About 1.9 million homes entered the foreclosure process in 2011, the lowest level since 2007 when the recession began, according to a report Thursday by the foreclosure listing firm RealtyTrac.
That the decline does not necessarily indicate that the housing market is getting better, as many foreclosures have been delayed due to confusion over documentation and legal issues involved in the process.
By many accounts, 2011 was a rough year for real estate – unless you happened to be a celebrity. For the rich and famous stars of screens large and small, 2011 was just another year of mega-house hunting, renting, selling and swapping.
Like those beloved holiday calendars that highlight the year’s eye candy, we’ve strung together a series of bright-light celebrity real estate deals from the past year’s high-stakes, high-profile ventures.
January: Charlize Theron
Source: IMDb
Sometimes, even celebrities have to dip their toes in before taking the plunge. That’s the route Academy Award-winning actress Charlize Theron took when she opted to be a landlord before listing her property. After her split with Stuart Townsend in 2010, the couple listed their Malibu home as a $50,000-a-month rental. A year later, Theron dove in and listed the property for $7.5 million. Not bad, considering that in 2003 she and Townsend paid $3,495,000. The beachfront home, pictured, is described as the “oldest home on La Costa Beach.” It sold in May for $6,562,500.
February: Ashton Kutcher
Source: IMDb
In February 2011, Ashton Kutcher was a happily married man and no longer needed his customized bachelor pad (pictured above). So, he listed the home on the Beverly Glen real estate market for $2.6 million and it sold in June for $2.35 million. Now, freshly split from his wife Demi Moore, Kutcher is searching for a new piece of real estate. Granted, the new star of “Two and a Half Men” can afford a bigger spread for himself these days, but perhaps he has regrets about selling the bachelor pad he and his dad built.
March: Christina Aguilera
Source: IMDb
When listing one house isn’t enough, some celebs try for a daily double. Take Christina Aguilera, for instance. Aguilera is a high-income earner who can eschew standard real estate advice.
In March, Aguilera listed her Beverly Hills home for $13 million while her Hollywood Hills home continued to linger on the market. While the Hollywood Hills mansion has since sold, Aguilera’s Beverly Hills pad — previously owned by the Osbournes — hasn’t wooed a buyer yet.
April: Jennifer Aniston
Source: IMDb
The real queen of real estate listed her extravagant L.A. estate “Ohana” in March for $42 million and she immediately made the move to New York, picking up not one, but two apartments a month later in a prewar West Village building (pictured above). Although she’s only owned the home for a few short months, rumors are flying that she’s looking for a new place — this time with beau Justin Theroux.
May: Charlie Sheen
Source: IMDb
In early 2011, Charlie Sheen was blowing up Twitter and news channels after his walk on the wild side. As if the former “Two and a Half Men” star’s interesting comments weren’t enough drama, leading to being fired from the show, Sheen also got busy hitting the real estate market by listing his Sherman Oaks home, above, for $7.2 million. In March, he picked up a home in the gated community of Mullholland Estates, a few blocks away, for $6,999,999. He wasn’t selling because he’s hard up on money: Sheen racked up about $40 million in the previous season of “Two and a Half Men.”
June: Katharine Hepburn
Source: IMDb
Although this house isn’t located in Hollywood or New York, the caliber of this Connecticut home — and its previous, Hollywood legend owner — sets it apart. Katharine Hepburn’s family estate (pictured above), hit the Fenwick real estate market for $18 million in June. Along with its private beach and dock, as well as 8,300-square-foot home, Hepburn’s property comes with storied history, including the tale of Hepburn vowing to rebuild the home after it suffered damage in the 1938 Great New England Hurricane.
July: Elizabeth Taylor
Source: IMDb
Regal beauty Elizabeth Taylor passed away in March and her hideaway estate hit the market as a pocket listing in May for $8.6 million. It didn’t take long for the luxurious ranch to sell. By July, the estate was picked up not by another A-Lister, but by an anonymous buyer rumored to be in the manufacturing biz. Although previous reports claimed the final sale price was undisclosed, property records now show the sale price to have been $8 million.
