Daily Archives: April 13, 2013

Altos: No Sign of Single Family Rental Weakness. Yet. | Bedford Hills NY Real Estate

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Rents in major investor markets are showing no sign of weakness despite expectations that the housing recovery will put pressure on single family vacancy rates, according to a report by the CEO of Altos Research

Accelerating household formation may be driving demand for both home purchases and rentals, preventing any slowing of demand in rental markets. But investors, if they haven’t already, will experience Cap Rate Compression as the ratio of costs-to-income on properties is weakens.

“Every week, new investment purchases are a worse deal for investors” said Mike Simonsen COE and Co-founder of Altos Research in report posted on the Altos blog this week.

By now it should be clear to everyone that a multi-year home price rebound started in January of 2012. It should also be obvious to everyone that home prices in 2013 are on a tear. The rest of 2013 will remain strong, with rising home prices. The data is already in and it is very clear, said Simonsen.

Each week, Altos Research surveys over 1 million apartments and single family homes for rent around the country. Simonsen sampled rents on a cross-section of the big investor markets, looking at price per square foot across all rentals, including single family homes, condos, and apartments. All data is weekly measurements.

Key findings:

  • Rents in Phoenix showing no signs of weakness.
  • Rents in Los Angeles and Orange County appear to be holding.
  • Market Rents in Dallas climbing notably.
  • The Florida markets appear to be keeping the positive momentum.
  • Las Vegas is one market where rents show any sign of weakness last fall. Though this spring they’ve resumed their climb.

The rental markets in most of the hot investor cities have not yet come under pressure. “My suspicion is that this is because rents and home prices both respond to new demand of accelerating household formation. Some of these new household are buyers, some are renters, but we’re all moving out from Mom’s basement,” wrote Simonsen.

“So rents are up a little bit. They’re clearly not climbing as fast a home prices.”

via realestateeconomywatch.com

Foreclosure Processing Time at New High | Bedford NY Real Estate

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In the first quarter, it took nearly 16 months to process the average foreclosure in America, longer it has ever taken and an increase of 14 percent over the fourth quarter of 2012.

Properties repossessed by lenders in the first quarter took an average of 477 days to complete the foreclosure process, up from 414 days in the previous quarter and up from 370 days in the first quarter of 2012. It was the highest average number of days to foreclose going back to the first quarter of 2007, a record high since RealtyTrac began tracking this metric in the first quarter of 2007.

The average time to complete a foreclosure increased from the previous quarter in 39 states, led by Oregon (up 61 percent), Arkansas (up 42 percent), Texas (up 40 percent), Tennessee (up 37 percent), and Michigan (up 22 percent) — all non-judicial foreclosure states.

Despite a 4 percent decrease in the average time to complete a foreclosure from the previous quarter, New York continued to register the longest state foreclosure timeline at 1,049 days from foreclosure start to bank repossession (REO). New Jersey came in second highest at 1,002 days followed by Florida at 893 days, Hawaii at 824 days, and Illinois at 720 days.

Texas documented the shortest time to complete a foreclosure at 159 days despite a 40 percent increase from the previous quarter. Virginia documented the second shortest foreclosure timeline at 166 days, followed by Delaware at 168 days, Maine at 182 days, and Alabama at 186 days.

Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 152,500 U.S. properties in March, a decrease of 1 percent from the previous month and down 23 percent from March 2012.

The decrease in March helped drop first quarter foreclosure numbers to the lowest level since the second quarter of 2007. Foreclosure filings were reported on 442,117 U.S. properties in the first quarter, down 12 percent from the previous quarter and down 23 percent from the first quarter of 2012.

“Although the overall national foreclosure trend continues to head lower, late-blooming foreclosures are bolting higher in some local markets where aggressive foreclosure prevention efforts in previous years are wearing off,” said Daren Blomquist, vice president at RealtyTrac. “Meanwhile, more recent foreclosure prevention efforts in other states have drastically increased the average time to foreclose, which could result in a similar outbreak of delayed foreclosures down the road in those states.”

Properties repossessed by lenders in the first quarter took an average of 477 days to complete the foreclosure process, up from 414 days in the previous quarter and a record high since RealtyTrac began tracking this metric in the first quarter of 2007.

The average time to foreclose in the first quarter increased from the previous quarter in 39 states, led by Oregon (up 61 percent), Arkansas (up 42 percent), Texas (up 40 percent), Tennessee (up 37 percent), and Michigan (up 22 percent) — all non-judicial foreclosure states.

First quarter foreclosure activity in the 26 judicial or quasi-judicial states combined increased 6 percent from the first quarter of 2012, while first quarter foreclosure activity in the 24 judicial states decreased 44 percent during the same time period.

Similarly, March foreclosure activity increased 4 percent annually in the judicial states combined but decreased 44 percent annually in the non-judicial states combined.

There were a total of 85,671 Florida properties with foreclosure filings in the first quarter, the most of any state and one in every 104 housing units — the nation’s highest state foreclosure rate and nearly three times the national average of one in every 296 housing units. Florida foreclosure activity in the first quarter increased 7 percent from the previous quarter and was up 17 percent from the first quarter of 2012.

Nevada foreclosure activity increased 13 percent in the first quarter compared to the previous quarter, helping the state post the nation’s second highest foreclosure rate. One in every 115 Nevada housing units had a foreclosure filing during the quarter. First quarter foreclosure activity in Nevada was still down 18 percent from a year ago, but the quarterly increase was driven largely by a recent uptick in foreclosure starts. Nevada foreclosure starts in March increased 88 percent from a year ago to an 18-month high.

