May 19, 2014

The Frenzy Is Discouraging Some Would-Be Buyers

The Mercury News reports from California. “In a milestone for the Bay Area housing market, April’s home prices reached the highest levels since just before the recession began, with Santa Clara County hitting a new peak in records going back 26 years, DataQuick reported. With too many buyers chasing too few homes, Silicon Valley has seen bidding contests with houses fetching thousands of dollars over asking prices. The frenzy is discouraging some would-be buyers. ‘I see clients giving up,’ said Avi Urban with Keller Williams in Palo Alto. ‘They’re saying it’s crazy with the competition, and they’re staying at home.’”

The Press Democrat. “Sonoma County’s home sales remained lackluster in April, as agents reported that an ongoing lack of inventory has left many first-time buyers frustrated. Buyers purchased 356 single-family homes in April, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. Sales declined 24 percent from a year earlier and remained below the 10-year average for April of 396 transactions.”

“The county’s median sales price declined nearly 5 percent from March to $468,975. The median remained nearly 8 percent higher than a year earlier. For the year, sales are at their lowest level since 2008, a period of recession and plunging home prices. Tim Freeman, manager of Coldwell Banker in Santa Rosa, said some first-time buyers are leaving the market after concluding that they can’t purchase a home at today’s prices. He recalled the experience of one of his agents. ‘She lost four clients within the last month because they all feel they’re being priced out,’ Freeman said.”

The Sacramento Bee. “Home prices in Sacramento have reached levels not seen since the recession gripped the market in the last decade and drove down home values, DataQuick reported. Despite the rising median, year-over-year price gains have been moderating lately, said DataQuick analyst Andrew LePage. Sacramento County’s 19 percent increase in the median home price from April 2013 to April 2014 was the lowest year-to-year gain in the past 16 months, he said.

“Many investors have left the market, reducing upward pressure on prices. Interest rates have risen. And affordability is also becoming a factor limiting sale prices, he said. ‘It wasn’t long ago we were talking about 30 to 40 percent gains,’ he said.”

“Pat Shea, president of Lyon Real Estate, said one factor limiting the number of homes listed is the historically low mortgage rates that homeowners refinanced to in recent years. Even if they want to move, people may be hesitant to give up those ultra-low rates. ‘People may not love their homes, but they do love their mortgages,’ Shea said.”

The Desert Sun. “Southern California home prices increased at a slower pace in April as inventories improved and investor purchases waned, DataQuick said. Sales fell but less sharply than previous months. ‘The housing market’s pulse quickened a bit in April. If the inventory grows more, which we consider likely, it’s going to make it a lot easier for sales to reach at least an average level, which we haven’t seen in more than seven years,’ said DataQuick analyst Andrew LePage.”

The Los Angeles Times. “Not long ago they were the punching bags of American real estate, accused of rank incompetence, wrecking home sales and failing to pick up on signs of the housing turnaround. That was then. Today appraisers are suddenly getting much more favorable reviews. ‘My personal belief is not so much that the incompetent appraisers are gone,’ said Gary Kassan, a Los Angeles-area realty agent in an email, ‘but rather that they have better comps to work with.’ With prices on the rise, ‘they have more latitude and are more comfortable stretching the comps to bring the appraisal in at sales price.’”

The San Fernando Valley Business Journal. “There were 7,521 foreclosures in the six-county region, down nearly 12 percent from the same month last year, according to RealtyTrac. In the greater Valley, Palmdale topped the list, with foreclosures in one out of every 415 homes. The other Antelope Valley city continues to struggle, with one out of every 420 homes in Lancaster in foreclosure.”

“Other Valley communities with high foreclosure rates include Granada Hills, with one in every 512 homes; Sylmar with one in every 530; and Canyon Country with one in every 554. Despite the overall decrease in foreclosures, bank repossessions – one step of a process that ranges from notices of default to bank sales – are on the rise. In Southern California, repossessions were up 49 percent in April to 1,528, compared to the same month last year.”

The Press Enterprise. “Bank repossessions – the last step in the foreclosure process – have gone up across the nation from March to April. California has seen a 27 percent increase, the RealtyTrac report says. One place where banks are calling in property at the so-called bottom of the barrel is Inland Southern California. There were 2,616 Inland housing units in April – 1,402 in Riverside County and 1,214 in San Bernardino County – that got a foreclosure notice of some kind. Yet, 1,090 total filings were notices of default, a first step in the foreclosure process. Another 790 trustee sale notices and 648 were notices of bank repossession.”

“It’s been a slow wind-down, said Daren Blomquist, VP at RealtyTrac. ‘I doubt this is the final gasp, although it is one of the final gasps of the foreclosure crisis,’ he said, explaining that the numbers have not caught up to the estimate of foreclosures that were delayed last year by the California Homeowners Bill of Rights.”

“To put the numbers in context, there were 7,600 Inland properties with foreclosure filings monthly in 2012. When the new law took effect in 2013, the number dropped more than 60 percent to 2,900 properties with filings. From 2010 through 2012, foreclosure filings had been dropping consistently by 25 percent to 30 percent. Given that rate, the Inland region should have seen 5,700 properties with foreclosure filings a month, not 2,900. ‘So, we still have a deficit of 2,800 foreclosure filings a month, or more than 30,000 for the year that need to be caught up in the Inland Empire,’ Blomquist said.”

Bits Bucket for May 19, 2014

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