Month: April 2012

Further Decline in California Foreclosure Activity

April 24, 2012

DQNews.com

La Jolla, CA.–The number of California homes entering the formal foreclosure process during the first quarter declined to its lowest level in almost five years, the result of a more stable economy and housing market, as well as policies that increasingly favor short sales, a real estate information service reported.

A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices during the first quarter of this year. That was down 8.5 percent from 61,517 for the prior three months, and down 17.6 percent from 68,239 in first-quarter 2011, according to San Diego-based DataQuick.

Last quarter’s tally of 56,258 NODs was the lowest since 53,943 NODs were recorded in second-quarter 2007. NOD filings peaked in first-quarter 2009 at 135,431.

“Prices peaked five years ago and then started to fall off a cliff. Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.

“A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem, some of which have played out, and some of which haven’t. The ‘shadow supply’ has yet to result in a second huge wave of foreclosures. The ‘reset problem’ hasn’t really materialized, largely because interest rates are resetting down, not up. And, remarkably, whole batches of presumed ‘toxic’ mortgages continue to perform. There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought,” he said.

The most active “beneficiaries” in the formal foreclosure process last quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380) and JP Morgan (5,343).

The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo) and Cal-Western Reconveyance Corp (Wells Fargo).

Most of the loans going into default are still from the 2005-2007 period. The median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for three years, indicating that weak underwriting standards peaked then.

Although NOD filings dropped across the home price spectrum last quarter, they remained far more concentrated in California’s most affordable communities. Zip codes with first-quarter 2012 median sale prices below $200,000 collectively saw 8.9 NODs filed for every 1,000 homes in those zip codes, while the ratio was 5.6 NODs filed per 1,000 homes for zip codes with $200,000 to $800,000 medians. For the group of zip codes with median sale prices above $800,000, there were 2.3 NODs filed per 1,000 homes.

On primary mortgages, California homeowners were a median nine months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $17,897 on a median $319,418 mortgage.

On home equity loans and lines of credit in default, borrowers owed a median $4,978 on a median $75,000 credit line. The amount of the credit line that was actually in use cannot be determined from public records.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 56,259 default notices were filed last quarter, they involved 55,368 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).

Of the state’s larger counties, mortgages were least likely to go into default in Marin, San Francisco, and San Mateo counties. The probability was highest in Tulare, Sacramento and San Joaquin counties.

Trustees Deeds recorded (TDs), or the actual loss of a home to the formal foreclosure process, totaled 30,261 during the first quarter. That was down 3.2 percent from 31,260 filed the prior quarter, and down 29.7 percent from 43,052 during first-quarter 2011.

Last quarter’s Trustees Deeds total was the lowest since the third quarter of 2007, when 24,209 were filed. The all-time peak was 79,511 in third-quarter 2008. The state’s all-time low was 637 in the second quarter of 2005, DataQuick reported.

Just as with NOD filings, foreclosures remained far more concentrated in the state’s most affordable neighborhoods. Zip codes with first-quarter 2012 median sale prices below $200,000 collectively saw 5.9 homes foreclosed on for every 1,000 homes, compared with 2.6 foreclosures per 1,000 homes for zip codes with medians between $200,000 and $800,000 and less than one – 0.8 – foreclosure per 1,000 homes in the group of zip codes with $800,000-plus medians.

While 1.45 million of California’s 8.7 million houses and condos have been involved in a foreclosure proceeding over the past five years, 835,000 (9.6 percent) have been lost to foreclosure.

Foreclosure resales – homes that had been foreclosed on over the past 12 months – accounted for 33.5 percent of California resale activity last quarter, down from a revised 33.6 percent the prior quarter and 39.8 percent a year ago. The statewide figure peaked at 57.8 percent in the first quarter of 2009. Foreclosure resales varied significantly by county last quarter, from 9.0 percent in San Francisco County to 55.2 percent in Yuba County.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 20.2 percent of statewide resale activity last quarter. That was up from an estimated 19.6 percent the prior quarter and up from 18.1 percent a year earlier.

On average, homes foreclosed on last quarter took 8.5 months to wind their way through the formal foreclosure process, beginning with an NOD. That’s down from an average of 9.7 months the prior quarter and 9.1 months a year earlier.

At formal foreclosure auctions held statewide last quarter, an estimated 33.4 percent of the foreclosed properties were bought by investors or others who don’t appear to be lender or government entities. That was up from an estimated 29.2 percent the previous quarter and up from 23.2 percent from a year earlier, DataQuick reported.

