Market Studies

The first quarter of 2010 proved to be one of improvement for many housing markets across the nation. According to the latest survey by the National Association of Realtors, a growing number of metropolitan areas experienced price gains from a year ago, and most states saw notable increases in home sales from last year.

Foreclosure filings in California were down in April for the first time since the beginning of the year, ForeclosureRadar reported Tuesday. Last month, the locally-based company tracked a total of 58,410 notices of default and trustee sale in the Golden State. Default notices fell 16 percent compared to March, while sale notices dropped 10 percent. ForeclosureRadar's market data shows that banks added 14,517 foreclosed California properties to their REO inventories in April. The company puts the total REO supply in the state at 90,295 properties.

The U.S. housing market is showing some signs of life, according to Integrated Asset Services (IAS). The company reported Tuesday that its national benchmark for residential property prices gained 1.1 percent in March. The increase follows seven straight months of declines recorded by the IAS360 House Price Index and puts the benchmark at first-quarter 2004 levels. But even with the modest rebound in the national data, IAS says neighborhood trend lines indicate house prices have not found a bottom in many parts of the country.

According to a recent report by DebtX, a full-service loan sale advisor based in Boston, the aggregate value of DebtX-priced commercial real estate (CRE) loans that collateralized commercial mortgage-backed securities (CMBS) dropped to 75.9 percent as of March 31, 2010, inching down from 76.5 percent as of February 26, 2010 and 81.2 percent as of March 31, 2009.

Delinquency rates for some residential mortgage-backed securities (RMBS) are beginning to improve. According to the latest performance metrics results from New York-based Fitch Ratings, April marked the first month in four years that serious delinquencies for U.S. Alt-A RMBS have declined. In addition, subprime late-pays fell for the second straight month, while prime RMBS delinquencies increased just slightly.

Home values in 106 of the 135 markets tracked by Zillow continued to decline on a year-over-year basis in the first quarter of this year, causing the Zillow Home Value Index to fall 3.8 percent from the same quarter last year and 1 percent from the fourth quarter of 2009 to $183,700. As a result, negative equity across the country remained high, with 23.3 percent of single-family homes underwater, the company said. Zillow also reported that foreclosures reached a new peak in March.

The decline in the commercial real estate market is finally beginning to level off, but tremendous uncertainty remains about the pace and strength of this recovery, according to the Real Estate Roundtable's latest quarterly Sentiment Survey. Of the 100-plus senior real estate executives who participated in the second quarter survey, 82 percent characterized market conditions today as better than a year ago, up from 73 percent in the first quarter. But, while sentiment is up, that's not to say things are ""good,"" Jeffrey DeBoer, president and CEO of the Roundtable, said.

After steadily increasing for 12 consecutive quarters, the national mortgage loan delinquency rate--the ratio of borrowers 60 or more days past due--dipped down to 6.77 percent in the first quarter of this year, according to data released Monday by TransUnion. This statistic, which is traditionally seen as a precursor to foreclosure, reflects a 1.74 percent decline from the previous quarter's 6.89 percent average. TransUnion reported that delinquency rates in the first quarter continued to be the highest in Nevada and Florida, both above 14 percent.

The true cause of the foreclosure crisis is up for debate. Did banks prey on unwitting consumers, or did households overreach and borrow more than they could afford? Economists at the University of Arkansas recently completed a study to answer that very question. The study, The Foreclosure Crisis: Did Wall Street Practice Predatory Lending or Did Households Overreach?, found the latter to be true. Although, the researchers were careful not to excuse Wall Street banks, as they say reckless lending enabled households to become dangerously leveraged.

Despite the fact that the economy added 290,000 jobs last month, the nation's unemployment rate rose to 9.9 percent in April. But the job gains were more than analysts were expecting and a positive for the housing market since unemployment has become one of the strongest default triggers for borrowers.