Housing Market

 Economist: Rising Rates May Bring

 Balance to Housing Market

 

    SANTA ANA, Calif. - (BUSINESS WIRE) - 2/23/2022 - First American Financial Corporation (NYSE: FAF), a major global provider of title insurance, settlement services and risk solutions for real estate transactions, recently released the December 2021 First American Real House Price Index (RHPI). The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability.

Chief Economist Analysis: Real House Prices Up 21.7 Percent Year Over Year

    “In December 2021, the Real House Price Index (RHPI) increased 21.7 percent compared with December 2020, the highest annual growth rate since 2014. The record increase was driven by rising mortgage rates and rapid nominal house price appreciation, which make up two of the three drivers of the RHPI,” First American Chief Economics Mark Fleming said. “The 30-year, fixed-rate mortgage and the unadjusted house price index increased by 0.4 percentage points and 21.4 percent respectively.

    “Even though household income increased 5 percent since December 2020 and boosted consumer house-buying power, it was not enough to offset the impact of higher mortgage rates and rising nominal prices on affordability. In the near term, affordability is likely to wane further, as mortgage rates are expected to continue to rise and the pace of house price appreciation exceeds gains in household income. How buyers and sellers react to higher rates may help the housing market regain some balance.”

Existing Homeowners Locked In?

    “When mortgage rates fall, a potential home buyer can buy the same amount of home for a lower monthly payment or buy more home for the same monthly payment. The 40-year tailwind of declining mortgage rates has allowed homeowners to buy a home at one mortgage rate and then later sell and move into a more expensive home when rates are lower,” Fleming said. “This long-run decline in mortgage rates has encouraged existing homeowners to move out and move up.

    “Faster house price appreciation, modestly rising mortgage rates and record low levels of homes for sale have been the economic dynamics dominating the housing market during the second half 2021. While existing homeowners have historically high levels of equity and may feel wealthier because of it, many have also secured historically low fixed-rate mortgages. There is a financial ‘lock-in’ effect that increases as mortgage rates rise and as the size of a mortgage increases. Rising mortgage rates increase the monthly cost of borrowing the same amount that a homeowner owes on their existing mortgage. The higher the prevailing market mortgage rate is relative to the homeowner’s existing mortgage rate, the stronger the lock-in effect. Why move out and move down?

    “Additionally, the record low level of houses for sale makes it difficult to find a better, more attractive house to buy, so sellers – who are also prospective buyers – don’t sell for fear of not finding something to buy. The good news is that builders have been breaking ground on more new homes, which may alleviate some of the supply crunch and encourage existing buyers to move.

    “Nonetheless, buying a home is often prompted by lifestyle decisions more so than financial considerations. Despite the financial lock-in, homeowners will still make the decision to move based on lifestyle changes, such as needing more space to accommodate a growing family or relocating for a new job or other reason.”

The Housing Market Will Adjust

    “Homeowners may feel rate-locked into their homes, but first-time home buyers have no such financial lock. Yet, first-time home buyers must also contend with the record low supply of homes in a declining affordability environment. But what goes up, must eventually moderate,” Fleming said. “Rising rates may be a housing market headwind in 2022, but as some buyers pull back from the market due to affordability and supply constraints and as new construction adds more supply, house prices will moderate, resulting in a more balanced housing market.”

December 2021 Real House Price Index Highlights

• Real house prices increased 1.9 percent between November 2021 and December 2021.

• Real house prices increased 21.7 percent between December 2020 and December 2021.

• Consumer house-buying power, how much one can buy based on changes in income and interest rates, increased 0.04 percent between November 2021 and December 2021, and decreased 0.2 percent year over year.

• Median household income has increased 5.2 percent since December 2020 and 69.3 percent since January 2000.

• Real house prices are 4.8 percent less expensive than in January 2000.

• While unadjusted house prices are now 44.5 percent above the housing boom peak in 2006, real, house-buying power-adjusted house prices remain 33.2 percent below their 2006 housing boom peak.

December 2021 Real House Price State Highlights

• The five states with the greatest year-over-year increase in the RHPI are: Arizona (+34.3 percent), Florida (+32.0), South Carolina (+29.4 percent), Connecticut (+28.6 percent), and Georgia (+28.4),

• There were no states with a year-over-year decrease in the RHPI.

December 2021 Real House Price Local Market Highlights

• Among the Core Based Statistical Areas (CBSAs) tracked by First American, the five markets with the greatest year-over-year increase in the RHPI are: Phoenix (+36.3 percent), Charlotte, N.C. (+36.0), Tampa, Fla. (+32.9 percent), Raleigh, N.C. (+31.5 percent), and Atlanta (+31.5 percent).

• Among the Core Based Statistical Areas (CBSAs) tracked by First American, there were no markets with a year-over-year decrease in the RHPI.

Next Release

    The next release of the First American Real House Price Index will take place the week of March 28, 2022 for January 2022 data.

Sources

• First American Data & Analytics

• Freddie Mac

• Census Bureau

Methodology

    The methodology statement for the First American Real House Price Index is available at http://www.firstam.com/economics/real-house-price-index.

Economic Analysis

House Price Index Shows Decline 

In Affordability for 

Third Month in a Row

    SANTA ANA, Calif. - (BUSINESS WIRE) - 8/12/2021 - First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, released the May 2021 First American Real House Price Index (RHPI) on July 27. The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability.

Chief Economist Analysis: Record Nominal House Price Appreciation Outpaces House-Buying Power Growth in May

    “Housing affordability declined on a year-over-year basis for the third month in a row in May, following a two-year streak of rising affordability,” said Mark Fleming, chief economist at First American. “The decline in May occurred even as two of the three key drivers of the Real House Price Index (RHPI), household income and mortgage rates, swung in favor of greater affordability relative to one year ago.

    “House-buying power increased by 8 percent in May compared with a year ago, propelled by lower mortgage rates and higher household income. The affordability gains from house-buying power, however, were offset by the third component of the RHPI, nominal house price appreciation, which reached a record 18 percent in May, surpassing the previous peak from 2005,” said Fleming. “As always, real estate is local and national affordability trends are not necessarily reflected in local trends, as house-buying power and nominal house price gains vary greatly from city to city.”

