Where Home Equity is Evaporating the Quickest (Map)
Forbes has compiled a list of 11 real estate markets with home values which are still declining quickly. Here is how they determined these areas:
Using data from Moody's Economy.com and Equifax, we measured the percentage of home equity--or the amount invested in the home, plus or minus any price appreciation or depreciation--relative to the home's current value in the country's 200 largest metropolitan statistical areas. We ranked metros based on data from the first quarter of this year. We also included numbers from 2006 and 2008 for reference.
Here are the markets:
- Modesto, CA
- Cape Coral-Fort Myers, FL
- Phoenix-Mesa-Glenda, AZ
- Las Vegas-Paradise, NV
- Oxnard-Thousand Oaks-Ventura, CA
- Stockton, CA
- Merced, CA
- Reno-Sparks, NV
- Riverside-San Bernadino-Ontario, CA
- Anchorage, AK
- Bremerton-Silverdale, WA
Top Ten Mortgage Fraud States (Map)
CNNMoney.com reports that the Mortgage Asset Research Institute (MARI) has released a report which shows incidents of fraud comitted by mortgage industry professionals had increased by 7% in 2009.
The jump in mortgage fraud is a troubling trend, given that it played a big role in setting the housing crisis in motion, with mortgage professionals doing things like listing false income claims for borrowers, and overstating a home's appraised value.
And the statistics may not capture the entire picture, according to Jennifer Butts of LexisNexis Mortgage Asset Research, since fraud isn't usually detected until a loan goes bad.
10 Top scam states |
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10 Top Mortgage Fraud States [CNNMoney.com]
Fannie’s April Forecast: Tax Credit Fails, but Home Sales Should Increase (Soon)
Fannie Mae's Economics & Mortgage Market Analysis (EMMA) unit recently released its April forecast, [PDF] and it is a must read for macro-minded real estate pros. Basically, they note the up-trending number of purchase applications from late-February (+25%) and see a self-sustaining recovery in the housing market in the fourth quarter if the labor market improves.
Existing home sales posted their third consecutive drop in February. However, the near-term outlook is brightening, as augured by improving leading indicators of home sales. Pending home sales, which measure contract signings of existing homes, surged in February. Another leading indicator also suggests increasing sales in coming months: purchase applications have trended up beginning in late February and have risen nearly 25 percent in the last six weeks. Existing home sales should strengthen substantially in the second quarter, as more homebuyers rush to beat the expiring tax credit. With the tax credit pulling forward some sales into the first half of this year, we expect sales to pull back in the third quarter. If the labor market improves substantially as we anticipate in the fourth quarter, home sales should rebound and begin a self-sustaining recovery without the help of a tax subsidy.
Shiller on a Double-Dip, Housing Prices and more…
Robert Shiller, Professor of Economics at Yale, was recently interviewed on Consuelo Mack WealthTrack and addressed many of his (and most people’s) fears about the housing market. He, like many others, is particularly concerned about the growing possibility of a double dip in the housing market.
The federal government has supported over 80% of sales up until now. This will (mostly) be coming to an end because the Federal Reserve has ceased buying MBS and the Home Buyer Tax Credit will expire at the end of the month.
Shiller doesn’t think that homebuyers have the same “naive optimism” that they had just 5 years ago. He is worried that prices will actually fall again (but stressed that he was not “predicting” that). This is mostly because of the shadow inventory that is right around the corner.
Here is the complete interview:
Top Ten Worst Housing Markets
- Milwaukee, WI
- Denver, CO
- Los Angeles, CA
- St. Louis, MO
- San Francisco, CA
- New York, NY
- Cincinnati, OH
- Cleveland, OH
- Atlanta, GA
- San Diego, CA
Top Ten Best Housing Markets
- Pittsburgh, PA
- Louisville, KY
- Houston, TX
- Minneapolis, MN
- Indianapolis, IA
- Memphis, TN
- Columbus, OH
- St. Louis, MO
- Dallas/Ft. Worth, TX
- Austin, TX
March Stats on Price Reductions
According to Zillow, fewer sellers reduced their prices in March (compared to February). Overall, about 1 in 5 listings saw a price reduction, but this rate varies from market to market, of course.
First, here are the stats on the % of listings that had any price reduction:
And here is the median amount of the price reductions:
For more information, see the Zillow Blog.
Debbie Downer Strikes Again!
Meredith Whitney (previously covered here) is featured in an interview with Leigh Gallagher, an assistant managing editor of Fortune. She predicts a rocky recovery for the housing market and thinks that more foreclosures are on the horizon.
Why Is Texas Smiling?
Earlier this week I wrote about a study conducted by the Federal Reserve Bank of New York which examined why upstate New York seemingly escaped the housing bubble. They determined, based on their findings, that upper New York faired well in this last cycle because they have relatively few subprime mortgages and, of the subprime loans that were issued, they performed much better than other areas.
Similarly, ABC News has found that in Texas (of all places!), subprime loans performed much better than average. Their foreclosure rate (among subprime) is below 19% – among the lowest anywhere. Also, real estate prices were largely contained and grew only modestly, compared to the rest of the United States.
Lessons should be learned and policies adopted in Washington that reflect on Texas’ experience:
If there’s one single thing that Congress can do now to help protect borrowers from the worst lending excesses that fueled the mortgage and financial crises, it’s to follow the Lone Star State’s lead and put the brakes on “cash-out” refinancing and home-equity lending.
How Texas Escaped the Housing Crisis [ABC News]
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