August: Matthew Perry
Source: IMDb
Matthew Perry’s real estate transactions are being featured for the month of August, but the former “Friends” star could the king of October, too. In August, Perry picked up a new home on the Sunset Strip and listed his West Hollywood apartment (pictured above). Then, in early October, he listed his beachfront home on the Malibu real estate market. Later that month, Perry finally wrapped up his real estate moves by listing his main L.A. residence. Whew!
September: Ryan Reynolds
Source: IMDb
Before dating Blake Lively, and before his short marriage to Scarlett Johansson, Ryan Reynolds lived in a relatively modest home in Hollywood Hills that he purchased for $1,175,000. After marrying Johansson in 2009, Reynolds tried to sell the home on the Hollywood Hills real estate market, but had little luck. In September, however, he re-listed the 2-bedroom, 2.5-bath home with a lowered price of $1.599 million. Currently, the home is off the market.
October: Donald Trump
Source: Forbes
Donald Trump may be a real estate mogul, but that doesn’t mean he’s immune to real estate trials. In October, Trump’s custom home in Rancho Palos Verdes sold for a significant price cut. The 11,000-square-foot home was first listed for $12 million and a buyer snagged it for $7.15 million. Trump originally purchased the house in the small California community as a party of a real estate development plan in the mid-90s. However, The Donald’s style was a bit aggressive for Rancho Palos Verdes and by selling his home there, he appears to be formally cutting ties to the city.
November: Bruce Willis
Source: IMDb
In the heyday of the 1990s, Bruce Willis and then-wife Demi Moore were the “king and queen” of Sun Valley, Idaho. The pair owned a nightclub and two bars as well as a few properties where they entertained other A-Listers who came to visit the luxury ski area. That era is well over. Willis is now selling his custom mansion on the Sun Valley real estate market for $15 million, Willis’ home has 8,400-square-feet of living space, a pool with spa and water swings, as well as a separate guesthouse and gym.
December: Ellen DeGeneres
Source: IMDb
In the world of celebrity real estate, the prize properties often go to other celebrities. Who else is going to need the high-end security systems or have the money to drop on a home with a custom closet? The most recent celeb-to-celeb real estate transaction went down in early December when fickle real estate holder Ellen DeGeneres bought Brad Pitt’s mid-century modern home in Malibu. DeGeneres and wife Portia De Rossi are currently listing their enormous, custom home for $49 million, making their purchase of Pitt’s home an apparent attempt at downsizing
“The plunging collapse of prices seen in 2007-2009 seems to be behind us. Any chance for a sustained recovery will probably need a stronger economy.”
For the third quarter, prices were down 1.2 percent from the previous quarter on a seasonally adjusted basis and were down 3.9 percent from the third quarter a year ago.
Compared to a year ago, price declines in the 20 cities continued to improve in September and were down 3.6 percent after a year over year decline of 3.8 percent the month before.
The number of U.S. homeowners who are underwater on their mortgages decreased modestly in the third quarter, though levels remained high, data analysis company CoreLogic said Tuesday.
The number of properties with so-called negative equity — in which the amount owed on the mortgage exceeds the property’s value — was 10.7 million, or 22.1 percent of all residential properties with a mortgage.
Next Tuesday, the September 10- and 20-City Composite Case Shiller Home Price Indices will be released, and Zillow is predicting the non-seasonally adjusted 20-City Composite Home Price Index will decline by 3.2% on a year-over-year basis, while the 10-City Composite Home Price Index will show a year-over-year decline of 2.8%.
We’re anticipating the seasonally adjusted month-over-month change from August to September will be 0.0% and -0.2% for the 10- and 20-City Composite Home Price Index, respectively.
