January 19, 2012

The New, Real Market

The Press Democrat reports from California. “Large volumes of financially distressed real estate boosted Sonoma County home sales last year, but they also helped drag down prices to the lowest level in a decade. The median price for 2011 fell to $325,000, a new low for this real estate cycle. It hasn’t been at that level since 2000. In contrast, the market peaked in 2005 with a median price of $595,000, according to The Press Democrat’s monthly housing report compiled by Pacific Union International vice president Rick Laws. A key problem remains that the market lacks ‘move-up buyers,’ those who own homes and can use their equity to purchase more-expensive properties, said Laws. Without them, he said, ‘this market will not heal.’”

“‘Everybody better get comfortable with it,’ said Shawn Hermosillo, an agent with Keller Williams in Santa Rosa. ‘This is the new, real market. This is what it is.’”

The Mercury News. “In the North Bay, Sonoma and Marin counties experiencing double-digit growth in year-over-year home sales and large dips in median price at the same time. Sonoma County’s home sales increased 17 percent to 538, while the median price fell 9.8 percent to $279,500; 280 homes were sold in Marin County in December, a 23.9 percent increase from the same month in 2010, while the median price declined 13.6 percent in the same period to $517,818. In San Mateo County, the median price dived from $560,000 in December 2010 to $500,000 in the same month last year.”

“While the volatility of prices has caused stress among realtors, experts say it is the perfect time to buy a home — if you can qualify for a loan in the tough credit market. ‘We’re going to see prices stabilize,’ Ken Rosen, chairman at the Fisher Center for Real Estate and Urban Economics at UC Berkeley, said late last year. ‘It’s already happening in pockets like Silicon Valley and San Francisco. If you want to buy a house, it’s probably the best time in California in 30 years.’”

“In Antioch, the multiple offers for lower-end houses are coming from investors and first-time buyers, according to agents there. ‘Anything below $200,000 right now, unless it’s a terrible dump that’s overpriced, is going to sell in the first week and almost all get multiple offers,’ said Neil Case of Altera/Signature properties in Antioch. ‘I have six buyers, every time we make an offer we get beat.’”

“The problem is inventory — there aren’t enough homes on the market, said Joyce Tietz, also with Altera. ‘The banks have foreclosed on some homes but we haven’t seen those homes come back on the market yet. That’s one factor,’ he said. ‘We’re seeing a bigger percentage of distressed properties purchased at the courthouse steps, and now they are being flipped, and lot more short sales than regular sales. I’d say that out of 100 homes on market, you might see three or four regular sales, where someone is deciding to move and they do have equity.’”

The Daily Pilot. “Home for less than $500,000 is the norm in most communities, but only in times of continually falling home prices would you talk about homes for sale for under that price-point in coveted areas like Laguna Niguel and Aliso Viejo. And buyers, many of them first-time buyers, seem to be keying in on the fact that there are deals to be had nowadays in such places.”

“Sari Ward, with Prudential California Realty in Laguna Niguel, was the listing agent and host at an open house for a two-bedroom, 2.5-bath townhome in for $364,000 in Aliso Viejo this week. It’s the price range more than the property itself that Ward thinks is attracting so much interest. ‘That’s a really hot price range,’ she said.”

The Whittier Daily News. “John Hall, sales manager at Whiting Realtors in San Dimas said this is a great time to buy because homes are priced low and interest rates have never been lower. ‘Anything under $500,000 is going pretty good now,’ he said. ‘And getting a loan isn’t too much of a problem as long as you have fairly decent credit.’”

‘Hall said about 40 percent of the transactions his office handles are still either bank-owned foreclosure properties or short sales. ‘I think it will be a while before we get through all of those,’ he said. ‘There are still a lot of homes that are upside down that people want to sell.’”

The Ventura County Star. “Home prices in Ventura County continue to sink and in December hit a low last seen nearly nine years ago. The median price locally for new and existing homes and condominiums was $325,000 last month, DataQuick reported. The last time it was that low was in January 2003. The median price peaked at $630,000 in December 2005. The falling prices are the reason local sales rose over the past month and year, according to Kirk Lesh, senior economist with the Center for Research and Economic Forecasting at California Lutheran University in Thousand Oaks.”

“‘This is a great time to buy,’ Lesh said. ‘I wish I would have bought now instead of when I did four years ago.’”

