Foreclosure rate hits 5-year low

With foreclosure rates dropping sharply, and the likelihood that rising home prices nationally and other measures will prevent many of those entering the process actually going into foreclosure, this Evansville Courier
article is a good summary of a recent report from Realty Trac.
Here is the RealtyTrac article Foreclosure market report

Marblehead First Quarter Report

The first quarter is usually the slowest of the year for sales and that pattern continued in 2013. But that doesn’t tell the whole story. As the quarter went on, activity accelerated as I have reported in several posts.

Sales were 31 vs 27 (29 vs 24 excluding distressed sales), and the median price $497,000, up 6% from last year’s depressed level, caused by the high percentage of sales under $500,000.

The most significant statistic from Q1 is the Assessed to Sale Ratio, which compares Assessed Values to Sales Prices. When sales take place above AV, the ASR is below 100%. So the lower the number the better the market! In my year rend review Read Review I pointed out that the ASR had declined during the year for SFH sales under $500,000.

Look now at the data for Q1.

Source: MLS, Oliver Reports

Source: MLS, Oliver Reports

We have seen quite a sharp drop in the ASR in all price ranges. Bear in mind this data refers to just 29 sales that closed in Q1, which means sales agreed late last year into early this.

At the end of March there were a further 46 houses with an accepted offer and these, which will be in Q2 numbers, will reflect the stronger market seen in recent weeks.

“Buyers face a dilemma: pay more today, compared with a year ago, or pay even more tomorrow”

Is the Federal Reserve’s success in driving down interest rates giving the housing market a sugar high?

This is the question posed by Nick Timiraos today in the Wall Street Journal online.

Reasons for the strength in home prices include:
– Inventories have fallen to 20 year lows
– Many homeowners aren’t willing – or able – to sell at prices that are, nationally, still down sharply from 2006 highs
– Demand has revved up
– Improving home-price expectations have unleashed pent up demand, as household formation in the last five years was lower than at any period since the 1960s

Result? Prices are rising as buyers say “If I’m going to get in I better get in now”.

Is this the beginning of another bubble? Not according to the experts quoted in Timiraos’ article, as prices are still below long-run averages relative to income.

I covered several of these points in my post on March 17:
How Much Will Home Prices Increase this Year

Here’s Nick’s article in full.
Jump in Housing Prices Stirs New Worry

Déjà vu all over again

Here is a comment from a new listing in Marblehead this week:

First showings @ open house 4/6,7. Offers held until 4/7 5pm.

In recent weeks houses have come on the market and offers have been accepted before the first public open house. Holding offers until the end of the open house allows the seller time to receive more offers. It also encourages buyers to make their best offer, which may well be above the asking price.

Did somebody say 2004?

North Shore Housing Inventory at the beginning of April

The first quarter on the North Shore is the time of the lowest sales and also the lowest number of houses for sale. Thus, the statistics as of April 1, give only a modest indication of what the spring market will be like.

As to that, I will comment in my next post.

Here are the numbers for SFHs for 17 North Shore Cities and Towns: (more…)

Moving up the food chain

The spring market continues to build momentum, as activity is moving up the price brackets.

Let’s look at the sequence of events:
– A February snowy Sunday with the temperature below freezing. 30 people showed up at an Open House for a property listed in the low $400s and multiple offers were received.
– In March another house priced in the low $400s never reached the open market as four offers were received above the asking price.
– Last week a house priced at $600,000 sold in one day.
– Four houses listed in March between $725,000 and $875,000 had offers accepted in 5-20 days.
– This week one house listed in the low $900s and one in the $1,500s had offers accepted in less than a week.

And in the last ten days two condos listed at $389,000 and $425,000 had offers accepted in 1 and 2 days.

Here’s a list of what is available by price. The last column shows the median Days on Market (how long it has been listed for sale) for those properties still available. (more…)

Listed for $550,000; sold for $630,000

The above example appeared in a Wednesday Boston Globe article Boston-area house hunters face bidding battles.
– The sale referred to above took place in Cambridge.
– In Jamaica Plain a buyer bid 12% above a condo’s asking price.
– reported that 89% of Cambridge deals this year involved multiple bids.
– A friend who owns a multi family in Boston’s South End has received three unsolicited offers in the last month, and I have reported earlier about the chronic shortage of condos for sale in Boston.

