YTD,  numbers tracked by the Grand Rapids Association of Realtors MLS show values to be relatvely even so far in 2011 : -0.4% for the first 10 months. This compares to a 7.0% gain in 2010, following a horrendoues -36% drop from mid 2006 to end of 2009. Will housing values stay even, march ahead or fall again in the election year of 2012.

One servicer of bank foreclosures isn’t optimistic. Paul Sveen, CEO of Integrated Asset Services, told DS News the following:

“The markets continue to act as though we’ve seen a bottom and buyers should be encouraged to go out and buy… Based on market volume and demographics of homebuyers during the 3rd quarter, there is a clear disconnect between the pricing indexes and real market strength. A large volume of distressed property still overhangs the market and it continues to hold most markets hostage.”

Nationwide, distressed sales reportedly made up one-third of home sales in 2010 and were expected to rise this year. Here in West Michigan, that number is 42% of all sales on GRAR Foreclosyres and short sales).

However, ntaionwide, foreclosures are on the decline — falling 39 percent from July 2010 to July 2011. According to Sveen, we are simply seeing “the calm before the storm.”

He says, “The reality is, lenders, for any number of reasons, are increasingly unable to pursue foreclosure. That means fewer foreclosure properties are coming to market and prices are not truly reflecting the residential housing market.”

* Six of 10 U.S. areas with the smallest homes are in the Midwest, based on the median square footage of homes for sale on Realtor.com in September. the six Midwestern states among the top 10 are Michigan, Iowa, Ohio, Illinois, Missouri and Wisconsin. Two of the states are in the West (Hawaii and California), one is in the Northeast (Maine), and one South, (Washington, DC).

*After falling to a 13-year low during the second quarter, the U.S. homeownership rate posted a highly unexpected rise in the third quarter. Data released by the Census Bureau puts the nation’s homeownership rate at 66.3%. That’s up from 65.9% at mid-year. With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the rate has been heading south for quite some time. In fact, the third-quarter rise is the first in two years!

* After declining between the first and second quarters of this year, Zillow.com says negative equity rose again in the third, reclaiming all of the previous quarter’s decline and then some. Zillow’s latest market analysis indicates 28.6% of American homeowners with a mortgage owed more on the loan than their home was worth at the end of September. The company says a lower rate of foreclosure liquidations, and relatively flat home values, combined to increase negative equity over the three-month period.

* Mortgages backing homes that were foreclosed on in September had been delinquent for an average of 624 days, according to Lender Processing Services (LPS). That’s up from 484 days in September of 2010. LPS says almost 40% of loans in foreclosure have not made a payment in two years.

So if values are down about 30% over five years, and 2011 looks like it will be flat or maybe one or two points to either side, why would you buy a house now? Aren’t they money pits between a mortgage payment, taxes, insurance, utilities and upkeep, let alone capital improvements? Sure there are, but the fact of the matter is that they are OUR money pits.

Homes give us a sense of belonging. They help bring stability to our lives. They are filled with the people or pets we love the most. Memories are created there. We watch our children grow up and learn life lessons there. We can put our personalized stamp on them, from interior decorating to creating backyard havens. We can take care of them as we please, when we please, or even run them into the ground if so desired. Homes are the one place where we can be ourselves and live our lives as we see fit, day after day after day. Along the way, we receive financial incentives from the government that renters only dream of. We can write off our property taxes and mortgage interest and beef up our bottom line on tax returns.

I think this emotional sense of belonging -  a significant other, a family, a neighborhood or a community, something larger than ourselves, is the crux of why we own homes even when the market has tanked. Intuitively, we know – or hope – the doldrums won’t last forever. We all expect home values to get back to even, if not positive numbers, in the near future. That may be two years or four or six years, we don’t know, but we all hope for the return to a robust economy.

And even if this slide takes another five or 10 years to correct, you know what? I think most of us still will want to own our own homes.

So far in 2011, values are just slightly negative (-08%) with an MLS sales price of $114,734.  This is a strong rebound from the first quarter where values were down almost -5%.  After 8 months YTD, total unit sales were up +8.4% while listing inventory was down -22% over last year – both very positive numbers.  Meanwhile, forclosures and short sales still make up approximately 43.7% of the total sales mix, the same rate as in 2010. We’re finding conventional mortgages are the primary financing tool used by buyers, with FHA loans a runner-up, especially for first-time home buyers. Lenders are also continuing to use very strict underlining guidelines, and appraisals not meeting the purchase price of homes is still an on-going issue, especially for homes over $250,000.