|
| |
|
Quality, Service & Speed
Real Estate Appraisals &
Appraisers for
California |
|
CALIFORNIA
HOUSING:
County
home
values
fall
Median
home
prices
fell
6.2
percent
in
Riverside
County
to
$196,000
in
December
compared
with
December
2008,
real
estate
information
service
MDA
DataQuick
said
Tuesday.
Riverside
and
San
Bernardino
counties
were
the
only
Southern
California
counties
to
see
declines
in
price.
Riverside
County
was
the
only
one
of
seven
counties
measured
to
see
a
decline
in
sales
volume
to
4,282
units,
a
3.4
percent
drop.
Most
of
the
activity
in
the
county
is
focused
on
homes
priced
in
the
lower
half
of
the
market,
said
David
Lynch,
chairman
of
the
Southwest
Riverside
County
Association
of
Realtors.
North County
Times By ERIC WOLFF - ewolff@nctimes.com
Bay area home
sales, price up a bit in
November
The Bay Area
real estate market showed
continued signs of stability
in November, according to a
real estate report released
on Thursday. Both the median
price and the number of
homes sold were higher than
a year ago - albeit a time
when the wrenching financial
crisis had paralyzed much
activity.
A total of 4,901 existing
homes changed hands in the
nine-county area in
November, up 15.5 percent
from a year ago. The median
price was $405,000, a 15.7
percent increase from last
November.
"Things are closer to normal
now, but it's easy to beat
the numbers" from November
2008, said Andrew LePage, an
analyst with MDA DataQuick,
the San Diego
research firm that released
the report. "That was a very
different market ... a grim
period where the high end
was comatose, and what sold
and sold fast was heavily
discounted foreclosures,
usually inland."
By contrast, this November's
sales showed a smaller
proportion of foreclosures
and more strength in
higher-cost areas, both of
which buoyed the median
price. A greater proportion
of high-cost sales raises
the median price.
Foreclosure resales
accounted for 32.5 percent
of existing-home sales in
November, compared with 46.8
percent a year ago. Sales in
the higher-cost counties of
Marin, San Francisco,
Santa Clara and San Mateo
accounted for 42.3 percent
of November's total, up from
35 percent a year ago.
The number of foreclosures
in the market has fallen as
many troubled borrowers are
in extended negotiations
seeking to reduce their
mortgage payments. But most
lenders have been slow to
offer permanent loan
modifications. Experts think
that the lengthy pipeline of
struggling homeowners
eventually could lead to a
fresh surge of foreclosures,
which would destabilize the
market.
Government stimulus -
including a homebuyer's tax
credit that expires April 30
and Federal Reserve action
to keep interest rates low -
continue to be potent
forces. Without the
government intervention, the
market could easily lose its
equilibrium, experts said.
Lured by bargain
foreclosures, real estate
investors have become a
larger presence than in the
past. Absentee buyers
account for 15.7 percent of
November's Bay Area sales,
and buyers paying all cash
purchased 22.4 percent of
the homes that sold. Banks
selling foreclosures prefer
all-cash buyers because
purchases close quickly and
easily.
"There's still some of that
gold-rush mentality among
investors," LePage said.
Competition among investors
may have helped fuel modest
price increases in areas
where inventory was tight,
he said.
Janelle and Eric Boyenga,
who are both real estate
agents with Intero Real
Estate in Los Gatos, are
among the investors who see
a market opportunity. Along
with a partner, the couple
bought a foreclosed home in
San Jose's Willow Glen
neighborhood for $525,000 in
late October. They plan to
spend three months and a
little over $150,000 fixing
up the four-bedroom home,
then hope to sell it for
about $900,000 in January.
Paying all cash and
accepting the house in as-is
condition helped them
compete with several other
offers, they said.
They chose Willow Glen
because it's a tight-knit
family neighborhood that is
relatively upscale for
San Jose; had some
foreclosures but not a
tremendous number; and has
homes at a range of prices.
They plan to rehab the 1950s
house to make it like new,
redesigning the floor plan
and landscaping.
"When people see a home that
(needs a lot of work), they
don't want to pay a lot of
money, but when it's perfect
... people are willing to
pay a premium," Janelle
said.
Tight inventory should help
spur demand for the house,
they said. Santa Clara
County's inventory is
the lowest they've seen
since 2005, with fewer than
2,000 homes for sale, less
than half the normal amount.
