Economic and other housing news this past week have given the housing recovery three strong legs to stand on. The dreaded shadow inventory that many have worried could derail the recovery and possibly even throw us back into a housing downturn showed some solid progress, home resale volume ticked up significantly in August, and Wall Street welcomed a successful IPO of a real estate search site.
JPMorgan Chase reports that banks trimmed 1.2 million troubled mortgages or foreclosed homes off their books in the first half of 2012. The bank’s research arm says the progress could double by the end of the year, leaving an estimated more than 4 million loans and properties to settle.
While 4 million properties left in the looming shadow inventory still sounds pretty deadly, it would be down from a peak of 6 million in 2010. Two million homes in two years is actually pretty great in the context of things.
Of those 1.2 million that were processed in the first half of the year, nearly 335,000 were short sales, 420,000 were loan modifications and another 470,000 were sold as REOs (bank-owned homes).
Let’s keep it up!
Summer resale volume heats up
Existing home sales were up 7.8% in August to a rate of 4.82 million homes from 4.47 million in July, according to the latest monthly numbers from the National Association of Realtors. Sales volume in August was 9.3% higher than the 4.41 million level in August 2011.
In addition to this good news, NAR reports that the national median price rose on a year-over-year basis for the sixth month in a row. The median price was $187,000 in August, up 9.5% from the same month a year ago and the strongest increase since January 2006 when the median price rose 10.2% from the previous year.
Summer traditionally is high season for home sales so this news is not surprising. But it shows a strength we need to see right now.
Real estate stocks get a warm welcome
Real estate search site Trulia.com debuted its IPO last week with a very warm welcome from eager investors. The stock traded up 41% to close at $24 per share in its opening day, according to Marketwatch.
Given that the company has yet to turn a profit, the move can be interpreted as good faith in a recovering real estate market. Investors clearly expect a strong recovery in housing and property markets. Of course, that doesn’t mean it’s a sure thing, but it’s a great vote of confidence and something the market needs right now.
Congratulations to Trulia! Here’s to many more successful IPOs in housing and to many more months of positive gains. Full steam ahead.