Real Estate News Recap for January 2012
Everybody wants 2012 to be the year of the housing market turnaround. The optimists among us may see rising sales and stabilizing prices as hopeful signs of recovery whereas the pessimists point to prices that are still falling on the national scale, an overabundance of foreclosures, and a lousy economic outlook.
Both are true. What recovery the housing market experiences this year will be slow at best, but hopefully steady. Here on ZipRealty’s blog, we’ll continue to take you through the process a month at a time. These are, of course, only broad recaps of the top real estate stories and trends seen on a national level. For the most up-to-date and local information on your micromarket, talk to your realtor about what they observe in your neighborhood.
Sales Slowly Warm Up
Existing home sales were up in December for the third straight month, according to a report released by the National Association of Realtors® and remain higher than the previous year. Lawrence Yun, chief economist for NAR, says this may be the signal of “sustained recovery”.
In addition, housing inventory has fallen to a healthy and encouraging level. Developments reports, “the inventory of previously owned homes listed for sale sank to 2.38 million, the lowest level since March 2005. Supply came in at 6.2 months — just about at the six-month level considered healthy. Lower supply is, of course, key to any recovery.”
As we continue to move into home selling season, we’ll keep an eye on inventory levels. Will people finally put their homes for sale on the market, or will the selling season be a tentative one?
Home Prices Still Falling According To… Everyone
Although there many housing markets that are seeing year-over-year price gains, the US housing market is still slumping, especially in the Midwest where home prices are down over five percent for the region.
Developments, one of our favorite real estate blogs, just started this awesome new feature called the Home-Price Scorecard. There are so many reports each month from so many reputable housing indexes like Case-Schiller, CoreLogic, Clear Capital, to name a few of my personal favorites. Now we have a graphic that puts all the findings in one place. Although the percentages differ, one thing is clear: home prices are doing poorly.
Breaking News: Mortgage Settlement Deal Reached
This is technically February news, but it’s too big not to report right now. Five of the “Big Banks”—Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally Financial—have agreed to commit $26 billion to compensate for the many homeowners who lost their homes due to negligent or abusive foreclosure practices, including the robo-signing scandal.
CNN Money has more of the details on the settlement, including who will qualify and what the implications will be for participating. It certainly remains to be seen how much this will really affect those who have already lost their home, and consequently, their equity. The New York Times has a great graphic of how the money is going to be divided as well as some helpful info on negative equity in the US.
Washington Drafts More Plans for Recovery
During his State of the Union address, Barack Obama said he would send a proposal to Congress to allow all homeowners who are current on their mortgage to refinance. We’ve done a fair bit of coverage on HARP 2.0, but that program was limited to Fannie & Freddie loans. The particulars of eligibility still aren’t clear, but it definitely seems like Obama is pushing to expand the refinancing program. Whether or not this is the result of being in an election year with the presidential race heating up around the topic of housing, it's welcome news.
Mortgage Rates Dip While Consumer Sentiment Jumps
Finally, two more semi-encouraging figures. Mortgage rates which have been flirting with historic lows since October fell again. The 30-year hit a bottom rate of 3.87 percent, which is the current record low. Of course, qualifying for a loan in this economy is a whole different story, but it’s nice to know that if a potential homebuyer does qualify, they’ll have some pretty sweet rates to work with.
And last but not least, consumer sentiment posted an 11-month high in January. The unemployment rate has been dropping, even if slowly. But before you get too excited, sentiment has already dropped and expected to continue. Such is the current climate. Stick with us as we ride out this potentially volatile year and keep our eyes peeled for signs of recovery.
Sources: Developments, CNN Money, HousingWire, NYT