Miami Real Estate Blog

Although home prices continued to stabilize in November, real estate experts believe we have another 5 or 10 percent of declines in store before values finally hit bottom. Home prices in 20 major cities declined 5.3 percent in November 2009 from a year earlier, a significant improvement over the 13.3 annual drop posted in July, according to the most recent S&P/Case-Shiller home price report. The figures, released Tuesday, represent the third month in a row of single-digit declines following 20 consecutive months of double-digit drops. But a number of factors--including the effects of a federal tax credit, still-elevated home inventories, and the prospect of higher mortgage rates--threaten to drag home prices lower from here. "On balance, while these data do show that home prices are far more stable than they were a year ago, there is no clear sign of a sustained, broad-based recovery," David Blitzer, the chairman of the index committee at Standard & Poor's, said in a statement.

After the historic housing crash dragged real estate values down nearly 33 percent from the second quarter of 2006 through April of 2009, prices in 20 major U.S. cities have stabilized since. The improvement is rooted in several factors. First, lower prices have made home buying more affordable to many Americans who were priced out of the market in the boom years. Second, a Federal Reserve asset-purchase program has pushed mortgage rates down to near historic lows. Rates on 30-year, fixed mortgages hit 4.88 in November of 2009. Meanwhile, Uncle Sam's $8,000 first-time home buyer tax credit has helped prod would-be buyers off the sidelines.

But a handful of market forces may work to bring prices lower from here. First, inventory levels remain elevated, says Mike Larson of Weiss Research. For example, the National Association of Realtors reported Monday that the monthly supply of unsold existing homes increased to 7.2 in December from 6.5 in November. While that's down sharply from the 9.3 months recorded a year earlier, it remains above the 6-month threshold that's more consistent with a balanced market. "It's a lot less bad than it was a year ago, but it is still not pretty," Larson said.

And more inventory is on the way. Even if home sales pick up, the market will have to chew through additional properties that will arrive via foreclosure. "We see a big backlog of distressed properties that could come on the market in the next several quarters," said Celia Chen of Moody's Economy.com. "[Additional distressed sales] would of course cause home prices to fall again." Moody's Economy.com expects nearly 2 million foreclosure sales to take place this year.

At the same time, the Fed program that has been instrumental in driving down mortgage rates is slated to expire at the end of the first quarter. Although the Fed could always resurrect the program if mortgage rates get too high, most analysts expect rates to climb from the rock-bottom levels consumers have enjoyed over the past year. Higher rates could siphon off housing demand and create downward pressure on home prices.

Finally, the November Case-Shiller report "probably reflects residual effects of the homebuyer tax credit, which lifted prices in 2009," economists at Goldman Sachs said in a report. Home buying activity increased during November as consumers scrambled to get their transactions completed by the tax credit's original, November 30th deadline. (The program was later extended and expanded to include even current home owners who complete a sale by the end of June.)

But the record 17 percent monthly drop in existing home sales recorded in December suggests prices may face renewed downward pressure in the wake of the tax-credit induced jump. "Demand has tapered off since the first tax credit expired, and the second tax credit, up to now, is having minimal effects," Patrick Newport, an economist for IHS Global Insight, said in a report. "So, despite the recent positive reports on housing prices, we believe that prices have further to fall--about another 5%."

Chen, of Moody's Economy.com, suggests prices will drop even further. She projects a decline of 11 percent from current levels before prices hit bottom in the third quarter of 2010.

By Luke Mullins , On Tuesday January 26, 2010

Existing home sales plunged in December, falling nearly 17 percent from November in their largest month-over-month drop since record-keeping began. Meanwhile, December's inventory represented a 7.2-month supply of unsold homes, notably higher than the 6.5-month supply recorded in November, the National Association of Realtors reported Monday. Although the monthly decline was larger than expected, the figures are much less jarring when compared with December 2008. Existing home sales remain 15 percent higher than a year earlier, while raw unsold inventory fell 11 percent from December 2008 to its lowest level since March 2006.

Although the monthly drop-off was steep, it had been expected for some time. Buyers scrambled to close transactions by November to qualify for the $8,000 first-time home buyers' tax credit, which was originally set to expire at the end of November. The credit--which was later extended through June--worked to juice home sales figures in November at the expense of December. "The collapse in sales simply reflects the bringing forward of transactions to beat the originally planned expiration of the first-time buyer tax credit," Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a report. Here's a look at what the December existing home sales report means for homeowners, home sellers, and home buyers:

[See Getting a Mortgage in 2010: 10 Things to Know.]

