Daily Archives: November 28, 2012

Case-Shiller Makes it Official: “We are Now in the Midst of a Recovery” | Pound Ridge NY Real Estate

Two of the nation’s most authoritative national housing price indices today reported significant third quarter price increases over last year at this time, and the chairman of the Index Committee at S&P Dow Jones Indices confirmed that a housing recover is underway.

The S&P/Case-Shiller U.S. National Home Price Index recorded a 3.6 percent gain in the third quarter of 2012 over the third quarter of 2011, marking the sixth consecutive month of increasing prices. In September 2012, the 10- and 20-City Composites posted annual increases of 2.1percent and 3.0 percent, respectively.

Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index reported today that deasonally adjusted house prices rose 4.0 percent from the third quarter of 2011 to the third quarter of 2012. FHFA’s seasonally adjusted monthly index for September was up 0.2 percent from August.prices and rose 1.1 percent from the second quarter to the third quarter of 2012.

With significant growth in home prices during the quarter and a modest inventory of homes available for sale, house price movements in the third quarter were similar to what we observed in the spring,” said FHFA Principal Economist Andrew Leventis. “The past year has seen consistent price increases, but a number of factors continue to affect the recovery in home prices such as stagnant income growth, high unemployment levels, lingering uncertainty about the macroeconomy, and the large number of homes in the foreclosure pipeline.”

FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transactions information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 1.0 percent over the latest quarter. Over the latest four quarters,the index is up 3.3 percent. For individual states, price changes reflected in the expanded-datameasure and the traditional purchase-only HPI are compared on pages 21-23 of this report.

Average home prices in the S&P/Case-Shiller 10- and 20-City Composites were each up by 0.3 percent in September versus August 2012. Seventeen of the 20 MSAs and both Composites posted better annual returns in September versus August 2012; Detroit and Washington D.C. recorded a slight deceleration in their annual rates, and New York saw no change.

The 10- and 20-City Case-Shiller Composites have posted positive annual returns for four consecutive months with a +2.1 percent and +3.0 percent annual change in September, respectively. Month-over-month, both Composites have recorded increases for six consecutive months, with the most recent monthly gain being +0.3 percent for each Composite.

“In September’s report all three headline composites and 17 of the 20 cities gained over their levels of a year ago. Month-over-month, 13 cities and both Composites posted positive monthly gains. says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.

“We are entering the seasonally weak part of the year.  The headline figures, which are not seasonally adjusted, showed five cities with lower prices in September versus only one in August; in the seasonally adjusted data the pattern was reversed: one city fell in September versus two in August. Despite the seasons, housing continues to improve.

Blitzer said Phoenix continues to lead the recovery with a +20.4 percent annual growth rate. Atlanta has finally reversed 26 months of annual declines with a +0.1 percent annual rate as observed in September’s housing data. At the other end of the spectrum, Chicago and New York were the only two cities to post annual declines of 1.5 percent and 2.3 percent respectively and were also down 0.6 percent and 0.1 percent month-over-month.

“Thirteen of the 20 cities recorded positive monthly returns; Boston, Charlotte, Chicago, Cleveland and New York saw modest drops in home prices in September as compared to August; Tampa and Washington D.C. were flat. With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market.”

As of the third quarter of 2012, average home prices across the United States are back at their mid-2003 levels.  At the end of the third quarter of 2012, the National Index was up 2.2 percent over the second quarter of 2012 and 3.6% above the third quarter of 2011.

As of September 2012, average home prices across the United States for the 10-City and 20-City Composites are back to their autumn 2003 levels. Measured from their June/July 2006 peaks, the decline for both Composites is approximately 29 percent through September 2012. For both Composites, the September 2012 levels are approximately 9 percent above their recent lows seen in March 2012.

In September 2012, 13 MSAs and both Composites posted positive monthly gains. Home prices in Tampa and Washington DC saw no change from August to September. Boston, Charlotte, Chicago, Cleveland and New York saw a slight drop in prices in September. Phoenix recorded the highest increase in annual rate, up 20.4% from its September 2011 level. Chicago and New York were the only two cities that fared worse year-over-year with respective annual rates of -1.5% and -2.3 percent.

