Tuesday, January 31, 2012

Pinterest: an Internet pinup board

Over the holidays I joined Pinterest even though I had been warned about how addictive it is. The site has been around since 2010 but has recently experienced explosive growth.
Pinterest is a social site but it is a little different in that it is more about collecting and curating than about content generation. As a serial blogger, it is a welcome break.
Pinterest boards display collections of photographs or digital images. The images are "pinned" onto the boards. There is a pin bookmark available for all the major browsers.
Find a picture, click on the Pinterest bookmark, and the picture gets pinned to a Pinterest board. It's just like pinning something to a cork board. Boards can be collaborative, with more than one person collecting content.
Pins can be links to photographs on the Internet, or photos can be uploaded from your computer.
I have a board dedicated to travel, and when I see a photograph of a place I would like to visit, or some place I would like to go again, or even a picture of a piece of luggage I like, I pin it to my board.
The board inspires me on those cold Minnesota January nights, as I look at photos of faraway beaches and historic architecture in European villages.
I have a board that is dedicated to pictures of porches, because I like them. On a board called "red" I have pictures with red in them.
I have a board for photography where I collect pictures of equipment that I can't afford and photographs that I think are amazing.
The boards are great for collecting and sharing ideas and can be a source of inspiration. Pinterest boards are a way to create a collection that does not take up space or ever need to be dusted.
Some people use the pin boards for wedding planning, and they can be used for planning trips or to plan a meal or a party -- you can use it as a recipe book, too. Pinterest has an iPhone app, too.
We can re-pin pictures that others have pinned and put them in our collections. Pins can be liked and they can be commented on. There is a like button and Twitter button next to every Pinterest pin, and the pins can be emailed or embedded into a blog.
I invited one of my clients to Pinterest so we can share pictures of houses and rooms and decorating ideas. We have shared photographs with each other through Flickr for years so it seemed natural to share through Pinterest.
Not everything in my life is work-related, but if I can find a work-related excuse to use Pinterest, that works for me.
Pinterest is a little like Twitter in that people join and say that they don't get it. As I follow friends on Pinterest I can tell who doesn't get it.
In fact, I can tell more about some of my friends by looking at their Pinterest boards than I can by reading their status updates on Facebook.
I expect that some REALTOR® will see this article and decide to use Pinterest to showcase his or her listings.
"Pinterest is designed to curate and share things you love. If there is a photo or project you're proud of, pin away! However, try not to use Pinterest purely as a tool for self-promotion," according to "Pin Etiquette."
Some of my own photography has landed on Pinterest. People have linked to pictures of local landmarks and architecture. When the photos are linked to correctly, the links go back to my blog and that helps generate traffic.
It is a reminder to me of how important it is to generate quality content because there is always a demand for it.
Pinterest is social but it isn't for everyone. Women seem to flock to it and appreciate it in greater numbers than men do. Eventually there will be classes on how to use Pinterest, and perhaps books on the subject, and maybe someone will come up with a Pinterest strategy that people who want to get rich can use.
But for now, it is fun to go on the site and look at the boards and it is fun to add to my own collections, look at my friends' collections, re-pin content, and leave comments and likes -- or just lurk and enjoy.
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Monday, January 30, 2012

Nothing like just hanging with the boys from Philly

3 considerations before abandoning underwater home

Q: At the top of the market, I owned three properties: my first home (in a marginal neighborhood, now about 100 percent upside down), my own residence (a big fixer in a great neighborhood), and a triplex I bought as an investment (an OK neighborhood, needed some work, fully rented, but now upside down by about 30 percent).
When the market turned, I had a couple of bad tenants in my first home and the triplex that set me way back financially, and I was unable to borrow the money I needed to fix the house I lived in. I did a short sale on the fixer and got temporary loan mods on the other two, and moved back into my first home.
The problem is, they're both so upside-down and don't seem likely to come back up anything soon ... should I just sell everything and start over?
A: Last week, we covered the preliminary step I want you to take with respect to your personal residence, of examining whether the home still works for you, for the most part, as a personal residence, notwithstanding the fact that it's upside-down.
Many a homeowner makes the wise decision of staying put in an underwater home on the grounds that the home is functioning well as a home for their family, is affordable and looks like it will remain functional on those counts for the foreseeable future.
I'm aware, though, that your situation is complicated by your perception of both of the properties at issue, at least in part, as investments that now seem likely to have outlived the purpose for which you bought them.
I can't give you a black or white answer in terms of whether you should sell or hold either or both of your properties. But I can give you a set of considerations to factor into your decision. After you evaluate the life-property fit of the home you currently live in, consider these three things:
1. Your options. One of the biggest, most stressful mistakes we make, as humans, is to agonize over decisions without a complete understanding of the full spectrum of options that are available to us. So, educate yourself!
Get online and do your reading, talk with your own lenders to see what options they might have available, and then also talk with local professionals you trust -- at the very least, include a real estate broker, a mortgage pro, an attorney and a tax expert on this list. They might know of options you don't, and they might be able to help you understand the timelines and feasibility associated with each option.
For example, banks seem to be granting short sales at higher rates than before, but they still take a long time, and the exemption from federal income taxation on the debt forgiven via a short sale is currently set to expire at the end of 2012. That might suggest you should list your properties for sale and apply for short-sale approval, stat.
On the other hand, there have been a number of governmental foreclosure relief program developments that might offer help for you, some of which are available only in the hardest-hit states.
The pros can also help you get a deep understanding for all of the tax, credit, financial and even legal implications of all the options available to you. Get the information and professional input you need to fuel a clear, complete understanding of your options before you move forward with your decision-making process.
2. Your values. The decision whether to hold or sell your properties is a hybrid business/personal decision that will impact the overall "after" picture of your life. While you can and should factor in input from professionals and even personal advisers whom you trust are knowledgeable and have your best interests at heart, only you can decide what's really important to you in a way that drives the ultimate decisions you make.
(And decision really should be decisions, plural, because you could very well create an action plan that involves putting the place on the market as a short-sale listing while you apply for a loan modification, or some other set or sequence of actions.)
So, when I say to factor in your values, I'm simply encouraging you to get clear on what is important to you. Owning the place you live? Tax advantages? Reducing your expenses? Saving up to secure your retirement?
This phase of the process will help you get out of the very common real estate decision trap of doing things for their own sake: owning because ownership is good, or getting out of the market because that's the supposedly smart thing to do.
Whether you decide to hold, sell, or try to make some other changes to your situation then sell as a backup plan, it's important that each action step you build into your plan be set in service of some higher life aim, goal or value.
3. Your priorities. Once you do a deep dive into your values and even list them out in writing, one essential truth will quickly become very evident: You can't (likely) have them all. Early on in this decision process, you'll need to rank your values and objectives in order of importance, and communicate that to the professionals you look to for advice.
There are trade-offs involved in virtually every real estate decision. For example, you might have to give up some tax benefits of property ownership to cut your costs and save your financial acorns for the winter of retirement.
You might have to sacrifice free time and get a side job to make your real estate obligations if you decide to keep the triplex after the mortgage adjusts (if you're currently paying only interest, a mortgage adjustment that happens in January might involve a decrease in interest rate but still increase the overall payment if you have to begin paying toward principal).
Only you can know what's important to you, in your finances and your life, to make the critical decisions you now face. So get clear on your full range of options and the implications thereof, build out a strong sense of your own values and life vision, then prioritize and rank the things that are important to you. Once you have these inputs, your action plan should soon become clear.
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Sunday, January 29, 2012