San
Francisco Chronicle
By Carolyn
Said
San Francisco
Home Prices Recovering
SAN FRANCISCO
(DQNews)11/19/09 --The San
Francisco area housing
market continued to ease
back toward normalcy last
month as fewer distressed
properties sold and
$500,000-plus sales
accounted for a greater
share of transactions than a
year ago.
The result:
The nine-county region
posted a modest
year-over-year gain in its
median sale price -- the
first in nearly two years, a
real estate information
service reported.
The median
price paid for all new and
resale houses and condos
that closed escrow rose to
$390,000, up 6.8% from
$365,000 in September and up
4% from $375,000 in October
2008. The last time the
median sale price rose on a
year-over-year basis was in
November 2007, when it
gained 1.5%, according to
MDA DataQuick. The San
Diego firm tracks real
estate trends nationally via
public property records.
Last month's
median was the highest since
it was $395,000 in July this
year, but it was 41.4% below
the $665,000 peak reached in
June and July of 2007.
"The regional
price statistics mainly
reflect the fading of the
foreclosures and the uptick
in high-end activity in
recent months," said John
Walsh, MDA DataQuick
president. "Down at the
neighborhood level,
different things are
happening depending on
location, but the big
picture is that prices in
many areas appear to be
bouncing along bottom.
Whether that bottom is
permanent is the subject of
endless debate right now."
In addition
to the Bay Area overall,
three counties - Santa
Clara, Marin and Sonoma
- saw their median sale
prices rise year-over-year
last month. The last time
that more than one county
posted an annual gain in the
median was November 2007.
Also last month, Alameda,
Santa Clara, San Francisco
and the nine-county region
overall posted single-digit
annual gains in their median
price paid for a specific
home-type: resale
single-family detached
houses.
A total of 7,933 new and
resale houses and condos
closed escrow in the
nine-county Bay Area
last month. That was up 0.7%
from 7,879 in September and
up 4.2% from 7,613 in
October 2008.
Last month's
sales were 10.2% below the
October sales average of
8,833 since 1988, when
DataQuick's stats begin.
October sales have ranged
from a low of 5,486 in 2007
to a high of 13,392 in 2003.
The average change in sales
between September and
October since 1988 is a gain
of 0.9%.
Sales in the
region's higher-cost
counties - Marin, San
Francisco, Santa Clara and
San Mateo - represented
42.2% of October sales, up
from 35.3% a year ago, when
more sales were concentrated
in the lower-cost inland
areas rife with deeply
discounted foreclosures.
Sales over $500,000 made up
36% of all sales last month,
up from 34.9% a year ago and
a low this year of 22.7% in
January.
October's
overall increase in sales
from September and a year
ago came even as fewer
foreclosed properties sold.
Foreclosure resales - homes
sold in October that had
been foreclosed on in the
prior 12 months - made up
31.9% of all resale
activity. That was down from
32.3% the prior month and
44.0% in October 2008. It
was the lowest since
foreclosure resales were
29.9% of all resales in June
2008.
Foreclosure
resales peaked at 52% of Bay
Area resales in February
this year.
Between January 2000 and
December 2007, foreclosure
resales averaged only about
1% of all Bay Area resales
each month. Since January
2008, the monthly average
for foreclosure resales is
about 37%.
The recent decline in
foreclosure resales follows
a generally downward trend
this year in the number of
homes being foreclosed on.
It's mainly because lenders
and loan servicers have
increasingly pursued short
sales and loan modifications
as an alternative to the
costly foreclosure process.
The declining inventory of
lower-cost foreclosures has
been key to stabilizing the
housing market, along with
the federal government's
efforts to boost housing
demand through lower
mortgage rates, tax
incentives and plentiful,
low-down-payment FHA
financing.
Home Sales
Edge Higher
Federally-insured FHA
loans, a popular choice
among first-time buyers,
made up 25.9% of all Bay
Area purchase loans last
month. That was up from
24.9% in September, 19% a
year ago and less than 1%
two years ago. Meanwhile,
the availability of
financing for pricier homes
continued to show mild signs
of improvement, but such
"jumbo" loans remained
relatively expensive and
difficult to obtain.
