RealtyTrac - Institutional investor purchases reach new high in September Realtytrac today released its September 2013 US residential & foreclosure sales report, which shows that US residential properties, including single family homes, condominiums and townhomes, sold at an estimated annualized pace of 5,673,249 in September, up 2% from august and up 14% from September 2012. The national median sales price of all residential properties — including both distressed and non-distressed — in September was $174,000, up 1% from a revised $172,000 median price in august and up 6% from a $164,500 median price in September 2012. The median price of a distressed residential property — in foreclosure or bank-owned — in September was $112,000, 41% below the median price of $189,000 for a non-distressed residential property. Distressed sales combined accounted for 25% of all sales in September, up from 18% of all sales a year ago. “The housing market continues to skew in favor of investors, particularly deep-pocketed institutional investors, and other buyers paying with cash,” said Daren Blomquist, vice president at RealtyTrac. “While the institutional investors are pulling back their purchases in many of the higher-priced markets — places like San Francisco, Washington, D.C., New York, Seattle and Sacramento — they are continuing to ramp up purchases in markets where median prices are still below $200,000 — places like Jacksonville, Atlanta, Charlotte, St. Louis and Dallas. The availability of distressed inventory also makes a difference. For example, institutional investor purchases have rebounded in Las Vegas corresponding to a recent rebound in foreclosure activity there. “Distressed sales remain persistently high, particularly short sales,” Blomquist added. “Markets with the biggest increases in short sales tend to be those where either foreclosure starts or scheduled foreclosure auctions have rebounded in the last 18 months — translating into more motivated short sellers — or those with a still-high percentage of underwater homeowners with negative equity.” Other high-level findings from the report: Institutional investors (purchasing 10 or more properties in the last 12 months) accounted for 14% of all sales in September, up from 9% in August and also 9% in September 2012. September had the highest percentage of institutional investor purchases of any month since RealtyTrac began tracking in January 2011. Among metro areas with a population of 1 million or more, those with the highest percentage of institutional investor purchases in September were Atlanta (29%), Las Vegas (27%), St. Louis (25%), Jacksonville, Fla., (23%), Charlotte, N.C., (17%), Memphis, Tenn. (16%), Richmond, Va., (15%), Dallas (15%), and San Antonio, Texas (15%). All-cash purchases nationwide represented 49% of all residential sales in September, up from a revised 40% in August and up from 30% in September 2012. Among metro areas with a population of 1 million or more, those with the highest percentage of all-cash sales were Miami (69%), Tampa, Fla. (62%), Jacksonville, Fla. (62%), Las Vegas (62%), Orlando, Fla., (59%), Atlanta (54%), Cleveland (51%), and Memphis, Tenn. (51%). States with the biggest annual increases in median prices were California (up 30%), Michigan (up 25%), Nevada (up 23%), Georgia (up 20%), and Arizona (up 20%). Among metro areas with a population of 1 million or more, those with the biggest annual increases in median prices were San Francisco (35%), Detroit (34%), Sacramento (33%), Atlanta (27%), Riverside-San Bernardino, Calif., (26%), and Phoenix (25%). Home price appreciation showed signs of plateauing in these top six appreciating markets. In all six markets, the annual increase in home prices was down compared to previous months this year. Short sales accounted for 15% of all US residential sales in September, up from 14% in August and 9% in September 2012. States with the biggest percentage of short sales were Nevada (32%), Florida (30%), Ohio (26%), Maryland (22%), and Tennessee (21%). Among metro areas with a population of 1 million or more, those with the highest percentage of short sales were Las Vegas (34%), Columbus, Ohio (33%), Tampa, Fla. (33%), Memphis, Tenn., (32%), and Miami (32%). Sales of bank-owned homes accounted for 10% of all US residential sales in September, up from 9% in August and also 9% in September 2012. Among metro areas with a population of 1 million or more, those with the highest percentage of bank-owned sales were Las Vegas (21%), Riverside-San Bernardino, Calif., (20%), Cleveland (19%), Phoenix (18%), and Columbus, Ohio (16%). Annualized sales volume increased from the previous month in 34 out of the 38 states tracked in the report and was up from a year ago in 35 states. Notable exceptions where annualized sales volume decreased from a year ago were California (down 15%), Arizona (down 11%), and Nevada (down 5%). Unemployment up Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 350,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 4,000 more applications filed than previously reported. Economists polled by Reuters had expected first-time applications to fall to 340,000 last week. A Labor Department analyst said claims from the backlog in California were still working their way through the system. Technical problems as California converted to a new computer system have distorted the claims data since September, making it difficult to get a clear read of labor market conditions. A 16-day partial shutdown of the federal government also pushed up claims in recent weeks as furloughed non-federal workers applied for benefits. Claims filed by federal employees fell 25,939 in the week ended October 12. The four-week moving average for new claims, considered a better measure of labor market trends, rose 10,750 to 348,250. The number of people still receiving benefits under regular state programs after an initial week of aid fell 8,000 to 2.87 million in the week ended October 12. The so-called continuing claims data covered the October household survey week from which the unemployment rate is derived. Continuing claims increased between the September and October household surveys, suggesting a rise in the unemployment rate. BofA loses fraud trial over mortgages Bank of America was found liable for fraud on Wednesday on claims related to defective mortgages sold by its Countrywide unit, a major win for the US government in one of the few big trials stemming from the financial crisis. Following a four-week trial, a federal jury in Manhattan