Tag Archives: real-estate
Foreclosure and distressed property sales in the US fall considerably year on year
There are fewer homes in the United States being sold which are in foreclosure as the real estate market continues its recovery. The national foreclosure inventory fell by 33% year on year in August 2014 to approximately 629,000 properties, or 1.6% of all homes with a mortgage, down from 936,000, or 2.4% in August 2013. According to the data from CoreLogic this marks 34 months of continuous year on year declines in the inventory of foreclosed homes, including 19 straight months of declines greater than 20%. Also in August, the 12 month sum of completed foreclosures continued to decline, dropping 20% from a year ago to 576,000. The seriously delinquent inventory fell to 1.6 million loans, a 21.7% decline from August 2013. The five states with the largest year on year drop in the foreclosure inventory were Utah which was down 46%, Idaho down 45.6%, Arizona down 44.5%, Florida down 43.6% and Iowa down 42.6. The data also shows that 49 states posted declines in the foreclosure inventory from a year ago, with 44 states showing decreases of more than 20%. Only the District of Columbia and Wyoming saw year on year increases in foreclosure inventory. Florida has seen the biggest improvement, falling 7.3% from its February 2011 peak level of 12.5% to its August rate of 5.2%. The foreclosure rate in New Jersey peaked in March 2013, much later than in Florida and the state has a 1.6% improvement in the foreclosure rate from its peak rate. Both New York and Hawaii experienced peak foreclosure rates in September 2012, and have experienced similar declines in foreclosure rates, with New York falling 0.9% from its peak and Hawaii falling 1.1% from its peak. Distressed sales (Real Estate Owned and short sales) accounted for 11.1% of total home sales in July 2014, the lowest share since December 2007 and a strong improvement from the same time a year ago when this category made up 15.5% of total sales. Within this category, REO sales made up 7.1% of total home sales, and short sales made up 4% of total sales in July. At its peak, the distressed sales share totalled 32.5% of all sales in January 2009, with REO sales making up 28% of that share. CoreLogic says in its report that the ongoing shift away from REO sales is a driver of improving home prices, as REOs typically sell at a larger discount than do short sales. There will always be some amount of distress in the housing market, so one would never expect a 0% distressed sales share, and by comparison, the pre-crisis share of distressed sales was traditionally about 2%. Michigan had the largest share of distressed sales of any state at 26.3% in July, followed by Florida at 23.3%, Illinois at 23.3%, Nevada at 21.9% and Georgia at 19.8%. California experienced a 13.7% drop in the distressed sales share from a year earlier, the largest of any state. California also saw the largest improvement from peak distressed… Continue reading
UK house prices set to fall in 2015 after rising too much this year
UK house prices are set to fall next year as price growth as got ahead of itself in 2014, but they will start rising again in 2016, according to a new analysis. According to the Centre for Economics and Business Research, house prices are about to hit a turning point. It’s report says that so far 2014 has seen largest rise in home values since the Prices this year are expected to rise by 7.8%, more than double the 3.5% national average increase last year. But now young buyers risk being priced out of the rising market, while an expected rise in interest rates will ‘startle’ prospective home owners, the report says. Scott Corfe, a director at the CEBR, pointed out that leading indicators already point to price declines in some parts of the UK, alongside falling new buyer enquiries and properties staying on the market for longer before they sell. ‘Affordability has become such an issue in the more expensive regions of the UK that buyers are starting to baulk at high prices. New mortgage rules, introduced in April, have also led to a slowdown in lending that will ‘curb demand for property in the short term’, he said. A rise in interest rates from the Bank of England next year is also expected to cool house price growth in the short term. ‘Although rises are expected to be very gradual, with rates remaining much lower than before the financial crisis, prospective buyers are likely to be startled by the first such increase, leading many to hold off from making purchases. This too will lead to lower prices,’ he explained. But he stressed that the CEBR is not anticipating a crash as the market is adjusting after getting ahead of itself at the start of 2014. It predicts that, after slipping in 2015, prices will start to rise again, growing by 2.6% in 2016, 3% in 2017 and another 2.7% in 2018. Howard Archer, an economist at IHS Global Insight, has previously said he expects house prices ‘to rise at a more retrained restrained rate over the coming months’. Continue reading
London housing bank being created
The Mayor of London has announced what is described as an innovative new £200 million investment scheme for developers and housing associations that will help accelerate the building of thousands more low cost homes in the city. He said that the London Housing Bank will offer tailored financial support to speed up the construction of homes compared to existing development timetables. This could include building later parts of large multi-phased housing schemes earlier than scheduled. The Bank offers low cost loans starting at 1% interest to incentivise development partners to build up to 4,000 homes on a range of sites, with the condition that these homes will be rented to Londoners at low cost rent with a minimum discount to market of 20 % for at least 7seven years. Boris Johnson said that this will result in homes being delivered several years earlier than traditional house building plans allow. The loan will be available for up to 16 years and after it is repaid, developers will have the option of selling the homes to the current occupiers to support home ownership, selling into the market, or retaining as affordable homes to use as long-term rent. The London Housing Bank prospectus is being launched at the same time as the Government launches a national investment scheme for developers to boost house building, with the initial funding for the Housing Bank being made available to the Greater London Authority by the Government. The Mayor's commitment to fast tracking development with the Housing Bank is part of a package of wider measures he is promoting to stimulate house building. He is on track to see 100,000 low cost homes built over his two terms, with more affordable homes being built this year than since 1980, as well as helping 50,000 Londoners into low cost home ownership and introducing a range of innovative new measures including new Housing Zones and accelerating purpose built rental sites. ‘Through the pioneering London Housing Bank, I'm challenging the capital's developers to get building, and deliver the homes Londoners need, as fast as humanly possible. Loans are available from a £200 million pot to significantly accelerate the pace of development, especially on bigger schemes, and unlock additional supply,’ Johnson explained. ‘Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible for hard working Londoners,’ he added. All homes will be advertised on the FIRST STEPS online portal, the Mayor's programme to help low and modest income Londoners to buy or rent in the capital at a price they can afford. A wide range of new and existing housing providers are encouraged to bid for loans as well as private sector organisations including private registered providers and developers. Bidding will be through the Greater London Authority's Investment Management System (IMS). The majority of funding is expected to be low cost interest bearing loans, with equity… Continue reading
