REAL ESTATE NEWS... Housing Recovery Slow and Steady in 2015, Will Pick Up Pace Next Year

April 23, 2015 - Solid employment gains, attractive mortgage rates, a growing economy and pent-up demand will help keep the housing market moving forward throughout 2015 and into next year, according to economists who participated in yesterday’s National Association of Home Builders (NAHB) 2015 Spring Construction Forecast Webinar.

“This should be a good year for housing, buoyed by sustained job growth, rising consumer confidence that is back to pre-recession levels and a gradual uptick in household formations,” said NAHB Chief Economist David Crowe. “We expect 2016 to be even better, due to a significant amount of pent-up demand and an economy that will be entering a period of reasonable strength and consistency.”

Over the past seven years, Crowe estimates the slow recovery and uncertainty in the job and housing markets resulted in 7.4 million lost home sales. “While some of these sales will never take place, this does indicate how many sales were lost as fewer households decided to move. We expect at least some of these to return in the form of new home sales as job and economic growth continue to firm.”

A key demographic to help jump-start this process should come from the millennials. The share of first-time home buyers has traditionally averaged around 40 percent, but in the aftermath of the housing downturn it now stands at just under 30 percent. First-time buyers are expected to provide a boost to the housing market, as the unemployment differential between young people and others is shrinking, Crowe noted.

Single-Family on the Rise

Turning to the forecast, the NAHB Remodeling Market Index, which averages ratings of current remodeling activity with indicators of future activity, stands at 57 in the first quarter of 2015 and has been at or above 50 most of the past two years. A reading above 50 indicates that more remodelers report market activity is higher (compared to the previous quarter) than report it is lower.

NAHB is projecting that residential remodeling activity will increase 2.3 percent in 2015 over last year and rise an additional 2.4 percent in 2016.

Single-family housing production is expected to post a 9 percent gain in 2015 to 704,000 units and jump an additional 39 percent to 977,000 units in 2016.

On the multifamily side, production ran at 355,000 units last year, what could be considered a normal level of production, and is expected to continue in that range or modestly higher through 2015 and 2016.

New Home Price Growth Fastest in Coastal Areas

Focusing on new home sales, Sam Khater, deputy chief economist at CoreLogic, said that sales volume is weak, but pockets of strength exist.

“New home price growth is fastest in the coastal states and eight of the top 10 healthiest new sale markets are in the Carolinas and Texas,” said Khater.

Of the top 100 new-home sale markets, Houston leads the pack at 2,000 sales per month, followed by Dallas and Atlanta which are running at about half that pace. In terms of volume, the bulk of the concentration is in southern markets.

“Nashville and San Jose stand out as the fastest growing markets, and Atlanta and San Antonio are the best large markets,” said Khater.

Only three new-sale markets are larger today than in 2000—Nashville, Oklahoma City and San Antonio.

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“We Really Have Turned the Corner”

Also delving beneath the national numbers, NAHB Senior Economist Robert Denk said that the housing recovery continues to vary by state and region.

“Housing demand is now being driven by population growth and employment and income growth,” said Denk. “We are reconnecting to underlying fundamentals. We really have turned the corner.”

The strongest housing markets are centered in several energy-producing states, including North Dakota, Texas, Oklahoma, Louisiana, Wyoming and Idaho.

“The recent decline in oil prices is not hurting housing,” said Denk. “We haven’t seen it yet. We still expect energy output to be higher at the end of this year than last year.”

Other states exhibiting strong employment and housing growth include North Carolina, South Carolina, Tennessee, Washington and Colorado.

Using the 2000-2003 period as a healthy benchmark when single-family starts averaged 1.34 million units on annual basis, NAHB is projecting that single-family production, which bottomed out at an average 27 percent of normal production in early 2009, will rise to 61 percent of normal by the fourth quarter of this year and climb to 81 percent of normal by the end of 2016.

In another way of looking at the long road back to normal, by the end of 2016, the top 40 percent of states will be back to near normal production levels, compared to the bottom 20 percent, which will still be below 75 percent.

“What we are seeing, no matter what bucket you are in, the numbers are getting better,” said Denk. “There’s a broader recovery all around.”

REAL ESTATE NEWS...Homeownership rate lowest in 25 years

The homeownership rate in the first quarter of this year fell to 63.7 percent, the lowest since 1990, according to the U.S. Census.

