The Distressed Market Is The Market In California
The Whittier Daily News reports from California. “Los Angeles County’s median home price for May was down 8.5 percent from the year-ago price of $297,410, the California Association of Realtors reported Wednesday. Sales fell 16.7 percent from May of 2010. California’s median home price plummeted 10.9 percent from a year earlier and year-over-year sales were off 14.4 percent. Leslie Appleton-Young, CAR’s chief economist, said the downturn was also driven by an unusually strong performance in May of 2010 when ‘expiring tax credits pushed home sales and prices to extremely high levels.’”
“Marty Rodriguez, who owns her own realty firm in Glendora, said it’s no wonder prices continue to drop. ‘Your market is first-time homebuyers who are buying in the lower price range,’ she said. ‘That’s why prices have gone down. A year ago, 85 percent of the buyers were under $500,000, but now I’d say closer to 90 percent of them are buying homes under $500,000.’”
The Press Democrat. “May home sales dropped to their lowest level in Sonoma County in four years. Analysts said the May figures revealed a significant drop in the sales of distressed properties. Allen Seelenbinder, a Bank of America portfolio retention manager, told a gathering of 250 real estate agents Tuesday morning in Santa Rosa that the bank now receives four requests to approve short sales for every foreclosure property it has taken back at auction.”
“Seelenbinder and fellow panelist Ivan Choi suggested to the real estate agents Tuesday that the current housing market isn’t poised for a quick turnaround. Choi, a regional director in Irvine for Primary Residential Mortgage, called the foreclosure market ’somewhat constipated’ and said he doesn’t expect a ‘tsunami’ of distressed properties. Instead, he said, the current market ‘will be with you for four years, at least.’”
The Reporter. “Solano County led the way in steep drops when comparing year-over-year numbers in the Bay Area. The median price of $189,000 in May was 13.7 percent less than a year ago when the median was $219,000. The median price paid for all new and resale houses and condos sold in the Bay Area last month was $372,000, down 9.3 percent from $410,000 in May 2010. It was the largest year-over-year drop in the median since August 2009, when it fell 19.5 percent from a year earlier, to $360,000.”
“The median has fallen year-over-year for eight consecutive months, following 12 months of annual gains. The median peaked at $665,000 in June/July 2007 and dropped to a low of $290,000 in March 2009. Around half of the peak-to-trough drop was the result of a decline in home values, while the other half was a shift in the sales mix toward lower-cost homes, especially foreclosures.”
The Mercury News. “Last month was the third lowest May in sales volume in the South Bay in 13 years, DataQuick reported. Sales of single-family homes in Santa Clara County fell 22 percent from May 2010 and 7 percent in San Mateo County. ‘The problem is jobs,” said Susan Gable, broker with Realty World People’s Choice Properties in San Jose. ‘Until people feel secure in their jobs, they won’t buy real estate.’”
The Manteca Bulletin. “Manteca is outperforming every city in the Northern San Joaquin Valley as it has for the past three years in new home starts. Joe Anfuso noted that Floresheim Homes targeted homes in Valley Blossom at the first-time buyers market coming up with a price point of right around $170,000. The vast majority of the sales at Valley Blossom are to first-time buyers with 80 percent of them coming from Manteca and surrounding valley cities with the balance from the Bay Area.”
“He noted the countywide unemployment rates for both Stanislaus and San Joaquin is in the 17 percent range. ‘Until people feel comfortable they won’t lose their job or that they can get another one quickly if they lose the one they have there won’t be a big improvement (in housing sales),’ Anfuso said.”
“Anfuso noted that the shadow inventory – homes that are delinquent but banks have either yet to start the foreclosure process or are holding on to them – will take a long time to work through the market.”
The Bakersfield Californian. “Funded by the federal Hardest Hit Fund, the California Housing Finance Agency’s Keep Your Home California program is designed to help homeowners who are considered hardest hit by the recession. But some, including Cal State Bakersfield economics professor Mark Evans, are still skeptical about Keep Your Home California’s widespread effectiveness.”
“According to Evans, principal reduction is where the program has the most potential — and it’s also where ‘the big banks,’ like Bank of America and Wells Fargo, have been less willing to commit. ‘They must be reluctant to reduce mortgages, even with the PRP program putting in a dollar for each of their one-dollar reductions,’ he said in an email. ‘My guess is that they think they can prevent another large price collapse by controlling the pace at which they foreclose and put properties back on the market — and that they are better off using this strategy than writing down the mortgages.’”
