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Foreclosures Plunge, but New States Now Suffer

Thu, 11 Oct 2012 18:52:18 +0000

In another sign that the still shaky housing recovery might be finding its footing, foreclosure filings in some of the hardest hit states of the housing crash have plummeted dramatically, and overall the nation is seeing the lowest level of foreclosure activity since 2007.

Foreclosure filings, which include notices of default, scheduled auctions and bank repossessions, were reported on 531,576 U.S. properties during the third quarter of this year, according to RealtyTrac, a foreclosure sales and data website.

That is a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011. One in every 248 U.S. housing units with a foreclosure filing during the quarter.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.

There is fast becoming a large divide in foreclosure activity between states that require a judge in the foreclosure process and those that don’t. The latter, which include formerly hard-hit states like California, Michigan and Arizona, are non-judicial, and foreclosures there have cleared the process faster. In states like New York, Florida, New Jersey, Ohio, and Illinois, where a judge is required, the picture is still bleak. (Read More: Top States for Business 2012.)

Foreclosure activity jumped on a year-over-year basis in 14 out of the 26 judicial foreclosure states. New Jersey saw a 130 percent increase, New York a 53 percent jump and Pennsylvania a 35 percent increase. This will make it harder for overall home prices to improve in those states, as distressed home sales bring values down. (Read More: Why Him Refinancing Boom Is Different This Time.)

It is a far different story in California, where overall foreclosure numbers are still high, but are down 45 percent from a year ago, according to RealtyTrac. Eager investors, as in Arizona, are standing ready to buy distressed properties, but they are finding little supply, and that is putting upward pressure on prices at the low end.

The inventory of lower-priced homes, in fact, is down more than 40 percent in California from a year ago, according to a new report from Zillow
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]. That is making it harder for first-time home buyers, who are in competition with often all-cash investors.

“First-time homebuyers are being squeezed out of the market by falling inventory and the rapid influx of investors looking to buy basic homes to rent out to the growing population of people who have recently been foreclosed upon,” said Stan Humphries, Zillow chief economist. “Investors are paying in cash and can close sooner, which is more favorable to banks and homeowners looking to sell.” (Read More: Apartment Demand Ebbs as ‘Avalanche’ of New Units Open.)

Supplies of lower priced homes are also down nationwide, 15 percent, according to Zillow, but the numbers differ dramatically state-to-state. While investors have focused on the markets out West and Florida, where the housing crash hit hardest, they may now have to turn to new locations, where they will find better deals. As home prices rise in Arizona, Nevada and California, the margins for profit shrink.

Make no mistake, despite nine consecutive quarters of annual drops in foreclosure activity, there are still 3.4 million homes that have either delinquent loans or are already in the foreclosure process, according to LPS Applied Analytics. Volumes of distressed properties will jump dramatically in judicial states throughout 2013, according to several surveys, so while the overall housing market is improving, recovery, like everything else in real estate, will be highly local.

—By CNBC’s Diana Olick; Follow Her on Twitter @Diana_Olick and Facebook.

Questions? Comments?

Article source: http://www.cnbc.com/id/49371943?__source=RSS*blog*&par=RSS

Home Prices See Gains, But That’s Not the Whole Story

Tue, 05 Jun 2012 18:21:33 +0000

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It is not exactly a trend, but for the second-straight month, U.S. home prices saw year-over-year gains.

Including distressed sales (foreclosures and short sales), prices rose 1.1 percent in April, according to a new report from analytics firm CoreLogic.

Excluding distressed sales, prices rose 2.6 percent. Prices have not been up two months in a row since June 2010, when the home buyer tax credit was in force.

The national gains, however, belie a deeply disparate state-to-state housing market.

Home prices rose dramatically in markets where distressed homes make up the majority of sales, like Arizona, up 8.8 percent annually and Florida, up 5.5 percent. That’s because inventories of foreclosures have shrunk due to more slowdowns in bank processing.

