North Orange County Real Estate Blog

I will now be posting at North Orange County Housing News

2012-01-24T19:38:00.000-08:00

Hi Readers,

I will now be posting at the new North Orange County Housing News website. It's part of the Orange County Housing News Network. I thank you for reading this blog and it was joy to post.

Thanks,

North Orange County Real Estate Blog

Realtors Lower 2007-2010 Home-Sales Estimates by 14%

2011-12-21T10:16:00.000-08:00

I like to know how many standard deviations this is wrong. This is a BIG error.

The Realtors’ new figures also show 2008 was the worst year for home sales during the housing bust, with only 4.11 million sold, down 16% from the previous estimate of 4.91 million.

Home sales for the first 10 months of this year were also revised downward. October’s sales pace was lowered to a rate of about 4.25 million sales per year, from an original estimate, from an original level of 4.97 million.

Yun cited several reasons for the group’s sales revisions. The group’s reports were “not matching up with other housing-related data,” he said.

The Realtors group, he said, was overcompensating for sales that were not recorded through the regional and local real estate listing services from which the group gets its data. Those “multiple-listing services” have consolidated in recent years, giving them more coverage of local housing markets.

Other factors leading to the downward revision included a decline in “for sale by owner” transactions that were completed without a real estate agent, some new-home sales also being reported by real estate listing services and some sales being reported on more than one listing service.

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November's Western US median home price down 8.4% from a year a go

2011-12-21T07:27:00.000-08:00

Existing-home sales in the West rose 3.6 percent to an annual level of 1.16 million in November and are 11.5 percent higher than November 2010. The median price in the West was $195,300, down 8.4 percent below a year ago

Also, this is when mortgage rates are still at record lows. Buried in this article is that fact that 2007 through 2010 sales of homes were overstated by 14.3%. I'll post that soon.

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Big Jump in defaults rates in Los Angeles in November

2011-12-20T09:32:00.000-08:00

The squatters are coming!

All five major metropolitan statistical areas showed November mortgage default rate increases. Los Angeles saw the largest increase, jumping to 2.53% in November from 2.15% in October. The rate in Miami rose to 4.47% from 4.16%.

That's a 20% increase in the default rate in one month. Nationally this is a slight increase, but their might be a another correction for the Los Angeles / Orange County metro area. This could be, in part, BofA increasing the number of foreclosures in the area. BofA needs cash, so they are starting to move out their inventory.

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Home building spikes higher

2011-12-20T08:27:00.000-08:00

Yes, but it's a minor spike, this is not 2007 again.

Home building spiked up in November to the strongest level in almost two years, as record-low mortgage rates and a surge in apartment and condo construction lifted activity.

Housing starts shot up to an annual rate of 685,000 in the month, up 9.3% from October and 24.3% higher than a year earlier. Building activity easily topped predictions of 627,000 starts economists surveyed by Briefing.com were expecting.

Building permits, a closely-watched reading that is less affected by weather than actual starts, also shot up, rising 5.7% from October and 20.7% from the year before to 681,000 homes annually.

"By historical standards, homebuilding activity is still very depressed, but at least it appears to be on an established upward trend," said Paul Diggle, property economist at Capital Economics.

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LPS: Delinquent mortgages rise in November

2011-12-19T07:13:00.000-08:00

I think this is the trend as more people walk away from their mortgage.

The number of delinquent mortgages in November rose to 8.15% from 7.93% the prior month, according to a first look report from Lender Processing Services (LPS: 14.47 +1.19%).

That delinquency rate as a percentage of the LPS database of 40 million mortgages declined nearly 10% from a year earlier. About 4.14 million homes were 30 or more days past due in November, with about 1.81 million properties more than 90 days past due.

LPS considers a mortgage delinquent when it's at least 30 days in arrears but not in foreclosure. The company recorded 6.26 million homes either delinquent or in foreclosure last month.

