Daily Market Update: $100 million homes in US increase

by MPA01 May 2015
$100 million homes in US increase
No, it’s not a misprint; the number of US homes listed at one hundred million dollars or more is increasing! The first single-family home to sell for the eye-watering figure was four years ago and since then more have followed. Christie’s International says that as of the end of March there were 10 homes listed for $100 million or above. Not all of them may achieve that figure but last year three did; one in New York City at the top of the One57 tower; one in the much-sought-after area of the Hamptons, Long Island; and the third in Greenwich, Connecticut. The listings this year include homes at Florida Keys and Dallas so there really is no defined area for these 9-digit homes. Perhaps you’ll be listing the next one?
 
Low credit scores were less of an issue in 2014
A new report shows that mortgage lending standards were less rigid in 2014 and allowed more people with low credit ratings to access loans although those with low downpayments struggled in the fourth quarter. Zillow’s analysis reveals that overall it was easier to obtain home financing last year than in the previous 12 months. The firm’s index would show a return to pre-crisis levels if it reached 100; it was at 69.4 at the end of last year which is 18 points higher than the fourth quarter of 2013.
Dr. Stan Humphries, Zillow chief economist commented: "With the mini-boomlet in refinance activity late last year, perhaps there was less business imperative for banks to attract new customers with looser lending. Don't expect this trend to continue though. The new normal likely lies somewhere between current conditions and those of the early 2000s."
 
Warning over Freddie & Fannie… if there was a recession
Freddie Mac and Fannie Mae may require a bailout of $157.3 billion from taxpayers if the US was to enter a severe recession. Although not looking likely currently, the estimate was part of the stress test of the firms by their regulator the Federal Housing Finance Agency using house pricing projections and modeling based on those used for big banks. The two state-run corporations do not keep profits as capital reserves as any surplus is repaid to the Treasury as part of the agreement made when they were bailed out during the financial crisis.
 

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