Survey Reports Interest in Purchasing Foreclosed Homes Spikes

Trulia.com, along with RealtyTrac, today released the latest results of a tracking study conducted on their behalf by Harris Interactive® showing notable gains in consumers’ willingness to buy foreclosed properties, with 55 percent of U.S. adults indicating that they are at least somewhat likely to consider purchasing a foreclosed home in the future, compared to the 47 percent of U.S. adults who indicated the same in November 2008. In the current market, U.S. adults believe foreclosed homes are an even greater bargain opportunity than before, with 40 percent expecting to pay at least 50 percent less for a foreclosed home, compared to only 31 percent of U.S. adults surveyed in November 2008. The May 2009 survey also found that 74 percent of U.S. adults familiar with President Barack Obama’s Mortgage Relief Program are at least somewhat confident it will give homeowners the incentive to renegotiate with mortgage lenders in order to prevent their homes from going into foreclosure.

While overall consumer interest in buying foreclosed homes has increased, the current wave of the study also found higher levels of negative sentiment around purchasing foreclosed properties. In November of 2008, 80 percent of U.S. adults felt that there were negative aspects to purchasing a foreclosed home. In the current survey, the number of U.S. adults concerned with negative aspects has risen to 85 percent. Among these 85 percent, 71 percent cite hidden costs as their top concern, 46 percent believe the process is risky and 31 percent are concerned that the home will lose value. Not surprisingly, consumers expect hefty discounts on foreclosed homes, with 83 percent believing they should pay at least 25 percent less for a foreclosed property, perhaps to compensate for perceived risks.

“As interest in purchasing foreclosed homes increases, competition is heating up with traditional sellers competing with bank-owned prices. Across the U.S., 24 percent of existing homes for sale on the market have seen at least one price reduction in order to stay competitive, creating a tremendous opportunity for consumers to buy homes at significantly lower prices,” said Pete Flint, co-founder and CEO of Trulia. “Competition amongst sellers, along with the newly created economic incentives, has created the most significant discounts that we’ve seen in decades, presenting opportunities for first-time home buyers and families looking to trade up to a bigger home.”

“Although consumers are aware that there may be some challenges involved in purchasing a foreclosed home, they are very interested in the bargain opportunities available in the foreclosure market. People want the best deals they can find and they are willing to go outside of their comfort zones if it means they can buy more home for less money,” said Rick Sharga, senior vice president of RealtyTrac. “Consumers who educate themselves on the opportunities available will likely be rewarded.”

Most Likely to Buy Foreclosures

• Two-thirds of U.S. adults between the ages 18-44 (66 percent) would consider purchasing a foreclosed home, compared to a little more than one-third of those ages 55 and older (38 percent). Respondents aged 45-54 fell in between, with 53 percent indicating that they would be at least somewhat likely to consider a foreclosed property.

• Current renters (68 percent) are more likely to consider purchasing a foreclosed home than current homeowners (49 percent).

• U.S. adults with children under 18 living in their household also show an increased likelihood to consider foreclosure properties, with 66 percent indicating they would be at least somewhat likely to purchase one, compared to 49 percent of those without children under 18 in the household.

PMI First Quarter 2009 U.S. Market Risk Index

    First Quarter 2009 PMI U.S. Market Risk Index (4th Quarter 2008 data)
    10 Riskiest and 10 Most Stable MSAs out of 50 Largest MSAs

                         10 Riskiest of the 50 Largest MSAs

    Risk                                               Risk  Affordability
    Rank                   MSA                         Index    Index

    High     Miami-Miami Beach-Kendall; FL             99.9    100.79

    High     Riverside-San Bernardino-Ontario; CA      99.9    100.20

    High     Ft. Lauderdale-Pompano Beach-             99.9    103.77
             Deerfield Beach; FL

