California January Home Sales

Posted on February 20, 2012 by John Reagan

An estimated 28,111 new and resale houses and condos were sold statewide last month. That was down 25.5 percent from 37,734 in December, and up 1.5 percent from 27,706 for January 2011. A decline from December to January is normal for the season. On a year-over-year basis sales have increased the past six months. California sales for the month of January have varied from a low of 19,145 in 2008 to a high of 47,138 in 2004, while the average is 31,717. DataQuick’s statistics go back to 1988.

The median price paid for a home last month was $236,000, down 4.1 percent from $246,000 in December, and down 1.3 percent from $239,000 for January a year ago. The median has decreased on a year-over-year basis for the last 16 months. The bottom of the current cycle was $221,000 in April 2009, while the peak was $484,000 in early 2007.

Distressed property sales – the combination of foreclosure resales and “short sales” – continued to make up more than half of California’s resale market.

Of the existing homes sold last month, 34.5 percent were properties that had been foreclosed on during the past year. That was up from a revised 33.9 percent in December and down from 40.4 percent in January a year ago. The all-time high was in February 2009 at 58.5 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 21.4 percent of resales last month. That was up from 19.6 percent in December and up from 18.7 percent in January 2011. Two years ago short sales made up an estimated 18.1 percent of the resale market.

The typical mortgage payment that home buyers committed themselves to paying last month was $893. That was the lowest since $882 in February 1999. Adjusted for inflation it was the lowest since at least 1988 .

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to move in different directions. Foreclosure activity is high, but well below peak levels. Financing with multiple mortgages is low, down payment sizes are stable, and cash and non-owner occupied buying remain at or near record levels, DataQuick reported.

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Southland Home Sales Flat, Prices Edge Down

Posted on February 15, 2012 by John Reagan

The Southland housing market started 2012 with slightly higher sales and slightly lower prices despite record-low mortgage interest rates. Home sales skewed toward the lower price ranges, which is normal for January, as many traditional buyers retreated and investors snapped up homes at a record level, a real estate information service reported.

A total of 14,523 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 24.5 percent from 19,247 in December, and up 0.4 percent from 14,458 in January 2011, according to DataQuick of San Diego.

Sales have increased year-over-year for five of the last six months. The sharp sales decline from December is normal for the season. Last month’s sales count was 17.8 percent below the 17,671 average for all the months of January since 1988.

A total of 669 newly built homes sold in January, the lowest number for any month since DataQuick started keeping track in 1988.

“January numbers have never been very good at providing an indication of what upcoming activity will be like. For that we need to wait until March. What we can determine is that the mortgage market remains dysfunctional. It will be interesting to see how a potential surge of refinance activity plays into the purchase market once the administration’s new guidelines are implemented,” said John Walsh, DataQuick president.

The median price paid for a Southland home last month was $260,000, down 3.7 percent from $270,000 for both December and January last year. The median was the lowest since $249,000 in May 2009. The median’s low point for the current real estate cycle was $247,000 in April 2009, while the high point was $505,000 in mid 2007. The peak-to-trough drop was due to a decline in home values as well as a shift in sales toward lower-cost homes, especially inland foreclosures.

Distressed sales made up more than half of January’s resale market.

Foreclosure resales – properties foreclosed on in the prior 12 months – made up 32.6 percent of resales last month, up from a revised 32.4 percent in December and down from 36.8 percent a year earlier. Foreclosure resales hit a high of 56.7 percent in February 2009 and a low of 32.8 percent last June.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 21.3 percent of Southland resales last month. That was a high for the current real estate cycle and compares with 19.6 percent in both December and January 2011.

Meanwhile, credit conditions remained tight.

Adjustable-rate mortgages (ARMs) accounted for 6.0 percent of last month’s Southland home purchase loans, down from 6.4 percent in December and 7.0 percent a year ago. Since 2000, a monthly average of about 35 percent of purchase loans were ARMs.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 13.6 percent of last month’s purchase lending, down from 15.2 percent in both December and a year earlier. In the months leading up to the credit crisis that struck in August 2007, jumbos accounted for 40 percent of the market.

Absentee buyers – mostly investors and some second-home purchasers – bought a record 26.8 percent of the Southland homes sold in January, paying a median $193,500. The Inland Empire saw absentee purchases rise to a record 33.6 percent of all sales. Since 2000, the Southland’s absentee buyers purchased a monthly average of 16.9 percent of all homes sold.