Notices of Default (Trustees Deeds further down)
houses and condos

County/Region    2011Q1   2012Q1 Yr/Yr%
Los Angeles    13,957   11,443 -18.0%
Orange     4,652    3,733 -19.8%
San Diego     4,758    4,185 -12.0%
Riverside     6,769    5,542 -18.1%
San Bernardino     5,514    4,722 -14.4%
Ventura     1,437    1,255 -12.7%
Imperial       289      257 -11.1%
Socal    37,376   31,137 -16.7%
San Francisco       466      340 -27.0%
Alameda     2,373    1,860 -21.6%
Contra Costa     2,778    2,251 -19.0%
Santa Clara     2,253    1,496 -33.6%
San Mateo       829      612 -26.2%
Marin       309      209 -32.4%
Solano     1,301    1,146 -11.9%
Sonoma       864      698 -19.2%
Napa       215      179 -16.7%
Bay Area    11,388    8,791 -22.8%
Santa Cruz       300      220 -26.7%
Santa Barbara       598      481 -19.6%
San Luis Obispo       482      291 -39.6%
Monterey       602      471 -21.8%
Coast     1,982    1,463 -26.2%
Sacramento     3,797    3,464   -8.8%
San Joaquin     1,853    1,572 -15.2%
Placer       933      735 -21.2%
Kern     1,865    1,641 -12.0%
Fresno     1,946    1,555 -20.1%
Madera       356      262 -26.4%
Merced       601      415 -30.9%
Tulare       970      796 -17.9%
Yolo       322      277 -14.0%
El Dorado       479      340 -29.0%
Stanislaus     1,384    1,170 -15.5%
Kings       237      186 -21.5%
San Benito       114       79 -30.7%
Yuba       194      189   -2.6%
Colusa        42       32 -23.8%
Sutter       205      177 -13.7%
Central Valley    15,298   12,890 -15.7%
Mountains*       732      663   -9.4%
North Calif*     1,463    1,314 -10.2%
Statewide*    68,239   56,258 -17.6%

 includes additional counties

Trustees Deeds Recorded (number of homes foreclosed on)
houses and condos

County/Region   2011Q1   2012Q1 Yr/Yr%
Los Angeles    6,836    4,723 -30.9%
Orange    1,926    1,521 -21.0%
San Diego    2,902    1,862 -35.8%
Riverside    4,990    3,291 -34.0%
San Bernardino    3,967    2,713 -31.6%
Ventura      649      552 -14.9%
Imperial      265     192 -27.5%
Socal   21,535   14,854 -31.0%
San Francisco      181      151 -16.6%
Alameda    1,307    1,152 -11.9%
Contra Costa    1,891    1,285 -32.0%
Santa Clara      952      681 -28.5%
San Mateo      346      261 -24.6%
Marin      146      118 -19.2%
Solano      976      679 -30.4%
Sonoma      519      397 -23.5%
Napa      119      111   -6.7%
Bay Area    6,437    4,835 -24.9%
Santa Cruz      164      135 -17.7%
Santa Barbara      314      258 -17.8%
San Luis Obispo      263      187 -28.9%
Monterey      421      293 -30.4%
Coast    1,162      873 -24.9%
Sacramento    3,096    2,225 -28.1%
San Joaquin    1,463      985 -32.7%
Placer      612      451 -26.3%
Kern    1,640      981 -40.2%
Fresno    1,383    1,004 -27.4%
Madera      319      204 -36.1%
Merced      607      333 -45.1%
Tulare      615      441 -28.3%
Yolo      272      157 -42.3%
El Dorado      302      198 -34.4%
Stanislaus    1,186      827 -30.3%
Kings      199      116 -41.7%
San Benito       63       63    0.0%
Yuba      194      136 -29.9%
Colusa       43       28 -34.9%
Sutter      170      146 -14.1%
Central Valley   12,164    8,295 -31.8%
Mountains*      564      438 -22.3%
North Calif*    1,190      966 -18.8%
Statewide*   43,052   30,261 -29.7%

* includes additional counties

Source: DataQuick; DQNews.com

Home sales in Southern California climb, price declines slow

Home sales in March increased 2.8% year over year to 19,953 homes in the region, DataQuick reported, while the median home price of $280,000 was essentially flat, down just 0.2% from March 2011.

April 18, 2012|By Alejandro Lazo, Los Angeles Times
Sales in March increased 2.8% year over year to 19,953 homes in the six-county… (Frederic J. Brown, AFP/Getty Images)

More Southern California homes sold in March than did a year earlier, and price declines slowed as the spring selling season got underway and more traditional home buyers entered a market that has seen record numbers of investors.

The Southland’s median home price of $280,000 was essentially flat, down just 0.2% from March 2011. Compared with February, the median price rose 5.8% for a second consecutive monthly increase, real estate research firm DataQuick reported Tuesday.

Recent home price data have shown a broad deceleration in price declines in California and the nation’s biggest metro areas. While a slowing decline may not be the most comforting news for average buyers looking to plop down their savings on a fixer-upper, it has led several economists and other observers to make hopeful calls that a bottom is approaching.

