According to Bloomberg:
Home prices in 20 U.S. cities rose in December by the most in more than six years, a sign the housing-market recovery is strengthening. The S&P/Case-Shiller index of property values increased 6.8 percent from December 2011, the biggest year-to-year gain since July 2006, after advancing 5.4 percent in November, a report showed today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 6.6 percent advance. Nineteen of 20 cities showed gains.
Near record-low borrowing costs and gains in employment are fueling demand and boosting property values as the number of houses on the market drops and foreclosures ease. The improvement is shoring up household net worth and confidence, which may underpin consumer spending even as an increase in the payroll tax reduces take-home pay.
“The key here is it’s not as if we’re getting all the juice from one area, it’s broadly based across the country,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who correctly projected the year-over-year increase. “Rates are low, prices are attractive, so affordability is high, and the labor market is gradually healing as well. If you were in the market to buy a home, right now it’s a good time…”
Visit Bloomberg to read more: http://www.bloomberg.com/news/2013-02-26/home-prices-in-20-u-s-cities-increase-by-most-since-2006.html
The Butcher Ranch Development Project in Rolling Hills Estates is prepared for home construction to begin. The development project planning began in 2006 and has gained tremendous progress recently. The new community built around Casaba Road includes eleven total lots at an average of twenty-thousand square feet in size. According to the City of Rolling Hills Estates all the lots have been sold. We will keep you updated on the project as it progresses over the next few months.
Nationwide, the median price for a home resale was $183,900 in September, up 11.3 percent from a year earlier as fewer people sold their homes under distressed conditions compared to a year earlier. Distressed sales include foreclosures.
Lawrence Yun, an economist at the NAR, said the low level of inventories was partially due to a lack of new homes. The rate of groundbreaking on new homes rose sharply in September but remained about 60 percent below its 2006 peak.
“Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” Yun said. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.”
Regionally, existing-home sales in the Northeast fell 6.3 percent to an annual level of 590,000 in September but are 7.3 percent above September 2011. The median price in the Northeast was $238,700, up 4.1 percent from a year ago.
Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.10 million but are 19.6 percent higher than a year ago. The median price in the Midwest was $145,200, up 7.0 percent from September 2011.
In the South, existing-home sales increased 0.5 percent to an annual level of 1.93 million in September and are 14.2 percent above September 2011. The median price in the region was $163,600, up 13.1 percent from a year ago.
Existing-home sales in the West fell 3.4 percent to an annual pace of 1.13 million in September but are 0.9 percent above a year ago. With continuing inventory shortages in the region, the median price in the West was $246,300, which is 18.4 percent higher than September 2011.
The South Bay Real Estate market…What is our condition now that we are half way through the 2012 selling season. Below in bold is a current heading of the leading real estate analysis firm in the United States, Case-Shiller and Zillow
“Zillow Forecast: April Case-Shiller Composite-20 Expected to Show 1.9% Decline from One Year Ago
On Tuesday, June 26th, the Case-Shiller Composite Home Price Indices for April was released:
Zillow predicts that the 20-City Composite Home Price Index will decline by 1.9 percent on a year-over-year basis, while the 10-City Composite Home Price Index will decline by 2.4 percent on a year-over-year basis.
April is the third consecutive month with monthly appreciation for the Case-Shiller indices, with April projected to be particularly strong. Buyers are experiencing many markets with extremely low inventory, which is propping up prices in the near term, paired with a decreasing share of foreclosure re-sales.
Despite the recent uptick in home prices, we do believe that 2012 will end on a lower level than 2011.”
For us in the South Bay our real estate market has been fairly strong in sales. We have very low inventory with incredibly low interest rates which have created a positive real estate market for the past 6 months. The uncertainty with the Global economies and an election year ahead does leave some uncertainty as to whether we have hit bottom in our values.
It is always my desire to give you just the facts and try to keep the opinions out of the equation. I have always felt and continue to believe after 26 years of practicing real estate that owning residential real estate is a marvelous investment. Yes, it will have it ups and downs but real estate has proven itself to be a great long-term investment.
If we can provide any assistance to you, your family and friends with any real estate related matters please do not hesitate to contact us at 310.375.5645 ext. 10.
Steve & Ceci Watts
South Bay real estate has seen a tremendous bump in sales and demand. Real estate sales over the past 6 months have shown an increase in activity. Some of the factors driving this current market are historically low interest rates, (30 year fixed in the 3% range) extremely low inventory and pent up buyer demand. These 3 factors combined have been fueling our current real estate market.
Despite media reports of the emergence of so-called “bidding wars” in select housing markets, average home prices remained flat in the month of April, according to the latest results of the monthly Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
While reports of some home listings attracting dozens of offers have become common this year, the closely watched nationwide HousingPulse survey found that most homes sold in April received only two or three offers and sold below list price.
Demand from investors remained strong during the month of April. Investors accounted for 25.1% of home purchases, while current homeowners accounted for 40.1% of purchases and first-time homebuyers accounted for 34.8% of purchases.