Foreclosure presale inventory dropped 3% from October, but increased 2% from November 2010.

States with the highest percentage of noncurrent loans include Florida, Mississippi, Nevada, New Jersey and Illinois, according to the LPS report. Montana, South Dakota, Wyoming, Alaska and North Dakota had the lowest noncurrent loan rates

Link Here

Ex-Freddie, Fannie Chiefs Sued by SEC

2011-12-16T07:42:00.000-08:00

Not surprised at this. However, Fannie and Freddie were following a failed pushed by the federal government to make "everyone a homeowner".

“This action arises out of series of materially false and misleading public disclosures,” the SEC said in the complaint filed against Syron. The agency seeks unspecified damages against the defendants. Fannie Mae or Freddie Mac aren’t named as defendants in the case.

Mudd, now CEO of Fortress Investment Group LLC, was ousted when Fannie Mae and Freddie Mac were seized by regulators in September 2008.

I wonder if this investigation or a new investigation will look at the policitians, but they always seem to cover themselves.

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New Foreclosure Wave is Coming: Olick

2011-12-15T09:45:00.000-08:00

There is an anticipation that more homeowners that can pay their mortgage will simply default, because they have negative equity in their house. This report sort of confirming this prediction.

"November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs [bank repossessions] or short sales sometime early next year,” said James Saccacio, co-founder of RealtyTrac. “Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona and Massachusetts actually posted year-over-year increases in foreclosure activity in November.

Also, there some states that are having major delays.

Other states, like New York and New Jersey, are still seeing huge delays in the foreclosure process--986 and 984 days respectively, says RealtyTrac, but they too are starting to ramp up, as various moratoria have been lifted and judges have made rulings that will kick-start the process. That will mean more distressed properties surging into an already troubled housing market. Foreclosure starts outnumber sales by three to one, and 45 percent of foreclosure starts in October were repeat foreclosures, according to Lender Processing Services.

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California ranks No. 1 for mortgage fraud

2011-12-14T09:24:00.000-08:00

Were Number #1!

Mortgage fraud activity slowed overall in the third quarter, but California ranks first in home loan fraud, with the state seeing as much as $204.2 million in losses on deceptive mortgage activity.

That's according to a new report from MortgageDaily, which found that lenders victimized by fraud faced inflated appraisals and fraudulent documentation.

California was followed by New York, which experienced $199.6 million in losses from nefarious activities in mortgage finance.

New York was followed by Florida, South Carolina and Minnesota in terms of fraudulent activity.

The total loss value of all mortgage activity in the third quarter hit $1.3 billion.

In the third quarter, the Mortgage Fraud Index maintained by MortgageDaily noted that there were 1,173 mortgage fraud cases in the third quarter.

Link Here

O.C. home prices hit 31-month low: Register

2011-12-14T08:10:00.000-08:00

With the lowest mortgage rates in history, what will happen to home prices when rates increase?

Orange County’s home pricing got hit with autmun’s chill, as builders had a record-worst sales month.

DataQuick reported this morning that 2,297 residence sold in November. That is up 1.8% from a year ago. That gain came at a price. Literally.

Median selling price was $400,000 — the lowest since April 2009 and off 8.0% in a year. Orange County’s median first hit $400,000 in May 2003

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Mortgage refinance demand jumped last week: MBA

2011-12-14T07:24:00.000-08:00

As rates just barely dip under 4%.

Applications for refinancing on home mortgages jumped last week, even as demand for new home purchases dried up, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.1 percent in the week ended Dec 9.

The MBA's seasonally adjusted index of refinancing applications climbed 9.3 percent, while the gauge of loan requests for home purchases tumbled 8.2 percent.

The refinance share of total mortgage activity rose to 79.7 percent of applications from 76.0 percent the week before.

Fixed 30-year mortgage rates averaged 4.12 percent, down 6 basis points from 4.18 percent the week before. It was the lowest rate this year, MBA said.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Link Here

NAR: We Overcounted Home Sales for Five Years

2011-12-13T21:24:00.000-08:00

Oops...

