USA: House prices and values increase

U.S. home sales increased 13 percent in October, compared to last year, according to the latest data from RealtyTrac.  

The number of homes sold in October -- including single-family homes, condominiums and townhomes -- was two percent higher than the previous month.  

Last week, the National Association of Realtors also reported a yearly increase in home sales.  

Although home sales increased nationwide, they dropped on an annual basis for the third consecutive month in three bellwether western states: California (down 15 from a year ago), Arizona (down 13 percent) and Nevada (down 5 percent), RealtyTrac reports.

The market share of short sales dropped to 5.3 percent in October from 6.3 percent the previous month and 11.2 percent last year.   

Daren Blomquist

"After a surge in short sales in late 2011 and early 2012, the favored disposition method for distressed properties is shifting back toward the more traditional foreclosure auction sales and bank-owned sales," Daren Blomquist,vice president at RealtyTrac, said in the report. "The combination of rapidly rising home prices -- along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO home -- means short sales are becoming less favorable for lenders." 

The national home median sales price -- including both distressed and non-distressed sales -- was $170,000 in October, unchanged from September but 6 percent higher from last year, representing the 18th consecutive month of yearly increases.   

The markets with the largest median home price increases included Detroit (up 38 percent), San Francisco (up 32 percent), Sacramento (up 30 percent), Atlanta (up 30 percent) and Jacksonville, Fla. (up 29 percent). 

More from the report:

• States with the highest percentage of short sales in October included Nevada (14.2 percent), Florida (13.6 percent), Maryland (8.2 percent), Michigan (6.7 percent), and Illinois (6.2 percent).

• Foreclosure auction sales to third parties -- a new category separated out in the report for the first time in October-- represented 2.5 percent of all sales, down from 2.8 percent in the previous month but nearly twice the 1.3 percent in October 2012.

• Markets with the highest percentage of foreclosure auction sales included Orlando (8.6 percent), Jacksonville, Fla., (8.6 percent), Columbia, S.C. (8.1 percent), Las Vegas (6.6 percent), Charlotte (6.1 percent), Miami (6.0 percent) and Tampa (5.7 percent).

• Cash sales represented 44.2 percent of all residential sales in October, down from a revised 45.0 percent in September but up from 33.9 percent in October 2012.

• States with percentage of cash sales above the national average included Florida (65.6 percent), Nevada (55.5 percent), Georgia (55.4 percent), South Carolina (53.9 percent), North Carolina (49.9 percent), Michigan (49.5 percent) and Ohio (49.2 percent).

• Institutional investor purchases represented 6.8 percent of all sales in October, a sharp drop from a revised 12.1 percent in September and down from 9.7 percent a year ago.

• Markets with the highest percentage of institutional investor purchases included Memphis (25.4 percent), Atlanta (23.0 percent), Jacksonville, Fla., (22.2 percent), Charlotte (14.5 percent) and Milwaukee (12.0 percent).

source WorldPropertyChannel.com

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High investor confidence forecast for 2014

More than 70 percent of global investors plan to expand their portfolio within the first six months of 2014, with investor confidence forecasted to reach high marks, according to a new report from Colliers International. 

The 522 global investors surveyed for Colliers' 2014 Global Investor Sentiment Survey demonstrated increased confidence in global markets for 2014, with investor focus expected to shift.  

Richard-Putnam

There will be an "increased [investment] volume across all property types as equity investment continues to spread to secondary markets in search of yield and loan capital continues to become more available," Richard Putnam, managing director, Western Region, Colliers International Capital Markets Group, told WPC News.  

The U.S. is the top investment destination among global investors, even as the country's economy recovers from the recent government shutdown, Colliers reports.  

Investors are also expected to target Western Europe, Brazil and gateway Asian cities, Mr. Putnam said. Investors in mature markets like the U.S., Europe and Canada tend to seek returns between five and 10 percent, but in Asia, investors are looking for returns of 20 percent or higher. 

Investors will target industrial and multi-family property for higher returns, as well as office products considered urban, creative, unique, necessity-based or high street retail, Mr. Putnam told WPC News.  

The capital source for investors consists of institutional co-mingled funds, private high-net worth family equity searching for longterm income and foreign sovereign funds.  

