California August Home Sales

September 11, 2014

http://dqnewspressreleases.blogspot.com/2014/09/august-california-home-sales-press.html

An estimated 37,228 new and resale houses and condos sold statewide in August. That was down 6.0 percent from 39,608 in July, and down 12.5 percent from 42,546 sales in August 2013, according to CoreLogic DataQuick data.

August sales have varied from a low of 29,764 in 1992 to a high of 73,285 in 2005. Last month’s sales were 21.6 percent below the average of 47,456 sales for all the months of August since 1988, when Irvine-based CoreLogic DataQuick’s statistics begin. California sales haven’t been above average for any month in more than eight years.

The median price paid for a home in California last month was $393,000, up 0.3 percent from $392,000 in July and up 8.9 percent from $361,000 in August 2013. Last month was the 30th consecutive month in which the state’s median sale price rose year-over-year. In March/April/May 2007 the median peaked at $484,000. The post-peak trough was $221,000 in April 2009.

Of the existing homes sold last month, 5.4 percent were properties that had been foreclosed on during the past year. That was down from 5.6 percent in July and down from 7.8 percent a year earlier. Foreclosure resales peaked at 58.8 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 6.0 percent of the homes that resold last month. That was unchanged from the month before and down from 11.4 percent a year earlier.

The typical monthly mortgage payment that California buyers committed themselves to paying last month was $1,523, up from $1,521 the month before and up from $1,456 a year earlier. Adjusted for inflation, last month’s payment was 35.5 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 47.7 percent below the current cycle’s peak in June 2006. It was 61.8 percent above the January 2012 bottom of the current cycle.

Bay Area Home Sales Slow in August; Prices Increases Ease Back

September 11, 2014

http://dqnewspressreleases.blogspot.com/2014/09/august-bay-area-home-sale-press-release.html

Irvine, CA.—-The number of Bay Area homes that sold last month declined again, as potential buyers continued to struggle with constrained supply, tricky mortgage availability and affordability issues. The median price paid for a Bay Area home dropped somewhat, as it usually does from July to August, a real estate information service reported.

A total of 7,578 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 10.6 percent from 8,474 in July and down 12.0 percent from 8,616 in August last year, according to CoreLogic DataQuick data.

August sales have varied from 6,688 in August 1992 to 13,940 in August 2004. The average since 1988, when CoreLogic DataQuick’s statistics begin, is 9,526.

“Among the professional number crunchers, there’s been talk lately of a ‘new normal’ and maybe even the need to re-benchmark key statistical indicators like sales and price levels. The fact is that the housing market is still slowly moving back toward long-term norms that were thrown out of whack back during the Great Recession. The most congestion in the various pipelines that comprise the housing market today is caused by abnormalities in the mortgage market,” said John Karevoll, an analyst with Irvine-based CoreLogic DataQuick.

The median price paid for a home in the nine-county Bay Area was $607,000 in August. That was down 1.6 percent from $617,000 in July, and up 12.4 percent from $540,000 in August a year ago. A seasonal late-summer decline in median price is normal in the Bay Area. The Bay Area’s median sale price peaked at $665,000 in June and July 2007, then dropped to a low of $290,000 in March 2009.

While bouncing around somewhat from month to month, a variety of market indicators are trending incrementally toward long-term norms.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 58.2 percent of last month’s purchase lending, up from a revised 57.3 percent in July, and up from 47.9 percent a year ago. Jumbo usage dropped to as low as 17.1 percent in January 2009.

Adjustable-rate mortgages (ARMs), an important indicator of mortgage availability, accounted for 24.5 percent of the Bay Area’s home purchase loans in August, down from a revised 25.4 percent in July, and up from 19.4 percent in August last year. ARMs hit a low of 3.0 percent of loans in January 2009. Since 2000, ARMs have accounted for 46.6 percent of all Bay Area purchase loans.

Last month foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 2.9 percent of resales, up from 2.7 percent the month before, and down from 4.3 percent a year ago. Foreclosure resales in the Bay Area peaked at 52.0 percent in February 2009, while the monthly average over the past 17 years is 9.8 percent, CoreLogic DataQuick reported.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 3.8 percent of Bay Area resales last month. That was down from an estimated 4.0 percent in July and down from 7.6 percent a year earlier.

Last month absentee buyers – mostly investors – purchased 18.4 percent of all Bay Area homes. That was down from a revised 18.9 percent the prior month, and down from 20.3 percent a year earlier.

Buyers who appear to have paid all cash – meaning no sign of a corresponding purchase loan was found in the public record – accounted for 21.8 percent of sales in August, up slightly from a revised 20.0 percent the month before and down from 23.7 percent a year earlier.

