Real estate broker Nina Miller advertised the home in the paper, but the offers arrived so quickly she didn’t have the chance to even put up a “for sale” sign outside the Hampstead cottage.
Despite the recent slowdown in Montreal’s real estate market, Miller’s phone buzzed with inquiries last month as soon as she’d listed the renovated, four-bedroom house for sale mid-week. She showed it that weekend, while her clients were off for a quick getaway in the Laurentians. By the time they got back, she’d received a conditional offer on the home for just over $1.1 million — the full listing price.
“There are still some homes that sell right away,” Miller said. “There are buyers for turnkey homes. And it (the Hampstead home) was priced properly. What happens often is that people put their properties out for $200,000, or even $300,000 too high. It takes a much longer time to sell because it puts (buyers) off.”
First-time delinquent home loans fell to 0.84 percent of the 50.2 million mortgages in March, the first month below 1 percent since 2007, before a wave of defaults led to the financial crisis, according to a report today by Lender Processing Services Inc. The rate of first-time defaults, defined as loans that went from performing to at least 60 days delinquent, peaked at 2.89 percent in January 2009.
The decline in new problem loans shows that the recovering U.S. economy, falling unemployment and rising home prices, combined with more than four years of banks’ tightening lending standards, are propelling the worst real estate crash since the Great Depression into the rearview mirror.
“Mortgage quality is improving rapidly,” Mark Zandi, chief economist for Moody’s Analytics Inc. said in a telephone interview from his office in West Chester, Pennsylvania. “Once we’re able to work through this last bulge of foreclosed property, which I think we’ll be able to do over the next 18 to 24 months, mortgage credit quality is going to look absolutely beautiful.”
Mortgages at least 30 days delinquent or in some stage offoreclosure fell to 5 million in March, down from a peak of 7.7 million in January 2010, according to Lender Processing Services, a real estate information service based in Jacksonville, Florida. That’s still more than double the 2.2 million non-current mortgages of January 2005, when the housing market was rising toward its peak.
Tight lending standards have made it harder for borrowers to obtain mortgages, helping drive down default rates while reducing the homeownership rate in the first quarter to 65 percent, the lowest since 1995.
The Federal Housing Administration, which offers loans to buyers with downpayments as low as 3.5 percent, has steadily raised its credit scores. In the third quarter of 2012, the most recent available, 97 percent of FHA borrowers had credit scores above 620 of a possible 850. In the last quarter of 2006, only 53 percent had a score above 620.