Moving to Prime Time

The loan type with the biggest jump in defaults are the prime loans. As a percentage of total loans the default rate is still lower but since most loans are prime that translates into a lot of defaults.

The best line from this article: "Freddie Mac estimates that 40% of the loans they have in foreclosure are on vacant homes. The borrowers don’t want a modification. Home prices have fallen so far that they will not see any equity for decades. So why pay?

Will the higher rates kill the party?

Interest rates took a big jump this week. They are currently sitting at about 5.5% for those with perfect credit and a DP. The scuttlebutt in the blogosphere is that this is going to kill the market. Refi's especially would seem to be hurt by this rise. I think most folks with reasonable credit and half a brain already have a fairly low rate. So a 5.5% refi may not help those families on the verge of affordability if they already have a 5% or 6% loan. Where as a refi at 4.5% might have made a difference.

One things for sure the higher the rates go the more pressure there will be on the prices. It also does not help those loan resets if the rates start to rise. That will lead to more foreclosures as payments adjust upwards. It's also likey to increase drop outs on sales that are curently pending. Since the loan process is taking so long these days loan locks will expire, potential payments will rise and people will back out.

It seems the Fed is losing control (what little they had). They Fed rate is already at zero, they were buying up treasuries yet the interest rates are still going up. It seems poor Ben may have run out of magic bullets. I wonder what he will try next....

Next news item, Mortgage delinquencies hit record levels

The Mortgage Bankers Assn. reported Thursday that foreclosures were at record levels, with 1.37% of all home loans nationally starting the foreclosure process during the first quarter of the year.

However, in California, Florida, Nevada and Arizona -- states where housing boomed the most and now has crashed hardest -- the rate of homes entering foreclosure was 2.45%, the trade association said.

"Those states account for about 46% of the foreclosure starts in the country and represented 56% of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts," the association's chief economist, Jay Brinkmann, said in a statement. "It is difficult to overstate the severe impact home price declines have had on mortgage performance in those four states."

Perhaps there is some consolation for California: It's not the worst state in terms of foreclosures.

In Florida, 10.6% of the mortgages "are somewhere in the process of foreclosure," Brinkmann said. "In Nevada it is 7.8%, Arizona 5.6% and California 5.2%."

In addition to the news above, over 12% of all residencial loans are delinquent at least one payment. 12%!

Economists aren't very good at predicting the future

Economists aren't very good at predicting the future, and I'm only slightly better it seems. I was trolling through the blog looking at how the homes in some older posts had done when they sold, when I ran across this post. The post talks about a report by Esmael Adibi, director of Chapman's Anderson Center for Economic Research on the overall economy. You know, jobs, housing etc.

His predictions were woefully wrong. He predicted real estate would drop 21% in 2008 and bottom out at $258k in late 09. He did not see much happening in unemployment as he expected added healthcare jobs to offset losses in construction. Man was he wrong.....

Then I made my predictions. Mine were better, but even Mr. Pessimistic was to optimistic. I predicted we would drop closer to 30% in 2008 and another 10 to 15% on 2009 and that the median would bottom around $175K in late 09. I predicted unemployment would increase to levels higher than that of the early 90s.

How far off were we? Prices dropped north of 40%. So I missed by about 10% but the expert missed by 20%. For the median we will have to wait and see. But we are both obviously off. He is WAY off. The median for the entire IE is currently sitting at $158k I believe. It's still dropping and how much farther is anyone's guess. I don't think it will go much lower but then again I didn't think it would go this low.

On employment, the expert wasn't even in the ball park. How he could forecast no additional job losses in mid 2008 is beyond me. I think the village idiot could see them coming in mid 2008. I was much closer here, predicting losses higher than the early 90's. Unemployment peaked at around 12% back then. I think we are close to 13% currently.

Funny stuff to look back and see what we though last year.....

Prices by city

Here's DataQuicks price by city. Interestingly enough I see they have adjusted the Riverside county median down $1k from their earlier report. It was $180k and on this later report it's listed as $179k (dropping by the week......)

