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Sat, 14 Sep 2013 07:12:48 +0000

Home builders are facing a tough buyer market, as mortgage interest rates rise and wage growth struggles. They are facing soaring land costs as well as limited labor and supplies. This pushed Pulte to raise prices 9 percent in the second quarter of this year from a year ago, even as the company faced a 12 percent drop in net new orders.

(Read more: Banks hit the brakes on mortgage operations)

The summer has not proved much better for the builders. Mortgage applications to purchase a newly built home dropped 14 percent from July, according to a new report from the Mortgage Bankers Association. Still, demand is there, and after building next to nothing during the housing crash, U.S. builders are now faced with renewing the nation’s housing stock. That, Pulte executives say, is why innovation is so important.

“When I was at my first conference, I met someone and referenced that I was doing market research,” said Ian Wild, Pulte’s director of market research. “The fellow said, ‘Let me tell you how I do market research. I get in my car and I drive down the road to the competition and I say what’s selling and why?’ And as a result of that, the innovation in the home building industry is, well, there’s very little.”

So on a hot September morning, with the roar of O’Hare’s traffic overhead, small groups of homeowners wind their way through the rows of homes in frames of back doors and out frames of front doors, gripping their clipboards and checklists, and eyeing every detail and every measure of space.

“It’s much easier than looking at a blueprint, where you keep turning it around trying to understand which way the door swings. Will this be this way?” asked Chicago-area homeowner Sasha Zingerman, motioning. “It’s much more comprehendible, and you can physically picture yourself in that space. You could see how you would orient yourself there.”

The subjects are paid to offer their opinions, and after the tours they sit down with a moderator to tell what they like, and more importantly what they do not like.

(Read more: Jobs report tempers mortgage rates)

“I like how it all flows together. It’s open, it’s airy, there’s a lot of light coming in. It seems like a happy environment,” said one woman.

Pulte gets at least five new design ideas from each of these events, which are held across the country, according to Wahl. The latest trends are full home automation (running every system in the home through a smartphone), larger mud rooms, or as Pulte calls them, Everyday Entries. Dining rooms are out, larger kids’ bathrooms are in.

“I don’t think I would ever use the formal dining room, so it would be a wasted space for a room that I don’t use often enough,” added another.

After living through the worst housing crash since the Great Depression, today’s home buyers are more skeptical and less trusting of home builders. Some blame builders for throwing up far too many houses, selling them to speculators and turning a blind eye to an overheated market that was bound to bust. They are treading back in slowly and finding higher prices.

Article source: http://www.cnbc.com/id/101029507

Bay Area home values up 28 percent, luxury home prices leap 11 percent

Thu, 12 Sep 2013 01:03:36 +0000

This home at 3800 Washington St. in the Presidio Heights neighborhood of San Francisco is on the market for $21 million. It has eight bedrooms, seven bathrooms and 17,895 square feet. Prices for homes above $1 million grew by 11 percent during the past year.

Blanca Torres
Reporter- San Francisco Business Times

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The Bay Area’s housing market continues heating up, but for how long?

Home values in the Bay Area rose by 27.8 percent during the past year to an average of $628,200 in July, according to Zillow, a real estate information site. Zillow calculates home value appreciation for all homes, not just homes that have sold or are on the market.

Click on the image for a slideshow of Bay Area homes that are on the market or have risen significantly in value.

San Francisco ranked third nationwide for home value appreciation after Sacramento with 33.1 percent growth to $274,600 and Las Vegas with 30.8 percent growth to $151,600.

Nationwide, home values crept up by 6 percent during the past year to an average $161,600 — about 25 percent of San Francisco’s average (kind of makes you want to move doesn’t it?).

“The U.S. housing market recovery has proven it is on very sound footing,” said Zillow Chief Economist Dr. Stan Humphries. “We have entered a new phase in the recovery when we can begin to turn away from ugly recent history and turn toward what the housing market of the future will look like and how it will act.”

