US Home Prices Show Positive Results in April
Home prices in the U.S. rose 0.5% in the month of April, according to the FNC Residential Price Index. The index increased for the first time since the withdrawal of the homebuyer tax credit in April 2010, despite the nation's economic malaise. Prices in April shrugged off downward pressure from a continued high number of foreclosures. The FNC 10-MSA composite showed a 0.4% increase from March. The 30-MSA increased 0.6% in April. Home prices nationwide remained 6.4% lower than one year ago. Read More: http://www.housingwire.com/2011/06/22/us-home-prices-show-positive-results-in-april-fnc
May New Home Sales Fall 2.1%
Sales of new single-family homes fell 2.1% in May to 319,000 units from a revised figure of 326,000 units the previous month. The May rate is 13.5% above 281,000 a year earlier, the Census Bureau and Department of Housing and Urban Development concluded in their latest report. Sales continue to climb after reaching the lowest level ever in February. Read More: http://www.housingwire.com/2011/06/23/may-new-home-sales-fall-2-1
Shadow Inventory Continues to Drop
The nation's shadow inventory dropped to 1.7 million residential units in April, down 10.5% from a year earlier and representing a five-month supply, CoreLogic (CLGX: 16.815 -0.27%) said Wednesday. The decline from a year ago is due to fewer new delinquencies and the high level of distressed sales, which helped reduce the number of outstanding distressed loans, the Santa Ana, Calif. based data company said. "The shadow inventory has declined by nearly one-fifth since it peaked in early 2010, in large part due to a reduced flow of newly delinquent loans in recent months," according to Mark Fleming, chief economist for CoreLogic. "However, it will probably take several years for the shadow inventory to be absorbed given the long timelines in processing and completing foreclosures." CoreLogic estimates current shadow inventory, also known as pending supply, by calculating the number of distressed properties not listed on multiple listing services that are at least 90-days delinquent, in foreclosure or in real estate-owned status. Transition rates of delinquency to foreclosure and foreclosure to REO are used to identify the distressed nonlisted properties most likely to become REO properties. Properties not yet delinquent but may become delinquent aren't included in CoreLogic's estimate. Of the 1.7 million residential units that make up the shadow inventory, 790,000 units are seriously delinquent - a 2.6-month supply, and another 440,000 are in some stage of foreclosure - a 1.4-month supply. Another 440,000 are already in REO, CoreLogic said.
The nation's shadow inventory peaked in January 2010 at 2 million units, representing 8.5-month supply. The total shadow and visible inventory was 5.7 million units in April, down from 6.2 million units a year ago. The shadow inventory accounts for 29% of available properties. In addition to the current shadow inventory, there are 2 million home loans with negative equity of more than 50% or $150,000. "These current but underwater loans have increased risk of entering the shadow inventory if the owners' ability to pay is impaired while significantly underwater," CoreLogic said.
Distress Claims Smaller Share of Dwindling Existing-Home Sales
Distressed properties accounted for just 31 percent of existing-home sales in May, the National Association of Realtors(NAR) reported Tuesday. The ratio of distressed homes - typically bank-owned or pre- foreclosure short sales - took a dive last month compared to earlier in the year. May's market share is down from 37 percent in April and 40 percent in March. However, it's right on target with May 2010, when distressed properties made up 31 percent of the month's sales. Clear Capital says all spring and summer seasons, even since the 2006 downturn, see an increase in non-distressed sales volume, so a decline in the relative proportion of REO and short sales is pretty standard. Read More: http://www.dsnews.com/articles/distress-claims-smaller-share-of-dwindling-existing-home-sales-2011-06-21
Long-term Mortgage Interest Rates at 'Ultra-low Levels'
Mortgage rates remained mostly unchanged this past week, with the 30- year, fixed-rate mortgage remaining 4.5% for a second week. Even still, disappointing economic news kept rates well below 5% and significantly lower than the 6% mark that defined more stable economic times. The U.S. has not seen mortgage rates higher than 6% since late 2008.
