From Zillow Blog on High End Market Foreclosures

“Recently, there’s been a fair bit of anecdotal discussion around the assertion that foreclosures, once a problem just for the sub-prime segment of mortgages, have been moving up-market. That is, people are suggesting that we’re seeing more foreclosures in the mid- to high-end segments of the market. We thought we’d crunch some numbers to see how much truth there is to this idea.

Turns out, there’s a lot of truth to it. In 2006, at the height of the real estate bubble, homes in the bottom one-third of home values made up almost 55% of all foreclosures. Homes in the middle one-third of home values made up almost 29% of foreclosures and homes in the top one-third represented just 16% of foreclosures. In the accompanying chart, you can see the dramatic changes in the distribution of home values among foreclosed homes. In July 2009, the bottom one-third made up 35% of foreclosures, compared to 35% and 30% for the middle and top one-thirds, respectively. Those are shocking numbers: Thirty percent of foreclosures are homes in the top tier of local home values. That means that top-tier homes make up almost twice the proportion of foreclosures as they did just three years ago.”

Read more at http://www.zillow.com/blog/

Housing prices rose 2.9% from the first quarter to the second — the first quarterly increase in three years, Standard & Poor’s reported Tuesday. Meanwhile, a business group announced Tuesday that amid signs of economic improvement, consumer confidence rebounded this month.

The S&P/Case-Shiller Home Price Index and the Conference Board’s consumer confidence index were the latest reports to suggest that the U.S. economy is staggering toward recovery. The progress is agonizing, and many ordinary people won’t see the payoff for a while. The Congressional Budget Office expects unemployment to rise from July’s 9.4% and average double digits next year.

But for all the caveats, the signs of recovery strike many economists as a huge relief. After the collapse of Lehman Bros. last Sept. 15, the United States and the world seemed to be teetering on the edge of a second Great Depression. And some say the improving outlook vindicates the aggressive actions taken since last fall by Federal Reserve Chairman Ben Bernanke. A student of the economic cataclysm of the 1930s, he slashed interest rates to zero and pumped hundreds of billions into the financial system.

Sales of new homes climbed to a seasonally adjusted annual rate of 433,000, the highest pace since last September, the government said.

That was a 9.6% increase over the revised rate for June — better than industry analysts had expected, but still 13.4% below the July 2008 rate.

The sales rate has risen 31.6% from this year’s lowest rate, which was set in January.

The seasonally adjusted estimate of new houses for sale at the end of July was 271,000, according to the government.

That represents a supply of 7.5 months at the current sales rate, the lowest figure since April 2007 and well below January’s supply of 12 months.

“It’s really good news. Inventory is down; sales are up,” says Patrick Newport, with IHS Global Insight.

The question, Newport says, is how much of a lift sales are getting from a federal tax credit of up to $8,000 for first-time home buyers. It expires Nov. 30.

The government’s report on new home sales follows Tuesday’s S&P/Case-Shiller Index report showing improving home prices in June compared with May in 18 of 20 cities tracked.

According to the government, the median sales price of new houses sold in July was $210,100.

“I’m optimistic,” says Tim Dwyer, CEO of Entitle Direct Group, a title insurer in Stamford, Conn. “What was needed was a bottoming. Then consumers would start to look left and right and start jumping. I believe that’s what’s happening here.”

In the Northeast, July’s sales rate rose 32.4% compared with June, the strongest gain of any region. The South was up 16.2%; the West was up 1%; and the Midwest’s sales rate fell 7.6%.

Joel Naroff, of Naroff Economic Advisors, said the rise in existing home sales is a tangible sign that the housing market is now back up and running.

That’s in part because builders are being more cautious about pursuing developments until they are certain they can sell their properties, he said.

“We can stop worrying about the housing market and start playing closer attention to other issues, such as when credit will start flowing more freely,” Naroff said in a statement.

Article from http://www.onestophousingresources.com/tutorials/The_USA_Housing_market_has_never_be_1017508_Low-Income-Housing_article.html

The USA Housing market has never been a better time to invest.

Sales of US homes rose for the third consecutive month in June 09, suggesting that Property investors are flocking back to pick fruitful deals as the US property clock has wound prices back to the same levels as in 2003, according to financial researchers Standard and Poor’s.

August 13, 2009
By belgrave group
Category: Low-Income-Housing
Related Articles: belgrave group usa foreclosures detroit property usa property investment
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Sales of US homes rose for the third consecutive month in June 09, suggesting that Property investors are flocking back to pick fruitful deals as the US property clock has wound prices back to the same levels as in 2003, according to financial researchers Standard and Poor’s.

