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More than One-Third of Listed Homes Sold Within 2 Weeks: Redfin

More than one-third of homes were taken off the market in two weeks or less last month, Redfin revealed in its most recent monthly housing report.

On average, 34 percent of homes were under contract within 14 days of their debut in February, an increase from 30.3 percent in January, the online real estate broker reported.

In addition, a handful of metros, especially in California, saw an even greater share of homes get taken off the market within two weeks.

In San Jose, 63.1 percent listings were sold within two weeks, the most out of the 19 metros the report covers.

Other California metros with a much higher percentage were San Francisco (56.8 percent), Ventura (52.6 percent), Los Angeles (51.3 percent), and Inland Empire (49.8 percent).

Redfin also reported a continued year-over-year decrease in inventory, which has fallen 32 percent from February 2012. Though, inventory did inch up 1.1 percent from January 2013.

As inventory stayed low, home prices ended last month with a 13.2 percent year-over-year increase and 2.4 percent month-over-month gain.

Sales, constrained by a lack of inventory, were up just 2.3 percent from a year ago and 0.7 percent from last month, Redfin reported.

Redfin’s analysis is based on local databases used directly by real estate agents to list properties and record sales.

Economist assures housing bubble is not happening

Rapidly rising home prices in certain markets have sparked fears of another housing bubble, but Diane Swonk, chief economists and senior managing director for Mesirow Financial, says don’t go there just yet.

“In economics, price is the ultimate equalizer. Prices rise when something is scarce, and fall when something if plentiful,” Swonk said in a recent housing report.

In 2007 and 2008, home prices fell as supply grew. Now, five years later, tight credit market conditions, fewer distressed sales and reluctance by would-be sellers to list their homes have brought inventory to an eight-year low, according to Swonk.

“Prices have risen but not enough to persuade owners who are still unsure to get off the fence and list their homes for sale,” Swonk wrote in the report.

Despite recent increases, home prices remain about 30% shy of their 2006 peak. So, many potential sellers are choosing to renovate their homes and hope to eventually see a return-on-investment once home values increase. 

In 2013, housing starts are expected to rise 33% to slightly over one million units. This will mark the first time that one million new homes have been built since 2007. But the even bigger news is the “return of the single-family market, which has been much more constrained than multi-family starts,” noted Swonk.

Additionally, home sales are expected to rise between 6% and 8% from December 2012 to December 2013, according to the report. Swonk says new home sales are predicted to outperform existing home sales because inventories are likely to remain more limited in the existing markets, while housing starts are forecasted to improve, as previously noted. 

While some worry a bubble is forming, Swonk reassured them that we still have a long way to go to meet pent up demand, let alone any level considered “normal.”

RealtyTrac: Top 15 Markets to Buy Short Sales, REOs

After assessing over 900 markets across the country,RealtyTrac put together a list of the top 15 markets for short sale and REO purchases for the year.

RealtyTrac only considered markets with at least 200 short sale or REO transactions in the fourth quarter of 2012.

For the list of short sales, RealtyTrac took into account four factors: fourth quarter annual percent change in short sales, average sales price, average amount short (difference between the sales price and the loan amount owed to the bank), and the time it took to sell from the foreclosure start date.

Out of the 15 markets selected, nine were located in California. Three California metros led with the biggest year-over-year surge in short sales. Santa Barbara experienced a 107 percent annual increase in the fourth quarter and was followed by Visalia (106 percent) and Fresno (97 percent). Other California metros on the list were Vallejo, Bakersfield, Sacramento, Stockton, Modesto, and Riverside. The time to sell for the metros averaged 235 days.

Two Michigan metros, Grand Rapids and Detroit, had the lowest average sales prices, $91,145 and $97,233, respectively. On the other hand, in Santa Barbara, short sales sold for an average price of $283,825.

Phoenix stood out among the pack for averaging the shortest time to close, 188 days.

Other metros that made the list were Las Vegas, Virginia Beach, and Des Moines.

RealtyTrac also noted the average remaining deficiency after a short sale exceeded $100,000 in seven of the 15 markets, which suggests banks are willing to take a huge loss with a short sale to avoid foreclosure.

“Short sales are on the rise as a better alternative to foreclosure in many areas — good news for buyers and investors in markets where short sales are closing more quickly at solid discounts,” said Daren Blomquist, VP at RealtyTrac.

“But buying from the bank may still be a better option in other markets because of increasing REO inventory, deeper discounts and shorter times to close,” he added.

For the list of the top REO markets, RealtyTrac took into account annual percent change in REO sales, average sales price, average days to sell, and percent discount compared to non-distressed sales.

Overall, the markets on the list averaged discounts ranging from 33 to 57 percent and the time to sell ranged from 139 to 175 days, compared to 188 to 358 days for short sales.

Out of the 15 metros on the list, two Ohio markets stood out. Cleveland and Dayton both averaged lower prices, the shortest days to sell, the most significant increases in sales, and the greatest discounts.

In Cleveland, REO sales increased 141 percent, the average REOsales price was $57,782, and discounts averaged 56 percent. Dayton has seen REO sales increase 123 percent over a one-year period, its average sales price was $50,579, and discounts stood at 57 percent. Both metros averaged 139 days before going to sale.

Meanwhile, Sarasota, Florida has seen REO sales increase just 19 percent and the average REO sales price was $127,181, the highest out of the other metros.

Other metros on the list included Columbus and Canton, Ohio; Chicago and Rockford, Illinois; Chattanooga and Memphis, Illinois; Daytona, Palm Bay, and Pensacola Florida; and Charlotte, Greensboro, and Winston, North Carolina.

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