By Mike Colpitts
Almost six years after the U.S. housing market began its collapse, one of the nation’s largest real estate research firms says the housing market is making strides towards stabilizing and may be close to a bottom of the market.
CoreLogic analysts say the U.S. housing market “is transitioning to more stability in sales and home prices.” With home values forecast to increase in more than 70 cities by Housing Predictor analysts during 2012, it seems that the firm might be on to something.
In its monthly economic publication, the CoreLorgic Market Pulse report, the firm said the U.S. housing market is making progress towards stabilizing, with the increase in short sales, mortgage modifications and other foreclosure alternatives “playing a larger role than in years past.” The firm sells its research to the financial industry, including banks and hedge funds.
Foreclosures have been slowed by the increase in modifications and delays caused by the robo-signing scandal, which may have affected as many as 4.5 million homeowners foreclosed by the nation’s largest five mortgage lenders.
Mortgage performance is also experiencing a slow and steady improvement as the 90+ day serious delinquency rate in March fell to 7.0%, the lowest since July 2009, according to CoreLogic. “This decline in serious delinquency represents a significant reduction of approximately three quarters of a million borrowers,” said chief economist Mark Fleming.
Home sales, including properties sold by real estate agents and private sales also improved, topping 410,000 units in the U.S. during April, an increase of more than 20% over a year ago and the highest since March 2007.
However, foreclosures haunt the marketplace. There were 572,928 residential properties that were filed against with a notice of foreclosure in the first quarter of the year, down 16% from a year ago, according to RealtyTrac. The first three months of the year were also the lowest since the last quarter of 2007.
Although there has been a reduction in the number of foreclosure starts and filings in real estate markets over the past few months, RealtyTrac’s CEO warns that the likelihood of a higher volume of foreclosures is in the offing.“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore.
“There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March.
“The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen, both in terms of new foreclosure activity and new short sale activity.”