While investors are expected to up their investments in 2014, they also forecast obstacles. Almost half of the investors surveyed expect the cost of debt to increase next year.  

The recovery of various countries, including Spain, is also creating caution among investors, analysts say. 

"Social changes created by austerity imply risks," Mr. Putnam said. -

 Source www.worldpropertychannel.com


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USA: Florida Q4 2013 report

Florida Boom Q4 2013 Report

Florida Q4 2013 Report

The housing market of Florida continued to grow in the third quarter of 2013. Main factors of its improvement were more closed sales, higher median prices, more pending sales and steady supply of homes for sale as compared to the same period of preceding year.

“Data from the third quarter of 2013 shows that Florida’s housing market continues to grow and gain strength,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Rolando. The housing sector is considered as essential to the economy of Florida, and many realtors in the whole state are reporting of increased activities in their respective markets.

In the third quarter of 2013, Florida’s overall closed sales of existing single-family homes was 60,661 units, up by 17.3 percent in contrast with the previous year, according to the data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards. Generally closed sales happen 30 to 90 days after signing of the sales contract.

And for the pending sales of single-family homes, it climbed by 17.0 percent in the third quarter of 2013 as compared with figure of the prior year. Moreover third quarter median sales price for the whole of Florida was $175,000 up by 18.6 percent compared with the same period of last year.

The state-wide year-to-year comparison for sales of townhouse-condos reached a total of 27,200 units sold in the third quarter, up by 11.3 percent from similar period of last year. Pending sales for townhouse-condos in third quarter of 2013 rose to 12.4 percent in contrast with the previous year, while state-wide median price for townhouse-condos was $130,000, up by 23.8 percent over the same period of last year. Furthermore its median days on market for single-family homes and townhouse-condos were 48 days and 54 days respectively.

“What’s remarkable for the third quarter data is that all metro areas in Florida show year-over-year increases in both prices and sales for single-family homes, and year-over-year increases in sales for condo-town home properties,” says Florida Realtors Chief Economist Dr. John Tuccillo. “Inventories have begun to pick up a little bit, which may be consistent with cash sales declining as a percentage of overall sales. We’re alert to the fact that it may signal a trend, which could be good for the long-term stabilization and health of Florida’s housing market.”

It is interesting to note that the investment hotspots of Florida’s housing market are Fort Meyers, Lehigh Acres and Miami. These places have shown remarkable increase in market price, great demand and even significant reduction in number of days on market. In these three places demand for housing have outstripped supply.

USA Advantage has seen these exciting figures which show clear signs of great and sustained economic upturn for Florida most especially in Fort Myers, Lehigh Acres and Miami.

Market Figures

From the most closely watched gauges of the housing market, the recent Standard & Poor’s Case-Shiller Home price Index for Miami, Florida indicated this data. For the month of June the figures which were released September 24 but were not seasonally adjusted or adjusted for inflation are shown below:

1. Home price index, year over year change +14%
2. Home price value since peak, -18%

From Zillow, Home Prices and Home values as follows:

1. Home value index – $146,000, 14.8% Y-O-Y
2. Median sale price – $166,000, 19.0% Y-O-Y

A)   Investment Benefits

By all indications, Florida’s housing market has been showing a sunny outlook for investors. Some of the few factors that Florida’s investment may give benefits to the housing investors are as follows:

1. Amazingly lower prices – Florida’s home prices have just bottomed-up in the recent years and continuously rising going back to its previous peak price. All indications are pointing to economic recovery; thus, this would be the best time to invest in any type of property in Florida.
2. No state tax – there is no state tax for individuals and business structures in the state of Florida; thus, this would be a great attraction for entrepreneurs.
3. Low mortgage rate – mortgage rates are still at the lowest levels which will help housing investors to multiply its purchasing power.
4. Purchasing incentives – these incentives are offered by the federal, state and local housing programs to help home buyers to make big purchases. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 (for more details please consult your local mortgage lender about this program).
5. Major ships’ port of call – there are major changes in the Panama Canal operation which will allow container ships to dock Florida in 2014. This will be an opportunity for the state to become a distribution centre of imports to the eastern seaboard.
6. High population growth – long term economic and demographic forecast continue to show interesting data. Recent pronouncement by economists that Florida will become the third-most-populated state in the country, and one of the 10-fastest-growing states in the U.S. Population growth is considered as driver for the other economic developments.