For homeowners: Property owners who have watched home values at the national level drop roughly 30 percent from their 2006 peaks will see some optimistic-looking data in the report. First, the national median existing home price increased 1.5 percent, to $178,000, from a year earlier. That's the first time median home prices have posted an annual gain since August 2007. Home values began stabilizing in the back half of 2009, thanks to increasing demand linked to cheap mortgage rates, more affordable prices, and Uncle Sam's tax credit. However, the increase in median home prices is also tied the tax credit's original expiration, which resulted in a larger percentage of sales to higher-end buyers in December, said Patrick Newport, an economist with IHS Global Insight, in a report. "Going forward, prices are likely to fall from December's level because of rising foreclosures," Newport said.

How much further will home prices fall? Mark Zandi, chief economist at Moody's Economy.com, argues that home prices have another 10 percent or so to fall before they hit bottom in the third quarter of 2010.

[Also see Expanded First-Time Home Buyer Tax Credit Becomes Law.]

For home buyers: Those looking to purchase a home this year should be encouraged by the report, which signals that buyers will at least retain leverage in the real estate market through the spring season. Buyers already have a number of things going for them. The tax credit has been extended and expanded to include even current homeowners who close a transaction by the end of June. Thirty-year, fixed mortgage rates fell below 5 percent for the week ending January 21. And the housing bust has dragged home prices down to more affordable levels and reduced the risk of another crash. "You never know 100 percent whether you are at the bottom in prices, but prices are very stable right now," said Zach Pandl, an economist at Nomura Securities. "Low prices, low mortgage rates, and stable price expectations are major positives and probably more important fundamentally than the first-time home buyers tax credit."

But would-be home buyers should keep their eyes on mortgage rates, which are likely to head higher as the year progresses. The Fed was able to pull rates on 30-year fixed mortgages to historic lows by launching a program to buy up debt and mortgage-backed securities from Fannie Mae and Freddie Mac. The program, however, is slated to expire at the end of the first quarter. And if private buyers don't step in, mortgage rates could increase significantly, perhaps by a half a percentage point, to 5.50 percent. But Pandl isn't overly worried about this potential to drive rates higher because the Fed could always decide to buy more securities if need be. "[The Fed is] exiting the market but they also have been hinting that they can return if mortgage rates rise too high," Pandl said. "And that's a very credible [possibility] because they have bought so many [mortgage backed securities]."

For home sellers: Although home sales should rise from December's depressed levels, those looking to sell property this spring will still have to have to work for it, said Guy Cecala, the publisher of Inside Mortgage Finance. "[Home sellers] should feel probably better than last year, but it was so bad last year that that's not a real fair comparison," Cecala said. "Anything is going to look better probably in the first half of this year than it did last year." That means home sellers will have to price their home aggressively, ensure the property is in tip-top condition, and be willing to entertain offers that aren't quite as strong as they would like. "I don't think anybody is going to be raising their prices," Cecala sad.

Source: By Luke Mullins , On Monday January 25, 2010

Next year may be to appliance buyers what 2009 was to car buyers: time for government rebates.

Modeled after the popular Cash for Clunkers program, which was intended to get cars with low gas mileage off the road, a federal appliance rebate program is launching in early 2010. It offers a boost to people buying energy-efficient clothes washers, refrigerators and other appliances — those that qualify for the federal "Energy Star" designation — and to manufacturers, whose sales fell 10 percent in 2008 and another 12 percent through mid-December this year.

The program has only $300 million, one-tenth as much money as Cash for Clunkers, or about $1 per U.S resident, so it could run out fast. States are receiving roughly the same amount per capita, with California getting the most at $35.2 million, but what's eligible varies by state.

Here's what to keep in mind as you decide whether to swap your washer for that supposedly whisper-quiet model or your old white refrigerator for a shapely stainless-steel number.

• WHAT'S MY STATE OFFERING? For state by state information, visit the federal Web site http://energysavers.gov and click on "state appliance rebate program" on the right.

California residents, for example, can get cash back on three types of appliances: $100 for washing machines, $75 for refrigerators and $50 for room air conditioners. Wisconsin offers rebates on washers and fridges plus $200 for boilers or furnaces, $75 for central air conditioning or geothermal heat pumps, $50 for freezers and $25 for dishwashers.

