Dreams come true for property owners, and nightmare for those who do not own any home in Canada yet .Why ?Because housing supply across the border is very tight, demand exceeds supply, prices are the rise (as much as 15% is anticipated) … this will give realtors, speculators, or otherwise crooks a very, very big excuse to continue to jack up the price (and hence, continue to inflate the already more than gigantic bubble).
Home Prices Rise 15% As Inventory Growth Lags
The housing recovery continues to hum along, cranking out ever increasing home prices, even as inventories grow.
Unfortunately, inventories aren’t growing fast enough to stem the tide of rising home prices and decreasing affordability.
Still, there’s some hope for a buyer’s market before the year is out, according to online brokerage Movoto.com’s State of the Real Estate Market July 2013 report, which covers the June 2012 to June 2013 period.
Across 38 cities Movoto tracks, the list price per square foot increased by an average 15 percent, rising from $158 in June 2012 to $181 by June 2013.
The list price per square foot increased for 36 of the 38 cities Movoto tracks.
The per-square foot price increased from $179 in May to $181 in June, even as inventories rose, just not fast enough, Movoto reported.
During the same month-to-month period, inventories were up for the second month in a row, but only by 3,574 properties across Movoto’s 38-city database – a drop in the bucket.
On a year-over-year basis, 32 of the 38 cities Movoto tracks continued to see a drop in total inventory. Overall, the total inventory dropped by 20.5 percent over the past year, decreasing the supply by more than 24,000 homes.
However, Movoto says, if the month-to-month trend of rising inventory holds, prices could begin to level off or even fall over the next several months.
That would be surprising, but it would help counteract rising costs associated with higher mortgage interest rates.
Mortgage interest rates have risen a full percentage point or more in recent months.
While higher mortgage rates might prompt more homebuyers to rush to market to head off still higher rates, the one percentage point recent increase in rates has already priced some buyers and refinancing homeowners out of the market.
State of the Real Estate Market July 2013 by Movoto
Here’s some of the up and down highlights from some cities in Movoto’s July report for the month of June.
Sacramento – One of the nation’s hottest recovery markets, Sacramento has enjoyed more than a 68 percent increase in the price per square foot over the past year ending in June, but the market has lost 1,325 homes over the same period. Inventories are down 54.5 percent.
Detroit – Likewise, inventories are down in the Motor City by 47.1 percent in the past year. However, with the loss of 1,554 homes, the market did squeeze out a price per square foot increase of 8.3 percent, from 12 to 13 bucks.
Boston – The Beantown price per square foot rose more than 19 percent from $393 to $468 over the past year as the market lost 46.7 percent of its homes. At the end of June 2013 there were 856 homes on the market, compared to 1,607 the year before.
Las Vegas – Even as inventories rose in Sin City, prices followed suit. In the past year the number of homes on the market increased by 18.2 percent, going from 3,254 in June 2012 to 3,847 in June 2013. Meanwhile the per square foot price was up more than 22 percent from $86 to $105.
“Our data indicates that it is still a seller’s market, with a strong possibility that as the summer rolls on more homes will come on the market and housing prices will decrease. At that point, the market will transition to a buyer’s market,” the Movoto report says.
Recovery Persists Despite Interest Rate Hikes
A recent survey conducted by Fannie Mae reveals that a clear majority of prospective homebuyers still believe it’s a good time to buy a home despite increasing interest rates on mortgages. A majority of people surveyed also believe home prices will continue to rise, which supports experts’ theories that most people are aware that the market is still good for buying when compared to previous years. Historical data reflect similar patterns regarding shifts in interest rates, which may also mean that interest rates don’t factor in as heavily as other indicators when people are considering a home purchase. For more on this continue reading the following article from TheStreet.
US Foreclosure Rates Falling
The newest report from CoreLogic shows that foreclosure activity dropped in May as the U.S. continues forward in its housing market recovery. The foreclosure inventory is also shrinking and seriously delinquent loans are at their lowest level since the end of 2008. Part of it is due to an improving economy and more positive activity in the housing sector, but it’s also because many banks have chosen to deal with delinquency by way of short sales and loan modifications rather than enter into costly foreclosures. Experts say the overall impact contributes to rising home prices and even more sales activity, further boosting the recovery. For more on this continue reading the following article from TheStreet.
Fewer homes were lost to foreclosure in May and the total number of homes in the foreclosure process continued to decline, according to the latest report from real estate analytics provider CoreLogic.
The number of completed foreclosures dropped 27% year-over-year in May to 52,000. Month-over-month, completed foreclosures rose 3.5%.
Completed foreclosures represent the number of homes actually lost to foreclosure. Since the crisis began in September 2008, there have been 4.4 million completed foreclosures. Prior to the crisis, completed foreclosures averaged 21,000 a month, less than half the current pace.
Still, the latest reports continue to support the view that the foreclosure crisis is slowly moving behind us.
The number of homes in some stage of foreclosure was about 1 million in May, down 29% year-over-year. Month-over-month, the foreclosure inventory was down 3.3%. About 2.6% of all homes with a mortgage were in some stage of foreclosure, compared to 3.5% a year earlier.
Seriously delinquent loans — loans that 90 days or more past due — are now at their lowest level since December 2008, at 2.3 million mortgages.
The decline in seriously delinquent loans is significant because a good proportion of these loans could ultimately end up in foreclosure if they are not resolved. And mounting foreclosures add to the supply of distressed homes in the market, dragging down home prices.
Homes that could potentially wind up in foreclosure represent “shadow inventory” or pending supply that could hit the market.
As of April, the shadow inventory was under 2 million, or 5.3 months’ supply.
For a long time time shadow inventory was seen as a threat to the housing market. However, that view changed as banks began to opt for short sales and loan modifications over a costly foreclosure process. An extremely lengthy foreclosure process, particularly in judicial foreclosure states, also slowed the pace of foreclosed homes hitting the market.
Ironically, the housing market now faces a housing shortage. The decline in foreclosures and shadow inventory has drained the excess supply of existing homes. Meanwhile, existing homeowners trapped with an underwater mortgage are unable to sell, while homebuilders are struggling to ramp up new construction.
This has caused a sharp rise in prices in the housing market, though rising mortgage rates might moderate price gains going forward.