Mobile Real Estate News and Trends from First American Core Logic

August 13, 2009 A real estate report by First American CoreLogic on home sales, price trends, and foreclosure activity

More information about First American CoreLogic can be found at www.facorelogic.com/newsroom/newsroom.jsp. Contact: Lori Guyton · (901) 277.6066 · lguyton@cvic.com

NEGATIVE EQUITY NEW DATA SHOWS NEARLY ONE-THIRD OF ALL MORTGAGES UNDERWATER Mobile Shows 11.34 Percent of Mortgages in Negative Equity More than 15.2 million U.S. mortgages, or 32.2 percent of all mortgaged properties, were in negative equity position as of June 30, 2009 according to newly released data from First American CoreLogic. June's negative equity share was slightly lower than the 32.5 percent as of the end of March 2009 and it reflects the recent flattening of monthly home price changes. As of June 2009, there were an additional 2.5 million mortgaged properties that were approaching negative equity. Negative equity and near negative equity mortgages combined account for nearly 38 percent of all residential properties with a mortgage nationwide. In Mobile, 5,875, or 11.34 percent of all properties with a mortgage, are in negative equity. A total of 9,404 mortgages, or 18.16 percent, are in near negative equity or negative equity. The aggregate property value for loans in a negative equity position was $3.4 trillion, which represents the total property value at risk of default. In California, the aggregate value of homes that are in negative equity was $969 billion, followed by Florida ($432 billion), New Jersey ($146 billion), Illinois ($146 billion) and Arizona ($140 billion). Los Angeles had over $310 billion aggregate property value that was in a negative equity position, followed by New York ($183 billion), Miami ($152 billion), Washington, D.C. ($149 billion) and Chicago ($134 billion). In Mobile, $992,999,780 total property value was at risk of default. Negative equity, often referred to as "underwater" or "upside down," means the borrower owes more on their mortgage than the home is worth. Near negative equity is when mortgages are within five percent of being in a negative equity position. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both. The distribution of negative equity is heavily skewed to a small number of states as three states account for roughly half of all mortgage borrowers in a negative equity position. Nevada (66 percent) had the highest percentage where nearly two-thirds of mortgage borrowers had negative equity. In Arizona (51 percent) and Florida (49 percent) half of all mortgage borrowers had negative equity. Michigan (48 percent) and California (42 percent) round out the top five states. The top five states' negative equity share was 47 percent, compared to 25 percent for the remaining states. In numerical terms, California (2.9 million) and Florida (2.3 million) had the largest number of negative equity mortgages, accounting for 5.2 million or 35 percent of all negative equity loans. Ohio (862,000), Texas (777,000) and Arizona (706,000) were also among the top five ranked states for the number of loans with negative equity. "Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock: job loss, illness or other adverse situation. Given that negative equity did not increase this quarter and home price declines are moderating or flattening, it may indicate we are at the peak of the negative equity cycle. However, until negative equity recedes and unemployment declines, mortgage risk will continue to be very elevated," said Mark Fleming, chief economist for First American CoreLogic. Click here to download a full-resolution version of this table Methodology*: First American CoreLogic has created state- and CBSA-level negative equity estimates for all single-family residential properties in the U.S. The data includes 47 million properties with a mortgage, which accounts for over 90 percent of all mortgages in the U.S.*. The data was revised for 2009 and the revisions included a large addition of junior liens (including multiple junior liens), additional residential property types that were previously excluded and a broader range of home values. The net impact of the revisions was an increase in negative equity. First American CoreLogic used its public record data as the source of the mortgage debt outstanding (MDO) and it includes 1st mortgage liens and junior mortgage liens in order to capture the true level of mortgage debt outstanding for each property. The current value was estimated by using the First American CoreLogic Automated Valuation Models (AVM) for every residential property in the U.S. The data was filtered to include only properties valued between $30,000 and $30 million because AVM accuracy tends to quickly worsen outside of that value range. The amount of equity for each property was determined by subtracting the property's estimated current value from the mortgage debt outstanding. If the mortgage debt was greater than the estimated value, then the property is in a negative equity position. The data was created at the zip code level and aggregated to the state, CBSA and U.S. totals. *Note: Only data for mortgaged residential properties that have an AVM value is presented. There are several states where the public record, AVM or mortgage coverage is very thin. Although coverage is thin, these states account for fewer than 5% of the total population of the U.S. The mortgage debt outstanding was not adjusted for amortization, however the majority of mortgages were originated within the last six years where the difference between the original mortgage debt outstanding and current mortgage debt outstanding is not large. ABOUT FIRST AMERICAN CORELOGIC: First American CoreLogic, a member of The First American Corporation (NYSE:FAF) family of companies, is the largest provider of real estate, property and ownership data and advanced analytics for information on foreclosures, delinquencies, median home prices, home price indices, home valuations, sales activity and mortgage loan originations. The market-specific data covers 7,607 ZIP codes, 958 Core Based Statistical Areas (CBSA) and 3,050 counties located in all 50 states and the District of Columbia. This data represents 99 percent of the United States population, 140 million (97 percent) of all properties, more than 50 million active mortgages and $2 trillion in loan-level, non-agency mortgage securities. First American CoreLogic products and services enable customers to better manage mortgage risk, protect against fraud, acquire and retain customers, manage credit risk, mitigate loss, decrease mortgage transaction cycle time, more accurately value properties and determine real estate trends and market performance. More information about First American CoreLogic can be found at www.facorelogic.com. © 2009 First American CoreLogic, Inc. All rights reserved.

