Pending Home Sales Increase Nearly 7 Percent
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.
Lawrence Yun, NAR chief economist, says buyers are responding to very favorable market conditions.
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he says. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
Geographical Breakdown
Northeast: The Pending Home Sales Index shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago.
Midwest: The index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008.
South: The index slipped 0.2 percent to 93 in April but is 3.5 percent higher than a year ago.
West: The index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.
NAR President Charles McMillan says there are numerous buyer assistance programs around the country.
“Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” McMillan says.
Last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment.
Affordable Housing
NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, which makes it the second-highest monthly reading on record after peaking at 176.9 in January of this year.
The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.
A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest.
Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.
Pending vs. Existing Sales
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability.
“In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he says. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun says.
Existing-home sales for May will be released June 23. The next Pending Home Sales Index will be on July 1.
Source: NAR (06/02/09)
Friday, June 5, 2009
Buyers: Bring on the Open Houses
Buyers: Bring on the Open Houses
More than 90 percent of potential home buyers plan to attend open houses as they look for a home to buy, according to a survey conducted for Trulia.com.
Here’s how they find out about properties open to view:
62 percent use online sites to find open houses.
53 percent use information provided to them by real estate professionals.
36 percent use neighborhood signs.
31 percent use information in the newspaper or other printed source
“We used to see home buyers walk into open houses with a newspaper in their hands,” says Aman Daro, vice president of Integrated Marketing at McGuire Real Estate in San Francisco. “Now they walk in with printouts of their search on the Web.”
Source: Trulia.com (05/28/2009)
More than 90 percent of potential home buyers plan to attend open houses as they look for a home to buy, according to a survey conducted for Trulia.com.
Here’s how they find out about properties open to view:
62 percent use online sites to find open houses.
53 percent use information provided to them by real estate professionals.
36 percent use neighborhood signs.
31 percent use information in the newspaper or other printed source
“We used to see home buyers walk into open houses with a newspaper in their hands,” says Aman Daro, vice president of Integrated Marketing at McGuire Real Estate in San Francisco. “Now they walk in with printouts of their search on the Web.”
Source: Trulia.com (05/28/2009)
Mortgage Rates Hit 25-Week High
Mortgage Rates Hit 25-Week High
Mortgage rates across the board jumped this week, with conventional mortgages reaching their highest point so far this year.
Freddie Mac reports a jump in the 30-year fixed mortgage rate to a 25-week high of 5.29 percent during the week ended June 4, up from 4.91 percent the prior week. As recently as two months ago, rates had been 4.78 percent.
The 15-year fixed rate also increased, rising to 4.79 percent from 4.53 percent, with Freddie Mac chief economist Frank Nothaft indicating that the gains follow a surge in long-term bond yields.
Meanwhile, the five-year adjustable mortgage rate climbed to 4.85 percent from 4.82 percent, and the one-year ARM surged to 4.81 percent from 4.69 percent.
Source: Chicago Sun-Times, Francine Knowles (06/05/09)
Mortgage rates across the board jumped this week, with conventional mortgages reaching their highest point so far this year.
Freddie Mac reports a jump in the 30-year fixed mortgage rate to a 25-week high of 5.29 percent during the week ended June 4, up from 4.91 percent the prior week. As recently as two months ago, rates had been 4.78 percent.
The 15-year fixed rate also increased, rising to 4.79 percent from 4.53 percent, with Freddie Mac chief economist Frank Nothaft indicating that the gains follow a surge in long-term bond yields.
Meanwhile, the five-year adjustable mortgage rate climbed to 4.85 percent from 4.82 percent, and the one-year ARM surged to 4.81 percent from 4.69 percent.
Source: Chicago Sun-Times, Francine Knowles (06/05/09)
NAR: Retain Public Link to Secondary Market
NAR: Retain Public Link to Secondary Market
A secondary mortgage market model that includes some level of government participation is necessary to ensure affordable and available home mortgages. That is the message the NATIONAL ASSOCIATION OF REALTORS® delivered during a House Financial Services Subcommittee hearing today.
“Fannie Mae and Freddie Mac serve an important role in expanding homeownership and providing a solid foundation for our nation’s housing financial system,” said Frances Martinez Myers, who spoke on behalf of NAR. “Unlike private secondary market investors, Fannie and Freddie remain active in housing markets during downturns, using their federal ties to facilitate mortgage finance and support homeownership opportunities for all qualified borrowers.”