    High     Los Angeles-Long Beach-Glendale; CA       99.9     98.62

    High     Las Vegas-Paradise; NV                    99.8    138.02

    High     Tampa-St. Petersburg-Clearwater; FL       99.7    108.91

    High     Orlando-Kissimmee; FL                     99.6    111.05

    High     Santa Ana-Anaheim-Irvine; CA              99.0     98.59

    High     Jacksonville; FL                          98.9    105.56

    High     Phoenix-Mesa-Scottsdale; AZ               98.8    116.85

                     10 Most Stable of the 50 Largest MSAs

    Risk                                               Risk  Affordability
    Rank                   MSA                         Index    Index

    Minimal          Pittsburgh; PA                    1.7     139.96

    Minimal          Cleveland-Elyria-Mentor; OH       2.3     175.93

    Minimal          Columbus; OH                      2.4     155.65

    Minimal          Dallas-Plano-Irving; TX           2.5     131.27

    Minimal          Fort Worth-Arlington; TX          2.5     135.09

    Minimal          Houston-Sugar Land-Baytown; TX    2.7     133.63

    Minimal          Memphis: TN-MS-AR                 2.8     159.96

    Minimal          San Antonio; TX                   3.8     122.68

    Minimal          Charlotte-Gastonia-Concord;       5.7     133.47
                     NC-SC

    Minimal          Indianapolis-Carmel; IN           9.6     135.85

January 2009 Home Price Data From LoanPerformance

LoanPerformance HPI Largest CBSAs Ranking:

CBSA	12 Month HPI Change %
	12-Month
	Change
Riverside-San Bernardino-Ontario CA	-29.62%
Miami-Miami Beach-Kendall FL	-28.79%
Las Vegas-Paradise NV	-28.41%
Oakland-Fremont-Hayward CA	-27.73%
Cape Coral-Fort Myers FL	-27.23%
Los Angeles-Long Beach-Glendale CA	-25.14%
Phoenix-Mesa-Scottsdale AZ	-24.26%
Fort Lauderdale-Pompano Beach-Deerfield Beach FL	-23.48%
San Diego-Carlsbad-San Marcos CA	-21.99%
Orlando-Kissimmee FL	-20.96%
Tampa-St. Petersburg-Clearwater FL	-18.05%
San Francisco-San Mateo-Redwood City CA	-15.12%
Washington-Arlington-Alexandria DC-VA-MD-WV	-14.77%
Chicago-Naperville-Joliet IL	-13.12%
Portland-Vancouver-Beaverton OR-WA	-11.62%
Seattle-Bellevue-Everett WA	-11.48%
Minneapolis-St. Paul-Bloomington MN-WI	-11.10%
Honolulu HI	-10.82%
Edison-New Brunswick NJ	-9.34%
New York-White Plains-Wayne NY-NJ	-8.46%
Boston-Quincy MA	-7.25%
St. Louis MO-IL	-5.85%
Cleveland-Elyria-Mentor OH	-4.84%
Charlotte-Gastonia-Concord NC-SC	-4.38%
Atlanta-Sandy Springs-Marietta GA	-3.58%
Detroit-Livonia-Dearborn MI	-3.44%
Raleigh-Cary NC	-3.38%
Salt Lake City UT	-2.95%
Philadelphia PA	-2.85%
San Antonio TX	-1.10%
Denver-Aurora CO	0.97%
Dallas-Plano-Irving TX	1.54%
Houston-Sugar Land-Baytown TX	3.58%
Austin-Round Rock TX	3.92%

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached as of January 2009

Forbes America’s 25 Weakest Housing Markets

Behind the Numbers
To find them, we asked Moody’s Economy.com to compile a list of the country’s real estate markets that are furthest from recovery. Moody’s looked at the country’s Census-defined metro areas–including metropolitan and micropolitan statistical areas–with populations over 500,000 and prepared forecasts through 2011. They then compared them with prices in the second quarter of 2008, the latest figures available, to calculate how far prices will likely fall before reaching bottom.

