Foreclosures drop sharply, but not because the market is improving

Posted on April 14, 2011 by grim

From CNN:

Foreclosures off 30% this year

On the surface, the foreclosure crisis seems to be easing. The number of foreclosure notices filed during the first three months of 2011 fell 27% compared with the first quarter of 2010, according to a report from RealtyTrac released Thursday.

Only 681,000 properties got hit with some type of filing — a notice of default, a scheduled auction or a foreclosure sale — during the quarter, one for every 191 households.

There were 215,046 borrowers who lost their homes, down 17% year-over-year.
…
“The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low,” said James Saccacio, RealtyTrac’s CEO.

The explanation for this contradiction is that the foreclosure improvement has been artificial, fueled by banks reacting to paperwork processing issues — the infamous “robo-signing” scandal — by cutting back on filings until they can clean up their procedures.

According to RealtyTrac spokesman Rick Sharga, without the cutback there would have been 900,000 filings during the quarter instead of 681,000. There would have been 280,000 to 300,000 bank repossessions instead of 215,000, he added.

From HousingWire:

Processing delays cut foreclosure activity by 27% in 1Q 2011: RealtyTrac

RealtyTrac’s March housing study reports a 15% decrease in foreclosure activity between the fourth quarter of 2010 and the first quarter of 2011, as well as a 27% decline compared to the same period a year ago. The online foreclosure property marketplace cites extended processing timelines as the main culprit for the drag.

While the numbers sound encouraging, RealtyTrac Chief Executive Officer James Saccacio said the numbers are artificially manipulated, and the decrease in activity is only temporary.

“The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low,” Saccacio commented. “Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork.”

Posted in Foreclosures, Housing Bubble, National Real Estate | 209 Comments

BOA CEO: Don’t bank on your house

Posted on April 13, 2011 by grim

From Reuters:

BofA CEO: Owners shouldn’t look at home as an asset

Homeowners may need to look elsewhere for long-term investment returns as housing prices in some areas may not rebound long-term, Bank of America Corp Chief Executive Officer Brian Moynihan said on Tuesday.

Moynihan, CEO of the largest U.S. bank, said at a state attorneys general summit that low population growth in some regions of the country indicated that prices might not rise in the wake of the worst financial crisis since the Great Depression.

“It’s sobering to think, but some people shouldn’t be thinking of (their home) as an asset,” Moynihan said at the 2011 National Association of Attorneys General conference. “They should be thinking of it as a great place to live.”

Moynihan said the long-term average annual rise in post-war U.S. home prices of 4 percent owed much to the explosion in domestic population and, in more recent times, the relaxation of credit standards across the mortgage industry.

“The reality is that the population is not expected to grow the way it did post World War I and World War II,” he said.

Posted in Economics, National Real Estate | 212 Comments

Housing is the best long-term investment a person can make!!!

Posted on April 12, 2011 by grim

(Brought to you by the folks who also recommended Beanie babies, Internet stocks, and Worldcom as the best long-term investments a person can make)

From Reuters:

Housing still best investment despite downturn: study

Even as a five-year slump in house prices drags on, eight-out-of-10 Americans say bricks and mortar remain the best long-term investment, according to a study released on Tuesday.

The survey by the Pew Research Center’s Social and Demographic Trends project found that 81 percent of respondents see housing as the best investment a person can make, despite a slump in prices that has knocked nearly a third off home values since 2006.

“The resilience of the American public’s belief in the investment value of home ownership is pretty impressive,” Paul Taylor, the project’s director and a co-author of the report, told Reuters.

“In modern economic history we’ve never had a five-year period where home values have fallen as long or as far as they have now,” he added.
…
It found that 37 percent “strongly” agreed that a home is the best long-term investment a person can make, while 44 percent “somewhat” agreed that homeownership is the best investment a person can make.

When the same questions were put to respondents in a CBS News/New York Times survey two decades ago, 49 percent “strongly agreed” that homes were the best investment, and 35 percent “somewhat agreed,” the study noted.

Nearly half of all homeowners said that their home was worth less now than before the recession began in late 2007, the survey found.

Of that group, the overwhelming majority said it would take at least three years for values to recover, while nearly half said it would take at least six years to recover.