:: Single women represent a significant and growing portion of Canadian home buyers ::

Although traditionally considered less inclined to buy homes than other demographics, single women of all ages are continuing to knock down barriers by purchasing real estate and tackling home repairs in droves.

According to a Female Buyers Report, 30% of single, never-before married women own their own home. For divorced or separated women that proportion is 45%, and for widowed women it’s 64%.

Poll results found that of the single, never-before married women who are not yet homeowners, 31% say they will potentially purchase their next home within three years. More than half (56%) of women who intend to purchase in the next three years are shopping for a property in the $150,000 to $350,000 price range, while 10% have slightly fatter pocket books and are looking for a property priced above $350,000.

Women today are earning higher salaries than ever before, and are much more financially independent than has been the case in the past. So it’s not surprising that women are distancing themselves from traditional patterns, like looking for a man to buy a home with, and are not intimidated by the home buying process. Of the women polled who intend to purchase a home in the next three years, 56% are willing to participate in bidding wars, in comparison to only 49% of men.

What’s more, the survey found that, of women intending to buy in the next three years, 25% said they are looking to purchase a ‘fixer-upper’ and plan to renovate it themselves. Only 9% intend to hire a contractor. Research shows that women in Toronto, Halifax and Regina are the most likely to undertake renovations.

According to the survey, the biggest factor driving women to buy homes is that it makes more sense to them than renting. Of women who own a home, 36% gave that as the reason they bought property. Other important factors include making a good investment, cited by 22% of female homeowners surveyed, and pride of ownership, cited by 13%. Simply put, women today are more financially astute than previous generations, and appreciate real estate as a long-term investment.

Women are eagerly learning all they can about real estate. When asked, “What methods will you use to educate yourself about home purchasing?” the top three responses were speaking with a real estate agent (83%), speaking with friends and relatives (78%) and using real estate and financial websites (64%).

The survey also found that 34% of women would forego a wedding reception in order to put a larger down payment on a house, as would 27% of men. Women and men are both moving away from tradition, as a 2004 survey found only 30% of women and 15% of men likely to forego a wedding reception in order to invest in a home. (CREA 17/04/07)

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:: Barrie Town Houses - A good first step ::

It makes good financial sense for first time buyers to consider a town home as the first home they own.

As average home prices in Ontario increase the percentage of first time home buyers who financially qualify to purchase a detached home in good liveable condition decreases leaving townhouses and condos as the feasible option for those who want to enter into home ownership.

On the plus side, a townhouse typically requires less maintenance cost and effort, less energy to run and taxes take a smaller chunk out of the wallet than a detached home of equal square footage. Be prepared to lay out a minimum of $50,000 more for a detached home as well.

Homes above the $300,000 mark in the current Barrie market are taking longer to sell and owners are experiencing a growing discrepancy between list price, and the eventual sale price. Townhouses on the other hand are continuing to increase in value and in demand.

Town home values should continue along this trend for some time and it’s a safe bet that a town home purchased in Barrie today will witness higher percentage value increases in each of the next few years than homes in the higher end of the price range in Barrie.