DataQuick President John Walsh doesn’t expect a sharp turnaround in the housing market soon, given the recent weak numbers. Although March’s sales statistics improved, they remain well below the historical average for the month dating to 1988.

“The results from the first big sales month of 2012 suggest the market is stuck in low gear,” Walsh said. “This remains a very gradual — not to mention fragile — recovery.”

Sales increased 2.8% year over year to 19,953 homes in the six-county region, DataQuick reported. Sales improved the most in Orange, Ventura and San Diego counties.

As is normal with the start of the spring shopping season, home sales from February to March jumped, this time 28.1%. Historically, sales have surged 37% between those two months, DataQuick said.

Sales have shown improvement recently, increasing for the last three months and for seven of the last eight months. Foreclosed homes and short sales — in which a home is sold for less than the outstanding debt on the property — accounted for about half of all sales last month.

Whether the housing market will turn around this year remains a key question among economists and policymakers. Economists see several factors working in favor of a real estate turnaround. Rents are quickly rising as prices are falling, making homeownership potentially more attractive to tenants who have steady work, can afford a down payment and have retained good credit.

In addition, while prices have trended down, they aren’t in the same free-fall that emerged after the subprime mortgage crisis and credit crunch of 2007, experts have said. The drop in prices is largely due to foreclosures, which continue to ravage certain hard-hit neighborhoods.

Other broad indicators that support a housing recovery include a growing number of households, low interest rates and a tighter supply of homes on the market. The California Assn. of Realtors reported Monday that the state’s housing inventory in March shrank to just over four months’ worth. Economists generally consider a six-month supply of homes for sale a healthy market.

“Inventory is low, and there is just a lot of stuff that is overpriced,” said Syd Leibovitch, president of Rodeo Realty. “But the stuff that is priced right is selling for much more than it would in October and November.”

Activity by speculators continued at a strong clip last month, boosting the low end of the market. Investor activity nearly hit a record for the month and cash purchases were double their historical average, DataQuick said. Absentee buyers bought 27.9% of all homes last month, while cash buyers accounted for 31.7% of homes sold.

But as long as the share of investors in the real estate market remains high, prices are likely to remain depressed, as many of these cash-rich bargain-hunters buy homes at a discount. Housing also remains stymied by persistent unemployment and the threat of more foreclosures. The difficulties buyers are having securing mortgages is also slowing down the market, real estate agents have said, and the large share of homes in the state that are underwater is keeping prospective sellers from listing their homes.

Richard Green, director of USC’s Lusk Center for Real Estate, said he is most concerned about the weak job market.

The high number of investors buying discounted homes is probably masking a recovery in values for properties purchased by people who buy homes to live in them, said Richard Green, director of USC’s Lusk Center for Real Estate. The real concern is the job weak job market, he said.

“Things are probably a little better than they appear,” Green said. “The only downside is the job numbers for January and February. If it weren’t for that, I think we would be on a verge of a turnaround.”

It’s safe to sell your home again

By Lisa Gibbs @Money April 19, 2012

By standing firm and rejecting low-ball bids, Deanna White sold her Denver-area home for close to list price - a sign the market is healing.By standing firm and rejecting low-ball bids, Deanna White sold her Denver-area home for close to list price – a sign the market is healing.

(Money Magazine) — Given everything they knew about the lackluster housing market, Meghann and Cort Battles didn’t expect much when they listed their four-bedroom home in Centennial, a Denver suburb, for sale in January. So they were taken aback by the onslaught of interest.

Meghann, at home on maternity leave with their two sons, juggled 32 showings in the first month. “It’s so exhausting trying to find somewhere to go for an hour two or three times a day,” she says. The Battles even installed a special front-door handle to text them when buyers enter and exit so that they can return as soon as possible. “It’s just crazy,” she says.

Wait, isn’t the real estate market still supposed to stink after five straight years of falling prices?

Turns out that while analysts debate when the market will hit bottom, for a surprising number of cities the turnaround has already begun. In December, prices rose in 109 of the 384 metro areas tracked by the data firm CoreLogic. Scrub out foreclosures, and that figure climbs to 169.

If you think that recovery means a return to the boom’s double-digit price increases, forget about it. “The market won’t suddenly snap back,” warns CoreLogic economist Sam Khater, who has studied past housing busts.

And for harder-hit areas such as central Florida and the Rustbelt, improving may simply mean things are less bad than they were two years ago.

No matter where you live, though — or where you want to live next — the strategies you employ to sell your home must change to reflect the realities of what’s now a healing market.

To see how that change might play out, MONEY visited Denver, ranked by CoreLogic as the most improved of the nation’s 100 largest markets.