From the WSJ:

Real Estate Bust Hasn’t Dimmed Americans’ Faith in Real Estate

Despite an extended slump in real-estate prices, most Americans still believe homes are the best investment, according to this a survey released today by the Pew Research Center.

According to the results of a telephone survey conducted in March, Pew found eight-in-ten adults believed a home was the best long-term investment a person could make.

This isn’t to say that Americans faith in real estate is unflappable. The “intensity” of the public’s faith has fallen off, according to the survey, with 37% of respondents saying they “strongly agree” that homeownership is the best investment, compared with 49% from a CBS News/New York Times survey conducted two decades ago, Pew said.

There is also some evidence that the next generation views real estate with a more pessimistic eye. According to Pew: “Adults ages 65 and older are more sold on the investment value of homeownership than any other age group. Some 48% of this older cohort agree that homeownership is the best long-term investment a person can make, compared with 39% of those ages 50 to 64; 32% of those ages 30 to 49; and 35% of those ages 18 to 29.”

Posted in Economics, National Real Estate | 176 Comments

Spring is in the air

Posted on April 11, 2011 by grim

From the Star Ledger:

Warmer weather, lower prices bringing out prospective homebuyers

Spring is here.

The birds are chirping, the daffodils are blooming and each weekend lawn signs are posted around New Jersey’s neighborhoods, guiding prospective homeowners to open houses.

After what has been a particularly rough housing market in the last few months, real estate agents said things may finally be looking up.

“When people want to buy, they want to buy, and stuff is moving,” said Perri Feldman, an agent with Keller Williams Realty who works in towns along the Midtown Direct train line.

Springtime is a popular home-buying season — warmer weather can encourage people to tour the neighborhood, plus buying now gives new owners enough time to finish renovations and move in by the time school starts in the fall. Add to that historically low interest rates, a glut of unsold homes, a job market that is slowly improving and homes priced under $600,000 that may finally align again with prospective homeowners’ salaries, and buyers who were on the fence are starting to make decisions now.

It can take weeks for sales data to be assembled, but statewide figures from February show pending home sales were up 19 percent compared with January, according to East Brunswick-based real estate valuator Jeffrey Otteau. There were more than 63,000 unsold homes on the market as of February, up more than 4,000 from December.

“I think that things get better from here, but it’s going to be a slow progression,” Otteau said. “It’s going to take a number of years before we get back to a housing market that feels anything like normal.”

Posted in Economics, New Jersey Real Estate | 137 Comments

Lowest priced areas see largest declines in North Jersey

Posted on April 10, 2011 by grim

From the Record:

Home values fall faster in lower-priced areas

North Jersey’s lower-priced neighborhoods were hit harder by the housing downturn last year, as home values plummeted by 9.1 percent in Passaic County, while Bergen County saw a milder 1.9 percent drop.

The split reflected higher rates of foreclosures and unemployment in lower-income areas, as well as tighter mortgage standards for marginal buyers.

Bergen County’s median home value was $412,000 last year, while Passaic’s was $294,000, according to an analysis of sales data by The Record. Home values in the region have declined 15 to 20 percent since they peaked in 2007, and are back to the levels of 2004.

Even with these declines, some analysts say the national and regional markets have not yet hit bottom.

“While the housing market still has a pulse, it remains faint,” East Brunswick appraiser Jeffrey Otteau wrote in a recent report on the statewide real estate market.

The price drops have been painful for homeowners who bought at the market’s peak. Brian Berkowitz, a watchmaker, paid $420,000 for a Hawthorne home in 2006, and sold it last year for $350,000 after a move to Texas. He had to bring money to the closing to pay off the mortgage.

“Of course, I was upset,” said Berkowitz, 36. “That’s life. There’s nothing you can do about it.”

On the other hand, the lower prices offer opportunities for buyers. Dave and Kelly Maver, for example, looked to Passaic County when they decided to move from their town house in Garfield. They were expecting their third child and needed more room.

“We started to look in Bergen County, but there was nothing we could afford,” said Dave Maver, who teaches in Paterson. “Even in a down market, we couldn’t find anything under $400,000 that didn’t need considerable work.” They ended up spending $260,000 for an updated four-bedroom house in West Milford, near Upper Greenwood Lake.
…
But the biggest factor in Passaic County’s larger price drop is probably the housing distress in urban areas. Prices are down 35 to 52 percent in Paterson, Haledon, Passaic and Prospect Park since the peak of the real estate boom in the mid-2000s.

