(Source: David Falchek The Citizens’ Voice, Wilkes-Barre, Pa. (MCT) — The drag of foreclosed properties and other distressed sales is letting up on local real estate prices, according to house price data released this week.
Home prices in the Scranton/Wilkes-Barre area declined 0.6 percent from July 2011 to July 2012, according to CoreLogic, a real estate information aggregator. But if you take out distressed sales, such as foreclosures, home values in the metro region increased 7.8 percent during those 12 months, according to CoreLogic.
The number of foreclosed properties clogging the market and pulling down prices is shrinking. Properties identified as foreclosures on the Multiple Listing Service in Lackawanna County were halved over the past year, from 67 in July of 2011 to 31 in July of 2012, according to the data from the Greater Scranton Board of Realtors.
The local 0.6 percent drop is small enough that it can be considered stable, said Stuart Huffman, Ph.D. finance and real estate professor at Temple University. He credits the improvement with the decreasing number of foreclosures.
He sees real estate finally bottoming out in the suburbs and secondary markets in Pennsylvania. But he’s not sure if the region will see a definite upturn in home prices in the second half of 2012 or the beginning of 2013. But signs are pointed in the right direction.
“There is no question the number of forecloses have fallen and prices are firming up,” he said. “Yet some of the biggest declining regions are still in decline or have an overhang of shadow inventory.”
National numbers were better than local numbers, with the home prices increasing 3.8 percent year-over-year, the largest increase since August 2006. Pennsylvania is doing better than the region, but not as good as the nation, with prices increasing 1.7 percent year-over-year. CoreLogic predicts the prices to continue to grow, estimating the increase for the nation in August will be greater, 4.6 percent. Those numbers will be released later.
Home values in Northeastern Pennsylvania should follow, said Austin Jaffe, Ph.D., chairman of the Department of Risk Management at Penn State University, University Park.
“NEPA is a lagging indicator, without question,” said Jaffe. “I would expect NEPA to follow the trends, but at a slower rate.”
Joyce Cornell, owner of Coldwell Banker Town & Country Real Estate, in Clarks Summit said her firm’s 2012 numbers are up 15 percent from last year and the number of homes for sale have decreased, suggesting an improvement. Her firm’s worst year was 2009 and gains have been steady since then.
Beyond the impact of foreclosures on home prices, they also have the effect of depressing prices for other homes in their immediate area that are being sold or refinanced. When a foreclosed or bank-owned property sells, the transaction may be used by appraisers as a comparable sale when determining the value of a similar properties nearby. Even if an appraiser avoids using distressed sales, many large lenders rely on data bases that include all transactions when making lending decisions.
Cornell said she’s seen that effect in areas with several recent foreclosures.
“This region is working through its foreclosed properties,” she said.
The total inventory of homes for sale has declined as well, according to the Greater Scranton Board of Realtors. In July 2011, 1,227 home sellers in Lackawanna County were looking for buyers. A year later, that number fell 12 percent, to 1,081.
dfalchek@timesshamrock.com Housing data in the Scranton/Wilkes-Barre area for July, compared to same month a year ago:
n 0.6 percent, amount home prices fell;
n 7.8 percent, amount home values jumped when discounting distressed sales;
n 12 percent fewer homes were on the market.
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©2012 The Citizens’ Voice (Wilkes-Barre, Pa.)
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Source: David Falchek The Citizens’ Voice, Wilkes-Barre, Pa. (MCT)
