HousingPulse Distressed Property Index
The United States amount of total residential distressed home transactions climbed from 47.2% in December 2010 to 49.6% in January 2011 according to the HousingPulse Distressed Property Index or DPI. This increase was way up from the November percentage of 44.5%.
With these percentages in mind, the USA could see distressed properties accounting for over 50% of all sales within the next few months.
Arizona and Nevada combined, have a whopping combined 72% distressed home sale rate, followed by Florida with 63% and California with 66%.
Agents in California have commented that they only have about a 20% normal home sale inventory that is not distressed, meaning an REO or short sale available as of February 2011.
The US is also experienced a sharp decline in first-time home-buyer activity during the month of January as mortgage rates climbed over the 5% mark and the FHA raised their fees associated with low down payment mortgages.
There was a decline of 2.7% for first-time home buyer mortgages in the month of January 2011, with these mortgages only accounting for 35% of all new long-term mortgages.
Mortgages that are not government backed like Freddie & Fannie are however increasing as government loan options are becoming more expensive.
Many lenders are causing homes not to close at the last minute due to guideline changes or any other excuse you can almost think of. Many borrowers are experiencing closing times of up to 60 days due to these ever changing lender practices.
FHA buyers are having troubles buying homes when they enter into a multi-offer situation where some buyers are using conventional financing with larger down payments that are more favorably viewer by REO sellers.
The increase in distressed properties, combined with constricted financing and a reduction in first-time homebuyers, is causing downward pricing pressure to build in the market, especially for the categories of damaged REO and move-in ready REO.
Over the past 12 months, time on market for the REO categories has strongly increased while the average number of offers has decreased. Also over the past 12 months, average prices for damaged REO have declined by 16% while average prices for move-in ready REO have declined 20%. Non-distressed prices have declined only 4% while the prices for short sales have been nearly flat.
We can only hope that lenders will get their practices more refined and speed up their processes so that we might start seeing some type of market recovery in the near future.
No related posts.
Tags: distressed properties, Distressed Property Index, fannie mae, freddie mac, payment mortgages, real estate transactions, term mortgages
Facebook Comments: