New Home Sales

New home sales up. Odd, but one suspects that this is due to the tax credit and plenty of incentives. I hope nobody buys the Home Builders on this news...

http://www.marketwat...june-2009-07-27

They are buying much smaller new homes aka post 1940's again?

Housing starts climb in June
Builders say local construction activity seems to be stabilizing.

Ground was broken for 247 single-family dwellings last month, up 1.6 percent from June 2008, according to data released Tuesday by permit tracking service New Orders Weekly. The numbers mark the first time in 2009 that a month's construction activity was higher than a year earlier.

Still, home starts in June were down more than 12 percent from the 282 projects begun in May, and the year-to-date total of 1,192 homes is nearly 25 percent below the first half of last year.
But Tom Pepper, president of New Orders Weekly, said he doesn't think last month's performance is definite evidence of a growth trend.

"I don't think it's indicative of anything at this point, though the number of home starts has been trending somewhat higher over the last four months," he said.

Furthermore, he noted the large percentage of smaller homes being built, thanks in part to the first-time home-buyer tax credit.
"We don't differentiate between a house that's 1,100 square feet and a house that's 11,000 square feet" in the monthly survey, he said.

"The square footage ratio has gone down substantially this year."
Smaller homes tend to have a smaller economic impact across the board, from reduced labor needs to a bare minimum of appliances and furnishings, Pepper said.

He also said construction of smaller homes has not yet created a "trickle-up" effect, where the sale of an existing smaller home allows the current owner to buy a bigger house.
Instead, a large proportion of first-time home buyers are opting for new homes, he said.

LINK

State foreclosures falling

A new report indicates Oklahoma endured significantly fewer foreclosures in the first half of 2009 than it did during the same period last year.
According to RealtyTrac, a real estate data service based in Irvine, Calif., approximately 5,609 homes faced foreclosure from January through June, down 27 percent from the same period in 2008.

The state's rate of one foreclosure for every 289 homes was the 35th highest in the nation and was far better than RealtyTrac's national estimate of one for every 84 homes, up nearly 15 percent from the first half of 2008.

However, figures provided by First American Core Logic, a Santa Ana, Calif.-based company, indicated that Tulsa area foreclosures are rising. The report, released earlier this month, indicated that 4.1 percent of the metro area's home loans were in some stage of the foreclosure process during a three-month period from March to May, compared with 3.1 percent during the same period of 2008.

Margo Mitchell, executive director of Consumer Credit Counseling Service in Tulsa, said her nonprofit agency is helping significantly more people with foreclosure difficulties than last year, though the number appears to have leveled off.

"Our number of foreclosure counseling sessions is staying consistent," she said. "We've done 65 per month for the last few months."

Mitchell said her cases cover a wide range of income levels and zip codes, with no real clustering in any one area or price range. Most of the service's clients are facing foreclosure due to job loss or income reduction, she said.

RealtyTrac's figures indicate the worst-performing state was Nevada, with a foreclosure rate in the first half of one for every 16 homes. The state is followed by Arizona, Florida and California.

More than 1.5 million American households were threatened with losing their homes in the first six months of this year, RealtyTrac Inc. said.
Almost 4 percent of the nation's homeowners with a mortgage are in foreclosure, and 8 percent on top of that are at least a month behind on payments — the highest levels since the Great Depression.

Something I've noticed: Rental properties are having little difficulty getting filled. This may bode well for the "reurbanization" of America. When you can get your rents, you're more likely to do rehabs and renovations for renters. Urban renovation does well when it's hip and there's lots of younger folks wanting to live there. A few years ago, it didn't make sense to rent as one could buy for the same money and with less skin in the game. Now, with credit relatively tight, folks are looking for more affordable places and are renting more often. I note that the condos that couldn't sell for two years are nearly full just two months after going to rental. While home ownership is generally better for urban neighborhoods, rentals of good rehabs works too, especially when starting a transition. None of this bodes particularly well (or ill) for the housing market at large, but it's just interesting to folks like me. Mark

CBS radio news has 11% increase in home sales and a 12% drop in home prices.

Mark, I think your comments are accurate. I live in the midwest and I see re-urbanization in a lot of cities. Three reasons: 1) housing prices are affordable, rents are fair (CRE is getting more reasonable in price--> small unit apartments/duplexes, and low rates). 2) crime is down in many urban areas-- crime is spreading to fringe suburbs 3) it is hip to live in urban areas Frankly, I think prices have stabilized in low end to low/mid range urban areas that have low crime. As always, any area where people don't feel safe, prices have trouble stabilizing. However, I have trouble believing mid/high to high priced homes are near a bottom. When I start hearing about real wage growth, then, after some lag, I will believe that the high end inventory can be cleared and appreciate.