The 15 Best Housing Markets for the Next Five Years

By Mamta Badkar | Business Insider – Fri, Nov 30, 2012 3:34 PM EST

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  Yahoo! Finance/Thinkstock - Santa Barbara, California

National home prices are expected to climb 0.3 percent in the next year, according to the latest home price report by Fiserv Case-Shiller. But over the next five years, home prices are projected to rise 3.3 percent.

We drew on Fiserv Case-Shiller data to identify the best housing markets for the next five years. The top 15 cities are ranked by the projected annualized change in home prices between Q2 2012 and Q2 2017. We also included the median home price, median household income, unemployment rate, and the change in home prices since their peak to offer a broader view of the local economy and housing market.

Note: The median family income is for Q1 2012, home price data is for Q2 2012. Unemployment data is as of August 2012, and population data is for 2011.

Glens Falls, New York

Google MapsAnnualized expected growth from 2012 - 2017: 7.7 percent

Home prices have declined 7.8 percent in Glen Falls since they peaked in Q4 2008. The median home price is $159,000 which is lower than the national median of $181,000.

Glen Falls has a population of 128,996, an unemployment rate of 9.1 percent, and a median family income of $64,300.


Yuma, Arizona

Google MapsAnnualized expected growth from 2012 - 2017: 7.7 percent

Home prices have fallen 37.1 percent in Yuma since their Q4 2006 peak.

It has a population of 200,870, an unemployment rate of 25.8 percent, and a median family income of $45,400, lower than the national median of $62,900.



Eugene-Springfield, Oregon

Wikimedia CommonsAnnualized expected growth from 2012 - 2017: 7.7 percent

Eugene-Springfield home prices have decreased 22.9 percent since their Q2 2007 peak. The metro has a population of 353,416, an unemployment rate of 8.8 percent, and a median family income of $53,200.




Yakima, Washington

Wikimedia CommonsAnnualized expected growth from 2012 - 2017: 7.8 percent

Home prices in Yakima are down 8.1 percent since their Q1 2009 peak. It has a median home price of $168,800.

Yakima also has a population of 247,141, an unemployment rate of 10.2 percent, and a median family income of $47,800.



Brunswick, Georgia

Wikimedia CommonsAnnualized expected growth from 2012 - 2017: 7.9 percent

Home prices in Brunswick have tumbled 32.3 percent since their Q4 2007 peak.

It has a population of 112,923, an unemployment rate of 10.4 percent, and a median family income of $50,500, that is below the national median.


Tucson, Arizona

Byways.orgAnnualized expected growth from 2012 - 2017: 7.9 percent

Tucson's home prices have plunged 42.6 percent since their Q1 2006 peak, and it has median home price of $153,000.

It also has a population of 989,569, a median family income of $57,400, and an unemployment rate of 7.5 percent.



Gulfport-Biloxi, Mississippi

Ed Schipul / FlickrAnnualized expected growth from 2012 - 2017: 8.0 percent

Home prices in the Gulfport-Biloxi metro area have slipped 20.4 percent since their Q4 2007 peak, and the metro has a median home price of $101,000.

It has a population of 253,511, an unemployment rate of 8.4 percent and a median household income of $52,700.


Napa, California

Google MapsAnnualized expected growth from 2012 - 2017: 8.0 percent

Home prices in Napa have plunged 50.1 percent since they peaked in Q1 2006, and the city has a median home price of $342,000.

Napa has a population of 138,088, an unemployment rate of 8.1 percent, and a median family income of $77,700 above the national median.

Ocala, Florida

Annualized expected growth from 2012 - 2017: 8.0 percent

Home prices in Ocala are down 49.1 percent from their Q3 2006 peak.

But Ocala has a high unemployment rate of 10.1 percent, a median family income of $44,600, well below the national median of $62,900, and a median home price of $105,000.


Santa Barbara-Santa Maria-Goleta, California

Wikimedia CommonsAnnualized expected growth from 2012 - 2017: 8.4 percent

The Santa Barbara-Santa Maria-Goleta metro area has a population of 426,878, a median family income of $69,000, and an unemployment rate of 8.1 percent.

Home prices are down 52 percent from their Q3 2006 peak, and the metro has a median home price of $290,000.