That equity gain puts you in better stead with lenders down the road when the time is right to trade up to a bigger home. Realizing the dream of being able to own and comfortably carry the perfect home is a more likely possibility for those who recognize the steps to get there.

Many who skip those steps find the dream short lived when they have left themselves no financial buffer zone to ride out economic fluctuation. The first step is to get into the market today at a price that doesn't put you in a financial strait jacket and let that investment move you closer to the home you really see yourself in.

Barrie has a large assortment of townhouse developments dispersed throughout town.

If you want to learn more about Barrie Town homes and or receive updates on townhouses for sale in Barrie, give me a call I’d be glad to help you out.

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:: Barrie vs. Toronto ::

Barrie, a city of just over 125000 people situated around a clean swim-able bay just under 60 minutes north of Toronto and within 20 minutes of dozens of golf courses, ski hills and parks has long been a popular lifestyle alternative for Toronto residents who wish to escape the smog, crime and congestion that is part and parcel with a metropolis of over 3 million people. It comes at a price though, an affordable price.

Have a look at these pictures of listings in Barrie available for sale on this day and priced between $200k and $210k. When you're done, click on the link to a story in the Toronto Star a friend emailed to me from his 18th floor perch overlooking the concrete and flashing lights of Hog Town this morning.

http://www.thestar.com/Business/article/194213

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:: Barrie News -Barrie one of two best investment regions in Canada ::

More and more experts point to the Barrie area as being a region of Canada most likely to see a prosperous future ahead of it. Here are some stories I read this week in the news that support this prediction.

:: Ontario is best place to invest
Rakshande Italia, National Post
Published: Wednesday, March 14, 2007

Even as Alberta leads Canada's growth, analysts predict that Ontario is the place for long-term investment, with its up-and-coming cities predicted to break real estate records.
"If I were to invest in the country, I'd say Barrie and the Kitchener- Waterloo region would be my two top choices," said Don R. Campbell, president of the Real Estate Investment Network and author of several books.
Mr. Campbell, who has studied Canadian markets for 15 years, said, "There is a short term slowdown in the [Ontario] economy but the fundamentals are strong and investors should invest today so they can benefit from good returns in 2008." click to continue


:: Families flock ever faster to vital cities on the edge
DAWN WALTON , RACHEL DE LAZZER and JAMES RUSK
Click to continue


:: Growth figures released by nation's number crunchers
Author: Julie DeBruin
Date: Mar 13, 2007

Barrie still has what it takes to bring in new residents, lots of them.
In fact, according to the latest Statistics Canada numbers released Tuesday, the city and its immediate surrounding area are the fastest growing click to continue


:: Canadian census sees cities surging
TENILLE BONOGUORE
Globe and Mail Update

Canadians are officially city folk, with four out of five people living in urban centres.
The first data from the 2006 Census puts Canada's national population at 31.6 million, a rise of 5.4 per cent since the 2001 census.
And most people are living in a metropolis. click to continue

:: Barrie Mayor Dave Aspden calls for Action ::

The Inter-Governmental Action Plan (IGAP) is a study developed by a think tank formed in 2004 and made up of municipal and regional representatives from within Simcoe County along with representatives from the Province.

This group was set up to study and develop a growth/action plan for the area that will best accomodate the inevitable urban growth the region will see over the coming years. Consideration for density management, infrastructure requirements and ecological impact are the cornerstones of the study.

As far as Barrie Mayor Dave Aspden is concerned, enough study has been done and what is needed now is action. He believes that conclusions have been drawn and any further study will only rehash that which we know and at further expense to the taxpayers.

Mayor Aspen agrees with many of the conclusions and recommendations of the IGAP study but not the idea of a two tier governing system between the City of Barrie and the County as recommended by the study.

In a release from City Hall Mayor Aspden said, “The City of Barrie strongly believes that the time to act on the IGAP recommendations is now. We support the principle of long-range land use and infrastructure planning for the region but reject any further consideration of two-tier service delivery involving the City. We do not support more government, additional taxation, and red tape. As a separated City, Barrie operates the most efficient and effective type of government for our residents.”

Barrie currently has the physical space to accommodate another 45,000 residents but the IGAP research forecasts the need to accommodate a further seventy thousand beyond that by the year 2031. Additional land resources will be needed to meet these numbers not just for residential growth but to provide economic opportunity to support the increased population.

