California Short Sales, Foreclosures, REOs Los Angeles, San Diego, Riverside & Orange County Short-Sales Listings

08 Jan 10 California Short Sales and Foreclosures Continue

Local realtors continue to report high activity for California short sales and foreclosures. California mortgage rates are starting to rise and many insiders are saying they will be continue to rise unless government extends low mortgage rate programs or starts new ones.  Unemployment is continuing to stay around 9% and there are more layoffs from 2 large companies this week and California is faced with more budget cuts to our already strapped state.

What does this mean for California homeowners?

Well with more people losing jobs that will increase home foreclosures and bankruptcy filings that are for sure.  Which means home prices could either fall again with the flood of foreclosures or they will stay where they are.  We would anticipate them falling if the next round of foreclosures on the market if they are anywhere as big as 2007 and 2008.  California Short sales will continue to be strong, we will see about the same amount of standard home sales and as far as homeowners keeping their homes with loan modifications I just don’t have much faith in, I don’t think the amount of successful loan modifications will change that much.  Already hard hit areas like San Diego, Inland Empire, and Merced Counties could face more devastation with this news.  These areas have started getting better with buyers moving in to foreclosed houses and starting to bring communities back to life.

Minutes of the Fed’s December meeting showed a few members of the central bank’s policy committee thought additional mortgage loan buying might be desirable under more adverse conditions.

03 Nov 09 California Home Sales Drop on Foreclosures and Short Sales

California short sales, loan modification agreements and home foreclosures continue to have a significant impact on the California housing sector. The good news was that mortgage refinance applications increased last quarter as a result of strong FHA financing and the Home Affordable Refinance Program that is sponsored by the government. A recent Bloomberg article reported that California home prices declined 7.3% in September from a year earlier, helping boost the number of houses sold, the state Association of Realtors said. The median price for an existing detached house fell to $296,090 from $319,310 a year earlier, the Los Angeles-based group said today in a statement. The California home sales price rose 1.1% from August, the seventh consecutive month-on-month increase.

Sales of foreclosed homes accounted for 42% of existing-property transactions in California in August, research company MDA DataQuick said Oct. 15. The Realtors said the number of existing houses sold climbed 2.1% last month from September 2008, boosted by lower prices and a federal tax credit for first-time homebuyers. “The success of the federal tax credit is clear,” James Liptak, president of the California Association of Realtors, said in the statement. The group supports an extension of the credit through mid-2010 and the removal of its restriction to first-time purchasers.

California, the most populous U.S. state, is on pace for 530,520 home sales this year, based on the rate of transactions last month, the association said. “Efforts by the government to stimulate housing and the economy clearly are impacting the market,” Leslie Appleton- Young, the group’s chief economist, said in the statement. Sales have exceeded 500,000 homes on an annualized basis for 13 consecutive months, she said.

The median amount of time it took to sell a California house fell to 33.6 days in September from 46.2 days a year earlier, the association said. The group’s unsold inventory index for existing, single-family houses dropped to 4.2 months from 6.5 months a year earlier. The index shows the time needed to deplete the supply of homes on the market at the current sales rate. The median price for a California condominium in September was $270,170, down 6.5% from a year earlier and up 3.8 % from August, the Realtors association said. Condominium sales rose 11% from a year earlier and 2.2% from August.

03 Feb 09 California Home Prices Fell 42%

Bloomberg released a report revealing that California home prices plunged 42 % in December from a year earlier as the U.S. housing slump deepened and home foreclosures hit record levels. The median price for a single-family home in the most populous U.S. state dropped to $281,100 from $480,820 a year earlier, the Los Angeles-based California Association of Realtors said today in a statement. “The decline in California home prices has brought the cost of housing more in line with household income, improving affordability across the state,” Leslie Appleton-Young, the association’s chief economist, said in the statement. “This should be especially helpful for first-time buyers who can qualify for a home loan.” More than 236,000 homes, or 2.8% of California’s housing stock, were foreclosed on in 2008, MDA DataQuick said today. Foreclosed properties tend to sell at a discount of 25% or more, and California home sales rose 85 % in response to last month’s drop in prices, the Realtors association said.

Daniel Taub’s article indicated the number of existing single-family detached homes sold soared to 544,580 on an annualized basis from 294,520 a year earlier, the group said. The median number of days it took to sell a property dropped to 46.1 days in December from 66.7 days a year earlier. The Realtors’ Unsold Inventory Index, which indicates the number of months needed to deplete the supply of homes on the market at the current sales rate, dropped to 5.6 months from 13.4 months a year ago.