The housing market has improved significantly, but I’m not sure the Bay Area’s performance will continue to rise at the rapid pace we’ve seen in the past couple of years.

Also, the market here is increasingly shifting toward the high-end and away from first-time and entry-level buyers.

First Republic Bank reported today that luxury home prices in the Bay Area jumped 10.9 percent during the second quarter of this year compared with 2012 to an average of $2.9 million — the highest since the fourth quarter of 2008 and approaching the all-time highs of 2007.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/08/bay-area-home-values-up-28-percent.html

Home values rise, but millions still drown in debt

Fri, 30 Aug 2013 06:19:19 +0000

More than three million U.S. borrowers have risen above water on their mortgages so far this year, thanks to swift home price appreciation, according to a new report from online real estate company Zillow.

The negative home equity rate fell in the second quarter of this year, the fifth straight quarterly drop, but it is still alarmingly high and continues to hamper the housing recovery.

Currently, 23.8 percent of homeowners with a mortgage, or approximately 12.2 million, owe more than their homes are worth, down from 15.3 million one year ago, according to the report. Some, however, are still so far underwater that even with fast-rising prices, it will take years for them to see any home equity.

(Read more: Home sales suffer on higher rates: Realtors)

“Widespread rising home values during the past year have helped chip away at negative equity nationwide, helping many homeowners who were only modestly underwater to come up for air. For those homeowners who are deeply underwater, though, there is still a long row to hoe,” said Zillow Chief Economist Dr. Stan Humphries in a release.

(Read more: He’s not buying a house—why is Obama on Zillow?)

Article source: http://www.cnbc.com/id/100995592

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

More Homes Are Above Water, But Some Sellers Still Suffer

Thu, 13 Sep 2012 04:56:08 +0000

As home sale prices rise, overall home equity rises, and consequently more and more mortgages are no longer “under water.”

1.3 million homes that were previously worth less than the mortgages on them came back into positive territory in the first half of this year, according to CoreLogic.

Billions of dollars in home equity are returning, but what exactly are homeowners doing with this new found cash? Not much.

They certainly aren’t taking it out of their homes the way they used to. In fact, they are actually putting more cash in during refinances, according Freddie Mac. Lenders say it is becoming nearly the norm.

“I continue to see large cash infusions at closing to pay down to conforming [loan] limits, as well as increases in monthly payments to obtain lower rates on shorter amortizations, both of which are very atypical traditionally, but more and more common in this latest refi market,” said Craig Strent, CEO of Rockville, Maryland-based Apex Home Loans.

As for home sales, the reason so many people cannot move isn’t entirely negative equity, but what’s called “near negative equity,” or having less than 5 percent equity in your home. 10.8 million or 22.3 percent of all residential properties with a mortgage were in a negative equity position at the end of the second quarter of 2012, according to CoreLogic, but an additional 2.3 million borrowers had less than 5 percent equity. (Read More: Pending Home Sales Beat Expectations in July.)

The bottom line is that most move-up buyers, the ones desperately needed for a real robust housing recovery, cannot move if they can’t make enough in the sale not only to cover the mortgage but to cover real estate agent fees, closing fees and of course a down payment on a new home.

Much of the recovery in the housing market of late has been thanks to investors, who are often all-cash buyers and who do not have to sell a home in order to buy another. All that activity on the very low/distressed end of the market is pushing overall prices higher. (Read More: How Investors Are Skewing Home Price Recovery.)

Many Realtors with whom I’ve spoken have said yes, the low end is still on fire, and even the very high end is doing well because high end buyers don’t rely so much on credit. It’s the middle that is still suffering.

But wait! According to CoreLogic’s report, negative equity is concentrated on the low end of the housing market: “For example, for low-to-mid value homes (less than $200,000) the negative equity share is 32 percent, almost twice the 17 percent of borrowers with home values greater than $200,000.”

So with less negative equity in the middle, why is the low end moving and the middle not? (Read More: Where Are the Move-Up Home Buyers?)

