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St. Louis Real Estate Search

 

2011 Real Estate Market Performing about as Poorly as Predicted Thus Far

Radarlogic, real estate data and analytics company that frequently disagrees with the National Association of REALTORS® view of the housing market, released their RPX Monthly Housing Market Report for May 2011 yesterday and in it had a scorecard showing how their rather bleak predictions they made at the end of 2010 for the 2011 housing market were holding up. Unfortunately, as you will see below, it seems many of their predictions have been accurate and the housing market is performing as poorly as they expected in many areas.

Here’s the scorecard from the RPX report:

  • Foreclosures
    • Prediction: “We expect foreclosures to increase moderately…”
    • Status: Thus far this prediction has proven inaccurate. Procedural delays in the foreclosure process arising from the robo-signing scandal continue to constrain foreclosure filings. According to RealtyTrac, total foreclosure filings hit a 42-month low in May.
  • Defaults
    • Prediction: “Likely to remain elevated…”
    • Status: This prediction has also proven to be off the mark, at least thus far. Process delays are also slowing defaults. According to RealtyTrac, May defaults were at the lowest level since December 2006.
  • Delinquencies
    • Prediction: “…likely to remain elevated…”
    • Status: So far this prediction has proven to be correct. According to the Mortgage Bankers Association’s latest National Delinquency Survey, the delinquency rate on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.32 percent of all loans outstanding as of the end of the first quarter of 2011, an increase of seven basis points from the fourth quarter of 2010.
  • “Visible” Supply
    • Prediction: “Flat to up moderately.”
    • Status: Thus far this prediction has been accurate. According to the latest figures from the National Association of Realtors, there were 3,765,000 homes for sale during June 2011, 5.8 percent more than in December 2010. This translates into a 15.9 percent increase from a 8.2-month supply in December 2010 to a 9.5-month supply in June 2011.
  • “Shadow” Supply
    • Prediction: “The number of underwater homes… will continue to increase…”
    • Status: This prediction has proven incorrect thus far. According to CoreLogic’s latest Negative Equity Report, 10.9 million homeowners were underwater in their mortgages during the first quarter of 2011, accounting for 22.7 percent of all homes with mortgages. This represented a 2 percent decline from 11.1 million underwater homes in the fourth quarter of 2010.
  • Transactions (as measured by the RPX transaction count)
    • Prediction: “…flat to down slightly”
    • Status: To control for seasonal factors we consider the year-over-year change in the RPX transaction count when assessing the accuracy of this prediction. When we do so we find that the prediction has been accurate to date. The 25-MSA RPX transaction count declined 13.4 percent year-over-year through May 2011.
  • Motivated Sales
    • Prediction: “…a significant increase…”
    • Status: Again, we consider the year-over-year change in the RPX motivated transaction count when assessing the accuracy of this prediction and find it to be inaccurate. The motivated transaction count declined 1.4 percent year over year through May 2011.
  • Other Sales (i.e., all sales not identified as motivated sales)
    • Prediction: “We expect these sales to decrease rapidly…”
    • Status: This prediction has been accurate on a year-over-year basis. The other transaction count declined 17.2 percent year over year through May 2011.
  • RPX Prices
    • Prediction: “Likely to decline during the year…”
    • Status: This prediction has also been accurate on a year-over-year basis. The 25-MSA RPX Composite
      Price has declined 5.9 percent year over year through May.
  • Motivated Prices
    • Prediction: “Overall, we expect motivated prices to be flat to down slightly.”
    • Status: This prediction has been accurate with regard to the year-over-year change in motivated prices. The 25-MSA Composite Motivated price has declined 6.7 percent year over year as of May.
  • Other Prices
    • Prediction: “… we expect to see… upward pressure on MSA-wide RPX prices for other sales…”
    • Status: This prediction has been inaccurate to date on a year-over-year basis. The 25-MSA Composite Other price has declined 4.9 percent year over year.

To see the entire report, click here.

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