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Fri, 11 Jun 2010 06:57:09 +0100

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Las Vegas Reported Negative Yearly Price Change (-1.3%) (May 2009-May 2010)

Fri, 04 Jun 2010 03:32:39 +0100

Metro Markets (May 2009 - May 2010)

Las Vegas reported negative yearly price change (-1.3%). The Las Vegas, Nev. Quarterly REO saturation rate remained high (45.9%), despite a slight 1.5 percentage point improvement from last month's report. However, recent improved price movements in Las Vegas have been sufficient enough to improve yearly losses from -7.2 percent in last month's report to its current -1.3 percent mark.

Gotta Move? Upside Down? Your Property May Qualify For A Short Sale: www.lindastrasberg.com

Nevada, Arizona, Florida post top state foreclosure rates in April

Thu, 13 May 2010 16:17:15 +0100

RealtyTrac® today released its U.S. Foreclosure Market Report™ for April 2010, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 333,837 properties in April, a 9 percent decrease from the previous month and a 2 percent decrease from April 2009. One in every 387 U.S. housing units received a foreclosure filing during the month.

“There were two important milestones in the April numbers that show foreclosure activity has begun to plateau — but at a very high level that will not drop off in the near future,” said James J. Saccacio, chief executive officer of RealtyTrac. “April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity. Secondly, bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis. We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties.”

Foreclosure Activity by Type
During the month a total of 103,762 properties received default notices (NOD, LIS), a decrease of 12 percent from the previous month and a decrease of 27 percent from April 2009 — when default activity peaked at more than 142,000.

Foreclosure Auctions were scheduled for the first time on a total of 137,643 properties during the month, a decrease of 13 percent from the previous month — when auction activity peaked with more than 158,000 properties scheduled for auction for the first time. Auction activity was up 1 percent from April 2009.

Bank repossessions (REOs) hit a record monthly high for the report in April, with a total of 92,432 properties repossessed by lenders during the month — an increase of 1 percent from the previous month and an increase of 45 percent from April 2009. Bank repossessions were less than 1 percent above their previous peak of 92,182 in December 2009.

Nevada, Arizona, Florida post top state foreclosure rates in April
Nevada posted the nation’s highest state foreclosure rate for the 40th straight month, with one in every 69 housing units receiving a foreclosure filing in April — more than five times the national average. A 57 percent monthly increase in REO activity pushed the state’s overall foreclosure activity up 10 percent from the previous month, but overall foreclosure activity was statistically unchanged from April 2009.

Arizona foreclosure activity decreased nearly 15 percent from the previous month, but the state’s foreclosure rate moved from third highest in March to second highest in April thanks to an even bigger decrease in California. One in every 169 Arizona housing units receiving a foreclosure filing in April — more than twice the national average.

Florida posted the nation’s third highest foreclosure rate, with one in every 182 properties receiving a foreclosure filing, despite monthly and annual decreases in foreclosure activity.

California posted the nation’s fourth highest foreclosure rate, with one in every 192 housing units receiving a foreclosure filing, and Utah posted the nation’s fifth highest foreclosure rate, with one in every 221 housing units receiving a foreclosure filing.

Other states with foreclosure rates ranking among the top 10 in April were Idaho, Michigan, Illinois, Georgia and Colorado.

Five states account for more than 50 percent of national total
California, Florida, Michigan, Illinois and Nevada accounted for 52 percent of the national total. California led the way, with 69,725 properties receiving a foreclosure filing — although that total was down 25 percent from the previous month and down nearly 28 percent from April 2009.

Florida foreclosure activity was down 18 percent from the previous month and down 25 from April 2009, but the state still documented the nation’s second highest state foreclosure activity total, with 48,384 properties receiving a foreclosure filing during the month.

An 8 percent month-over-month increase in foreclosure activity boosted Michigan’s total to third highest among the states in April. A total of 19,173 Michigan properties received a foreclosure filing during the month, up 77 percent from April 2009.

Illinois foreclosure activity increased nearly 33 percent from the previous month, the nation’s seventh biggest month-to-month increase, and the state’s 18,870 properties receiving a foreclosure filing was the fourth highest total among all states.

A total of 16,217 Nevada properties received a foreclosure filing in April, the fifth highest total among the states.