Mortgages
above $417,000 - formerly
the definition of a jumbo
loan - made up 30.1% of all
home purchase loans last
month. That was up from
29.6% in September and 25.9%
a year ago. More than 60% of
Bay Area purchase
loans were over $417,000
before the August 2007
credit crunch hit.
Another fuel
source for high-end sales -
adjustable-rate mortgages (ARMs)
- continues to be used far
less than what's been normal
historically, but has
trended higher lately. In
October, 8.1% of Bay Area
purchase loans were ARMs, up
from 7.9 in September and
7.4% a year earlier. ARMs
fell to a record low of 3.0%
in January this year. ARMs
had averaged 61% of the
region's purchase loans this
decade up until the August
2007 credit crunch.
San Diego-based MDA
DataQuick is a division of
MDA Lending Solutions, a
subsidiary of
Vancouver-based MacDonald
Dettwiler and Associates.
MDA DataQuick monitors real
estate activity nationwide
and provides information to
consumers, educational
institutions, public
agencies, lending
institutions, title
companies and industry
analysts. Because of late
data availability, sales
were estimated in Alameda
and San Mateo counties.
The typical
monthly mortgage payment
that Bay Area buyers
committed themselves to
paying was $1,665 last
month, up from $1,578 the
previous month, and down
from $1,837 a year ago.
Adjusted for inflation,
current payments are 36.7%
below typical payments in
the spring of 1989, the peak
of the prior real estate
cycle. They are 53.3% below
the current cycle's peak in
July 2007. Indicators of
market distress continue to
move in different
directions. Foreclosure
activity is off its recent
peak but remains high by
historical standards, with
mortgage default notices
flattening out or trending
lower in some areas but
edging higher in others.
Financing with multiple
mortgages is low, down
payment sizes are stable,
and non-owner occupied
buying is above-average in
some markets, MDA DataQuick
reported.
New data
shows continuing Southern
Californian Real Estate
recovery
News Posted On: 18 November
2009
A new report by the real
estate information service
MDA DataQuick (MDADQ) shows
home sales in
Southern California
rising. November sales
totalled 22,132 for
Los Angeles,
Riverside, San Diego,
Ventura, San Bernardino and
Orange counties,
up by 2.8 percent in October
from the previous month.
MDADQ also saw "more
signs of firming" in the
region's house prices, with
the median in this,
California's most populous
area, up 1.8 percent from
September to $280,000. Year
on year the median price
showed a drop of 6.7
percent, the smallest such
decline since September
2007.
"The [annualised] median
sale price fell by the
smallest amount in two
years, the result of a
shrinking inventory of homes
for sale and government and
industry efforts to stoke
demand and curtail
foreclosures," the report
stated.
House prices in
Southern California and
elsewhere in the US have
been driven by people
seeking to take advantage of
the federal tax credit for
first-time buyers, a benefit
the US administration has
said it will eventually
withdraw as prices firm.
Also record low interest
rates and bargain prices
have helped to post a 16th
consecutive month of
year-on-year gains in sales.
"The government is
playing a huge role in
stabilizing and, to some
extent, reinvigorating the
housing market," said John
Walsh, MDADQ president. "The
real question now is how
well can the market perform
next year as some of the
government stimulus
disappears."
It seems analysts are
split on how sustainable
this housing recovery will
prove to be.
"The more upbeat outlooks
suggest a strengthening
economy and job market will
help pick up the slack, and
that demand for lower-cost
foreclosures will remain
robust," said Walsh.
"The more negative
forecasts assume, among
other things, a much slower
economic recovery, more
foreclosures than the market
can readily digest, and more
turbulence in the credit
markets," he continued.
Observers have noted that
US house price stabilisation
may be temporary and
directly attributable to
government efforts that may
prove temporary. However you
have to ask – would an
administration prematurely
reverse policy decisions
that are having the desired
effect? Do turkeys vote for
Christmas?
Thanks to property-abroad.com
Tax credit, low
interest rates spur home
sales
Carolyn Said, San Francisco
Chronicle Staff Writer
(10-15) SAN FRANCISCO -- A
home-buyer tax credit and
low interest rates helped
spur a modest increase in
Bay Area home sales in
September, according to a
real estate report released
Thursday.
At the same time, the median
price edged up, with fewer
bargain-priced foreclosures
to drag it down and more
high-end home sales to buoy
it.
