February numbers are in.

DataQuick has released the sales numbers for Feb. Keeping with the current trend, we have set another record for the lowest sales totals.

here's what they have to say,

Southern California home sales limped along last month at the slowest pace ever for a February, the result of a market crippled by uncertainty and credit constraints. The median sale price dropped by a record 17.6 percent from a year ago, a real estate information service reported. A total of 10,777 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February. That was up 8 percent from 9,983 the previous month but down 39 percent from 17,680 in February last year.

Last month's sales total was the second-lowest for any month in DataQuick's statistics, which go back to 1988. The prior month's total of 9,983 was the lowest ever. Since September, sales each month have been a record low for that particular month.

Of the homes that resold in February, about one-third, 33.5 percent, had been foreclosed on at some point since January 2007. A year earlier the figure was 3.5 percent. At the county level, the percent of homes resold in February that had been foreclosed on since January 2007 ranged from 25.3 percent in Orange County to 48.1 percent in Riverside County.

"Sales remained extraordinarily low, and a significant portion of what did sell was in areas beset by foreclosure activity. That's where sellers are the most motivated and price cuts are largest. Mainly it's in the inland markets, often in newer suburbs, where prices got pumped up artificially with the sort of crazy loans that no longer exist," said Marshall Prentice, DataQuick president.

Those numbers are pathetic. In Riverside they sold 30% less homes this year in Feb and there was an extra day this year. The median price is down 21% from last Feb and down about 30% from the peak median in July 2006. Next month should show a decent sales increase over this month but that's normal. Sales usually increase through May or June. But those numbers will probably be far below last years numbers. Also keep in mind that last years numbers were way down from 2006 sales numbers. Feb 2007 sales were down 32% from Feb 2006.


February Foreclosures

Inland Southern California continued to be a hotbed of foreclosure activity last month, with the number of homes repossessed by lenders increasing nearly 21-fold in Riverside County and 15-fold in San Bernardino County over a year ago.

Riverside County saw 6,103 homes go into all stages of foreclosure -- defaults, bank repossessions, and trustee auctions -- which was an increase of 92 percent over February 2007. In San Bernardino County, 4,963 homes were involved in some kind of foreclosure activity last month, more than double the number a year earlier.

The most dramatic year-to-year increase was in the number of homes repossessed by lenders because the owners could not find a way out of their financial trouble by refinancing, selling the property for enough to cover the mortgage, or getting the lender to accept a "short sale" for less than what they owed.

Bank repossessions in Riverside County soared to 1,346 last month, up from 65 in February 2007. There were 1,235 repossessions in San Bernardino County, compared to 84 a year earlier.
"The bank repossessions are off the charts because properties going into foreclosure have no equity or are worth less than their mortgages," said RealtyTrac Vice President of Marketing Rick Sharga.

Analysts said they do not expect housing to rebound until distressed properties, including bank repossessions and short sales, are gone.

"You have to clear the deadwood out," said Alan Nevin, chief economist for the California Building Industry Association.

"Some say it could be 2009 before we see some recovery in the housing market," said Bob Visini, spokesman for First American Loan Performance.

Chapman University economist Esmael Adibi said he expects foreclosures will continue at a high rate, not just because of subprime mortgages adjusting but also because of defaults on prime mortgages, such as those that allowed people to start with below-market teaser rates or to make monthly payments that did not cover their principal or interest.

Inland economist John Husing said he expects that this year, foreclosures will drive down the Inland economy. "2008 will likely be the worst year in the 44 years I have studied the Inland Empire because of the housing market," Husing said.

Made you look!

Some auction properties are getting people excited when they see the extra low prices listed. Of course, these are the minimum bid amounts for the action and don't reflect what the homes will sell for.

Short sales can also trick you and get your heart pumpin' a bit. You see the prices and get excited. But will the lenders actually let the properties go when they are listed at a very low price.

Here's a couple of examples in Orangecrest.

18996 Alderbrook is in the new Centex/Fox development. This home is a 4 bedroom/2.5 bath and is 2700 sq/ft. It sold new in Nov 2006 for $480k. It's listed as a "pre-foreclosure" short sale for $190k (That's $70 sq/ft). That is a 290k loss or a 61% loss if you prefer it in percentage form.. Do you think there is any chance a bank would go for this? Of course not. They bank will take it, list it for $359k. It will sit for 6 months and they will end up selling it for $250k or less.

In the same tract there is another shorty short sale at 9372 Golden Lantern (was that a super hero? the green lantern's ex?) This 3 bedroom/3bath home is 2384 sq/ft. This one is listed for $215k ($90 sq/ft). Again, there is little chance the bank will go for this sale.

