Mortgage rates are about a full percentage point higher today than they were at the beginning of March. The average rate on the 30-year fixed hit 4.80 percent by the middle of last week, according to the Mortgage Bankers Association. That is the highest since April 2011.

Rates have been trending higher on expectations that the Federal Reserve will begin to taper its investments in mortgage-backed securities.

Home prices are also trending higher in part due to the fact that there are fewer distressed properties for sale. Excluding distressed sales, prices were up 11.4 percent year over year. Distressed properties have seen big price jumps in the past year, as investors fight to get the remaining bargains.

Markets hit hardest by the housing crash have seen some of the biggest price gains: Nevada home prices were up 27 percent annually in July, California up 23 percent and Arizona up 17 percent. Completed foreclosures nationally were down 25 percent in July from a year ago, according to CoreLogic.

(Read more: Map: Tracking the recovery)

Prices are also getting a boost from the sheer lack of properties for sale. Inventories are way down in local markets across the nation, and home builders are not ramping up production fast enough to meet new demand.

While the inventory situation is not expected to ease very much over the next year, home prices are expected to weaken slightly, as higher rates and weak income growth put a cap on just how high prices can go.

Article source: http://www.cnbc.com/id/101004096

SAN FRANCISCO (CBS/AP) – The real estate tracking firm DataQuick said Thursday that the median price for homes in the nine-county San Francisco Bay area reached $555,000 in June, an increase of 6.9 percent over the previous month.

The real estate data firm is reporting the median year-over-year price paid for a Bay Area home rose at its fastest pace on record in June.

DataQuick said Thursday that the rise was the result of disappearing distress sales, an improving economy and mortgage rates remaining low.

However, the number of homes sold dropped 7.5 percent to 7,897 in June. DataQuick attributes the decrease to the number of homes for sale falling short of demand and an easing of purchases by cash and investor buyers.

The real estate information service says last month’s sales were 20.9 percent below the June average of 9,993 sales.

• See the full DataQuick report and County-by-County sales breakdown

Home prices in the Bay Area are through the roof according to a new study by Data Quick.

Back in 2009, during the depths of the recession, the median price of a home was $290,000. Now that figure is $555,000; six percent higher than last month and 33 percent higher than one year ago.

Data Quick Analyst Andrew LePage said it’s a matter of supply and demand. We’ve seen sales fall on a year-over-year basis for the last five months in a row.

Richard Green with the Lusk Center for Real Estate at the University of Southern California said much of it is the shortage of homes for sale.

“Inventories are very small,” he said adding that there are many more all cash transactions than ever, which drives up the market for higher-end homes and drives up sale prices.

Speculators have said that things could ease with fewer homes underwater, prompting sales and increasing supply. In addition, developers are also starting to build new homes again.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Article source: http://sanfrancisco.cbslocal.com/2013/07/18/median-bay-area-home-price-jumps-again-as-inventory-remains-tight/

“What are they so excited about?” asked Hunter. “That they have pricing power.”

Housing completions fell 0.9 percent to an annualized rate of 690,000, well below demand. Underlying demand consists of new households forming (about 1.1 million, according to Census data,) replacement demand (about 250,000 homes) and second home demand (about 50,000,) according to IHS Global Insight.

“The wide gap between housing completions and underlying demand suggests that inventories are likely to get leaner over the next 12 months,” IHS analysts said in a report to investors. “For the record, it takes about seven months on average for a single-family permit to turn into a completed home.”

The supply pinch can be seen quite dramatically in California, where there was barely a two-month supply of homes for sale in May. That, and a change in the mix of home sales from distressed to nondistressed, pushed the median sale price up 32 percent from a year ago. Some might call that a “bubble,” but the real state agents do not.

(Read More: Rising Rates Scare Borrowers Into Action)

“While home prices are increasing at levels above those observed in 2006-2007, the fundamentals of the housing market are much more solid than what we experienced a few years ago,” said Leslie Appleton-Young, chief economist for the California Association of Realtors. “More home buyers are putting down larger down payments, and many of them are opting for more stable loan products.”

