The economy has driven our home values down and there is no end in site. Many areas in the nation has experienced major price reductions. Not all areas have been hit but California has 6 areas that had the largest drop in value out of the top 10 areas nationwide. The prices have decreased more then 60% from 5 years ago. This situation will not get any better anytime soon due to the 1,000,000+ foreclosures that the banks are holding this year and another 1,000.000+ foreclosures in next 2 years. It will take a few years to sell off all of the phantom inventory before any appreciation can be realized in these areas.
Bank owned inventory nationally grew to a record high of 2.2 million in March and foreclosures starts increased by 33% month over month. This may sound bad but foreclosure sales have increased and delinquencies are down by 11% which is the lowest since 2008.
Pending sales have increased which is a good sign that the demand is strong and the inventory will decrease hopefully faster then any increase. The U.S. is expected to add at least 750,000 new households in 2011 which is a healthy demand. A lot of these new homeowners are a result of lower home prices that are cheaper to buy then to rent, low interest rates, and more confidence in the recovery of the economy.
“The good news is that recent home buyers are staying well within budget, leading to exceptionally low loan default rates among home buyers over the past two years,” Yun added.
Lenders have foreclosed on 78,133 properties in January, which is up by 12% from the previous month but it is 11% less then a year ago. Although there has been an increase in default notices, auctions, and bank repossessions in January, it is encouraging to know that the increase is 17% less then a year ago.
5 states are responsible for more then 50% of the nation’s total foreclosure activity; California, Florida, Michigan, Arizona and Illinois. Nevada was the hardest hit state with the highest foreclosure rate in the nation. Bank repossessions increased 16% from December which is more then 5 times the national average. Even though we are seeing more foreclosures, they are less then what it was a year ago. Let’s hope that this is a good sign that we might be on the right track to recovery.
Wow!! It’s almost the end of January and boy did it fly by. Since the beginning of the year, the rates have been going up. In November of 2010, the 30 year fixed loans were at a 40 year low of 4.17% the 15 year rate was 3.57%. Now it’s at 4.8% and the 15 year rate is 4.09%. I don’t think we will ever see the November rates ever again. There will probably be less borrowing, in 2011, due to the economic conditions.
So what do you think prices of homes will do? Well, most of the country will continue to see declines or stablize in prices except for 10 cities. Unfortunately, Florida and parts of the Western parts of the US will see the largest drops in home values.
Home prices dropped 4.1% annually, in 2010. Although there was an increase in prices, overall 70% of the major market prices experienced a decline and 8 had double digit declines. There were 6 markets in California that managed to have some price gain.
Unfortunately, 2011 will probably be the same, unless unemployment and distressed homes decrease. Until there are more jobs and less people loosing their homes, we will not see too many price gains.
You probably have heard a lot information about foreclosures but don’t know to believe. Well here is some information about foreclosures. This should help you understand what foreclosures are all about.
With interest rates moving up, you should consider purchasing a property soon. There is more pressure for rates to go up then down. We have seen rates at it’s lowest rates historically and may not see them again.
Do you think that the governmental programs from the president are helping the economy to get better? Well, it seems like it has based on a study by Realty Trac. February’s forclosures have declined by 2% from the previous month but still 6% above the level reported in February 2009. This means one in every 418 U.S. housing units received a foreclosure filing in February.
I think we are heading in the right direction but I think it is still too soon to say that we are out of the woods.
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