Strengths

In general the housing market of Florida has been growing and continuously gaining strength in every aspects of the market. This strength is influenced by strong buyer demand together with limited supply of resale houses. This resulted in putting upward pressure on housing prices, and ultimately enhancing the vibrancy of the housing industry.

Moreover the positive momentum in the recent quarter continued to achieve more closed sales, higher median prices and a lot of pending sales which fuelled the housing market to move forward at a faster rate.

Recent data shows that Florida has lower unemployment rate as compared with the entire nation. Hence more jobs will give more stability for future growth in the state’s housing market and its general economy.

One of the most vital factors which contributes to the strength of Florida’s economy is its geographical location. It is considered as one of the top tourist destinations because of its all year-round fine weather condition. Hence this feature draws substantial number of tourist and consequently ensures higher demand for the housing sector.

Moreover Florida has the natural and health-friendly climate which attracts people who will not only stay for a week but for years. These are the retirees who are choosing Florida as their permanent residence because of its climate which comfortably fits to their lifestyle and physical condition.

Core Industry

The economic progress of the state is usually dependent on its core industries, and these industries usually drive the economic growth of the state. Some of the few major industries of the State of Florida are as follows:

1. International Trade – this one of the biggest income generating industry of the state in which about 40% of all U.S. exports to Latin and South American countries pass through the ports of Florida.
2. Tourism industry – there are about 90 million visitors a year that visited Florida, and is considered as one of the top travel destination in the world. The tourism industry has given to state’s economy of about $70 billion a year.
3. Space Industry – this industry represents about $4.1 billion of the state’s economy. The average annual wage of aerospace workers is approximately $67,000. The number employed at Kennedy Space Centre (KSC) alone is 13,000 and Florida ranks 4th among the states in overall aerospace employment with 33,000 jobs.
4. Agriculture industry – Florida’s agricultural income leads the southeast states in farm income. The state produces about 67% of the U.S. oranges and accounts for about 40% of the world’s orange juice supply.
5. Construction industry – this industry sector’s strength is mainly due to the steady flow new residents and visitors who are welcomed to Florida every year.
6. Services industry – this industry has shown tremendous growth in high tech, financial & back office operations.
7. Software industry – this industry has developed many small, entrepreneurial companies.

For more details on our Florida properties please enquire at info@lydnemproperty.com

USA: Pending US home sales hit highest levels in two years

Source: Ivan Radford

Pending sales of US homes hit the highest level in the past two years in May, according to the National Association of Realtors. Monthly and annual gains were seen in every region, the NAR revealed this week, with pending sales rising 5.9 percent in May from April, 13.3 per cent higher than May 2011.

Lawrence Yun, NAR chief economist, said longer term comparisons are more relevant.  "The housing market is clearly superior this year compared with the past four years.  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."

The national median existing-home price is expected to rise 3.0 percent this year and another 5.7 percent in 2013.

The PHSI in the Northeast increased 4.8 percent to 82.9 in May and is 19.8 percent above May 2011.  In the Midwest the index rose 6.3 percent to 98.9 in May and is 22.1 percent higher than a year ago.  Pending home sales in the South increased 1.1 percent to an index of 106.9 in May and are 11.9 percent above May 2011.  In the West the index jumped 14.5 percent in May to 108.7 and is 4.8 percent stronger than a year ago.

Low inventory could hold back some contract activity.  "If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers.  In an environment of historically favorable housing affordability conditions, it's frustrating to see some consumers thwarted in the process," Yun said.

Low inventory results partly from underwater homeowners who are unwilling to list their homes, which would require a lengthy short sale process, or additional cash to complete the transaction.  NAR estimates 85 percent of homeowners have positive equity, with 15 percent in an underwater situation.

"Low inventory can be cured by increasing new home construction," Yun said.  He projects housing starts to rise by 26 percent this year and another 50 percent 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.

