real estate

Chinese & Canadian Investors Helping To Stabilize Housing Market

 

 

 

Chinese buyers lead foreign  investment in US housing market

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Published November 27, 2012

FoxNews.com

As the U.S. housing market slowly starts to recover, foreign investment is  helping it along.

According to the National Association of Realtors, non-American buyers  accounted for $82 billion in home sales last year. More than $7 billion of that  is by the Chinese, who are now the second largest foreign home purchasers after  Canadians. They’re buying high-end, multimillion-dollar homes from California to  New York and paying cash.

“They’re probably the top 1 percent of the Mandarin speakers that are coming  from China,” said Brent Chang, a Coldwell Banker realtor in Southern California.  “They’re really the people who have their own businesses or maybe were part of  the government.”

Some of these homes are specifically catered to Chinese buyers. Fox News  visited a home listed at $8 million in Pasadena, Calif., that had two kitchens,  the smaller one had ventilation for the cooking for aromatic or “stinky” foods  like fish. It also has a lower level in-law suite and even a koi pond.

“People from China do a lot more business in their homes so they want their  homes to really scream that they’ve made it and they’re successful, ” said  Chang.

The Chinese like the U.S. because their money goes further. In Shanghai, $2  million might only get you a two-bedroom condo.

“You get a huge bang for your buck, you get land, you get good schools, you  get a safe environment,  nice community life, ” said Linda Chang, a realtor  who works with her son, Brent, in the San Marino and Pasadena areas of  California.  

Chang says while many other real estate markets have suffered, her area has  flourished thanks to Chinese and other foreign buyers.

“It’s been fantastic for the U.S. housing market because we have not suffered  as other communities have,” said the elder Chang. “In fact, our property values  have increased.”

While some of the Chinese buyers live in the U.S. full or part-time, realtors  estimate about 40 percent of the homes are for investments. They’re snapping up  houses in states hit hard by foreclosures such as Nevada and Florida. Some are  buying two or three homes at a time.

According to Shanghai magazine Hurun Report, mainland China has almost 1  million millionaires and nearly half of them say they want to invest in the  United States.

“It’s a sign of their status,” said Betty Chan, who deals with Chinese buyers  in Las Vegas. “You can show off to your friends and family that I can buy  something overseas, not everybody can do it.”

Chan continued: “Most Chinese like to own a Mercedes … it doesn’t matter  whether a Mercedes is a good car or not. It’s just showing their status in the  community, so owning a foreign house is pretty much a prestigious status in  China, so they’re proud to tell their friends: ‘Hey, I own a house  overseas.'”

Buyers from China also invested almost $2 billion in commercial property in  2011, or quadruple what they spent several years ago.

Read more:  http://www.foxnews.com/us/2012/11/27/chinese-buyers-lead-foreign-investment-in-us-housing-market/#ixzz2EfDNWu68

Short Sales Now An Option For Homeowners Who Are Current On Their Underwater Mortgage

One of the questions that I get asked about on occassion is ” Can I sell my home via a Short Sale if I am current on my payments?” Up until recently almost all short sales involved mortgages where the homeowner had fallen behind on their mortgage and were seeking a short sale as a way to avoid foreclosure.
Recently, strategic defaults have become popular and many banks are now willing to let a homeowner do a short sale even if they are current on their mortgage.

Trending up: short sales outside foreclosure

 

MIAMI – Dec. 7, 2012 – More Florida borrowers are short selling their homes without defaulting on their mortgages, a far-reaching change from days when stopping payments was the only sure-fire way to spur bank approval.
About 29 percent of all Florida home sales during late summer and early fall were short sales granted when the homeowner was not yet in foreclosure, according to a new RealtyTrac measure of non-distressed short sales. That’s an increase of 32 percent from the previous year.
In Palm Beach, Broward and Miami-Dade counties, 21 percent of sales were of properties where the owner was not in foreclosure, but owed more to the bank than the home was worth – a 49 percent annual increase. The difference between the sale price and unpaid mortgage balance in South Florida was an average of $106,712.
Daren Blomquist, RealtyTrac vice president, said this is a new trend that reflects recent federal changes that expand what can be considered a financial hardship and attempts to streamline the short sale process. It’s also likely that banks are more reluctant to file a foreclosure, hoping to avoid years-long foreclosure proceedings in court.
“We’re hearing a lot more about short sales happening outside of foreclosure,” Blomquist said. “Everyone is celebrating that foreclosures are down, which is good, but a lot of the reason for that is distressed homes are being disposed of further upstream.”
In a short sale the bank agrees to sell the home for less than what the owner owes on the mortgage.
The federal rule changes only affect loans backed by Fannie Mae and Freddie Mac, which announced the new guidelines during the summer. The rules didn’t take effect until Nov. 1.
Under the changes, borrowers who are current on their mortgage but suffer a hardship such as a death, divorce, or a job change requiring them to move more than 50 miles from their home can be qualified for a short sale by their loan servicers without additional approval from Fannie or Freddie.
“The bottom line is banks are trying to remedy the number of foreclosures any way they can,” said Realtor Dean Hooker of Pompano Beach-based Southeast Realty. “It’s taken them four years to get to this position.”
About 28 percent of all homes sold during the third quarter in Palm Beach County were properties in some stage of foreclosure, but the majority were sold through short sales rather than as bank-owned homes repossessed through foreclosure, according to a separate RealtyTrac report released this morning.
The 12 percent increase in distressed property short sales from the previous year and 28 percent jump from the second quarter was likely spurred by the National Mortgage Settlement and pending Dec. 31 sunset of the Mortgage Forgiveness Debt Relief Act, Blomquist said.
Joanne Epstein, a South Florida Realtor with the Keyes Company/Ragbir Team, said she has 18 short sales she’s trying to close before the end of the year when the act expires. If it isn’t extended, sellers will have to count the debt forgiven by the banks in a short sale as income – an expense that could cost tens of thousands of dollars depending on the tax bracket and amount forgiven.
Epstein is confident Congress will extend the act, even if the vote is taken next year and it’s made retroactive.
“They want people to be able to move on and our country to move on,” Epstein said.
Nationally, distressed short sales also outnumbered bank-owned sales, increasing 22 percent from last year to account for nearly 10 percent of all home purchases during the third quarter. The shift to more short sales is happening as “both lenders and at-risk homeowners realize that short sales are often a better alternative than foreclosure,” Blomquist said.
But it’s also a requirement under the $25 billion National Mortgage Settlement signed by the five largest banks in March.
More than $2.2 billion, or 63 percent, of Florida’s share of the settlement has come in the form of deficiency waivers for short sales. Nationwide, about 60 percent of the debt forgiven through Sept. 30 had been through short-sale deficiency waivers. Not all short sales are distressed sales
Short sale: Bank accepts less for the home than the borrower owes on the mortgage, but the homeowner has not had a foreclosure filed against them.
Distressed short sale: Homeowner has a foreclosure filed against them, but during the court process, a short sale is conducted.
Bank-owned sale: A final foreclosure judgment is awarded by the court. The home is repossessed by the bank then resold.
© 2012 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by MCT Information Services