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Real Estate Big Data

Foreclosure filings slide, time on market is up

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Today, RealtyTrac, released its U.S. Foreclosure Market Report™ for March and the first quarter of 2014, which shows foreclosure filings were reported on 117,485 U.S. properties in March; a 4.0 percent increase from February, but still down 23 percent overall from March 2013 figures. March was the 42nd consecutive month where U.S. foreclosure activity decreased from a year ago, helping to drop first quarter foreclosure activity to the lowest level since the second quarter of 2007.

“Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,” said Daren Blomquist, vice president at RealtyTrac. “This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states like California, where an increasing number of judicial foreclosure filings boosted foreclosure starts in the first quarter.”

Increases in Foreclosures

Despite the decrease in overall foreclosure activity in the first quarter, 29 states posted annual increases in scheduled foreclosure auctions, including Utah (up 226 percent), Oregon (up 177 percent), Connecticut (up 131 percent), New Jersey (up 79 percent), Delaware (up 49 percent), New York (up 47 percent), Maryland (up 46 percent), Massachusetts (up 37 percent), Nevada (up 21 percent) and Florida (up 21 percent).

Also, foreclosure starts in the first quarter increased from a year ago in 19 states, including: New Jersey (up 83 percent), Maryland (up 43 percent), Indiana (up 38 percent), Delaware (up 24 percent), Connecticut (up 13 percent), and California (up 10 percent). The increase in California was the first annual increase since the second quarter of 2012, and the first double-digit percentage increase since the fourth quarter of 2009.

REO Properties

RealtyTrac also included an update of occupied REOs (bank-owned properties still occupied after the completed foreclosure) in its first quarter report. Of the 259,783 bank-owned properties with owner-occupancy data available — out of a total of 483,224 bank-owned homes nationwide — 51 percent were still occupied by the former homeowner or a tenant. Metros with the highest percentage of occupied REOs included Nashville, Tenn. (80 percent), Richmond, Va. (80 percent), New York (73 percent), Houston (73 percent) and San Jose, Calif., (73 percent).

Average Times to Sell

U.S. properties foreclosed in the first quarter of 2014 were in the foreclosure process an average of 572 days, up 1 percent from 564 days in previous quarter and up 20 percent from 477 days in first quarter of 2013. New Jersey overtook New York as the state with the longest average time to foreclose in the first quarter with an average of 1,103 days to complete foreclosure.

The average time to foreclose was the shortest among all states in Alaska (151 days), followed by Texas (169 days), Delaware (177 days), New Hampshire (190 days), and Alabama (193 days).

Average Time to Sell REO

U.S. bank-owned properties sold in the first quarter had been bank-owned for an average of 226 days when they sold, up 34 percent from the average of 168 days in the first quarter of 2013. States with above-average time to sell REOs included Texas (347 days), Michigan (342 days), Minnesota (313 days), Colorado (305 days), and Georgia (276 days).

Properties in the foreclosure process that sold during the first quarter took an average of 509 days to sell after starting the foreclosure process, up 33 percent from an average of 382 days in the first quarter of 2013.

Jennifer Walpole is a Senior Staff Writer at The American Genius and holds a Master's degree in English from the University of Oklahoma. She is a science fiction fanatic and enjoys writing way more than she should. She dreams of being a screenwriter and seeing her work on the big screen in Hollywood one day.

Real Estate Big Data

NAR Chief Economist predicts housing market uncertainty

(BIG DATA) Warning bells on the housing market have been ringing for over a year. While this prediction isn’t a surprise, it’s disappointing news.

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Multitude of colorful homes representing housing market.

The housing market is booming. Many experts are concerned about another bust like we experienced in 2008, but the conditions are much different today. Homeowners aren’t extended like they were when the market crashed in 2008. National Association of Realtors® Chief Economist Lawrence Yun suggests that the housing market is still uncertain, even though he says, “housing kept the economy afloat” during the pandemic.

What is impacting the housing market? 

Yun cites record-low inventory and inflation as “curveballs” to the housing market. Many economists, including Yun, have been concerned about low inventory for many years, especially in certain markets. Even though builders are working hard to construct new residences, supply chain and labor issues are not accelerating the process.

Yun is more concerned about inflation impacting the housing market. He says,

“wages have risen by 6% from one year ago…but inflation is 8.5%.”