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Spain: Good opportunity for bargain hunters

Source: Ivan Radford

There's no denying that the Spanish economy has been suffering recently. Banking losses resulting in the Iberian nation asking for help to recapitalise its banks has caused concern and aided a decline in property prices but for bargain property hunters, it isn't all doom and gloom.

While investment house Variant Perception reports that parts of Spain have seen prices drop by as much as 50% from their peak, Marc Pritchard, Sales and Marketing Manager of leading Spanish house builder Taylor Wimpey España believes that there remains plenty of opportunities to capitalise off the back of low prices commenting:

"In spite of Spain's current situation there are some big opportunities for shrewd property hunters right now. Property investors will not only benefit from the fact that Spanish property is currently around 33% lower than it was during its peak in 2008 but from growing tourism, which saw a 2.6% increase in the first few months of this year. Indeed, cheaper prices along with a particularly favourable euro rate means that Spanish property is an extremely worthwhile consideration as long as potential buyers ensure that they do thorough research first to avoid getting burnt. "

Further boosting the case for buying a second property in Spain today, research conducted by Holiday Lettings has revealed that Spanish property continues to dominate the holiday rental market with strong demand for apartments and villas in Spain in the first three months of 2012.

Pritchard explains,

"Demand for second homes in Spain has not been broken. Properties in prime locations are now more readily available to potential buyers given low prices and, considering the unfaltering love for Spain as a holiday destination, Spanish property owners will still be able to obtain a solid return on a relatively low-cost investment.

"For anyone dubious about how the market is performing we at Taylor Wimpey de España, the only developer on the Costa del Sol actively building and selling and the only developer building and selling larger developments in Mallorca have been experiencing great success of late. Not only has traffic taken a positive turn with a 15% increase from May until now, reaching its highest level ever last week but both leads and sales are up. Just two weeks ago we made 4 sales - our strongest performance so far this year. Indeed, our biggest success story has to be our complete sell out recently in just 13 months of our off plan development at Cala Anguila, Mallorca. Our positive results highlight that in spite of what is going on in Spain right now, buyer interest still remains solid. 

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USA: Latest property news

GM Motors expand in Detroit

General Motors Co has shown their belief in the recovery in Detroit, by purchasing a mixed-use commercial property across the street from it's world headquarters.

Cleveland-based real estate company Forest City Enterprises Inc. announced Thursday that it sold the Millender Center's hotel, parking facility, retail and office space to GM subsidiary Riverfront Holdings Inc. for $37.8 million.

Forest City and associates retain ownership and management of Millender Center Apartments.

The sold assets had been leased to Riverfront Holdings with an option to buy since 1998.

GM spokesman Tom Wilkinson says the automaker has not occupied the center's commercial property but has used space in the parking deck.

GM bought its previously leased Renaissance Center headquarters in 2008 for $626 million. It moved into the riverfront complex in 1996.


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Improving Economy Helps Vacancies Rebound

The National Association of Realtors claims that U.S. commercial property vacancies may have peaked, caused by the improving economy.

"The basic fundamental of rising commercial leasing demand, resulting from a steadily improving economy, means overall vacancy rates have already peaked or will soon top out," Lawrence Yun, chief economist of the real estate group, said in a statement today. "Multifamily housing is the one commercial sector that has held on relatively well in the past year, and can expect the best performance in 2011."

U.S. gross domestic product grew by 2.5% in the third quarter, beating the 2% estimate, according to the Commerce Department. As the economy improves commercial real estate occupancies increase as businesses expand and employers add jobs.

"Property fundamentals are improving, investment capital is slowly flowing back into the sector, commercial mortgage originations are increasing, and demand for CMBS issuance is gaining traction," Standard & Poor's said in the report today.

As commercial property grows, investors are also looking to residential property to decide where the peak is, or whether it has already passed.

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Steady US Real Estate Recovery Predicted

A steady recovery is predicted for the US residential real estate market, despite some ongoing challenges, according to the National Association of Realtors.

NAR chief economist Lawrence Yun said to the 2010 Realtors Conference and Expo that he expects a continuing improvement of underlying fundamentals of the current market in the coming years.

'A slow recovery is taking place as we head toward our goal of a stable, solid housing market. However, the pace of job growth will determine the strength of the housing market recovery," he explained.

