Legislators trying to grease the foreclosure machine

Posted on August 13, 2012 by grim

From the Star Ledger:

Foreclosure bills advance from N.J. Senate Economic Growth Committee

A pair of bills sponsored by Senate Economic Growth Committee Chairman Raymond J. Lesniak which would begin to address New Jersey’s foreclosure crisis by creating an expedited process for foreclosure on abandoned, dilapidated properties, and by creating a mechanism to transform abandoned properties to affordable and market-rate housing was approved by the committee yesterday.

The bills represent different aspects of S-1566, legislation Senator Lesniak introduced earlier this year which was vetoed by Governor Christie.

“I believe the governor should reconsider this important legislation and have streamlined the process to hopefully address his concerns,” said Senator Lesniak, D-Union. “The foreclosure crisis in New Jersey is driving down residential property values, causing urban and suburban blight, contributing to increased crime rates, and exacerbating itself by making homes surrounding an abandoned, dilapidated property all but unsellable. We need to take action on this crisis, and begin to turn foreclosed, abandoned properties into affordable homes for New Jersey’s middle class.
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The first bill, S-2156, which was approved by a vote of 5-0, would establish an expedited foreclosure procedure for abandoned residential properties which have fallen into disrepair.
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The second bill in the package, S-2157, which was approved by a vote of 3-2, would require the New Jersey Housing and Mortgage Finance Agency (HMFA) to facilitate and finance the purchase of foreclosed residential properties from institutional lenders, and dedicate such properties as affordable housing units or market-rate housing. The agency would be able to use its bonding authority – without recourse to the state – federal funds and funds from the State Affordable Housing Trust Fund to finance the purchase of foreclosed homes by for-profit and not-for profit corporations.

Some properties could be deed-restricted with the consent of the affected municipality, to be used as affordable housing. The bill would also create incentives for municipalities to transition abandoned properties to affordable housing on their own, giving them a 2-to-1 match against their affordable housing obligation for affordable units created from foreclosed properties using funds from municipal affordable housing trusts. Under estimates from the original bill, Senator Lesniak said this bill could result in over 10,000 new affordable and market-rate units and over 10,000 less unoccupied, boarded-up properties.

“This bill is at the core of the effort to mitigate New Jersey’s foreclosure crisis,” said Senator Lesniak. “It would create a legitimate mechanism to boost the number of available affordable housing units, it would create new market-rate housing, and it would do it while cleaning up blighted, abandoned properties within our municipalities. It doesn’t get any better than that.”

Posted in Foreclosures, New Jersey Real Estate, Politics | 114 Comments

Lift Off?

Posted on August 10, 2012 by grim

From Bloomberg:

Home Prices Rise in 75% of U.S. Cities in Second Quarter

Prices for single-family homes climbed in three-quarters of U.S. cities and values nationally jumped the most since 2006 as real estate markets stabilized.

The median sales price increased in the second quarter from a year earlier in 110 of 147 metropolitan areas measured, the National Association of Realtors said in a report today. In the first quarter, 74 areas had gains.

U.S. housing prices are beginning to lift off the bottom after the worst housing slump since the 1930s as buyers compete for a tight supply of available properties. At the end of June, 2.39 million previously owned homes were available for sale, 24 percent fewer than a year earlier, the Realtors said.

“The turnaround in home prices feels pretty broad,” Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania, said yesterday. “There are still risks that home prices will dip a little more before they start appreciating with any consistency,”
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The national median existing single-family home price was $181,500 in the second quarter, up 7.3 percent from the same period last year, the strongest annual increase since the first quarter of 2006, according to the Realtors group. Distressed properties, including discounted foreclosures and short sales, in which the price is less than the mortgage balance, accounted for 26 percent of second-quarter deals, down from 33 percent a year earlier.

The share of all-cash home purchases was 29 percent in the second quarter, down from 30 percent in the second quarter of 2011. Investors, who make up the bulk of cash purchasers and compete with first-time buyers, accounted for 19 percent of all transactions, matching the share a year earlier.