‘’The US Housing marketing is bottoming out and now really is the time to invest. We have come across some super bank owned properties, which yield as much as 25 % rental on a three bedroom house that can be picked up for under £25,000, in Detroit which include costs of property Aquistion, all legal costs, property refurbishment and placing of a tenant. Prices, are staring to rise due the massive amount of overseas investment. Last month over 2,800 properties sold in Detroit mainly to overseas investors ‘’

‘’The June sales number appeared to confirm the stabilisation, down a mere 0.2% from a year earlier.’’

‘’Prices also showed signs of stabilising. The average price of existing home sales was 181,600 in June, 15% lower than a year ago but up from 174,700 in May according to NAR ‘’. said James O’Brien Chairman of the London property investment firm Belgrave Group

‘’I think there’s going to be the best opportunity to make money in the last 20 years in real estate in the US. “ Now that the meltdown has happened, the new emerging market is the United States,” Tom Shapiro, president of real estate investment firm GoldenTree InSite Partners, said at the Reuters Global Real Estate Summit in New York.

The company are looking to sink up to $1 billion in to property, and are ready to return to the US market and take advantage of the rock bottom prices.

Alex Walia Managing Director of the London based Belgrave Group said “ Areas like Detroit have fallen by as much as 60 % making Detroit a very popular place to invest with overseas investors. ‘ CNN recently voted Detroit as one of the top places to invest in the US, due to rock bottom prices and high rental yields. We recently sold one property to an investor which had sold in 2007 for $180,000. A typical investment package we would offer would be for a round £24,500, with a tenant in place paying from $800 - £900 pm or higher in some cases. This investment will pay for itself in 4 years, making this a great income or pension. A lot of our investors have previously held funds in high interest bank accounts. The bank interest has become so low they have come to us because of the high 25 % rental yields offering a huge return on investment. ‘

Though with prices starting to rise and Obama keen to stop the Foreclosure market, these amazing bargains may not be around for much longer.

For Further information log onto www.belgravegroup.com

http://www.atlantageorgiarealestateinfo.com/info/2009/08/24/canadian-real-estate-market-recovery/

Interesting post from Barry Ritholtz. Read the whole story http://www.ritholtz.com/blog/2009/08/existing-home-sales-not-as-advertised/

The latest housing consensus as sung in three part harmony amongst the media and green shoots crowd. Their song goes something like this:

1) The worst of the housing trouble is now behind us;
2) Only recently, Housing was “Getting worse more slowly;”
3) That has  transitioned to “Housing is getting better.”

I don’t believe it. IMO, all 3 are misleading or outright wrong. This post explains why.

On Friday, the market rallied smartly –  and while expiry had something to do with it, the larger part of the gains came after the release of the Existing Home Sales data. Traders’ kneejerk reaction seemed to reflect the belief that not only is the worst of Housing now behind us, but that Housing was actually getting better.

Indeed, Housing is going to be a growth driver for the economy going forward!

Only, not so much. A close look at the data reveals this to be a false premise. If you only read the NAR spin, its easy to fall into their web of happy talk. (We’ve said it so many times, it still bears repeating: The National Association of Realtors are a highly misleading news source. Look past what they say to the  actual numbers if you seek economic truth).

In the past, I have gone so far as to imply the Realtors group are spinmeisters. This month, I will be more blunt: Their actual data has become untrustworthy, their spokesmen lie for a living, and their “news releases” is little more than misleading junk.

Investors who rely on the NAR version of the news do so at their own great financial peril.

Witht hat intro, lets dig intot he actual data to show why the real estate trade group happy talk is misleading bunk. IF YOU ARE INTERESTED IN HOUSING, then you need to thoroughly fisk the NAR data, put it into context, and strip the lipstick off the pig.

Let’s do just that: A closer look at the actual unspun data reveals the NAR fantasies. Rather than recently improving, we see that January to July 2009 is actually the weakest 7 month period in 5 years — since the market topped in ‘05.

Consider Mark Hanson’s analysis: He points out that “If not for a surprise and suspect 16k increase in Northeast condo sales, Existing Home Sales would have been lower month-over-month and only up 12k units from July 2008, which was the worst year on record for housing.”

Let’s see what happens if we back out those condo sales to look at just Single Family Homes ex Condos — which accounts for the vast majority of the US housing market. We see a very different picture. Existing home sales (ex-Condos) were down 10% from July 2007, flat from July 2008, and off 5% from June 2009.

Hence, the boom in cheap Northeast condo units accounted for all of the excitement in Friday’s EHS release. Indeed, the overall UNADJUSTED data shows not only that housing is not getting better, it is still getting worse.