Bay Area home buyers committed $2.53 billion of their own money in the form of a down payment or as an outright cash purchase last month, while they borrowed $3.64 billion in mortgage money from lenders.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $2,352. Adjusted for inflation, last month’s payment was 19.2 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 40.3 percent below the current cycle’s peak in July 2007. It was 82.9 percent above the February 2012 bottom of the current cycle.

Because of late data availability, sales were estimated in Alameda, San Francisco and San Mateo counties.

Southland Home Sales Sputter; Median Sale Price Hits 80-Month High

September 11, 2014

http://dqnewspressreleases.blogspot.com/2014/09/august-southland-home-sale-press-release.html

Irvine, CA—Southern California home sales slipped to a four-year low for August as would-be buyers faced inventory and affordability challenges and investor purchases held at the lowest level in several years. The median sale price climbed to a post-recession high, a real estate information service reported.

A total of 18,796 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 7.7 percent from 20,369 sales in July, and down 18.5 percent from 23,057 sales in August 2013, according to CoreLogic DataQuick data.

On average, sales have risen 3.7 percent between July and August since 1988, when CoreLogic DataQuick statistics begin. Southland sales have fallen on a year-over-year basis for 11 consecutive months. Sales during the month of August have ranged from a low of 16,379 in 1992 to a high of 39,562 in 2003. Last month’s sales were 28.2 percent below the August average of 26,169 sales.

The median price paid for all new and resale houses and condos sold in the six-county region last month was $420,000, up 1.7 percent from $413,000 in July and up 9.1 percent from $385,000 in August 2013. Last month’s median was the highest for any month since December 2007, when it was $425,000. The median’s 9.1 percent year-over-year gain in August was the highest in three months. But it also marked the third consecutive month with a single-digit annual increase following 22 months of double-digit year-over-year gains as high as 28.3 percent.

“There was certainly pressure on home values this summer but some of that jump in the August median sale price appears to reflect a shift in market mix. A slightly higher share of sales occurred in the more expensive coastal markets, and that can nudge up the median. Nevertheless, prices are high enough to be a hurdle for a lot of potential buyers, even though mortgage rates have fallen in recent months. And price isn’t the only impediment. Some still struggle to qualify for a loan or to mend their household finances in the wake of the Great Recession. Others are simply waiting for price appreciation to give them enough equity in their homes to make a move up,” said Andrew LePage, an analyst with Irvine-based CoreLogic DataQuick.

Last month three counties – San Diego, Los Angeles and Orange – logged single-digit, year-over-year gains in their median sale prices, while Riverside, San Bernardino and Ventura counties saw double-digit increases. Orange County’s $590,000 August median was the closest – within 8.5 percent – to its all-time peak of $645,000 in June 2007.

For the Southland overall the August median stood 16.8 percent below the peak $505,000 median in spring/summer 2007.

Home prices have been rising at different rates depending on price segment. In August, the lowest-cost third of the region’s housing stock saw a 13.1 percent year-over-year increase in the median price paid per square foot for resale houses. The annual gain was 7.9 percent for the middle third of the market and 4.3 percent for the top, most-expensive third.

The number of homes that sold for $500,000 or more last month fell 0.6 percent compared with a year earlier. But sales below $500,000 fell 16.3 percent year-over-year. Sales below $200,000 dropped 35.6 percent. Sales in the lower price ranges are hampered by, among other things, the drop in affordability over the last year, a fussy mortgage market and a relatively low inventory of homes for sale.

In August, 37.2 percent of all Southland home sales were for $500,000 or more, up from 37.1 percent in July and up from 33.3 percent in August 2013. The $500,000-plus level peaked for this year in June at 38.1 percent.

Distressed property sales continued to fade as a market force.

Foreclosure resales – homes foreclosed on in the prior 12 months – represented 5.0 percent of the Southland resale market last month. That was down from 5.2 percent the prior month and down from 7.0 percent a year earlier. In recent months the foreclosure resale rate has been the lowest since early 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 5.9 percent of Southland resales last month. That was up slightly from 5.8 percent the prior month and down from 11.5 percent a year earlier.

Absentee buyers – mostly investors and some second-home purchasers – bought 23.5 percent of the Southland homes sold last month. That tied the July level as the lowest absentee share since December 2010, when 23.4 percent of homes sold to absentee buyers. Last month’s figure was down from 26.7 percent a year earlier. The peak was 32.4 percent in January 2013, while the monthly average since 2000, when the CoreLogic DataQuick absentee data begin, is about 19 percent.

Cash purchases hovered near a 5.5-year low last month. Buyers paying cash accounted for 24.4 percent of August home sales, up a hair from a revised 24.1 percent in July and down from 28.4 percent in August last year. The July 2014 figure was the lowest since January 2009, when 22.0 percent of Southland homes were bought with cash. The peak was 36.9 percent in February 2013, and since 1988 the monthly average is 16.6 percent.