Posted in Employment, Housing Recovery, National Real Estate | 172 Comments

Is this the big jump in foreclosures?

Posted on August 9, 2012 by grim

From the Record:

Foreclosure activity picking up steam in NJ

Foreclosure activity in New Jersey doubled last month compared with a year earlier, as lenders resumed their efforts to evict homeowners in default, RealtyTrac reported Wednesday. One in every 1,566 homes in the state received a foreclosure filing in July.

Lenders had been stopped in their tracks for over a year in the state, as they dealt with questions about “robo-signing,” in which they were accused of abusing homeowners’ rights in their rush to take back distressed properties. Several court rulings and settlements have cleared the way for lenders to begin foreclosing again in the state.

“In states like Florida, Illinois and New Jersey, where processing and procedural issues slowed foreclosure activity to a crawl last year, foreclosure numbers continue to rebound off those artificially low levels,” said Daren Blomquist, vice president of RealtyTrac, a California company that tracks the foreclosure market.

Nationally, however, foreclosure activity declined year over year, RealtyTrac reported. One in every 686 housing units in the nation received a foreclosure filing during July, down about 9.8 percent from the previous year.

In Bergen County, one in every 2,381 residential properties received a foreclosure filing and in Passaic, one in every 1,294. RealtyTrac counts all filings, from the lender’s initial notice that a homeowner is in default on the mortgage all the way through to sale of the property at sheriff’s auction.

In Bergen County, sheriff’s auctions rose to a total of 30 in July, up from six in July 2011. In Passaic County, 16 properties were auctioned in July, compared with seven in July 2011, according to Sheriff Richard H. Berdnik.

Posted in Foreclosures, New Jersey Real Estate | 139 Comments

Housing just got more expensive

Posted on August 7, 2012 by grim

From the WSJ:

Recovery or Not, Home Prices Keep Rising

Today CoreLogic, a real-estate data provider, weighed in with its view of what’s happening with home prices. According to the firm, prices were up 2.5% in June, compared with a year earlier, and rose 1.3% compared with May.

June’s gains cap four straight months of both year-over-year and month-over-month increases in prices. And what’s more, CoreLogic is upbeat about the future: It’s predicting a 0.4% monthly rise and a 2% yearly jump for July prices when they are released next month.

The data come on the heels of three other price indexes that generally are showing that home prices nationally are either rising slightly or starting to see a slowdown in their declines.

But it’s worth remembering that this is the time of year for home-price gains.

As Capital Economics points out, the CoreLogic numbers may look good, but they probably don’t indicate anything much better than home prices remaining flat. More people go home shopping in the spring and summer than in the fall and winter, so it’s hard to compare numbers from one month without adjusting for seasonal factors. CoreLogic doesn’t account for seasonal trends in home sales.

Of course, annual comparisons are more meaningful than monthly ones, and CoreLogic is showing significant improvement over last year. Most economists agree that home prices have bottomed, but the more salient issue today, and the one that has most people worried, is whether or not the recovery will remain sluggish, or gain any real momentum.

From CNBC:

In a Twist, Both Home Prices and Rents Rise

Asking rents rose in 24 of the 25 largest rental markets from a year ago, according to a new report from online real estate company Trulia. Rents are pushing double digit gains in San Francisco, Miami, Oakland, Denver, Seattle and Boston, and rents are rising faster than asking prices in 21 of the 25 largest rental markets year-over-year.

“For the first time, [home] prices are up year over year in a majority of metros, and asking home prices have increased for six straight months,” writes Trulia’s chief economist Jed Kolko in a release. “Rents, however, are rising even faster than prices in most markets. These price and rent increases, along with declining vacancies, should encourage new construction, which means housing will finally start contributing to the economic recovery.”

The question remains, where is the tipping point? As it becomes more expensive to rent than buy in more markets, more Americans should turn to buying, but so far they are not. Issues with negative equity, credit and confidence continue to plague home buying.

