September 17, 2014

We’ve Forgotten What Normal Is

The Daily Bulletin reports from California. “California home sales slipped in August after two months of increases as the median home price rose, the California Association of Realtors reported. August marked the 10th straight month that sales were below the 400,000 level and the 13th straight month that sales have declined on a year-over-year basis. Sales in August decreased 1.2 percent from 398,940 in July and were down 9.3 percent from 434,910 in August 2013, according to CAR. ‘With more homeowners in a position to list their homes for sale following rising home prices, housing supply is improving across all price ranges as would-be sellers may be seeing this as an opportunity to list their homes for sale,’ said CAR President Kevin Brown.”

The Central Valley Business Times. “What happened to the housing recovery? Perhaps it went on vacation last month. In August, 34,269 California single-family homes and condominiums were sold, down 4.2 percent from July’s total of 35,787 and a decline of 13.5 percent from 39,614 sales in August 2013, according to figures compiled by PropertyRadar Inc. August 2014 sales were the lowest August sales since 2010, it says. On a regional basis, over the past 12 months sales are down 18.8 percent in the Central Valley, down 15.7 percent in the Bay Area, and down 16.7 percent in Southern California.”

“‘The bloom is definitely off the California real estate rose,’ says Madeline Schnapp, director of economic research for PropertyRadar. ‘The rapid rise in prices over the past two years has outstripped the ability of many would-be California homeowners to purchase.’”

The Press Democrat. “Sonoma County home sales slowed in August to the lowest level in four years, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. Sales declined 15.1 percent from a year earlier and were the smallest number for the month since 400 homes were sold in August 2010. The county’s median sales price declined to $475,000 in August from $510,000 in July. The median remained 8.7 percent higher than a year ago.”

“Sales may have dropped because buyers face tougher standards to obtain home loans and because there are fewer foreclosures and shorts sales on the market than in the last four years, said Gerrett Snedaker, a senior VP in Sonoma for Wine Country Group by Better Homes and Gardens Real Estate. ‘I think we’re still working some normalization into the market after seven years of disruption,’ Snedaker said. ‘It’s been so long, we’ve forgotten what normal is.’”

The Orange County Register. “What are house hunters in San Bernardino trying to tell us? August’s Southern California housing market fit all-too-familiar 2014 themes, according to trends within CoreLogic DataQuick’s monthly report. First, the buying pace stayed cool, with 20,369 homes sold in the six counties – the slowest August in four years and down 18.5 percent from August 2013. It was the 11th consecutive month of year-over-year homebuying declines. Second, selling prices stayed high, but appreciation slowed.”

“My trusty spreadsheet tells me that such an extended streak of San Bernardino over-performance is a bit of a rarity in the past quarter-century of CoreLogic DataQuick record keeping. The two previous noteworthy lengthy streaks were: 14 straight months (and 16 out of 18 months) in 1990-91 as the late 1980s boom was ending, and 19 straight months (and 24 out of 25) in the 2004-06 boom years. This year’s house shopper is clearly balking at various conditions that significantly pushed up Southern California selling prices. The regional median price is up 70 percent since its 2009 bottom.”

“It’s also a good bet that this same pricing phobia gave an edge to the often sensitive San Bernardino market. And comparatively, San Bernardino home sales are only down 9.8 percent in a year. Only Orange County – down 9.3 percent – has fared better. That leaves us to fret whether this cycle of anxiety over affordability ends badly for everyone in Southern California – as it did twice before in the past quarter-century.”

The Sacramento Bee. “Two dozen protesters wearing yellow T-shirts marched through a downtown Sacramento conference room and chanted slogans Tuesday during a meeting of the California Housing Finance Agency’s board of directors. The members of the Alliance of Californians for Community Empowerment demanded that the agency’s Keep Your Home California program move faster in distributing $2 billion in federal aid for struggling homeowners.”

“Keep Your Home California still has about $1 billion of the money it received from the U.S. Treasury Department’s Hardest Hit Fund several years ago. It must spend that remaining amount by 2017. Critics say the program has been dragging its feet as more homes are lost to foreclosure. ‘What do we want? Principal reduction! When do we want it? Now!’ the protesters chanted as they marched in circles around the room.”

The Record Bee. “Nearly two-and-a-half decades after his father purchased property and began building a house in Cobb, Rob Somerton is unsure how much longer he will be its owner. Somerton claims that Bank of America has been trying to foreclose on the house since 2011, using the Mortgage Electronic Recording System,or MERS. ‘They could foreclose in a month, or they can drag it out longer,’ Somerton said. ‘I really don’t know.’”

“‘Something has to be done about this,’ Somerton said. ‘It ruins lives. You can’t imagine the anguish and stress something like this does to a person.’”

Bits Bucket for September 17, 2014

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