Despite the slowed pace of home value depreciation, Zillow Chief Economist Stan Humphries is still anticipating further home value declines in the coming months. “We expect to see continued home value depreciation as unemployment and negative equity remain high and as the pace of foreclosures, kept artificially low since the robo-signing controversy, increases again,” said Humphries. The full forecast and further commentary can be found on the Zillow Research page.
When it comes to home improvement, a few changes in paint and furniture can go a long way towards changing the look of a place. But for a bigger transformation, updating countertops can bring shiny new appeal to a room or home.
Like most flooring materials, countertops now come in a wide variety of options. Even if you love the look of white marble, but worry about water stains and other normal wear and tear, there are plenty of other materials that mimic the look, but match your lifestyle — and budget.
Let’s take a look at a range of countertop options.
The Stone Age
Natural stone holds up to heat and water, is extremely durable and with repeated sealings can last a lifetime. Even if the stone chips or cracks, repair is easy. However, the cost and installation of stone countertops can be a show stopper.
Granite
Cost (including installation): $50+ / sq. ft
Granite has become one of the most popular options for countertops. Available in a variety of colors ranging from blacks, greens, browns to whites, beige and corals, no two granite slabs are the same. The cost of granite can depend on the color, finish and origin of the stone.
Due to the nature of the stone, granite may require professional installation. Additionally, to protect the stone from stains and water, granite needs to be sealed periodically as suggested by the manufacturer.
Marble
Average cost (including installation): $50+ /sq. ft
Marble has a majestic look, partly because of its soft tones and smooth surface. However, marble is not as strong as granite, is more porous and may do better with lighter or more delicate use. Like granite, it is usually requires professional installation and needs to be sealed periodically for protection.
Quartz, soapstone, limestone, travertine and other natural stones Average cost (including installation): $30 + /sq. ft
A little more affordable than marble or granite, these natural stones can vary in their level of resistance to stains and chips. Soapstone and slate are dense and acid-resistant, but they scratch easier than quartzite or travertine.
With lighter stones, the countertop can be accidentally stained by dark juices or wine. Citrus fruits, vinegar and some cleaners can also damage a counter but a professional can re-polish the counter to remove damage.
This West Linn home features another stone option for countertops: Travertine
Stone Tile:
Like other the tile options in flooring, the look of stone can be achieved with a fraction of the cost — and perhaps on your own without the help of a pro.
Engineered Stones:
The latest stone countertops combine natural stones like quartz with 5-percent polymer resin, creating a low-maintenance, durable counter top that doesn’t require sealing, however, installation can be labor intensive.
Solid surface is another version of engineered stone, blending marble dust, bauxite, acrylic or resin for a non-porous, low-maintenance countertop. Ranging from a variety of colors and blends, even wood-grain effects, solid surface is often found in commercial properties.
A Tile or Two
Ceramic
Average cost: $10 to $30 per tile
Ceramic tiles can be a durable and stain-resistant choice for countertops. Grout needs to be resealed to protect against stains.
While you can install ceramic tiles on your own, if the shape of your counter is unusual, it will make installation more labor intensive.
Like ceramic, porcelain is made from fired clay and is resistant to heat, scratches and stains. However, the grout, as in most tiled finishes, must be sealed often to prevent discoloring and wear.
Glass Average cost: $50+/sq ft.
Unlike porcelain or ceramic, glass is not as durable but is a high-end countertop or accent option with a wide variety of colors and stains. Recycled glass can also be an eco-friendly option.
Concrete
Average cost: $65- $135/ sq. ft
The cost of a concrete countertop varies greatly on the installation. Concrete can be precast in molds and installed, or poured at site. Each way creates a unique, durable and environmentally-friendly option. However, concrete can be a labor-intensive installation and needs regular maintenance to keep it from cracking and staining.
Butcher block countertops
Average cost: $75 – $150/sq. ft
Butcher block countertops are a way to warm up a kitchen space and comes in a variety of wood types, from maple to eco-friendly bamboo and exotic zebrawood. One of the easier countertops to install, with proper maintenance and sealing, butcher block countertops have great durability.
The preponderance of granite and other high-end countertop materials in many of today’s homes has given laminates a bad name. But really, does anything else wipe up easily and come at such a wallet-saving cost? Similar to laminate floors, laminate countertops come in a wide variety of finishes and customizations in color and design. Laminate is a great choice for being cost-effective, durable and fairly maintenance-free.
Do you know the difference between a home appraisal and a home inspection? Are you aware which home-buying costs are negotiable? What’s your understanding of legalities, such as when you can back out of your purchase agreement? Or, do you know when you actually, officially own your home?
Before the keys are actually handed over, there are so many different steps in the home-buying process and so many players that it’s not surprising many people are confused about key aspects of the process.
Just like NBC’s public service announcements from the ’80s stated — “The More You Know“ — we here at Zillow think informed consumers make better decisions. Along with Ipsos, we fielded a survey to gauge how familiar potential home buyers were with the most common aspects of home buying. For the most part, we found buyers were fairly knowledgeable, answering questions correctly more than half the time. However, there were a few areas that tended to trip people up.
For example, 41% of prospective home buyer respondents think they are required to buy private mortgage insurance, regardless of the amount of their down payment. And 56% said the purpose of an appraisal was to determine if the home is in good condition, when in fact, that’s the purpose of a home inspection.
Perhaps most surprising was that 42% of buyers polled believe home values typically appreciate by 7% a year. In reality, home values have historically appreciated by 2-5% a year. It’s important that potential buyers not go into their purchase believing they will get a 7% annual return on their investment, especially in the coming years when little to no appreciation is expected in most markets.
So how much do you know versus those we surveyed? Check out our survey results below and then take our Buyers IQ quiz to see how you measure up.
Among the outpouring of eulogies, analysis and other post-mortem offerings about Steve Jobs, the one authored by his sister, novelist Mona Simpson, is the most poignantly rendered.
Mona Simpson met her brother when she was 25. Source: Monasimpson.com
While the world continues to debate the genius of Jobs and how he applied that gift in delivering life-altering personal technology, Simpson’s remembrance of Jobs was succinct, smart and loving without being overwrought or overblown — especially insight about Jobs as house remodeler.
While she only first met her older brother at age 25 since their mother had put Steve up for adoption at birth, Simpson grew very close to Jobs. Oddly, when it came to Jobs’ well-known home on Waverley St. in Palo Alto, Simpson was able to offer an interesting revelation that belied the public image of the billionare Apple founder.
Jobs did not make the kind of dictatorial design demands for his residential remodel as he did for the creation of his Macs, iPods, iPhones and his other sleek inventions.
“They once embarked on a kitchen remodel; it took years. They cooked on a hotplate in the garage. The Pixar building, under construction during the same period, finished in half the time. And that was it for the Palo Alto house. The bathrooms stayed old. But — and this was a crucial distinction — it had been a great house to start with; Steve saw to that,” said Simpson.
That is really a priceless headline: Steve Jobs Cooks on Hotplate!
Protecting His Assets
The idea that the Jobs’ family endured the kinds of remodel mayhem that the average homeowner puts up with was a nice table-turning moment. Can’t billionaires pay their way out of contractor delays and hotplate cooking?
Turns out that personal nugget was only the start of a wave of Steve Jobs real estate news to emerge since Jobs died Oct. 5 after a long battle with of pancreatic cancer.
On Oct. 6, Reuters reported that in 2009, when Jobs took a second leave of absence from Apple to undergo a liver transplant, Jobs and his wife, Laurene, transferred three real estate properties into a living trust.
In addition to the Palo Alto home lined with — you got it — apple trees, Jobs transferred two other Woodside real estate market properties. While it is unclear what other stock holdings or assets were transferred to the living trust, estate planning experts call this kind of planning appropriate for someone who wanted to protect assets, tax liabilities as well as privacy.