Posted in Economics, Housing Recovery, National Real Estate | 141 Comments

Has the starter home returned to North Jersey?

Posted on August 6, 2012 by grim

From the Record:


The return of the under-$300,000 house in Bergen, Passaic counties

Tired of paying rent, Jorge and Christine Garcia saved up and recently bought their first home: a move-in-ready colonial in Bogota. Though the property had sold for $393,000 in late 2008, the housing bust meant the Garcias were able to get it for only $275,000.

“The downturn in house prices allowed us to stay in Bergen County,” said Christine Garcia, 29, an assistant to a sports-industry executive and mother of a 1 1/2-year-old daughter.

The Garcias’ experience is a stark example of how the starter-home market has changed in North Jersey. In March 2005, The Record ran a story about North Jersey’s vanishing under-$300,000 home. Seven years later, with regional home values down about 27 percent since the market’s peak in mid-2006, it’s now easy to find a home for less than $300,000 in Bergen and Passaic.

In fact, it’s pretty easy to find a home for less than $250,000.

That’s what Sue Choe and Mike Park did. They recently hit “the jackpot,” in Choe’s words, on a Teaneck home in great condition for $241,000, after selling (and breaking even on) their Fort Lee co-op.

“For us to purchase a home so competitively priced allows me to stay home [with my year-old son] and not worry too much about the bills,” said Choe, 33, a former marketing manager. Her husband is a corporate supervisor.

While the drop in home prices is good news for young buyers like the Garcias and Choe and Park, it can be devastating for sellers, especially those who bought at peak prices.
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In Bergen County last year, one in four home sales was for less than $300,000; that compares with only 11 percent in 2007, according to an analysis of property records by The Record. In Passaic County, more than half of home sales were for under $300,000, compared with one in four in 2007.

The Record’s look at property records found that under-$300,000 homes were a majority of sales in many towns that have traditionally drawn first-time home buyers, such as Bogota, Bergenfield, Elmwood Park, Garfield, Hackensack, Lodi, Clifton, Wanaque, West Milford and Pompton Lakes. But properties under $300,000 also made up 42 percent of the sales in Fair Lawn, 27 percent of the sales in Mahwah and 23 percent of the sales in Waldwick.

“The long process of downward price adjustments in the housing market has been painful in many dimensions,” said Joseph Seneca, a Rutgers economist. “However, it was, and remains, necessary, to clear what was a badly distorted housing market. Inventories are finally realigning and demand is returning.”

Several real estate agents said the lower prices — combined with mortgage rates below 4 percent — make a compelling case for buying, rather than renting.

“People who are looking under $300,000 or even under $250,000, a lot of times they can buy a house for less than what it would cost them to rent,” said Dominie Healey, an agent with Vikki Healey Properties in Maywood.
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If buyers are getting good deals, sellers are facing painful losses — including some so far underwater that they have to write a check to pay off the mortgage when they sell. But many decide to move anyway, because they need more space, have new jobs or want to be closer to their jobs or families, said Frances Rosado, a Coldwell Banker agent in Clifton.

“Some people just need to move,” Rosado said. “What are you going to do, stay in the house for the rest of your life? Or just bite the bullet and go?”

It’s certainly easier for sellers who bought decades ago and are still coming out ahead financially.

Ronald and Patricia Schiller, for example, bought their Clifton home 40 years ago. Now they are retiring to Florida and selling the house for $255,000.

“We would have liked to get more, but we see houses in our neighborhood just sitting there,” said Patricia Schiller.

Posted in Economics, Housing Bubble, Housing Recovery, North Jersey Real Estate | 158 Comments

Time to be greedy?

Posted on August 5, 2012 by grim

From the WSJ:

Finally, It Is Time to Buy a House

Warren Buffett famously once said: “Be fearful when others are greedy, be greedy when others are fearful.”

And if you’re not instinctively scared of the housing market, then global warming, saturated fat, running with scissors and the bogeyman probably aren’t keeping you awake at night, either.

