Housing News Digest, October 18

Mountain Real Estate Capital Acquires 267-Lot Project with Classic Homes of Colorado Springs
Torrance, CA - October 10, 2011 - (RealEstateRama) — Mountain Real Estate Capital (MREC) (www.mountainrecapital.com) announces the closing of a new investment with Classic Homes of Colorado Springs to develop Promontory Pointe, a 267-lot community located in Monument, Colo. The transaction represents MREC’s first investment in the Colorado Springs housing market. The terms of the deal were not disclosed.

Builders are less pessimistic about housing market, but outlook remains dim
WASHINGTON — U.S. homebuilders are less pessimistic about the struggling housing market, but not enough to signal a recovery any time soon.

The National Association of Home Builders said Tuesday that its index of builder sentiment this month rose from 14 to 18.

Any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the housing boom. The index has been below 20 for all but one month during the past two years.

Housing Market Index Jumps 4 Points In October
Builder confidence for newly built, single-family homes is up for October as the Housing Market Index rose 4 points. According to the National Association of Home Builders/Wells Fargo, this 4-point gain is the largest since April 2010.

"Builder confidence regained some ground in October due to modest improvements in buyer interest in select markets where economic recovery is starting to take hold and where foreclosure activity has remained comparatively subdued," said NAHB Chairman Bob Nielsen. "That said, confidence remains quite low as builders continue to confront overly restrictive lending policies that are discouraging prospective buyers, problems with new-home appraisals and widespread uncertainty regarding federal support for homeownership."

Home Short Sales Rise in ‘Dramatic Shift’ That May Boost U.S. House Prices
U.S. home prices may get a boost from an unlikely source: a pickup in sales of properties in default before they reach the stage where they are repossessed by the bank and sold.

There has been a “dramatic shift” in banks’ willingness to sell a property for less than the mortgage balance to avoid foreclosing, said Ron Peltier, chairman and chief executive officer of HomeServices of America Inc., the second-biggest U.S. residential brokerage.

The transactions, known as short sales, typically change hands at a discount of about 20 percent to homes not in financial distress, compared with a 40 percent price cut for bank-owned homes, according to RealtyTrac Inc. Short sales jumped 19 percent in the second quarter from the prior three months while foreclosure sales were flat, the data seller said.

New Mortgage Plan Floated
State and federal officials are pushing a plan that could help some "underwater" borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market.

The proposal was raised in a meeting last week between government negotiators and giant lenders as part of an effort to settle allegations of questionable foreclosure practices. Discussions are still fluid and any final outcome is uncertain. Talks between government officials and the banks are expected to continue this week.