Home prices are rising, and homeownership is falling. How can that be? How can that be?

If prices are rising, it must be because there is increasing demand for homes, but if there is increasing demand, then why are there fewer homeowners?

It has to do with this: math. The homeownership rate in the first quarter of this year fell to 63.7 percent, the lowest since 1990, according to the U.S. Census. The homeownership rate is the ratio of households that own to overall households—the remaining being rental households.

We already know that rentership has increased dramatically, and continues to do so, as the economy improves and more kids move out of their parents' basements and into rental apartments. Rental vacancies are at historic lows. Rents are soaring.

The pool of total "households" or occupied houses, which includes both owners of those houses and renters of those houses, is getting bigger. The gain is all on the renter side, the census report also notes. That therefore means that the share of owners of that total pool, which is the homeownership rate, must get smaller, even if there wasn't a big drop in the actual number of people who own homes. There's the math.

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"Inventory remains tight in many markets and that's helping keep a floor under price gains," said Jed Kolko of Trulia, a real estate company. "Because of demographics and a strengthening job market for young adults, there is very strong rental demand." 

Having said all that, we should also note that there was actually a slight decline in the total, real number of homeowners. It wasn't enough alone to push the homeownership rate down as far as it did, but it should be noted. As investors continue to buy single-family homes, and first-time buyers remain unable to afford today's prices, real homeownership takes a hit.

In the nation's 20 largest markets, home prices were 5 percent higher in February versus the same month one year ago, according to the S&P/Case-Shiller home price index. While this index is a three-month running average of closed sales, other surveys have also seen a reacceleration of home price gains. Denver and San Francisco saw the biggest gains, with prices up 10 percent and 9.8 percent, respectively.

"Home prices continue to rise and outpace both inflation and wage gains," said David Blitzer, of S&P Dow Jones Indices. "If a complete recovery means new highs all around, we're not there yet."

First-time buyers historically increase the homeownership rate, but they are still a historically small share of today's buyers. If prices continue to heat up, and more markets hit or surpass their bubble peaks, homeownership will continue to drop.

That's because unlike during the latest housing boom, the mortgage market isn't fueling the prices; instead, it's a lack of supply. Lower- and even middle-class Americans are therefore less and less able to become homeowners. The split between the haves and the have-nots, at least in housing, appears to be widening.

REAL ESTATE NEWS...Home Price Growth Slows In February, S&P/Case-Shiller Says

The growth in sales prices for single-family homes continued to slow in February, S&P/Case-Shiller indicated Tuesday.

On a national basis, prices appreciated 4.2% (seasonally adjusted) year-over-year in February, compared to 4.4% (seasonally adjusted) year-over-year in January, according to the S&P/Case-Shiller National Home Price Index, which tracks all nine Census divisions. While price growth across the nation slowed overall, collectively the major American cities saw their prices accelerate. An index tracking single-family home prices in 20 major U.S. cities gained an annual 4.8% in February, up from a 4.3% increase in January; a separate index tracking 10 cities gained 5% in February, compared to 4.5% in January.

“Home prices continue to rise and outpace both inflation and wage gains,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

Of course, price growth varied significantly by city. Denver and San Francisco recorded the highest year-over-year price gains, at 10% and 9.8% respectively. Miami saw an annual price increase of 9.2%, followed by Dallas (8.6%), Portland, Ore. (7.1%), and Seattle (7.1%). Next in line were Tampa (6.9%), Las Vegas and Los Angeles (both 5.8%). Washinton, D.C. (1.4%), Cleveland (2.3%), and New York (2.5%) saw the smallest annual price gains.

Seventeen cities welcomed greater year-over-year gains in February than in January. Only San Diego, Las Vegas, and Portland, Ore., recorded slower annual increases in February than in January.

In the S&P/Case-Shiller National Index has witnessed 34 straight months of year-over-year gains, while all 20 cities have shown year-over-year gains every month since the end of 2012, Blitzer noted.

 

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“While prices are certainly rebounding, only two cities–Denver and Dallas–have surpassed their housing boom peaks,” Blitzer said. “Nationally, prices are almost 10% below the high set in July 2006. Las Vegas fell 61.7% peak to trough and has the farthest to go to set a new high; it is 41.5% below its high. If a complete recovery means new highs all around, we’re not there yet.”