That may be, but the jump in the median California home price jump is predominantly due to a change in the mix of homes selling, that is, more nondistressed sales and fewer foreclosure and short sales. The median price is where half the homes sell for more and half sell for less. In May, distressed properties accounted for 31 percent of total sales in California, down from 52 percent of sales a year ago, according to Propertyradar, a data and analytics company. Meanwhile, nondistressed sales were 69 percent of total sales, up from 48 percent a year ago.

Article source: http://www.cnbc.com/id/100821976

Home News Case-Shiller: San Francisco Home Prices Rose Again in March, Climbing 22% YOY

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By Brandon Cornett | Housing Market News
June 14, 2013 | © 2013, All rights reserved

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By Brandon Cornett | June 14, 2013 | 2013, All rights reserved

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Mortgage shopping?

The housing market in San Francisco continues to be a standout, where prices are concerned. According to the latest release of the SP/Case-Shiller Home Price Index, house values in San Francisco rose 3.9% from February to March of this year. Prices have risen by a whopping 22% annually, when measured from March 2012 to March 2013. There is a two-month reporting lag with the Case-Shiller index, which is published on the last Tuesday of every month.

The chart below shows the 20 cities that make up the Case-Shiller 20-city composite. As you can see, the San Francisco real estate market experienced the second-largest annual gain in home prices, slightly behind Phoenix, Ariz.

San Francisco had the largest monthly gain of any metro in the 20-city index, and one of the largest monthly returns in the country. According to the Case-Shiller index, San Francisco property prices rose by 3.9% from February to March.

The Bay Area real estate market continues to rise a wave of recovery that has spread across the entire state. In the chart above, you’ll also notice strong annual returns for San Diego and Los Angeles. These returns are indicative of the positive housing trends throughout California.

In San Francisco’s real estate market, as in other metros across the Sunshine State, housing inventories have plummeted. According to Realtor.com’s monthly housing summary, the total number of homes listed for sale in San Francisco has dropped by 31.22% over the last year. This trend is being seen in other California cities as well, and often to a larger degree. Listing inventory is down 52% in Orange County, 46% in Oakland, and 45% in San Jose.

These are unprecedented statistics. Imagine half of a local real estate market disappearing in a single year. It’s no wonder home buyers are having trouble finding properties in these markets. The supply-and-demand picture has shifted considerably over the last couple of years, and it’s sending prices north. In short, more buyers are vying for fewer properties.

The median list price within the San Francisco housing market has climbed by more than 20% over the last year, according to Realtor.com.

According to DataQuick, a San Diego-based company that provides real estate market data, the median sale price in the nine-county Bay Area reached $519,000 in May. That was an increase of 1.8% from the previous month and 29.8% from the same time last year. The median for San Francisco County climbed to $870,000 last month — the highest of any county in the Bay Area.

Within the city proper, the median sale price is a cool million. According to the real estate firm Redfin, sellers within the city are getting 112% of their asking prices, on average. Clearly, it’s a good time to be selling a home within the San Francisco real estate market.

Home sales have slowed over the last year. In May 2012, a total of 8,899 sales were recorded across the Bay Area. Last month, 8,541 sales were recorded, 4% fewer than the same time last year. In San Francisco County, home sales have declined by 14% over the last year. But this is certainly not due to a lack of demand. It’s from a lack of inventory. If every buyer who wanted to buy a home in the Bay Area could actually find one, sales would probably be 20% to 30% higher this year.

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Filed under Housing Market News

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Article source: http://www.homebuyinginstitute.com/news/case-shiller-san-francisco-409/

(Read More: Short Supply Has Home Sales ‘Squeaking’ Out Gains)

While Humphries does not make the connection to rising bank repossessions in the report, his numbers do. They show inventory easing much more on the low end of the market, where distressed homes tend to be.

“The greatest year-over-year decreases in inventory were among more expensive homes, with the availability of top-tier and middle-tier properties each falling 15.7 percent year over year. The number of bottom-tier properties for sale on Zillow nationwide fell only 2.5 percent in early June compared to June 2012.”