Affordability Declined in 49 of the 50 Major Markets

    “The drop in affordability was broadly felt as affordability declined year over year in 49 of the 50 markets we track,” said Fleming. “The five markets with the greatest year-over-year decline in affordability were:

1. Phoenix (-22.7 percent)
2. Seattle (-20.1 percent)
3. Kansas City, Mo. (-19.6 percent)
4. Tampa, Fla. (-17.8 percent)
5. Las Vegas (-17.2 percent)
   

    “Mortgage rates are generally the same across the country, so a decline in mortgage rates boosts affordability equally in each market,” said Fleming. “Household income growth and nominal house prices, on the other hand, differ from market to market, so the affordability dynamic varies as well.

    “In May, Phoenix had the greatest year-over-year decrease in affordability. While annual income growth was steady at 1.9 percent, Phoenix experienced the biggest annual increase in nominal house prices of any major market – 29.3 percent. The steep increase in nominal house prices overshadowed any affordability gains from increased house-buying power,” said Fleming. “A similar dynamic played out in Tampa as year-over-year nominal house price appreciation of 25.6 percent outpaced house-buying power.

    “In Seattle and Las Vegas, house-buying power ticked up as the positive impact of falling mortgage rates offset a decline in household incomes. However, like Phoenix and Tampa, nominal house price growth in Seattle (20.7 percent) and Las Vegas (19.9 percent) overshadowed the house-buying power gains,” said Fleming. “Kansas City was the only one of the five markets where house-buying power declined, combining with faster house price appreciation to drive a decline in affordability.”

Where Are Nominal House Prices Headed?

    “Declining affordability may cause potential home buyers on the margin to be priced out, prompting fewer or less intense bidding wars and causing house price appreciation to moderate. The increase in housing inventory may likewise ease pressure on nominal house price growth, though the increase remains small relative to historic levels and the broader housing supply shortage is likely to take years to reverse,” said Fleming. “Affordability trends in the coming months will depend on the supply and demand dynamics behind nominal house price appreciation – dynamics which will play out differently in each market.”

May 2021 Real House Price Index Highlights

• Real house prices increased 0.7 percent between April 2021 and May 2021.
• Real house prices increased 8.9 percent between May 2020 and May 2021.
• Consumer house-buying power, how much one can buy based on changes in income and interest rates, increased 1.4 percent between April 2021 and May 2021, and increased 8.4 percent year over year.
• Median household income has increased 4.7 percent since May 2020 and 78.0 percent since January 2000.
• Real house prices are 19.9 percent less expensive than in January 2000.
• While unadjusted house prices are now 30.1 percent above the housing boom peak in 2006, real, house-buying power-adjusted house prices remain 43.8 percent below their 2006 housing boom peak.

May 2021 Real House Price State Highlights

• The five states with the greatest year-over-year increase in the RHPI are: Arizona (+19.4 percent), Vermont (+17.0 percent), Washington (+16.6 percent), Nevada (+16.3 percent), and Connecticut (+15.4 percent).
• There were no states with a year-over-year decrease in the RHPI.

May 2021 Real House Price Local Market Highlights

• Among the Core Based Statistical Areas (CBSAs) tracked by First American, the five markets with the greatest year-over-year increase in the RHPI are: Phoenix (+22.7 percent), Seattle (+20.1 percent), Kansas City, Mo. (+19.6 percent), Tampa, Fla. (+17.8 percent), and Las Vegas (+17.2 percent).
• Among the Core Based Statistical Areas (CBSAs) tracked by First American, the only market with a year-over-year decrease in the RHPI is San Francisco (-0.1 percent).

Next Release

    The next release of the First American Real House Price Index will take place the week of August 30, 2021 for June 2021 data.

Sources

First American Data & Analytics
Freddie Mac
Census Bureau

Methodology

    The methodology statement for the First American Real House Price Index is available at http://www.firstam.com/economics/real-house-price-index.
 

Note: Original release date, July 27, 2021.

Economic Trends

 Home Price Appreciation Rises 

Prices at Highest Levels Since Before Lockdowns Began

    PHILADELPHIA - (BUSINESS WIRE) - 5-22-2021 - Home prices in the U.S. rose again in April, albeit at a slightly lower rate than recorded in the prior month. According to Radian Home Price Index (HPI) data released May 21, 2021 by Red Bell Real Estate, LLC, a Radian Group Inc. company (NYSE: RDN), home prices nationally rose from the end of March 2021 to the end of April 2021 at an annualized rate of 10.4 percent. The company believes the Radian HPI is the most comprehensive and timely measure of U.S. housing market prices and conditions available in the market today.

    For the prior twelve months, the Radian HPI rose 9.2 percent (April 2020 to April 2021), the fastest annual rate recorded since before the COVID outbreak. While the April month-over-month rate was slightly lower than the prior month, the twelve-month rate increased compared to March. Recent annual increases are benefiting from the more distanced months of lower appreciation recorded during the early days of the national shut-down. The Radian HPI is calculated based on the estimated values of more than 70 million unique addresses each month, covering all single-family property types and geographies.

    “As we are now a full year from the initial COVID induced national closures of 2020, the U.S.’s strong national housing market continues to chug along in April,” noted Steve Gaenzler, SVP of Data and Analytics. 

    Gaenzler added: “Pent-up demand for homes, improving economic activity, a strong labor market and low mortgage rates have been strong tailwinds for housing. However, as the U.S. starts to see growing considerations for ending or reducing government stimulus (monetary and fiscal) in the coming months, and concerns of higher potential inflation making headlines, there is a need to keep a very close eye on housing in the coming half year,”

National Data and Trends

• Median home price in the U.S. rose to $277,356
• Active supply of homes well below long term average

    The national median estimated price for single-family and condominium homes rose to $277,356. Since the start of the COVID lockdowns in March 2020, the average home in the U.S. has appreciated by more than $20,000. Home price appreciation over the past year has increased homeowner equity levels by more than $1.5 trillion dollars.

    Gains in home prices are partially due to a continued lack of supply. After falling for 10 of the prior 12 months, active listings have now increased three consecutive months—although only by 32,000 properties from the prior month. In April, more than 881,000 residential properties were for sale, the fifth month with less than one million properties listed nationally. Over the last decade, the U.S. has had an average of 1.4 million homes on the market each month. At the current count of active listings, the U.S. has 40 percent fewer homes on the market, on average, than at any time over the past decade.