Overall real estate experts are cautious but optimistic about the current and future state of the industry. Panelist Margaret Kelly, chief executive officer of RE/MAX, said today"s market shouldn"t be called the new normal because the old market was abnormal. 'The spike up and down in the housing market wasn"t normal so we shouldn"t be measuring ourselves against it," she said.

Kelly added that despite some challenges there are plenty of opportunities in the housing market with low mortgage interest rates, abundant inventory and stable prices attracting buyers to the market.

'To be successful in the current housing market, real estate professionals need to educate themselves about buying and selling distressed properties and working with investor buyers, who are a significant part of the market. Real estate professionals should be learning how to handle short sales, how to market themselves and find buyers and to really understand market conditions," she explained.

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Commercial Property Boosts US Market

Commercial property is one sector which is currently booming in the US, providing stability to the property market as a whole, according to a recent report. In fact, almost one-third of global capital available for commercial real estate investment is expected to target the US market in 2011.

Both Europe and Asia are also expected to see double-digit increases in capital commercial real estate investment, and worldwide investment in commercial real estate is expected to rise substantially in 2011.

A new study by DTZ Research finds that global investors are prepared to plow some US$97 billion into the U.S. commercial real estate market in 2011. That represents a 54% increase over DTZ's previous estimate in December 2009.

On a global basis, DTZ estimates that $281 billion of capital will be available to invest in global real estate in 2011, a 22% increase over its previous estimate. The firm's latest The Great Wall of Money report analyzed the capital being raised by an extensive range of investor groups. The greatest increase in available capital is forecast to be focused on the U.S. ($97 billion), which is in line with the "DTZ Fair Value Index" score of 89. That score indicates that most markets in the U.S. now offer an attractive opportunity to investors.

"The current attractiveness of the US is in stark contrast to the situation a year ago," says Nigel Almond, Associate Director of Forecasting & Strategy at DTZ and author of the report. "Most U.S. markets were cold, offering expected returns below risk adjusted required returns. This opportunity remains largely unexploited to date, since transaction volumes in the U.S. have not yet seen the levels witnessed in Europe and Asia Pacific."

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New Research Shows Detroit as Investment Hotspot

Residential property prices in the US rose slightly last month, according to government figures, but foreclosures are still rising, increasing opportunity for overseas buyers looking for a bargain in the US.

A 0.4% increase in property prices in September almost reversed the 0.7% fall in August according to the latest report from the Federal Housing Finance Agency. However, its monthly House Price Index also shows that overall prices fell 2.4% in August from the year before and remain 13.6% below the peak of the market in April 2007. Reports also show that foreclosure filings, which include notices of default, pending cases, notices of foreclosure sale and repossessions, increased from last year in 65% of metropolitan statistical areas tracked in the third quarter of the year.

Figures from RealtyTrac shows that the Seattle area had the highest increase with filings rising 71% from the third quarter of 2009. Chicago was second with a 35% increase followed by Houston, Texas at 26%.

California, Florida, Nevada and Arizona accounted for 19 of the top 20 foreclosure rates in the country. The only exception was Boise City, Idaho, which was 14th.

Las Vegas saw the highest rate in the third quarter, where one in every 25 housing units received a filing, more than five times the national average. But the 32,288 filings is down 20% from last year.

Cape Coral-Fort Meyers, Florida, was second with a one in 35 foreclosure rate. Filings there reached 10,352, down 22%. While one in 36 houses in Modesto, California, received a filing in the third quarter for the third highest rate, but it was an 18% drop from a year ago.

Miami, Florida, experienced the highest total number of foreclosures in the third quarter, at more than 58,600 filings, an increase of 9% from last year and up 25% from the previous quarter.

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New Research Shows Detroit as Investment Hotspot

The Michigan city is fast becoming a top choice for foreign real estate buyers, as US president Barack Obama declares he loves the place and the US government pours millions into its car industry.

According to a market commentator, it is displaying classic signs of being ripe for investment for buy to let investors in particular.

'The US housing market, in general, remains ideal for investment opportunities. House prices are still low due to foreclosures and rental demand is high. Now, as Detroit enjoys an economic recovery, investors can benefit from Government subsidised rents, capital growth over time and re-selling back into the local market," it was explained.

