When Appreciation Slows, There’s No Call To Action
The Merced Sun Star reports from California. “Merced County’s property value increase of 9.3 percent to $19.5 billion ranked as the second highest increase in California from the same time last year. Stanislaus County property values had the highest year-over-year increase, rising 11.4 percent to $39.7 billion for the 2014-15 tax year, and San Joaquin County’s 8.8 percent increase to $61 billion was the fourth highest percentage gain among California’s 58 counties. Terry Ruscoe, owner of Merced Yosemite Realty in Merced, said Merced’s property values are being pushed up by continued interest from Bay Area investors and having many more homes in escrow compared to a year ago. ‘The market’s moving and the market’s pushing prices up,’ he said.”
“Merced County’s values reached $20.5 billion during the 2007-08 tax year. Values then plunged down to $16.6 billion through 2011-12. ‘The housing market has recovered, though it’s a little softer than it was even six or eight months ago,’ Merced County Assessor Barbara Levey said.”
The Union Tribune. “The slowdown in the pace of appreciation in San Diego County’s housing market continued in August, concluding a markedly tame summer peak buying season. ‘When prices are going up every month, there’s a hard motivation to get in right now and get the deal closed,’ said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. ‘When price appreciation slows down there’s no call to action, meaning if I wait until next month, it takes away that urgency from the buyer.’”
The Los Angeles Daily News. “The San Fernando Valley’s housing market continued sputtering in September, with sales falling from a year ago amid modest price increases, according to two reports. The Southland Regional Association noted that the median resale home price rose 3 percent from a year ago, to $535,000, but fell $8,000 from August. The group’s report also showed that the inventory of houses and condos increased 11 percent from a year ago. ‘Prices rose too high too fast, increasing 37 percent over two years,’ said Jim Link, the association’s CEO. ‘In addition to tight lending rules, affordability is the culprit for this slower market. Two years ago, first-time and median income buyers were being outbid for the ‘bargain’ distressed properties by cash-paying investors.’”
“Now buyers, and especially first-time buyers, simply cannot qualify for the higher prices, he said.”
The San Fernando Valley Business Journal. “In the Santa Clarita Valley, prices have risen substantially over the past year. Median home prices jumped more than 9 percent from last September to $490,000. That price was flat from August. Realtors in that area say inventory rose nearly 38 percent from the same month last year. ‘The market is much more balanced now that investors have largely retreated, with foreclosure-related sales hitting a record low,’ said Nancy Starczyk, president of the Santa Clarita Valley division of the association. ‘Prices are still rising, but sellers realize that buyers can go only so high.’”
The Los Angeles Register. “The piercing alarm of a stun gun shattered the quiet in a Laguna Niguel neighborhood one morning last week as a real estate broker let it rip. When Janet DePerry bought the stun gun from a vendor at a Realtors convention in Anaheim a few weeks ago, there was a long line of real estate professionals with the same idea, she said. Lately, brokers have been reminded that their routine – often working alone with strangers, and sometimes in empty or remote homes – exposes them to unusual risks.”
“Last Saturday, a transient put a real estate agent in Laguna Niguel into a chokehold, punching her in the face and almost knocking her unconscious, according to sheriff’s deputies. The agent was securing a lockbox at a home that was for sale for more than $1.5 million. ‘I feel more secure,’ said DePerry.”
The Inland Valley Daily Bulletin. “Thousands of homeowners in need of lowering their house payments have been coming to the Ontario Convention Center since Friday to seek assistance from the Neighborhood Assistance Corporation of America. The organization has come every year to the Ontario Convention Center since the height of the Great Recession to serve residents in the Inland Empire, which several years ago, was ‘ground zero’ for foreclosures.”
“Among the many seeking assistance was Hilda Lazaro Lopez, who continues to have difficulties with mortgage payments on her home in Los Angeles. Lopez attended a NACA mortgage relief event two years ago, which resulted in a $2,000 monthly savings on her mortgage payment. ‘I’m looking for help to pay less and try to sleep more,’ Lopez said. ‘I did this two years ago and it was a huge help. I almost lost my house. I need to get better interest.’”
“Maria Gamez, of Riverside, is also looking to lower mortgage payments. ‘Right now it’s $2,100 a month and we want it down to at least a thousand-something,’ Gamez said. ‘They keep refusing my (loan) modification, and so I’m here personally to see if they can help me.’”
“In September, the number of properties that received a foreclosure filing in San Bernardino County, was 11 percent higher than the previous month.”
The Orange County Register. “Mel Watt, currently head of the Federal Housing Finance Authority, recently announced plans – in a speech at a Las Vegas casino, of all places – to allow mortgage giants Fannie Mae and Freddie Mac, which he regulates, to purchase loans with down payments as low as 3 percent. With only a 3 percent down payment, and poor credit to begin with, these subprime borrowers will have virtually no ability to weather dips in the market. They will be trapped in homes with underwater values, denied the mobility that is key to pursuing job prospects in a changing labor market.”
“Good jobs and rising incomes are the only fundamentally stable way to expand access to housing. Policies enabling unsupportable consumption to stimulate certain sectors while trying to socially engineer the nation are doomed to failure, and those pushing them are simply proving they will pursue ideological goals no matter what havoc was wreaked just a few years ago.”
“If lenders want to lend to borrowers at high risk of default, nothing is preventing them from doing so, but they must be allowed to suffer if those practices get them in financial trouble.”