Mortgage Loan Defaults

California mortgage defaults dropped 7.7 % in the fourth quarter after the state enacted a law to delay foreclosures, MDA DataQuick said in a separate report today. Homeowners in the state received 75,230 default notices in the fourth quarter, down from 81,550 a year earlier. Fourth- quarter defaults were down 20 % from the previous three months, according to the San Diego-based research company. Kelly Media Group President, Jason Cardiff commented, “When borrowers are in line to renegotiate their mortgage, most lenders don’t report loan defaults even if the borrower is behind 6 months.” Cardiff continued, this means “We need to be extremely cautious when considering foreclosure data and housing reports.”

A law that requires mortgage lenders to discuss ways to avoid foreclosure with California borrowers before filing a default notice went into effect in September. Defaults plunged to 14,995 that month, and were back up to 39,993 in December. `No one expected defaults to stay at the much lower levels we saw immediately after the new law took effect,” MDA DataQuick President John Walsh said in a statement.

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19 Jan 09 Southern California Home Sales up 50% but Most Are Foreclosures

California Short Sales continue to close at a rapid pace, while many home foreclosures have been slowed by the recent trend of loan modification plans. Recent reports suggest that most mortgage lenders continue are accepting reasonable requests for home financing relief from loan modification companies and distressed homeowners. In a recent Reuters article, Lisa Baertlein evaluates the significance of recent reports that December home sales in Southern California jumped 50.5 % from the year earlier. The DataQuick report also indicated that the median price fell 34.6 % to $278,000 as homebuyers snapped up foreclosed properties.

The area’s median price, which reflects the midpoint of sale prices, hit $505,000 in mid-2007, DataQuick said. A total of 19,926 new and resale homes and condominiums were sold and purchased last month in the 6-county region that is the most heavily populated area in the state of California. The area, including such cities as Los Angeles, San Diego and Riverside, recorded 13,240 sales during December 2007. The median price paid for homes sold in Southern California hit $278,000 in December, down from $425,000 in December 2007. DataQuick said the drop in the median price “overstates the decline in home values” since more affordable homes in the foreclosure-hit inland markets accounted for a large portion of sales. The Southern California foreclosure sales accounted for 55.7 % of December’s re-sales, up from 24.3 % in December 2007.

California’s residential real estate market was one of the most expensive in the US during the years-long housing bubble. The state is now struggling with one of the country’s highest foreclosure rates after many buyers got in over their heads with debt Formerly sidelined buyers are rushing to snap up foreclosed homes, but many would-be buyers in expensive markets remain on the sidelines because financial institutions are reluctant to make so-called “jumbo mortgage loans required to pay for homes in California’s many high-price neighborhoods. John Walsh, president of DataQuick said, “Mortgage interest rates last month were near record lows … It does look like the spigot is being opened a little bit, at least for reduced home purchases.” Read the complete article.

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23 Dec 08 California Homebuying Frenzy

The LA Times. “We’ve pretty much blown through the first couple of stages of grief with regard to the Southern California housing bust. There’s no room left for denial now that home prices in the Southland are down 44% from their peak in 2007, and there’s not much use for anger. Now we’re bargaining.”

“Pretty typical is a one-bedroom, one-bathroom house on East 98th Street in South Los Angeles, near the intersection of the Harbor Freeway and Century Boulevard. Its listing calls the 738-square-foot house ‘great for a growing family.’ The seller wants $85,000 for the house, which sold in 2006 for . . . $365,000.”

“Throughout Southern California, real estate agents say and sales records confirm that attractively priced foreclosed houses sell quickly and does not mean prices will go back up any time soon. ‘I am absolutely positive it’s still going down,’ said Dennis Findly, 18-year veteran of Inland Empire real estate. ‘If you’re looking at a home like this for $250,000, it looks like a good deal, but a year from now it could be $220,000 or $230,000,’ he said.”  California loan modifications and foreclosure statistics continue to send shock waves through the Westen real estate communities.  Read the complete Housing Bubble article > A Bidding War For Buyers In California.

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07 Dec 08 Home Sales Drop

“Some servicers keep a loan in a delinquent state until they see customers carrying through on their agreements, and then they’ll switch it to performing,” Brinkmann said. U.S. home sales and prices began to tumble in 2006 after a five-year boom, dragging the economy into a recession that began in December 2007, according to the National Bureau of Economic Research.

