Nov 16, 2012 | Housing Analysis
According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings increased 3 percent in October as compared to September 2012, climbing to 186,455 U.S. properties.
RealtyTrac defines a “foreclosure filing” as any foreclosure-related action including a Notice of Default, a Scheduled Auction, or a Bank Repossession. On average, 1 in every 706 U.S. homes had a foreclosure filing during the month of October.
For the 24th consecutive month, the number of bank repossessions fell, down less than 1% from the previous month and down 21% from October 2011. Bank repossessions dropped in 37 states, plus the District of Columbia, indicating that banks are seeking alternatives to foreclosure.
Distressed home sales, which include foreclosures and short sales, represented 23% of sales in the second quarter of 2012, down from 30% a year ago, according to the National Association of REALTORS®.
Florida again posted the top foreclosure rate nationwide.
One in every 312 Florida housing units had some sort of foreclosure filing in October as foreclosure starts moved to a 12-month high. Monthly filings increased 2% from last month.
In Nevada, the monthly increase was larger, rising 41% month-over-month, lifting it from the fifth-highest rate in September 2012, to the second-highest in October 2012.
Third-ranked Illinois saw a 6% increase in foreclosure filings over September 2012. California and Arizona rounded out the top five.
Hurricane Sandy made an impact on the foreclosure market, too, with a foreclosure moratorium being put into effect in the states most affected such as New Jersey, New York, and Connecticut.
For Worcester County area home buyers planning to venture into the home foreclosure market, there are well-priced homes for sale. However, understand that a foreclosure property is often sold “as is,” and that you may not be allowed into the property prior to the sale to inspect for damage. Home may have termites, been gutted by previous tenants or owners, or be filled with lead paint or asbestos.
For this reason, it’s a good idea to engage an experienced real estate professional when buying foreclosure properties. Real estate agents can guide you through the foreclosure process and give advice regarding contracts and home inspections.
Nov 7, 2012 | Housing Analysis
The U.S. economy continues to improve.
The National Association of Homebuilders released its Improving Markets Index Tuesday. The report attempts to identify U.S. metropolitan areas in which the economy is improving, demonstrating “measurable and sustained growth”.
125 U.S. markets are qualified as “improving” this month, a 22-market jump from the month prior and and all-time high for the index which launched late last year.
Compared to November 2011, this month’s IMI has climbed more than four-fold, rising from last year’s reading of 30. This jump suggests that housing recovery is firmly taking root, helping to generate needed jobs and economic growth across much of the country.
So what qualifies a market as “improving”? The NAHB uses strict criteria.
First, the group gathers data from the three separate, independent sources :
- Employment growth from the Bureau of Labor Statistics
- Housing price appreciation from Freddie Mac
- Single-family housing permits growth from the U.S. Census Bureau.
Next, for each of the above data sets, the National Association of Homebuilders separates for local data in each U.S. major metropolitan area.
And, lastly, armed with data, the NAHB looks for areas in which growth has occurred for all three data points for six consecutive months; and for the most recent “bottom” is at least six months in the past.
In this way, the Improving Market Index doesn’t just measure housing market strength — it measures general economic strength.
Of the 22 markets added to the Improving Market Index in November, the following cities were included : San Diego, California; Gainesville, Florida; Omaha, Nebraska; Louisville, Kentucky; and Charlotte, North Carolina.
Several markets dropped off the list, too, including Hanford, California; Orlando, Florida; Terre Haute, Indiana; and Greenville, North Carolina.
The complete list of 125 metropolitan areas on November’s IMI, plus breakouts of the metropolitan areas newly added and dropped is available online at http://www.nahb.org/imi.
Oct 31, 2012 | Housing Analysis
Home value rose to close out the summer, according to the S&P/Case-Shiller Index, a national home-valuation tracker.
Nationwide, values rose 0.9% between July and August 2012 with 19 of 20 tracked markets showing improvement. Only one tracked city — Seattle, Washington — showed a decrease, falling just 0.1 percent.
On an annual basis, 17 of the 20 Case-Shiller Index markets improved, led by Phoenix. Home values in the Arizona city are up 18.8 percent from August 2011. The next closest city in terms of home price gains is Detroit, Michigan at 7.6 percent
We should temper our excitement for the August Case-Shiller Index, however. Although it suggests an ongoing U.S. housing recovery, the methodology of the Case-Shiller Index is far-from-perfect. In fact, one could argue that the index is more effective for policy-makers than for actual buyers and sellers of real estate.
There are three reasons for this :
- The Case-Shiller Index tracks home prices of single-family homes only. Multi-unit homes are excluded.
- The Case-Shiller Index can be distorted by “discounted” home sales (e.g.; foreclosure, short sale).
- The Case-Shiller Index publishes on a two-month delay — data is hardly current.
Beyond the above three points, however, the Case-Shiller Index falls short in another area — it ignores the basic tenet of housing that “all real estate is local”. In using 20 cities to represent the entire United States, the Case-Shiller Index reduces more than 3,100 municipalities into a single “market”.
Even within its 20 tracked cities, the Case-Shiller Index fails short as a housing market barometer. This is because — even with cities — home values vary. Some Worcester County area zip codes perform better than others, for example, as do some streets. The Case-Shiller Index can’t capture markets with that level of detail.