By providing capital for mortgage finance during disruptive and down markets, these government-sponsored enterprises are vital to the success of the nation’s housing system.
“As the market turmoil reached its peak in late 2008, it became apparent that the role of the GSEs, even in conservatorship, was of utmost importance to the viability of the housing market, as private mortgage capital effectively fled the marketplace,” Martinez Myers said.
Fannie Mae and Freddie Mac help ensure that home buyers have access to fair and affordable mortgages, which in turn stimulates real estate transactions and supports the larger economy. “If no government-backed entity had existed as private mortgage capital dried up, the housing market would have come to a complete halt and thrown our nation into a deeper recession, or even a depression,” said Martinez Myers.
Principles to Foster Homeownership
A thriving U.S. housing market and economy will require a secondary mortgage market with safe, sound and dependable participants. NAR shared with Congress a set of principles for ensuring a robust financing environment for homeownership.
These principles include facilitating the flow of capital into the mortgage market, in all conditions; requiring institutions to pass on the advantage of lower borrowing costs to qualified borrowers; mandating sound underwriting standards; and providing rigorous oversight to protect taxpayers.
“We believe that the principles we have set forth today will help Congress and our housing partners design a secondary mortgage model that will be in all of our best interests, now and in the future. We look forward to working with Congress and the Obama administration in ensuring a strong housing market and a full economic recovery,” Martinez Myers said.
Source: NAR
A secondary mortgage market model that includes some level of government participation is necessary to ensure affordable and available home mortgages. That is the message the NATIONAL ASSOCIATION OF REALTORS® delivered during a House Financial Services Subcommittee hearing today.
“Fannie Mae and Freddie Mac serve an important role in expanding homeownership and providing a solid foundation for our nation’s housing financial system,” said Frances Martinez Myers, who spoke on behalf of NAR. “Unlike private secondary market investors, Fannie and Freddie remain active in housing markets during downturns, using their federal ties to facilitate mortgage finance and support homeownership opportunities for all qualified borrowers.”
By providing capital for mortgage finance during disruptive and down markets, these government-sponsored enterprises are vital to the success of the nation’s housing system.
“As the market turmoil reached its peak in late 2008, it became apparent that the role of the GSEs, even in conservatorship, was of utmost importance to the viability of the housing market, as private mortgage capital effectively fled the marketplace,” Martinez Myers said.
Fannie Mae and Freddie Mac help ensure that home buyers have access to fair and affordable mortgages, which in turn stimulates real estate transactions and supports the larger economy. “If no government-backed entity had existed as private mortgage capital dried up, the housing market would have come to a complete halt and thrown our nation into a deeper recession, or even a depression,” said Martinez Myers.
Principles to Foster Homeownership
A thriving U.S. housing market and economy will require a secondary mortgage market with safe, sound and dependable participants. NAR shared with Congress a set of principles for ensuring a robust financing environment for homeownership.
These principles include facilitating the flow of capital into the mortgage market, in all conditions; requiring institutions to pass on the advantage of lower borrowing costs to qualified borrowers; mandating sound underwriting standards; and providing rigorous oversight to protect taxpayers.
“We believe that the principles we have set forth today will help Congress and our housing partners design a secondary mortgage model that will be in all of our best interests, now and in the future. We look forward to working with Congress and the Obama administration in ensuring a strong housing market and a full economic recovery,” Martinez Myers said.
Source: NAR
Low-Ball Appraisals Cause Problems
Low-Ball Appraisals Cause Problems
Real estate practitioners in Nevada, one of the areas hit hardest by foreclosures, say low-ball appraisals are slowing sales and preventing recovery.
Mark Stark, CEO of Prudential Americana Group in Las Vegas, says he thinks appraisers are too focused on projecting how much prices could fall rather than reflecting what values really are.
“The appraisers are being very conservative,” Stark says. “They are trying to cover themselves.”
Mark Madsen, communications director for Raintree Mortgage Services, says appraisers are just doing what they’ve been told. “I think appraisers are scared to get blacklisted,” he explains. “If the appraisals are too high, then banks may no longer accept appraisals from that person.”
Source: Brian Wargo, Las Vegas Sun (06/05/09)
Real estate practitioners in Nevada, one of the areas hit hardest by foreclosures, say low-ball appraisals are slowing sales and preventing recovery.
Mark Stark, CEO of Prudential Americana Group in Las Vegas, says he thinks appraisers are too focused on projecting how much prices could fall rather than reflecting what values really are.
“The appraisers are being very conservative,” Stark says. “They are trying to cover themselves.”
Mark Madsen, communications director for Raintree Mortgage Services, says appraisers are just doing what they’ve been told. “I think appraisers are scared to get blacklisted,” he explains. “If the appraisals are too high, then banks may no longer accept appraisals from that person.”
Source: Brian Wargo, Las Vegas Sun (06/05/09)
The Two Latest Signs Housing Is Recovering
The Two Latest Signs Housing Is Recovering
Here’s more evidence that the housing market is recovering.
Two major home builders, Toll Brothers Inc. and Hovnanian Enterprises Inc., say their losses were shrinking compared to last year because buyers are coming back to the market.
Other encouraging news came from HIS Global Insight, a research firm, which said home prices fell on average at an annual rate of 2.2 percent in the first quarter in 199 of 330 metropolitan areas. That compares with a 12.5 percent decline in the fourth quarter of 2008 in 312 metropolitan areas.
"While it's too early to see a bottom of this housing downturn," the report said, the latest data "may signal that the market is beginning to stabilize."
Source: The Wall Street Journal, James R. Hagerty and John Spence (06/04/2009)
Here’s more evidence that the housing market is recovering.
Two major home builders, Toll Brothers Inc. and Hovnanian Enterprises Inc., say their losses were shrinking compared to last year because buyers are coming back to the market.
Other encouraging news came from HIS Global Insight, a research firm, which said home prices fell on average at an annual rate of 2.2 percent in the first quarter in 199 of 330 metropolitan areas. That compares with a 12.5 percent decline in the fourth quarter of 2008 in 312 metropolitan areas.
"While it's too early to see a bottom of this housing downturn," the report said, the latest data "may signal that the market is beginning to stabilize."
Source: The Wall Street Journal, James R. Hagerty and John Spence (06/04/2009)
Wednesday, June 3, 2009
Monday, June 1, 2009
Now is the time to buy
Now is an ideal time to buy, in most markets prices won’t go any lower
and there is an abundance of inventory. Inventory of homes for
sale is at a 15-year high. There are many options out there for
many buyers and many sellers who are willing to negotiate and work
towards a win-win situation that works for both parties.
Go to www.REALTOR.com to see over 4 million active listings.
The Market is Getting Stronger and
Every Market is Different
Remember that all real estate is local and that all markets are
different. There are opportunities out there for a buyer if you’re
willing to look. The Homebuyer Tax Credit contained in the Housing
and Economic Recovery Act of 2008 was updated in the American
Recovery and Reinvestment Act of 2009. For 2009 purchasers
the credit is $8000 and does not need to be repaid. The credit is
available through December 1, 2009, meaning qualified buyers
only have a short window of opportunity to take advantage of this
special program.
A modest recovery for existing-home sales is expected
in 2009. Pent-up demand, coupled with an abundance of safer
mortgage products, will lead to near-term market improvements.
The Emergency Economic Stability Act enacted on October 3, 2008
will help to improve credit markets and allow housing to lead the
economic recovery.
FHA Loans Set to Increase
There are many choices for buyers looking for mortgages in this
market. One option, FHA home loans, are a viable alternative for
many first time buyers. The Federal Housing Administration (FHA)
— which is part of HUD — insures the loan, so your lender can
offer you a better deal, offering low down payments, low closing
costs, and easy credit qualifying. FHA market share for home
purchases is expected to rise significantly over the next 3 years, from
an estimated 4% in 2007 to an estimated 35% in 2009.
Find out about FHA and other loans, go to www.Hud.gov/buying/loans
and www.REALTOR.org and do a search for Consumer Literacy.
Benefits of Ownership
Owning a home is the American dream. It not only provides amazing
tax benefits but it also provides shelter and security to families. Did
you know that:
— Dollar for dollar, the rate of return on an individual’s cash
down payment on a house is substantial? And that repeat
buyers are able to put 19% more down on a new home due
to appreciation?