“We are seeing an uptick of foreclosure starts particularly in the Reno, Sparks MSA where they are up 100 percent from a year ago due to lenders gaining confidence around their strategies related to SB 284. That strategy development around filing notices of default has taken more than a year. Fortunately, we are seeing a significant drop in the number of scheduled foreclosure auctions and REO’s in Nevada as lenders seek alternative ways to resolve the backlog of foreclosures through short sales or other methods,” said Craig King, RealtyTrac Network member and COO of Chase International, one of the nation’s premier real estate companies located in the Lake Tahoe/Reno region.

Illinois foreclosure activity in the first quarter decreased 2 percent from the previous quarter and was down 5 percent from a year ago, but the state’s foreclosure rate — one in every 147 housing units with a foreclosure filing during the quarter — still ranked third highest nationwide. The annual decrease in the first quarter followed four consecutive quarters with annual increases in Illinois foreclosure activity.

Ohio foreclosure activity increased annually for the fourth consecutive quarter in the first quarter, helping the state post the nation’s fourth highest foreclosure rate — one in every 188 housing units with a foreclosure filing.

Georgia foreclosure activity in the first quarter decreased annually for the third consecutive quarter, but the state still posted the nation’s fifth highest foreclosure rate — one in every 200 housing units with a foreclosure filing.

Other states with foreclosure rates ranking among the top 10 were Arizona (one in every 202 housing units with a foreclosure filing), Washington (one in 220 housing units), Maryland (one in 254 housing units), South Carolina (one in 254 housing units), and California (one in 266 housing units).

One in every 79 housing units in the Miami metro area had a foreclosure filing in the first quarter of 2013, more than three times the national average and highest among metropolitan statistical areas with a population of 200,000 or more.

Six other Florida metro areas documented foreclosure rates that ranked among the top 10: Orlando at No. 2 (one in every 86 housing units with a foreclosure filing); Ocala at No. 3 (one in 92 housing units); Tampa at No. 5 (one in 100 housing units); Jacksonville at No. 7 (one in 105 housing units); Palm Bay-Melbourne-Titusville at No. 8 (one in 109 housing units); and Lakeland at No. 10 (one in 128 housing units).

Other cities with foreclosure rates in the top 10 were Las Vegas at No. 4 (one in 99 housing units); Rockford, Ill., at No. 6 (one in 102 housing units); and Chicago at No. 9 (one in 116 housing units).

High-level findings from the report:

  • U.S. foreclosure starts increased 2 percent from February to March, the second straight monthly increase following three consecutive monthly decreases. There were a total of 73,113 foreclosure starts nationwide in March, still down 28 percent from a year ago.
  • Foreclosure starts in March increased from the previous month in 23 states and were up annually in 12 states, led by New York (200 percent increase), Maryland (193 percent increase), Washington (154 percent increase), Arkansas (101 percent increase), and Nevada (88 percent increase).
  • Lenders repossessed 43,597 properties nationwide in March, the lowest since September 2007. U.S. bank repossessions (REOs) in March decreased 3 percent from February and were down 21 percent from a year ago.
  • A total of 34 states reported annual decreases in REO activity in March, including Oregon (down 72 percent), Utah (down 71 percent), Massachusetts (down 61 percent), Michigan (down 56 percent), and Nevada (down 55 percent).
  • States bucking the national downward trend in REOs included Arkansas (up 121 percent annually in March), Maryland (up 114 percent), Washington (up 88 percent), Pennsylvania (up 41 percent), and Ohio (up 39 percent).
via realestateeconomywatch.com

Realtor.com: Broad-based Recovery Underway | Pound Ridge NY Real Estate

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While the median national list price rose by only a modest amount in March, all indicators suggest that a broad-based housing recovery is beginning to take hold across the nation as a whole. List prices are appreciating at a year-over-year basis in more than 100 of the 146 markets tracked by Realtor.com and nearly all are within reach of achieving positive year-over-year price growth by the end of the year. A successful spring market could move the entire nation into the black.

The recovery is broadening and reaching smaller markets and markets that still have significant foreclosure inventories and local employment problems. Of the 146 markets tracked by Realtor.com, only 42 still report negative year-over-year prices compared to 63 in December. Prices rose in all by three of these markets in March.

List prices are down more than 5 percnt in only six of Realtor.com’s 146 markets: Roanoke VA, Akron OH, Dayton-Springfield OH, Springfield IL, Columbia MO and Peoria-Pekin IL.

While the number of markets experiencing year-over-year list price declines increased in the second half of 2012, this pattern appears to have turned around in the past three months. Since the beginning of the year, a growing number of markets have experienced a YOY increase in their list price, while a declining number have experienced a YOY list price decline. These patterns suggest that 2013 could well see a broad-based recovery of the housing market.

Inventories on Realtor.com continue to be down significantly on a year-over-year basis (-15.22%). The size of the for-sale inventory is now roughly half of its 2007 peak. These historically low inventories set the stage for continued broad-based recovery and the change over from buyers’ to sellers’ market.

Realtor.com reported the total U.S. for-sale inventory of single family homes, condos, townhomes and co-ops remained at near-record lows in March, with 1,529,432 units for sale. While the inventory was down by 15.22 percent compared to a year ago, the national inventory increased for the second month in a row, growing by 2.35 percent in March.

The national median age of the inventory fell to just 78 days in March, down by 20.41 percent over the month and by 12.35 percent on a year-over-year basis. The sudden decline in the age of listings indicates that volumes of new listings are flooding into markets across the nation in preparation for the spring season.

The net increase in listings coupled with the 20 percent decline in the median age of listings suggests that seller confidence is responding to higher prices and positive price forecasts.

via realestateeconomywatch.com