Real Estate News

Consistent with trends that materialized in December, home value appreciation continued to weaken in many markets around the country during January.  Nationally, while the annualized appreciation rate continued to improve -– increasing from -5.5% in December to -4.8% in January –- home values declined 0.33% from the prior month (a slightly larger monthly depreciation than the 0.27% recorded in December).  See Figure 1 for the national performance in historical context.

Of the markets I focus on in the table below, four stayed in positive or flat territory in terms of month-over-month appreciation: Los Angeles (0.2%), Philadelphia (0.2%), San Diego (0.0%) and San Francisco (0.3%).  Five markets stayed in positive territory in terms of year-over-year appreciation: Boston (1.7%), Denver (0.4%), Los Angeles (0.9%), San Diego (0.2%) and San Francisco (0.9%).   It was just four months ago that sixteen of the twenty-four markets shown in the accompanying table had recorded four or more months of positive monthly appreciation in home values.

The number of homeowners losing their homes to foreclosure across the country remained unchanged from December, but was still pegged at the highest level seen in Zillow’s data, which began in 1996. In January, more than one in every thousand homes in the U.S. reached the final stage of foreclosure.

Foreclosure re-sales as a percentage of all transactions notched up in January to 22.28%, largely as a function of the decreasing volume of non-foreclosure sales in the winter months relative to the steady stream of foreclosure re-sales.

It seems that the home buyer tax credits are keeping some additional incremental demand in the marketplace during the winter, but they are not having the same powerful impact on home sales seen in the late summer and fall of 2009.  This suggests that most of the incremental buyers who could be coaxed off the fence and into the marketplace were already persuaded to purchase before the extension of the tax credit last November.  Undoubtedly, there will be another mini-frenzy of home buying around the expiration of these tax credits in June but we expect this spike to be a very muted version of the November spike.   In line with our smaller expectations for a spike in sales before expiration, we also think that the payback in diminished sales post-expiration will be more muted.

Read the rest here:
A Month That Makes Us Miss Last Summer – January Real Estate Performance

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Zillow’s chief economist Stan Humphries appeared live on Bloomberg TV this morning to talk about the double dip in home values and his overall housing outlook for 2010.

Stan says he expect U.S. home values to fall another 5 percent on the national level before we reach the bottom by middle of this year.

Credit:
Zillow Chief Economist Stan Humphries Talks About Double Dip in Home Values on Bloomberg TV

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December brought signs that the fledgling recovery of home values in many markets is slowing again. U.S. home values got a bit lower again in December relative to November levels and the rate of decline got just a little bit higher as well.  The national Zillow Home Value Index (ZHVI) was down 0.21% on a monthly basis in December to $186,200 versus a monthly decline of 0.16% in November.  Annualized depreciation was 5.0% nationally. See Figure 1 below for monthly and annualized rates of change for the ZHVI.

More significantly, a number of large markets saw an end to their streak of consecutive monthly gains, including Atlanta, Baltimore, Boston, Denver, Minneapolis, and Portland, Ore. In total, one in five (29) of the 143 markets tracked by Zillow saw monthly depreciation or flattening  of home values in December after having experienced at least five consecutive month-over-month increases in home values during 2009.  If these declines are sustained, as we expect to happen in many markets, the result will be a “double dip ” in home values, defined as two periods of sustained declines in home values separated by a brief period of stabilization or recovery.

Home values in an additional 29 markets, including the Los Angeles and New York metropolitan statistical areas (MSAs), increased on a month-over-month basis each month throughout the fourth quarter. However, the rate of increase slowed from November to December in 21 of those markets, and several appear likely to experience several months of sustained decline in early 2010.

The percent of single family homes with mortgages in negative equity was essentially flat from the third to the fourth quarter, changing from 21 percent in Q3 to 21.4 percent in Q4. This comes after a decrease in negative equity from the second quarter’s 23 percent.

