Top 10 Turnaround Towns of 2012's Second Quarter

As we continue to see signs of a broad real estate market recovery, it's important to remember that the recovery still varies wildly from market to market. Anyone still struggling to sell their homes, or with underwater mortgages are well aware that things aren't better everywhere. But some of the hardest hit areas are seeing the fastest turnarounds. Realtor.com has put together a list of the top 10 turnaround towns in the U.S. The list, which shows the metropolitan areas with the fastest recovering housing markets, is ranked by comparing the year-over-year change in median prices, and the changes in the median age and size of the inventory.

Santa Barbara is in the top 10!

Click here for the full article.

How Investors Are Skewing Home Price Recovery

Home prices finally appear to be catching up with the increase in overall sales pace. That is usually the case, as prices lag sales on the way up and on the way down. 

The latest reading from S&P/Case-Shiller, which employs a three month running average, shows home prices in June posted positive annual growth rates nationally and for the top ten and top 20-city composites. (Read More: Home Prices Rose in All Major US Cities in June: Case-Shiller.)

“I think this is a very strong report,” said S&P’s David Blitzer in an interview on CNBC. “I think this is a clear sign we’ve turned around.”

The summer months are usually stronger for home prices historically, due to the mix of homes that are selling. Larger, more expensive homes sell in the spring and summer, so that families can move without disrupting school. Still, the gains are showing not just month-to-month, but year-over-year, so seasonality should not play too much of a role.

What is playing a strong role is a combination of investor activity in the market and supply, both of which have been falling. Listed inventory in July was down nearly 24 percent from a year ago, according to the National Association of Realtors. Investor activity in the market fell to 21.9 percent of all transactions in July, according to a new survey by Campbell/Inside Mortgage Finance. That’s down from 23.5 percent in June and a two-year peak of 25.3 percent in May. (Read More: As Housing Boom Recovers, Will Apartment Boom End?)

From the survey:

Real estate agents responding to the HousingPulse survey indicated that recent price increases caused the sharp reversal in investor interest. “Investors are dropping out due to the increase in prices,” reported an agent in California. “Prices are too high here for investors,” added an agent in Massachusetts.

Thomas Popik, research director for Campbell Surveys, claims the drop in investor share is not just due to a rise in overall home sales and fewer distressed sales.  

“Overall homebuyer demand and home price appreciation is being driven by historically low interest rates,” Popik said. “But savvy investors are the canaries in the coal mine—they are warning that if rates rise, the high proportion of distressed properties could once again push home prices down.”

Foreclosures have been falling steadily, with 58,000 completed in July, down from 69,000 in July of 2011, according to CoreLogic. (Read More: Cautious Moves on Foreclosures Haunting Obama.)

"Completed foreclosures were down again in July, this time by 16 percent versus a year ago, as servicers increasingly rely on alternatives to the foreclosure process, such as short sales and modifications," said Mark Fleming, chief economist for CoreLogic.

Given the unprecedented nature of the recent housing crash, there is not a lot of historical perspective to help us gauge if this is in fact a real recovery in home prices or a temporary bump due to a slowdown in distressed supply and a pull-back by investors. Seasonal factors will likely come into play in the fall, tempering home price gains. (Read More: Cities With the Most Affordable Homes.)

There is still too much noise in the numbers, however, to draw any firm conclusions yet. Nearly 12 percent of all homeowners with a mortgage are either delinquent in their payments or already in the foreclosure process, according to the Mortgage Bankers Association.  

Banks are still sitting on thousands of already-foreclosed properties, while the government looks to unload even more foreclosures through bulk deals. Record-low mortgage rates are beginning to rise again, and new rules governing the mortgage market that could further affect those rates are in the works. Too much noise.

—By CNBC's Diana Olick

Pending home sales in California decline

By Alejandro Lazo

July 24, 2012, 12:17 p.m.

Contracts signed for previously owned California homes took a dip in June, indicating that the decline in foreclosures is slowing the Golden State sales recovery.

The California Assn. of Realtors said Tuesday that its index for pending homes fell 3.8% from the prior month. The index posted a 4.7% increase from the same month a year prior.

Contracts are an early indicator of where sales are headed. Sales often close six to eight weeks after contracts are signed so a decline in June could mean weakness when July and August sales statistics are reported.

In a healing market, sales should be accelerating as buyers gain confidence that their investments won’t be worth less in the future than what they pay today.

But as The Times previously reported, a lack of inventory has become a critical dynamic of the market. And perhaps more important than the sales statistics released Tuesday are the figures from the association showing a decline in the number of foreclosed homes selling.

Bank-owned homes helped fuel the sales market earlier this year as big and small investors stormed into California’s market.

Last month, foreclosed homes made up just 20.2% of all pending sales last month, a decline of 22.6% from May and 29.2% in June 2011. There were similar declines for foreclosures in closed sales, as The Times reported last week.

The California Assn. of Realtors blamed the drop in pending sales in part on the slowing economy. But as Times staff writer Ricardo Lopez reported last week, California’s economy appears to be accelerating. Nevertheless, fears of a sluggish economy and tight credit also probably play some role in the summer sales slowdown.

Zillow: Home Values See Highest Monthly Increase Since 2006

By: Tory Barringer

Zillow issued a released Friday reporting that both national home values and rents rose in the month of April.





According to the April Zillow Real Estate Market Reports, national home values rose 0.7 percent in April to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, and it makes April the second month in a row in which home values climbed up.

Zillow also reported that rents rose from March to April, increasing by 1.6 percent, according to the Zillow Rent Index. Of the 178 markets covered by Zillow, 78 percent experienced a rise in rents.
The Miami-Fort Lauderdale and Phoenix metro areas saw the biggest increases in home values, rising 1.6 and 1.9 percent, respectively. Values continued to decrease in hard-hit markets like Atlanta, where home values fell 0.7 percent.

“The housing market continues to show positive signs, with home values increasing significantly in April,” said Dr. Stan Humphries, chief economist at Zillow. “The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market. With almost one-third of homeowners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We’ll continue to watch this signal as increasing home values turn from a blip into a trend.”
Foreclosures also continued to decline in April, with 6.8 out of every 10,000 homes being foreclosed across the U.S. That figure was down from 8 out of every 10,000 in March.

 

Home sales improve nationally in December

Home sales rose nationally in December, marking the third consecutive month that the market has shown improvement.

Previously owned homes were sold at a seasonally adjusted annual rate of 4.61 million units, up 5.0% from November and 3.6% from December a year prior, according to the National Assn. of Realtors.

“The market for single-family homes picked up in the second half of 2011, after being stuck near the bottom for nearly three years,” Patrick Newport, an economist with IHS Global Insight, wrote in a note. “This pickup is real, but the road to recovery will be a slow one.”

About one in three homes sold last month was a so-called distressed sale, either a foreclosure or a short sale, the latter involving a bank allowing a home to be sold for less than the outstanding debt on the property. Roughly one in three homes was purchased in cash.

The nation’s housing inventory dropped 9.2% from the prior month, to 2.38 million homes available for sale. That represents a supply of six months and a little less than a week. Economists consider about six months of supply to be a stable market.

By Alejandro Lazo

January 20, 2012, 10:49 a.m.

Click here for the article in the LA Times