Three top indices of economic health in the U.S. came out with negative reports this month, supporting the notion that the nation’s inventory of available properties — particularly the supply of properties in foreclosure — will remain elevated for at least the immediate future.

According to its latest report released Tuesday, Standard & Poor’s said home prices across the nation continued to fall in April 2008, with prices in all 20 metro areas it studies for the S&P/Case-Shiller Home Price Indices showing annual declines. Of those 20 metros, 13 of them posted record annual lows, and 10 of them reported double-digit declines.

“There might be some pockets of improvement, but on an annual basis the overall numbers continue to decline,” said David M. Blitzer, Chairman of the Index Committee at S&P. The biggest decliners were Las Vegas and Miami, with 26.8 percent and 26.7 percent declines respectively. These areas were two of the fastest gainers during the boom of 2004-2005.

Also on Tuesday, The Conference Board released its monthly Consumer Confidence Index report, showing an almost eight point decline between its May measurement (58.1) and its June measurement (50.4) of consumer confidence nationwide.

In the group’s monthly release, Lynn Franco, Director of The Conference Board Consumer Research Center, said, "This month's Consumer Confidence Index is the fifth lowest reading ever. Consumers' assessment of present-day conditions continues to grow more negative and suggests the economy remains stuck in low gear. Perhaps the silver lining to this otherwise dismal report is that Consumer Confidence may be nearing a bottom."

In addition to a general negativity from consumers regarding the present state of the economy, the Board’s monthly Expectations survey concluded that consumers were pessimistic about business conditions improving over the next six months, and their outlook on the labor market was also negative.

Adding more insult to injury, the Commerce Department came out with its May report of new residential home sales on Wednesday, revealing a 2.5 percent decline from the revised number for April, and down 40.3 percent  from a year ago. At the current sales rate the report projects there is a 10.9 month inventory of new homes available.

Considered together, the three reports give further credence to the belief that the nation’s real estate marketplace will not be making a sudden turnaround of fortune anytime soon. And in fact things may have to get worse before they get better.

In the meantime this all portends well for would be homebuyers as well as investors looking for potential bargains in real estate around the country.

The Federal Open Market Committee took the advice Wednesday of all the financial analysts and market watchers and did absolutely nothing with the short term Federal Funds Rate (FFR).

After whittling away at the rate over time from a high of 5.25 percent back in August 2007 down to 2 percent last month, the Fed has decided to go back to the wait-and-see stance Chairman Ben Bernanke established when he first took over the reins of the agency back in August 2006. At that time former Fed Chairman Alan Greenspan had just finished adjusting the rate upward 17 consecutive times.

Of the 10 Committee members, the only dissenting vote was from Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas, who preferred that the Committee not wait and raise the FFR at this meeting.

This move by the Fed is recognition of the fact that further increases in oil prices threaten the economy by pushing up prices in goods and services, according to the New York Times.

Oil, other commodities and food prices are a chief concern to the Fed Committee at this time as the expectation of continued inflation could change their entire way of thinking, possibly even convincing them to start raising rates sooner than later in reaction to those concerns.

Still, the official FOMC statement says the Committee “expects inflation to moderate later this year and next year.” The problem is, that’s what they’ve been saying all along even as they were cutting the FFR back.

The ongoing housing contraction, along with stressed financial markets and soft labor markets are key concerns for the Fed, as are tight credit conditions and rising energy costs. All told, the Fed says these “are likely to weigh on economic growth over the next few quarters.”

Reading between the lines, it appears the Fed does not have a definite grasp on which way the economy is headed at this time so it has decided to hedge its bet until further data comes in.

What’s your take on the Fed’s latest move? ForeclosurePulse would love to have your comments.

The nation’s housing slump, crippled by falling prices and rising inventories of unsold homes, is the worst in a generation and still hasn’t run its full course, according to Harvard University’s annual housing report.

Harvard University’s Joint Center for Housing Studies painted a bleak picture of the current housing downturn, claiming that “the nation is in the throes of a housing downturn that is shaping up to be the worst in a generation.”

The study,  the “State of the Nation's Housing 2008,” noted that housing starts, new home sales and existing home sales are at all-time lows since after World War II, while home price declines and foreclosure filings are the worst on record.