Beware of vague advice in home inspection report

Great Advice from Barry Stone

Hidden defects could've been discovered pre-purchase By Barry Stone

DEAR BARRY: Our home inspector failed to disclose that our roof is in deplorable condition. The inspection report says, "Due to the steepness of the roof, we were unable to walk on the roof and inspect the flashing, stacks and vent covers. We recommend having a qualified contractor evaluate further if desired."
This week, I walked on the roof with a roofing contractor and was astounded at the bad condition of the shingles. The roofer said the inspection report was worthless. Does the wording in the report absolve the inspector of liability? --Douglas
DEAR DOUGLAS: Most roofs can be reasonably inspected without walking on the surface. If it is a one-story roof, the inspector can go around the building with a ladder, placing it against the eaves in various locations, to view as much of the roof as possible.
In most cases, this enables the inspector to see visible defects. If the roof is on a two-story building, it is often possible to see defects by using high-powered binoculars.
If neither of these options was exercised, then your home inspector was not sufficiently motivated to find defects and was not doing a professional-quality job. In this case, however, alternative viewing methods were not necessary, as you and your contractor were able to walk on the roof.
Unfortunately, the fact that you waited until you had purchased the property before calling a roofing contractor weakens your claim against the inspector. If you had followed the advice in the inspection report and had called a roofing contractor before closing the deal, you could have known the condition of the roof in a timely manner.
On the other hand, the inspector's recommendation for further evaluation was not unequivocal. The report says, "if desired," rather than making a firm advisement.
The bottom line is that the roof defects could have been discovered by your home inspector if he had walked on the roof or had inspected it from a ladder.
DEAR BARRY: In a recent article, you advised a homebuyer to call real estate brokers and ask for a home inspector with a reputation as a "deal killer." You suggested this as a means of obtaining the name of a competent inspector.
As a real estate professional, I want an inspector who will give a fair and accurate assessment of the property. But these so-called "deal killers" are often more interested in killing the deal than providing objective disclosure. Killing a deal is not the buyer's objective. It is to know the true condition of the property before completing the transaction. --Janis
DEAR JANIS: The comment about "deal killers" in that article had nothing to do with home inspectors who actually kill deals. It was about home inspectors who are unfairly labeled as deal killers simply because they do very thorough inspections.
Obviously, there are many agents who would not label a qualified home inspector in this demeaning way. But there are many agents, as well, who commonly use this questionable label. Ask any group of experienced home inspectors, and all will tell you they have been labeled in this way by some agents. Fortunately, you are not one of those misguided professionals.
To write to Barry Stone, please visit him on the Web at www.housedetective.com.

Saturday, January 28, 2012

FHA may lower cap on seller concessions to buyers

Agency rethinking rules on how much financial help sellers can give

It was easy to miss, but last Friday afternoon the Federal Housing Administration hinted that it is finally ready to resolve a real estate and mortgage issue that has been simmering away on the back burner for the past two years: How much in the way of financial concessions can home sellers provide to buyers using FHA mortgages?
It's an important subject, since FHA traditionally has allowed buyers, sellers and their advisers more latitude than any other federal mortgage player when it comes to concessions.
In some parts of the country, especially where settlement charges and transfer taxes are high, buyers with little cash on hand after scraping together a down payment routinely depend on FHA's generous standard on concessions from sellers.
In January 2010, David Stevens, the FHA commissioner, proposed lowering the ceiling on concessions -- funds moved from the seller's side of the transaction to help defray the costs of the buyer's loan origination and closing expenses -- from the long-standing limit of 6 percent to 3 percent.
Stevens, who is now CEO of the Mortgage Bankers Association, said that insurance claims on loans where sellers provided buyers a full 6 percent in assistance were as much as 50 percent higher than when concessions represented a smaller chunk of the total deal.
High concessions, he added, "create incentives to inflate appraised values." He estimated that the new, reduced limit on concessions would go into effect during the summer of that year. But the proposal never was finalized, no changes took effect, Stevens left the FHA in 2011, and nothing much has happened publicly on the matter since then.
But tucked away at the end of an announcement last Friday on indemnification rules for mortgagees, FHA's acting commissioner, Carol J. Galante, disclosed that the agency is now ready -- or more accurately, almost ready -- to cut the seller concession limit from 6 percent to some unspecified lower amount.
Though FHA officials aren't talking for the record about what's coming, conversations I've had suggest that interested real estate and mortgage professionals ought to know the following:
1. Nothing is likely to change soon because FHA plans to "re-propose" its plan sometime in the first half of February. A re-proposal is significant because rather than an adoption of a final regulation -- which FHA could have opted to do -- it now starts the bureaucratic clock ticking once again.
Under federal administrative law procedures, FHA will have to give the public additional time to comment on its latest proposal, then take adequate additional time to analyze the responses it receives.
In this case, the agency plans a relatively short public comment period -- just 30 days -- giving industry groups little time to formulate responses.
But since the National Association of REALTORS®, the mortgage bankers, homebuilders and other groups had submitted their views on seller concessions in the late summer of 2010 -- all of them critical of a flat 3 percent cap -- FHA believes the industry doesn't need a lot of time to come up with positions on its revised proposal.
2. The 30-day comment period is likely to be followed by at least 60 to 90 days for FHA to consider revisions to its proposal, redraft the text as needed, and publish the final rule in the Federal Register with an effective date sufficiently in the future to allow pending deals to go to closing.
So, for anyone who has buyers or borrowers needing the full 6 percent concessions to close sales, you've got three or four months at least -- maybe until the early summer -- to nail down your transactions.
3. Though Galante said the new limit on seller concessions would put FHA "more in line with industry norms," don't expect any direct copycatting of Fannie, Freddie or other agencies. FHA's proposal is likely to be more nuanced than any other agency's approach.
Fannie and Freddie, for example, generally impose a 3 percent ceiling on concessions. The U.S. Department of Veterans Affairs is more generous, allowing an across-the-board 4 percent.
But FHA has spent much of the past 18 months gathering data on insurance claim differentials based on mortgage amount, loan-to-value ratios, and whether the property is newly constructed and sold by the builder or whether it's an existing home being resold.
So look for a proposal next month that allows higher-concession ceilings on small loans, where closing costs represent a larger hurdle percentagewise than larger loans, and lower concession ceilings on loan amounts above some threshold.
Don't be surprised either if FHA puts a dollar amount on seller concessions or imposes stricter standards on newly built homes -- which might get a 3 percent cap -- compared with resale homes.
But no matter how the proposal comes out, you'll still get a shot -- at least for 30 days -- to tell FHA where it went wrong.

