrial output slipped lower in February. But the overall picture for key measures, while still weak, wasn’t as bad as it had been.

“We’re still in the basement, but we may be on the steps out of the basement,” Sonders said.

The three strategists also think the Obama administration removed uncertainty hanging over the market by laying out its major economic recovery plans by the quarter’s end.

Unemployment and consumer confidence

High joblessness and a lack of consumer confidence are linked, and there’s a long way to go for both before the economy stabilizes.

The unemployment rate reached 8.1 percent in the quarter, the highest in more than 25 years, and many economists expect it to reach 10 percent by year’s end.

Hogan thinks the rate could keep rising until the second half of 2010, especially if GDP doesn’t show sustained strength until next year.

“It’s important to remember that the unemployment situation, as in all down cycles, will get worse even as the economy gets better,” he said. “Corporate America is reluctant to start new hires unless they’ve seen a string of quarters put together where we’re seeing improvement in the economy.”

The consumer confidence index, seen as a critical factor in turning the economy around, fell to an all-time low during the quarter.

A recent uptick in sales has laid the foundation to improve confidence, Skrainka said.

“It helped that we had our bank CEOs coming out and talking about how they’ll be profitable this year, (Federal Reserve Chairman) Ben Bernanke saying forcefully that he’ll do everything it takes, President (Barack) Obama saying it’s a good time to buy stocks,” he said. “I think as confidence spreads, people will spend a little more.”

Housing

The long-moribund housing market showed signs of life as the quarter came to a close.

Government intervention in credit markets helped nudge rates on fixed-rate 30-year mortgages to a record-low 4.85 percent, spurring a refinancing rush and new interest in home purchases. House prices rose 1.7 percent in January to end a months-long losing streak.

Housing starts and sales of new and existing homes all fared better than expected in the latest reports, although the slump can’t be declared over.

Hogan said there still are plenty of pending foreclosures left to hit the market, adding to an already-large inventory of residential real estate. But he said it’s noteworthy just that the housing market is not getting worse.

Nationwide, housing prices probably still have another 10 percent to 15 percent to fall, Sonders estimated.

Still, she said: “We’re starting to see a light at the end of the tunnel.”

Stock market

When the S&P 500 sank to 676 on March 9, it marked a 58 percent drop in the index since the bear market began — and a stunning 25 percent drop since the start of the year.

A sharp rebound in the following days left market-watchers hesitant to declare the bear’s demise, but somewhat confident the bottom had been reached.

“We’ve had a volatile year already and we’ve only gone through a quarter,” said Hogan. “We have probably seen the lows in the marketplace.”

He predicted the S&P will finish the year up 5 percent to 10 percent from where it began, albeit only after the market endures more fits and starts.

Sonders put the chances at “better than even” that the March 9 low turns out to be the bottom. She cited more promising technical signs than existed previously and a “mountain” of cash that investors have parked on the sidelines that stands ready to be to put back into equities.

Still, Skrainka said investors shouldn’t get too caught up in stocks’ short-term outlook.

The market’s potential looks more appealing now, particularly for the long haul. Skrainka said he likes to look at the S&P’s returns over 10-year periods, and it is certainly due to rise after declining by 1.4 percent from 1999 through 2008. The historic average return is a return of 6 percent to 7 percent after inflation.

“It wouldn’t surprise me if we were positive for the year,” he said. “But we really try to emphasize the importance of investing for the long term.”

 

Source: http://www.floridarealtors.org/NewsAndEvents/n1-040209.cfm

Commercial real estate loan defaults skyrocket

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WASHINGTON (AP) – March 27, 2009 – With loan defaults rising, analysts say the struggling commercial real estate industry is poised to fall into the worst crisis since the last great property bust of the early 1990s.

Delinquency rates on loans for hotels, offices, retail and industrial buildings have risen sharply in recent months and are likely to soar through the end of 2010 as companies lay off workers, downsize or shut their doors.

The commercial real estate market’s fortunes are tied closely to those of the sinking economy, especially unemployment, which hit 8.1 percent in February.

