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» VISIT US ONLINE @ DSNEWS.COM SEVERAL MARKETS WITH STRONG PRICE GROWTH ALSO HAVE HIGH UNEMPLOYMENT For several markets across the country, strong home price growth is also attached to a double-digit unemployment rate, leading Fitch Ratings' analysts to view their price appreciation as unsustainable. In a recent report, Fitch highlighted seven metro areas where high unemployment rates are in the backdrop of double-digit annual home price gains. The top two were Detroit and Las Vegas. The remaining five were in California: Sacramento, Stockton, Los Angeles, Bakersfield, and Riverside. As of the fourth quarter of 2012, Detroit has seen prices skyrocket by 17 percent year-overyear, but the city's unemployment rate is at 11.2 percent compared to the national rate of 7.6 percent of June. Las Vegas and Sacramento both posted annual gains in home values of 13 percent, but their unemployment rates are each at 10 percent, according to Fitch's study. Stockton had an unemployment rate of 14.4 percent, yet home prices surged 11 percent compared to the previous year. STAT INSIGHT 4.2% Federal budget deficit as percentage of GDP as of July, compared to last year's 7.2%. Decline attributed to 13.9% increase in federal revenues from higher payroll tax rates and Fannie Mae's and Freddie Mac's reimbursement payments combined with 2.9% reduction in federal spending following sequestration. Source: Wells Fargo Securities Economics Group, U.S. Treasury "Housing markets in Detroit and Las Vegas experienced huge drops in prices during the crisis, so the abrupt rise is worth keeping an eye on given the still-languid state of their respective economies," said Stefan Hilts, director at Fitch. On a broader level, Fitch concluded national home prices, which rose 6 percent in 2012, are overvalued by about 12 percent. However, the rating agency expects the difference to narrow over time as markets stabilize and improvements in local economies become more pronounced. According to Fitch, "several unique aspects" of the market have pushed prices up. For one, housing supply has remained limited due to extended foreclosure timelines as a result of legislation that has slowed the pace of foreclosures sales, as well underwater borrowers who are reluctant to sell, the report explained. Overall, a combination of limited supply and demand from purchase borrowers and investors has caused a rapid gain in prices, according to the ratings agency. "It remains to be seen if these trends can continue as residential housing markets stabilize, with a higher volume of listed properties and sales. Nonetheless, the current growth is a positive sign of the housing market recovery," Fitch stated. KNOW THIS A new Rasmussen Reports survey found just 12% of U.S. homeowners think the value of their home will go down over the next year. That's the lowest percentage reported since Rasmussen began regularly tracking this question in April 2009. Speed Agility Precision IMS is your total distressed asset management solution offering tailored real-time answers to fit the needs of our diverse client base. Property Inspections Property Preservation and Rehabilitation Defective Drywall/Mold Remediation Hazard Claim Recovery Mortgage Insurance Claims BPO/Appraisal Short Sale Management REO "Back Office" Asset Management REO Asset Management and Marketing Rental Property Management Loss Mitigation Services – Residence Verification Door-Knocks – Document Retrieval INFO@IMSTODAY.COM | WWW.IMSTODAY.COM | 888-KNOW-IMS 55