Sebastian-Vero Beach, Florida

Google MapsAnnualized expected growth from 2012 - 2017: 8.7 percent

Sebastian-Vero Beach home prices have fallen 50.9 percent since their Q4 2005 peak.

The metro has an unemployment rate of 10.6 percent, and a median family income of $58,600, while the median cost of a home is $150,000.


Madera-Chowchilla, California

Google MapsAnnualized expected growth from 2012 - 2017: 8.8 percent

Home prices in the Madera-Chowchilla metro area have fallen 54 percent since their peak in the third quarter of 2006.

At 14.2 percent, the unemployment rate is much higher than the national average of 8.1. The metro has a population of 152,925 and a low median family income of $52,700.


Santa Fe, New Mexico

Wikimedia CommonsAnnualized expected growth from 2012 - 2017: 8.9 percent

Santa Fe's home prices have fallen 21.7 percent from their Q4 2007 peak. The city has a population of 145,648, an unemployment rate of 5.4 percent below the national average, and a median household income of $59,600, below the national median of $62,900.



Panama City-Lynn Haven-Panama City Beach, Florida

Wikimedia CommonsAnnualized expected growth from 2012 - 2017: 9.5 percent

Home prices in the Panama City-Lynn Haven-Panama City Beach metro area have fallen 45.3 percent since their Q1 2006 peak. It now has a median home price of $137,000.

The metro has a population of 169,856, an unemployment rate of 8.8 percent, and a median family income of $56,300.


Medford, Oregon

Bailey Weaver / FlickrAnnualized expected growth from 2012 - 2017: 11.2 percent

Medford's home prices have fallen 39.8 percent since their peak in Q2 2006. The metro has a population of 204,822 and median family income of $49,600.

At 10.8 percent Medford's unemployment rate is higher than the national average.

Measure 79

As you may have heard Measure 79 is on the ballot for the November 6^thelection. This measure was created to preemptively block any future tax on the transfer of any interest in real property in Oregon. As a REALTOR® and advocate for private property rights, I fully support this measure. Homes are the most significant asset that people invest in and a transfer tax wouldn’t just impact the sale of a home, it would affect ANY transfer of a title on any real property. So it would potentially impact refinancing, transferring an inheritance, deeding land, etc. Any transfer tax will place an additional burden on property owners and will ultimately diminish the equity that they have worked so hard to build, if they even have any equity after the past 4 years of economic struggle. As our economy starts to show slow signs of recovery, an additional tax now would undo the progress that has been made.

As a real estate expert I want to pass onto you the importance of Measure 79 and how it will protect the equity you have in your property as well as reducing the cost of purchasing a home or passing your asset to a loved one in the future. Please help me in passing on the message that ‘Yes on 79’ helps today’s as well as tomorrow’s property owner. Please visit www.yesonmeasure79.com for more information.

A "Yes" vote on Measure 79 will stop state and local governments from imposing a new tax on real estate in Oregon.

  

 

 

 

Home prices jump 2.2% in May

NEW YORK (CNNMoney) -- In a sign that the U.S. housing market is recovering, home prices rose for the second straight month in May, according to an industry report issued Tuesday.  Home prices climbed 2.2% compared with a month earlier, according to the S&P/Case-Shiller 20-city home price index. Prices are still off 0.7% compared with May 2011, but that's the lowest year-over-year decline in 18 months, according to David Blitzer, a spokesman for S&P.   The report gave support for industry experts who have been saying that the long-awaited housing market recovery is underway. But Blitzer sounded a note of caution.  "We need to remember that spring and early summer are seasonally strong buying months so this trend must continue throughout the summer and into the fall," he said.  Adjusted for seasonal effect, the price gain shrank to 0.9%, but that's still a strong increase.  The roller coaster ride for home prices took them up 106.5% between January 2000 and their high of July 2006. After they peaked, prices lost more than 34% of their value. The gains of the last two months have pared that loss to 33%. 

 All 20 cities in the index posted positive returns, led by Chicago, where prices rose a whopping 4.5% month-over-month. In Atlanta, where prices dropped 17% over the 12 months ended in April, turned that around in May with an increase of 4%.   Other big winners were San Francisco, up 3.9%, and Minneapolis, where prices rose 3%. The smallest gain was recorded by Detroit, where prices inched up 0.4%. Phoenix posted the best annual return by far, up 11.5%.   "Investor money has come in to some of the hard-hit markets like Phoenix and Florida cities," said Mike Larson, a real estate analyst with Weiss Research.   That has helped stabilize housing by shrinking inventory.   