The number of homeowners losing their homes to foreclosure across the country reached a peak in December, with more than one in every thousand homes being foreclosed – a number not reached since Zillow began recording national foreclosure data in 2000.

While we’ve had a brief respite in mid-2009 from home value declines in many markets, the larger market correction has still not fully run its course.  The recent stabilization owed a lot to policy support in the form of tax credits, lower mortgage rates and increased Federal Housing Administration lending. The remaining correction in home values we’ll see in the first half of this year is a function of market fundamentals, such as the increasing flow of foreclosures, high levels of inventory in the market and a probable decrease in demand as the impact of the tax credit wanes and mortgage rates rise.

While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year. Thereafter, home values are likely to bounce along the bottom with real appreciation remaining negligible for some time.  This sustained period of languid real estate performance will really constitute the final leg of the housing downturn, as our possibilities are either sharper depreciation now followed by a sharper rebound off the bottom, or modest depreciation now followed by a long period of minimal appreciation.  Either path results in home values getting to the same level ultimately in real, inflation-adjusted terms.  The second path appears more likely at this point.

Here is the original:
Zillow Q4 Reports: Recovery of Home Values Slowing; Some Markets Poised for Double Dip

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For the first time in 11 months, buyers gained some negotiation power in December. Homebuyers negotiated a median 2.7 percent, or $5,618, off the last listing price of homes sold in December, up slightly from 2.6 percent or $5,538 in November. We calculate this by comparing the last listing price of individual homes and their final sale price.

That’s still far less than buyers were negotiating off the listing price at this time last year. In December 2008, they bargained a median 4.5 percent, or $10,018, off the last listing price.

Buyers in the Vero Beach, Fla. metropolitan statistical area were again most firmly in the driver’s seat and negotiated a median 8.8 percent off the last listing price.

In many markets in California, sellers continued to be in the driver’s seat, and homes often sold for more than asking price. Many of these markets were among the hardest-hit in the country by the housing downturn, and foreclosure re-sales make up more than 50 percent of all home sales in most of these.

Listing prices across the nation showed a slight increase December, with the median price of homes listed on Zillow at $209,900. That marks a 0.4 percent increase since November, but a decrease of 6.7 percent since December 2009.

More:
Buyers Gain More Negotiating Power in December; Florida, Northeast Buyers Still Bargaining the Most

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Here at Zillow, we’ve assumed for a long time that, in most markets, buyers can get pretty good deals on foreclosures. Our chief economist, Dr. Stan Humphries, has called foreclosures and non-foreclosures two distinct markets — a comment that set off some debate in a previous blog post.

That debate prompted us to delve further into the issue, and today we’re releasing a whitepaper called “Price Differences Between Foreclosures and Non-Foreclosures.” It turns out that, in most markets, foreclosures and non-foreclosures do indeed constitute two distinct markets, with previously foreclosed homes regularly fetching much lower prices than non-foreclosed homes with similar attributes.

The extent of the “discount” for foreclosed homes varies by market.

Of the 16 markets we analyzed (using data from the end of the third quarter), the Pittsburgh metropolitan statistical area (MSA) showed the biggest discount for foreclosed homes, with buyers currently paying 59 percent less for foreclosures than they would for similar non-foreclosures.

However, there aren’t as many foreclosures to choose from in Pittsburgh as there are in some other markets. Ten percent of all sales in September were sales of previously foreclosed homes. That’s decreased even more, with 8 percent of sales in November being foreclosure re-sales.

On the other end of the spectrum was the Portland, Ore. MSA, where foreclosures typically fetched  18 percent less than non-foreclosures. Across all 16 markets, the average foreclosure discount was 28% (i.e., foreclosures sold for 72% of the price of a non-foreclosure. Here’s the full list:

A little about methodology: Our analysis attempted to control for physical differences in the homes, as well as differences in local that may exist between foreclosures and non-foreclosures (see the full methodology in the whitepaper). Without controlling for these factors, the discount for foreclosures was much larger, with foreclosures selling at a 42% discount compared to non-foreclosures.

