Home Prices Soared to Six-year Record in September

Any improvements in home prices is a positive indicator of the overall health of the economy. The improvements are an even better indicator when this excludes distressed home sales. PrivoCorp as a processing company has seen volumes of new home sales as well as refis increase over the past few months mirroring the observations of the Niche Home report as well as the corelogic data.

As per Niche Report Home prices nationwide, including distressed sales, increased on a year-over-year basis by 5 percent in September compared to September 2011, the biggest increase since July 2006 and the seventh consecutive increase in home prices nationally on a year-over-year basis, according to CoreLogic Pending’s HPI indicates that October prices will be even stronger, rising by 5.7 percent on a year-over-year basis from October 2011 and falling by 0.5 percent on a month-over-month basis from September 2012 as sales exhibit a seasonal slowdown going into the winter.

Excluding distressed sales, October house prices are poised to rise 6.3 percent year-over-year from October 2011 and by 0.2 percent month-over-month from September 2012. The CoreLogic Pending HPI is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

On a month-over-month basis, including distressed sales, home prices fell by 0.3 percent in September compared to August*.  The HPI analysis from CoreLogic shows that all but seven states are experiencing year-over-year price gains.

Excluding distressed sales, home prices nationwide also increased on a year-over-year basis by 5 percent in September compared to September 2011. On a month-over-month basis excluding distressed sales, home prices increased 0.5 percent in September compared to August , the seventh consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

“Home price improvement nationally continues to outpace our expectations, growing five percent year-over-year in September, the best showing since July 2006,” said Mark Fleming, chief economist for CoreLogic. “While prices on a month-over-month basis are declining, as expected in the housing off-season, most states are exhibiting price increases. Gains are particularly large in former housing bubble states and energy-industry concentrated states.”

“Home prices are responding to better market fundamentals, such as reduced inventories and improved buyer demand,” said Anand Nallathambi, president and CEO of CoreLogic. “So far this year, we’re seeing clear signs of stabilization and improvement that show promise for a gradual recovery in the residential housing market.”

Highlights:

•  Including distressed sales, the five states with the highest home price appreciation were: Arizona (+18.7 percent), Idaho (+13.1 percent), Nevada (+11.0 percent), Hawaii (+8.9 percent) and Utah (+8.7 percent).
• Including distressed sales, the five states with the greatest home price depreciation were: Rhode Island (-3.5 percent), Illinois (-2.3 percent), New Jersey (-1.8 percent), Alabama (-1.3 percent) and Delaware (-0.5 percent).
• Excluding distressed sales, the five states with the highest home price appreciation were: Arizona (+14.0 percent), Idaho (+10.5 percent), Nevada (+9.5 percent), Montana (+8.5 percent) and California (+8.4 percent).
• Excluding distressed sales, this month only four states posted home price depreciation: Alabama (-3.1 percent), New Jersey (-1.6 percent), Delaware (-1.4 percent) and Rhode Island (-1.3 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to September 2012) was -27.0 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.4 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, are Nevada (-53.9 percent), Florida (-44.7 percent), Arizona (-41.7 percent), California (-37.2 percent) and Michigan (-35.0 percent).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 18 are showing year-over-year declines in September, nine fewer than in August.

*August data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Home prices rise for first time in 8 months

As per The Niche Report Home prices rose in March for the first time since last July, helped by tighter housing inventory, data analysis firm CoreLogic said on Tuesday.

CoreLogic’s home price index gained 0.6 percent from February, but was still down 0.6 percent compared with March a year ago.
Excluding sales of distressed properties, prices climbed 0.9 percent on a yearly basis. Homeowners in danger of foreclosure, or in “distress”, often sell their homes at significantly reduced prices.
“This spring, the housing market is responding to an improving balance between real estate supply and demand, which is causing stabilization in house prices”, Mark Fleming, chief economist at CoreLogic, said in a statement.
Of the top 100 statistical areas measured by population, 57 showed year-over-year declines, down from 65.
The closely watched S&P/Case Shiller index released in late April showed a rise in U.S. single-family home prices in February for the first time in 10 months, with a gain of 0.2 percent on a seasonally adjusted basis.

HVCC

Much of the current controversy around appraisals stems from the May 1 implementation of Fannie Mae’s and Freddie Mac’s new Home Valuation Code of Conduct – a set of standards pushed by the New York Attorney General’s Office as part of a settlement with the Federal Housing Finance Agency.

Critics of this new code are of the opinion that this has greatly elevated the status of Appraisal Management Companies to the detriment of the mortgage and housing markets. Experienced appraisers feel that they have been sidelined by these AMCs in favor of appraisers with little experience, but who sign up with these AMCs to perform appraisals at a low cost in return for large quantities of work. (quantity discounts).

Separately, Fannie and Freddie have moved to tighten their appraisal standards outside the framework of the HVCC and beyond industry rules by mandating a new “market conditions” addendum. According to many this will cause a disturbing rise in failed home sales where appraisals won’t support purchase prices and mortgage loan-to-value requirements.

In another post, PrivoCorp (http://www.privocorp.com)- the fastest processors of home mortgages, will articulate some of the things Congress is considering doing in this regard. We welcome all opinions in this matter.