10 States Still Battling High Foreclosure Rates

10 STATES STILL BATTLING HIGH FORECLOSURE RATES
Artcicle by: Daily Real Estate News | Monday, August 13, 2012

Several states continue to be plagued with high foreclosure rates. RealtyTrac reported last week that foreclosure starts rose 6 percent year-over-year, which is the third consecutive month for increases following what had been more than a year of declines.

California has the highest foreclosure rate in the country, according to RealtyTrac, with one in every 325 housing units receiving a foreclosure filing in July (more than twice the national average). California had the highest foreclosure rate in the country despite an 11 percent decline month-over-month and a 25 percent drop year-over-year, according to RealtyTrac.

The states with the highest foreclosure rates in July RealtyTrac’s most recent data are:

  1. California: 1 in every 325 housing units
  2. Arizona: 1 in every 346 housing units
  3. Florida: 1 in every 352 housing units
  4. Georgia: 1 in every 376 housing units
  5. Illinois: 1 in every 385 housing units
  6. Nevada: 1 in every 415 housing units
  7. Michigan: 1 in every 518 housing units
  8. Ohio: 1 in every 528 housing units
  9. South Carolina: 1 in every 536 housing units
  10. Indiana: 1 in every 665 housing units

Source: RealtyTrac; Daily Real Estate News (August 13, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

Foreclosures Fall 8%, New Wave Expected…

Article by: Daily Real Estate News

Foreclosures Fall 8%, New Wave Expected

After falling 19 percent in January, foreclosures continued to fall in February with filings dropping 8 percent last month, according to RealtyTrac’s latest report. The big drops in foreclosures have served as a hopeful sign in the housing market that the foreclosure crisis was finally fading.

But housing experts caution that banks haven’t unclogged the pipeline of foreclosures yet, and a new wave of foreclosures is on its way. A $25 billion mortgage settlement among the nation’s five largest banks and state attorneys general is expected to prompt lenders to speed up their foreclosure processing in the months ahead.

The signs are already there: Twenty-one states posted increases in foreclosure filings in February–the highest number since November 2010, RealtyTrac reports. In Florida especially, the numbers dramatically increased in February: In Tampa, Fla., foreclosure filings in February were up 64 percent and spiked by 53 percent in Miami.

“February’s numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed,” says Brandon Moore, CEO of RealtyTrac.

Source: Daily Real Estate News (March 15, 2012; “Foreclosures Fall, but There’s a ‘Rising Tide’ Ahead,” CNNMoney (March 15, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

Fourth Quarter Metro Area Home Prices Boost Affordability, Sales Improving

Article by: National Association of REALTORS®

Fourth Quarter Metro Area Home Prices Boost Affordability, Sales Improving

Housing affordability conditions improved in most metropolitan areas from softer existing-home prices and record-low mortgage interest rates in the fourth quarter, with rising sales and lower inventory creating more balanced conditions, according to the latest quarterly report by the National Association of REALTORS®.

Introduced with this release is a new annual metro-level housing affordability index, with historically favorable conditions dominating across the country.

The median existing single-family home price rose in 29 out of 149 metropolitan statistical areas in the fourth quarter from a year earlier; two were unchanged and 118 areas had price declines.

Lawrence Yun, NAR chief economist, said the figures reflect greater home sales activity at lower price points. “Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish,” he said. “More importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices.”

The national median existing single-family home price was $163,500 in the fourth quarter, down 4.2 percent from $170,600 in the fourth quarter of 2010. The median is where half sold for more and half sold for less. Distressed homes — foreclosures and short sales which sold at discounts averaging 15 to 20 percent — accounted for 30 percent of fourth quarter sales; they were 34 percent a year earlier.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times because the level of distressed sales, which artificially depress median prices, can vary notably in given markets. Annual price measures, also reported today, generally smooth out any quarterly swings.

“Broadly speaking, the very middle of the country, from the Dakotas and Nebraska to Oklahoma and Texas, has experienced very stable home price trends because of stronger job creation in those areas,” Yun said.

Total existing-home sales, including single-family homes and condos, increased 5.9 percent to a seasonally adjusted annual rate of 4.42 million in the fourth quarter from 4.17 million in the third quarter, and were 9.2 percent above the 4.04 million pace during the fourth quarter of 2010. All regions rose from the third quarter and from a year ago.

At the end of the fourth quarter there were 2.38 million existing homes available for sale, which is 21.2 percent lower than the close of the fourth quarter of 2010, when there were 3.02 million homes on the market.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions vary widely around the country. “Even with record high housing affordability conditions, all real estate is local,” he said. Both buyers and sellers need to be aware of what works in their local market, and REALTORS® are the best resource because they have unparalleled knowledge of local market conditions and options.”

NAR’s national Housing Affordability Index rose to a record high 184.5 in 2011, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power; recordkeeping began in 1970.

An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent down payment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small down payments, the affordability levels are relatively lower.