The fact that everyone is scared to dabble in—much less commit to—housing makes it a close-to-perfect investment based on Mr. Buffett’s principle. But buying real estate is a good long-term investment for many more reasons, some of which have only become apparent in recent weeks.

The most striking: Housing prices rose sharply from April to May. The S&P/Case-Shiller Index rose 2.2% in 20 of the nation’s big cities. Prices shot up more than 3% in Chicago, Atlanta, San Francisco and Minneapolis. Even Detroit’s housing market scored a gain, inching up by 0.4%.

Nationally, the increase was the first in seven months. More importantly, the increase matched other data and empirical evidence this spring that foreclosures slowed and inventories were shrinking. Simple economics suggests that as the supply of distressed property slows, buyers will be forced into higher-price properties.

In addition, interest rates on 30-year fixed mortgages have tumbled below 3.5%. For those who can get credit, these aren’t just historically low rates; they are one-sided deals tilted toward borrowers.
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Here’s where the fear comes in. From 30% to 50% of existing mortgages in the U.S. market are underwater, depending on the estimate. That means many borrowers are trapped in their homes and loans. They either can keep paying and hope prices will improve or walk away, putting downward pressure on home prices.

Foreclosure rates have leveled off, but market analysts believe an increase is likely.

Here’s why. Since the financial crisis, 3.7 million homes have been foreclosed on, but an additional 1.4 million remain in the national foreclosure inventory, according to CoreLogic, a real-estate research firm.

Finally, a housing recovery won’t happen, or could be snuffed out, by a rotten economy. There’s never been significant growth in housing with high unemployment. And as Dow Jones’s Kathleen Madigan noted, “Potential buyers must feel secure with their job prospects before they commit to long-term mortgages. Higher loan standards mean banks want to see an applicant’s solid income history before lending.”

There is plenty to be afraid of when it comes to home buying. But in the current investing climate, housing presents an attractive long-term investment that should hold steady or even have upside surprise in the short term.
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Mr. Buffett would remind us that investments of any kind are not without risk. Each should be considered with the investor’s time horizon and appetites. But he also has acknowledged that real estate is especially attractive when financing is cheap, there is pent-up demand and prices have been driven down by a spooked market. Put another way, it’s time to be greedy.

Posted in Economics, Housing Recovery, National Real Estate | 62 Comments

Bizarro Friday: Housing is key to unemployment, not the other way around

Posted on August 3, 2012 by grim

From Reuters:

U.S. housing market recovery key to boosting growth – IMF

The International Monetary Fund said on Thursday it believes a recovery in the U.S. housing market is key to eventually boosting economic growth in the United States and bringing down the country’s unemployment rate.

The IMF’s annual assessment of the U.S. economy released on Thursday forecast U.S. growth strengthening from current low levels of around 2.0 percent to about 3.4 percent by 2016 and 3.3 percent in 2017.

“We know that over the next few years the formation of U.S. households and depreciation of the housing stock will imply there will be a need for about 1.5 million homes to be built on a yearly basis,” IMF economist Gian Maria Milesi-Ferretti told a conference call with reporters.

“That is clearly going to be something that will help U.S. growth over the medium term and of course a firming of the housing market will have all sorts of positive implications … in other sectors connected to housing,” he added.

Posted in Economics, Housing Recovery, National Real Estate, New Development | 160 Comments

A Look at NJ/NY Price Dynamics

Posted on August 2, 2012 by grim

From the WSJ:

Local Prices Slow to Mend

The housing market is improving across the nation, but the New York metro area is lagging behind.

According to the closely watched S&P/Case-Shiller home price index, which was released Tuesday, prices in the largest 20 metro areas were up a seasonally adjusted 0.9% in May from April and were down 0.7% when compared with May a year ago. But in the New York metro area, prices are recovering far more slowly, up just 0.6% in May from April and down 2.8% from a year ago.

Economists say cities and towns in New York and New Jersey are experiencing an uneven recovery where affluent areas are generally improving while working-class communities remain in distress. The New York area is “still suffering a bit from what happened during the financial collapse,” says Maureen Maitland, vice president of S&P Indices. “There was a lot of job loss for people in financial services in the area, and that hasn’t come back.”

