Trulia Chief Economist Jed Kolko on the Housing Market
Feb 27, 2013|
Trulia Chief Economist Jed Kolko on the Housing Market
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Welcome back into the financial exchange that's the opening bell brought to buy northern bank and trust neighbors. You can count on and I'm seeing a lot of red in front of me very but it is not crazy Dow. Is down by fifteen points S&P is flat you've got the NASDAQ down but only by one. To 3128. Oil is trading down five cents in 1958 gold is down 870 to sixteen a six. That ten year US treasury down a teeny tiny bit to one point 8483. Just give you a hint durable goods orders came out at 830 and they both missed slightly okay including ex transportation so that's a -- that could be and then we're getting pending home sales data. At 10 AM so we'll track that as well that's that's a key stat Ari we are joined by jet call call he is the chief economist at truly good morning jet hurry this morning. Good morning -- Craig Parry has been a busy morning for you I was watching you earlier on CNBC. So yeah. Very early wake up here in California that's our intently at the big bucks right. -- -- Case Shiller report yesterday. -- eat -- we tend to focus up here primarily -- New England what did you learn from the national numbers on case -- The case Shiller home price index yesterday showed the eleventh straight monthly increase on after the biggest monthly increase in the past six months. Which means home prices continue to rise edit anything. It was price increases are accelerating they're getting stronger and the market recovers. But any acting you only can you identify markets that are still weak across the country like where where is he is Vegas still weak as Florida still weak. Boat they get to order a market that from our own beautiful truly don't price monitor goes very strong price increases. Lacquered right now. Are -- like Chicago. New work. Places that is -- slower job growth but also we are rebounding is much the biggest price increases were seen aerial. Our market that were hit really hard during the housing costs. And are now bouncing back partly because low prices. Have a -- a lot of investor interest investors looking up market a lot of bargains to be at 28 in Detroit in Phoenix the prices are up. -- -- -- Now let me ask you -- what is the mortgage delinquency rate you know for for a law holds -- still have a mortgage. You know in a good market that number runs I think about one and a half percent what is it today. It depends US served different potent negative of course -- the going rate is still above normal. Typically normal rate normally look even spoke to work a little bit delinquent it's a few percentage points and right now -- about that. 7% pre plus and another Big Three or 4% of mortgages that are in the foreclosure process. It's all hold. Between ten and 11% of mortgages. Are delinquent or in foreclosure and normally -- those -- -- 4%. So there's still a long way to go. Well here's -- confusion that is that a lagging indicator. Or is it an indication that prices are gonna remain weak for an extended period -- that's I think a lot of us have difficulty. Grappling with that -- you say to yourself OK the market's coming back. Yet you still got a millions and millions of homes across the country that are under water and people are paying their mortgage. It's a lagging indicator. One and a lasting -- -- copper. In housing boom and bust like what -- -- Is it delinquency and opened the foreclosure rate and the reason is that in many states. Many parts of the country it takes home years to go through the delinquency and foreclosure process. Of places like Florida New York entered the -- and the places that the longest foreclosure process and it can take three years or more. -- it go all the way through that foreclosure process which means even after prices are covering. Home purchasing it back up stale or back up it'll take awhile for foreclosure. And all -- delinquencies to get back down. The PM this is just a personal observation. For the community that I live in. But it seems like the high end properties are sitting and it's the low and properties like two to 400000 dollar homes. That are moving in scene of the increase and I view is that is that a correct observation on my part or is it just anecdotal. Evidence about seeing happen in in the Boston area. -- -- market the lower -- has gotten bigger boost. And that's because. A lot of foreclosures. Have gone through the process. And they are there to report closures now on the market and there are had it on those foreclosures are up and competing with other lower price told. And what goes foreclosures go away. It means there's a lot less supply of those lower priced at it will -- -- -- -- -- But we're actually price increases. At all of the market on both low and anti. We are okay and what about two days to sell they in the high end market is it longer he'd have to wait longer to sell your home. It that's also coming -- very regional you know there are some market. Particularly out here in California where I am where inventory is down almost 50% year over year -- that means that. Places are staying on the market sometimes just a few days. Because they're so little inventory especially now that spring buying season is picking up -- -- got more fire. -- very few homes on the market. Got gotta pay listen thank you very much for your time jedi great interpretation -- read -- it's tough to glean through all this data especially when you're looking at a from the national. Perspective thank you very much. Did call call from Trulia and and I Anatolia. Do you compare those two sites I'm not sure Trulia isn't more accurate getting -- IBC. Always text now they're pouring in the out there pouring it it was highly critical -- well yes and a lot of people saying. The taxes went up you know the value has. On up you know less than seven case is finally pay taxes went up. 12100 in Grafton and I just had a friend that sold her house -- Marlboro tax is just he's got the letter two weeks ago they went a thousand bucks. And I've got to say I hate to say this but it is the tip of the iceberg really you'd you'd think price if you live in Massachusetts now. And you think your property tax is our high today -- wait a couple years. -- when the economy gets colonies in the property taxes are gonna increase dramatically during the next 510 years got to remember you have a 24. Billion dollar unfunded pension liability way to think they're gonna get the money. From our property property taxes properly so you know even the folks that are thinking about buying some piece of real estate even though -- interest rates -- gonna push it down to the communities are gonna say okay. Town -- field you have to contribute more for your state pension fund. And it was a talented to raise property going to be unpopular but it's Adobe is -- that is what's going to and that's we have to look forward to. Easy and they don't like and act and here -- -- just brings up one more tax excellent seven they bought and box -- for 3.5 K thirteen years ago. It would about a 150 green and into it. And it's just barely sold for three to money while the boxer style it's beautiful town they. -- will be back when we come back all Swindon from Morningstar joins us we're going to be -- and stock with all that's next.