A total of 7,879 new and
resale houses and condos
changed hands in the
nine-county Bay Area last
month, up 8.4 percent from
September 2008, according to
MDA DataQuick, a San
Diego real estate
research firm. Existing-home
sales stood at 5,705, up 4.7
percent from last year.
The
median price paid for an
existing single-family
home was $380,000 last
month, down 5 percent from
$400,000 in September 2008
and a notch above $375,000
in August.
Although
home sales usually drop
after the summer, the new
and resale total was up 4.8
percent compared with
August. Real estate experts
said first-time buyers'
eagerness to take advantage
of an $8,000 tax credit due
to expire Nov. 30 fueled
some of the increase.
"That's
caused a last-minute
frenzied panic-buying mode
in people's minds," said
Doug Sager, a Realtor with
ZipRealty in the East Bay.
The real
estate industry would like
nothing more than to see the
tax credit continue. On
Thursday, the Senate floated
a proposal to expand the tax
credit to all buyers, not
just first-timers, and to
extend it until June 30.
While the
market shows some signs of
stability, another
foreclosure deluge could
easily swamp it, experts
said. Revisions to option
adjustable-rate mortgages
and growing delinquencies as
unemployment spreads could
unleash new rounds of bank
repossessions.
"What
will be key is how many more
foreclosures we see and the
timing of when they hit the
market," said Andrew LePage,
a DataQuick analyst. "We're
still climbing our way out
of a deep recession."
He and
others said the market
continues to diverge
depending on prices. Low-end
homes - most of them
foreclosures - spur multiple
offers from investors and
first-time buyers, and sell
for more than the asking
price.
On
Thursday, Sager was showing
an $84,000 two-bedroom
foreclosure in Oakland near
the Coliseum; it had 10
offers within one day of
being open for viewing.
On the Peninsula, where "low
end" has a pricier
definition, a similar
dynamic is in play.
"At
$400,000 and under, there
are so many offers that it's
almost impossible to get
someone into contract," said
Eric Boyenga, a Realtor with
Intero Real Estate
Services in Los Gatos.
"There is hardly any
inventory in the lower-end
market; it changed
dramatically from the
beginning of the year where
there was so much
inventory."
Sales of
mid-range homes are sluggish
but have picked up some
momentum, LePage said. And
at the high end,
million-dollar-plus homes
are not getting much action.
"There
are a lot of people with
money who've been waiting to
pounce, who are now looking
for big-time discounts,"
Sager said. "Those
(million-dollar-plus)
properties are defenseless
because there are not a lot
of offers coming. A
motivated seller might have
to give up $100,000 or
$200,000 on the purchase
price to get it sold."
Realtors around the bay said
that investors with all-cash
offers still muscle out
first-time home buyers who
must rely on a mortgage.
The
percentage of foreclosed
homes being sold has
dropped significantly. In
February, 52 percent of all
Bay Area homes sold were
foreclosures. In September,
it was 32.8 percent - still
significant by historical
standards.
"Some of
the distressed properties
have started to clear out,"
said John Oldham, director
of marketing for ZipRealty
in Emeryville. "In some
areas, we're seeing
traditional sales begin to
dominate again."
"Traditional" means they are
not foreclosures or short
sales.
Cindy Hagley, a
broker-associate with
Windermere Welcome Home in
San Ramon, said the
inventory shortage tends to
spur multiple offers.
"If I had
my druthers, I would love
nondistressed listings," she
said. "We're starting to see
more come on."
The
Bay Area median for
existing homes peaked at
$738,500 in July 2007 and
saw a low point of $295,000
in March. About half the
decline in the median since
its peak is due to a drop in
home values; the other half
can be attributed to the
shift in market mix,
DataQuick said.
Home Sales Climbed in
August Across West
By THE ASSOCIATED PRESS
September 24, 2009
LOS ANGELES (AP) -- Homebuyers scrambling to qualify for a temporary
tax credit helped propel
home sales in the
Western region of the
country last month
nearly 5 percent higher
than a year ago,
according to two reports
released Thursday.
Foreclosures
continued to fuel much
of the sales surge in
the 13-state region,
primarily in
California, Arizona
and Nevada. That helped
drag down the region's
median home sales price
more than 12 percent
from August last year to
$220,500, according to
the National Association
of Realtors.
The national median
declined almost 13
percent to $177,700.
''The story in the
West is still very much
one of foreclosure sales
occurring,'' said Celia
Chen, senior director at
Moody's Economy.com.