An ongoing change in the mix of homes sold may be contributing to improving prices, according to Stan Humphries, chief economist for real estate website Zillow. Fewer homes are going as foreclosures, which banks discount heavily to move quickly.  Short sales are claiming a bigger market share, according to David Crowe, chief economist for the National Association of Home Builders. They're often in better condition than foreclosures and the selling process plays out more like conventional sales. Prices, as a result, are higher for short sales.  The strength of the gains was unexpected. A panel of experts put together by Briefing.com had projected a year-over-year decline of 1.8% but the big jump in May prices led to the more modest 0.7% dip.   Larson pointed out that Case-Shiller is a lagging housing market indicator. It is a three-month rolling average through the end of May, so some of the data is almost five months old. Back then, the overall economy seemed to be on the upswing and unemployment was dropping.   Those improvements have flattened out. The unemployment rate actually ticked up in May to 8.2% and stayed at that level in June.  "Momentum will fade as we enter the summer months," said Larson. "The broad economy can't seem to generate much growth."  Crowe said that there has also been a fundamental change in market confidence. Buyers are beginning to believe the market has hit bottom and that the time to buy is now, especially with mortgage rates at historic lows.  Humphries said there could be ups and downs during the next six months, but buyers should not be overly concerned about that.  "This will be a function of seasonality in the share of sales that are foreclosures, which will rise as overall sales decline in the fall and winter," he said. "Overall, we remain cautiously optimistic that home values are at a bottom nationally even while our expectations for price appreciation in the next couple of years are muted. "

U.S. Fixed Rate Mortgages Hit New Record-Breaking Lows

According to Freddie Mac's latest Primary Mortgage Market Survey (PMMS), average fixed mortgage rates continuing to find new all-time record lows amid recent data showing less consumer spending and a contraction in the manufacturing industry. The average 30-year fixed-rate mortgage has matched or hit a new record low in 10 of the last 11 weeks. The 1-year ARM also averaged a new record low this week.

Frank Nothaft, vice president and chief economist of Freddie Mac said, "Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new all-time record lows. Growth in personal expenditures was revised downward to an annualized rate of 2.5 percent in the final GDP estimates for the first quarter of the year. In addition, monthly consumer spending in April was revised from a 0.3 percent gain to 0.1 percent and was unchanged in May. Finally, the Institute for Supply Management reported that manufacturing shrank in June, the first decline since July 2009."

30-year fixed-rate mortgage (FRM) averaged 3.62 percent with an average 0.8 point for the week ending July 5, 2012, down from last week when it averaged 3.66 percent. Last year at this time, the 30-year FRM averaged 4.60 percent.

15-year FRM this week averaged 2.89 percent with an average 0.7 point, down from last week when it averaged 2.94 percent. A year ago at this time, the 15-year FRM averaged 3.75 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent this week, with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 3.30 percent.

1-year Treasury-indexed ARM averaged 2.68 percent this week with an average 0.5 point, down from last week when it averaged 2.74 percent. At this time last year, the 1-year ARM averaged 3.01 percent.  

California's Low Listing Inventory Becomes an Issue as Home Sales Rise to Highest Levels in Three Years

Los Angeles, CA

(Los Angeles, CA) -- The California Association of Realtors (C.A.R.) reported today that California's housing market continued to improve in May, with home prices posting solid gains for the third straight month and home sales well above last year's pace.

"California home sales were strong in May, continuing the gradual recovery of the California housing market," said C.A.R. President LeFrancis Arnold. "First-time buyers are recognizing that the housing market has hit bottom and are now seeing a sense of urgency to take advantage of ultra-low interest rates and advantageous home prices. Additionally, trade-up buyers are returning to the market after sitting it out for the past few years to get in on favorable home prices."

Closed escrow sales of existing, single-family detached homes in California climbed 3.4 percent from April's revised 553,670 to a seasonally adjusted annualized rate of 572,260 in May, according to information collected by C.A.R. from more than 90 local Realtor associations and MLSs statewide. May sales surged 21.5 percent from May 2011's revised 470,910 pace, marking the highest year-over-year sales increase since May 2009. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the May pace throughout the year and is adjusted to account for seasonal factors that typically influence home sales.