The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.

"All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.

"We're capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list."

This is companies like CoreLogic, DataQuick, and other have become popular. They less juice in the game.

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Fitch: Properties average eight months in REO

2011-12-13T12:42:00.000-08:00

The Federal Housing Finance Agency is working on new ways to sell these homes. Fannie Mae and Freddie Mac currently own around half of them, according to Fitch. Analysts said bulk sales would be "a key part" of the housing market for the next two years.

If they want to sell them fast, why don't they just sell them a auctions instead of making them REO's?

A typical foreclosed home will spend eight months in REO before being resold, Fitch Ratings analysts said.

More than 2 million of these properties are somewhere in the foreclosure process, Lender Processing Services (LPS: 17.77 -3.69%) estimates, and more are coming. The majority of the backlog could take as long as two years to clear, according to Fitch as the current foreclosure timeline can last more than 12 months, before the time the property will spend in REO.

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Mortgage Banks Association (MBA) shortsold office space, but tells homeowners to pay mortgages

2011-12-13T11:25:00.000-08:00

From the New Yorker

Sometimes the hypocrisy is staggering: last winter, the Mortgage Bankers Association—the very body whose president attacked defaulters for betraying their families and their communities—got its creditors to let it do a short sale of its headquarters, dumping it for thirty-four million dollars less than the value of the building’s mortgage.

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November 2011 median home price down 4.2% from November 2010: Dataquick

2011-12-13T10:47:00.000-08:00

Last month the median price paid for all new and resale Southland houses and condos sold was $275,000, up 1.9 percent from $270,000 in October but down 4.2 percent from $287,000 in November 2010.

The regional median has declined year-over-year for the past nine months – since March. San Bernardino County’s 2.3 percent year-over-year gain in its median sale price in November marked the first time since January this year that any Southland County posted an annual gain in its overall median.

However, total sales have increased year over year.

A total of 16,884 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in November. That was up 0.3 percent from 16,829 in October and up 4.2 percent from 16,208 in November 2010, according to San Diego-based DataQuick.

Now let's look at sales of homes above.

Last month 17.8 percent of all home sales were for $500,000 or more – the lowest portion since May 2009, when it was 17.4 percent. November’s share of $500,000-plus sales was down a hair from 17.9 percent in October and down from 21.1 percent a year earlier. The low point for $500,000-plus sales in this cycle was in January 2009, when only 13.8 percent of sales crossed that price threshold. Over the past 10 years, a monthly average of 27.9 percent of homes sold for $500,000 or more.

And their chart.

Sales Volume			Median Price
All homes	10-Nov	11-Nov	%Chng	10-Nov	11-Nov	%Chng
Los Angeles	5,540	5,859	5.80%	$325,000	$308,000	-5.20%
Orange	2,257	2,297	1.80%	$435,000	$400,000	-8.00%
Riverside	2,977	2,971	-0.20%	$195,000	$195,000	0.00%
San Bernardino	2,271	2,378	4.70%	$152,000	$155,500	2.30%
San Diego	2,566	2,754	7.30%	$335,000	$315,000	-6.00%
Ventura	597	625	4.70%	$375,000	$349,550	-6.80%
SoCal	16,208	16,884	4.20%	$287,000	$275,000	-4.20%

Read it all

Home values dip in October as market reaches for the bottom

2011-12-13T07:48:00.000-08:00

This is a another weak housing report from Zillow.

Regionally, 95 of the 156 of the metropolitan statistical areas covered by Zillow experienced monthly home value depreciation and 39 metros showed monthly home value increases. Twenty-two metros remained flat.

Some of the nation's hardest hit areas showed some stabilization. In Miami, home values were flat on a monthly basis while Phoenix and Detroit saw monthly gains of 0.2% and 1%, respectively.