The median home price in the fourth quarter probably will be $190,300, down 19% from the record $226,800 in 2006’s second quarter, according to a Nov. 24 forecast by Fannie Mae, the world’s largest mortgage buyer. Purchases of existing homes in October slid to an annual rate of 4.98 million, lower than forecast, the National Association of Realtors said in a Nov. 24 report. The median price fell 11.3% from a year earlier, the most since the group began collecting data in 1968. Short sales in states like California have become all too common.

Federal Reserve Chairman Ben S. Bernanke yesterday urged using more taxpayer funds for new efforts to prevent home foreclosures, saying the private sector is incapable of coping with the crisis on its own. The Fed chief outlined four possible options, including buying delinquent mortgages and providing bigger incentives for mortgage refinancing. He called for addressing the “apparent market failure” where mortgage lenders aren’t offering loan modifications even in cases where it’s in their own economic interest to do so. Bernanke’s proposed changes would go beyond those announced last month by Housing and Urban Development Secretary Steve Preston, who oversees the FHA. The agency will change the amount of the loan a lender must forgive and allow banks to extend the payback time of a mortgage.

The bankers’ report cites percentages without providing the number of mortgage loans. The U.S. had $11.3 trillion of outstanding home loans at the end of June, according to Federal Reserve data. Mortgage lending fell to $80.8 billion in the second quarter, down from $764 billion a year earlier, the Fed said. The Mortgage Bankers report is based on a survey of 45.5 million loans by mortgage companies, commercial banks, thrifts, credit unions and other financial institutions.

30 Nov 08 Home Foreclosures Hindering California Economy

In addition to the US Treasury Secretary’s policy reversals and changing rationales on how to stabilize the financial system, we now have further proof that Henry Paulson has no idea what he is doing. His statement yesterday that ‘Nothing is more important to getting through this housing correction than the availability of affordable home loan financing,’ is simply wrong. The problem is not that people can’t buy homes the problem is we can’t keep people in their homes. In other words, ‘It’s the foreclosures, stupid.’ Watch this video with California Governor Promoting Foreclosure Prevention Methods >

The colossal and continuing wave of home foreclosures caused the disintegration of numerous banks and financial institutions, destabilized the housing market, and have resulted in national and global financial chaos. In August of this year, California experienced 101,000 foreclosure filings, which equated to about one filing every thirty seconds. At the same time, our nation experienced about one foreclosure filing every ten seconds. Home loan defaults, short sales and all its consequences are causing the credit and liquidity crisis, not the other way around. Until we solve the foreclosure problem, we will continue to have credit and liquidity issues.

AIG, Citigroup, and numerous other financial institutions are collapsing because of defaults and loan modifications. Yet the Treasury Secretary continues to believe that a top-down approach where we continue to throw money at Wall Street will somehow solve the problem. Using hundreds of billions of dollars of taxpayer money to buy distressed mortgage securities from Wall Street firms does nothing to help distressed homeowners stay in their homes. None of the Treasury Secretary’s approaches are targeted at preventing foreclosures. That is a massive and unforgivable strategic and tactical error.

It is time to listen to FDIC Chair Sheila Bair, who since last year has repeatedly identified home foreclosures as the root cause of the economic crisis. Her foreclosure prevention policies of forcing Wall Street to accomplish home loan modifications to keep people in their homes is one of the few sensible solutions that will help our economic recovery begin.

10 Nov 08 Short Sales Transactions Stimulate Real Estate Sales

As home foreclosures rates continue to climb in Florida and throughout the country, buyers increasingly look to non-traditional purchase methods. One of those that continue to draw interest is the “short sale” — an agreement by a lender to accept less than it is owed when a property is sold. Distressed homeowners seem to get a loan modification, sell the home in a short sale or let it go in foreclosure.

From the standpoint of the seller, the consumer convinces the lender to forgive a portion of the mortgage balance; the borrower avoids foreclosure — a more costly event for the bank, which with a short sale is able to minimize its losses. The buyer, in turn, purchases a home for substantial discount — 10 to 30 % off the previous sales price, though the property may be in need of repair. Nearly 2of every 5 homes sold today are the result of distressed situations, either with a short sale or foreclosure, according to the National Association of Realtors.

The short sale practice has been around for years but has increased significantly in recent months, especially as nearly 1 in 5 American home loan borrowers owe lenders more than their homes are worth, according to a recent report by First American CoreLogic. The housing report concludes that roughly 7.63 million homes had negative equity in September 2008 and more are headed that way if home prices fall another 5 %. Florida is among the seven hardest-hit states (including Arizona, California, Georgia, Michigan, Nevada and Ohio), accounting for nearly 2 of every 3 homeowners who owe more than the value of their house while accounting for only 2 of every 5 mortgage loans.