Regional Data and Trends

• All Regions reported solid appreciation from prior month.
• Three Western states consistently demonstrate strong home price appreciation

    While all six Regional indices reported higher 12-month rates of home price appreciation, only two Regions (Mid Atlantic and Northeast) reported higher rates of appreciation compared to March. In April, the Northeast narrowly edged out the South Region for the highest appreciation rate (+11.9 percent). All Regions showed strength in the month with the worst performing Region (Midwest) still recording a very impressive 9.1% increase from the prior month.

    Looking at trends from the last six months, the Radian HPI can identify some state-level winners and losers. The states showing the greatest increase in appreciation trends include a combination of South, Southwest and Midwest states including NE, AZ, AR, and MS. The most consistently strong states for appreciation in the last half year include ID, MT, GA, and WA. While these states showed increasing or consistently steady rates of appreciation, eleven of the 50 states plus DC, recorded lower monthly appreciation rates than the average appreciation over the last six-months including NC, ND, WV and KY.

Metropolitan Area Data and Trends

• Boise got stronger in April
• Large metro areas median price outpace nation

    Across the largest or most important metro areas of the U.S., the last three-months have been some of the faster appreciating on record with an average annualized rate of 9.6 percent appreciation. The strongest metro markets over the last quarter include Boise, ID, which continues to rise rapidly, Phoenix, AZ and Charlotte, NC. Some of the slower appreciating larger cities and metro areas over the last quarter include Boston, MA, Fargo, ND, and Burlington, VT.

    The average median estimated home price of homes in the 50-largest metros ended April at $295,259. However, just the top 20-largest metros topped an average median home price of more than $385,000. Compared to the national median estimated price, the largest cities continue to outpace the nation. In April, the largest metros median stood more than $100,000 higher than the national median.

Brokerage Firm Owner Pleads Guilty to Fraud

   NEW YORK – 1/1/2013 - Mitchell Cohen, the owner of the now defunct Buy-A-Home real estate brokerage business, pleaded guilty on December 27, 2012, to one count of conspiracy to commit wire, bank and mail fraud in connection with a multimillion-dollar mortgage fraud scheme, announced U.S. Attorney for the Southern District of New York Preet Bharara.

   Cohen also pleaded guilty to one count of perjury in connection with statements he made in a contempt proceeding related to the December 2010 civil fraud lawsuit filed against him by this office. Cohen pleaded guilty before U.S. Magistrate Judge Ronald L. Ellis and is scheduled to be sentenced on April 26, 2013 by U.S. District Judge Denise L. Cote.

   The charge of conspiracy to commit wire, bank and mail fraud, carry a maximum penalty of 30 years in prison. The perjury charge carries a maximum penalty of five years in prison. Charges against Cohen’s co-defendant, Erin Davis, remain pending.
   “Mitchell Cohen was a tornado of mortgage fraud, and he left a trail of destruction in his wake – borrowers who could ill-afford the homes he pushed them to buy, banks that were saddled with the bad loans, and taxpayers whose tax dollars paid the insurance claims that had to be paid when borrowers defaulted. Cohen also thumbed his nose at the legal process by defying a judge’s order and then lying about it under oath. With his plea today, Cohen is owning up to his crimes,” Bharara said.
   According to the Indictment and statements made in public proceedings in Manhattan federal court: During the period charged in the Indictment, 2007-2010, the U.S. Department of Housing and Urban Development’s Federal Housing Administration (HUD-FHA) provided mortgage insurance to borrowers seeking residential mortgages. Unlike conventional loans, FHA-insured loans required little cash investment from borrowers and were more flexible in income and payment ratio requirements. To qualify for FHA mortgage insurance, a potential borrower had to meet HUD’s requirements regarding creditworthiness and ability to make mortgage payments. No undisclosed payments could be made or promised by third parties on behalf of the borrower in connection with a residential mortgage transaction. At all relevant times, certain private lenders were authorized to make commitments on behalf of HUD for the provision of FHA mortgage insurance. They did so through the execution and ultimate submission to HUD of various mortgage documents, forms, and supporting documentation. Because FHA-backed mortgages were valuable commodities, lenders typically sold them to banks that pooled them and then resold them to institutional investors.
   From April 2007 through October 2010, Cohen operated a real estate brokerage business in Queens, N.Y. known, at various times, as Buy-a-Home, LLC and First Home Brokerage, LLC (Buy-a-Home). Buy-a-Home employed several sales managers, as well as a number of sales agents who recruited clients who were usually first-time buyers to purchase homes. Cohen and Buy-a-Home employees facilitated the sales of the homes by preparing documentation to secure FHA-insured loans to fund the borrowers’ purchases.
   During that time period, Cohen engaged in a widespread conspiracy to defraud HUD into issuing FHA mortgage insurance and to defraud banks into purchasing the FHA-backed mortgages issued to Buy-a-Home’s clients in order to earn substantial profits. Through entities he controlled, Cohen bought, or promised sellers he would buy, homes at one price, and then he and others at Buy-a-Home recruited unsophisticated buyers of modest means and induced them into purchasing the same homes at inflated prices, which were typically $100,000 higher than the original sale price. To insure that the deals for these properties would go through, Cohen and others schemed to make the Buy-a-Home clients – who did not and could not qualify to receive FHA mortgage insurance – seem more creditworthy. In furtherance of this scheme:
   • Cohen directed Buy-a-Home employees to pay off borrowers’ debts, often with cash funneled through bank accounts belonging to the borrowers’ relatives, in order to make them appear more creditworthy and to make it seem that their debts had been paid by an appropriate source;
   • Cohen directed Buy-a-Home employees to provide cash to borrowers so that they could obtain certified checks falsely showing that they had sufficient funds to close;
   • Cohen directed borrowers’ relatives to sign false gift affidavits to make it seem that the borrowers’ debts had lawfully been paid, or that the borrowers’ funds for closing had been appropriately provided by relatives, when in fact they had unlawfully paid off the debts themselves or through Buy-a-Home; and
   • Cohen advised borrowers to make other false statements on loan applications submitted to HUD.
   In so doing, Cohen concealed the borrowers’ true financial condition from HUD and the banks that subsequently bought the FHA-backed mortgages, all in an effort to insure that Cohen and Buy-a-Home could profit from the deals. Cohen also made mortgage payments on behalf of certain borrowers to further conceal their financial condition and to prevent banks from enforcing their right to sell loans back to the lenders that first provided the borrowers with mortgages.
   Through this scheme, Cohen defrauded HUD into issuing, and banks into purchasing, millions of dollars in fraudulent loans. Furthermore, because the FHA insurance was based on false statements made to HUD, and the borrowers could not really afford their mortgages, many of the homes went into foreclosure proceedings forcing HUD to pay out at least $1 million in insurance payments.
   In December 2010, the Civil Frauds Unit of the U.S. Attorney’s Office for the Southern District of New York filed a complaint against Cohen and others alleging fraud at Buy-a-Home. On Dec. 29, 2010, the District Judge presiding over the civil action entered a preliminary injunction barring Cohen from participating in real estate sales involving HUD-insured mortgages and any advertising, marketing, or solicitation of business involving the same. Subsequently, in October 2011, the government moved for a finding of civil contempt against Cohen, alleging that he willfully violated the preliminary injunction by re-establishing Buy-a-Home under a new name – Y-Rent New York, LLC – which was nominally owned by Cohen’s wife and another individual, but was in fact operated by Cohen. In connection with his opposition to the contempt motion, Cohen filed a declaration on Nov. 11, 2011, in which he stated, under penalty of perjury, that he was not involved with Y Rent, did not train Y Rent’s salespeople, did not take certain types of business calls, and did not speak to prospective borrowers. As Cohen admitted during the plea, those statements were false.