(Also in effect through Dec. 31, 2010, is a federal tax credit for 30 percent of the cost up to $1,500 on equipment for a primary residence.)

• HOW DO I KNOW IT'S A DEAL? Joe McGuire, president of the Association of Home Appliance Manufacturers, said buying Energy Star appliances can mean hearty power savings. But it's important to make sure you save enough in water and energy bills over time to justify paying for a new unit.

"A good example is a 10-year-old clothes washer," he said. "With Energy Star, you could reduce utility costs by $145 a year and save 5,000 gallons of water a year."

At that rate, a typical $500 to $700 dishwasher would pay for itself in four years. In larger households that use more power and water for laundry, the payoff can come much sooner.

It's probably not worth replacing appliances less than five to seven years old just because rebates are available, unless you plan to upgrade to a far more efficient model. That's because newer appliances are already more efficient. But switching from a top-loading to front-loading clothes washer could in itself cut water use enough to make a purchase worthwhile.

The older the appliance, the greater the possibility of saving money by buying a new one. McGuire says a 20-year-old refrigerator uses three times as much power as Energy Star-approved units made today, some of which run on less than 60 watts.

"You would save over $250 a year on an average 20-year-old refrigerator if you replaced it," McGuire said. "That's about $1,200 over five years. That is real savings to consumers."

The Department of Energy estimates Americans saved more than $19 billion on utilities last year using Energy Star products.

• WHEN WILL IT END? Rebates will be available until February 2012 or the money's gone. And Jen Stutsman, a spokeswoman for the Department of Energy, expects the funds to run out fast.

By VINNEE TONG, AP Business Writer

NEW YORK (Reuters) – U.S. home buyers are less willing to buy foreclosed properties than they were six months ago, citing risks like hidden costs, but demand could grow because of the government's expanded tax credit, a survey showed on Tuesday.

A continued drop in demand for the glut of foreclosed properties would add a fresh layer of pain to a housing market just emerging from a three-year nosedive.

The percentage of Americans at least somewhat likely to consider buying a foreclosed home fell to 43 percent in November, sharply below May's 55 percent, according to a survey by Harris Interactive.

The survey was conducted November 5-9 on behalf of Trulia.com, a real estate search engine, and RealtyTrac, which tracks foreclosures.

Buyer expectations are becoming more realistic, Trulia Chief Executive Pete Flint said on a conference call.

Next year "government interventions will start to disappear, shadow inventory will hit the market and mortgage rates will start to rise" to around 6 percent from under 5 percent, he said. "We're in a false state of stability."

Shadow inventory includes houses that banks now hold but have yet to put up for sale.

Double-digit unemployment will push more owners into foreclosure, further destabilizing the housing market and pressing prices down another 5 to 10 percent, said Flint.

Some closely watched measures show prices have toppled by about 30 percent on average from 2006 peaks. Although prices are rising in some areas, the survey found lingering concern about buying now, when prices could fall still further.

Demand for foreclosed properties, which are often deeply discounted compared with other homes on the market, is of particular concern. RealtyTrac expects over 3 million properties will receive at least one foreclosure notice this year, up from a record 2.3 million last year.

About half of those properties will ultimately go back to banks, RealtyTrac said last week.

The company reported that November was the fourth straight month of declines in foreclosure actions, thanks to various loan modification efforts. But it said many of those problem mortgages would fail anyway.

Foreclosures could escalate to 4 million in 2010, RealtyTrac Senior Vice president Rick Sharga said.

"Unemployment, negative equity are driving factors, as is credit availability," he said. "We don't believe we will get back to normal levels of foreclosure activity on a month-to-month basis until probably the end of 2012, and we will still be going through the shadow inventory well into 2013."

Banks will place the unsold homes on the market at a measured pace to thwart prices on all homes from falling off a cliff anew, he said.

AGE, MARITAL STATUS MATTER

Real estate investors, renters and homeowners looking to "trade up" to a larger house still show strong interest in foreclosed properties, the survey found. Although overall demand dropped, a large share of current homeowners looking to trade up are willing to consider such a purchase.

About 24 percent of homeowners are at least somewhat likely to trade up to a larger home. Of these, 88 percent are at least somewhat likely to consider a foreclosure, the survey found.

Demand from those buyers could rise due to the government's new $6,500 tax credit for current homeowners who buy a new home. These are the "trade-up" or "move-up" buyers.

