Spring Fever!

Posted on January 31, 2013 by grim

From HousingWire:

Trulia reveals best home-searching season

Online real estate marketplace Trulia revealed its latest survey findings Wednesday, showing the seasonal patterns of home search activity based on its search traffic.

The research, which was based on all home searches on Trulia from 2007 to 2012, was used to determine whether a state’s search activity in each month is above or below the annual average for that state.

The study revealed that post-holiday motivation pushed many potential homebuyers and renters back into full-on search mode at the beginning of the year. Nationally, online real estate search activity surged in January and usually reaches its peak around March or April.

Typically May sees a slight dip, but is directly followed by a second yearly peak during the summer months. Home searches usually dip the lowest in December.

“Home-search activity swings with the seasons in every state. Buyers and sellers can use these ups and downs to their advantage,” said Jed Kolko, chief economist of Trulia. “Sellers looking for the most buyers should list when real estate search traffic peaks. Buyers, however, should think about searching off-season, when there is less competition from other searchers.”

While most online home searches at the state level correspond with typical seasonal patterns, local markets are completely different depending on the market.

Posted in National Real Estate | 59 Comments

HARP 4.0?

Posted on January 30, 2013 by grim

From Bloomberg:

Menendez, Boxer plan bill to help struggling homeowners

Underwater homeowners may get additional federal assistance for refinancing government-backed loans under a proposal being revived in the U.S. Senate.

Democratic Senators Robert Menendez of New Jersey and Barbara Boxer of California plan to introduce a bill as soon as this week that would expand the existing Home Affordable Refinancing Program by promising lenders they won’t be forced to absorb the loss on refinanced loans that default, according to a person with knowledge of the matter. The person asked not to be identified because the timing is not final.

The bill is the first of a series of measures planned by the White House and congressional Democrats to promote refinancing as a way to spur a recovery of the housing market.

The Menendez-Boxer bill, a new version of a measure that failed to advance in the last session of Congress, would include a one-year extension of HARP, which is aimed at helping borrowers who are current on their mortgages but unable to refinance because their home values have dropped. The program, which applies to loans backed by U.S.-owned mortgage finance companies Fannie Mae and Freddie Mac, is set to expire at the end of this year; the bill would extend it through 2014.

“We believe the legislation — if it could be adopted — would be positive for the mortgage originators by giving them more time to find borrowers eligible for HARP,” Jaret Seiberg, senior policy analyst at Washington Research Group, a unit of Guggenheim Securities LLC, wrote in a market commentary today.
…
Menendez and Boxer were unable to pass the bill during the last session of Congress because they were unable to garner Republican support without opening up the measure for amendments.

Passage also is not assured this session, Seiberg wrote.

“We detect little support among House Republican leaders,” he said. “So even if it can pass the Senate, it may well die in the House.”

Posted in Housing Recovery, Mortgages, Politics | 133 Comments

November Case Shiller

Posted on January 29, 2013 by grim

From CNBC:

Housing Prices Climb; Market ‘Clearly Recovering’

U.S. single-family home prices rose in November, building on a string of gains that points to a housing market that is on the mend, data from a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.6 percent in November on a seasonally adjusted basis, in line with economists’ forecasts.

Prices on a non-adjusted basis slipped 0.1 percent. The non-adjusted numbers showed prices fell in about half of the cities covered by the survey, with the winter months typically a weak period for housing, the survey said.

“Housing is clearly recovering”, David Blitzer, chairman of the index committee at S&P Dow Jones Indexes, said in a statement.

Prices in the 20 cities rose 5.5 percent year over year.

It was the 10th month in a row that prices have increased, the longest string of gains since before the market started to turn down in 2006.

From Bloomberg:

Home Prices Climb by Most in Six Years as U.S. Market Firms

Home prices in 20 U.S. cities rose in November from a year earlier by the most in more than six years, indicating the U.S. housing rebound is gaining ground.

The S&P/Case-Shiller index of property values increased 5.5 percent from November 2011, the biggest year-over-year gain since August 2006, a report showed today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 5.6 percent advance.

Mortgage rates near a record low are propelling demand for real estate that’s outpacing the available supply, a sign prices will keep strengthening. Home-equity gains and an improving job market may help to put a floor under Americans’ confidence and spending, the biggest part of the economy, cushioning the hit from a higher payroll tax that began in January.

