This Week in Real Estate: May 23, 2016

New construction, average time to close and cash sales top the headlines This Week in Real Estate. Below are a few highlights from the third week of May that influence our business:

* Strong Housing Market Helps Reduce Lingering Foreclosure Inventory. A little less than 20,000 residential properties in the foreclosure process lie vacant (zombies), representing 4.7% of all foreclosures, according to the Q2 2016 U.S. Residential Property Vacancy and Zombie Foreclosure Report by housing data provider RealtyTrac. Currently, 19,187 properties are undergoing zombie foreclosures, a decrease of 3.1% from last month. “Lenders have been taking advantage of the strong seller’s market to dispose of lingering foreclosure inventory over the past year, evidenced by 12 consecutive months of increasing bank repossessions ending in February and now evidenced by these numbers showing a sharp drop in vacant zombie foreclosures compared to a year ago,” RealtyTrac senior vice president Daren Blomquist said. Among states with at least 100 zombie foreclosures, these are the states with the highest zombie foreclosure rates: Oregon (11.8%), Indiana (9.5%), Kentucky (8%), Maryland (7.2%) and Washington (6.6%).
Full Story…

* Time to Close a Loan Settles at 44 Days For The Second Month. For the second month in a row, the time to close all loans remained steady at 44 days in April, as lenders fall into a routine in the post-TRID environment, the latest Origination Insight Report from Ellie Mae found. As a refresher, this is the shortest time to close since March 2015 and is down two days from February, when the time to close fell to 46 days. Broken up, the average time to close a purchase also remained steady at 45 days in April, while the time to close a refinance increased to 44 days in April, up from 41 days in March.
Full Story…

* U.S. Home Construction Rebounds in April. Construction on new houses rebounded in April after a sharp did in the prior month, but a slowdown in building permits suggest work on new properties could taper off from last year’s double-digit pace. Housing starts climbed 6.6% last month to an annual pace of 1.17 million, the Commerce Department said Tuesday. In March, starts were revised to a 1.1 million rate. Housing has been one of the economy’s strongest sectors of growth over the past few years, but sales and construction are not growing as fast in early 2016 as they did in 2015. Permits for new construction, a sign of future demand, might offer another clue. They rose slightly to an annual rate of 1.12 million in April, but they are running 5.3% below year-ago levels. In April, new construction sped up in the Midwest and South and declined in the Northeast and West, the government said.
Full Story…

* Cash Sales on Pace to Fall to 8-Year Low. The share of homes bought in cash is on pace to hit an eight-year low after the first two months of the year saw the smallest portion of homes purchased in cash in the same time period since 2008, a new report from CoreLogic shows. According to CoreLogic’s Report, for the first two months of 2016, the cash sales share averaged 35.6%, the lowest start to any year since 2008. For perspective, the cash sales share peaked in January 2011 when cash transactions accounted for 46.6% of total home sales nationally. According to CoreLogic’s report, prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%. In its report, CoreLogic states that if the cash sales share continues to fall at the same rate it did in February 2016, the share should fall back to the pre-crisis average by mid-2018. 24% of total sales were cash sales in Washington through the first 2 months of 2016, while 31% of total sales were cash sales in Oregon during the same time period.
Full Story…
Have a productive week!


Leave a Reply


©2016 BHH Affiliates, LLC. An independently operated subsidiary of HomeServices of America, Inc., a Berkshire Hathaway affiliate, and a franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc. Equal Housing Opportunity.