   Source: Finance Fraud Enforcement Task Force

Homebuilder to Pay Civic Penalty of $741,000

   WASHINGTON –  6/20/2012 - The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that Toll Brothers Inc., one of the nation’s largest homebuilders, will pay a civil penalty of $741,000 to resolve alleged Clean Water Act violations at its construction sites, including sites located in the Chesapeake Bay Watershed. Toll Brothers will also invest in a company-wide stormwater compliance program to improve employee training and increase management oversight at all current and future residential construction sites across the nation. The company is required to inspect its current and future construction sites routinely to minimize stormwater runoff from sites. Polluted stormwater runoff and sediment from construction sites can flow directly into the nearest waterway, affecting drinking water quality and damaging valuable aquatic habitats.
   “Keeping contaminated stormwater runoff out of the nation’s waterways, like the Chesapeake Bay, is one of EPA’s top priorities,” Assistant Administrator for EPA’s Office of Enforcement and Compliance and Assurance Cynthia Giles said. “Today’s settlement will improve oversight of stormwater runoff at construction sites across the country and protect America’s waters.”
   “This settlement will help protect the nation’s waters from the harmful pollutants contained in stormwater runoff from construction sites,” said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. “The settlement requires Toll Brothers to implement system-wide management controls and training that will help prevent polluted stormwater runoff from contaminating rivers, lakes and sources of drinking water.”
   EPA estimates the settlement will prevent millions of pounds of sediment from entering U.S. waterways every year, including sediment that would otherwise enter the Chesapeake Bay, North America’s largest and most biologically diverse estuary. The bay and its tidal tributaries are threatened by pollution from a variety of sources and are overburdened with nitrogen, phosphorus and sediment that can be carried by stormwater.
   The complaint, filed simultaneously with the settlement agreement, alleges over 600 stormwater violations that were discovered through site inspections and by reviewing documentation submitted by Toll Brothers. The majority of the alleged violations involve Toll Brothers’ repeated failures to comply with permit requirements at its construction sites, including requirements to install and maintain adequate stormwater pollution controls.
   The Clean Water Act requires permits for the discharge of stormwater runoff. In general, Toll Brothers’ permits require that construction sites have controls in place to prevent pollution from being discharged with stormwater into nearby waterways. These controls include common-sense safeguards such as silt fences, phased site grading and sediment basins to prevent construction contaminants from entering the nation’s waterways.
   The settlement requires Toll Brothers to obtain all required permits, develop site-specific pollution prevention plans for each construction site, conduct additional site inspections beyond those required by stormwater regulations, and document and promptly correct any problems. The company must properly train construction managers and contractors on stormwater requirements and designate trained staff for each site. Toll Brothers must also submit national compliance summary reports to EPA based on management oversight inspections and reviews.
   This settlement is the latest in a series of enforcement actions to address stormwater violations from residential construction sites around the country. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion, and stormwater runoff from sites can pick up other pollutants, including concrete washout, paint, used oil, solvents and trash.
   The state of Maryland and the commonwealth of Virginia have joined the settlement and will receive a portion of the $741,000 penalty. The settlement includes Toll Brothers sites in Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Nevada, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and West Virginia.
   The consent decree, lodged in the U.S. District Court for the Eastern District of Pennsylvania, is subject to a 30-day public comment period and approval by the federal court.
   More information about this settlement: http://www.epa.gov/compliance/resources/cases/civil/cwa/tollbrothers.html
   More information about EPA’s stormwater enforcement:http://www.epa.gov/oecaerth/data/planning/priorities/cwastorm.html

Foreclosure Rescue Scheme Brought To End

   DENVER – 3/26/2012 - U.S. Attorney for the District of Colorado John F. Walsh and Colorado Attorney General John W. Suthers announced today the end of a national foreclosure rescue scheme. The perpetrators, operating through Bella Homes LLC, had promised hundreds of distressed homeowners that Bella Homes would help homeowners avoid foreclosure. Instead of helping homeowners, the perpetrators helped themselves to a lavish lifestyle replete with fancy cars, vacations and even gold coins.