The market is especially troubled in New Jersey. Data compiled for The Wall Street Journal by Zillow.com shows that of the 25 cities in the metro area with the biggest year-over-year price declines as of June, nearly 70% are in New Jersey.

Three of the four largest declines were in New Jersey, with Roselle, down 12.5%; Plainfield, down 10.5%; and Union Township, down 10.3%. All three towns have been grappling with job losses. In the past few months, prices improved across the state but it isn’t clear whether the trend will continue.

“It’s urban and rural markets where home prices are the worst,” says Jeffrey Otteau, president of Otteau Valuation Group, a New Jersey-based analysis firm. “That’s where the greatest number of subprime loans originated, where unemployment is highest.”
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Even in some affluent New Jersey towns with stable prices and just a handful of foreclosures, appraisers are being exceptionally conservative when placing values on properties. “Appraisers cannot ignore distressed sales as possible comparable sales,” says Ken Chitester, a spokesman for the Appraisal Institute, an industry trade group.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 121 Comments

Otteau: 2012 still running strong

Posted on July 31, 2012 by grim

From the Otteau Group:

Housing Recovery Still Strong

The steady improvement in home sales can be seen in this graphic which shows that YTD home purchase contracts in New Jersey are running at their highest level in 3 years. Home buyers in the state entered into 7,235 purchase contracts during the 1st half of 2012 which reflects an 18% increase compared to 2011, and a 31% increase over 2010.

Posted in Housing Recovery, New Jersey Real Estate | 141 Comments

Watching for the turn

Posted on July 31, 2012 by grim

From the WSJ:

Are Home Prices Rising? A Price-Index Primer.

Look for the S&P/Case-Shiller index to post a year-over-year decline of 1% when the latest results are released Tuesday, according to estimates from Zillow.

That would be the smallest decline in two years, when a short-lived run-up in home prices evaporated after federal home-buyer tax credits expired. Prices have been in negative territory ever since, as housing markets have struggled with a surfeit of homes and anemic demand.

But price declines are easing — and several other indexes are now reporting year-over-year gains — as the supply of homes for sale has fallen sharply. Those inventory declines, coupled with a modest uptick in demand, have helped stabilize home prices.
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What the numbers show: S&P/Case-Shiller reported a 1.9% decline for April home prices from one year ago. Prices were up by 1.3% from March, though the increase was around 0.7% after adjusting for seasonal factors.
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What the numbers show: The FHFA house price index reported that prices rose in May by 3.7% from one year ago. Prices were up by 0.8% from April on a seasonally adjusted basis.
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What the numbers show: CoreLogic, a data firm, reported that prices rose by 2% in May from one year ago. On a month-over-month basis, prices rose by 1.8% from April. Those figures aren’t seasonally adjusted.
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What the numbers show: Home values rose in June by 0.2% from one year earlier, the first year-over-year gain recorded by Zillow since October 2007.

Posted in Economics, Housing Recovery, National Real Estate | 95 Comments

Still better to be rich than poor in NJ

Posted on July 29, 2012 by grim

From the Star Ledger:

Study: N.J. wealthy flourishing, gap between rich and poor is largest since Great Depression

The rich really did get richer in New Jersey over the past 10 years, and the gulf between the wealthiest and poorest residents is the widest it’s been since the Great Depression, a new study has found.

And as most New Jerseyans were hit hard during a decade that ended in recession — with hundreds of thousands out of work, take-home pay sapped and lifestyles curbed for the poor and middle class — the bad times barely touched the wealthiest Garden Staters, the Legal Services of New Jersey study concluded.

