Archive for May, 2009

Orange County home affordability up in first quarter

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on May 20th, 2009

By Kristen Schott, OCMetro

Fifty-six percent of households could afford to buy an entry-level home in Orange County during the first quarter of this year, according to the California Association of Realtors’ First-time Buyer Housing Affordability Index.

That number compares to a rating of 52 percent in the fourth quarter of 2008 and 38 percent in the first quarter of last year. The increased affordability demonstrates the recession’s toll on real estate in the region, where decreases in home prices and mortgage rates have prevailed. (During March, for example, Orange County’s median home price was $444,520, down 25 percent from March 2008, though it was up 2.5 percent from February.)

The median price of an entry-level home was $370,410 during the first quarter of this year. This means buyers needed a minimum qualifying income of $66,220. And first-time buyers typically purchase a home equal to 85 percent of the prevailing median price, says C.A.R., which is about $314,850. Monthly payments – which include taxes and insurance – were $2,210 during the quarter.

But Orange County is still the one of the most costly areas in the state, second only to San Luis Obispo County, where housing affordability was 49 percent and the median price for an entry-level home was $306,570.

Statewide, the First-Time Buyer Housing Affordability Index hit 69 percent compared with 46 percent at the same time last year. The median home price of an entry-level home was $213,040.

But Orange County is still the one of the most costly areas in the state, second only to San Luis Obispo County, where housing affordability was 49 percent and the median price for an entry-level home was $306,570.

Statewide, the First-Time Buyer Housing Affordability Index hit 69 percent compared with 46 percent at the same time last year. The median home price of an entry-level home was $213,040.

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Foreclosure inventory rises in Huntington Beach

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners on May 20th, 2009

 Mathew Padilla, OC Register

Buyer demand has not kept pace with the spike in foreclosures in Huntington Beach — a bad sign because some experts see another wave of foreclosures hitting the entire county. Other coastal ZIPs are also seeing slow foreclosure sales.

As of April 10, Huntington Beach had about 125 unsold foreclosures, up 47% in seven months. Over the same period foreclosure inventory dipped less than 1% in the entire county to 3,317.

DataQuick ran a special report on foreclosures by ZIP code for the Orange County Register.

Foreclosures are selling more slowly on the coast. Here’s a clip from the story:

Kerry Vandell, finance professor and director of UCI’s real estate center, said high prices along the coast cause properties to sell slowly, whether foreclosure or not. For one thing, mortgage rates are higher on bigger loans, he said.

Rates are higher because government-backed mortgages are limited to about $730,000. Anything over that limit is also harder to get.

Laura Pephens, a San Clemente-based banking consultant and director with the California Mortgage Bankers Association, said there is another reason why coastal foreclosures are slower to sell. Banks are more reluctant to lower their asking prices, because the loan balances are bigger.

A bank can knock $25,000 off a $400,000 property in Brea, but knocking $200,000 of a $1.2 million property in Laguna Beach is a much bigger loss, Pephens said.

“You are going to write down those small balances more quickly,” she said.

Below is a table showing how Huntington Beach’s four  ZIPs compare to the county as a whole. First, though, here are definitions of the columns:

  • “Total” stands for all foreclosures from July 2007 (start of credit crunch) to January 2009.
  • “Unsold” is how many of the total did not sell by April 10, 2009 (DataQuick left a little more than a couple of months from January ‘09 to April 10 to account for time it takes a bank to prepare a property for sale) .
  • “%Unsold” is total unsold as a percentage of all foreclosures in that ZIP.
  • “Rank” is how high the ZIP ranks in the county based on %Unsold.
  • “Unsold/000? is total unsold per 1,000 houses and condos in each ZIP. All figures are from DataQuick.
Zip Total Unsold Unsold% Rank Unsold/000
92649 80 34 42.5% 4 3.3
92648 127 37 29.1% 16 3.1
92646 145 33 22.8% 31 1.8
92647 117 21 17.9% 59 1.8
Countywide 15,309 3,317 21.7% N/A 4.3

The table shows that Huntington Harbor’s 92649 had the fourth highest rate of unsold foreclosures as of April 10, at 42.5%. And 3 out of 4 ZIPs had a higher percentage of unsold foreclosures than the county’s 21.7%.

And here’s another table with the 10  ZIPs with the highest percentages of unsold foreclosures. This really shows coastal ZIPs are seeing the slowest sales.