Friday, January 27, 2012

5 signs you're real estate-obsessed

I wanted to share this from Tara Nelson.....

Mood of the Market By Tara-Nicholle Nelson
Inman News®
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I recently had an instant message chat with a friend about one of her eventful -- and entertaining -- adventures in Internet dating. She suspected her date had been a classmate of mine in school, but I didn't recognize his name, so as we chatted I did some Internet investigating.
At one point during her hilarious retelling of the evening's events, my search results prompted me to interject, "Uh, did you Google this guy before your date?"
"No," she replied quickly, before saying much more slowly and with rapidly increasing dread, "Whyyyyyyyyy?"
The next moment was one of those scenes that would have been marked by a long, jagged record screech in the movies. "Excuse me?" I typed manically. "You got into someone's car without Googling them first???!!! That's just not safe." I went on.
She thought I was joking, but my knee-jerk reaction on this point is actually a symptom of a syndrome with which I've been afflicted for a few years now. I call it my "Google tic."
That just means that I have the uncontrollable urge to Google, well, almost any and everything.
It started in my work, writing and creating digital content. But it's gotten to the point that I Google every person I meet, am about to meet, or have recently met, every question that comes to mind or debate that comes up.
In fact, tapping into my Google history, I find recent searches for how old Clint Eastwood is; what it means if you keep getting shin splints; the last three medications and supplements that were prescribed and recommended to those close to me; how to tell if someone's really a jerk or just insecure; and the origins of almond milk.
I'm nearly equally captivated by other people's online search behavior. When I type my questions into the search bar, often I'll leave the last few words off, just to see what Google auto-populates into the form, as a peek inside what other searchers are looking for. The mix of highbrow and lowbrow things about which today's inquiring minds want to know is pretty entertaining.
Typing "how do you know if" is auto-completed with "a guy likes you?" and "a girl likes you?" But to end the question "how do you know whether ..." Google suggests alternatives like "whether an image is copyrighted?" "a function is even or odd?" and "an inequality has no solution?"
Unfortunately, not enough of the online search-obsessed are in the market for a home or a solution to a housing issue to get Google to suggest real estate-related subjects for the most common questions people begin typing.
But after many years of living and breathing the stuff of what real estate users care about, I can probably take a guess at what the real estate-related online search obsessions are, and can even categorize them into syndromes in the same vein as my own personal Google tic:
1. The Online House Hunting Tic. These are the folks who are always online, looking at listings, searching for houses -- whether they are actually looking for homes or not! (Frankly, this is just an online extension of the behavior symptomized by an obsession with TV shows like "House Hunters" and "House Hunters International" -- see a related article at Inman News: "Behind the scenes at 'House Hunters International.' ")
And there are several variants on this. Some people just want to know what's on the market in their neighborhoods and their towns. Others take a more escapist approach, searching for homes in the areas they fantasize about living in, whether or not they actually have any sort of plan on moving. Life would be perfect if ...
2. The Open House Tic. This is a hybrid online and offline version of the fixation exhibited by those who get online every Friday and Saturday to prepare their plan of attack for Sunday open houses. This behavior is completely normal and, even, advisable, in actual house hunters -- people who are actually in the market to buy a home, or even home sellers who are (wisely) seeking to scope out the competition.
But it takes on a compulsive element when people who have just bought a home, or have no intention of buying a home anytime soon keep open-house hunting as a weekly habit.
To be fair, this goes on the list of relatively harmless vices, except to the extent that it signals or churns up that feeling of constant discontent, that sense that the home you have is never quite enough.
3. Interest Rate OCD (obsessive-compulsive disorder). Chances are good that you know someone who suffers from these symptoms: obsessively checking online mortgage and news sites to see whether mortgage interest rates have gone up or down, often either (a) dropping an email to their mortgage broker afterward to see whether they've dropped low enough to warrant a refinance, or (b) freaking entirely out that they locked their interest rate or refinanced too soon to catch the very lowest rates.
Market conditions these last few years have only caused this epidemic to spread, as every time we think rates have gotten about as low as they ever have or ever will, it seems like a new "historic low" benchmark is set the very next week.
4. Amateur Appraiser Syndrome. The advent of home-value estimates on various real estate sites has caused some people to fixate on what the sites say is the value of their home. That's not that strange, considering that our homes are our biggest assets and that they have taken such a hit in value of late.
However, it becomes a little strange when you leverage these sites to voyeuristic purposes, tackling your Christmas card address list or your friends' and neighbors' addresses to figure out what the algorithm says their homes are worth, and why you do or don't agree with that.
5. Incessant Redecorating Syndrome. Typically, people suffering from Incessant Redecorating Syndrome tend to prowl celebrity home listings and luxury home sites, as well as home decor and furnishing sites, well, incessantly, even if they live in a fully furnished rental or just peeled the stickers off their new furniture at home.
And they often do these searches on their laptops, while watching home remodeling shows on television or flipping through home decor magazines.
It's a compulsion.
These behaviors, which are actually smart and a great use of technology if you're readying to make an actual real estate move, can become obsessive and even a distraction from other things you should be doing if you persist at it, allowing it to take up a large amount of your time, even when you have no intention or even the vaguest plan of making a move.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Thursday, January 26, 2012