Freddie Mac said the 15-year, fixed-rate mortgage rose to 3.69% this past week from 3.67% a week earlier, but down from 4.13% a year earlier. Read More: http://www.housingwire.com/2011/06/23/bankrate-long-term-mortgage-interest-rates-at-ultra-low-levels
PMI Program Rewards Servicers for Foreclosure Prevention
Mortgage insurer PMI has announced the launch of its new MODEL Servicer Program to identify mortgage servicers who score high marks for keeping borrowers in their homes. These companies will benefit from certain advantages when doing business with PMI. "Since the beginning of the housing crisis, PMI has seen that the use of certain mortgage servicing best practices plays a central role in maximizing the level of home retention and achieving positive results for borrowers, communities, and mortgage investors," said Chris Hovey, SVP of servicing operations and loss management at the California-based PMI. Read More: http://www.dsnews.com/articles/pmi-program-recognizes-and-rewards-top-servicers-in-foreclosure-prevention-2011-06-17
REAL Trends Comment: Finally, some sunshine
Reports from an informal phone survey we are doing at this time indicate that pendings in May and June for a wide variety of markets shows that business is up measurably from last May and June. While this was expected, as these two months compared to the depressed results from these two months last year as the tax credit expired, it is nonetheless seen as confirmation that the worse may well be in the past for housing sales. Some markets were showing gains in pendings over a year ago (>30) percent and many up 20 or more percent. Prices are flat to slightly down, again somewhat expected. However, as seen in the REAL Trends Housing Market report for the last three months, the average price of what brokerage firms are selling is inching up.
Fannie Mae Lowers Growth Estimate as Home Prices Continue to Search for Bottom
Fannie Mae economists predict slower economic growth for 2011 as home sales and consumer spending lag, and home prices search for a bottom that's unlikely to appear before the fourth quarter. The overall economy is now expected to grow at a pace of 2.5% this year, down from a prior forecast of 2.9%, economists with the government- sponsored enterprise's economics and mortgage market analysis group said Monday. Read More: http://www.housingwire.com/2011/06/20/fannie-mae-lowers-growth-estimate-as-home-prices-continue-to-search-for-bottom -- You can also see REAL Trends Housing Market Forecast along side NAR's and Fannie Mae's by following this link: http://realtrends.com/analytics/housing-market-forecast
Foxfire Commerce Center sells for $3.15 million in Surprise
The foreclosure sale for land and buildings at Westgate City Center is scheduled for Sept. 19. The Ellman Cos. disclosed earlier this week that Westgate lender iStar Financial had sent two Ellman entities notices of trustee sales. On Friday, it was disclosed those foreclosure sales and auctions would occur in September. The Ellman businesses that face foreclosure at Westgate could work out a new financing deal to remain owners of the entertainment complexes. Westgate could be sold to a new owner or lenders could take the property in moves that mirror residential foreclosures. Developer Steve Ellman said the economic slide and problems with attendance at Phoenix Coyotes hockey games conspired against Westgate’s success. AMC Theatres, restaurants and bars at Westgate will remain open and likely won’t be impact by the possible foreclosure sale until new ownership take over the Glendale complex. Ellman said this he is optimistic Westgate will be successful in the long-term. He and Glendale Mayor Elaine Scruggs point out there are and have been plenty of developments that have gone through foreclosure sales in the region.
New iPhone 5 expected this fall
New reports surfaced Wednesday that indicate that Apple Inc. will roll out the iPhone 5 in the fall with a better camera and faster chips. Bloomberg cited unnamed sources who said the new smartphones will have the A5 processor that Apple (NASDAQ:AAPL) included on the iPad 2. It also said there will be an 8-megapixel camera to replace the 5-megapixel version in the iPhone 4 and a higher resolution screen. Apple passed on unveiling the iPhone 5 at the World Wide Developers Conference this month, the venue where it has rolled out previous versions. Bloomberg said that the new device will come in September, contradicting a story on Tuesday from Boy Genius Report that said it would come in August.