The May 2012 sales pace was the highest since February 2009, when 598,770 homes were sold at a seasonally adjusted annualized rate.

Home prices appear to be stabilizing, with the median home price posting both month-over-month and year-over-year gains for the third consecutive month. The statewide median price of an existing, single-family detached home was $312,110 in May, the highest since September 2010.

May's price was up 1 percent from a revised $309,050 in April and 6.6 percent from a revised $292,850 recorded in May 2011. The May 2012 figure was 27.3 percent higher than the cyclical bottom of $245,230 reached in February 2009. The median price has posted above the $300,000 level for the second straight month after remaining below that mark for 15 months.

The increase in the median price can be attributed to the strong sales increase in the higher-priced coastal regions, particularly in the San Francisco Bay Area, where job growth is strong and the economy is growing faster than other areas of the state.

California's housing inventory sank lower in May, with the Unsold Inventory Index for existing, single-family detached homes dropping to 3.5 months in May, down from 4.2 months in April. May's housing inventory was down from a revised 5.7 months in May 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal.

Leslie Appleton-Young

"Low housing inventory continues to be the critical issue in the California market," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Inventory levels have not been this low since December 2005, when the supply matched the current level. The Bay Area has the greatest shortage of homes for sale, with inventory levels in the two- to three-month range for Santa Clara, San Mateo, Alameda, and Contra Costa counties."

Interest rates continued their downward trend in May, with 30-year fixed-mortgage interest rates averaging 3.80 percent, down from 3.91 percent in April and 4.64 percent in May 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.74 percent in May, down from 2.78 in April and 3.13 percent in May 2011.

Homes are moving faster on the market with the median number of days it takes to sell a single-family home dropping to 46.6 days in May, down from a revised 48.9 days in April and 52.0 days in May 2011.

Short Sales up in Q1 2012

Monday, June 4, 2012 — Short sales increased dramatically during the first quarter, rising 25% over year-ago figures and reaching a three-year high, according to foreclosure research firm RealtyTrac.
Homes acquired in pre-foreclosure, generally via short sales, grew 16% from the previous quarter to 109,521 pre-foreclosure sales and increased 25% from the first quarter of 2011.
Transactions involving all distressed property made up a larger portion of the homes sold in the first quarter of 2012 — 26% of all U.S. home sales in 1Q, up from 22% in the fourth quarter of 2011 and 25% from the year-ago period.
The average sales price of a home in foreclosure or bank-owned hit $161,214, down 1% from the previous quarter and down 2% from the first quarter of 2011. The price of homes in foreclosure is 27% below the average sales price of nondistressed home sales for the same month. That figure also is down from the 29% discount on foreclosures experienced in the first quarter a year earlier.
“Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure — typically via short sale,” said Brandon Moore, chief executive officer of RealtyTrac.
“Those pre-foreclosure sales hit a three-year high in the first quarter even as the average pre-foreclosure sales price dropped to a record low for our report. Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions.”

Short Sale Process Expected to Get Shorter

 

Tuesday, May 29, 2012 — The short-sale process is expected to get shorter starting June 15. New guidelines issued under the Federal Housing Finance Agency will require Fannie Mae and Freddie Mac to give home buyers of short sales notice of their final decision within 60 days. The new guidelines also will require the mortgage giants to respond to initial short-sale requests within 30 days of receiving an offer from a potential buyer.
The speedier process is expected to be a boost to the housing market, Michael McHugh, president of the Empire State Mortgage Bankers Association, told the New York Times. Home buyers and sellers often have to wait months before they receive a decision from a lender on an offer for a short sale. Some deals fall apart just from the long wait alone.
Short sales have been increasing in recent months, as many lenders find them more appealing than foreclosures, which can be much more costly and take longer to remove from their books.
Short sales now outpace foreclosure sales in many parts of the country. Short sales represent more than 14 percent of existing-home sales, according to CoreLogic housing data from March, the most recent month available.

McHugh says that a faster short-sale process may be particularly helpful in speeding the recovery in judicial states, where foreclosures must go through the courts before they are approved. For example, in New York, judicial foreclosures can take a year or longer to be approved. Now short sales may be viewed by defaulting home owners as more of an option in avoiding foreclosure.
“There should be a significant improvement in the turnaround,” McHugh said regarding housing markets with judicial foreclosure processes.

