There Is No End In Sight In California
The Los Gatos Weekly Times reports from California. “More than 30,000 California families will face higher down payments, higher mortgage rates and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration, Fannie Mae and Freddie Mac are reduced beginning Oct. 1, according to analysis by the California Association of Realtors. ‘By reducing the conforming loan limit, thousands of California home buyers will be shut out of homeownership,’ said Beth L. Peerce, the state group president. ‘The higher mortgage loan limits are critical to providing liquidity in today’s housing market and are essential to our housing recovery.’”
The Press Democrat. “Three years ago, the federal government agreed to raise the limit on the mortgages it guarantees to as much as $729,750 in California and other states with more-expensive homes. The change resulted in maximum loan limits of $662,500 for Sonoma County and $512,500 for Mendocino County. Lake County received a maximum amount of $401,250 for FHA loans only. Unless Congress acts, Sonoma County’s limit this fall will drop to $520,950.”
“Nick Costa, president of American Mortgage Partners, said at his Ukiah office he rarely sees people who would be affected by the lower loan limit. ‘We’re in a first-time homebuyer market and first-time homebuyers aren’t buying $500,000 homes,’ Costa said.”
“Sonoma County’s condominium market is still bleeding, and no cities have been hit worse this year than Rohnert Park and Cotati. Nearly nine in 10 condos sold this year in the two cities were foreclosures or short sales. Condo sales in Rohnert Park and Cotati are ‘totally dominated by people who have to get rid of them,’ said Dave Roberts, an agent with Sotheby’s International Realty in Healdsburg who analyzed this year’s sales.”
“Prices have tumbled to the lowest level in 12 years. The median price for sales to date this year fell to $140,000, down 13 percent from the same period in 2010. Prices have dropped 62 percent since the peak year of 2006, when the median reached $365,000 during the first five months.”
The Record.net. “Martha Robles, a single mother of two young girls, is happy to have found a spot in the recently opened Gleason Park Apartments project in downtown Stockton. ‘It’s like I found the promised land here,’ she said.”
“But Robles’ experience is just one example of a larger problem for San Joaquin County. Despite the region being a poster child for the housing boom gone bust, with nation-leading foreclosure rates and imploding home prices, rental housing rates have actually increased. Almost half of San Joaquin County renters spend at least 35 percent of their income on gross rent and just over 28 percent spend 50 percent or more on housing.”
“One factor affecting the market may be foreclosure properties, said Terry Hull Sr. of Property Management Experts, one of Stockton’s largest rental management companies. Banks and lenders, having taken possession of homes, are slow to put them up for sale or rent, so they sit empty. ‘In effect, what they’ve done is reduce the supply of housing that is available,’ he said. ‘There’s been no supply. The only supply has been single-family housing that has been foreclosed.’”
The Press Enterprise. “Wil Herring, owner and president of MTG Experts and Baxter Wellington Real Estate in Moreno Valley and past president of the Inland Empire chapter of the California Association of Mortgage Professionals, said in the last couple weeks he has seen lenders start relaxing restrictions on home purchasers looking for a mortgage. ”
“What is more lenders are beginning to make loans to investors buying up to ten homes each, where before they set the limit at four homes per investor, he said. So what is going on? Herring figures there is a good chance that lenders are planning to release more of their so-called ’shadow inventory’ of homes they have foreclosed on but not yet listed for sale. Often the former owners have not been evicted, he observed.”
“‘I think they (lenders) are preparing to get rid of some of their forclosure inventory and want to make it easier for people to buy it,’ said Herring. ‘As it sits now we have to got move the properties because you can’t keep letting people live in houses who aren’t paying a mortgage.’”
The Camarillo Acorn. “The department of community development released its state-mandated annual report last week, highlighting Camarillo’s development throughout 2010 in housing, commercial and industrial properties. As part of the Regional Housing Needs Assessment, Camarillo is expected to have 3,340 new homes built between 2008 and 2014.”
“The city is on track at 42 percent— or 1,392—of the seven year total. Yet zero homes were built in 2010 in the city. Camarillo approved only one new-home permit.”
The Tribune. “Jack Ranch Vineyard in Edna Valley, once one of the myriad holdings of Paso Robles businessman and developer David Weyrich, will be auctioned on the courthouse steps at 11:30 a.m. July 8. Lender RE Loans LLC., of Lafayette, reported an unpaid balance on the property of nearly $11.4 million. The ranch has an assessed value of nearly $5.8 million, according to public records.”
“In January, 47 parcels that foreclosed at Santa Ysabel Ranch in Templeton went back to R.E. Loans because no one bid for them at the foreclosure auction. The company reported at the time that they would attempt to market the home parcels, valued at a total of $8.2 million.”
