Some Good Real Estate News!

Home prices showing signs of life

According to the Clear Capital home price index, home prices stopped declining in early January and even increased for the first time since August.  Over the last three months, home prices did decline 1.6% from the previous period. But at the start of 2011, Clear Capital said prices began "showing life." The company's senior statistician Alex Villacorta said it is the first uptick since the homebuyer tax credit was in force. It expired in April 2010, and prices have dropped off since.  Villacorta warned however that any conclusions of a recovery would be premature, but he did say it was a positive sign.  "This recent national change in price direction is encouraging for the overall housing sector, yet it is still too early to determine whether this current uptick in home prices is a temporary reprieve or the start of a sustained recovery," Villacorta said. 

The changes in prices, especially during a point in the year when sales are slow, is a sign that demand may be returning. Even more encouraging, Clear Capital said the main driver of the price increase was the slowing rate of sale of REO properties, those repossessed through foreclosure.  Every spike in REO saturation, or the percentage of REO sales of all activity, has coincided with a drop in prices. But over the past three months, that saturation increased 1.4%, a drop from recent gains of 3.2%. If this deceleration continues, Clear Capital said, home prices could be poised for future gains "ahead of a seasonal spring lift."  But RealtyTrac's Senior Vice President Rick Sharga said from what his company is looking at, major banks currently hold 1 million REO and have kept 70% of that off of the market so far. 

Still, Clear Capital reported that thirteen of the highest performing markets posted gains over the last three months. The largest gains came in Cleveland (12.6%) and Dayton, Ohio (9.6%). However, Cleveland prices remain 55% below its peak in 2006.  "Although many markets still remain under significant downward pressure in light of increased distressed sale activities, it is clear that the severity of the downturns observed in October and November have subsided," Villacorta said.

Initial claims down for the week

There were 415,000 initial jobless claims filed in the week ended Jan. 29, the Labor Department said today. That was down 42,000 from the week before, and better than the 425,000 claims economists surveyed by Briefing.com had expected.  Continuing claims -- which include people filing for the second week of benefits or more -- fell to 3,925,000 in the week ended Jan. 22, a decline of 84,000 from the week before.  While the latest report shows an improvement, jobless claim figures have been jumping around recently, so economists haven't been reading too much into the weekly figures, said Robert Dye, a senior economist at PNC Financial Services. 

The 4-week moving average of initial claims -- a measurement used to smooth out week-to-week volatility -- is viewed as a more accurate representation of job market conditions. While that number rose by 1,000 to 430,500, Dye said this is still well below the high levels seen in 2010.  The report comes a day before the government releases its widely anticipated monthly jobs report. Economists expect the report to show that the economy added 149,000 jobs in December and that the unemployment rate rose to 9.5%.

CNBC's Olick - kicking tires

"Yesterday the folks at online real estate sale and data site Zillow were all a twitter (on Twitter) about how they had reached 15.7 million unique monthly visitors in January. That's up 75 percent year over year and a new record. While they touted the merits of their web site, I wondered, no offense to Zillow, if part of it didn't have to do with increasing buyer traffic on the web overall last month. So I asked.  'Off the cuff, I'd put the split at about 50/50, with maybe half of our surge in usage coming from greater Zillow brand awareness, and half from more people starting to show interest in real estate,' confessed Zillow's CEO Spencer Rascoff. 

'We’re seeing this increased usage in Zillow Mortgage Marketplace as well. Loan requests from borrowers were up 56% from December to January, so that definitely signals that people are thinking about diving into the market.'  We also saw a surge in mortgage applications last week in the Mortgage Bankers Association survey, with applications to purchase a home up 9.5 percent from the previous week. The MBA, however, cautions that the previous week had a holiday in it and so applications had fallen accordingly; the two week average for purchase applications is basically flat. Refis are down.  January isn't exactly a hot season for home sales historically, and this year, in many markets, you'd be hard pressed to find any homes under all the snow. Still, the traffic online, where I imagine most folks go before even heading to an open house, is an important sign, as we head into the Spring market. The question mark remains in financing. 

Federal regulators are still working on the definition of a 'Qualified Residential Mortgage,' (QRM), which will determine for which loans banks will have to hold some risk on the books and which they will be able to sell off in securities entirely. That's a pretty big deal, given that Fannie, Freddie and the FHA are still the only mortgage games in town, and a return of private capital to the mortgage world is essential for the future health of housing.  Next week all kinds of banking types will convene at the annual conference of the American Securitization Forum. QRM will be the hot topic, no doubt. It will be interesting to see what the financers of this still-crawling housing recovery think will happen to all that blossoming buyer interest, with a still-uncertain mortgage market.  No doubt there is a cautious optimism in the air, but there is still a very large fence running through today's housing market, with a whole lot of buyers lodged on it indefinitely."

Retail sales up in January

According to Thomson Reuters, the retail sector reported same-store sales growth of 4.2 percent on average. That far outpaced the average estimate of 2.7 percent.  Among the surprises were Limited, Zumiez, Wet Seal and Gap, which all reported sales at stores open at least 12 months were higher than analysts' estimates. Some of these companies also raised their forecasts for the latest fiscal quarter.  Limited, the parent of Victoria's Secret and Bath & Body Works, reported January sales surged 24 percent, adding to its recent streak of strong results. Analysts surveyed by Thomson Reuters were expected same-store sales to rise 6.7 percent.  Warehouse club store Costco Wholesale also outpaced analysts' estimates, saying same-store sales rose 9 percent, ahead of the 6.1 percent average analyst estimate.

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