2014 Foreclosure Filings Hit Lowest Level Since 2006, RealtyTrac Says

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Foreclosure filings—default notices, scheduled auctions and bank repossessions—were down 18% in 2014 compared to the prior year, according to a report released today by Irvine, Calif.-based real estate data firm RealtyTrac. The 1.12 million properties with filings during 2014 represent a 61% drop from 2010, when foreclosure filings peaked at 2.87 million.

The 2014 figure was also the lowest number since 2006, when 717,522 properties in the U.S. had foreclosure filings. Last year one in 118 housing units, or 0.85%, had filings, marking the first time since 2006 that the annual foreclosure filing rate dropped below 1%.

“To me, this means that the housing market can move forward on much more stable footing. One pillar of the housing crisis is gone,” said Daren Blomquist, vice president of RealtyTrac. “That will allow a lot of stakeholders involved in housing to move forward with confidence that there’s no shadow inventory of foreclosures that’s going to rear up and disrupt the housing recovery–at least on a national level.”

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8 Key Forecasts For 2015

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I do not believe that the market is significantly overvalued as some have suggested. My analysis suggests that the market is actually either slightly overvalued or near fair value from a historical standpoint.

According to Bespoke Investment Group, the average reading of the price/earnings ratio (P/E) of the S&P 500 for the time period starting in 1989 and ending in 2014 was 18.90. Looking at a shorter timeframe, the P/E of the S&P 500 for the time period starting in 2004 and ending in 2014 was 16.95. The S&P 500 closed 2014 at 2,059 with a consensus earnings estimate for the year of 117.02. This equates to a P/E of 17.6, just slightly above the 10-year average of 16.95 but below the 25-year average of 18.9.

Looking forward, the median forecast of Wall Street strategists for 2015 S&P 500 earnings and the closing price of the S&P 500 are $126 and 2,213 respectively according to Business Insider. This equates to a median forecasted P/E of 17.6 for 2015, which interestingly is the same level where it is expected to be at the end of 2014. Hence, valuations are not currently anticipated to become richer, or cheaper, over the course of the New Year and are arguably reasonable from a historical perspective.

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Moving Downtown? Here Are 6 Things To Figure Out First

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If your 2015 resolutions include moving into the city, you’re not alone — living downtown is fast becoming the in thing. The trend has given cities like Boston, Los Angeles, Cleveland and Miami a lift, and the list of reviving downtowns keeps getting longer.

As the economy recovered from the last downturn, U.S. census data showed populations growing faster in primary cities than in suburbs, startling many economists, sociologists and journalists. From 2010 to 2012, many cities gained more new residents than they had over the previous 10 years, sparking a vigorous debate about whether the era of suburban superiority was over. Though a recent Forbes magazine storysuggests that the suburbs are staging a comeback, the latest census data indicate a more subtle closing of the gap: Their growth has slowed, but cities are still on the upswing.

Whatever the future may hold, few see a meaningful threat to the ongoing revival of certain cities. People are continuing to migrate downtown, accompanied by a surge of capital from developers and investors. Employers are expanding to these hotbeds as well, meaning businesses have been willing to pay higher rents for proximity to better talent. According to CoStar Group, downtown office rents in the U.S. have risennearly 19% over the past four years, versus just 3% in the suburbs. And Prudential Investment Management recently issued a report arguing that urbanization across the globe is in its “prime time.” The report cites a projection from New York University professors Paul Romer and Brandon Fuller that cities worldwide will gain more than 60 million people annually over the next three decades.

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Big Houses And Sprawling Suburbs Are Back — And Better Than Ever

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With their younger son off finishing college and their older one out on his own, Linda and Lee Sussman found their four-bedroom house near downtown Boca Raton, Fla. too quiet. But the couple, now in their mid-50s, didn’t want to downsize to, say, a luxury condo. Instead, they sold the old house for $430,000 and moved last year into a $731,000 newly constructed home with a backyard pool overlooking the lake at Parkland Golf & Country Club in the northernmost reaches of Broward County.

“The backyard is phenomenal. We see water, wrapped by water all around. It’s like being on a peninsula,” marvels Linda, a retired art teacher who appreciates a good view. Sure, Lee, a golf-loving financial planner, has to drive an extra 7 miles each way to his office. But the supermarket is close by, and it’s just a short stroll to the Parkland clubhouse, with its spa, restaurant, lounges, tennis courts, pools and fountains. “It feels like a Disney resort,” Linda says. Get this: At 3,300 square feet, the empty nesters’ new home is bigger than the one where they raised two sons.

“Nobody moves to a smaller house,” crows Robert “Bob” Toll, the 73-year-old cofounder and executive chairman of luxury home builder Toll Brothers TOL +3.45%, which sold the Sussmans their new spread. At least not if Toll can help it.

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