In Paterson, about half of all sales are either short sales or foreclosures, according to John Susani, broker/owner of Coldwell Banker Susani Realty in Paterson. These tend to sell at a steep discount to the market.
…
But the larger pattern is that lower-priced areas in both counties — such as Garfield, Wallington and Ridgefield in Bergen — have experienced the largest declines. At the same time, median prices rose last year in some wealthier communities in northern Bergen County, including Glen Rock, Allendale and Old Tappan.
…
Over the four-year course of the real estate downturn, prices have dropped 30 percent in North Jersey’s lowest-priced communities, compared with 20 percent in lower middle-class areas and 17 percent at the high end.

Otteau said that pattern is to be expected in a recession, which has more impact in what he calls “secondary” housing markets, which are less desirable than primary markets with easier commutes and high-ranked school systems. Homeowners in secondary markets tend to have lower incomes and are more vulnerable to layoffs when recession hits, Otteau said.

In both counties, the number of sales last year was less than half the level seen during the housing boom. Even with the boost of a federal home buyer’s tax credit that expired in 2010, about 6,000 homes sold last year in Bergen and 2,700 in Passaic, compared with up to 13,000 homes a year sold in Bergen and 6,300 in Passaic during the peak years.
…
Prices are likely to continue to decline in the area, especially in Passaic County for the rest of this year, in part because foreclosures remain a threat, Otteau predicted. While the volume of foreclosures has dropped over the past six months in the wake of questions over lenders’ handling of legal documents, those issues are likely to be resolved soon. That will restart the foreclosure engine, dumping more foreclosed properties on the market, Otteau said, especially in urban and rural areas.

“This could trigger a next round of price declines in those submarkets,” Otteau said.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 120 Comments

Febuary CoreLogic HPI shows stabilization in nondistressed pricing

Posted on April 8, 2011 by grim

Prices in the New York Metro Area (New York-White Plains-Wayne, N.Y.-N.J. MSA) were up 0.8% in the past year, and up 2.6% if you exclude distressed properties.

From MarketWatch:

Home prices fall for seventh month in February

Home prices fell for a seventh straight month in February as a wave of distressed properties continued to wash over the U.S. market, real-estate data company CoreLogic Inc. said Thursday.

CoreLogic’s national home price index dropped 6.7% in February, versus the same month a year earlier. The decline was bigger than the January index reading, which was 5.5% lower than a year ago.

More than three years since house prices began to collapse in the U.S., the market is still struggling to absorb millions of properties that are in foreclosure or other stages of distress. In January, CoreLogic estimated there were 1.8 million residential units lingering in the shadows of the market. Read about shadow inventory here.

Excluding distressed sales, CoreLogic said home prices fell 0.1% in February, compared to a year earlier.

Despite the continued overall decline, home prices excluding distressed properties are showing signs of stability, according to Mark Fleming, chief economist at CoreLogic.

“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets,” Fleming said in a statement.

“Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared,” he added.

From Inman:

Greater stability in nondistressed real estate prices

U.S. home prices fell for the seventh month in a row during February, although price declines are increasingly concentrated in sales of distressed properties such as bank-owned homes, data aggregator CoreLogic said in releasing its home price index.

The CoreLogic home price index showed U.S. home prices down 6.7 percent from a year ago during February, a sharper decline than the 5.5 percent year-over-year drop registered in January.

Excluding distressed sales, the index was essentially flat, declining by 0.1 percent from a year ago compared to 1.4 percent in January. Distressed sales include short sales and real-estate owned, or “REO,” properties.

Posted in Economics, National Real Estate | 247 Comments

High taxes not just for homeowners

Posted on April 7, 2011 by grim

From the Record:

N.J. commercial property owners filing in record numbers

In 2007, the Shanahan brothers who own Washington Garage, a small auto repair shop on Main Street in Bergenfield, paid $22,107 in property taxes.

After the town conducted a revaluation two years later to bring its property assessments in line with market values, Washington Garage’s yearly property tax bill shot up 70 percent to $37,520. The revaluation shifted tax burdens from residents to commercial property owners.

