Now It’s Not A Trickle In California
The LA Times reports from California. “Houses and condominium units in Los Angeles, Orange, Ventura, San Bernardino, Riverside and San Diego counties sold at a median price of $385,000 last month, the lowest since April 2004, according to DataQuick. The total number of homes sold, 12,808 in Southern California, was about half the average March sales total since DataQuick began compiling its statistics in 1988. Last month’s sales total was down 41.4% from March 2007.”
“Nearly 38% of homes sold in March had been foreclosed at some point in the prior year, up from 8% in March 2007. In recent months, foreclosure resales typically sold for about 15% less than other homes in the surrounding area, DataQuick said.”
The Union Tribune. “San Diego County’s median home price dropped below the $400,000 mark last month for the first time since late 2003, driven largely by discounted foreclosure sales, DataQuick reported.”
“The median, representing the midpoint of all prices reported, has now sunk $122,500, or 23.7 percent, from the peak of $517,500 in November 2005, DataQuick figures show. But the median price is still twice what it was in March 1999.”
“There were 2,108 sales in March, down 34.5 percent from March 2007 and the lowest March total since DataQuick began tracking the San Diego market in 1988. Riverside had the least drop in sales, off 26.9 percent, followed by San Diego and San Bernardino, down 38 percent. Orange County (was) down 19.6 percent.”
“Foreclosure filings in Riverside County surged 30 percent last month and topped year-ago levels by well over 100 percent. A total 7,960 filings of mortgage default notices, auction sale notices and bank repossessions were recorded in Riverside County in March, making it the state’s fourth largest location in terms of foreclosure activity, said RealtyTrac.”
The Press Enterprise. “San Bernardino County had 6,182 foreclosure-related filings, up 25 percent from February and 118 percent from a year earlier. Daren Blomquist, spokesman for RealtyTrac, said the firm had expected an even steeper increase in foreclosures because many mortgages with low introductory interest have been resetting to higher rates.”
“One reason might be that programs aimed at stemming foreclosures are helping, he said. Another possibility is that the foreclosure workload is overwhelming lenders.”
“‘I have heard anecdotally that some people who have not made (mortgage) payments for quite a few months have not had a notice of default yet,’ Blomquist said.”
The Modesto Bee. “No matter how you crunch the numbers, March was a brutal month for foreclosures throughout the Northern San Joaquin Valley. About 2,000 properties in Stanislaus, San Joaquin and Merced counties were repossessed by lenders last month, statistics show.”
“Stanislaus County, particularly, saw a spike last month in the number of homes forced into foreclosure auctions on the courthouse steps. According to ForeclosureRadar, bidders bought only 20 of those homes, with 633 foreclosed properties being returned to lenders.”
“Those lenders lost nearly $208 million on those loans gone bad in Stanislaus County. That was a record loss and a record number of repossessions.”
“Lenders have taken back so many homes in the Northern San Joaquin Valley, they’ve dramatically slashed sales prices in an effort to unload them to new buyers. More than 100 foreclosed Stanislaus houses, for example, will be auctioned by lenders April 29 during a massive sale at Modesto Centre Plaza. Most of those homes have starting bids listed at less than $100,000, and many of them have posted starting bids of $1,000.”
“Stanislaus home prices have plummeted about 30 percent during the past year, according to sales statistics. Sales volume has dropped so much that more homes are being foreclosed every day than are being sold by real estate agents.”
The Bakersfield Californian. “From the day they moved into their brand-new northwest Bakersfield home three years ago, Steven and Marsha Bishop have been dogged by problems — cracks, leaks, mold and more.”
“So when a lawyer’s letter recently showed up asking if they’d like to join a lawsuit against builder Lennar Homes, the couple didn’t hesitate. Owners of 88 other nearby homes are also listed on the complaint.”
“The subdivisions listed in the suit were built almost entirely in the last five years. In the Westlake area, buyers paid between $139,000 to $580,000, according to records from First American Real Estate Solutions.”
“The Bishops bought their four-bedroom home on Chinook Falls Drive in May 2005. Troubles started immediately, they said. ‘You cannot believe the headaches I’ve had with this house,’ Marsha Bishop said.”
“The sinkhole under the garage was particularly troubling. ‘When the dirt’s collapsing under your house, it kind of concerns you,’ said Steven Bishop.”
The Press Democrat. “In three decades in the building industry, Santa Rosa developer Chris Peterson has never seen a housing slump this severe. His company, Rivendale Homes, has been forced to make tough choices to survive.”
“Rivendale has slashed prices 25 percent in its Sonoma County subdivisions since the onset of the downturn in 2005. To make payments to its lenders, Rivendale is tapping into reserves it set aside for times just like this. And to cut costs, the close-knit company has laid off a quarter of its employees, many of whom had worked with Peterson for a decade or more.”
“He predicts local home builders will struggle financially throughout the year. ‘That’s when you’re going to see the brunt of the bloodletting. Profits are way down, and there are some homes that we are losing money on,’ Peterson said.”
