Inventory of New Homes Down to Lowest Level in Nearly 50 Years

“In recent years, new housing supply has been running at the lowest levels since the 1960’s due to the slow down in new home construction, the size of homes being built, and the complicated process for selling/buying distressed properties.”

See the whole article here.

Case-Shiller: August Home Prices at 2-Year High

U.S. home prices continued to increase in August as the Case Shiller 20-city Home Price Index increased 0.9 percent to its highest level since September 2010. The 20-city index is up 2.0 percent in the last year.

See the article here.

In bay area, it is absolutely a seller's market. 15 to 30 offers per house is not uncommon at this moment.

Home Prices rise due to Banks' Holding onto REOs ?

A sharp drop in distressed sales is one of the main drivers behind the steady rise in home prices seen in certain areas throughout the country.

In September, the HousingPulse Distressed Property Index (DPI), which measures the proportion of purchase transactions involving distressed properties, hit a record low of 38.6 percent based on a three-month moving average.

The drop marks the fifth consecutive monthly decline and is more than 10 percentage points lower than the February’s near-record-high of 48.7 percent.

Please see the whole article here.

Bay Area housing prices at four-year high on August 2012

The Bay Area's housing recovery showed increasing signs of strength in July, as eager buyers pushed prices to four-year highs.

The region logged its 13th consecutive month of yearly sales increases and the median price for all types of homes in the nine-county Bay Area was at its highest -- $421,000 -- since 2008, according to a report Wednesday from DataQuick. The median sale price has been rising for five months. 
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Prices are still 37 percent off their 2007 peak for all types of homes in the Bay Area. Contra Costa County is down 51 percent from its peak price for single-family homes before the housing crash; Santa Clara County is 19 percent below the peak; San Mateo County almost 23 percent below and Alameda County 35 percent under its peak price.

Read more here. 

The U.S. Housing Bust Is Over

This is the consensus on the street. Check the WSJ article here.

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

 Economists aren't always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don't.

Why Aren’t There More Homes for Sale?

It’s no secret to anyone who has watched the real-estate market over the past year that the number of homes for sale has dropped sharply, especially in hard-hit markets such as Miami, Orlando and Phoenix.

Economists at CoreLogic have new evidence showing how big price declines are keeping many home sellers on the sidelines. They found that the supply of homes for sale declines as the rate of negative equity — or the share of borrowers who owe more than their homes are worth — rises.

Many hard-hit markets have seen an influx of well-funded investors scooping up foreclosures that can be rented out, meaning inventory is being taken off the market, at least for now.

Meanwhile, banks have sharply slowed down their foreclosure processes after being caught fraudulently processing the paperwork required to take back those properties two years ago.

Read more on WSJ 6/11/2012 here.

Foreign Purchases of U.S. Homes Rise Strongly

WSJ June 11, 2012,

A survey released Monday showed that the six-year slide in U.S. housing prices, coupled with the rising value of some foreign currencies and continued instability in Europe, is fueling a property-buying binge in the U.S. by wealthy foreigners.

The survey showed that around 55% of all buyers came from five countries: Canada, China, Mexico, India and the United Kingdom. Canadians accounted for nearly one quarter of all foreign sales.

See the whole article here.

Many Home Owners still way underwater

Here is the complete list of metropolitan areas and their underwater mortgage rates from Zillow’s report:

• Las Vegas: 71%
• Phoenix: 55.5%
• Atlanta: 55.2%
• Orlando: 53.9%
• Riverside, Calif.: 53.4%
• Sacramento, Calif.: 51.2%
• Detroit: 49.8%
• Tampa, Fla.: 48.3%
• Miami - Fort Lauderdale, Fla.: 46.4%
• Chicago: 41.1%
• Minneapolis - St. Paul, Minn.: 39.9%
• Seattle: 39.6%
• Charlotte, N.C.: 36.6%
• San Diego: 35.6%
• Portland: 34.3%
• Columbus, Ohio: 34.2%
• Cleveland: 33.9%
• Virginia Beach, Fla.: 33.2%
• Washington D.C.: 32.4%
• Baltimore: 31.4%
• Dallas - Fort Worth, Texas: 30.7%
• San Francisco: 30.7%
• St. Louis: 30.7%
• Los Angeles: 30%
• Denver: 29%
• Philadelphia: 25%
• San Jose, Calif.: 22.7%
• Boston: 22%
• New York: 21.3%
• Pittsburgh: 16.7%
• U.S. average: 31.4%

Read the whole article here. 

