Southland Home Sales Up Again From 2011

From DataQuick:

Southland Home Sales Up Again From 2011; Median Price Nears 4-Yr High

August 14, 2012

La Jolla, CA—Southern California home sales rose above the year-ago level for the seventh consecutive month in July despite continued declines in low-end distress sales. Increased activity in move-up and high-end submarkets also contributed to a significant rise in the region’s median sale price, which neared a four-year high, a real estate information service reported.

The median price paid for a home in the six-county Southland rose to $306,000 last month, up 2.0 percent from $300,000 in June and up 8.1 percent from $283,000 in July 2011, according to San Diego-based DataQuick.

July’s median was the highest since the median was $308,500 in September 2008. The median has risen month-to-month for six consecutive months and has increased year-over-year for the past four. July’s 8.1 percent annual gain was the highest for any month since July 2010, when the median rose 10.1 percent.

Greater demand, partially triggered by historically low mortgage rates, and a thinner inventory of homes for sale help explain recent gains in the median price. But the increases also stem from a sharp drop in foreclosure resales, which often sell at a steep discount and are concentrated in lower-cost areas, as well as a substantial increase in the portion of sales in mid- to high-end neighborhoods.

It appears that about half of the 8.1 percent year-over-year gain in July’s median sale price can be attributed to the shift in market mix. In July, price levels for the lowest-cost third of Southern California’s housing stock rose 4.9 percent year-over-year, while they rose 4.8 percent in the middle and dipped 0.8 percent in the top third.

“Even adjusting for changes in market mix, there’s growing evidence prices have crept up in areas where more demand has met a shrinking number of homes for sale. But we’re approaching the peak of the traditional spring-summer home-buying season. Whether these trends hold into the fall and winter isn’t clear. If they do, then logically the number of homes on the market would eventually rise to meet the demand. More owners will be interested in selling, knowing their homes are likely to fetch a higher price, and more people will shift from a negative to at least a slightly positive equity position, enabling them to sell. Home builders could rev up operations and lenders could push more distressed properties onto the market sooner. It would tame any price appreciation,” said John Walsh, DataQuick president.

In July, a total of 20,588 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 6.7 percent from 22,075 in June, and up 13.8 percent from 18,090 in July 2011.

Last month’s sales were 19.4 percent lower than the average sales tally of 25,545 for all the months of July since 1988, when DataQuick’s statistics begin. The low for July sales was 16,255 in 1995, while the high was 38,996 in July 2003.

The number of Southern California homes sold in July for less than $200,000 fell 5.8 percent from a year earlier, while the number that sold for $200,000 to $400,000 rose 13.4 percent. Sales between $300,000 and $800,000 – a range that would include many move-up buyers – increased 22.0 percent year-over-year. Sales over $800,000 rose 7.2 percent from July 2011.

Last month 22.5 percent of all Southland sales were for $500,000 or more, down from 23.1 percent in June and up from 20.7 percent a year earlier.

Distressed property sales – the combination of foreclosure resales and short sales – made up 39.7 percent of last month’s resale market. That was the lowest level since the figure was 36.0 percent in January 2008.

Foreclosure resales – properties foreclosed on in the prior 12 months – accounted for 21.0 percent of the Southland resale market last month, down from a revised 24.4 percent the month before and 32.6 percent a year earlier. Last month’s figure was the lowest since foreclosure resales were 18.8 percent of the resale market in November 2007. In the current cycle, the figure hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 18.7 percent of Southland resales last month. That was up from an estimated 17.7 percent the month before and 17.4 percent a year earlier.

There were no signs of a major easing of credit conditions last month but the share of purchase loans in the “jumbo” category did inch up again, holding at its highest point since December 2007.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 20.2 percent of last month’s purchase lending, up from 20.0 percent the prior month and 17.8 percent a year ago. In the months leading up to the credit crisis that hit in August 2007, jumbos made up about 40 percent of the market.

The use of adjustable-rate mortgages (ARMs) slipped last month. ARMs made up 6.2 percent of home purchase loans in July, compared with 6.7 percent in June and 8.9 percent a year earlier. Since 2000, a monthly average of about 34 percent of Southland purchase loans were ARMs.