Because the low end activity is largely in short sales (when the home is sold for less than the value of the mortgage) and foreclosure sales. That’s also where we’re seeing investors do all the bulk deals. Witness Fannie Mae’s sale of 699 properties earlier this week to Pacifica Group, a real estate investment company. The homes in that deal averaged around $111,000.

The middle of the market is still struggling with near negative equity, not to mention tighter credit the higher the loan value is. The more expensive the home, the bigger down payment you’re going to need to meet today’s tough standards. Home prices are going to have to come back a whole lot more strongly before the middle of the market is able to move again.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49005248?__source=RSS*blog*&par=RSS

More Homes Are Above Water, But Some Sellers Still Suffer

Thu, 13 Sep 2012 04:56:08 +0000

As home sale prices rise, overall home equity rises, and consequently more and more mortgages are no longer “under water.”

1.3 million homes that were previously worth less than the mortgages on them came back into positive territory in the first half of this year, according to CoreLogic.

Billions of dollars in home equity are returning, but what exactly are homeowners doing with this new found cash? Not much.

They certainly aren’t taking it out of their homes the way they used to. In fact, they are actually putting more cash in during refinances, according Freddie Mac. Lenders say it is becoming nearly the norm.

“I continue to see large cash infusions at closing to pay down to conforming [loan] limits, as well as increases in monthly payments to obtain lower rates on shorter amortizations, both of which are very atypical traditionally, but more and more common in this latest refi market,” said Craig Strent, CEO of Rockville, Maryland-based Apex Home Loans.

As for home sales, the reason so many people cannot move isn’t entirely negative equity, but what’s called “near negative equity,” or having less than 5 percent equity in your home. 10.8 million or 22.3 percent of all residential properties with a mortgage were in a negative equity position at the end of the second quarter of 2012, according to CoreLogic, but an additional 2.3 million borrowers had less than 5 percent equity. (Read More: Pending Home Sales Beat Expectations in July.)

The bottom line is that most move-up buyers, the ones desperately needed for a real robust housing recovery, cannot move if they can’t make enough in the sale not only to cover the mortgage but to cover real estate agent fees, closing fees and of course a down payment on a new home.

Much of the recovery in the housing market of late has been thanks to investors, who are often all-cash buyers and who do not have to sell a home in order to buy another. All that activity on the very low/distressed end of the market is pushing overall prices higher. (Read More: How Investors Are Skewing Home Price Recovery.)

Many Realtors with whom I’ve spoken have said yes, the low end is still on fire, and even the very high end is doing well because high end buyers don’t rely so much on credit. It’s the middle that is still suffering.

But wait! According to CoreLogic’s report, negative equity is concentrated on the low end of the housing market: “For example, for low-to-mid value homes (less than $200,000) the negative equity share is 32 percent, almost twice the 17 percent of borrowers with home values greater than $200,000.”

So with less negative equity in the middle, why is the low end moving and the middle not? (Read More: Where Are the Move-Up Home Buyers?)

Because the low end activity is largely in short sales (when the home is sold for less than the value of the mortgage) and foreclosure sales. That’s also where we’re seeing investors do all the bulk deals. Witness Fannie Mae’s sale of 699 properties earlier this week to Pacifica Group, a real estate investment company. The homes in that deal averaged around $111,000.

The middle of the market is still struggling with near negative equity, not to mention tighter credit the higher the loan value is. The more expensive the home, the bigger down payment you’re going to need to meet today’s tough standards. Home prices are going to have to come back a whole lot more strongly before the middle of the market is able to move again.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49005248?__source=RSS*blog*&par=RSS

Big Banks Pushed to Outsource Mortgages

Tue, 14 Aug 2012 01:16:16 +0000

In the wake of the financial crisis and still in the midst of the foreclosure mess, the Consumer Financial Protection Bureau announced new rules for mortgage servicers designed to protect borrowers and get them faster, more effective and informative service.