In August, Southern California home buyers committed a total of $4.57 billion of their own money in the form of down payments or cash purchases. That was up from a revised $4.49 billion in July. The out-of-pocket total peaked in May 2013 at $5.41 billion.

Although credit conditions remain fairly tight, the use of larger “jumbo” home loans and adjustable-rate mortgages has generally trended higher this year compared with last, edging toward more normal levels.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 32.3 percent of last month’s Southland purchase lending, which is unchanged from July and the highest level since the credit crunch struck in August 2007. Last month’s figure was up from 27.0 percent a year earlier. Prior to August 2007 jumbos accounted for around 40 percent of the home loan market. The jumbo level dropped to as low as 9.3 percent in January 2009.

In August, 13.3 percent of Southland home purchase loans were adjustable-rate mortgages (ARMs), down slightly from 13.6 percent in July and up from 11.7 percent a year ago. ARM use dropped to as low as 1.9 percent of all purchase loans in May 2009. Since 2000, a monthly average of about 31 percent of Southland purchase loans have been ARMs.

All lenders combined provided a total of $6.36 billion in mortgage money to Southern California home buyers in August, down from a revised $6.51 billion in July and down from $6.51 billion in August last year.

The typical monthly mortgage payment Southland buyers committed themselves to paying last month was $1,624, up from a revised $1,602 the month before and up from $1,553 a year earlier. Adjusted for inflation, last month’s typical payment was 33.6 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 45.6 percent below the current cycle’s peak in July 2007.

To view the county-by-county chart, please visit DQNews.com.

Freddie Mac: Rates stay tame through summer

Hold steady three weeks straight

Fixed mortgage rates posted little movement for the week ended Sept. 4 amid light economic reports, according to the latest Freddie Mac Primary Mortgage Market Survey.

The 30-year, fixed-rate mortgage averaged 4.10%, unchanged from last week, but down from 4.57% a year ago.

In addition, the 15-year, fixed-rate mortgage came in at 3.24%, down from 3.25% a week prior and 3.59% last year.

The 5-year Treasury-index hybrid adjustable-rate mortgage remained unchanged at 2.97%, but is down from 3.28% a year ago.

The 1-year Treasury-index ARM averaged 2.40%, slightly up from 2.39% a week ago but down from 2.71% last year.

“Mortgage rates were little changed amid a week of light economic reports. Of the few releases, the ISM’s manufacturing index rose to 59.0 in August from 57.1 the previous month. This was the highest reading of the index since March 2011,” said Frank Nothaft, vice president and chief economist for Freddie Mac.

Bankrate posted similar results, with the 30-year, FRM increasing to 4.24% from 4.23%.

The 15-year, FRM fell to 3.37% from 3.38% a week ago, while the 5/1 ARM dipped to 3.25%, down from 3.32% last week.

“Movements in mortgage rates have been very tame all summer, with rates fluctuating within a band of just one-eighth of a percentage point since mid-May. But at some point, that will come to an end. If we get another upbeat jobs report this week, the bond market could begin to realize that higher interest rates are an eventuality, leading mortgage rates higher,” Bankrate said. 

Home price decline not as severe as once reported

Case-Shiller revises data

Now that the economy has had seven years to digest the financial crisis, the real impact of the recession might not be as bad as it appeared, according to an article inBloomberg.

The article explained that property values nationally only fell 26% from the February 2007 peak to the December 2011 trough, not 34% as previously reported, revised data shows.

Meanwhile, the index will now be issued monthly rather than quarterly.      

The change is the result of CoreLogic’s $6 million purchase of the S&P/Case-Shiller index from technology company Fiserv Inc. in March 2013. Case-Shiller has spent more than a year retrofitting its model with CoreLogic’s bigger, higher-quality data set, leading to a change in how the index looks.

The index has always measured repeat, arm’s-length transactions. Transfers of ownership such as bank repossessions are thrown out and the value of those foreclosed properties are captured later, when they’re sold. That ensures that sales of distressed properties aren’t counted twice, Case-Shiller principal economist David Stiff said. 

Monday Morning Cup of Coffee: Housing data storm ahead

Can housing shake off the winter, spring and now summer doldrums?

Monday Morning Cup of Coffee takes a look at stories across the HousingWire news desk, with more coverage to come on bigger issues.

It’s a week of key housing data and metrics releases, and Monday kicks off bright and – not early but at 10 a.m. ET – with the report on new home sales for July.

New home sales came in at a paltry annual rate of 406,000 in June while the May reading, which was extraordinarily strong, was revised 62,000 lower to 442,000. June’s 8.1% drop was the biggest% decline in almost a year and followed an 8.3% boost the month before. All regions showed declines in June with the most important region, the South because of its overwhelming size in this report, posting a 9.5% drop. The drop in sales raised supply relative to sales, to 5.8 months versus May’s 5.2 months.