Metro areas with the greatest housing affordability conditions in 2011 include the Detroit-Warren-Livonia area of Michigan, with an index of 383.4; Toledo, Ohio, at 242.9; and Decatur, Ill., at 236.8. Only 24 out of 152 metros measured had an affordability index below 100 in 2011.

“Clearly, the Midwest has the greatest concentration of areas where home buyers have the strongest purchasing power, followed by the South,” Yun said. “Metros on the West Coast and along the Northeastern seaboard have generally higher-priced homes, which account for lower affordability.”

Between 2010 and 2011, in markets where comparisons are available, all but 2 out of 148 areas showed improvement in housing affordability, and 69 MSAs had double-digit increases in affordability conditions.

The share of all-cash home purchases in the fourth quarter was 29 percent, unchanged from the third quarter; they were 30 percent in the fourth quarter of 2010. Investors, who are drawn by bargain prices and who account for the bulk of cash purchases, accounted for 19 percent of transactions in the third quarter; they were 20 percent in the third quarter and 19 percent a year ago.

First-time buyers purchased 33 percent of homes in the fourth quarter; they were 32 percent in both the third quarter and the fourth quarter of 2010.

In the condo sector, metro area condominium and cooperative prices — covering changes in 54 metro areas — showed the national median existing-condo price was $160,800 in the fourth quarter, which is 1.7 percent below the fourth quarter of 2010. Ten metros showed increases in their median condo price from a year ago; one was unchanged and 43 areas had declines.

Regionally, existing-home sales in the Northeast rose 6.3 percent in the fourth quarter and are 3.7 percent above the fourth quarter of 2010. The median existing single-family home price in the Northeast fell 4.6 percent to $229,200 in the fourth quarter from a year ago.

In the Midwest, existing-home sales increased 7.0 percent in the fourth quarter and are 14.1 percent higher than a year ago. The median existing single-family home price in the Midwest declined 3.3 percent to $134,100 in the fourth quarter from the fourth quarter in 2010.

Existing-home sales in the South rose 3.8 percent in the fourth quarter and are 9.1 percent above the same quarter in 2010. The median existing single-family home price in the South was $146,500 in the fourth quarter, down 3.8 percent from a year earlier.

Existing-home sales in the West increased 8.1 percent in the fourth quarter and are 8.4 percent higher than a year ago. The median existing single-family home price in the West declined 4.2 percent to $205,200 in the fourth quarter from the fourth quarter of 2010.

Source: National Association of REALTORS®; Daily Real Estate News (February 9, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

December 2011 Existing-Home Sales Show Uptrend…

Article by: National Association of Realtors, (January 20, 2012)——————-

DECEMBER EXISTING-HOME SALES SHOW UPTREND

Existing-home sales continued on an uptrend in December, rising for three consecutive months and remaining above where they were a year ago, according to the National Association of REALTORS®.

The latest monthly data shows total existing-home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.

Affordability Conditions

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to another record low of 3.96 percent in December from 3.99 percent in November; the rate was 4.71 percent in December 2010; recordkeeping began in 1971.

NAR President Moe Veissi said more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November.

Available inventory has trended down since setting a record of 4.04 million in July 2007, and is at the lowest level since March 2005 when there were 2.30 million homes on the market.

“The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future,” Yun said.

Who’s Buying What

Foreclosures sold for an average discount of 22 percent in December, up from 20 percent a year ago, while short sales closed 13 percent below market value compared with a 16 percent discount in December 2010.

The national median existing-home price for all housing types was $164,500 in December, which is 2.5 percent below December 2010. Distressed homes — foreclosures and short sales — accounted for 32 percent of sales in December (19 percent were foreclosures and 13 percent were short sales), up from 29 percent in November; they were 36 percent in December 2010.

All-cash sales accounted for 31 percent of purchases in December, up from 28 percent in November and 29 percent in December 2010. Investors account for the bulk of cash transactions.

Investors purchased 21 percent of homes in December, up from 19 percent in November and 20 percent in December 2010. First-time buyers fell to 31 percent of transactions in December from 35 percent in November; they were 33 percent in December 2010.

Contract failures were reported by 33 percent of NAR members in December, unchanged from November; they were 9 percent in December 2010. Although closed sales are holding up better than this finding would suggest, contract cancellations are caused largely by declined mortgage applications and failures in loan underwriting from appraised values coming in below the negotiated price.

Single-family home sales increased 4.6 percent to a seasonally adjusted annual rate of 4.11 million in December from 3.93 million in November, and are 4.3 percent higher than the 3.94 million-unit pace a year ago. The median existing single-family home price was $165,100 in December, which is 2.5 percent below December 2010.

Existing condominium and co-op sales rose 8.7 percent to a seasonally adjusted annual rate of 500,000 in December from 460,000 in November but are 2.0 percent below the 510,000-unit level in December 2010. The median existing condo price was $160,000 in December, down 3.0 percent from a year ago.