“The rise in home prices is a demand-supply story that should continue this year,” Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said before the report. “Inventories are low, so that’s good news for home prices. Higher prices will also boost confidence and spending overall.”

Posted in Housing Recovery, National Real Estate | 133 Comments

Walking away about to get easier

Posted on January 28, 2013 by grim

From Bloomberg:

Fannie Adds Bailout For Underwaters Walkaways

Fannie Mae and Freddie Mac will let some borrowers who kept up payments as their homes lost value erase their debts by giving up the properties, helping Americans escape underwater loans while adding to losses at the mortgage giants bailed out with $190 billion of taxpayer money.

Non-delinquent borrowers with illness, job changes or other reasons they need to move will become eligible in March to apply for a so-called deed-in-lieu transaction that erases the shortfall between a property’s value and the size of its mortgage. It follows a change in November that lets on-time borrowers sell properties for less than they owe, known as short sales, wiping out the remaining mortgage debt. Normally, the lenders could pursue people to recoup their losses.

“It’s an extraordinarily generous approach for companies still in debt to American taxpayers,” said Phillip Swagel, a professor at the University of Maryland’s School of Public Policy in College Park, Maryland. “We’re giving people an incentive to walk away, right when the housing market is starting to right itself.”

Previous foreclosure-prevention programs were designed to help only borrowers on the verge of losing their homes, in effect penalizing those who kept paying, according to homeowner advocates such as Julia Gordon, director of housing finance and policy at the Center for American Progress in Washington. In some cases, servicers have advised borrowers to stop making their mortgage payments to qualify for help, leading to evictions if their applications are denied, Gordon said.
…
“Fannie and Freddie are playing catch-up, making these changes when defaults are falling and the housing market is coming back to some extent,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California. “It should have happened a long time ago.”
…
The deed-in-lieu transactions, which require homeowners to leave properties in good condition, preserve the value of homes by preventing owners from abandoning them to take a new job or cope with an illness, Gordon said. Vacant and dilapidated real estate drags down values of nearby houses, increases expenses for Fannie Mae and Freddie Mac, and reduces the amount they’ll recover when the property is sold, she said.
…
To qualify for the programs, borrowers are required to have a 55 percent debt-to-income ratio — meaning 55 percent of their monthly gross income goes to paying debt. To be eligible, homeowners have to document a hardship, such as illness, for Fannie Mae and Freddie Mac to consider the deal.

Posted in Economics, Foreclosures, Mortgages, National Real Estate | 113 Comments

Sellers holding firm on pricing?

Posted on January 26, 2013 by grim

From HousingWire:

Buyers want to buy now, while sellers are inclined to wait

Of the 895 respondents recently surveyed by online real estate broker Redfin, less than half, 49% to be exact, indicated that they were planning to sell their homes.

Even further, only 22% believe now is the time to sell. While this is up from 15% in the fourth quarter, the number remains relatively low.

This, in large part, is based upon the fact that 81% believe home prices will rise in 2013. Those in the 81% are not far off, as the Federal Housing Finance Agency reported just that in its latest house price index. In fact, from November 2011 to November 2012, prices rose 5.6% and are predicted to continue their upward trajectory into 2013.

Because of this, some sellers are more inclined to wait. More than 34% of sellers indicated that missing out on future price gains was a major concern.

These future price gains have buyers wanting to get in now too, before prices jump much higher. Of those surveyed, 54% believe now is a good time to buy.

Posted in Economics, National Real Estate | 62 Comments

Tailwind for housing? Or too optimistic?

Posted on January 25, 2013 by grim

From the NYT:

Housing Offers Hope of Strength in the Economy

A funny thing is happening to the United States housing market. It is getting better at an accelerating rate.

And therein could lie hope for a surprisingly strong economy this year.

It has been a long time, as the economy worked off the excesses of the boom and cleared out the inventory of homes that should never have been built or were “sold” to people who could not hope to afford the payments. But now the inventory of houses for sale — both new and used — is as low as it has been in decades. Home prices are rising in most markets. Sales have picked up, though they are still low by historical standards.

