Foreclosure Sales Prices On the Rise

According to a RealtyTrac report released last week, foreclosure sales prices have increased 6 percent in the second quarter and grew 7 percent year-over-year. The report indicated that this is the largest annual increase in foreclosure-related sales prices since 2006.

Over the second quarter, the average foreclosure-related sales price was $170,040.

New Home Sales Grow 7.6% in May

The housing market received some good news this week, as the government reported that sales of new homes increased 7.6% in May.

According to the Census Bureau, sales hit an annual rate of 369,000, compared with the revised April rate of 343,000. That's an increase of 20% year-over-year, but still a long way from the annual rate of nearly 1.4 million reached during the real estate boom years.

Shadow Inventory At Lowest Level in Three Years

According to real estate data provider, CoreLogic, shadow inventory has reached its lowest level in three years, falling almost 15 percent year-over-year in April. This drop puts inventory at about a four month supply.

Shadow inventory refers to properties that are seriously delinquent by 90 days or more, as defined by CoreLogic, in the foreclosure process, as well as homes that have completed the foreclosure process but not yet have been listed for sale.

Pending Home Sales Down in April but Still Recovering

Pending home sales retreated somewhat in April after three straight months of gains, but are notably higher than a year ago, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking study which is based on contract signings, fell 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was only 83.5. Note that the data reflects contracts but not closings.

Did the High Price of Oil Cause the Housing Crisis

“High gasoline prices provided the trigger that burst the [housing] bubble,” stated JunJie Wu, an Oregon State economist and one of the authors of a study that is blaming the rise of gas prices as the main contributing factor for the housing crisis that began in 2007.

“The theory recognizes the role of subprime mortgages and lax lending practices as inflating the housing bubble,” Wu says, but adds that a spike in gas prices was the “trigger.”

Investors have been buying up a large amount of residential real estate with cash since the housing crisis, which has pushed the national home prices lower, according to the latest Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey.

The proportion of cash buyers in the housing market rose significantly to a record 33.2%, which was only at 29.6% a year earlier.

At the same time, the investor class relied heavily on cash to buy homes, with 74% of investors purchasing homes using cash in December.

Single-family sales increased 4.6% in December after growing 4% in November, reported the National Association of Realtors this morning.

"The pattern of home sales in recent months demonstrates a market in recovery," said NAR chief economist Lawrence Yun.

The sale of existing single-family homes grew to a 4.11 million seasonally adjusted annual rate in December, up from a 3.93 million rate in November.

As shown in year-end totals, 3.78 million single-family homes were sold in 2011, an increase of 2% from 2010.

While the ratio of foreclosure sales nationwide decreased in the second quarter of this year, distressed sales as a whole still have a substantail influence on the mortgage market.

RealtyTrac state that bank-owned properties equaled 31 percent of transactions in the second quarter, growing from 24 percent in 2010 but falling from 36 percent at the beginning of the year. On the same note, the firm said lenders seem to be speeding up short sales, which rose 19 percent on a quarterly basis.

Foreclosure filings and repossessions dropped to the lowest level they’ve been since 2007 last year.

The total number of filings, including default notices and bank repossessions fell by 33% for the year to 2.7 million, according to RealtyTrac.

One out of every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. This is quite a substantial improvement from the peaks reached in 2010 -- when 1.05 million homes were repossessed -- and the lowest levels seen since 2007.

The House of Representatives passed H.R. 5072, the FHA Reform Act of 2010 which could be good news for home-buyers that must rely on an FHA loan for a home purchase but, not so good for taxpayers. The bill still needs to be passed by the Senate and signed into law by the President, but a huge step toward this was taken by the House passing it.

Highlights of the bill that are most important to home-buyers are as follows: