Unless you have only had your TV and newspaper focused on the Olympics, you have probably heard or read that the arrival of the long awaited housing recovery might be happening.
The latest housing data released by S&P Dow Jones Indices, Case-Schiller, indicate that the long awaited housing recovery could finally be here. Summarizing the data through May 2012, home prices had increased 2.2% in the month for both the 10- and 20- City Composites. Compared to a year ago, home prices fell by 1.0% for the 10-City Composite and 0.7% for the 20-City Composite.
The annual returns in May compared to April for both composites and 17 out of the 20 MSAs showed an increase. Cities that were also hard-hit in the housing crisis are also showing positive annual rates of change, such as Miami and Phoenix.
RealtyTrac reported that the national foreclosure activity dropped for the 22nd consecutive month. There was a drop of 3% in July from June and an annual decrease of 10%. While this information would seem to support reports that the housing market could finally be rebounding, Housingviews.com, an interactive blog by S&P Dow Jones Indices, reports that properties starting the foreclosure process increased on an annual basis for a consecutive third month.
In states like Illinois, New Jersey, Florida and Ohio where courts are involved in the foreclosure process (judicial foreclosure), foreclosure numbers continued to increase from the artificially low levels caused by the slow process. In the Chicago area, The Chicago Tribune reported that there was a 37% annual increase in the foreclosure notices issued compared to July 2011. In Cook County alone, there were more than 7,500 properties that began the foreclosure process during June and July.
While we may have to wait and see if positive numbers continue to come in for the next few months to determine if this is a true recovery, the recent reports are encouraging and could help boost more confidence in the market. Given the lack of confidence that has existed for a number of years now, a upward trending real estate market is what we have been long waiting for.
Michael Hobbs, SRA PahRoo Appraisal & Consultancy