The Marin Independent Journal. “The county assessor, citing a continuing slide in home values, has reduced the value of 27 percent of Marin’s residential properties, providing tax breaks for 21,600 homeowners. The move by Assessor Rich Benson eclipses adjustments made last year that reduced the value of 21 percent of the county’s residences in what was then the biggest reassessment purge since Proposition 13, providing breaks for 16,000 property owners.”
“Benson, noting declining values in a deflated real estate market, reduced assessed valuations for thousands of parcels ‘mostly because of the economic conditions that have existed’ for several years.”
“The assessment situation reflects a lackluster real estate market. The number of Marin single-family homes sold in May dropped 12.4 percent to 169 from a year ago, and the median sales price dipped slightly to $775,000. Annual median prices peaked in Marin in 2007 at $1 million for a single-family house and $570,000 for a condo.”
“Cyd Gardner, manager of the Greenbrae office of Frank Howard Allen Realtors, wasn’t fazed by news from the county assessor, saying she’s seeing ‘increased sales activity’ for those who price homes in line with the times. ‘We’re seeing multiple offers when homes are priced right,’ she said.”
The Mountain View Voice. “Local real estate development appears to be back in full swing, as a parade of developers came before the City Council Tuesday night. But it was a bad night for Mozart development, the high flying Palo Alto developer of 5.5 million square feet of office space in the Valley and numerous homes under its subsidiary, Classic Communities.”
“Earlier in the evening the council rejected another Mozart project, one that would have squeezed 14 three-story homes on a 0.8 acre, rhombus-shaped site. Member Margaret-Abe-Koga said the homes would have been affordable for families with the estimated average sale price of $587,500 for three- and four-bedroom homes. But she ended up voting against the project because it violated many of the city’s award winning row-home design guidelines with too little parking and no common areas, only private backyards. ‘Folks won’t socialize as much,’ she said.”
The Pasadena Star News. “Real estate guru Mike Ferry told a group of about 70 local real estate agents that the current market is the best it’s been in several years and that they need to change their behavior in order to capitalize on it. ‘I’m going to tell you the truth: this is the best market we’ve seen in the past five years,’ Ferry said. ‘But there have been many changes and things are difficult. That’s why you need to change your behavior.’”
“According to Ferry, the behavior of agents, brokers, sellers and buyers has been counterproductive and is the main reason the market has failed to benefit from low interest rates and low home prices. ‘The seller wants to list their property at the highest possible price … and the buyer wants to steal it at the lowest possible price,’ he said. ‘You need to change their attitude.’”
The Voice of San Diego. “House prices in America have now fallen further than they did in the Great Depression. An economic ‘double dip’ led by housing is almost upon us, with economists unable to agree how much further house prices could fall. America’s housing policies are making a dreadful situation unbelievably scary. It is time to change course and the first thing we must do is stop the foreclosure madness.”
“What sort of society throws a million families a year onto the economic scrap heap? What kind of country creates financial cripples out of ordinary citizens who did nothing wrong? People who just tried to achieve the American Dream and were led into a mortgage nightmare.”
“Instead of throwing home-owners out of their homes, let’s create policy that requires lenders to keep them in their homes. Instead of turning communities and cities and whole regions into economic wastelands, let’s put a floor under house prices.”
The Salinas Californian. “There’s one big reason why foreclosure reforms that strongly encourage banks to redo loans for ‘underwater’ homeowners are a must for California, and soon: This state’s overall economy and employment levels cannot recover to pre-recession status until the foreclosure crisis ends.”
“Places like Merced, Stockton and Fresno grew immensely in large part because of easy money made available by banks that demanded little or no down payment on houses and then sold off the mortgages they wrote, helping cause the Wall Street debacles of the past four years. That’s had a wide impact — thousands of homes now sit vacant after their occupants either were forced out via foreclosure or abandoned houses and mortgages when property values fell to the point where loan amounts topped home values, putting them figuratively under water.”
“With so many houses vacant, or even derelict, there is little or no demand for new housing. That means there’s little or no new residential construction under way or in prospect. Last September, the Associated General Contractors of America reported California construction employment was off by almost 51,000 jobs from the preceding year. Put these numbers together, and they suggest the construction industry has lost more than 250,000 jobs in this state since the foreclosure crisis began.”
“That doesn’t even count all the out-of-work real estate brokers, carpet salespeople, air conditioning installers, furniture salespeople, fence builders and more in myriad other construction and remodeling fields. California has been so dependent on homebuilding for so long that its virtual disappearance has led to an inevitable nightmare.”
“California needs actions that can somehow alter the foreseeable future. Foremost among these should be mortgage loan reforms, laws compelling banks to work with underwater homeowners on restructuring payments so homeowners won’t be on the hook each month for more than they’d pay to rent something similar to their houses. There are no signs Congress will do anything, so it may be up to state legislators to act.”
“Without this kind of move, there is no end in sight to the foreclosure crisis, high unemployment or the persistent recession.”
