Yesterday’s S&P Case Shiller housing report tracked the continuing decline in housing prices:
… all three headline composites ended the first quarter of 2012 at new post-crisis lows. The national composite fell by 2.0% in the first quarter of 2012 and was down 1.9% versus the first quarter of 2011. The 10- and 20-City Composites posted respective annual returns of -2.8% and -2.6% in March 2012. Month-over-month, their changes were minimal; average home prices in the 10-City Composite fell by 0.1% compared to February and the 20-City remained basically unchanged in March over February. However, with these latest data, all three composites still posted their lowest levels since the housing crisis began in mid-2006.
The potential inventory is still high, Zillow reported:
[M]ore than 30% of borrowers, or close to 16 million homeowners, were underwater on their mortgage during the first quarter, according to Zillow. The percentage of borrowers who owed more on their home than it was worth increased to 31.4% during the quarter, up slightly from 31.1% three months earlier, according to Zillow. In the year-ago period, 32.4% of all borrowers had negative equity on their loan.
Zillow also said that:
The rate of homes foreclosed continues to significantly decline in April with 6.8 out of every 10,000 homes in the country being liquidated. We had been expecting an increase in foreclosure liquidations after the multi-state attorneys general settlement in February, however we are not yet seeing evidence of this in the data. Nationally, foreclosure re-sales slowed a bit, making up 19.1 percent of all sales in April (Figure 4).
CoreLogic’s latest report on shadow inventory (January, 2012 data):
[S]hadow inventory remained at 1.6 million units, or 6-months’ supply and represented half of the 3 million properties currently seriously delinquent, in foreclosure or REO. Of the 1.6 million properties currently in the shadow inventory (Figures 1 and 2), 800,000 units are seriously delinquent (3.1-months’ supply), 410,000 are in some stage of foreclosure (1.6-months’ supply) and 400,000 are already in REO (1.6-months’ supply). … The shadow inventory is approximately half of the size of all visible inventory listings. For every two homes available for sale, there is one home in the “shadows”
There is still much to be concerned about. Declining home prices affects all of the subsequent data (underwater mortgages, foreclosures, shadow inventory). This process is too slow and is a major contributing factor to our economic stagnation.