— Home owners move less often and are more likely to vote
and volunteer time for political and charitable causes than
renters?
— When you own a home you can deduct the property taxes and
mortgage interest from your income taxes?
— The gains that you make on a primary residence that you’ve
occupied for two years out of 5 can be tax free?
Housing Market Facts
NAR has created a new website www.HousingMarketFacts.com to
help consumers find out the latest information about the housing
market and the issues that affect you, information specifically for
buyers, how to do more research, and learn more about the benefits
of home ownership.
Mortgages are at Historically Low Rates
For buyers who qualify, mortgage rates are near historical
lows. Rates are well under 6%. According to data provided by
Freddie Mac, rates averaged 9.2% in the past 30 years.
Go to www.FreddieMac.com and look at the Primary Mortgage
Market Survey® for more information on the latest rates. In addition,
low interest rates, coupled with recent corrections, give people
looking to upgrade a unique opportunity to take advantage of
market conditions.
The Value of Your Investment
Despite some contrary media reports and some moderate losses in
value in the short-term, home values long-term have and
will continue to rise. Real estate is a long-term investment.
Home values could fall in some years, though, on average over the
past 30 years, the median price of existing homes has increased
more than 6 percent every year. Thanks to the power of leverage,
a homeowner’s return on investment is even more impressive over
time. Visit www.HousingMarketFacts.com to learn more.
and there is an abundance of inventory. Inventory of homes for
sale is at a 15-year high. There are many options out there for
many buyers and many sellers who are willing to negotiate and work
towards a win-win situation that works for both parties.
Go to www.REALTOR.com to see over 4 million active listings.
The Market is Getting Stronger and
Every Market is Different
Remember that all real estate is local and that all markets are
different. There are opportunities out there for a buyer if you’re
willing to look. The Homebuyer Tax Credit contained in the Housing
and Economic Recovery Act of 2008 was updated in the American
Recovery and Reinvestment Act of 2009. For 2009 purchasers
the credit is $8000 and does not need to be repaid. The credit is
available through December 1, 2009, meaning qualified buyers
only have a short window of opportunity to take advantage of this
special program.
A modest recovery for existing-home sales is expected
in 2009. Pent-up demand, coupled with an abundance of safer
mortgage products, will lead to near-term market improvements.
The Emergency Economic Stability Act enacted on October 3, 2008
will help to improve credit markets and allow housing to lead the
economic recovery.
FHA Loans Set to Increase
There are many choices for buyers looking for mortgages in this
market. One option, FHA home loans, are a viable alternative for
many first time buyers. The Federal Housing Administration (FHA)
— which is part of HUD — insures the loan, so your lender can
offer you a better deal, offering low down payments, low closing
costs, and easy credit qualifying. FHA market share for home
purchases is expected to rise significantly over the next 3 years, from
an estimated 4% in 2007 to an estimated 35% in 2009.
Find out about FHA and other loans, go to www.Hud.gov/buying/loans
and www.REALTOR.org and do a search for Consumer Literacy.
Benefits of Ownership
Owning a home is the American dream. It not only provides amazing
tax benefits but it also provides shelter and security to families. Did
you know that:
— Dollar for dollar, the rate of return on an individual’s cash
down payment on a house is substantial? And that repeat
buyers are able to put 19% more down on a new home due
to appreciation?
— Home owners move less often and are more likely to vote
and volunteer time for political and charitable causes than
renters?
— When you own a home you can deduct the property taxes and
mortgage interest from your income taxes?
— The gains that you make on a primary residence that you’ve
occupied for two years out of 5 can be tax free?
Housing Market Facts
NAR has created a new website www.HousingMarketFacts.com
help consumers find out the latest information about the housing
market and the issues that affect you, information specifically for
buyers, how to do more research, and learn more about the benefits
of home ownership.
Mortgages are at Historically Low Rates
For buyers who qualify, mortgage rates are near historical
lows. Rates are well under 6%. According to data provided by
Freddie Mac, rates averaged 9.2% in the past 30 years.
Go to www.FreddieMac.com and look at the Primary Mortgage
Market Survey® for more information on the latest rates. In addition,
low interest rates, coupled with recent corrections, give people
looking to upgrade a unique opportunity to take advantage of
market conditions.
