Property Index Rises for Month; Homebuyer Traffic Flattens
WASHINGTON, D.C. (April 25) – The HousingPulse Distressed
Property Index (DPI), a key indicator of the health of the U.S. housing
market, rose to 48.6 percent in March – the second highest level seen in
the past 12 months. In another potentially significant development, the
HousingPulse Homebuyer Traffic Index (HTI) registered a
slowdown for owner-occupant activity during March.
the indexes are generated by the Campbell/Inside Mortgage Finance
HousingPulse Tracking Survey, a monthly measure of housing and
mortgage usage patterns.
The HousingPulse DTI indicated that nearly half of the housing
market is now distressed properties. This trend is likely to continue as
a backlog of foreclosures and mortgage defaults make their way through
the housing pipeline.
The HousingPulse HTIs for both current homeowners and
first-time homebuyers tracked each other from February to March, both
falling from 52.5 to 52.1. Meanwhile, the HTI for investors was nearly
flat, registering 57.1 in February and 57.2 in March.
Survey respondents reported mixed opinions on traffic for the winter and
spring housing market. “January, February and March sales were
characterized by a wait and see attitude of buyers. Both investors and
first time homebuyers are fearful of what is going on nationally with
Washington, D.C. Both the gas prices and the weather influenced the
local market.” stated an agent in California.”
market bottomed out last year and started to rise slowly. January was
flat with activity and inventory. February saw more buyers coming out.
March has seen a sharp increase of new listings, approximately double
what we had in February. It appears that we should have a marked
increase in activity as we continue in this strong season of the year,
“reported an agent in Colorado.
significant number of respondents commented on the problems that the
high proportion of distressed properties is causing for the appraisal
system. When many properties are distressed, it is often difficult for
appraisers to find recently sold non-distressed properties to gauge
values continue to decline, making normal sale homes worth much less
than they should be. Appraisers continue to use distressed property
sales to establish value on non-distressed listings. Further, these same
appraisers will not make any adjustments for amenities, (pools, spas,
solar, etc.), when compiling a normal sale vs. distressed comps. I have
had at least one appraiser tell me that his firm has been given marching
orders to calculate the current value based on all properties sold
within the last 3 to 6 months and only use the average square footage
minus 10% to establish neighborhood value comps. If this is indeed
standard practice, it will take a mighty long time to realize any
increases in property values,” complained an agent in Arizona.
positive sign, short sales boomed in the month of March and the
proportion of damaged REO fell. Short sales rose from 17.0% in February
to a record-high 19.6% in March. Damaged REO fell from 14.9% in February
to 12.0% in March. Because damaged REO has the worst effect on
comparables used for appraisals, smaller amounts of damaged REO should
affect appraisals less in future months.
Mortgage Finance HousingPulse Tracking Survey involves more than
3,000 real estate agents nationwide each month and provides up-to-date
intelligence on home sales and mortgage usage patterns.