Around the Country

Regionally, existing-home sales in the Northeast jumped 10.7 percent to an annual pace of 620,000 in December and are 3.3 percent above a year ago. The median price in the Northeast was $231,300, which is 2.7 percent below December 2010.

Existing-home sales in theMidwestrose 8.3 percent in December to a level of 1.04 million and are 9.5 percent above December 2010. The median price in theMidwestwas $129,100, down 7.9 percent from a year ago.

In the South, existing-home sales increased 2.9 percent to an annual level of 1.76 million in December and are 3.5 percent above a year ago. The median price in the South was $146,900, down 1.1 percent from December 2010.

Existing-home sales in the West rose 2.6 percent to an annual pace of 1.19 million in December but are 0.8 percent below December 2010. The median price in the West was $205,200, up 0.3 percent from a year ago.

Source: NAR; Daily Real Estate News (012012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

More Military Can Take Advantage of HAFA

More military service members who are underwater on their homes may now be able to take part in the Home Affordable Foreclosure Alternatives program, allowing them to qualify for short sales and deeds-in-lieu of foreclosure.

The Treasury Department on Thursday clarified its guidelines for HAFA, after many military families had complained that the program failed to consider a permanent change of station as a financial hardship. The omission was preventing many from taking part in the program. Many military members who were underwater on their homes say they were current on their mortgage until receiving orders to move.

“An example of such hardship includes a service member citing a ‘Permanent Change of Station’ order as the basis for his or her financial hardship when requesting HAFA even if such service member’s income has not been decreased, so long as the service member does not have sufficient liquid assets to make his or her monthly mortgage payments,” the Treasury said in a directive sent to mortgage servicers Thursday.

Source: “Treasury Moves to Help More Military Qualify for HAFA,” HousingWire (Sept. 29, 2011); Daily Real Estate News; Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

House Flippers Return; Still Finding Profits

More investors are taking on the risk of flipping homes, despite falling home prices and sluggish real estate markets across the country. But investors say there are still profits to be made in the house flipping business. 

Nearly 1 million homes were bought as investment properties in 2010, according to the National Association of REALTORS®, and a record number of buyers purchasing properties with cash currently are flooding the market. 

Flipping homes for profit is easier in rising markets, but not many markets are reporting increases in home prices, analysts say. In Washington, D.C., Justin Konz of RestorationCapital says his clients are going through four of five properties a month and are making gross profit margins of 35 percent or higher. 

Where to Find the Deals

Flippers mostly are finding their homes through foreclosures auctions, REOs, and short sales. They seek homes at rock-bottom prices that will have low fix-up costs, no more than about 5 percent or 10 percent of the purchase price. 

In Florida, where investors are finding it more difficult to flip homes because of the drastic drop in prices and high inventories, flippers are targeting inner-city properties that are being sold at steep discounts. For example, some of houses are selling for $30,000 when they once sold for $200,000. 

Perry Henderson, a real estate agent and investor in Austin, Texas, says the biggest opportunities in flipping are the “ugly” houses that have lingered on the market or “old houses that somebody’s grandma lived in for 40 years and didn’t do anything to. Now, she’s passed away and her family wants to sell quickly.” 

Real estate investor Brian Fuller, who with partners buys and sells more than 200 properties a year in the San Diego area, says he’s drawn to the “biggest eyesore on the block.” He says they then “ turn it into the best looking house there. We’re helping pull up values in the neighborhood.” 

Source: “Vulture Investors Flipping Their Ways to Big Profits,” CNNMoney.com (April 13, 2011); Blog distribution provided by Kenneth Bargers and Bargers Solutions residential real estate services located in Nashville, Tennessee

Revamped Foreclosure Procedures Coming Soon

The country’s top mortgage servicers have reportedly reached an agreement on changes to their foreclosure procedures. 

The consent agreement has not yet been made public, but The New York Times was able to get a preview of what the agreement contains from individuals who spoke on the condition of anonymity. 

Among the proposed changes include

  • Greater oversight of foreclosures. The oversight will happen from third party groups that include law firms, who mostly will be charged with doing the actual work of eviction, The New York Times reports.
  • Improved training of foreclosure staff.
  • A single point of contact for every defaulting home owner with the servicers. Mortgage servicers will no longer be able to foreclose while borrowers are pursuing loan modifications.
  • Servicers will hire independent consultants to review foreclosures that have been completed in the past two years. Mortgage servicers have agreed to compensate any owner who is found to have been improperly foreclosed on or made to pay excessive fees.

Analysts say that in order for mortgage servicers to meet these revamped rules they’ll need to hire more employees so they can be thoroughly review the cases of home owners in default or servicers will need to slow the pace of foreclosures even more (The average household in foreclosure has been delinquent for more than 500 days) 

Source: “Servicers Said to Agree to Revamped Foreclosures,” The New York Times (April 5, 2011); Blog distribution provided by Kenneth Bargers and Bargers Solutions residential real estate services located in Nashville, Tennessee