City......................Sales...Median...2008median...% drop

Riverside County	4,390	$179,000	$295,000	-39.32%
AGUANGA	2	$125,000	$277,000	-54.87%
BANNING	38	$105,500	$217,500	-51.49%
BEAUMONT	96	$199,250	$287,500	-30.70%
BLYTHE	4	$187,500	$190,500	-1.57%
CABAZON	8	$42,500	n/a	n/a
CALIMESA	7	$194,000	$275,000	-29.45%
CATHEDRAL CITY	83	$150,000	$245,000	-38.78%
COACHELLA	62	$140,000	$235,000	-40.43%
CORONA	447	$300,000	$395,000	-24.05%
DESERT HOT SP	154	$90,000	$174,500	-48.42%
HEMET	271	$115,000	$193,000	-40.41%
HOMELAND	3	$60,000	n/a	n/a
IDYLLWILD	7	$220,000	$233,500	-5.78%
INDIAN WELLS	23	$500,000	$830,000	-39.76%
INDIO	172	$170,000	$290,000	-41.38%
LA QUINTA	99	$340,000	$566,000	-39.93%
LAKE ELSINORE	215	$170,000	$285,000	-40.35%
MENIFEE	133	$195,000	$275,000	-29.09%
MIRA LOMA	41	$276,000	$416,500	-33.73%
MORENO VALLEY	458	$135,250	$235,000	-42.45%
MURRIETA	296	$225,750	$310,000	-27.18%
NORCO	30	$394,500	$450,000	-12.33%
NUEVO	9	$140,500	$241,000	-41.70%
PALM DESERT	145	$278,000	$354,000	-21.47%
PALM SPRINGS	125	$210,000	$238,250	-11.86%
PERRIS	237	$136,000	$226,250	-39.89%
RANCHO MIRAGE	52	$355,000	$537,500	-33.95%
RIVERSIDE	505	$175,000	$300,000	-41.67%
SAN JACINTO	159	$130,000	$220,000	-40.91%
SUN CITY	154	$140,000	$246,500	-43.20%
TEMECULA	223	$257,000	$333,000	-22.82%
THERMAL	3	$171,000	$85,000	101.18%
THOUSAND PALMS	14	$110,500	$187,500	-41.07%
WHITE WATER	2	$111,000	$173,000	-35.84%
WILDOMAR	64	$224,000	$327,000	-31.50%
WINCHESTER	45	$244,000	$329,000	-25.84%
San Berdu Co	3,060	$138,750	$265,000	-47.64%
ADELANTO	91	$84,500	$179,000	-52.79%
APPLE VALLEY	169	$115,000	$207,250	-44.51%
BARSTOW	38	$55,750	$157,500	-64.60%
BIG BEAR CITY	24	$132,000	$257,500	-48.74%
BIG BEAR LAKE	34	$262,000	$329,500	-20.49%
BLOOMINGTON	50	$136,250	$220,000	-38.07%
CEDAR GLEN	2	$63,000	n/a	n/a
CHINO	72	$316,500	$431,000	-26.57%
CHINO HILLS	76	$395,000	$455,000	-13.19%
COLTON	72	$115,000	$227,500	-49.45%
CRESTLINE	14	$115,000	$184,000	-37.50%
FONTANA	430	$188,136	$315,000	-40.27%
GRAND TERRACE	11	$237,500	$263,000	-9.70%
GREEN VALLEY	2	$146,250	$172,750	-15.34%
HELENDALE	21	$140,000	$260,000	-46.15%
HESPERIA	232	$106,000	$215,000	-50.70%
HIGHLAND	65	$120,000	$325,000	-63.08%
JOSHUA TREE	22	$90,000	$123,000	-26.83%
LAKE ARROWHEAD	33	$260,000	$437,500	-40.57%
LANDERS	4	$67,500	$65,000	3.85%
LOMA LINDA	12	$299,500	$349,500	-14.31%
LUCERNE VALLEY	6	$66,500	$174,500	-61.89%
LYTLE CREEK	2	$79,250	n/a	n/a
MENTONE	17	$165,000	$315,000	-47.62%
MONTCLAIR	31	$215,000	$350,000	-38.57%
MORONGO VALLEY	3	$70,000	$155,000	-54.84%
NEEDLES	6	$46,500	$53,000	-12.26%
ONTARIO	150	$180,000	$305,250	-41.03%
PHELAN	15	$130,500	$230,000	-43.26%
PINON HILLS	8	$202,500	$230,000	-11.96%
RANCHO CUCA	172	$315,000	$400,000	-21.25%
REDLANDS	44	$200,000	$322,500	-37.98%
RIALTO	158	$133,000	$240,000	-44.58%
RUNNING SPRINGS	2	$111,500	$180,250	-38.14%
SAN BERNARDINO	370	$73,000	$190,000	-61.58%
SUGARLOAF	13	$140,000	$142,000	-1.41%
TRONA	2	$44,750	$45,000	-0.56%
29 PALMS	23	$82,000	$110,000	-25.45%
TWIN PEAKS	4	$102,500	$215,000	-52.33%
UPLAND	67	$379,000	$450,000	-15.78%
VICTORVILLE	376	$111,500	$222,000	-49.77%
WRIGHTWOOD	5	$290,000	$137,000	111.68%
YUCAIPA	51	$222,000	$287,000	-22.65%
YUCCA VALLEY	49	$95,500	$154,500	-38.19%