Community Zip Total Unsold %Unsold Unsold/000
Laguna Beach 92651 52 28 53.8% 2.5
San Clemente 92672 107 47 43.9% 3.1
Laguna Woods 92637 21 9 42.9% 1.5
Huntington Beach 92649 80 34 42.5% 3.3
Newport Beach 92663 52 22 42.3% 3.6
Corona del Mar 92625 20 8 40.0% 1.6
Newport Coast 92657 23 9 39.1% 2.2
Los Alamitos 90720 21 8 38.1% 1.4
Dana Point 92624 33 12 36.4% 2.9
Santa Ana 92705 221 80 36.2% 7.2
Orange County Total 15,309 3,317 21.7% 4.3

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San Diego Real Estate Roundup

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on May 20th, 2009

By CONNIE LEWIS
San Diego Business Journal Staff

Properties Sold On Local MLS Jump in April

The San Diego Association of Realtors said in a report issued May 11 that sold listings in April increased compared with those in March, with both attached and detached property sales up nearly 9 percent.

Year-to-date, the report said sold listings taken from its multiple listings service, or MLS, are up 43 percent from the same period in 2008 for both attached and detached homes.

The median sales price in April for attached properties increased 2.4 percent to $180,000 from $175,750 in March and the median sales price for detached homes increased 3 percent to $335,000 from $325,000 in March.

Both property types on average spent just over a day longer on the market in April than in March, said the Association of Realtors report.

Many areas in San Diego county continued to experience a doubling in sales when compared with the same time last year, the report said.

The Encanto area, for example, in the 92114 ZIP code, had the most detached home sales in April with 66 and has the most sales year-to-date with 269, according to the association.

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Southern California home values fall to $247,000 in April

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on May 20th, 2009

The price drop drives homes sales up. April sales are at record or near-record levels in foreclosure-heavy inland areas; higher-priced coastal areas are seeing record or near-record lows in sales.
By Peter Hong , LA Times
Southern California’s median home price in April was $247,000, down slightly from the previous month, a real estate research firm reported today.

 
  • Housing construction plunges to record low in April 

    Chart: Housing starts 

Last month’s price drop, however, drove home purchases up. The total of 20,514 homes sold in six Southland counties last month was up 5.2% from March and up 31.4% from a year ago, DataQuick reported.

The rise in home sales is an important step to housing market recovery, said UC Irvine economist Kerry Vandell, because the sales help to clear the surplus of homes — many vacant — still flooding the market.

“There seems to be some market clearance going on,” Vandell said. Among lower-priced homes, “product is moving, which will in fact stabilize that [segment] of the market.”

Previously foreclosed homes — many of them deeply discounted — accounted for 54% of the sales total. April was the seventh consecutive month in which the majority of homes sold in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties had been foreclosed.

Sales were at record or near-record levels in foreclosure-heavy inland areas. Higher-priced coastal areas, including Malibu, Pacific Palisades, the Palos Verdes Peninsula and Manhattan Beach, as well as Beverly Hills, saw record or near-record lows in sales.

A tale of two markets is clear in Southern California, with low-priced areas appearing close to recovery, while wealthier areas face greater uncertainty as sales languish amid an economic downturn.

In lower-priced markets, “we’ve seen signs you’d expect to see not long before prices would normally stabilize: robust investor and first-time-buyer activity, 10-plus months of year-over-year sales gains, and less price erosion, if any,” said John Walsh, MDA DataQuick president.

Wealthier areas may face new troubles because “we still face two big threats to price stability: layoffs, which can cause foreclosures across the home price spectrum, and possibly a new round of foreclosures triggered by defaults on ‘option ARM’ and ’stated income’ loans used in mid- to high-end markets,” Walsh said.

San Bernardino County showed the sharpest price decline in April, with its median price falling 48% from a year ago, to $138,500. Riverside County’s median price of $180,000 was a 39% decline. Los Angeles County prices were down 31% to a median of $300,000. Orange County’s median price was down 24% to $380,000. Ventura County’s median of $340,000 was down 24% from April last year and San Diego’s median of $290,000 was down 28% from a year ago.

The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,030 last month, down from $1,074 the previous month, and down from $1,831 a year ago. Adjusted for inflation, current payments are 52.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.4% below the current cycle’s peak in July 2007.

The price drop — a decline of 51% from the 2007 peak — came after three months in which the median price had held steady at $250,000, according to the data from San Diego-based MDA DataQuick. The brief respite from price declines had raised hopes the housing market may have been close to its bottom.

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Homeowner Confidence Shrinks - Most Americans Now Believe Their Home’s Value Has Declined

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on May 19th, 2009

wknd-homeowner-web2RISMEDIA, May 16, 2009-American homeowners have a solid understanding of what has happened to the values of their own homes over the past year. A majority (60%) believe their own home lost value during the past 12 months, according to the Zillow Q1 Homeowner Confidence Survey. In reality, 80% of homes across the country lost value during the past 12 months, according to Zillow’s first quarter Real Estate Market Reports. Additionally, 18% believe their own home gained value in the past 12 months, and 22% believe its value remained the same. That resulted in a Zillow Home Value Misperception Index of five-the lowest it has been since Zillow introduced the index in the second quarter of 2008-and down from 10 in the fourth quarter of 2008. A Misperception Index of zero would mean homeowners perceptions’ were in line with actual values.