The Napa Valley Register. “The number of Napa County foreclosures hit a four-year low in 2011. Susan Archer, president North Bay Association of Realtors, said that the government’s attempts to enact new programs to help struggling homeowners, the banks’ inability to process increased numbers of loan defaults, and the strategies homeowners and banks used to recover from default, such as ’short sales’ all impacted foreclosure rates over the past several years. ‘There are still a lot of distressed properties out there that may not be showing up in these numbers right now,’ Archer said.”

“Foreclosure rates may rise in 2012, she predicted. ‘There are just way too many distressed properties out there.’ ‘The good news is there is movement in the market,’ Archer said. ‘Prices are going up,’ she noted, adding that multiple offers on entry-level homes are common.”

“The Occupy movement came to this area Monday - at the home of a past Whittier-Pico Rivera PTA president - where about 40 people protested the foreclosure of her home by Bank of America. Virginia ‘Ginny’ Hosking, who had lived in her home in unincorporated South Whittier for nearly 31 years, moved out Monday.”

“Hosking’s problems began in October 2008 when her husband, lost his job in December 2008 and they couldn’t make their home payments of more than $2,100. While they had purchased their house in 1981 for $76,500, they had refinanced several times to remodel the house. ‘The banks need to be dismantled because they’re bad,’ said Hosking. ‘They’re not doing what’s right by people.’”

“In an e-mailed statement from Bank of America, the company states that at the time of the foreclosure sale, Hosking was past due 32 months. ‘In the almost three years of delinquency, we offered temporary assistance and then reviewed the loan multiple times for long-term assistance but unfortunately, we were not able to qualify her for any modification programs.’”

The Bay Citizen. “Since taking office as attorney general a year ago, Harris has clashed with the Obama administration over one of her signature issues: foreclosures and mortgage fraud. In September, Harris walked away from settlement talks with the nation’s five largest mortgage servicers. She said the proposed settlement sought by the Obama administration asked California to ‘excuse conduct that has not been adequately investigated.’”

“Harris’s supporters said her position, which raises the possibility that California would independently investigate and file lawsuits against the lenders outside any federal-state agreement, simply showed that Harris had proved to be a tough negotiator, while Obama is perceived as more conciliatory. ‘The joke is that he’d wear Speedos to a strip poker party,’ said Mark Buell, a San Francisco philanthropist who has headed the finance committee of each of Harris’s campaigns.”

The Press Enterprise. “The number of loans modified annually more than doubled from 421,322 in 2008 to 939,226 in 2010, then dropped to 310,018 through the third quarter of last year, according to the U.S. Comptroller of the Currency. Even with a quarter of data yet to be collected, it is obvious that the volume of approved modifications will be far lower than for the previous year.”

“‘Numbers of modifications are shrinking because servicers are exhausting the pool of eligible people,’ said Comptroller of the Currency spokesman Bryan Hubbard. Meanwhile, foreclosures are expected to increase because servicers have run out of alternatives to prevent many people from foreclosure, he said. Critics complain that the number of modifications seems paltry and that many of the borrowers who get the loans later default again.”

“‘Modifications have just been a huge waste of time,’ said Greg McBride, a financial analyst at Bankrate.com. He complained that one of the major tools in loan modifications will push down the interest rate as low as 2 percent but then let it rebound to market rate over the next few years, which he warned is likely to produce future defaults. ‘The measure of success isn’t how many people whose payments you reduce now but how many of those borrowers can still afford their homes five years later when the payment starts to go back up,’ McBride said.”

“The 3,584 homes sold in Riverside County last month was 3 percent less than in December 2010, and the median price of $194,000 also showed a 3 percent year-to-year drop. The biggest barrier to stronger home sales is the anemic pace of job growth, said Chapman University economist Esmael Adibi. ‘Everything goes back to job creation,’ he said. ‘Once people find jobs then household formation occurs. A kid living with parents who finds a job then needs a rental or will buy a home.’”

The Visalia Times Delta. “While the value of all building permits jumped 21 percent in 2011, the value of single-family housing permits fell to a decade low. In 2011, there were 269 new home permits pulled, compared to 2005, when there were 1,450 new home permits, and 2006, when there were 1,317 permits. According to Zillow, there were 943 homes for sale in Visalia as of Monday, 405 of which are foreclosures.”

“‘There no building. No work,’ said Javier Castro, a construction foreman who adds that he is one of the lucky few to still have a job. ‘I’ve gone from a crew of 12 down to three.’”

“Even with bleak housing numbers last year, Steve Salomon, Visalia’s city manager, says he believes the economy has turned a corner. ‘The housing market was never going to be the factor that got us out of our declining economy,’ he said. ‘It’s always been the creation of jobs and with new businesses comes new jobs.’”

Bits Bucket for January 19, 2012

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