Tag Archives: Home Prices

The national reading of Standard & Poor's closely watched Case-Shiller index registered a 3.9 percent decline during the third quarter of this year when compared to the same period in 2010. That's an improvement over the 5.8 percent decline posted in the second quarter, but S&P described home prices as weakening as the third quarter came to an end. The national index rose by only 0.1 percent from the second quarter. Three cities posted new index lows as of the end of September - Atlanta, Las Vegas, and Phoenix.

Investors are making up an increasing share of home purchase transactions, especially in the distressed sector, according to an industry report. In October, investor purchases accounted for 22.3 percent of transactions, in keeping with the last three months during which the rate has remained above 20 percent. At the same time, distressed property transactions grew to take up a larger portion of the market. Investors are seeing profit potential in homes that may need repair because rents are steadily rising.

Sales of previously owned homes got an unexpected boost last month while the number of homes on the market continued to decline, according to data released Monday by the National Association of Realtors. The trade group recorded a 1.4 percent month-over-month increase and a 13.5 percent year-over-year increase for existing-home sales in October. At the same time, housing inventory fell 2.2 percent to 3.33 million existing homes available for sale, which represents an 8.0-month supply. Distressed homes made up 28 percent of October's transactions.

An annual audit of the Federal Housing Administration's (FHA) books has concluded there is a 50-50 chance the government mortgage insurer will need a bailout from taxpayers within the next 12 months. The agency's cash reserves have been cut almost in half over the past year and its capital reserve ratio has plunged to 0.24 percent. The minimum legal limit mandated by Congress is 2 percent. News of the agency's deteriorating bottom line comes just as lawmakers are advancing a bill that would likely increase FHA's market share.

Freddie Mac says its REO homes sell for an average of 94 percent of market value. According to the GSE, because Freddie Mac-owned homes are well maintained and priced right for the local market, most sell close to full estimated market value. Freddie Mac sold more than 80,000 single-family REO homes in the first nine months of 2011, which the company says is a record. According to the GSE, it is selling more homes than it's taking in through foreclosure.

Estimates of the industry's shadow inventory vary widely, but one thing analysts do agree on is that the overhang is massive and will likely weigh on market dynamics for years to come. Measurements of soon-to-be repossessed and foreclosed homes that have yet to hit the market range from 1.6 million to 8.2 million. Capital Economics' assessment falls in the middle of that range, and the company's analysts say if anything, theirs is probably an underestimate. They put the industry's shadow inventory at 4.3 million homes.

National home prices have been on the decline since June 2006 with a few bursts of increases, which Lender Processing Services (LPS) attributes to seasonal trends. Overall, prices have declined 28.3 percent since their peak in June 2006, according to LPS' new home price index. The company reports home prices fell 0.9 percent across the nation in August, after a smaller 0.4 percent decline the previous month. The largest price declines since the beginning of this year have occurred in Atlanta and Phoenix.

Home prices rose 4 percent during the third quarter, according to the latest IAS360 index from Integrated Asset Services. The index also posted a 0.4 percent gain from the beginning of the year and a 0.6 percent gain from the third quarter of last year. ""I did a double-take when I saw the numbers,"" says Paul Sveen, CEO of Integrated Asset Services. He says the market is behaving like it's already hit bottom, but it's likely just the calm before the storm considering the large volume of distressed properties hidden in the shadows.

In the second quarter of 2011, single-family home prices fell 5.9 percent on an annual basis, according to the latest national Fiserv Case-Shiller home price indexes released Wednesday. This continuation of the double-dip that started in 2010 is not the end, according to Fiserv. In fact, the company predicts prices will continue to fall into the coming year -- dropping another 3.6 percent by the first half of 2012. However, Fiserv does see a light at the end of the tunnel.

After declining between the first and second quarters of this year, Zillow says negative equity rose again in the third, reclaiming all of the previous quarter's decline and then some. Zillow's latest market analysis indicates 28.6 percent of American homeowners with a mortgage owed more on the loan than their home was worth as of the end of September. The company says a lower rate of foreclosure liquidations and relatively flat home values combined to increase negative equity over the three-month period.