According to the latest data from the Federal Reserve, Americans' net equity in their houses jumped nearly $500 billion during the last three months of 2012 and $1.7 trillion since spring 2011.
What does this mean to you personally? Depending on where your home is, it could mean that finally — after years of struggling with an underwater mortgage, one that exceeds the value of the home — you are seeing the market value of your property rise into positive equity territory, or at least closer to the break-even mark. Zillow Real Estate Research estimates that nearly 2 million U.S. homeowners exited negative equity status during 2012 alone.
It could also mean that should you wish to sell your house, you're now in a better position to do so. And if your home is
California’s median home price marked a full year of annual price gains, propelled by strong sales of higher-priced homes in February, while a lack of inventory constrained total home sales for the month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported this week.
Sales in February were down 0.9 percent from a revised 420,270 in January and down 5.9 percent from a revised 442,660 in February 2012. The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The statewide median price of an existing, single-family detached home slipped 1 percent from January’s
Some are questioning whether the current rally in the real estate market will fall victim to financial uncertainty regarding the impending debt ceiling debate and sequestration. However, many experts believe housing will be able to maintain its current momentum.
In a March 2013 report, Someone Say House Party?, analysts at Bank of America/ Merril Lynch concluded:
“We believe that the gain in home prices can persist despite subpar economic growth this year…Absent a significant weakening in the economy with negative payrolls, we think the housing recovery can continue. The combination of low inventory, high affordability and improving expectations for home prices provide powerful momentum for the housing sector.”
Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% for 2013, according to its latest global securitized credit report.
Additionally, Morgan Stanley anticipates home prices will rise roughly 5% in 2014 and 4% in 2015, respectively.
"The momentum in most metrics of housing activity is running well ahead of the pace we had expected," said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.
The Morgan Stanley Proprietary Index ($22.01 -0.28%), which provides early looks at home price behavior, was up 1.67% for January and indicated that the positive momentum will
Strong demand and tight inventory have brought existing home sales back to “normal” levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.
These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5 percent price gain this year up to 8 percent. Next year’s projection is a smaller 4 percent gain. Much of the recent demand in the housing market has been the result of investment activity. Though an uptick in sales from one investor to another indicates some investors may be leaving the market, Capital Economics is confident investor
The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optomistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:
The Home Price Expectation Survey
The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.
Tony Leocadio Prudential California Realty 714-673-7363 www.agentx2.com www.fullertonhomesearch.com
Home prices in Los Angeles and Orange County increased 12.1 percent in January, increasing for a seventh straight month from the year-earlier levels, the S&P/Case-Shiller Home Price Index shows.
The Case-Shiller index was the fourth key indicator showing that local home prices increased in January.
The other three – CoreLogic, DataQuick and the California Association of Realtors – showed Orange County prices up from 11.5 percent to 17.3 percent in January. Case-Shiller is the only one of the four that didn’t report prices for just Orange County.
January’s price gain was the largest since home prices turned around and began rising in July. Before then, local home prices had dropped in 53 of the previous 65 months.
S&P Case Shiller home prices for January released today showed a 8.1% year-over-year increase for the 20-city index, the largest monthly increase since 2006. All 20 metropolitan areas showed year-over-year increases in January, as New York turned positive after declining for the last 28 months. Phoenix posted the largest increase, surging 23.2%. Month-over-month, prices rose a seasonally-adjusted 1%, following a 0.9% increase (seasonally adjusted) in December. “Economic data continue to support the housing recovery,” David Blitzer, chairman of the S&P index committee, said in a statement. “Steady employment and low borrowing rates pushed inventories down to their lowest post-recession levels.” The 10-city composite index rose by 7.3% year-over-year. There
While still at an elevated level, foreclosure inventory is fading and has fallen for 15 straight months as of January 2013, CoreLogic reported Thursday. According to the data provider’s foreclosure inventory report, the number of homes in some stage of the foreclosure process is now down to 1.2 million as of January. Year-over-year, foreclosure inventory has fallen 21 percent from 1.5 million. Month-over-month, foreclosure inventory shrunk by 3.3 percent. At the same time, foreclosure inventory accounted for 2.3 percent of all homes with a mortgage, down from 3.5 percent in January 2012.
“The backlog of distressed assets continues to fade as the foreclosure inventory has fallen to a level not seen since mid-2009,” said Mark Fleming, chief economist for
Two years ago, Redwood Trust was the canary in the coal mine, the first investment trust to venture out with a new batch of mortgage-backed securities since the Great Collapse of 2007. More than $220 million worth of securities were put on the market at the time, and the Mill Valley firm has been making its way out of the coal mine ever since. This week, it announced plans to sell $576.4 million in residential mortgage-backed bonds. That's on top of the $1.7 billion tied to home mortgage loans it has already issued this year, twice the total sales covering 2010 and 2011, according to data compiled by Bloomberg. Yes, another sign for investors that the housing market is in serious recovery mode. At least in the sector in which Redwood specializes: jumbo home