Month: October 2012

Foreclosures fall in 62% of U.S. cities

By Les Christie @CNNMoney October 25, 2012

Recent data suggests the housing market is beginning to rebound.

NEW YORK (CNNMoney) — Foreclosures fell in nearly two-thirds of the nation’s largest metro areas during the third quarter, according to RealtyTrac Thursday.

With 62% of the nation’s 212 largest markets seeing foreclosure activity shrink during the latest quarter, the ongoing decline is yet another sign that the housing market is starting to stabilize.

During September, foreclosure activity in 58% of the major metro markets had even dropped below September 2007 levels.

The numbers indicate that “most of the nation’s housing markets are past the worst of the foreclosure problem,” Daren Blomquist, RealtyTrac’s vice president said in the report.

Major cities like San Francisco, DetroitLos AngelesPhoenix and San Diego saw foreclosures fall by double-digit percentages of 26% or more.

Stockton, Calif., which saw a 21% decline in foreclosures, still managed to claim the nation’s highest foreclosure rate, however. “That foreclosures there are still the highest in the country speaks to how severe the problem was,” said Blomquist.

Other California cities in the top 10, RiversideVallejoModesto,MercedBakersfield and Sacramento, all posted year-over-year declines of between 22% and 34%.

Yet, there are still some trouble spots, particularly in Florida.

In Miami, which had the 10th highest foreclosure rate, filings rose 11%. InJacksonville, foreclosures were up 32%, Palm Bay saw a 64% increase,Tampa was up 43% and Orlando notched a 15% jump.

Blomquist attributed Florida’s problems to the after effects of the robo-signing scandal. Florida is a “judicial state,” where foreclosures get processed through the courts. Lenders hesitated to bring foreclosure cases before a judge until they were confident their paperwork would stand up to the stepped-up scrutiny that followed the scandal. But now that new rules have been put in place through the $25 billion mortgage settlement, they are playing catch-up.

Of the metro areas with the 20 highest foreclosure rates, all are still in California, Arizona, Nevada and Florida, with two notable exceptions.Chicago saw a 34% jump from a year-ago, and had the ninth highest foreclosure rate. Atlanta had the 15th highest rate. The good news there: Foreclosures fell 20% year-over-year.

In Las Vegas, filings fell dramatically — 71% — because of state legislation passed last year that requires lenders to file affidavits vouching for their paperwork and their foreclosure action against a borrower, Blomquist said.

Many lenders now bypass the foreclosure process entirely in Nevada, working with troubled borrowers to arrange short sales even before filing notices of default. That’s not all good news, however. “[For cities like Las Vegas,] it’s a shift in the way the distress is handled rather than the distress evaporating,” said Blomquist.

Analyst: Rising rent a boost for homebuying

October 25th, 2012,  by 

OC Register
Veteran Southern California real estate analyst G.U. Krueger adds his commentary on the housing market to this blog in a spot we call “Thursday Morning Quarterback.” Here’s his latest installment. …

RealFacts’ third-quarter reports shows rents are rising throughout the nation. And not just in the major job centers like San Jose, San Francisco, and Denver — but also in smaller attractive metros like Boulder, Colo., Durham, N.C., and Jacksonville Fla.Apartment owners are enjoying the economic recovery — and their bid to cash in, raising rents, may be a plus for the ownership segment of housing.

But what about California?

According to RealFacts, Orange County rents for all asset classes averaged $1,628, which made it the fifth most expensive apartment market in California following San Jose ($1,980), San Francisco ($1,858), Los Angeles ($1,757), and Santa Cruz ($1,664). Rents rose annually by 10.5% in San Jose, 9.5% in San Francisco, and 4.7% in Orange County.

Apartment rents becoming expensive is creating a significant gap between the rents consumers are expecting and reality.

According to a recent survey by, people searching for apartments have unrealistically low rent expectations, particularly in many of the “hip” cities that young adults seem to like. In Brooklyn, for example, consumer expectations are 50% below actual rents; in Los Angeles 36%; and in San Francisco 35%.

Sounds like especially young adults might be experiencing sticker shock. But what does it all mean?

It is a good economic sign that the apartment market is still going strong. That may benefit the housing market in the years ahead.

The financial competitiveness of apartment living has been sheltered until recently by low price-gain expectations for ownership housing. But this has changed recently, which is increasing the attractiveness of owning a home for many consumers.