The market on the North Shore tends to lag behind Boston, but there are already signs that buyers here are feeling the pressure of increased competition for the small number of properties available for sale. I have reported before on multiple bid situations over the asking price in the last few weeks. (more…)

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Real estate market remains red hot

Perhaps more important than the actual numbers – which show a continuing recovery in home prices and sales – is the tone of commentary on the announcements.

The headline above was the Associated Press’s headline of a story about this week’s data for existing home sales.
Read Article to see the data

The New York Times, referring to single family housing starts, used “Housing, ailing for years, start to recuperate”
Read article

The Wharton Public Policy Initiative pointed out that “Housing starts to Give Promising News for Economic Recovery”
Read article

How much will home prices increase in the next decade?

According to a Bloomberg report, JPMorgan Chase & Co. (JPM) more than doubled its forecast for U.S. home price gains in 2013 to 7 percent this week, and predicts a more than 14 percent increase through 2015. Bank of America Corp. (BAC) said last week property values will jump 8 percent this year, up from a prior estimate of 4.7 percent in a report titled “Someone say house party?”

I have previously written that I expect any surprise in 2013 to be on the upside. I also reported a recent open house in Marblehead on a snowy and blustery day when 30 people showed up and multiple offers were received. Then last week before a new property came on the open market it received several offers above the asking price.

What every oceanfront property buyer should do NOW

Some oceanfront houses get battered by storms time and time again, while others remain unscathed.

What is the difference?

Largely, it is a question of the direction the house faces and the protection – or lack of it – from the elements, mainly water and wind.

If you are looking for an oceanfront property, what you should do this weekend is get in your car and drive around the areas in which you are interested. And take a compass with you (I find the compass on my iPhone unreliable).

FHA announcements raise costs, lower defaults

In a letter to Sen. Corker, FHA Commissioner Carol Galante committed to “aggressive action”, including raising minimum credit score requirements, raising downpayment requirements on jumbo-sized loans, and restricting access to FHA mortgages after a foreclosure.
The FHA changes may impede your ability to get a loan beginning April 1, 2013. March 10, 2013

Letter to Sen.Corker

Is this why the housing market is heating up?

The stock market hit an all-time high this week, unemployment dropped to 7.7%, and the Federal Reserve reported that Americans have regained the $16 trillion in wealth lost during the Great Recession.

In contrast, home prices nationally remain, depending on the index, up to 30% below peak levels, while mortgage rates are at all-time lows.

Plus, as I reported last week, home ownership between 2004 and 0212 declined by 3.6% or some 4 million households.

Add to that an historically low level of houses for sale, and what do you get?

In classical economic theory, the relation between supply and demand determines the price of a commodity. As demand for an item increases, prices rise. When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down

Demand is up and increasing
Supply is at historic lows
New housing starts remain well below “normal” levels and can’t be increased quickly

Based on the above, where do you think prices are headed in 2013?

Associated Press; March 7, 2013

WASHINGTON — It took five years, but surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession.

The most important website for first time and Veteran homebuyers

For many first time home buyers the process can seem intimidating, but information available on the internet can help the buyer become well informed and able to be in control of the process.

This website North Shore Home Programs provides a remarkable amount of information, ranging from a step-by-step guide to home buying, to a list of programs available to help with down payments.

The greatest gift of the internet is the way it empowers the consumer through knowledge. Spending a little time on this website, and then googling “first time home buyer”, will go a long way to giving power to you, the buyer.

Knowledge helps to remove intimidation from the process of buying your first home.

Foreclosure activity in Massachusetts continues to drop

Foreclosure petitions down 30%
Foreclosure deeds down 63%
Foreclosure auction announcements down 80%

The Warren Group; March 5, 2013

Read article