Las Vegas, Nev.

Miami, Fla.

Palm Bay, Fla.

Fort Lauderdale, Fla.

Provo, Utah

Jacksonville, Fla.

Bradenton, Fla.

Tucson, Ariz.

Orlando, Fla.

Boise City, Idaho

West Palm Beach, Fla.

Phoenix, Ariz.

Honolulu, Hawaii

Tampa, Fla.

Salt Lake City, Utah

Santa Ana, Calif.

Deltona, Fla.

Stockton, Calif.

Los Angeles, Calif.

Fresno, Calif.

Edison, N.J.

Riverside, Calif.

Camden, N.J.

Cape Coral, Fla.

Newark, N.J.

Read the entire article “America’s 25 Weakest Housing Markets” written by Deborah Orr, at Forbes.com

September 2008 LoanPerformance House Price Index

12-Month Change By Top CBSAs (Core Based Statistical Areas) as of September 2008
	12-Month
	Change
Oakland-Fremont-Hayward, CA	-29.07%
Riverside-San Bernardino-Ontario, CA	-28.56%
Los Angeles-Long Beach-Glendale, CA	-28.46%
Miami-Miami Beach-Kendall, FL	-27.38%
Las Vegas-Paradise, NV	-26.20%
Cape Coral-Fort Myers, FL	-24.92%
San Diego-Carlsbad-San Marcos, CA	-24.90%
Phoenix-Mesa-Scottsdale, AZ	-24.03%
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL	-22.46%
Orlando-Kissimmee, FL	-18.24%
San Francisco-San Mateo-Redwood City, CA	-16.76%
Tampa-St. Petersburg-Clearwater, FL	-15.36%
Washington-Arlington-Alexandria, DC-VA-MD-WV	-13.14%
Honolulu, HI	-10.61%
Minneapolis-St. Paul-Bloomington, MN-WI	-9.76%
Seattle-Bellevue-Everett, WA	-9.16%
Chicago-Naperville-Joliet, IL	-8.04%
Detroit-Livonia-Dearborn, MI	-7.67%
Portland-Vancouver-Beaverton, OR-WA	-7.62%
New York-White Plains-Wayne, NY-NJ	-5.92%
Boston-Quincy, MA	-5.85%
Atlanta-Sandy Springs-Marietta, GA	-5.79%
Edison-New Brunswick, NJ	-5.75%
Cleveland-Elyria-Mentor, OH	-5.19%
St. Louis, MO-IL	-3.59%
Denver-Aurora, CO	-3.34%
Philadelphia, PA	-3.00%
Charlotte-Gastonia-Concord, NC-SC	-2.26%
Raleigh-Cary, NC	-0.49%
Salt Lake City, UT	-0.34%
Dallas-Plano-Irving, TX	2.23%
San Antonio, TX	2.73%
Houston-Sugar Land-Baytown, TX	3.53%
Austin-Round Rock, TX	4.04%

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached Series as of September 2008

Sales Of Existing U.S. Homes Fall 3.1 Percent

Existing home sales including single-family, townhomes, condominiums and co-ops – fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million units in October from a downwardly revised pace of 5.14 million in September, and are 1.6 percent below the 5.06 million-unit level in October 2007.

Lawrence Yun, NAR chief economist, said consumer hesitation is understandable. “Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” he said. “We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.”

Total housing inventory at the end of October slipped 0.9 percent to 4.23 million existing homes available for sale, which represents a 10.2-month supply² at the current sales pace, up from a 10.0-month supply in September.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.20 percent in October from 6.04 percent in September; the rate was 6.38 percent in October 2007. “Mortgage interest rates have been moving up and down in a historically low range, with the fixed rate down to 6.04 percent last week,” Yun noted.

