- Nationally, the foreclosure rate eased from 2.8% in June of 2011 to 2.7% by December with 113 of the 163 markets surveyed by NAR Research experiencing a decline in their foreclosure rate over this period.
- While the improvement was widespread, the largest aggregate declines occurred in markets where the rate had ballooned in 2009 and 2010.
- Markets in Florida and Nevada dominated the top 10 in declines, but Seattle and Spokane (Washington) also made the top 10 despite having a small overall foreclosure rate, which suggests stronger proportionate improvements and potential for robust recoveries.
- Falling foreclosure rates reflect stronger employment conditions and consumer confidence as well as record low mortgage rates which are driving additional home sales. Efforts to improve the short sale process and modification programs have also had an impact.
- To view the latest Local market Reports, click here.
- While the national 90-day delinquency rate eased from 3.65% in the 4th quarter of 2010 to 3.11% in the 4th quarter of 2011, foreclosures are likely to remain an issue both nationally and regionally over the next two years.
- In recent quarters, an emphasis on modifications and short sales has grown in an attempt to staunch the flow of delinquencies into foreclosure and onto bank balance sheets. According to data from the Office of the Comptroller of the Currency, the six-month re-default rate for loans modified in the first quarter of 2011 was 17.0% nationally.
- Surprisingly, the re-default rate was lowest in California and Arizona, Nevada, and Florida were all in the top 15 performing states. However, the bottom five was dominated by markets in the South and the Midwest. This trend may reflect the fact those states which experienced the sharpest sub-prime correction have been in the process longer.
- Consequently, many of the worst performing loans have already been through the system leaving those borrowers who were better able to keep up with their loans. These markets have also experienced substantial improvements in their economies and foreclosure rates.
- To view the latest Local market Reports, click here.
- In the wake of the housing downturn, construction of new homes fell as builders were faced with a large oversupply issue born from the flow of foreclosed homes.
- Sales of new homes have been sluggish in recent years and were forced to compete with existing homes which were often priced less than the cost of new construction.
- More recently, new home sales and permits for new construction have been on the rise. The later trend likely reflects improved confidence on the part of builders that the supply of homes has fallen and that the remaining inventory does not meet the desires of potential buyers.
- Furthermore, in this tight lending environment, builders must often pony up their own funds for construction rather than rely on loans. This dynamic makes builders particularly keen to local supply and demand dynamics at all price levels. Thus, the rise in permits in 107 of the 163 markets monitored by NAR Research is likely a reflection of improved supply and demand conditions at the most local level.
- To view the latest Local Market Reports, click here.
- Reducing unemployment is important for a housing recovery. Nationally the unemployment rates fell from 9.1% in December of 2011 to 8.3% in December of 2012 and the impact was widespread with all but 17 of the 163 markets tracked by NAR experiencing an improvement.
- However, the markets with the largest absolute reductions in their unemployment rates might surprise you. All 10 of the markets with the strongest decline in the unemployment rate were hard hit by the subprime crisis and subsequent market correction. All but two of these markets were in Florida.
- However, the unemployment rate in most of these markets remained very high as of December, so that the percentage decline in the unemployment rate over the 12-month period ending in December was small with one notable exception. The unemployment rate in Farmington, New Mexico fell 2.4 percentage points from 8.9% to 6.5%, which was a 36.9% decline, the strongest of all the markets monitored.
- Boston experienced a 25.9% decline in its unemployment rate from 6.8% to 5.4% over this same time period, the strongest improvement for a large metro area. Boston was one of the first large metro areas outside of the subprime hotspots to enter the housing recession, but with recent employment improvements, Boston could be one of the first large markets to expand.
- To view the latest Local market Reports, click here.
- The median national home price peaked at $221,900 in 2006, but fell 25.2% over the five subsequent years to $166,100 in 2011. Not every market experienced this same trend.
- Rather, the decline was overwhelmingly born by the sand states (Arizona and Nevada) as well as the high priced markets on the coasts, particularly California.
- Many markets in the Midwest were able to avoid the harsh boom and bust cycle and have accumulated a modest gain in home prices over this period.
- Markets in New York and Texas performed particularly well, accounting for half of the top twenty performing markets in the panel of 165 markets monitored by NAR Research. Relatively stable economic growth in both of those areas combined with the minimal exposure to the sub-prime crisis and relatively low construction during the national boom, set these markets up for more stable conditions during the national slump.
- To view the latest Local market Reports, click here.
- The weak economy along with high credit and downpayment requirements combined to expand the demand for rental housing. Furthermore, the recent economic downturn and housing recession created credit problems for a large number of Americans.
- This rapid expansion of demand for rental housing resulted in strong rent growth in the first 3 quarter of 2011, which is expected to increase by 3.2% and 3.5% in 2012 and 2013, respectively.
- The two markets with the lowest rental vacancy rates were both in Massachusetts; Worcester and Springfield.
- Curious about rental vacancy rates in your market? For more information, see the Local Market Reports for the 3rd quarter of 2011.
- Improvements in employment and prices have begun to reduce the flow of delinquent borrowers into the shadow inventory.
- Nearly all of the ten markets with the largest declines in their 90-day delinquency rates over the 12-month period ending in August were in California, Arizona, Nevada, or Florida, areas that experienced the worst of the housing correction.
- While the delinquency rates from August of this year are still elevated relative to the national average for most of the markets, the current rates are solid improvements relative to August of 2010.
- In addition, the 90-day delinquency rates in August of this year were below the national average in both Boise and San Diego. The markets with the two largest improvements were Riverside and Las Vegas, respectively.
- Curious about the delinquency rates in your market? For more information, see the Local Market Reports for the 3rd quarter of 2011.
- The unemployment rate has fallen over the 12-month period ending in September of 2011, in the majority of the 154 markets monitored by NAR Research.
- The largest decline occurred in Farmington, New Mexico where the unemployment rate fell from 9.1% to 6.5% for an improvement of 2.6 percentage points.
- Six of the markets with the largest declines in unemployment rates are areas that were hardest hit by the decline in the housing market and the economy; markets in Florida, Michigan, and Nevada.
- Curious about unemployment rates in your market? For more information, see the Local Market Reports for the 3rd quarter of 2011.
- Home sales plummeted in July of 2010 following the end of the Federal tax credit and remained weak through the end of that summer.
- Sales improved in the fall of 2010 and have remained steady through 2011. Consequently, sales in the 3rd quarter of 2011 have been much stronger than they were during the same period in 2010.
- North Dakota registered the strongest year-over-year gain in sales, but four other states including Utah, Nebraska, Idaho, and Iowa registered growth rates greater than 30% over this same 12-month period.
- Curious about home sales in your state? For more information, see the Local Market Reports for the 3rd quarter of 2011.
- Record low mortgage rates, steady incomes, and falling home prices combined to boost affordability in Boise, Idaho.
- The ratio of debt service (principle and interest) relative to the local median household income stood at 9.3% in the 2nd quarter of 2011, down from 9.4% in 2010 and well below the national average of 14.7%.
- Historically, the local long-term average was 13.4%.
- Curious about affordability conditions in your market? For more information, see the Local Market Reports for the 2nd quarter of 2011.
