Integrated Asset Services is a leader in default management and residential collateral valuations. Each month the company issues its House Price Index (HPI), which is a compilation of housing price data gathered from around the country. The August 2009 HPI showed the second consecutive decline in housing prices after a strong gain of 2.8% in the second quarter.
With an overloaded “shadow market,” those properties owned by banks and waiting to come onto the marketplace, looming in the wings, housing supply still far outweighs demand. Prices in the South (-0.1%) and in the West (-1.2%) continued to fall sharply. Prices in the Northeast (+ 0.7%) and Midwest (+0.7%) sustained steady growth.
The HPI is down 8.0% for the previous 12 months and 16.0% since market highs in June 2007. However, in areas like Fort Myers, Florida, and San Joaquin. California, housing prices are 50% below market highs. Both areas suffered another 7.0% decline last month.
The Index tracks data from 15,000 neighborhoods that provide information on 360 counties spread throughout the country. Dave McCarthy, President of Integrated Asset Services, offered the following interpretation, “The HPI has been designed to be an early-detection tool for the housing industry. It may well be showing us the further signs of a prolonged downturn.”
For today’s real restate investor, the HPI spells opportunity. With extremely favorable interest rates, low housing prices and sellers eager to move property, the investor who has pre-arranged financing and an understanding of distressed offerings, is well positioned to turn short and long-term profits.
Many of today’s best real estate values are Real Estate Owned (REO) opportunities. The aggressive investor does not wait for banks or lenders to list their properties but follows foreclosure proceedings diligently and approaches the lender before properties are listed. While purchase offers taker time to process, the investor who shapes relationships can expect more opportunities from the same REO banks. Opportunity is knocking, will you answer?