June 30, 2014

Some People May Be In For A Shock

The Santa Cruz Sentinel reports from California. “For the first time in 39 months, listings of single-family homes rose compared to a year ago, increasing from 633 to 662, up 4.6 percent, according to Gary Gangnes of Real Options Realty, who tracks the numbers. The median price, the midpoint of what sold, was $675,000. The May median was the highest since February 2008, the year of the crash. Sales were slower compared to a year ago. ‘If it’s a good property, people should come in and make offer immediately or it’s gone,’ said Jerry Smeltzer of American Dream Realty, an agent with 37 years in the business.”

“A three-bedroom, two-bath home in Capitola was snapped up in nine days, sold for the asking price. ‘They wrote a letter that was heartwarming,’ said Don O’Regan, an agent with Thunderbird Real Estate representing the sellers, who ‘liked the idea of a young family moving in and building their own memories.’”

The Signal. “The typical house in Santa Clarita changed hands for $485,000 in May – even with April, and higher than any month since February 2008 when the price was $490,000. The all-time high came in April 2006 when the average house sold for $645,000. There were 663 active listings on Southland Regional Association of Realtors’s MLS at the end of May, up 74.0 percent over a year ago, the association reported. It was the highest inventory since April 2012 and has been slowly climbing from a recession-low of 312. ‘Even inventory is slowly growing, which expands options for buyers and reflects renewed optimism in the housing market,’ said Jim Link, SRAR CEO.”

The Glendale News Press. “The number of single-family homes and condominiums for sale grew last month, though these hikes were larger than in the past. There were 116 homes on the market last month, up almost 40% from 83 in May 2013, according to statistics compiled by Realtor Keith Sorem with Keller Williams in Glendale. For condos, there were 62 for sale last month, up a whopping 72% from 36 the same time a year ago. Realtor Ira Bland in La Crescenta said he is seeing some more housing inventory coming online, but there are a lot of potential sellers who are sitting on the sidelines. ‘There still are people who are underwater, so it’s difficult for them to do anything right now,’ he said.”

“Bland said one potential factor that could impact the housing market in the future is the number of homeowners who took out home-equity lines of credit before the housing-market bust. Some of those homeowners opted for a payment structure where they paid only on the interest for 10 years. They may be reaching the point where they’ll have to pay on the interest and principal soon, Bland said. ‘Some of those people may be in for a shock,’ he added.”

Capital Public Radio. “RealtyTrac’s home sales report for May show a 15 percent drop in California sales compared to a year ago. RealtyTrac’s Daren Blomquist says sales of bank-owned properties however were up a bit. Blomquist says banks are finally pushing through properties that have been lingering in the foreclosure process. He says there’s still a lot of foreclosures in limbo. ‘Properties that have started the process maybe two or three years ago that the banks are finally pushing through,’ says Blomquist.”

The New York Times. “A year ago, buying foreclosed homes to rent out was the sure-thing trade for investment firms, but some early investors are looking to cash out a bit by flipping homes to competitors. The Waypoint Real Estate Group, one of the first companies to raise money from private investors to buy foreclosed homes, is quietly shopping as many as 2,000 houses in California that it acquired in the last few years in several private investment funds, said three people who had been briefed on the matter.”

“The companies are finding that the most challenging part of the rental business is expanding their property management operations to deal with leaky toilets, damaged roofs and tenants who do not pay rent on time. ‘Most of these companies have 18-month track records as property managers, so they are still working out the operational details,’ said Michael Gutierrez, managing director of operational risk assessments at Morningstar Credit Ratings. ‘There have been growing pains.’”

The Desert Sun. “A growing number of price reductions are entering the Coachella Valley housing market, in part a result of sellers who were too optimistic last fall. Lowering prices is a common tool to attract buyers during the slower summer season.”

“‘I’ve seen a lot of reductions across the board in the last month, in all cities and price ranges,’ said Beverly Bell, a longtime HK Lane luxury real estate agent based in Palm Desert. ‘It’s not an uncommon thing to do. I also think that last fall, everybody was a little more optimistic thinking what season would be. It didn’t turn out to be quite what they thought it would be. Prices were a little bit too high because of that forecast. In all price ranges, when we do see the sale, they’ve had maybe one or two price reductions. Unless it’s a motivated seller, price reductions are from the lower end to all the way up into $2 million-plus.’”

Bits Bucket for June 30, 2014

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