Shadow Inventory: 46 Months to Clear Distressed Housing Supply

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.

Read the whole article here. 

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It is 4 years away to clear all of them. I think the end of bank foreclosure is near. The impact from bank distressed properties will lesson in 1 - 2 years.

LPS: Home Prices Increased, but We've Been Down This Road Before

For the first time since March 2010, data from Lender Processing Services (LPS) showed an increase in home prices. 

“Reasons for caution are clear, as we’ve been here before. Non-seasonally adjusted prices increased for a few months in early 2009, 2010 and 2011 – trends that all ended by summer, after which all the gains – and then some – were lost,” said Raj Dosaj, VP of LPS Applied Analytics.


Read the whole article here. 

RealtyTrac: Short Sales Up 33% in January, Outpace REO Sales in 12 States

Short Sales has replaced REO and becomes the dominating theme in foreclosure market since 2nd half of 2011.
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Short sales even outpaced bank-owned REO sales in 12 states, including Utah, California, Arizona, Florida, Indiana, Colorado, New York and New Jersey.

Read more here.

California Home Prices Going Up, Inventory Down, C.A.R. Reports

The median price of a single-family home for March 2012 was $291,080, a 1.6 percent increase compared to a revised $286,550 for March 2011, and a 9.2 percent increase compared to February’s median price of $266,660. The month-over-month increase was the largest since March 2004.

When breaking up prices by specific regions, the San Francisco Bay area was an exception, seeing a year-over-year decrease of 1.6 percent, but a 9.1 percent month-over-month increase.

Read more here.

BofA Makes Changes to Trim Short Sale Timeline

Bank of America says it will now be able to provide a decision on a short sale offer in 20 days. Typically, BofA’s short sale process has taken anywhere from 45 days upwards.

See the article here.

Best Markets for Single-Family Rental Investments

from DSNews on 4/12/2012

I don't know how those cap rates are calculated. In Northern California, the cap rate can range from 3% to 8% if you hire a property manager. Lowest cap rate of 5.4% sounds still high.
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Based on the 26 major markets CoreLogic assessed, the markets that yield the highest single-family rental cap rates were generally in Florida or the Midwest. West Palm Beach had the highest rate at 12.4 percent, followed by Cleveland (12.3 percent), Fort Lauderdale (12 percent), Chicago (11.6 percent), and Las Vegas (11.4 percent).

The common denominator for areas with lower cap rates was lower than average prices. Honolulu at 5.4 percent had the lowest cap rate, followed by Raleigh (7.3 percent), and Austin (7.7 percent). Among the larger markets, Miami had the lowest cap rate at 7.7 percent, which is partly due to improved home prices.

As of January 2012, cap rates for the single-family market averaged 8.6 percent, according to CoreLogic.

Home Prices Have Been Rising for Three Months

As you may already know, bay area housing price is going up in the past 3 months. Multiple offers are everywhere. I've heard 28 offers on a house.


Standard & Poor’s reported Tuesday that it’s closely watched Case-Shiller index declined in January for the fifth straight month, with both the 10-city and 20-city composite readings slipping 0.8 percent from December.
But according to John Burns Real Estate Consulting (JBREC), that’s stale news and doesn’t reflect what’s actually happening in the market right now. In fact, the independent research company says home prices are rising.

Read more here.

Taking a year or more to foreclose a property?

The average loan in foreclosure has been in the process for 571 days, but judicial states are weighing heavily on that average.

Foreclosures in judicial states have aged an average 654 days, while foreclosures in non-judicial states have aged an average 297 days, according to Moody’s. 

To be relevant to you or to California, which is a non-judicial state, it will take 10 months to foreclose a house. 