Further, U.S. home prices fell a record 16.6 % in August from a year earlier, with declines in all 20 major metropolitan areas measured by the S&P/Case-Shiller Home Price Indices. For home buyers interested in the short sales market, there are deals to be had, but only if the consumer expends the effort to understand the process. For example, the buyer should understand the property in question. Is the seller behind in payments and in default? These situations make for a short sale candidate and should be known before starting negotiations. > Read Complete Short Sale Article

29 Oct 08 Why California Home Values have Not Hit Bottom

Housing in California is years away from a bottom. Let me make that clear and if you have any doubts, after reading this essay you will have a better understanding as to how I arrived at that conclusion. This article is longer since it will try to answer many of the arguments from those calling for a real estate bottom here in California. After looking at multiple sources of information like income, demographics, sales, psychology, and the economy there is no logical evidence for a housing bottom in California. It is well worth the read and certainly provides more information than a 1 minute sound bite. Recently I have noticed a resurgence of bottom talk coming from professionals in the field but also through e-mail questions.  Short sales, foreclosures and loan modifications have become standard alternatives to home refinancing for California homeowners.

My assessment is this renewed energy has come from two primary culprits. The first is of course the Housing and Economic Recovery Act of 2008 that provides $300 billion in loan refinances and also bails out Fannie Mae and Freddie Mac. In addition, there are many provisions in the bill to juice the market all of which will have very little impact on California. Both Fannie Mae and Freddie Mac announce earnings this week and the news isn’t going to be good. Freddie Mac lost $821 million in the second quarter and announced that they will be slashing their dividend from 25 cents to 5 cents to conserve capital. This wouldn’t be such a big deal except the U.S. taxpayer is now on the hook and a loss for Fannie Mae and Freddie Mac leads us one step closer to a bailout.

The second reason for the upsurge in bottom talk at least for California is the massive price drop we’ve seen this past year. A drop in the median sales price statewide by 38.38% is bound to get the attention of anyone. Yet simply because prices have fallen steeply in one year does not signal that now is a good time to buy. In fact, I will give you 10 solid reasons in this article why we are years away from any bottom in California.

We really are living in a once in a lifetime bubble. It is highly probable that none of us will see a real estate and credit bubble of this size ever again. There will be minor jumps and dips in the future but nothing on this level. I think the best way to conceptualize this extremely large fiasco is to think of someone who is massively in debt. Everyone knows of a friend or family member that spends way beyond his or her means and is usually in major debt. They have nine credit cards, a $700 car payment, a $4,000 mortgage, and yet seem to shuffle debt around like musical chairs. At a certain point, this game ends and some accept the reality and confront the issue head on and others live in denial.

Those that confront the reality sometimes meet with a financial professional or a debt counselor usually with advice to cut up the credit cards and develop a sustainable budget. A prudent plan. If you are serious about correcting negative cash flow situations, you really have to create a budget that takes into account how much money is coming in and going out. In the case of our country, it has gone into debt counseling, was told to cut up the credit cards but is refusing to do so and is actually applying for more credit cards!

What you will not hear from bottom talkers is any mention of incomes from the vast majority of people. Sure they will use random examples of those in Bel Air, Brentwood, Laguna Beach, La Jolla or Newport Beach but that is a tiny fraction of the population. They cannot use income as a measure of support because it will demolish their bottom theory. Let us now move on to the 10 reasons why California is years away from a housing bottom.  Read Complete Real Estate Article


29 Oct 08 Welcome to the California Short Sale Market

The early 1990’s saw quite a few short sales in California.  A recent home sales report from Sacramento and San Diego indicated that short sales transactions were on pace to shatter previous records. Most people would agree that home prices have been inflated for some time.  Is anyone really surprised that California housing bubble bursted?  

Creative financing promoting negative amortization and interest only mortgages certainly did not help matters.  With these risky home loans, homebuyers had more purchase power because $5,000 a month would help buy them a home priced in the million dollar range if they financed with an option ARM.

Greenspan continuously lowered interest rates and this paved the road for the new era of American real estate.  Builders raced the growing housing demand and housing construction exploded. Investors began to speculate in real estate and home values grew and grew, just like the stock market did in the late nineteen ninety’s.

The short sale market increases when the demand to sell home increases, but borrower owes more than their property is worth because the market is declining faster than anticipated.  Thousands of California homeowners are trying to dump their homes because they can no longer afford their mortgage payments.  Welcome to the short sale market in beautiful California.

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