“Until jobs start coming back and industry starts doing better we don’t see performance increasing” among landlords, said Christopher Stanley, an associate with research firm Reis Inc.

While the commercial real estate industry’s woes led to the recession of nearly 20 years ago, this time the industry is “the victim of the economic and financial crisis,” said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services in Walnut Creek, California.

Vacancies at retailers, Nadji forecasts, will shoot up to 11 percent by year-end, matching the peak of the early 1990s. Office vacancies are likely to hit 18 percent by year-end, he said, short of the 1990s-era peak of more than 20 percent.

The commercial real estate market is “at the precipice,” a report by Detusche Bank said earlier this month. So far this year, delinquency rates are up to 1.8 percent of loans in March, more than four times the year-ago level.

Faring worst were retailers, office building owners and apartment buildings. Hotels and industrial properties posted more moderate increases.

Deutsche Bank’s Richard Parkus projects delinquency rates will keep soaring to more than 3.5 percent by year-end and as high as 6 percent by late 2010. He says the industry’s woes will be “at least of a similar magnitude as those that the commercial real estate faced in the early 1990s.”

Drops in property values of 45 percent from a peak in late 2007 are possible, Parkus said, exceeding those of the early 1990s, as demand for office, retail and other commercial space plummets amid a worsening economy.

Adding credence to those gloomy predictions, the government said Thursday that the U.S. economy shrank at a 6.3 percent annual pace at the end of 2008, the worst showing in a quarter-century.

Funding for commercial loans virtually shut down last year as the financial system unraveled.

There was $12.2 billion in commercial mortgage debt issued last year, the lowest figure since 1991 and down 95 percent from 2007, according to a report by Reis.

Making matters worse, about $216 billion in loans are coming due through 2012.

That is putting landlords in a squeeze.

About $11 billion of distressed commercial property is currently up for sale, compared with a lackluster $2.7 billion worth of properties that were actually sold in February, according to Real Capital Analytics.

A growing imbalance between supply and demand is likely to push down prices in the coming months, analysts say.

Similar to the residential property market, foreclosures and defaults are surging, with nearly $19 billion in commercial real estate loans in default, foreclosure or bankruptcy so far this year, according to Jessica Ruderman, a senior analyst with Real Capital.

More than 20 metropolitan areas nationwide now have at least $1 billion in troubled commercial loans, she said, up from five at the end of last year. Landlords in Las Vegas, Manhattan and Los Angeles are struggling the most.

As the industry’s troubles worsen, disputes are breaking out. The Dubai developer helping build the $8.6 billion CityCenter complex on the Las Vegas Strip said Monday it is suing struggling partner MGM Mirage over concerns about the project’s viability.

One major shopping mall owner, Chicago-based General Growth Properties Inc. has been struggling to avoid bankruptcy for months. It faces a Friday afternoon deadline to get permission from lenders to avoid penalties for late debt payments.

 

Source: http://www.floridarealtors.org/NewsAndEvents/n5-032709.cfm

Survey: Households say now is good time to buy

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ORLANDO, Fla. – March 27, 2009 – Out of 1,000 potential first-time home buyers, 78 percent say that now is a good time to buy a home, despite widespread concern about the economy. And 68 percent think now is a better time to buy than six months ago. The survey was conducted in early March for the Century 21 First-Time Home Buyer Survey.

Prices are the driving motivation for potential first-time home buyers, with more than eight of 10 first-time home buyers (85 percent) saying they consider current home prices affordable, and 73 percent citing current prices as a major factor in their decision to buy now. However, potential first-time buyers are still split between “being willing to consider an offer now” (42 percent) and “waiting for prices to go down before they seriously consider making a purchase” (48 percent).

“Current pricing, rates and incentives, such as the First Time Homebuyer Tax Credit, provide tremendous opportunities for first-time home buyers to get into the market,” says Tom Kunz, Century 21 Real Estate president and CEO. “Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season.”