Cash purchasers accounted for a near-record 31.4 percent of January home sales, paying a median $199,000. That was up from 29.8 percent in December, and up from 30.4 percent a year earlier. The 10-year monthly average for Southland homes purchased with cash is 15.1 percent. Cash purchases are where there was no indication in the public record that a corresponding purchase loan was recorded.

Government-insured FHA loans, a popular low-down-payment choice among first-time buyers, accounted for 31.2 percent of all purchase mortgages in January. Last month’s FHA level was up from 30.7 percent in December but down from 33.2 percent in January 2011. Two years ago FHA loans made up 35.0 percent of the purchase loan market, while three years ago it was 38.9 percent.

Last month 16.0 percent of all sales were for $500,000 or more, down from a revised 18.4 percent in December and down from 18.3 percent a year earlier. The low point for $500,000-plus sales was in January 2009, when only 13.8 percent of sales were above that threshold. Over the past decade, a monthly average of 27.2 percent of homes sold for $500,000 or more.

Viewed differently, Southland zip codes in the top one-third of the housing market, based on historical prices, accounted for 35.1 percent of total sales last month. That was down from 36.4 percent in December but up from 33.6 percent a year earlier. Over the last 10 years, those higher-end areas contributed a monthly average of 36.7 percent of regional sales. Their contribution to overall sales hit a low of 26.2 percent in January 2009.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $983 last month, the lowest since it was also $983 in May 1999. Adjusted for inflation, last month’s typical monthly mortgage payment is the lowest in DataQuick’s records, which go back to 1988.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

Sales Volume Median Price
All homes Jan-11 Jan-12 %Chng Jan-11 Jan-12 %Chng
Los Angeles 4,908 4,997 1.8% $300,000 $289,000 -3.7%
Orange 1,929 1,872 -3.0% $415,000 $392,000 -5.5%
Riverside 2,738 2,684 -2.0% $190,000 $180,500 -5.0%
San Bernardino 2,085 2,051 -1.6% $151,500 $150,000 -1.0%
San Diego 2,248 2,358 4.9% $304,000 $305,000 0.3%
Ventura 550 561 2.0% $350,000 $322,500 -7.9%
SoCal 14,458 14,523 0.4% $270,000 $260,000 -3.7%
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Trustee Sale Investors Kickoff the New Year with Near Record Activity

Posted on February 15, 2012 by John Reagan
Real Estate investors started off 2012 with a bang. Sales to Third Parties, typically investors rose significantly in January throughout our coverage area, with the exception of Washington. California saw the most activity, with investors purchasing 3,964 properties for $766.2 million. Note that trustee sale investors must pay in cash, in full, with no title insurance or inspections prior to purchase. This is the fourth largest month on record in California, and the busiest since March of 2011.

Nevada saw the largest month-over-month increase in Foreclosure Sales, with investors there purchasing 973 properties for $99.1 million. This increase, coupled with the dramatic decline in new foreclosures that began in October 2011, is quickly depleting the foreclosure inventory that remains scheduled for sale in Nevada. Year-over-year the number of Nevada properties scheduled for sale has dropped 57.6 percent.

Despite what appears to be significant percentage increases in Foreclosure Starts in California, Nevada and Washington, these increases barely offset the declines seen over the holidays. Compared to January one year ago, Foreclosure Starts are significantly lower now – despite the fact that many banks were still under self-imposed moratoriums due to robo-signing last year.
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California Foreclosure Activity Drops

Posted on January 25, 2012 by John Reagan

The number of California homes going into foreclosure dropped in the fourth quarter of 2011 to the second-lowest level in more than four years, the result of evolving lender and mortgage servicer policies as well as shifting market conditions, a real estate information service reported.

A total of 61,517 Notices of Default (NODs) were recorded at county recorders offices during the fourth quarter. That was down 13.7 percent from 71,275 for the prior three months, and down 11.9 percent from 69,799 in fourth-quarter 2010, according to San Diego-based DataQuick.

Last quarter’s 61,517 NODs marked the lowest level since 56,633 NODs were filed in second-quarter 2011, and the second-lowest since 53,943 NODs were recorded in second-quarter 2007. New foreclosure filings (NODs) peaked in first-quarter 2009 at 135,431.

“We are certainly seeing a lower level of foreclosure activity than a year or two ago. The question is, how much of that decline is due to market conditions, and how much is due to policy changes that try to address economic distress and lower home values,” said John Walsh, DataQuick president.