Is this the eye of the storm?

From Barron's (this was written by a real estate broker)

A lot of people think that we've seen the worst of the housing crisis. They're talking about green shoots and glimmers of hope, when they should be back in the storm shelter, preparing for a flood of inventory that will overwhelm the markets and produce another round of falling prices

For the past few months there has been a semi-moratorium on foreclosures. Most institutions with delinquent mortgages didn't foreclose. The signs that blanket many neighborhoods have been posted by a fraction of the lenders. Now the rest of the banks are rushing to get their properties on the market.

As a Florida real-estate broker who works with bank asset managers to dispose of foreclosed properties, I get a good view of this market. From December 2008 through mid-March 2009, the number of asset managers calling to discuss REO (real estate owned) properties on their client banks' books dropped by more than 80% from the level at which it previously had been running. In the past two months, however, asset managers have been busy, with most interested in how many properties we could handle at once.

Law firms for banks are once again lining up to file foreclosures and to process evictions. The asset managers we work with have warned us to expect a flood of properties, beginning in early June. This will hit as the number of potential buyers continues to dwindle. Builders, traditional sellers and investors who entered too early are already loaded with REO properties...

There's no light at the end of the tunnel yet. We're still supporting builders through misguided programs that are only adding to the inventory woes. California decided to offer a $10,000 credit to buyers of new homes, on top of the $8,000 federal credit. But California made the $10,000 available only for new homes purchased directly from builders. That shows the power of the builders' lobby, but it only adds to California's housing-industry problem. It encourages builders to construct dwellings we don't need, and it penalizes anyone else trying to sell a home.

Housing inventory soon will flood a market in which more than 500,000 homes are being built each year, even though the annual sales pace for new homes is closer to 300,000. We must also deal with a system clogged with impossible short sales, a surge of second and vacation homes being dumped, and third-wave flippers realizing that they entered the market too soon.

Unemployment presents a two-pronged problem. If homeowners lose their jobs, they have difficulty meeting mortgage payments. And a high jobless rate forces more people to put their homes on the market.

During the housing bubble, many second homes were purchased with the mythical equity from primary residences. These second homes are coming onto the market at an alarming rate, as many middle- and upper-class sellers need to raise cash. In some very exclusive private communities in Florida, where home prices are in the seven figures, more than 50% of the homes are on the market.

Unfortunately, there are no signs of recovery, despite the hype and the twisting of numbers in many media reports. The end of the unofficial moratorium on foreclosures, combined with rising unemployment, signals that the back half of this housing hurricane is only just beginning.

One for Buttermonkey

Here's one in Victoria Woods that's listed for 1999 prices. 2627 Dorchester is a 4 bedroom 2.5 bath home that is nearly 3000 s/f. That's a good size for an older area. This looks like a home equity withdrawal gone wrong. They ex-owners look to have purchased this in 1999 for $325k. They lost it to the bank back in Jan. The bank tried to get $418k at the trustee sale but obviously no one took the bait. It's now listed for $332k. That's just about what it sold for in 1999.

Riverside county by Zip

Before I take off here is the April data for price by zip code.