Late 2013 and early 2014 witnessed several months of of double-digit annual price increases, but price appreciation has now been generally slowing for more than a year. Economists forecast further slowdowns throughout 2015.

The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.2% annual gain in February 2015. The 10- and 20-City Composites reported year-over-year increases of 4.8% and 5.0%.

National Index, year-over-year change in prices (seasonally adjusted):
June 2013: 9.2%
July 2013: 9.7%
August 2013: 10.2%
September 2013: 10.6%
October 2013: 10.9%
November 2013: 10.8%
December 2013: 10.8%
January 2014: 10.5%
February 2014: 10.2%
March 2014: 9.0%
April 2014: 7.9%
May 2014: 7.1%
June 2014: 6.3%
July 2014: 5.6%
August 2014: 5.1%
September 2014: 4.8%
October 2014: 4.7%
November 2014: 4.7%
December 2014: 4.6%
January 2015: 4.5%
February 2015: 4.2%

In February the National Index increased by 0.1% on a month-over-month basis. Both the 10 and 20-City Composites bumped up by 0.5%, their largest increases since July 2014. Again, price growth varied by city. Sixteen cities saw price appreciation rise month-over-month in February compared to January (on a non-seasonally adjusted basis), led by San Francisco (2%) and Denver (1.4%). Cleveland reported the biggest monthly drop at 1%; Las Vegas and Boston saw declines of 0.3% and 0.2%, respectively.

“A better sense of where home prices are can be seen by starting in January 2000, before the housing boom accelerated, and looking at real or inflation adjusted numbers. Based on the S&P/Case-Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9% or a 1.7% annual rate,” Blitzer said. “The highest price gain over the last 15 years was in Los Angeles with a 4.3% real annual rate; the lowest was Detroit with a -3.6% real annual rate. While nationally, prices are recovering, new construction of single family homes remains very weak despite low vacancy rates among both renters and owner-occupied homes.”

Groundbreakings on new homes rose just 2% in March compared to February, and were 2.5% below the level in March 2014. Sales of previously-owned homes hit its highest level in 18 months in March as inventory eased. (Both reports are a month ahead of the S&P/Case-Shiller report, which lags by two months.)

“Home value growth seems to have stabilized, a positive development overall, but also one that sheds light on an unchanging and ugly remnant of the housing crisis: Negative equity,” said Stan Humphries, Zillow Z -0.21%’s chief economist, in reaction to Tuesday’s numbers. “As home value appreciation flattened, the negative equity rate also stabilized over the second half of last year. Roughly 17% of homeowners with a mortgage were underwater as of the end of last year, owing more on their home than it is worth, unchanged from the prior quarter. Negative equity is likely to remain a persistent feature of the housing market for years, particularly among the kinds of less expensive, entry-level homes so attractive to younger buyers.”

As of February 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both the 10- and 20-city measures is approximately 15-17%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 28.8% and 29.5%.

S&P/Case-Shiller is now releasing its National Home Price Index each month. Previously, it was published quarterly, while the 10-City and 20-City Composites were published monthly. The “July” numbers listed for the National Index above reflect a roll-up of data for the three-month average of May, June and July prices.

REAL ESTATE TRENDS...8 DIY Ways to Sell Your Home for More

1. Modernize your house numbers.
Don’t stick with those standard-issue digits. Here, more modern-style numbers play against a brick wall, and give a more traditional entry a bit more style. Find out how on Go Haus Go. Courtesy Go Haus Go

2. Or make them personal.
Plain numbers not your thing? So go bright and colorful, like this DIY monogram from Craft Cuts. Spray-painted numbers and a chevron background come together for a totally unique porch-ready accent. Find out how at Craft Cuts. Courtesy Craft Cuts

3. Build a tulip planter.
Even if you don’t have room for a full garden, you can still cash in on the curb appeal benefits of flowers. This super-simple stone-effect tulip planter is actually made from a

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 wooden CD rack transformed with textured spray paint. Read the full instructions at Claireabelle Makes.Courtesy Claireabelle Makes

4. Light your walkway.
Well-lit walkways create ambiance, and provide a safety and security boost come dark. These glowing orbs from The Art of Doing Stuff not only give off more light, but also look super cool. Added bonus: They’re easy to make. Get the instructions on The Art of Doing Stuff.Courtesy The Art of Doing Stuff