Pros and cons of pricing home under market

Don't jump to conclusions when you hear that a listing sold for more than the asking price. You need more information. Are prices are heading up in your area, or did the sellers intentionally price low to stimulate multiple offers?
There was good news about the housing market recently. In October, pending sales rose 9.2 percent from the same month a year earlier, according to the National Association of REALTORS®. Pending sales are a leading indicator, and the index is a measure of homebuying interest.
Unlike recorded home sales, a certain number of pending sales don't close. Even so, this is a positive sign in the midst of a volatile market.
In some areas where job growth is strong and there aren't many homes for sale, home prices are starting to rise. But at this point, these areas represent a small part of the overall housing market.
Unless you're selling in a high-demand, low-inventory market, it's risky to list your home under market value. Some sellers use this strategy to increase their chance of multiple offers and a quick sale for over the asking price.
This strategy could backfire if you are priced low and receive only one offer for the asking price or less. It's difficult to negotiate buyers up on price when they're not in competition with another buyer.
On the other hand, if you know there is strong demand for a home like yours, pricing on the low side could generate enough action to get your home sold at or over the list price. But you shouldn't price lower than a price you'd be willing to accept if you receive only one offer.
HOUSE HUNTING TIP: Sellers should have a good understanding of the pricing dynamics currently operating in their neighborhood before they select a list price for their home. Are listings sitting on the market for months or are they selling quickly? Are certain locations or price ranges more active than others? How does your home compare to those that sold recently? Pricing right for the market is critical to selling in today's market.
Like sellers, buyers should become price experts on the areas where they would like to buy. The Internet makes this chore a lot easier. But you'll get a better feel for valuation if you see homes that would satisfy your housing needs in person.
Don't focus on list prices. Sellers often make the mistake of listing for more than their neighbor's second-rate home. However, if the neighbor's home is priced too high, this isn't a good benchmark. Also, consider that the reasons you think your home is better may not be in sync with the way a buyer may view your home.
It's difficult for buyers and sellers to be objective about buying and selling homes. Most sellers have strong attachments to their home and have a hard time divorcing themselves from it emotionally. This can cause them to reject a good offer and later regret the decision.
Buyers can be so objective that they find it impossible to buy a house. The perfect house does not exist. Neither does the perfect deal. Compromises need to be made, but with full understanding of the pros and cons. In other words, you should make rational decisions about the price you pay and what you're willing to live with.
Knowledge of local pricing is essential for buyers in market niches that are hot compared to the rest of the market. Be sure to find out the sale price of homes that you've seen and liked or bid on and lost.
THE CLOSING: This way you'll be in a better position to have a shot at winning in competition the next time.

Vineland prepares for Christie's town hall meeting today

Vineland prepares for Christie's town hall meeting today

Wednesday, January 25, 2012

Refinance or modify while it's still possible

As income and property values change, so do your chances to qualify

Interest rates have been very low for several years, and right now they are lower than ever, yet millions of mortgage borrowers who could profit from a refinance haven't.
Similarly, millions of borrowers who are having trouble making their mortgage payments but want to remain in their homes could have their mortgages modified to make the payment affordable but haven't.
The reasons in both cases probably include apathy, resignation and ignorance, but this article is about ignorance only. I find that many borrowers are even hazy about the difference between a refinance and a modification.
Refinance vs. modification
In a refinance, you take out a new mortgage, either from your current lender or from a different one, and use the proceeds to pay off your existing mortgage. In a modification, the terms of your current mortgage are changed by your existing servicer, usually for the purpose of reducing the payment.
Most often this involves an interest-rate reduction, but it may also include a term extension and, in some cases, the loan balance may be reduced.
A refinance is a market-based transaction entered into by a lender who wants the new loan. A modification is an administrative measure designed to prevent the costs of a foreclosure. In both cases, however, the borrower must document an ability to make the new payment.
Refinance profitably if you can
In general, borrowers should refinance if a profitable refinance option is available to them. A refinancing will not drop a borrower's credit score, while a modification will. Refinancing borrowers can deal with their existing lenders but are free to shop alternatives.
A modification is a lot more complicated, takes a lot more time, and borrowers are wholly dependent on their existing servicers, which means that they have no bargaining power.
Qualifying for a refinance vs. qualifying for a modification
Declining home values have severely restricted the ability of many borrowers to refinance by eroding the equity in their homes. (Equity is property value less the mortgage balances.) With an important exception noted below, borrowers who have negative equity cannot qualify.
Borrowers with equity of 3 percent to 20 percent can qualify if they purchase mortgage insurance, which in some but not all cases will eliminate the profit from the refinance.
Borrowers with equity of 20 percent or more are best positioned to refinance profitably. In contrast, insufficient or negative equity will not bar a modification.
A low credit score will also prevent a refinance, but not a modification. Because lenders have become extremely risk-averse in the post-crisis market, credit scores have increased in importance and are related to equity.
On a Federal Housing Administration (FHA) mortgage, for example, the minimum score is usually 620, but a 620 score may require equity of 15 percent. If the borrower's equity is the minimum of 3 percent, the required credit score is likely to be 660.
Borrowers who have suffered income declines to the point where the ratio of housing expense to income is viewed as excessively high will have their refinance applications rejected. However, an income decline of this magnitude will not necessarily prevent a loan modification.
On the contrary, an income decline that weakens the ability of the borrower to continue current payments but still enables the borrower to afford lower payments is the major problem loan modifications are designed to meet.
Borrowers can check on whether they qualify for a refinance using the new qualification calculator on my website.
The HARP exception
The earlier statement that borrowers with negative equity cannot refinance has a major exception: If their loan is owned by Fannie Mae or Freddie Mac, they are eligible for refinancing under the Home Affordable Refinance Program (HARP). This program was recently extended and liberalized.
The previous negative equity ceiling of 25 percent was eliminated for fixed-rate mortgages; fees were reduced; the requirement for a new appraisal was eliminated in some cases; and incentives were provided to the lenders servicing the loans to refinance them.
Qualifying for a modification
Determining whether a borrower is eligible for a modification is a complicated exercise on which the rules are anything but clear. The government-supported program, which differs from the strictly private programs, requires that the borrower's income be large enough to afford a reduced payment but it cannot exceed 3.23 times the current mortgage payment. Further, the borrower cannot have "sufficient liquid assets" to make the payments, whatever that means.
In addition, the owner of the loan must be better off with the modification than without it, which is determined by a complicated algorithm that is available to servicers but not to borrowers or to me. The servicer has the final say.
More on navigating the modification maze next week.

Tuesday, January 24, 2012

Top 10 US metro areas with steepest home-price cuts in 2011

Michigan and the Southeast markets dominate the list

Editor's note: This list, based on data compiled by Zillow, represents the top 10 metro areas ranked by steepest year-over-year percentage drop in average listing price during 2011 compared to the previous year. Median home values listed in the charts are based on the Zillow Home Value Index.
Metro areas in Michigan and the Southeast experienced the most substantial cuts in for-sale home prices listed on Zillow.com in 2011 compared to 2010. Flint, Mich., and Detroit topped the list at No. 1 and No. 2, respectively, experiencing 13.21 percent and 12 percent price drops on average home listing prices, respectively.
The rest of the top 10 spanned from No. 3 Bakersfield, Calif., with a 9.85 percent price drop in listing price, to No. 10 Gainesville, Ga., at a 9.6 percent drop.
Following the most recent housing market turmoil geographic trends, all of the top 10 metro areas were clustered in north-central Florida, Georgia, Michigan and California.
The Interstate 75 corridor cuts through or near most of the markets on the list, including: Lakeland, Fla.; Ocala, Fla.; Macon, Ga.; Atlanta; and Gainesville, Ga., in the Southeast, and Detroit; Flint, Mich.; and Lansing, Mich., in Michigan. Bakersfield, Calif., and Madera, Calif., in Calfornia's Central Valley, are the exceptions.
Lansing, Mich., at No. 9, was the metro with the lowest average listing price in the top 10, at $56,600. No. 7 Macon, Ga., was not far behind with $57,000. Bakersfield, Calif., at No. 3, had the highest average listing price at $130,300, followed closely by Gainesville, Ga., at $124,500.

