Press Release: April 25, 2011 -
HousingPulse Distressed Property Index Rises for Month; Homebuyer Traffic Flattens
HousingPulse Distressed 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.
Both of the indexes are generated by the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, a monthly measure of housing and mortgage usage patterns.
”Our 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.
A 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 value.
“Home 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.
In a 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.
The Campbell/Inside 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.
For more information on the survey, contact John Campbell at Campbell Surveys at (202) 363-2069 or .
*** 04/25/2011
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