Among the survey’s other key findings:

• Bargains in the marketplace provide additional options for buyers to consider. Fifty-six percent of potential first-time home buyers are considering a foreclosed or short sale home, and 63 percent are open to a “fixer-upper” or “as-is” home.

• When asked to rate the features that they look for when choosing a home, price is the primary consideration, with 87 percent saying this feature is “very important,” followed closely by neighborhood safety (80 percent) and the home’s condition (71 percent).

• Having enough money for a downpayment is a top concern of potential first-time home buyers, as nearly half (46 percent) said they are “very worried” about the issue.

• Most respondents (86 percent) are in the market for single family homes.

Source: http://www.floridarealtors.org/NewsAndEvents/n3-032709.cfm

Group seeks fix to insurance dilemma

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ST. PETERSBURG, Fla. – March 26, 2009 – Dan Montgomery said there has to be a better way to insure Floridians against a potential Hurricane Andrew-like storm than to continue to pour money into Citizens Property Insurance Corp. and the state’s Hurricane Catastrophe Fund.

Neither entity can truly protect the state if it suffered a major storm hit, he said.

That’s why Montgomery has started the Shield Our State Coalition, a St. Petersburg-based group with a plan to change the way hurricane insurance is handled in the state.

Basically, Montgomery’s plan would have private insurers continue to write homeowners policies in the state. But premium dollars collected on the wind portion of policies would go directly to a reserve pool maintained by the state that would be used to pay future storm claims.

“Our core premise is that the people of the state of Florida, one way or another, are going to have to pay for hurricane risk,” Montgomery said. “They are paying $6.5 billion a year in premiums. And what use is that going to? It’s going out of state and in many cases out of the country and into the pockets of reinsurers. What’s left in the state of that money to pay hurricane damages? Our plan takes that same money, but keeps it right here in the state in what I call HIP – the Hurricane Insurance Pool.”

Montgomery calls the current system broken. He notes that Citizens Property Insurance Corp., the state-created insurer of last resort, has had to go back to the state for more funding to cover its claims from past storms.

Legislators also have been trying to find a way to shore up an $18 billion shortfall in the state’s CAT fund, which has about $10.5 billion in cash and bonding capabilities to pay future claims.

“All you’ll find is a mountain of debt,” Montgomery said. “The magnitude of that debt if we were hit this year by an Andrew-type hurricane, would be about $14,000 per household on top of the highest premiums in the nation that they are already paying.”

Montgomery, who spent time working on Wall Street and has 16 years experience in catastrophe insurance claims, may have allies in his pursuit.

State Rep. Ellen Bogdanoff, R-Fort Lauderdale, House Minority Leader Franklin Sands and Senate President Pro Tempore Mike Fasano have been working on legislation that would have the hurricane portion of policies covered by the state.

But not everyone is convinced it would work. State Rep. Ron Reagan, R-Bradenton, believes it would take time to build up enough reserves through the plan to cover the effects of a serious storm.

“I think while it’s well-intentioned, it doesn’t help us immediately. It shifts all the hurricane coverage to the state,” Reagan said. “I don’t believe the state should be in the hurricane business if we don’t have to be. I think the idea in the long run may have merit; we need to continue to look at it. I would prefer to have the wind covered by private money and private participation.”

Montgomery believes that after administrative costs, the state could bank about $5 billion a year in reserves in the Hurricane Insurance Pool. He said the money would be able to compound, tax-free, and therefore grow quickly.

Andy Gregory, co-owner of Des Champs & Gregory, Inc. insurance in Bradenton, strongly opposes Montgomery’s plan.

“It’s ridiculous because it puts the state on the hook for the largest catastrophe-prone exposure that exists,” Gregory said. “When private industry exists to be able to offset that risk, why subject the state to it?”

Gregory believes such a concept would drive independent agents out of business because large insurers would undercut their prices, knowing they would only be covering lower-risk perils like fire and theft.

“The direct writers will come in and undercut, competition would end up limited, and in the future, prices would begin to rise,” Gregory said. “It’s a form of socializing when we don’t have to. He’s not thinking this through.”