Metro: Flint, Mich.

Median Home Value N/A
  Year-over-year Listing Price Change -13.21%
Downtown Flint, Mich. Flickr/Michigan Municipal League

Metro: Detroit, Mich.

Median Home Value N/A
  Year-over-year Listing Price Change -12%
Detroit, Mich., skyline. Flickr/Bernt Rostad

Metro: Bakersfield, Calif.

Median Home Value $130,300
  Year-over-year Listing Price Change -9.85%
Bakersfield, Calif. Flickr/jjandames

Metro: Lakeland, Fla.

Median Home Value $94,900
  Year-over-year Listing Price Change -9.85%
Lake Mirror Promenade in Lakeland, Fla. Flickr/jared422_80

Metro: Madera, Calif.

Median Home Value $108,500
Year-over-year Change -9.82%
Downtown Downtown Madera, Calif. Flickr/gflinch

Metro: Ocala, Fla.

Median Home Value $77,300
  Year-over-year Listing Price Change -9.82%
An Ocala, Fla., farm. Flickr/Bruce Bouley

Metro: Macon, Ga.

Median Home Value $57,000
Year-over-year Listing Price Change -9.74%
U.S. Courthouse and Federal Building in Macon, Ga. Flickr/Ken Lund

Metro: Atlanta, Ga.

Median Home Value $114,100
  Year-over-year Listing Price Change -9.7%
View of Buckhead, a district in downtown Atlanta. Flickr/Brokentaco

Metro: Lansing, Mich.

Median Home Value $56,600
  Year-over-year Listing Price Change -9.64%
Downtown Lansing, Mich. Flickr/Dextera Photography

Metro: Gainesville, Ga.

Median Home Value $124,500
  Year-over-year Listing Price Change -9.6%
Hall County Courthouse, Gainesville, Ga. Flickr/jimmywayn 

Monday, January 23, 2012

When it makes sense to keep an underwater home

Part 1 of 2Q: At the top of the market, I owned three properties: my first home (in a marginal neighborhood, now about 100 percent upside down), my own residence (a big fixer in a great neighborhood), and a triplex I bought as an investment (an OK neighborhood, needed some work, fully rented, but now upside-down by about 30 percent).
When the market turned, I had a couple of bad tenants in my first home and the triplex that set me way back financially, and I was unable to borrow the money I needed to fix the house I lived in. I did a short sale on the fixer, got temporary loan mods on the other two, and moved back into my first home.
Problem is, they're both so upside-down and don't seem likely to come back up anything soon. I'm 45 years old and have a great job, but I don't like the neighborhood I live in now and I can barely ever save anything because these properties -- which I thought would help fund my retirement -- eat me alive.
Also, I just got word that my loan mod on the triplex is going to expire in January. Should I just sell everything and start over?
A: First, know this: You are not alone. More than 25 percent of home mortgages nationwide are upside-down.
While the majority of Americans have held onto homes with declining and stagnant values in the hopes that the market will recover to avoid locking in their losses, the data is clear on the fact that those who own homes worth less than they owe are the borrowers most likely to fold, short-selling, strategically defaulting or negotiating a "deed in lieu of foreclosure" with the bank.
I don't think data exists on this point, but I suspect these are the borrowers most prone to give up on the excruciating and prolonged path of home retention efforts the most easily. "Why throw good money, time, energy and emotions after bad?" they wonder.
A few years ago, I would probably have fallen into the cheerleader camp, exhorting "Hang on! Hang in there!" Now, though, going into the fifth or sixth year of this real estate recession, depending on whom you talk to, I'm more jaded and realistic.
As I see it, you have two different scenarios that make up your dilemma, and there are a couple of different ways to think about them. First, let's limit the scope of our conversation to the situation on the home you actually live in. Next week, we'll look at the broader constellation of issues you have, including both your residence and the investment property.
My advice to people in your situation is to always go through the preliminary step of getting clear on whether their personal residence still works for their lives as a personal residence.
If you own a home that works well for your life, is affordable and seems like it will continue to be a good fit for your life and your finances in the foreseeable future, I'm generally inclined to advise homeowners to avoid making market-based decisions about whether to continue to hold on to it, whether or not it happens to be upside down.
On the flip side, I've seen numerous situations in which families have expanded or shrunk or need to relocate, rendering the upside-down home a serious mismatch. In these cases, it makes sense to more seriously consider whether to divest.
I'd encourage you to ask yourself that question -- "Does this home 'fit'?" -- regarding your personal residence. You mention the neighborhood weighs against that finding of fit; you might also be thinking that the neighborhood could prolong the "value recovery" timeline.
Take a more holistic viewpoint and make a decision about whether the home overall still works for your life or not -- outside of the context of it being underwater. Whether it does or does not, this knowledge will get you started down the path of cultivating the clarity you'll need to put a full action plan and decision-making process in place. We'll discuss what the rest of that plan looks like next week.

Saturday, January 21, 2012

5 faces of real estate dealmaking: from 'Drama Queen' to 'No-gotiator'

