Foreclosures rising and prices falling in the US real estate market, latest figures show
Recent talk of a recovery in the US real estate market has been dealt a blow by the latest figures that show foreclosures still rising and prices falling.
Foreclosure filings including default notices, scheduled auctions and bank repossessions rose 7% in the first quarter of 2010 compared with the last three months of 2009, the most recent figures from RealtyTrac show.
Some 932,234 properties, or on in every 138 US housing units, received filings. During March alone, 367,056 properties received filings, 19% more than in February and 8% more than the same time last year.
Foreclosure activity followed a similar seasonal trend a year ago but there is a major difference this time which could point to a more positive outlook in coming months, according to RealtyTrac chief James Saccacio. ‘The increases are more tilted toward the final stage of foreclosure, with REOs increasing 9% on a quarterly basis in the first quarter of 2010 compared to a 13% quarterly decrease in REOs in the first quarter of 2009,’ he said.
‘This subtle shift in the numbers pushed REOs to the highest quarterly total we’ve ever seen in our report and may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programmes and processing delays slowed down the normal foreclosure timeline,’ he explained.
Foreclosure auctions reached the highest quarterly total in the history of the report and bank repossessions also reached a record high for the quarter.
Meanwhile the latest property price index from valuation firm Integrated Asset Services shows that house prices fell 0.6% in February, the seventh consecutive month of decline, keeping prices only fractionally higher than levels seen in 2004.
And credit ratings agency Fitch said that any recovery in US real estate market can only be described as anaemic at best. ‘The federal housing credit and very attractive affordability both gave the housing sector a brief jolt after bottoming out in the middle of last year. However, faltering consumer confidence has somewhat restrained the recovery so far, with numerous challenges still awaiting the sector,’ said analyst Bob Curran.
Among the challenges facing the US housing market include the termination of the Federal Reserve’s mortgage-backed securities purchase programme, the conclusion of the housing credit programme, and continued high levels of delinquency and foreclosure.
One encouraging sign, however, is that there seems to be more first time buyers. They made up a record high share of sales in March, according to the latest Campbell Surveys poll of more than 1,500 real estate agents nationwide.
Of all home purchases in the month, first time buyers accounted for 48.2%. The new monthly record eclipsed the previous peak of 46.9% last October when the expected November expiration of the original homebuyer tax credit drove up the share of first time buyers.
‘The strong participation of first time buyers this spring is a welcome surprise. Many observers had felt that the pool of first time buyers had been depleted last fall, but this is turning out not to be the case. Instead, the normal spring-summer buying season is combining with the tax credit to produce blow-out results for first time buyer,’ said Thomas Popik, research director for Campbell Surveys.