March 2013 - Star One Realtors

Home Sales Continue Upward Trend

 

Home Sales Continue Upward Trend; February Sales Highest Since 2007 

Cincinnati home sales (closings) continued the upward momentum in February, a 6-year high.  Home sales last month totaled 1,335 compared to 1,163 from a year ago, up 14.8%. This represents 20 consecutive months of increased sales. Sales in February 2013 compared to January 2013 were up 2.7%, which is typical of the season.

February’s average home selling price was $143,424 vs. $130,251 a year earlier, for a 10.1% increase. The average price has increased year-over-year for 12 consecutive months.  For the first 2 months of 2013, the average price of homes has increased 5.5%.

Local home mortgage rates in February averaged 3.67% for a 30-year fixed rate loan. That is down from 3.91% a year ago. The difference represents a $164 yearly savings on a $100,000 home loan, which enhances home affordability. Inventory of homes for sale continued its declining trend to 9,395 from 11,114 a year ago, down 15.5%. This means that homes for sale — newly added to the current inventory — if priced properly and in good condition, are in a position to sell faster. It is common for inventory to start low and build as the year goes on. As of today, the inventory of homes for sale is at 9,611 listings.

“Buyers are taking advantage of the low interest rates, the low inventory and are placing offers on  some listings as soon as they hit the active market,” said Kevin Kelly, president of the Cincinnati Area Board of Realtors. “February sales are the highest in 6 years. With the number of buyers looking for properties that are priced right and in good condition, the properties seem to sell as fast as they are listed.”

Nationwide, February home sales were up 0.8% from January on a seasonally adjusted basis and were up 10.2 % from February 2012. February home sales marked the 20th consecutive month where home sales – nationwide and statewide – also improved over a year ago.

Housing Recovery Takes Hold for the Long Haul

FNC Report: Housing Recovery Takes Hold for the Long Haul

houseThough home foreclosures continue to be a challenge in many hard-hit markets, a report released this week by mortgage technology company FNC indicates the ongoing housing recovery should continue for the long haul.
According to FNC’s Foreclosure Market Report, foreclosure prices have bottomed out in recent months and the foreclosure market has stabilized while underlying home values are rising. Foreclosure prices are at a 10-year low (when the sizes of foreclosed homes are factored in).
This trend of a rising underlying market accompanied by stabilizing foreclosure prices is the first encouraging development in the housing recession, according to FNC Senior Research Economist, Dr. Yanling Mayer.
“The fact that we are seeing a combination of rising home prices and a bottoming out of foreclosure prices is a very good sign the housing recovery is taking hold,” Mayer says. “This is the very first time in the long housing recession that the two are happening at the same time.”
FNC’s report shows that foreclosure price discounts, which compare a foreclosed home’s estimated market value to its final sales price, have dropped to pre-mortgage crisis levels at about 12.2 percent in Q4 2012. At the height of the mortgage crisis in 2008 and 2009, foreclosed homes were typically sold at more than 25 percent below their estimated market value. Additionally, the report indicates that the typical size of foreclosed homes is also approaching pre-crisis levels.
“If you look at the period of short-lived recovery under the first-time homebuyer tax credits, the foreclosure market was still in the midst of rapid deterioration with the influx of delinquent mortgages,” Mayer says. “This time, we are witnessing an entirely different development in the foreclosure market.”
FNC publishes the mortgage industry’s first market-valued based foreclosure price discount to gauge the degree of market distress.
More highlights from FNC’s Foreclosure Market Report:
• Single-family REO and foreclosure sales are 18.1 percent in Q4 2012, down from 26.5 percent in Q1 2012 and 24.2 percent in Q4 2011.
• The median foreclosure price is $93,000 or $65 per square foot. In comparison, the median price on non-foreclosure sales is $183,500 or $106 per square.
• Foreclosure price discounts are typically larger for low-tier properties, averaging 18.4 percent in Q4 2012. High-end properties, on the other hand, are typically sold close to their market value.
• Collateral depreciation – the difference between a property’s prior purchase price and foreclosure sale price – continues to decelerate, down to 6.4 percent in Q4 2012 from 8.4 percent a year earlier. Among the re-sales of non-distressed homes, homeowners typically broke even and many even realized a small price appreciation (+0.4 percent).
• Michigan has the nation’s highest concentration of foreclosure sales; 56 percent of homes sold in Q4 2012 are foreclosure sales. In contrast, foreclosure sales in judicial states such as New York, New Jersey, and Vermont only make up 5 percent of home sales.
• Foreclosure rates in a number of the hardest hit states are at or below the national average: Arizona (14.3 percent), California (19.8 percent), Florida (20.5 percent), and Nevada (13.0%).
• Midwest cities including Detroit, Chicago, Cleveland, and St. Louis have the largest concentration of foreclosure sales.
• Las Vegas, Phoenix, Riverside, and Sacramento show rapid declines in foreclosure sales in the last 12 months.
• Foreclosure price discounts are much smaller in markets with fast-rising prices. Many buyers in Phoenix, Las Vegas, Sacramento, San Diego, and Riverside paid a price premium on foreclosure sales, meaning foreclosure sales price exceeded estimated market value.
• Judicial foreclosures are generally associated with the largest price discount in foreclosure sales: New York (30 percent), Boston (32 percent), and Philadelphia (32.8 percent).
• Of the cities identified by the Federal Reserve Board as the largest REO inventory markets entering 2012, Phoenix, Los Angeles, and Riverside saw a significant decline in market distress during the year. Phoenix is leading the nation in recovery with home prices up 26 percent in 2012 and foreclosure down from 29 percent to 12 percent.

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