   “Today (3/26) brings an end to a scheme that harmed distressed homeowners across the country,” Walsh said. “With false promises, the perpetrators of this scheme convinced hundreds of homeowners to hand over the last of their life savings and turn over the deed to their homes. Together with our partners in the state Attorney General’s Office, we stopped this fraud from harming additional victims within our state and across the nation.”
   “This agreement not only will help Bella Homes’ victims, but it also will bar the defendants from engaging in any kind of mortgage or foreclosure activity ever again,” Suthers said. “Foreclosure rescue scams prey on distressed homeowners’ desire to save their homes and to find any means to help fix their dire financial situations. Our work in cooperation with the U.S. Attorney’s Office quickly shut down this scam and should send a message that we and our partners in law enforcement will vigorously pursue any foreclosure or mortgage scam preying on Colorado homeowners.”
   The civil action, brought jointly by the U.S. Attorney’s Office for the District of Colorado and the state attorney general of Colorado, put an end to a scheme that started in March 2010, in the basement of a convicted felon in Georgia, and went national, affecting homeowners in Colorado and other states across the country. The civil action that put an end to the scheme was filed in the U.s. District Court for the District of Colorado on Feb. 14, 2012, and resulted in a consent judgment, in which Bella Homes “admits the allegations in the complaint and acknowledges its role in defrauding homeowners who signed over title to their homes to Bella Homes.” Bella Homes further admitted that all deed transactions in which it entered should be deemed.
   As alleged in the complaint, the defendants, through Bella Homes, engaged in a fraudulent scheme in which they solicited homeowners to convey title to their homes to Bella Homes for no consideration and to enter into purported lease agreements under which the homeowners, instead of making their mortgage payments, paid Bella Homes monthly “rent.”

   To entice homeowners into this arrangement, defendants made or caused to be made numerous material misrepresentations to homeowners to convey the false and fraudulent impression that:

• Bella Homes would stop any foreclosure on the home;
• Bella Homes would purchase or otherwise settle the existing mortgage on the home from the lender;
• Federal law provided the homeowner the right to remain in the home for the duration of the lease with Bella Homes; and
• The homeowner would have an option to repurchase the home in three years from Bella Homes for significantly less than the amount currently owed on the mortgage.

   Defendants made these false representations on a website and in solicitations and documents sent to interested homeowners across the country. Contrary to Bella Homes’ representations and promises, Bella Homes admitted in response to a subpoena that it had not purchased any mortgages as of October 2011, and that it lacked the financial capacity to purchase mortgages. In all, more than 560 homeowners were victimized by Bella Homes. Throughout the life of the scheme, the company only acquired one mortgage just before the complaint was filed. As part of the consent judgment, the single mortgage may be sold and the proceeds returned to victims.
   The complaint alleged that Mark Stephen Diamond, Daniel David Delpiano, David Delpiano and Michael Terrell were involved in running Bella Homes. Through the consent judgment, these individual defendants confess liability to counts six and seven of the complaint, which allege violations of the Mortgage Assistance Relief Services Rule (MARS Rule). Specifically, the individual defendants confess liability to: violating Section 322.3(c) of the MARS Rule by making a representation, expressly or by implication, about the benefits, performance, or efficacy of any mortgage assistance relief service without competent and reliable evidence that substantiates that the representation is true. violating Section 322.5(a) of the MARS Rule, which makes it a violation of the MARS Rule to: request or receive payment of any fee or other consideration until the consumer has executed a written agreement between the consumer and the consumer's dwelling loan holder or servicer incorporating the offer of mortgage assistance relief the provider obtained from the consumer's dwelling loan holder or servicer. 

   As part of the consent judgment, the defendants have permanent restrictions on their ability to work in the mortgage industry and residential real estate related businesses. In addition, the defendants must return any vehicles in their possession that were leased by Bella Homes, Mark Diamond, Diamond and Associates or Diamond Corporation. Finally, money previously frozen in defendants’ bank accounts, as well as cash in a safe deposit box, and the proceeds of gold coins obtained by Bella Homes, will all be made available to the Department of Law at the state of Colorado to be returned to homeowner victims. To this amount, defendant Mark Stephen Diamond will add an additional $300,000 within the next 90 days. After that time, the defendants will make additional payments of approximately $200,000 over the next five years, for a total anticipated recovery of approximately $1.2 million.
   If you are a victim of Bella Homes, visit the website set up by the Colorado Department of Law at: www.coloradoattorneygeneral.gov/departments/consumer_protection/consumer_protection_cases/bella_homes.

   Source: Financial Fraud Enforcement Task Force

Settlement Reached Over Foreclosure Abuses

   WASHINGTON – 2/11/2012 - U.S. Attorney General Eric Holder, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, Iowa Attorney General Tom Miller and Colorado Attorney General John W. Suthers announced on Feb. 9 that the federal government and 49 state attorneys general have reached a landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. The agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future.

  Under the terms of the agreement, the servicers are required to collectively dedicate $20 billion toward various forms of financial relief to borrowers. At least $10 billion will go toward reducing the principal on loans for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth. At least $3 billion will go toward refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth. Borrowers who meet basic criteria will be eligible for the refinancing, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate mortgages are due to soon rise to much higher rates. Up to $7 billion will go towards other forms of relief, including forbearance of principal for unemployed borrowers, anti-blight programs, short sales and transitional assistance, benefits for service members who are forced to sell their home at a loss as a result of a Permanent Change in Station order, and other programs. Because servicers will receive only partial credit for every dollar spent on some of the required activities, the settlement will provide direct benefits to borrowers in excess of $20 billion.
   Mortgage servicers are required to fulfill these obligations within three years. To encourage servicers to provide relief quickly, there are incentives for relief provided within the first 12 months. Servicers must reach 75 percent of their targets within the first two years. Servicers that miss settlement targets and deadlines will be required to pay substantial additional cash amounts.
   In addition to the $20 billion in financial relief for borrowers, the agreement requires the servicers to pay $5 billion in cash to the federal and state governments. $1.5 billion of this payment will be used to establish a Borrower Payment Fund to provide cash payments to borrowers whose homes were sold or taken in foreclosure between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. This program is separate from the restitution program currently being administered by federal banking regulators to compensate those who suffered direct financial harm as a result of wrongful servicer conduct. Borrowers will not release any claims in exchange for a payment. The remaining $3.5 billion of the $5 billion payment will go to state and federal governments to be used to repay public funds lost as a result of servicer misconduct and to fund housing counselors, legal aid and other similar public programs determined by the state attorneys general.