Mood of the Market

I was one of those kids who was mortally embarrassed by my parents. (I later realized that their fashion choices were not bizarre -- they were just '70s chic held over a tad bit too long.) My mother seemed always to gravitate to the yellow 'sale' signs on top of retail racks -- which seemed horrifying back then.
And my Dad? Horror of horrors, he tried to negotiate everything -- and I mean every single thing. He would actually bargain for things like TVs and computers at stores like Sears, and I would grow hot with embarrassment, detouring into what we'd now call the "tween" section, hoping no one would know we were related.
Fast forward 10 or 15 years, and you'd find me, at an appliance outlet, getting my washer and dryer for 50 percent off because the front windows had been scratched, and negotiating for them to order and install new windows before delivering the machines to me.
Or maybe you'd find me shopping my favorite consignment stores (where I still negotiate, despite the already discounted pricing) or walking straight into my favorite retail establishments and taking my familiar route straight back to the sale section, and back out when nothing strikes my fancy.
Or haggling for my car, which I bought for 60 percent -- you read that right! -- of the Blue Book price. Or watching my kid's mouth gape open when I got the sales clerk to throw in the two flannel shirts he wanted with the sneakers I'd just bought him. Score more notches on my negotiating belt.
No matter how flush with cash I am, I love a deal (no, I mean, I love a deal!). I'll spend, but I want to feel like I'm getting more than the "average bear" (to quote a famous Yogi) for my dollar.
In my adulthood, my Dad and I have often worked together on strategies for negotiating our largest purchases -- particularly when it comes to real estate. (My Dad is a prolific investor, and I've negotiated for a hundred or so homes myself.)
I've noticed that my Dad and I have distinct negotiating styles. I tend to gravitate toward properties that are already value-priced, get as much information as possible about the seller's situation, and negotiate a reasonable discount plus as many perks and incentives thrown in as I can.
I like places with major upside potential, so I can control how their value increases, no matter what's going on in the market.
My Dad tends to run all sorts of numbers and analytics, plus wield the fact that he pays in cash, as major bargaining leverage. And his constant refrain is "Buy it right." He wants to feel that he is buying a place that already has lots of equity and/or cash flow potential because he bought it for such a low price -- it takes the pressure off when he later wants or needs to sell.
We share in common that we never make our best offer on our first offer (except in a seller's market, when all the rules change) and we virtually never accept the first offer we receive.
We both place a strong priority on neighborhoods, have a tendency to avoid getting emotionally involved or attached at all to homes, and insist on starting the negotiation off being very clear and realistic in our own minds about the contours of our own personal top or bottom lines.
As I contemplated how my father's negotiating skills and my own negotiating styles are similar and dissimilar, I could not escape noticing how other buyers' and sellers' negotiating styles can be grouped into profiles, so to speak.
Some I've run into more than a few times in my real estate lifetime include:
1. "The Faux-gotiator." The Faux-gotiator makes a minimal effort at negotiating, because she knows that's what she's supposed to do. Like my Dad and I, this breed of negotiator tries to abide by the never-take-the-first-offer rule. But the Faux-gotiator caves at the slightest sense of resistance from across the negotiating table. And devotees of this style come in two varietals: lazy (they simply don't want to do the work of negotiating, so they barely bother) and attached (they just love the house too much -- or need to sell too much -- to give more than a modicum of negotiating effort).
2. "The Drama Queen or King." These wannabe royals are, in some ways, the opposite of the Faux-gotiator. They make a big hue and cry about how "hard core" their bargaining skills are, about how the other side's issues or interests are just "not relevant" to them, and about how outraged they are when they receive resistance from across the negotiating table.
Yet all that drama tends to be a front behind which they hide truly poor negotiation skills. After they wax hyperbolic, they tend to cave and strike deals not too far from the original list price or offer. Methinks they doth protest too much; often the drama is driven by a premature attachment to the property or sale, or the fact that they have no basis in market data or facts for their negotiation demands.
3. "The High-Rolling Lowballer." These folks pull up to view a modest starter home in a rapper-style Mercedes Benz, and literally drip logos in their wake as they tour the home. Though they seem to have the highest possible ratio of status symbols per square inch of body area, when it's time to actually buy or sell a home, they insist on overpricing or lowballing the seller beyond all reason.
These folks cause lots of head-shaking by the agents and other parties in their transactions, as it seems that a slight reprioritization of their real estate matters over high-status consumer goods might make them better able to make reality-based offer and pricing decisions.
4. "The No-gotiator." These are the folks who offer to pay the list price or take the first offer, as a matter of course, even when the market or transaction dynamics suggest that they could get better terms. Some No-gotiators find the confrontational, adversarial connotations of negotiationg distasteful or anxiety-creating. Others are so attached to a certain outcome that they fear the deal falling apart too much to try to push back against the list price or buyer's offer.
5. "The Reality Checker." Finally, there's a fifth type of real estate consumer negotiation profile, which I'll call the Reality Checker. These negotiators do the research. They know how long the place has been on the market, relative to average in the area; and they're well aware of how much list prices are usually able to be bargained down in that neck of the woods.
They have asked for information about the other side's priorities and, to the extent they received any, they have taken that information into consideration in formulating their offer or response. They are clear about what they can afford to do, and how much they simply want a particular property or outcome, but they are not overly optimistic about their negotiating prowess or unrealistic about what the market will bear.
And they don't go in with rules of thumb -- always trying to get 20 percent off, or some such. They make a smart offer (or counteroffer), or accept the other side's position when reasonable and affordable. And, not surprisingly, they often succeed in both striking a good deal and actually getting what they want.

Friday, January 20, 2012

7 steps to soundproof your condo

Enjoy home theater without bothering neighbors

Q: I finally saved enough money to buy and install a home theater in my duplex condo. The picture on the big screen is amazing and the sound from the six speakers is even better. I have three front speakers and a subwoofer on the floor and two surround speakers mounted in the ceiling. I love it.
Unfortunately, my neighbor doesn't feel the same way. Whenever a movie soundtrack gets a little loud, say the Martians attack or the earthquake and tidal wave hit, she pounds on the wall. Once she even came over and threatened to call the police.
What can I do? I want to be a good neighbor, but I also want to enjoy my new toy.
A: We doubt you'll be able to fully soundproof your condo, at least not without hiring an engineer, a contractor and spending a whole lot of money. So we suggest you sell it and move to a single-family house on 5 acres of open land.
If that's not an option, there are a few steps you can take to dampen the sound and keep your neighbor at bay. Some are relatively inexpensive; others are free.
What's bugging your neighbor is vibrations from sound waves that strike your wall and ceiling, then reverberate through the wall and attic to her space. Your goal should be to isolate and reduce these vibrations.
First, you should build a new sound wall. This will be the most time-consuming and expensive job, but it's pretty much mandatory, especially in a condo. Take these steps:
1. Build a standard 2-by-4 wall with top and bottom plates and studs on 16-inch centers. Make sure it's parallel to the existing wall, leaving 1 to 2 inches of dead space between the two walls.
2. Reroute your power into the new wall. Installing a 2-inch flexible conduit will make it easier to run your wiring to components and speakers.
3. Install the insulation. Owens Corning manufactures fiberglass sound attenuation batts that are designed specifically for use in interior partition systems. You can find this product and lot of other good information on sound attenuation at this link.
4. Finish the wall with sound-dampening wallboard. Make sure any seams and cutouts for outlets are sealed up tight. You should use special sound-dampening products for this job. These materials will cost up to four times more than a standard drywall wall, but they're absolutely worth the money. Bill did a similar project a couple years ago and was pleased with products from a company called QuietRock.
Once your wall is built, there are three more little jobs you'll need to do:
5. Sound from your in-ceiling surround speakers is probably leaking into your neighbor's space through the attic. Consider adding speaker enclosures here. A number of choices are available. Start by doing a Web search for "in-ceiling speaker enclosures."
6. Low-frequency sounds from your subwoofer may be a major source of your neighbor's headaches. If your sub is against the common wall, move it as far away as possible. No need to worry about this degrading the quality of your sound.
7. Finally, make certain your speakers -- especially your subwoofer -- do not sit directly on the floor. Use speaker stands or do a Web search for "sound isolation cones."
These steps won't solve your problem completely, but if your neighbor is at all reasonable, you should be able to coexist. Why not nuke up a batch of popcorn and invite her over for the next feature presentation?