A recession followed six of the last seven housing downturns, said Nicolas P. Retsinas, director of Harvard University’s Joint Center for Housing Studies. The report concludes that the high levels of foreclosures will continue to exert downward pressure on housing prices, especially in low-income and minority communities, where subprime loans are heavily concentrated.

“The slump in housing markets has not yet run its full course,” Retsinas said in a news release. “With home prices falling in most metropolitan areas, homeowners are tightening their belts, remodeling less and staying on the sidelines.” 

Are we headed for a recession or are we already there? Send your comment to ForeclosurePulse..

So far in 2008 nearly 240,000 households have been facing some stage of the foreclosure process on average every month. Even those homeowners who are not currently facing foreclosure may be at some point in time if they can’t sell their home. And then there’s those homeowners who just want to sell but don’t necessarily have to.

No matter why they are trying to sell, today’s declining market is bad enough that some homeowners are starting to look at alternative options for intervention, choosing not to wait for government entities that promise to offer up a ray of hope a day late and a dollar short.

According to a recent poll, government intervention is not the kind many buyers are looking to these days. Feeling that they don’t stand a prayer against the big bad lender who is either about to take their home away from them, or making it difficult for them to line up a buyer who qualifies for a loan, they are looking to something else…divine intervention!

Commissioned by the St. Joseph Statue organization, the poll revealed that nearly one-third of adults (23.5 million) would consider asking their real estate agent to bury a four-inch statue of St. Joseph in their yard if it would help sell their home in today’s sluggish economy.

We’d like to know if you’ve heard of statue-burying sellers in your community or if you are one yourself.

“Faster than a speeding bullet. More powerful than a locomotive. Able to leap tall buildings in a single bound. Look! Up in the sky! It’s a bird! It’s a plane! It’s SUPERMAN!”

So much for old ‘60s TV shows!

In today’s world where foreclosure numbers are running rampant, especially in parts of Florida (where 37,364 properties with foreclosure filings were reported in May), distressed homeowners could use a superhero of their own to help them avoid or stop the foreclosure process.

Into the spotlight steps Shaquille O’Neal. The 15-year NBA superstar who started his career with the Orlando Magic, and who in one of many reincarnations dubbed himself “Superman,” is speeding to the rescue, leaping over government bureaucracy and pledging to help local residents who are facing foreclosure.

Florida posted the second highest foreclosure total and fourth highest foreclosure rate in the nation for May, with one in every 228 households receiving a foreclosure filing during the month. Orange County, which includes Orlando, ranked seventh highest county foreclosure rate in the state for the month, with one in every 188 households receiving a foreclosure filing.

Visiting Orlando City Hall earlier this week, O’Neal told the Orlando Sentinel that, “I want to come in not to kick them out, but to work with them and save them so they can stay in their homes.”

Although exact details have not been released, attorney Mark NeJame explained that Shaq’s plan is basically to buy up the mortgages of distressed Orlando homeowners who have gone into foreclosure due to high interest rates and to sell their homes back to them at lower rates and hope to make a small profit.

Shaq is no stranger to real estate. In 2006 he formed The O’Neal Group looking to develop both commercial and residential projects.

Given that more subprime mortgages are scheduled to reset to higher interest rates in the not so distant future, Shaq may be onto something.

We’d be interested in hearing what your opinion is. Let us know by commenting below.

Foreclosure activity continued its upward climb in May, increasing on a year-over-year basis for the 29th consecutive month, according to the RealtyTrac U.S. Foreclosure Market Report released today. The report showed one in every 483 U.S. households received a foreclosure filing during the month, the highest monthly foreclosure rate since RealtyTrac began issuing its report in January 2005.

Bank repossessions (REOs) accounted for 28 percent of the total activity and the biggest increase among the three types of foreclosure filings tracked in the report. REOs were up 35 percent from the previous month and 158 percent from May 2007. Default notices increased 1 percent from the previous month and were up 35 percent year over year, while auction notices decreased 3 percent from the previous month but were still up 13 percent year over year.

View state-by-state data.

It's apparent from the report that a high inventory of foreclosures will continue to saddle the real estate market. But for how much longer? Does the slowing rate of increase in defaults and auctions represent a patch of blue sky in the midst of a torrential downpour of foreclosures? Let us know what you think.

A non-profit group has launched a program to turn former foreclosures into farmland.

National Public Radio is reporting that the non-profit group Urban Farming requested that Wayne County, Mich., allow it to garden vacant lots from the thousands of foreclosures in the county’s inventory and allow its volunteers to plow and plant them in order to grow fruits and vegetables for needy locals.