Prices in the Mile High City and its suburbs, which didn’t experience the extreme booms or busts of Phoenix or Las Vegas, rose in December. Foreclosures are ebbing. And homes are selling about 19% faster than they were a year ago.

Our tour of this recovering market reveals that the rebound is likely to creep rather than surge ahead. Yet if you know how to price and market your home properly — which this story will lay out — you can finally list your home with confidence that it can sell reasonably quickly and close to your asking price.

Many economists predict that 2012 will be the last year overall housing prices decline, as the final wave of foreclosures from the slump hits the market. After that, prices should inch up: 2% in 2013, 3% in 2014, according to a consensus of analysts tallied by Moody’s Economy.com.

Why? Against a backdrop of low mortgage rates, employment has improved slightly, and home prices have fallen long and hard enough that buyers are beginning to realize that they won’t necessarily lose their shirts by purchasing real estate. To see if your neighborhood is on the verge of a rebound, you have to look for the signs.

For instance, is local employment on the upswing?

That’s a critical factor for a region to get itself on the path to recovery. The improving jobs picture has led to shrinking housing stock across the country, as enough investors and bargain hunters have come on the scene to unclog the glut of foreclosures that’s been blocking a recovery.

Also, “builders are not putting up very many new homes,” says Celia Chen, who follows housing for Economy.com.

In Denver the improved job market has led not only to falling inventory but also a boost in buying activity and an uptick in prices. During the lean years Denver, like many other regions, was hit by both falling prices and rising foreclosures, though the suburbs far from the city center — where construction of new homes exploded — bore a disproportionate amount of pain.

Today, however, distressed properties make up around 30% of the Denver metro market compared with 45% at the trough, says local real estate analyst Gary Bauer. And the number of homes on the market has fallen to lows not seen since 2000.

Understand the buyer’s psychology.

Sellers aren’t the only ones who’ve been affected by the bust. For years buyers were scared to death of overpaying for a home. They’re less so now, but they’ve grown accustomed to thinking that they’ll score deals, so they tend to act slowly, and typically start bidding around 10% to 15% below list price.

Denver real estate agent Ron Buss says he sees this all the time with clients such as Aaron Blankenship, who lost 10% when he sold his home in Rochester, N.Y., last year to move to Denver for a new job with Molson Coors.

Blankenship, 37, is biding his time renting as he looks for a new home. “I’m much more risk-conscious,” he says. “It’s a challenge figuring out how much we really want to spend and how much we really want to be tied to our home.”

The cautiousness is not just in people’s heads. Lenders are still stingy about approving mortgages, and buyers must be sure that whatever price they offer will pass muster with the appraiser and the bank. “It’s been a little better in the last few quarters, but credit will take five years to sort itself out,” says Economy.com’s Chen.

Still, a growing number of buyers realize that if they wait too long in this market, they may miss out. Charles Roberts, co-owner of a 400-agent brokerage in Denver, points out that his group oversaw 155 closings in February — the highest number in eight years.

You can hold firm on price if you’re patient. The days of having to deal with low-ball offers are coming to an end. Ask Deanna White. The divorced mother of two says she didn’t need to sell her home in the Denver suburb of Highlands Ranch; she simply wanted to. White no longer required four bedrooms and three bathrooms, and she didn’t enjoy spending the time left after frequent business travel on yard work and household chores.

In July the house next door, smaller than White’s, sold for its list price of $337,000 in three weeks. In August a three-bedroom down the street went for $341,700 in five days. So in the fall White, 41, decided to go for it.

“I knew I had a good lot with a view of open range,” she says. “I said, ‘Here’s the deal. We’re going to do this, but I’m willing to ride it out because I don’t have to move.’ ”

Her home, listed at $365,000, attracted offers of around $330,000. White didn’t bite, though she adjusted her price to $359,000. After a holiday lull, activity exploded. “I had barely put up the Christmas decorations, and I couldn’t get into my house,” she recalls. White agreed to sell for $354,000. She moves in April into a newly built smaller home nearby.

The higher your price, the more patient you must be. Cheaper homes are affordable to more buyers and appealing to investors, so recoveries usually start there. Two years ago Denver properties above $210,000 were still falling. At the end of 2011 it was homes above $315,000. Also, jumbo mortgages that aren’t government-guaranteed — loans above $417,000 and up to $625,500 in high-cost areas like New York — not only charge higher rates, they come with tougher underwriting standards, further slowing things down.

Screen your buyers. Working only with buyers pre-approved for a sufficient mortgage has long been standard advice. But with more offers rolling in, a good agent will call loan officers for more information. There’s an incentive for borrowers to grant their loan officer permission to talk. “If I’m going to speak with a listing agent to advocate on my borrower’s behalf, I clear it with the borrower first,” says mortgage consultant Kym Poladsky. “Most borrowers who are competing want you to help get their offer accepted.”

Strike the right balance on pricing.