Bob Lotane, spokesman for the National Association of Insurance and Financial Advisers–Florida, says the agency’s members are split on the issue but open to new suggestions.

“We have members who support concepts such as this and we have others who have reservations or who are not as supportive,” Lotane said. “They do agree, however, that we need out–of–the–box thinking such as this to address the difficulties in the market.”

 

Source: http://www.floridarealtors.org/NewsAndEvents/n1-032609.cfm

Rates trigger race to buy, refinance

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ORLANDO, Fla. – March 26, 2009 – Tumbling interest rates are setting off a mortgage-refinancing scramble among homeowners and pulling undecided buyers into the market.

Loan terms for 30-year fixed-rate mortgages fell to 4.63 percent from 4.89 percent for the week ending March 20, the Mortgage Bankers Association (MBA) reported Wednesday. That’s the lowest in the history of the survey, which began in 1990.

Refinancing accounted for 78.5 percent of all mortgage applications last week.

Applications are up in part because of a federal refinancing program through Freddie Mac and Fannie Mae that is part of the Obama administration’s housing rescue plan.

Rates have been driven down by the Federal Reserve’s decision last week to buy up to $300 billion of long-term government bonds and $750 billion in mortgage-backed securities held by Fannie and Freddie.

The falling rates are jolting homeowners and buyers:

• Homeowners who had been waiting to refinance say they’re now getting great deals. Nancy Hemenway, 58, of Arlington, Va., is closing on a refinance in a couple of weeks.

“We were watching the rates and didn’t see how they could go much lower,” says Hemenway, executive director of a non-profit. “We thought there might be a problem because banks weren’t lending, but that didn’t happen at all. We just filled out some paperwork and faxed it.”

• Low prices on foreclosed homes are luring buyers into the market. Up to 45 percent of existing home sales in February were distressed properties, according to a report this week by National Association of Realtors.

Michael McCullough, a public relations specialist in Atlanta, is closing today on a 3,000-square-foot home with a large yard and four bedrooms.

“My wife and I have no business buying this large a home, but we can afford it because it was a foreclosure, and we secured a 4.6 percent, 30-year fixed” loan, says McCullough. “There are tons of deals out there.”

• Realtors such as Leslie McDonnell at Re/Max Suburban in Libertyville, Ill., are seeing sudden pickups in business. Enticed by low prices and rates, McDonnell has bought several properties herself this year. “We’ve definitely seen an impact. Things have gotten busier for sure,” McDonnell says. Low rates “are compelling people into action. I do feel like we’ve hit bottom.”

Overall mortgage applications last week were 20 percent above their year–ago level, according to the MBA.

 

Source: http://www.floridarealtors.org/NewsAndEvents/n2-032609.cfm

Survey says Americans still eager to buy

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WASHINGTON – March 24, 2009 – Nearly 25 percent of adults say they plan to purchase a home in the next five years and half of those (53.5 percent) will be first-time homebuyers, according to a survey commissioned by Move Inc., operator of Realtor.com.

More than 18 percent cite the $8,000 tax credit as a motivating factor. Potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, with 43.4 percent of potential first-time buyers who earn $50,000 or more saying they plan to use the tax credit.

According to the survey, half of all Americans (49.6 percent) are paying more attention to home values today than they were a year ago, especially those ages 25 to 34 (61.9 percent). The median age of first-time homebuyers is 30 years old.

The Move survey uncovered changing attitudes toward owning a home. About two-thirds (62.5 percent) now consider their home primarily a place to live as opposed to an investment. Adults earning up to $20,000 and between $30,000 and $39,900 annually are significantly more likely to feel most strongly that a home is more of a place to live than an investment as compared to those earning $50,000 or more.

When presented with a list of amenities, homeowners wanted it all – with more space leading the list (about 10 percent chose that option). Other amenities that were high on many shoppers’ lists included energy saving features (6.8 percent), bigger or nicer yard (6.1 percent), a better location (4.2 percent) or updated amenities (3.4 percent).

The Move survey also found that 18 percent plan to take advantage of the Obama administrations program to prevent foreclosures.