“We had 48 months of depression in the housing industry,” said Karl E. Case, an emeritus professor of economics at Wellesley College and the co-developer of the Standard & Poor’s/Case-Shiller house price index. “Housing has brought us out of every recession in the past, and it was not available.”

But now, he said in an interview, “there is no question that we have turned what seemed to be a headwind into a tail wind.”
…
The National Association of Realtors, which reports each month on sales of existing, or used, homes, tries to calculate how many sales are distressed and how much that distress lowers the prices received. Lately, the proportion of distressed sales has been declining slowly and so has the discount. In December, 12 percent of sales were said to be of foreclosed homes, and an equal number were short sales, in which the home is sold for less than the amount owed on the mortgage.

There is reason to hope that those figures will continue to decline. Moody’s reports that the “shadow inventory” of homes with foreclosures pending and homes already owned by banks but not on the market is declining. It voices hope that banks “are finally putting behind them the operational and regulatory issues that plagued them in the past and are taking the steps necessary to address their backlogged foreclosure inventory.”

At some point, the declining proportion of distress sales could well mean that house price indexes will begin to rise faster than the underlying market might really justify, as those sales stop holding down the averages.

If that came as the economy began to strengthen enough that the Federal Reserve decided to let interest rates start to creep up, could that create a rush to buy among those who fear rising prices and mortgage interest rates?

Perhaps, but nothing like during the old days. People do know now that prices can fall, demographics will limit the number of new families that need housing, and banks are far less willing to make loans than they were. (That is true even though nearly all mortgages are sold to Fannie Mae and Freddie Mac. Banks fear they will have to repurchase any bad loans they sell, and seem to be erring on the side of caution.)
…
None of this is meant to suggest that the housing market is in good shape. But it is improving.

During the years running up to the collapse of the housing bubble, Professor Case was among those warning that prices had risen to unsupportable highs. But now he has a different view.

When I called him this week, he apologized for having to end the interview because of a prior appointment. “I’m going to look at a property that I may buy as an investment,” he said.

Posted in Employment, Housing Recovery, National Real Estate | 91 Comments

Economic Recovery? Focus on housing, not stocks.

Posted on January 24, 2013 by grim

From Bloomberg:

Rising House Prices, Not Stocks, Make People Feel Wealthy

As a key influence on households’ spending decisions, the health of the housing sector trumps stock-market moves, a paper released this week by the National Bureau for Economic Research claims.

The study, written by prominent economists Karl Case, John Quigley and Robert Shiller, refines their existing study of what is called the wealth effect. Case and Shiller are well known names, especially on housing issues. Quigley, another luminary, died in May, before the research’s publication.

Most economists and policymakers agree asset price gains can be big drivers of consumer spending power. Rising home or stock prices are generally agreed to increase consumer spending, while falling asset prices cut the other way.

That said, economists and policymakers have had a hard time quantifying the wealth effect. That’s problematic for many reasons, but it’s even more so due to the fact that the housing market’s crash and apparent recovery are considered central to the overall fate of the economy. To that end, the Federal Reserve is pursing a policy course deliberately aimed at driving up all manner of asset prices in hopes its actions will boost household spending to power better overall growth.

In the paper, the economists update their decade-old work, drawing on a wider and more up-to-date set of data ranging from 1975 to the second quarter of 2012. The broader information changes and clarifies what was once thought about the wealth effect’s influence.

There is “at best weak evidence of a link between stock market wealth and consumption,” the economists wrote. “In contrast, we do find strong evidence that variations in housing market wealth have important effects upon consumption,” they said.

“An increase in real housing wealth comparable to the rise between 2001 and 2005 would, over the four years, push up household spending by a total of about 4.3%,” the paper stated. Meanwhile, “a decrease in real housing wealth comparable to the crash which took place between 2005 and 2009 would lead to a drop of about 3.5%.”

This finding upends the old understanding that housing gains tended to push spending higher by a wider margin that home price declines depressed spending, the economists wrote.

From HousingWire:

Wealth effect creeps back into American households

The nascent housing recovery is beginning a shift from economic headwind to tailwind, creating the indirect effect of giving average American households hope to, once again, begin to retain a level of wealth.

Of course, being in America, the feeling of wealth is best described as a family’s healthy relationship with their overall composition of debt — and this is one relationship that is still changing.