Just like it was in 2007, Wayne County has been a hotbed of foreclosure activity in Michigan so far in 2008. In fact it’s had one of the highest county foreclosure rates in the state for a long time. Similar to other parts of the nation’s Rust Belt, the county’s real estate market — particularly Detroit — is suffering. Contributing to the downfall are high unemployment, low home sales volume and deflating home prices.

Taja Seville, founder of Urban Farming, says the gardens cultivated would be left unfenced to allow people to pick their own produce. Any food left over would then be donated to local food banks. The pilot program would start with 20 plots, with the City of Detroit donating the water.

Wayne County Treasurer Raymond Wojtowicz is on board with the 20-plot program, entering into a partnership with the group back in November 2007. Ground was broken on the first “farm” in May.

Urban Farming has been doing this around the country since it was founded in 2005. The properties where the farms are located are left available for sale, but in the meantime the properties are being productive and cared for by group volunteers.

We are seeing more and more foreclosures come onto the market at this time here in South Carolina. There is an immense amount of short sale activity going on. We are in an area — known as the Grand Strand — that is a tourist town, popular with second home buyers and investors.

Due to the mortgage and lender problems, there are a large number of people walking away from their investments. I personally blame this on the fact that the lenders are so overwhelmed right now that they are allowing this and not punishing those that got into the market on speculation. I am referring to the investors who over-extended themselves with speculation, the second home buyers who bought more than they could afford, and the buyers who were talked into adjustable rate mortgages (ARM) loans so they could buy more home than they could afford. 

A lot of foreclosures here in South Carolina are also manufactured houses. I see a lot of them on the market as foreclosures now. There seem to be more high-end homes being foreclosed on too. 

Of course the condo market is what is really making our area look bad. We have a 22-month inventory (it is going down slightly) of active listings on the market right now, but we are hoping that will be dropping since summer is here now. All in all, the people that are being foreclosed on are the ones who never should have purchased in the first place unless they could afford to take the hit if the market dropped. But they are not being “punished” for their bad investment choices; instead they are being forgiven for the defaults, not given 1099s on the losses when they walk away. And so many people are just saying, “It’s the banks problem, they never should have given us the loan in the first place!” 

Hello?

Not sure where that mentality comes from, but don’t get me started!

Contact Beth Ross or post comments below.

With a population of fewer than 55,000, the Lake Havasu, Ariz., real estate market is still declining.  With our beautiful Lake and hot summers, we are considered a vacation and second home community.

In May 2008, there were 272 new listings, down 1.5 percent from May 2007. There were 134 sold listings in May 2008, down 15.52 percent from May 2007.

I am seeing a rise in foreclosures and short sales far higher than May of 2007.  My last seven sales have all been bank-owned homes, with over 171 contacts from my RealtyTrac source. Of those, 32 buyers are watching the market pretty closely and looking for that bargain of the year.

The other folks are waiting for the market to decline further. Unfortunately, what folks hear in the news, for the most part, does not apply to Lake Havasu; with it being a second home community, people from out of state are not jumping on the buying wagon since their present homes, which are up for sale, are still not selling.

What I have found is the builders are hurting. Since January, I have seen builders giving away their product just to get out from under the declining market and stop the payments on their construction loans. For example, one sale I did 30 days ago, was a brand new 1,700 square foot home, with 3 bedrooms with a motor home garage 55 feet deep. The property was worth $550,000 in 2005, but today sold for $308,000.

Also, I have noticed fewer visitors in Lake Havasu since gas has gone up to $4.00 and higher. Normally, on a holiday weekend, we have so many visitors all of us locals stay away from the Lake with lines a mile long to get on the Lake. This last holiday weekend, however, there was no waiting time at all to get on the Lake.

Right now I am telling my buyers to come on over and pick out a home before everyone realizes the bargains and lines forms on offers forcing prices back up. After 24 year in real estate, I have seen many cycles in our market and I am positive this cycle is good for all. Many of the selling home owners realizing the decline and are electing to rent their homes out until the market goes up. This has created a huge inventory on rentals, pushing down rents. All in all, Lake Havasu is a beautiful place to live with our clear air, beautiful Lake and gorgeous mountains. We all love the small town feeling of friendly neighbors saying hello.