5. Add window boxes.
A classic option, sure, but always a solid bet. These darkly stained containers play nicely against a pop of colorful flowers. Get the how-to at Kruse’s Workshop. Courtesy Kruses Workshop

6. Install a slate walkway.
Classic sidewalks are a snooze. Slate makes for an attractive alternative to concrete and creates a fun, textured pattern headed towards your door. Read the instructions at Young House Love.Courtesy Young House Love

7. Build a privacy trellis.
Feel like you’re practically on top of your neighborhood? A trellis on your front porch can create a sense of privacy and individuality — not to mention an excellent space to grow flowering vines. Follow the directions at Chez Larsson. Courtesy Chez Larsson

8. And don’t forget your doormat.
Greet your guests in style, like with this colorful, polka-dotted doormat from The Crafted Life. It’s a small project that can really cheer up an entry. Courtesy The Crafted Life

REAL ESTATE TOPICS...Live Lecture Real Estate School (Concord, CA)

LIVE LECTURE DISCUSSION

LIVE LECTURE Real Estate School

Have you decided that becoming a California REAL ESTATE AGENT is the right career choice for you? The Real Estate Market is heating up. If so, then you'll need the three mandatory College level Certificates the State requires to take the Real Estate License TEST. Chose the best option available and join our newest location in Concord CA. Call Mike at 510-325-8865 now to reserve your position in his next class. 

REAL ESTATE TRENDS...Home Design in the Lap of Luxury

Designing your home for lavish living may not be as hard as you think. In fact, you’ll come to see that by the end of this article, you’ll be able to turn a boring living room or bedroom into a luxury retreat.

There are so many expert design ideas out there, so it’s easy to become overwhelmed. To make it easier on you, the homeowner, we have compiled a list of our top favorite ideas and projects to turn your home into the lap of luxury.

Here are some top expert decorating ideas for your next home project:

emilywheeler.wordpress.com

1. Haute Headboards

Utilizing luxurious fabric and fine details on your bed’s headboard will set it apart from all the rest. Whether is a specialized construction or custom upholstery, your headboard is the finishing touch in the bedroom by bringing all design elements together.

residencestyle.com

2. Serene Window Seat

Adding or sprucing up the window seat in your home is a great way to add some elegance. Remember to keep it simple when it comes to color by sticking with shades of ivory or various monochromatic hues. You can also drape curtains framed by crown molding for a dramatic effect.

HGTV.com

3. Sophisticated Storage

When it comes to storing your belongings, the most important thing to remember is to keep them hidden. If you don’t have enough closet space, an nice piece of furniture like an armoire or dresser will do the trick.

HGTV.com

4. Luxurious Lighting

Whether you have pretty sconces in the bedroom, contemporary pendant fixtures in the living room, or a glamorous chandelier in the dining room, these lovely accents will brighten up your home in the most luxurious way.

BrazilianKoaFlooring.com

5. Fabulous Flooring

Although accents do hold high importance in decorating the most luxurious home, don’t forget about what’s under your guest’s feet! From all types of hardwood like Eucalyptus and Koa Hardwood, to tile flooring and area rugs, there are many options for you to choose from. Which one is right for your home’s style?

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REAL ESTATE TOPICS...Tiny homes (The Bunkie)

Put one anywhere. No building permit required. Click link below for more info on the Bunkie.

http://www.thebunkie.com/

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REAL ESTATE TOPICS...Real Estate Markets, Hot or Not?

When it comes to negotiating power, it’s better to be a home seller in the Bay Area and a buyer in Philadelphia. Zillow’s spring analysis of buyers’ and sellers’ markets across the U.S. looked at how long homes spend on the market, how likely they are to have had a price cut and how much they sold for in relation to their listing price.

The nation’s top sellers’ markets are the big West Coast tech centers in San Jose, San Francisco and Seattle. Less competitive markets where buyers have time to negotiate are in the East and Midwest, including Philadelphia, Chicago and Cleveland.

The rankings are being released as home values are leveling off across the country, according to Zillow’s first quarter market reports. The Zillow Home Value Index (ZHVI) was up 3.9 percent from same time last year, and rents are up 3.7 percent.

You can see the full breakdown on top buyers’ and sellers’ markets below. For more on this report, check out Zillow Research.

