Talking about home prices both national & here in Upstate South Carolina, mortgage delinquencies and much more…
LPS Home Price Index Shows US Home Prices Increase
Recently, LPS released their Home Price Index based on data through February 2012. While LPS is reporting that US home prices increased for the first time since March 2010, they are far from being optimistic. Raj Dosaj, vice president of LPS Applied Analytics said:
Our HPI shows an increase in seasonally adjusted prices this month for the first time since March 2010, and for only the third time in five years. There have been signs of price declines slowing for a few months now, and our estimates for next month are flat to slightly positive. Without a pickup in sales volumes from their current anemic levels, it’s hard to be more optimistic that the market may be nearing the end of its fall.
What a downer! So does this mean all the different reports about the housing market hitting bottom have been premature? And what about house prices in Upstate South Carolina? The latest data from the April 2012 Mark Indicators shows the median home price is up 9.9% compared to the April 2011 level. Of course, that is for the entire WUAR MLS so if you are wondering what a specific home is worth, it means looking at all the recently sold comparable homes. And looking at all the comparable homes that are for sale.
Since Dosaj points out the sales volume, I must mention that the number of closed sales in April 2012 were down 21% compared to the April 2011 level. We still have way too many homes for sale since there is an inventory of 17.9 months. That means it would take 17.9 months to sell every home in the MLS if homes keep selling at the same pace.
But in some price ranges or areas, it is hard to find a nice home. And when a home that is in good shape and priced right hits the market, you can expect that several buyers will make an offer. While national reports on home prices can be interesting, they do not always give you a clear picture of what a home in Upstate South Carolina is worth…
Bullish Billionaires Say to Buy a Home Now
Both Warren Buffett and Donald Trump recently said that now is the time to buy a house. I would say Buffett is bullish on buying a home but I think Trump is full of bullshit 99% of the time. With that warning out of the way, you can read more of their opinions at Why are Billionaires Buffett and Trump Bullish on Real Estate Right Now?
NAR First Quarter 2012 Report on House Prices
US home prices are stabilizing, sales are improving and inventory is declining according to the latest quarterly report by the National Association of Realtors. The median existing single-family home price rose in 74 out of 146 metropolitan statistical areas in the first quarter from the same quarter in 2011 BUT 72 areas had prices decrease.
Existing-home sales in the South increased 2.1% in the first quarter and are 4.1% above the first quarter in 2011. The median existing single-family home price in the South rose 1.2% to $143,600 in the first quarter from a year earlier. For information about home prices in Upstate SC, check out the Market Reports.
Real Estate Mortgage Delinquencies Down
Good news from the Mortgage Bankers Association that the delinquency rate and number of foreclosure starts fell on a quarterly and yearly basis in the first quarter of 2012. The bad news is that foreclosure inventory increased slightly compared to the previous quarter. Probably banks ramping back up after the foreclosure/mortgage settlement.
Michael Fratantoni, MBA’s Vice President of Research and Economics:
Mortgage delinquencies normally fall during the first quarter of the year, but the declines we saw were even greater than the normal seasonal adjustments would predict, so delinquencies are clearly continuing to improve. Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future. The percentage of loans three payments or more past due, the loans that represent the backlog of problems that still need to be handled, is down to the lowest level since the end of 2008. Foreclosure starts are at their lowest level since the end of 2007.
And some more good news comes from S&P:
On May 15th, S&P Indices and Experian released April 2012 data for the S&P/Experian Consumer Credit Default Indices, which measure consumer credit default rates. April data showed a decline in the composite index, led by a 12 basis point drop in first mortgage default rates.
Overall, this is good news and hopefully we will see fewer foreclosures in 2012. Maybe, just maybe this news means people can start feeling more confident. And start buying homes while mortgage rates and prices are so good?
Federal Reserve Governor Elizabeth Duke Says Lending Requirements Too Tight
In a speech made at a joint Real Estate Services/Regulatory Issues Forum Tuesday morning, Federal Reserve Governor Elizabeth Duke said the nation’s housing recovery is being constrained because lenders have no idea how the government will regulate the mortgage business in the future. NAR is having a big pow wow in Washington this week. Part of what they will do is visit all the elected officials so they can to bend their ears about how screwed up things are in real estate today.
The fact that someone from the Federal reserve is openly admitting the banks are being too restrictive with lending is one thing. But getting the government to finally address the problem is another. We do not want to go back to giving mortgage to anyone that can fog a mirror. But on the other hand, some of the horror stories about how hard it is to get a mortgage might discourage buyers from talking to a lender.
Housing Starts Up 11.6% in the South
The Census Bureau and HUD just released the latest new residential construction numbers and it was good news! Housing starts are up 2.6% in April from March, with a 2.3% increase in single family home starts. The increase in housing starts is a good sign for the economy and could mean that consumers are regaining their confidence.
However, I wonder if we will see a healthy level of new residential construction before all the excess inventory is finally gone?
Rental Housing Boom Set to Explode
Just the other day I posted an infographic entitled Should You Buy or Rent a Home. A friend shared my post on twitter and someone replied “No”. My first reaction was if it is NOT the right time for you to buy a home, then it would be foolish of you to ignore the facts and buy a home.
But then I though about how many homes we have sold to investors in the past 6 months. So many people either cannot buy a home or do not want to buy a home. Which means they will rent and No Matter What…Someone Owns That House. Right now is not just a great time for someone to buy a home to live in. You just read what Warren Buffet and Donald Trump have to say about buying a home today.