The discount after controlling for differences between homes is probably the result of seller motivation (many sellers of foreclosed homes are banks), and the condition of the home (versus the physical specifications of the home, like number of bedrooms and bathrooms). Finally, the amount of foreclosure discount varies somewhat by how common foreclosures are in the metro area, but read the whitepaper for more about this relationship.

More:
Looking for a Deal on a Foreclosure? Try Pittsburgh.

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(Photo courtesy keetsa.com/blog)

With experts across the globe spending January analyzing Obama’s performance during his first year in office, we thought we’d join in and analyze what we here at Zillow know best: His current home.

We first gave the White House a Zestimate in January 2009 as the Obama family was preparing to take residence. At that time, we estimated it was worth $308 million, based on the home’s physical attributes (132 rooms! 55,000 square feet!), historical value and housing performance in the local Washington, DC market.

Today, as President Obama prepares to mark his first anniversary in office, our estimates put White House at a bit less: $292.5 million, a drop of $15.6 million, or 5.1 percent from last January.

But it’s not all bad news for the country’s most famous home. Just like most homes across the U.S., the White House’s decline in value over the past year was not as dramatic as it was the previous year. From January 2008 to January 2009, we estimate the White House lost almost $24 million in value, or 7.2 percent.

It’s a trend that’s playing out over much of the country. According to our latest data, the November Zillow Home Value Index for the United States fell 5 percent year over year. Not great, but consider how far it fell during the previous 12 months: 11.9 percent.

In the Washington DC metro area, the Zillow Home Value Index fell 3.6 percent from November 2008 to November 2009. That showed marked stabilization from the previous year, when it fell 15.6 percent.

A few of the White House’s attributes: It has 132 rooms, 55,000 square feet, 18 acres, 16 family-guest rooms, an underground bunker, three kitchens, three elevators and 28 fireplaces. See more details on the White House or see last year’s blog post, “What is the White House Worth?”

Source:
One Year Into Obama Presidency, What is the White House Worth Now?

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Zillow Chief Economist Stan Humphries Talks About Home Values

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U.S. home values in November showed continued stabilization when compared to previous months, with the Zillow Home Value Index (ZHVI) down slightly (-0.1%) from October, and down 5% from levels a year ago.  The ZHVI was $190,000 at the end in November, down 21% from its peak value of $239,500 in June 2006.

But, as always, conditions vary by market. The table below shows trends in twenty-five selected metro markets.  Of these markets, twelve had negative monthly changes in home values in November versus only nine with negative monthly changes in October, an indication that some of the markets that have exhibited positive appreciation in recent months are seeing renewed depreciation, as we expected.  The three cities with flat or positive performance in October that turned slightly negative again in November were San Diego (down 0.1% in November after six consecutive months of gains), Seattle (down 0.1% after four consecutive months of gains) and Washington D.C. (down 0.1%).  Other metros with several months of gains turned in much weaker appreciation in November and are very likely to show renewed depreciation in the coming months.  These include Baltimore, Boston, Cleveland, Denver and Los Angeles.

Nationally, the percentage of homes foreclosed in the month (out of all homes) regained its former peak of 0.1% in November indicating that foreclosure activity is picking up again.  Foreclosure re-sales as a percentage of all transactions remained steady at 20% but would have likely risen higher had it not been for robust sales activity fueled by the anticipated expiration of the first-time homebuyer tax credit (which was expanded and extended to the end of April).

The figure below shows the month-over-month and year-over-year changes in home values for the past nine years.  The annualized appreciation rate continues to moderate but we think it’s unlikely monthly appreciation is going to break into positive territory near-term.  Instead, we expect monthly appreciation to get more negative in the coming months as foreclosures continue, inventory levels stay high, and mortgage rates increase.