As more bank-owned homes hit the market, inventories are likely to turn positive again in the near future.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100812845

(Read More: Despite Rising Demand, Some Builders Slow Production)

Listings were down 17 percent in March from a year earlier, according to the association, with several factors affecting inventories. Millions of Americans still owe more on their mortgages than their homes are worth, and that makes it impossible for them to move without incurring major expense.

Others are watching home prices rise and may be waiting to see just how high they go before listing their homes.

Meanwhile, home builders, while trying to ramp up production, are faced with a lack of land, labor and materials. Single-family starts were at a seasonally adjusted annual rate of just 619,000 units, an improvement from the worst of the crash but far below historical norms.

(Read More: Map: Tracking the US Real Estate Recovery)

Regionally, the pending home sales index was unchanged in the Northeast from February, up 0.3 percent in the Midwest, up 2.7 percent in the South and up 1.5 percent in the West.

Existing home sales in March, based on closings, fell just under one percent in March. While higher than a year ago, home sales appear to have leveled off, despite this being the normally busy spring season.

(Read More: Government Mortgage Fix Is Failing)

Article source: http://www.cnbc.com/id/100683911

Inventories are tightest on the low end of the market, where investors came in and bought most of the distressed properties and are now holding them as single-family rentals. There is about a four-month supply of homes priced under $100,000, while there is around a twelve-month supply of homes priced over $500,000. That’s why sales of those low-end homes are down 16 percent from a year ago, and sales of higher-end homes are up 25 percent, according to the Realtors.

(Read More: Housing’s Big Challenge: Student Debt)

“The housing shortage is going to continue,” claimed Yun, who says the builders need to ramp up housing starts by 50 percent. He admits that is unlikely to happen due to land, labor and supply constraints.

Weak supplies are pushing home prices up far faster than wage growth, which is keeping first-time buyers especially on the sidelines. These buyers made up just 30 percent of the market in March, compared to the historical norm of 40-45 percent. They just can’t compete with all cash investors.

(Read More: Why Housing Affordability Is at Risk)

But if prices get too high, investors could leave the market. Their share was already down in March to 19 percent compared to 22 percent just one month ago. The danger is that they will start to unload the homes they own, which would bring much-needed supply back but which could also turn home prices in the other direction.

Article source: http://www.cnbc.com/id/100660999

Nevada instituted a new law criminalizing faulty foreclosures. Banks are taking a big breather there, resulting in the foreclosure backlog doubling in the last 8 months. Massachusetts, a non-judicial state, saw a similar jump after new state foreclosure legislation, and California’s Homeowner Bill of Rights, modeled on Nevada’s law, went into effect in January 2013, so it too will likely see a slowdown in the clearing of distressed loans.

It all brings into question the recent jump in home values, which is being caused by a huge drop in supply of distressed homes.

(Read More: Taking The Real Estate Recovery Local)

Sale prices of homes jumped nearly 10 percent in January, according to CoreLogic. Even with the price surge, inventories continue to drop dramatically across the nation, perhaps because would-be sellers want to see just how high prices will go before testing the waters.

Housing bulls seem unconcerned about the so-called “shadow inventory” of distressed properties, but perhaps they should be. Of the loans that were in foreclosure in January 2012, 42 percent still are, according to LPS. Just 33 percent moved to bank repossession or other forms of liquidation.

In addition, while new mortgage delinquencies are falling in non-judicial states, they are increasing almost 20 percent in judicial states, according to Lender Processing Services.

“The line that we would draw goes through home prices,” Blecher speculated. “If those back logs are having any impact on home prices that could drive new problem loans as well.”

(Read More: Pending Home Sales Soar Despite Rough Winter)

Article source: http://www.cnbc.com/id/100533234

Supplies are down across the nation, not just in the former crash markets, like Phoenix and Las Vegas, where investors decimated inventories of distressed homes in bulk purchases. Listings are down 31 percent in Seattle from a year ago, down 32 percent in Denver, down 20 percent in Houston, down 37 percent in Boston, according to local Realtor associations.

(Click Here: Recover Watch Map, Complete Coverage)

“At the moment it’s a seller’s market again,” said David Fogg, a real estate agent in Burbank, CA. “Very low inventory, very low interest rates, almost no bank inventory of homes, it’s crazy out there. Every good property I’ve listed this year has brought 10-50 offers and sales prices 10-20 percent over comps. Cash is King.”

