By Lauren Baier Kim
RISMEDIA, August 24, 2007-(RealEstateJournal.com)-Here’s a look at what’s new in real-estate markets across the U.S. from around the Web.
Where foreclosures reign
During the housing boom, home prices in Stockton, California, rose 20% a year, according to an International Herald Tribune article. Today, Stockton has the highest foreclosure rate in the U.S., and home prices are falling 10% to 12% a year, the Tribune says. Many Stockton homeowners financed their purchases with subprime loans, often with 100% financing and no money down, the article says.
The town is located in California’s Central Valley, near Modesto and Merced — both rated in the top three in terms of U.S. foreclosure hot spots. California has the third highest foreclosure rate in the U.S., after Nevada and Colorado, the Tribune says.
Short sales in San Francisco
As more homeowners find themselves unable to meet their mortgage payments, “short sales” — in which a home is sold for less that what is owed on its mortgage — are becoming more common, says an article published by the San Francisco Chronicle. Short sales are now prevalent in San Francisco neighborhoods such as Antioch, Oakley, Brentwood, Discovery Bay, Pittsburg and Bay Point, the article says.
The sales are a way for lenders to avoid the losses that normally accompany a foreclosure — as much as $40,000 per foreclosed house, the article says. However, home buyers have run into problems with short sales — the mortgage lenders and investors who own the mortgage are in the driver’s seat in these transactions, and have been known to take as long as 16 weeks to respond to interested home buyers, the Chronicle says. House hunters interested in purchasing a short-sale home shouldn’t expect to get a huge break on the price, the Chronicle notes, as banks aim to get market value for such properties.
Gritty inner-city neighborhoods sell
Home buyers who want a big-city lifestyle without big-city prices are buying homes in several of San Antonio’s inner-city neighborhoods, says the Express-News of San Antonio. Investors are hoping that homes in not-yet-rehabilitated neighborhoods like Dignowity Hill and Tobin Hill will turn out to be profitable investments in the long term.
For example, prices in the Mahncke Park area have risen from an average selling price of $114,000 in 2002 to $177,650 last month, the newspaper says. “We’re sitting on a gold mine that is about to explode,” the newspaper quotes one homeowner as saying.
Utah’s cooling market
The “red hot” real-estate market in Utah’s Salt Lake, Utah and Davis counties — the “Wasatch Front” — is softening, says a Salt Lake Tribune article. The hardest hit segment of the market is for homes priced above $500,000, where it’s estimated there is a three-year supply of homes. Included in the housing backlog are homes being unloaded by speculators and thousands of newly built homes, the Tribune says. Tightened loan standards are hurting the market, while a high employment rate and population growth are boosting local sales, the article says. While home prices were up in most cases between the second quarters of 2006 and 2007, Moody’s Economy.com predicts a 4% drop in the median selling price for the area this year or next, the article says.
Hot prices up north
In contrast to the U.S. housing market, Canada’s real-estate market is in the midst of a buying boom, according to a Los Angeles Times article. While the National Association of Realtors forecasts U.S. home sales to drop 5.7% this year and the median price to fall 1.4% in 2007 to $218,800, Canadian home sales are expected to increase 8% with the average price rising 9.5% to $285,000, the Times says. Sales are especially hot in western Canadian cities, with low unemployment levels and a strong Canadian dollar boosting sales nationwide, the article says. Two factors that the Canadian housing market lacks: a high amount of residential real-estate investor activity and factors that led to the current U.S. mortgage crisis: “There is no subprime mortgage market,” the Times quotes an executive of one large Canadian real-estate franchiser as saying.
— Ms. Kim is a senior editor at RealEstateJournal.com.
Send links to articles about residential-real-estate markets to Lauren Kim at email@example.com.