Published Wednesday, Feb. 11, 2009 | 9:10 a.m.
Updated Wednesday, Feb. 11, 2009 | 3:18 p.m.
- Feb. 10 -- Home sales slow as prices continue tumble
One company that tracks foreclosures issued a report Wednesday suggesting the housing market is finally turning around in Nevada and the rest of the nation. But an analyst at a competing firm said things are likely to get worse before turning around later this year.
Foreclosures nationwide fell by more than 25 percent in January, with many of the hardest-hit states seeing dramatic drops in the number of homes repossessed by lenders, said ForeclosureS.com of Sacramento, Calif.
Completed foreclosures nationwide dropped from 97,841 in December to 72,694 in January 2009 – the lowest number since April 2008, ForeclosureS.com found. It said completed foreclosures fell 20 percent month-to-month in Nevada, totaling 3,207 in January.
Pre-foreclosure filings – an indicator of future completed foreclosures – also dropped 12 percent, from 190,467 in December to 166,860 in January. In Nevada, pre-foreclosure filings fell 2.3 percent from December to 6,774 in January, the company said.
“Efforts last year by government and industry to lay the groundwork for housing recovery finally are yielding the hoped-for slowdown in the foreclosure hemorrhage,” said ForeclosureS.com President Alexis McGee.
“While unemployment definitely is a concern to the economy overall, it appears it’s outweighed by favorable conditions bringing buyers into the housing markets,” McGee said in a statement. “Home sales are roaring back. The dramatic drop in home prices and historically low mortgage interest rates are making homes more affordable – and accessible – than we’ve seen in almost 30 years.”
McGee said she does not expect to see foreclosures jump because of the expiration of a moratorium on foreclosures enacted by lending giants Fannie Mae and Freddie Mac. That moratorium was in effect Nov. 26 through Jan. 9. McGee noted that despite the moratorium, foreclosures nationwide actually rose in December. Fannie Mae and Freddie Mac announced in January that they would extend the suspension of foreclosure sales and evictions from single-family properties through Jan. 31.
The bottom line, according to McGee: "While many headlines still focus on foreclosures, the story is now the recovery of real estate."
Rick Sharga, senior vice president at competitor RealtyTrac, disagreed that the market has turned around.
"No way," he said Wednesday.
Sharga said foreclosure activity in January was artificially suppressed by the lending companies and a state government program in Florida -- but that market forces will soon prevail and cause foreclosures to increase again.
While he expects the real estate market to bottom out sometime this year, Sharga said that hasn’t happened yet and it may take the market until 2011 to work its way through the existing inventory of foreclosed homes and the foreclosures in the pipeline.
"With what everyone is forecasting with increasing unemployment, there’s a buildup of pending foreclosure activity waiting to hit the market,’" he said.
He said a new set of adjustable-rate mortgages is being adjusted upward to higher interest rates and that will soon lead to more foreclosures as consumers are unable to make the higher payments.
And banks, which have been flooding the resale market with foreclosed homes, are actually sitting on more foreclosed homes than they have listed on the multiple listing service for sale, he said.
RealtyTrac also had a different take in a report last month on foreclosure filings, which it said rose 17 percent nationwide from November to December.
“State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth quarter numbers overall, but that effect appears to have worn off by December,” James Saccacio, chief executive of RealtyTrac, said in a January statement. “The big jump in December foreclosure activity was somewhat surprising given the moratoria enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners.
“Clearly the foreclosure prevention programs implemented to-date have not had any real success in slowing down this foreclosure tsunami. And the recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners,” he said.
The California law, which RealtyTrac said required lenders to provide written notice of their intent to initiate foreclosure proceedings 30 days prior to issuing a notice of default (NOD), resulted in a reduction of NODs from 44,278 in August to 21,665 in September, RealtyTrac said. Notice of Default filings then surged by 122 percent, to more than 42,000, in December. Similar patterns have occurred in other states, such as Massachusetts and Maryland, where similar types of foreclosure prevention legislation has been enacted.
The report by ForeclosureS.com followed Tuesday's monthly sales report from the Greater Las Vegas Association of Realtors.
The Las Vegas-area Realtors said median home prices fell 8.6 percent in January to $160,000 -- 49 percent below the high of $315,000 recorded by the GLVAR in June 2006. Prices have fallen 36 percent since January 2008.
The 2,224 sales in January were off 11 percent from December, but were up 126 percent from January 2008, the Realtors said.
“January is usually one of our slowest months for home buying. So, it’s good to see buyers continuing to act on this unprecedented opportunity to buy a home here in Southern Nevada, even in a traditionally slow month,” GLVAR President Sue Naumann said in a statement. “While we’d like to see home prices stabilize soon, we’re at least encouraged to see the number of homes listed for sale remaining stable month after month.''
Bank-owned properties now account for more than three out of every four homes being sold in Southern Nevada, the Realtors said.
“Lenders are selling these bank-owned homes at such low prices that it drives down the price of all properties in the area,” Naumann explained. “Then again, the silver lining in this situation is that qualified buyers can now buy many homes for less than what it would cost to build them today.”
Naumann said the value of all real estate transactions tracked through the Realtors' Multiple Listing Service during January decreased from the previous month, totaling nearly $415 million worth of single-family home sales, down 18.7 percent from $510 million in December, but up 37.2 percent from one year ago. More than $45 million in local condo and townhome properties were sold during January, compared to nearly $52 million in December. That’s down 12.6 percent for the month and 3.5 percent from one year ago.
Steve Green can be reached at [email protected].