Clark's e-news: Real Estate Markets

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Samantha Clark, Associate Broker                                     Real Estate Services

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Real Estate Markets

Reports the Wall Street Journal, new data suggest that foreclosures are rising in more expensive housing markets. About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now ac­count for 35% of foreclosures, down from 55% in 2006. The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. "The slope of that curve in recent months is much sharper than it was recently," said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up.   Note—This is creating a unique situation for move-up buyers. For those folks who desire a more expensive house, now is an ideal time to sell and find a bargain among the upper end of the housing market.

Commercial

Remarks Bloomberg, Canada’s commercial real estate market is recovering after an 18-month slump as new transactions indicate the industry has de-coupled from its struggling U.S. counter­part, the Globe and Mail reported. Investments in commercial property in the Greater Toronto Area rose 46 percent in the third quarter from the previous period to C$1.31 billion ($1.27 billion) and the number of transactions increased by 20 percent, the newspaper said today, citing RealNet Canada Inc.   Reuters - A top White House economist said on Thursday that the tough climate for commercial real estate was a concern but, in contrast to the collapse of the residential property market, it was a more manageable threat. "This is a slower, evolving problem, so it is one that we will have the time and ability to deal with," Christina Romer, chairwoman of the White House Council of Economic Advisers, told the congressional Joint Economic Committee during testimony on the economic outlook. "I know the Fed and the Treasury, we are all concerned by what we see happening in commer­cial real estate," she said.

Home Sales Gain

Bloomberg -- Sales of existing U.S. homes surged a record 9.4 percent in September as Ameri­cans rushed to take advantage of a tax credit for first-time buyers before it expires next month. Purchases rose to a 5.57 million annual rate, more than forecast and the highest in more than two years, the National Association of Realtors said today in Washington. The median price fell at the slowest pace in a year as the number of houses on the market shrank. While sales may cool unless Congress decides to extend the $8,000 credit due to expire Nov. 30, lower prices and mortgage rates have also made houses more affordable and may cushion any decline. Smaller price decreases show the market is stabilizing as demand improves, easing the strain on consumer finances that deepened the worst recession since the 1930s. “The excess supply of unsold homes has declined a lot and this reduces the downward pressure on home prices,” said Harm Bandholz, an economist at UniCredit Global Research in New York. “An improvement in house prices is an important condition for an increase in housing wealth and therefore higher willingness of households to start spending again.” Record Gain The September increase in combined sales of single-family houses and condominiums was the biggest since comparable records began in 1999. A recent report showed sales of existing single-family homes climbed 9.4 percent, the biggest gain since 1986, to an annual rate of 4.89 million. Sales of condominiums and cooperatives in­creased 9.7 percent to a 680,000 rate. Purchases increased in all four regions, led by a 13 percent surge in the West. Purchases climbed 9.6 percent in the Midwest, 9 percent in the South and 4.4 percent in the Northeast. Purchases of previously owned homes, which make up more than 90 percent of the market, are tabulated when sales close and therefore reflect contracts signed a month or two earlier. Sales of newly built residences, which make up the rest, are counted when a contract is signed, and may therefore cool months before the tax credit expires. Buyers must close before the Nov. 30 deadline to be eligible for the tax credit.

Contact Samantha Clark at samantha.clark@coldwellbankerlegacy.com  or 505.401.1561

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