The National Association of Realtors reported May 28 that home purchases rose 0.3% in April (the second increase in the past three months). Is this the latest sign that the housing market might be in recovering? Well, it depends on where you live. First-time buyers and investors are jumping in to take advantage of low prices in California, Florida, Nevada, Arizona, and northern Virginia. But the pace of sales almost everywhere else is slowing.

The Realtors don't break out monthly data by state, but all the action in the first quarter seemed to be happening in California, Florida, Nevada, and Arizona, which showed a combined 68.4% increase in sales compared to the first quarter 2008. U.S. sales for the nation dropped 6.8% during that period, but if you subtract those four states, the decline would have been more like 19.1%.

Some of the sales declines in the first quarter are startling. Hawaii home purchases fell off 40%. North Carolina was down 37%. And Washington sales fell 35%. Virginia and Minnesota, which both saw first quarter sales increases of about 12%, were the only other states in positive territory.

Mortgage rates burst past the 5% mark for a 30-year fixed-rate loan late in May, peaking at an average of 5.45% on Thursday. It was the highest level reached by mortgage rates this year, but on Friday they fell back to 5.27%.

Investors in mortgage securities swung from irrational exuberance to equally irrational pessism. Not long ago, they seemed to have concluded that just about every house in America was going to be foreclosed on. Now some rationality is returning. People are realizing that there is some real value in some of the private-label residential mortgage-backed securities that were issued during the go-go years, 2004-2007. Notice I said "some," not all. There are plenty of losses left to be felt in the housing market. I wrote about investors' efforts to pick out the sweet fruit from the lemons in a news story. Let me know what you think.

After a rough 2008, Manhattan's property investment market has continued to take it on the chin thus far in 2009. Real estate sales in Manhattan reached a 25-year low in 2009's first quarter, according to a new report by Massey Knakal Realty Services.

Industrial property sales in San Joaquin County in California's Central Valley have been practically nonexistent this year, but USAA Real Estate Co. just broke the monotony with the acquisition of a 658,000-square-foot distribution facility in the city of Tracy, about an hour east of San Francisco.

The current economic turmoil might well have  the commercial property industry feeling pain for some time to come. But according to a newly-hired executive with Buchanan Street Partners, the tumult will also create an environment rife with opportunities.

New foreclosure data out today illustrates two important trends. One is that the problem has spread from adjustable rate loans to borrowers with bad credit to prime borrowers, an indication that the weak economy and job market is impacting peoples' ability or willingness to pay. The other some what counterintutitive trend is that the hardest hit markets are Sunbelt states, not in the Rustbelt where job losses are the greatest.

Two explanations here. One is that people in those Sunbelt states, directly or not, had incomes tied to the housing market. Secondly, when home prices fall, that severely impacts a person’s willingness to keep paying the mortgage.

According to the industry trade group the Mortgage Bankers Association, the number of foreclosures jumped 30% in this year’s first quarter. Foreclosures now account for about one out of every 70 home loans in the country. Both the level of foreclosures and the size of the increase are record highs.

The overall delinquency rate for residential mortgages was 9.12 percent at the end of the first quarter, up from 7.8 percent in the fourth quarter of 2008, and 6.3 percent one year ago. The seasonally adjusted rate is the highest in the MBA’s records going back to 1972.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 3.85 percent. Both the foreclosure inventory percentage and the quarter to quarter increase are record highs.

The combined percentage of loans in foreclosure and at least one payment past due, meaning the percentage of mortgage holders not current on their mortgages, was 12.07 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey. Put another way, one out of every eight home loans in the country is in some form of distress.

“The rate of foreclosure starts remained essentially flat for the last three quarters of 2008 and we suspected that the numbers were artificially low due to various state and local moratoria, the Fannie Mae and Freddie Mac halt on foreclosures, and various company-level moratoria,” said Jay Brinkmann, the MBA’s chief economist. “Now that the guidelines of the administration’s loan modification programs are known, combined with the large number of vacant homes with past due mortgages, the pace of foreclosures has stepped up considerably.”

The association notes that the foreclosure problem has shifted from subprime to option ARM loans and prime loans. The foreclosure rate on prime, fixed-rate loans has doubled in the last year and now represents the lion’s share of troubled loans.

As has been the case since the start of the bust, most of the trouble is concentrated in four, former housing bubble states. Some 10.6 percent of the mortgages in Florida are now in the process of foreclosure. In Nevada it is 7.8 percent, Arizona 5.6 percent and California 5.2 percent. In comparison, the states with the highest foreclosure rates in the hard hit Midwest were Michigan and Illinois at 1.5 percent and Indiana and Ohio at 1.3 percent.

“Looking forward, it does not appear the level of mortgage defaults will begin to fall until after the employment situation begins to improve,” said Brinkmann. “MBA’s forecast, a view now shared by the Federal Reserve and others, is that the unemployment rate will not hit its peak until mid-2010. It is unlikely we will see much of an improvement until after that.”

With the growing evaporation of jobs, Orange County, Calif.'s multi-family housing sector is starting to feel the burn. Yet, deteriorating fundamentals aren't scaring off investors like Sequoia Equities Inc., which recently acquired the 484-unit Alize Apartments in the upscale Aliso Viejo master planned community from Northwestern Mutual Life Insurance Co. for $75 million.

The battered housing market has some spring it its step, at least according to the National Association of Realtors. The trade group says sales of existing home sales rose 2.9% in April, from March, to an annual rate of 4.68 million.

There are some notes of caution here before we declare the housing slump over. Sales were still down 3.5% year-over-year. Most of the activity remains in the low price points. The percentage of first-time home buyers fell to 40% of all transactions, down from 53% in March. A lot of the activity is investors snapping up multiple foreclosed homes. Distressed properties represent 45% of the sales total.

Anecdotally I’m beginning to see and hear of more higher-end homes selling in my neighorhood in Los Angeles. The magic number seems to be under $1 million. Once an asking price gets lowered below that and the home sells. The Realtors Association economist Lawrence Yun says the larger, jumbo loans needed to buy higher-end homes still aren’t available. “The Federal Reserve needs to help restore liquidity for the jumbo mortgage market by buying these loans under the TALF program,” he says

Your home value has sunk like a stone, and you're so far underwater you'll have to hold your breath for years. Can you at least get a break on your property taxes?