“Five years ago almost all mortgage payment delinquencies would have triggered a default notice after a certain amount of time. Strategies now include short sales, refinances, interest rate changes, principal reduction as well as just plain waiting longer. It will be interesting to see how this plays out as the economy improves and the housing market finds its footing,” Walsh said.

The most active “beneficiaries” in the formal foreclosure process last quarter were Bank of America (14,453), Bank of New York (9,612), and Wells Fargo (7,187).

The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), Cal-Western Reconveyance Corp (Wells Fargo), NDEx West (Wells Fargo) and California Reconveyance Co (JP Morgan Chase).

Most of the loans going into default are still from the 2005-2007 period: The median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for three years, indicating that weak underwriting standards peaked then.

As the foreclosure problem surged four years ago, newer neighborhoods in affordable areas were hit the hardest. The problem spread gradually into other areas, but that spreading appears to have leveled off. In third-quarter 2008, well over half of all recorded NODs were in neighborhoods that represented one-fourth of California’s housing stock. By third-quarter 2010 those neighborhoods’ share of all NODs had fallen to 41.1 percent as other neighborhoods got hit, too. But more than a year later, in fourth quarter 2011, the relatively affordable neighborhoods’ NOD share wasn’t much different – 37.9 percent.

While the number of mortgage defaults dropped across all home-price ranges last quarter, NODs remained far more concentrated in the more affordable areas. Zip codes with median sale prices last year below $200,000 collectively saw 9.4 NODs for every 1,000 homes, while the ratio was 7.0 NODs per 1,000 homes for all zips statewide, and 2.3 NODs per 1,000 homes in zip codes with 2011 median sale prices above $800,000.

On primary mortgages, California homeowners were a median nine months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $19,949 on a median $333,036 mortgage.

On home equity loans and lines of credit in default, borrowers owed a median $4,664 on a median $69,943 credit line. The amount of the credit line that was actually in use cannot be determined from public records.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 61,517 default notices were filed last quarter, they involved 60,289 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).

Of the state’s larger counties, mortgages were least likely to go into default in San Francisco, Marin and San Mateo counties. The probability was highest in Sacramento, San Joaquin and Stanislaus counties.

Trustees Deeds recorded (TDs), or the actual loss of a home to the formal foreclosure process, totaled 31,260 during the fourth quarter. That was down 19.6 percent from 38,895 for the prior quarter, and down 11.8 percent from 35,431 for fourth-quarter 2010. The all-time peak was 79,511 in third-quarter 2008. The state’s all-time low was 637 in the second quarter of 2005, DataQuick reported.

Just as with mortgage defaults, foreclosures remained far more concentrated in the state’s most affordable neighborhoods. Last quarter zip codes with 2011 median sale prices below $200,000 collectively saw 6.0 foreclosures for every 1,000 homes, compared with 3.7 foreclosures per 1,000 homes for all zip codes statewide and less than one – 0.7 – foreclosure per 1,000 homes in zip codes with $800,000-plus medians.

There are 8.7 million houses and condos in the state.

Foreclosure resales accounted for 33.7 percent of all California resale activity last quarter. It was 34.2 percent the prior quarter, and a year ago it was 37.5 percent. It peaked at 57.8 percent in the first quarter of 2009. Foreclosure resales varied significantly by county last quarter, from 9.8 percent in San Francisco County to 56.6 percent in Yuba County.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 19.8 percent of statewide resale activity last quarter. That was up slightly from an estimated 17.8 percent the prior quarter and 17.9 percent a year earlier. Two years earlier, in fourth-quarter 2009, short sales made up an estimated 16.4 percent of the resale market.

On average, homes foreclosed on last quarter took 9.7 months to wind their way through the formal foreclosure process, beginning with an NOD. That’s roughly even with 9.9 months the prior quarter and up from 8.8 months a year earlier.

At formal foreclosure auctions held statewide last quarter, an estimated 30.0 percent of the foreclosed properties were bought by investors or others who don’t appear to be lender or government entities. That was up insignificantly from an estimated 29.7 percent the previous quarter and up from 22.1 percent from a year earlier, DataQuick reported.

