The Commerce Department said Thursday that 302,000 new homes were sold in 2011, 6.2% below the 323,000 new homes sold the year before.

On a seasonally adjusted annual rate basis, the number of new homes sold in December was 307,000, a decline of 2.2% from the previous month and 7.3% below the number sold in December a year ago.

The median sales prices of new homes sold in December was $210,300; the average sales price was $266,000. And based on government estimates, there is a supply of 6.1 months worth of homes for sale at the current sales rate.

Source:  USA Today “December new home sales fall, 30 year mortgages rise” January 26, 2012

Foreclosures accounted for a smaller share of total sales as banks already glutted with properties slowed the pace of new seizures until they could unload the houses they already owned. The share of distressed sales also slowed last year following a slowdown in new foreclosures after consumer complaints and lawsuits challenging seizures that resulted from “robo-signing” and other questionable document practices.

Distressed sales fall into roughly two categories: properties already owned by banks and those at various stages of foreclosures, some of which may be sold in a “short sale” before the foreclosure is final. Once owners have moved out, bankers who own the property are much more willing to cut prices because they now bear the cost of maintaining it. Compared to a non-distressed sale, the average discount for a bank-owned property was nearly 42 percent in the third quarter of 2011, according to RealtyTrac. That compares with a discount of just 24 percent for properties earlier in the foreclosure pipeline.

Source: MSNBC “Foreclosures pushing home prices” January 26, 2012

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Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.

Market researcher RBC Capital Markets has also turned from a “bearish” view on housing to saying that 2012 “will mark a step in the right direction.”

USA Today “Optimism builds in housing market” January 16, 2012

Total filings, including default notices and bank repossessions were down 33% for the year to 2.7 million, according to RealtyTrac, the online marketer of foreclosed properties.

One in every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. That’s a significant improvement from the peaks reached in 2010 — when 1.05 million homes were repossessed — and the lowest levels seen since 2007.

More than 4 million homes have been lost to foreclosure over the past five years.

Source:  CNN Money “Foreclosure rates plunge in 2011” January 12, 2012

“The real test of the distress plateau is likely to be seen in 2012 and 2013, when about $300 billion in loans comes due each year,” according to a recent article in the Washington Post.

At $41.9 billion, the office sector continues to have the largest number of distressed commercial properties. But that number has been steadily declining — about 11.8 percent less than its peak reached in October 2010.

The apartment sector has the second-highest level of distressed commercial properties with $35.6 billion in troubled loans, according to the Washington Post article. Land and other property types have about $29.8 billion in distressed assets.

The metro areas with the largest number of commercial properties in distress is Manhattan, in which the total volume of distress properties stands at $11.8 billion, followed by L.A.-Orange County with $10 billion. Meanwhile, Houston has the lowest at $111 per capita.

Source:  Washington Post “Amount of Distressed Real Estate Could be on Way Down” 11/26/2011

“Rents are rising, vacancies are falling, household formations are growing and rental supply is limited,” according to a recent report, “2012: The Year of the Landlord,” issued by Morgan Stanley. “We believe the demand for rental properties will continue to grow.”

Vacancies of rental properties dropped to 9.8 percent in the third quarter of this year compared to 10.3 percent earlier this year.

Led by strong gains in multifamily housing, groundbreaking for new-housing market soared 9.3 percent in November. Construction of multifamily homes of at least two units increased 25.3 percent in November, the Commerce Department reported last week. Starts for structures with five or more units has increased more than 30 percent from October and is nearly double year-over-year levels, Reuters reports.

Rental costs are also on their way up, increasing 2.4 percent over last year compared with an increase of 0.6 percent in 2010, Reuters reports.

Source:  Reuters  “America Becoming a Nation of Renters” Dec. 27, 2011

The decline was disappointing in light of several other recent reports, which painted a more positive picture of the housing market.

The 20-city index has dropped every month since April. Since the housing bust began in mid-2006, homes have lost nearly 33% of their value.

Peter Morici, a professor of economics at the University of Maryland, said home prices remain weak because demand for existing homes is soft. Many potential buyers are migrating to rental markets or buying new homes that had been sitting unsold for months.

According to Morici, the current home price levels represent a correction from inflated prices reached during the bubble.

Source:  CNN Money “Home Prices Drop for 6th Straight Month” December 27, 2011

That was up 1.6% compared with the revised October rate of 310,000 and 9.8% higher than November 2010.

The good news followed other recent positive industry reports. November sales of existing homes rose12% year-over-year; homebuilding spiked nearly 21% compared with 12 months ago; and mortgage rates hit record lows this week.

The sales hike was in line with expectations: The forecast from Briefing.com was for a 315,000 annualized rate.

The median price for a new home was $214,100 in November. Inventory shrank to 158,000 units, a 6-month supply at the current sales rate.

Source:  CNN Money “New Home Sales Edge Up” December 23, 2010

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