Real estate activity is doubling in some major cities, while some types of foreclosures are too. So where are home buyers flocking? Where are the hottest and most distressed real estate markets in the U.S. this year?
Busting the Two Biggest Myths about the U.S. Housing Market
There have been two very counterproductive and irresponsible myths being floated around this year. You’ll be glad there is proof that they aren’t true.
Myth #1: The U.S. Housing Market has Finished its Growth Phase
People love controversy and attention. As a result. the media has published plenty on how growth may slow. Historical data clearly shows that once we get back to par, we’ll still have years of great growth ahead. While some markets may be getting back close to their previous values, there appears to be no signs of slowing. Given that the economy really hasn’t caught up yet, we should see robust growth when it finally does.
Myth #2: Foreclosures Are Over
This is a dangerous myth for two or three reasons. First, it can take the motivation out of additional aid for those that are struggling to keep their homes. Second, it causes some real estate investors that rely on the hype to pause. They become afraid that there aren’t any deals left. This, in turn, can cause many to overpay for properties, or buy wildly due to a scarcity mindset. However, new data from the Mortgage Bankers Association reports that the percentage of Fannie Mae loans that were 60 days or more past due almost doubled in the first quarter of 2015.
Sizzling Summer Buyer’s Season Starts Early in 2015
According to Realtor.com, website traffic is up 50 percent. More individuals are shopping for houses online. According to the firm’s chief economist, house searches and online real estate traffic keep setting new highs. Expectations are that the summer buying season will boost these numbers even further.
Consumers aren’t just looking either. Rising home prices are enabling more homeowners to get out from being underwater and list their homes. However, while home listings are up, Realtor.com reports that the national average marketing time for homes keeps dropping. In May 2015, days on market (DOM) fell 10 percent month-over-month.
America’s Hottest House Markets in 2015
According to the latest rankings, California has half of the country’s hottest housing markets based on online search activity, searches per home listed, and how fast homes are selling.They include:
- San Diego-Carlsbad, CA
- San Francisco, CA
- Vallejo, CA
- Santa Rosa, CA
- Sacramento, CA
- Los Angeles, CA
- Venture, CA
- Stockton, CA
- Santa Cruz, CA
- San Jose, CA
America’s Hardest Hit House Markets in 2015
RealtyTrac reports that banked owned properties doubled in April 2015 over the previous year, and rose almost 25 percent month over month. RealtyTrac shows the 5 states with the highest foreclosure rates as:
- Florida
- Nevada
- Maryland
- New Jersey
- Tennessee
Real estate investors and homebuyers are likely to find high foreclosure density in ‘judicial’ foreclosure states where the foreclosure process takes the longest. Think New York, where it can easily take over 900 days to foreclose on a home.
Even though California is now one of the hottest and healthiest housing markets in the nation, the statistics show there are plenty of distressed properties coming online in the Golden State. Properties in foreclosure appear to be split almost equally between pre-foreclosure, going to foreclosure auction, and becoming bank owned REOs. California bank REOs shot up 74 percent in April 2015 alone.
Summary
Looking at the big picture, we see plenty of distressed properties working through the system. Meanwhile, the retail end of the market is experiencing a great uptick in demand, and with sunny expectations for price growth. This creates an incredible sweet spot and window of opportunity for those ready to step in and serve both distressed borrowers and asset holders.