I'm really not sure what these people hope to accomplish. I have a feeling that these homes will probably end up being worth around what they are listed at. I think it will take a couple of years though and I doubt the banks will be too interested in speeding up the process.

Delusional realtard of the week

Another amazing listing from a realtor. You just can't make this stuff up....

Another Corona realtor has decided to list his/her house for sale. Maybe they are bored with Corona, maybe they hit the lotto and are moving to Beverly Hills or more likely they are broke and moving to Barstow (I've read that where the next RE boom will be!).

Our realtor purchased the home, 2443 Picasso Crk in Feb 2004 for $469k. The house is a 4 bed/3 bath home and it's 3468 sq/ft. It says to see pictures of the breath taking backyard but alas there are none. Just one fuzzy shot of the front of the house. Let's hope the listing agent gets those pics up soon. Our realtor obviously didn't get the memo about the current market conditions. He has this baby listed for $825k! That's $238 sq/ft.

I give up trying to guess what these idiots are thinking. There are at least 2 other properties in the same tract selling for WAAAY less than our expert's home.

2492 Hannum Crk is a REO property just around the corner. It's a 4 bed 3.5 bath home and it's a little bigger at 3816 sq/ft. It's currently listed for $499,900. It's been on the market 38 days and has already had one $35k price reduction.

255 Nanners way is also just around the corner and this home is quite a bit bigger at 4011 sq/ft. This is also an REO priced at $510k. This home has been on the market for 125 days and has had multiple price cuts totalling $100k so far.

Now if the two REO's can't sell why list another home for $325k more than them??

He list for $325k more than 2 homes that are larger than his. I don't care how breath taking his back yard is, it's not worth $325k

Here it is!

The first sub $100 sq/ft home in Corona (that I've run across).

24983 Cliffrose St, Corona 92883. This is a big-un. It's a 5 bedroom/3 bath home, 4519 sq/ft on a minuscule 5661 sq/ft lot. It's a McMansion on a Mcpostage-stamp. This home was purchased new in March 2005 for $581k. It looks like it went to the bank in Jan for $472k. It just listed for $445k or $98 sq/ft. Even at that price this thing is way too much. The location is not very good. As mentioned in a multitude of previous posts, it's too far down the 15 fwy. The traffic blows, there is no gas stations or grocery stores nearby and the tract is overflowing with foreclosures. The lot size is big turn off for a lot of people. Those homes are nearly touching. Your neighbors snoring might keep you up an night. It's not the home for me at any price but will some other knife catcher buy it at this price??

Fannie Mae, giving away free money

I ran across this gem on MSN Money today. It explains how Fannie Mae is doing a little creative damage control in order to not get stuck having to buy back bad mortgage loans that were sold off as Mortgage Backed Securities (MBS). Banks are often required to buy back loans that they have sold to Wall St. if the loans go bad within a certain amount of time. If the banks/lenders get the loans back then they are stuck with the losses when the house is foreclosed. Obviously banks don’t want this loss on the books and it looks like Fannie Mae has concocted a method of delaying the inevitable default. I’m sure they are just praying it holds off the default until after the buyback date expires. There solution is to hand out unsecured loans to delinquent borrowers so they can bring their accounts current. They are just giving away money! Unfrikinbeleivable….Do they really expect any of these people to pay this back?

http://tinyurl.com/3dqupm

Fannie Mae's new trick (from MSN Money)
Knowing the complete scope of this credit disaster is impossible because of the absurdly pliable accounting treatment accorded to financial institutions.
Case in point: Fannie Mae. Before excerpting one of the relevant passages from the company's latest quarterly financial report, let me cut to the chase with this explanation from a friend: "They take a delinquent mortgage loan and replace the delinquent part with an unsecured loan in order to circumvent the buybacks and mark-to-market consequences." That is the reality.
Here is how Fannie goes at lengths to sugarcoat it:
"We recently introduced a new HomeSaver Advance initiative, which is a loss mitigation tool that we began implementing in the first quarter of 2008. HomeSaver Advance provides qualified borrowers with an unsecured personal loan in an amount equal to all past due payments relating to their mortgage loan, allowing borrowers to cure their payment defaults under mortgage loans without requiring modification of their mortgage loans. By permitting qualified borrowers to cure their payment defaults without requiring that we purchase the loans from the MBS (mortgage-backed security) trusts in order to modify the loans, this loss mitigation tool may reduce the number of delinquent mortgage loans that we purchase from MBS trusts in the future and the fair value losses we record in connection with those purchases."
Obfuscation cannot change the big picture. The housing bubble -- which bailed out the equity bubble -- was in essence the economy. Now that we don't have the housing ATM or the jobs it created, the economy will continue to weaken.