Higher property taxes have squeezed the business, whose annual revenue has fallen from $1.4 million in recent years to about $900,000 annually and its profit margin has fallen below 1 percent, according to Brian Shanahan, who along with his brother Tim run the repair shop their grandfather founded 80 years ago.

“They’re bleeding us to death,” Shanahan said. “It’s just too much of a burden.”

As commercial real estate owners deal with the recession’s lingering effects, record numbers of them this year are expected to appeal the assessed values of their properties, which determine how much property taxes they pay to municipalities.

The appeals, if successful, could shift tax burdens and add to municipalities’ financial strain in a year in which employee pension costs are rising and as a 2 percent cap on property taxes goes into effect.
…
Multiple appeals for single properties build up over the years, and eventual settlements can clear multiple cases. For example, Elmwood Park-based paper products maker Marcal Manufacturing LLC recently settled six years’ worth of tax appeals with the town. This month, Elmwood Park sent Marcal two checks worth a total of $649,996, Borough Clerk Keith Kazmark said.
…
“This is the toughest year yet since the recession began,” said Julie Beglin, a vice president on the public finance team at the bond rating agency Moody’s Investors Service.

Posted in Economics, New Jersey Real Estate, Property Taxes | 279 Comments

Trulia: New York area sellers “stubborn”

Posted on April 6, 2011 by grim

From Fortune:

America’s most stubborn home sellers

Homeowners in certain cities are more likely to quickly reduce their price than others. And where are the sellers most resistant to price reductions? New York City, of course.
…
In many cities across America, home affordability has returned to pre-bubble levels, making real estate look like a bargain (see Top 10 cities for home buyers). But aside from big-time investors snatching up properties at lower prices, few people are actually buying amid high unemployment and tighter lending standards. In fact, in cities outside major metros with high foreclosure rates, sellers this Spring will likely cut their asking price — not once, but twice.

On average, U.S. home sellers will reduce their list prices after about 2.5 months, or 79 days on the market, by 8%, according to a new report by real estate website Trulia.com. After making one reduction, 35% of these sellers will make a second.

Not every city has been enduring the long slog, however. Sellers in America’s 50 largest cities have been more aggressive and quicker to make the first price reduction than the rest of the country, according to Trulia’s analysis of non-foreclosure listings of residential properties between March 2010 and 2011. Minneapolis, MN led as the state quickest to slash prices at an average of 45 days, followed by major cities in California such as Oakland and Sacramento ranging from 49 to 53 days.

Tara Nicholle-Nelson, Trulia’s residential real-estate expert, says the difference in urban areas has less to do with demand than with negotiating tactics. Urban sellers may be more aware that they need to negotiate downward than suburban and rural homeowners and may be able to afford to put the certainty of sale over money. These cities tend to discount their listings by slightly less than the national average at 7% and have a higher probability, 42%, of reducing their listing price again.
…
Detroit, with an average discount of 19%, led with the nation’s deepest price cuts during the initial listing, followed by other foreclosure hotspots including Miami, FL with 11%, Columbus, OH with 11%, Baltimore, MD with 10%, and Atlanta, GA with 9%. Since these areas are already gravely depressed, the deep cuts could likely have long-lasting impacts on future home values.
…
And what Trulia calls the most “stubborn” sellers often waiting the longest, 80 days, before cutting the initial listing price, are New York City, followed by El Paso, TX, Charlotte, NC, Cleveland, OH, Raleigh, NC, Louisville, KY, Kansas City, MO and Memphis, TN ranging from 70 to 79 days.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 137 Comments

No takers for Jersey timeshares

Posted on April 5, 2011 by grim

From the Press of Atlantic City:

Timeshares in southern New Jersey hit by foreclosure

When times get tough, the timeshare has got to go.

Owners of timeshare resorts in southern New Jersey apparently feel that way, as nearly 30 of them at the Fairway Villas at Seaview in Galloway Township have gone to sheriff’s sale in recent weeks. The condominium association was the plaintiff in some of the cases, and the banks that financed the purchase loans pursued other claims.

So far, there have been no takers.

“I have never seen one go to a third-party bidder,” in the few years she has worked with the sales, said Jillian Taylor, a clerk in the Atlantic County Sheriff’s Department.

