Post Double Dip, Case-Shiller Index Edges Higher
06/28/2011 By: Carrie Bay
One month after reporting that its home price gauge had officially double dipped, Standard & Poor’s says prices have inched up, in line with the expected seasonal boost that accompanies the spring buying season.
The 20-city composite reading of the S&P/Case-Shiller index posted a 0.7 percent increase in April versus March. It’s the first monthly gain in eight months.
The 20-city composite reading remains 4.0 percent below April 2010.
From: http://ping.fm/NOvF5
Tuesday, June 28, 2011
Friday, June 17, 2011
Inventory Overhang Means 6.5M New Households Needed
Inventory Overhang Means 6.5M New Households Needed
06/16/2011 By: Carrie Bay
Experts blame the massive inventory of existing homes on the market for hindering the U.S. housing sector’s recovery. The overhang has been inflated by large volumes of foreclosures, and it’s expected to grow with millions more coming down the pipeline.
Brendan Lowney, macroeconomist for the firm Forest Economic Advisors in Massachusetts, says it will take 6.5 million new household formations to absorb the excess inventory.
Lowney has spent more than 16 years interpreting international economic and policy trends and advising North American companies.
He estimates excess home inventories at 2.5 million. He says this oversupply has put downward pressure on home prices, which in turn has caused a variety of undesirable effects, such as pushing more houses underwater. This negative equity causes even more defaults, thereby increasing the oversupply, Lowney explained.
CoreLogic reports that nearly one-quarter of all mortgage borrowers in the U.S. were underwater as of the end of 2010.
The company’s analysts say the “stubbornly high” level of negative equity could have a significant impact on the industry’s shadow inventory – that looming supply of
homes that are winding their way through foreclosure and expected to end up as REO, plus homes that have already been repossessed by banks but not yet been put on the market.
At last count, Lender Processing Services put the number of mortgages that were delinquent or in foreclosure at 6,388,000. Of those, 2,184,000 properties were in the process of foreclosure.
CoreLogic says current shadow inventory has declined slightly over the past year, but will remain elevated for an extended period of time given that there are still over 2 million non-delinquent borrowers not part of the current shadow inventory but in “very deep negative equity,” which for some can serve as a default trigger particularly when other economic factors such as unemployment are added to the mix.
Based on an analysis of Census vacancy data and housing occupation trends, Lowney says it will take an average of 1.3 million new household formations per year, for the next five years, before a significant portion of the excess home inventory can be cleared.
Lowney states his estimate of the housing overhang sheds light on when the housing market will recover.
Looking at household formation data from the Census Bureau, the 10-year average has been 1.3 million per year.
The decade-high was 3.5 million new households formed in 2001, but there was a sharp falloff due to the recession, down to 772,000 in 2008, 398,000 in 2009, and only 357,000 in 2010.
The figures are expected to pick up this year, with some analysts estimating between 750,000 and 1 million new households in 2011.
Lowney’s not projecting a 1.3 million gain in new households for each year over the next five. He foresees a progression, airing on the conservative side with 600,000 in 2011 and steadily increasing to 1.9 million by 2015.
From: http://ping.fm/OLMB1
06/16/2011 By: Carrie Bay
Experts blame the massive inventory of existing homes on the market for hindering the U.S. housing sector’s recovery. The overhang has been inflated by large volumes of foreclosures, and it’s expected to grow with millions more coming down the pipeline.
Brendan Lowney, macroeconomist for the firm Forest Economic Advisors in Massachusetts, says it will take 6.5 million new household formations to absorb the excess inventory.
Lowney has spent more than 16 years interpreting international economic and policy trends and advising North American companies.
He estimates excess home inventories at 2.5 million. He says this oversupply has put downward pressure on home prices, which in turn has caused a variety of undesirable effects, such as pushing more houses underwater. This negative equity causes even more defaults, thereby increasing the oversupply, Lowney explained.
CoreLogic reports that nearly one-quarter of all mortgage borrowers in the U.S. were underwater as of the end of 2010.
The company’s analysts say the “stubbornly high” level of negative equity could have a significant impact on the industry’s shadow inventory – that looming supply of
homes that are winding their way through foreclosure and expected to end up as REO, plus homes that have already been repossessed by banks but not yet been put on the market.
At last count, Lender Processing Services put the number of mortgages that were delinquent or in foreclosure at 6,388,000. Of those, 2,184,000 properties were in the process of foreclosure.
