Housing Momentum Builds But Perils Persist

There's new evidence the housing market is healing after a
four-year slump, but the danger of further price drops remains
amid persistent job-market weakness, according to The Wall
Street Journal's quarterly housing survey.

Inventories of homes listed for sale are down sharply across
the U.S. and have reached very low levels in some areas,
including Boston and Sacramento, Calif. The decrease in
supplies has sparked a return of bidding wars on lower-end
properties in some neighborhoods, but the national picture
is mixed.

Jobs and mortgage woes will help shape the housing market
this spring, the busiest time of year for home shoppers. See
how six locales are faring.

Fundamental market drivers look relatively strong in the
metropolitan areas of Minneapolis, Raleigh, N.C., Dallas,
Houston and Washington, D.C., where mortgage-default
rates are below the national average and job markets are
likely to outperform the U.S. as a whole, according to Moody's
Economy.com.

But other areas look decidedly less hopeful. Miami, Las Vegas,
Phoenix, Orlando, Jacksonville and Tampa, Fla., had the highest
rates of defaulting borrowers among the 28 markets surveyed.
The weakest job-market prospects this year were found in Tampa,
Jacksonville, Las Vegas, Atlanta, Detroit and Phoenix, according
to Moody's Economy.com.

Jobs and mortgage woes will help shape the housing market this
spring, the busiest time of year for home shoppers. Without a
return to job growth, it will be hard to sustain demand and mortgage
defaults will eventually lead to foreclosures, dumping more supply
on the market.

*************************************************************
Foreclosed Homes in U.S. Selling at 28% Discount

People who buy foreclosed U.S. homes get an average discount
of 28 percent off the price of similar properties that haven’t been
seized by banks, according to a study released today by real estate
data provider Zillow.com.

The biggest discounts are in Pittsburgh, where foreclosure prices
run 59 percent less than those of non-foreclosed homes, according
to Zillow, which studied 16 metropolitan areas. Portland, Oregon,
had the smallest foreclosure discount at 18 percent, Seattle-based
Zillow said.

“Foreclosures sell for substantially less than non- foreclosures even
after controlling for other characteristics of the home,” Stan Humphries,
Zillow’s chief economist, said in the research brief. “Foreclosures and
non-foreclosures do constitute two distinct markets.”

Lenders will repossess a record 3 million U.S. homes this year as
unemployment and depressed property values leave borrowers unable
to make house payments or break even if they sell, according to a
RealtyTrac Inc. forecast released this month. Banks foreclosed on
2.82 million homes in 2009, the most in the four years for which Irvine,
California-based RealtyTrac has been compiling the data.