Even with the overall decline, Yun identified a number of areas with solid sales gains from a year ago, including many California and Florida markets, as seen previously, as well as Boston, Minneapolis, and Denver.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the need for professional assistance is growing. “Navigating the transaction process is easier said than done without professional assistance in today’s market,” McMillan said. “Proper valuation when many homes are being sold below replacement construction costs is very challenging – buyers remain in the driver’s seat.”

The national median existing-home price³ for all housing types was $183,300 in October, down 11.3 percent from a year ago when the median was $206,700. There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices; the median is where half of the homes sold for more and half sold for less.

Single-family home sales declined 3.3 percent to a seasonally adjusted annual rate of 4.43 million in October from a level of 4.58 million in September, but are unchanged from a 4.43 million-unit pace in October 2007. The median existing single-family home price was $181,800 in October, down 11.2 percent from a year ago.

Existing condominium and co-op sales eased by 1.8 percent to a seasonally adjusted annual rate of 550,000 units in October from 560,000 in September, and are 12.0 percent below the 625,000-unit pace a year ago. The median existing condo price⁴ was $193,000 in October, which is 13.0 percent below October 2007.

Regionally, existing-home sales in the Northeast slipped 1.2 percent to an annual pace of 830,000 in October, and are 9.8 percent lower than a year ago. The median price in the Northeast was $241,700, down 9.8 percent from October 2007.

Existing-home sales in the West eased by 1.6 percent to an annual rate of 1.21 million in October but are 37.5 percent higher than October 2007. The median price in the West was $231,400, down 27.0 percent from a year ago.

In the South, existing-home sales declined 3.2 percent to an annual pace of 1.84 million in October, and are 10.2 percent below a year ago. The median price in the South was $161,100, which is 5.8 percent lower than October 2007.

Existing-home sales in the Midwest fell 6.0 percent in October to a pace of 1.10 million and remain 9.1 percent below October 2007. The median price in the Midwest was $149,400, down 6.7 percent from a year ago.

July 2008 LoanPerformance Home Price Index

“As of July, nominal home prices declined 10.9 percent from a year ago. Our early August view of the data indicates a decline of 10.8 percent from a year ago. This continues the positive trend of no further acceleration in the pace of the rate of decline. Furthermore, in part because of the declines in house prices, our projection for pre-foreclosure and foreclosure filings through the end of 2008 is 3.2 million, an increase of just over 80 percent from a year ago.” said Mark Fleming, chief economist for First American CoreLogic. “The recent price trend is similar to the Massachusetts and Texas house price declines in the 1980s and 1990s that took approximately two years to bottom out. In both cases there was stabilization in the rate of decline before the lengthy recovery in price levels. There is reason to be cautiously optimistic because the price decline stabilization we observe in this cycle is necessary before any improvement in price levels occur,” added Fleming.

12-Month Change By Top CBSAs (Core Based Statistical Areas) as of July 2008
	12-Month
	Change
Los Angeles-Long Beach-Glendale, CA	-27.95%
Oakland-Fremont-Hayward, CA	-27.28%
Riverside-San Bernardino-Ontario, CA	-26.93%
Miami-Miami Beach-Kendall, FL	-25.95%
Las Vegas-Paradise, NV	-25.13%
San Diego-Carlsbad-San Marcos, CA	-23.24%
Cape Coral-Fort Myers, FL	-23.12%
Phoenix-Mesa-Scottsdale, AZ	-22.95%
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL	-20.97%
Orlando-Kissimmee, FL	-18.02%
Tampa-St. Petersburg-Clearwater, FL	-15.82%
San Francisco-San Mateo-Redwood City, CA	-13.59%
Washington-Arlington-Alexandria, DC-VA-MD-WV	-13.58%
Cleveland-Elyria-Mentor, OH	-11.27%
St. Louis, MO-IL	-10.31%
Minneapolis-St. Paul-Bloomington, MN-WI	-9.09%
New York-White Plains-Wayne, NY-NJ	-7.68%
Boston-Quincy, MA	-7.49%
Atlanta-Sandy Springs-Marietta, GA	-6.93%
Seattle-Bellevue-Everett, WA	-6.90%
Honolulu, HI	-6.73%
Detroit-Livonia-Dearborn, MI	-6.59%
Chicago-Naperville-Joliet, IL	-6.42%
Edison-New Brunswick, NJ	-6.15%
Portland-Vancouver-Beaverton, OR-WA	-4.40%
Philadelphia, PA	-3.78%
Denver-Aurora, CO	-2.21%
Charlotte-Gastonia-Concord, NC-SC	-0.74%
Salt Lake City, UT	1.37%
Raleigh-Cary, NC	1.49%
Dallas-Plano-Irving, TX	2.17%
San Antonio, TX	3.53%
Houston-Sugar Land-Baytown, TX	4.12%
Austin-Round Rock, TX	4.15%