Nearly one third of all existing home sales in January were paid for in cash, and not just by investors, who are making up a shrinking share of the market. Fierce competition is forcing buyers to use every advantage, given that so many are going after so little.

In California’s San Fernando Valley there are usually over 9,000 homes for sale this time of year, according to real estate agent Billy Wynn. Today there are just over 1,400.

“Realtors are getting so many offers they are taking the homes off the market and not accepting additional offers before any offer is even accepted,” said Wynn. “This is real estate bubble 2.0 on steroids.”

It is a puzzling situation, given all the warnings of a tsunami of so-called “shadow inventory” that was supposed to be flooding the market right now. As it stands, fewer distressed properties are coming to the market.

“The ticking time bomb of shadow supply has been diffused by a combination of foreclosure processing delays in judicial states, legislation slowing down the foreclosure process in non-judicial states, foreclosure prevention programs and initiatives encouraging short sales,” said Daren Blomquist of RealtyTrac. “Notably, in 2012, was the National Mortgage Settlement, which both encouraged foreclosure prevention and short sales as an alternative to foreclosure, and the loosening of short sale guidelines by Fannie Mae and Freddie Mac in November.”

As a result, short sales, where the home is sold for less than the value of the mortgage, are rising as a share of total distressed sales, while bank-owned home sales are falling. Investors are now competing for such little supply that they are ironically pricing themselves out of the market.

(Read More: Distressed Homes Still Drive Sales)

“We are hearing also, that new home buyers are not really looking at the foreclosure market—the houses are either not in good neighborhoods or the house is in bad condition and needs a lot of updates,” noted Paul Miller, an analyst at FBR. “So home buyers are either going to new-builds or being very picky with the type and shape of the house. We are hearing from plenty of mortgage brokers that they are working with many couples, and they just can’t find the perfect house.”

Article source: http://www.cnbc.com/id/100512238

(Read More: Pending Home Sales Soar Despite Rough Winter)

Banks are making more of an effort to do short sales instead of taking a home to foreclosure, and new federal guidelines are streamlining the process. That led to a 15 percent drop in sales of bank-owned homes and a 6 percent increase in short sales. This has helped home prices because short sales on average sell for a higher price than do bank-owned homes, because they are usually neither abandoned nor vandalized.

“Although foreclosure-related sales represent a shrinking share of total sales, primarily because of fewer bank-owned purchases, distressed sales are still a disproportionately high portion of the overall housing market,” said Daren Blomquist, vice president of RealtyTrac. “And while distressed properties — whether bank-owned, pre-foreclosure or short sales not in foreclosure — are still selling at a significant discount compared to non-distressed properties, average distressed property prices are increasing in many markets thanks to strong demand and limited inventory.”

(Read More: Housing May Not Be as Healthy as It Looks: NAHB Pro)

Limited inventory continues to be the key in today’s housing market, driving prices higher than most analysts expected. This is surprising, as distress in the market has not simply vanished. There are currently 1.7 homes in the foreclosure process and 1.5 million more seriously delinquent loans (90 days without a payment), according to a new report from Lender Processing Services. Banks are being more aggressive with loan modifications and principal forgiveness, but many of these homes will inevitably end up going back to the banks.

“Inventories continue to be low because non-distressed sellers are largely absent from the market, apparently waiting for prices to increase even more before they decide to sell,” noted Blomquist. “I think we are seeing signs of the shadow [foreclosure] supply hitting, but more on a market-by-market basis and often in the form of short sales as opposed to REO [bank-owned] sales — although REO sales are starting to show signs of life in judicial foreclosure markets with bigger backlogs.”

(Read More: Homeowners Rise Above Water on Mortgages)

Strong investor demand for these properties is pushing prices higher, even creating bubbles in some of the formerly hardest hit markets, like Phoenix and Las Vegas. If prices get too high, however, and investors can’t reap the returns they need, then supplies could grow. So far that has not happened, but home prices are rising far faster than anyone predicted.

(Read More: Taking The Real Estate Recovery Local)

Article source: http://www.cnbc.com/id/100503223