Read more here:
U.S. Housing Values Continue to Show Stabilization in November

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Over the past ten months, home buyers’ negotiating power has fallen steadily, meaning buyers are negotiating less and less off the final asking price each month. Nationally in November, buyers were able to negotiate 2.6 percent off of the last listing price of homes, according to Zillow’s Real Estate Market Reports. This is down from 2.7 percent in October.

This median percent difference of 2.6 percent between the list and sale price translates into $5,538. By comparison, at the peak of buyers’ negotiating power in January 2009, buyers negotiated $10,178 (4.5 percent) off of the asking price.

Buyers had the greatest negotiating power in the South. Florida alone boasts twelve of the 25 top markets with the most buyer negotiating power. Vero Beach, Fla. once again topped the list after falling into second last month. Buyers there negotiated 9.3 percent off of the final asking price — a median discount of $21,279. Also on the list is Atlantic City, N.J., Cape Cod, Mass., Chicago, Ill. and New York, N.Y..

Buyers aren’t finding much room to negotiate in California. Zillow’s data shows buyers getting little to no discount off of the final listing price there. In fact, buyers in hard-hit Stockton, Calif. are now paying a median of $5,538 more than the final asking price.

Sellers are also holding back on cutting their listing prices. The Percent of Listings with a Price Cut fell in November compared to October. In November, 20.5 percent listings on Zillow saw a price cut compared to 22.7 percent in October. In November 2008, 33.9 percent of listings had a price cut.

Read more here:
Buyer Negotiating Power Continues to Slip in November

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It’s jobs and wages, not growth in the GDP that will really spur the housing recovery, Zillow’s Spencer Rascoff told Forbes. Spencer regularly participates in panel discussions on Forbes.com. Other participants include Donald Trump, Jr., Michael Feder of Radar Logic and Pat Lashinsky of ZipRealty.

This time, the discussion centered around whether a weak housing market could tank the economy. Spencer responded by saying, “I tend not to focus on economic growth rates when thinking about the housing market, because economic growth typically includes government spending, and governments don’t buy homes.”

See the full discussion here.

See more here:
Zillow COO Spencer Rascoff Talks How Jobs Affect Housing on Forbes.com

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Last October, we wrote that singer-songwriter Lenny Kravitz’ SoHo duplex was up for sale for $18.5 million (looks like it dropped in price to $14.9 million).

Now comes word that Kravitz is selling his Miami Beach property at 7936 Biscayne Point Circle, Miami Beach  FL 33141 for $2,850,000. (Thanks for the heads up, Kevin). It’s 5,717 sq ft and made of concrete. From the looks of it, you can land a plane on the roof. It looks like he has a nice pool next to the bay, but it’s not filled with water in each of the bird’s eye view photos.

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Kravitz Lists Miami Beach Home for $2.85 Million

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Carnival of Real Estate #135

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In the high desert of Phelan, California, the Almquist Family created the non-profit Forever Wild sanctuary whose mission is to rescue exotic animals (bobcats, cougars, leopards, tigers, servals, snakes, parrots — you name it) that have been abandoned, abused, neglected or illegally obtained. As with most missions of mercy, their generosity and time spent caring and rehabbing these animals has left them with a house that resembles the animals: abused and neglected. According to the Hesperia Star, the family lives in a doublewide trailer without heat or air-conditioning, has leaking pipes, gaping holes in the doors and is partially held together with duct tape. Here’s the home details page of the Almquist Family.

Likewise, ABC made a commitment to finding families who give back to the community and are in need of a better home. This is a perfect match for ABC’s Extreme Makeover:Home Edition show. This episode will air tonight at 8/7 central (check your local TV listings and get your tissues ready). I’m having a hard time trying to find photos of the makeover, so you’d better tune in to see. I do know that solar panels are being used courtesy of Akeena Solar:

This Sunday’s episode of “Extreme Makeover: Home Edition” features many green and sustainable building elements, the centerpiece being a 24-panel, 5 kW Andalay solar system. Long after the building crews have left, the donated system worth nearly $40,000 will continue to give back to the Almquist family and the community, drastically reducing their electricity bills and decreasing carbon emissions by 10,000 pounds — or the equivalent of planting more than 115 trees.