RIVERSIDE SFR Price % chg $/Sq Ft Countywide 3,757 $171 -34.70% $90 Aguanga 92536 1 $190 n/a $78 Anza 92539 n/a n/a n/a n/a Banning 92220 36 $97 -27.20% $75 Beaumont 92223 66 $182 n/a $87 Blythe 92225 4 $188 n/a $112 Cabazon 92230 8 $43 n/a $41 Calimesa 92320 6 $195 n/a $117 Canyon Lake 92587 43 $160 n/a $95 Cathedral City 92234 71 $150 -41.20% $93 Coachella 92236 54 $138 n/a $75 Corona 92879 62 $205 -21.70% $128 Corona 92880 81 $335 n/a $120 Corona 92881 48 $300 -4.10% $141 Corona 92882 73 $258 -31.40% $141 Corona 92883 78 $303 n/a $122 Dsrt Hot Springs 92240 139 $86 7.80% $54 Dsrt Hot Springs 92241 8 $109 n/a $67 Hemet 92543 52 $71 -49.00% $64 Hemet 92544 91 $107 -42.00% $68 Hemet 92545 112 $132 n/a $67 Homeland 92548 3 $60 n/a $56 Idyllwild 92549 7 $220 n/a $149 Indian Wells 92210 12 $673 -16.90% $256 Indio 92201 91 $146 -40.50% $81 Indio 92203 66 $195 -52.30% $91 La Quinta 92253 83 $310 -37.80% $161 Lake Elsinore 92530 128 $145 -52.20% $81 Lake Elsinore 92532 60 $206 n/a $81 Menifee 92584 115 $190 n/a $87 Mira Loma 91752 37 $276 n/a $122 Moreno Valley 92551 92 $129 n/a $77 Moreno Valley 92553 136 $103 n/a $75 Moreno Valley 92555 95 $195 n/a $81 Moreno Valley 92557 109 $145 n/a $88 Mountain Center 92561 1 $267 n/a $175 Murrieta 92562 107 $250 -28.40% $103 Murrieta 92563 143 $228 -34.20% $91 Norco 92860 31 $395 n/a $145 N Palm Springs 92258 1 $73 n/a $94 Nuevo 92567 8 $140 n/a $74 Palm Desert 92211 49 $309 -30.70% $167 Palm Desert 92260 39 $252 -3.90% $146 Palm Springs 92262 37 $250 79.70% $142 Palm Springs 92264 21 $528 -37.40% $219 Perris 92570 71 $135 n/a $70 Perris 92571 146 $135 -42.30% $70 Rancho Mirage 92270 25 $380 -29.00% $187 Riverside 92501 25 $150 n/a $102 Riverside 92503 111 $158 n/a $108 Riverside 92504 59 $145 n/a $105 Riverside 92505 49 $170 -20.70% $113 Riverside 92506 56 $258 n/a $141 Riverside 92507 32 $155 -39.70% $102 Riverside 92508 51 $300 n/a $108 Riverside 92509 95 $165 n/a $113 San Jacinto 92582 67 $138 n/a $58 San Jacinto 92583 80 $116 -29.80% $61 Sun City 92585 51 $159 n/a $87 Sun City 92586 49 $122 -43.60% $88 Temecula 92590 3 $350 n/a $103 Temecula 92591 59 $242 -33.30% $114 Temecula 92592 119 $260 -37.50% $113 Thermal 92274 4 $171 n/a $75 Thousand Palms 92276 14 $111 n/a $78 White Water 92282 2 $111 n/a $65 Wildomar 92595 46 $202 n/a $96 Winchester 92596 35 $240 n/a $89

Taking a few days off

I've been a little bit of a slacker lately because I've bee getting ready for a model sailplane contest. The contest is this weekend so I will be taking a few days off from blogging to have some real fun. I'll be back on Monday.

X out

April numbers are out, no sign of bottom!

Contrary to the media hype the median price is still dropping in the IE according to the latest sales figures from DataQuick.

Sales Volume			Median Price
All homes	Apr-08	Apr-09	%Chng	Apr-08	Apr-09	%Chng
Los Angeles	5,016	6,425	28.1%	$435,000	$300,000	-31.0%
Orange	2,166	2,391	10.4%	$500,000	$380,000	-24.0%
Riverside	3,186	4,469	40.3%	$295,000	$180,000	-39.0%
San Bernardino	1,667	3,130	87.8%	$265,000	$138,500	-47.7%
San Diego	2,809	3,375	20.1%	$400,000	$290,000	-27.5%
Ventura	771	724	-6.1%	$445,000	$340,000	-23.6%
SoCal	15,615	20,514	31.4%	$385,000	$247,000	-35.8%

April's median was $180k and last months median for Riverside was $187k. That makes another 4% fall in one month. The sales numbers were up slightly from last month which is normal for this time of year. In fact they should probably be a little higher than they were.

