Foreclosures Continue to Dive
There’s a mixed bag of news for foreclosures as the real estate industry continues its unpredictable dance this month.
First the good news. For the 22nd month, foreclosure filings declined, according to RealtyTrac, an online marketer of foreclosed properties. Last month, there were less than 192,000 reported foreclosure filings including default notices and bank repossessions. That’s 3 percent down from the previous month. Compared to last year, that’s a 10 percent dip. The double digit low is very encouraging, but we have to be cautiously optimistic.
While filings dropped, foreclosure starts – when defaulters first get notices – rose 6 percent compared to last year. On an annual basis, that’s the third straight month increase in notices, according to CNN. The notices come close on the heels of the $25 billion settlement triggered by instances of banks allegedly abusing the foreclosure process. During the investigation, foreclosures were delayed as banks tried to work out a solution to the problem.
With the investigation behind, experts had predicted that foreclosures would trend upward. Looks like we are just getting to clearing the backlog now.
The increases varied by markets. Some had it worse than others. In Connecticut, foreclosure starts jumped 201 percent in July, according to RealtyTrac. Other struggling states are New Jersey with 164 percent and Pennsylvania with 139 percent. But not all of these would end up in a foreclosure. RealtyTrac said bank repossessions dropped 21 percent in July when compared to the previous year – a sign that the numbers may not be as menacing after all.
Home Prices Rise
Sellers take note. And buyers, you may want to hurry.
Home values jumped the most nationally since 2006 while prices for single-family homes increased in most parts of the country.
The National Association of Realtors® reported that median sale prices in the second quarter jumped in 110 of the 147 metropolitan areas measured. That’s a positive sign and hopefully a trend that will continue in the future.
According to Bloomberg, home prices in the country are finally taking off with buyers competing and bidding amid a tight inventory. Inventory was 24 percent down at the end of June when compared to a year earlier.
“The turnaround in home prices feels pretty broad,” Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania, told Bloomberg. “There are still risks that home prices will dip a little more before they start appreciating with any consistency.”
We have already mentioned the rise in foreclosure starts, and that could spoil the party for sellers. But still, don’t expect home prices to hover at the bottom for too long. If you have been waiting for the best price, you may have already missed the opportunity in some markets.
Phoenix and Detroit were the star performers with prices rising 29 percent compared to a year ago. Other notable mentions are Boise City, Idaho (29 percent) and Florence, N.C. (22 percent).
Builder Confidence More Than Doubles in 55+ Category
According to the National Association of Home Builders’ 55+ Housing Market Index, builder confidence in the 55+ single-family home segment more than doubled in the second quarter. The index, which takes into account sales and prospective buyer traffic, rose from 13 to 29 on a scale of 100, the highest second quarter reading since 2008.
A reading above 50 is considered the sign of a healthy market. Though 29 is way below 50, experts say the increase is a good sign.
“As the share of 55+ households continues to grow in all regions across the country, we have a unique opportunity to create communities that address specific needs of the mature homebuyer,” NAHB 50+ Housing Council Chairman W. Don Whyte said in a statement.