by Bill McBride on 6/17/2013 12:47:00 PM

The bottom for inventory is a key topic for 2013 …
From Tim Ellis  at Redfin: Here Comes  the Inventory

Increasing home prices are  giving more sellers sufficient equity to sell, and sellers who already had  equity are being lured into the market after seeing their neighbor’s homes sell  in record time and in fierce bidding wars.
More inventory begets more  inventory, too. “I have several clients who are ready to take the plunge and  list their homes—they’ve even decluttered and we have the listing ready to hit  the MLS,” explained Redfin listing specialist Paul Stone. “The sellers are just  waiting to get under contract on a home to buy, at which point we’ll pull the  trigger and list their current home.”

Here’s what the inventory recovery looks like so far, along with a  forecast for the rest of the year, should the trend hold:
Total active  listings are still down 22% from a year ago as of May, but even that is an  improvement compared to the 32% year-over-year drop we experienced in January.

New listings have turned around completely in just four months, from  a 10% year-over-year decline in January to a 15% year-over-year increase in  May. … As supply and demand are brought back into balance bidding wars  will ease and price  gains will moderate.

CR Notes: I’ve been tracking inventory very  closely this year.  Ellis thinks (first graph) that inventory in the areas  Redfin tracks will continue to build until September or October, and only  decline slightly at the end of the year.   He thinks inventory will be up  year-over-year towards the end of this year. (that is pretty close to my current  outlook for inventory).
As more inventory comes on the market, buyer  urgency will wane and price increases will slow and even decline seasonally in  many areas this winter.  IMO this will be another step towards a more normal  housing market.

Jan 11 2013, 4:22PM

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the December edition of the Obama Administration’s Housing Scorecard.  The Scorecard is a summary of housing data from various sources such as the S&P/Case-Shiller house price indices, the National Association of Realtors®existing home sales report, Census data, and RealtyTrac foreclosure information.  Most of the information has already been covered by MND.

The report pointed to a number of positives for the housing market.  For example, Home prices showed large annual gains for the 12 months ending October 2012. Based on Case-Shiller data, house prices have increased much faster than predicted and are now running about 25 points higher than futures on the Case-Shiller Index.

Theequity Americans have in their homes continues to rise and is nearing $8 trillion.  This is still well below the nearly $14 million in equity that existed before the housing downturn but is nearly $2 trillion above the trough it reached in the first quarter of 2009.

Mortgage aid has been extended to nearly 6 million homeowners through various programs since 2009.  This includes loan modifications and other forms of assistance provided through the Making Home Affordable Program, HOPE Now, and FHA modification programs.  The home preservation programs have reached nearly twice as many homeowners as have been foreclosed.

The Scorecard includes by reference the monthly report on the Making Home Affordable Program which includes subsidiary programs Home Affordable Modification Program (HAMP), the Second Lien Modification Program (2MP), the Home Affordable Foreclosure Alternative Program (HAFA), and the Principal Reduction Alternative (PRA).  The current report covers information through October.

Through October there had been 1.96 million HAMP trial modifications started with 21,816 of them initiated since the previous report.  Over the life of the program 1.12 million of these trials have been converted to permanent modifications and about 68,000 homeowners remain in trial status.

HAFA which assists homeowners to exit homeownership without going through foreclosure has now completed 85,881 transactions, 5,618 since the last report.  Of the total, 83,741 of the transactions have been short sales; the remaining numbers were deeds in lieu of foreclosure.

Nearly 102,000 second lien modifications have been completed through 2MP.  About a quarter of these modifications (25,078 full) resulted in a full extinguishment of the second lien at an average cost of $61,850.

Since the HAMP program underwent substantial revisions to the modification process and HAMP ramped up supervision of participating servicers in June 2010 the conversion rate of trial modifications to permanent modifications has risen to 87 percent from the 44 percent average pre- program changes. All major servicers now have at least an 81 percent conversion rate and the length of an average trial is 3.5 months.

“As the December housing scorecard indicates, our housing market is continuing to show important signs of recovery – with the FHFA and Case-Shiller housing price indices up 5.6% and 4.3%, respectively, from one year ago,” said HUD Senior Advisor on Housing Finance Michael Berman.

“The Administration’s programs to prevent foreclosure have helped millions of families stay in their homes and prompted critical changes in the way the mortgage industry assists struggling homeowners, which have helped our country recover faster from an unprecedented housing crisis,” said Treasury Assistant Secretary for Financial Stability Tim Massad.

Dating and Recordkeeping

To be deductible, the tax must be imposed on you and must have been paid during the tax year for which you are claiming the deduction. You must obtain copies of your tax assessments, as well as records of payment, and keep them in case of an IRS audit of your tax return.

Restrictions

Any state, local or foreign taxes on your property are deductible, as long as the same tax is levied on all other property in the community. There is no limit on the amount of the deduction, although it is not available to taxpayers subject to the Alternative Minimum Tax (AMT). The tax must have been based on the assessed value of your property, and it must have been levied and paid during the tax year for which you are claiming the deduction.

Escrow Accounts

The mortgage lender who pays property taxes out of an escrow account can provide a full accounting of when the tax was paid and in what amount. The portion of your monthly payment that goes into the property tax escrow account is not deductible. Only the payout by the lender to the taxing authority is deductible, and only in the year it was made. In addition, property taxes assessed but not paid by the seller of your home, and which were rolled into the final closing price, are also deductible.

Assessments and Fees

Unless they are used for maintenance or repair, assessments charged to your property for municipal improvements, such as new sewer or water lines, are not normally deductible, though they are in effect a local property tax. In addition, regular fees charged to owners, such as homeowner’s association dues, are not deductible.

Non-Itemized Returns

The property tax deduction must be itemized on Schedule A of the federal 1040 tax return. Normally, taxpayers who take a standard deduction, rather than itemizing, may not deduct property taxes from their income. However, Congress passed an amendment effective in 2008 that allows those who do not itemize to take a property tax deduction of up to $500 if they file as single and up to $1,000 fif they are married couples filing joint returns.

California Homeowner Assistance

For fiscal year 2007, California passed a Homeowner Assistance Program, which allowed one-time payments to qualified homeowners that represent a partial refund of their local property taxes. However, the state’s ongoing budget crisis persuaded legislators to defund this program for 2008 and 2009, and future funding for homeowner assistance is doubtful.