Source: First American CoreLogic, LoanPerformance HPI, Single Family Detached Series as of July 2008

U.S. Home Foreclosures Increase By 121% From Previous Year

RealtyTrac® (realtytrac.com), today released its Q2 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings were reported on 739,714 U.S. properties during the second quarter, a nearly 14 percent increase from the previous quarter and a 121 percent increase from the second quarter of 2007. The report also shows that one in every 171 U.S. households received a foreclosure filing during the quarter.

“Although much of the fallout from foreclosures is being driven by rampant activity in a few states, such as Nevada, California, Florida, Ohio, Arizona and Michigan, most areas of the country are seeing at least some increase in foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “Forty-eight of 50 states and 95 out of the nation’s 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter.

“Bank repossessions, or REOs, accounted for 30 percent of total foreclosure activity in the second quarter, up from 24 percent of the total in the first quarter,” Saccacio continued. “This shift in the distribution of activity indicates that there is a progression toward purging the problem loans out of the system — at which point the housing market can regain some sense of normalcy. Of course if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery.”

Nevada, California, Arizona post top state foreclosure rates
One in every 43 Nevada households received a foreclosure filing during the second quarter, the highest foreclosure rate among the states and nearly four times the national average. Foreclosure filings were reported on 24,657 Nevada properties during the quarter, up 26 percent from the previous quarter and up 147 percent from the first quarter of 2007.

Foreclosure filings were reported on 202,599 California properties during the second quarter, the highest total among the states and a rate of one in every 65 households — the nation’s second highest state foreclosure rate. Foreclosure activity in California increased 19 percent from the previous quarter and was nearly three times the level reported in the second quarter of 2007.

With one in every 70 households receiving a foreclosure filing, Arizona posted the nation’s third highest state foreclosure rate in the second quarter. Foreclosure filings were reported on 37,230 Arizona properties during the quarter, up nearly 36 percent from the previous quarter and close to four times the number reported in the second quarter of 2007.

Florida documented the nation’s fourth highest state foreclosure rate in the second quarter, with one in every 78 households receiving a foreclosure filing during the quarter — more than twice the national average. Foreclosure filings were reported on 109,433 Florida properties during the quarter, the second highest total of any state and an increase of nearly 25 percent from the previous quarter.

Despite a nearly 15 percent quarterly decrease in foreclosure activity in the second quarter, Colorado posted the nation’s fifth highest state foreclosure rate — one in every 129 Colorado households received a foreclosure filing during the quarter. Second quarter foreclosure activity in Colorado was still up more than 50 percent from the second quarter of 2007.

Foreclosure filings were reported on 37,689 Ohio properties in the second quarter, the third highest total among the states and a rate of one in every 134 households — the nation’s sixth highest state foreclosure rate. Second quarter foreclosure activity in Ohio was up nearly 21 percent from the previous quarter and nearly 27 percent from the second quarter of 2007.

With foreclosure filings reported on 32,868 properties during the second quarter, Michigan notched the fifth highest total among the states. One in every 137 Michigan households received a foreclosure filing during the quarter, the nation’s seventh highest state foreclosure rate.

