homesmillbrae.com » Rough Winter

Housing Recovery Leaves Some Behind

Fri, 08 Mar 2013 08:11:42 +0000

To add to the delays, now some non-judicial states are seeing a big jump in backlogs due to new state laws that while attempting to safeguard borrowers, are delaying the foreclosure process in general.

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

Foreclosure-Related Homes Still Driving Sales

Fri, 01 Mar 2013 13:22:22 +0000

Foreclosure-related sales made up 21 percent of all U.S. sales in 2012 and short sales, when the home is sold for less than the value of the mortgage, made up 22 percent, according to a new report from RealtyTrac. Add it up and 43 percent of all 2012 sales were of distressed properties.

(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

Foreclosure-Related Homes Still Driving Home Sales

Thu, 28 Feb 2013 19:19:35 +0000

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

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

(Read More: Homeowners Rise Above Water on Mortgages)

(Read More: Taking The Real Estate Recovery Local)

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

Pending Home Sales Soar Despite Rough Winter

Thu, 28 Feb 2013 01:11:50 +0000

Banks have been slow to put foreclosed homes up for sale recently, possibly waiting for prices to improve further. While some expected a surge in inventory once home prices began to improve, that so-called “shadow supply,” has yet to emerge. Prices are rising fast, up nearly 7 percent in December from a year ago in the nation’s twenty largest real estate markets, according to the SP/Case Shiller Index. But some would-be sellers may be waiting to see just how high prices move in the coming months, while millions of others are still trapped underwater, owing more on their mortgages than their homes are worth.

Mortgage applications to purchase a home fell 5 percent last week from the previous week and is now at its lowest level since the end of last year, according to a Mortgage Bankers Association weekly survey. Applications historically start to pick up around now, as President’s Day weekend marks the unofficial start of the usually busy spring housing season.

(Read More: Homeowners Rise Above Water on Mortgages)

Regionally, the Realtors’ Pending Home Sales Index in the Northeast rose 8.2 percent in January and is 10.5 percent higher than January 2012. In the Midwest the index increased 4.5 percent and is 17.7 percent above a year ago. Pending home sales in the South rose 5.9 percent and are 11.3 percent higher January 2012. In the West the index edged up 0.1 percent in January but is 1.5 percent below a year ago. Supplies of homes for sale are most limited in the West, where investors have been buying distressed properties in bulk.

(Read More: Jumbo Mortgages Are Back: Should You Be Worried?)

Article source: http://www.cnbc.com/id/100501214