by Calculated Risk on 2/13/2012 08:57:00 PM

From the NY Times: 6 European Nations Get Downgrades

Moody’s Investors Service cut the debt ratings on Monday of six European countries, including Italy, Spain and Portugal, and became the first big ratings agency to switch Britain’s outlook to negative.
...
Moody’s downgraded Spain to A3 from A1 with a negative outlook; Italy to A3 from A2 with a negative outlook; and Portugal to Ba3 from Ba2 with a negative outlook. The agency also lowered the ratings for Malta, Slovakia and Slovenia.

Moody’s revised to negative its outlook on Britain, France and Austria, which have the agency’s top Aaa rating.

Via the Financial Times Alphaville, here is the Moody's document: Moody's adjusts ratings of 9 European sovereigns to capture downside risks

From the Financial Times: EU tries to finalise €130bn Greek bail-out. The FT reports that if Germany is not convinced that Greece is taking action, then the bail-out might be given "conditional approval" and be reassessed at the next week.

In that case, ministers would only give the go-ahead for a critical part of the new bail-out, a €200bn restructuring of privately held debt which must begin in a matter of days ...
excerpt with permission

So the next key date is Wednesday (they are running out of time for the "Private Sector Involvement"), and then another key date next week if the approval is conditional.

by Calculated Risk on 2/13/2012 03:39:00 PM

CR Note: There are only a few areas where the MLS breaks down monthly sales by foreclosure, short sales and conventional (non-distressed) sale. I've been tracking the Sacramento market to watch for changes in the mix over time. (here was my post this morning: Distressed House Sales using Sacramento Data)

Economist Tom Lawler sent me the following table today for several other areas. For most of the areas (with the exception of Reno), the distressed share of sales is down from January 2011. The share of short sales has increased in most areas, while the share of foreclosure sales are down - and down significantly in some areas.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	11-Jan	12-Jan	11-Jan	12-Jan	11-Jan	12-Jan
Las Vegas	26.6%	28.1%	48.8%	45.5%	75.4%	73.6%
Reno	40.0%	37.0%	37.0%	40.0%	77.0%	77.0%
Phoenix	22.6%	29.8%	47.6%	27.9%	70.2%	57.7%
Sacramento	25.6%	32.1%	47.6%	34.5%	73.2%	66.6%
Minneapolis	15.6%	16.2%	45.3%	39.1%	60.9%	55.3%
Mid-Atlantic (MRIS)	14.7%	16.4%	26.7%	16.9%	41.4%	33.3%

Note: The table is a percentage of total sales.

The general trend is short sales are up, and foreclosure sales are down - and total distressed sales are down too, although this could be related to the foreclosure process issues.

by Calculated Risk on 2/13/2012 12:41:00 PM

The BuildFax Residential Remodeling Index was at 127.4 in December, down from 137.9 in November, but up 22.8% from December 2010. This is based on the number of properties pulling residential construction permits in a given month.

From BuildFax Remodeling Index

The Residential BuildFax Remodeling Index is up 22.8% year-over-year in December 2011 at 127.4 points. Residential remodels in December were down month-over-month 10.5 points (7.6%) from the November value of 137.9, and up year-over-year 23.6 points from the December 2010 value of 103.8.
...
“Remodeling activity slowed from November to December 2011 as it did in 2010 ─ an expected change seen in previous years around the holidays. The BuildFax Remodeling Index is still showing notable year-over-year growth,” said Joe Emison, Vice President of Research and Development at BuildFax.

Click on graph for larger image.

Although the index declined in December from November, this is the highest level for a December since the index started in 2004, even above the levels from 2004 through 2006 during the home equity ("home ATM") withdrawal boom.

Starting next month, BuildFax will release a seasonally adjusted index.

Note: Permits are not adjusted by value, so this doesn't mean there is more money being spent, just more permit activity. Also some smaller remodeling projects are done without permits and the index will miss that activity.

Since there is a strong seasonal pattern for remodeling, the second graph shows the year-over-year change from the same month of the previous year.

The remodeling index is up 22.8% from December 2010. This is the 26th consecutive month with a year-over-year increase.

For residential investment, multi-family construction and home improvement have already picked up, and it appears single family construction will increase in 2012.

Data Source: BuildFax, Courtesy of Index.BuildFax.com

by Calculated Risk on 2/13/2012 09:53:00 AM

I've been following the Sacramento market to look for changes in the mix of house sales in a distressed area over time (conventional, REOs, and short sales). The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

This will be interesting once something changes significantly. So far there has been a shift from REO to short sales, and the percentage of distressed sales has declined year-over-year. The percent of distressed sales in Sacramento increased in January compared to December 2011; the normal seasonal pattern. Usually January has the largest percentage of short sales for the year.

In January 2012, 66.6% of all resales (single family homes and condos) were distressed sales. This was down from 73.1% in January 2011, and the lowest percentage of January distressed sales since Sacramento started breaking out the data.

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales. There is a seasonal pattern for conventional sales (stronger in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales decreases every summer and the increases in the fall and winter.

Total sales were up 4.7% compared to January 2011. Active Listing Inventory declined 49.4% from last January, and total inventory, including "short sale contingent", was off almost 30% year-over-year.

Cash buyers accounted for 32.4% of all sales (frequently investors), and median prices are off 5.9% from last January.

This data might be helpful in determining when the market is improving. So far it looks like REO sales have declined, partially offset by an increase in short sales, and a small decline in the total percent of distressed sales. This data might also show if there is a surge in distressed sales following the mortgage servicer settlement.

Also inventory has plummeted - even inventory including "short sale contingent" listings.

by Calculated Risk on 2/13/2012 08:49:00 AM

SNL Financial put together a list of the settlement by state.

From Lindsey White and Sam Carr at SNL: In foreclosure deal, California, Florida come out on top

The accounting in the settlement is somewhat confusing. The much-quoted $25 billion figure includes $17 billion that banks must spend on a variety of programs to help beleaguered borrowers. Banks will receive credits for each dollar spent. "Sometimes they get a dollar for dollar credit, sometimes they get 45 cents on the dollar, sometimes they get 10 cents on the dollar," Iowa Attorney General Tom Miller explained during a press conference. "The benefit to homeowners on the full dollar amount is $32 billion." In addition, the deal includes $3 billion dedicated to refinancing loans and $5 billion to be paid to federal and state governments.

Using these figures, the settlement totals closer to $40 billion. California will receive up to $18 billion ... Florida Attorney General Pam Bondi estimated that her state will get $8.4 billion in the deal.

The housing markets in Arizona and Nevada were also hit hard by the crisis. The states stand to receive $1.6 billion and $1.5 billion, respectively.

See the article for the list.

Weekend:
• Summary for Week ending February 10th
• Schedule for Week of February 12th