Real Estate Recap for February 2012
Welcome to this month’s real estate news recap. On the whole, the housing market has been pretty flat for a while now, and February didn’t change that. Let’s take a closer look at some of the figures that experienced increases or drops last month. The changes may be small, but they indicate how the market is slowly changing, what areas continue to suffer, and what areas are gaining steam.
Home Prices: Down isn’t necessarily bad (as we’ll show you with default and mortgage rates), but in the case of home prices, this awesome Home-Price Scorecard, put together by Developments, has one thing to say: national home prices are down (numbers are for December reports). The scorecard tracks a bunch of different indices, and while the percentages vary, the results don’t. Thumbs down, all around.
It’s not the best of news for the health of the housing market, but it’s no surprise either. And if you’re looking to buy a home for sale, you may be in for a sweet deal!
Inventory: Inventory of available homes for sale dropped in January, which is the eight straight monthly drop. “Housing inventories typically rise heading into the spring selling season, but only four markets saw inventories increase from December, all of them in Florida, says Developments. Remember our recent post on the hot real estate market in Orlando?
These falling inventories could mean that the backlog of unsold homes is finally being worked through, which is good for the housing market. Then again, super-low prices could be causing sellers to pull their homes off the market.
Rates: We love to keep reporting back about the “record low” mortgage rates – well, that record continues to be broken. During February, mortgage rates fell to an unbelievable 3.87 percent! That’s amazing news if you can qualify for a home loan.
In addition to low mortgage rates, national consumer credit default rates are down. Less people defaulting on their mortgages means less foreclosures, and eventually, higher prices. It will take a long time to get there, but this is encouraging news, to be sure!
Foreclosures: Last month, we touched on the foreclosure settlement that the “Big Banks” signed. CNN Money reports that the settlement should move distressed properties through the pipeline more quickly, which could result in an initial surge.
Foreclosure filings were up 3 percent in January from December, yet remain at much lower levels than the year before. We’ll be keeping our eye on foreclosures as a surge could keep home prices low for a long time.
REO Listings: About a quarter of the nation’s listings are REO (real estate owned: homes that went into foreclosure and were repossessed by the lender), which is slightly up from last quarter, according to Clear Capital.
What’s really fascinating about the report is that ten of the fifteen highest performing markets (in terms of home prices) have an REO saturation higher than the national average of 25.8 percent. We can infer that prices on non-distressed listings are rising solidly, despite large inventories of distressed properties.
Building: Finally, housing starts and building permits were up in January as well as builder confidence. Although the number still remains relatively low at 29, January saw the index rise to its highest point since May 2007.
That wraps up this month’s recap. Keep reading ZipRealty’s blog for up-to-date info on the real estate market!
Sources: Developments, Inman, HousingViews. CNN Money