“New-Home Sales Jump by 11%, Largest Monthly Rise in 9 Years”

Good News?

Published today on CNBC by AP…check out the full article.

Are we seeing signs of a turn in the housing market?

“New U.S. home sales rose by the largest amount in more than eight years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades.”

and the article goes on to say…

“Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.”

There it is….median sales price “down nearly 6 percent from $219,000 in May”

What this means to me is that when prices fall far enough sales will pick up….classic price dynamics right?

Now compare this article with the June 2009 leading housing indicators. Look at the Consumer Confidence and “Plans to buy a new home in the next 6 months”  Key Indicators Here

What is interesting is the rise in Consumer Confidence from 2008 and 1st Qtr ‘09 levels, yet in May 2009 the lowest indicator levels for “Plans to buy a new home”, even compared to 2008.

Hmmmm quite the conflict.

Putting an I.R.A. to Work in Ventures Beyond Stocks

I have had several comments about my previous blog “You Can Buy Foreclosure Property With Your 401K/IRA Funds”, so I hope that this article from the NY Times might offer some more insight.

Read The Full Story

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Also my company Market Advisors LLC will be hosting a San Francisco Bay Cruise Mixer from 6pm to 8pm on Thursday September 10th. A very enjoyable time to meet several professionals and enjoy our beautiful San Francisco skyline.

Contact Us for Information

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“Foreclosure Sales: A Real Estate Sugar-High”

Excellent article published on CNBC this morning, wriiten by Albert Bozzo Senior Features Editor.

In a nutshell the article provides good factual information on the effect foreclosure home sales are having on the overall picture of the residential home sales market throughout the US.

“From one region to the other, a powerful pattern is emerging in the national real estate market. In areas where state foreclosure rates are among the highest—Florida (3^rd), Arizona (2^nd), California (4^th) and Nevada (1^st)—sales are booming, partly because prices are so low; on the flip side, in states like with the lowest foreclosure rates—Kentucky (40^th) West Virginia (48^th) and Iowa (41^st), Nebraska (45^th) —prices are often stable or the declines modest, while sales are down, usually in the singe digits. ”

“In some of the worst markets, it’s not usual in any given month for 80 percent of the sales to be distressed properties,” says Rick Sharga, SVP at RealtyTrak, whose foreclosure rate data are widely followed. In some of the worst markets, we’re starting to see that the market has overreacted.  We’re seeing bidding wars similar to what we saw in the boom.”

If you read this carefully you can begin to see the bigger picture that across the board any enthusiasm of a market recovery is short sighted, as most all of the sales volume is distressed property driven. Take out the foreclosure and short sale factor and you can see a very limited and lackluster “normal” sales market.

When the time comes that Foreclosure Home inventories are depleted, what will the “normal” market be telling us?

Read the entire article here.

Foreclosures a Symptom of a Disposable Society?

Lets start with a link to a commentary written by Andy Rooney of 60 Minutes fame, this was written in August of 2003…

A Disposable Society

It seems to me that much of the continuous record rate of foreclosure activity can be directly related to most consumers’ perceptions of value in housing. Meaning quite simply that one perceives their homes current market value as being less than what one owes in mortgage debt…so it is simply easier to stop making payments and ultimately walk away from the home as if “throwing it away”.

When an asset becomes disposable then value diminishes, which continues to feed deterioration of market value as more foreclosure product comes to market.

This is not just a plague afflicting the housing market, but one that also afflicts the auto industry.

Possible cures?

Lower LTV maximums…require the buyer to make a more meaningful investment of their hard earned cash.

Other ideas?

Foreclosures Rise 15% in First Half of 2009

Well now…just when you thought things were beginning to look better. Here are some interesting quotes from the article published today by CNBC.

“The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.”

“The data show that, despite the Obama administration’s plan to encourage the lending industry to prevent foreclosures by handing out $50 billion in subsidies, the nation’s housing woes continue to spread.”

“Experts don’t expect foreclosures to peak until the middle of next year.”

“Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up nearly 5 percent from May, RealtyTrac said.”

“It was the fourth-straight month in which more than 300,000 households receiving a foreclosure filing, which includes default notices and several other legal notices that homeowners receive before they finally lose their homes.”

“Banks repossessed more than 79,000 homes in June, up from about 65,000 a month earlier.”

“The Obama administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments, but it’s off to a slow start.”

I will say it again and again and again….there can be no meaningful recovery in the real estate markets until UNEMPLOYMENT improves.

Read the full article

U.S. FORECLOSURE ACTIVITY DECREASES 6 PERCENT IN MAY

I know this was published on June 11th…but there are some highlights I want to post.

Full Report State by State

“May foreclosure activity was the third highest month on record, and marked the third straight month where the total number of properties with foreclosure  filings exceeded 300,000 — a first in the history of our report,” said  James J. Saccacio, chief executive officer of RealtyTrac. “While defaults  and scheduled foreclosure auctions were both down from the previous month, bank repossessions, or REOs, were up 2 percent thanks largely to substantial increases in several states, including Michigan, Arizona, Washington, Nevada, Oregon and New York. We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end.”

