Zillow does not expect the second downturn to be as severe or to last as long. It will merely correct some price over-valuation that went on during a five month period in mid-2009.
One reason Stan Humphries, Zillow’s Chief Economist, is still bearish on home valuation is that foreclosures remain at an all-time high. Of all U.S. home sales in the 4th quarter of 2009 20.3% were foreclosed homes. In Las Vegas, and several California cities, foreclosures were the majority of home sales in the 4th quarter.
Not all the home price news was bad, according to Zillow. In 27 of the 143 markets surveyed home prices appreciated year-over-year in the 4th quarter, and in 15 markets home prices stayed steady.
The percentage of U.S. homes with negative equity rose in the 4th quarter to 21.4%. In some communities sellers settled for 23-28% less than they paid originally for their home when the home was resold in the 4th quarter of 2009.
It will be interesting to see whether Zillow’s trend information gets rosier when it reports on the 1st quarter of 2010. If it is using the same playbook as Clear Capital, the news should get better.
Foreclosure Activity Calms Down Over the Holidays
Realtytrac’s January 2010 U.S. Foreclosure Market Report shows a 10% decline in foreclosure filings during January, after a 14% month-over-month increase reported in December. January’s foreclosure filings were still 15% ahead of the same month in 2009. One in every 409 homes in the U.S., according to Realtytrac, received a foreclosure filing in January representing 315,716 properties.
REO activity was down 5% in January, also, but still represented a 31% increase over January 2009.
Nevada’s foreclosure rate remained the highest for the 37th straight month, according to the Realtytrac report. One in 95 Nevada households received a foreclosure filing in January. One in every 129 Arizona homes received a foreclosure notice; one in 187 homes received one in California and in Florida. The fifth highest state for filings was Utah where one in every 231 homes received a foreclosure notice. Idaho, Michigan, Illinois, Oregon and Georgia rounded out the top 10 foreclosure states.
Among hot foreclosure metropolitan areas, Las Vegas registered a filing for one in every 82 households, while Phoenix registered a double-digit increase in filings to impact every 102 households.
Good News Out of Las Vegas for Short Sales
While Las Vegas leads the nation in foreclosure filings, it is also gaining ground in Short Sales. The Greater Las Vegas Association of Realtors announced that in January 21.1% of all home sales were Short Sales. This is a 2% increase over December. Rick Shelton, GLVAR president, called the Short Sale trend “promising” because it accompanied a similar decline in the sale of foreclosed homes. Still, REOs represented a hefty 57.4% of all Las Vegas home sales in January.
Home prices are reported to declining at a rate of less than 1% from the previous month in the Las Vegas market, while the number of sales is increasing.
The number of homes purchased with cash increased from 40.4% to 45.5% between December and January, an indication that Investors, second home buyers and retirees are beginning to see a good value in the Las Vegas market once again.