Contact Stacy Coltrin or post comments below.

The first quarter MBA National Delinquency Survey released today largely supports the findings of the RealtyTrac Q1 2008 U.S. Foreclosure Market Report released at the end of April, which found overall foreclosure activity increased 23 percent from the fourth quarter of 2007 and 112 percent from the first quarter of 2007.

That closely mirrored the trend in MBA’s foreclosure rate, which put the percentage of loans in the foreclosure process at 2.47 percent at the end of the first quarter, up 21 percent from the 2.04 percent reported in the fourth quarter of 2007 and up 93 percent from the 1.28 percent reported in the first quarter of 2007.

The trend lines are even closer when looking at the RealtyTrac first quarter foreclosure rate (0.515 percent of total housing units with a foreclosure filing during the quarter), which was up 21 percent from the fourth quarter of 2007 — exactly the same percentage increase as the MBA foreclosure rate — and up 109 percent from the first quarter of 2007.

The record-high delinquency rate reported by the MBA in the first quarter indicates that foreclosure activity has not peaked, which is also reflected in the numbers RealtyTrac has reported so far for the second quarter. The total number of properties with foreclosure filings in the RealtyTrac April report was the highest monthly total since RealtyTrac began issuing the report in January 2005.

State trends
The four states with the highest foreclosure rates in the RealtyTrac first quarter report — Nevada, California, Arizona and Florida — were also the four states identified in the MBA report as having the most severe foreclosure problems. Those four states accounted for 47 percent of the total foreclosure activity in the RealtyTrac report and 42 percent of the foreclosure starts in the MBA report.

Both the RealtyTrac and MBA reports identified Ohio and Michigan as states where foreclosure activity decreased in the first quarter. It’s too early to say that the lower foreclosure numbers in states such as Ohio and Michigan represent a light at the end tunnel for the battered real estate industry, but it’s certain that the continued surge in foreclosures in populous states such as Florida and California will cast a shadow over the entire U.S. housing market for several months and even years to come.

Former heavyweight boxing champion Evander Holyfield is on the foreclosure ropes.

Holyfield’s palatial 235-acre estate in Fayette County, Ga. — worth an estimated $10 million — is under foreclosure and is set to be auctioned by Washington Mutual on July 1, according to the Fayette Daily News. The 104-room, 54,000-square-foot estate, is located in North Fayette County.

So how does someone squander millions of dollars won in the boxing ring?

Since 1990, Holyfield won the heavyweight title four times and has earned an estimated $100 million over the course of his career, according to BoxingScene.com. In 1997 alone, he was paid $34 million fighting against Mike Tyson in the infamous ear-biting bout. Holyfield’s record is 42 wins, 9 losses, two draws and 27 KOs. The 1984 Olympic bronze medalist last fought on Oct. 13, 2007, in a 12-round loss to Sultan Ibragimov.

But the ex-champ has taken a one-two punch where it hurts the most — his pocket book. First, the mother of his 10-year old son (one of 11 children he’s fathered) filed a petition for contempt over missing two child support payments totaling $6,000. Next, a Utah consulting company hit the prize fighter with a suit for failing to repay a $550,000 loan related to landscaping his estate, reports the Atlanta Constitution.

Another heavyhitter in foreclosure is Adam “Pacman” Jones, former cornerback for the Tennessee Titans, who signed with the Dallas Cowboys in April 2008 after a one-year suspension from the NFL due to numerous legal entanglements.

ESPN reported that Jones originally had his Tennessee estate in West Nashville listed for $1.8 million. The property, which went into foreclosure in April, sits on 30 acres with its own lake. The 3,000 square-foot home consists of two guest quarters, game rooms and a garage.

ForeclosurePulse wants to know what you think about all these star athletes going into foreclosure. Send in your comments.

Note: joelc contributed to this post

The fallout that followed in the aftermath of Hurricane Katrina in 2005 left many Gulf Coast residents homeless or facing foreclosure — or both. Temporary relief from the devastation was granted in the form of a foreclosure moratorium at the time.

Given today’s economic climate, however, there exists a connection between foreclosures and hurricanes that poses a potentially even greater threat to the health and safety of U.S. residents from Texas to Maine.

The Institute of Business and Housing Safety is reporting that the increasing number of abandoned or vacant foreclosed homes is so great as to generate real concern for the oncoming hurricane season this year.

