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Shadow Inventory of Homes to Take Nearly 3 Years to Clear
February 17th, 2010 categories: Real Estate News
The “shadow inventory” of bank-repossessed properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current sales rate, according to a report from the credit rating agency Standard & Poor’s (S&P). The analysts add that during this period many servicers will likely shift their emphasis from mortgage modification to loan liquidation.
The “shadow inventory” of homes includes all delinquent loans and real-estate owned (REO) property that has not reached the market. REO property are foreclosed homes taken back by the bank for liquidation. As for the total amount of homes in the shadow inventory, Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m.
S&P estimates the inventory to equal a 33-month supply of homes. Analysts added the estimate is actually conservative, as they did not assume homes not showing signs of distress would default and push the overhang of supply even further.
Furthermore, court delays, political pressure and servicing backlogs constricted the flow of foreclosures hitting the market to a trickle. These delinquent borrowers who have not received a foreclosure fuel the “rapidly” growing shadow inventory of properties, according to the report.
“Overall, it is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market,” according to the report.
Another credit rating agency, Moody’s, showed that the underwhelming performance of the Home Affordable Modification Program (HAMP), which the US Treasury Department launched in March 2009 to give incentives to servicers for the modification of loans on the verge of foreclosure, will drive down housing prices another 8% from Q409 to the end of 2010.
According to the S&P report, homes are falling into serious delinquency faster than REO transactions are closing. The total balance of seriously delinquent loans reached well over $400bn through November 2009, while the balance of REO properties reached its peak in September 2008 and declined to $50bn. On average, $14.5bn of seriously delinquent loans or REO property liquidates each month. According to the report, it will take 29 months to clear this supply of homes:
Posted via web from Sights and Sounds of Columbus, Ohio Real Estate
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Homebuyer Tax Credit Likely Extended if Recovery Stalls: John Burns « HousingWire
January 28th, 2010 categories: Real Estate News
Wednesday, January 27th, 2010, 4:51 pm
While many project the economy will be on stable footing by this summer, real estate consultant John Burns believes if it’s not, Congress may once again extend the homebuyer tax credit.
“A lot of people are not buying homes right now because they’re worried about their jobs,” Burns, president of John Burns Real Estate Consulting (JBREC), said in an interview with HousingWire. “If the economy’s not on stable ground in May or June, I wouldn’t be surprised to see it extended again.”
Despite the November extension and expansion to the homebuyer tax credit, an extraordinary government stimulus measure enacted to boost housing activity, new home sales took a 7.6% drop in December, according to data released by the Commerce Department’s Census Bureau and the Department of Housing and Urban Development (HUD). The results come on the heels of National Association of Realtors (NAR) reports of similar December declines in existing home sales.
Sales of new single-family houses hit a seasonally adjusted annual rate of 342,000 in December 2009, down 7.6% from the revised November rate of 370,000 and 8.6% below the December 2008 estimate 374,000.
“The fact that the tax credit was extended helped new home sales,” Burns said. “Without the tax credit extension, this number would have been in the 200s.”
The median sales price in December was $221,300, down from $217,400 in November. The average was $290,600 in December, up from $280,300 in November.
At the end of December, the seasonally adjusted estimate of new houses for sale was 231,000, representing an 8.1-month supply of homes at the current sales rate, up from 7.9-month supply in November.
For all of 2009, the report estimates 374,000 new homes were sold, 22.9% fewer than the 2008 estimate of 485,000.
The homebuyer tax credit extended for first time homebuyers and expanded to include existing homeowners requires buyers have a contract in place by April 30 and close by June 30. The problem, homebuilder insiders and real estate agents tell HousingWire, is that consumers who tried to take advantage of the tax credit too late in the fall before realizing there wasn’t enough time to close a deal by the original Nov. 30 expiration date have yet to reengage themselves in the home buying process.
“With new homes, the homebuilders ran out of everything they could close by the end of November,” Burns said. “There were people that wanted to buy in these communities that didn’t because they couldn’t close in time.”
December’s cold weather not only slowed construction for builders, but also kept prospective buyers from shopping. It remains to be seen when those prospective buyers will return to the home shopping process.
Wednesday’s results follow last week’s joint Census-HUD report that housing starts and completions were down, but building permits were up in December. As HousingWire previously reported, the JBREC December monthly builder survey showed optimism among 264 home building industry executives from public and private companies. The belief that builders will have increased community count, better orders and slightly higher prices has 57% of respondents planning for more revenue in 2010 than in 2009.
Another confidence booster is the tax refund many builders are receiving from the temporary extension of the terms of net operating (NOL) carryback laws, which let builder recoup losses from taxes paid in profitable years.
“It’s given them more confidence in their cash balances and they’re wanting to start more speculative homes because of the extra cash that they now have,” Burns said.
Both new and existing home sales dropped in December. NAR said December’s drop in existing homes sales was “expected,” because of a late surge of buyers looking to get into a home before the tax credit was originally set to expire.
Another lingering question is what the industry learned from December’s sales results and what the industry could expect after buyers won’t be able to take advantage of the tax credit, if it’s not extended.
