Oct 12, 2012 | Housing Analysis
Foreclosure volume continues to slip.
According to foreclosure-tracking firm RealtyTrac, in September, the number of foreclosure filings nationwide fell 7 percent from the month prior, and fell 16 percent from September 2011.
RealtyTrac defines a “foreclosure filing” as any of the following foreclosure-related events : (1) A default notice on a home; (2) A scheduled auction for a home; or, (3) A bank repossession of a home.
September’s 180,427 foreclosure filings mark the lowest monthly total in more than 5 years. It’s a signal that the U.S. housing market is in recovery, while also reflecting the success with which banks and homeowners have found alternatives to the foreclosure process, including the short sale.
Based on data from the National Association of REALTORS®, short sales now account for 45 percent of “distressed” home sales nationwide/ As recently as April, the percentage of short sales was just 39 percent.
Other noteworthy statistics from the September 2012 foreclosure report include :
- Default Notices fell 12% between August and September 2012
- In Q3 2012, quarterly foreclosure filings fell for the 9th straight quarter
- The average time to foreclose on a home rose to 382 days nationwide, the highest since early-2007
In addition, in September, Florida posted the top foreclosure rate nationwide for the first time since April 2005.
Foreclosure starts moved higher in the Sunshine State for the 11th straight month and bank repossessions are now up 23 percent as compared to September 2011. 1 in every 318 Florida homes received some form of foreclosure filing last month.
The national average was 1 in 730.
Whether you’re a first-time home buyer or an experienced one, homes in various stages of foreclosure have allure. They tend to be sold cheaply as compared to non-distressed properties, for example. However, buyers should look beyond just the “list price”. Foreclosed homes are often sold as-is which means that homes may be defective and uninhabitable.
This would render the home un-lendable, too, for buyers using bank financing.
If you plan to buy a foreclosed property in Massachusetts , therefore, be sure to engage an experienced real estate professional. The internet can teach about “how to buy a home”, but when it comes to writing contracts and inspecting homes for defects, you’ll want to have an experienced agent on your side.
Oct 10, 2012 | Housing Analysis
It’s not just the housing market that’s improving nationwide — it’s the economy overall.
The number of U.S. metropolitan areas showing “measurable and sustained growth” climbed to 103 this month. The data is measured by the Improving Markets Index, a monthly metric from the National Association of Homebuilders.
The Improving Market Index is meant to identify which U.S. markets are experiencing broad economic growth — not just growth in terms of housing.
The index’s conclusions are based on three data series — each collected separately; each from a different division of the U.S. government; and, each tied to specific local economic conditions.
Those three data series are :
- Employment Statistics (from the Bureau of Labor Statistics)
- Home Price Growth (from Freddie Mac)
- Single-Family Housing Growth (from the Census Bureau)
After collating the data, the National Association of Homebuilders evaluates the reports as a group for each specific major metropolitan area.
A metropolitan area can be cited as “improving” only if the following two conditions are met. One, all three data series show expansion and/or growth as compared to 30 days prior; and, two, none of the data series have “bottomed” within the last six months.
As a result of its methodology, the Improving Market Index specifically passes over short-term growth bursts in a market, isolating for areas with long-term, sustainable growth instead.
Furthermore, “improving” cities may be more apt to outperform other U.S. cities in the months and years ahead, rendering them ideal for relocating buyers from Massachusetts in search of long-term employment and income opportunities, as well as real estate investors in want of healthy, stable markets.
33 states are represented in the October Improving Market Index, plus the District of Columbia. 11 new areas were added to the list as compared to September and just 7 dropped off.
The newly-added areas include State College, Pennsylvania and Raleigh, North Carolina. Cities falling off the list for October include Lakeland, Florida.
The complete Improving Markets Index is available for download at the NAHB website.
Oct 2, 2012 | Housing Analysis
There have been no shortage of “housing market” stories lately. After sinking through much of late-last decade, home values slowly stabilized into mid-2011. By October 2011, values appeared to have bottomed.
Today, nearly five-and-one-half years after the April 2007 housing market peak, home prices are finally showing their ability to rebound. Over the past 12 months, a bevy of housing market data highlights broad-based market growth.
For example, as compared to August 2011, Existing Home Sales are up 9.3 percent nationally; New Home Sales are up 27.7 percent nationally; and home inventories have slipped to multi-year lows in Worcester County area and throughout the country.
Furthermore, multiple home value trackers show home prices rising both regionally and nationwide.
Last week, the government’s Federal Housing Finance Agency released its Home Price Index (HPI) — a metric which tracks how home values change between sequential property sales. HPI showed home values up 3.7% nationally.
Another home valuation tracker — the S&P Case-Shiller Index — has shown home values to be rising, too.
As compared to one year ago, the private-sector metric puts home prices higher by 1.2 percent via its 20-city composite. 20 cities remains a small subset of the broader U.S. population, but, in looking for a trend, it’s clear that the trend is a positive one.
Some of the Case-Shiller Index highlights from its most recent report :
- All 20 tracked cities showed home price gains between June 2012 and July 2012
- The previously hard-hit city of Phoenix now leads the nation with a 16.6% annual gain
- Versus their respective lows, San Francisco and Detroit are up 20.4% and 19.7%
In addition, on a 12-month basis, only four cities are showing negative home value growth — Atlanta, Chicago, Las Vegas, and New York City.
The Case-Shiller Index is a national index, though, and specifically does not report on valuation changes in specific U.S. cities and their neighborhoods. For local real estate data, make sure to speak with a local real estate agent instead.