As opposed to the hurricanes causing the foreclosures, this time around the foreclosures already exist, and in much greater numbers than back in 2005. In April, the U.S. Commerce Dept. reported a rise in homeowner vacancies for the first quarter of 2008 from the previous quarter and the same quarter a year ago.

The key concern for public safety here stems from the possibility of flying debris coming from abandoned foreclosures that have been sitting empty and in a state of disrepair.

The potential for damage to other homes and personal property, along with the hazardous danger of bodily harm involved, may give support to the idea being promoted in many cities, counties and states around the country to hold lenders liable for maintaining the foreclosed properties in their REO inventory until they are sold.

Some governments already have legislation in the works to charge lenders a registration fee for every REO they own, as well as impose penalties for not maintaining the properties while under their ownership.

Most jurisdictions looking at these new laws justify them by noting that the existence of foreclosures devalues surrounding properties in the neighborhood. But is climate a good enough justification for these new laws as well?

We’d like to know what you think. Give us your comments below.

If you’re attending the  annual 2008 USFN National Default Servicing Seminar in Texas this week, you can catch RealtyTrac Vice President of Marketing Rick Sharga speaking on the latest foreclosure legislation at a 9 a.m. panel discussion titled “In the News: Current Issues Affecting the Default Servicing Industry.”

“The housing slump — accompanied by a surge in foreclosures — in the midst of a presidential election year has pushed foreclosure prevention legislation to the top of many politicians’ priority lists,” Sharga said in a statement. “The U.S. House and Senate both recently passed legislation aimed at providing relief to homeowners facing foreclosure, and many states have passed or proposed similar measures. Many of the laws being considered, or already enacted, could have a significant impact on the default servicing industry. In addition, the Executive Branch has also attempted to address the issue via programs such as HOPE NOW and FHASecure, which are designed to provide lifelines to distressed homeowners.”

Foreclosure activity increased 112 percent in the first quarter of 2008, according to the RealtyTrac U.S. Foreclosure Market Report, and Sharga noted that myriad state and federal governmental entities, including the U.S. Senate Joint Economic Committee and Banking Committee, Treasury Department, Federal Reserve, FBI and New York State Banking Department, have requested in-depth foreclosure data from RealtyTrac to help inform public policy decisions.

RealtyTrac is also a sponsor and exhibitor (Booth #4) at the 2008 USFN National Default Servicing Seminar and Technology Forum. The USFN Seminar runs from Wednesday, June 4 through Friday, June 6.

Analysts at the A. Gary Anderson Center for Economic Research at Chapman University in Orange, Calif., are reporting consumer confidence among Californians at the lowest level recorded since it began tracking the economic indicator back in 2002.

The Center’s California Composite Index of Consumer Sentiment stood at 57.6 for the second quarter of 2008, down from 66.3 for the first quarter of the year. A reading below 100 on the index indicates a higher degree of consumer pessimism than optimism.

The report cites concerns about the housing market, gasoline prices, the job market and the volatility of the stock market as key to the negativity among consumers about present and future economic conditions.

These concerns are genuinely justified in California, the state which has led the nation in total properties with foreclosure filings for 19 out of the last 20 months, according to RealtyTrac. A state where home sales volume and home prices have been deflated while job layoffs continue to mount.

According to the Chapman report, consumer spending on big ticket items — like housing — is expected to drop precipitously over the next six months. This will strongly effect the state’s real estate sector, leaving a window of opportunity open for investors to come in and buy up local real estate at bargain prices compared to the overly inflated prices of the past few years.

Ed McMahon, who for decades appeared as Johnny Carson’s sidekick on “The Tonight Show,” is the latest casualty of an ever-growing foreclosure crisis that is gripping the nation.

Yesterday, the Wall Street Journal reported that McMahon was $644,000 in arrears on a $4.8 million loan for a home in Beverly Hills, California.

The 85-year old McMahon fell and broke his neck 18 months ago and defaulted on $4.8 million in mortgage loans with Recon Trust, a unit of Countrywide Financial Corp., which filed a notice of default in February.

McMahon’s home has been on the market for about two years and is listed for $6.25 million. The Hollywood dream home has six bedrooms, five bathrooms and is located on a hilltop and is part of a gated community called “The Summit,” according to the Associated Press.

Do you think other celebrities could face foreclosure? Foreclosure Pulse wants to know. Send us your thoughts.