Tag Archives: crisis
Distressed properties in the US selling 37% below market value, latest data suggests
Distressed residential properties in the United States sold for a median 37% below market prices in September, according to the latest foreclosure report. This was $130,000 nationwide compared to the median price of $205,000 for non-distressed homes during the month, according to the data from RealtyTrac’s report covering the third quarter of the year. ‘Even as the share of distressed sales decreases, the average discount on distressed properties continues to be substantial because the primary factors driving that discount are still in place,’ said Daren Blomquist, RealtyTrac vice president. ‘Distressed properties are typically in poor condition and have a highly motivated seller whether that seller is the distressed homeowner in foreclosure or the bank that has repossessed the property through foreclosure,’ he explained. The major metropolitan areas were distressed homes were most heavily discounted were Pittsburgh and Milwaukee both at 67%, Cleveland at 64% and Memphis at 59%, a breakdown of the data shows. Overall, the median sales price of US residential properties, both distressed and non-distressed combined, was $195,000 in September, an increase of 1% from August and 15% from September 2013, the largest year on year increase since October 2005. September 2014 was also the 30th consecutive month in which the median home price increased annually. ‘Median home prices nationally in September were boosted by a new low in the share of distressed sales during the third quarter, resulting in fewer home sales on the lower end,’ Blomquist pointed out. ‘The share of homes selling above $200,000 is up 7% from a year ago, and the share of homes selling above $500,000 is up 15% from a year ago,’ he added. Continue reading
Australian housing market weaker outside of larges cities, latest index suggests
Residential property values across Australia’s capital cities increased by 1% over the month of October, according to the latest RP Data CoreLogic index. The data highlights that despite a slowdown in growth in September, values continued to rise, increasing by 2.2% over the past three months. Although combined capital city home values were up by 1% not all cities saw increases. Only Sydney with an increase of 1.3%, Melbourne up 1.9% and Brisbane at 0.6% actually recorded value rises over the month. According to Tim Lawless, head of research, this result highlights weaker housing market conditions outside of Australia’s largest cities. Looking over the past three months Sydney, Melbourne, Brisbane and Adelaide, which happen to be four of the five largest capital cities, were the only capital cities to record an increase in home values. Sydney leads the growth with home values increasing at a rate of more than 1% a month, up 3.9% over the past three months. Lawless said that Perth and Canberra have clearly moved through the peak of their growth cycles. However, the greatest value falls over the last three months were recorded in Hobart with a decline of 2.8% and Canberra where values were down 2.4%. ‘Looking at the increase in home values over the 12 months to October, it is clear that the rate of capital growth is continuing to moderate. Despite the annual rate of value growth slowing, all capital cities have still recorded an increase in home values over the past year,’ said Lawless, He pointed out that home values across the combined capital cities have increased by 8.9% over the 12 months ending October 2014, which has slowed from a peak of 11.5% in April of this year. Sydney, and to a lesser degree Melbourne, continued to be the main drivers of the increase in home values. Over the past year, Sydney home values were 13.1% higher, while Melbourne values were up 8.9%. Brisbane was the third best performing capital city for value growth over the year with values up 5.6% followed by Darwin where values rose by 5%. Elsewhere, value growth was more subdued with increases of 3.4% in Perth, 4.3% in Adelaide, 4.4% in Hobart and 0.9% in Canberra. ‘Despite the fact that the annual increase in home values is slowing, other indicators remain strong,’ added Lawless. Auction clearance rates continued to hover around the 70% mark week to week while volumes across RP Data real estate agent and valuation platforms remained strong which is indicative of heightened levels of industry and mortgage market activity. The number of new properties listed for sale continues to rise as are total listing numbers. However, Lawless said that the fairly rapid rate of sale is resulting in a slower increase in total listings than new listings. Conditions across capital city rental markets remained subdued, with weekly rents rising by only 1.8% over the past 12 months, the lowest annual change in capital city rents since the year ending August 2003. According to Lawless, the consistent… Continue reading
Prime central London rental values up for eighth month in a row
Rental values in prime central London rose for the eighth successive month in October, recovering to a level last seen two years ago, the latest index report shows. Rental values climbed 0.5% in October as the UK economic recovery strengthened and yields saw the strongest improvement in three years, according to the report from Knight Frank. Annual growth was 2.6%, the highest rate since December 2011 and in the third quarter of 2014 tenancies agreed rose by a quarter while tenancies started increased by a third. Rental yields rose to 2.9%, recording the biggest monthly gain in more than three years, the report also reveals. It explains how in October 2012, rental values were at the early stage of a shallow decline that took place against the background of a tepid economy and a strong sales market. Now the International Monetary Fund has forecast that UK economic growth will outpace other developed countries in 2014 and at the same time demand in the sales market shown signs of cooling ahead of next May’s general election and uncertainty surrounding the possibility of a mansion tax. ‘With UK economic data remaining mixed, the prime central London rental market is still not in full-blown recovery mode,’ said Tom Bill, head of London residential research. ‘Though the number of new prospective tenants and viewings rose in October compared to the same month last year, the number of tenancies started is likely to end the month down, which reflects the hesitant nature of the recovery,’ he added. He pointed out that the positive IMF forecast should be balanced against data from accountant Ernst & Young that showed the number of profit warnings issued by UK companies between July and September was the highest in the period for six years. ‘In a further move that may dampen demand in the short term, mortgage lenders have cut rates as the likelihood of an imminent interest rate rise recedes. Lenders are also attempting to bolster their loan books after a slower period that followed the introduction of stricter lending criteria earlier this year,’ said Bill. ‘In positive news for investors, rental yields recorded their biggest monthly increase in more than three years, rising to 2.9% in October. Also, the spread between prime central London yields and the so-called risk free rate of a 10 year government bond has widened notably in recent months,’ he added. Continue reading