Other states with foreclosure activity totals among the nation’s 10 highest were Arizona (16,088), Georgia (13,963), Texas (13,133), Ohio (11,936), and Virginia
(7,065).

Nine of 10 top metro areas report annual decreases in foreclosure activity
Metro areas in the sand states of Nevada, Florida, California and Arizona continued to account for all top 10 foreclosure rates among metropolitan areas with a population of 200,000 or more, but foreclosure activity decreased on a year-over-year basis in nine of those top 10 metros.

Reno-Sparks, Nev., was the only metro area in the top 10 to report increasing foreclosure activity on an annual basis. A total of 1,614 properties in the metro area received foreclosure filings in April, an increase of 16 percent from April 2009 and one in every 112 housing units — the nation’s seventh highest metro foreclosure rate.

Las Vegas continued to document the highest metro foreclosure rate, with one in every 60 housing units receiving a foreclosure filing, despite a 3 percent decrease in foreclosure activity from April 2009.

Foreclosure activity in Modesto, Calif., decreased 32 percent from April 2009, but the metro still posted the nation’s second highest foreclosure rate, with one in every 101 housing units receiving a foreclosure filing during the month. Other California cities in the top 10 were Merced at No. 3 (one in every 104 housing units); Stockton at No. 5 (one in 108); Riverside-San Bernardino-Ontario at No. 6 (one in 110); Vallejo-Fairfield at No. 8 (one in 117); and Bakersfield at No. 9 (one in 120).

Cape-Coral-Fort Myers, Fla., posted the fourth highest metro foreclosure rate, with one in every 105 housing units receiving a foreclosure filing, and Phoenix-Mesa-Scottsdale posted the 10th highest metro foreclosure rate, with one in every 136 housing units receiving a foreclosure filing.

If you're facing a foreclosure crisis, your property may qualify for a short sale! Call 702-677-8796 www.lindastrasberg.com

The risk of continued price declines shrunk in most metropolitan areas...

Wed, 05 May 2010 01:57:07 +0100

The risk of continued price declines shrunk in most metropolitan areas studied by the PMI Mortgage Insurance Co. — the principal operating subsidiary of The PMI Group.

The report finds that 93%, or 356, of 384 metropolitan statistical areas (MSAs) showed declining risk scores in Q409 compared with the previous quarter, while only one rose and the rest remained unchanged.

“This is a significant change in the outlook for lower house prices, as the past couple of quarters showed a much smaller share of MSAs with declining Risk Scores,” wrote David Berson, chief economist and strategist at PMI, in the report.

The number of MSAs in the riskiest category (90-100) fell by 26.4% during Q4, while those in the lowest risk category (0-10) surged by 79%. The risk score measures the probability that house prices will be lower in two years, based on a scale of zero to 100. PMI noted its risk index usually predicts future pricing trends with an average 80% accuracy.

“Many of the components of the Risk Index caused this widespread decline in Risk Scores,” Berson wrote. “The most important factors were that housing affordability rose further to near historical highs (helped by extremely low mortgage rates), home prices have dropped sharply relative to incomes in most areas (and thus suggest that prices have fully, or more than fully, adjusted for their unsustainable increases during the housing boom), and some of the riskiest mortgage products were much less prevalent in new mortgage originations toward the end of 2009.”

The number of MSAs with a risk score under 50 — indicating better-than-even odds of higher rather than lower house pricing in two years — grew by 26.5% to 186, from 147 in the previous quarter. At the same time, the number with scores over 50 dropped by 16.5% to 198 from 237:

Among the top 50 MSAs in the US, the share of metro areas with a greater than 50% chance of further price declines by the end of 2011 fell to 64% from 82% in the previous quarter. By that same token, 36% of the top 50 MSAs — from 20% the previous quarter — have a risk score below 50, indicating a probability of higher prices in two years.

Additionally, 40% of these MSAs showed a score improvement of 20% or more.

“Although the risk index does not measure the magnitude of future declines, the forecast does provide encouraging signs for moderating probabilities of price declines for the remainder of 2010 and into 2011 among these largest MSAs,” PMI said in an e-mailed statement on the report.

Upside Down? Need To Move? Your Property May Qualify For A Short Sale! Call 702-677-8796 www.lindastrasberg.com

Las Vegas continues to post the nation's highest metro foreclosure rate

Thu, 29 Apr 2010 15:25:34 +0100

They are rolling the dice in Las Vegas these days -- on the casino craps tables but also on foreclosure charts, betting how many more homes will go under.