Average prices for home purchases declined slightly from March to April, according to transactions reported by HousingPulse survey respondents. The average price for non-distressed properties declined 1.5% from March to April, while the average price for short sales dipped 1.7%. For damaged REO the average price fell 1.4% and for move-in ready REO the average price slipped 0.3%.
The average number of offers for non-distressed properties sold in April was only 1.9, according to the nationwide sample. For damaged REO, move-in ready REO, and short sales, comparable offer statistics were 3.5, 3.1, and 3.0, respectively.
Despite random reports of homes being sold above list price, comprehensive HousingPulse survey statistics show that average ratios of sales prices to listing prices continued to be below 100% in the month of April. Non-distressed properties sold for 94.9% of list price in April, on average, a metric that has not changed substantially for the past two years. Damaged REO sold for 92.2% of list price, while move-in ready REO sold for 95.3% of list price and short sales sold for 94.1% of list price.
One factor continuing to hold home prices down is the high share of distressed properties, especially short sales. The total share of distressed properties in the housing
market in April, as represented by the HousingPulse Distressed Property Index (DPI), was 47.9%, using a three-month moving average. This was the 26th month in a row that the DPI has been above 40%.
Even when potential homebuyers bid up property prices above list price, appraisals required for mortgage financing prevented transactions from closing at higher prices. “Yes, we are experiencing bidding wars on desirable properties, but many times the appraisals don’t come in at the [contract] price. The appraisers are keeping the [transaction] prices down even when buyers see the value and are willing to pay more,” complained one real estate agent responding to the HousingPulse survey.
FORECLOSURE ACTIVITY JUMPS IN TROUBLING SIGN FOR HOUSING RECOVERY
By Allison Linn
The housing market has shown some promising signs of late, but a fresh batch of foreclosure data offers a reminder that any recovery from the housing bust will likely be slow, spotty and painful.
RealtyTrac reported Thursday that foreclosure filings rose by 9 percent in May from a month earlier, to 205,990 total properties that were subject to default notices, scheduled auctions or bank repossessions.
The jump in foreclosure activity was likely because lenders are finally getting to a backlog of homes they might have started foreclosing on last year if they weren’t facing criticism for cutting corners and pushing foreclosures through too quickly and without adequate controls, said Daren Blomquist, a vice president with RealtyTrac.
He noted that the major increases came from properties that are just starting the foreclosure process.
Still, the figures for May are down 4 percent from a year ago. In addition, the report noted, recent sales data suggests that not all homes with foreclosure filings will result in the bank taking the property.
“Based on the rise in pre-foreclosure sales we’ve seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward,” Brandon Moore, RealtyTrac’s CEO, said in a statement.
That’s important because bank-owned homes tend to sell for less than homes in earlier stages of foreclosure.
RealtyTrac’s data shows that a home that is in pre-foreclosure sells for 21 percent less than a non-distressed home, on average. A bank-owned home sells for 33 percent less on average.
Blomquist cautioned that some of these houses entering the foreclosure process will end up being repossessed by the bank. In addition, the increase in foreclosure activity that is expected as banks work through their backlog could put a damper on housing prices once again, at least in some parts of the country.
“I actually think the stabilization in home prices and home sales is, in part, a result of the foreclosure inventory being artificially restricted over the past year and a half,” he said.
The National Association of Realtors reported last month that existing-home sales rose 3.4 percent from March to April and were up 10 percent from a year earlier.
Median home prices also were up about 10 percent in April from a year earlier. May data is due out next week.
Record-low mortgage rates also could be providing a boost for the housing market. Freddie Mac said last week that the average rate on a 30-year loan dropped to 3.67 percent.
Of course, with real estate it’s always all about location, and the foreclosure report showed that while some pockets of the country have seen some improvement others are still struggling. Georgia posted the highest foreclosure rate for the month, overtaking traditionally foreclosure-plagued states such as Florida, California, Nevada and Arizona.
Blomquist said while some cities seem to have broken the housing-bust cycle and at least stabilized, the data from Georgia illustrates the uneven nature of the market.
“Georgia is still caught in the downward spiral of decreasing home prices, and that in turn is helping to fuel more foreclosures,” he said.
Housing market may be on rebound at last
New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since 2007.
By Alejandro Lazo, Los Angeles Times
April 25, 2012, 1:32 a.m.
The housing market’s long, cold winter may finally be heading into a springtime thaw.
New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since before the start of the credit crunch nearly five years ago.
The easing of foreclosures is seen as key by many economists, since the glut of these properties being sold at a discount has been a significant drag on home prices.
“The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory,” said Sean O’Toole, chief executive of the firm ForeclosureRadar.com. “If it continues, it will likely mean that we’ve either seen a bottom — or have passed a bottom — in prices because of limited supply and still strong demand.”
Home prices remain depressed from their peak in 2007, when the median-priced home in Southern California sold for $505,000. The median price last month was $280,000.