San Berdu fell from $150k in March to $137k. That's an 8% drop in one month. How much lower can it go? It also saw a increase in the number of homes sold over last month.

Here's the juicy bits from the DQ report.

A total of 20,514 new and resale houses and condos closed escrow in the six-county Southland last month. That was up 5.2 percent from 19,506 in March and up 31.4 percent from 15,615 a year ago, according to San Diego-based MDA DataQuick, a real estate information service.

Last month’s sales were the highest for that month since April 2006, when 27,114 homes sold, but were 18.2 percent below the average April sales total since 1988, when DataQuick’s statistics begin.

Foreclosure resales – homes sold in April that had been foreclosed on in the prior 12 months – accounted for 53.6 percent of all Southland resales last month. It was the seventh consecutive month in which post-foreclosure properties made up more than half of all resales.

A total of 20,514 new and resale houses and condos closed escrow in the six-county Southland last month. That was up 5.2 percent from 19,506 in March and up 31.4 percent from 15,615 a year ago, according to San Diego-based MDA DataQuick, a real estate information service.

Last month’s sales were the highest for that month since April 2006, when 27,114 homes sold, but were 18.2 percent below the average April sales total since 1988, when DataQuick’s statistics begin.

Foreclosure resales – homes sold in April that had been foreclosed on in the prior 12 months – accounted for 53.6 percent of all Southland resales last month. It was the seventh consecutive month in which post-foreclosure properties made up more than half of all resales.

The deep discounts associated with foreclosures have created stiff competition for builders, who last month sold the lowest number of newly constructed homes for an April since at least 1988.

At the same time, the number of single-family houses that resold last month was at record or near-record-high levels for an April in many of the more affordable, foreclosure-heavy inland markets. They included Palmdale, Lancaster, Moreno Valley, Perris, Indio, San Jacinto, Lake Elsinore and Victorville.

The sales picture was dramatically different in many older, high-end communities closer to the coast, where foreclosures and deep discounts are less common. Sales of existing houses remained at or near record lows for an April in markets such as Beverly Hills, Malibu, Palos Verdes Peninsula, Manhattan Beach and Pacific Palisades.

“The problem,” he continued, “is that we still face two big threats to price stability: layoffs, which can cause foreclosures across the home price spectrum, and possibly a new round of foreclosures triggered by defaults on ‘option ARM’ and ‘stated income’loans used in mid-to high-end markets. Also of concern are reports of lenders holding back for many months before making a public foreclosure filing, which we track. If job cuts remain deep and foreclosures spike, then the past few months might later be viewed as nothing more than a brief calm before the next foreclosure storm.”

One in six!

Delinquency rates in the Riverside-San Bernardino metro area hit a staggering 15.7 percent ---- meaning borrowers on roughly one out of every six mortgages were at least 90 days late on their payments, according to the report by First American CoreLogic, a Santa Ana research firm.

Oh yea, things are looking up........not!


And this about the $8k tax credit being used as a DP, Not so much! I found this at Boston.net.
Remember that promise that Shaun Donovan, HUD Secretary made at the Realtor mid-year meeting on Monday? The one about that the $8000 tax credit being made available for down payments? Well, the promise is broken.

This notice came from NAEBA headquarters this afternoon:

According to contacts with both FHA and HUD, Mortgagee Letter 2009-15, which stated that first-time homebuyers would be allowed to use the tax credit for their downpayment, has been rescinded. On a phone call with FHA, Kim Kahl was told, "The mortgagee letter has been rescinded for the time being.” NAEBA President John Sullivan was told something similar when contacting HUD. Neither FHA nor HUD gave further details.

I am not surprised. I think when HUD officials look at it, they see a buyer who needs that $8000 for a down payment as a buyer without enough reserve to be a homeowner.

This may be a good sign for Federal lending policy, IMHO.