Buyers looking to lock in that incentive, as well as buyers wanting to take advantage of the $8,000 first-time homebuyer credit, need to sign contracts by the end of April and close on mortgage loans by the end of June.

Fifty-seven percent of renters are at least somewhat likely to buy a distressed home. Demand from renters, as well as all adults, fades as ages rise.

Marital status also impacts demand, with more never-married adults willing to consider a foreclosed property than those who are married, divorced or widowed.

Two-thirds of buyers expect to get a discount of at least 30 percent for a foreclosure.

The survey found that 95 percent of foreclosure buyers are willing to invest in renovations, with more than half expecting to spend 20 percent or more of the purchase price to improve the property. Such spending can help stimulate the economy.

By Lynn Adler Lynn Adler – Tue Dec 15

Properties in these cities stay on the market longest, and sell for less than asking price.

Prospective buyers eying real estate deals in foreclosure-ridden Florida, where home prices have plummeted and unsold properties clog the market, might find fewer bargains than they'd expected. That's because sellers in Orlando, Miami, Jacksonville and Tampa are likely to put their properties on the market for more than what they're worth.

They're not alone. In these markets and elsewhere across the country, homeowners still have an inflated sense of what their properties will fetch. Only 49% of U.S. homeowners believe their home's value has decreased in the past year, whereas prices have plunged for 72% of homes, according to a survey released last month by Zillow.com.

"Sellers are notoriously slow to adapt to declining market conditions," says Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers. "Another way to look at it is that they're chasing the market down."

Behind the Numbers

To find the cities with the most overpriced homes, we ranked the 40 largest Metropolitan Statistical Areas--geographic entities defined by the U.S. Office of Management and Budget, for use in collecting statistics--in four measures. Using data provided to Forbes by Altos Research, a Mountain View, Calif.-based real estate research firm, we ranked each metro on the percentage of homes that had seen price reductions, an indicator of inflated pricing; the median number of days spent on the market (the longer homes stay on the market, the more likely they are to be overvalued); and the ratio of median list price (or asking price) to median absorbed price.

The absorbed price of a home is what it was priced when it went off the market. It differs very slightly from sale price, as not all sales in this category have necessarily closed. But data on absorbed homes is more current, because home sales can take months to close after the price is set. The data from Altos Research is based on a 90-day rolling average as of the last week in November.

We also included the five-year forecast for the percentage change in the S&P/Case Shiller Home Price Index, from Moody's Economy.com. In markets where home prices are expected to rise precipitously, a home priced above the average sale price may earn its investment. Thus, we ranked homes with a positive housing outlook as less overpriced. We averaged the scores for these four measures to arrive at a final ranking.

Trouble Moving Pricier Homes

In some markets, a glut of unsold high-end homes causes a discrepancy between a metro's median asking price and the median price at which it exits the market. Miami, the second-most-overpriced city, illustrates this trend. The median asking price here is high, at $490,197, (by comparison, the median asking price for the Altos 20-city composite, a measure used by the firm to approximate national prices, is $390,939). The homes going off the market sell for 19% below asking price.

The problem is financing. Although government stimulus programs have spurred some home buying activity in the lower-priced market, would-be buyers of more expensive homes are strapped for credit. In most markets including Miami, Fannie Mae considers loans for homes above $420,000 or so to be "jumbo loans" that typically have higher interest rates. As sales of these homes are tight, home prices are hit--but prices are slower to budge.

"The high-end market is going down more than the overall market, but sellers in that market don't necessarily see themselves as being different from other sellers," says Miller. "So it's causing the spread between the ask price and contract price to widen."

In Orlando, the most overpriced large metro by our measures, homes are listed at 43% higher than what they sell for--a median $202,381.

"The demand in Orlando is really only for the least expensive properties," says Mike Simonsen, CEO of Altos Research. "The market as a whole is overpriced, in that people are not buying on the high end, they're buying on the entry level."

Underwater Can Become Overpriced

But that doesn't mean that cheaper homes are moving faster in all markets. The 23% of American homeowners who owe more on their homes than what they are worth would be unable to pay back their loans if they budged on their asking price. Most have no choice but to wait out the market even though values continue to drop.

"The people selling now are the people that have to sell," says Miller. "Some sellers simply can't adapt to the market. Maybe they bought a year ago and now they're underwater. They will wait."

