All the Real Estate News That’s Fit to RE-Print™
Welcome to our weekly edition of Real Estate Investing News This Week. Highlights this week include:
- REO inventory is rising
- Home-price growth slows in many metros
- Builder confidence is down again
- Bank repo’s increase 4 percent
We hope these real estate news items help you stay up-to-date with your real estate investing strategies and inspire some profitable real estate deals for you.
After reaching a trough in August of 2013 of 375,000 properties, the number of real estate owned (REO) properties increased 15 percent to 430,000 as of March 2014.
The increase in REO properties was broad based, rising in 46 states.
While the increase was moderate nationally, some states had large increases. Idaho led the way with the stock of REO properties nearly doubling between August 2013 and March 2014. Maryland had the 2nd largest increase in the number of REO properties, which increased 78 percent, followed by Nevada (up 70 percent), Oregon (up 47 percent) and North Dakota (up 42 percent).
The rise in REOs across most states reflects several inter-related factors….
Cash sales made up 40.2 percent of total home sales in February 2014, down from 43.7 percent the previous year and 40.8 percent the previous month.
Cash sales share comparisons should be made on a year-over-year basis due to the seasonal nature of the housing market, and by that measurement, the trend in cash sales is clearly down.
Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. The peak occurred in January 2011, when cash transactions made up 46.2 percent of total home sales.
Real-estate owned (REO) sales made up the largest portion of cash sales in February at 58.5 percent, followed by re-sales (40.2 percent), short sales (39 percent) and newly constructed homes (17 percent).
While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 11.5 percent of total sales in February, and therefore did not have a large influence on the overall cash sales share.
Although strong year-over-year price growth continued in most metropolitan areas in the first quarter, increases were somewhat smaller, according to the latest quarterly report by the National Association of Realtors®.
The median existing single-family home price increased in 74% of measured markets, with 125 out of 170 metropolitan statistical areas showing gains based on closings in the first quarter compared with the first quarter of 2013.
Thirty-seven areas, 22%, had double-digit increases, and 45 areas recorded lower median prices.
In the fourth quarter of 2013, price increases were recorded in 73% of metro areas from a year earlier, with 26% rising at double-digit rates, but 89% of markets were showing year-over-year gains in the first quarter of 2013.
Builder confidence in the market for newly built, single-family homes in May fell one point to 45 from an April reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index.
Anything above 50 is considered positive sentiment.
“After four months in which the HMI has shown little signs of fluctuation, it is clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.
On Tuesday, RealtyTrac® released its U.S. Foreclosure Market Report™ for April 2014, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions— were reported on 115,830 U.S. properties in April, a 1 percent decrease from the previous month and down 20 percent from April 2013.
Despite the decrease in overall foreclosure activity, bank repossessions in April increased 4 percent from the previous month, although they were still down 14 percent from a year ago.
Bank repossessions increased from the previous month in 26 states and were up from a year ago in 16 states.