Meanwhile other states with relatively smaller shares of distressed sales saw prices plunge: Delaware, down 10 percent, Alabama down 4.4 percent and Connecticut down over 2 percent, according to CoreLogic.

The spring sales season, while not exactly robust, was busy, especially for investors in distressed properties.

As for the summer, the numbers do not look as strong. After two months of gains, asking prices on for-sale homes, a two-month leading indicator, were unchanged in May month-to-month, according to a new report from sale site Trulia.com.

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Investcorp acquires $65m US properties

Tue, 13 Mar 2012 09:40:52 +0000

Investcorp acquires $65m US properties

Manama:

Bahrain-based Investcorp, a leading provider and manager of alternative investment products, has acquired a portfolio of mixed-use commercial real estate properties in the Northern San Francisco Bay Area in the US.

In the largest transaction closed in the North Bay area so far this year, Investcorp’s US-based real estate arm acquired the properties for approximately $65 million, said a statement.

The predominately Class A portfolio comprises 14 buildings, including a mix of office, industrial, and retail properties concentrated in Petaluma, also known as Telecom Valley, totaling 840,637 sq ft.

In acquiring the portfolio, Investcorp ventured with PBJ Acquisitions, a San Francisco-based real estate owner and operator. Together Investcorp and PBJ will seek to increase the net operating income of the properties by leasing the currently vacant space and by renewing existing tenants.

Mohammed Al Shroogi, Investcorp’s president for Gulf Business, said: “Investcorp Real Estate has over 16 years of experience and has completed transactions totaling over $10 billion. In the last 12 months alone, Investcorp has deployed more than $200 million of capital in US real estate including two other acquisitions in the greater Los Angeles area.” – TradeArabia News Service

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Plunging Mortgage Rates Won’t Juice Housing

Thu, 04 Aug 2011 16:58:13 +0000

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The one positive in all the uncertainty surrounding the nation’s debt was a plunge in Treasury yields, which in turn sent mortgage rates to record lows.

The 30 year fixed hit a near-low of 4.45 percent last week from 4.57 percent, and the 15 year made a new low of 3.52 percent, according to the Mortgage Bankers Association. Those low rates pushed refinance applications up 7.8 percent and purchase applications up 5.2 percent (both seasonally adjusted).

So are we housing geeks now jumping for joy? All good? Maybe not so much.

“Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year’s level. Factors such as negative equity and a weak job market continue to constrain borrowers,” notes the MBA’s VP of research and economics, Michael Fratantoni. “Purchase activity increased off of a low base, returning to levels of one month ago, but remains weak by historical standards.”

So even ridiculously low rates are not exactly boosting the housing recovery; that’s because rates have been historically low for a while.

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Article source: http://www.cnbc.com/id/44004035?__source=RSS*blog*&par=RSS

Cancellations Roil Realtors

Thu, 21 Jul 2011 08:16:36 +0000

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Forecasters expected sales of existing homes to rise in June because the pending home sales index, which measures signed contracts, rose in May. If you consider it takes 1-2 months to close, then there’s your indicator.

But that was not the case.

Sales fell, not by much, down 0.8% month-to-month, surprising even the Realtors, who thought May would be the weakest point. Sales were down 8.8 percent from June of last year, when most closings took place from the end of the home buyer tax credit.

What Realtors and prognosticators did not even consider was a strange phenomenon: June saw a spike in the contract cancellation rate to 16 percent. Existing home cancellation rates usually run under ten percent, and, in fact, in May were at just 4 percent. Cancellation rates for new home construction usually run higher than that, as buyers of newly built homes tend to be more volatile and put less (often nothing) down when signing a contract.

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Struggling to Make a House Call on Confidence

Fri, 17 Jun 2011 22:49:53 +0000

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Today’s report on consumer confidence, or the striking lack of it, is yet another sign that housing is going to be in a very sticky state for a while. It’s hard to say whether housing is weighing on confidence or lack of confidence is weighing on housing; the answer lies somewhere in the middle.