''Prices have fallen so
much in the West that I
think that's also
encouraging some buyers
-- both investors and
those who intend to
actually live in their
units -- to come back
into the market.''
The West's sales
edged up nearly 1
percent from July. That
bucked the national
trend, which saw sales
tumble 6.2 percent from
July to August, but rise
2 percent above
prior-year levels,
without adjusting for
seasonal factors.
Several of the
largest Western metros
saw improved sales last
month, according to The
Associated Press-Re/Max
Monthly Housing Report,
which tallies all home
sales in the
metropolitan statistical
area by all real estate
agents, regardless of
company affiliation.
Phoenix, Las Vegas,
Boise, Idaho, Los
Angeles and San
Diego registered an
increase in home sales
in August. While Denver,
Seattle, Billings,
Mont., Honolulu,
Anchorage, Alaska,
San Francisco and
Albuquerque, N.M., all
saw sales slip last
month from a year
earlier, according to
the AP-Re/Max report.
Many of the buyers
who purchased homes last
month were first-timers
eager to close the deal
before Nov. 30, the
deadline to qualify for
a tax credit of up to
$8,000. The closing
process can easily take
more than a month, which
leaves buyers less
wiggle room as November
nears.
''Some of them are
getting a little freaked
out about finding a
house to get the tax
credit,'' said Floyd
Scott, broker-owner of
Century 21
Arizona-Foothills in
Phoenix.
Sales in Phoenix were
up more than 44 percent
compared to August last
year. The median sales
price, meanwhile,
tumbled about 32 percent
to $125,000, according
to the AP-Re/Max report.
About a quarter of
the buyers his firm
dealt with in August
were first-time buyers.
Another 20 percent were
investors, and the rest
were homeowners moving
to the area or looking
to trade up.
Scott expects his
September sales will be
ahead of August's, but
concedes the scheduled
sunset of the tax credit
could dampen traffic
next month.
''I'm crossing my
fingers and hoping sales
don't drop too much
starting in October,''
he said.
The average days a
home was on the market
fell between July and
August in several
Western metros,
including Los
Angeles, San Diego, San
Francisco, Phoenix,
Denver and Seattle.
Buyers have snapped
up bank-owned homes
while fewer foreclosures
have been coming on the
market, and that has
helped cut down the
number of unsold homes.
Foreclosures made up
about 31 percent of all
sales nationally in
August, according to
NAR. But in some Western
states, they overwhelmed
regular sales.
In California
and Arizona, financially
distressed sales made up
more than half of all
sales in August. In
Nevada, four out of five
were distressed.
Still, even in
Arizona, the inventory
of bank-owned homes has
been falling as bargain
hunters snapped up
properties this summer.
In Phoenix, roughly 15
percent to 18 percent of
the houses on the market
now are bank-owned
properties, Scott said.
In San Francisco,
where foreclosures
haven't been nearly as
common as they are in
Oakland and other swaths
of the Bay area, home
sales have begun to
slow.
Sales fell nearly 2
percent compared to
August last year, while
the median sales price
dropped about 13 percent
to $430,000, according
to the AP/Re-Max report.
And yet, the
inventory of unsold,
single-family homes is
down to a 2.6 month
supply -- the lowest
level in more than two
years, according to the
San Francisco
Association of Realtors.
Sales didn't dip for
Century 21 Hartford
Properties in San
Francisco. They climbed
about 10 percent in
August, said sales
manager Romeo Aurelio.
The worst period was
between October through
November last year, ''so
things have definitely
rebounded since then,''
he said, noting
September has been on
par with August.
The majority of the
sales are for homes
under $400,000, because
financing remains an
obstacle for more
expensive properties.
''People who should
be qualifying just
aren't able to get loans
right now,'' Aurelio
said. ''And it's really
making it tough to sell
these properties between
$800,000 and $1.2
million.''
Many buyers looking
to collar a
bargain-priced
foreclosed property are
finding stiff
competition from
investors willing to pay
cash and outbid
newcomers.
In markets like
Denver, real estate
investors like Ramon
Navarro are also
beginning to pounce on
homes that aren't
distressed.
Denver sales plunged
nearly 20 percent versus
August last year, while
the median sales price
jumped 4.6 percent to
$209,000, according to
the AP/Re-Max report.