“The wealth effect is multi-faceted: It is partly due to the psychological lift resulting from higher home values, i.e. the perception of a stronger household balance sheet position actually supports spending,” said Deutsche Bank ($47.23 -1.1%) analyst Carl Riccadonna in a note to clients. “More directly, price appreciation enables households to refinance debt, thereby reducing interest expenses, as well as tap into home equity via lines of credit or cash-out refinancing.”

The second detail is particularly interesting as, according to recent Federal Flow of Funds data, HELOCs and refis represent a large portion of the shrinking mortgage debt.
…
Deutsche Bank’s Riccadonna added that even small moves in home prices can have large effects on consumption, because housing comprises such a significant share of household assets.

“Based on previous analysis, we are projecting home price appreciation of 5-10% in 2013, which translates into a further increase in household assets, i.e. wealth creation, ranging between $860 billion and $1.72 trillion,” he said. “To be sure, the wealth effect on consumer spending could be substantial.”

Posted in Economics, Housing Recovery, National Real Estate | 61 Comments

What’s the right timeframe to resolve a foreclosure? Fast or slow?

Posted on January 23, 2013 by grim

From Bloomberg:

New York Protecting Defaulters Stalls Rebound: Mortgages

New Yorkers Paul and Angelica Kashman, declared in default on their mortgage in July 2010 and foreclosed on by Wells Fargo & Co. (WFC) in February 2011, say they aren’t deadbeats.

“We always knew that when we get into a court of law and show that we have all the information and backup, the truth will come out,” said Paul Kashman, 37, a manager in the hospitality industry. The couple, stuck in limbo by legal bureaucracy, says they were mistakenly pushed into foreclosure, and are eager now to save their home, using court mediation.

Their case is among 72,000 pending in the New York system, accounting for a quarter of the civil caseload, and highlighting the strength and weakness of the state foreclosure process. While borrowers have protections unavailable in many other states, it takes more than 1,000 days for banks to repossess a home, stalling a housing recovery by keeping pressure on values for years to come as a constant drip of distressed properties enter the sales market.

The New York area was one of only two in the country to post year-over-year home price declines in the latest Case- Shiller 20-city index. Homebuyers also could lose, with the Federal Housing Finance Agency considering a fee increase to compensate Fannie Mae (FNMA) and Freddie Mac for doing business in New York and four other states with slow, costly foreclosures.

“New York suffers from what appears to be altruism, in that it postpones foreclosures as long as possible — the problem is that altruism can be expensive,” said Anthony B. Sanders, an economics professor at George Mason University in Fairfax, Virginia. “It slows down the housing market and it results in lenders being almost unwilling to lend. New buyers will pay the price for this.”
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It’s one of five judicial foreclosure states, including New Jersey, Connecticut, Florida and Illinois, in which home repossessions require court review that the FHFA is targeting. The agency has said it’s seeking to compensate Fannie Mae and Freddie Mac (FMCC) by bringing their pricing of risk more in line with how private lenders operate. The FHFA last year had the two government-controlled companies almost double the annual fees they charge for guaranteeing mortgage bonds, with increases averaging 0.2 percentage point.
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“The proposal would create the perverse incentive that states should either give up the fight against mortgage fraud and roll back consumer protections or face the consequences of higher mortgage rates for consumers,” Benjamin Lawsky, superintendent of the New York Department of Financial Services, wrote in the letter. “The proposal would also shift the cost of the failures of lenders and servicers onto New York State borrowers.”
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“The byproduct of an aggressive and zealous defense is that the homeowner gets to stay in the home much longer than they otherwise could have and actually gets to keep his home,” Richardson said.

In New York it took 1,089 days on average to foreclose in the fourth quarter, the longest of any state and more than five times the pace in hard-hit Arizona, a non-judicial state that has worked through much of its backlog, according to data from RealtyTrac.

Posted in Economics, Foreclosures, Housing Recovery, National Real Estate | 88 Comments

December Existing Home Sales

Posted on January 22, 2013 by grim

From Bloomberg:

December home sales probably highest in 3 years

Sales of U.S. homes probably rose in December to the highest level in three years as the industry headed toward a more rooted recovery in 2013, economists said before reports this week.