But the housing market is far from healthy with only 10 metros seeing home value appreciation on a yearly basis with seven of those metros also having monthly appreciation, including Fort Collins, Colo., Madison, Wis., and Oklahoma City.

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JPMorgan warns home prices face another 5% decline

2011-12-09T14:42:00.000-08:00

This could be bad for the FHA program, which is supporting 30% of the home purchases. If home prices drop, then the FHA insurance fund will run out of money and program will need a federal bailout. Potentially, 30% of the homebuyers will need another avenue for financing.

JPMorgan Securities concluded that if existing home sales fail to reach the 5.5 million level next year, the nation could be looking at another 5% decline in home prices in 2012. Overall, by the end of 2011, home prices will have dropped 3% this year and are expected to fall another 1.6% in 2012.

While the report is not overly optimistic, it does take note of several positive developments, including higher demand in November, increased consumer confidence and an uptick in job gains during the month.

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BofA developing foreclosure rental programs to deal with distressed properties

2011-12-09T14:24:00.000-08:00

But private banks own $50.4 billion worth of REO properties, too, according to the Federal Deposit Insurance Corp., and millions of these homes are sitting vacant.

Sturzenegger described how their idea would work.

"We and Fannie Mae are looking at programs where you can capture somebody before the REO process and offer a deed-for-lease. We would go to the customer and say, 'We'll do a short sale. Will you be interested in leasing your property back? We're still going to sell the property. You will no longer be the owner. But you can be a tenant now in that same property and save you from moving on,'" he said.

I don't think it will be that easy. A bank is not going on the top of the tenant like a real landlord. In addition, if the tenant cause $20,000 damage to the place and value of the home continues to decrease isn't the bank losing even more money. 1) If the sell the home in 3 years, but it's not worth as much and tenants have done damage. 2) The can sell the non performing asset and invest the money in a performing asset that's collecting a good return. However, if the Fed has given the banks $7.7 trillion in shadow loans in the last 3 years, so there isn't really need by the bank to find performing assets, they had cheap loans with the Federal Reserve .

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Hot real estate markets begin to cool

2011-12-09T14:16:00.000-08:00

Top real estate markets in the United States are beginning to cool down, according to Clear Capital, a provider of housing data and valuation services. The markets are still growing and improving, its latest report finds, but not at the rates seen in recent memory.

"Even though as a whole, this group hasn’t experienced returns this low since June 2011, each of the 15 markets continued to post quarterly gains," the Clear Capital report states. "The overall performance of the group has stabilized and tightened, with only 3.1% separating the highest performing market, Washington, D.C., from the 15th place market, Cleveland."

Four Florida markets — Orlando, Tampa, Jacksonville and Miami — continue to keep their positions among the highest performing markets quarter-over-quarter, rebounding from the steep drops and high levels of foreclosures they experienced over the past two years, the report states.

According to Clear Capital, Orlando and Miami also show strong year-over-year performance, topping the list with 5.9% and 5.4% growth respectively.

"The strong upward price movement for these Florida markets has correlated with a 12% drop in REO saturation over the last year at the state level," the report says. "The growth in Florida’s MSAs must be described in proper perspective against the state’s precipitous -59.1% drop in prices from peak values in 2006 to today."

Atlanta is now the market feeling the most acute drop in housing. The city is down nearly 20% year-over-year and the REO saturation rate is reaching 43%, second only to Las Vegas and Detroit.

Link

Profile of today's homebuyer

2011-12-07T09:58:00.000-08:00

This can't be the sign of a healthy market.

What stood out to me was that home buyers are:

Older

Have higher incomes

Are more likely to be married

Naturally, those who can afford to spend more are generally older and have higher incomes. In fact, the median age for overall home buyers rose from 39 to 43. The number of married couples buying homes rose 6 percent, while purchases by singles and unmarried couples were slightly down.