But even for those who are not in foreclosure, they reported the following:

• 21 percent of all homeowners with a mortgage contacted a lender in the last 12 months to restructure their loans.
• 10.6 percent received help; 5 percent are still waiting for an answer.
• 27 percent know someone who is likely to face foreclosure.
• 25.6 percent know someone whose mortgage is underwater.

Source: Move Inc. (03/23/2009)

Small banks could drive recovery, Bernanke says

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WASHINGTON – March 23, 2009 – Small banks could play a key role in spurring the nation’s economic recovery, Federal Reserve Chairman Ben S. Bernanke said Friday, as many appear strong enough to make new loans while bigger institutions have pulled back.

Bernanke urged community bankers “not to let fear drive” their decisions and to make sound loans. In a speech, he told the Independent Community Bankers of America that the Fed has instructed bank examiners to encourage such institutions to make loans so long as they are “economically viable.”

The Fed chairman is working on multiple fronts to try to restart lending, and his words of encouragement yesterday were part of that broader effort. The central bank has already supported government injections of cash into big financial institutions and, this week, launched a new program to fund $200 billion in consumer loans.

Smaller banks have, generally, held up better through the recession than the biggest financial institutions. While 20 banks have failed so far this year, that pace is far slower than in the early 1990s, when hundreds failed annually.

Small banks have tended to make straightforward loans to individuals and businesses, rather than exposing themselves to the complicated securities that dragged down their larger competitors. “If community banks are prudent but opportunistic in extending credit to strong borrowers, they will help the economy recover while benefiting from that recovery themselves,” Bernanke said. He also said that “in some instances, community banks are able to step in at crucial moments when local businesses or consumers have been unable to find credit elsewhere.”

But there are some limits to how much small banks can boost the broader economy. One is scale.

The 7,800 smallest U.S. banks had total deposits of only about $1.2 trillion last year, about the size of Bank of America and J.P. Morgan Chase put together. Even though some community banks have seen their deposits rise by up to 8 percent this year, according to Cam Fine, chief executive of the independent bankers group, they would have to grow improbably fast to make up for the total decrease in lending last year.

Moreover, while most community banks have held up relatively well through the recession so far, major losses could still lie ahead. Small banks tend to lend heavily for office buildings, retail centers and other real estate projects in their communities. Losses on those loans are likely to rise in the coming months, analysts have said, as stores and office tenants default and newly developed homes sell for less than had been anticipated.

There are indeed large parts of the country, such as the Southwest, Florida and the industrial Midwest, where commercial real estate is “very, very weak,” Fine said. He argued, though, that small banks, burned by the real estate crash of the early 1990s, made loans on sufficiently conservative terms that most should be able to weather the problems.

Banks as a whole still face major challenges. The Federal Deposit Insurance Corp. said yesterday that the industry lost $32.1 billion in the final three months of 2008, more than the $26.2 billion first reported last month.

 

Source:  http://www.floridarealtors.org/NewsAndEvents/n5-032309.cfm

Economic woes slow U.S. migration to Sun Belt region

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WASHINGTON – March 19, 2009 – Strapped by the nation’s economic crisis, fewer Americans are migrating to Sun Belt hot spots in Nevada, Arizona and Florida, instead staying put for now in traditional big cities.

Census data released Thursday highlight a U.S. population somewhat locked in place by the severe housing downturn and economic recession, even before the impact of rippling job layoffs after last September’s financial meltdown.

The population figures as of July 2008 show growth slowdowns in once-booming metropolitan areas such as Atlanta, Las Vegas, Phoenix and Tampa, due mostly to a rapid clip of mortgage foreclosures as well as frozen lines of credit that made it harder for out-of-staters to move in.

As a result, rust-belt metro areas such as Buffalo, N.Y., Pittsburgh and Cleveland stanched some population losses, and Boston, Los Angeles and New York saw gains. Well-to-do exurbs around Washington, D.C. saw growth slowdowns as people weary of costly commutes moved closer to federal jobs in the nation’s capital.