More Good News for the Housing Market

10 Housing Markets set for Double-digit Price Gains

NEW YORK (CNNMoney) -- Ten hard-hit housing markets will record double-digit price increases through 2013, according to a report Wednesday. And with mortgage rates low, many house hunters have already started to pounce on bargains, said David Stiff, chief economist at Fiserv, a financial analytics company that prepared the forecast. "Some markets may have overshot to the downside, and people are jumping in to try to catch the bottom," Stiff said. Nationwide, home prices will start rebounding late this year and gain an average of 4% a year over the next five years, Fiserv projects.

In a separate report released Wednesday by the National Association of Realtors, the national median home price declined by just 0.4% in the three months ended March 31 compared with the same period in 2011. About half of the 146 metro-area markets surveyed by NAR showed a price increase, as buyers make inroads into the supply of homes for sale all across the country. National inventory has dropped by 22% compared to a year earlier… 0:00/4:27Buffett's carpet chief eyes housing bounce Home prices will also be driven higher as banks opt for short sales instead ofrepossessions. Repossessed homes sell for between 25% and 50% less than comparable homes sold by conventional sellers, according to Daren Blomquist, a spokesman for RealtyTrac, which markets foreclosed properties. Bank repossessions often go through lengthy foreclosure processes and long periods of vacancy, during which they may deteriorate and lose value.

Fiserv's Stiff forecasts that Madera, Calif., will produce the largest home price gain over the next two years. This market bubbled during the housing boom, with the median home price jumping above $300,000, according to the National Association of Home Builders. Prices have since tumbled 53% off their peak, to about $125,000. Fiserv is projecting a price jump of 21.5% by the end of 2013 with 16.5% of that increase coming next year.Other double-digit gainers will include Medford, Ore., with a 20.1% rise, Yuma, Ariz., with 16.7%, and Corvallis, Ore., with 11.4%.

Medford, Oregon

Median home price: $144,000   Drop since market peak: 37.1%  Forecast gain through 2013: 20.1%

A hot spot among retirees, this small city located just north of the California border is staging a comeback. "We now have the lowest [housing] inventory in six years and the strongest buyer traffic in seven years," said Colin Mullane, a real estate broker at Full Circle Real Estate in Medford. Homes are selling at a quicker pace and at higher prices than they did over the past several years, according to the local multiple listing service. Another promising sign: more distressed properties are being sold in short sales rather than going into foreclosure.One factor could hinder the housing market recovery, however: unemployment. In March, unemployment stood at 11.7%, well above the national average. But a steady influx of retirees should help. According to Mullane, many seniors are drawn to the area for its mild Mediterranean-like climate, excellent medical facilities and reasonable cost of living.

Where Home Prices Are Rising Fastest

The tide is already starting to turn in some U.S. housing markets, with home prices in these metro areas expected to climb anywhere between 10% and 21% by the end of next year, according to Fiserv.

1. Madera, Calif.

Courtesy: Madera County EDCMedian home price: $125,000
Drop since market peak: 53.1%
Forecast gain through 2013: 21.5%

Home buyers started coming back to Madera earlier this year.

"Homes are selling quickly and with competing bids," said Esther Riffel, president of the Madera Association of Realtors.

A lot of that has to do with the dirt-cheap prices. At $125,000, the median home price is well below the national average of $163,000, according to Fiserv.

And buyers get plenty of home for their money: Recently, a 2,400 square-foot home with three bedrooms and three baths sold for just $127,000. Five years ago, the same home went for about $375,000.

However, part of the reason the deals are so good is that most of the sales are foreclosures or short sales, said Riffel.

Another thing to be wary of in Madera: The jobs picture. As in most nearby cities in California's Central Valley, unemployment is high, at 16.6% in March, according to the Bureau of Labor Statistics.

2. Medford, Ore.

Courtesy: Medford CVBMedian home price: $144,000
Drop since market peak: 37.1%
Forecast gain through 2013: 20.1%

A hot spot among retirees, this small city located just north of the California border is staging a comeback.

"We now have the lowest [housing] inventory in six years and the strongest buyer traffic in seven years," said Colin Mullane, a real estate broker at Full Circle Real Estate in Medford.

