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HILTON HEAD FORECLOSURES IN THE NEWS
Pending Home Sales Have Record Rise; Construction Flat
Published: Tuesday, 1 Dec 2009 | 10:24 AM ET
By: CNBC.com
Pending sales of previously owned U.S. homes rose unexpectedly to their highest level in 3-1/2 years in October, a survey showed on Tuesday, suggesting the housing market recovery was gaining steam.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in October, rose 3.7 percent to 114.1, rising for a ninth straight month. This is the longest streak of gains since the series started in 2001.
Analysts polled by Reuters had forecast pending home sales, which lead existing home sales by one to two months, falling 0.8 percent in October after rising to 110 in September.
The Pending Homes Sales Index surged a record 31.8 percent in October from its year-ago period. The housing market, the main trigger of the worst U.S. recession in 70 years, is recovering from a three-year decline.
Housing construction contributed to economic growth in the third quarter for the first time since 2005.
Recovery is being supported by the popular $8,000 tax credit for first-time buyers, low mortgage rates and falling house prices. The government last month extended the incentive into next year and added a $6,500 credit for home owners buying a new residence. It had been due to expire on Nov. 30.
"The credit is helping unleash a pent-up demand from a large pool of financially qualified renters," said NAR economist, Lawrence Yun.
Data from the Realtors group last week showed sales of previously owned homes rose to their highest level in more than 2-1/2 years in October. Yun, however, cautioned sales could dip in the months ahead.
"The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months," said Yun.
"Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process."
The pending home sales index in the Northeast jumped 19.9 percent to 100.2 in October. In the Midwest the index rose 11.6 percent to 109.6. Pending home sales activity in the South increased 5.4 percent to an index of 115.4, while contract activity in the West fell 11.2 percent to 127.7.
Meanwhile, US construction spending was flat overall in October at $910.8 billion despite the biggest surge in homebuilding in more than a decade, the Commerce Department said on Tuesday in a report that sharply revised the prior month's data.
Instead of rising by 0.8 percent as it said a month ago, the Commerce Department now says September construction spending slumped by 1.6 percent, its sharpest monthly fall since a 2.8 percent decline last January. The department said the last month in which total construction spending rose was in April, when it was up 0.5 percent.
Economists surveyed by Reuters had forecast October construction spending would decline by 0.5 percent. Spending on homebuilding was up 4.4 percent in October, more than recovering from a 2 percent dip in September. It was the biggest monthly gain in private residential spending since a matching 4.4 percent rise in March 1998.
Spending on public construction projects was down 0.4 percent in October after rising 0.9 percent in September. Spending on healthcare, highways and streets and power projects all was off from September, the department reported.
Home Prices Start to Stabilize In the US as Sales Pick Up
Published: Monday, 9 Nov 2009 | 10:23 AM ET
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By: Diana Olick
CNBC Real Estate Reporter
On the way down and on the way up, home prices always lag sales, but they may be beginning to catch up. A new report from Zillow.com finds home values stabilized in the third quarter of this year, as sales of new and existing homes grew.
"While 116 metropolitan areas experienced Q3 year-over-year declines in home values, only nine metropolitan areas saw accelerating year-over year home value declines," according to the report.
That is resulting in slightly improved negative equity. Zillow finds 21 percent of single-family home owners are in a negative equity position in Q3, as compared to 23 percent at the end of Q2.
The question remains if this is a real trend or a temporary surge brought on by non-organic factors. The first-time home buyer tax credit added an additional 350,000 buyers to the housing market, according to the National Association of Realtors, and the Federal Reserve's investment in Fannie Mae and Freddie Mac mortgages and mortgage backed securities have kept mortgage rates artificially low.
And then there's the foreclosure quandary. Zillow estimates more than one fifth of all sales in September were foreclosure re-sales, up from 15 percent a year ago. Realtors have put that at a higher number.
But the fact is that foreclosure inventory is diminishing, thanks to more efforts to modify borrowers, which are slowing down some of the inevitable. That's pushing prices on the low end higher, and the low end is where all the activity is. In September, the National Association of Realtors reports that nearly 70 percent of all sales were on homes priced $250,000 or lower.
Home values are still worst in the local markets that saw the biggest housing boom and bust. These are in California, Florida, Arizona and Nevada. The best performing zip codes are in areas with more stable employment, that did not see huge home price appreciation during the housing boom, like parts of North Carolina.
Last week President Obama signed into law an extension and expansion of the home-buyer tax credit, opening it to some move-up buyers and moving the expiration date to May 1, 2010.
Most analysts say the extension will not have near the impact the initial credit did, because demand was pulled forward in advance of the first expiration date. In other words, we saw the tax credit bump over the summer, and now, as we head into the traditionally most sluggish housing season, the credit isn't going to help much.
Home prices have stabilized and in some regions begun to rise a bit, but foreclosures, unemployment and still weak consumer confidence are warning signals that they could dip yet again.
October Housing Update From Campbell Survey's
First-Time Homebuyers Help Drive Sales
As Housing Market Continues to Stabilize
In October the housing market continued to stabilize, according to respondents to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. Real estate agent survey respondents reported increasing short sales, decreasing REO sales, and a rapid ramp-up in transactions by first-time homebuyers. The reported change in short sales—from 14% of transactions in September to 15% of transactions in October--was driven by more homeowners falling behind in their mortgage payments due to unemployment and other financial stress. In contrast, sales of damaged REO to investors declined from 15% of transactions in September to 13% of transactions in October. “Our survey statistics are indicating a transition in the housing market,” commented Thomas Popik, research director for Campbell Surveys. “The first wave of the mortgage crisis involved subprime borrowers going into foreclosure, which resulted in REO properties for sale. We’ve worked through a lot of that subprime REO inventory—but now we’ve got to deal with prime borrowers that are putting underwater properties on the market as short sales.” The average price for damaged REO properties increased from $124,400 in September to $129,600 in October, indicating high demand for these properties. A majority of damaged REO was purchased by investors. In the current market, investors are using cash instead of mortgage financing. Survey respondents reported high sales-to-listing prices for damaged REO, another indication of high demand. Average sales-to-list price for damaged REO was 97%, compared to just 92% for non-distressed properties.
Front Page of the Island Packet Jan 19, 2009
Beaufort County foreclosure filings rise; Realtors hope bottom is near
By JOSH McCANN
Chris Walker was on his way to Bluffton on Thursday to show six different properties to prospective buyers. Three of the properties had been seized through foreclosure.
Walker specializes in marketing such properties, but he said everyone connected with Beaufort County's real estate industry has been affected by the growing phenomenon.
Walker, co-founder of the Web site hiltonheadforeclosures.net, said the number of distressed properties in Beaufort County has climbed beyond his expectations. Distressed properties include both foreclosures and short sales. Short sales occur before foreclosure, when owners sell their homes for less than they owe and lenders forgive the difference.