While you don’t have to placate low-ballers anymore, you can’t shoot for the moon either.

Adele Work and Jennifer Caldwell can attest to that. The couple have lived in their 1910 home in the desirable Washington Park neighborhood near downtown Denver for the past 12 years. They weren’t thinking of selling their place, until they happened upon a farm in northern Colorado last August while visiting their son in college.

They wound up buying that property and put their Washington Park “baby” on the market in October for $734,999 — even though their agent lobbied for a lower price. Sure enough, the buyers’ feedback started to come in: “Love the house, but slightly overpriced.” So they cut the price tag to $714,000. In February they dropped it again, to $699,000. “If we had priced our house lower to begin with we maybe would have sold it before the end of the year,” Caldwell says. Adds Work: “We’ve let our heart lead us a bit.”

Get it right the first time. Set a realistic price from the get-go so your house doesn’t look like a throwback to lousy price-slashing times. To do that, think like an appraiser. Analyze comparable sales for price-per-square-foot and see how long competing homes have been on the market.

Scouting active listings is also crucial, says appraiser Matthew George. “You have to know what you’re competing against,” he says. Arm yourself with a simplified evaluation of your home, called a summary or restricted-use appraisal, before listing ($150 to $200). To find professionals in your area, go to appraisalinstitute.org.

If you think you erred in pricing, act quickly and decisively. Are you getting lots of showings but still no offers after 30 days on the market? Cut the price by at least $10,000, says Justin Knoll, chairman of the Denver Realtors organization. At that point, you can hold firm on price and try to negotiate offers up.

Let your home’s value dictate the price. This advice may seem self-evident, but owners may have lost sight of it during the bust. On the one hand, some sellers clung to the false hope of a return to boom prices, so they set prices unrealistically high. Others may have gone too far the other way — by setting the price on their higher-end home below jumbo loan levels simply to draw more interest. In an improving market, that type of thinking isn’t really necessary.

Understand that you’re no long competing with gutted foreclosures.

Buyers are tired of looking at worn-down, neglected, distressed properties and often don’t have much extra money to do a lot of fixing up. “Clients tell me all the time, ‘I’ll spend a little more for something that’s ready to move into,’ ” says Knoll. “Sellers need to take advantage of that.”

Take care of structural and cosmetic necessities — but not much more. In lean times, forking over $50,000 on a new kitchen may have seemed like a necessary move to stand out. That’s probably the wrong thing to do now, says George, the appraiser. Instead, stick with basics like paint and flooring. And fix things that will come up in inspection. For instance, Kathy and Bruce Frank, of Golden, Colo., recently spent $1,600 to repair a sunken driveway before they put their house on the market.

In their 28 years there, the Franks — she’s a retired elementary school principal; he works at the University of Colorado — have done a little of this and a lot of that. “Finished the basement, popped the top on the garage and added a master suite, new hardwood floors, moved the laundry room to the top floor, new roof,” she says.

When the empty nesters listed their home, they focused on small stuff, like decluttering and packing up their personal stuff. They also brought in a stager to set the kitchen and dining room tables. The Franks’ agent, Buss, says the house is shipshape but admits it reflects the longtime owners’ tastes. “Blue,” he says. “The house is very blue.”

Respond quickly to feedback. If an issue arises over and over in buyers’ reactions, it needs to be addressed immediately. Buss, for instance, planned on giving the Franks 10 days or 10 showings. If buyers complained about the blue, he was going to have them paint. It turned out not to be necessary. Just three days after listing, the Franks had a full-price offer: $375,000. They’re under contract.

Things aren’t moving quite as fast back in Centennial, where Meghann Battles sits in her car, e-mailing on her iPad and playing the waiting game. Meghann is waiting for lots of things — for her 32nd showing to end, for would-be buyers to realize how few homes are for sale in the neighborhood, and for families hoping to move in the summer to start searching. As husband Cort reminds her, though, “It takes only one showing for it not to be a waste of time.”

House sellers in short supply

By JONATHAN LANSNER
THE ORANGE COUNTY REGISTER April 19th 2012

The housing question of 2012: “Where’d all the sellers go?”

The time to sell an Orange County house — by one measure — quickened three days in two weeks in mid-April and sped up 52 days vs. a year ago. And a sharp drop in supply can get much of the credit, says the latest Orange County home inventory report — data as of April 13 — from Steve Thomas and ReportsOnHousing.com.