found the Charlotte, North Carolina bank liable on one civil fraud charge in connection with shoddy home loans that the former Countrywide Financial Corp sold to Fannie Mae and Freddie Mac and originated in a process called Hustle. The four men and six women on the jury also found a one-time Countrywide executive, Rebecca Mairone, liable on the one fraud charge facing her. A decision on how much to penalize the bank would be left to US District Judge Jed Rakoff. The US Department of Justice has said it would ask Rakoff to award up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans. Obamacare - no one wants it, no one can get it Leading insurance company CEOs met Wednesday at the White House with top Obama administration officials to discuss solving the serious tech problems afflicting the new federal Obamacare insurance marketplace, specifically the ones that are drastically crippling enrollment. In a statement after the meeting, the White House said we are collaborating very closely with the insurers to address problems we have witnessed in what are called 834 forms and in direct enrollment. Those 834 forms contain information about individuals that insurers then use to officially enroll that person in health-care coverage. The session came a day after Jeffrey Zients, the former acting director of the Office of Management and Budget, was assigned to oversee the round-the-clock, frantic push to correct the many software problems on HealthCare.gov, which is being operated by HHS. Zients appointment follows scathing criticism of HHS handling of the rollout of the site by both Republican opponents of Obamacare and supporters of the health-care reform effort. The appointment was seen as the White House taking a leading role in solving the problems, which threaten to cripple the presidents signature legislative victory. On Tuesday night, Sebelius, who has rejected Republican calls for her resignation, told CNN that Obama had not been told about software problems with that website until after it launched Oct. 1, when those problems began making headlines nationally. Many if not most of the 834 forms being transmitted each night to insurers from HealthCare.gov contain corrupted or questionable data that prevent people from being enrolled quickly, or even at all. But the Obama administration to date had been vague about the specific issues plaguing HealthCare.gov. We havent seen any improvement in the 834s, said a top executive at one of the 13 insurance companies whose CEO was at the afternoon meeting with embattled Health and Human Services Secretary Kathleen Sebelius, White House Chief of State Denis McDonough, Director of Centers for Medicare and Medicaid Services Marilyn Tavenner and top Obama advisor Valerie Jarrett. The datas pretty bad, the executive said. And even if the data was not corrupted, the number of enrollments the insurers are getting from HealthCare.gov is pretty low. Mortgage rates and Fed easing Now that the Fed is expected to keep its foot on the easy money pedal for months to come, dont expect to see interest rates go much lower. Fixed income strategists say the 10-year Treasury is likely closing in on the bottom of its yield range, a move that could be good for roughly another quarter point reduction in 30-year mortgage loan rates. The 10-year yield, on a wild ride since the Fed first began talking about tapering its $85 billion monthly bond buying program, was at 2.48% Wednesday, a four month low. That is well above the 1.61% year low from May 1 and off the 3% it reached at the height of anticipation about a possible pull back in Fed easing. A lot has changed. Its a tough environment, said Brett Rose, head of US interest rate strategy at Citigroup. I think were going to settle into a range around here. I dont think were going to go a lot lower. I think we would trade in the 2.40 to 2.75 range for the next couple of months. Rose said the economy, while growing slowly, does not justify lower yields. The economic data is good, not great, but good enough. Some of the systemic risks weve been dealing with over the last several years have been lowered -- fiscal policy negotiation being a big exception to that so I dont see any reasons for rates to go back to levels of the first half of this year, he said. Rose said the mortgage rates should go down along with the five-year and 10-year Treasury yield. Since the 14th, weve got 5-years down 15 basis points and 10-years down 21 basis points so I would expect the mortgage rate to be down about 18 basis points. He said if the 10-year moves down to the bottom of his expected range it could be another 20 basis points decline for 30-year mortgage loan rates. NAHB - remodelling index climbs The Remodeling Market Index (RMI) continued to climb at a modest pace in the third quarter of 2013 rising two points to 57, the highest reading since the first quarter of 2004, according to the National Association of Home Builders (NAHB). An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. The RMI’s current market conditions index rose from 54 in the previous quarter to 58, the highest reading since the creation of the RMI in 2001, driven partly by rising existing home sales. “The growth in home equity and home sales prompted home owners to remodel as they prepare to move or undertake upgrades that they put off during tough times,” said NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. “NAHB Remodelers looks forward to continuing our tradition of professional service and craftsmanship as the housing recovery makes progress.” All three major components of the RMI’s current market conditions index increased in the third quarter. Major additions and alterations increased from 51 to 55, minor additions and repairs from 55 to 58 and maintenance and repair from 57 to 59. The future market indicators component of the RMI remained even with the previous quarter reading of 56. Regionally, the RMI has registered two consecutive quarters of gains in the Northeast, Midwest and West. In the South, the RMI edged down slightly in the third quarter after a five point gain the previous quarter. All four regions were above 50 and higher in the third quarter than in the first quarter of 2013. “In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefitted from rising home values,” said NAHB Chief Economist David Crowe. “This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period.” See you at the top! Chris McLaughlin
Posted on: Fri, 25 Oct 2013 13:26:40 +0000
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