The Value of Your Investment
Despite some contrary media reports and some moderate losses in
value in the short-term, home values long-term have and
will continue to rise. Real estate is a long-term investment.
Home values could fall in some years, though, on average over the
past 30 years, the median price of existing homes has increased
more than 6 percent every year. Thanks to the power of leverage,
a homeowner’s return on investment is even more impressive over
time. Visit www.HousingMarketFacts.com
Homebuyers Tax Credit Buy a home and you get a tax break!
As part of the Housing and Economic
Recovery Act of 2008 and the American
Recovery and Reinvestment Act of 2009,
a First-time Homebuyer Tax Credit is now
available. But this special
tax break ends in 2009.
A homebuyer tax credit has been
available for first-time homebuyers in
Washington, D.C. for many years, and
now first-time homebuyers nationwide
can take advantage of a similar benefit.
In this brochure we’ll discuss some of the
provisions of the credit, changes based
on the new legislation, and explain how
to use it.
Buying a first home is a big step.
Fortunately, trained professionals like
your Realtor® are willing and able to help
you through the process. In addition to
the many benefits of homeownership,
the homebuyer tax credit and more
affordable prices make now an especially
opportune time to purchase. Still, the
commitment is a substantial one, and the
National Asociation of Realtors®
encourages you to ask questions and
be informed about the decision you are
making so that the home you buy is a
home you can enjoy for years to come.
Recovery Act of 2008 and the American
Recovery and Reinvestment Act of 2009,
a First-time Homebuyer Tax Credit is now
available. But this special
tax break ends in 2009.
A homebuyer tax credit has been
available for first-time homebuyers in
Washington, D.C. for many years, and
now first-time homebuyers nationwide
can take advantage of a similar benefit.
In this brochure we’ll discuss some of the
provisions of the credit, changes based
on the new legislation, and explain how
to use it.
Buying a first home is a big step.
Fortunately, trained professionals like
your Realtor® are willing and able to help
you through the process. In addition to
the many benefits of homeownership,
the homebuyer tax credit and more
affordable prices make now an especially
opportune time to purchase. Still, the
commitment is a substantial one, and the
National Asociation of Realtors®
encourages you to ask questions and
be informed about the decision you are
making so that the home you buy is a
home you can enjoy for years to come.
There’s never been a better time to buy a home.
There’s never been a better time to buy a home. Really.
That’s because, thanks to the efforts of the NATIONAL ASSOCIATION OF REALTORS®, Congress is now offering a new $8,000 tax credit to help first-time homebuyers, like yourself, purchase a home.
If you qualify and buy a principal
residence before December 1,
2009, then you’re eligible for
the credit—allowing you to
deduct 10% of the purchase
price of your home up to
$8,000 when you file your
taxes. Visit
www.HousingMarketFacts.com
for more information.
So, why wait? Please contact me for more information about this can’t-miss opportunity.
That’s because, thanks to the efforts of the NATIONAL ASSOCIATION OF REALTORS®, Congress is now offering a new $8,000 tax credit to help first-time homebuyers, like yourself, purchase a home.
If you qualify and buy a principal
residence before December 1,
2009, then you’re eligible for
the credit—allowing you to
deduct 10% of the purchase
price of your home up to
$8,000 when you file your
taxes. Visit
www.HousingMarketFacts.com
for more information.
So, why wait? Please contact me for more information about this can’t-miss opportunity.
Homes: Almost 20% cheaper
Homes: Almost 20% cheaper
NEW YORK (CNNMoney.com) -- The home price slide accelerated during the first three months of 2009, according to a report issued Tuesday.
The S&P/Case-Shiller National Home Price index, a bellwether of real-estate market direction, plunged a record 19.1% during the quarter compared with the first three months of 2008. That followed an 18.2% drop last quarter.
The Case-Shiller 20-city index dropped 18.7% year-over-year, also a record. It fell 18.5% during the last three months of 2008. This index has plummeted 32.2% from its July 2006 peak and has fallen 32 straight months.
The national index covers almost all homes sold throughout the United States and is reported quarterly, while the 20-city index reports sales in 20 major metro areas and represents a cross section of the national market. The 20-city index comes out every month.
