For Housing, Some Hopeful Signs

MBA (6/11/2008 ) Sorohan, Mike
It is, of course, too early to suggest that the worst of the current housing slump has ended. But this week offers a few signs that the industry see as hopeful.
Data released this week by FNC Inc., Oxford, Miss., found that the Southern California housing market, which has been among the hardest hit in home price depreciation, saw a sliver of hope—despite an overall decline in home prices between January and April, those homeowners who sold their homes did so at higher prices than the previous quarter.

Also this week the National Association of Realtors’ Pending Sales Index found that the number of potential homebuyers signing contracts to buy previously owned homes increased in April. The Index rose by 6.3 percent to 88.2 in April—still low, but up from the index’s 83.0 rating in March, which ranked as the lowest reading since its inception in 2001. The April Index shot up to its highest rating since October 2007, although it was still down by 13.1 percent from last April.

In Southern California, FNC's Residential Price Index said single-family home prices declined 6.9 percent in San Diego County, by 3.8 percent in Orange County and by 6.5 percent in Los Angeles County between January and April. But for the same period, 15 percent of zip codes in San Diego, 25 percent in Orange County and 24 percent in Los Angeles County appreciated, said Robert Dorsey, executive vice president for data and analytics at FNC.

"Clearly housing prices are continuing to fall in Southern California,” Dorsey said. “However, we are seeing signs that certain zip codes, typically in coastal areas, are beginning to stabilize and even appreciate from their end-of-2007 lows."

But Dorsey added that even in those zip codes, “markets are slow and prices are still significantly off of their 2005/2006 highs."

California has been one of the hardest hit states, according to the Mortgage Bankers Association’s latest National Delinquency Survey released last week. The NDS found that California, which holds 13 percent of all loans outstanding in the U.S., had 21 percent of all loans starting the foreclosure process.

FNC's Residential Price Index is based on single family home purchase transaction data from the FNC National Collateral Database. The NCD blends transaction data from public records and from appraisals used in loan originations to create timely and detailed records on residential properties. The FNC index uses all of the properties within a region and their physical property characteristics.