Health check on housing
Housing has been giving off mixed signals lately, have you noticed? There is great news in the form of pricing, and even recovering sales, but foreclosures continue to be the ankle weight of the market. Could the optimists that believe a housing recovery is here be right? While AGBeat remains skeptical, even the Wall Street Journal and CNN are calling it a comeback.
Today, analytics and business services company, CoreLogic, released its July CoreLogic MarketPulse report, noting that home prices are up in many markets as high negative equity shares keep many sellers off of the market, and adds that demand for distressed properties remains high.
The report also notes that the lower end of the home price tier is rebounding at more than three times the rate of the upper end of pricing, driven by distressed sales.
Additionally, the Home Price Index (HPI), including distressed sales, posted the largest year-over-year spring price gain in the last 25 years, which is welcome news for underwater borrowers who need any help they can get in closing the gap between what they owe and what their home is now worth.
Can home prices continue to recover?
CoreLogic estimates show that refinancing accounted for 70 percent of the total mortgage originations market over the past 12 months, slightly lower than the percentage reported by the Mortgage Bankers Association.
CoreLogic Senior Economist Sam Khater asks in the report, “can home prices continue to recover even if the overall economy does not? The short answer is no, because prices are highly correlated to median incomes, which have not increased on an inflation adjusted basis since 1996.”
Khater continued, “Recently, the Federal Reserve reached back into its play book and announced a continuation of its maturity extension program (commonly known as “Operation Twist”) designed to lower long term interest rates to spur economic growth. The move was expected and did not substantially impact the financial markets. However, the large overhang of household debt prevents many households from taking advantage of the lower rate environment. As a result it’s becoming clear that ‘Groundhog Day’ monetary policy is only helping those who need it least.”
So….you may be asking well, How’s Austin’s market doing. Well heatly would be an understatment. The market in Austin is RED HOT, and doesn’t seems to showing signs of a slow down anytime soon. Inventory of available homes for sale is still below a seasonal average of just over 7,800 units. We normally see about 10 to 11 thousand homes for sale this time of year. Here are the latest stats from June 2012.