After a strong winter in the real estate industry, the spring season continues to disappoint with sluggish market performance. Though the industry hit a record-breaking 6.0 twice earlier this year, the April Cal-Culatorlingered at a 5.7. Positive gains in underwater mortgages (home loans with a higher balance than the market value of the home) and foreclosures were offset by slow growth in existing-home sales and home prices.
One of the bright spots of the month is CoreLogic’s latest National Foreclosure Report. The report found that foreclosure rates (the 12-month sum of completed foreclosures) are back to November 2008 levels and foreclosure inventory is down 5.1 percent year-over-year.
“The inventory of homes in foreclosure and serious delinquency status are back to 2008 levels, yet remain elevated from a historic perspective,” said Dr. Mark Fleming, chief economist for CoreLogic. “While getting healthier, the housing market is still a long way from being fully recovered.”
Unfortunately, Georgia was leading the nation with the fifth-highest number of completed foreclosures during the past 12 months – 33,000.
The most recent S&P/Case-Shiller Home Price Indices showed little growth in home price gains for the majority of the 10-City and 20-City Composite, where Atlanta is included. Atlanta posted a -0.6 percent change, seasonally adjusted, month-over-month and -0.1 percent change year-over-year. David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said these “annual rates cooled the most we’ve seen in some time” and that the recovery in housing starts is “faltering.”
A report from the National Association of Realtors found that existing-home sales remained stagnant in March. Declining sales in the West and South offset gains in the Northeast and Midwest. Overall total existing-home sales slipped 0.2 percent.
“There should really be stronger levels of home sales given our population growth,” said Lawrence Yun, NAR chief economist. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
However, pending home sales increased for the first time in nine months. The Pending Home Sales Index, a “forward-looking indicator,” rose 3.4 percent nationwide and 5.6 percent in the South in March.
“After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers,” said Yun. “Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
RealtyTrac’s U.S. Home Equity & Underwater Report for the first quarter of 2014 showed that 17 percent of all properties with a mortgage were seriously underwater, where the combined loan amount of the property is at least 25 percent higher than the property’s estimated value, the lowest level since RealtyTrac began tracking negative equity in 2012. Unfortunately, Georgia has the 10th-highest number of underwater mortgages in the nation.
“U.S. homeowners are continuing to recover equity lost during the Great Recession, but the pace of that recovering equity slowed in the first quarter, corresponding to slowing home price appreciation,” said Daren Blomquist, vice president at RealtyTrac.
The May Cal-Culator will be released June 10 and will hopefully represent resurgence in the housing industry.