Foreclosure slowdown stabilizes real estate values

Zillow: Home values down year-over-year in August

Home values were down on a yearly basis in August, but showed relative stability in the near term, according to indices that track home values nationwide.
Home values fell 4.5 percent year over year in August, to $172,600, and remained essentially flat compared to July, according to the Zillow Home Value Index, released today. CoreLogic's Home Price Index showed a similar drop year over year, down 4.4 percent, with month-to-month prices also remaining virtually flat.
Overall, prices have dropped 30.5 percent since an April 2006 peak, according to CoreLogic. When distressed sales (bank-owned homes and short sales) are excluded, the drop from peak stood at 21 percent in August.
Zillow's index report showed a somewhat similar drop from a June 2006 peak: 28.3 percent. That index tracks 157 metropolitan areas nationwide. Of the 25 largest metros tracked, all saw their index values remain virtually the same on a monthly basis. On a yearly basis, Sacramento, Calif., saw the biggest drop (-11.3 percent), followed by Minneapolis-St. Paul, Minn. (-10.7 percent) and Atlanta (-10 percent).
Only Pittsburgh experienced year-over-year value appreciation: 2.8 percent. That metro continues to be the only one among the top 25 to have seen its index value remain essentially flat from peak, falling only 0.8 percent.
Miami-Fort Lauderdale, Fla., and Orlando, Fla., have seen the biggest drops from peak, each down 54.5 percent.
Zillow Home Value Index

Largest 25 metros	Zillow Home Value Index			Foreclosures
	Aug-11	Y-o-Y Chg.	Chg. from peak	Homes foreclosed (for every 10k homes)	Foreclosure resales
U.S.	$172,600	-4.5%	-28.3%	9.2	19.5%
New York	$350,700	-2.90%	-23.30%	0.4	2.5%
Los Angeles	$389,900	-6.10%	-35.60%	12.9	25.4%
Chicago	$172,800	-9.10%	-36.30%	--	--
Dallas	$128,000	-2.80%	-11.40%	8.8	18.6%
Philadelphia	$194,300	-4.20%	-17.70%	3.2	7.2%
Miami-Fort Lauderdale, Fla.	$139,900	-3.30%	-54.50%	--	--
Washington, D.C.	$315,400	-1.60%	-28.10%	5.7	14.1%
Atlanta	$121,700	-10%	-33.30%	--	--
Detroit	$75,000	-6.50%	-52.80%	--	--
Boston	$316,200	-3%	-20.60%	--	--
San Francisco	$474,700	-7.10%	-32.80%	13	25.5%
Phoenix	$123,100	-8%	-56.40%	32.3	44.2%
Riverside, Calif.	$184,300	-4.40%	-54.20%	25.9	46.1%
Seattle	$259,800	-6.30%	-31.90%	13.6	22.2%
Minneapolis-St. Paul, Minn.	$159,600	-10.70%	-35.40%	11.9	19.6%
San Diego	$347,300	-5.80%	-35.30%	12.6	27.2%
St. Louis	$130,700	-7.30%	-16.90%	--	--
Tampa, Fla.	$106,400	-9.00%	-51%	--	--
Baltimore	$224,000	-3.90%	-25.60%	3.2	12%
Denver	$198,000	-4.20%	-14.70%	11.4	23.9%
Pittsburgh	$110,500	2.80%	-0.80%	3.8	8.9%
Portland, Ore.	$211,400	-4.60%	-27.90%	7.9	16.5%
Cleveland	$112,300	-4.90%	-22.10%	7	19.7%
Sacramento, Calif.	$202,400	-11.30%	-51.30%	22.7	40.8%
Orlando, Fla.	$117,400	-5.10%	-54.50%	--	--