Combined purchases of new and existing properties climbed to a 5.49 million annual rate last month, the highest level since November 2009, according to the median forecast of economists surveyed by Bloomberg News.
Another report may show the outlook for growth brightened last month.

Historically low mortgage rates, an improving job market and an increasing number of households will probably keep spurring demand for housing this year. The rebound comes as political wrangling in Washington over federal-spending cuts and the debt begins to shake consumer confidence, raising the risk that the world’s largest economy will suffer.

“The housing market is coming back, gaining momentum, and it’s one of the bright spots for the economy as we start 2013,” said Robert Dye, chief economist at Comerica Inc. in Dallas.

Purchases of previously owned homes climbed to a 5.1 million annual rate in December, the strongest since November 2009, economists project National Association of Realtors figures will show Tuesday. New-home sales picked up to a 385,000 annual rate for the month, the best showing since April 2010, according to the survey median ahead of a Friday Commerce Department report.

The combined reading would be the strongest since a government tax credit for first-time buyers first expired three years ago. It would the second-highest since August 2007, four months before the last recession began.

Posted in Economics, Housing Recovery, National Real Estate | 137 Comments

“No one told us about this basement thing.”

Posted on January 21, 2013 by grim

From the AP:

Superstorm Challenges Basement Definition

Irene Sobolov thinks the first floor of her house is just that. The federal government and her insurance company say it’s a basement.

The semantics, Sobolov has learned, are very expensive.

Sobolov and others whose lower-level apartments or businesses sustained water damage during Superstorm Sandy say the property they own is being classified as a basement, severely limiting what is covered under the National Flood Insurance Program.

“It’s the battle of the definitions,” said Sobolov, standing on concrete that a wood floor once covered. She says the damage to her home came when the sewer overflowed, sending a repellent brew of sewage, condoms and garbage water up through her toilet and drain. “No one told us about this basement thing.”

The basement classification has become a point of contention in Hoboken, a city of 50,000 across the Hudson River from Manhattan. Hoboken sustained major flooding when the Hudson jumped its banks and roared into the city during Superstorm Sandy, one of the strongest storms to ever hit the area. It is one of the densest cities in the country, and there are about 1,700 below-ground units that house people or businesses, according to Mayor Dawn Zimmer.

A spokesman for Senator Frank Lautenberg said people whose homes or businesses were classified as a basement are eligible for grants that are part of the $50.7 billion Sandy aid package approved by the House of Representatives Jan. 15. It is unclear how much will be allocated or what the rules will be.
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While there may be some relief coming, the classification is leading some to call for changes to the National Flood Insurance Program, saying the basement definition unfairly punishes people who own property in cities.

The flood insurance rules “do not reflect the reality” of urban living, Zimmer told Congress last month.

“A store or apartment that requires you to walk down one or two steps is plain and simply not a basement,” Zimmer told the Senate Committee on Small Business and Entrepreneur-ship.

“For many people, that’s their primary residence. It’s where they have the kitchen, the bedroom,” Zimmer said in an interview. “It’s their home.”
…
Sobolov said she is challenging the assertion that her home was flooded because of her claim that what came up through the toilet and drain damaged her home. But because the insurance company declared her home flooded, she is also fighting the basement classification. There was about a foot of water and sludge in her home.

She and her husband have owned the home for 12 years and pay about $2,500 a year in flood insurance, Sobolov said.

“They collect our money for 12 years and only now it’s, ‘Oh, I forgot to tell you, we don’t cover you?'” she asked.

Posted in General, New Jersey Real Estate | 89 Comments

Movin’ Out

Posted on January 19, 2013 by grim

From the Huffington Post:

More Young Americans Moving Out Of Mom’s House

Americans are feeling increasingly confident in the future and more and more are striking out to set up their own homes, a move that is helping propel the housing recovery.

The deep financial crisis and recession of 2007-2009 kept many Americans from leaving their parents’ nests and drove others back into them, putting a sharp brake on the pace at which new households formed.

Household growth averaged about 500,000 per year from 2008 through 2010 – less than half the rate seen at the height of the housing boom in the years just before that. The pace in 2010 was the weakest since 1947.