REAL ESTATE TOPICS...THE GEOGRAPHY OF WELL-BEING

Source: The Atlantic

A new index takes a holistic look at America's inequalities. The report, “Geographies of Opportunity: Ranking Well-Being by Congressional District,” is an in-depth look at how residents of America’s 436 congressional districts are faring in three fundamental areas of life: Health, access to knowledge, and living standards. The report stems from the Social Science Research Council’s Measure of America project. The hallmark of this work is the American Human Development Index, a supplement to GDP and other money metrics that tell the story of how ordinary Americans are faring.

Making sense of the story

• The top ten congressional districts in terms of human development (HD) are all in the greater metropolitan areas of LA, NYC, San Francisco, and DC.

• Life expectancy remains extremely uneven across the country. In sections of Mississippi, West Virginia and Kentucky, life expectancy remains at 73 years of age, about the same as it was for the nation as a whole in 1980. 

• Life expectancy is far greater in the Northeast corridor, along the West Coast of California, in retirement areas along Florida’s southern coast, in Seattle, suburban Dallas, and around Denver and Boulder, Colorado. In these places, people can expect to live up to eight years longer than the national average.

• The areas of highest knowledge access are concentrated in parts of L.A., the San Francisco Bay Area, and Seattle in the West; the Boston-New York-D.C. corridor in the east; Orem and Provo in Utah; Dallas and Houston in Texas; the Twin Cities of Minneapolis-St. Paul; Denver and Boulder; and in the suburbs of Detroit.

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• The gap in earnings is considerable and divides exist not only between regions and metros but within. One of the districts with the lowest earnings ($20,100 annually) is California's 34th, which covers downtown L.A. That’s just a few miles from California’s 33rd, where a median income of $51,300 puts it in the top ten earning districts in the country.

• The higher the proportion of foreign-born residents in a congressional district, the longer the district’s life expectancy.

• African Americans fare particularly poorly on health indicators. Whites outlive African Americans by 3.6 years; African Americans have higher death rates from a variety of causes, chief among them heart disease, cancer, homicide, diabetes, and infant death.

REAL ESTATE NEWS...'Stale' homes are tightening up the housing market

'Stale' homes are tightening up the housing market

Diana Olick | @DianaOlick

Thursday, 23 Apr 2015 | 11:42 AM ET

The biggest barrier to a more robust spring housing market is simply a lack of listings, and there may be even fewer than we think, at least fewer homes people want to buy.

Nearly three-quarters of the homes on the market are "stale," which is to say that they have sat on the market for more than a month with little to no interest from buyers, according to a new report from Redfin.

The number of homes for sale rose 2 percent in March from a year ago, according to a report from the National Association of Realtors released Wednesday. That, however, includes both new listings and homes that have languished on the market for months. With demand and sales increasing, there is just a 4.6-month supply of listings; a six-month supply is considered to be a healthy market balance between buyers and sellers.

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Of course, all real estate is local, but even in the most sought-after neighborhoods, some houses sit. In the Chevy Chase, neighborhood of Washington, D.C. (not to be confused with the Maryland suburb with the same name), which boasts the top schools in the district, inventory is down 24 percent from a year ago, according to Long and Foster. And yet one home there has been on the market since the end of February.

"Everyone loves it; it's the price," said Ghada Barakat, the Long and Foster listing agent for the property.

After starting at $1.45 million, the seller, a builder who renovated and is flipping the four-bedroom, 4.5-bathroom home, lowered the price to $1.395 million, which is now bringing more interest. Still, at the higher price points, even in this competitive area, it is hard to sell.

Matthew Staver | Bloomberg | Getty Images

"People cannot come up with the down payment to qualify. Jumbo loans are very tough," added Barakat.

Tight supply in the neighborhood has pushed the median price up 17 percent from a year ago, but sales are down 33 percent, a function of the short supply and so-called "stale" homes. Jumbo loans, those above $417,000, usually require higher down payments.

There is something else at play as well: information. With so many websites and apps pushing moment-to-moment market movement, today's buyers are increasingly data driven. Especially after the epic housing crash that gave birth to all this data, buyer psychology and suspicion are in full swing.

"The trust is broken among buyers. In Denver and Silicon Valley, if the house has been on the market for two weeks, there is something wrong with it," noted Nela Richardson, Redfin's chief economist. "Everyone is afraid to overpay, and the herd behavior in the stock market is something we're now seeing in the housing market."

