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A warming trend?

Is the residential real estate market finally coming out of its deep freeze? Well, the answer is "sort of." And more to the point: "It depends on where you live." So how about we just put to rest, once and for all, the whole notion of "the housing market." There just is no such thing as one, single, monolithic housing market in these United States. Sorry, but it just doesn't exist.

When it comes to statistics on housing, you need to go local. That's what our cover story this month does. CoreLogic's Mark Fleming (chief economist) and Sam Khater (senior economist) went on record with their picks for the most-and least-improved housing markets in the country. Phoenix convincingly won top honors for most improved. Chicago took the title for least improved, according to Fleming and Khater.


In their article titled, "Phoenix Emerges as Most Improved," they convincingly portray the extraordinary turn-around taking place in this once hard-hit Arizona market. Consider this: "In February 2012, the REO [real estate owned] share dropped to 17 percent, down from 4o percent a year earlier." The drop in REOs relieves the downward pressure on overall home prices in the area. The authors write, "In February, Phoenix's home prices rose 5 percent from a year earlier--the fastest rate since October 2006."

As for Chicago, things are moving in the other direction. A key factor is that the city is located in a judicial foreclosure state. The authors note, "A big reason for the lack of housing recovery in Chicago is the impact of foreclosure laws." (Is anybody listening?)

But let's say you did want to go big-picture and get some uber-global takeaway on the overall housing market. What in this issue might satisfy that urge? I found what I was looking for in a Full Disclosure column this month by Mark Milner, vice president, portfolio analytics for LPS Applied Analytics. He writes that two questions are lingering in people's minds: "1) Is the housing market getting better? and 2) When will it be back to normal? Like kids in the car to anywhere, we want to know--Are we there yet?"

And he doesn't waffle one bit with the answer. But first, he gets us to accept this working definition of normal: How long will it take various regions to get back to pre-2008 levels of seriously delinquent inventories? Then he lays out the answer: "So using pre-2008 as the starting point, and assuming a return to those levels in 2016, we are about halfway there." So that's it, then--2016. If you really must believe in the notion of "the housing market" as some unified entity, there's your answer for when it will return to normal. (Milner did point out certain states will take longer, but some people just don't want to hear it.)

In July ...

We explore the avalanche of HARP 2.0 business, hear from code-enforcement officials on how servicers are doing with vacant properties and consider lenders' liabilities for the actions of their brokers.

Janet Reilley Hewitt

Editor in Chief
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Title Annotation:Portfolio
Author:Hewitt, Janet Reilley
Publication:Mortgage Banking
Date:Jun 1, 2012
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