In its first in-depth look at the widening gap between the haves and have-nots, the group’s Poverty Research Institute found:

• New Jersey’s top 20 percent saw their average income rise by 22 percent from 2000 to 2009;

• Those earning less than $34,300 — about 3 million people — took home even smaller average paychecks by decade’s end;

• The top 1 percent — the 75,000 New Jerseyans earning at least $570,000 — accounted for more than a quarter of the new wealth generated in the state during the decade;

• Most of those in the middle didn’t share in the gains, and households led by women and minorities lost ground on both ends of the economic spectrum.

“As the middle class shrinks and the number of people living in poverty or near-poverty increases, their chance of climbing the ladder of economic success is likely to diminish,” the report concludes. “That, in turn, increases the likelihood that not only they but their children in the future will have diminished lives.”
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The report found that more than three-quarters of all the new income generated in New Jersey during the decade was earned by the top 20 percent: households earning $132,000 and more. Drop down a few brackets and the picture is different: Families earning $53,231 to $85,500 took home only 11 percent of the decade’s new income.

Posted in Economics, New Jersey Real Estate | 169 Comments

We’ve all seen better bottoms…

Posted on July 28, 2012 by grim

From the WSJ:

Is This What a Housing Bottom Looks Like?

Another housing report shows that market activity is up considerably from one year ago but easing off of the levels set by a surge of transactions earlier this year.

A report Thursday by the National Association of Realtors showed the index of pending home sales, reflecting deals that have gone into contract but haven’t yet closed, fell in June by 1.4% from May, though activity was still above the level of one year ago by 9.5%.

The report is the latest indication of an uneven housing bottom — things aren’t getting better rapidly, but we’re also not in the “hold-your-hat” declines of 2010 or the “spring that never materialized” of 2011. The report is also a reminder that a recovery will have trouble taking hold without meaningful job and wage growth, which has slowed in recent months.

June’s reading is slightly below the level set in both March and May of this year. But it is better than any reading in 2011 and better than all but two months in 2010, when federal tax credits spurred a burst of sales activity. It was the highest level for the month of June since 2007.
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After a strong start to 2012, other sales indicators have hinted at a slowdown in June. New-home sales fell by 8.4% from May, though they were still up by 15.1% from one year ago, according to a report Wednesday. Last week, the Realtors reported that sales of previously owned homes in June fell by 5.4% from May, though they were 4.5% the level of one year ago.

Both Thursday’s pending sales report and earlier reports that builder confidence is at a five-year high don’t quite fit with the recent sales drops. The Realtors have increasingly blamed smaller sales volumes on the dearth of attractive inventory. For-sale inventories in June were down 24.4% from one year ago, the largest annual drop in at least 30 years.

The market faces other challenges: Many buyers can’t qualify for mortgages because they have too much debt. And many sellers can’t sell their house because they owe more than it is worth, depriving the market of all-important “trade-up” buyers. Both of these problems won’t be fixed overnight.

Prices are rising, however, because the number of homes for sale is down sharply from one year ago in many markets.

Posted in Economics, Housing Recovery, National Real Estate | 28 Comments

The “other” housing market (p.s. this one is hot)

Posted on July 27, 2012 by grim

From Globe St:

M&M: NJ Rental Market Will Continue To Surge On Wings Of Economic Uncertainty

Vacancies down. Rents up. Investor interest way up. That is real estate firm Marcus & Millichap’s prediction through the end of 2012 for the New Jersey multifamily market–despite the fact that construction is also way up and the economy is unpredictable.

“Nearly 4,400 market-rate units are under way, with more than half of the stock slated for northern New Jersey,” the California-based firm said in a report supplied to GlobeSt.com. Michael Fasano heads the office in Elmwood Park.

A large number of those units will be completed next year and in early 2014, expanding statewide inventory by 1.3%, M & M’s new report noted.

Based on statistics through June, the vacancy rate for apartments will nevertheless remain at only about 3.5% – the lowest it has been since 2008 – through the end of this year, M & M predicted.