Other states with foreclosure rates among the top 10 were Georgia, Massachusetts and Illinois.

Top 20 metro areas include Las Vegas, Phoenix, Miami, San Diego and Detroit
The Q2 2008 U.S. Foreclosure Market Report also ranks the nation’s 100 largest metropolitan areas by foreclosure rate. California and Florida metro areas accounted for 16 of the top 20 metro foreclosure rates, with the California cities of Stockton and Riverside-San Bernardino taking the No. 1 and No. 2 spots.

One in every 25 Stockton households received a foreclosure filing during the quarter — nearly seven times the national average — and one in every 32 Riverside-San Bernardino households received a foreclosure filing during the quarter — more than five times the national average. Other California metro areas in the top 20 were Bakersfield at No. 4, Sacramento at No. 5, Oakland at No. 8, Fresno at No. 9, San Diego at No. 11, Orange at No. 15, Ventura at No. 16 and Los Angeles at No. 19.

Las Vegas documented the third highest metro foreclosure rate, with one in every 35 households receiving a foreclosure filing during the quarter. Foreclosure filings were reported on 21,742 Las Vegas metro properties during the quarter, up more than 25 percent from the previous quarter and up nearly 144 percent from the second quarter of 2007.

The highest ranked Florida metro area was Fort Lauderdale, which ranked No. 6 with one in every 51 households receiving a foreclosure filing during the quarter. Other Florida metro areas in the top 20 were Miami at No. 10, Orlando at No. 13, Sarasota-Bradenton-Venice at No. 14, Tampa-St. Petersburg-Clearwater at No. 17 and Palm Beach at No. 18.

One in every 51 households in the Phoenix metro area received a foreclosure filing during the quarter, ranking No. 7; one in every 66 households in the Detroit metro area received a foreclosure filing during the quarter, ranking No. 12; and one in every 91 households in the Atlanta metro area received a foreclosure filing during the quarter, ranking No. 20.

Texas Commercial Real Estate Market Holding Steady

Despite the downturn in the national economy, Texas’ real estate market remains resilient as major metropolitan areas continues to post gains in employment and population.

That’s according to a report by Houston real estate valuation and consulting firm Lewis Realty Advisors.

“Texas is not completely immune to the national economic downturn. But we continue to see positive trends in real estate and in the overall economy,” says David M. Lewis, founder of the firm.

“Houston, Austin, Dallas/Fort Worth, and San Antonio are the top four gainers in job growth in the nation. Those four cities are also in the nation’s top 10 for population growth,” Lewis says. “When Texas cities dominate the national economic statistics, it signifies that Texas real property is significantly outperforming other regions.”

Texas’ economy has been bolstered by health care, education and technology. However, the energy sector is continuing to drive the state’s economy, particularly in the Houston and Dallas/Fort Worth markets.

The domestic rig count, a measure of oil and gas drilling activity, is at its highest point since 1985. This is fueling demand for more office and industrial space by Texas energy companies and manufacturers of oilfield equipment.

FHA Will Temporarily Lift A 90-day Waiting Period For Property Resales

In an effort to stabilize declining home values in certain neighborhoods, the Bush Administration today announced a temporary policy that will extend government-backed mortgage insurance and allow for the immediate sale of vacant foreclosed properties.

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.

“A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community’s recovery,” said Brian D. Montgomery, Assistant Secretary of Housing-Federal Housing Commissioner. “The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country.”

FHA’s new temporary policy will help stabilize neighborhoods experiencing high rates of foreclosure by reducing the inventory of unsold properties. Many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It’s reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This prohibition is intended to prevent property “flipping,” a predatory practice that strips a home of its equity before being quickly resold at an inflated price to an unsuspecting buyer. FHA’s new policy will permit the immediate sale of foreclosed properties to legitimate borrowers wishing to use FHA-insured financing.