More accurate perceptions of the past gave way to hope for the future. Most homeowners-74%-believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home’s housing slide. Specifically, one in four homeowners (27%) think their home’s value will increase in the next six months, while nearly half (47%) believe their home’s value will remain the same. Homeowners were similarly optimistic when it came to predicting home values in their local markets. About two-thirds of homeowners believe home values in their local markets will increase (26%) or stay the same (37%) over the next six months. Thirty-seven percent believe home values will decrease.

As for selling activity, it’s clear a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31% of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround.

“The perception of American homeowners is finally catching up to reality, which is that 80% of all homes in the country lost value during this past year,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes’ prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well.”

Humphries continued, “Also interesting is the information we have for the first time this quarter on the levels of ’shadow inventory’ - homes that people would like to sell but that aren’t currently on the market, and thus aren’t captured in the official number of homes on the market. With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.”

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When It Comes to Buying a Home, Two Points Can Make a World of Difference

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners on May 19th, 2009

RISMEDIA, May 18, 2009-Whether now is the precise time to purchase your dream home or not, there are certainly more than just a few good reasons to purchase-especially for first time buyers, according to John B. Bearden, president & CEO of GMAC Real Estate.

In May, 30-year mortgage rates of 5 percent were widely available and down from January’s already low 5.8%, and rates are down a full two percentage points from August of last year.

“What many consumers are not hearing is that despite a turbulent real estate market, mortgages are at historic lows,” said Bearden. “Compared to just last summer, 30-year fixed rate mortgages are about a point and a half lower.”

So what does this mean-especially for a first time buyer? Buying power. A lot more buying power.

For instance, with the lower rates, a home buyer could save $257 per month ($3,084 per year) on their payment toward a $200,000 mortgage versus if they had recently obtained a 30-year fixed interest rates compared with August of last year. On a $200,000, 30-year fixed rate mortgage at 5%, the monthly payment would be $1,073 - compared with $1,330 for a 7 percent mortgage, the national average for a 30-year fixed rate last summer.

According to national mortgage statistics, here’s a breakdown of how much further a home buyer’s dollar goes on a $200,000 mortgage as rates continue to hover at historically low levels:

7 percent mortgage: $1,330 monthly payment (rates in August 2008)
6 percent mortgage: $1,199 monthly payment (rates in December 2008)
5 percent mortgage: $1,073 monthly payment (rates in May 2009)

“When you combine record low interest rates, low prices and the federal government’s tax credit for first time home buyers, and the mortgage interest deduction, there are certainly a lot of positive reasons to make the case for buying versus renting right now,” Bearden said.

For more information, visit www.gmacrealestate.com.

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Home Sellers become More Realistic on Home Prices while Realtors Express Greater Optimism about Housing Market

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on May 18th, 2009

RISMEDIA, May 18, 2009-HomeGain, one of the first websites to provide free instant home values, announced the results of an extensive nationwide survey on home prices based on the responses of over 1,150 Realtors.

The survey shows that 36% of homeowners think their homes should be listed 10 to 20% higher than what their Realtors’ recommend, down from 45% in the first quarter.

Conversely, 64% of homebuyers think that homes are overpriced versus 59% who believed the same in the first quarter.

“Realtors are in a unique position as they get to hear both sides of the home price story - the buyers’ and the sellers’. They then apply their own home valuation analysis based on their understanding of the market which often meets resistance from buyers and sellers,” said Louis Cammarosano, General Manager of HomeGain. “The results of our second quarter Realtor home prices survey indicates that home sellers seem to be getting the message that perhaps their homes are not worth as much as they thought they were, while buyers are expecting to find a bargain on every corner.”

The Realtors surveyed expressed more optimism in the second quarter survey on the direction of home prices than in the first quarter, with 22% of them believing that home values will increase in the next six months versus 11% who believed the same in the first quarter. Twenty-nine percent of survey respondents believe that home prices will fall in the next six months versus 53% who believed the same in the first quarter survey.

“There is major improvement in the number of homes selling,” stated Heather Lawson, Broker Century 21 Watson Real Estate in Genoa, IL. Gillian Goldrich of Coldwell Banker Residential Brokerage in Woodbridge, CT, agreed with Lawson, stating, “Markets are definitely picking up. It seems that buyers are getting off the fence and taking advantage of tremendous buys.”

Fifty-seven percent of Realtors surveyed indicated their approval of Obama’s performance as President. These results mirrored the nationwide results of the Rasmussen Daily Presidential Approval Index. Fifty-five percent of survey respondents believe that the Obama stimulus plan will have or has had no impact on home values versus 45% who believed the same in the first quarter survey.

