Archive for April, 2012

April 3, 2012

The foreclosure wave is still out at sea.

  • April 3, 2012, 9:56 AM  wall street journal

By Nick Timiraos

 

For months, housing pundits have warned that banks were likely to jumpstart the foreclosure process after finalizing their $25 billion settlement with the federal government and 49 state attorneys general.

But so far, there’s little indication of a lift in foreclosures. The number of newly initiated foreclosures actually fell in February from January and from one year ago by around 15%, according to Lender Processing Services. That marks the 11th straight month in which the level of foreclosure “starts” has fallen versus the same month in the previous year.

True, newly initiated foreclosures jumped by 28% in January from December, but much of that increase was driven by a surge in repeat foreclosures. In other words, banks were restarting the foreclosure process on properties that had already been in foreclosure before.

To be sure, the settlement could simply delay the inevitable uptick in foreclosure activity because banks still have a laundry list of requirements in the settlement. “It could potentially slow things down,” said Herb Blecher, vice president at LPS. “We’ll believe it when we see it at this point.”

The Obama administration said the settlement would require banks to reach out to more borrowers. At the same time, officials said it would also help provide clarity by avoiding a maze of state lawsuits that could further slow down the foreclosure process.

The problem is that banks’ processing difficulties may be more complicated than any settlement can address. Judges across the country may not care if banks have settled allegations of wrongdoing with state officials if those same banks are still unable to properly document ownership of mortgages in their courtrooms.

“There are operational issues and there are legal issues that are generating these fits and starts, and this sporadic movement of loans,” said Mr. Blecher.

Banks started the foreclosure process on 172,500 loans in February, which is the third lowest level of the past four years. Only November and December of 2011 saw lower levels of foreclosure starts.

Tuesday’s report from LPS shows that mortgage delinquencies fell to 7.6% in February, the lowest level since August 2008. Delinquencies tend to fall at the beginning of the year. Still, about 4.1% of all loans were in the foreclosure process, near the highest levels of the crisis

April 3, 2012

Investment and Vacation Home Sales Surge in 2011

Washington, DC, March 29, 2012

WASHINGTON (March 29, 2012) – Sales of investment and vacation homes* jumped in 2011, with the combined market share rising to the highest level since 2005, according to the National Association of Realtors®.

NAR’s 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, shows investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.

Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period. Any government program to sell REO inventory in bulk to large institutional companies should be limited to small geographic areas. Even where alternatives are needed, it’s best to rely on the expertise of local businesses, nonprofit organizations and government,” he said.

All-cash purchases have become fairly common in the investment- and vacation-home market during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.

“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who aren’t hesitant to use cash,” Yun said. Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent.

April 3, 2012

OC sees best housing market since boom

The latest figures surfaced in this week’s report from O.C. broker Steve Thomas of ReportsOnHousing.com. The numbers — based on pending deals — give a preview of closed-sale data expected in future months.

Specifically, Thomas’ figures show:

  • The number      of homes listed for sale totaled 6,615 in the 30 days ending last      Thursday. That’s the smallest housing market since July 2005. Inventory is      down 38% from 2011. And it’s down 63% from the peak in September 2007,      when 17,898 homes were listed for sale in Orange County.
  • The number      of pending sales – homes going into escrow in the latest 30-day period –      was 3,840, the second-highest number since the end of June 2005. Only      April 2010’s tally of 3,979 deals reached was higher.
  • The      “market time,” or time it would take to sell all 6,615 listings that the      current sales pace, fell to 52 days. That’s the shortest market time since      August 2005.

“As this scenario drags on, it will only be a matter of time before prices star to really rise again,” Thomas said.

While sales demand is up and the supply of homes for sale is down, Thomas is quick to point out that it’s still a different market than in 2005 — the final year before home sales tanked and triggered the first dominos in the cascading, three-year collapse that ate the global economy.

Thomas noted that the types of homes now selling and the prices at which they’re selling is very different than in the boom, with the hottest demand for homes selling at $750,000 and below, and very little demand for homes in the $1.5 million range and above.

“We’re still digesting and absorbing short sales,” he said, referring to homes selling for less than is owed on their mortgages.

Still, he said: “If you’re a buyer stepping into the market, it feels just like ’04 and ’05. … It’s still a crazy market.”

For example, agents are canceling appointments with buyers because there aren’t enough homes to show them.

Thomas noted also that a neighbor in Ladera Ranch got two offers on his home before his agent could put a lock box on the door.

“Agents are clamoring to get their buyers into a home,” he said.

So where have all the homes for sale gone?

Thomas found that the biggest decline is in the number of short sales on the market. They’ve come down 25% from the same period last year.

It’s hard to tell why. Thomas speculated that there are more loan modifications that are being made, so homeowners can afford their loans and avoid short sales. There are some promising signs that the overall economy is improving as well.

But all types of homes have come off the market, not just short sales.

For example, bank-owned home listings fell 11% last month, and listings of traditional, non-distressed homeowner sales – also called “equity sales” – decreased s for sale dropped 12%.

And supply isn’t just down in Orange County.

“It is down significantly across Southern California,” Thomas said.

Thomas said that the market could change dramatically if homeowners suddenly see an opportunity to sell and put their homes on the market.

“That could be the monkey wrench in this thing,” he said

April 3, 2012

The number   …

  • The number      of homes listed for sale totaled 6,615 in the 30 days ending last      Thursday. That’s the smallest housing market since July 2005. Inventory is      down 38% from 2011. And it’s down 63% from the peak in September 2007,      when 17,898 homes were listed for sale in Orange County.
  • The number      of pending sales – homes going into escrow in the latest 30-day period –      was 3,840, the second-highest number since the end of June 2005. Only      April 2010’s tally of 3,979 deals reached was higher.
  • The      “market time,” or time it would take to sell all 6,615 listings that the      current sales pace, fell to 52 days. That’s the shortest market time since      August 2005.

“As this scenario drags on, it will only be a matter of time before prices star to really rise again,” Thomas said.

While sales demand is up and the supply of homes for sale is down, Thomas is quick to point out that it’s still a different market than in 2005 — the final year before home sales tanked and triggered the first dominos in the cascading, three-year collapse that ate the global economy.

Thomas noted that the types of homes now selling and the prices at which they’re selling is very different than in the boom, with the hottest demand for homes selling at $750,000 and below, and very little demand for homes in the $1.5 million range and above.

“We’re still digesting and absorbing short sales,” he said, referring to homes selling for less than is owed on their mortgages.

Still, he said: “If you’re a buyer stepping into the market, it feels just like ’04 and ’05. … It’s still a crazy market.”

For example, agents are canceling appointments with buyers because there aren’t enough homes to show them.

Thomas noted also that a neighbor in Ladera Ranch got two offers on his home before his agent could put a lock box on the door.

“Agents are clamoring to get their buyers into a home,” he said.

So where have all the homes for sale gone?

Thomas found that the biggest decline is in the number of short sales on the market. They’ve come down 25% from the same period last year.

It’s hard to tell why. Thomas speculated that there are more loan modifications that are being made, so homeowners can afford their loans and avoid short sales. There are some promising signs that the overall economy is improving as well.

But all types of homes have come off the market, not just short sales.

For example, bank-owned home listings fell 11% last month, and listings of traditional, non-distressed homeowner sales – also called “equity sales” – decreased s for sale dropped 12%.

And supply isn’t just down in Orange County.

“It is down significantly across Southern California,” Thomas said.

Thomas said that the market could change dramatically if homeowners suddenly see an opportunity to sell and put their homes on the market.

“That could be the monkey wrench in this thing,” he said