Mortgage Delinquencies, Foreclosure Rates Fall.

Mortgage Delinquencies, Foreclosure Rates Fall. Image courtesy of digitalart / FreeDigitalPhotos.net

The foreclosure picture continues to show year-over-year improvement, with delinquencies down and foreclosure inventories falling, according to a report of February data from Lender Processing Services (LPS), which provides technology and data for the mortgage and real estate industries.

The total U.S. loan delinquency rate — loans 30 or more days past due but not in foreclosure — dropped to 6.8 percent in February, according to LPS. The delinquency rate has fallen 6.51 percent in the past year.

The foreclosure pre-sale inventory rate has fallen nearly 20 percent in the past year to 1.7 million homes, according to LPS.

About 5.1 million homes in the U.S. are either in foreclosure or delinquent, according to LPS.

The states with the highest percentage of delinquent loans are:

• Florida
• New Jersey
• Mississippi
• Nevada
• New York

Meanwhile, the states with the lowest percentage of delinquent loans are:

• Montana
• Arkansas
• Wyoming
• South Dakota
• North Dakota

Source: Lender Processing Services

Competition Heats Up for Home Buyers.

Competition Heats Up for Home Buyers. Image courtesy of Ambro / FreeDigitalPhotos.net

Bidding wars are brewing again in more housing markets, and buyers are finding themselves up against increased competition in snagging a home.

California buyers reportedly are feeling some of the biggest competition in the housing market, as inventories of homes for sale have fallen at the same time that buyer demand has picked up, sparking a supply-demand conundrum.

For example, in Sacramento, Calif., inventory of for-sale homes is less than a month; generally a balanced real estate market has about a six-month supply of houses for sale. The lack of inventory has made multiple offers on homes and fast sales more common.

A Sacramento area couple says they received five offers in a week on their home. They say they even fielded personal letters from buyers who expressed how much they wanted to buy the couple’s house, hoping the letters would help give their offer the edge.

“This is our fourth house,” home seller Angie Deuel says. “I’ve never experienced the market the way it is right now for a seller.”

Another Sacramento-area seller said she’s seeing increased competition among home buyers too — with three offers on her home in three days.

Some real estate agents are trying to lure more sellers to the market by showing them how competitive home buyers have gotten and how bidding wars are leading to houses selling above the asking price in many cases.

Some home owners say they are deciding to sell now to take advantage of the buyer competitiveness. These sellers say they were concerned that the inventory of homes would increase, interest rates would rise, and buyers would be less competitive down the road.

Source: “Bidding Wars Erupt in California Housing Market,” SunHerald.com (March 26, 2013)

New-Home Sales Slow in February as Prices Rise.

New-Home Sales Slow in February as Prices Rise. Image courtesy of ddpavumba / FreeDigitalPhotos.net

New-home sales posted the largest drop in two years, falling 4.6 percent in February, the Commerce Department reported Tuesday. Housing experts say the bad weather may have had a big part in the dip, just as the new-home market had shown signs of picking up its pace during the last few months.

The Northeast saw sales drop nearly 14 percent — the largest amount in the U.S. — as it battered a major snowstorm in February, The Wall Street Journal reports. New-home sales also dropped in the South by 9.7 percent and by 2.1 percent in the West. The Midwest posted an increase of 13.7 percent.

Despite some of the regional drops in sales, the new-home market is still showing signs of a rebound. Sales are up 12.3 percent year-over-year. Also, the median price of new homes in February increased 3 percent to $246,800.

“Potential home buyers are entering the market now instead of later because they are afraid that prices will shoot up if they wait,” economists at IHS Global Insight wrote in a report.

Source: “Sales of new homes sink 4.6% in February,” The Wall Street Journal (March 26, 2013)

Will Farmland Values Reverse Course?

Will Farmland Values Reverse Course? Image courtesy of meepoohfoto / FreeDigitalPhotos.net

Farmland values have risen rapidly over the past few years, renewing fears of a bursting bubble in that sector.

In Iowa alone, farmland values have surged 90 percent since 2009. Mike Duffy, an economist at Iowa State University, says that an acre of farmland in the state used to sell for an average of $2,275 about a decade ago. Today, it sells for $8,700. Last October, an 80-acre parcel of farmland near Boyden sold for a record $21,900 per acre.

But some analysts say the increase in land values are not sustainable.

“The concern clearly is not so much how much higher are they going to go, but when this bubble breaks, how low will they go and what will the aftermath of that be?” Michael Hein, vice president of the Liberty Trust and Savings Bank in Durant, Iowa, told USA Today. “If profits start to diminish, there will be an impact on land values as well.”

In the early 1980s, a  a surge in interest rates, and a drop in crop prices led to a rapid decline in farm prices. Many farmers — who had financed their purchases with debt — were forced to unload their properties. It caused a sharp decline in farmland values, which dropped 63 percent in Iowa, going from $2,147 an acre in 1981 to $787 five years later.

But some analysts say that won’t happen again. Farmers are more financially conservative, with many of the recent land purchases being made with farmers using 50 percent to 75 percent of their own cash, USA Today reports. The debt-to-asset ratio on farms is expected to be the lowest level on record this year, according to the U.S. Department of Agriculture.

Still, some banks like Liberty Trust and Savings are reportedly becoming more cautious in issuing new loans for farmland, as values start to show some decline.

Source: “Farmland prices: Is the bubble about to burst?” USA Today (March 24, 2013)

Some Buyers Snap Up Retirement Homes Early.

Some Buyers Snap Up Retirement Homes Early. Image courtesy of Ambro / FreeDigitalPhotos.net

With home values falling over the past few years, some buyers are seeing a great opportunity to buy their retirement home now instead of waiting until they retire years later.

For example, in one of the largest retirement areas in the nation — Century Village in Boca Raton, Fla. — the average age of a new home buyer has dropped from the mid-70s to the low 60s in the last year.  Charlie Rocque, 56, may not be ready for retirement but he already bought his retirement apartment there for $20,000 (though it was valued at around $75,000).

“People are looking at this in terms of their long term future,” Ben Schachter with Century Village Real Estate Inc. told CNBC. “They recognize that with the time value of money they are better off investing now, taking advantage of 20, 40, $60,000 price points, because if they look back just a half a decade ago, prices were 3-4 times what they are now. They’re looking at the market as it increases, as the economy is strengthening, and they want to buy now while it’s the best opportunity to do so.”

Younger investors also may even rent out the property until they need it years later for their own retirement.

Source: “Younger Buyers Jumping Into Retirement Real Estate,” CNBC (March 25, 2013)