Since Jan. 1, 27 timeshares at Fairway Villas have been put up for sheriff’s sale, said Deputy Sheriff Ted Kammer. Of those, 19 reverted to the condominium association or the lending bank and eight are pending.

Timeshares used to go up for sheriff’s sale every so often, but “all of a sudden, we’re seeing quite a few,” said Sheriff Frank Balles.

There are several timeshare resorts in Atlantic County, mostly in beach communities. Purchasers, often after listening to a high-pressure sales pitch, buy one week per year in a given unit. They are considered part-owners of a condominium, and pay annual maintenance fees to the resort’s homeowners association.

When owners default on those maintenance fees, the condominium association forecloses on the property — or in this case, the particular week at the unit — and it goes to sheriff’s sale, Balles said. If no one buys, the deed reverts to the association.

Posted in Economics, Employment, New Jersey Real Estate | 121 Comments

But they said they weren’t making any more land…

Posted on April 4, 2011 by grim

From the Record:

North Jersey housing vacancy rates rising

A growing number of houses and apartments sit empty in North Jersey, a result of the four-year-old housing bust.

From affluent to middle-class to poor neighborhoods, the percentage of vacant homes was higher in 2010 than in 2000, according an analysis of U.S. census data by The Record.

The vacant homes include a Saddle River Victorian that an investor hoped to flip; newly constructed Waldwick town homes, and boarded-up, bank-owned houses in Paterson. And then there are the rentals that, in more prosperous times, would have been filled with new college graduates starting their careers.

“We’re still suffering from the downturn in the housing market that started in 2007 and 2008,” said Dan McCue, an analyst with Harvard’s Joint Center for Housing Studies.

According to the Census, 16,658 — or one in 21 — houses, condominiums and apartments in Bergen County sat vacant in 2010, compared with one in 38 in 2000. In Passaic County, 9,181 — or one in 19 — were vacant last year, up from one in 27 a decade ago. Nationally, about one in nine year-round homes were vacant.
…
Although lots of vacant properties are in Paterson and other poorer areas, it’s not hard to find them in more affluent areas as well.

The hardest-hit areas include Alpine, where the vacancy rate rose from 3 percent to 8.8 percent, and Allendale, where it increased from 1.5 percent to 6.4 percent. Prospect Park’s rate climbed from 3.5 percent to 6.9 percent. Edgewater’s rate remained among the highest in the region, at 10.3 percent — apparently reflecting a large number of newly constructed condos that remain unsold.

“It transcends cities,” said John Susani, a Coldwell Banker agent in Paterson. He recently sold an 11-year-old, five-bedroom, bank-owned Colonial perched on a hilltop in Wayne to an investor for $200,000. The house was stripped clean of its plumbing and kitchen cabinets and appliances before it was lost to foreclosure.
…
Poppe Contractors of Franklin Lakes, for example, put up six town houses in Waldwick starting a few years ago. Only two are sold. The rest are on the market for $469,000, down more than $100,000 from their original asking price. The town houses have hardwood floors, three bedrooms, and luxury touches such as granite countertops and stainless steel appliances. They’re in walking distance to stores and the commuter train.

“You would think they’d be flying off the market, but they’re not,” said Lisella.
…
As a result of the higher vacancy rates, North Jersey rents have barely risen recently, and are unlikely to climb by more than 2 percent this year, according to Michael Fasano, vice president at the Elmwood Park office of Marcus & Millichap, a large commercial real estate brokerage. That compares with annual rent hikes of as much as 5 percent when a more robust economy drove up demand for apartments in North Jersey.

Posted in Employment, Housing Bubble, New Jersey Real Estate | 167 Comments

National snoop around your neighbor’s house day!

Posted on April 3, 2011 by grim

From the Record:

NJAR Open House Weekend kicks off home-buying season

With the spring home-buying season approaching, Realtors across New Jersey are showcasing inventories of homes for sale and celebrating the second year of Open House Weekend. Today and tomorrow (April 2 – 3), the New Jersey Association of Realtors (NJAR) aims to trump the success of last year’s event by featuring hundreds of participating Realtors and thousands of listed homes on display.

Editor’s note – Interesting, every year prior, Superbowl weekend was the kickoff. I suppose they’ll just keep rescheduling the kickoff until the buyer’s show.

