8 Metros Where List Prices Are on the Rise

A number of housing markets nationwide have been seeing modest increases in median list prices. In the last year alone, median national list prices ticked up 6.82 percent year over year in February, according to Realtor.com data of 146 metro markets. And a number of markets have seen increases in just one month by 3 or 4 percent.

The following are the eight metro areas that saw the highest median list price increases from January to February:

1. San Jose, Calif.

Month-over-month increase: 4.20 percent

Median list price: $468,888

2. Washington, D.C.-Md.-Va.-W.Va.

Month-over-month increase: 4.17 percent

Median list price: $384,950

3. Detroit

Month-over-month increase: 3.92 percent

Median list price: $84,900

4. Corpus Christi, Texas

Month-over-month increase: 3.89 percent

Median list price: $165,700

5. San Francisco

Month-over-month increase: 3.77 percent

Median list price: $611,700

6. Punta Gorda, Fla.

Month-over-month increase: 3.35 percent

Median list price: $185,000

7. Atlanta

Month-over-month increase: 3.27 percent

Median list price: $154,900

8. Oakland, Calif.

Month-over-month increase: 3.23 percent

Median list price: $320,000

And where have median list prices fallen the most in the last month? Iowa City, Iowa, where median list prices have declined 4.95 percent, and Toledo, Ohio, where list prices dropped 4.31 percent from January to February, according to Realtor.com data.

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

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Housing Market Reaches Turning Point, Economists Say

Economists say the housing market is starting to heal, but too many people aren’t aware of it because they’re judging a housing recovery on the wrong sign: What’s happening with home prices.

Paul Dales at Capital Economics says higher prices won’t be the sign that the housing market is on the mend — that can be a lagging indicator — but rather an increase in overall home sales. And that’s showing signs of improvement: Existing home sales in 2011 rose to 4.26 million compared to 4.19 million in 2010. In the last six months alone, home sales have increased 13 percent.

As a recent article at Fortune points out, “The evidence reminds us that perhaps we should change our expectations of what a housing recovery might look like, particularly following a crisis marked by record foreclosures and a financial crisis that sent the economy into one of the deepest recessions. The recovery we have been anticipating is defined more on the rate at which the glut of vacant properties comes off the market as opposed to any steady rise in prices, which some think won’t happen for another few years.”

Source: “The One Number to Watch for a Housing Recovery,” Fortune (March 20, 2012)

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New-Home Market Shows Steady Improvement

After a surge last month, housing starts dropped in February by 1.1 percent, the Commerce Department reported Tuesday. However, the slip was offset by a hopeful sign for builders that a recovery is still on track: Permits for future construction soared 5.1 percent, reaching its highest level in more than three years.

Permits for single-family homes increased 4.9 percent alone, the highest since April 2010, while permits for multi-family homes rose 5.6 percent, the Commerce Department reported.

The future gauge of building is a welcome sign for the building industry, which last year suffered one of its worst years on record for construction.

In comparing residential construction from this February to February 2011, construction is up 34.7 percent.

February’s modest decrease in housing starts was mostly due to a drop in single-family home construction, which makes up the biggest bulk of new construction. Single-family home construction dropped 9.9 percent in February. Meanwhile, multi-family housing continues to be a bright spot in the sector, soaring 21.1 percent in February due to an increase in demand for rental apartments.

Builder confidence has picked up in recent months and held steady, holding at near a five-year high in March, according to an index by the National Association of Home Builders/Wells Fargo.

“While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving,” says Barry Rutenberg, chairman of the National Association of Home Builders. However, builders still cite hurdles that persist in the recovery, particularly the tightening of credit for builders and buyers and the inventory of distressed properties pulling down overall home prices.

Source: “U.S. Housing Starts Dip; Permits Near 3-1/2 Year High,” Reuters News (March 20, 2012) and the National Association of Home Builders

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8 Banks to Be Fined for Wrongful Foreclosures

The Federal Reserve announced it will fine eight more banks for allegedly improperly foreclosing on home owners. The financial institutions were not included in the recent $25 billion mortgage settlement involving the nation’s five largest banks.