Attracting and implementing opportunities for existing commercial and industrial lands are concerns for present day Barrie. Hopefully action is what we do in fact see from Mayor Aspden and his council in the coming months.
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:: Younger Canadian Mortgage holders sited as most fiscally aware ::

Results from a survey conducted by CMHC in the latter part of 06 revealed that 75% of Canadian home owners put paying off the mortgage as soon as possible to the head of the to do list. At least half of those surveyed said the cash surplus when available was put toward paying down the mortgage. Younger home owners were sited as being the most fiscally aware when it came to the mortgage.

Also revealed was that 86% of Canadians prefer their lender to be a Canadian Institution and that 84% were satisfied with the mortgage product they had chosen. This is reflected by the fact that the majority of mortgage holders who have renewed recently stayed with the same lender although the number of people making use of a mortgage brokerage when renewing and refinancing continues to rise.

71% of Canadian mortgage holders who refinanced, did so prior to the scheduled renewal time mainly to free capitol for home renovation and debt management.

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:: January Real Estate Stats show promise for a good year in Barrie

MLS® sales in the region served by the Barrie and District Association of REALTORS® increased this January compared to both the previous month and the same month last year.
Click to continue

:: Barrie Events Centre Sold to Developer ::

I remembered as a kid going to the Barrie fair and trading money earned from cutting lawns over the summer holidays for corndogs, candy floss and hurling rides on the rock-o-plane. Later as a teenager going with a friend and his dad to the Barrie Raceway and placing my first bet on the horses. The Raceway buildings are now known (at least for a short while longer) as the Barrie Events Centre.

The Barrie Agricultural Society (BAS), owners of this large triangle of land at Essa rd. and the 400 highway going back to when Barrie was a small rural community have just sold the property for a tidy sum of 33 million dollars, a benchmark price per acre for land anywhere in Barrie. The property was purchased by Toronto-based real estate investment firm, Osmington Inc.

How will this land likely serve Barrie in the future? No doubt as a bloated retail developement that will compete for business with retailers in the Bayfield Street shopping district, the Mapleview Shopping district, the soon to be developed Park Place retail district and the Dunlop Street/down town shopping district that already finds itself challenged to attract and keep business by road construction mayhem and the rerouting of downtown traffic that is frustrating many.

City Hall planners better be on the stick in putting the plans together to see that this already busy and crucial traffic area does not become another traffic boondoggle for Barrie.

The Barrie Agricultural Society has plans underway to build new facilities in Innisfil, south along Veterans drive. I have no doubt they will do it up right and that the new facilities will rival the old. That project will cost roughly half what the Barrie location has sold for to develop according to Paul Timpano, BAS President.

It will be interesting to see if the well-to-do BAS comes up with some additional plans for within Barrie. That would be seen as a show of gratitude to all of us who contributed to their existence with our allowances and summer jobs over the past few decades.

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:: Canadians spending more on housing: study ::

Canadian Press

OTTAWA -- A new study reports that Canadians are spending a greater proportion of their incomes on housing than they used to.

The Statistics Canada report says the vast majority of households live in suitable and adequate housing, but 1.7 million -- or 14 per cent -- spent 30 per cent or more of their budgets on shelter costs in 2004.

Traditionally, affordability has been based on a ratio of housing costs to total household income, with a household paying 30 per cent or more of its pre-tax income for housing considered to have affordability problems.

The study found 12 per cent of those spending more than the traditional limit spent between 30 and 50 per cent of their incomes on housing, and two per cent spent 50 per cent or more on housing.

The study found that people who rented were more likely to experience affordability problems.

Almost a third (31 per cent) of people who rented spent 30 per cent or more of their budgets on shelter compared with only six per cent of those who owned their homes, and most of them were living alone, relying on government assistance, or had low incomes.

The average shelter cost in 2004 was $9,400, about 15 per cent of the average household budget.

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:: Don't lose your home to fraud ::

The RESTORE THE DEED ACT brought forward at Queens Park by MPP Joe Tascona will safeguard rightful ownership of real property and limit access to vital property and mortgage documents to those licenced to have access, thus eliminating opportunities to commit title fraud and mortgage theft. In addition it will create a fund for those who become victims of this fraud prior to the enactment of the Act.