The Jackling House boarded up after Jobs abandoned it. SOURCE: Richard Silverstein
Demolition Man
One of those transferred properties was likely to be the site of the former Jackling House – the massive, 1926 Spanish Colonial Jobs bought in 1984 and, after much fighting and controversy with a neighboring preservationist group, finally had it demolished in Feb. 2011.
The saga of the Jobs’ drive to demolish the historic mansion he dubbed “an abomination” was decades in the making. It skewered Jobs’ reputation as an architectural preservationist.
Now, according to Peter Bohlin, the founder owner of the renowned Bohlin Cywinski Jackson architectural firm, which has designed nearly all of Apple’s 350-plus stores and the Pixar headquarters, there are no plans to move forward.
The cleanup begins after dynamite leveled the historic Jacking House in Feb. 2011. SOURCE: Wired
Architectural Inspiration
As for the roots of Jobs’ design sense? That also stems from the realm of real estate — the California ranch homes that sprung up in the 1960s of Jobs’ childhood.
According to the authorized biography of Steve Jobs by Walter Isaacson released just days after Jobs’ death, Jobs said his appreciation for Joseph Eichler homes instilled in him a “passion for making nicely designed products for the mass market.” Here’s an excerpt:
“I love it when you can bring really great design and simple capability to something that doesn’t cost much,” he said as he pointed out the clean elegance of the houses. “It was the original vision for Apple. That’s what we tried to do with the first Mac. That’s what we did with the iPod.”
The Jobses’ house and the others in their neighborhood were built by the real estate developer Joseph Eichler, whose company spawned more than eleven thousand homes in various California subdivisions between 1950 and 1974.
Inspired by Frank Lloyd Wright’s vision of simple modern homes for the American “everyman,” Eichler built inexpensive houses that featured floor-to-ceiling glass walls, open floor plans, exposed post-and-beam construction, concrete slab floors, and lots of sliding glass doors. ‘Eichler did a great thing,’Jobs said on one of our walks around the neighborhood. ‘His houses were smart and cheap and good. They brought clean design and simple taste to lower-income people. They had awesome little features, like radiant heating in the floors. You put carpet on them, and we had nice toasty floors when we were kids.’
Steve Jobs grew up in an Eichler-designed house similar to this one. SOURCE: EichlerSoCal.com
Trick or Treat
The Eichler ranch of his youth inspired his sense of design, but for the kids in Steve Jobs’ Palo Alto neighborhood, inspiration of a more sugary sort was the talk of the town. Despite his death, Jobs’ Waverly Street house was open for business on Halloween — complete with spooky decorations and a fog machine.
The man who brought a personal technology revolution by insisting that he knew what consumers wanted must have what kids still want: Candy. In fact, some of the trick or treaters who descended on Jobs’ home came dressed in costumes that would have pleased the Apple baron.
Odd, really, that as the world attempts to sort out Jobs’ legacy, the kids at his haunted Halloween house might have brought it all back home with low-tech homage to the high-tech priest of Palo Alto.
Steve Jobs inspired some high-tech costumes for kids who came trick or treating at his house Oct. 31. SOURCE: Mercury News
Over the past few months, Occupy Wall Street actions have sprung up all across the United States. In the wake of Wall Street’s meltdown, protestors have taken up a new cause: Calling out the income disparity between the top 1 percent, who possess an estimated 25 percent of American wealth, and everyone else — otherwise known as the 99 percent.
While the Occupy protests are taking place in cities like Atlanta, Harrisburg, PA., Seattle, Oakland, Des Moines and dozens of other locales across the country, those are not necessarily the places where the 1 percent live.
A stellar report by the Atlantic magazine delves into this issue. Using IRS data, the Atlantic report shows that the 1 percent — Americans earning at least $516,633 in 2010 – are concentrated in large metropolitan areas led by New York, Los Angeles and Chicago.
