Will Tampa Bay home prices rise 5.6 percent by Sepember 2010?

First American CoreLogic is upbeat about Tampa Bay home prices. The real estate company predicts Tampa Bay appreciation of 5.56 percent between September 2009 and September 2010.

Most of that price growth will occur in the spring and summer of 2010, the company said. Short term, depreciation is the name of the game:

The new First American CoreLogic HPI Forecast anticipates continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring. Above-average levels of foreclosures, inventories and unemployment will continue to take their toll in many major metropolitan markets in the short term. As the economy continues to improve and these factors improve, the forecast calls for housing prices to bottom for most markets by March 2010 and then turn positive. This would yield the first positive year-over-year house price appreciation since the beginning of 2007.

Here's a chart with a state-by-state breakdown of home price changes from 9/08 to 9/09 and the projected changes from 9/09 to 9/10. Note how Florida outperforms states like Arizona, Nevada, Georgia and North Carolina, but under-performs California.

State	September 2009 12 Month HPI Change by State		12 Month Forecast (September 2009 - September 2010)
	Single Family Combined	Single Family Combined Excluding Distressed	Single Family Combined	Single Family Combined Excluding Distressed
National	-9.83%	-5.95%	0.65%	1.09%
Nevada	-25.49%	-20.40%	0.00%	-3.09%
Arizona	-20.28%	-15.37%	-4.78%	-10.85%
Florida	-17.66%	-14.76%	3.88%	2.05%
Michigan	-15.06%	-8.02%	-6.84%	-4.33%
Idaho	-14.92%	-10.85%	-1.19%	2.60%
Oregon	-12.55%	-9.80%	-1.77%	2.56%
Washington	-12.36%	-10.31%	-4.17%	-3.18%
California	-12.16%	-6.95%	9.36%	8.24%
Maryland	-12.03%	-8.18%	4.33%	5.35%
Utah	-11.42%	-9.09%	1.22%	2.19%
Illinois	-10.56%	-8.18%	2.54%	-0.89%
Wyoming	-9.74%	-4.93%	-3.33%	-1.05%
New Jersey	-9.55%	-7.63%	2.47%	2.97%
Montana	-9.04%	-4.69%	1.60%	0.85%
New York	-8.75%	-5.67%	0.03%	1.26%
Connecticut	-8.62%	-6.87%	1.05%	0.81%
Georgia	-8.29%	-5.75%	-0.89%	-0.97%
Maine	-8.11%	-8.16%	1.94%	-0.16%
Rhode Island	-7.77%	-6.59%	6.31%	-1.40%
Delaware	-7.44%	-5.52%	0.04%	1.68%
Minnesota	-7.36%	-6.81%	0.76%	-0.51%
Alabama	-6.91%	-3.92%	2.58%	1.93%
District of Columbia	-6.64%	-4.90%	4.72%	2.14%
South Carolina	-6.29%	-5.18%	2.38%	2.41%
North Carolina	-5.70%	-4.80%	-0.19%	0.36%
Wisconsin	-5.60%	-4.76%	1.59%	1.58%
Tennessee	-5.52%	-3.20%	1.16%	1.46%
Pennsylvania	-4.68%	-3.86%	0.69%	1.46%
New Hampshire	-4.60%	-5.94%	5.00%	2.98%
Mississippi	-4.55%	-3.02%	0.79%	1.30%
Indiana	-4.50%	-3.16%	0.14%	-0.15%
New Mexico	-4.36%	-3.57%	3.38%	4.50%
Hawaii	-4.20%	-1.65%	3.31%	3.31%
Missouri	-4.10%	-2.11%	2.35%	1.21%
Louisiana	-4.08%	-1.77%	2.24%	2.69%
Arkansas	-3.89%	-2.79%	1.37%	1.78%
Virginia	-3.66%	-4.38%	0.54%	7.17%
Kansas	-3.30%	-3.94%	2.11%	1.60%
Colorado	-3.02%	-3.13%	0.58%	-0.61%
Ohio	-3.00%	-3.55%	0.00%	-1.05%
Massachusetts	-2.80%	-3.64%	12.75%	1.57%
Alaska	-2.70%	-2.60%	2.06%	3.93%
West Virginia	-2.56%	-5.46%	0.79%	-1.08%
Kentucky	-1.53%	-0.37%	2.74%	1.70%
Oklahoma	-1.51%	-1.14%	4.01%	2.48%
Iowa	-1.37%	-0.39%	2.37%	1.67%
Nebraska	-0.97%	-0.43%	3.93%	2.36%
Vermont	-0.13%	-2.96%	7.00%	3.54%
Texas	-0.01%	-1.60%	1.83%	1.68%
South Dakota	1.86%	-0.48%	5.39%	2.26%
North Dakota	6.93%	5.08%	7.88%