The economy overall has been improving, however, with unemployment, retail sales, corporate profits and other measures showing steady if unspectacular gains. Housing has been one of the last holdouts, but analysts note that prices have stabilized and sales volume has been gaining.
“What are important are sales and inventory, and those are pointing in the right direction,” said Christopher Thornberg, a principal at Beacon Economics who was one of the early callers of the housing crash. “I would say that by the end of the year, they should translate into better prices.”
Thornberg added, “The recovery is here.”
Notices of default, the first step in the foreclosure process, fell to 56,258 statewide in the first three months of the year, a 17.6% drop from the same period last year, DataQuick of San Diego reported Tuesday. That was the fewest number of default notices filed since the second quarter of 2007.
Banks still retain many foreclosed properties on their books, and some analysts have predicted that housing prices could weaken again if lenders dump these properties into the recovering market. But O’Toole and other analysts see that long-feared “second wave” as increasingly unlikely, pointing out that the banks would be acting against their own interests by undercutting prices through a fire sale.
“A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem,” DataQuick President John Walsh said. “It’s not necessarily playing out the way some pundits thought.”
Low interest rates and the availability of bargain-priced properties are drawing more buyers into the market.
Bobbie Dunlap, 61, an office manager, said she recently bought a bank-owned home for $225,000 that she intends to fix up and rent out. The South Gate resident said she had to raise her price to beat competing bids on the two-bedroom property in Bellflower. She hopes that the rental income from the investment will provide her with a financial cushion when she stops working.
“It is in pretty good shape, but it still needs some extra work, of course,” Dunlap said.
Maryam Javadi of Palos Verdes Estates is hopeful that buyers will take the plunge this spring. She recently listed her 2,074-square-foot house at $950,000, and about 40 people showed up Sunday to check out the four-bedroom property, which has canyon views and sits near the end of a quiet cul-de-sac.
“Some people have been back to see it two or three times already,” Javadi said.
Betting on the rebound, investors made up a record share of buyers in Southern California during the first two months of the year, according to DataQuick. As more foreclosed homes in hard-hit neighborhoods are filled with renters, an increasing number of everyday buyers will grow interested in owning, said Ivy Zelman, chief executive of Zelman & Associates, a New York housing research firm.
“This is not a robust recovery, but I feel confident that we are not sitting here lingering,” said Zelman, who predicts that home prices will end the year up about 1%. “There really is more meat to the bone.”
Other new housing data also point to a fledgling recovery.
The real estate website Zillow estimated that home values in Los Angeles hit a bottom in the first quarter as the median price flattened from February to March; several communities posted price increases, including Compton, Manhattan Beach and Santa Monica. Zillow’s is among several recent predictions that certain markets have put the worst behind them.
New-home sales nationally fell 7.1% in March from the previous month, the Commerce Department said Tuesday, but that was partly because it revised February sales figures up significantly. Even though the figure for March was the lowest since November, overall sales of new homes are up about 16% for the first three months of the year from the same period a year earlier, the Commerce Department said. The report helped boost the Dow Jones industrial average 74 points to 13,001.
That improvement means that new-home sales will probably be stronger than last year’s, which were the worst on record.
One of the most widely watched measures on home values, the Standard & Poor’s/Case-Shiller index of 20 U.S. cities, showed price declines moderating from January to February. Prices fell 0.8% from January to February, and were down 3.5% from February 2011. Los Angeles fell 0.8% in February from the previous month, while San Francisco was down 0.7%. San Diego was slightly positive, up 0.2% from January.
Many economists brushed off the decline as the Case-Shiller numbers capture the traditionally slow months of January and December, as well as February, because they average three months’ worth of data. The index’s year-over-year decline in home values has also been steadily shrinking in recent months.
Times staff writer Lauren Beale contributed to this report.
Copyright © 2012, Los Angeles Times
For the second month in a row we’ve seen a dramatic drop in the number of properties sold at foreclosure, or “trustee sale”, auctions. Foreclosure sales in California are down 16.7 percent from February to March 2012 and down 53.1 percent from March a year ago. A total of 86,487 sales were scheduled to occur in California, but of those 80.0 percent postponed, and 10.6 percent were cancelled, leaving just 8,392 that were actually sold. Third parties, typically investors, purchased a record 38.6% of the properties that did sell in California.
Foreclosure starts rose in most states, with the largest increases occurring in Washington, California and Nevada. This, at least temporarily, reverses a downward trend, but even with the increase the volume of new foreclosures remains significantly down year-over-year in all the states we cover.
The increase in foreclosure starts is especially interesting in Nevada. Bank foreclosures came to an almost complete halt there after the passage of Assembly Bill 284, which made significant changes to Nevada’s foreclosure laws. The increase this month is directly attributable to new foreclosure starts by Fannie Mae, which is one of very few lenders to have filed any new foreclosures in Nevada since September 2011. Even with the increase by Fannie Mae it is still homeowner associations that are initiating the vast majority of foreclosures in Nevada.