The table below summarizes the results for September 2012.

2012 Q32012 Q3/2012 Q22012 Q2/2012 Q1
LevelChange (%)Change (%)1-Year Change (%)
U.S. National Index135.672.2%7.1%3.6%
September 2012September/AugustAugust/July
Metropolitan AreaLevelChange (%)Change (%)1-Year Change (%)
Atlanta96.060.3%1.8%0.1%
Boston157.26-0.6%0.7%1.9%
Charlotte116.28-0.3%0.6%3.5%
Chicago116.69-0.6%0.7%-1.5%
Cleveland102.10-0.9%1.0%1.4%
Dallas121.570.2%0.1%4.4%
Denver134.010.4%0.5%6.7%
Detroit79.820.7%2.1%7.6%
Las Vegas97.381.4%1.6%3.8%
Los Angeles174.801.0%1.3%4.0%
Miami150.240.1%1.0%7.4%
Minneapolis126.021.1%1.2%8.8%
New York166.10-0.1%0.6%-2.3%
Phoenix120.651.1%1.8%20.4%
Portland141.100.2%0.5%3.7%
San Diego160.091.4%0.9%4.1%
San Francisco143.150.5%0.5%7.5%
Seattle142.090.3%-0.1%4.8%
Tampa134.900.0%0.4%5.9%
Washington192.360.0%0.5%3.2%
Composite-10158.930.3%0.8%2.1%
Composite-20146.220.3%0.8%3.0%
Source: S&P Dow Jones Indices and Fiserv
Data through September 2012

Since its launch in early 2006, the S&P/Case-Shiller Home Price Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked.

A summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data can be found in the table below.

2012 Q3/2012 Q22012 Q2/2012 Q1
NSASANSASA
US National2.2%1.1%7.1%2.4%
September/August Change (%)August/July Change (%)
Metropolitan AreaNSASANSASA
Atlanta0.3%1.7%1.8%1.7%
Boston-0.6%0.1%0.7%0.5%
Charlotte-0.3%0.4%0.6%0.4%
Chicago-0.6%-0.7%0.7%-0.1%
Cleveland-0.9%0.6%1.0%0.3%
Dallas0.2%1.0%0.1%0.2%
Denver0.4%1.0%0.5%0.2%
Detroit0.7%0.4%2.1%0.5%
Las Vegas1.4%1.1%1.6%0.8%
Los Angeles1.0%0.8%1.3%1.0%
Miami0.1%0.3%1.0%0.4%
Minneapolis1.1%1.0%1.2%0.4%
New York-0.1%0.3%0.6%0.0%
Phoenix1.1%1.3%1.8%1.4%
Portland0.2%0.7%0.5%0.4%
San Diego1.4%1.7%0.9%0.7%
San Francisco0.5%1.0%0.5%0.1%
Seattle0.3%0.5%-0.1%-0.2%
Tampa0.0%0.0%0.4%0.2%
Washington0.0%0.1%0.5%0.0%
Composite-100.3%0.3%0.8%0.3%
Composite-200.3%0.4%0.8%0.4%
Source: S&P Dow Jones Indices and Fiserv
Data through September 2012

House Poor: Just Another Learning Experience | Armonk NY Real Estate

House Poor:

Just Another Learning Experience

By Homer Guthrie

Expert Homeowner

Have you ever had that free-falling feeling, like someone has blindfolded you, pushed you out of an airplane door at 5,000 feet and all you can do is scream at the top of your lungs and wonder how long it will take before you hit the ground?

That’s what buying a foreclosure felt like.

I was counting on my real estate team, Bea Meriwether, my real estate agent, and Earnest S. Crowe, my mortgage guy, to guide me through the process. After all, they were the ones who had talked me into it. They said I would make eight percent or better and I would learn a lot. They were half right.