In Charlotte, North Carolina, the scenario is much the same. The supply of properties for sale is at a three-year low, and fresh listings, less than 30 days old, accounted for just over 5 percent of Charlotte's inventory as of March 31, also a low, according to Redfin. In other words, 95 percent of Charlotte listings are stale. Last month, only 55 new properties came on the market, versus 225 a year ago.

Housing supply is not being helped by the home builders either. Housing starts are still well below historical norms, and even the largest home builders are being cautious. Sales of newly built homes, which represent contracts signed in March, fell more than 11 percent month to month, according to a government report released Thursday. The median price of a newly built home, $277,400, is well above that of an existing home, $212,100.

REAL ESTATE NEWS...New-Home Prices Are on Fire

A flag advertising a newly built home for sale flaps in the breeze in Richmond, Va. Research by economists at TD Securities show the uptrend in resale home values is nothing compared to the speedy rise in new-home prices.

 

Steve Helber/Associated Press

Two different segments of the housing market are yielding two different price trends.

When discussing Wednesday’s news that existing home sales climbed in March, National Association of Realtors chief economist Lawrence Yun said the 7.8% yearly rise in March’s median price was unsustainable. “This price gain of near 8% is not healthy, considering people’s incomes are only rising by 2%,” said Mr. Yun. “The only way to relieve housing cost pressure is to have more homes coming onto the market.”

Yet research by economists at TD Securities show the uptrend in resale values is nothing compared to the speedy rise in new-home prices.

New homes generally command a 10% to 20% premium over existing houses because new construction tends to be of higher quality and have more up-to-date amenities, the TD economists said. But by 2014, the price gap between new and existing houses had widened to 40%.

What’s behind the bigger spread? The housing bust and consumer preferences, saysGennadiy Goldberg, a U.S. strategist at TD Securities. After the financial crisis, “many existing homes were in foreclosure or in poor maintenance,” said Mr. Goldberg. “Buyers wanted a discount.”

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That bargain-seeking plus the flood of existing homes into the market caused the median resale price to plummet by about one third during the bust. In fact, even at $212,000 in March, the median resale price is below the $230,000 record set during the boom.

Meanwhile, the median price for a new home fell only about 25% during the bust and surpassed its boom peak way back in early 2013. That’s because home builders cut back drastically on single-family housing starts during the recession. Plus, as household finances stabilized, “consumer preferences changed,” said Mr. Goldberg. “Consumers wanted a new home.” More demand plus tight inventories allowed builders to lift prices.

As with most consumer items, the mix of new homes has changed in this expansion. That has shifted prices a bit. Although homes costing less than $300,000 still hold a slim majority of all new homes sold, the growth sector has been in more luxurious residences. Homes costing $500,000 or more accounted for almost 11% of new homes sold in 2014, up from 8% in 2011.

The price premium builders can secure for new homes suggests housing starts will pick up this year, as long as wage growth accelerates as many economists expect. The lagging rise in existing-home values, however, means smaller gains in household wealth. That will be especially true for lower-income homeowners who count their house as their largest financial asset. That should hold back the growth in consumer spending, said Mr. Goldberg who thinks home prices will increase between 4% and 5% this year and next.

REAL ESTATE NEWS...REALTOR STUDY: RECOVERING MARKET WILL LEAVE OUT MANY FORMER HOMEOWNERS

We may be past the era of foreclosures, but a new study from the National Association of Realtors found that one-in-four homeowners whose investments went belly up during the recession will be unlikely to re-enter the real estate market.

The good news? The real estate market is in the midst of a big comeback. The bad? Many of the people whose homes went underwater during the l of the financial crisis may not be able to take advantage of it.

According to a new study by the National Association of Realtors (NAR), nearly 1 million of the people whose homes were foreclosed upon during the financial crisis have already repurchased homes. Another 1.5 million are likely to buy again within the next five years.

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But that leaves out of the market nearly 7 million of the 9.3 million who lost their homes to foreclosure between 2006 and 2014.

“They won’t be a significant factor to the housing market going forward,” NAR Chief Economist Lawrence Yun told Bloomberg Business. “The majority of the 9.3 million won’t be coming back.”

On the plus side, the 1.5 million people coming back to the real estate market still represent a significant growth opportunity for the industry. The study notes that the economic recovery will create new opportunities for real estate demand beyond normal industry demand, and that many former homeowners will become eligible for Federal Housing Administration or other home-financing programs.