The proposed changes by the CFPB would require servicers to consider applications for help from troubled borrowers within 30 days of receiving them. Meanwhile, servicers would not be allowed to proceed with a foreclosure until the decision on a potential modification has been made.
The new rules would apply to all mortgage servicers, not just the nation’s five largest banks that earlier this year agreed to a $25 billion settlement in the wake of the “robo-signing” paperwork scandal.

The new guidelines present new challenges to mortgage servicers — especially big banks already overwhelmed with delinquent loans.

“There’s a finite amount of capacity in the servicing enterprise today, and the system by design was never set up to withstand these rates of delinquency, these high rates of foreclosure for an extended and protracted period of time which is where we’re at right now,” said Edward Delgado, COO of Wingspan Portfolio Advisors, a Texas-based specialty servicer.

That is why many institutions are increasingly farming out servicing, or directly selling the loans to so-called specialty servicers. These entities, which number about two dozen, often have more experience and resources to deal with troubled loans.

Despite improvements in the overall mortgage markets, 5.8 million loans — or 11.9 percent of all residential U.S. mortgages — were either delinquent or in the foreclosure process at the end of June, according to Mortgage Bankers Association data. Mortgage delinquencies increased in the second quarter of this year, reversing a trend of fairly steady drops in the rate.

The bureau’s new policy “amplifies our role as a strategic partner in the prevention of foreclosures for the most part, by enhancing our outreach to homeowners and working closely with the banks to make contact,” said Delgado. He said his company works with smaller pools of troubled loans and can therefore conduct consumer outreach more effectively, even go door-to-door.

Just last week CitiMortgage
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] announced it is selling $158 million worth of mortgages to special servicer Carrington Capital, which will conduct a deed-for-lease program. That’s where troubled borrowers turn over ownership of the home to Carrington and then can rent the home back if they choose, sidestepping a more costly and credit-crushing foreclosure.

“As a financial institution, managing a program of this nature is not within our area of expertise, so we joined with Carrington, one of the best property management companies in the country, to help make this program work,” said Sanjiv Das, CEO of CitiMortgage in a release.

Insiders at Carrington said they expect to see more deals like Citi’s, saying federal regulators are actually pushing larger banks to offload bad loans. The larger firms simply don’t have the capacity to handle the large volume of delinquent loans, made abundantly clear in hundreds of stories from frustrated borrowers who face foreclosure. They tell of lost documents, impersonal service and constant runaround.

Now specialty servicers stand to gain more business; publicly traded servicers like Nationstar
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] may be good bets for investors, as the foreclosure crisis plods on.

“The further we go into the crisis — the addition layers of regulatory oversight, the complexity of various programs that are being engaged — the more that the larger banks will presume a position of being a master servicer maintaining control and oversight of key functions,” said Wingspan’s Delgado. He added the role of special servicer would “continue to expand across the marketplace.”

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48648395?__source=RSS*blog*&par=RSS

Fannie Mae’s New CEO: ‘Comfortable’ With Decision Not to Slash Mortgage Balances

Thu, 09 Aug 2012 12:43:20 +0000

Fannie Mae is no longer bleeding cash, at least for now.

After devastating losses since 2008, the mortgage giant reported its second straight quarter of positive net income, even after making a $2.9 billion dividend payment to the U.S. Treasury. Fannie Mae has taken $117.1 billion from the Treasury since the fall of 2008.

Improving home prices and decreasing mortgage delinquencies have helped to boost the bottom line, but Fannie Mae’s CEO Tim Mayopoulos, who took the reigns of the company earlier this summer, says he’s not convinced housing is out of the woods yet.

“I think it’s too early to declare a national housing recovery,”Mayopoulos said in an interview Wednesday on CNBC. “What’s driving our results has been home price improvements. We are not expecting to see huge improvements going forward.”

Fannie Mae reported net income of $5.1 billion in the second quarter of this year, up from $2.7 billion in the first quarter. Foreclosures, however, still weigh heavily on the balance sheet, despite the far higher quality of loans in the new book of business since 2009. 59 percent of Fannie Mae’s single-family guaranty book of business as of the end of the second quarter consisted of loans it had purchased or guaranteed since the beginning of 2009.