The median-based price indicators for last month, Horrfying

From the Voice of San Diego,

Let's have a quick look at the median-based price indicators for last month. They were, in a word, horrifying. Between January and February, the size-adjusted median price declined 5.7 percent for single family homes and 7.7 percent for condos.

I emphasize the first clause of the above sentence. The aforementioned shellacking took place in a single month. From the September 2005 peak of the series, the size-adjusted median price is down 25.1 percent for single family homes and 28.1 percent for condos. The downtrend has accelerated of late, however, and a hefty portion of that decline has taken place in the past several months.

The "plain vanilla" median, beloved by analysts everywhere despite being just about the least accurate of the price indicators, was hit even harder. It was down 7.4 percent for single family homes and 8.1 percent for condos. Again, in a month. From the aggregate peak in November 2005 the vanilla median is down 24.1 percent for detached homes and 26.4 percent for condos

Housing market spirals, no end in sight,

NEW YORK - Nervous homeowners and economic analysts have been wondering how much worse the housing market could get. On Thursday they got an answer: Plenty.

Foreclosures are at a record high. Home equity is at a record low. The housing market is spiraling down with no end in sight — and taking people's sense of economic security with it.

For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built.

The Fed reported Thursday that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just below 48 percent in the fourth quarter.

And that was just one example in a day of dismal housing reports.

The Mortgage Bankers Association said foreclosures hit an all-time high in the final quarter of last year. And pending U.S. home sales — those in the gap between when a buyer signs a contract and when the deal closes — came in below analyst expectations for January and remained at the second-lowest reading on record.

Experts believe foreclosures will rise as more homeowners struggle with monthly payments as the interest rates on their mortgages adjust higher. Problems in the credit markets and eroding home values are making it harder for people to refinance their way out of unmanageable loans.
"If you're struggling with payments and you have negative equity in your home, your struggling isn't getting you very far," Elmendorf said. "It's very likely you want to stop and walk away."

Gov't fixes can't force banks to lend

Fevered talk in the capital of possible government fixes for the mortgage crisis belies an inconvenient truth of the credit market: banks simply are not eager to lend money.

Congress and the government may have a limited capacity to ease the crisis because it has gotten too advanced, experts say.

The latest signpost: Even a relatively modest legislative proposal to tighten the government's reins on mortgage finance companies Fannie Mae and Freddie Mac won't be coming together soon in the Senate Banking Committee, its chairman Sen. Christopher Dodd said Thursday.

Even with the Federal Reserve cutting a key interest rate five times in recent months, banks have been retrenching on lending. Many have suffered billions of dollars in losses from subprime mortgage securities that have sucked their capital dry. On a retail level, 55 percent of U.S. banks recently reported tightening their lending standards for mortgages to creditworthy borrowers, not those with tarnished credit histories considered high risk.

"This is just not going to be solved today,' said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C., and a former chief economist of the Senate Banking Committee. "A lot of banks just don't have the money right now" to lend.

And not for the biggest "No Shit" in the long sad history of this decade so far.

Americans poorer than a year ago

Fed reports household net worth down 3.6% in fourth quarter

Considering the impact of higher prices, a bigger debt burden and sagging home prices, Americans were poorer at the end of 2007 than they were the year before, the Federal Reserve reported Thursday.

The net worth of U.S. households fell by $533 billion, or a 3.6% annual rate, in the fourth quarter of 2007, the first time total wealth has fallen since late 2002, the Fed said.

For all of 2007, household net worth rose 3.4% to $57.7 trillion, the slowest growth in five years. After the effects of 4.1% inflation are included, real net worth fell for the year.

The Fed's flow of funds report also confirmed a sharp slowdown in borrowing by households to the slowest growth in 10 years. Household borrowing rose at a 5.6% annual rate, less than half the debt growth seen during the credit boom years in 2003 through 2005. Read the full report.

Borrowing by households for mortgages slowed to a 5% annual rate, also the lowest in 10 years. Borrowing for consumer credit -- mostly credit cards -- slowed to a 4% growth rate.

Despite the slowing in mortgage debt, households' equity in their homes fell for the third straight quarter, dropping by $286 billion, or an 11% annual rate.

The IE, still 33% overvalued

According to Global Insight and National City Economics The IE is still 33% overvalued even though the combined median (Riv/San Berdu) is down to $303k. An additional 33% drop would put our median at $203k (that's even lower than I thought it should be). The last time that this survey thought the IE was fairly valued was in the first quarter of 2003 when the median price for the IE was $189k. We peaked in mid 2006 at 63% overvalued.

You can read the methodology they used to compile this report on their site as well as the excel spreadsheet with the numbers

Fanie Mae's new conforming loan guidlines

Here's Fannie Mae's new rules for conforming loans. (from Calculated Risk). In case you didn't read about it in the Press Enterprise they did raise the conforming loan limit for Riverside to $500k. The based that on a median of $400k. I don't know why they did that other than pressure from NAR or the government. It makes no sense since the actual median is closer to $300k which would have meant no change for the IE.