People who are considering buying or selling a home are being urged to take advantage of this statewide event by either hosting an open house or visiting those that are open for viewing.

“Momentum is building, as Realtors across New Jersey are working with their clients to prepare listed homes and help map out buyers’ routes for Open House Weekend,” said NJAR President Allan “Dutch” Dechert. “This event makes home shopping easier for those looking to sell their properties and find a new place to live.”

Editor’s note – Open houses don’t sell houses, they are a sales tool for the sales agent showing the house to find new clients.

With mortgage interest rates still at record lows, Dechert stated that housing in New Jersey is more affordable than it has been in years. Customers can benefit by capitalizing on the opportunity to purchase a larger house or one in a more desirable neighborhood.

Editor’s note – Lord I feel dirty from posting that drivel

Posted in National Real Estate, New Jersey Real Estate | 98 Comments

Weekend Open Discussion

Posted on April 1, 2011 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labeled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 232 Comments

Corelogic: Shadow inventory still very high, especially in NJ

Posted on March 31, 2011 by grim

From USA Today:

1.8M ‘distressed’ homes could weigh on home prices for years

The U.S. had 1.8 million distressed homes in January that had yet to be listed for sale, a “shadow inventory” that is expected to weigh on home prices for years.

Market researcher CoreLogic said Wednesday that the shadow inventory had shrunk slightly the past year, from 2 million homes in January 2010.

The dip was driven by an improving economy, which helped more people stay current on their mortgages, strengthening in some home prices last year and more loan modifications, says Sam Khater, CoreLogic senior economist.

Khater expects the numbers to keep falling with an improving economy. But risks remain, including renewed declines in U.S. home prices and any hit to the national economic recovery.
…
As defined by CoreLogic, the shadow inventory includes homes that are more than 90 days delinquent on the mortgage, are in the foreclosure process or are already bank owned.

CoreLogic expects all of the shadow inventory to eventually become foreclosed homes. Foreclosed homes sell at a 20% to 30% discount to non-foreclosed homes so they represent an especially “virulent” threat to home prices, says Stan Humphries, chief economist at Internet real estate portal Zillow.com.
…
When adding them up, and considering the current pace of sales, CoreLogic estimates that it’ll take more than 21 months in New Jersey, Illinois and Maryland to sell the homes that are 90 days or more delinquent.

The long time frames underscore the scope and magnitude of the U.S. housing recession. “It’s hitting far and wide in America,” Humphries says.

From the WSJ Developments Blog:

Shadow Housing Inventory — Going Nowhere Fast

Another day, another troubling housing statistic: A shadow supply of millions of bank-owned and potentially foreclosed homes looms over the residential market, threatening to depress values even further and delay recovery.

The number, currently at 1.8 million units, represents a nine-month supply that, when added to the current 8.6-month supply of existing homes on the market, makes for sobering total that could depress values even further and delay recovery. A six-month supply is typically considered balanced.

Mortgage modifications likely helped whittle the shadow supply from 2 million a year ago. But, despite widespread efforts to help troubled home owners stay in their homes, CoreLogic doesn’t expect the shadow market to lighten up anytime soon.

While the trend “is improving somewhat, the current level and distressed months’ supply remain very high,” says Mark Fleming, CoreLogic’s chief economist. “The short-term weakness in prices and longer-term weakness in the drivers that affect the housing market imply that excess supply will remain high for an extended period of time.”

The usual suspects remain drags on the market: Many Americans are still unemployed as the economy hobbles toward health. Particularly troublesome for housing is that more Americans owe more on their homes than the mortgage, a factor only adding more fuel to the foreclosure crisis. Indeed, there’s another 2 million-or-so negative equity loans more than 50% “upside down” and likely to soon become part of the shadow inventory.

CoreLogic sees the most distress in New Jersey, Illinois and Maryland.

From the CS Monitor:

Housing market: Which state faces biggest foreclosure risks? New Jersey.

Conditions vary widely from state to state. By the CoreLogic analysis, the states with the largest “supply” of distressed properties (measured in months it would take to sell them) are New Jersey, Illinois, Maryland, Florida, Delaware, Georgia, Connecticut, Alabama, California, Washington, and Michigan.

Those states all exceed the national average of nine months’ supply of distressed properties that aren’t yet for sale.

