Case-Shiller released the 4th quarter tracking on home prices. Los Angeles, while not a the top, certainly was showing now signs of home pricing rebounds…with an annualized decrease of almost 5% year over year and a 1 month decline of 1.5% from September “11 to October “11.
There is much talk about a massive influx of foreclosures in 2012…however, with continued declines I believe the numbers are much exaggerated. Why? The banks and services are already dealing from massive volumes of losses…supported by the recent announcement from BofA carrying over $2.5 billion in foreclosed housing inventory…yes, BofA is holding on to these homes to keep the hosting prices strong and limit the continued declines in pricing. If BofA flushed their inventory on the US Housing market, I project that the housing market would see an additional decrease of up to 0.5% based on the volume and impact to the seasonal lows. I believe banks are doing everything in their power to control housing prices.
Simple economics…greater inventory equates to reduced proportional demand equates to reduced housing prices.
With the banks now endorsing the once elusive Real Estate Short Sale…we will realize more incentives to sellers to choose short sale -vs- the alternative of walking away and adding foreclosure inventory to the overstressed housing market.
With the government endorsing new Short Sell, Rent and Buy Back programs, we will see Americans choosing to salvage their immediate futures and securing a more dignified solution to foreclosure by short selling their home to a “non-profit” entity, renting for a few years, and purchasing the home back minus the negative equity that strapped them to the burden…a win, win…win for all parties.
Heres is a snippet from the most recent Case Shiller Housing Report:
New York, December 27, 2011 – Data through October 2011, released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed decreases of 1.1% and 1.2% for the 10- and 20-City Composites in October vs. September. Nineteen of the 20 cities covered by the indices also saw home prices decrease over the month. The 10- and 20-City Composites posted annual returns of -3.0% and -3.4% versus October 2010, respectively. Fourteen of the 20 MSAs and both Composites saw improved annual returns compared to September’s data. Miami saw no change in annual returns in October; while Atlanta, Detroit, Las Vegas, Los Angeles and Minneapolis saw their annual rates worsen. At -11.7% Atlanta posted the lowest annual return. Detroit and Washington DC were the only two cities to post positive annual returns of +2.5% and +1.3%, respectively.