The most active lenders to Southland home buyers last month were Wells Fargo with 10.0 percent of the market, Bank of America with 2.9 percent and Prospect Mortgage with 2.7 percent. Combined market share for the top 10 lenders was 28.1 percent, down from 34.2 percent a year ago. Wells Fargo’s share of the market a year ago was 11.0 percent, Bank of America’s was 8.3 percent and Prospect Mortgage’s market share was 3.0 percent.

Absentee buyers – mostly investors and some second-home purchasers – bought 27.1 percent of the Southland homes sold last month. That was down from 27.3 percent the prior month and up from 23.9 percent a year earlier. The record was 29.9 percent in February this year, while the monthly average since 2000 is 17.3 percent. Last month’s absentee buyers paid a median $230,000, up 7.0 percent from a year earlier.

Buyers paying with cash accounted for 31.0 percent of July home sales, down from 32.3 percent the month before and up from 28.7 percent a year earlier. Cash purchases peaked at 33.7 percent of all sales this February, and since 2000 the monthly average is 14.9 percent. Cash buyers paid a median $235,000 last month, up 9.3 percent from a year ago.

Government-insured FHA loans, a popular low-down-payment choice among first-time buyers, accounted for 27.2 percent of all purchase mortgages last month. July’s FHA level was down from 27.8 percent the month before and 31.4 percent a year earlier. July’s FHA share was the lowest since August 2008, when it was 26.8 percent.

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 Southland buyers committed themselves to paying last month was $1,106, compared with $1,102 the month before and $1,154 a year earlier. Adjusted for inflation, last month’s typical payment was 52.9 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 61.5 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity, while above long-term averages, has been trending downward this year and is far below peak levels. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.


Here’s an interesting perspective on where to best invest your money right now – your home

He makes an interesting point which has some merit however I’m not on board with his assumption/foregone conclusion that central banks meddling in their economies will jolt them into growth.  Sure hasn’t worked for Japan for the last 20 years…

Invest in Your Home, NotStocks: Chris Martenson

Don’t look to the major market indices to get a sense of the global economy. The Dow Jones Industrial Average (DJI) and the S&P 500 Index (GSPC) are headed toward multi-year highs and both have posted gains of 8 percent or more since January. This discord between investor sentiment and the current macro outlook has strategists like Chris Martenson confounded.

“It’s almost inconceivable at this point that we’re not seeing some money off the table,” Martenson says in an interview with The Daily Ticker. “Markets don’t always move in sync with the economy [but] we have a global slowdown right now…and there seems to be a lot of risk out there.”

Martenson, the CEO and co-founder of the website and the author of “The Crash Course,” says he expects coordinated global intervention by central banks to jolt the depressed economies of the U.S., China, Japan and Europe, going so far to say “we need something larger than we’ve seen before.”

Eurostat, the European Union’s statistics agency, reported Tuesday that the euro zone economy contracted in the second quarter, falling 0.2 percent from the previous three months. Most economists believe that the 17-member region has already entered a recession.

Meanwhile, economic growth in Japan slowed to an annual rate of 1.4 percent in the second quarter compared to 5.5 percent growth in the first quarter of the year. U.S. gross domestic product grew a modest 1.5 percent in the April to June quarter. And China — the world’s second and fastest growing economy — has experienced six consecutive quarters of slower growth prompting concerns that the country is headed for a hard landing.

The rise in global markets has partly been a response to expectations that the Federal Reserve and European Central Bank will take more aggressive action — i.e. quantitative easing — this fall to prevent further economic deterioration. The Federal Reserve did not take new steps to boost the U.S. economy at its August policy meeting but said it “will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.” ECB Chief Mario Draghi excited markets in late July when he vowed to do “whatever it takes” to save the euro but a week later softened his tone, proclaiming his bond buying comment was merely “guidance.” Investors around the globe later dumped stocks.

The interminable guessing and conjecture about central bank action has caused hedge funds, institutional and retail investors to become speculators, Martenson says. Professional money managers have publicly acknowledged their own difficulty picking stocks. Hedge Fund titan Louis M. Bacon has decided to return $2 billion to investors after his Louis M. Bacon Moore Capital Fund was down 2 percent in 2011 and flat for the year.

