Real Estate Investing News This Week 2014-06-07

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:

  • Home prices rise 10.5% year over year
  • More than 300,000 homes returned to positive equity
  • Commentary: “Something’s Missing in the Housing Recovery”

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.

CoreLogic: Home Prices Rise by 10.5% Year Over Year

home prices on the riseHome prices nationwide, including distressed sales, increased 10.5 percent in April 2014 compared to April 2013. This change represents 26 months of consecutive year-over-year increases in home prices nationally.
Excluding distressed sales, home prices nationally increased 8.3 percent in April 2014 compared to April 2013. Distressed sales include short sales and real estate owned (REO) transactions.
“The weakness in home sales that began a few months ago is clearly signaling a slowdown in price appreciation,” said Sam Khater, deputy chief economist for CoreLogic. “The 10.5 percent increase in April, compared to a year earlier, was the slowest rate of appreciation in 14 months.”
 

312,000 Residential Properties Regained Equity in Q1 2014

Negative Equity Share Has Dropped from 9.8M to 6.3M Properties

More than 300,000 homes returned to positive equity in the first quarter of 2014, bringing the total number of mortgaged residential properties with equity to more than 43 million.
The CoreLogic analysis indicates that approximately 12.7 percent of all residential properties with a mortgage, were still in negative equity as of Q1 2014 compared to 13.4 percent for Q4 2013.
As a year-over-year comparison, the negative equity share was 20.2 percent, or 9.8 million homes, in Q1 2013.
 

Something’s Missing in the Housing Recovery

From David Blitzer, Chairman of the Index Committee, S&P Dow Jones Indices
The most popular comments about the housing recovery are that it’s weak and that’s why the GDP growth is so slow.  There is some truth to both of these — the problem is new single family homes.
Looking across housing, one sees surprisingly strong construction of apartments, progress in working through the backlog of foreclosures as banks sell real estate they don’t want to own and increasing sales of existing homes.  Prices of existing single family homes, helped by low mortgage rates and improved consumer confidence rose 12.5% in the year ending in March.
All this is positive, but without growth in new single family homes, GDP growth lags.
New construction, not sales of existing homes, is what generates jobs and adds to GDP growth.  In most recoveries, the share of single family homes in housing starts surges. This time, there was an initial surge followed by a sharp drop.  While apartment construction is up, it has not made up the difference in housing starts which continue at about two-thirds the level we should be seeing.
single-family starts