Here’s a look at homes for sale in these select areas:
Manhattan
According to data from the Brookings Institute, nearly 12 percent of high-income homes are located in the New York city region. Specifically, the Upper East and West Sides and Greenwich Village hold the vast majority of these income earners. This statistic is reflected in real estate data: the median home value for the Upper West Side is currently $977,600 (rising at a rate of 12.5 percent year-over-year.) Upper East Side home values are currently $965,300 (rising 12.8 percent year-over-year.) Greenwich Village has a median home value of $1,115,900 and a yearly increase of 21.6 percent. Unlike other parts of America, the rich in these highly-populated urban areas don’t live in enormous mansions, but penthouses with sprawling city views or compact townhouses.
43 5th Ave FL 5, New York NY
For sale: $17,000,000
Greenwich Village has been the spiritual home of painters, poets, musicians and other Beatnik free spirits, but tough news for the struggling artists who think they might find an affordable place to crash. Greenwich Village has long gone upscale, as this penthouse demonstrates. Sitting on streets lined with shops and restaurants, this 5-bedroom, 4.5-bath home features one-percent worthy details like intricate moldings and wainscoting, stained white oak flooring and what looks to be a painted orange ceiling. Assuming a 20 percent down payment on a 30-year mortgage, the monthly payment is $63,556.
Scarsdale, NY
Just north of the Big Apple in Westchester County is another concentration of high-income earners. Continually ranked by Money magazine as one of the top-earning towns, Scarsdale is full of residents who prefer to live in the quiet suburb over the dense and intense isle of Manhattan. Scarsdale is populated with gracious Tudors and Colonials where the area’s current median home value is $1,086,800.
18 Sherbrooke Rd, Scarsdale NY
For sale: $6,995,000
Like many Scarsdale real estate listings, this home is a traditional Colonial, but what sets it apart is the indoor spa complex which includes a full-size pool and painted sky mural on the ceiling. The home has 6 bedrooms, 8 bathrooms and 7,800 square feet of living space.
Chicago
When it comes to enclaves in the Windy City that cater to the wealthy, Lake Shore Drive jumps to mind. However, another ZIP code where a high concentration of high income earners can be found is Lincoln Park. It is one of the city’s most historically significant neighborhoods and is studded with attractions like the Lincoln Park Zoo, Chicago History Museum, Peggy Notebaert Nature Museum and Lincoln Park Conservatory. The coveted neighborhood noted for its historic mansions is 2.5 miles north of downtown Chicago and is bordered on the east by Lake Michigan. Median Lincoln Park home values are not quite up to New York numbers and are currently $333,900.
1956 N Orchard St, Chicago IL
For sale: $5,999,000
This Lincoln Park home for sale was built in 2001, but fits in with the Victorian mansions that dot Lincoln Park streets with its limestone and brick exterior, four fireplaces, curved staircase and 12-foot ceilings. The 7-bedroom, 6.5-bath home is only a mile from the Lincoln Park Zoo and other attractions.
Cupertino, CA
This San Jose suburb is synonymous with the billionaires of Silicon Valley. Home to Apple, Cupertino is called “the heart of Silicon Valley” and also holds management offices for IBM, Oracle and Hewlett Packard. It’s just a quick hop over to headquarters for some other upstart startups: Facebook and Google. Like most towns in California’s Silicon Valley, Cupertino home values are very high, resting currently at $1,044,600.
22335 Regnart Rd, Cupertino CA
For sale: $2,998,888
Nestled in the foothills overlooking the Santa Clara valley, this Cupertino house for sale has recently been reduced in price by $250,094. The luxury 5-bedroom, 5-bath home sits on 2.3 wooded acres with panoramic views of San Jose and Santa Clara city lights.
Sugar Land, TX
The extended Houston metro is one of the fastest-growing areas in the country, according to the 2010 Census, and the affluent Sugar Land is included in this population uptick. Founded as a sugar plantation, the city is still home to Imperial Sugar and its main refinery, although its foundation as a blue-collar community is dwindling. While Sugar Land is home to many high-income earners, Houston real estate remains relatively affordable with a median list price of $165,000.