A first-quarter analysis of the housing market released today by Irvine, CA-based RealtyTrac shows Las Vegas continues to post the nation's highest metro foreclosure rate with one in 28 housing units receiving a foreclosure filing (3.51 percent) -- 4.9 times the national average.

A total of 28,480 Las Vegas housing units received a foreclosure filing during the quarter, an increase of nearly 13 percent from the previous quarter but a decrease of 19 percent from the first quarter of 2009.

Vegas, however, is not alone on the high-volume foreclosure list. Cities in California, Florida, Nevada and Arizona once again accounted for all top 20 foreclosure rates among metropolitan areas with a population of at least 200,000 -- even while the majority of those top metros reported decreasing foreclosure activity from the first quarter of 2009.

California accounted for 10 out of the top 20 metro foreclosure rates, followed by Florida with seven, Nevada with two and Arizona with one.

Foreclosure activity declined on a year-over-year basis in 14 of the cities in the top 20 and in eight of the cities in the top 10. In contrast, foreclosure activity in the first quarter increased on an annual basis in 159 of the 206 metro areas tracked in the report, and foreclosure activity nationwide increased 16 percent from the first quarter of 2009.

"The decreasing foreclosure activity in some of the nation's top foreclosure hot spots in the first quarter is largely the result of government intervention and other non-market influences, and not a sure signal that those areas are out of the woods yet when it comes to foreclosures," said James J. Saccacio, chief executive officer of RealtyTrac.

"For example, the federal government's new program designed to encourage short sales, which was launched April 5, may have caused some lenders to delay initiating foreclosure against distressed properties -- particularly in hard-hit housing markets where a short sale costs less than a foreclosure.

Top 10 metro foreclosure rates

Modesto, Calif., foreclosure activity decreased 13 percent from the first quarter of 2009, but the metro area still documented the nation's second highest metro foreclosure rate, with one in every 34 housing units receiving a foreclosure filing (2.93 percent).

Other California cities in the top 10 were Riverside-San Bernardino at No. 4 (2.82 percent), Stockton at No. 5 (2.77 percent), Merced at No. 6 (2.76 percent), Vallejo-Fairfield at No. 8 (2.41 percent) and Bakersfield at No. 9 (2.33 percent).

With one in every 35 housing units receiving a foreclosure filing (2.82 percent) the Cape Coral-Fort Myers metro area in Florida documented the third highest metro foreclosure rate despite foreclosure activity decreasing nearly 6 percent from the previous quarter and decreasing nearly 26 percent from the first quarter of 2009. The other Florida metro area in the top 10 was Orlando-Kissimmee at No. 10 (2.30 percent).

The Phoenix-Mesa-Scottsdale metro area in Arizona documented the nation's seventh highest metro foreclosure rate in the first quarter, with one in every 38 housing units receiving a foreclosure filing (2.63 percent). First quarter foreclosure activity in Phoenix was up 23 percent from the previous quarter and up 9 percent from the first quarter of 2009.

Cities outside Sun Belt post big increases

Several cities in the top 100 but not in the top 20 posted substantial year-over-year increases, continuing the trend of foreclosure activity spreading to areas previously protected from the brunt of the real estate slump.

Foreclosure activity increased nearly 171 percent from the first quarter of 2009 in Columbia, S.C., and the city's foreclosure rate ranked No. 99, with one in every 202 housing units receiving a foreclosure filing.

Baltimore's first quarter foreclosure rate was also below the national average, with one in every 170 housing units receiving a foreclosure filing, but the city's foreclosure activity increased nearly 141 percent from the first quarter of 2009.

Salt Lake City and Charlotte, N.C. also posted year-over-year increases in foreclosure activity of more than 100 percent.

For more and more Las Vegas home owners facing a Foreclosure Crisis...When your property is upside down and you need to move, YOUR PROPERTY MAY QUALIFY FOR A SHORT SALE! Don't delay! 702-677-8796 http://www.lindastrasberg.com

Q1 2010 U.S. Metro Foreclosure Market Data

Las Vegas Region March Home Sales Rose...