Thursday, January 19, 2012

What you should know about balloon loans

As large number of loans come due, those underwater face refi dilemma

A balloon mortgage is one on which the outstanding balance is due at some point before amortization has paid off the balance in full. Aside from the repayment obligation, balloon loans are identical to standard fixed-rate mortgages (FRMs).
For example, if a five-year balloon loan for $100,000 is at 5 percent for 30 years, the initial payment of $537 would be the same as on an FRM, with the same rate and term. The difference is that on the balloon loan the balance of $91,829 after five years must be repaid. At that point, the loan may be extended at the current market rate, or refinanced with the current or a different lender.
In Canada, one- to five-year balloon mortgages have long been the standard instrument. They have been less common in the U.S., but a number of them were written in the years immediately prior to the financial crisis, with balances due in five or seven years. That means that they are now coming due.
I'll discuss some frequently asked questions about balloon loans below.
Refinancing out of a balloon: Borrowers with balloon mortgages who are able to refinance, either with their existing lender or another lender, may be concerned about the timing.
Q: I have a balloon payment due Jan. 10, 2012, and am refinancing with a different lender who is taking his time, and I am getting nervous. What will happen if the new loan is not closed until after the due date on the balloon?
A: Nothing very serious will happen. The lender holding the balloon will charge interest for each day of delay beyond the due date, but that's all. However, it is a good idea to keep both lenders informed about your progress.
Refinancing a balloon when you are underwater: The borrower with a balloon balance larger than the property value has a more serious problem:
Q: We have a balloon payment due in December 2012. The current balance on the mortgage is around $150,000. The house might sell in today's market for $125,000. Is the lender required to refinance it?
A: I have never seen a balloon mortgage note that requires the lender to refinance, but when a mortgage is underwater, that doesn't matter. Because no other lender will refinance an underwater mortgage, either your current lender refinances it or you will be forced to default.
Expect an offer to extend the term for another five years at the same rate. If you have problems making the payments on this mortgage, you don't have to accept the offer.
Paradoxically enough, your lack of options gives you negotiating power. Your existing lender knows you have no other options except to default, which would impose a large loss on the lender. A much better outcome from his standpoint would be a refinance that would keep your payments coming. That way, you might eventually pay off the loan. If necessary, the lender should be willing to relieve your payment problems by modifying the loan terms.
The bottom line is that the deal that emerges is the one you negotiate. My negotiating position would be to refinance a balance about equal to the value of the property. An alternative might be a significant drop in the interest rate. If they understand that you view your choices as either refinancing at terms you can afford or defaulting on the mortgage, they should be reasonable.
But note the potential hazard illustrated by the letter below:
Q: I have a credit issue with trying to refinance the first mortgage on my property. I had a second mortgage but paid off the $400,000 balance in response to an offer from the second mortgage lender to accept $250,000 as payment in full. I was delighted to do this because I believed it would leave me in a good position to refinance the first mortgage.
My credit was always excellent. Then I discovered that the second mortgage lender had reported the transaction to the credit agencies as "paid for less than full balance," which caused my credit score to drop like a rock and prevents me from refinancing the first mortgage.
A: Credit score write-downs have plagued the mortgage modification programs, including those under the federal Making Home Affordable program. Borrowers with underwater balloon mortgages coming due who seek a private modification deal face the same problem. The issue of how the transaction will be reported to the credit bureaus should be one of the factors negotiated with the lender.

Wednesday, January 18, 2012

Price is not all that matters in real estate sales

Sellers typically prefer deals with fewer contingencies

Negotiation strategies differ depending on how well the home is priced and who's on the other side. If you're trying to buy a short-sale listing where the lender has to agree to accept less than the amount owed, the seller doesn't have much say in the negotiations about price unless he can contribute money to pay down the loan amount.
Regardless of who you're dealing with, you're more likely to grab a seller's or lender's attention if you are preapproved for the mortgage you'll need and can provide verification of cash for the down payment and closing costs.
Many buyers feel that cash is king. If buyers are willing and able to pay all cash with no mortgage, no hassling with the lender and no appraisal contingency, they feel they're owed a price concession.
Not all sellers agree. Some, who are confident in the value of their home, would rather work with an offer from a well-qualified buyer who needs to obtain a mortgage but who will pay a higher price.
Before you start negotiating, you should understand as much as you can about the other party. For instance, if the sellers are moving to a retirement home, they might go for the highest-priced offer in a multiple-offer situation, even though it might not be ideal in other regards. If they are liquidating their last asset, every penny will count.
An all-cash or large-cash-down buyer might not be able to negotiate a "deal" based on the fact that no lender will be involved. But if the home is a good value and suits your long-term needs, you might increase your offer price and include a mortgage. This way, you conserve cash for other uses.
HOUSE HUNTING TIP: Many buyers don't want to negotiate. They want their first offer to be their best offer. Usually, the only time this is effective is if yours is the only offer, the house is priced right for the market, and you offer full price. In this market, you're better off planning for some negotiation, and not putting all your cards on the table at once.
In most areas, the home-sale market still favors buyers. A lot of sellers are selling for less than they paid. Some have to bring money to the closing. Sellers who have owned for years are selling for less than they would have years ago. It's natural that they would want to try for the highest price possible.
Negotiations are about more than price. Generally, the fewer the contingencies or the cleaner the contract, the more attractive it will be to the seller. Closing and possession dates can become issues at the bargaining table. What's included and excluded, time periods to satisfy contingencies, and virtually everything in the contract is negotiable.
Since everything is up for grabs, be clear about what's not negotiable -- for instance, you can't go over a certain price. Show flexibility in areas that will hopefully be valuable to the sellers, such as buying "as is" regarding some needed repairs.
Don't waste your time with sellers who are firm at a price that is considerably over market value. Wait until they become realistic while you continue looking. Some sellers eventually get tired of having their home listed and reduce the price to market value. Others don't.
Sellers need to understand that buyers in today's market will walk away from a negotiation if they feel they're not getting anywhere or are being treated unfairly. Buyers could become suspicious or disappear if they're told by the sellers or their agent that other buyers are lining up to make an offer when they aren't.
THE CLOSING: A smart strategy is to defend your position while being honest and fair with the other party.