Sep 28, 2012 | Housing Analysis
Nationwide, homes continue to sell briskly.
According to the National Association of REALTORS®, the Pending Home Sales Index read 99.2 for August — the fourth straight month in which the index hovered near its benchmark value of 100.
A “pending home” is a home that is under contract to sell, but has not yet closed. The index measures with fair accuracy the future strength of the U.S. housing market.
For today’s Massachusetts home buyers, the August Pending Home Sales Index is relevant for several reasons.
First, the index remains near its highest point since April 2010, the last month of that year’s federal home buyer tax credit. This implies that the current housing market is performing nearly as well as the “stimulated” market of two years ago — except without the accompanying federal stimulus.
The housing market is standing on its own, in other words.
Second, the Pending Home Sales Index suggests that today’s housing market is among the strongest of the last decade. We can make this inference because the Pending Home Sales Index is a relative index, benchmarked to the value of “100” which represents the housing market as it behaved in 2001.
2001 was strong year in housing. With today’s Pending Home Sales Index remaining near 100, it tells us that 2012 is similarly strong.
And, third, the Pending Home Sales Index is relevant because it’s a forward-looking housing metric — one of the few that are regularly published. As compared to the Case-Shiller Index or Existing Home Sales report which both report on how housing fared in the past, the Pending Home Sales Index projects 30-60 days to the future.
Based on August data, therefore, we can expect for home sales volume to remain high as 2012 comes to a close.
If you’re currently shopping for a home, you’ve likely noticed a change in the market. Multiple-offer situations are more common and sellers are regaining negotiation leverage. The longer you wait to buy, therefore, the more you may pay for a home.
Read the complete Pending Home Sales Report on the NAR website.
Sep 27, 2012 | Housing Analysis
The market for new construction homes remains strong nationwide.
According to the U.S. Census Bureau, the number of new homes sold slipped 0.3 percent in August 2012 to a seasonally-adjusted, annualized 373,000 units sold — just 1,000 units less than July 2012 and the second-highest reading since April 2010.
April 2010 was the last month of that year’s tax credit which granted home buyers up to $8,000 off of their federal tax bill.
As compared to one year ago, sales of new homes are higher by 28%.
Furthermore, during the same time frame, the median sale price of a new home moved higher by 17 percent. The rising prices, in part, are the result of a shrinking national new home inventory.
When August ended, there were just 141,000 homes for sale nationwide — a 12% drop from the year prior. This suggests that home builders have stopped building without buyers; that some lessons were learned in last decade’s homebuilding frenzy.
At today’s pace of home sales, the entire stock of new homes nationwide would sell out in 4.5 months. As a comparison point, in January 2009, the new home supply reached 12.1 months.
With home supply below 6.0 months, analysts say, it signifies a “seller’s market” and home supplies have not been north of 6.0 months since October 2011. And, based on recent homebuilder confidence surveys, supply doesn’t appear headed back over 6.0 months anytime soon.
Builders in Worcester County area and nationwide report that prospective buyer foot traffic is at its highest point in 6 years. Low mortgage rates and affordable housing choices have held demand for new homes strong. Rising rents contribute, too.
For today’s home buyers of new construction, then, shrinking supply amid rising demand portends higher home prices into 2013 and beyond. If you’re a buyer of new construction, therefore, think about moving up your time frame.
The best deals left in housing may be the ones you grab while the calendar still reads 2012. By January, low prices may be gone, and low rates may be, too.
Sep 26, 2012 | Housing Analysis
Tuesday, the Federal Home Finance Agency’s Home Price Index (HPI) showed home values rising 0.2% on a seasonally-adjusted basis between June and July 2012, and moving +3.7% on an annual basis.
Home values have not dropped month-to-month since January of this year — a span of 6 months.
For today’s home buyers and sellers throughout Worcester County area , though, it’s important to recognize on what the HPI is actually reporting.
Or, stated differently, on what the HPI is not reporting. The Home Price Index is based on home price changes of some homes, of certain “types”, with specific mortgage financing only.
As such, it excludes a lot of home sales from its results which skews the final product. We don’t know if home values are really up 0.2% this month — we only know that’s true for the home that the HPI chooses to track.
As an example of how certain homes are excluded, because the HPI is published by the Federal Housing Finance Agency and because the FHFA gets its access to home price data from Fannie Mae and Freddie Mac, it’s upon data these two entities upon which the Home Price Index is built.
Home price data from the Federal Housing Administration (FHA), from local credit unions, and from all-cash sales, for example, are excluded from the HPI because the FHFA has no awareness that the transaction ever happened.
In 2006, this may not have been a big deal; the FHA insured just 4 percent of the housing market at the time. Today, however, the FHA is estimated to insure more than 20% of new home purchases. Furthermore, in August, more than 1 in 4 sales were made with cash.
None of these home sales were included in the HPI.
Furthermore, the Home Price Index excludes certain home types from its findings.
Home sales of condominiums, cooperatives, multi-unit homes and planned unit developments (PUD) are not used in the calculation of the HPI. In some cities, including Chicago and New York City, these property types represent a large percentage of the overall market. The HPI ignores them.
Like other home-value trackers, the Home Price Index can well highlight the housing market’s broader, national trends but for specific home price data about a specific home or a ZIP code, it’s better to talk with a real estate agent with local market knowledge.
Since peaking in April 2007, the Home Price Index is off 16.4 percent.