Expectations of an improving housing market prompted Fannie Mae to reduce its future loan loss reserves to $68 billion from nearly $77 billion in the first quarter. The company notes in its report that it believes credit-related expenses will be lower in 2012 than in 2011. Mayopoulos, again, seems to hedge that somewhat.

“We are very excited about the new book of business we’ve been writing since the beginning of the crisis. We believe that we could be profitably going forward but it doesn’t mean we will necessarily make enough every quarter to be able to cover the entire dividend payment to the Treasury,” said Mayopoulos, who added that he is very comfortable with where Fannie Mae’s underwriting standards are now, despite criticism from housing industry players who claim credit is too tight.

Mayopoulos expects home prices to bounce around more before finding a solid bottom, and that will in turn keep millions of borrowers, around 11 million by several recent accounts, in a negative equity position, owing more on their mortgages than their homes are currently worth. The Obama administration has been pushing hard for Fannie Mae and Freddie Mac to participate in the government’s program that pays lenders to reduce balances on troubled loans. Last week, however, Fannie Mae and Freddie Mac’s conservator, FHFA director Edward DeMarco, said the mortgage giants would not participate in that program.

“We are comfortable with where Director Demarco came out. We believe that we have the tools here at Fannie Mae to really help homeowners in terms of doing modifications and to help people who are in distress,” Mayopoulos said.

Fannie Mae completed 35,332 loan modifications in the second quarter, down from 46,671 in the previous quarter. It also approved just over 24,000 short sales and deeds-in-lieu of foreclosure, up from just over 22,000 in the previous quarter. Refinances were far higher, with Fannie Mae acquiring 247,000 of those loans in the quarter.

Fannie Mae still has over 109,000 foreclosed properties on its books, despite selling more of them than they took in during the quarter. Its foreclosure rate is falling as are its loan delinquencies, but the legacy losses are still quite large. Fannie Mae has been experimenting with bulk sales of foreclosures as well as bad loans to investors.

As for the future of the mortgage giant, which along with Freddie Mac and FHA accounts for around 90 percent of all new mortgage originations, Mayopoulos said he would leave that to policy makers. Until then, he is somewhat hopeful that Fannie Mae will continue on its own path to recovery.

“We do think over the long term Fannie Mae can have strong profitability and can return a considerable amount of value to taxpayers, but over the next few quarters I think it’s going to really depend on housing prices and other factors.”

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48570817?__source=RSS*blog*&par=RSS

Renter Nation Rages On

Sat, 28 Jul 2012 11:25:13 +0000

The supply of empty homes for rent is falling, and the nation’s homeownership rate is hovering near a fifteen year low.

How can that be when the housing market is finally turning around and more homes are selling?

The answer is simple: Investors.

The nation’s home ownership rate ticked up a statistically insignificant basis point, from 65.5 percent in the first quarter of this year to 65.6 percent in the second quarter, according to the U.S. Census Bureau. Q1 was the lowest home ownership rate since 1997 and is down from the peak of 69.4 percent in 2004.

Given that home sales improved significantly during the first half of this year, you would think that home ownership rate should have surged higher, but the rate is calculated using only owner-occupied homes. If an investor buys one home or 100 homes, those homes are not even put into the calculation because they owner doesn’t live in the homes. Realtors estimate around 20 percent of homes sales are currently to investors, but given bulk deals offered by the government and banks on foreclosed properties, that percentage is likely higher.

“The very modest increase in the homeownership rate in Q2 does not persuade us to alter our view that the share of the population who own their home will fall further over the next couple of years,” writes Paul Diggle of Capital Economics. “Meanwhile, supply conditions in the rental market are tightening, with a falling proportion of single and multi-family rental homes vacant.”

Rental vacancies in fact fell to their lowest rate since 2001. That is why so many investors are rushing in to buy distressed properties. The rental market his hot and getting hotter. Average asking rent rose 5 percent from a year ago, though they are down slightly from the previous quarter.