21 Grand Mnr, Sugar Land TX
For sale: $9,795,000
This Sugar Land home for sale is situated in an exclusive neighborhood on 1.27 acres, which include two pools and a fairway. The 6-bed, 9-bath home has a separate master wing with oversized master bedroom with fireplace, a breakfast bar, bath with steam shower and private gym.
Potomac, Maryland
The place where horse country meets the land of the Beltway elite’s tony estates, this Washington D.C. suburb holds 0.2 percent of all the nation’s very high-income households. According to 2009 Census data, the median household income $157,738. Potomac home values hit at $777,300.
7013 Natelli Woods Ln, Bethesda MD
For sale: $6,999,999
At 35,000 square feet, this Potomac home for sale is by far the largest on this list. Each of the 12 bedrooms include an en suite bath, bringing the home’s bathroom count up to 15.5. Other staggering details of the home include 49 closets, 6 bathrooms and 331 recessed lights, one indoor pool and one grand foyer.
Sales of previously owned homes fell sharply in February, setting the stage for steep discounting in the spring market.
The National Association of Realtors reported Monday that existing home sales dropped 9.6%, and the median price, $156,100, was the lowest since February 2002.
The silver lining, say economists, is that bargain prices, coupled with low interest rates, might finally spur some buyers off the fence as the real-estate industry prepares for its busiest season. Even without the $8,000 federal tax credit that stoked sales last spring, industry watchers predict a larger number of transactions this year.
“The job market is getting better and that will make people feel more confident about their income-earning prospects,” said David Berson of the PMI Group. “You need that confidence to buy a house. Household formations are also very important. … Kids may have moved back in with their parents, or two people may have moved in together, because of job concerns. Now they can move into their own place.”
Still, Monday’s data painted a picture of pain and price declines that have spared no region.
“The housing market is still clearly years away from staging any meaningful recovery,” Toronto-based Capital Economics wrote in a note to clients.
February sales data due Wednesday are expected to show that the market for new homes is just as lackluster as that for existing dwellings.
Some builders of new homes are increasing discounts on residences and boosting commissions to brokers.
“They don’t do that if things are going well,” said Alex Barron, a home-builder analyst with the Housing Research Center, an independent sell-side research firm. “The level of desperation in the builders is just going to increase substantially in the next two months, which is the heart of the spring selling season.”
Overall, February’s weakness could have been driven by bad weather, deals canceled over lowball appraisals and a higher number of distress sales, according to the National Association of Realtors.
A third of transactions were all-cash sales, and investors accounted for 19% of February sales activity, down from 23% in January. Low prices in many markets also reflect a new reality as sellers finally give in and reduce the asking prices on their homes in hopes of a fast deal.
“After three years of the housing downturn, people are becoming much more realistic in terms of valuing their homes,” said Lawrence Yun, the National Association of Realtors’ chief economist.
In Atlanta’s upscale Buckhead neighborhood, Natasha Swann put her family’s five-bedroom colonial on the market about six weeks ago. The $1.6 million asking price won’t recoup the roughly $200,000 that Ms. Swann spent on renovations such as finishing the basement and adding a bedroom. Still, the 41-year-old mother of three is eager to sell because she is building a bigger house nearby.
After six showings, she is optimistic the home is priced competitively. “We had to be kind of aggressive” about making the price attractive, she says. “We don’t know where the market’s going, and I’m not going to wait a long time in an uncertain market.”
Economists say the number of distressed sales will continue to rise, and put pressure on prices. But mortgage rates, which were trending upward during the fall and winter months, have been falling in recent weeks amid global turmoil over the crises in Japan. Rates for 30-year loans were well below 5% last week.
“Few think mortgage rates are going lower,” said Moody’s Analytics chief economist Mark Zandi. “It’s more likely they will be 6% than 4% next spring. This lights a fire under buyers.”
