Daily Archives: May 29, 2012

March Case-Shiller | Bedford Hills NY Realtor

A slight miss.

Case-Shiller home prices rose just 0.09% in March.

That’s slightly worse than the 0.2% that was expected.

And it’s a bit below the 0.15% from last month.

On a year over year basis, home prices fell 2.57%.

The good news. It’s clear that on the pace of YOY declines is improving every month.

This chart shows the 10 and 20 city composite.

image

The full report can be found here.

More to come in a moment.

———-

 

The big housing datapoint of the day is March Case-Shiller, the gold standard of housing data indices.

The number comes out at 9:00 AM ET.

Analysts are expecting a 0.20% sequential increase, and a 2.6% year over year decrease in the 20 city composite.

The drumbeats are definitely growing louder that we’re reaching some kind of a housing bottom.

Other indices are showing signs of turning up, and though people have been predicting a bottom for years, this is definitely the first time people seem to believe it.

Spring revival for America’s housing market | Bedford Corners Realtor

NEW YORK (Reuters) – Kate Carpenter and her husband waited for two years before sensing the time was right to look to buy a home in the suburbs of New York.

“This is the first time homes are at an affordable point,” said the freelance writer, 35.

She hopes to move her two young daughters out of their rented New York City apartment soon, taking advantage of record low mortgage rates and signs the slump is over.

Six years after the housing market began its slide, dragging the U.S. economy into recession, this year’s spring season — traditionally the busiest period for home sales — is shaping up to be the strongest since the crash.

Sales rose more than 10 percent in April from a year earlier and may end the year up by as much as 13 percent, according to the National Association of Realtors.

Prices, which plunged by a third from 2006 according to some measures, are rising in some cities. Realtors report bidding wars, albeit more modest ones than during the bubble years, and buyers are snapping up homes much more quickly than only a few weeks ago.

“We have more buyers than we have houses to sell,” said April Bolin, a realtor in Riverside, California, considered one of the epicenters of the U.S. housing crash.

“We have multiple bids all the time. I recently sold a property that had 10 offers in three days,” Bolin said.

A reminder of how damaged the market remains: That contested condominium sold for the asking price of $173,000, less than half of what it fetched at the peak of the bubble.

Even if existing home sales this year touch 4.8 million, the top end of the NAR’s forecasts, that compares with more than 7 million in 2005, before the crash.

“We’re guardedly optimistic,” said Ron Phipps, a broker at Phipps Realty in Warwick, Rhode Island, a state hit hard by the 2007-09 recession. “We’ve seen some really good signs. We just want them to be sustained.”

WORKING OFF THE OVERSUPPLY

One of the most significant signs of recovery is the fall in the bloated inventory of homes on the market. Nationally, it has fallen to about six-months’ supply, usually considered a healthy market, down from more than nine months in April of last year.

Agents attribute some of the quick drawdown to a broadening of the kind of buyers getting into the market – homeowners looking to upgrade, first-time purchasers and retirees as well as the cash investors who ventured in earlier and growing numbers of Wall Street funds betting on juicy rental returns.

Some of the cities looking at a potential inventory shortage were among those hardest hit by the crisis, including Phoenix and Miami, because investors have already swooped on many homes. In Sacramento, California, supply has shrunk to just 1.1 months’ worth, according to data firm RealtyTrac.

“We don’t have a lot of product, and we have a lot of eager buyers,” said Donna Evers, an owner of Evers & Company, a real estate company in the greater Washington, D.C. metropolitan area, one of the hottest spots in the recovery so far.

A five-bedroom house that needed a lot of renovation drew 11 offers within three days and eventually sold for $250,000 over the asking price at $1,350,000, Evers said.

“Prices are building pretty fast,” said the 30-year veteran of the U.S. property market.

The market still faces big obstacles, not least a large number of homeowners whose properties are worth less than their mortgages or who are behind on their payments. In March, data firm CoreLogic estimated that for every two homes sold, there is one that could yet be foreclosed.

A setback in the still fragile U.S. economic recovery could also scare away potential buyers.

MORTGAGE LENDING STILL TIGHT

Another risk to the recovery: Despite record low interest rates, lending conditions remain very tight for anyone who cannot show a high credit score and satisfy often highly detailed demands from banks for proof of their financial standing.

“The cruel irony is that during the housing boom, we were giving mortgages to anybody with a pulse,” said Guy Cecala, publisher of industry newsletter Inside Mortgage Finance. “Now we aren’t willing to give a mortgage to anybody but an Olympic athlete. Somewhere in between there’s an appropriate balance.”

Mortgage originations by U.S. banks were flat in the first quarter compared to the last three months of 2011 although they were up from a year earlier, according to the Federal Deposit Insurance Corp., a U.S. bank regulator.

Bankers, smarting from a $25 billion settlement over shoddy foreclosure practices, complain about uncertainty as regulators draw up new mortgage rules. The Federal Reserve said in April some community banks have given up on mortgages altogether.

But comments from major lenders Bank of America and Wells Fargo & Co suggest they could soon start beefing up lending again.