More than 1 in 10 Tampa Bay mortgages two months late

Here's another take on the late mortgage/foreclosure crisis from a company called TransUnion: Nearly 11 percent of Tampa Bay mortgages were 60 or more days late as of September 30.

In the quarter ending June 30, the delinquency rate was 9.99 percent. A year earlier the rate was 6.83 percent. Mortgage defaults in the rest of Florida were worse. As of Sept. 30, 13.34 percent of mortgages were late statewide.

Here's a spread sheet: Download Transunion09

Conclusion? The number of troubled mortgages around Tampa Bay continues to rise. This is also confirmed by raw counts in the Tampa court house and reports from the likes of First American CoreLogic.

Short sales should help keep many of these homes off the foreclosure auction block. But rising unemployment tugs in the other direction.

Is another Tampa Bay home price dip coming next spring?

Many economists, most recently at a home builders conference I reported on last month, have been predicting housing weakness next spring when several things happen at once: Interest rates rise, the home buyer tax credit expires, foreclosures tick up and the government eases purchases of mortgage backed securities.

Now here's more support for that theory from Reuters:

Both the credit and another major government action -- the purchase of more than $1.4 trillion in mortgage-related securities aimed at cutting home loan rates -- will now end within weeks of each other. The purchases stop by March 31.

Unless the employment picture brightens around that time, housing does not have enough footing to forge a recovery on its own, most economists and industry experts said.

More proof that the government should be focusing on making it easier to operate small- to medium-sized businesses - whether we like it or not our primary job engine. Talk of large tax increases, crushing debt and new multi-trillion-dollar government entitlements encourages caution and businesses retrenchment.

Realty Web site: Tampa in top 100 for home appreciation

In the last quarter, Tampa home prices rose 2.48 percent, making the city 100th best for home appreciation in the United States.

So says the Web site neighborhoodscout.com.

Changes that small over 3 months are pretty much meaningless, but I was struck by the fact that Florida cities like Bradenton, Sarasota, Fort Myers and Miami crowded the list of top appreciators. Here's what neighborhoodscout had to say:

This makes Tampa one of the highest appreciating communities in the nation for the latest quarter, and may signal the city's near-future real estate investment strength.

Relative to Florida, our data show that Tampa's latest annual appreciation rate is higher than 46% of the other cities and towns in Florida.

A reader called me excitedly about the "news" and I did him the courtesy of checking it out. I admit I'm a bit suspicious. The Web site babbles on about its proprietary home evaluation method developed by "Dr. Schiller," he of the mysteriously absent first name.

Could it be trying to conflate its Dr. Schiller with the Dr. Shiller of S&P Case-Shiller home price index fame? No, I'm sure it's just an oversight.

Government cuts mortgage banking slackers a break

Remember way back in 2008 when the Bush administration approved the Real Estate Settlement Procedures Act? RESPA included new mortgage lending rules aimed at preventing lenders from charging confiscatory closing costs and slipping in unfavorable interest rate changes. Lending documents were supposed to clarify rather than cloud:

By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.

The federal government gave mortgage lenders the whole of 2009 to get up to speed with the new disclosure policy. Most banks have already complied. Starting on Jan. 1, 2010, the Feds were set to go medieval on any scofflaws.

No longer.

In a press release this week, the Department of Housing and Urban Development (HUD) announced that regulators would "exercise restraint in enforcing new regulatory requirements." The grace period will last 4 months, through April 30.

I can understand the desire not to rock our rickety recessionary boat too much. But lenders have had a year - and in many cases 18 months - to make what amounts to piddling changes to their lending documents. Why is the government going soft?

The irony is that government has squeezed mortgage brokers - whom it blames for helping bring down the housing market - and puffed up the large banks. For all their flaws, mortgage brokers allowed home buyers to shop around for the best interest rates. In the Tampa Bay area, they're being pushed out of business by the banks.