CoreLogic says current shadow inventory has declined slightly over the past year, but will remain elevated for an extended period of time given that there are still over 2 million non-delinquent borrowers not part of the current shadow inventory but in “very deep negative equity,” which for some can serve as a default trigger particularly when other economic factors such as unemployment are added to the mix.
Based on an analysis of Census vacancy data and housing occupation trends, Lowney says it will take an average of 1.3 million new household formations per year, for the next five years, before a significant portion of the excess home inventory can be cleared.
Lowney states his estimate of the housing overhang sheds light on when the housing market will recover.
Looking at household formation data from the Census Bureau, the 10-year average has been 1.3 million per year.
The decade-high was 3.5 million new households formed in 2001, but there was a sharp falloff due to the recession, down to 772,000 in 2008, 398,000 in 2009, and only 357,000 in 2010.
The figures are expected to pick up this year, with some analysts estimating between 750,000 and 1 million new households in 2011.
Lowney’s not projecting a 1.3 million gain in new households for each year over the next five. He foresees a progression, airing on the conservative side with 600,000 in 2011 and steadily increasing to 1.9 million by 2015.
From: http://ping.fm/OLMB1
Tuesday, June 14, 2011
Fannie Mae offering REO agents $1,200 incentive � HousingWire
Fannie Mae offering REO agents $1,200 incentive
by JACOB GAFFNEY
Real estate agents selling real-estate owned properties on behalf of Fannie Mae must work toward selling the home to owner occupants.
And the government-sponsored enterprise will now offer a cash incentive of $1,200 to agents selling REOs, according to high level staffers at Fannie Mae.
"Beginning [Tuesday] we will continue our current incentive of up to 3.5% off buyer closing cost per property," said a Fannie Mae panelist at the REO Expo conference in Fort Worth, Texas. "And we are adding an additional $1,200 incentive."
"The initial offer must include this incentive," he added. "And the buyer must be an owner occupant."
There are other stipulations to receiving the $1,200 incentive, all which will be made available tomorrow on the HomePath website.
Fannie will also be rolling out a more comprehensive utility programs, for agents who pay to maintain REO properties.
Fannie dearly wants owner occupants to gravitate to the REO market. Another program, it's First Look standard, mandates that for the first 15 days on the market, only owner occupants can bid on REO properties.
Fannie Mae admits that costs are rising for REO agents in the sector, even if it is related to issues that are industry-wide.
"We know that title has become a challenge, not just for Fannie Mae," another panelist said.
From: http://www.housingwire.com/2011/06/14/fannie-mae-offering-reo-agents-1200-incentive
by JACOB GAFFNEY
Real estate agents selling real-estate owned properties on behalf of Fannie Mae must work toward selling the home to owner occupants.
And the government-sponsored enterprise will now offer a cash incentive of $1,200 to agents selling REOs, according to high level staffers at Fannie Mae.
"Beginning [Tuesday] we will continue our current incentive of up to 3.5% off buyer closing cost per property," said a Fannie Mae panelist at the REO Expo conference in Fort Worth, Texas. "And we are adding an additional $1,200 incentive."
"The initial offer must include this incentive," he added. "And the buyer must be an owner occupant."
There are other stipulations to receiving the $1,200 incentive, all which will be made available tomorrow on the HomePath website.
Fannie will also be rolling out a more comprehensive utility programs, for agents who pay to maintain REO properties.
Fannie dearly wants owner occupants to gravitate to the REO market. Another program, it's First Look standard, mandates that for the first 15 days on the market, only owner occupants can bid on REO properties.
Fannie Mae admits that costs are rising for REO agents in the sector, even if it is related to issues that are industry-wide.
"We know that title has become a challenge, not just for Fannie Mae," another panelist said.
From: http://www.housingwire.com/2011/06/14/fannie-mae-offering-reo-agents-1200-incentive
Friday, June 3, 2011
Double Dip: Altos Says Prices Have Been Steadily Rising Since Then
Double Dip: Altos Says Prices Have Been Steadily Rising Since Then
06/02/2011 By: Carrie Bay
While a number of closely-watched home price indices show that national readings have slipped into a double-dip, Altos Research says it’s come and gone.
According to the S&P/Case-Shiller index released earlier this week, national home prices dropped to a new recession low during the first quarter of this year as prices slipped another 4.2 percent.
Altos conducts its own analysis of price trends using active listing data to provide what the company says is more of a real-time view. The firm notes that the latest Case-Shiller findings are based on data only through the end of March. Since that time, Altos has recorded a steady uptick in prices for both major metros and mid-city markets across the country.