Notices of Default (first step in foreclosure process)
houses and condos

County/Region 2010Q4 2011Q4 Yr/Yr%
Los Angeles 14,188 12,355 -12.9%
Orange 4,388 4,297 -2.1%
San Diego 4,917 4,813 -2.1%
Riverside 6,885 6,014 -12.7%
San Bernardino 5,744 4,827 -16.0%
Ventura 1,470 1,437 -2.2%
Imperial 376 270 -28.2%
Socal 37,968 34,013 -10.4%
San Francisco 435 409 -6.0%
Alameda 2,660 2,117 -20.4%
Contra Costa 2,931 2,398 -18.2%
Santa Clara 2,325 1,847 -20.6%
San Mateo 820 712 -13.2%
Marin 276 263 -4.7%
Solano 1,441 1,245 -13.6%
Sonoma 884 815 -7.8%
Napa 226 206 -8.8%
Bay Area 11,998 10,012 -16.6%
Santa Cruz 293 295 0.7%
Santa Barbara 509 524 2.9%
San Luis Obispo 364 359 -1.4%
Monterey 632 509 -19.5%
Coast 1,798 1,687 -6.2%
Sacramento 3,954 3,791 -4.1%
San Joaquin 1,989 1,745 -12.3%
Placer 988 871 -11.8%
Kern 2,011 1,562 -22.3%
Fresno 1,944 1,675 -13.8%
Madera 402 274 -31.8%
Merced 645 487 -24.5%
Tulare 874 777 -11.1%
Yolo 319 300 -6.0%
El Dorado 463 352 -24.0%
Stanislaus 1,469 1,259 -14.3%
Kings 232 175 -24.6%
San Benito 130 139 6.9%
Yuba 210 189 -10.0%
Colusa 52 45 -13.5%
Sutter 245 210 -14.3%
Central Valley 15,927 13,851 -13.0%
Mountains* 663 579 -12.7%
North Calif* 1,445 1,375 -4.8%
Statewide* 69,799 61,517 -11.9%

includes additional counties

Trustees Deeds Recorded (number of homes foreclosed on)
houses and condos

County/Region 2010Q4 2011Q4 Yr/Yr%
Los Angeles 5,597 5,380 -3.9%
Orange 1,693 1,508 -10.9%
San Diego 2,433 2,044 -16.0%
Riverside 3,942 3,397 -13.8%
San Bernardino 3,272 2,718 -16.9%
Ventura 630 595 -5.6%
Imperial 243 194 -20.2%
SoCal 17,810 15,836 -11.1%
San Francisco 156 162 3.8%
Alameda 1,362 1,038 -23.8%
Contra Costa 1,559 1,354 -13.1%
Santa Clara 901 718 -20.3%
San Mateo 302 290 -4.0%
Marin 129 96 -25.6%
Solano 786 697 -11.3%
Sonoma 443 391 -11.7%
Napa 126 85 -32.5%
Bay Area 5,764 4,831 -16.2%
Santa Cruz 134 132 -1.5%
Santa Barbara 250 287 14.8%
San Luis Obispo 217 171 -21.2%
Monterey 353 281 -20.4%
Coast 954 871 -8.7%
Sacramento 2,398 2,194 -8.5%
San Joaquin 1,264 1,006 -20.4%
Placer 548 460 -16.1%
Kern 1,286 1,013 -21.2%
Fresno 1,159 1,029 -11.2%
Madera 256 187 -27.0%
Merced 453 351 -22.5%
Tulare 505 469 -7.1%
Yolo 158 151 -4.4%
El Dorado 213 207 -2.8%
Stanislaus 956 793 -17.1%
Kings 132 125 -5.3%
San Benito 65 64 -1.5%
Yuba 135 148 9.6%
Colusa 25 23 -8.0%
Sutter 105 144 37.1%
Central Valley 9,658 8,364 -13.4%
Mountains* 373 425 13.9%
North Calif* 872 933 7.0%
Statewide* 35,431 31,260 -11.8%

* includes additional counties

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Bay Area Sales Up, Prices Down

Posted on January 21, 2012 by John Reagan

The Bay Area’s housing market rounded out 2011 much the way it started it: with constricted and atypical sales activity, lots of bottom feeding, and a largely dormant mid- to move-up market. Sales were up slightly last month, while prices dropped, a real estate information service reported.

A total of 7,494 new and resale houses and condos sold in the nine-county Bay Area in December. That was up 18.6 percent from 6,317 in November, and up 4.4 percent from 7,178 in December 2010. The year-over-year increase was the sixth in a row, according to San Diego-based DataQuick.

The November-to-December increase was normal for the season, although the rise was higher than the 9.9 percent historic norm. While last month’s sales were 13.3 percent below the December average of 8,643, that below-the-norm rate was the lowest of 2011. Since 1988 December sales have varied from 5,065 in 2007 to 12,349 in 2003.