“It’s the bursting of a ‘migration bubble,'” said William H. Frey, a demographer at the Brookings Institution think tank who analyzed the numbers. “Places that popped up in migration growth in the superheated housing markets earlier in the decade are now just as quickly losing their steam.”

“It’s the constraint of not being able to buy or sell a home that is keeping people from moving long distances,” he said.

The latest population trends come as state and local governments are deciding where to pour billions of dollars in federal stimulus money to develop schools, roads, bridges and other infrastructure. The nation’s decennial head count, used to apportion House seats and redraw congressional districts, also is fast approaching.

Las Vegas, known for its warm climate and wide spaces, had its smallest annual population gain in nearly 20 years.

Despite its pricier housing market, San Francisco was back to its heyday growth of the 1990s, having formerly shriveled when the tech boom went bust in 2000.

Economists explain that because housing in San Francisco was so expensive for so many years, only the wealthy were able to buy. As a result, the area was less affected by mortgage foreclosures than other cities. San Francisco’s tech industry also has been slower to lose jobs so far in the current recession, but officials aren’t sure how long that will hold up given California’s double-digit unemployment.

California had the biggest net loss from people moving to other states. The declines in its interior regions put it at risk of losing a House seat. Los Angeles had major gains, but partly at the expense of Riverside, a sprawling exurb nearby.

In the months ahead, jobs are expected to be a growing factor in U.S. migration.

The population in the nation’s distressed counties, or areas with unemployment rates of 6 percent or higher in 2007, grew by 0.3 percent, compared to a 1.2 percent growth rate in areas with relatively low unemployment.

The overall nationwide growth rate was 0.9 percent, according to the Population Reference Bureau.

In Michigan, where the struggles of the auto industry led to the nation’s highest unemployment rate, 60 of the state’s 83 counties lost population. Florida and Rhode Island are facing similar pressures.

Despite slowing migration, the South and West continued to account for the most growth from 2007 to 2008.

Raleigh-Cary, N.C., and Austin-Round Rock, Texas, were the nation’s fastest-growing metro areas, registering growth rates of 4.3 percent and 3.8 percent, respectively. Both high-tech centers, the two metros are also sites of major college campuses that helped cushion them from the housing slowdown.

Other findings:

-Metros registering the biggest numerical gains were Dallas-Fort Worth and Houston. Despite housing slowdowns in 2008, Phoenix and Atlanta ranked third and fourth in growth, respectively, followed by Los Angeles.

-The New Orleans area grew 2 percent to more than 1.1 million, still lagging its pre-Hurricane Katrina level of 1.3 million. St. Bernard Parish and neighboring Orleans Parish were the nation’s first and third fastest-growing counties.

-The Washington, D.C., region was among the top 10 numerical gainers, due partly to federal government jobs. Far-flung D.C. exurbs such as Virginia‘s Loudoun and Prince William counties had flat or declining growth rates, victims of the housing bubble and a spike in gasoline prices.

-Out of the nation’s 100 fastest-growing counties, the majority were in Texas (19), Georgia (14), North Carolina (11) or Utah (nine).

The census estimates used local records of births and deaths, Internal Revenue Service records of people moving within the United States, and census statistics on immigrants. The estimates were for both counties and metropolitan areas, which generally include cities and surrounding suburbs.

On the Net:

Census Bureau: http://www.census.gov/

 

Source: http://www.floridarealtors.org/NewsAndEvents/n2-031909.cfm

How will foreclosure affect credit scores?

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The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.

FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the past two years, says Todd J. Zywicki, a professor of law at George Mason University.

”It just seems obvious that a foreclosure in 2008 or 2009 doesn’t have as much information value as a foreclosure five years ago,” he says. ”To the extent that foreclosure doesn’t predict future behavior as much as it did in the past, you’d expect that the FICO algorithm would change to adjust for that.”

One of the country’s largest credit unions, Golden 1, has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.

BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ”How to Lend to the Newly Credit Impaired.”

Source: The New York Times, Ron Lieber (03/14/2009)