NAR doesn’t project a repeat of December’s results in May. Despite December’s results, NAR believes the traditional summer selling season will be strong enough to absorb any drop experienced by the sunset of the tax credit.
“We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010,” said NAR chief economist Lawrence Yun.
Burns agrees, but said it depends on whether the widely-held assumption that the economy will be growing again by this summer pans out. If not, it’s possible lawmakers will extend the tax credit, if for only self-serving goals.
“The tax credit extension, and all of politics this summer, is going to be about officials getting reelected in November,” he said. “It’s going to come down to if the economy needs a boost, the elected officials are going to give it one because they can’t afford for the economy to go into the tank before the election.”
Write to Austin Kilgore.
Don’t believe it for a minute. We’re only talking a few months away and while the economy won’t be “back to normal” by any stretch of the imagination, I don’t see Congress extending the Home Buyer tax credit again.
Posted via web from Sights and Sounds of Columbus, Ohio Real Estate
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Will The Columbus Housing Market be worse in 2010 than it was in 2009?
December 17th, 2009 categories: For Home Buyers, For Home Sellers, Market Updates, Real Estate News
Robert Hahn wrote an article that appeared on Inman News recently that was ripe with 2010 predictions regarding the state of Real Estate in the country. It is a good read and I liked his take on many of the subjects. Aside from mentioning the Jets not going to the Super Bowl, Hahn predicted that 2010 will actually see a worse housing market than 2009.I don’t believe it. Read the rest of this entry »
Authored by Joe Peffer | Discussion: No Comments »
August Solds and Total Numbers of Homes in the Columbus Real Estate Market
September 26th, 2008 categories: For Home Buyers, For Home Sellers
Clicking on the thumb nail will bring up a chart of the total number of homes that have sold in the month of August in 2008 and past years and how many homes were available at those times in the Columbus Real Estate Market.
First, notice that the charts look about like what you would have expected and second, note that we are at the lowest inventory point that we’ve seen in the last two years. That’s good news because if our local Columbus Real Estate market is going to continue to bounce back, we need lowered inventory.
Yes, I know September is all but over but look how pretty these graphs are.
Authored by Joe Peffer | Discussion: No Comments »
Clintonville Real Estate Update – Homes Sold this Summer in Clintonville
September 4th, 2008 categories: Clintonville, For Home Buyers, For Home Sellers, Market Updates
Now that summer is all but over (yes, let’s not forget about the remaining 17 days but let’s face it – the kids are back in school and the summer selling season is all but wound down) let’s take a look at how well Clintonville homes did.
All in all, it was a very good Summer for Clintonville homes. Let’s dissect the market by looking at 43202 and then 43214, more or less South Clintonville and North Clintonville which would include Beechwold homes.
43202: Since June 1
65 Homes sold. These range from a 2 bedroom cottage that was only studs and in need of a complete rehab on Duncan that sold in one day for $43,000 to 3 bedroom 2.5 bath, 2400 sq ft home on Midgard that sold for $397,000 in 122 days (Yes, the one that started out at $440,000).
- Average 81 days on market
- Average $118/sq ft
- Average sales price of $171,088
- Average just under 1500 s.f.
- Average list/sales price of 97%
- 89 Active South Clintonville Listings with a median list price of $128 s.f.
- About 4.2 months months of inventory on hand
43214: Since June 1
115 Homes sold in the north Clintonville zip code of 43214. From a 1027 sf 3 bedroom on Kanawaha that sold for $61,000 in 13 days to an historic but dated 4 bed, 3.5 bath 3546 sf home in the middle of Old Beechwold that sold in 296 days for $520,000 (Yes, the one that was listed at $600,000 at the time).
- Average 85 days on market
- Average $135/sq ft
- Average sales price of $205,389
- Average just over 1530 s.f.
- Average list/sales price of 96%
- 168 Active Clintonville homes for sale with a median list price of $144 s.f.
- About 4.3 months of inventory on hand
Authored by Joe Peffer | Discussion: 1 Comment »
Columbus Real Estate Market – Getting back to Normal
August 21st, 2008 categories: Market Updates
While Normal is a relative term, this press release from the local Board of Realtors this morning calls it “pre-boom” levels, aka 2001ish. . . .
Low interest rates and high inventory added up to more homes going into contract in July. More homes in fact than any other
month since August 2007 as new listings fell, according to the Columbus Board of REALTORS®.
Homes in contract continued to increase this summer to an 11-month high. There were 2,051 houses in contract in July, the
highest amount since last August.
A drop in new listings in July helped contribute to declining inventory levels.
The number of homes on the market, 17,707, slid nearly 12 percent compared to July 2007.
July was also central Ohio’s second highest month for home sales, just slightly below the years’ strongest month (June) with 2,242 home sales.
“With more homes in contract and fewer being listed, Columbus is continuing its trend of getting back to pre-boom sales and inventory levels,” says Greg Hrabcak, President of the Columbus Board of REALTORS®.