For more information, visit www.homegain.com.

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Selling off California real estate to help the budget?

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for mortgage pros on May 15th, 2009

Calling buyers with deep pockets. Remember our earlier L.A. Land item on the proposal to sell San Quentin? Well it’s apparently just the tip of the iceberg in terms of sites that California wouldn’t mind selling off. From latimes.com:

Gov. Arnold Schwarzenegger wants to sell the Los Angeles Memorial Coliseum, San Quentin State Prison, the Orange County Fairgrounds and other state property to raise cash amid the state’s growing fiscal crisis, according to a copy of a proposal reviewed by The Times.

Sale of the properties, to be included in the governor’s revised budget plan today, would raise between $600 million and $1 billion, although it would not provide financial relief for two to five years, according to the proposal.

“There are thousands of buildings and land parcels throughout California that represent billions of dollars of equity,” the plan says. “California’s current fiscal crisis has prompted new ways of thinking about how the state can unlock some of this value.”

Other items on the list for potential disposal include Cal Expo, site of the state fair in Sacramento; the Del Mar Fairgrounds in San Diego County; the Cow Palace, a nearly 70-year-old exhibition hall in Daly City, bordering San Francisco; and the Ventura County Fairgrounds.

It is not clear whether lawmakers would be willing to part with the real estate the governor has identified. Proposals to sell San Quentin and the Coliseum have not advanced in the Legislature in recent weeks.

 


Be interesting to see how much interest these generate.

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Gain in Pending Home Sales Suggests Stabilization

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on May 14th, 2009

The Pending Home Sales Index rose more than expected with a 3.2% advance in March, against forecasts that it would be unchanged after a revised 2.0% gain in February. The index now stands at 84.6.

Annually, pending sales have risen 1.1% since March 2008.

The index, released by the National Association of Realtors, gives some hope that the housing market may be stabilizing, and NAR chief economist Lawrence Yun said momentum could build up in the coming months.

“We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” he said. 

Yun added that first-time buyers are responding favorably to an $8,000 tax credit, adding that affordability conditions remain near record highs.

The affordability index ?  which measures the relationship between home prices, mortgage interest rates, and family income ? moved down slightly to 166.7 in March, but it remains nearly 31% higher than one year ago. 

Economics strategist Ian Pollick from TD Securities attributed the gain to “the dramatic retreat in mortgage rates.” He called the report “encouraging,” but expressed caution going forward.

“As long as the U.S. labor market continues to wane, and as long as overall economic activity remains sparse, the necessary conditions for a housing market revitalization will not occur,” Pollick said.   

Charles McMillan, president of the NAR, said the housing market is favorable to buyers who have been waiting on the sidelines for prices to deflate. “Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique,” he said.

 

Results were not positive across the board, however. Pending sales in the South rose 8.5% to 93.2 in March, and in the West the index advanced 3.9% to 93.1. By contrast, sales in the Northeast fell 5.7% to 59.5, while in the Midwest the index dropped 1.0% to 82.3.

Pending sales are a forward-looking indicator based on contracts that have been signed but not finalized. The indicator forecasts existing home sales, which represent the majority of the housing market, for the following month.

Also released at 10 am was the construction spending report from the Commerce Department, which unexpectedly rose for the first time in six months.

Construction spending in March was estimated at an annual rate of $969.7 billion, a figure 0.3% above the revised estimate from February.  Compared to last year though, construction spending has plummeted 11.1% from the March 2008 estimate of $1,090.5 billion. 

Public spending on construction improved from the February estimate, but spending fell in the private sector. The estimate for annual public construction spending was $308.7 billion, a 1.1% higher estimate than in February, while private spending was estimated at $661.0 billion, a 0.1% lower estimate than one month before.

Thanks to Mortgagenewsdaily.com

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California Reassessment service called a scam

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on May 13th, 2009

California moves to shut down two related companies

By Inman News

California’s attorney general has filed suit to shut down two related businesses that allegedly billed tens of thousands of homeowners nearly $200 each by claiming they had helped them reduce their property tax assessments.

The lawsuit, which seeks $2.5 million in civil penalties, alleges businesses owned by Sean and Michael McConville targeted homeowners with mailers that read like government billing statements, demanding payment for reassessments and reassessment appeal services.

The Southern California-based businesses, “Property Tax Reassessment” and “Property Tax Adjustment Services,” did not make it clear to consumers that they were not government entities, that the solicitations were not a bill, and that the services they offered but “almost never performed” were available free of charge from county assessors, the attorney general said.

The companies continue to solicit California homeowners and recently sent out mailers with “due dates” of May 26, 2009, the attorney general warned.

Sean McConville has been indicted in Ventura County on 20 felony counts for criminal conduct stemming from his property tax reassessment operations, the attorney general said.

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