Friday, January 13, 2012

A quick guide to cloud computing

Making the right choice: public, private or hybrid
By Tom Flanagan
Inman News®
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I'll be moderating one of my favorite workshop topics this week during the Real Estate Connect conference in New York City: cloud computing. The session, "Transitioning Your Brokerage to the Cloud," will include panelists Jamie Goldman of ERA Franchise Systems LLC, Jack Miller of The GoodLife Team, and Monty Smith of NRT LLC.
Cloud computing is a big buzzword -- especially as the need to access data and applications across all of our favorite devices becomes more prevalent. However, for many real estate professionals, cloud computing remains a nebulous technology. What exactly is it?
In its simplest form, cloud computing is a service that allows applications and storage to be accessed across multiple devices -- typically over the Internet and with minimal administration. 
There are three popular cloud solutions:
1. Public cloud
A public cloud is a service, such as Amazon Web Services, where resources such as applications and storage are available to the general public over the Internet.
2. Private cloud
A private cloud functions similarly to a public cloud, but the infrastructure is proprietary and is managed by an organization, typically internally.
3. Hybrid cloud
A hybrid cloud combines two or more unique clouds, private and public, working together. For example: utilizing a hosted public cloud solution and an in-house database.
Public vs. private cloud computing is a popular debate in the tech community. This leads many businesses to implement a hybrid solution, unlocking the benefits of both platforms.
Which solution is right for your business? There are many variables to consider, particularly the size and scalability of the business. Like many technologies, both public and private clouds have advantages and disadvantages. Let's take a look at the pros and cons:
Advantages of a public cloud
  • Products such as Google Apps are extremely popular in the real estate industry because they eliminate information technology hassles and alleviate expensive infrastructure costs. Google Apps allow brokerages to focus on sales and not on things like servers, software, bandwidth and archiving. That's a good thing.
  • Pay per use is a sensible business model for real estate.
  • Public cloud services are familiar to users and can be easy to use.
Disadvantages of a public cloud
  • With a public cloud service you surrender a certain amount of control over a product and system. I implemented Google Apps last year at my brokerage and have relinquished control over certain features, such as upgrades. This can be challenging, especially when some users really dislike Gmail's new design.
  • The service provider is responsible for security and privacy. This can be unsettling for some users and administrators.
Advantages of a private cloud
  • A private cloud solution allows a brokerage to leverage its existing infrastructure (hardware and software).
  • An organization has complete control over maintenance, upgrades and security.
  • A private cloud solution allows an organization to determine standards and supported devices.
Disadvantages of a private cloud
  • Brokerages still need to invest in the resources to maintain the platform. Not having this responsibility is the beauty of the public cloud.
  • Brokerages still need to invest in expensive infrastructure, including hardware, software and bandwidth.
As I mentioned in my previous column, "Top 10 real estate tech trends for 2012," cloud computing will play a definitive role in the real estate industry this year.
Reducing expensive infrastructure and allowing REALTORS® to work remotely with powerful tools will better serve consumers. This is a good thing.
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Wednesday, January 11, 2012

10 US metros with largest drops in real estate values

Zillow data shows a geographic clustering among markets on the list By Inman News
Inman News®
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Editor's note: This article is based on data compiled by Zillow, using the Zillow Home Value Index.
The top 10 U.S. metro areas with the greatest year-over-year median home-value declines, by percentage, from October 2010 to October 2011, were conspicuously clustered in two regions, according to data from online real estate site Zillow.
The 10 metro areas, clumped in the Southeast and the far West, declined an average of 13.4 percent, from No. 1 Gainesville, Fla.'s 17.2 percent drop to an 11.8 percent decline for No. 10 Reno, Nev.
The chart-topping Gainesville, Fla., metro area's 17.2 percent decline settled the area's median home value to $111,300 in that timespan.
Just 40 miles away, the Ocala, Fla., metro area, No. 7 on the top 10 list, showed a 12.7 percent decline in median home value, to $85,200. Nearby, Atlanta and Mobile, Ala., rounded out the Southeast metros on the list at No. 2 and No. 5, respectively.
The far West portion of the top 10 features six metros in a Pacific-leaning band that curves from No. 3 Medford, Ore., in the Northwest to No. 6 Tucson, Ariz., in the Southeast.
The Mobile, Ala., metro area, at No. 5, has the lowest median home value on the list at $78,200, and is counterbalanced by No. 9 Santa Barbara, Calif.'s highest median home value of $371,200. After Santa Barbara, Calif., the next highest median home value on the list takes a steep drop to No. 4 Chico, Calif., metro area's $169,300.
U.S. metro areas clustered in the Southeast and in the far West experienced the greatest 2011 year-over-year declines in median home value, by percentage, according to Zillow data.

Metro: Gainesville, Fla.

Median Home Value $111,300
Year-over-year Change -17.2%
Gainesville, Fla.Alligator at Ben Hill Griffen Stadium, aka "The Swamp," in Gainesville, Fla. Flickr/jrgatormogo

Metro: Atlanta, Ga.

Median Home Value $109,700
Year-over-year Change -14.7%
AtlantaView of Buckhead, a district in downtown Atlanta. Flickr/Brokentaco

Metro: Medford, Ore.

Median Home Value $158,200
Year-over-year Change -14.2%
Medford, Ore.View of Medford, Ore. Flickr/as737700

Metro: Chico, Calif.

Median Home Value $169,300
Year-over-year Change -14.0%
Chico, Calif.Municipal Park in Chico, Calif. Image via Shutterstock.

Metro: Mobile, Ala.

Median Home Value $78,200
Year-over-year Change -12.8%
Mobile, Ala.Mobile, Ala., Bay. Image via Shutterstock.

Metro: Tucson, Ariz.

Median Home Value $130,500
Year-over-year Change -12.7%
Tucson, Ariz.Saguaro Cactus near Tucson, Ariz. Image via Shutterstock.

Metro: Ocala, Fla.

Median Home Value $85,200
Year-over-year Change -12.7%
Ocala, Fla.An Ocala, Fla., farm. Flickr/Bruce Bouley

Metro: Madera, Calif.

Median Home Value $123,600
Year-over-year Change -12.3%
Madera, Calif.Downtown Madera, Calif. Flickr/gflinch

Metro: Santa Barbara, Calif.

Median Home Value $371,200
Year-over-year Change -12%
Santa Barbara, Calif.Santa Barbara, Calif., mission. Flickr/Randy Pertiet

Metro: Reno, Nev.

Median Home Value $149,700
Year-over-year Change -11.8%
Reno, Nev.Reno, Nev., sign. Flickr/Zack Sheppard