"Declines in residential real estate continued at a steady pace into March," said David Blitzer, chairman of the Index Committee at Standard & Poor's in a prepared statement. "All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines."
The ugly report was somewhat unexpected, according to Mike Larson, a real estate analyst for Weiss Research.
"The market was anticipating better results," he said. "There had been some signs of increased sales in post-bubble markets."
Home prices at AOL.com
But that sales increase has not translated into higher prices. Bargain hunting - bottom fishing really - for foreclosures and other distressed properties has driven sales volume up while further depressing prices.
The foreclosure sales, which many appraisers used to ignore when they evaluated home prices because they represented outliers rather than typical sales, now have to be accounted for.
"These used to be anomalies," said Larson. "Now, when sales are dominated by foreclosures, where they represent 50% or more of [transactions], they are the market."
The market plague has burst far beyond its Sun Belt epicenter, as the latest month's data reveals. In March, Minneapolis recorded the largest monthly price loss of any metro area in the 20-city index, losing 6.1% compared with February. That is the biggest single-month decline for a city in index history.
Sun-Belt cities still had the largest year-over-year declines in March, with Phoenix prices down 36%, Las Vegas off 31.2% and San Francisco dropping 30.1%.
Two cities have now have fallen more than 50% from their peak prices: Phoenix is down 53% since June 2006 and Las Vegas is off 50.4% from its August 2006 high. Dallas prices suffered the smallest loss from peak, just 11.1% since June 2007.
Economist Mark Zandi, the founder of Moody's Economy.com, is optimistic that the market will stop falling sometime this summer or fall. "We need to focus on the mortgage-modification program," he said. "If that plan doesn't work or only works as well as the other modification programs have, we've got a problem."
Source: By Les Christie, CNNMoney.com
NEW YORK (CNNMoney.com) -- The home price slide accelerated during the first three months of 2009, according to a report issued Tuesday.
The S&P/Case-Shiller National Home Price index, a bellwether of real-estate market direction, plunged a record 19.1% during the quarter compared with the first three months of 2008. That followed an 18.2% drop last quarter.
The Case-Shiller 20-city index dropped 18.7% year-over-year, also a record. It fell 18.5% during the last three months of 2008. This index has plummeted 32.2% from its July 2006 peak and has fallen 32 straight months.
The national index covers almost all homes sold throughout the United States and is reported quarterly, while the 20-city index reports sales in 20 major metro areas and represents a cross section of the national market. The 20-city index comes out every month.
"Declines in residential real estate continued at a steady pace into March," said David Blitzer, chairman of the Index Committee at Standard & Poor's in a prepared statement. "All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines."
The ugly report was somewhat unexpected, according to Mike Larson, a real estate analyst for Weiss Research.
"The market was anticipating better results," he said. "There had been some signs of increased sales in post-bubble markets."
Home prices at AOL.com
But that sales increase has not translated into higher prices. Bargain hunting - bottom fishing really - for foreclosures and other distressed properties has driven sales volume up while further depressing prices.
The foreclosure sales, which many appraisers used to ignore when they evaluated home prices because they represented outliers rather than typical sales, now have to be accounted for.
"These used to be anomalies," said Larson. "Now, when sales are dominated by foreclosures, where they represent 50% or more of [transactions], they are the market."
The market plague has burst far beyond its Sun Belt epicenter, as the latest month's data reveals. In March, Minneapolis recorded the largest monthly price loss of any metro area in the 20-city index, losing 6.1% compared with February. That is the biggest single-month decline for a city in index history.
Sun-Belt cities still had the largest year-over-year declines in March, with Phoenix prices down 36%, Las Vegas off 31.2% and San Francisco dropping 30.1%.
Two cities have now have fallen more than 50% from their peak prices: Phoenix is down 53% since June 2006 and Las Vegas is off 50.4% from its August 2006 high. Dallas prices suffered the smallest loss from peak, just 11.1% since June 2007.
Economist Mark Zandi, the founder of Moody's Economy.com, is optimistic that the market will stop falling sometime this summer or fall. "We need to focus on the mortgage-modification program," he said. "If that plan doesn't work or only works as well as the other modification programs have, we've got a problem."
Source: By Les Christie, CNNMoney.com
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