The eight companies are: EverBank, Goldman Sachs Group, HSBC Holdings PLC, PNC Financial Services Group, MetLife, OneWest Bank, SunTrust Banks, and U.S. Bancorp. The Fed did not disclose the amount of the fines on the banks.

Banks continue to face fines and new mandates from federal and state officials due to the way they handled foreclosures over the last few years. Last April, government regulators had ordered 14 lenders and servicers to reimburse home owners who in 2009 and 2010 were improperly foreclosed upon. Eligible home owners have until July 31 to apply for reimbursement.

Source: “U.S. Fines Eight Banks for Alleged Foreclosure Abuse,” Associated Press (March 19, 2012)

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FHFA: Local Laws to Blame for Slow Foreclosures

Federal Housing Finance Agency general counsel Alfred Pollard warned that state and local laws meant to aid home owners at risk of foreclosure actually delay the process, hurting the housing finance system and neighborhoods.

He cited such laws as in Washington, D.C., where mediation can prolong the foreclosure process by as many as 132 days, and in Worcester, Mass., where a $5,000 bond must be posted at the time of foreclosure to ensure the home will be maintained.

Pollard said states and localities must “review the balance between home owner protections and the movement to efficient and professionally undertaken foreclosures.”

Source: “FHFA Blames Local Laws for Slow Foreclosure Process,” American Banker (March 20, 2012)

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A ‘Mega Force’ Emerging in Housing?

The Latino population is becoming a growing force in the housing market, with this demographic’s purchasing power more than doubling over the past decade, according to a new report by the National Association of Hispanic Real Estate Professionals called “The State of Hispanic Home Ownership 2011.”

The purchasing power of Latinos grew to $1.1 trillion in 2011 and is projected to reach $1.6 trillion by 2016, according to NAHREP.

Rapid population growth (the Hispanic population more than tripled between 1980 and 2010), the population’s relatively young age, dramatic employment growth, and growing incomes are all triggering a higher rate of Hispanic home buyers, according to NAHREP. Fifty-three percent of the total U.S. population’s 545,000 new owner-occupants in the third quarter of 2011 were Hispanic home owners, according to Census Bureau data.

What’s more, about two-thirds of Hispanic renters have said they plan to purchase a home, according to a 2011 Fannie Mae survey.

“Despite recent losses suffered by Hispanics during the housing crisis, young Latino families that were unaffected by foreclosure or lost home values are ready to enter the market,” says NAHREP President Carmen Mercado. “When they do, they will have an exponential impact on housing sales.”

New household growth is projected to be greater for the Hispanic population than any other demographic, says David Stevens, president of the Mortgage Banker’s Association. “The need to recognize the most critical variables in housing type, price range, affordability, and mortgage product terms will be critical for all housing stakeholders — from lenders and [real estate professionals] to policy makers — in order to ensure that the home ownership needs of Hispanics and other Americans are met,” he says.

Source: National Association of Hispanic Real Estate Professionals

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Seniors, Young Adults Will Influence Housing

Aging Baby Boomers and their “Echo Boomer” children will significantly impact trends in the nation’s housing market over the next 20 years. In a new report released by the Bipartisan Policy Center, “Demographic Challenges and Opportunities for U.S. Housing Markets,” researchers at the National Association of REALTORS®, The Urban Institute, and the University of Southern California analyze key demographic trends and their likely influence on housing and homeownership in the United States.

Over the next two decades, the aging baby boomer generation will swell the nation’s senior population by 30 million. That demographic shift will likely help increase the supply of housing, since people over age 65 typically release much more housing than they absorb.

“The Northeast and Midwest are most likely to see a large number of older home owners selling their homes to younger home owners as the baby boomers age,” says NAR Chief Economist Lawrence Yun. “This increased supply could mean additional buying opportunities for Echo Boomers. That generation will absorb 75-80 percent of the available inventory of owner-occupied housing by 2020.”