Martenson’s investment recommendations range from the conventional (he’s a buyer of gold) to the unorthodox.

“One of the things we counsel people to do is consider investing in your own homestead,” he says. “Plugging all the leaks” in your house yields a 10, 12 or even 18 percent return on investment by cutting the homeowner’s heating and energy bills, he notes. “This is a time you have to consider other places for investments,” he adds.

As if you didn’t need another reason to not trust Wall Street investments

I’ve spoken on this topic before.  Yes, some form of rules and regulations with teeth in them are needed.  Wall Street, when left alone, will continue to prove there are no adults in the house and when the regulators are not watching or can not inflict any serious and painful consequences then well, we all know what happens.  Spare the rod and spoil the child…

From the NY Times

Wall Street’s Race to the 48-Millisecond Trade

It took just 45 minutes this month for one of Wall Street’s top trading firms to lose $440 million, a loss that has focused attention on the potential problems associated with high-speed trading. Today’s technological challenges are not unlike those faced by traders in the 19th century, whose jobs were revolutionized by the advent of ticker machines.

– – – (follow the title link for full story)

Computerized trading of stocks, which took off exponentially in the 1980s, is often blamed for accelerating the Black Monday market crash of Oct. 19, 1987. Regulators responded the next year by introducing new competition from more computerized trading and electronic exchanges.

But desktop day traders armed with real-time market quotes and business cable channels have been unable to compete with new powerful algorithms run on giant computers. Stock transactions are measured in microseconds, and they can be ordered and canceled faster than the “American Deer” could blink an eye.

After a spate of flash crashes, including the one in which Knight Capital recently lost $440 million, regulators are discussing steps that would reduce trading volume, including a transaction tax. Although not even the strongest critics of high-speed trading are calling for rules to turn back the clock to 900 characters a minute, there is a growing consensus that the potential negative consequences of raw speed need to be addressed for the good of the financial markets.

A Crazy and scary ordeal, another unfortunate byproduct of the Real Estate Collapse

This whole story just makes me cringe.  I feel for the family that was dupped by the realtor con-artist but it seems legal action steps in to over rule common sense.  By all means they need to vacate the house which they are now wrongfully possessing and restore it to its owners.  The real owners are getting screwed and I’m sure they will never be made whole again for all the insanity of this ordeal.

Read on, and when you go on your next extended vacation, be sure you have a neighbor or family member do regular stops by your house when your gone.  I can’t imagine this can happen everywhere, I would think the conditions, legal and economic climate, etc would have to be just right.  But then again, I wouldn’t think this could happen at all.  Go figure.

Squatters in Littleton, Colo., Couple’s Home Refuse to Vacate Despite Judge’s Ruling

Despite a judge’s ruling that a pair of squatters vacate a Colorado couple’s home in two days, two weeks later they are still there, forcing the home’s owners to stay put in a relative’s basement.

Troy and Dayna Donovan (pictured above) had spent a few months away from their home in Littleton, Colo., and when they returned late last year they found another couple, who claimed that they bought the house, living there.

Veronica Fernandez-Beleta and her husband, Jose Rafael Levya-Caraveo (pictured in the yellow shirt at right), said that a man named Alfonso Carillo offered them a deed of adverse possession — which purportedly allowed them, for $5,000, to take over the Donovans’ house as abandoned property.

Earlier this month, the Donovans won an eight-month legal battle against the two in their home, and a judge ordered Fernandez-Beleta and Levya-Caraveo to vacate in two days.

But that wasn’t the end of the story.

As CBS Denver reported, Fernandez-Beleta and Levya-Caraveo have filed a “flurry of legal paperwork,” and are still living in the home on Mabre Court (pictured below). First, the two took the Donovans to court after the Donovans walked into the house through an unlocked door. The home occupants said that they were afraid for their safety and they were granted a restraining order, keeping the Donovans away from their own home.

Then, Fernandez-Beleta filed for bankruptcy, canceling the entire eviction process just hours before sheriffs were scheduled to remove them from the property.