Navarro, a health
insurance consultant who
lives in the Denver
suburb of Castle Rock,
got into escrow last
month on a four-bedroom,
three-bath house in
Aurora, about 15 miles
east of Denver.
The 3,620 square-foot
house was initially
priced at $350,000, but
the seller agreed to
take $342,000. The
appraisal came back too
low, however, so Navarro
lowered his offer to
$335,000, and the seller
accepted.
''It was a good deal
and I already got a
renter,'' said Navarro,
52, who has a bid on
another property, which
he plans to fix and
flip.
''There's still some
investments to be made
out here,'' he said.
''How much longer it's
going to continue, I
don't know.''
4 signs
your home value could drop
Despite signs
that the
real estate
market
is bottoming out, millions of
homeowners
are likely to find themselves in
worse shape within the next two
years.
Nearly half of
the nation’s 52 million
mortgage
borrowers will have negative equity
by the end of the first quarter of
2011, up from the 14 million at the
end of this year’s first quarter,
according to estimates in an Aug. 5
report by Deutsche Bank. With so
many borrowers “underwater” — or
owing more on their mortgages than
their
homes
are worth — the risk is high that
they’ll default and their
homes
will go into foreclosure, says Mark
Zandi, the chief economist at
Moody’s Economy.com. (Moody’s
Economy.com estimates that 17.5
million
mortgage
borrowers will be underwater by
early 2010.)
Negative
equity is the product of several
factors. The most significant weight
is the broad and persistent decline
in
home values.
A Zillow.com index of
home values
fell 12.1% year-over-year during the
second quarter, resulting in a total
drop of 22.3% since the market
peaked in mid-2006, according to an
Aug. 11 report by the online real
estate marketplace. Many buyers who
bought their
homes
around the peak with a 20%
down payment
have lost that dollar amount.
“The continued
decline of U.S. home prices
will contribute to rapidly rising
rates of negative equity,” Karen
Weaver, a Deutsche Bank research
analyst, wrote in the report. “The
most obvious implication is for
mortgage
defaults.”
Current
homeowners,
or those
shopping for a
home and who are concerned that
they’ll end up underwater, should
consider how long they expect to
live in their
homes.
Being underwater doesn’t affect
homeowners
unless they plan to sell, Zandi
says.
Individuals
who are staying put for at least the
next five to seven years will likely
recoup the lost value of their home,
says Amy Bohutinsky, a Zillow.com
spokeswoman. In addition,
homeowners
should refrain from borrowing
against their mortgages, she says.
Those who find
themselves underwater can turn to
the federal Making Home
Affordable plan, which can help
you refinance or do a loan
modification. You’ll have to meet
the eligibility requirements listed
here.
Whether you’re
at risk for falling behind may have
more to do with the economy and your
neighborhood than your job, your
credit or your income. Here are four
warning signs that you’re heading
underwater.
Foreclosures in your neighborhood
The quickest way to end up
underwater is to live in a
neighborhood that’s plagued by
foreclosures.
When one home
on your block goes into foreclosure,
your home’s value drops by 1%, Zandi
says. But that isn’t a one-to-one
relationship. If two
homes
on a block go into foreclosure, your
home’s value will drop by more than
2%.
As
homes
go into foreclosure, they create a
domino effect, lowering
home values
throughout a neighborhood in a
cascade beyond homeowners’ control.
(For more, see “Foreclosure nearby?
It’s your problem.”)
You can find
neighborhood
foreclosure
listings
at MSN Real Estate.
Homes
lingering on the market
When “For Sale” signs linger in a
neighborhood for three or more
months, that may mean buyers and
sellers can’t agree on a price. In
that environment,
homes
are unlikely to sell unless the
sellers lower their asking prices.
“The time on
the market is always a good
barometer of demand for
homes
and for the price
homes
are transacting at,” Zandi says.
“The longer it appears that
neighbors are taking to sell their
home the more likely it is they’re
not getting the price they want and
that prices are falling.”
Compare the
time it took for
homes
to sell in your neighborhood three
years ago versus today; if it’s
taking weeks or months longer to
sell, the prices
homes
can fetch are dropping, Zandi says.
MSN Real
Estate’s
home valuation
tool includes time-on-market
information.
Increasing unemployment
In most cases, the cities where
homes
have lost the most value during the
past year also possess the highest
unemployment rates.