M & M’s Jersey office report laid this to continuing uncertainty in the residential for-sale market, stemming from overall economic uncertainty and the rising tide of home foreclosures in the state. After the hold on court foreclosure actions following the “robo-mortgage-signing” scandal was lifted this year, foreclosure rates have risen sharply.
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Under these conditions, landlords will have the leverage to continue boosting rental rates, which have already hit new highs in 2012. By year’s end, average asking rents will reach $1,366 a month, says the report. Effective rents will jump 4 % for the year to $1,311 a month. Last year, effective rents were up 2.3%.

Meanwhile, fierce investor competition for the best properties in areas closest to Manhattan will keep investor’s capitalization rates compressed near 5%. Competition in the north is increasing driving “risk-tolerant” investors to older and distressed properties along train lines in Essex County, and smaller investors to central and South Jersey, M & M reported, saying the trend will continue.

Posted in Economics, New Jersey Real Estate | 91 Comments

Foreclosures continue to loom large

Posted on July 26, 2012 by grim

From CNBC:

New Crop of Foreclosures Is Coming

While fewer Americans are falling behind on their mortgage payments, the huge backlog of already delinquent mortgages is finally making its way through the banking system to foreclosure.

Total foreclosure activity rose in the first half of this year from the previous six months, according to online foreclosure sale site RealtyTrac, driven by a jump in new foreclosure actions by lenders.

“Those foreclosure starts are welcome news for prospective buyers and real estate brokers in many local markets where a shortage of aggressively priced inventory has been holding up sales activity. Markets with increasing foreclosure starts will likely see more distressed inventory for sale in the form of short sales and bank-owned properties in the second half of the year,” said Brandon Moore, CEO of RealtyTrac.
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While many of the previously hard-hit markets are seeing declines in foreclosures, other cities are seeing big gains. Foreclosure activity increased more than 20 percent from second half of 2011 in Tampa (47 percent), Philadelphia (30 percent), Chicago (28 percent), New York (26 percent), and Baltimore (21 percent).

From Bloomberg:

Foreclosure Filings Increase in 60% of Large U.S. Cities

Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac Inc. reported.

More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, California-based data provider said today in a statement. Among the 20 largest markets, Tampa, Florida; Philadelphia; Chicago and New York City had the biggest percentage increases in filings.

The gain in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide. More repossessions will buoy deals “in many local markets where a shortage of aggressively priced inventory has been holding up sales,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.

Posted in Foreclosures, Housing Recovery, National Real Estate | 131 Comments

Is the housing recovery here? Or is Goldman just trying to dump homebuilders?

Posted on July 25, 2012 by grim

From the IB Times:

The US Housing Recovery Is Here: Goldman Sachs

The U.S. housing recovery is here, with an uptick in prices and governmment support and a decrease in unsold-off market homes, known as shadow inventory, according to analysts from Goldman Sachs Group Inc., the fifth-largest U.S. bank by assets.

“The super cyclical housing market has turned and a strong recovery in new-home sales is ahead,” wrote Joshua Pollard and Anto Savarirajan of Goldman Sachs in a research note. They upgraded their ratings on three U.S. homebuilders: Denver-based M.D.C. Holdings Inc., Los Angeles-based KB Home and Westlake Village, Calif.-based Ryland Group Inc.
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The positive Goldman report follows a 4.7 percent increase in construction of single-family homes in June to an annual pace of 539,000, according to the Commerce Department. Goldman predicts 700,000 sales of new homes by 2014, more than twice the 307,000 new homes sold in 2011, the worst figure on record.

The Goldman analysts cited government efforts to convert single-family homes into rentals through investors, which will help address the supply imbalance between rentals and fore-sale properties. Expansion of the Home Affordable Refinance Program will also allow homeowners to refinance their mortgages, taking advantage of record low interest rates and stabilizing local markets.

Shadow inventory, defined as homes that are expected to be sold but have yet to come on the market, has fallen even in states hit hard by the housing bubble, including Arizona, Nevada and Florida.

“Investors are quickly swallowing new foreclosure supply, limiting shadow inventory and creating a floor for home prices,” Pollard and Savarirajan wrote.

Posted in Economics, Housing Recovery, New Development | 87 Comments