   The unprecedented joint agreement is the largest federal-state civil settlement ever obtained and is the result of extensive investigations by federal agencies, including the Department of Justice, HUD and the HUD Office of the Inspector General (HUD-OIG), and state attorneys general and state banking regulators across the country. The joint federal-state group entered into the agreement with the nation’s five largest mortgage servicers: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc. (formerly GMAC).
   “This agreement – the largest joint federal-state settlement ever obtained – is the result of unprecedented coordination among enforcement agencies throughout the government,” U.S. Attorney General Holder said. “It holds mortgage servicers accountable for abusive practices and requires them to commit more than $20 billion towards financial relief for consumers. As a result, struggling homeowners throughout the country will benefit from reduced principals and refinancing of their loans. The agreement also requires substantial changes in how servicers do business, which will help to ensure the abuses of the past are not repeated.”
   The joint federal-state agreement requires servicers to implement comprehensive new mortgage loan servicing standards and to commit $25 billion to resolve violations of state and federal law. These violations include servicers’ use of “robo-signed” affidavits in foreclosure proceedings; deceptive practices in the offering of loan modifications; failures to offer non-foreclosure alternatives before foreclosing on borrowers with federally insured mortgages; and filing improper documentation in federal bankruptcy court.
   The $5 billion includes a $1 billion resolution of a separate investigation into fraudulent and wrongful conduct by Bank of America and various Countrywide entities related to the origination and underwriting of Federal Housing Administration (FHA)-insured mortgage loans, and systematic inflation of appraisal values concerning these loans, from Jan. 1, 2003 through April 30, 2009. Payment of $500 million of this $1 billion will be deferred to partially fund a loan modification program for Countrywide borrowers throughout the nation who are underwater on their mortgages. 

    The investigation was conducted by the U.S. Attorney’s Office for the Eastern District of New York, with the Civil Division’s Commercial Litigation Branch of the Department of Justice, HUD and HUD-OIG. The settlement also resolves an investigation by the Eastern District of New York, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Housing Finance Agency-Office of the Inspector General (FHFA-OIG) into allegations that Bank of America defrauded the Home Affordable Modification Program.

   The joint federal-state agreement requires the mortgage servicers to implement unprecedented changes in how they service mortgage loans, handle foreclosures, and ensure the accuracy of information provided in federal bankruptcy court. The agreement requires new servicing standards which will prevent foreclosure abuses of the past, such as robo-signing, improper documentation and lost paperwork, and create dozens of new consumer protections. The new standards provide for strict oversight of foreclosure processing, including third-party vendors, and new requirements to undertake pre-filing reviews of certain documents filed in bankruptcy court.
   The new servicing standards make foreclosure a last resort by requiring servicers to evaluate homeowners for other loss mitigation options first. In addition, banks will be restricted from foreclosing while the homeowner is being considered for a loan modification. The new standards also include procedures and timelines for reviewing loan modification applications and give homeowners the right to appeal denials. Servicers will also be required to create a single point of contact for borrowers seeking information about their loans and maintain adequate staff to handle calls.
   The agreement will also provide enhanced protections for service members that go beyond those required by the Servicemembers Civil Relief Act (SCRA). In addition, the four servicers that had not previously resolved certain portions of potential SCRA liability have agreed to conduct a full review, overseen by the Justice Department’s Civil Rights Division, to determine whether any servicemembers were foreclosed on in violation of SCRA since Jan. 1, 2006. The servicers have also agreed to conduct a thorough review, overseen by the Civil Rights Division, to determine whether any servicemember, from Jan. 1, 2008, to the present, was charged interest in excess of 6 percent on their mortgage, after a valid request to lower the interest rate, in violation of the SCRA. Servicers will be required to make payments to any servicemember who was a victim of a wrongful foreclosure or who was wrongfully charged a higher interest rate. This compensation for servicemembers is in addition to the $25 billion settlement amount.
   The agreement will be filed as a consent judgment in the U.S. District Court for the District of Columbia. Compliance with the agreement will be overseen by an independent monitor, Joseph A. Smith Jr. Smith has served as the North Carolina Commissioner of Banks since 2002. Smith is also the former Chairman of the Conference of State Banks Supervisors (CSBS). The monitor will oversee implementation of the servicing standards required by the agreement; impose penalties of up to $1 million per violation (or up to $5 million for certain repeat violations); and publish regular public reports that identify any quarter in which a servicer fell short of the standards imposed in the settlement.
   The agreement resolves certain violations of civil law based on mortgage loan servicing activities. The agreement does not prevent state and federal authorities from pursuing criminal enforcement actions related to this or other conduct by the servicers. The agreement does not prevent the government from punishing wrongful securitization conduct that will be the focus of the new Residential Mortgage-Backed Securities Working Group. The United States also retains its full authority to recover losses and penalties caused to the federal government when a bank failed to satisfy underwriting standards on a government-insured or government-guaranteed loan. The agreement does not prevent any action by individual borrowers who wish to bring their own lawsuits. State attorneys general also preserved, among other things, all claims against the Mortgage Electronic Registration Systems (MERS), and all claims brought by borrowers.
   For more information about the mortgage servicing settlement, go towww.NationalMortgageSettlement.com. To find your state attorney general’s website, go towww.NAAG.org and click on “The Attorneys General.”

   Source: Financial Fraud Enforcement Task Force

Pending Home Sales Rise in California in October

   LOS ANGELES - (BUSINESS WIRE) - 11/22/2011 - Pending home sales in California rose in October and were up from the previous year for the sixth consecutive month. Additionally, distressed home sales rose in October from both the previous month and year, the California Association of REALTORS® (C.A.R.) reported on Nov. 21.
   

Pending home sales

   California pending home sales climbed 3.1 percent in October and were up from a year ago, according to C.A.R.’s Pending Home Sales Index (PHSI)*. The index was 122.0 in October, based on contracts signed in that month, up from September’s index of a revised 118.2. The index also was up 10.7 percent from October 2010. October marked the sixth consecutive month that pending sales rose from the previous year. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
   “October’s increase in pending sales is encouraging, especially the six straight months of year-over-year increases,” said C.A.R. President LeFrancis Arnold. “Despite all the challenges the housing market has faced this year, California home sales continue to perform modestly well and should be on pace to match or better last year’s level.”
 