Finally, especially young adults — those echo boomers in search of an active urban lifestyle -– may be somewhat surprised by expensive and rising rents as they enter the market. As they search for a place to live, they are likely to develop more realistic rent expectations — and turn a more favorable eye to homeownership.

Chart below compares third-quarter RealFacts data for major California markets — and recent job growth:

Metros Q3 asking rent Annual rent growth Q3 vacancy rate Annual job growth 9/12
San Jose $1,980 10.5% 4.7% 2.5%
San Francisco-Oakland $1,858 9.5% 3.9% 3.1%
Los Angeles $1,757 4.7% 4.8% 1.6%
Santa Cruz $1,664 3.0% 4.0% 2.9%
Orange County $1,628 4.7% 5.4% 1.7%
Ventura County $1,456 3.7% 4.2% 0.5%
San Diego County $1,456 3.8% 4.9% 2.1%
Inland Empire $1,107 1.7% 6.3% 1.4%
Sacramento $963 0.9% 5.9% 2.0%
Bakersfield $913 7.4% 2.7% 1.6%

Report: Housing ‘spooked’ by low supply

October 29th, 2012,  by 

OC Register

The latest Orange County home inventory report from Steve Thomas and — data as of October 25 includes these thoughts …

With homes appreciating again, inventories much lower, and demand much higher, there is nothing to worry about, right? Wrong. The number one spooky feature of today’s market is the absurdly low inventory. Everybody has heard that inventories are low, but the depth of those lows is only understood by active buyers and sellers today. There are only 4,043 homes on the market after shedding an additional 4% in the past two weeks. The most recent prior record low inventory was established in March 2005, with 4,912 homes. That is 21% more than today!

Thomas’ signature housing measurement is his “market time” benchmark. It tracks how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of October 25 — we see …

  • Market time of 1.29 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 1.29 months two weeks ago vs. 3.46 months a year ago vs. 4.28 months two years ago.
  • Of the 8 Orange County pricing slices Thomas tracks, 4 had faster market time vs. 2 weeks ago; and 8 improved over a year ago.
  • Orange County homes listed for under a million bucks have a market time of 0.99 months vs. 4.41 months for homes listed for more than $1 million.
  • So, basically, it is 4.5 times harder to sell a million-dollar-plus residence!
  • And just so you know, the million-dollar market represents 31% of all homes listed and 9% of all homes that entered into escrow in the past 30 days.

Here’s the recent data for listings; deals pending; market time in months; latest vs. 2 weeks earllier, a year ago and 2 years ago. Color coding for market time is red (slowed by 5%-plus in year); green (sped up by 5%-plus in year); and yellow (in between!) Note: k=thousand; m=million …

Slice Listings Deals Market Time (months) 2 week ago 1 yr. ago 2 yr. ago
$0-$250k 470 532 0.88 0.84 2.71 3.06
$250k-$500k 970 1,394 0.70 0.72 2.49 3.39
$500k-$750k 846 690 1.23 1.18 4.12 4.49
$750k-$1m 553 266 2.08 2.16 5.89 6.11
$1m-$1.5m 397 153 2.59 3.01 6.31 6.82
$1.5m-$2m 261 71 3.68 4.66 9.18 16.67
$2m-4m 352 45 7.82 6.78 17.96 16.47
$4m+ 233 13 17.92 12.05 47.33 81.75
All O.C. 4,043 3,145 1.29 1.29 3.46 4.28


Lansner: Housing’s back from the brink

Business Columnist

Published: Oct. 19, 2012 Updated: Oct. 22, 2012

Four years ago, the local housing market was in the grips of a death spiral.

A financial crisis — in good part tied to risky “subprime” mortgages pioneered in Orange County — was in full bloom.

Article Tab: image1-Lansner: Housing's back from the brink

Local home sales had peaked in 2005. Prices topped out in 2007, the same year homebuilding vanished. Those housing troubles, compounded by dumb lending practices and broader economic weakness, pushed local foreclosures to record highs in the summer of 2008.

Then came the spike to the housing heart. Global economic fears in late 2008 all but shut down the mortgage market for a time. When lending resumed, it was cash for only those with the very best credit.

So, when you ask the grand presidential reelection question — “Are you better off four years later?” — the real estate retort must note how bleak it was at the end of 2008.