Another interesting article I ran across involves those REDC auctions. Ever wonder how many of those houses actually sell. A reporter in Florida did, so he checked to see.

I thought I'd check up on REDC this week to see how many of those foreclosure homes actually closed. After studying the results, I feel duped. And you should, too.

Leave aside the fact that REDC admitted later that only 75 homes actually sold on Feb. 7. When I plowed through the first part of the "sold" list and compared addresses against property appraiser records, I didn't find a single home that closed as of Thursday. Not one.

Mr Mortgage's latest pearl

I was over on the new Mr. Mortgage site reading his latest post. It in line with everything else I've posted lately about the rising amounts of foreclosures, the increasing defaults and reasons for it. He has compiled tons of data showing the amount of REO's, NOTs, and NODs by lender. He also has a chart I found particularly interesting. It shows the re-defaults by lender. The loan modifications that are going bad. Some of the numbers are shocking even for me. Countrywide loan mods gone bad (for loans were the initial loan was delinquent) are running 80%. Go read the entire post, it's another good one.

New foreclosure wave predicted in Inland area

Really, are you sure,A realtor just told me there's never been a better time to buy....

From the PE.

A near record number of homes entered the first stage of the foreclosure process last month in Riverside and San Bernardino counties after mortgage industry foreclosure moratoriums were lifted.

The supply of bank-owned houses has shrunk from a year ago, sparking intense competition from investors and first-time buyers, who often find they must make offers on multiple houses to get one accepted.

But economists expect the number of bank repossessions to burgeon in coming months as a new influx of defaulted mortgages proceeds to foreclosure.

Christopher Thornberg, an economist with Beacon Economics in Los Angeles, said the slowdown in foreclosures while mortgage delinquencies increased "was a mirage. It wasn't real. At some point you have to foreclose."

According to a report released late Tuesday by RealtyTrac, an Irvine-based foreclosure monitoring company, notices of default, the first step in the foreclosure process, were issued for 6,019 homes in Riverside County last month. That was fewer than the 6,642 record in March but more than the 4,706 default notices recorded in April, 2008.

San Bernardino County recorded 4,661 notices of default last month, down from 5,336 a month earlier but sharply up from 3,759 a year earlier.

Meanwhile real estate agents complain about a shortage of foreclosed houses for sale because banks have stopped taking over homes and seem to be slow putting the ones they have on the market.

Riverside County last month had 1,519 bank repossessions, the final stage of foreclosure, down from 1,934 in March, and down from 2,598 homes repossessed in April 2008. There were 1,580 homes repossessed in San Bernardino County last month, up from 1,179 in March but fewer than the 1,845 homes repossessed the same month a year earlier.

"There is now a dip in (bank repossessed houses) similar to the dip in the notices of default in the third and fourth quarters of 2008. We expect a corresponding spike (in bank repossessions) probably in the third or fourth quarter of this year," said Daren Blomquist, a spokesman for RealtyTrac.

Pete Nyiri, owner of Corona-based Top Producers Realty, a high-volume broker of bank-owned Inland houses, said late last week he started getting more repossessed houses to sell. He said lenders and loan servicers "are telling us it is going to be back to where it was as far as numbers are concerned."

Realtors predict another 28% fall in prices

Huh is this for real. Realtor thinking things will get worse?

The initial 2009 forecast for California was a price drop of 6%. The CAR has revised that forecast to a drop of 28%.

in its revised forecast, the association predicts that:

• The median house price will fall to $248,000 in 2009. In October, CAR expected the price to fall only to $358,000.
• The projected drop comes on top of a 38% price decline in 2008, when the median fell to $346,400, down from $560,300 the year before.
• House sales, however, are projected to be much better than expected back in October, with 550,000 houses sold statewide this year.
• That would be a 25% increase from 2008, when 439,800 houses sold.
• The revised sales outlook is pretty good considering that the state was down to 347,000 sales a year in 2007.
• The 550,000 sales is revised from an earlier projection of 445,000 houses sold.

Foreclosures are climbing but where are the listings

The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, according to data released Wednesday.

More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac Inc. said. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since the Irvine, California-based foreclosure listing firm began its report in January 2005.

April was the second straight month with more than 300,000 households receiving a foreclosure filing, as the number of borrowers with mortgage troubles failed to abate.