Homes are selling at a quicker pace and at higher prices than they did over the past several years, according to the local multiple listing service. Another promising sign: more distressed properties are being sold in short sales rather than going into foreclosure.

One factor could hinder the housing market recovery, however: unemployment. In March, unemployment stood at 11.7%, well above the national average.



But a steady influx of retirees should help. According to Mullane, many seniors are drawn to the area for its mild Mediterranean-like climate, excellent medical facilities and reasonable cost of living.

3. Yuma, Ariz.

Courtesy: Yuma Visitor CenterMedian home price: $105,000
Drop since market peak: 37.4%
Forecast gain through 2013: 16.7%

Yuma can thank its location for helping it recover from the housing meltdown. The Arizona town sits in a Foreign Trade Zone, where products and materials can be moved between Yuma and Mexico duty-free.

And the nearly constant sunshine also makes it a center for renewable energy development, with companies like First Solar and Abengoa Solar hiring hundreds of workers, according to Julie Engel, director of the Yuma Economic Development Corporation.

Agriculture is another major industry here, especially due to the long growing season.

All that is helping, but the economy is still struggling. The area has one of the nation's highest unemployment rates, nearly 24% in March. And median household income of just over $45,000.

A structural problem for the economy is that it's seasonal with agricultural workers often facing months of idle time, according to Moody's Analytics. The workforce also tends to be poorly educated with only 15.9% holding a bachelor's degree or higher, according to the Census Bureau.

Yet, home prices are so cheap that the vast majority of families earning the area's median income can afford a home, according to the National Association of Home Builders.


4. Corvallis, Ore.

Courtesy: Corvallis Visitor CenterMedian home price: $224,000
Drop since market peak: 11.4%
Forecast gain through 2013: 13.2%

The economic fortunes of the Corvallis area are closely tied to Oregon State University, which not only hires a lot of workers but has also spawned a handful of local businesses.

Recently, the local economy has been on an upswing. The unemployment rate has fallen by nearly one percentage point in the past year to 6.1%. And enrollments at the university climbed by 8% and 5% over 2010 and 2011, respectively, boosting demand for rental units.

That has created an opportunity for real estate investors, who are buying up homes priced below the median level and renting them out to college students, said Jimmy Yang, an associate professor of finance at Oregon State

Supply is limited though, according to Stuart Conser of Conser Realty. Smart growth initiatives aimed at preserving open spaces put limits on development in certain parts of town. With fewer new homes being built, it should put upward pressure on pricing.

5. Eugene, Ore.

Courtesy: travellanecounty.org/Jamie HooperMedian home price: $166,000
Drop since market peak: 21.2%
Forecast gain through 2013: 12.4%

Like Corvallis, Eugene's comeback is partly being fueled by the fact that it hosts a big university.

The University of Oregon brings a steady supply of students, many of whom stay in the area post-graduation.

However, earnings here are not very high. Household income in the Eugene area is about $53,000, about $13,000 below the national median.

Still, homes are selling -- just not at the high-end of the market, said John Hoops, a former president of the Oregon Association of Realtors and a broker with Windermere Real Estate.

"On inventory under $200,000 we're seeing multiple offers," said Hoops. Sales of properties near the university are especially strong with some of the demand coming from investors who rent out properties to students.

 

Rogue Valley Real Estate Market

Here are the April 2012 statistics for our valley.  Click the link below:

http://www.somls.com/member_area/stats/Real%20Value%200412.pdf

U.S. Foreclosures Down 14% Over Last Year, Filings Shifting to the East

According to RealtyTrac's U.S. Foreclosure Market Report for April 2012, foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 188,780 U.S. properties in April, the lowest monthly total since July 2007.

April foreclosure activity decreased 5 percent from the previous month and was down 14 percent from April 2011. One in every 698 U.S. housing units had a foreclosure filing during the month.

"Rising foreclosure activity in many state and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona and Nevada," said Brandon Moore, CEO of RealtyTrac. "Those three states and several other non-judicial foreclosure states like them, more efficiently processed foreclosures last year, resulting in fewer catch-up foreclosures this year.

"In addition, more distressed loans are being diverted into short sales rather than becoming completed foreclosures," Moore continued. "Our preliminary first quarter sales data shows that pre-foreclosure sales -- typically short sales -- are on pace to outnumber sales of bank-owned properties during the quarter in California, Arizona and 10 other states."

