January Residential Highlights

Sale Prices

The index reveals metro areas that have shown improvement in home prices, housing permits, and employment for at least six straight months.

In the latest index, some markets that were particularly hard-hit during the housing market crash — such as Miami and Detroit — were added to this month’s list. Such cities are seeing a turnaround in their sluggish housing markets, possibly already hitting bottom.

“Despite the many challenges that continue to drag on the housing recovery — including the tight lending environment for builders and buyers — improving conditions are slowly but surely spreading from one housing market to the next,” Bob Nielsen, NAHB chairman, said in a statement.

The 29 metro areas added to the list this month are:

• Napa, Calif.
• Deltona, Fla.
• Miami, Fla.
• North Port, Fla.
• Tampa, Fla.
• Augusta, Ga.
• Shreveport, La.
• Springfield, Mass.
• Cumberland, Md.
• Lewiston, Maine
• Boston, Mass.
• Detroit, Mich.
• Duluth, Minn.
• Rochester, Minn.
• Jefferson City, Mo.
• Kansas City, Mo.
• Hattiesburg, Miss.
• Omaha, Neb.
• Ocean City, N.J.
• Syracuse, N.Y.
• Springfield, Ohio
• Youngstown, Ohio
• Portland, Ore.
• Longview, Texas
• Memphis, Tenn.
• Provo, Utah
• Salt Lake City, Utah
• Bellingham, Wash.
• Kennewick, Wash.

See all 98 metro areas on the list at www.nahb.org/imi.

Still, while there are signs of improvement, the metros on the list, for the most part, continue to have a long way to go to fully recover, said David Crowe, NAHB’s chief economist. But “this is a sign that a large cross section of the country is starting to turn the corner as local economic conditions stabilize,” Crowe said.

While nearly 30 markets were added to the February index, seven markets dropped off the list this month as home prices started to soften. The metro areas dropped from this month’s index are: San Jose, Calif.; Washington, D.C.; Kankakee, Ill.; New Orleans; Worcester, Mass.; Jackscon, Miss.; and Sherman, Texas.

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Tigard is located in Washington County. The city is located south of Beaverton and north of Tualatin, and is part of the Portland metropolitan area. Interstate 5 and 217 are the main freeways in the city, with 99W and the 210 serving as other major highways, with rail service provided by the TriMet operated Westside Express Service.

The school system in Tigard is highly regarded and therefore is attracting families from around the country. In Tigard, there are many comfortable older neighborhoods in beautiful condition, and Tigard is growing at a fast rate. Lovely new homes and new neighborhoods are springing up in rapid progression. One of the fastest growing areas is beautiful Bull Mountain offering views of the Willamette Valley and the Cascade Range.

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Tigard Real Estate

Tigard Quick Search Links

Home prices nationwide dropped nearly 5 percent from 2010 to 2011, but if you exclude distressed sales, prices dropped only by 0.9 percent, according to CoreLogic.

Foreclosures continue to hamper neighboring property values.

“Until distressed sales in the market recede, we will see continued downward pressure on prices,” Mark Fleming, chief economist of CoreLogic, told AOL Real Estate.

The states that saw home prices decline by the largest amounts since the housing peak are Nevada, Arizona, Florida, Michigan, and California. All five states have a high rate of foreclosures too. Nevada, which has the highest foreclosure rate in the country for the last several years, saw home values fall 60 percent since the peak.

Lending standards increased sharply after the financial crisis in 2008, and even after the recession ended in 2009. Lenders have yet to ease their stricter standards, according to a report by Goldman Sachs economists Hui Shan and Jari Stehn. 

Why? The researchers say it’s mostly because there’s less money available to lend. 

“During the housing boom, as brokers produced a flood of new mortgages, Wall Street bankers churned out a torrent of mortgage-backed bonds for investors waiting to snap them up,” an article at MSNBC.com notes, in describing the study’s findings. “That market has all but vanished; 90 percent of new mortgages written today are backed by the government.”

Also, researchers found that lenders are swamped with more paperwork, which is also causing delays in processing. Many lenders have issued stricter documentation requirements before they’ll approve a loan. Nowadays, nearly 90 percent of mortgage applications require “full documentation” before getting approved. From 2000 to 2006, less than 60 percent of applications required “full documentation,” researchers found. 