A separate study released this week by CoreLogic corroborates Altos’ assertion that prices have risen since the double-dip timestamp. CoreLogic says based on April sales activity, just after the Case-Shiller double-dip, it has recorded an increase in home prices nationally of 0.7 percent.
About three weeks ahead of the Case-Shiller announcement of a new cycle low, Clear Capital reported an official double-dip for its national home price gauge had hit, but in April rather than March.
Regardless of the disparities in the various home price indices, Altos says it expects to see a rising and falling pattern for several years. The firm’s VP Scott Sambucci believes the double dip is “really just the start of the next housing cycle.”
Altos has coined a colorful phrase to depict the ebb and flow of home prices – they call it the “Catfish Recovery.”
Sambucci laid it out by describing the catfish as a bottom dweller that moves slowly, feeding off the lake or river floor for a while, then heads up to the surface and back down, bobbing up and down without a distinct pattern or clear direction.
Altos says markets should plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again.
Sambucci says constant growth for home values is a myth. Charting housing cycles all the way back to 1890, he notes that the sharpest run-up by far occurred at the turn of the millennium, and the market is now in payback mode. In every other historical boom, Sambucci says the run-ups, all of which have been significantly smaller that the most recent, have always been given back.
“The housing recovery will take a long time and it is going to happen slowly,” Sambucci said.
In the short-term, Altos says the seasonal price bump for the spring is still evident in the firm’s active market statistics and will likely show up in the Case-Shiller numbers in late summer and early fall.
Altos recorded a 0.93 percent increase in its national home price composite between April and May.
The company says May numbers showed an increase in median prices across the board. The big winners were San Francisco (+3.33%), Washington D.C. (+3.27%), and San Jose (+3.14%).
Only two of the 26 markets tracked by Altos saw prices decrease: New York (-2.85%) and Las Vegas (-0.76%).
From: http://www.dsnews.com/articles/double-dip-altos-says-prices-have-been-steadily-rising-since-then-2011-06-02
06/02/2011 By: Carrie Bay
While a number of closely-watched home price indices show that national readings have slipped into a double-dip, Altos Research says it’s come and gone.
According to the S&P/Case-Shiller index released earlier this week, national home prices dropped to a new recession low during the first quarter of this year as prices slipped another 4.2 percent.
Altos conducts its own analysis of price trends using active listing data to provide what the company says is more of a real-time view. The firm notes that the latest Case-Shiller findings are based on data only through the end of March. Since that time, Altos has recorded a steady uptick in prices for both major metros and mid-city markets across the country.
A separate study released this week by CoreLogic corroborates Altos’ assertion that prices have risen since the double-dip timestamp. CoreLogic says based on April sales activity, just after the Case-Shiller double-dip, it has recorded an increase in home prices nationally of 0.7 percent.
About three weeks ahead of the Case-Shiller announcement of a new cycle low, Clear Capital reported an official double-dip for its national home price gauge had hit, but in April rather than March.
Regardless of the disparities in the various home price indices, Altos says it expects to see a rising and falling pattern for several years. The firm’s VP Scott Sambucci believes the double dip is “really just the start of the next housing cycle.”
Altos has coined a colorful phrase to depict the ebb and flow of home prices – they call it the “Catfish Recovery.”
Sambucci laid it out by describing the catfish as a bottom dweller that moves slowly, feeding off the lake or river floor for a while, then heads up to the surface and back down, bobbing up and down without a distinct pattern or clear direction.
Altos says markets should plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again.
Sambucci says constant growth for home values is a myth. Charting housing cycles all the way back to 1890, he notes that the sharpest run-up by far occurred at the turn of the millennium, and the market is now in payback mode. In every other historical boom, Sambucci says the run-ups, all of which have been significantly smaller that the most recent, have always been given back.
“The housing recovery will take a long time and it is going to happen slowly,” Sambucci said.
In the short-term, Altos says the seasonal price bump for the spring is still evident in the firm’s active market statistics and will likely show up in the Case-Shiller numbers in late summer and early fall.
Altos recorded a 0.93 percent increase in its national home price composite between April and May.
The company says May numbers showed an increase in median prices across the board. The big winners were San Francisco (+3.33%), Washington D.C. (+3.27%), and San Jose (+3.14%).
Only two of the 26 markets tracked by Altos saw prices decrease: New York (-2.85%) and Las Vegas (-0.76%).
From: http://www.dsnews.com/articles/double-dip-altos-says-prices-have-been-steadily-rising-since-then-2011-06-02
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