Article Tab: The time to sell an Orange County house — by one measure — quickened three days in two weeks in mid-April and sped up 52 days vs. a year ago. And a sharp drop in supply can get much of the credit, says one recent  Orange County home inventory report
The time to sell an Orange County house — by one measure — quickened three days in two weeks in mid-April and sped up 52 days vs. a year ago. And a sharp drop in supply can get much of the credit, says one recent Orange County home inventory report

Thomas writes that “Unbelievably, the active listing inventory shed an additional 261 homes in the past two weeks, totaling 6,354, levels not seen since June 2005. If you recall, both 2004 and 2005 were nuts with very little inventory and scorching demand. Ask any real estate professional that experienced that market how the activity today compares and they will quickly state that it is not much different. Lower prices and plenty of distressed properties are the big differences. To date in 2012, the inventory has dropped by 1,760 homes, a 22 percent drop. The unabated drop actually began back in July 2011. Compared to this time last year, there are 42 percent fewer homes on the market. There are 31 percent fewer than 2010. In some ranges, the year over year differences is stunning. There are 51 percent fewer homes on the market priced below $500,000. Even the upper ranges are experiencing tighter inventory with 20 percent fewer homes on the market for all homes priced above $1 million. The low levels look like they are here to stay.”

Thomas’ signature housing measurement is his “market time” benchmark. It tracks how many months it theoretically takes to sell the entire inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of April 13 — we see …

•Market time of 1.63 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 1.72 months two weeks ago vs. 3.36 months a year ago vs. 2.45 months two years ago.

•It’s broad-based: Of the eight Orange County pricing slices Thomas tracks, six had faster market time vs. 2 weeks ago; and 7 improved over a year ago.

•The cheaper, the faster: Orange County homes listed for under a million bucks have a market time of 1.34 months vs. 6.04 months for homes listed for more than $1 million. So, basically, it is 4.5 times harder to sell a million-dollar-plus residence!

•If you can afford it … just so you know, the million-dollar market represents 24 percent of all homes listed and 6 percent of all homes that entered into escrow in the past 30 days.

Another part of the current housing puzzle is distressed properties. Or, in 2012, “Where’s the rush of foreclosures that were purported to come swamp the market?”

Thomas shows that the distressed-home inventory has dropped 49 percent so far this year. In October 2011, 3,563 distressed properties were on the market. Now, 1,602!

Thomas writes: “There are 328 foreclosures in all of Orange County, a drop of 64 in the past two weeks. The inventory started the year with 620. The foreclosure inventory has not been this low since October 2009. The expected market time is 0.7 months, almost untouchable for a buyer unless they come to compete. Short sales have become almost as hot as foreclosures. After shedding 164 homes in the past two weeks, the short sale inventory now totals 1,274, levels not seen since the distressed inventory began to rise in 2007. The expected market time for short sales is 0.9 months, a very hot sellers market. The short sale process is improving, but only slightly, almost undetectable to the untrained eye. They still take a long time to put together and the more complex the short sale (multiple lenders, delinquent HOA dues, unpaid property taxes, liens against the title), the longer it takes to put together. Distressed properties now represent 25 percent of the overall active inventory versus 35 percent one year ago.”

What’s for sale, in a distressing way?

•1,602 distressed Orange County properties were listed for sale — 25 percent of the 6,354 listed overall. It was 35 percent a year ago!

•1,883 new escrows were opened to buy distressed Orange County properties in the past 30 days. That is 53 percent of the 3,553 new pending sales countywide.

•Thomas calculated “market time” — cross of supply and new escrows showing how long, theoretically, it would take to sell inventory. Using that “market time” math, there’s 0.85 months worth of distressed properties on the market vs. 2.71 months worth of non-distressed homes. So, distressed homes currently sell 3.2 times faster than non-distressed homes.

•Pricey? No, as just 67 of the listed distressed homes were price above $1 million — 4 percent of all distressed listings. Note: 1,195 of the listed distressed homes were priced $500,000 or less — 75 percent of all distressed listings.

Thomas offers this advice for all spring shoppers: “The lower the inventory, the stronger the pressure on purchasing and the harder it is to be a buyer in today’s market.”

And for those with eyes on distressed properties: “Good deals will be much harder to come by. That’s not to say that a lender won’t get it wrong and price a home incorrectly. I have seen it in my own backyard. Instead, it means that when demand drops anywhere below 1.5 months, the seller, and banks, are in the driver’s seat and NOT buyers!”

New rules will speed up short sales

By Les Christie @CNNMoney April 19, 2012

NEW YORK (CNNMoney) — The Federal Housing Finance Agency laid out new rules aimed at speeding up the short sale process, a move that could keep many homes from falling into foreclosure.

In a short sale, the bank that holds the mortgage must agree to accept a price for the home that is less than what is owed. Even though short sales are considered a better alternative to foreclosure, banks often take so long to review and approve short sales that the deal falls apart and homes get repossessed.

“Delays in approving short sale requests remain a significant challenge for realtors and consumers and often results in canceled contracts and the property going into foreclosure,” said Moe Veissi, president of the National Association of Realtors.

