REAL ESTATE

Real Estate

Real Estate

QUESTION 1

Typical real estate markets

March is usually the month when people in the real estate business start getting hopeful. Spring usually brings out both buyers and sellers and, along with them, higher values for most homes. But for some of the biggest housing markets in the country, those hopes look to be in vain this year. The problem is the glut of homes that have been repossessed by banks or that seem headed in that direction. The glut is far bigger than it was a year ago. (Young, Adam 2004, 54-67)

In fact the outlook is flat-out grim, based on the latest data from First American CoreLogic, a housing data firm that tracks 97% of U.S. transactions for the mortgage industry. The percentage of homes that banks have filed foreclosure on or repossessed (and stamped with the dreaded "REO," or "real estate owned," moniker) now account for 3% of all mortgaged homes. That's up from 2.2% a year ago. In some large cities, the rate is two-to-six times the national average. The number of homeowners who haven't quite sunk into the foreclosure swamp--but are in serious danger of doing so--is also way up from 2009. First American CoreLogic tracks mortgages that are at least 90 days delinquent. (They include mortgages already in foreclosure or converted to REO.) One in 14 mortgages in the U.S. now meets this standard, up from one in 22 a year ago. "The overhang is a dark specter over the housing market," says Sam A. Khater, senior economist at First American CoreLogic. There are now 3.5 million mortgages at least 90 days delinquent. In addition, 2 million mortgages are at least 180 days delinquent, says Khater. Unlike unemployment, the rise in delinquent mortgages hasn't decelerated, he adds. The government's various efforts to keep most of these mortgage from being converted to REO have helped struggling homeowners remain in their homes, but most of the moratoria against foreclosures and the various federal programs aimed at supporting low-income borrowers are soon to end. "Then what?" asks Kahter. In Las Vegas the 90-day delinquency rate is 21.7%. In Miami it's 28.8%. Those two sunny cities were the twin epicenters of the condo boom, so maybe their comeuppance was to be expected. But the other metro areas on the list of places where at least 10% of mortgages are delinquent, in foreclosure or converted to REO include some big names that may surprise you: Chicago, Los Angeles and the towns and cities of Nassau and Suffolk counties on New York's Long Island. Even tiny Bend, Ore., is in serious trouble, with 10.3% of its mortgages either delinquent or foreclosed on, up from 4.7% a year ago. Wasn't Bend one of those charming villages where people moved to escape high prices? Opt instead for Corvallis, three hours further east of Portland. Delinquencies there are a tame 1.7 %.( Young, Adam 2004, 54-67)

More and more real estate properties were released last month as the number of homes sold in Salt Lake ...