Bea had her eye on a sweet little bank-owned split-level not far from my home in Mirage Mills, a suburb widely known as the Chernobyl of American real estate because we live in the epicenter of the foreclosure crisis. I had to close out my 401K to pay for it and by the time the check arrived, the house was gone. So Ernest had another idea.

“Let’s play poker with the big boys,” he winked at me. “That’s where the real deals are.”

That didn’t sound like a very good idea to me. I’m a terrible poker player. When I try to bluff, my voice turns squeaky and gives me away.

Ernest’s “real deals” would be at the next sheriff’s auction of foreclosures, a popular event in Mirage Mills. In most counties, sheriff’s auctions are just a few guys meeting outside a courthouse once a month. But in Mirage Mills, dozens of people show up to watch serious investors spend tens of thousands of dollars on foreclosures they had seen only from the street. Most of the crowd consists of carpenters, plumbers, electricians, roofers and landscapers hoping to get hired to fix the messes that the new owners will soon discover.

Ernest got a list of the foreclosures to be in the next auction and the three of us toured the houses up for bid. To my way of thinking, if you’ve seen one house with a line of laundry out the back because the dryer is busted and a dirt yard packed hard by little bare feet and blistering sun, you’ve probably seen them all. Bea and Ernest, on the other hand, unanimously felt that 12765 Prosperity Way was the deal of the day, bound to make some smart guy a potful of money. The way they added it up on my kitchen table, I was going do a whole lot better than eight percent.

So when the big day came, I was standing at the courthouse steps with a cashier’s check for nearly all the money I had to my name. Both Bea and Ernest and other appointments that morning and were late. Felicity went to get coffee, leaving me alone with several other guys in the middle of the crowd, when a county bureaucrat appeared and started rattling off case numbers and addresses from a clipboard. When nobody bid on any of the homes, they all went “back to the beneficiary,” whatever that meant. Things got boring. I really needed Felicia’s coffee.

Suddenly the bureaucrat said “Prosperity Way.” My nerves kicked into overdrive. I knew my team would kill me if I missed this house.

She read the opening bid, which was the minimum amount the bank would take for the foreclosure and looked up.

“First bid?” she asked.

“Yes, please!” I squeaked as loudly as I could squeak.

At that very moment a police car sped past the courthouse with its siren blaring. She didn’t hear me even though I was less than ten feet away.

The siren was still sounding when she asked, “Second bid?”

A big man in sunglasses standing right next to her silently raised two fingers like he was Winston Churchill. Obviously, he was a regular who knew the secret code.

“Mr. Cameron bids two hundred thousand. Last bid. Anyone else?” she asked and quickly looked around. “No?”

Desperate to be heard, I pushed my way in front of her and squeaked into her face so loudly that she had to notice me. No sense playing around with a pro like Cameron, so I bid the limit we had agreed upon. “Two fifty!”

Cameron took off his dark glasses, gave me a peeved look, laughed sarcastically and muttered “You gotta be kidding me.” He shook his head at both me and the county bureaucrat to indicate he was done. She acknowledged me at last. She asked for my cashiers’ check, took down my name and address, and gave me a receipt and some paperwork. I was the proud owner of a foreclosure that was going to change my life in ways I couldn’t imagine.

I stepped away from the circle of bidders and sighed. It felt good to best the big boys at their own game. Just then Felicity arrived with the coffee. As we sat on a bench and sipped, I told her the good news. Instead of being pleased she was concerned that I had spent so much, so I described my fierce bidding war with Cameron and how I crushed him into dust. “He wanted it sooooo bad,” I gloated. “That pretty much confirms that we got a great deal.”

“Oh, my God,” she shouted suddenly when she read the receipt. “No, you didn’t!”

“Didn’t what?”

“Homer, please dear God in heaven please tell me this is not the house you bought.”

“All sales are final. Why?”

“You didn’t buy 12765 Prosperity Way. This is a receipt for 12675. Oh, Homer, that’s ten blocks away from the house we wanted!”