U.S. Median Home Prices Jump – Biggest Since 2006

17 08 2012

Fewer deeply discounted foreclosures are being sold these days, and that means the median price of homes sold in the U.S. is on the rise.

According to NAR, home prices rose in 75% of local markets in the second quarter of this year. Nationwide, the median price for single-family homes sold in the April-June quarter was $181,500, up 7.3% from the same quarter a year earlier. It was the strongest quarterly increase in six years.

The trend shows that the median — the midpoint between the highest and the lowest price of a home sold — is an imperfect measure of home prices. It can be skewed by shift in the mix of properties sold — a greater number of expensive properties sold in any given period means a higher median.

National Association of Realtors said home prices posted the strongest quarterly increase in more than six years in the second quarter of the year. They actually rose in 75% of local markets.

Nationwide, the median price for single-family homes sold in the April-June quarter was $181,500, up 7.3% from the same quarter a year earlier, the Realtors’ group said. It was the biggest increase since the first quarter of 2006.

The improvement was seen around the country. Prices rose compared with last year in 110 out of 147 metro areas tracked by the Realtors’ group. Prices fell in 34 metro areas and were unchanged in three. In the first quarter, median prices rose in 74 cities.

Lawrence Yun, the trade group’s top economist, acknowledged that part of the price increase has resulted from fewer sales of lower-priced homes, where there is less inventory available. Nevertheless, Mr. Yun said it is “most encouraging to see a growing number of metro areas with rising median prices” because it is helps homeowners who owe more on their properties than their homes are worth to rebuild equity.

In the second quarter, however, home sales declined slightly, dipping 0.7% on a quarterly basis. They were up 8.6% from the same quarter a year earlier.

The metro areas showing the biggest increase in median prices from a year earlier were Detroit (29.2%), Phoenix (29%) and Boise, Idaho (21.7%). Areas showing big price declines were Bridgeport, Conn. (-12.9%), Edison, N.J (-9.5%) and Gulfport, Miss. (-9.4%).

Nationwide, “distressed property,” including foreclosures and homes at risk of foreclosure, accounted for 26% of second-quarter transactions, down from 33% a year earlier, the Realtors’ group estimated.

Realtors want to keep the market’s recovery going and are hoping banks will loosen their standards so that more potential buyers can get credit. “With gains apparent in all of the price measures, banks also should have more confidence in expanding mortgage credit to home buyers using safe but sensible standards,” said the group’s president Moe Veissi, owner of Veissi & Associates Inc., in Miami.

Source: Wall Street Journal, National Association of Realtors





Evidence that Home Prices Hit Bottom Last Winter

8 08 2012

Recent housing indexes have shown single-family home prices are on the rise, providing more evidence that the “bottom” of the market is already behind.

“We’re wiping out just about all of the decline,” Joel Naroff, chief economist at Naroff Economic Advisors, told NBC.com about recent housing data showing home prices inching up. “It indicates the market has turned the corner on the pricing side.”

Some recent housing indexes suggest that the “bottom” of the market was reached in January 2012. Since that time, housing prices have been picking up in many housing markets.

But “the turnaround in home prices was unexpected,” says Patrick Newport, an economist with IHS Global Insight. “The conventional wisdom in February, following that landmark agreement (of the $26 billion mortgage settlement with the nation’s five largest banks), was that we would see a surge in foreclosures of some size that would lead to lower home prices. This surge never materialized and home prices have turned.”

Newport points to several signs of a housing market on the mend. For one, housing starts are up after reaching a low in the fourth quarter of 2011. Also, he says the Federal Housing Finance Agency’s (FHFA) monthly House Price Index shows a 3.7 percent increase in May year-over-year, which he notes is higher than inflation and “means that real housing wealth, a consumer spending driver, was also up.”

The increase in home prices is also leading to a fewer number of homeowners underwater on their mortgages. The number of underwater homeowners fell from 12.1 million at the end of 2011 to 11.4 million at the end of the first quarter this year, according to CoreLogic data.

Source: “Evidence Mounts that Home Prices Hit Bottom Last Winter,” NBC News (July 31, 2012)





Buffett’s Housing Bet Pays Off

8 08 2012

In July, Billionaire investor Warren Buffett said a recovery in the housing market was a critical part of a broader economic recovery. He also said, he had noticed the market was gathering some momentum.

He then made a sizable bet in the housing market with a bid on ResCap loans.

He has hit the mark on the housing market, data and company reports indicate.

Buffett’s investment firm Berkshire Hathaway Inc., then announced “revenues from home sales increased $40 million – 11 percent – in the second quarter and $103 million in the first six months,” referring to the country’s largest producer and financier of manufactured homes, Clayton Homes, which Berkshire Hathaway owns.

In addition, a closely watched index on home prices, the S&P/Case-Shiller 20-city index rose 2.2 percent in May.

The index also rose 1.3 percent in April, which was the first climb in seven months.

“We would like to think that housing is finding its equilibrium, that it is searching for a bottom and establishing a base,” said investment manager Steven Jones at First Washington.

Berkshire Hathaway’s second quarter earnings far exceeded expectations, coming in at $3.72 billion or $2.252 per Class A Share, a solid jump from the $1,640 Class A share value at the end of the second quarter of 2011.

Source: United Press International





June Home Price Index rises 2.5%

8 08 2012

CoreLogic released its June Home Price Index (HPI) report today.

According to the HPI, home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011. On a month-over-month basis, home prices increased by 1.3 percent in June 2012 compared to May 2012.

It’s the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

CoreLogic also backs distressed sales – short sales and real estate owned (REO) transactions – out of the data. If excluding distressed sales from the analysis, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012 – the fifth consecutive month-over-month increase.

Forecast

The CoreLogic Pending HPI indicates that in its next release covering July, home prices will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011.

When excluding distressed sales, July house prices are poised to rise by 1.4 percent month-over-month from June 2012 and by 4.3 percent year-over-year from July 2011. The CoreLogic Pending HPI is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

“Home prices are responding positively to reductions in both visible and shadow inventory over the past year,” says Mark Fleming, chief economist for CoreLogic.

“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” adds Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

June 2012 highlights

• Including distressed sales, the five states with the highest appreciation were: Arizona (+13.8 percent), Idaho (10.4 percent), South Dakota (+10.1 percent), Utah (+8.3 percent) and Wyoming (+7.7 percent).

• Including distressed sales, the five states with the greatest depreciation were: Alabama (-4.8 percent), Connecticut (-4.0 percent), Illinois (-3.4 percent), Georgia (-2.9 percent) and Delaware (-2.8 percent).

• Excluding distressed sales, the five states with the highest appreciation were: South Dakota (+10.2 percent), Utah (+9.1 percent), Montana (+8.7 percent), Arizona (+8.7 percent) and Wyoming (+6.9 percent).

• Excluding distressed sales, the five states with the greatest depreciation were: Delaware (-3.6 percent), Alabama (-3.1 percent), Connecticut (-2.1 percent), New Jersey (-0.9 percent) and Kentucky (-0.4 percent).

• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to June 2012) was -28.8 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -21.3 percent.

• The five states with the largest peak-to-current declines including distressed transactions are Nevada (-57.1 percent), Florida (-45.3 percent), Arizona (-44.1 percent), California (-39.2 percent) and Michigan (-39.0 percent).

• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 27 are showing year-over-year declines in June, five fewer than in May.

Source: Florida Realtors








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