“There is still a great selection of homes on the market, but as central Ohio continues its balancing act, the market will continue to be favorable for both buyers and sellers,” says Hrabcak. “The fact that we saw more homes go into contract last month shows that homes in central Ohio are competitively priced and suggest consumers are taking advantage of low interest rates and assistance programs.
“Programs such as the first-time buyer tax credits in the recently passed Housing and Economic Recovery Act should motivate even more buyers in the coming months.”
Hrabcak added, “I think people who don’t take advantage of the favorable market conditions now are going to look back five years from now and say ‘What was I thinking’”
Year to date sales of homes through July total 12,869, 13.8 percent behind the July 2007 total, but still in keeping with pre-boom levels. The average sale price of a home in central Ohio in July was $173,940.
The Columbus Board of REALTORS® Multiple Listing Service (MLS) serves all of Franklin, Delaware, Fayette, Madison, Morrow and Union Counties and parts of Champagne, Clark, Hocking, Licking, Fairfield, Knox, Logan, Marion, Pickaway and Ross Counties.
Let’s go find a home for you before they’re all gone.
Authored by Joe Peffer | Discussion: No Comments »
Can’t See the Housing Market Through the Trees 2007 Columbus Real Estate in a Nutshell
January 25th, 2008 categories: Mortgage/Finance, Real Estate News
Lots of bad news in the headlines and on the airwaves about “The Real Estate Market” over the last couple days. Remember that most media stories are greatly effected by larger east and west coast markets and that all Real Estate is Local. Here are some facts and figures on our market, here in Central Ohio.
- Last year was the third highest number of sales ever in Central Ohio. Yes, it was down 4.5% from 2005 and the average sale price is down a `whopping’ 1%, but it was still a good year. Today, compared to 2004, only 3 years ago, we have sold close to the same number of houses and the average sales price is up nearly 3%.
- Inventory levels are at record highs providing prospective homebuyers with the best selection of homes in the history of central Ohio!
- Central Ohio home values have increased almost 33 percent in the last decade and the average home sale prices have increased on average 3.65 percent each year from 1996 through 2006. For consumers looking for long-term and stable growth rates, real estate is still, hands down, their number one choice.
- Our home prices are very competitive. Right now, there are more homes for sale than buyers to buy them. The result is that sellers are pricing their homes to compete. As the market corrects itself, home prices will start to increase again. So, buyers should act now while homes are priced to sell!!!
- There are still many great loan programs for deserving buyers.
- The recent Fed cut is good news! Even though a Fed rate cut doesn’t necessarily spell lower mortgage rates, it does mean good news for housing. The recent half point cut was intended to induce lenders to say yes more often – especially to jumbo borrowers, who have applied for mortgages greater than the conforming limit of $417,000. Making borrowing more affordable will make money more available and this will have a positive affect on the housing market.
What is going on in the micro-market of the Columbus community you want to buy or sell in Ask Me.
- Why was the average sales price in Central Ohio down 1%
- First, because for much of the year we had roughly ten homes on the market for every buyer, many homeowners were forced to drop the selling price of their home in order to compete.
- Second, we had 22 percent fewer homes sell in the $1 million dollar range. Homeowners resistance to drop the price as well as lenders’ temporary aversion toward jumbo loans likely had impact here
- And third, we saw 124 percent more homes sell for less than $30,000. Many of these lower priced homes were purchased by investors who recognized just how favorable the 2007 housing market was and took full advantage of these conditions
- The average price of a home in central Ohio last year – $172,531 – is well below the national median price which was $210,200 in November 2007. The average sale price is also 1.2 percent lower than the average sale price of $174,688 in 2006.
Don’t just take my word for it, this post is derived from yesterday’s Columbus Board of Realtors Press Release.
Authored by Joe Peffer | Discussion: 1 Comment »
What is happening Right Now in the Columbus Real Estate Market
January 16th, 2008 categories: Real Estate News
There are Only 16,226 Active Listings in Central Ohio. I can’t remember the last time the active inventory was that low. Sadly, based on how many sold last month, that also means there is about an 11.2 month backlog of homes on the market.
Things are really picking up though in the last 2 weeks. More showings, more buyers calling, more emails. Other Realtors report the same all over. I’ve always experienced more activity in January than in the previous 2–3 months and this year is no different.
2007 was a fantastic year for Real Estate in Columbus and 2008 is also beginning strong.
Authored by Joe Peffer | Discussion: 1 Comment »
Was it a ROCKtober for Columbus Area Home Sales
November 7th, 2007 categories: Real Estate News
October saw 11% more single family homes sales in Columbus than September. Still lots of inventory out there but as of last week, I noticed the entire Columbus MLS had dipped below 20,000 homes for sale for the first time since at least April.
In October, In Franklin County:
927 single family homes sold
- Average sales price of $155,853 and 97.4% of list price
- Average 97 days on market (remember, this can be manipulated)
- Average home had 1648 sq ft
189 condos also sold in October
- Average sales price of $160,097 and 97.7% of list price
- Average 142 days on market
- Average home had 1413 sq ft
Today
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