Distressed housing market data

• At 53.9 percent, equity sales made up more than half of home sales in October, down from 55.5 percent in September and 55.2 percent in October 2010.
• While equity sales have edged down from their peak of 57.1 percent in July 2011, they are up from the beginning of the year when less than half (46.5 percent) of sales were non-distressed.
• The total share of all distressed property types sold statewide rose to 46.1 percent in October, up from September’s 44.5 percent and 44.8 percent in October 2010.
• Of the distressed properties sold statewide in October, 20.7 percent were short sales, slightly up from the previous month’s share of 20.1 percent and up from last October’s share of 19.7 percent.
• At 24.9 percent, the share of REO sales was up from September’s 24.0 percent, and slightly up from the 24.8 percent reported in October 2010.

Man Pleads Guilty to Mortgage Fraud Scheme

   CHARLESTON, W.Va. — 11/17/2011 - A Utah man pleaded guilty on November 10 in federal court before U.S. District Judge Thomas E. Johnston to charges connected to a multimillion-dollar mortgage fraud scheme involving properties at a Hurricane, W.Va., subdivision.
   Michael S. Hurd, 37, of Salt Lake City, pleaded guilty to conspiracy to commit wire fraud and bank fraud. The defendant also pleaded guilty to mail fraud arising out of his involvement in a similar scheme in Modesto, Calif.
   Hurd admitted that during the early and mid-2000's, he operated a company called "The Gift Program," which he described as a "seller funded down payment assistance program" used to provide home buyer's money to make the down payment and initial mortgage payments on real estate purchases. Hurd further admitted that he used The Gift Program to create an elaborate scheme to defraud lenders by concealing the transfer of loan funds to the borrower from the lender. In essence, through the use of The Gift Program, lenders unwittingly funded their own down payment and made the initial mortgage payments.
   Hurd admitted that in 2006 he became involved with Deborah and Todd Joyce of Hurricane in the "flipping" of homes in the Stonegate subdivision in that town. Deborah Joyce obtained inflated appraisals from two local appraisers, James Thornton and Mark Greenlee, and subsequently sent the appraisals on to another co-conspirator Raymond Morris in Salt Lake City. Morris identified investors to purchase those properties at fraudulently inflated prices. Morris then got those investors in contact with Hurd, who then used The Gift Program to conceal the transfer of a portion of the loan proceeds to the investor from the lender. Hurd admitted that he paid Morris an undisclosed "commission" for this referral.
   Hurd also admitted that during the scheme, he wired additional loan funds to the investor to make initial mortgage payments. Once those funds ran out, the investors defaulted on the loans and the properties went into foreclosure. All told, Hurd, Joyce and Morris illegally flipped six properties in the Stonegate subdivision. The respective lender losses total almost $2 million.
   At the same time, Morris and Hurd orchestrated a similar investment-type scheme in Modesto. Hurd acknowledged that he was involved in illegally flipping 20 properties with losses in excess of $5.5 million. As part of his plea agreement, Hurd agreed to transfer those charges from the Eastern District of California to the Southern District of West Virginia so the matters could be disposed of jointly.
   Hurd faces up to 60 years in prison and a $2 million fine when he is sentenced on Feb. 29, 2012.
   Deborah Joyce was sentenced in April 2011 to 46 months in prison for her role in the scheme. Todd Joyce received an 18-month prison sentence. Thornton and Greenlee are set to be sentenced in December 2011. Hurd's co-conspirator, Raymond P. Morris, was charged in September 2011 and his trial is set for Feb. 28, 2012.
   This case is being investigated by the FBI and the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney Thomas Ryan from the Southern District of West Virginia is in charge of the prosecution.
   Source: Financial Fraud Enforcement Task Force, U.S. Department of Justice.

Higher Home Prices Reduce Housing Affordability

   LOS ANGELES - (BUSINESS WIRE) - 8/11/2011 - Housing affordability fell throughout most areas of the state in the second quarter of 2011, primarily due to a seasonal increase in home prices, the California Association of Realtors (C.A.R.) reported today.
   The percentage of buyers who could afford to purchase a median-priced, single-family home in California declined to 51 percent in the second quarter of 2011, down from 53 percent in first-quarter 2011 but was up from 46 percent in the second quarter of 2010, according to C.A.R.’s Traditional Housing Affordability Index (HAI).
    C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most fundamental measure of housing well-being for home buyers in the state.
    “The pending cut in the Fannie Mae/Freddie Mac high cost loan limits will make it harder and more expensive for those who live in high cost areas to purchase a home,” said C.A.R. President Beth L. Peerce. “Buyers who plan to finance their home purchase with a mortgage of $625,500 or more will face higher interest rates, higher down payments, and tighter loan qualification requirements beginning Oct. 1. Those in a position to buy should act before the loan limits are reduced,” Peerce noted.
    Mortgage rates in the second quarter of 2011 were essentially unchanged from the first quarter of 2011, but were down from second-quarter 2010.
   Buyers needed to earn a minimum annual income of $63,080 to qualify for the purchase of a $293,580 statewide median-priced home in the second quarter of 2011. The monthly payment, including taxes and insurance, would be $1,580, assuming a 20 percent down payment and an effective composite interest rate of 4.85 percent.
    Regionally, housing affordability fell in the higher-priced areas of the state, such as the San Francisco Bay Area and Central Coast, but edged up in lower-priced areas, such as the Central Valley. At 77 percent, San Bernardino County was the most affordable, while San Mateo County was the least affordable, with only 21 percent of households able to afford the county’s median-priced home.
    Visit http://www.car.org/marketdata/data/haitraditional/ to see C.A.R.’s historical housing affordability data. For first-time buyer housing affordability data, visit http://www.car.org/marketdata/data/ftbhai/.

