Market Studies

The Urban Land Institute released its Real Estate Consensus Forecast Wednesday morning, and overall, the 38 real estate economists and analysts surveyed project broad improvements for the economy. With signs of improvement in the housing sector already emerging, participants expect to see housing starts nearly double by 2014, and project home prices will begin to rise in 2013. The average home price, which has declined somewhere between 1.8 percent and 4.1 percent over each of the past three years, according to FHFA data, is expected to stabilize in 2012, followed by a 2 percent increase in 2013, and a 3.5 percent increase in 2014.

Standard & Poor's reported Tuesday that it's closely watched Case-Shiller index declined in January for the fifth straight month. But according to John Burns Real Estate Consulting (JBREC), that's stale news and doesn't reflect what's actually happening in the market right now. In fact, the independent research company says home prices are rising. JBREC conducted its own analysis of home prices in 97 markets and found that over the January-to-March period prices are up in 90 of them, with an average increase of 1.1 percent.

In California, the sale of distressed properties slowed down as equity sales picked up in February after two months of decline, the California Association of Realtors (C.A.R.) reported this week. ""A lack of inventory in the bank-owned (REO) and short sale market was a contributing factor to the decline in share of distressed sales in February,"" said C.A.R. President LeFrancis Arnold. The share of distressed properties that sold statewide decreased to 48.9 percent in February, down from January's 50.1 percent and from 55.2 percent a year ago in February 2011.

The Case-Shiller Home Price Indexes fell for the fifth straight month in January, with the 10- and 20-city composites each dropping 0.8 percent from December, Standard & Poor's, which compiles the indices, reported Tuesday morning. The 10-city index slid to its lowest level since May 2003 and the 20-city index dropped to its lowest level since December 2002. Home prices fell in 16 of 19 major cities during the month of January.

The commercial real estate (CRE) sector faces $362 billion in maturing debt this year, according to the latest estimates from Trepp LLC. For the five-year period of 2012 to 2016, the company's research team estimates $1.73 trillion of CRE maturities, with the largest one-year sum of $371.1 billion dropping in 2013. They also reported that nearly two-thirds of the maturities through 2016 are underwater or close to sinking underwater, which could reduce borrowers' chances for extending the loan term upon reaching the balloon date.

Investors are making it a practice to endure through obstacles that come with the discounted price of short sales and pursued them at a greater pace in February compared to previous months, according to the latest results of the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The percentage of investors buying homes climbed from 20.9 percent of all transactions in September 2011 to 24.2 percent in February 2012, according to the survey. The investor share of short sales also rose, going from 25.9 percent to 30.6 percent during the same six-month period.

The Pending Home Sales Index (PHSI) edged down February to 96.5 from January’s 97.0 which had been the highest level since April 2010, the National Association of Realtors reported Monday. The index slipped for just the second time in the last five months, but was 9.2 percent ahead of the level in February 2011. It remains down 26 percent from the April 2005 level.

NPR reported Friday that Fannie Mae and Freddie Mac might consider principal reduction as a means to help underwater homeowners. Edward DeMarco, acting director of the FHFA, has stood firm in his decision to not allow for principal reduction, despite mounting criticism from Democrats and petitioning from organizations to have DeMarco fired. ""NPR and ProPublica have learned that both firms have concluded that giving homeowners a big break on their mortgages would make good financial sense in many cases,"" NPR stated in its story.

Foreclosure timelines are on the rise, and the increase is resulting in greater losses to residential mortgage backed securities (RMBS), according to Moody's Investor Service's Servicer Dashboard for the fourth quarter 2011, released Thursday. The average loan in foreclosure has been in the process for 571 days, but judicial states are weighing heavily on that average. Foreclosures in judicial states have aged an average 654 days, while foreclosures in non-judicial states have aged an average 297 days, according to Moody's.

New homes sales fell 1.6 percent in February to a seasonally adjusted annual rate of 313,000, the second straight monthly decline, the Commerce Department and Department of Housing and Urban Development reported jointly Friday. Sales for January were revised downward from 321,000 to 318,000.