In California, which accounts for a disproportionate number of the nation’s short sales, 60% of short sale offers failed to result in a closed sale last year, according to a California Association of Realtors member survey

The organization attributed much of the closing problems to extended lender response times. Some agents said that lenders even foreclosed on the homes before a short sale could close.

To help avoid the trend from continuing, the Federal Housing Finance Agency, which oversees Fannie Mae (FNMAFortune 500) and Freddie Mac (FRE), laid out rules that will require lenders to review and respond to short sale requests within 30 days and make a final decision within 60 days. The lender is also required to provide weekly status updates to the borrower if the offer is still under review after 30 days.

The new guidelines, which go into effect on June 1, can prove to be beneficial for all of the parties involved.

For lenders, it could mean saving a distressed property from falling into foreclosure, saving them tens of thousands of dollars in lost property value and costs.

The average foreclosure during the last three months of 2012 sold for $149,686, while short sales averaged $184,221, according to RealtyTrac. And foreclosures also pile up higher expenses with lenders paying for property taxes, heating and maintenance costs.

Home sellers, too, would be better off because they often will take just a one-time hit to their credit score for a short sale rather than the multiple delinquencies associated with a foreclosure.

And buyers get homes in better condition, typically because the sellers have been living there and keeping the homes in good condition.

Don’t fear falling home prices

THE ORANGE COUNTY REGISTER

JEBB HARRIS, April 13th 2012

Sellers accepting losses on their homes isn’t necessarily all bad. If nothing else, it shows that owners – and bankers, when the deal is a short sale – are willing to accept pricing’s realties and move on.

Roughly 2-in-5 Orange County homes are selling at a loss, according to Zillow. That should be no surprise as by this online real estate tracker’s math local home values have fallen at a 7.4 percent-a-year pace in the past five years.

Article Tab: Roughly 2-in-5 Orange County homes are selling at a loss, according to Zillow. That should be no surprise as by this online real estate tracker’s math local home values have fallen at a 7.4 percent-a-year pace in the past five years.
Roughly 2-in-5 Orange County homes are selling at a loss, according to Zillow. That should be no surprise as by this online real estate tracker’s math local home values have fallen at a 7.4 percent-a-year pace in the past five years.

For February, Zillow’s database of values for all homes shows its Orange County Zillow Home Value Index with a median home value at $463,400 — that’s down 7.0 percent in a year. Median value per square foot? $266 — that’s down 5.7 percent in a year. And 72.3 percent of the homes in the market had declining values — that’s off 1.0 percent in a year.

As for sales data tracked by Zillow, $405,800 was the median sales price — that’s down 5.8 percent in a year. Of those deals, 37.5 percent of the homes sold were done so at a loss to the owner — that’s up 1.7 percent in a year. At least, sellers – as a median — got 97.7 percent of list price— that’s down just 0.1 percent in a year.

As for what sellers are listing their homes at, Zillow found a $450,000 median ask price — that’s up 0.2 percent in a year. But there’s a reality check — 28 percent of the homes listing had price cuts — that’s down 2.4 percent in a year. And 5.3 percent was the median price cut on listed homes — that’s down 0.5 percent in a year.

Price cutting is probably one factor why spring home sales run ahead of last year’s pace.

For the 22 business days ending March 22, DataQuick found total Orange County sales of 2,660 residences closed in the latest period — that is up 5.8 percent vs. a year ago. Condos lead the way with a 12.5 percent faster selling pace vs. 2011.

It was a broad sales gain as home sales are on the rise in 48 of 83 Orange County ZIPs. Three Orange County ZIPs saw sales gains of 100 percent or more in the period – Newport Beach 92661, up 150; Anaheim 92802, up 144 percent; and Santa Ana 92705, up 115 percent.

Of course, discounting helps: DataQuick’s median selling price for all residences in this most current period was $400,000 — that is off 5.9 percent vs. a year ago. Just 29 of O.C.’s 83 ZIP codes had gains in their respective median selling price. Taking sales volume in consideration, home-sale pricing is up in ZIPs representing 28 percent of the Orange County market.

When we looked at how DataQuick’s data trends hit various corners of Orange County, we saw that all four regions had year-over-year sales gains.

For the 22 business days ending March 22, our region-by-region analysis of local real estate trends found Orange County home sales slicing up by geography this way …

•South Inland: These ZIPs — median selling price $457,000 — had 794 sales, up 10.3 percent from a year ago. This was largest year-to-year gain among the four regions. In these 19 ZIPs, median price change was down 14.3 percent in a year. South Inland accounted for 30 percent of recent home sales vs. 30 percent a year ago.

•North Inland: 623 homes sold in these Orange County ZIP codes in this most recent period, up 9.5 percent from a year ago. Median selling price? $401,750 in these 22 ZIPs. This most recent median price change was down 7.8 percent in a year. North Inland accounted for 27 percent of recent home sales vs. 28 percent a year ago.

