For the second month since recording an official double-dip in home prices, the S&P/Case-Shiller index has posted an uptick.

Data released Tuesday by Standard & Poor's shows that 16 of the 20 metros included in the study and both composites reported positive monthly increases.

The 10- and 20-city composites were up 1.1 percent and 1.0 percent, respectively, in May over April.

Detroit, Las Vegas, and Tampa were down over the month and Phoenix was unchanged.

On an annual basis, Washington D.C. was the only metro with a positive rate of change, up 1.3 percent.

The remaining 19 metros were down in May 2011 versus the same month last year. Minneapolis fared the worst posting a double-digit decline of 11.7 percent.

The 10-city and 20-city composites recorded annual declines of 3.6 percent and 4.5 percent, respectively, when compared to May 2010. (Last year's spring season had the benefit of federal homebuyer tax credits which served to boost activity.)

Still, David Blitzer, chairman of the index committee for S&P, says he's seeing some seasonal improvements in May's data.

"This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities," Blitzer said. "However, 19 of 20 cities saw prices drop over the last 12 months. The concern is that much of the monthly gains are only seasonal."

Blitzer also noted that May's report showed unusually large revisions across some of the metros, in particular, Detroit, New York, Tampa, and Washington D.C.

He says these markets reported a lot more sales from prior months than previously recorded, which caused the revisions.

"The lag in reporting home sales in these markets has increased over the past few months," Blitzer said. "Also, when sales volumes are relatively low, as is the case right now, revisions are more noticeable."

Blitzer also highlighted recent housing statistics indicating a leveling off in existing-home sales, contract cancellations, and tight credit.

"These data all support a continuation of the 'bounce-along-the-bottom' scenario we have witnessed in the housing market over the past two years," he said.

Although we have now seen two consecutive months of generally improving prices, Blitzer says the industry still has a long way to go before there is evidence of a real recovery.

"Sustained increases in home prices over several months and better annual results need to be seen before we can confirm real estate market recovery," he said.

Measured from their peaks in June/July 2006 through May 2011, the S&P/Case-Shiller 10-city composite is down 32.1 percent and the 20-city composite is down 32.3 percent.

According to S&P, as of May 2011, average home prices across the United States are back to the levels where they were in the summer of 2003.

WASHINGTON, May 12, 2011

Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the Realtors® Midyear Legislative Meetings & Trade Expo here.

Lawrence Yun, NAR chief economist, said existing-home sales have been underperforming by historical standards and will rise gradually but unevenly. "If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better," Yun said. "We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million - that's a sustainable level given the size of our population."

Mortgage interest rates should rise gradually to 5.5 percent by the end of the year and average 6.0 percent in 2012 - still relatively affordable by historic standards.

"A huge volume of cash sales, supported by the recovery in the stock market, show that smart money is chasing real estate. This implies that there could be a sizeable pent-up demand if mortgages become more readily accessible for qualified buyers," Yun said. "The problem isn't with interest rates, but with the continuation of unnecessarily tight credit standards that are keeping many creditworthy buyers from getting a loan despite extraordinarily low default rates over the past two years."

Yun said that if credit requirements returned to normal, safe standards, home sales would be 15 to 20 percent higher. He added that some parents are buying homes with cash for their children, and offering them loans which provide better returns than bank accounts or CDs.

Yun projects the Gross Domestic Product to grow 2.5 percent this year and 2.7 percent in 2012, adding 1.5 million to 2 million jobs yearly over the next two years. The unemployment rate should decline to 8.8 percent by the end of 2011 and average 8.6 percent next year, returning to a normal level of 6 percent around 2015.

Housing starts are forecast to rise but remain below long-term trends, reaching 603,000 in 2011, up from 595,000 last year, and continue growing to 908,000 in 2012. New-home sales are seen at a record low 320,000 this year, rising to 487,000 in 2012. "A recovery in new homes will be slow because of the extra price discount in the existing home market," Yun noted. In March, the typical new single-family home cost $53,300 more than an existing home.

Inflation appears to be relatively modest for now, with the Consumer Price Index rising 2.9 percent this year. "We'll be closely watching the impact of fuel costs on consumer spending and inflation - that would slow economic growth, job creation and home sales," Yun said.

Apartment rents are trending up, and are likely to rise at faster rates as vacancies decline. Following the correction in home prices, it has now become more affordable to buy in most of the country. "Twice as many renters had enough income to buy a home in 2010 in comparison with 2005, so we have a much larger pool of financially qualified renters," Yun said. "Rising rents and excellent housing affordability conditions will encourage potential buyers who've been on the sidelines."

Yun expects the median existing-home price to remain near $170,000 over the next two years, which would mark four consecutive years of essentially no meaningful price change.