And what about new stricter mortgage standards called a Qualified Residential Mortgage (QRM)

The effect of QRM regulation would be to raise down payments to 20 percent to meet the requirements of a qualified residential mortgage. This would disproportionately affect first-time and minority borrowers.

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Realtors Report Even Higher Cancellations; And It's Not Why You Think

2011-12-07T09:39:00.000-08:00

It's not just tight credit, it looks like buyers are getting pickier.

On-time settlements were reported as declining from 65 percent to 47 percent," according to the Realtors. It's not why you think, or at least not why I thought. Inability to get a mortgage was reported by just 9 percent of respondents to the Realtor survey. Bigger issues were failed inspections, buyers with cold feet and adverse economic conditions. I'm sure appraisals figured in there as well.

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September home prices dip 1.2% in LPS home price index

2011-12-06T11:40:00.000-08:00

Home prices dipped 1.2% in September, and partial data for October suggest prices dropped about 1.1% that month, consistent with seasonal declines, according to Lender Processing Services (LPS: 19.15 -0.10%).

To date, the LPS home price index has reflected a 3.7% annual drop in prices. The index summarizes home price trends nationwide by tracking monthly sales in more than 13,500 ZIP codes.

The average home sold for $202,000 in September, down 1.2% over the previous month and down 1.8% since the beginning of the year.

Home prices have been on a downward trend since the market peaked in June 2006 when the total value of U.S. housing inventory covered by the LPS home price index stood at $10.6 trillion. The value has declined 30.2% since that peak to $7.56 trillion.

Price changes were consistent across the country, declining in all ZIP codes. Higher-priced homes had somewhat smaller declines — down 1.2% for the top 20% of homes (prices above $317,000), compared to a decline of 1.4% for the bottom 20% (below $102,000).

Link Here

NAR pending home sales surge in October

2011-11-30T07:06:00.000-08:00

Pending home sales soared more than 10% in October and remain above year-ago levels, in a hopeful sign for the nation's housing market, according to the National Association of Realtors.

NAR's pending home sales index, a forward-looking indicator based on contract signings, surged 10.4% to 93.3 in October from 84.5 in September. The index is 9.2% above October 2010 when it stood at 85.5.

The index is based on signed real estate contracts for existing single-family homes, condos and co-ops. An index of 100 is equal to the average level of contract activity during 2001, the first of five consecutive record years for existing-home sales and coincides with a level that is historically healthy.

"Home sales have been plodding along at a subpar level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years," said Lawrence Yun, NAR chief economist.

The PHSI in the Northeast rose 17.7% to 71.3 in October, 3.4% above October 2010. In the Midwest, the index jumped 24.1% to 88.7 in October and remains 13.2% above a year ago.
The South saw a smaller gain, 8.6% in October, to an index of 99.5 — 9.7% higher than October 2010.

Only the West saw slippage, but remains above 100. There, the index slipped 0.3% to 105.5 in October but is 8.1% above a year ago.

The index is based on a national sample, typically representing about 20% of transactions for existing-home sales.

Link Here

3Q home prices remain weak: S&P Case Shiller

2011-11-29T07:14:00.000-08:00

We are about to break 2002 prices, in what a lot of experts are calling the "Lost Decade".

The third quarter brought another dose of persistently disappointing home prices, with the U.S. national home price index up only 0.1% from the second quarter and down 3.9% from year-ago figures, the S&P Case-Shiller report said Tuesday.

The national index decline is not as steep as the 5.8% decline posted in the second quarter, but home prices overall are back to first quarter of 2003 levels.

The report found that the annual rate of change in 14 of the 20 metropolitan statistical areas covered by the report improved in September when compared to August.

And some analysis.

The relative lack of closed transactions might be exacerbating the downside, the report said.

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Jobs, Housing Costs Forcing Millions To Flee California; Most In 100 Years

2011-11-28T08:40:00.000-08:00

It's only one line, but I think the impact can be felt.

Housing costs are another factor cited by economists.

Read and Listen to it all