Since the peak of home ownership in 2004, six and a half million additional U.S. households are renting, which Diggle calculates is equivalent to 90 percent of the increase in total household numbers over that time. He estimates home ownership will fall to 64 percent over the next two years.

An investor-driven recovery in home sales is certainly positive and is helping to clear the huge backlog of distressed properties on the low end; investors are necessary now, but until real owner-occupants, including the all-important first-time home buyer, return, a robust recovery in all price tiers of the market will remain out of reach.

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48354027?__source=RSS*blog*&par=RSS

Home Price Bottom or Bubble?

Wed, 25 Jul 2012 10:56:03 +0000

Home prices rose, just barely, in the second quarter of this year annually for the first time since 2007, according to online real estate firm Zillow. That prompted the popular site to call a “bottom” to home prices nationally. The increase was a mere 0.2 percent, but in today’s touch and go housing recovery, that was enough.

Nearly one third of the 167 markets Zillow tracks in this survey saw annual price gains from a year ago.

“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” said Zillow Chief Economist Dr. Stan Humphries. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.”

Zillow’s report, which compares prices of homes sold in the same neighborhood, also showed a stronger 2.1 percent gain quarter to quarter, which is the biggest uptick since 2005. The biggest price gains, however, are in the markets that saw the biggest price drops during the latest housing crash. Phoenix, for example, saw a 12 percent annual price gain on the Zillow index.

That has other analysts claiming that the overall surge in national prices is due to price bubbles in certain markets.

“Strong demand, particularly in areas of California, Arizona and Nevada, are pushing up home prices very quickly in the short-term. And because many of the home purchases in these areas are cash transactions, there appears to be less braking of prices by our current appraisal system than seen in other parts of the country,” noted Thomas Popik, research director for Campbell Surveys and chief analyst for HousingPulse. “The trend raises the distinct possibility of housing price bubbles emerging in some of these hot housing markets.”

The supply of foreclosed properties for sale has been dropping steadily, as lenders try to modify more loans or actively pursue foreclosure alternatives, like short sales (where the home is sold for less than the value of the mortgage). Investors, eager to take advantage of the hot rental market, are having to spread out to more markets in order to find the best deals.

“We were heavily into Phoenix early in the cycle. Those markets are heating up,” said James Breitenstein, CEO of investment firm Landsmith in an interview on CNBC Monday. “We see a shift more to the east, states like North Carolina, Michigan, Florida.”

While home prices on the Zillow index are improving most in formerly distressed markets, like Miami, Orlando and much of California, they are still dropping in other non-distressed markets, like St. Louis (down 4 percent annually) Chicago (down 5.8 percent annually) and Philadelphia (down 3.5 percent annually).

“Those people looking at current results and calling a bottom are being dangerously short-sighted,” said Michael Feder, CEO of Radar Logic, a real estate data and analytics company. “Not only are the immediate signs inconclusive, but the broad dynamics are still quite scary. We think housing is still a short.”

Radar Logic sees price increases as well, but blames that on mild winter weather that temporarily boosted demand. This means there will be payback, or weakness in prices during the latter half of this year. And even without the weather hypothesis, they see further trouble ahead:

“On the supply side, higher prices will entice financial institutions to sell more of their inventories of foreclosed homes and allow households that were previously unable to sell due to negative equity to put their homes on the market. As a result, the supply of homes for sale will increase, placing downward pressure on prices. On the demand side, rising prices could reduce investment buying,” according to the Radar Logic report.

Investors are driving much of the housing market today, anywhere from one third to one quarter of home sales. That makes these supposedly national price gains more precarious than ever, because they are based on a finite supply of distressed homes and that supply is dependent on the nation’s big banks. First time home buyers, who should be 40 percent of the market, are barely making up one third, and millions of potential move-up buyers are trapped in their homes due to negative and near negative equity.

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48302188?__source=RSS*blog*&par=RSS