Wednesday, 4 July 2012

Real estate stays muddled

BROOKSVILLE -- The first six months of 2012 were a mixed bag when it came to the housing market in Hernando County.

Foreclosure filings were up 125 percent. Existing home sales stayed about even. The number of single-family permits increased slightly.

Gary Budek, president of the Hernando County Association of Realtors, said the reduced inventory of single-family homes on the local market is encouraging.

In fact, the level is now about the same as it was in 2001, Budek said.

"Our inventory is definitely down," Budek said. "We definitely have seen more activity and an increase in pending sales."

Foreclosure homes are selling fast and at affordable prices, he said. There has also been healthy movement from existing homes being put on the market and — if they are affordably priced – selling.

There were 1,356 existing single-family homes sold from January through June 2011, with the average selling price $95,203 and average days on the market 119.

During the same period for 2012, there were 1,344 sales, with an average selling price of $94,972 and 117 days on the market.

Budek said that while "it's still going to be a bit of a rocky road for awhile," there are signs of improvement.

There was moderate change on the new-home front. The number of single-family building permits issued so far this year is 66, compared with 50 this time last year.

The news was much worse on the foreclosure-filing front.

Foreclosure filings totaled 1,185 for the first six months, a 125 percent increase from 527 in the same period in 2011.

Don Barbee, incoming clerk of the circuit court, said the striking increase in foreclosures from last year is not surprising.

Foreclosure filings had dropped dramatically at the start of last year because of the "robo-signer" controversy, where some banks and mortgage houses were found to have paid people to forge their names on mortgage documents that were then used to start foreclosure proceedings.

The federal Office of Comptroller of the Currency ordered financial institutions to review their practices.

But now that banks have had time to adjust, the foreclosure numbers are on the way back up, not only in Hernando County but across the nation.

Attorneys are starting to file on the foreclosures again, and Barbee is hopeful this will burn off some of the ones that have been hanging for awhile.

"I'm hoping that some of the filings these banks have been sitting on will now be cleaned out," Barbee said.

Nationally, single-family housing starts rose 3.2 percent in May, according to the most recent data from the National Association of Home Builders.

That's a sign that builders are cautiously moving to replenish their depleted inventories of single-family homes in response to increasing buyer demand, NAHB Chairman Barry Rutenberg said in a news release.

"In certain housing markets across the country, the momentum toward recovery is gradually building, though tough credit conditions and inaccurate appraisal values continue to weigh down that progress," Rutenberg said.

NAHB chief economist David Crowe said the latest data provides evidence of the kind of slow but steady growth expected in housing production through the end of the year, and shows that housing continues to regain strength regardless of some weakening in other parts of the economy.

"Particularly encouraging are the gains in permit issuance posted in both the single-family and multifamily sectors in May, which are indicative of builders' intentions to start new projects in the coming months," Crowe said in a prepared statement.

On the existing home front, pending home sales bounced back in May, matching the highest level in the past two years, and are well above year-ago levels, according to the National Association of Realtors.

Monthly and annual gains were seen in every region.

The pending home sales index reached 101.1 in March, which was the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit.

Lawrence Yun, chief economist with the NAR, said longer-term comparisons are more relevant.

"The housing market is clearly superior this year compared with the past four years," Yun said in a statement.

The latest increase in home contract signings marks 13 consecutive months of year-over-year gains, he said.

"Actual closings for existing-home sales have been notably higher since the beginning of the year, and we're on track to see a 9 to 10 percent improvement in total sales for 2012," Yun said.

The national median existing-home price is expected to rise 3 percent this year and 5.7 percent in 2013.

Yun projects housing starts to rise by 26 percent this year and 50 percent more in 2013.

"If housing starts do not rise in a meaningful way over the next two years due to the difficulty in getting construction loans, and barring an unexpected shift in the economy, the steady shedding of inventory could lead to shortages where home prices could get bid up close to 10 percent in 2013," Yun said. (352) 544-5290


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