Home Prices Show Strongest Gain In 6 Years: NAR

By: Mark Lieberman, Five Star Institute Economist

Existing-home sales rose to 4.62 million (seasonally adjusted annualized rate) in April from a downwardly revised March rate of 4.47 million, the National Association of Realtors (NAR) reported Tuesday. Economists had forecast the April sales pace would be 4.66 million.

The median price of an existing home climbed 10.1 percent to $177,400 from $161,100 in April 2011, the strongest year-to-year gain since January 2006. The median price in April reached its highest level since July 2010 when it was $182,100.

The inventory of homes for sale in April rose to 2.54 million, the highest level since last November, bringing the months’ supply of homes on the market to 6.6.

The 10.0 percent yearly gain in the sales rate was the strongest since October when sales were up 14.0 percent year-over-year.

Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011, the NAR said.  Foreclosures sold for an average discount of 21 percent below market value in April (compared with an average discount of 19 percent in March), while short sales were discounted 14 percent in April compared with 16 percent in March.

The months’ supply of existing homes for sale remains well below the July 2010 cyclical peak of 12.4 which had been the highest level since 1982. Inventories as tracked by the NAR are 20.3 percent below their year ago level. However, anecdotal evidence suggests there is still a large “shadow” inventory of homes available for sale, especially bank-owned properties.

Regionally, existing-home sales rose in April in every region of the country led by a 5.1 percent month-to-month increase in the Northeast where sales were up19.2 percent over April 2011. Sales rose 4.4 percent over March in the West (a 7.3 percent year-year gain), 3.5 percent in the South (6.5 percent year-year) and 1.0 percent in the Midwest (14.4 percent year over year).

The median price of an existing home rose month-to-month and year-to-year in all four regions. At $256,600, the median price of an existing home reached its highest level since August 2010. The median price of an existing home in the South rose to $153,400, the highest level since July 2010 and the median price of an existing home in the West rose to $221,700, also the highest since July 2010.

The year-to-year price gain in the West, 15.9 percent, was the strongest since November 2005. The year-to-year price increase in the Northeast was the first since last June.

Source: http://www.dsnews.com/articles/existing-home-sales-rise-in-april-for-after-two-month-month-drops-prices-show-strongest-year-year-gain-6-years-2012-05-22

April 2012 Greater Metropolitan Denver Home Market Statistics

Below is an overview of the of the March vs April stats along with a YTD 2011 vs YTD 2012 comparison.


Shadow Inventory: 46 Months to Clear Distressed Housing Supply

By: Carrie Bay

It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data.

The agency’s latest estimate came in one month shy of the liquidation timeline determined in the fourth quarter of 2011.

While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets, which prevented any significant reduction in S&P’s months-to-clear estimate, the agency explained in its report.

Regional variations in how quickly servicers can clear the backlog of nonperforming loans are primarily due to differences in foreclosure procedures, judicial vs. non-judicial.

As of first-quarter 2012, S&P says its months-to-clear estimate in judicial states was almost 2.5x as long as non-judicial states.

S&P includes in the shadow inventory all outstanding properties on which the mortgage payments are 90 or more days delinquent, properties in foreclosure, and properties that are REO. The agency also includes 70 percent of the loans that became current, or “cured,” from 90-day delinquency within the past 12 months because S&P says these loans are more likely to re-default.

S&P’s calculation of the months to clear the shadow inventory is the ratio of the total volume of distressed loans to the six-month moving average of liquidations. Although S&P’s analysis of the shadow inventory uses only non-agency loan data, the agency’s analysts believe the months-to-clear is similarly high for the market as a whole.

The volume of these distressed U.S. non-agency residential mortgages—which excludes loans from government sponsored entities, such as Fannie Mae and Freddie Mac—remained extremely high at $354 billion in the first quarter, according to S&P. The agency does note, however, that the industry’s distress volume has declined in each quarter since mid-2010.

To put the shadows into perspective, S&P says this latest number, which is based on the original balances of the loans, represents slightly less than one-third of the outstanding non-agency residential mortgage-backed securities (RMBS) market in the United States.

The New York City metropolitan statistical area (MSA) has the highest months-to-clear in the nation, at 202 months.

S&P also reported that the U.S. monthly first default rate fell to 0.67 percent in March 2012, the lowest level since May 2007. The first default rate is the percentage of loans that became 90-plus-days delinquent in that month for the first time, as a percent of all loans that have never before been at least 90 days or more past due.

This means that properties are entering the shadow inventory at a slower rate. S&P says with this improvement, the speed at which servicers can liquidate or cure nonperforming loans will determine the size of the shadow inventory going forward.

Default rates have been falling since first-quarter 2009 and the average national liquidation rate has stabilized, according to S&P—both factors that bode well for getting a handle on the magnitude of the industry’s shadow inventory and its inevitable impact.

Source: http://www.dsnews.com/articles/shadow-inventory-update-46-months-to-clear-supply-of-distressed-homes-2012-05-14

Fannie Mae: Confidence In Economy And Home Values Increasing

By: Esther Cho

Both the expectation for home prices and the percentage of those who think the U.S. economy is on the right path reached record highs in Fannie Mae’s April 2012 National Housing Survey.

Americans continue to expect home prices to go up, with the projection averaging 1.3 percent over the next 12 months, the highest value recorded.

At 71 percent, a high percentage of Americans still say it is a good time to buy while the percentage who said it is a good time to sell was 15 percent, a 1 point increase from March.

“Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations,” said Doug Duncan, Fannie Mae chief economist.

Duncan also mentioned the recent figures on employment in April, which showed a decline in job growth.

“Friday’s report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year,” said Duncan.

The expectation for average rental prices decreased slightly to 3.6 percent; in March, respondents expected rent to go up by 4.1 percent over the next 12 months.

If respondents were to move, 32 percent said say they would rent while 64 percent said they would buy. The percentage of those who said they would rent increased 2 points and reached the highest level since November 2011.

The percentage of Americans who believe the economy is on the right track rose to 37 percent, a 2 point increase from the previous month and the highest level in the survey’s two-year history. Still, an even greater 56 percent believe the economy is moving in the wrong direction.

Also, 23 percent of Americans reported their household income is significantly higher than it was a year ago, while 36 percent said their household expenses are significantly higher since the same time period. Both categories rose 2 percentage points compared to March.

The percentage of those who think their financial situation will decline was unchanged from the previous two months at 12 percent, the lowest value recorded in over a year.

The Fannie Mae survey polled a nationally representative sample of 1,000 respondents aged 18 and older between April 4, 2011 and April 27, 2012.

Source: http://www.dsnews.com/articles/fannie-mae-more-americans-expressing-confidence-in-economy-and-home-values-2012-05-07?utm_source=dlvr.it&utm_medium=twitter

Stunned Home Buyers Find the Bidding Wars Are Back

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.

From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.

“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking to buy his first home in Seattle’s Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.

Competitive bidding in the current environment isn’t producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.

An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.

Read full article: http://online.wsj.com/article_email/SB10001424052702304723304577366294046658820-lMyQjAxMTAyMDIwNzEyNDcyWj.html?mod=wsj_share_email_bot

Impatient Buyers Target Homes Before They Go on Sale

By Jim Buchta

(MCT)—House hunters frustrated with the market’s supply of homes have shifted their search from the streets to underground.

More buyers are targeting homes that haven’t yet hit the market, a trend agents say will grow as inventory shrinks and the mismatch of what’s available and what’s desired continues.

Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush. But lower-priced houses are becoming a bigger part of the mix because even those are in short supply. Read the rest of this entry »

5 Signs That It’s A Good Time To Sell

Why desperate homeowners could find relief this year

By Dian Hymer, Monday, April 23, 2012. Inman News®

Traditionally, most homes have sold during the spring months. In the  current volatile housing market, the time of year is not the most reliable predictor  of the best time to sell.

Homes certainly show better in spring than they do on a dark and dreary  winter day. Lately, however, weather patterns are hard to predict.

The weather has some effect on home sales. It can slow things down if  incessant rain keeps sellers from being able to prepare their homes for sale.  However, a bigger influence on the housing market is the overall economic  situation and its impact on buyers’ psyche.

Normally, the home-sale market ramps up in March or April and stays busy  until the beginning of July when the market tends to slow down for the summer.  The 2011 home sales went counter to this. The market was active at the  beginning of the year, but stalled in April. If you waited until spring to sell  last year, you would have missed the best selling opportunity of the first half  of 2011.

The early slowdown was partially due to the expiration of the homebuyer  stimulus package. The homebuyer tax credit program accelerated home purchases  creating a mini bubble in 2010 that was followed by a significant slowdown in home  sales.

Negative economic news played a big part in the sluggish home sales  during most of last year. The stock market was unpredictable, and the earthquake in Japan had repercussions for many  industries. Plus,  Greece  was on the brink of bankruptcy, and the future of the European Union was in  doubt.

Bad economic news and massive uncertainty lowers consumer confidence.  Buyers need to have jobs, but they also need to feel confident in their future  to take on a major purchase like a house.

HOUSE HUNTING TIP: The best time to sell is when consumer confidence is  on the upswing; interest rates are low; unemployment is decreasing; the  economic news is mild; and there are more buyers in your local market niche  than there are sellers. A high-demand, low-inventory market gives sellers an  edge.

The Conference Board Consumer Confidence Index fell in March  2012 to 70.2 (1985=100), down from 71.6 in February, when it was up sharply.

Lynn Franco, director of The Conference Board Consumer Research Center,  attributed the improvement in consumer confidence in February to less pessimism about  current business and employment conditions and more optimism about the  short-term outlook for the economy and job prospects despite a rise in gas prices. Franco said the moderate decline seen in March was “due solely to a less favorable short-term outlook.”

Interest rates are currently at historic lows and are expected to stay  low for the rest of the year. Even with low rates, buyers have had difficulty  qualifying due to rigid mortgage approval underwriting.

Capital Economics, an analytics firm, expects the housing crisis to end  this year partially due to lenders loosening credit. According to Capital  Economics, one indicator of loosening is that banks are now lending 82 percent  of loan-to-value (LTV), compared with a low of 74 percent LTV reached in  mid-2010. This means qualified buyers need less cash to buy, which should lead  to more sales this year, although higher home prices are not expected.

These positive indicators combined with a drop in homes for sale at the  end of 2011 and a decrease in unemployment may provide an opportunity for sellers  in spring 2012, provided their homes are priced right for the market. A major  surprise on the economic front could change the picture.

THE CLOSING: Regardless of the economic indicators, the best time to  sell is when the time is right for you.

Source: http://www.inman.com/buyers-sellers/columnists/dianhymer/5-signs-its-a-good-time-sell?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+inmannews+%28Inman+News+-+Headlines%29