National housing data helps in spotting broader trends of growth but provides very little for today’s active buyers and sellers of real estate who need “real-time” data. For that, talk to a local real estate agent.
Oct 30, 2012 | Housing Analysis
The home resales is expected to finish the year with strength.
Last month, for the fifth straight month, the Pending Home Sales Index hovered near its benchmark value of 100, registering 99.5 in September.
he Pending Home Sales Index tracks homes under contract to sell, but not yet sold, and is published by the National Association of REALTORS®. The index is a relative one. It compares today’s housing market activity to the housing market activity of 2001 — the index’s first year of existence.
The Pending Home Sales Index has averaged 99.1 this year.
Among housing market indicators, the Pending Home Sales Index is unique. It doesn’t report on prior market activity as the Existing Home Sales and New Home Sales reports do. By contrast, the Pending Home Sales Index is a forward-looking indicator.
The real estate trade association tell us that 80% of U.S. homes under contract go to closing within 60 days, and many of the rest go within Months 3 and 4. In this way, the monthly Pending Home Sales Index can foreshadow to today’s Worcester County area home buyers and sellers what’s next for housing.
Based on September’s Pending Home Sales Index, then, we should expect to see closed home sales stay strong through November and December. That said, home sales are expected to vary by region.
Here is how the Pending Home Sales Index broke down by area last month as compared to one year ago on a seasonally-adjusted, annualized basis :
- Northeast Region : +26.1% from September 2011
- Midwest Region : +19.3% from September 2011
- South Region : +17.6% from September 2011
- West Region : +0.8% from September 2011
Often, the last few months of a year are considered to be a “slow” period for the housing market. Based on regional, annual Pending Home Sales Index improvements, though, 2012 may be different. The market looks poised to finish with momentum that may carry home prices higher into 2013.
For today’s home buyers, mortgage rates remain low and home prices have only started to climb.
Oct 26, 2012 | Housing Analysis
The U.S. housing market appears headed for a strong close to 2012.
According to the U.S. Census Bureau, the number of new homes sold jumped to 389,000 units in September 2012 on a seasonally-adjusted, annualized basis.
Not since the expiration of the $8,000 federal home buyer tax credit in April 2010 have new homes sold at such volumes.
September’s tally marks a 5.7 percent increase from the month prior, and a 27 percent increase from September 2011. There are now just 145,000 new homes for sale nationwide and, according to the National Association of Homebuilders, buyer demand continues to grow.
At today’s pace of home sales, the entire U.S. inventory of new homes for sale would sell out in 4.5 months. By way of comparison, in January 2009, new home supply was 12.1 months.
When home supplies dip below 6.0 months, analysts say, it signifies a “seller’s market”; one in which sellers tend to benefit from negotiation leverage over buyers. The national New Home Supply has been below 6.0 months since October 2011.
Perhaps that’s one reason why the average new home sale price has climbed 14.5 percent over the past 12 months to $292,400; and why median new home sales prices have made a similar jump.
With builders reporting prospective buyer foot traffic at its highest level since 2006, home supplies are shrinking at a time when buyer demand is rising. Low mortgage rates and affordable housing choices contribute, too.
30-year fixed rate mortgage rates have been under 4 percent for all of 2012, and are now under 3.50% nationwide. Low rates make for low monthly payments but, like home prices, conditions can’t remain buyer-friendly forever.
For today’s home buyers of new construction, the outlook for finding “great deals” in 2013 may be grim. New home prices are expected to rise and supplies will continue to get scarce. The best homes in the new construction market, therefore, may be the ones you buy today.
By early-next year, low home prices may be gone, and low mortgage rates may be, too.
Oct 24, 2012 | Housing Analysis
As the third quarter closed, home resales showed considerable momentum nationwide.
The National Association of REALTORS® reports Existing Home Sales at 4.75 million units in September 2012 on a seasonally-adjusted, annualized basis, an 11 percent increase from one year ago.
An “existing home” is a home that’s been previously occupied; a resale.
The reading marks the second-highest tally of the year — second only to August 2012 when 4.83 million homes were sold on a seasonally-adjusted, annualized basis. The real estate trade association reports that there are now just 2.32 million previously-occupied homes for sale nationwide.
It’s the thinnest national home supply since March 2005 and, at today’s sales pace, all 2.32 million homes would sell in 5.9 months.
A 6.0-month home supply is thought to represent a market in balance. September’s home supply, therefore, suggests a market which favors sellers. Buyers in many U.S. markets may have noticed this shift. Multiple-offer situations are increasingly common and “right-priced” homes are selling quickly.
The median Time on Market is down 31 percent from last year to 70 days nationwide.
Meanwhile, for purchasers of foreclosures and short sales, September Existing Home Sales report included interesting data on the relative value of buying “distressed” property :
- Foreclosures sold at an average discount of 21% to market value last month
- Short sales sold at an average discount of 13% to market value last month
And, although distressed homes remain a large part of the U.S. housing market, their relative size is shrinking.
In September, foreclosures and short sales accounted for roughly 1 in 4 home sales. Earlier this year, that figure was 1 in 3.
For today’s Worcester County area home buyer, September’s Existing Home Sales report may be a “buy signal”. With home supplies down and demand for homes rising, home prices are poised to increase through the last three months of 2012 and into the start 2013.
