The national housing market continues to show signs of improvement but there’s plenty more progress to be made. Due to progressive foreclosure laws in our state, the California real estate market is way ahead of the curve, the foreclosure report shows. The state has made great headway in recovering from the crash with foreclosure numbers that are among the lowest in the nation.
The January 2014 CoreLogic National Foreclosure Report shows promise for continued improvement in the housing market in 2014.
The report states that 48,000 foreclosures were completed in January, a number that is down 19% from the previous 12 months and down a whopping 11.8% from December. That month-to-month drop is indeed significant and is an excellent forecast of the progress that still needs to be made. Before the housing market crash the number of monthly foreclosures was around 21,000. So even with these strong decreases we still have a ways to go before we return to an equilibrium. So January’s numbers still need to see a 50% drop before we begin to reach the stats from the pre-bubble days but the month-over-month change is a good indicator of the nation’s continued momentum toward that goal.
Judicial Foreclosure States are Slowing the Nation’s Recovery
The numbers also show that states requiring Judicial Foreclosure are seriously lagging behind the states that offer non-Judicial Foreclosure. The simple difference here is that Judicial Foreclosure requires the lender to sue the borrower in state court before proceeding with the auction of the property. This process costs the lenders more money than in Non-Judicial states and takes significantly longer. This has caused a foreclosure backlog in the Judicial Foreclosure states and is seriously hindering the recovery process in those states. The CoreLogic Foreclosure Report shows that, on average, the Judicial Foreclosure states have higher Foreclosure Inventory Rates and Serious Delinquency Rates than the Non-Judicial states mainly because they are so back logged that they are two to three years behind the Non-Judicial states.
As a Non-Judicial Foreclosure state, California is bucking the national trend with a Foreclosure Inventory Rate and Seriously Delinquent Rate that are among the lowest in the nation.
California seems poised for solid housing price growth in 2014 with one of the lowest foreclosure inventories in the nation and one of the strongest housing price indexes as well.
Extreme Cold is Slowing the National Housing Market
No matter where you live in the United States chances are you aren’t immune to the freezing cold temperatures that have been sweeping the nation this winter. Even the warmest climates are reporting record low temperatures.
Well it seems this is not the kind of weather that leaves consumers excited about going out and shopping for a new home: CoreLogic’s January Market Pulse and December Housing Price Index reports tell the story. Even though national prices are up nearly 12% from December 2012, those same numbers are actually down 0.1% from the month before. Meaning that housing prices continue to remain frozen throughout this winter season.
What’s more important to note is the prediction that prices in January 2014 are going to represent a 0.8% decline from December 2013. Based on their month-over-month decline in December and minimal increases since September, the result is home prices are actually dipping below the prices reached in 2013.
Sacramento-Roseville Housing Market Shows Room for Growth
The trend does show that the rate of housing price increase is slowing, but the most telling number is that nationally the housing price index is still 18% below its peak reached in April 2006.
And even though California and the Sacramento-Roseville metro area have seen year-over-year increases of around 20%, their respective housing price indices still remain further from their peaks than the national market. According to CoreLogic’s January MarketPulse Report, California’s HPI remains 21.3% below its peak and Sacramento-Roseville real estate has even more room for growth as it remains 33% below its peak.
To put that number in perspective, home prices in the Sacramento-Roseville metro area would need to increase by 50% to equal its peak price reached during the housing bubble in 2005.
But who knows how much longer the cold will keep the prices of California homes down.
If you’re “In the Market”, it’s time to get Pre-Qualified
If you’re on the fence about buying a home in California in 2014 you should seriously consider getting in touch with a lender to determine what you can afford. The extreme cold is getting the year off to a slow start; use that to your advantage and get in before real estate prices in Roseville and California jump up again. Looking at the national monthly housing price increases in 2013 you can see how rapidly prices begin to increase in the spring.
You might also be thinking, “I’ll just wait till next winter when prices will be lower.” That simply won’t be the case. Remember the report says that housing prices in December were also up 11.8% from December 2012. Those increases being even higher in California and the Sacramento-Roseville real estate markets. The spring heat will be here before you know it, so don’t miss out!