The U.S.housing market is beginning to show signs that it has turned a corner. According to the latest home price report from Trulia, asking home prices were up 5.1% in 2012. This is a big turnaround after falling 4.3% in 2011. Las Vegas and Seattle topped 2012’s biggest turnaround markets according to the report. The report also mentions that nationally, rents rose 5.2% year-over-year, with Houston, TX and Oakland, CA experiencing the largest percent change in rents. According to data from Realty Trac the crisis may not be over and opportunities exist for investors of single family homes, since the rental market may get better in 2013, at least in some areas.
Let's look at the 12 leading States with largest number of foreclosure filings in November 2012:
In Washington State 1 in every 756 homes received a foreclosure notice in November 2012, this is up 45.37% from a year before.
Wisconsin has the same ratio of new foreclosure filings but this reflects a 21.70% down from the previous year. Indiana had 1 in every 684 homes, up 31.14% from the previous year, Michigan 1 in every 621, down 47.04%, Georgia 1 in 494 down 32.9% and Arizona 1 in 468 which is down 43.51% from 2011. Then you see Ohio with 1 in every 458 homes, up 9.96%, South Carolina 1 in 455, up 16.68% and California 1 in 430, down 50.08% but still a lot of filings.
Nevada had 1 in every 390 homes which is actually down 53.82%, Illinois 1 in 392, which is up 9.05%.
Then we get to the State of Florida where we operate. Florida showed 1 foreclosure filing in November 2012 for every 304 homes, which is actually up 19.7% from November 2011. Especially in South Florida we have seen a lower inventory of single family homes and therefore some positive trend and prices. International private investors plus many domestic institutional investors moving to increase their single family rental portfolios, may be the driving force, but still high unemployment and an economy with many unsolved problems may hurt our local market and trends may change. It is difficult to quantify the shadow inventory of single family homes held by financial institutions and somewhere in the foreclosure process but it is there and these new foreclosure filings are also there and a sign of possible problems for our Florida market. Of course South Florida may be the area with the best positive influence but still something that opportunistic investors should take into account and move fast in their investment decisions.
Our particular view is that the train has left the station but there is still a chance to catch it, investors still have an opportunity, and it may greater than many think, to acquire quality residential real estate for their rental portfolios and Florida is a key State with a bright future. The time to act is now when there are still opportunities out there as the numbers show.