Take Phoenix, the No. 12 most overpriced city, where 64% of homeowners are underwater, according to Zillow.com's most recent Negative Equity Report. In that metro, homes are listed for 22% more than when they are sold, among the highest spread of all the cities we surveyed. Homeowners there simply can't afford to drop their prices.

Some of the cities that were ranked most overpriced, like Chicago and San Antonio, had about average discrepancies between asking price and sale prices. By the strictest definition, they aren't tremendously overpriced. But red flags fly for other, more subtle signs that their list prices may be out of whack.

In the largely healthy Chicago metro, rampant overbuilding in suburbs like Naperville has kept homes on the market for an average of six months--sellers aren't pricing them to move fast. In San Antonio, 42% of homes have knocked asking prices down, a sign that the market disagrees with sellers on their initial price.

"There's the straight list-to-absorbed price ratio, but a lot of metros are in this common range of about 115%," says Simonsen. "So then you have to look at other factors, like how many homes have price reductions."

Las Vegas, a market that has yet to emerge from the wreckage of the foreclosure crisis--one in every 68 homes was in foreclosure in October, according to RealtyTrac--is among the least overpriced large metro, a fact that may seem surprising. But although its housing market may take a long time to recover, homes are listed at a median $168,161, far lower than most large metros, suggesting that sellers have gotten pragmatic about pricing. And government initiatives like the first-time home buyer tax credit have spurred demand among budget buyers.

"In Las Vegas, it looks like homeowners are pricing homes to clear the market," says Delores Conway, a visiting real estate economist at the Simon School at the University of Rochester. "And it's because there's financing available at the low end."

Sellers don't necessarily cling to optimistic asking prices out of stubbornness or cluelessness. Many can't change their price--either because they're trapped in a slow-moving high-end market, or because their homes are underwater, and selling at a loss isn't an option.

"People don't have negotiating power," says Miller. "They're not being greedy, but they just can't be as flexible as the market demands."

America's Top 5 Most Overpriced Markets

1. Orlando-Kissimmee, FL Metro Area

2. Miami-Fort Lauderdale-Pompano Beach, FL Metro Area

3. Jacksonville, FL Metro Area

4. Baltimore-Towson, MD Metro Area

5. Chicago-Naperville-Joliet, IL-IN-WI Metro Area

Francesca Levy, Forbes.com Dec 10th, 2009

Before you bid on a home, check for potentially dicey, and pricey, problems.

In most states, home sellers must disclose any defect they know about that could affect how desirable -- and marketable -- their home is before they sign a purchase contract. Even in the six states that lack a "mandatory seller's property condition disclosure" (Alabama, Arkansas, Kansas, Vermont, West Virginia and Wyoming), the state's licensing agency may require real estate agents to tell buyers what they know. In all states, real estate agents who belong to the National Association of Realtors are obligated by their code of ethics to disclose any defects they know about.

But you may have fallen in love with a house, and spent hours preparing a purchase contract, before the disclosures are made. You should always make your purchase contract contingent on a professional home inspection ($300 to $350). Home inspectors could miss hidden problems, however, such as a basement that floods during a downpour.

This list of red flags, recommended by Kathleen Kuhn, president of HouseMaster, a nationally franchised home-inspection company, and Bill Richardson, president of the American Society of Home Inspectors, can help you identify potentially pricey problems. You can use your observations to winnow your choices or to factor in condition when you negotiate price with the seller.

Poor water pressure. Aside from issues of comfort and convenience, low water flow may indicate plumbing problems, such as corroded pipes that will need to be replaced down the road. Tearing out old plumbing and replacing it with copper pipes can run $2,000 to $15,000 or more in a typical 1,500-square-foot home. A less costly alternative is cross-linked polyethylene (PEX) piping, which unlike rigid copper piping, is flexible and easier to install (approved for potable use in all U.S. model plumbing and mechanical codes, but may not be approved in local building codes).

Among tests you can do: Run water in a bathroom sink and check for weak flow. Flush the toilet while the water is running. Does the faucet flow drop off during the flush? In the bathroom located farthest from the water heater, turn on the hot water. Is there an unduly long delay before the water turns hot?

Ceiling stains. Something's leaking. If the stain appears beneath a bathroom, odds are the shower is leaking. It may merely need recaulking or regrouting, but it could also require ripping out tile and replacing the shower pan, a much more costly process (about $1,500). Most roof leaks result from neglected flashing that seals "valleys" in the roof or around a chimney or vents (cost to repair: $200 to $500). But roof leaks may also mean it's time to replace shingles -- at $100 to $350 per 100 square feet for asphalt shingles and $210 to $1,000 for wood shingles.