Read more here.

In Stockton, Calif., slow fall off financial cliff

By HANNAH DREIER, The Associated Press

The city of 290,000 that rode the wave of the housing boom in the late 1990s and early 2000s now finds itself littered with foreclosed homes, saddled with pension, health care and other obligations it can't afford, and unable to pay its bills.

The City Council voted last month to suspend $2 million in bond payments and begin negotiations with bond holders, creditors and unions. A new California law requires that cities begin a 60-day mediation process before filing for Chapter 9 bankruptcy, though city leaders can file at any time if negotiations stall.

Though many communities across the country are struggling with their finances and some already have filed for bankruptcy — Pennsylvania's capital of Harrisburg, Jefferson County, Ala., and little Central Falls, R.I. — Stockton's litany of problems stand out.

The unemployment rate has doubled over the past decade and now hovers around 16 percent. A fifth of residents live below the poverty line.

Read the whole article here 

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Zillow report: Median Rent Prices on the Rise as Home Values Drop

While homes prices continue to be on the decline, rent prices are actually on the rise and showed a 3 percent increase from January 2011 to January 2012, as opposed to home values, which dropped 4.6 percent during that same period, according to the January Zillow Real Estate Market Reports. Zillow data also showed year-over-year gains for 69.2 percent of metropolitan areas covered by the index while only 7.3 percent of metros saw increases in home values. Based on the Zillow Rent Index, the states with the greatest increases in median rent over a year were New Jersey (+16.5), New York (+13.7), Kansas (+10.2), Indiana (+10), and Michigan (+10.0). » Read More

Warren Buffett's View on Single Family Home Investment

On Monday, February 27, 2012 Warren Buffett appeared live on CNBC for his annual “Ask Warren” marathon. During this interview he mentioned that one of the best investment opportunities around right now in the United States are Single Family Homes!

BUFFETT: I would say that single-family homes are cheap now, too.

BECKY: You would?

BUFFETT: Yeah, single-family homes— but if I had a way of buying a couple hundred thousand single-family homes and had a way of managing— the management is enormous— is really the problem because they're one by one. They're not like apartment houses. So— but I would load up on them and I would take mortgages out at very, very low rates. But if anybody is thinking about buying a home— five years ago they couldn't buy them fast enough because they thought they were going to go up, and now they don't buy them because they think they're going to go down. And interest rates are far lower. It's a way, in effect, to short the dollar because you can— you can take a 30-year mortgage and if it turns out your interest rate is too high, next week you refinance lower. And if it turns out it's too low, the other guy's stuck with it for 30 years. So it's a very attractive asset class now.

BECKY: If you are a young individual investor at home and you have your choice between buying your first home or investing in stocks, where would you tell someone is the better bet?

BUFFETT: Well, if I thought I was going to live— if I knew where I was going to want to live the next five or 10 years I would— I would buy a home and I'd finance it with a 30-year mortgage, and it's a terrific deal. And if I— literally, if I was an investor that was a handy type, which I'm not, and I could buy a couple of them at distressed prices and find renters, I think that's— and again take a 30-year mortgage, it's a leveraged way of owning a very cheap asset now and I think that's probably as an attractive an investment as you can make now.

After Two-Year Lull, Delinquencies Rise for Second Straight Quarter

The national mortgage delinquency rate rose during the fourth quarter of 2011, TransUnion reported Tuesday, marking only the second time since the end of 2009 the Chicago-based credit bureau has recorded an increase in its quarterly assessment of past due mortgage payments.

The first was during the third quarter of 2011, with the succession signaling what could be a troubling trend in the making.

The rate increased from 5.88 percent at the end of the third quarter to 6.01 percent as of the end of the fourth.

The highest mortgage delinquency rates during the fourth quarter were found in Florida (14.27%), Nevada (12.08%), New Jersey (8.32%), and Arizona (7.50%).
States with the lowest mortgage delinquency rates included North Dakota (1.50%), South Dakota (2.45%), Nebraska (2.57%), and Alaska (2.77%).

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You can read the whole article here.