Firm Commentary:  It’s still a great time to buy if you have good income and credit history.  But while rising home prices are good for the nation’s economic recovery but will reduce the possibility for loan modification for those still in financial distress.  If you are still chasing a modification, you must act quickly to avoid certain denial and the risk of a foreclosure.

 Zillow reports national home price increase for 6th straight month.  Zillow’s Home Value Index climbed to $158,300 for April, an increase of 0.5 percent month-over-month and 5.2 percent year-over-year.  said Zillow chief economist Dr. Stan Humphries.  “April marks the sixth straight month of annual home value appreciation of 5 percent or above, the longest such streak since the height of the bubble in 2006.

In the short-term, this has been welcome news for homeowners. But in the long-term, this cannot be sustained, and consumers entering the market today should not expect this kind of appreciation to last,” Humphries said.  But then again, the last bubble lasted for 5 years.

Of the 30 largest metro areas, Sacramento experienced the largest monthly increase at 3.4 percent. Other large metros with notable monthly gains include Las Vegas (3 percent) and San Francisco (2.8 percent).  29 of the 30 biggest markets posted annual increases, with more than half going up by double-digit percentages. The largest improvements were seen in Phoenix (25.5 percent), Sacramento (25.4 percent), San Jose (25.2 percent), San Francisco (24.8 percent), and Las Vegas (23 percent). Chicago was the only market to see home values decline year-over-year (-0.2 percent).  Over the next year, Zillow projects home values will rise 4 percent to approximately $164,648.

Overall, we expect home value appreciation to moderate as more supply comes on line over the next year, but in some areas, runaway home value appreciation, combined with expected interest rate hikes in coming years, runs a real risk of pricing out many potential buyers. Home values in these areas will have to flatten or even fall to come back in line,” Humphries explained.

Zillow also reported the number of completed home foreclosures in April fell to 4.81 homes foreclosed out of every 10,000 homes nationwide, down from March and April 2012. Foreclosure re-sales represented 12 percent of homes sold in April, 2013, down 4 percentage points from a year ago.

Loan modifications are driven by the Net Present Value comparison between the long term return on investment for a lender if it chooses to foreclose and re-invest proceeds versus the assumed rate of return if the lender grants modified payments and accepts the payments you can afford. As prices rise, foreclosure looks more attractive to the lender.  If you are still struggling to obtain a modification, contact the firm immediately as time is of the essence.





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