“The Sheriff’s Office will not proceed with an eviction if there is a bankruptcy in question,” Arapahoe County Undersheriff David Walcher told the TV station.

This means that a Federal Bankruptcy Court will have to determine ownership of the house, which could take months, CBS Denver said.

But the Donovans aren’t the only victims in this case. Fernandez-Beleta and Levya-Caraveo seemingly were conned by Carillo, a real estate agent whose license was revoked. Carillo has already been arrested twice in similar cases. In Colorado, a property can only be claimed through adverse possession if it is vacant for 18 years; the Donovans were only gone for six months.

“You’re going to lose your money, and you’re going to lose the house eventually,” criminal investigator Daniel Chun told Fernandez-Beleta and Levya-Caraveo.

When asked why they haven’t left the home yet, Fernandez-Beleta and Levya-Caraveo’s daughter, Caren, told “We were going to leave on Thursday [July 19th], but then the reporters came yelling, so we went back inside and decided to stay.”

She said her family is unsure of what to do, and they can’t afford to move.

The Donovans are still living in a relative’s basement with their two children, possibly for the next several months, as this ordeal continues.

Single-Family Rental Houses Draw Millions

So when someone looses their house to the bank where do they go?  To another house, only they rent it now.  Opportunity.

Single-Family Rental Houses Draw Millions Impacted by Foreclosure Crisis

After splitting from her husband, Tami Wingfield couldn’t afford to keep up with the mortgage on the home that they had shared. The monthly $1,600 bill was too much for her to bear alone, and in 2008, she lost the house to foreclosure.

Like many people who lost their homes in the housing collapse, Wingfield decided the next logical step was to rent. But that didn’t mean she had to give up the lifestyle of a homeowner. Wingfield and her three children have managed to stay in a four-bedroom single-family house all to themselves – they just don’t own it.

They’re part of a new class of American renters that has emerged in the wake of the housing bust: people who lost the houses they owned and are now renting single-family homes. Ironically, many of these rental homes are a reflection of the troubles that once plagued the renters. They used to be owned by other families who lost them in the downturn. Now they’re owned and rented out by investors who purchased them at a discount.

At least 1.75 million renters in the U.S. have gone down the same path as Wingfield, according todata from analytics firm CoreLogic.

Wingfield rents her $1,000-a-month home in Goodyear, Ariz., from The Empire Group, a development and investment firm that bought it as a foreclosure. She has a backyard where she’s planted a garden, and she’s on a desirable suburban street lined with quaint homes just eight miles from the house that she owned with her husband.

It’s as if hardly anything has changed.

Feeling Part of the Community

“I am able to provide my daughters and myself a nice home,” Wingfield said. “I don’t have to find a parking spot when I come home, tired from working double shifts at the hospital. I pull my car into the garage and walk into my house.”

Being able to maintain a homeowner’s lifestyle, even as a renter, has also helped her continue to feel like a part of her community.

“You can establish a place in the neighborhood — get a school for your children,” Wingfield said. “The buses run in the neighborhood…. There’s parks and sidewalks to walk your dog.”

Empire, which owns about 1,000 homes in the Phoenix area, spends close to $7,000 a pop to restore each of the distressed properties that it purchases. Its average rental home is 2,100 square feet and goes for $1,050 a month, said Geoffrey Jacobs, a principal at the company.

Jacobs said Empire, which started off as a developer, “put on the investor hat” in 2009. “It was an opportunity for us to take advantage of something we never thought we’d see again,” he said.

Investors provide the capital that Empire needs to convert homes into rentals, and the company turns a profit by taking a cut of the monthly rents that it collects and distributes to investors.

Empire is just one of many firms that are snapping up bargain homes and leasing them to families like Wingfield’s. And with rental rates soaring nationwide, the business strategy is currently lucrative.

As of January, investors are raking in an average 8.6 percent return on their investments annually, according to CoreLogic. That’s a 3 percent increase from 2006. And there are 21 million units in the country’s single-family rental inventory, putting the size of the market at a whopping $3 trillion, CoreLogic said.

That might be a good thing, since millions more borrowers are headed toward foreclosure and may flood the rental market. If that happens, it could continue to push up rental prices and lure more investors into the market, experts have said.


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