The current housing trends are indicated as stable overall with a slight summer seasonal increase throughout most of Southeast Michigan according to local MLS (Multi-List Services) data and the Case-Shiller Index.. It should be noted that this applies to the overall marketplace, but does not encompass all neighborhoods.
Sales prices rose significantly during 2013 in most marketplaces due to the overall residential listing inventory being at artificially or excessively low levels. This inventory shortfall was caused primarily by the GSE's (Government Sponsored Enterprises such as Fannie Mae, Freddie Mac), the FHA (Federal Housing Administration), MERS (Mortgage Electronic Registration Service) and banks liquidating their lower performing loan portfolios, limiting or eliminating the processing of long term delinquent loans and foreclosures. The noted low 2013 inventory levels energized price bidding wars through most of that year, however, in 2014 prices have generally stabilized with active inventory levels increasing.
It is unclear if the recent improvement in home values is sustainable long- term or if prices will decline again once overall listing inventory levels return to normal. Another factor affecting the marketplace is the overall potential buyer pool being limited for an extended period because of consumers' long term credit difficulties resulting from short sales and foreclosures.
CoreLogic’s recently released Home Price Index (HPI) report shows that home prices increased in June 2014 by 7.5 percent when compared with a year earlier. It is the 28th consecutive month of year-over-year increases in national prices among distressed sales. When distressed sales were excluded from the statistics, the year-over-year growth was slower at 6.9 percent.
According to Mark Fleming, chief economist for CoreLogic, the ongoing slowdown in price appreciation reflects a "reversion to normality" that is "expected to continue across the country and should further alleviate concern over diminishing affordability and the risk of another asset bubble."
Arkansas was the only state to post a decline in prices, while a dozen states and Washington, D.C., posted new record highs since 1976. Though the index rose 7.5 percent nationwide, many states exceeded that number by significant margins. The top five states for price growth were: Michigan with a growth of 11.5 percent, California, 11.3 percent, Nevada 11.1 percent, Hawaii 10.8 percent, and Oregon with 9.5 percent. However, the national change from "peak-to-date" still remains at -9.0 percent. The index rose in 98 of the 100 Core Based Statistical Areas measured by the report. [DSNews August 6, 2014]The housing market lost momentum in the second quarter of 2014, however, as near-term indicators show that growth slowed from the first quarter. Residential investment, although expected to contribute to growth in 2014 and 2015, is not expected to be a major driver of economic growth going forward as was originally forecasted.
“With respect to housing’s contribution to growth this year, we have downgraded our outlook following the disappointing housing activity seen during the first half of the year,” Fannie Mae chief economist Doug Duncan said. “The impact on mortgage rates from the market’s expectation that the Federal Reserve would soon start tapering their securities purchases, combined to some degree with the weather effect in the first half of 2014, led to very little seasonal growth in housing. In the first six months of the year, total sales have run below last year’s pace. " [DSNews August 18, 2014]In February 2014 there were 43,000 foreclosures in the country, down from 51,000 in February 2013, a year over year decrease of 15%. Since the beginning of the financial crisis in September 2008, there have been approximately 4.9 million completed foreclosures across the United States. As of February 2014, approximately 752,000 homes in the country were in some stage of foreclosure, compared to 1.2 million a year ago, a year over year decrease of 35%.
CoreLogic also ranked the top five states for completed foreclosures over a one-year period ending January 2013. California led with 96,000 completed foreclosures and was followed by Florida (95,000), Michigan (74,000), Texas (59,000), and Georgia (50,000). Those five states accounted for almost half of all completed foreclosures.