Glen’s Numbers — December 2012
I keep expecting us to change course, but month after month, we continue to see a decrease in the number of homes that are available to buy.
Listening to agents and brokers who have been in the business for years, most are stating we’re seeing our lowest level in years if not ever. Finding the right home to buy has become a real challenge, but given the historic low interest rates being offered, it’s a real opportunity for buyers that are able to get in.
Competition for such a limited supply has brought us upward pressure on prices.
- This is the 20th consecutive decline in inventory for the East Bay (the 38 cities tracked) and we are now at 1,086 homes actively for sale. This is the lowest level since July of 2005 when I first began tracking numbers. To give you some perspective; the high point was in July 2007 at 13, 053 Active Listings.
- The month’s supply for the combined 38 city area is now at 2 weeks. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio increased to the highest level I’ve seen, 4.4. This is the 10th month in a row that the ratio has been above 2, and the first time we’ve seen a number over 4, signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining. 30% of the active listings, 63% of our pending sales (primarily due to the large number of short sales – 55%), and 38% of the sales over the last 4 months have been distressed properties.
By: Tory Barringer 01/07/2013
Consumers continued to show increased optimism toward home price, rental price, and mortgage rate expectations, a sign that home purchase activity may see a boost in the coming months.
“Combined with consumers’ growing mortgage rate and rental price increase expectations, the positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later and thus support continued housing acceleration,” said Doug Duncan, SVP and chief economist at Fannie Mae
By: Esther Cho 01/04/2013
Despite the steady increase in home prices in 2012, Fitch Ratings says it “remains cautious” in its outlook on home values.
According to a report from the ratings agency, home prices have risen “at their greatest pace since 2005,” but in certain markets, technical factors rather than “fundamentals” acted as the driving force behind the price gains over the past few quarters.
Fitch explained technical factors such as low mortgage rates, the tight supply of existing homes for sale, and weak levels of new home construction are leading to affordability and driving demand while “offsetting weak fundamentals.” Weak fundamentals include issues such as unemployment and unimpressive wage growth.
In addition, Fitch stated it believes price movement is “highly dependent on the pace of distressed sales and liquidations.”
Fitch warned “short-term price movements can be misleading when the impact of distressed properties has been withheld from the market.”
If liquidations continue at their current pace, Fitch estimated it would take 34 months to clear out the inventory of serious delinquencies, down from 44 months a year ago.
“While positive, the improvement masks those markets with disproportionately large inventories that have yet to be cleared and where double-digit price declines are projected,” the report noted.
By: Esther Cho 01/02/2013
Struggling homeowners who are considering a short sale or modification will be eligible for tax relief in 2013.
The “fiscal cliff bill” passed by Congress on January 1 included a provision to exclude borrowers from paying taxes on debt forgiven through a short sale, foreclosure, or loan modification.