Non-judicial foreclosure activity down, judicial foreclosure activity up

Combined foreclosure activity in the 24 states with a non-judicial foreclosure process and the District of Columbia decreased 7 percent from the previous month and was down 29 percent from April 2011. More populous states like Arizona, California and Nevada drove the overall decreases in non-judicial foreclosure activity, but 14 of the 24 states and the District of Columbia posted month-over-month increases in foreclosure activity. Still, only seven of the non-judicial foreclosure states posted annual increases, including Georgia, Tennessee and Minnesota.

Combined foreclosure activity in the 26 states with a judicial foreclosure process decreased 3 percent from the previous month but was still up 15 percent from April 2011. Foreclosure activity decreased on a month-over-month basis in 14 of the judicial foreclosure states but increased on a year-over-year basis in 15 of the judicial foreclosure states.

Foreclosure starts down nationwide, but up in more than half of states

After three straight monthly increases, U.S. foreclosure starts -- default notices or scheduled foreclosure auctions, depending on the state -- decreased 4 percent from March to April. A total of 97,665 properties started the foreclosure process for the first time during the month, down 2 percent from April 2011.

Despite the overall decrease in foreclosure starts, 26 states posted monthly increases in foreclosure starts, and 27 states posted year-over-year increases in foreclosure starts. States with the biggest annual increases in foreclosure starts included New Jersey (180 percent), Utah (179 percent), Indiana (49 percent), Pennsylvania (44 percent), Florida (43 percent), and Michigan (42 percent).

Bank repossessions decrease for third straight month

Bank repossessions (REOs) decreased on a monthly basis for the third straight month in April, down 7 percent from March. Lenders completed the foreclosure process on 51,415 U.S. properties during the month, down 26 percent from April 2011 -- the 18th consecutive month with a year-over-year decrease in REOs.

REO activity decreased on an annual basis in 37 states and the District of Columbia, while 28 states posted monthly drops in foreclosure activity. States with the biggest year-over-year decreases in REO activity included Nevada (71 percent), Arizona (70 percent), Washington (67 percent), California (52 percent), Virginia (47 percent), and Maryland (47 percent).

11 of 20 largest metros post annual increases in foreclosure activity

Eleven of the nation's 20 largest metro areas based on population documented annual increases in foreclosure activity, led by the Florida cities of Tampa (59 percent) and Miami (38 percent). Other cities with increases included St. Louis (29 percent), Chicago (26 percent), Philadelphia (24 percent), and Atlanta (21 percent).

Among the 20 largest metros areas, cities posting the biggest annual drops in foreclosure activity included Seattle (54 percent), Phoenix (44 percent), San Francisco (34 percent), Washington, D.C. (30 percent), Riverside-San Bernardino, Calif., (30 percent), and Los Angeles (28 percent).

The metro areas with the highest foreclosure rates among the 20 largest were Riverside-San Bernardino (one in every 213 housing units with a foreclosure filing), Miami (one in every 273 housing units), Atlanta (one in every 298 housing units), Phoenix (one in every 313 housing units), and Tampa (one in every 315 housing units).

The 11 cities with annual increases in foreclosure activity were all in the Midwest, South or on the East Coast, while six of the nine cities with annual decreases were in the western states of California, Arizona and Washington.

Foreclosure Activity in 20 Largest U.S. Metros - April 2012



Nevada, California, Florida post top state foreclosure rates

A 15 percent month-over-month increase in foreclosure starts helped Nevada post the nation's highest state foreclosure rate in April: one in every 300 housing units with a foreclosure filing. Despite the monthly increase in foreclosure starts, overall Nevada foreclosure activity decreased 67 percent from April 2011.

California foreclosure activity decreased 30 percent from April 2011, but the state still posted the nation's second highest foreclosure rate: one in every 351 housing units with a foreclosure filing.

Florida foreclosure activity increased 26 percent from April 2011, boosting the state's foreclosure rate to third highest in the nation. One in every 364 Florida housing units had a foreclosure filing during the month.

The top 10 foreclosure rates among metropolitan statistical areas with a population of 200,000 or more were all in Nevada, California and Florida. Stockton, Calif., led the way, with one in every 213 housing units with a foreclosure filing during the month. Seven other California cities had foreclosure rates in the top 10, along with Las Vegas at No. 7 and Miami at No. 9.