The Ventura County Star. “In Ventura County, 1,083 properties in May were subject to foreclosure activity, about the same number as in April but down from 1,326 a year ago. Bank repossessions fell in May to 205 from 263 in April and 282 in May 2010. However, Sung Won Sohn, professor of economics and finance at CSU Channel Islands, cautioned against thinking the foreclosure crisis is coming to an end.”
“‘Banks have been beaten up for not doing it right, and so they are holding back. There’s a big backlog of new foreclosures to hit the market,’ he said.”
“In Ventura County, 693 homes were sold in May, compared to 815 the same time last year. Ventura County’s median price also dropped by 5.1 percent in May compared to the same time last year. Janet Dorsey, president of the Ventura County Coastal Association of Realtors, said DataQuick’s numbers reflect the general trend in the housing market since the beginning of the year.”
“Dorsey said some buyers also are choosing to hold off until they see other foreclosed and bank-owned properties that have yet to be released into the market. ‘What we are seeing is buyer cautiousness,’ Dorsey said. “Buyers know there is inventory out there…’”
The Informer. “Things were looking up there for a second, right? Unemployment was creeping down, people were starting buy houses again, you got the new iPhone. And then, boom: Housing prices went toilet-bound again, unemployment barely budged, and the stock market is experiencing Charlie Sheen-like mood swings. People are talking double-dip recession again.”
‘Now the UCLA Anderson Forecast has to put an exclamation point on that bad news. It’s titled … “No Recovery in Sight.”
The Malibu Times. “They all start out with the highest hopes and a most elevated view of their property value. Firmly convinced their special little slice of heaven will be further branded an investment success as well, the Malibu home owner lists their home with a broker and awaits their due bounty. And they wait. And wait. And they reduce their price. And reduce their price again. A small percentage are the fortunate ones. There are also the unlucky ones, who lose their house to foreclosure along the way.”
“In times when 80 percent of the listings in Malibu result in no deal, it is not surprising many listings experience drastic price reductions before finding a buyer, or spending very long periods on the market. Or both.”
The Auburn Journal. “Housing has been trending downward for the last 57 months straight. Even with all the government support, various moratoriums, delays, refinances, loan reworks and a plethora of other gadgetry the trend still remains. In a normal RE market distressed sales made up about 2% of total sales the remaining could be broken out into new homes and organic resales. Today we have anything but a normal market. Just released for Sacramento RE in May 2011, 65.6% of all resales (single family homes and condos) were distressed sales.”
“This is down from 66.8% in April but this is a very high percentage of distressed sales for May. A full two thirds of the market IS DISTRESSED sales in the Sacramento region. For the state it is over 45%. Foreclosures are selling for over 30 percent price reductions and in many areas including California foreclosures are a large part of the market.”
“A high level of distressed sales suggests falling prices. Some have tried to spin it that distressed and conventional are two different worlds, they are not. Home sales are set by the buyer, not the seller. The seller can set any price they want but reality is the DISTRESSED MARKET IS THE MARKET and anyone wanting to sell must compete in that market.”
“On October 1 the GSE’s (Fannie, Freddie, and FHA) will drop the loan guarantee amount from $729,750 to the original amount of $417,000 for most areas of the country. For Sacramento, Placer and El Dorado counties the amount will be dropped to $474,950.”
“Since 2008 the GSE’s have backed 90% of the market. When banks can no longer offload ‘affordable’ mortgages to the USGovt all homes currently priced in what is essentially the jumbo market will have no buyers. Prices must drop.”
From KFSN. “The move to a new Downtown Fresno apartment four months ago has meant a change in lifestyle for Travis Sheridan. Before the housing crash, Sheridan lived in 28-hundred square foot home in North Fresno. Now he says the two bedroom, 11-hundred square foot unit at the new Broadway Lofts, is all he really needs. According to a just-released report by the UCLA Andersen forecast many Californians will be downsizing, like Sheridan has done.”
“Sheridan said, ‘Before the recession we were at a time of surplus and everybody got very greedy, myself included, buying things we didn’t need, taking home equity loans and being frivolous with it.’”