Interest doesn"t just come from the more traditional investors in Canada and the UK, investors from Saudi Arabia and Singapore are also making enquiries and looking to buy.

Analysts believe there are two potential investment strategies for Detroit, the first involving robust cash flow for purchase at a low cost, refurbish and rent and then a strategy for capital growth over time.

'Detroit was in a terrible state when we first looked at investment opportunities there. However, this worked in our favour because we approached the City and offered to assist with the housing and economic regeneration by bringing in international investment. This led to the City endorsing our product and also offering a significant reduction in taxes for investors," said one commentator.

Analysis shows that employment and the local economy are picking up in Detroit. Auto companies such as Ford and General Motors (GM) are reporting second quarter profits in the $billions. GM"s electric car, the Chevy Volt, is about to go into production for worldwide sales. Chrysler"s Fiat 500 electric car is also planned for 2012.

Although approximately 230,000 workers were laid off when the motor industry crashed in Detroit a few years ago, the industry has already taken on around 15,000 new employees so far this year. Reports indicate 10,000 new auto workers will be required, per year, from 2011 to 2013. US Mortgage collective, Quicken Loans, is creating 4,000 new jobs in Detroit. Plus Marathon Oil Corporation is expanding its refinery and creating 2,000 new positions in the area.

Detroit is also becoming a major player in the film industry. Tax incentives mean that in 2009 parts of 470 movies were filmed in Detroit and a number of 2011 release films are being shot there this year including Scream 4, LOL: laughing Out Loud with Demi Moore, Real Steel with Hugh Jackman and The Mechanic with Donald Sutherland.

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Detroit Property Shows Signs of Recovery

Signs that the Detroit region is starting to recover have appeared in home foreclosure rates and jobless figures. August figures showed that the foreclosure rate slowed for the first time in the year, while the state jobless rate was steady for the second month at 13.1%.

"In the Detroit area, the worst part of the recession is over," said Patrick Anderson, an economist and principal of Anderson Economic Group in East Lansing.

Anderson cited a two-percentage-point drop in the Metro Detroit area's jobless rate to 14.1 compared with a year ago, and improving median sales prices of homes and condominiums.

Comerica Inc. Chief Economist Dana Johnson said it "all adds up to fairly convincing evidence that a moderate recovery is under way." He contends the housing market may be poised for a healthy rebound next year.

"Once people in Michigan become more convinced that their jobs are secure and that house prices have stabilized, demand will begin to build and homebuilding will start contributing to a more broadly based recovery," Johnson said in a recent report.

The state's jobless rate remained unchanged in August at 13.1 percent compared with July and was down 1.2 percentage points compared with the August 2009 rate of 14.3 percent, the Michigan Department of Energy, Labor & Economic Growth reported Wednesday.

"Michigan job levels have stabilized somewhat since August 2009," said Rick Waclawek, director of DELEG's Bureau of Labor Market Information and Strategic Initiatives.

Another positive sign is that Metro Detroit foreclosure activity, while on a record pace for the year, fell 7.8 percent in August compared with a year ago, according to RealtyTrac, a California-based foreclosure tracking firm.

Foreclosure activity from initial notices of default to sheriff's auctions of seized properties fell to 9,849 from 10,683 a year ago in Macomb, Oakland and Wayne counties. For the six-county area -- which also includes Lapeer, Livingston and St. Clair counties -- foreclosures dropped 8.8 percent last month compared with the same period a year ago.

An increase in foreclosures usually leads to lower home sales prices, but prices have been recovering in Metro Detroit because of a drop-off in foreclosure sales.

One explanation is the slowing loss of jobs and growing confidence among homeowners, Johnson said. "Houses are worth whatever people are willing to pay for them," he said. "I think you are seeing more people feeling secure in their jobs and feeling (home) prices have fallen enough."

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Foreclosures reach record high

A record number of homes in September and the third quarter fell into foreclosure as lenders continue to work through the shadow inventory of distressed properties, according to RealtyTrac, which monitors the filings across the country.

For the month of September, foreclosures increased 3% from August to 347,420 properties. Banks repossessed 102,134 properties in September, the first time REO reached triple digits for a single month.