But the rate at which individuals or families are getting their own homes picked up over the past two years, underpinned by a steady if tepid economic recovery and gradual labor market gains. In 2011, households increased 1.1 million and they grew closer to 1.2 million last year.

“The rise in household formation bodes well for the housing recovery. Instead of having too many houses, we are turning to a situation where there aren’t enough,” said Guy Berger a U.S. economist at RBS in Stamford, Connecticut.

Indeed, housing has turned from the economy’s sorest spot to its brightest, with new building activity at 4-1/2-year highs. Housing activity in turn spurs related areas like furniture.
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The worst recession since the Great Depression of the 1930s cost the economy 8.8 million jobs and drove the unemployment rate up to 10 percent.

Dim job prospects and growing financial stress undercut the pace of household formation – a central force behind housing demand – even though the population kept growing at a rate of about 2.7 million per year.
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An analysis by economist Timothy Dunne at the Cleveland Federal Reserve Bank found there was a shortfall of 2.6 million households from 2008 through 2011 compared to what pre-recession trends would have suggested.
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The gains are being felt primarily in the rental market, where rising demand has spurred a sharp pick up in construction of apartment buildings. In contrast, the U.S. homeownership rate hasn’t risen much from a 15-year low reached in early 2012.

“We are going to see more recovery in the rental market, in the very short run. As the market improves, people will start to face higher rents and over time, that will spill over into the owner-occupied market,” sai d Gary Painter, a public policy professor at the University of Southern California.

New home completions have lagged the increase in household formation, leading to a tightening supply.

According to RBS’ Berger, more than 1.3 million new residential structures should have been completed last year to keep pace with household growth. But only 651,400 homes were finished, the second lowest on record.

“Given that the stock of homes available for sale is already very low, inventories alone are unlikely to meet the demand presented by these new households,” said Berger.

Posted in Demographics, Economics, Housing Recovery | 69 Comments

NJ adds 30,900 jobs in December, can it be sustained?

Posted on January 18, 2013 by grim

From the AP:

NJ adds record 30,900 private jobs in December

Private employers in New Jersey added 30,900 jobs in December, the largest one-month gain since the current system of employment tracking began in 1990, the state Labor Department reported Thursday.

Economists say that cleaning up from Superstorm Sandy and the start of rebuilding were factors, but there was strong growth in areas that seem to have been unaffected by the storm.

“Do you believe in miracles?” asked James Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University. “It’s kind of spectacular job growth for December.”

But it comes with caveats.

The strong month capped a sluggish year and accounted for about two-thirds of the state’s total job growth for 2012. Even with the new jobs, the unemployment rate was a stubbornly high 9.6 percent. That’s the same as the rate initially reported for November. But on Thursday, November’s rate was adjusted upward to 9.7 percent.

The unemployment rate remained nearly 2 points higher in New Jersey than the national December rate of 7.8 percent.
…
“New Jersey has 1.2 percent more jobs today than it did a year ago,” said Patrick O’Keefe, director of economic research at J.H. Cohn. “That’s better than going backward, but it’s still not very robust.”

O’Keefe said that at the current growth rate, it would take three more years for the state to get back to the number of jobs it had in December 2007, just before the Great Recession began taking its toll on jobs.
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A preliminary analysis shows that from December 2011 to December 2012, employment grew by 48,000 jobs, with the private sector accounting for more than 46,000. The Labor Department said that figure represents the largest over-the-year private sector increase in jobs since December 1999 to December 2000, when more than 64,000 jobs were added.

It will not be clear until March whether the major one-month growth can be sustained. The Labor Department does not release a monthly report in February.

Posted in Economics, New Jersey Real Estate | 131 Comments

No end to the foreclosures? Does it matter?

Posted on January 17, 2013 by grim

From the Philly Inquirer:

Foreclosure filings fell nationally in 2012, but not locally, research shows

Foreclosure filings fell 3 percent nationally in 2012 from 2011’s levels and were 36 percent below their 2010 peak, RealtyTrac reported Thursday.

Filings did increase in New Jersey (up 55 percent) and Pennsylvania (up 28 percent) last year, the Irvine, Calif.-based real-estate information firm said, but were still below the levels of 2010, considered a record year for foreclosures nationwide.