Wed, 28 Apr 2010 00:07:27 +0100

Las Vegas region home sales rose last month to the highest level for a March in four years as buyers took advantage of soon-to-expire tax credits and low home prices and mortgage rates. The median sale price inched up from February and declined from the year-ago level by the smallest amount since October 2007, thanks mainly to an uptick in transactions over $200,000 and a decrease in foreclosure resales, a real estate information service reported.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – fell to 55.5 percent of all resales in March, down from 59.6 percent in February and down from 73.1 percent a year ago, according to MDA DataQuick of San Diego. The firm tracks real estate trends nationally via public property records.

Foreclosure resales peaked in April 2009 at 73.7 percent of all resales. They’ve declined each month since then. Last month’s figure was the lowest since foreclosure resales were 54.7 percent of the resale market in May 2008.

A total of 4,328 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) last month, up 31.9 percent from February and up 12.7 percent from a year earlier. A rise in sales between February and March is normal for the season, with the gain averaging 29.1 percent since 1994, when DataQuick’s complete Las Vegas region stats begin.

March’s sales total was the highest for that month since March 2006, when 8,486 homes sold, and it was 0.8 percent lower than the average March sales tally back to 1994. Last month marked the 19th in a row in which total sales rose on a year-over-year basis.

Sales of homes priced above $200,000 made up 23.5 percent of total sales, up from 22.4 percent in February but down from 28.5 percent a year earlier.

The number of houses and condos that resold (excludes new homes) in March rose to 4,334, up 30.9 percent from February and up 12.3 percent from a year earlier to the highest point since 4,721 resales in March 2006. Resales have risen on a year-over-year basis for 23 straight months.

Sales of newly built homes, including condos and condo conversions, rose to 543 in March, up 40.3 percent from February and up 15.5 percent from a year earlier. But it was still the second-slowest March, behind last year, for new-home sales since at least 1994.

Given the typical new home sells for more than the typical resale home, last month’s gain in the percentage of total sales that were newly built homes helped push the all-homes median sale price up from February, as did the uptick in overall sales above $200,000. Moreover, existing condos, which tend to have the lowest sale prices, represented a slightly smaller portion of sales last month compared with February.

The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in March was $130,000, up 3.0 percent from $126,197 in February but down 10.3 percent from $144,900 a year earlier. The year-over-year decline was the smallest since October 2007, when the median dropped 9.2 percent from a year earlier, to $279,790.

The overall median sale price has fallen on a year-over-year basis for 35 consecutive months and in March stood 58.3 percent below the peak $312,000 median in November 2006.

The median price paid for resale single-family detached houses – by far the region’s largest home-type category – was $135,000, up from $133,800 in February but down 8.8 percent from $148,000 a year ago – the smallest annual decline since September 2007. The March median was 56.8 percent lower than the peak $312,250 median in June 2006.

The median price paid last month for resale condos was $68,500, down a tad from $69,000 in February and down 4.9 percent from $72,000 a year earlier – the smallest annual decline since July 2007. The resale condo median has been hovering a bit below or above $70,000 for nearly a year. March’s resale condo median was 66.3 percent below its $203,000 peak in July 2006.

An alternative price gauge – the median paid per square foot for resale single-family detached houses – edged insignificantly higher in March, to $77. That’s up from $76 in February – a level that had held since last October – but down 4.9 percent from a year earlier. It was the smallest year-over-year decrease since April 2007. March’s figure was 59.5 percent below the June 2006 peak of $190 per square foot.

Meantime, foreclosures rose last month compared with February, but fell below the year-ago level. In March 2,188 homes and condos were foreclosed on in the Las Vegas region, up 24.6 percent from February but down 6.9 percent from a year earlier. For the first quarter of this year (January through March), foreclosures totaled 5,611, down 26.4 percent from the prior quarter and down 36.3 percent from a year ago. The figures are based on the number of trustees deeds filed at the Clark County recorder’s office. Those filings have seesawed monthly for more than a year, and a single month’s rise or fall doesn’t necessarily indicate a new trend.

In March, a popular form of financing among first-time home buyers – government-insured FHA loans – accounted for 52.2 percent of all home purchase loans.

Absentee buyers purchased 41.5 percent of all Las Vegas–area homes sold in March, paying a median $110,000 for their homes. That was down from 44.6 percent absentee buyers in February. Absentee buyers are often investors, but can include second-home buyers and others who, for various reasons, indicate at the time of sale that the property tax bill will go to a different address.