Let’s go back to the NAR release. As noted on Friday, on a NON-seasonally-adjusted basis, existing home sales were nowhere near as strong as advertised. According to M Hanson Advisors:

“Even with condos included, the all-important Western Region was down 10% m-o-m. It is consensus that the housing market in the West is booming. While sales are booming at low end, I have argued for months that demand from first-timers and investors was at peak levels and July’s results prove this.Such weak results m-o-m and relative to 2008 underscore how critically injured the housing market remains.

Think about it…prices are down sharply y-o-y; rates are at historic lows; moratoriums and modification initiatives have kept hundreds of thousands of foreclosures off the market; housing sentiment is worlds better; a tax credit is available; and still, y-o-y sales are flat for all intents and purposes and down 6.5% from weak 2007 levels when pricing was near the peak. Conditions won’t get much better than this in the future — what is it going to take to sell houses?

This confirms my prior view that there are a lot of federal forces focused mightily to merely maintain housing in a gentle downdraft. But for this extraordinary government intervention, Housing would actually be much much worse. Foreclosures would be driving prices much lower — a good thing IMO, as it would hasten the cleansing of the boom’s excesses.

Recall that as the market topped out in 2005-06, cheaper Condo sales became a disproportionate source of total volume, as struggling buyers ran low on both cash & credit and were forced to move downstream.

That is now replaying over again. Perhaps its a sign of tight credit conditions or retiring boomers downsizing. Regardless, the mix of condos to single family homes is especially noteworthy.

Why NOW is a good time to buy a house

            In the current economic climate we are in, it may seem that
purchasing a house may be the worst thing you could do, but you may be
surprised to find that now or within the next 3-6 months may actually be the
best time to buy a home! 

            To be frank, housing markets are not in as bad shape as the
media is making them out to be. In Florida, supposedly one of the hardest
hit markets, home sales have risen for the past 4 months, while home sales
were UP 27% in December 2008 as opposed to December 2007. Investor purchases
(that is second home purchases by people not intending to live there) were
just under 50,000 state-wide in 2008; in Miami alone, one of the markets
most maligned by the media, there were 2,142 investor purchases in 2008, a
rate of almost 6 a day. In California, the worst hit market in the West had
over 48,000 investor purchases in 2008.

            Real estate markets go in cycles, and they have all throughout
history and they will continue to do so. A typical real estate market cycle
is 5-7 years, with periods of rapid price growth, followed by a stagnant
period, followed of course, by a pricing crash. Eventually prices will shoot
up again, starting the cycle all over again. Most markets in the USA peaked
in 2005. If markets follow their usual pattern (which they have, for the
most part, following other recessions) then markets will start to recover in
the near future. Due to the recession the cycles will be slightly extended
meaning they will start to recover in approximately 2 years. Markets have
always recovered after recessions. House prices reached their highest
levels, and even after the crashing prices, prices are still higher than
ever.

            The current recession will most likely be incredibly harsh, but
short-lived. The recession and the bad news being reported in the media have
depressed house prices in unseen ways in years. 

Mortgages are now harder and harder to apply for and if you can get
qualified for a mortgage that can actually play into your favor. If you know
there were so many more hurdles to jump through to qualify for a mortgage
then you know you have some security behind your mortgage if you were
approved! 

            Finally, there is really no better investment than the roof over
your head.

The sales of new homes has gone up in September, compared with August as builders slash prices to move inventory as quickly as possible.

The median home price fell  in September to $218,400, down over 9 percent from the same point one year ago. This is the lowest median house price since the $211,600 level of September, 2004.

A group in Detroit, Moratorium Now! is fighting the surge of foreclosures in the Detroit metro, one of the worst foreclosure-hit areas in the entire country.

The group is to meet with the intern Mayor Cockrel today (October 27th) to demand he declares Detroit in a “Economic State of Emergency,” which would help freeze foreclosure processes from going forward.

With the current bailout of Wall Street, the general public should not be who suffers from Wall Street’s greed. Detroit is suffering from one of the highest unemployment and foreclosure rates in the country; 18% of housing units stand vacant.

The people who should be benefiting from the bailout should be those who funded the bailout - the taxpayer who is getting foreclosed on, rather than the rich CEOs who caused this whole mess in the first place.

Good Luck

Nearly 766,000 homes in the USA in the last year have received one or more foreclosure notice from July -September.

Nationwide this is an increase of over 70 percent from just last year.

RealtyTrac, a foreclosure listing expert, expects over a million bank owner homes on the market by the end of 2008. This staggering number would represent about 30% of all properties on the market.

California, Florida, Ohio, Michigan, Arizona and Nevada account for over 60% of foreclosures in the last quarter. With over 25% of the nations foreclosures, California by far leads any state.

Detroit was one of only two (Atlanta was the other) citiies that were outside California, Florida, Nevada and Arizona to be in RealtyTrac’s list of the 20 hardest-hit areas.