Homes
in Merced, Calif., have lost 40.2%
of their value year-over-year, the
biggest loss of
home values
in the nation, according to
Zillow.com. The city’s unemployment
rate is the fourth-worst among 372
metropolitan areas at 17.6%,
according to July data from the
Labor Department. El Centro, Calif.,
where
home values
plunged 37.6% year-over-year (the
second-biggest drop in the country),
has the worst unemployment rate at
30.2%.
Individuals
living in areas battered by high
unemployment are likely to see their
home values
drop further, especially if they
live in areas dependent on dwindling
industries — like Central Valley,
Calif., and the
mortgage
lending business or Detroit and the
auto industry, Zandi says.
You can find
the latest unemployment statistics
for most metro areas here.
Homes
in disrepair
Dented siding, peeling paint and
broken porches could be signs that
neighbors are having trouble making
ends meet and can no longer pay to
take care of their
homes,
Zandi says. Or they may have gotten
an appraisal and discovered their
homes
have dropped in value and are no
longer worth the cost of repairs. As
the condition of
homes
in your neighborhood worsens,
home values
almost inevitably drop.
What underwater borrowers have in
common
Risky mortgages: Some 77% of
option-ARM borrowers and 50% of
subprime
mortgage
borrowers were estimated to be
underwater as of the first quarter
of 2009, according to the Deutsche
Bank report. With option-ARMs,
borrowers could make minimum monthly
payments that didn’t even cover the
loan’s interest. As the market
declined, these balances grew. With
subprime mortgages, borrowers often
had poor
credit scores
and little documentation of their
financial situation. In both cases,
borrowers often ended up with a
large
mortgage
relative to the house’s price.
“The mere fact
that they’re not investing in their
homes
will affect you too,” Zandi says.
Date of purchase:
Individuals who bought their
homes
between 2003 and 2008 are at risk of
being underwater because they bought
while prices were rising, Zandi
says. The risk is greatest for those
who bought in 2005 and 2006, as the
market approached its peak.
Excessive borrowing: Many
individuals borrowed against their
homes
during the bubble by taking out
second mortgages or tapping into
home equity
lines of credit
or
home equity
loans.
This borrowing left their
homes
with less equity to weather the drop
in
home values.
Home’s location:
The areas that have been hit the
hardest by plunging
home values
include the “sand states” of
Arizona, California, Florida
and Nevada because they brought the
most speculation, easy credit and
overbuilding during the bubble,
Zandi says. Also hurt: the states
where unemployment is especially
high and manufacturing jobs have
been eliminated like Michigan, Ohio
and Indiana, Zandi says.
- By AnnaMaria
Andriotis
Pending Home Sales Up 3.2% in July.
A key housing report that
anticipates future sales posted
its sixth straight monthly gain
in July. The Pending Home
Sales Index jumped 3.2% in the
month, doubling the
consensus call for a 1.6%
advance and providing optimism
that the prime mover of the
credit crisis ― housing ― is
experiencing a broad leveling
out.
“Do not underestimate this
report, the great housing
stabilization is firmly upon us
within the residential housing
market in the U.S.,” said TD
strategist Ian Pollick.
Pending sales are contracts
that have been signed but not
finalized. Annually, they have
jumped 12.9% since last year,
compared with a +9.2% Y/Y print
in June.
Patrick
McGee on Sept. 1, 2009
Mortgagenewsdaily.com
In a further sign that the housing slump may be ending, a
closely watched national pricing index said San Diego County
values were up for the second straight month.
The difference wasn't much — a 1.55 percent boost from May to
June — but it's the upward direction that counts, economists
say.
The Standard and Poor's/Case-Shiller Home Price Index was up
for a 20-city composite as well as the county, showing prices
are starting to rise in nearly all large U.S. cities.
In addition, the Federal Housing Finance Agency, Real Estate
Research Council of Southern California and California
Association of Realtors all released statistics that showed a
slowing of price declines or a slight increase month-to-month or
quarter-to-quarter, even if year-over-year figures were still
negative.
Beyond housing, the New York-based Conference Board reported
an unexpected increase in consumer confidence, leading Wall
Street to add to last week's rally. The Dow Jones industrial
average rose about 30 points, or 0.32 percent.
The confidence index rose to 54.1 from an upwardly revised
47.4 in July. That reading reversed two months of decline and
easily beat analysts' expectations. Still, it remains far below
the 90-point level at which the economy is considered to be on
solid footing.