The Echo Boom generation includes nearly 65 million people born between 1981 and 1995. NAR’s analysis illustrates the potential impact of economic and housing policy on this generation’s demand for homes as they come of age.

“Housing, jobs, and the economy are inextricably connected,” Yun says. “A strong recovery with favorable housing market conditions would encourage substantial growth in Echo Boomer households, which would help absorb the current vacant inventory and stabilize conditions for residential construction. Under a reasonable ‘middle’ recovery scenario, approximately 12 million new households will be formed over the next decade, requiring construction of up to 15 million new housing units.”

NAR President Moe Veissi notes that current market trends favor would-be home owners of all ages. “As the supply of rental housing continues to fall, rents are increasing,” he says. “At the same time, affordability for home owners is at a record high. For buyers who qualify and are ready to assume the responsibilities of owning a home, opportunity is knocking.”
Source: NAR

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Gov’t Trims Half of Its Foreclosure Inventory

The government was able to chip away at its foreclosure inventory in 2011, reducing it by nearly half, HousingWire reports in analyzing financial statements from three government enterprises.

From the end of 2010 to 2011, Freddie Mac, Fannie Mae, and the Department of Housing and Urban Development saw a 49 percent reduction in the number of REO properties it owns. The three government enterprises held about 150,700 properties as of Dec. 31, 2011, compared to 296,000 at the end of 2010.

“The GSEs sold REOs at a record pace in 2011,” HousingWire reports. “Combined, both sold more than 353,000 previously foreclosed property for the year.”

Here’s a closer look by how much the government enterprises trimmed their foreclosure inventories:

HUD: Reduced its foreclosure inventory to about 32,000, a 47 percent drop from more than 62,000 it held at the end of 2010.
Fannie: Reduced its foreclosure inventory to more than 118,000, which is down 27 percent from about 162,000 at the end of 2010.
Freddie: Reduced its REO inventory to 60,500, down 16 percent from more than 72,000 in 2010.

Source: “Government-held REO Halved During Robo-Signing Freeze,” HousingWire (March 9, 2012)

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Builders Off to Early Spring Selling Season

The spring selling season is already heating up for home builders, with sales activity increasing and some builders slightly increasing home prices, reports Barclays Capital.

“We believe the spring selling season has arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005,” Barclays Capital analysts reported.

Analysts with Barclays Capital project 1 million housing starts by 2013. The analysts project that housing starts will return to 1.7 million — a more normal amount by historical standards for the sector — by 2015. Last year marked one of the worst selling years for home builders on record.

Some home builders have already started rising prices slightly by about $1,000 to $3,000 due to the increase in demand.

Analysts attribute some of the pick up in demand to the rise in the nation’s employment rate recently.

“Job creation has been considerably better this fall than it was last year, which we believe will lead to a stronger, more sustained spring selling season,” analysts say.

Source: “Homebuilder Spring Selling Season off to Solid Start,” HousingWire (March 12, 2012)

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Property Taxes Dropping?

More Americans whose homes have fallen in value may finally see that break on their property taxes that they’ve been waiting for, according to a USA Today analysis.

As home values have fallen, many Americans have wondered why their property taxes have stayed the same or even risen.

“People say, ‘Hey, my house value went down. How about my tax bill going down?’ But it doesn’t work that way,” Robert Ross, chief assessment officer for McHenry County, Ill., told USA Today.

Many states base their tax assessments on home values from three, six, or up to 10 years ago. This protects home owners from seeing rapid increases in their taxes if home values dramatically increase, but as the USA Today article points out, it also means that home owners can see lengthy delays to any tax cuts when home values drop.

That help explains why cities, counties, and school districts are still “collecting about 20 percent more in property taxes than they did in 2006, when home values were one-third higher,” the article notes.

But some home owners may soon see their property taxes reflect their current home’s assessment. For the first time since 1995 — and only the third time in 40 years — property tax collections have fallen below the inflation rate, dropping 0.9 percent in 2011, according to USA Today.

Source: “Property Tax Collections to Start Downward Trend,” USA Today (March 12, 2012)