Group Says Fannie Mae, Freddie Mac are Needed

   LOS ANGELES - (BUSINESS WIRE) - 2/14/2011 - In response to the White House’s recommendations last week to phase out Fannie Mae and Freddie Mac, the California Association of Realtors said the elimination of government involvement would raise borrowing costs for home buyers and severely restrict a safe and affordable flow of financing, further impeding the still-fragile housing market recovery.
   “A reduced government presence in the mortgage market will raise the cost of homeownership and make mortgages less available,” CAR President Beth L. Peerce said. “Moreover, Congress needs to understand that during economic downturns, the housing market needs government involvement to ensure capital stability. History has shown the private market is incapable and unwilling to step in during the hardest of times and meet the demands of the nation’s home buyers.”
   CAR, along with the National Association of Realtors, believes that Fannie Mae and Freddie Mac government-sponsored enterprises (GSEs) should be converted into government-chartered, non-profit corporations. Such an entity would ensure government’s role in a stable real estate finance system, while eliminating the conflict created by the GSE’s current charter allowing for a private profit and public loss structure. With a clear explicit guarantee by the government, these entities would continue to be able to offer low interest rate loans onto home buyers and assure investor confidence.
    The White House’s proposal to allow the maximum loan limit to drop back to $625,500 in high cost areas also would hamper California’s housing recovery
   “California dominates the jumbo loan market and cannot afford a reduced loan limit. The homeownership rate here consistently has lagged behind national figures for the last three decades,” Peerce said. “Any reduction to the conforming loan limit will prevent low- and moderate-income home buyers in high-cost areas from accessing low cost, low rate mortgages.”
    The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.
    GSE key points:

• The national loan limit for Fannie Mae and Freddie Mac is $417,000. Only in areas where the median home price is above $417,000 does the higher loan limit apply, which allows all homebuyers to have equal and fair access to affordable capital.
• An efficient and adequately regulated secondary market is essential to providing affordable mortgages to consumers. The secondary market, where mortgages are securitized and/or combined into bonds, is an important and reliable source of capital for lenders, and therefore, for consumers.
• Without a secondary market, mortgage interest rates would be unnecessarily higher and unaffordable for many Americans. In addition, an inadequate secondary market would impede both recovery in housing and the overall economic recovery.
• Government-sponsored entities have a separate legal identity from the federal government but serve a public purpose. Unlike a federal agency, the entities will have considerable political independence and be self-sustaining, given the appropriate structure.
• The mission of the GSEs would be to ensure a strong, efficient financing environment for homeownership and rental housing, including access to mortgage financing for segments of the population that have the demonstrated ability to sustain homeownership. Middle class consumers need a steady flow of mortgage funding that only government backing can provide.
• The entities should guarantee or insure a wide range of safe, reliable mortgage products such as 30- and 15-year fixed-rate loans, traditional ARMs, and other products that have stood the test of time and for which American homeowners have demonstrated a strong ability to repay.
• There must be strong oversight of the entities (for example, by the Federal Housing Finance Agency – FHFA, or a successor agency) that includes the providing of timely reports to allow for continual evaluation of the entities’ performance.

Veros Predicts Home Values Will Rise in 2011

   SANTA ANA, Calif.--(BUSINESS WIRE)-- 12/23/10 - The San Diego area regained its lead position for the strongest home price appreciation over the next 12 months in the most recent update to the U.S. real estate market forecast from Veros Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services.
   Veros’ U.S. real estate market forecast, VeroFORECAST, uses advanced analytics and micro-market data to achieve highly accurate results, and is utilized by economists, statisticians and business leaders as a key resource for forecasting and strategic planning due to its consistent strength and accuracy over the eight years the forecast has been available.
   The forecast for December 2010 through December 2011 indicates that select markets in the U.S. can expect to witness 2.5-3.5 percent appreciation on home values over the next 12 months, including Washington State’s tri-city area, Pittsburgh, Pennsylvania, Fargo, North Dakota, and the Washington D.C. metro area. Florida, Reno, Nevada and Boise, Idaho will experience the nation’s greatest depreciation rates in the coming 12 months, a trend which continues from prior periods.

Projected Five Strongest Markets*

1. San Diego / Carlsbad / San Marcos, CA +3.5 percent

2. Kennewick / Richland / Pasco, WA +3.4 percent

3. Pittsburgh, PA +2.7 percent

4. Fargo, ND-MN +2.6 percent

5. Washington / Arlington / Alexandria, DC-VA-MD-WV +2.5 percent

Projected Five Weakest Markets*

1. Reno / Sparks, NV -7.2 percent

2. Orlando / Kissimmee, FL -6.5 percent

3. Boise City / Nampa, ID -6.4 percent

4. Deltona / Daytona Beach / Ormond Beach, FL -6.3 percent

5. Port St. Lucie / Fort Pierce, FL -6.3 percent

 Strengthening Markets

    The Central Plains and Texas continue to see positive appreciation compared to prior periods, with generally good forecasts in Texas, Louisiana, Arkansas, Oklahoma, South Dakota, North Dakota and Iowa. A strengthening trend is also spreading to the Midwest with encouraging numbers in parts of Mississippi, Kentucky, Illinois, Indiana and Wisconsin. San Diego, California continues its consistent pattern of staying among the nation’s leaders in home value gains. “Smaller metro markets with populations less than 250,000 make up the majority of the better appreciating markets,” says Eric Fox, Veros’ vice president of statistical and economic modeling, crediting affordability factors.

Weak Markets

    The outlook for Florida remains weak, with six of the 10 U.S. markets expecting the greatest depreciation. Other especially weak forecasts include Reno / Sparks, Nevada, California’s interior, much of Idaho, and western portions of Washington and Oregon.

Good News

    “It is noteworthy that depreciating forecasts remain much better than those from a year ago with nothing worse than 7 percent depreciation,” Fox said. “A year ago, we were seeing some markets with depreciation rates in the double-digit range.
    “Approximately 40 percent of all major metro areas are forecast to appreciate over the next 12 months, even though appreciation is expected to be mild. Looking out to the 12 to 24 month horizon, nearly 60 percent of markets are expected to appreciate,” he says. “So while things aren’t happening rapidly, the forecast indicates they are getting better.”
    VeroFORECAST provides forecasts on the national real estate market with the capacity to segment results by property types, by three distinct pricing tiers – upper, middle and entry-level – and by metro area, county or zip code. The forecast utilizes more than 50 critical decisioning factors in its forecast analytics to develop reliable market trend predictions covering more than 900 counties, more than 300 metro areas and nearly 14,000 zip codes.
   Key factors range from interest, unemployment and inflation rates, to housing inventory levels and an array of economic and geographic trends. Veros engineered VeroFORECAST in response to demand for more focused and useful reports featuring improved methods and emphasizing more localized data in its analytics.
    *Markets demonstrated are for residential real estate in major metro areas (typically greater than 500,000 residents) among single-family homes in the median price tier.