Market Insights

Home Price Declines:

• Federal Housing Finance Agency reported a 2.5% decline in home prices for Q1 2011 compared to the previous quarter.¹

• S&P/Case Shiller national home price index declined 4.2% in Q1 2011 compared to Q4 1010.²

• CoreLogic reports that home prices fell 7.5% in March 2011 compared to March 2010. In a demonstration of the extent foreclosure sales are having on the market, a comparison of non-distressed only sales shows just a .96% decline compared to a year ago. ³

Buyers:

• Investment buyers are driving sales of foreclosed homes during the spring buying season. This has resulted in a better
• performance in the foreclosure market, than the market for all other homes. ⁴

• First-time home buyers made up just one-third of the market, well short of what’s needed to offset the large volume of
• distressed property inventory. ⁶

• Half of today’s real estate investors plan to hold their properties for five-plus years, only 11% expect to sell within 12 months. ⁵

• About half of US renters and current homeowners are at least “somewhat likely” to purchase a foreclosed home.

• These buyers expect to pay 38% less for a foreclosed home than a similar home that was not in foreclosure, very close to
• the average discount of 36% currently seen on sales of bank-owned REO homes. ⁷

Declining Foreclosures:

• Foreclosure activity is at a 40-month low. The slowdown is the largely
• the result of massive delays in processing foreclosures rather than
• the result of a housing recovery. ⁸

• The time between seriously delinquent and foreclosure continues to
• grow as lenders and services are waiting longer to allow for loan
• modifications or short sales. Mortgage Bankers Association shows
• that about 3.7 million properties are in this limbo stage.

• A second delay occurs after foreclosure has started as a result of
• processing delays, nationally completed foreclosures took an average
• of 400 days from initial default notice to REO, an increase of almost
• 20% compared to last year.

Sources:

1) Federal Housing Finance Authority, May 2011
2) S&P/Case Shiller national home price index, May 2011
3) Core Logic Home Price Index, May 2011
4) Radar Logic, May 2011
5) Move Inc., May 2011
6) Campbell HousingPulse Survey, May 2011
7) Trulia/RealtyTrac Survey, May 2011
8) Realy Trac, May 2011