The current Bill 152 proposed by Premier McGuinty as a save face/quick response to recent concern and media attention to the problem of Title and Mortgage fraud falls far short of what we need to protect the ownership of our property in Ontario.

You should be receiving a petition from MPP Joe Tascona in your mail that can be sent postage paid to show your government we expect serious action be taken. Sign it and drop it in the mail if you have any concern for protecting what is likely your most valuable asset. www.joetasconampp.com

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:: Real Estate Issues being addressed ::

Three key issues are being discussed by the REALTORS® Political Action Committee (PAC) with our local members of Provincial and Federal Government this fall.

Additionally through our efforts, Progressive Conservative MPP Joe Tascona (Barrie-Simcoe-Bradford) has responded to the recent public attention being given to the issue of title fraud by introducing a Private Member’s Bill.

The Restore the Deed Act proposes reforms to the Land Titles Act that would require increased security measures when registering new owners of property and enhances the availability of funds from the Land Titles Assurance Fund to compensate victims. The legislation has passed second reading and been referred to the Standing Committee on General Government for further deliberation.

Gerry Phillips, Minister of Government Services, has stated that the government will introduce
its own bill later this session.

Issue #1: Home Buyers' Plan
REALTORS® are asking the federal government increase the amount Canadians can withdraw from their RRSP under the Home Buyers’ Plan to $25,000. This reflects the 27 per cent increase in inflation since the limits were established in 1992. The program has operated for 14 years, but the withdrawal limits – $20,000 per person and $40,000 per couple – have not been increased to account for market realities and inflation. REALTORS® are also asking the federal government to adjust the limits every five years to account for inflation after the loan limits are increased.

Issue #2: Residential Rehabilitation Assistance Program
REALTORS® are asking the federal government to extend funding for the Residential Rehabilitation Assistance Program (RRAP) to 2010. This is a successful federal government program that has existed for more than 60 years. The program helps homeowners with low-incomes and fixed-incomes come up with the funds required to finance essential home repairs and upgrades. The current federal funding commitment for the program ends in March 2007.

Issue #3 : Reinvestment in Real Property
REALTORS® are asking the federal government to amend the Income Tax Act to provide real property investors with the freedom to change asset classes without the financial penalties they currently face. Under our proposal, this would be achieved by allowing property investors to defer the capital gains tax and the capital cost allowance recovery on the sale of an investment property when the funds are reinvested into another within a specified time period. This change would allow investors to grow their real property investments, provide flexibility to their investment strategies, and encourage the upkeep of renovation of investment properties.

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:: "Park Place" Lands to be Re-Zoned Commercial ::

Barrie, ON--After weeks of waiting for the Ontario Municipal Board's (OMB) decision, the verdict is in. A portion of North American lands will be re-designated and re-zoned commercial, contradictory to what was previously outlined in the City's official plan. "The City is disappointed that the OMB has gone against Council's decision on this significant application. This issue went before the OMB because we as the city felt that the proposed amendment to the Official Plan and rezoning was not in the best interest of the community, and we are disappointed with the final outcome," comments Mayor Hamilton. "We will be reviewing our options on how best to proceed, and will work with the developer to ensure we get the best development we can for the City."

The original application for an Official Plan Amendment and re-zoning to construct a "Lifestyle Centre" including approximately 930,000 square feet of retail space and approximately 400,000 square feet of office space on 190 acres of land at the north-east corner of Mapleview Drive East and Highway 400 was submitted in August 2002. Additional proposed uses included an industrial building, hotels, a cinema and restaurants. To implement this "Lifestyle Centre" proposal, the applicant requested the re-designation and re-zoning of almost 120 acres of the City's prime industrial lands to commercial. Prior to considering this very significant application Council requested a full financial impact analysis, a retail market and impact analysis, traffic studies and comments from the Ministry of Transportation.

In August 2004 the applicant revised their proposal and the amount of land being re-designated for purely commercial uses was reduced to approximately 94 acres leaving the 38 acres of land east of Bayview Drive in a General Industrial designation. The lands North of the open space area, consisting of 41 acres are being re-designated from general industrial to Business Park. On the 94 acres 1.1 million square feet of retail, restaurant, office, entertainment and hotel uses were proposed. The City has negotiated a settlement with regards to transportation issues in the South end of Barrie and contributions will be required by the developer to assist in minimizing traffic congestion in the area; these improvements will be required prior to development

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