Today’s real estate news about the number of foreclosures dropping and a different way to look at the buy or rent question plus much more!
Ahhh…Friday has arrived. I am sure that many of you are like me and will be working this weekend. Before we get too far off track thinking about the weekend, let’s look at the most recent real estate news:
Number of Foreclosures Drops to 2007 Level
Just read some great news from CoreLogic that the number of completed foreclosures in June 2012 dropped to 60,000. Which is much lower than the 80,000 completed foreclosures back in June 2011. Sadly, the May 2012 and June 2012 numbers are the same. But it is still an improvement versus the same time period one year ago.
CoreLogic said that about 3.4% of all homes with a mortgage were in the national foreclosure inventory as of June 2012. Which is only slightly better than the 3.5% level back in June 2011. CoreLogic defines foreclosure inventory as homes in some stage of the foreclosure process. So it is possible some of these homes might NOT actually be foreclosed on. Maybe there will be a short sale or a loan modification. Miracles still happen…
But does this mean fewer foreclosures hitting the market? Not according to Mark Fleming, chief economist for CoreLogic:
Over the last two months REO sales declined while completed foreclosures leveled out. So we could see foreclosure inventory rising going forward.
Of course they are talking about the entire US and not just Upstate South Carolina. CoreLogic said that foreclosure inventory in South Carolina is up 0.2% compared to the same time in 2011. Which isn’t much of an increase but it is still an increase.
Somewhat related is both Fannie Mae and Freddie Mac reported Serious Delinquency rates feel in June. Fannie Mae said that the Serious Delinquency rate for Single Family homes declined in June 2012 to 3.53% from 3.57% May. This is down from 4.08% in June 2011. Freddie Mac said that the Serious Delinquency rate for Single Family homes fell in June 2012 to 3.45% from 3.50% in May 2012. This is only down from 3.50% in June 2011.
While all of this is great news it does not mean the foreclosures are suddenly going to stop. We must see real meaningful improvement in the economy and unemployment rate before real estate will heal completely.
Is Buying Better Than Renting?
Just read about a recent survey from Zillow that says for buyers who intend to live in a home for at least three years, buying is a better than renting. And anytime there is a survey that says buying is better than renting, you can expect the BUY NOW cheerleaders to start repeating their tired cheers. But is this time the truth?
Well consider the source. Sure, Zillow has lots of incorrect information about home values. And they have homes on their website that are NOT for sale. So how much can we trust this survey? Maybe more than you would think!
They actually considered ALL the costs of owning or renting by including stuff like down payments, taxes & tax deductions, maintenance. They even adjusted for inflation and forecasted home price appreciation or increases in rent.
The key thing to remember here is they actually talk about some of the factors that are often overlooked by home buyers. So while the data may be suspect, this concept is very important for anyone looking to buy a home. Consider all the costs. Think about how long you plan on staying in the home. While home prices and mortgage rates are very attractive today, that does not mean buying is the right decision for everybody.
More Real Estate News
Baby got back? The U.S. Housing Market Is Back
Out of the frying pan Underwater homeowners could be hit with a huge tax bill
While everyone is distracted fighting over chicken sandwiches: LPS Settles With Missouri Over Foreclosure Fraud Charges