Bank of America Chief Executive Brian Moynihan told investors last week that his bank is adding loan officers as it looks to recover lost market share.

Wells Fargo, which now makes more than one in three U.S. mortgages, is also looking to grow.

“Now, we fully expect some bumping along here as the national economy has its own fits and starts and the like. But we see some real continued improvement,” Mike Heid, head of Wells Fargo’s mortgage unit, told investors last week.

Wells Fargo wrote $129 billion in mortgages in the first quarter, up from $120 billion in the fourth quarter and $84 billion a year earlier.

Still, demand has been far stronger from homeowners trying to bring down the cost of their existing mortgage than from prospective buyers. Last quarter, refinancing accounted for 76 percent of all mortgage applications.

Some of those who can buy are moving fast.

Twenty-six-year old John, who asked that his family name not be published, signed a contract on a three-bedroom property in Ponte Vedra, Florida, just a day after seeing it.

“There was another family that put in a bid on the same day, so we offered a little bit more than we were originally planning because we just wanted to get it off the market,” he said.

(Additional reporting by Michelle Conlin in New York, Tim Reid in Los Angeles and Rick Rothacker in Charlotte; editing by William Schomberg and Kenneth Barry)

MBA: Mortgage originations will outpace 2011 | North Salem NY Real Estate

Because of increased refinance applications and originations, the Mortgage Bankers Association raised its mortgage origination forecast for 2012 by $188 billion to $1.28 trillion.

In 2011, originations totaled $1.26 trillion.

The MBA expects refinance originations to reach $870 billion in 2012, a figure similar to 2011. The association is slightly lowering its purchase originations forecast for 2012 to $409 billion from $415 billion, reflecting lower than previously expected home prices and home sales.

The MBA’s updated forecast of refinance activity is largely independent of the HARP 2.0 initiative.

“We factored HARP lending of roughly $100 billion in both 2012 and 2013 into our April forecast, and the HARP share of refinance activity has remained relatively constant over recent months,” said Mike Fratantoni, MBA’s vice president of research.

“However, mortgage rates below 4% and regular media coverage showcasing ‘record low mortgage rates’ provide sufficient incentive and impetus for borrowers to examine their current rate,” Fratantoni said.

The MBA projects lower mortgage rates for the rest of 2012, also causing it to lift its refinance forecast.

“Scenarios we have consistently highlighted that could drive rates down and refis up have materialized, primarily due to market turmoil in Europe,” Fratantoni said. “Deterioration of the debt situation in Spain and Greece and a new regime in France that is a weaker proponent of European austerity, along with slower economic growth globally, have driven the U.S. 10-year Treasury yield down.”

Mount Kisco NY Real Estate | Consumer sentiment reaches post-recession high

Consumer sentiment rose in May to its highest level since October 2007, despite a tough month on Wall Street and worsening conditions in Europe.

The Thomson Reuters/University of Michigan index climbed to 79.3 in its final May reading, up from a midmonth tally of 77.8 and April’s score of 76.4.

May’s consumer sentiment index beat out February 2011’s score of 77.5, the previous post-recession high in a month-end reading. It also topped analysts’ expectation of 77.8 according to Econoday.

The index surveys households each month on economic conditions, with a score of 100 considered an exceptionally high level.

Countries in the eurozone are struggling under the weight of austerity packages. Industrial output in stronger countries slowed the last quarter, dimming the ability to bolster weaker economies in the eurozone. Talk of Greece exiting the Euro increased in May, adding to volatility.

On Wall Street, major stock indices are all down. Dow Jones and Standard & Poor’s are down 5% this month. Nasdaq is also down nearly 7% for May.

Gas prices, however, loosened their grip on U.S. consumers’ wallets this month. The natonal average was at $3.67 a gallon Friday, down from $3.84 a month earlier, according to AAA.

Conditions also improved on the jobs front, according to survey respondents, as fewer people said they heard about job losses in May than anytime since mid-2007. Richard Curtin, director of the survey, said that could either mean more positive employment reports are on the way from the government, or consumers are a bit too optimistic.

“The most likely prospect is that job growth resumes at a modest pace and that confidence remains largely unchanged until after the November election and decisions about tax policy are made,” Curtin said in a news release.

First-quarter housing data shows promise: Freddie Mac | Pound Ridge NY Real Estate

Initial economic growth estimates for the first quarter hit 2.2%, slower than the fourth quarter of 2011, but still improved from three of the past four quarters, Freddie Mac said in its U.S. Economic and Housing Market Outlook.

Optimism also spread through the market due to a rise in new housing construction and remodeling initiatives. Personal consumption also grew at a 15.3% annual rate as more Americans spent on kitchen appliances and consumer durables, Freddie Mac said.

“Taken together, the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “While not uniformly positive, for the most part, the data trend in the right direction.”

Nothaft also pointed out that home prices are now at or near the trough in many housing markets and delinquency rates are beginning to decline.

Another incentive for homebuyers comes in the form of record low interest rates, which offer purchasers a chance to jump into the market at rates not experienced in 60 years.