Monday Morning Cup of Coffee is a quick look at the news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.
Detroit has seen its share of hard times, and the dawning new year brings another one — a rash of foreclosures due to delinquent property taxes. The Wall Street Journal reports that after giving delinquent tax payers a break for the last several years, Wayne County is now looking to get paid the taxes it is owed — or else.
More than 70,500 Detroit properties fell into county tax foreclosure from 2009 through 2013, resulting in $745 million in lost city property taxes, according to the White House-affiliated Detroit Blight Removal Task Force. But the county is just now clampling down on many past-due accounts, resulting in a jump from 20,000 foreclosures in 2012 to an estimated 62,000 foreclosures expected next year.
Unfortunately, the average amount of taxes owed is $7,067, while the average assesed value for properties entering foreclosure in Detroit is $20,930. Makes it easy to see why that's hard for homeowners to come up with, and why the city continues to face an uphill battle for recovery.
It’s the last week of 2014, and after seeing GDP growth of 5% and gas prices below $2 a gallon, it's easy to be giddy about economic prospects for 2015. But at least a few voices are not convinced. Slate ran a cautionary piece on Christmas Eve that covers the economic good news but warns against too much optimism.
The last six months of exceptionally speedy growth are partly just a product of the economy making up for lost time. Remember, GDP shrank at a 2.1% rate last winter as freak snow storms blanketed the South and the cold kept us all huddling inside. Look across a full 12 months, and the economy has only grown 2.7% — which is fine, but no better than 2012.
But it’s not all bad news. Black Knight’s home price index for October shows a slight uptick before what will likely be a down November.
According to Black Knight, national home prices edged back up after last month’s extremely slight decline — they rose 0.1% in October (4.5% from last year), putting the U.S. 10.4% off its June 2006 peak.
Of the largest states, only Florida (0.4%) and Texas (0.7%) saw HPI increases for October, while California, New Jersey and New York saw their HPIs fall for the month.
Just nine of the 20 largest states saw positive monthly movement in home prices, while exactly half of the 40 largest metros saw improvement in October.
Finally, while some of this can be chalked up to seasonality effects, three of the five largest states and four of the five largest metros all saw prices fall slightly in October.
Tuesday we’ll see the S&P/Case-Shiller home price index, which has been on a downward trend. The index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home re-sales. The key composite series tracked are for the expanded 20-city composite indexes.
On Wednesday we’ll see the National Association of Realtors pending home sales index. This, too, is likely to reflect a continuing deceleration of price increases. This index is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale.
On Friday, we’ll get the construction spending report. Over the last year, a decline in residential outlays has pulled down year-on-year growth for overall construction outlays. Nonresidential and public outlays are positive with nonresidential actually strong.
No banks were reported closed the week ending Dec. 26, according to the FDIC.