“In an attempt to entice buyers, Rivendale has cut its prices sharply and frequently — sometimes weekly. Today, new Rivendale homes sell for between $350,000 and $450,000, about 25 percent less than at the housing market’s peak in 2005.”
“Those prices include $10,000 from the builder to pay closing costs or reduce loan rates, Peterson said.”
“A developable acre sold for $800,000 to $1 million at housing’s peak. Prices are only beginning to come down, and builders likely will wait until land costs settle at about half that range, analysts said.”
“‘Anyone buying land today is very hesitant. You can’t sell homes for what it costs,’ said Jim Scally, new home specialist for North American Title Company. ‘It’s going to take the land people quite some time to realize that they’re not going to get the same value that they were going to get two years ago.’”
The Santa Cruz Sentinel. “Look who’s selling homes in Santa Cruz County. Countrywide, US Bank, Deutsche Bank and Downey Savings and Loan sold homes in March. So did Wachovia and three other financial institutions.”
“Look what’s not selling so fast: Million-dollar homes.”
“In March, only 11 percent of the sales were for more than $1 million and 20 percent were for less than $500,000, according to Gary Gangnes of Real Options Realty, who tracks the data. The trend was the reverse in February, with 24 percent of sales more than $1 million and 19 percent less than $500,000.”
“Only 75 homes sold in March, the fewest number of sales for a month in 11 years, an indication of buyer reluctance despite lower list prices. The previous low — 143 sales — was set last March.”
“Among the factors cooling the market: More foreclosures, dropping values and homeowners having difficulty refinancing, creating a cycle of more foreclosures.”
“In Santa Cruz County, bank-owned homes are selling at a discount. Among the examples in March: 233 Vista Del Mar Drive, Watsonville: Foreclosed in December and sold by Downey Savings and Loan for $490,000. Previously sold for $829,000 in 2005.”
“52 Hawthorne Ave., Watsonville: Foreclosed in January and sold by US Bank for $305,000. Previously sold for $579,000 in 2007. 148 Holly Drive, Watsonville: Foreclosed in July and sold by Credit Suisse for $395,000. Previously sold for $685,000 in 2005.”
“612 Bonita Drive, Aptos: Foreclosed in September and sold by Citigroup for $465,000. Previously sold for $500,000 in 2003.”
“‘REOs really drive down prices in an area because the banks are going to keep lowering the price on a home until it sells,’ said John Wake, an associate broker in Scottsdale, Ariz. ‘Joe Homeseller, on the other hand, often has the option of continuing to live in the home if he does get ‘his price’ so prices don’t fall as fast in areas without a lot of REOs.’”
“Ganges doesn’t specifically track REOs but he found 12 of the 28 homes sold in Watsonville in January, February and March were bank-owned. The 12 properties were on the market an average of 118 days before a purchase contract was obtained, he said. One sold in one day and two others in about two weeks; another took 295 days.”
“Lenders are taking up to 60 days to respond, said Mary Saccullo of Santa Cruz Title Co. ‘I think they’re overwhelmed,’ she said. ‘It was a trickle. Now it’s not a trickle.’”
The San Francisco Chronicle. “Some nights Sonya Smith can’t sleep because she’s worried about how she’ll make payments on her small home in Oakland’s Laurel District. Since getting divorced a couple of years ago, it’s much harder to carry the mortgage - and she can’t sell because the home’s value has declined below the $500,000 she owes on it.”
“‘At the end of last year, I looked really hard for a second job, but nothing panned out,’ said Smith, a technical writer. ‘I started (in this house) with two incomes; the only way I can see out is to get a second income.’”
“An analysis by home-price site Zillow.com of Bay Area homes purchased in 2006 during the height of the real estate frenzy shows that in many outlying areas, more than half of such homes are underwater. The negative equity regions closely track to the places where prices have fallen most steeply, such as eastern Contra Costa County, Oakland, Richmond and Solano County.”
“But even in upscale areas like the Peninsula, Marin and Walnut Creek, Zillow’s analysis shows that a significant percentage of people who purchased in 2006 now owe more on their house than it is worth.”
“‘I’m very concerned about the decline in our home’s value,’ said David Peters, who lives in Hollister (San Benito County). ‘Prior to the market crash, we had been looking at moving up. … Now I don’t even engage in the sort of ‘house lust’ that was so common only a couple of years ago - going to open houses, looking through the newspaper real estate section, dreaming about the possibilities provided by ever-upward spiraling equity.’”
“He and his wife owe close to their home’s current value. ‘We’ve got no flexibility left,’ he said. ‘There’s certainly no possibility to move.’”
“He’s also worried about the long-term future, as he had hoped in a couple of decades to sell the home for enough for a comfortable retirement out of state.”
“‘Who knows what’s going to be happening in 25 years?’ he said. ‘Certainly now you get these pangs of doom; maybe real estate prices will be more equalized across the country.’”