The April number, however, was less than 1 percent above that posted in March, when more than 340,000 properties were affected. The March data was up 17 percent from February and 46 percent from a year earlier.

"We've never seen two consecutive months like this," said Rick Sharga, RealtyTrac's senior vice president for marketing. "It's the volume that's surprising."

While total foreclosure activity was up, the number of repossessions by banks was down on a monthly and annual basis to their lowest level since March of last year, RealtyTrac said.

But that's far from positive news. Because much of the foreclosure activity in April was in the default and auction stages -- the first parts of the foreclosure process -- it's likely that repossessions will increase in coming months, RealtyTrac said.

About 63,900 homes were repossessed in April, down 11 percent from about 71,700 in March, RealtyTrac said. But the mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac, together with many other lenders.

"All of these loans are now being processed pretty rapidly by the servers," Sharga said.

Everything but the kitchen sink

The title may be misleading, because this is a delusional seller of the month post. This one's a real peach too.

5963 Pingrove Pl in Eastvale has hit the market at peak prices PLUS another 10% a year! Yes, someone didn't get the memo. This home was purchased right at the peak, new from the builder for $683k. Two years into the biggest bust in the history of real estate our obviously clueless owner thinks it's now worth an astonishing $900k!


But wait, act now and he will throw in the furniture! The listing is another real gem too. Written in what can only be described as elementary school level English. Check this out,

"Beautiful property close to schools parks and shopping centers. This property has 6 bedrooms, and many upgrades like crown molding around the house, marble and Hardwood in stairs and one fireplace. It also fitures marble on entire home, all bathrooms have granite counter tops. Sellers will also include all 3 livingroom furniture, 1 dining room furniture 6 bedroom furniture and 1 baby grand piano and lots more."

He starts out so strong too, a whole sentence without a spelling error. It's a bit fragmentary but I'll let him slide. Then it all goes wrong. Buy it and it comes with THREE livingrooms. I'm so glad, dead grooms just aren't much fun. What's with the Hardwood in one of the fireplaces? They marbled the entire home? I'm no English major, far from it. But my 10 year old could write a better listing than this. Rafeal at Mi Casa Financial needs to get his ass back into school!

Sorry no pics yet

Condo anyone?

Take a look at this condo complex in Corona. This is on the corner of Mckinley and Parkview, just North of the McKinley shopping center. Holy smokes, it looks like every other Condo is in trouble. Talk about a foreclosure cluster!

Has the media stopped cheerleading ?

The real estate industry and the politicians seem to be trying really hard to convince Joe-6-pack that the bottom is in, a turn around is just around the corner. A couple of years ago the media would have been all over news like this regardless of what a few naysayers might preach. Lately however, the media hasn't been so kind. In fact nearly all of the major media outlets have articles refuting the claims of the real estate and political pundits.

Like this one from Bloomberg.

We might be looking at a lost generation for U.S. home values.

Far too many analysts are calling a bottom to the housing market after home prices in 20 metropolitan areas declined at a slower pace in February, according to the Standard & Poor’s/Case-Shiller Index.

Don’t be blinded by the glint of optimism in headlines about rising consumer confidence and slowing price declines. Demographic and market realities tell a more sobering story.

You won’t see a widespread housing rebound in an economy in which 600,000 jobs a month are lost and foreclosures ravage the most overleveraged areas. These are just the visible barriers to a recovery.

Mortgage lending has also been an unusually tightfisted process of late. Lenders are demanding a 20 percent deposit for home purchases, and want impeccable credit ratings. About 45 percent of U.S. banks surveyed by the Federal Reserve said they had “tightened their lending standards on prime mortgages.” I suspect that number is much higher.

Then there’s the reality that the market is glutted with homes. A record 19 million homes stood empty at the end of 2008.

What you can’t see in the most recent housing numbers is the least-visible driver of home prices today: demographics.

Baby Boomers

The baby-boomer generation, the largest in American history, will be buying fewer single-family homes.

The U.S. is experiencing a 40-year generational peak in consumer spending, one that will lead to “the first and last Depression of our lifetimes,” author Harry Dent predicts in his book “The Great Depression Ahead” (Free Press, 2008).