Buyers who appear to have used cash to purchase their homes accounted for 48.5 percent of all March sales, down from 51.5 percent in February, based on an analysis of public property records. The median price paid in these seemingly all-cash deals in March was $103,000. Specifically, they were transactions where there was no indication of a purchase mortgage recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical, recorded purchase mortgage, and in some cases they might be taking out mortgages after their purchases. All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who can’t always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions.

Have A Home To Sell In Las Vegas? 702-677-8796 http://www.lindastrasberg.com

Las Vegas-Paradise, NV MSA

Number of sales	Mar-09	Mar-10	%Chng
Resale houses	3,178	3,395	6.80%
Resale condos	680	939	38.10%
New homes	470	543	15.50%
All homes	4,328	4,877	12.70%

Median sale price	Mar-09	Mar-10	%Chng
Resale houses	$148,000	$135,000	-8.80%
Resale condos	$72,000	$68,500	-4.90%
New homes	$218,995	$201,360	-8.10%
All homes	$144,900	$130,000	-10.30%

The foreclosure tide is still rising...

Sat, 17 Apr 2010 19:22:31 +0100

The foreclosure tide is still rising. RealtyTrac reported Thursday that foreclosure filings were brought against nearly one million properties during the first three months of 2010. That’s a seven percent increase from the previous quarter, 16 percent higher than a year ago, and equates to one in every 138 homes in the United States.

Altogether, foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were reported on 932,234 properties from January to March of 2010. According to RealtyTrac, the number of scheduled auctions and bank repossessions hit new quarterly records.

All foreclosure types spiked in March. Filings were reported on 367,056 properties last month, an increase of nearly 19 percent from the previous month and the highest monthly total since RealtyTrac began issuing its report in January 2005.

“Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: a shallow trough in January and February followed by a substantial spike in March,” explained James J. Saccacio, RealtyTrac’s CEO.

“One difference, however, is that the increases were more tilted toward the final stage of foreclosure,” with REOs increasing in the first quarter of this year, compared to a decrease during the same period last year, he said.

“This subtle shift in the numbers pushed REOs to the highest quarterly total we’ve ever seen in our report and may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure time line," Saccacio said.

During the first three months of this year, RealtyTrac’s data shows there were 257,944 properties repossessed by the lender – an increase of 9 percent from the previous quarter and an increase of 35 percent compared to the first quarter of 2009.

As it has for the past 13 quarters, Nevada continued to document the nation’s highest state foreclosure rate in the first quarter of 2010. One in every 33 Nevada homes received a foreclosure filing during the three-month period, more than four times the national average and an increase of nearly 15 percent from the previous quarter. Still, Nevada’s total of 34,557 properties receiving a foreclosure filing in the first quarter was down 16 percent from the first quarter of 2009.

Arizona’s foreclosure activity increased on both a quarterly and annual basis, helping the state to post the nation’s second highest state foreclosure rate for the third consecutive quarter. One in every 49 Arizona properties received a foreclosure filing during the quarter – nearly three times the national average.

With one in every 57 Florida properties in some stage of foreclosure, the state posted the nation’s third highest state foreclosure rate for the second straight quarter. Florida’s Q1 foreclosure activity also increased on both a quarterly and annual basis.

California foreclosure activity decreased 6 percent from the first quarter of 2009, but the state still documented the nation’s fourth highest foreclosure rate, with one in every 62 homes receiving a filing.Utah’s foreclosure activity increased 75 percent from the first quarter of 2009, the highest annual rise among top-10 states, giving it the nation’s fifth highest foreclosure rate.

Foreclosure filings were reported on 10,756 Utah properties, a rate of one in every 88 housing units and an increase of 21 percent from the previous quarter.

Other states with foreclosure rates ranking among RealtyTrac’s top 10 in the first quarter of 2010 were Michigan, Georgia, Idaho, Illinois, and Colorado.

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Distressed properties, including short sales and REOs, accounted for 29 percent of all home ...

Fri, 09 Apr 2010 13:10:58 +0100

Distressed properties, including short sales and REOs, accounted for 29 percent of all home sales in the United States in January, according to new data released Thursday by First American CoreLogic.

The company says it’s the highest level of distressed transactions since April 2009, and not too far off from the peak in January 2009 when distressed sales accounted for 32 percent of all sales transactions.