“We’ll remember 2011 as much for what didn’t happen as for what did. People put discretionary buying and selling on hold, except at the very top of the market. The spectacular gains in affordability, based on the combination of lower prices and ultra-low interest rates, was largely theoretical for many people because it was so hard to get a mortgage. That, combined with negative equity and economic uncertainty, kept people away,” said John Walsh, DataQuick president.

“Many of the deals that did make their way through the system were in the distressed arena – foreclosures and short sales. Much of it was deeply discounted cash purchases, disproportionately at the lower end of the price scale,” he said.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $351,500. That was down 3.5 percent from $363,500 in November, and down 6.3 percent from $375,000 in December 2010. The median has declined on a year over year basis for the last fifteen months.

The median’s low point of the current real estate cycle was $290,000 in March 2009. The peak was $665,000 in June/July 2007. Around half of the median’s peak-to-trough drop was the result of a decline in home values, while the other half reflected a shift in the sales mix.

Last month distressed property sales – the combination of foreclosure resales and “short sales” – rose to 49.6 percent of the resale market. That was up from 45.9 percent in November and up from 48.2 percent from December 2010.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 28.6 percent of resales in December. That was up from a revised 25.2 percent in November, and down from 30.1 percent a year earlier. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is about 9 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 21.0 percent of Bay Area resales last month. That was up from 20.6 percent in November and up from 18.1 percent a year earlier.

Last month 31.4 percent of Bay Area sales were for $500,000 or more, down from a revised 32.0 percent in November, and down from 35.0 percent in December 2010. The low for the current cycle was January 2009, when just 22.7 percent of sales crossed the $500,000 threshold. Over the past 10 years, a monthly average of 47.6 percent of homes sold for $500,000-plus.

The number of homes that sold for $500,000 or more last month fell 5.7 percent from December 2010, while sales under $500,000 rose 11.2 percent year-over-year and sales below $300,000 increased 15.2 percent.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 23.4 percent of all Bay Area home purchase mortgages in December, up from 21.0 percent in November and up from 23.2 percent a year earlier.

One indicator of mortgage availability that had seen improvement this year dropped again in December, when 11.7 percent of the Bay Area’s home purchase loans were adjustable-rate mortgages, down from a revised 12.3 percent in November, and up from 9.6 percent in December last year. Over the last decade, ARMs have accounted for 50.8 percent of all purchase loans. ARMs hit a low of 3.0 percent of loans in January 2009.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 26.2 percent of last month’s purchase lending, down from a revised 29.0 percent in November, and down from 31.6 percent a year earlier. Jumbo usage dropped to 17.1 percent in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market.

Last month absentee buyers – mostly investors – purchased a record 23.8 percent of all Bay Area homes sold, up from 21.7 percent in November and 20.2 percent a year earlier. Absentee buyers paid a median $225,000 in December, down from $250,000 in November and $262,750 a year earlier.

Buyers who appear to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 27.4 percent of sales in December, up from 27.1 percent in November, and up from 24.5 percent a year earlier. The record was 30.5 percent last February, while the monthly average going back to 1988 is 12.1 percent. Cash buyers paid a median $215,000 in December, down from $250,000 in November and $245,000 a year earlier.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales were estimated in Alameda, san Francisco and San Mateo counties.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,336, down from $1,387 in November, and down from $1,558 a year earlier. Adjusted for inflation, last month’s payment was 51.6 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 64.2 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but below peak levels reached over the last three years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.

Sales Volume Median Price
All homes Dec-10 Dec-11 %Chng Dec-10 Dec-11 %Chng
Alameda 1,516 1,584 4.5% $347,000 $328,000 -5.5%
Contra Costa 1,488 1,534 3.1% $265,000 $259,000 -2.3%
Marin 226 280 23.9% $599,000 $517,818 -13.6%
Napa 134 132 -1.5% $310,000 $317,500 2.4%
Santa Clara 1,646 1,611 -2.1% $460,000 $440,000 -4.3%
San Francisco 491 499 1.6% $617,000 $594,500 -3.6%
San Mateo 616 602 -2.3% $560,000 $500,000 -10.7%
Solano 601 714 18.8% $198,000 $182,250 -8.0%
Sonoma 460 538 17.0% $310,000 $279,500 -9.8%
Bay Area 7,178 7,494 4.4% $375,000 $351,500 -6.3%
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