of the subprime ARM loans written in Virginia were 30 days or more past due in 2nd quarter 2006.Things are about to get immensely more complicated, now that the Senate is holding hearings assessing non-traditional mortgage products…. I was told the other day that there are only two local lenders who have not written any Option-ARM mortgages. I am pleased to consistently work with one of them.The next 12 to 18 months are going to be very interesting, and very full of opportunity for some and sadness/desperation for many.Quoth Jonathan Miller:I have come to belive all news is presented in the most negative light possible, especially news about the economy…. For this data, I would have to bold it all.And finally, if you want to see the laughing hyenas taking pleasure in all of this, spend some time at the housing bubble thread…. From Comstock Partners’ commentary:Ø 32.6% of new mortgages and home equity loans in 2005 were interest only, up from 0.6% in 2000Ø 43% of first-time home buyers in 2005 put no money down.Ø 15.2% of 2005 home buyers owe at least 10% more than their home is worth.Ø 10% of all home owners have no equity in their homesØ $2.7 trillion in loans will adjust to higher rates in 2006 and 2007.Ø 70% of borrowers who took out pay-option ARMS in the past year have loan balances larger than their initial loan.Ø Homeowners face higher payments as mortgages are reset. Generally, monthly payments rise between $200 and $500 depending on the size of the mortgage.Ø According to Reality Trac, August foreclosures were up 23% over July and 53% over a year ago.Ø The number of homes for sale is at record highs, and inventories are 59% higher than a year earlier.Ø New home sales are down 22% and existing home sales down 11%.Ø The NASB housing market index has recorded an all-time decline.Ø The housing affordability index is at a 15-year low.Ø The house price-to-income (rents) ratio is off the charts. According to HSBC, in 18 states accounting for over 40% of national home values, the price-to-income ratio is 3.6 standard deviations above the mean.Ø The OFHEO index of house prices deflated by the consumption price deflator has soared to a record high of 350 from 250 in 2001. From 1976 to 1996 it never was above 220.Ø According to the NAR the year-to year prices of existing homes are now flat.
Browsing Category Market statistics
You think interest rates are high?
The real estate market has been viewed of late through a lens that is about five years old. “Conventional wisdom” may say that low rates have driven the market, but when one looks at interest rates over the past thirty years, they don’t look so bad. The commoditization of the real estate market looks to be on its last legs.Graph courtesy of Jay at buygilberthomes. Data courtesy of FreddieMac. I actually downloaded this data weeks ago, but am not the graphical wizard that Jay is.
Following the Charlottesville area market trends
*Active in August 2006: 432Active in August 2006: 441% change: 2.08%Contingent: -28.74%Pending: -34.36%Sold: -21.95%Very, very interesting data. What do the data tell us about the Charlottesville and Central Virginia area’s real estate market?… The market is very good for buyers right now – good Buyer’s Agents are advising their clients that there is sometimes significant flexibility in asking and selling price. From a general market overview, properties are still selling for 97% of their asking price – not bad. In short, don’t believe all the doom and gloom reporting. The market is different. There are more houses on the market now than there have been in many years…. Not in my humble opinion – market “normalization/cooling/equilibrium” – whatever you want to call it – qualifies as a “good thing.”Daniel has the County-by-County breakdown.*Only for those properties in CharlAlbemarle, Fluvanna, Greene.
Charlottesville area housing sales
Following up on Liesel Nowack’s story this morning in the DP, fast on the heels of the Virginia Association of Realtors’ release of home sale data:First on low interest rates’ impact on the boom – did they have an influence?… For a (per usual) far more in-depth review, read Samuel Miller’s post entitled “Low Rates Did/Did Not Fuel the Housing Boom.”Did rates fuel the housing boom?… Rates impacted the psychology of buyers (and sellers, who usually purchased after they sold) by offering nearly “free money,” from an historical point of view…. (from Inman, subscription required:) The study, “The Great turn-of-the-century housing boom,” is here)”That the increase in home ownership cuts across so many different categorizations suggests that the overall home-ownership rate is not merely reflecting changes in the distribution of the population among the categories. Something fundamental about the home-ownership process has changed,” the study theorized.What’s changed, the economists say, is mortgages…. Specialized firms have sprung up to capture different segments of the market, such as origination, servicing and securitization, the authors say.Year over year, pending sales are down in the CharlAlbemarle region* by 22%…. Mortgage Rates Decline, to 6.48%Mortage rates dip for fifth straight week (USA Today)Houses are not normal, liquid commodities; they are serious investments that require careful analysis of many, many factors prior to purchasing…. That is a “good thing.”Further reading:OFHEO Housing Price Index for Charlottesville*The Association of Realtors includes Louisa County in their statistics, despite its omission as part of the Charlottesville MSA.
Market Data for July 2006
The past few months have seen some significant changes in our market. It’s not just the interest rates, though – they’ve actually gone down a bit of late…. *Active in July 2005: 456Active in July 2006: 418% change: -8.33%Contingent: -16.74%Pending: -29.31%Sold: -20.02%In short – the market has slowed…. Surprisingly, there were fewer properties on the market in July 2006 versus July 2005, but fewer of those are going under contract. The greatest jump in new-to-the-market inventory was in the second quarter of this year…. From an aggregate point of view, May, June and July – There were nearly 4% more properties on the market for this time period in 2006 when contrasted with 2005, yet not nearly as many going under contract. March/June/JulyActive: 3.82%Contingent: -2.32%Pending: -13.48%Sold: -5.62%Bottom line (except for the *): Real estate remains a wise investment. Everybody’s expectations need to be re-evaluated: buyers have time to decide, sellers need patience and agents need educating.*these are only for those properties in CharlAlbemarle, Fluvanna and Greene.
Simple Data analysis for CharlAlbemarle
Below are the number of new listings in the Charlottesville/Albemarle area. As this is my first attempt at this basic analysis, I figured I would start small. Note: I excluded condos for this dataset. I wrote about them several days ago.The bulk of the inventory is in the $300k-$500k range – not so good for those seeking “affordable” housing. What other data would you find interesting and/or valuable? I am going to expand the counties and try to include/exclude new construction data as well.Hat tip: I took this idea from Noah’s blog; my goal is to get to Merv’s level of data analysis and presentation.
Charlottesville Housing “Overvalued”
Their methodology is here. USA Today is good at presenting pretty shocking pictures.The good news – The Charlottesville MSA is the 82nd most overvalued MSA in the country…. (Please note the touch of sarcasm) We have seen a pretty dramatic increase – the area was statistically considered (by this data) to be 0.2% under-valued in the 1st Quarter of 2002 and now the area is 29% over-valued. Wow.Do you see the difference between these two statements? From the report: After determining what house prices should be, in this statistically normal sense, we compare those theoretical prices to actual prices to determine the extent of over-, or under-valuation.From USA Today’s byline: Metro areas’ first quarter housing prices with the greatest percentage above and below what they should be:Having someone say arbitrarily what a house price “should be” removes (to me) the free market’s influence. When buyers choose not to meet a Sellers’ asking price – that is showing that the house is over-valued. Locally, sellers seem to still not realized that the value of their home is not set by what they need to make; it is what a ready, willing and able buyer is willing to spend. They are slowly coming around – there have been nearly 80 price reductions in the MLS in the past three days.