Next week is a big week for housing because we get the all-important readings on existing and new home sales for May. The pending home sales index, based on contracts signed, not closings, fell dramatically in April, and that has the housing prognosticators building another arc for the flood of bad news yet to come. Home builder sentiment fell in June, largely based on competition from distressed properties and high material costs, but you can bet the builders know we’re in for some tough sales numbers in their market as well.

I know I’ve said this before, but here I go again: All real estate is local, but confidence is national. Potential summer buyers, who are historically few and far between, will be watching the national numbers, as they try to time the bottom of the market, which is of course impossible to do.

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Commercial Real Estate Clouded by Delinquencies

Thu, 05 May 2011 23:11:12 +0000

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Barely a few minutes after reading an article in the Wall Street Journal about banks finally opening the “spigot for commercial real-estate,” the folks over at Trepp issued their monthly report on the delinquency rate for commercial mortgage backed securities (CMBS); let’s just say it isn’t good.

After two months of very minimal rate increases, the number jumped in April, 23 basis points, to 9.65 percent, “the highest reading in the history of the CMBS market,” according to Trepp.

To say the recovery is, as the report notes, “bumpy,” is putting it mildly. The rate should be going down for two reasons:

First, as new CMBS deals, which are generally current loans, are added to the pool of all CMBS loans, the larger denominator in itself should push the rate down. Second, “special servicers have been resolving a greater number of troubled legacy CMBS loans than they were 18 months ago,” according to Trepp. And yet the rate goes higher.

So now the balance of delinquent loans exceeds $62.8 billion, up from $61.5 billion in March.

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New Evidence Mortgage Market Is Choking Housing Recovery

Sat, 09 Apr 2011 22:21:02 +0000

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One piece of data does not a conclusion make…two pieces get closer. A new report on the apartment market out today from Reis, Inc [ REIS 35.00 +27.165 (+346.71%) ]. shows a big surge in net absorptions, despite very little new supply of apartment units. Apartment vacancies dropped 40 basis points to 6.2 percent, which is a record plunge.

Rents are rising steadily, but the renters keep coming.

“We are now seeing the results of a sharp convergence of positive factors for apartment rentals. First, as labor markets continue to improve and hiring picks up, demand for housing is increasing, particularly in the 20 to 34 year segment of the labor market,” notes Reis’ Victor Canalog. “However, with the single family home sales market still on the ropes, and with deflationary expectations for home prices for at least the coming year, few of these newly hired young workers have the appetite to commit to buying a home.”

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New Evidence Mortgage Market is Choking Housing Recovery

Thu, 07 Apr 2011 07:49:01 +0000

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One piece of data does not a conclusion make…two pieces get closer. A new report on the apartment market out today from Reis, Inc [ REIS 7.80 +0.05 (+0.65%) ]. shows a big surge in net absorptions, despite very little new supply of apartment units. Apartment vacancies dropped 40 basis points to 6.2 percent, which is a record plunge.

Rents are rising steadily, but the renters keep coming.

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Why Housing Is Going Through a Double Dip

Wed, 23 Mar 2011 17:53:57 +0000

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The sales pace of newly built homes is now at the lowest on record.

Sales dropped nearly 17 percent in February after a big drop in January. Put that on top of the nearly 10 percent February drop in existing home sales reported earlier this week and the incredibly low level of mortgage purchase applications, and you get a clear case for a double dip in housing.

Remember, this number from the Census is based on contracts signed in February, not closings, like the existing home sales number from the Realtors. That means it is a real indicator of how the Spring market is starting.

“Further, the plunge in new home prices [down 8.9% year over year] does not bode well for existing sales prices in February, which will close in March and April and be reported by NAR in April and May,” notes analyst Mark Hanson.

I really don’t have to tell you that, since the vast majority of you voting on the blog cast the double-dip vote yourselves. The question now is: How long will it last? As I noted yesterday, more than a hundred economist and housing types surveyed by MacroMarkets said there would not be real recovery in housing until 2013.

I want to talk pros and cons.

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