Source: Zillow.
The rate at which homes were foreclosed in August was 9.2 out of every 10,000 homes, a decline from 10.9 of every 10,000 homes in October 2010, before investigations into documentation irregularities lengthened foreclosure timelines. Foreclosure resales stood at 19.5 percent of overall sales.
"Due to the robo-signing controversy, the pace of foreclosure liquidations has been slower than it would be otherwise, which is impacting home-value trends positively. Eventually the pace will pick up again, putting more bank-owned homes into local markets and putting additional downward pressure on prices," said Stan Humphries, Zillow's chief economist, in a statement.
"We remain encouraged about the organic stabilization in home values that we have been seeing absent the federal homebuyer tax credits, but we remain concerned about the impact that recent economic turmoil and continued weak economic indicators will have on future home sales and home-value trends.
"At this point, we maintain the expectation that a definitive bottom will not occur until 2012 at the earliest."
According to CoreLogic's price index, home prices fell a slight 0.7 percent year-over-year in August when distressed sales are excluded.
"The continued bright spot is the nondistressed segment of the market, which is only marginally lower than a year ago and continues to exhibit relative strength," said Mark Fleming, CoreLogic's chief economist, in a statement.
Of the 100 most-populous metro areas nationwide, 80 saw yearly price declines in August, including seven of the top 10.

10 largest metro areas	Y-o-Y Chg.	Y-o-Y Chg.
	Single-family	Excluding distressed
Chicago-Joliet-Naperville, Ill.	-10.2%	-1.3%
Phoenix-Mesa-Glendale, Ariz.	-9.8%	-8.2%
Atlanta-Sandy Springs-Marietta, Ga.	-7.2%	-2.8%
Riverside-San Bernardino-Ontario, Calif.	-6.0%	-3.8%
Los Angeles-Long Beach-Glendale, Calif.	-5.2%	0.7%
Houston-Sugar Land-Baytown, Texas	-2.6%	3.3%
Philadelphia, Pa.	-1.7%	-1.7%
Dallas-Plano-Irving, Texas	0.2%	2.6%
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.	0.9%	2.4%
New York-White Plains-Wayne, N.Y.-N.J.	3.2%	4.0%

Source: CoreLogic.
In September, home prices remained little changed, either from August or over a three-month period starting in July, according to a report from Altos Research.
Altos' 10-city national composite dipped 0.6 percent in September from August and 1.3 percent from July, to $444,045. Salt Lake City posted the largest price change from August, an increase of 1.7 percent.
Unsold inventory in the 10-city composite fell in every market, declining 1.9 percent overall from August and 2.3 percent from July. Tampa, Fla., posted the biggest decrease from August: 9.9 percent.
"The mass liquidation of foreclosure portfolios is best described as a trickle. The inventory is coming on the market slowly as more loans are modified to keep homeowners in their homes. Although the millions of properties in the shadow inventory are still looming, there is nothing that indicates a flood of foreclosures hitting the market anytime soon," the report said.

latimes.com

Number of permanent mortgage modifications rises

15,522 borrowers received permanent modifications through the Home Affordable Modification Program in August, up 2.3% from July, lifting the total since the program began to 690,969, the Treasury Department said.

By Alejandro Lazo, Los Angeles Times
October 6, 2011

The number of borrowers who received permanent aid through the Obama administration's signature foreclosure relief program increased slightly in August.

A total of 15,522 borrowers received permanent modifications through the Home Affordable Modification Program in August, up 2.3% from July. Since the program began more than two years ago, 690,969 have gotten the long-term aid, the Treasury Department said Wednesday.

Also in August, the number of troubled homeowners eligible for the program fell below 1 million, with 992,968 borrowers potentially qualified, the Treasury Department said.

A total of 1,902,606 borrowers were in extended temporary trial modifications.

Launched in 2009, the initiative was aimed at helping 3 million to 4 million homeowners avoid foreclosure through 2012. Critics assert that the program is on track to fall below those goals.

Loss of income remains the overwhelming reason that people seek mortgage relief through the program, cited by 61.5% of those receiving a permanent modification.

That compared with 11.2% who said "excessive obligation" was the main reason for seeking help and 2.9% who cited illness of the principal borrower.

The government did not report reasons given for the remaining 24.4% of borrowers.

Last month, the Treasury Department said that Bank of America Corp. and JPMorgan Chase Bank were in "substantial" need of improvement in helping troubled borrowers modify their mortgages and that those two banks would be denied financial incentives for completing modifications until their performance in the program improved.

Wells Fargo & Co. and Ocwen Loan Servicing, after previously being on the list of banks that needed "substantial" improvement, were categorized in the Treasury report as needing only "moderate" improvement, as were American Home Mortgage Servicing Inc., CitiMortgage and Select Portfolio Servicing Inc.

The banks that were in need of minor improvement included GMAC Mortgage, Litton Loan Servicing and OneWest Bank, the government said.