Investor Enthusiasm Is Lacking but Most Housing Markets Showing Signs of Stability
by: Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
Trends in investor traffic took an uncharacteristic divergence from trends in traffic from current homeowners and first-time homebuyers in December, according to the latest results from the
However, six months after interest rates started to rise, the housing market shows remarkable resilience.
While investor traffic has largely moved in step with traffic from other buyers in recent years, the investor traffic index in December lagged behind owner-occupant indexes. The investor traffic index for December was at 46.5, essentially flat compared with the previous month. The index tracks sentiment of agents. Any average above 50 is rising; any average below 50 is falling.
The owner-occupant indexes were both up sharply in December compared with the previous month. The current homeowner traffic index even shifted into rising territory, from 47.1 in November to 50.5 in December.
Investors accounted for 18.5% of home purchases in December, based on a three-month moving average, also flat compared with the previous month. In December 2012, investors accounted for 21.5% of home purchases, based on a three-month moving average.
The decline in investor participation is tied to rising home prices and a lack of inventory. “Prices have gone up significantly since the bottom of the market in 2010,” said an agent in Arizona. “Investors are now pulling back, but other buyers are all looking still for inventory below $150,000, which there is very little of, and not in good condition.”
Distressed properties accounted for 24.8% of home sales in December
This was based on a three-month moving average. The share of distressed property sales continues to be closely divided between move-in ready REOs, damaged REOs and short sales.
Florida had the highest share of distressed properties in December. Some 36% of home sales during the month were distressed property transactions, based on a three-month moving average. The industrial Midwest and Farmbelt also had distressed property proportions above the national average. The Northeast had the lowest distressed property share in December, at 18% based on a three-month moving average.
The housing market in December was much stronger than it has been in previous years.
Non-distressed properties were on the market for 9.7 weeks in December, based on a three-month moving average. In December 2012, the average time on market for non-distressed properties was 12.4 weeks.
Properties in western states continued to sell more quickly than the national average. In California, the average time on market for non-distressed properties in December was 4.8 weeks, based on a three-month moving average. Non-distressed properties take longest to sell in the industrial Midwest, Northeast, South and Farmbelt, where the time on market in December was at least 10.5 weeks, based on a three-month moving average.
Sales-to-list price ratios on non-distressed properties in December were well above levels seen in recent years. The national average was 97.1%, based on the three-month moving average, up from 95.5% in December 2012.
Western states and oil producing states had sales-to-list price ratios at- or above the national average for non-distressed properties in December. In California, the sales-to-list price ratio during the month was 99.7%, based on the three-month moving average.
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