A 44 percent year-over-year decrease in foreclosure activity dropped Arizona's foreclosure rate -- one in every 377 housing units with a foreclosure filing -- to fourth highest among the states, while a 21 percent year-over-year increase in foreclosure activity helped Georgia maintain the nation's fifth highest state foreclosure rate -- one in every 398 housing units with a foreclosure filing.

Other states with foreclosure rates ranking among the top 10 were Illinois (one in 418 housing units with a foreclosure filing), Utah (one in 419), Michigan (one in 487), Ohio (one in 525), and Wisconsin (one in 547).

Building Permits in U.S. Jump 23% in April Over Last Year

According to the U.S. Census Bureau and the Department of Housing and Urban Development's (HUD) new residential construction statistics for April 2012, building permits in U.S. spiked 23.7% in April over last year's numbers.

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 715,000. This is 7.0 percent (±1.0%) below the revised March rate of 769,000, but is 23.7 percent (±1.9%) above the revised April 2011 estimate of 578,000.

Single-family authorizations in April were at a rate of 475,000; this is 1.9 percent (±1.1%) above the revised March figure of 466,000. Authorizations of units in buildings with five units or more were at a rate of 217,000 in April.

Housing Starts

Privately-owned housing starts in April were at a seasonally adjusted annual rate of 717,000.  This is 2.6 percent (±14.8%) above the revised March estimate of 699,000 and is 29.9 percent (±15.2%) above the revised April 2011 rate of 552,000.

Single-family housing starts in April were at a rate of 492,000; this is 2.3 percent (±11.9%) above the revised March figure of 481,000. The April rate for units in buildings with five units or more was 217,000.

Housing Completions

Privately-owned housing completions in April were at a seasonally adjusted annual rate of 651,000.  This is 10.0 percent (±16.7%) above the revised March estimate of 592,000 and is 20.1 percent (±18.0%) above the revised April 2011 rate of 542,000.

Single-family housing completions in April were at a rate of 489,000; this is 11.4 percent (±13.6%) above the revised March figure of 439,000. The April rate for units in buildings with five units or more was 158,000.

 

U.S. Home Builder Confidence Index Rises in May, Highest Levels Since Mid-2007

David Crowe

According to the National Association of Home Builders (NAHB), home builder confidence in the market for newly built, single-family homes gained five points in May from a downwardly revised reading in the previous month to reach a level of 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

This is the index's strongest reading since May of 2007.

"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."

"While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back," said NAHB Chief Economist David Crowe. "The pace of this emerging recovery could be stronger were it not for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices."

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Each of the index's components rebounded from declines in the previous month. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points in May to 30 and 23, respectively, with the traffic component hitting its highest level since April of 2007. The component gauging sales expectations in the next six months rose three points to 34.

Three out of four regions registered improving builder sentiment in May. This included a six-point gain to 32 in the Northeast, and five-point gains to 27 and 28 in the Midwest and South, respectively. The West posted a two-point decline, to 29.

 

U.S. Housing Affordability Index Reaches Record Highs in Q1

Moe Veissi

According to the National Association of Realtors (NAR), housing affordability conditions for all home buyers reached a milestone in the first quarter of 2012.

NAR's composite quarterly Housing Affordability Index rose to a record high of 205.9 in first quarter, based on the relationship between median home price, median family income and average mortgage interest rate.  The higher the index, the greater the household purchasing power.  This is the first time the quarterly index broke the 200 mark; recordkeeping began in 1970.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions are optimal for home buyers.  "For those with good credit, we've never seen better housing affordability conditions or market opportunities than we see at present," he said.  "Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means.  This is especially true for self-employed buyers."

Veissi noted home sales would be much higher if lending standards would return to normal.

The index shows the median income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter, which is more than double the national median existing single-family home price of $158,100.  The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income.

A companion index measuring the ability of first-time buyers to purchase a home also set a record, with the first-time buyer index reaching 135.8 in the first quarter.

Assumptions for the first-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, and a downpayment of 10 percent.  This index means the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.

"It's never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better," Veissi explained.

Most first-time buyers choose a loan with a lower downpayment, often an FHA-insured loan with 3.5 percent down, and some use the VA program with no downpayment.

Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home.  For all of 2012 the index is projected to set an annual record, averaging 191 for the year.