“The large number of return buyers coming to the market will continue to play an important role in the market,” the report states. “This demand is in addition to nascent household formation and the normal baseline demand from trade-up buyers. While overlays will hamper some borrowers, those overlays will likely normalize in the future.”

On the other hand, home-buying demand will have different impacts on different states, much as it did during the recession. The study notes that California, Florida, and Arizona are seeing the most return buyers.

But one thing that will dampen the demand for many of the homeowners that went underwater is that mortgage underwriting standards have become much stricter, so people who, for example, used a subprime mortgage to purchase a home will be unlikely to re-enter the market.

“Many of them should not have gotten a mortgage to begin with,” NAR’s Yun said in his interview with Bloomberg Business.

REAL ESTATE TOPICS...Tiny Seattle house takes a final stand

Diana Olick | @DianaOlick

Monday, 20 Apr 2015 | 1:49 PM ET

It is a classic story of David versus Goliath—the real estate edition. Only this time, David, a 600-square-foot Seattle home, may not emerge the victor, as the hours tick down to the end of an auction that will leave the structure's future uncertain.

For nearly a century, the tiny house, nestled on a 1,900-square-foot lot, was home to Edith Macefield. In 2006, when Ballard Blocks developers came calling with plans to turn the area into a retail mall, she did not answer the door, rejecting offers reportedly as high as $1 million. So the five-story mall went up around her, literally walling in her home. Her new neighbors were a UPS Store and a Ross Department store. The area is no longer zoned for residential properties, despite the last stand of the tiny house.

The structure, and the story, bear a striking resemblance to the 2009 Disney Pixar film, "Up," in which an elderly man fights a construction project and ends up using colorful balloons to lift his house up and away from all his troubles. And so, not surprisingly, Macefield's home in Seattle's Ballard neighborhood has come to be known as "the 'Up' house." Tourists and residents alike have added balloons with messages scrawled on them to the front gate. One says "Adventure is out there!"

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That notoriety, however, came after Macefield passed away in 2008. Ironically, she left the home to Barry Martin, one of the construction workers who built the mall. As the project developed, so too did their friendship.

"I first met Edith right there," said Martin, pointing to a front corner of the house. "She was tending to her garden."

As Martin tells it, the story of the house really became bigger than Macefield. She only wanted to stay in the house, and didn't really mind the mall because she had been on the block by herself for a while. She actually looked forward to the noise and commotion of the people, he claimed.

"I see that she had lived here for a major portion of her life, and she just wanted to die here," he said. "She didn't understand what the big fuss was when she was still alive. She wouldn't want for it to be a memorial to her, but I'm pretty sure that's going to happen. 

Macefield, who had no living family, wanted Martin to sell the house in order to pay college tuition for his children. And he did sell it, for $310,000, to an investor group called Reach Returns, which had all kinds of plans for the home, including, reportedly, putting it up on stilts. Instead it ended up defaulting on its loan. Now the lender is selling it in a closed bid auction. The deadline for offers is the end of the day Monday.

"I wouldn't be surprised if it sold for a quarter million dollars or less, and I wouldn't be surprised if it sold for over a million because there are no comparables," said Paul Thomas, the real estate agent representing the sellers. "There is nothing I can look at anywhere in this country that's anything like this to give myself a wide range, so I don't have a clue."

Thomas said he has had hundreds of thousands of hits to his website and hundreds of inquiries. Some want to demolish the house, some even to lift it up and move it somewhere else. Several groups have tried to crowdfund the purchase of the home, but as of yet, nothing is firm.

"I think it's done a lot for the business people in this community and for the community as a whole," said Leslie Mehren, a nearby business owner and co-founder of the Ballard tourism office. "It has brought people down here from all over the world. It's becoming a destination, a place you have to see when you come to Seattle."

There is now a music festival in Macefield's name, a drink at a nearby restaurant and even a tattoo paying tribute to her. 

As for the tiny house, real estate agent Thomas said he expects it will either be incorporated into the mall or transformed into a restaurant or office. 

"It could be a pot shop," he added. Marijuana is legal in the state of Washington.

Thomas actually had to stage the home, which had been boarded up and was overgrown. He added windows and a front door. The white picket fence is long gone. While colorful balloons adorn the outside, there is literally nothing inside—just the shell of one woman's determination to hold on to her past ... and the way things were.