States experiencing hefty increases in 2012, including New Jersey and Pennsylvania, were those in which the courts handle foreclosures, said RealtyTrac vice president Daren Blomquist.

“We expect to see continued increases in judicial-foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states,” Blomquist said. There will be another set of increases in some non-judicial states near the end of the year, he added, as “lenders adjust to the new laws and process some deferred foreclosures in those states.”

Yet the additional foreclosures are unlikely to be the torrent many housing observers had predicted.

“There are more distressed [sales] to come, but I doubt it will result in more price declines,” said Mark Zandi, chief economist of Moody’s Analytics in West Chester.

Investor demand for such properties is verging on voracious, he said. Demand for nondistressed properties also continues to strengthen.

“There may be a lull in house-price gains early this year, but it will be temporary and modest,” Zandi said Wednesday.

Posted in Foreclosures, National Real Estate, New Jersey Real Estate | 161 Comments

Setting the stage for a strong spring market?

Posted on January 16, 2013 by grim

From DowJones:

Freddie Mac See Unemployment Lower in 2013

The unemployment rate is projected to edge lower this year and home sales are expected to rise at a rate similar to last year’s, while interest rates are projected to remain relatively low throughout 2013, mortgage-finance company Freddie Mac said.

Despite fiscal uncertainties facing the U.S., the company said consumer confidence has remained fairly resilient in recovering from its recession lows, buoyed by improving labor and housing market news. Business owners and managers, however, are more sanguine about the nation’s business outlook than consumers seem to be, according to its U.S. Economic and Housing Market Outlook.

Freddie Mac said 1.86 million jobs were created last year, representing the largest annual gain since 2006. Of that, 155,000 jobs were created in December, while November’s payrolls were revised up 24,000, keeping the unemployment rate steady at 7.8%–the lowest since December 2008.

The unemployment rate is expected to provide support for a continuation of an accommodative policy stance by the Federal Reserve through the coming year, making a case for relatively low interest rates for mortgage lending and the broader capital markets, the company said.
…
Freddie Mac said home sales for the first 11 months of last year grew 9% from the year earlier, leading to expectations of similar results this year.

“As we begin 2013, the economy is undoubtedly at a better place now than at this time in 2012. And despite the clouds of fiscal uncertainty facing the country, positive jobs reports and the strengthening housing market continue to be the bright spot as we begin the New Year,” said Frank Nothaft, Freddie Mac vice president and chief economist.

Last week, sister company Fannie Mae reported that consumer confidence in the U.S. housing sector rose in December to the highest level since 2010. Fannie Mae said its poll of 1,002 Americans showed that most expect home prices to increase an average of 2.6% over the next year.

Posted in Economics, Housing Recovery, National Real Estate | 152 Comments

Sandy strikes again

Posted on January 15, 2013 by grim

From Bloomberg:

Mortgage Delinquencies Jump in Areas Hit Hard by Sandy

Mortgage delinquencies have jumped about four times the U.S. average in areas of New York, New Jersey and Connecticut that were damaged by Hurricane Sandy, according to Lender Processing Services Inc. (LPS)

The share of loans with late payments rose 3.7 percent nationwide from August to November, the Jacksonville, Florida- based company said in a report today. In ZIP codes hit hardest by the storm, delinquencies surged 15.4 percent in Connecticut, 15.2 percent in New Jersey and 14.8 percent in New York.
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Sandy made landfall on Oct. 29, killing more than 100 people, inundating New York City’s subway system and destroying waterfront properties from New Jersey’s Atlantic City to Greenwich, Connecticut. While many homeowners fell behind because of brief disruptions, such as difficulty retrieving mail after the storm, some people lost homes and jobs that won’t be replaced easily, said Keith Gumbinger, vice president of HSH.com, a Pompton Plains, New Jersey-based mortgage-information website.

“A good portion of these are probably temporary,” he said in a telephone interview. “However, there are people who did suffer from catastrophic loss, whose houses are not habitable.”
…

Fannie Mae and Freddie Mac said on Nov. 9 that they would suspend evictions and foreclosure sales for 90 days in storm- disaster areas. The government-backed housing-finance agencies will allow firms that service their loans to extend forbearance plans for as long as 12 months.

Posted in Foreclosures, Shore Real Estate | 135 Comments