•Beach Towns: 488 homes sold in these ZIP codes in the most recent period, up 6.3 percent from a year ago. Median selling price? $555,000 in these 17 ZIPs. Median price change was down 1.3 percent in a year. Beach Towns accounted for 19 percent of recent home sales vs. 19 percent a year ago.

•Mid-County: These ZIPs — median selling price $336,750 — had 716 sales, up 3.9 percent from a year ago. This was the smallest year-to-year drop among the four regions. In these 25 ZIPs, the median price change was down 1.3 percent in a year. Mid-County accounted for 24 percent of recent home sales vs. 23 percent a year ago.

FYI: We’ll bet that discounting helps! Did you notice the pricing dips in all four regions?

Supply of distressed home listings cut in half

April 16th, 2012, 10:00 am ·  posted by 

OC Register

Where’s the rush of foreclosures that were purported to come swamp the market?

Steve Thomas of ReportsOnHousing.com publishes every two weeks a report on the supply of local homes for sale and the share of that inventory that’s distressed properties — foreclosures and short sales. His latest report — as of April 13 — says …

The distressed inventory has dropped 49% so far this year. Similar to the overall inventory, the distressed inventory has dropped unabated so far this year. The consistent drop dates back to October 2011 when there were 3,563 distressed properties on the market. Today there are 1,602, a 1,961 home drop. There are 328 foreclosures in all of Orange County, a drop of 64 in the past two weeks. The inventory started the year with 620. The foreclosure inventory has not been this low since October 2009. The expected market time is .7 months, almost untouchable for a buyer unless they come to compete. Short sales have become almost as hot as foreclosures. After shedding 164 homes in the past two weeks, the short sale inventory now totals 1,274, levels not seen since the distressed inventory began to rise in 2007. The expected market time for short sales is .9 months, a very hot sellers market. The short sale process is improving, but only slightly, almost undetectable to the untrained eye. They still take a long time to put together and the more complex the short sale (multiple lenders, delinquent HOA dues, unpaid property taxes, liens against the title), the longer it takes to put together. Distressed properties now represent 25% of the overall active inventory versus 35% one year ago. With demand for distressed properties so strong, good deals will be much harder to come by. That’s not to say that a lender won’t get it wrong and price a home incorrectly. I have seen it in my own backyard. Instead, it means that when demand drops anywhere below 1.5 months, the seller, and banks, are in the driver’s seat and NOT buyers.!

Some of the details …

  • 1,602 distressed Orange County properties were listed for sale — 25% of the 6,354 listed overall.
  • 1,883 new escrows were opened to buy distressed Orange County properties in the past 30 days. That is 53% of the 3,553 new pending sales countywide.
  • Thomas calculated “market time” — cross of supply and new escrows showing how long, theoretically, it would take to sell inventory. Using that “market time” math, there’s 0.85 months worth of distressed properties on the market vs. 2.71 months worth of non-distressed homes. So, distressed homes currently sell 3.2 times faster than non-distressed homes.
  • 29% of the distressed listings were foreclosures being sold by banks; 71% were short sales.
  • 47% of the distressed listings were attached homes; 53% were detached homes.
  • 31% of distressed Orange County listings were in ocean-close communities.
  • Pricey? 67 of the listed distressed homes were price above $1 million — 4% of all distressed listings.
  • Cheap? 1,195 of the listed distressed homes were priced $500,000 or less — 75% of all distressed listings.
  • Chart summarizes trends in Thomas’ report, distressed counts and share of all listings (plus, pending sales and market time — demand divided by inventory.)

Highlights …

All O.C. Distressed All Pct. Distress
Total 1,602 6,354 25.2%
By type of distress Pendings Listed Time (months)
O.C. foreclosures 469 392 0.84
O.C. short sales 1,414 1,438 1.02
By home type Distressed All Pct. Distress
Attached homes 746 2,286 32.6%
Detached 839 4,040 20.8%
By price slice Distressed All Pct. Distress
O.C. $0-$250k 431 1,014 42.5%
O.C. $250-$500k 764 1,892 40.4%
O.C. $500k-$750k 254 1,284 19.8%
O.C. $750k-$1m 78 705 11.1%
O.C. $1m-$1.5m 31 505 6.1%
O.C. $1.5m-$2m 20 320 6.3%
O.C. $2m-4m 14 421 3.3%
O.C. $4m+ 2 252 0.8%
By city/High share Distressed All Pct. Distress
Portola Hills 6 9 66.7%
Stanton 19 29 65.5%
Anaheim 162 298 54.4%
By city/Low share Distressed All Pct. Distress
Seal Beach 234 4 1.7%
Corona Del Mar 116 3 2.6%
Laguna Beach 247 18 7.3%