Posted in Economics, Foreclosures, Housing Bubble, National Real Estate | 169 Comments

Prices? Still falling…

Posted on March 29, 2011 by grim

From S&P:

Home Prices Off to a Dismal Start in 2011

Data through January 2011, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show further deceleration in the annual growth rates in 13 of the 20 MSAs and the 10- and 20-City Composites compared to the December 2010 report. The 10-City Composite was down 2.0% and the 20-City Composite fell 3.1% from their January 2010 levels. San Diego and Washington D.C. were the only two markets to record positive year-over-year changes. However, San Diego was up a scant 0.1%, while Washington DC posted a healthier +3.6% annual growth rate. The same 11 cities that had posted recent index level lows in December 2010, posted new lows in January.

“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20-City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now.

“These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing. A few months ago we defined a double-dip for home prices as seeing the 10- and 20-City Composites set new post-peak lows. The 10-City Composite is still 2.8% above and the 20-City is 1.1% above their respective April 2009 lows, but both series have moved closer to a confirmed double-dip for six consecutive months. At this point we are not too far off, and that is what many analysts are seeing with sales, starts and inventory data too.

From the Washington Post:

Drop in home prices in January raises fear of double dip

Home prices dropped in nearly all major housing markets in the country in January, according to price index numbers released Tuesday. Analysts said the decrease might be a harbinger of a double-dip recession in the housing market.
…
The S&P/Case-Shiller 20-city composite index fell 3.1 percent from its January 2010 level. The 10-city index declined 2 percent.
…
Patrick Newport, an economist with IHS Global Insight, said normal seasonal factors probably account for nearly half of the decline in S&P’s index for December and January

“I don’t think the numbers were that ugly,” he said. “Prices are slowly coming near bottom. They’re not in a free-fall like they were in 2009.” Using his estimates, he expects housing prices nationally to decline another 5 percent and hit bottom — a double dip — in the second half of this year.

From Forbes:

Home prices hit pre-boom levels in 14 US cities

Damage from the housing bust is spreading to areas once thought to be immune.

In at least 14 major U.S. metro areas, prices are now at 2003 levels – when the housing bubble was just starting to inflate. Prices will likely fall further this year, making many people reluctant to buy or sell. That would push down sales and prices more.

The depressed housing industry is slowing an economy that has shown strength elsewhere. And it’s starting to hurt those who bought years before the housing boom began. In some cities, people who have paid their mortgages for a decade have little or no home equity.

Prices have tumbled in familiar troubled spots, such as Las Vegas, Cleveland and Detroit. But they’re also at or near 10-year lows in Denver, Atlanta, Chicago and Minneapolis – cities that weren’t as swept up in the housing boom and bust.

“It’s been tough on the lower class but it’s filtering up,” said Paul Dales, senior U.S. economist with Capital Economics. “It may be only a matter of time before it hits the wealthy.”

Posted in Economics, Housing Bubble, National Real Estate | 204 Comments

February pending home sales down 11% in the Northeast

Posted on March 28, 2011 by grim

From the AP:

More people signed contracts to buy homes in Feb.

More Americans signed contracts to buy homes in February, but sales were uneven across the country and not enough to signal a rebound in the housing market.

Sales agreements for homes rose 2.1 percent last month to a reading of 90.8, according to the National Association of Realtors’ pending home sales index released Monday. Sales rose in every region but the Northeast.

Signings were 19.6 percent above June’s index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a home-buying tax credit.
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The pace of sales varied from region to region. Signings fell 10.9 percent in the Northeast. They rose 2.7 percent in the South, 4 percent in Midwest and 7 percent in the West.

From the Real Deal:

Northeast home sales down due to “unusually bad” winter weather

The Pending Home Sales Index, a leading housing sector indicator based on signed contracts for homes that have not closed, increased 2.1 percent nationwide to 90.8 in February compared to a month earlier, according to the National Association of Realtors, but still lags significantly behind the 98.9 mark recorded a year ago. An index of 100 is equal to the level of contract activity in 2001.
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The Northeast was the only region in the country to suffer a decline in February, as the Pending Home Sales Index fell 10.9 percent to 65.5. But Lawrence Yun, chief economist at NAR, attributed the decline to “unusually bad” winter weather.

Posted in Economics, Housing Bubble, National Real Estate | 110 Comments