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Mortgages increased 1.0% in July Between May and June, the HPI increased 0.7%. This index is calculated using home price information Read More...
NEW YORK, Sept. 24, 2013 /PRNewswire/ -- Data through July 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed increases of 1.9% and 1.8% from June for the 10- and 20-City Composites. For at least four months in a row, all 20 cities showed monthly gains. Phoenix posted 22 consecutive months of positive returns. Although home prices in all the cities increased, 15 cities and both Composites saw these monthly rates decelerate in July versus June.
Over the last 12 months, prices rose 12.3% and 12.4% as measured by the 10- and 20-City Composites. The year-over-year returns show a brighter outlook with 13 cities posting improvement in July versus June values. Las Vegas increased the most from +24.9% in June to an impressive +27.5% in July.
In July 2013, the 10- and 20-City Composites posted annual increases of 12.3% and 12.4%, respectively.
"Home prices gains are holding their 12% annual rate of gain established by the two Composite indices in April," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "The Southwest continues to lead the housing recovery. Las Vegas home prices are up 27.5% year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8%, 20.8% and 20.4% respectively. However, all remain far below their peak levels.
As of July 2013, average home prices across the United States are back to their spring 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 21-22%. The recovery from the March 2012 lows is 20.5% and 21.2% for the 10-City and 20-City Composites.
All 20 cities continued to show positive monthly gains with Chicago leading at +3.2%. Seattle, Tampa and Washington were the only three MSAs where returns increased from June to July. Cleveland showed the most weakness with a +0.5% return in July versus +2.0% in June.
Looking at the annual rates of change, thirteen cities showed acceleration with San Francisco posting its highest year-over-year return of 24.8% since March 2001. Atlanta, Boston, Charlotte, Detroit, Miami, Minneapolis and Phoenix were the seven MSAs with lower annual growth rates; the Twin Cities decreased the most with +9.5% in July compared to +11.5% in June. Although Detroit posted its 25th consecutive positive year-over-year return, it remains the only city below its January 2000 level.
More than 26 years of history for these data series are available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market may also be found on S&P Dow Jones Indices' housing blog: www.housingviews.com.
The table below summarizes the results for July 2013. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data.
Home values on properties secured by conforming mortgages increased 1.0% in July over June on a seasonally adjusted basis, according to the Federal Housing Finance Agency House Price Index.
Between May and June, the HPI increased
0.7%. This index is calculated using home price information
Brent Nyitray, the director of capital markets at iServe Residential Lending, commented, “The FHFA index is more of a central tendency index because it focuses on homes with conforming mortgages attached to it—in other words, it ignores the jumbo space and cash transaction which are often distressed sales.” The index also only covers data from purchase mortgages.
On a year-over-year basis, the FHFA HPI is up 8.8%, but right now it is 9.6% below its peak month of April 2007. The current index value is 205.5, compared with June’s 203.5 and July 2012’s 188.9.
By region, the East South Central states of Kentucky, Tennessee, Mississippi and Alabama saw a 0.7% decline in value, while the neighboring West South Central region of Oklahoma, Arkansas, Texas and Louisiana lost 0.4% in value. The largest gain was seen in the Pacific states, up 2.2%.----------------------------------------------------------------------------------------------
GSEs Still Finding Problems with Home Appraisals
Three years after the creation of a database seeking to standardize the home appraisal process, Fannie Mae and Freddie Mac continue to see major issues in numerous appraisals submitted by mortgage lenders, American Banker reported Sept. 12.
Fannie Mae conducted a sampling of appraisals and determined that 17.6 percent contained contradictory information, typically pertaining to the condition or quality of the property, Robert Murphy, the GSE’s director of collateral and single-family risk policy, told a Phoenix conference of risk managers. He added that those two factors are the most important in determining a property’s value.
Elevated appraisals contributed to the housing market collapse because lenders frequently pressured appraisers to place artificially high values on properties, which helped increase home prices.
Murphy’s comments followed similar remarks from an official at the Office of the Comptroller of the Currency, who that same day told conference attendees that banks have been lax in their oversight of appraisers, American Banker reported.
The Federal Housing Administration, which oversees the GSEs, estimated that approximately 35 percent of repurchases that require lenders to buy back a loan are tied to faulty appraisals.
Murphy told conference attendees that Fannie will give guidance to lenders next month regarding ways to decrease appraisal conflicts.
In 2010, the GSEs established the Uniform Mortgage Data Program to provide standard requirements for appraisal and loan data. Mortgage lenders have to provide information via an online portal so the GSEs can identify issues and reject them prior to origination.
“Just because a lender uses an appraisal management company, doesn’t relieve them of responsibility as a lender selling to us,” Murphy said, according to American Banker. “At the end of the day, the lender is responsible.”
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