Nevada, California, Florida post top state foreclosure rates
Nevada continued to document the nation’s highest foreclosure rate, with one in every 64 housing units receiving a foreclosure filing during the month — more than six times the national average.

With one in every 144 housing units receiving a foreclosure filing during the month, California posted the nation’s second highest state foreclosure rate despite a 4 percent decrease in foreclosure activity from the previous month.

Florida posted the third highest state foreclosure rate in May, with one in every 148 housing units receiving a foreclosure filing during the month.

Arizona posted the fourth highest state foreclosure rate in May, with one in every 158 housing units receiving a foreclosure filing, and Utah posted  the fifth highest state foreclosure rate, with one in every 316 housing units receiving a foreclosure filing.

Other states with foreclosure rates ranking among the nation’s 10 highest were Michigan, Georgia, Colorado, Idaho and Ohio.

Top 10 states account for nearly 77 percent of total U.S. foreclosure activity

Hmmm..are markets improving? have we hit bottom? Is there more downside to come?

I will enjoy hearing your thoughts.

Real Estate Market Outlook…Enlightening Excerpts

A very interesting article by Kerry Stirton of the Globe and Mail. I missed it when it was published on May 15, 2009, but I want to share some relevant excerpts.

“It will take time to get real estate market back to balance”

“Two leading thinkers on the U.S. real estate bubble and its attendant effects, one a top-ranked real estate analyst and fund manager, the other a Nobel laureate economist, say we are probably a meaningful distance from an ultimate trough in valuations and a positive economic rebound. To various extents, their logic suggests that reallocations of investment monies, and moves to take on riskier investment positions, should continue to be made only cautiously from this point – at least until greater price stability appears to have returned.”

Jonathan Litt: Top-ranked U.S. Real Estate Analyst and Fund Manager

“Our fundamental view is that the unprecedented real estate valuations of the 2005-2007 time period will take several years to unwind. Cheap and plentiful debt, along with rose-coloured glasses, drove the boom. It could take four to five years for the private real estate markets to find a bottom in valuations and fundamentals. Publicly traded property companies will likely be part of the solution to the dearth of capital.”

Vernon L. Smith: Professor of economics and 2002 Nobel laureate

“We economists were wrong: Even when traders in an asset market know the value of the asset, bubbles form dependably. … Over the past 18 months as housing prices have fallen, millions of homes became worth less than the loans on them, huge losses have been transmitted to lending institutions, investment banks, investors in mortgage-backed securities, sellers of credit default swaps, and the insurer of last resort, the U.S. Treasury. …

“The events of the past 10 years have an eerie similarity to the period leading up to the Great Depression. … In 1920, residential mortgage debt was 10.2 per cent of household wealth; by 1929, it was 27.2 per cent of household wealth. The causes of the Great Depression need more study, but the claims that losses on stock-market speculation and a monetary contraction caused the decline of the banking system both seem inadequate. It appears that both the Great Depression and the current crisis had their origins in excessive consumer debt – especially mortgage debt – that was transmitted into the financial sector during a sharp downturn. … It appears that we’re witnessing the second great consumer debt crash, the end of a massive consumption binge.”

This is why we are excited about the real estate foreclosure markets. Market Advisors are aggressive buyers of select opportunities throughout this market correction.

Case Shiller April Home Values Report

I apologize for not posting this earlier, but with the 4th weekend and all….I admit I got side-tracked. Standard and Poors released the Case Shiller Home Value Index for April 2009, last Tuesday June 30. Yes, I know this is a lagging indicator, yet an important source of information that I use for the Market Advisors Home Value Trend Table

So what are we seeing…In April an improvement in home values in the following metro areas; Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, and Washington DC… Interesting?

However further declines in the following Metros; Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle and Tampa…Hmmm troubling as these are the major appreciation centers in the Nation.

So, the pressure continues with a bias to the downside, as unemployment still rears it’s ugly head across all Metro markets in the U.S.

Invest in Foreclosure Real Estate with Your IRA/401k: Free Webinar, 6/25

Check out this latest article

http://www.prweb.com/releases/foreclosure_real_estate/self-directedIRA/prweb2570844.htm

Great Opportunity to hear from Tom Anderson CEO PENSCO Trust Co.

Have Real Estate values reached market bottom in California?

How do you determine a market bottom in real estate, specifically in California? One of the prime indicators that we follow at Market Advisors is the Unemployment index.

“California’s 11.5% jobless rate in May is highest since 1941″ this was the headline in Saturday’s 6/20/09,SF Chronicle, page 1, by Tom Abate.

Certainly sobering news for pundits who have been calling the market bottom since the 1st quarter ‘09. Here is why we believe that we will see further declines in real estate values in California…simply put…

Increasing Unemployment = Increasing Default Activity = Decreasing Real Estate Values

A good reason why we continue to be buyers of real estate in California…it simply is an on going fire sale!

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