Friday, July 17, 2009

Bits and pieces

Man what a week I had..... sometimes work just sucks!

Looks like SoCal had two bank failures today. Vinyard Bank and Temecula Valley Bank were both seized by the FDIC today. The estimated losses for the FDIC and nearly a BILLION between the two banks! It's not going to take many more failures of this size to decimate the reserves of the FDIC. Another two smaller banks failed. One in S Dakota and one in Georgia. Those will take another 120 million from them. 4 banks per weekend is getting to be a trend.


The California employment mumbers are out. The state held steady at 11.6%. Unfortunately the IE jumped up the chart. We shot up to 13.7%. That's a new all time high (well for as far back as they have records).


The June housing numbers are out and as expected there is an increase in the median. Many had expected a bump mainly due to the lack of low priced homes. The current leveling off of prices can be attributed more to the low inventory and the shift of sales to higher prices homes than to actual rising prices. Inventory usually rises this time of year. The spring/summer selling season is when most people put there homes on the market. This year the inventory is plummeting. Mainly due to the banks not getting the foreclosures through. The listings that regular Joe's would placing are just not happening because they know they can't sell them for what they need to get. This whole market is being held together with duct tape and bailing wire....

From DQ news

A total of 23,262 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was up 12.0 percent from 20,775 in May and up 29.0 percent from a revised 18,032 a year ago, according to San Diego-based MDA DataQuick.

June’s sales were the highest for that month since 2006, when 31,602 homes sold, but were 17.7 percent below the average June sales total since 1988, when DataQuick’s statistics begin. June sales peaked at 40,156 in 2005 and hit a low last year.

Foreclosures remained a major force in June, but their impact on the resale market eased for the third consecutive month.(because the banks are still not foreclosing)

Foreclosure resales – homes sold in June that had been foreclosed on in the prior 12 months – represented 45.3 percent of Southland resales last month, down from 49.7 percent in May and down from a peak 56.7 percent in February this year. Last month’s level was the lowest since foreclosure resales were 43.7 percent of resales in July 2008.

Resales of single-family houses priced $500,000 and above rose to 19.6 percent of all existing houses sold in June, up from 18.0 percent in May but still down from 29.2 a year ago. The last time the $500,000-plus market made up more than 19 percent of sales was last October, when it was 19.9 percent. Sales of $500,000-plus houses dipped to as little as 13.4 percent of sales in January this year.

The recent shift toward higher-cost markets contributing more to overall sales has put upward pressure on the region’s median sale price – the point where half of the homes sold for more and half for less.

Sales Volume Median Price
All homes Jun-08 Jun-09 %Chng Jun-08 Jun-09 %Chng
Los Angeles 5,678 7,636 34.5% $415,000 $320,000 -22.9%
Orange 2,538 2,958 16.5% $470,000 $418,000 -11.1%
Riverside 3,757 4,694 24.9% $275,000 $185,000 -32.7%
San Bernardino 2,215 3,438 55.2% $240,000 $140,000 -41.7%
San Diego 3,077 3,692 20.0% $370,000 $314,250 -15.1%
Ventura 767 844 10.0% $420,000 $365,000 -13.1%
SoCal 18,032 23,262 29.0% $360,000 $265,000 -26.4%


rays97runner said...

Just went into escrow on a house in victorville for 80,000. Its a three bedroom two bath 1400 sq ft house built in 1992. Considering it's a bank owned house, its in relatively good condition. I think homes in this area are pretty close to the bottom. The plan is to hold onto this house for quite sometime. My payment with taxes and ins. is going to be about $500 a month. Im hoping I can rent it for $700-$850. There's a guy down the street trying to rent the same floorplan house for $1100, but this seems a bit unrealistic right now. The lender is being very demanding concerning documenting everything so i have my fingers crossed. If these lenders would have been more like this all along, we would have far fewer problems now. I hope this house isnt worth $40,000 this time next year!. Oh well if it is, I'll buy another one!

rays97runner said...

This house actually sold for $235,000 in 2004. Im not counting it seeing that price again anytime soon

Empire Realty said...

Hey Runner, With Rents relaxing only 4.5% so far and the banks holding inventory hopefully prices will not relax much more.

I closed on a home recently which took 2.5 months to close, in underwriting no less than 7 times and kicked out for the oddest reasons.

I don't see prices going to much less than $40 a square foot overall in any area. With building costs near $100 a square thay can't go to zero.

Sit back hold on and enjoy the cash flow.

golfer_X said...

"With building costs near $100 a square thay can't go to zero."

Tell that to Detroit! Home values can easily go to zero or close to it in the outer parts Southern California. But for us it will take a catastrophic water shortage. The coastal areas could always make fresh water from the ocean. Victorville and Palmdale really don't have that option. If NorCal and the Colorado dries up the deserts will turn back to sand. I'm just being a smart ass, but it could happen ....say 20 years from now.

david said...

...or if gas goes to $20 a gallon...

Empire Realty said...


I'll give you that one, sure a huge shift in a fundamental of our local economy could make this place a waste land. Improbable but real.

Wait for the big earthquake to pull out the foundation of more than your home.

Keep up the good work!


Kevin said...


Where do you think high end >750K homes in chino hills or alto loma (91737) are heading? I'm looking to buy in 9-12 months.

golfer_X said...

Dunno where anything is heading. My guess is prices will return to the long term averages. Last time we were anywhere near that was around 2001. So I say look at 2001 prices as your target.

rays97runner said...

Not too worried about the water, if they can take it from the Colorado, They could pump it and desalinate from the ocean! Its really not that far! Maybe 150 miles. Probably would drive prices up a bit though. In twenty years We'll be able to seed clouds anyways maybe! And... maybe with global warming the icecaps will melt and victorville will be oceanfront!The house Im buying sold for 68,000 in 1994 so i figure at 80,000 Im not too far from the 1994 level(maybe 15% higher) which seems like a decent price to me