Market Trends and Condition

Foreclosures are still moving along in every state. Some states are getting ahead of the curve, with foreclosure activity down in the first quarter of this year and new delinquencies down as well. One activity that’s contributing to this trend is the new attitude by banks as regards short sales.

From 2007 into the last quarter of 2011, short sales worked for fewer than 25% of buyers of all types. Many investors avoided them, as banks took months to respond to offers, made repeated demands for the same paperwork, and generally just seemed like they had no desire at all to sell short, preferring to go on to foreclosure.

In multiple articles around the Web, it’s being reported that recent numbers indicate a significant drop in foreclosures and homeowners dropping behind in their mortgage payments.

- Foreclosure filings in April fell for the third straight month to the lowest level since 2007.

- Bank repossessions, at 51,415 in April, were down 26% from a year ago and about half what they were in September 2010.

- In Arizona and Nevada, hard-hit states, bank repossessions were down roughly 70%, and in California they were down more than 50%.

- In the first quarter of this year, the percentage of borrowers who have dropped behind on their mortgage payments fell to a four year low.

- The percentage of loans delinquent fell to 11.33% in the first quarter, the lowest level since 2008.

This is another article from the New York Times this week, and it’s about commercial property appraisals. However, many of the problems discussed are also common to residential appraisal procedures around the country. Generally, studies are showing that there are wide variations in appraisals, but in the majority of cases properties are being over-valued.

In an article titled The Investor Next Door, the New York Times discusses a new real estate investment trend. It’s condo owners buying other units where they live as rental properties. It’s approached from the perspective of the investor already living in a condo and buying others in their complex. However, it could be considered an interesting strategy for investors who are currently renting or are considering selling a home and moving.

An article at seekingalpha.com, an investing site, this week is titled “Private REITs Backfire on Investors Again.” A REIT is a Real Estate Investment Trust. Investors buy shares and the REIT invests in properties in one type of REIT. Another type invests only in mortgages, not owning the properties involved. There are publicly traded and private REITS, and the principal draw for investors is a nice dividend and possible appreciation in value as well.

The National Association of Realtors®, NAR, publishes a monthly Pending Home Sales Index that tracks contracts to purchase existing homes. The April index report is out, and it shows a solid uptick in sales contracts in March. Contracts signed in March jumped by 4.1percent to 101.4 for the index. This is the highest level since April of 2010.

This articles shows the stupidity of the Federal Housing Finance Agency and how it screwed homeowners by the thousands. The best part: No one will lose their job over this. Isn't that the kind of job we all need.....to cost your employer millions of dollars and not be worried. Read the whole story here:

http://economywatch.msnbc.msn.com/_news/2012/05/01/11476793-agency-ignor...

The following is very revealing about the trends in the residential housing industry. The author is a noted journalist in news...Justin Hilley

"Pending home sales increased in March and are well above a year ago, according to the National Association of Realtors.
NAR’s pending home sales index, a forward-looking indicator based on contract signings, rose 4.1% to 101.4 in March from an upwardly revised 97.4 in February. It is 12.8% above March 2011 when it was 89.9. The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3.

For those of you in the Silicon Valley area! http://tech.fortune.cnn.com/2012/04/30/fb/?=&iid=HP_LN

Of course, we already knew this was going to happen. Read the whole story here:

http://economywatch.msnbc.msn.com/_news/2012/04/26/11413890-home-ownersh...