To better ponder the difference in four years, we asked DataQuick to compared homebuying activity in this year’s third quarter to the same period in 2008.

You may say, with a political bent, is that fair? Didn’t President Obama take office in early 2009?

Well, real estate is cyclical. To compare a first quarter — typically the slowest slice of a year — with a busy summer quarter would be skewed. Plus, my choice of comparisons has more than political meaning.

If we forget how bad things were in 2008, no matter our politics, we may end up with bad analysis or off-point future tactics or policies.

Bottom line in this math: Orange County home buying rose 11 percent in four years — by no means a boom, but clearly progress. The median sales price only rose 1 percent since 2008, a hint that we’ve bottomed.

And most stunning: Those painful foreclosures are down 75 percent.


It’s been, by no means, a uniform four years of home buying in Orange County.

Comparing 2012’s third quarter results to 2008, we see a theme that’s been repeated in numerous slices of the economy in this recovery period: the upper crust faring better than the lower end of the economic spectrum.

When we sliced the market into four geographic regions, Orange County’s 17 beach-close ZIP codes had the best four-year sales performance: up 48.6 percent from 2008.

The beach remains the county’s priciest housing, with the median selling price at $627,500 this year — and that’s after a median price drop of 9.5 percent from 2008.

The seaside surge in buying parallels the uptick in high-end home buying. DataQuick stats show Orange County’s six million-dollar-plus ZIPs in the third quarter had collectively 572 purchases — 112 percent more than four years ago.

Buyers of such high-end home are enjoying the return of mortgage financing to this risky niche. Large-dollar mortgages — often dubbed “jumbos” — all-but vanished during the 2008 financial crisis and ensuing years.

That pricier buying boomlet is a sharp contrast to what’s gone on in the county’s midsection, home to the most affordable residences.

Sales counts in these 25 mid-county ZIP codes were down 13 percent in four years. Pricing was weak, with median selling price at $356,250 following a median price dip of 4.4 percent.

Several quirks are built into these trends that look like lower-end weakness.

Modest tax incentives in 2009 and 2010 were best suited to buyers of lower-prices homes. As a result, some folks may have moved up their purchasing plans, and cut into 2012’s low-end activity.

Also, analysts say there’s a huge shortage of lower-priced homes to buy, another factor depressing this niche.

Finally, a meager economic recovery — with unemployment stubbornly high — doesn’t give the typical shopper of more affordable housing, the first-time buyer, lots of confidence to jump into the market.


The housing market is by no means fully healed.

For example, there were 1,007 foreclosures in Orange County in the third quarter. That’s roughly equal to the total homes lost to the banks from the entire 2003-2005 period.

Or ponder the 9,101 homes that sold from July to September. That sales pace is 15 percent slower than average homebuying since 1988.

You can argue the causes of the latest boom and bust — or this local industry’s habitual leaning toward insane volatility. Or question the sanity of the numerous rescue tools deployed for housing since the 2008 crisis. Or ponder whether recent housing strength — by many measures — is sustainable.

But one thing is not debatable: Anything looks better than four years ago and today’s Orange County home market is a noteworthy upgrade.

Existing homes sales fell 1.7% in September, but trends still good

By Jim PuzzangheraOctober 19, 2012, LA Times

WASHINGTON — Sales of existing homes fell 1.7% in September after a big increase the previous month, but the trends in the housing market remain positive, the National Assn. of Realtors said Friday.

The drop from August, which was in line with analysts’ expectations, was caused by a tighter supply that is helping push up prices and encourage more construction, the group said.

Sales decreased to a seasonally adjusted annual rate of 4.75 million in September, down from a revised pace of 4.83 million in August. But the rate of sales last month was up 11% from a year earlier.

And the median sales price last month was up 11.3% from last September, marking the seventh-straight month of year-over-year increase, the Realtors group said. The last time there were that many consecutive months of year-over-year price increases was in late 2005 to early 2006, during the housing boom.

“Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” said Lawrence Yun, chief economist for the group. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.”

Tighter inventory, continued low mortgage rates, and rising prices all indicate a housing market rebound.

This week, the government reported that new home construction starts were up in August to their highest annual rate in four years.

And in California, one of the states hardest hit by the collapse of the housing market, the number of homeowners entering foreclosure fell in the three months ending in September to the lowest quarterly level since early 2007, according to a real estate firm DataQuick.

