Housing Market: California Home Sales And Prices Expected To Rise In 2013 At Slower Rate Due To Effects Of “Underwater Borrowers”

5 10 2012

When will the housing market be “corrected?”The housing recovery in California is expected to continue through to 2013, but the market won’t be “corrected” until as far off as 2017, according to the California Housing Market Forecast released by the CALIFORNIA ASSOCIATION OF REALTORS.

  • Homes sales and prices are expected to keep rising, but lower-than-normal inventory levels and underwater mortgages are key hindrances to a faster recovery, according to Leslie Appleton-Young, chief economist with the CALIFORNIA ASSOCIATION OF REALTORS®.
  • Home sales are forecasted to rise 1.3 percent to 530,000 units next year, based on the projected tally of 523,300 units this year. That’s a slower growth than that of 2011 to 2012, which is roughly 5 percent.
  • The momentum in prices also is expected to carry through to 2013, a result of pent-up demand for a limited housing supply. The median price could rise 5.7 percent to $335,000 in 2013. That’s lower than the projected price growth from 2011 to 2012, an estimated 11 percent. The state has a 3.2 months’ worth of housing inventory, significantly lower than the 16 months’-plus supply of saw roughly four years ago.
  • “Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” said Appleton-Young in the report.
  • Appleton-Young says what underwater borrowers throughout the state will do — be it selling or holding — will have a big effect on next year’s housing recovery.
  • Other things to watch next year that will have a bearing on the housing market include: policies related to the state,local and federal governments; and housing and monetary policies, Appleton-Young said.

Housing Market: S&P Case-Shiller Home Price Index Increases 0.5% In June 2012; Prices Return To Summer 2003 Levels

28 08 2012

Housing Market: Latest Data Shows Home Prices Increasing Annually Year-Over-Year For First Time Since 2007

27 08 2012

According to the FHFA data, the first and second quarter of this year delivered the first year-over-year increase in the seasonally adjusted purchase-only house price index ()HPI)( since the first and second quarters of 2007. The second quarter registered a 1.3% inflation-adjusted price increase. Forty-three states experienced price increases. The two FHFA charts below show a distinct stabilization in prices. The chart of price changes shows an encouraging pattern of higher highs and higher lows that signifies a sustained trend upward from the bottom. The price index indicates downward momentum came to a screeching halt last yearת with 2012 building off that base.

For more:  http://seekingalpha.com/article/828731-latest-housing-price-data-confirm-housing-bottom-is-underway

California Home Sales And Prices Move Higher In July; Prices Near Four-Year High

21 08 2012

California Housing Market: Percentage Of Homeowners Who Can Afford To Purchase A Home Falls To 51% In Second Quarter Of 2012; Rising Home Prices Cited

17 08 2012

Higher home prices reduce California housing affordability in second quarter 2012. Higher home prices offset record-low interest rates and lowered housing affordability in California in the second quarter of 2012.

  • The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California fell to 51 percent in the second quarter of 2012, down from 56 percent in first-quarter 2012, but matched the 51 percent recorded in second quarter 2011, according to C.A.R.’s Traditional Housing Affordability Index (HAI).
  • C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most fundamental measure of housing well-being for home buyers in the state.
  • Home buyers needed to earn a minimum annual income of $62,390 to qualify for the purchase of a $316,230 statewide median-priced, existing single-family home in the second quarter of 2012. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $1,560, assuming a 20 percent down payment and an effective composite interest rate of 3.92 percent. The effective composite interest rate in first-quarter 2012 was 4.16 percent and 4.85 percent in the second quarter of 2011.
  • The San Francisco Bay Area experienced the largest quarterly declines in housing affordability, resulting from double-digit price increases with little movement in theinterest rate. However, when compared with the previous year, changes to the affordability index were minimal, thanks to a near-one percent drop in the effective composite interest rate.
  • At an index of 78 percent, San Bernardino County was the most affordable county of the state. At the other end, San Mateo County edged out San Francisco County (24 percent) to be the least affordable, with only 23 percent of households able to purchase the county’s median-priced home.

For more:  http://www.car.org/media/pdf/consumer/Beyond_the_Headlines__81612.pdf

U.S. Home Prices Show 2.2% Monthly Increase In May 2012 According To S&P/Case-Shiller Index; No Major Metro Areas Post New Lows

3 08 2012

The S&P/Case-Shiller home price index was released Wednesday, showing month over month strength and lower year over year weakness. Less weakness is strength in the housing market.

Among the datapoints released were (data and charts from S&P/Case-Shiller):

  • Average home prices increased by 2.2% in May over April for both the 10- and 20-City Composites.
  • Home prices fell annually by 1.0% for the 10-City Composite and by 0.7% for the 20-City Composite versus May 2011.
  • All 20 cities and both Composites posted positive monthly returns. No cities posted new lows in May 2012.

Riverside-San Bernardino, CA Area Ranked As America’s Worst Housing Market With Highest Negative Equity, 12.3% Of Homeowners 90-Days Delinquent On Mortgages And Home Prices 55% Below 2006 Peak

14 07 2012

1) Riverside-San Bernardino-Ontario, Calif.
Average annual list price decline: -1.8%
Rental vacancy: 9.4%
Homeowner vacancy: 4.4%

Riverside is the third California metropolitan area suffering from a sick housing market. In this region, homeowners paying a mortgage have $41.5 billion in negative equity, the fifth-highest amount in the nation. Many of these homes are under water because median home prices plunged by 55.6% from their peak in 2006. The metro had an annual unemployment rate of 14.3% in 2010, the highest among the largest cities in the country (it was 11.8% in May 2012), and 12.3% of homeowners with a mortgage are 90 or more days delinquent on their payments — the ninth-highest rate. According to Southern California’s City News Service, the assessed value of all taxable property in the county is estimated to be $204.8 billion for the 2012-2013 fiscal year, a $300 million decline from the $205.1 billion assessment in the previous fiscal year. While the decrease is lower than previous years, it means things have yet to improve.

For more:  http://realestate.yahoo.com/news/sickest-housing-markets-in-america.html