Although we may not be headed for a 1930s-style Depression, there’s plenty of evidence to suggest that boomers are dumping their four- and five-bedroom suburban homes for two- and three- bedroom condominiums.

Trouble Spots

That’s why it’s unlikely that there will be any swift recoveries in Phoenix, Las Vegas or San Francisco, where prices fell 35 percent, 32 percent and 31 percent respectively in February from a year earlier, according to the Case-Shiller Index. More setbacks are coming in central and Southern California and south Florida.

One thing hasn’t changed in this recession: Those who are mobile will continue to move where jobs are relatively plentiful and housing is cheaper.

One of the reasons the housing mania was so damaging was that median home prices rose to about three times average household incomes as opposed to double income levels in 1950. (or TEN times household incomes here in SoCal!!)

Wages simply weren’t keeping pace with housing inflation, so homeowners overleveraged to make up the difference. The wave of deleveraging will depress home prices in most markets.

Looks like the bank owns a lot of The Retreat!

So I'm perusing the latest foreclosures on Realtytrac.com when I run across this in the Retreat. Take a look at the big line of "A's" and "B's" on the left side of the image. A means it is coming up for auction (N.O.T.) and B means it's Bank Owned. I think these lots were owned by KB ( I could be wrong). What ever company previously owned them has let them go back to the bank. These are just lots, there are no homes built up at the top of the hill. I wonder what will happen when the bank dumps them and a builder comes in and puts up a bunch of 1500 s/f cracker boxes on 4000 s/f lots. That would sure get the nieghbors uptight!

Quote of the day

I really like this quote (from an article in The Huffington Post). It so perfectly explains the market around here (in bold). Read the whole article it' pretty good.


Oddly enough I find myself back in the position of warning that the housing market may be heading to a terrible crash in the near-future. The bubble mentality has not changed at all and appears to be restarting in the very places where the bubbles were the worst. This is probably because people got used to unaffordable prices and think that a drop from unaffordable to just really, really expensive is a buying opportunity. Meanwhile government and the real estate industry are trying to "reignite" the market -- hoping that starting another bubble will put off the reckoning.

People still think that what we are going through a temporary "correction" and that real estate prices are going to "go back up," that houses are "cheap" now, that they should "snap them up" before they are "priced out." They still think real estate is the path to wealth, instead of somewhat of a burden that should only be undertaken under certain circumstances. Namely, when you plan to live there for a long, long time, and you'll pay less (including closing costs, taxes, insurance, maintenance, possible price depreciation, etc.) than rent.

Another delusional seller

There seems to be another wave of delusional sellers hitting the MLS again. Maybe it's because it's spring, maybe they are hearing about 50% increases in sales numbers and interpreting that as a 50% rise in price, maybe there's a carbon monoxide leak in their house. Who knows, I just know I'm starting to see more and more of these.

Here's the latest one in the areas I'm watching. 140 Trakenher Pl, Norco. This home is in Norco Hills. It has 6 bedrooms, 4.5 baths and is 4313 s/f in size. It's a nice looking house but the back yard is basically dirt. The home was purchased in 2006 for $878k. 3 years later, after one of the biggest real estate crashes in history this guy thinks he can still make a profit on it. The asking price is $1.15M. WTF?? Why are agents taking these ridiculous listings.

Check out the appraised values;

	Low	Middle
Zillow	$427,980	$509,500	$580,830
Eppraisal	$481,490	$566,459	$651,427
Cyberhomes	$423,321	$470,357	$540,910

It looks like the average middle value is about $500k. And I actually think that's probably about right. Priced at $500k this home would sell.

This home for $1.3 million or (see below)

Here's delusional seller #2. Also in Norco Hills but on the Corona Side. 300 Cross Rail Ln. This is a bigger home, with 6 bedrooms, 5 baths and 5659 sq/ft. This home also looks very nice from the front. The realtor didn't put much effort into the listing. No pictures and no description. This home was purchased in late 2005 for just over #1.2M. He now has it listed for $1.3M.

What are the apprasials on this one? Well apparently the seller doesn't what you to see that! No surprise because they would probably be around $600k (or less). This house does have a couple of model matches and a couple that are just slightly smaller listed near by . All of them are between $500k and $600k

Or this one for $585k? And this isn't going to sell at that price. There were two model matches recently listed under $550k. They seem to have gone pending finally.