Need home improvement ideas? Visit Dueling Digs, a “hot or not” game for design ideas. Hmm, maybe we need a a solar panel category.

Read more here:

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Candy Spelling, widow of the late mega-TV producer Aaron Spelling (”Charlie’s Angels,” “Dynasty,” “Starsky and Hutch,” “Beverly Hills 90210,” “Melrose Place,” “The Love Boat,” “Fantasy Island,” “Vega$,” “Hart to Hart,” … and the list goes on and on…) and mother to Tori and Randy Spelling, has put “The Manor” up for sale for $150 million, according to Gawker.

Located in the Westwood section of LA at 594 S Mapleton Dr, Los Angeles, CA, the home is being co-listed by Coldwell Banker’s Sally Forster Jones. It is said to be the most expensive home for sale in the U.S.

Here are a few interesting anecdotes about the sale:

• Spelling doesn’t know how many bathrooms the 56,000 sq ft home has.
• Spelling had her Wheaten Terrier “Madison” pick out the real estate agent.
• Spelling is trading mansion life for a luxurious, two-story condo in Los Angeles that she bought last year for $47 million.

If the Mapleton address is familiar-sounding, it’s because Hugh Hefner’s “other” home (next to the Playboy Mansion) is 500 S Mapleton Dr and it, too, is for sale — for $27.9 million.

An interview with Candy Spelling will air tonight on ABC’s 20/20.

(Photo of Candy, left, and Tori Spelling courtesy ABC News)

Read more from the original source:
Spelling Mansion on Market for $150 Million

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I’m still getting tons of comments to the blog posts I wrote on the Home Affordable refinance and loan modification programs. Homeowners also continue to post questions in Zillow Advice about each plan. With all of the confusion out there, we got in touch with Fannie Mae and Freddie Mac to ask a few questions about the refinancing portion of the plan.

From Fannie, here’s info about Fannie-backed loans:

Fannie has a couple of options, and the guidelines we could find seem to be written for lenders, but I’ll try to wade through the technical language and figure out what this means for borrowers.

• DU Refi Plus: This option, which is available April 4, will allow you to use any lender who uses Fannie’s Desktop Underwriter for underwriting. This means you don’t have to go through your current servicer. Fannie’s definition of a servicer is, “a firm that performs servicing functions, including collecting mortgage payments, paying the borrower’s taxes and insurance, and generally managing borrower escrow accounts.”
• Refi Plus: There’s no date spelled out for this option, but this program seems to be pretty streamlined. You have to go through your current servicer, and the process relies on the information contained in your original mortgage file (as long as it was fully documented). Your lender could choose to obtain new documentation for the loan, though. For this option, the eligibility focuses on your financial stability, as demonstrated by mortgage payment history.

Both of these options aim to give you a reduced monthly mortgage principal and interest payment, or get you into a more stable mortgage product.

Find out if you have a Fannie Mae-backed mortgage.

From Freddie, here’s info about Freddie-backed loans:

• The program is effective April 1, 2009.
• The loan has to be refinanced by the same company that currently services your loan, or an affiliate of that company.
• You must have made at least three payments on the loan.

Find out if you have a Freddie Mac-backed mortgage.

To be eligible for the Home Affordable Refinance with either a Freddie or Fannie backed loan your loan MUST be current. If it is not you might want to look into the Home Affordable Modification program.

The government has created a Making Home Affordable Web site that can help lead you through a series of questions to see if you’re eligible for the Home Affordable Refinance option or the Home Affordable Modification option.

I just posted a question in Zillow Advice to see if anyone has a Home Affordable success story, or if any lenders are gearing up to help borrowers with this. Please let us know about your experience.

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