The Case-Shiller report had 18 of the 20 metro areas
registering increases in June — Detroit and Las Vegas were the
exceptions — and the national index rose 1.4 percent in the
second quarter from the January-March period, the first
quarterly increase in three years.
“As seen in both seasonally adjusted and unadjusted data
. . . there are hints of an upward turn from a bottom,” said
David M. Blitzer, S&P's index chairman.
Further confirmation came in the Federal Housing Finance
Agency's house price index. It rose 0.5 percent in June
following a revised increase of 0.6 percent in May.
As recently as six months ago, there was widespread
expectation that housing prices, which were already down a third
from their peaks, would tumble another 10 percent nationally.
That decline would likely have prompted another round of
foreclosures and threatened a broader economic recovery.
Jed Kolko, associate director of the Public Policy Institute
of California, said stable or higher prices are encouraging for
these reasons:
•Many would-be buyers may jump off the fence if they believe
prices are rising. Increasing sales counts in San Diego,
accompanied by reports of multiple offers and overbidding on the
cheapest properties, already demonstrate that interest is
growing. The California Association of Realtors said
single-family resales were up 12 percent from July 2008
statewide and up 3 percent in San Diego.
•Some homeowners will be less likely to go into foreclosure
if they think higher values have the potential of giving them
equity in their properties. Declining values have put many
homeowners underwater, meaning more is owed on a mortgage than
the home is worth.
•Consumers may spend more because they may feel some marginal
“wealth effect” from regaining lost equity in their homes.
James Hamilton, economics professor at the University of
California San Diego, interpreted the data as good news, because
he had worried that a glut of foreclosed homes would continue to
depress prices.
“This is one indicator that used to be giving us very grim
indications, and now it's looking more favorable,” Hamilton
said. “The question is does it completely reverse whatever
perception there is in the market? Probably not. We're looking
for better confirmation, but it's better than a kick in the
teeth.”
Christopher Thornberg of Beacon Economics in Los Angeles,
said the increases reported in the index are suspect because
they reflect a reduction in distressed-property sales that were
so dominant a few months ago.
“I'm inclined to say we're pretty damn close to the bottom,
but I also think there will be a headshake in the numbers,”
Thornberg said. “I don't think prices are starting to rise; it's
just a shift in mix.”
Kolko acknowledged that prospects of rising unemployment,
leading to continued foreclosures and defaults, could put a
damper on the housing market.
“Until people's job prospects improve, it's likely to be at
least several months that will keep the foreclosure rates higher
than they would otherwise be,” he said.
Scot Ellsworth, president of the Southern California real
estate council, described current conditions as transitional. In
its second-quarter report, the research group called the
near-term outlook for Southern California's home ownership
markets “downcast.”
“I think it's a little premature to say everything is on the
ups,” Ellsworth said.
In San Diego County, there are still strong signs that
lower-priced properties are attracting buyers while more
expensive homes are not.
At yesterday's weekly meeting of Scripps Ranch real estate
agents, there were only three new properties pitched to buyers'
agents. The inventory of homes for sale is about half of the
usual pace and top-end homes are sitting unsold for months, as
would-be buyers struggle to sell their current homes and obtain
affordable financing.
Jim Berns presented one home for sale priced at $625,000,
down from $680,000 last year and far below the loan balance of
$720,000. The sellers have retired to Palm Springs and want to
sell the home they've owned since 1989 by getting their lender
to agree to a short-sale — a price at less than the outstanding
mortgage balance.
“A lot of people are doing an ‘immoral’ foreclosure — walking
away because it doesn't make sense” to wait for values to rise
above the loan amount, Berns said. The Case-Shiller news may be
positive “but not overwhelmingly so.”
But in the South Bay, Pat Russiano, president of the Pacific
Southwest Association of Realtors, reported a great deal of
frustration among would-be first-time buyers who are outbid by
investors and who are afraid they will miss out on the $8,000
federal tax credit that expires Nov. 30.
But she said the positive news is driving more buyers and
sellers to her Web site at Century 21-Award and more referrals
from past clients.
“Perhaps we're on our way up,” Russiano said. “I do believe
there is going to be a (positive) psychological effect in the
marketplace.”
Union-Tribune
Roger Showley: (619) 293-1286
|
|
| |
|