Phoenix, Tucson midpack in brainpower for young adults
Phoenix and Tucson are in the middle of the pack when it comes to brainpower among young adults. A new On Numbers study shows that 18.5 percent of Phoenix-area young adults (18-34 years old) hold bachelor's degrees. The rate is 18 percent in Tucson. Among 385 metro areas across the nation, Phoenix ranks 149th and Tucson ranks 159th. Washington possesses America’s strongest concentration of young brainpower. More than half-a-million young adults within the Washington metropolitan area hold bachelor’s degrees. They account for 38.8 percent of the area’s 1.31 million residents between the ages of 18 and 34. Close behind is Boston, where 38.7 percent of young adults have four-year degrees. All other U.S. metros trail the two frontrunners by at least two full percentage points. San Francisco-Oakland is third at 36.7 percent. Slightly more than one-fifth -- 21.6 percent -- of the nation’s young adults have bachelor’s degrees, according to the U.S. Census Bureau’s 2009 American Community Survey, the most recent source of comprehensive data for specific age groups. Numbers for each of the 385 metros can be found here. Fifteen metros have college-degree percentages higher than 30 percent within their 18-34 age groups. The biggest of these elite markets is the New York City area, which contains nearly 4.4 million young adults. The smallest are Rochester, Minn., and Ithaca, N.Y., both with about 41,000 people between the ages of 18 and 34.
National Association of Realtors: Existing home sales slump in May
Sales of existing homes slumped in May as spiking gasoline prices and severe weather took a toll on house-shopping activity, according to data released Tuesday by the National Association of Realtors in Washington. Purchases of existing homes declined 3.8 percent from April, to an annual pace of 4.81 million -- down 15 percent from a pace of 5.68 million a year earlier, when sales surged just before the expiration of the home-buyer tax credit. “The price decline could be diminishing as buyers recognize great bargain prices and the highest affordability conditions in 40 years,” said Lawrence Yun, NAR’s chief economist. “This will help mitigate the impact going forward.” With the unemployment rate near 9 percent and millions of distressed properties on the market, some economists have said it will take years for the real estate market to recover. Yun called the numbers “disappointing” and said home sales are being held back in part by overly restrictive loan underwriting standards. Distressed sales, in which the lender agrees to a transaction for less than the principal balance of the mortgage, accounted for a smaller share of the total in May than in recent months, Yun said. Of all purchases, cash transactions accounted for about 30 percent, up from 25 percent in May 2010. Investors account for most cash purchases. Single-family home sales dropped 3.2 percent from April to May, to an annual rate of 4.24 billion -- 15.4 percent below the high of 5 million a year earlier. Existing-home sales in the West were little changed from April, with an annual pace of 1.17 million in May, but they were 10 percent lower than a year earlier. The median price in the West was $192,300, down 12.6 percent from May 2010.
Phoenix employment won't recover until 2016
A new report from the United States Conference of Mayors states metro areas will be slow to regain their pre-recession employment levels, and the Phoenix-area economy faces a particularly steep uphill climb. The report states the Phoenix area has lost more than 244,000 jobs since its peak employment level in late 2007. Employment is not expected to reach that level again until the second quarter of 2016. Of the 363 metro areas in the report, 75 are expected to have double-digit unemployment rates by December 2011, and 48 are not expected to return to peak employment until after 2020. The mayors group predicts Phoenix will have an unemployment rate of 8.4 percent at the end of this year. That rate is predicted to drop to 7.3 percent by the end of 2013. The mayors’ annual U.S. Metro Economies report anticipates the nation’s gross domestic project will jump from a sluggish 1.9 percent growth during the first half of 2011 to 3.5 percent for the second half. The report also measures gross metropolitan product (GMP), which showed that Phoenix had the eighth smallest GMP growth among 347 metro areas last year. However, its 0.9 percent GMP growth was better than Tucson’s, which was just 0.1 percent. The Phoenix-area’s GMP was $196.4 billion in 2007, but fell in 2008 and 2009 before the small gain last year. Other report findings include:
- National unemployment will be at 8.6 percent at the end of 2011 and not fall below 8 percent until late 2013.
- Only in the first half of 2014 will employment in the U.S. match its previous peak level of early 2008.
- By the end of 2011, 75 metros will have double-digit unemployment rates, and 193 metros (53 percent) will have rates higher than 8 percent.
- Following consecutive years of decline in 2008 and 2009, total real GMP increased by 3.1 percent in 2010, with 347 (out of 363) metros experiencing increases
- Of the 100 largest economies in the world, 37 of them belong to metropolitan areas of the United States.
- The U.S. Conference of Mayors is the official nonpartisan organization of cities with populations of 30,000 or more. There are 1,210 such cities in the U.S. today, and each city is represented in the Conference by its chief elected official, the mayor.
- Click here for the full report.
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