Why does it seem like the administration doesn't always have the best interests of the consumer at heart?

Buying Florida foreclosures Online can be hazardous to your financial health

Florida counties, including Sarasota, are moving foreclosure auctions onto the Internet. But as this story in the Sarasota Herald-Tribune makes clears, some investors are being played for fools.

How long can Tampa Bay keep piling up these foreclosure filings?

It's reaching the point where discussing month-to-month changes in Tampa Bay foreclosures is missing the point.

Take October. RealtyTrac says we had 6,216 foreclosure filings in October, down from 6,709 filings in September. Hip, hip, hurrah? More like hip, hip, horrible.

Here's the spread sheet: Download Realtytracoct09

We're missing the dinosaur in the den. Let's talk Lis Pendens, the Latin name for foreclosure lawsuits lenders initially file against delinquent homeowners.

Lis Pendens cases totaled 4,415 in October, a hair below the 4,586 Lis Pendens filed in September. But if RealtyTrac is counting properly, these are fresh cases each and every month.

Pasco County showed large declines in foreclosures measured month to month and year to year. Let's hope that continues. Pasco, together with southeast Hillsborough County, was the epicenter of over-construction through 2007.

How long can a housing market tolerate this never-ending assembly line of foreclosures? Where's the cut-off switch? We can only hope that economist predictions of another wave of foreclosures next year is untrue.

 

Nine year low: Fewer people borrowing to buy homes

This isn't good news: Mortgage applications at lowest levels since 2000.

On the other hand, with cash purchases making up about a third of Tampa Bay home purchases, this might not be as troubling from our perspective.

Is this going to be like Cash for Clunkers? Remember how car sales in July and August cannibalized car sales in September and October?

Hillsborough County home sales improve in October

We'll start by conceding that home sales in October 2008 were beaten down by last year's credit lock up. Nevertheless, it's none too shabby when sales rise 35 percent year over year.

The Greater Tampa Association of Realtors recorded 1,722 sales in October 2009 versus 1,279 a year earlier. The average sales price - Tampa Realtors used average instead of median - dropped 16 percent over those 12 months. A typical home sold for $156,775 last month compared to $186,424 a year earlier.

I don't put much faith in month-to-month zig zags, but Hillsborough County home prices fell almost 5 percent from September to October. That suggests plenty of cut-rate foreclosure homes are finding buyers, which weighs down average home prices.

Here's a detailed chart: Download Gtaroct09

Foreclosure prevention program less successful in Florida

This story from the AP says 650,000 homeowners are enrolled in the Obama administration's foreclosure prevention/mortgage modification program. But Florida has been less successful in attracting candidates to the Making Home Affordable program. Why? Blame the investors:

Launched with great fanfare in March, the plan got off to a weak start, but now nearly 920,000 loan modification offers have been sent to more than 3.2 million eligible homeowners. That works out to 29 percent, up from 15 percent at the end of July.

In California, about 130,000 homeowners have been enrolled in the "Making Home Affordable" loan modification plan, which President Barack Obama unveiled in February. That works out to about 19 percent of the state's homeowners who were either two payments behind or in foreclosure at the end of last month, according to Treasury Department data.

Two other hard-hit states, Arizona and Nevada had similar rates of assistance as California, at 22 percent and 18 percent respectively. Florida, however, was much lower, at 12 percent, possibly because of high numbers of investor-owned properties that don't qualify for the program.

If you'll recall, the program is supposed to guarantee that homeowners current on their mortgage payments pay no more than 31 percent of their incomes toward monthly mortgage payments, including taxes and insurance.

To enroll, however, you have to prove a "hardship" that can include family illness, pay cuts and unemployment, etc. After a 3- or 4 month trial period, during which the bank checks if the homeowner can afford the lowered mortgage payment, the cheaper mortgage becomes more or less permanent.

I think it's a good program, considering the other options. These are people who aren't in foreclosure but fear they're headed that way. But let's not fool ourselves: This is a massive, hugely expensive, long-term subsidy for homeowners who in many cases bought too much house during a period of exuberance.

It's also subject to abuse, but much less so than other programs. Even at the risk of federal penalties, some Tampa Bay homeowners will certainly understate their incomes to exceed Washington's 31-percent-of-income cap.