Tuesday will have both the Federal Housing Finance Agency home price index and the Case-Shiller home price index for June. After their performance in May, the June numbers will likely come up a little, but we’re not holding our breath for a breakaway.

The FHFA purchase only house price index, based on data from the GSEs, rose just 0.4% in May, and the year-on-year rate slowed by 6 tenths to plus 5.5% from a revised 6.1%. This rate had been in the 7.0% range earlier in the year. The regional breakdown shows special monthly weakness in East South Central and East North Central with gains in the West South Central and Middle Atlantic.

The S&P/Case-Shiller 20-city home price index unexpectedly declined in May at a seasonally adjusted minus 0.3% and followed a 0.1% rise the month before. May’s dip was the first negative reading since January 2012. Year-on-year, both adjusted and unadjusted, home prices were at plus 9.3%, down substantially from 10.8% and 12.4% in the two prior months. Unadjusted data showed deceptive strength, at a monthly plus 1.1%. But this reflected seasonal strength in the spring months for housing and was not a sign of pricing power.

The Conference Board’s consumer confidence survey for August is also due out Tuesday, and it often serves as an indicator for housing, though not nearly as much as mainstream financial reporters make it out to be. It’s like on CNN when they turn to an online poll asking “What do you think happened to the missing flight?” – interesting to know what people are thinking, but not that informative. (Look at the NAHB builder confidence survey with its regular overconfidence as an example.)

Thursday will give the industry the pending home sales index for July. It’s an index, not a data compilation, from the National Association of Realtors, but it’s a solid metric.

The pending home sales index for existing home sales came in at a solid 102.7 in June, healthy but down a bit from a revised 103.8 in May. The monthly percentage change, at minus 1.1%, followed a monthly 6.0% spike in May. The regional breakdown showed a dip in the South but a gain for the Midwest and a fractional gain for the West.

For all of these critical monthly reports, and the weekly mortgage application and mortgage rates reports, look to HousingWire for the first and best coverage.

Here’s your video laugh for Monday morning. It’s not an ice bucket challenge, but someone needs to pour cold water on whoever authorized this story at Fox Business News. This is like looking at five inches of data to extrapolate two miles of road.

Sometimes headlines astound for their obviousness, and sometimes they do it for hitting the target and yet still missing the point. “What if the Fed created a bubble?” This is sort of like asking, what if the reason today is hot is because of the sun?”, no?

Southlake is a suburb in HousingWire’s backyard, and this story from the Fort Worth newspaper on the large lot, spacious home suburb’s decision to decline, repeatedly, the construction of a bunch of zero-lot line houses is a commendable preservation of housing diversity. Usually when people want diversity in housing, they push the same old urban chic trends of higher density, public rail orientation, and the great god called walkable design. But some people like tree-lined avenues, larger lots and more elbowroom all around. Not every community has to bow to the urban hipster designers. And in a market as big as Dallas-Fort Worth, with its dozens of suburbs and exurbs, having a few that don’t bow to trends is a change.

How have QM and ATR affected the industry? The Fannie Mae Financial & Strategic Analysis Group launched the outcomes of a current survey of senior mortgage executives designed to see how mortgage lenders or would adapt to the CFPB’s rules, and here is a preview of the results.

No banks were reported closed by the Federal Deposit Insurance Corp. for the week ending August 22, 2014.

Is the boom era for home flipping ending?

RealtyTrac: Trends return to historical normal

This is also down from 5.9% in the first quarter of 2014. But when looking at home price trends, it comes as no surprise.

According to Trulia’s home price report, for the first time in more than two years, none of the 100 largest U.S. metros had a year-over-year price increase above 15% as home price increases start to decrease in pace.

“Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013,” said Daren Blomquist, vice president at RealtyTrac.

“Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to,” Blomquist added.

On average, investors made a gross profit of more than $46,000 per flip on homes flipped in the second quarter of 2014, a 21% gross return on the initial investment.

This is a drop from 24% in the first quarter and down from 31% in 2013, which was the peak in percentage return on flips nationwide since RealtyTrac began tracking the flipping data in the first quarter of 2011.

(source RealtyTrac: click for larger image)

flipping

And the problem is not only with increasing home prices, with CoreLogic reporting that the foreclosure inventory across the nation continues to shrink.

While this is good news, it means less distressed properties to buy and flip.

This does not mean the days of home flipping are over though. Zillow (Z) has listed the top 10 markets where it pays the most to become the Ropers.

These are the best places where the amount an owner can charge a tenant is greater than mortgage costs.

As a whole for the month of May, there were 47,000 completed foreclosures nationally, a drop from 52,000 in 2013, a year-over-year decrease of 9.4%.

At the top were Oklahoma City, Miami, and Tulsa, where homeowners can make an average of $536, $515, and $396, respectively.