Reduced foreclosures also translate into a smaller inventory, which helps raise prices.

Distressed sales — either foreclosures or short sales — were up in September from the previous month, accounting for 24% of sales compared with 22% in August. However, a year earlier in September 2011 such transactions accounted for 30% of all sales.

The were 2.32 million existing homes for sale in September, down 3.3% from August.

“The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production,” Yun said.

Mortgage delinquencies spike in September, report says

By Paul Jackson

• October 22, 2012 •

While the nation’s foreclosure inventory continues to shrink, new delinquencies spiked sharply during September 2012, new data released Monday afternoon showed.

According to Lender Processing Services ($28.51 -0.56%), the total U.S. mortgage delinquency rate — loans 30+ days past due, but not in foreclosure — surged upward by 7.72 percent, reaching 7.4 percent in September versus the 6.87 percent reported one month earlier.

Despite the spike, September 2012 delinquency totals still remain below levels seen last year, LPS said.

While new delinquencies spiked in September, the volume of properties in foreclosure continues to shrink as banks and other financial instutions continue to work through a backlog of distressed real estate that remain well above historical levels of half of a percent or so, according to most industry experts.

LPS said that the nation’s foreclosure pre-sale inventory rate fell to 3.87 percent during September, down 4.05 percent from one month earlier and 7.37 percent less than one year ago.

Florida, Mississippi, New Jersey, Nevada, and Louisiana represented the states with the highest percentage of non-current loans, according to the data report; Lousiana replaced New York, which had been in the top five for most of this year.

Despite the drop in foreclosure inventory, the surge in new delinquencies has led to something not seen this year until now: an increase in the amount of distressed properties, defined as properties 30 or more days delinquent or in foreclosure.

According to LPS, there were 5.45 million properties in distress during August 2012; for September, thanks to increasing delinquencies, that number now equals 5.64 million.

Federal housing leaders seek faster return of private capital

By Kerri Ann Panchuk

• October 21, 2012 •


The leaders of the nation’s federal housing agencies want a faster, not slower, transition to a housing finance system supported by private capital.

That’s the message the heads of Fannie MaeFreddie Mac, theDepartment of Housing and Urban Development, the Federal Home Loan Bank of Chicago and Ginnie Mae communicated when speaking at the opening session of the Mortgage Bankers Association‘s 99th Annual Convention & Expo in Chicago.

In fact, Donald Layton, CEO of Freddie Mac, said the consensus from inside Freddie is that staffers would like to see the conservatorship of the government-sponsored enterprises no longer in effect four years from now.

Other members of the panel agreed, but challenges remain as theFederal Housing Finance Agency and the GSEs it regulates take a step-by-step approach in piecing together a securitization model that can eventually draw private capital back into the mortgage market.

Such a system requires checks and balances, transparency, streamlined contracts and a dose of patience since it will be a long journey from today — where government housing agencies are keeping the market afloat — and tomorrow where private capital is expected to drive a substantial portion of the mortgage finance system.

“While government should play a key role (in housing finance), the ultimate question is how much government is necessary,” said E.J. Burke, the MBA’s vice chairman.

“Earlier this year, the FHFA released its strategic plan for the future of Fannie Mae and Freddie Mac. The transition must not disrupt our fragile mortgage and mortgage securities markets,” Burke told the crowd.

Fannie Mae CEO Timothy Mayopoulos noted his agency is already a different firm today when compared to pre-crisis times.

“The people of Fannie Mae today are part of the solution, they are not part of the problem,” he asserted. “The company is no longer run for the profit of shareholders.”

Instead, decisions are made with the interest of taxpayers taking center stage, he said.

Despite hopes for private capital in the market, Mayopoulos said “more than four years after the onset of the financial crisis, we see little evidence of private capital to meet the market’s needs.”

Some of the factors holding private capital back include capacity concerns, repurchase risk, regulatory issues and a reluctance among lenders to extend credit, the Fannie Mae CEO said.

Still, the GSEs are working on a new mortgage securitization model, hoping it will provide the structure for private-label mortgage activity in the future.

Carol Galante, acting assistant secretary for housing and Federal Housing Administraion commissioner, said over the next year, her agency will be focused on providing continued access to credit, building the FHA insurance fund, overseeing its legacy business and deepening the agency’s risk management capabilities and analytics.