Source: “Tight-Fisted Mortgage Lenders Pressure Home Sales,” MSNBC.com (Jan. 27, 2012)

Editor’s Note: Another reason banks have tightened up their lending is because Fannie Mae and Freddie Mac are requiring banks to repurchase some of the loans they’ve made. As reported by Bloomberg News, banks don’t want to get hit with more mandatory repurchases, so they have added “overlays” (such as minimum downpayment, debt ratio, etc.) to FHA, Fannie, and Freddie standards, and are only making the most conservative loans.

Read More

Increased Lending, Loan Modifications Key to Recovery

Diggle’s analysis of the housing market showed a 33 percent drop in home prices, record-low mortgage rates (with 30-year fixed-rate mortgages available under 4 percent now), and a 15 percent rise in rents since the housing market turned sour are making more consumers take a closer look at buying.

“The median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check,” an article at MSNBC.com notes about Diggle’s analysis. “If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.”

Case in point: Diggle says that a buyer who purchases a median-priced home and stays there for at least seven years would likely come out ahead  by about $9,000 than if they chose to rent for those seven years. Diggle’s calculations factor in rents continuing to rise 3 percent a year, and housing prices staying flat for the next two years before rising in 2014.

But while more Americans may be motivated to buy, many still can’t, Diggle notes. Home owners who lost their home to foreclosure may be forced to wait on the sidelines before owning again, other Americans may not have a 20 percent down payment that more lenders are wanting, lack a high credit score to qualify for the best financing, or have steady employment.

Source: “Home Buying Could Soon Beat Renting,” MSNBC.com (Jan. 23, 2012)

The latest monthly data shows total existing-home salesrose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.

Affordability Conditions

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to another record low of 3.96 percent in December from 3.99 percent in November; the rate was 4.71 percent in December 2010; recordkeeping began in 1971.

NAR President Moe Veissisaid more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November.

Available inventory has trended down since setting a record of 4.04 million in July 2007, and is at the lowest level since March 2005 when there were 2.30 million homes on the market.

“The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future,” Yun said.

Who’s Buying What

Foreclosures sold for an average discount of 22 percent in December, up from 20 percent a year ago, while short sales closed 13 percent below market value compared with a 16 percent discount in December 2010.

The national median existing-home price for all housing types was $164,500 in December, which is 2.5 percent below December 2010. Distressed homes — foreclosures and short sales — accounted for 32 percent of sales in December (19 percent were foreclosures and 13 percent were short sales), up from 29 percent in November; they were 36 percent in December 2010.

All-cash sales accounted for 31 percent of purchases in December, up from 28 percent in November and 29 percent in December 2010. Investors account for the bulk of cash transactions.

Investors purchased 21 percent of homes in December, up from 19 percent in November and 20 percent in December 2010. First-time buyers fell to 31 percent of transactions in December from 35 percent in November; they were 33 percent in December 2010.

Contract failures were reported by 33 percent of NAR members in December, unchanged from November; they were 9 percent in December 2010. Although closed sales are holding up better than this finding would suggest, contract cancellations are caused largely by declined mortgage applications and failures in loan underwriting from appraised values coming in below the negotiated price.

Single-family home sales increased 4.6 percent to a seasonally adjusted annual rate of 4.11 million in December from 3.93 million in November, and are 4.3 percent higher than the 3.94 million-unit pace a year ago. The median existing single-family home price was $165,100 in December, which is 2.5 percent below December 2010.

Existing condominium and co-op sales rose 8.7 percent to a seasonally adjusted annual rate of 500,000 in December from 460,000 in November but are 2.0 percent below the 510,000-unit level in December 2010. The median existing condo price was $160,000 inDecember, down 3.0 percent from a year ago.

Around the Country

Regionally, existing-home sales in the Northeast jumped 10.7 percent to an annual pace of 620,000 in December and are 3.3 percent above a year ago. The median price in the Northeast was $231,300, which is 2.7 percent below December 2010.

Existing-home sales in the Midwest rose 8.3 percent in December to a level of 1.04 million and are 9.5 percent above December 2010. The median price in the Midwest was $129,100, down 7.9 percent from a year ago.

In the South, existing-home sales increased 2.9 percent to an annual level of 1.76 million in Decemberand are 3.5 percent above a year ago. The median price in the South was $146,900, down 1.1 percent from December 2010.

Existing-home sales in the West rose 2.6 percent to an annual pace of 1.19 million in December but are 0.8 percent below December 2010. The median price in the West was $205,200, up 0.3 percent from a year ago.

Source: NAR