Foreclosures were filed on 930,437 properties in the third quarter, a 1% dip from last year but a 4% increase from the previous quarter. In the third quarter, one in 139 homes received a foreclosure filing, which includes default notices, scheduled auctions and bank repossessions (REO).

REO for the third quarter reached a new record as lenders took back 288,345 properties, a 7% increase from the previous quarter and up 22% from last year.

But as lenders work through the supply of serious delinquent loans, fewer are defaulting. RealtyTrac reported 269,647 default notices in the third quarter, down 22% from the peak in the third quarter of 2009.

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Freeze on Foreclosures Restricts Supply

The largest mortgage firms in the US have put a halt on home foreclosures, to attempt to process legal issues. This sudden tightening of supply, with distressed properties accounting for almost a quarter of transactions, is likely to lead to soaring prices on foreclosed property, and a rush by investors to purchase what is left over.

Bank of America Corp, the largest US lender, extended a freeze on foreclosures to all 50 states on October the 8th 2010. JPMorgan Chase & Co. and Ally Financial Inc"s GMAC Mortgage unit stopped repossession cases in 23 states where courts supervise home seizures.

According to one data company, foreclosure sales accounted for 24% of all home sales as of September 2010. They made up an even larger share in states which suffered strongly in the downturn. In Nevada it was 56%, in Arizona 47%, and 43% in California. Florida, Massachusetts, Michigan and Rhode Island the share of home sales was about a third.

Some indicators show the U.S. real estate market had turned a corner in August. The number of contracts to purchase previously owned homes increased 4.3 percent, the second monthly gain, according to an Oct. 4 report from the National Association of Realtors. Sales of previously owned homes rose to an annual pace 4.13 million, up 7.6 percent from July"s record low, the Chicago-based group said last month.

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One in Four US Home Sales Foreclosed Property

A massive 24% of homes sold in the United States in the second quarter of 2010 were foreclosure homes, according to new research, highlighting the amount of homes going into foreclosure as well as the demand for these homes due to their below market value cost.

The report, which examined homes for sale in Q2 2010 that were in a stage of foreclosure—either default, scheduled for auction, or bank-owned (REO)—said that more than 150,000 properties sold in April, May, and June 2010 were distressed.

The number is a rise of 3% from Q1 2010, but a decrease of 28% from Q2 2009, when the housing market crisis was at its peak. This may mean tightening supply as the recovery continues.

Despite the rise in the number of foreclosed houses sold in Q2 2010, the percentage of properties sold that were distressed dropped, due to a surge of sales of homes that were not in foreclosure.

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Michigan Bank Boosts Home Borrowing

The bank JPMorgan Chase & Co. has released new plans to help unemployed home borrowers across Michigan, by participating in a state fund which aims to pay a portion of the resident"s mortgage payment for up to a year.

This will boost the property market across Michigan, especially cities whose property markets were hard hit during the downturn, such as Detroit.

Michigan's Hardest Hit fund helps qualified borrowers by paying up to half of their mortgage payments for up to 12 months, saving them thousands of dollars. The help will be available for Chase customers who are behind on their mortgage payments as well as those who are current. Chase said it will roll out the program once the Michigan State Housing Development Authority has all the logistics in place.

For example, a borrower who has been making a $1,400 monthly payment for principal, interest, property taxes and homeowners insurance may be eligible to pay only $700 per month, with the state paying the difference.

This is likely to provide support to the housing market in Detroit, and helping with the recovery.

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Investment Accounts for 21% of US Home Sales in August

Residential property sales in the US increased in August with investors accounting for 21% of sales, up from 19% in the previous month. August saw an increase in sales of 7.6% alongside the ending of the homebuyer tax credit scheme, according to the latest index from CoreLogic.

Paul Dales, an economist at Capital Economics, said, 'Looking ahead, as the distortion from the tax credit continues to fade, home sales will rise further. But when unemployment is so high demand for housing in certain areas may remain relatively weak," he warned.

'Home values have shown stabilizing trends over the past year, even as the economy shed millions of jobs, because of the homebuyer tax credit stimulus. Now that the economy is adding some jobs, the housing market needs to steadily improve and eventually stand on its own," one analyst explained.


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