Troublesome doors. Are the doors hard to close? Do they swing open by themselves or fail to open fully? If you have one bad door, it may simply have been installed incorrectly. But more than one may indicate a serious structural issue, such as a foundation that has settled or framing that is deteriorating. Fixing this problem can require structural and geotechnical engineering reports and thousands of dollars in repairs.

Overloaded electrical outlets or lots of extension cords. Today's electrical demands may exceed the capacity of homes built as little as a decade ago, says Kuhn. You'll spend $75 to $250 to have an electrician add a 120-volt outlet to an existing circuit. Or, if the electrical system is very outdated, it may require a new electric panel. A new, 100-amp panel will cost $1,500 to $2,500.

Exterior features that slope toward the home. A porch, patio, driveway or grading that slopes toward the home all but guarantees water in the basement. And that may lead to structural decay, mold and insect infestation. In the basement, a musty smell may indicate previous flooding or ongoing moisture problems. Check the walls for stains, dark or light, which are tell-tale signs that water has penetrated the walls.

Solving the problem may be as simple and cheap as adding gutter extensions or regrading soil away from the home, or it could require thousands of dollars to excavate and build drains. Some homes may require exterior drains (one at the bottom of a sloped driveway, for example) as well as buried drains.

Odors. Cigarette smoke and pet odors can be hard to get rid of. And if a home smells too clean -- heavy with the scent of cleaning products (especially bleach) or plug-in deodorizers -- the seller may be trying to cover up an odor, such as mold or urine. If so, you need to inquire further, says Richardson, of the American Society of Home Inspectors.

Synthetic stucco siding. This must be installed precisely or else moisture will be trapped behind it, resulting in mold and decay. In the worst case, the siding will have to be replaced. For a medium-sized house (1,250 square feet of exterior surface area), replacing vinyl siding can cost $2,500 to $8,750, while wood or fiber cement siding can cost $5,600 to $10,000 or more. Especially in humid climates, you may want to pay for a special inspection. HouseMaster charges $600 and up, depending on how much of the material has been used and the size of the house.

If you find out before you close your purchase that the seller deliberately misrepresented or failed to fully disclose the home's condition, you may have the right to rescind the contract under state law. If it's a done deal, you'll probably have to sue the seller to recoup your damages. In some states you can also seek repayment of your legal costs. Consult with a lawyer who specializes in real estate fraud. If you have reason to believe that the seller's agent was negligent, you can take it up with the local Board of Realtors (www.nar.com, click on "local and state associations") and the state's licensing agency (to find yours, visit the Web site of the Association of Real Estate License Law Officials).

Source: Pat Mertz Esswein, Associate Editor, Kiplinger's Personal Finance Dec 7th, 2009

NEW YORK – Nov. 11, 2009 – One in 20 Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West, according to a survey released Wednesday.

Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices appear to have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes.

The survey, conducted for Move.com, a real estate listings site, reveals how Americans are responding to a nascent and fragile housing recovery after three years of staggering price declines. The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.

Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index. But with high unemployment and foreclosures clouding the picture, economists debate whether prices will dip again.

Recent housing figures and homebuilder earnings support a stabilizing housing market, and concerns about the expiration of federal homebuyer tax credit are moot after Congress last week extended and expanded the credit.

Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers - or anyone who hasn’t owned a home in the last three years - would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.

The survey was conducted before the credit extension.

Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home. And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.

Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year. And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.

One of the survey participants, Joe Handley of Harrington, Del., called his lender last December to consolidate a second mortgage and cut his interest rate from 6.75 percent to 5.25 percent.

“We wanted to build up our savings for emergencies,” the 37-year-old said.

His timing was prescient. In July, Handley, who works in the information technology department for the State of Delaware, took a pay cut and the $400 monthly savings from the new loan has helped cushion the blow.

Almost a quarter of Americans who refinanced their mortgages have used the savings for living expenses or paying down debt, the survey found. Less than 9 percent are putting the savings toward investment or retirement.

The telephone poll, which included about two-thirds homeowners and one-third renters, was conducted in October by market research firm GfK. It had a margin of error of plus or minus 3 percentage points.

Copyright © 2009 The Associated Press, J.W. Elphinstone, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.