Frank Nothaft, chief economist at Freddie Mac, holds similar views on the outlook. "Economic activity will accelerate this year - there will be no double dip in the economy," he said. Nothaft is more optimistic on job growth, expecting 2.0 million to 2.5 million jobs created in 2011 with unemployment dropping to 8.4 percent by the end of the year.

Nothaft expects the 30-year fixed-rate mortgage to trend up to 5.25 percent by the end of the year, and for home sales to rise 5 percent. "National home price indices are close to a bottom and prices are likely to bottom sometime this year," he said.

Refinancing activity in 2011 will be only half of what it was last year. "As a result, banks may become more willing to lend to home buyers," Nothaft said.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

In a release sent out on July 17, President Barack Obama stated that he will announce his intent to nominate Richard Cordray as the director of the Consumer Financial Protection Bureau (CFPB). He will make the announcement at an event today at the White House.

Last year, the President fought to pass and signed into law the strongest consumer protections in history in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act created the CFPB, an independent agency with the primary mission of acting as a watchdog for American consumers. The CFPB ensures that consumers have the information they need to make the financial choices that are best for them and prevents abusive and deceptive financial practices.

"American families and consumers bore the brunt of the financial crisis and are still struggling in its aftermath to find jobs, stay in their homes, and make ends meet," Obama said. "That is why I fought so hard to pass reforms to fix the financial system and put in place the strongest consumer protections in our nation's history. Richard Cordray has spent his career advocating for middle class families, from his tenure as Ohio's attorney general, to his most recent role as heading up the enforcement division at the CFPB and looking out for ordinary people in our financial system."

"I also want to thank Elizabeth Warren not only for her extraordinary work standing up the new agency over the past year, but also for her many years of impassioned leadership, and her fierce defense of a simple idea: ordinary people deserve to be treated fairly and honestly in their financial dealings. This agency was Elizabeth's idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country."

Currently, Cordray is serving as chief of enforcement at the CFPB. Immediately prior, Cordray served as attorney general of Ohio from January 2009 to January 2011. As attorney general, Cordray recovered more than $2 billion for Ohio's retirees, investors and business owners and took major steps to help protect its consumers from fraudulent foreclosures and financial predators. Prior to his tenure as Ohio's attorney general, Cordray spent two years as Ohio's state treasurer and four as the treasurer of Franklin County, Ohio. In 2008, he received a Financial Services Champion award from the U.S. Small Business Administration and a Government Service Award from NeighborWorks America. In 2005, he was named "County Leader of the Year" by American City & County Magazine.

Earlier in his career, Cordray was an adjunct professor at the Ohio State University College of Law (1989-2002), served as a state gepresentative for the 33rd Ohio House District (1991-1993), was the first solicitor general in Ohio's history (1993-1994), and was a sole practitioner and of counsel to Kirkland & Ellis (1995-2007). Cordray has argued seven cases before the U.S. Supreme Court, including by special appointment of both the Clinton and Bush Justice Departments. Cordray is a graduate of Michigan State University, Oxford University, and the University of Chicago Law School. He was editor-in-chief of the University of Chicago Law Review and later clerked for U.S. Supreme Court Justices Byron White and Anthony Kennedy.

Recently Gov Schwarzenegger's signed bill SB 401 just days before April 15th tax deadline.

Under this provision much needed tax relief will come to homeowners who have already lost their homes and can't afford to be penalized for thousands of dollars in taxes because Mortgage Company forgave the remainder of their loan.

This legislation will provide those who sold their homes in a short sale to exclude the amount or deficit as taxable income for money still owed to the mortgage company. This will apply to loan modifications as well.

This legislation brings California in line with the already existing federal Mortgage Forgiveness Debt Relief Act 2007, which is in effect through 2012.

Just a side note: there are some exceptions... debt forgiveness on a second home mortgage, investment property, business property or refinance that was used for cash-out equity are excluded.

It is estimated according to the franchise Tax Board the cost to California will be about 34 million in tax revenue over the next 3 years.

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The foreclosure tide is still rising according to recent information published by RealtyTrac reported April 15, 2010. There was an estimated report that nearly 1 million foreclosure filings were brought against properties in the first 3 months of 2010. That is a 7% from previous quarter and a 16% increase from a year ago.

That amounts to 1 in every 138 homes in the United States.

Those numbers were including foreclosure filings including the notices of default, scheduled auctions and bank repo's totaling 932,234 properties. This was a new quarterly record.

It was reported that in March there was some 367,056 foreclosure filings the highest monthly total since RealtyTrac has reported since 2005.

In the first 3 months it was reported that there was 257,944 properties repossessed by the lender - an increase of 9% from previous quarter and 35% from the 1st quarter of 2009.

California ranked in the nation's fourth highest foreclosure rate, with one in every 62 homes receiving a filing.
Other states in the top 10 in the first quarter of 2010 were Michigan, Georgia, Idaho, Illinois, and Colorado.

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