After declining through most of 2009, the rebound in distressed sales occurred due to increases in both the REO and short sales shares.

According to First American CoreLogic's analysis, REO sales increased to 22 percent in January 2010, up from 19 percent in December but down from a year ago when they were 27 percent.

Short sales made up 8 percent of all sales in January, up from 7 percent in December and 5 percent a year ago.

Among the largest 25 markets, Riverside, California had the highest percentage of distressed sales in January (62 percent), followed closely by Las Vegas (59 percent) and Sacramento (58 percent).

The top REO market was Detroit where the bank-owned share of sales was 48 percent. San Diego’s short sale share was 19 percent in January, making it the highest ranked short sale market.

Although the top 10 markets for foreclosures are all located in Florida, only two Florida markets, Orlando and Cape Coral, made the top 10 distressed sale list. First American CoreLogic says this is probably because Florida is a judicial state where foreclosures process through the courts and take quite a bit longer than in California, Arizona, or Nevada, where non‐judicial foreclosures are the norm.

First American CoreLogic also reported that during the last year, there were 974,000 distressed sales: 740,000 were REOs and 234,000 were short sales. The company noted that distressed sales have a very strong influence on home price trends.

First American CoreLogic pointed out that home prices did not begin to decline until late 2007 in response to the rapid rise in the distressed sale share. The trough in average home prices in early 2009 occurred at exactly the same time that distressed sales had peaked, the company said.

In January, the average non-distressed sale price was $247,700, while the distressed average price was $161,600. First American CoreLogic says REOs averaged $141,900, compared to $215,300 for short sales.

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Home Sales in Las Vegas Increased to 3,175 in March...

Wed, 07 Apr 2010 21:45:34 +0100

Home sales in Las Vegas increased to 3,175 in March, up 32.8 percent from the previous month and up 6.5 percent from the same month a year ago, the Greater Las Vegas Association of Realtors reported Wednesday.

Inventory of homes for sale declined 9.9 percent from a year ago to 20,548 and median home price dropped 8.7 percent to $136,000.

Realtors association president Rick Shelton attributed the jump in sales to buyers rushing to take advantage of the federal tax credit that expires April 30, combined with consumer belief that home prices in Southern Nevada are likely to increase in the future.

Housing analyst Dennis Smith of Home Builders Research said one of the factors holding back prices in Las Vegas is the appraisal process. Appraisers are being pressured by lenders to bring in "low-ball appraisals," he said.

Realtors are seeing a dramatic spike in short sales, or homes sold for less than the mortgage owed. Short sales now comprise about 25 percent of sales, compared with 8 percent a year ago.

The Home Affordable Foreclosure Alternative program implemented Monday could go a long way toward increasing short sales in Las Vegas, real estate industry experts said.

Housing remains a key concern in the US...

Wed, 07 Apr 2010 21:27:20 +0100

Members of the Federal Open Market Committee (FOMC) in their March meeting revised down their expectations of gross domestic product (GDP) growth because of a leveling off in housing activity.

Weak state and local government spending, as well as substantially reduced household income in the second half of 2009, also contributed to the FOMC’s downward projections.

Despite government interventions, housing remains a key concern in the US. For example, housing starts remained flat while investment in nonresidential structures declined since the Fed’s last meeting.

“Activity in the housing sector appeared to be leveling off in most regions despite various forms of government support, and … commercial and industrial real estate markets continued to weaken,” FOMC said in the meeting minutes. “Indeed, housing sales and starts had flattened out at depressed levels, suggesting that previous improvements in those indicators may have largely reflected transitory effects from the first-time home buyer tax credit rather than a fundamental strengthening of housing activity.”

Foreclosures rates are likely to remain high in coming quarters, according to the FOMC. The likelihood of additions to the already large inventory of vacant homes also poses downside risks to home prices.

Adding to the weak real estate outlook was the fact that the delinquency rate on commercial mortgages in securitized pools increased in January, and the delinquency rate on commercial mortgages at commercial banks rose in Q4 2009.

Kansas Federal Reserve Bank president Thomas Hoenig once again voted against keeping the target for the federal funds rate so low “for an extended period,” suggesting instead to keep rates low “for some time,” giving the FOMC flexibility to begin raising rates modestly.

He said such an adjustment to the target for the federal funds rate should be made sooner rather than later, to reduce longer-run risks to the fragile financial stability so far.