Rising mortgage rates have made mortgages cost $300 to $400 a month more, according to Yun. Many working families can’t afford that. Yun predicts inflation is going to be high for several months. The market will slow as the Federal Reserve raises rates.

Yun also cites the Russia-Ukraine war as another contribution to the uncertainty of the market. The war is also driving inflation, not just overseas, but in the United States. With gas prices climbing higher each week, this is impacting the housing market.

Is real estate a good investment in this market?

Last year, when Yun opened the Residential Economic Issues & Trends Forum at NAR’s annual REALTOR® Conference & Expo in San Diego, he expected the “housing sector’s success to continue,” but he did suggest that 2022’s performance wouldn’t exceed 2021s.

“Rising rents will continue to place upward pressures on inflation,” he said. “Nevertheless, real estate is a great hedge against inflation.”

There’s a lot we don’t know about the future. It’s disappointing to think that the housing market may be uncertain, but real estate is still a good investment.

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Real Estate Big Data

Housing starts stagnate, market conditions are rapidly shifting

Housing starts for April stagnated, marking the second consecutive months of declines, and more renters being left out of this shifting market.

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Housing starts stagnated in April, down 0.2% from the prior month, according to the U.S. Commerce Department.

The sentiment appears to be that although this marks the second straight month of dips, most are seeing today’s news as a positive, especially as construction of new homes was expected to fall 2.4% in April.

Further, housing starts are up 14.6% from April of last year, driven primarily by multifamily construction.

But it’s worth not getting overly excited, given that permits dipped 3.2% in April which is a forward-looking indicator, so expect starts to continue cooling in a time where we quite need the inventory.

Demand for housing inventory remains high, but the National Association of Home Builders reports today that confidence in the single-family housing market fell dramatically in May, marking the lowest level in two years.

Dr. Lawrence Yun, Chief Economist at the National Association of Realtors said in a statement, “The worst of the housing shortage is ending, but market equilibrium between supply and demand is still some ways off.”

He notes that as mortgage rates increase, builders “are chasing rising rents, with fewer homebuyers and more renters being forced to renew their leases,” noting that even prior to the interest rate increases, rents were rapidly rising and vacancy rates rapidly declining.

Pointing to another market shift, Dr. Yun notes that “Some degree of a return to the office is also fueling back-to-city living where high rises are concentrated.”

That’s a problem.

“Even as home sales look to trend back to pre-pandemic levels after the big surge of the past two years,” concludes Dr. Yun, “inventory will not return to pre-pandemic conditions. That means home prices will get pushed even higher in the upcoming months, albeit modestly, given the supply-demand imbalance.”

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Real Estate Big Data

Home prices jump double digits in majority of American metros [report]

(REAL ESTATE) Housing affordability was already a widespread challenge before current economic pressures were applied, but now home prices are skyrocketing.

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As home sales slide and mortgage rates rise, home prices in 70% of 185 measured metros saw a double digit annual increase in Q1, according to the newest data from the National Association of Realtors (NAR), up from 66% in the previous quarter.

The Southern region accounted for 45% of home sales in Q1, and experienced a 20.1% increase in annual home prices (compared to 14.3% just the quarter prior). Home prices in the Midwest jumped 8.5% annually in Q1, while The Northeast rose 6.7%, and the West increased 5.9%.

The median sales price of a single family existing home has now hit an astonishing $368,200.

“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022,” said NAR Chief Economist, Dr. Lawrence Yun. “Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”

Yun expects supply levels to improve, and for “more pullback in housing demand as mortgage rates take a heavier toll on affordability,” given that “there are no indications that rates will ease anytime soon.”

At first blush, price appreciation sounds lovely to anyone that owns a home, given that it is the largest investment most Americans will ever make.

But regarding today’s report, several homeowners told us that they now feel trapped, and that if they sold their current home, even if they purchased a new house at that same price, they would likely have to downgrade.

Affordability is an ongoing problem weighing down the housing sector. NAR reports that the monthly mortgage payment on a typical existing single-family home with a 20% down payment rose to $1,383 (up $319, or 30%, from one year ago). Families now typically spend 18.7% of their income on mortgage payments (but only spent 14.2% one year ago).

“Declining affordability is always the most problematic to first-time buyers, who have no home to leverage, and it remains challenging for moderate-income potential buyers, as well,” Dr. Yun observed.

Map of how home prices are behaving nationally

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