Moody's Expects Continuing Home Price Decline

Thu, 25 Feb 2010 21:42:00 -0400

Moody’s Expects Continuing Home Price Decline

Moody’s Investors Service predicts another 8% decline in the housing market in many areas over the coming months. They blame the anemic Home Affordable Modification Program (HAMP) for failing to put a damper on foreclosure and the continuing escalation of foreclosure sales throughout the country for the continuing slide in home prices.

The national home price drop from peak to trough is expected to be 34%. The one bit of good news is Moody’s revised downward the expected total value decline. Previously Moody’s had predicted a 37% total decline. The bad news is, instead of the trough being reached in the 3rd quarter of this year, Moody’s now does not expect to see the leveling out to impact the market nationally until the end of the 4th quarter 2010.

Moody’s analysis shows that only 400,000 to 1 million homes might be saved through HAMP. The rest of the job of cleaning up the housing market will be left to the slow process of foreclosure, deed-in-lieu of foreclosure agreements and, of course, short sales.

Moody’s Predictions on Short Sales

Moody's Economy.com predicts that the number of deed-in-lieu of foreclosures plus short sales this calendar year will increase by more than 50% to almost 500,000. This is still only a fraction of what is needed to save more than 1.9 million homes from foreclosure.

Moody’s sites the decisions by many lenders to loosen rules as an indication Lenders are now more willing to find solutions short of foreclosure. Some of the recent changes by Lenders include:

· CitiMortgage decision to allow beleaguered homeowners to remain in the home without paying if homeowners will sign over the home and take care of it.

· Fannie Mae and Freddie Mac programs to allow Homeowners to remain in the home as renters while the disposition of the house is being sorted out.

· Treasury Department’s recent decision to pay Lenders $1000 when they agree to a Short Sale and to forgiving the remaining debt.

While we believe there are flaws in the government’s Short Sale program, there is no question that this new willingness to look at selling a home for less than the mortgage amount is certainly going to increase the numbers of Short Sales that are approved this year. There has never been a better time to be a Short Sale Investor!

First American CoreLogic HPI Says Price Decline is Slowing

First American CoreLogic Home Price Index (HPI) tracks home prices in all U.S. markets and basically concurs with Moody’s report that home prices are continuing to fall when considered nationally. The one silver lining the HPI reveals is that the decline is smaller and slower than before.

The December decline year over year was 3.7% compared to the 5.3% year over year decline the previous December. Even when distress sales are removed both years registered a decline in home values year over year—3% in December 2009 and 5% in December 2008.

The HPI is expected to drop another 4.4% through spring 2010. Then it is a matter of whether the latest homebuyer credit is extended beyond April as to whether the remainder of 2010 will show a faster decline, or begins to stabilize. At the present time First American CoreLogic predicts a rosier home value prospect than Moody’s. It believes home values will be up 3.5% by December 2010, or 2.7% when distressed sales are removed from the calculation.

Homeowners More Pessimistic About Home Value

Zillow has completed a survey which shows for the first time that Homeowners are no longer confident that their homes are going up in value. Only 20% believed their home had gone up in value, where, in fact Zillow shows about 28% of homes appreciated in the past year. For the first time since Zillow started surveying homeowner confidence, the level as a -2 showing that homeowners are actually more cynical than reality about the value of their homes.

Half of the surveyed home owners believed their homes had fallen in value, while 30% believed their home had stayed the same in value. According to Zillow, actually 65% of homes lost value while only 7% stayed the same.

In the past homeowners found it easier to believe that their neighbor’s home was falling in value than to believe the same about their own house. Now more homeowners understand that home value decline is the rule rather than the exception.

What this means for Short Sale Investors is that it may become a little easier to convince homeowners that a Short Sale is needed in order to sell the home, and their Agent may well be easier to convince as well. You will have solid market sales data behind you to justify your offer, and more and more, homeowners are accepting that reality.

Have a great evening!

Tim Cook

www.Texas-AgentsAdvantage.com

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RealtyTrac: Texas foreclosures jump 17 percent in September

Tue, 20 Oct 2009 12:33:00 -0400

Texas foreclosures were up 17 percent in September from the previous month and 43.7 percent higher than in September 2008, according to new data from RealtyTrac Inc. The Irvine, Calif.-based company, which compiles and sells foreclosure data for its U.S. Foreclosure Market Report, said the state had 13,216 default notices, scheduled auctions and bank repossessions filed in September, giving it the 25th-highest rate in the nation. For the third quarter, Texas foreclosures were 11.3 percent higher than the second quarter and 8.7 percent above third quarter 2008. There were 29,838 filings during the quarter, with one in every 316 housing units receiving a foreclosure filing, according to the company. That put Texas at No. 28 in the nation. Nationwide, filings fell 4 percent between August and September, but were up 29.2 percent from September 2008. More than 340,000 filings were made in September. Overall, filings increased by 5.4 percent in the United States between the second and third quarters with 937,840 properties foreclosure filings during the third quarter — one out of every 136 housing units — the highest quarterly rate since RealtyTrac began its market reports in 2005. That compared with a 22.5 percent rise between third quarter 2008 and third quarter 2009. California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62 percent of the nation’s total foreclosure activity in the third quarter, with 579,541 properties receiving foreclosure filings in the six states combined. For More information on preventing foreclosure go to read our special report or Call NOW for a free consultation on how we can help you. Call NOW 817-550-5069.

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Veterans, Sell Your House Fast! - Foreclosure News

Moody's Expects Continuing Home Price Decline

RealtyTrac: Texas foreclosures jump 17 percent in September