1. Fixed rates can be sold to Fannie on or after April 1; ARMs on or after May 1. The loan has to be closed on or after March 1 to be subject to the following rules; inventory loans (closed from last July to March) have to be subject to a "negotiated commitment."

2. No AUS approvals. It seems they plan to update Desktop Underwriter (their automated underwriting system) before the year is out, but they haven't done so yet and they're rollin' without it.

3. For principal residences, fixed-rate loans are limited to 90% LTV/CLTV for a purchase, and 75% LTV/95% CLTV for a no-cash-out refi. ARMs are limited to 80%/80% on a purchase and 75%/90% on a no-cash-out refi. CASH OUT REFIS ARE NOT ALLOWED.

4. For second homes and investment properties, the maximum LTV/CLTV is 60% in all cases for purchases and no-cash-out refis.

5. Minimum FICO for any loan is 660, with a minimum of 700 for LTVs greater than 80%.

6. One-unit properties only.

7. On a primary residence, existing subordinate liens must be resubordinated. The new loan cannot "cash out" an existing subordinate lien.

8. No late mortgage payments in the preceding 12 months.

9. 45% maximum DTI, with ARMs qualified at fully-amortizing fully-indexed rate.

10. Full doc only.

11. For purchases, the borrower must make at least 5% of the down payment from his or her own funds.

12. A full appraisal with interior inspection is required on all loans; if the property value is more than $1 million, a field review appraisal is also required.

13. Loans are subject to all current pricing adjustments, plus another .25 for FRMs and .75 for ARMs.

What does all this mean? I'm sure a few people will benefit from this. Those will be higher income families that have a down payment and can qualify (full doc) for a loan. I doubt it will help more than a handfull of people refi since hardly anyone that purchased in the last 5 years has 25% equity in their home.

The Kool-Aid runs deep in Cucamonga

With the market collapsing faster than Milli-Vanilli's singing career why would anyone think they can make 220% on a home purchased in 2002? How much magic kool aid must one drink to think they can ask $850k for a home they paid $385 for only 6 years ago in today's market? Should we assume this person lives in a cave, on a remote island in the North Atlantic, to be so out of touch with today's market. No, this person is a REALTOR! Another realtor that is completely out of touch with reality. Another realtor that has watched his income fall farther than New Century's stock. Another realtor about to lose his home. To be asking this much, it's obvious he drank heavily from the Heloc kegerator.

Let's take a look at his castle,
7380 Marquis Pl, rancho Cucamonga this is a large home, 3766 sq/ft and it has 5 bedrooms and 4 baths. It's agood looking home on a decent sized lot and has a nice back yard with a pool. It was purchased new in Jan 2002 for $385k. Current asking price is $850k. Our realtor/owner is looking to make $465k in 6 years. These homes were selling in the mid to high 800's in mid 2006. But 2006 has come and gone unfortunately our realtor/owner is not willing to accept that.




Unfortunately for him the banks are under no such illusion. They are in the here and now and they own several near-by homes. Nearly right behind the realtor is 12830 Golden Leaf. This 3808 sq/ft home is an REO and it is listed for $625k. That's $225k less than realtor boy.



Nearly right across the street is 12855 Golden Leaf. Same model home, and another REO. This one is also listed for $625k.



And one block over thereis 12772 Wine Seller Ct. This is also the same model home, also an REO and this one is priced at $620. Nice looking kitchen in this one too!



There's also an even bigger home priced at $599k, 12846 Crestfield Ct although I think this one is a short sale.

The banks have set their price 28% below realtor boy. The buyers have set the price even lower because the REO homes are all just sitting on the market growing roots. They have been listed for a couple of months with no sales. Realtor boy listed his today...go figure. With 3 basically identical homes priced $225k lower he must be hoping for a miracle. He better get one of those St Joseph statues and bury it in the yard!

So how many are selling?

Sticking with Norco for a moment I wanted to see how many homes were pending in the Norco Hills area (Zip 92860). I searched the MLS (through Catalysthomes.com) for 4+ bedroom and bigger than 2000 sq/ft. It found 192 homes for sale matching that criteria and ONLY 3 pending.




I also found another sub $500k home in this tract. It's only sub by $1k but it is under. This one is owned by a realtor. He bought it new in 2004 for $585k and it's now listed for $499k. No mention if it's a short sale. I suppose it's possible he made a down payment...nah. Now I'm not going to beat up this guy too much because the listing isn't bad by realtor standards but you'd think that after 186 days on market he could find time to fix all the spelling errors in the description. I counted 7. He has whacked the price 200k so far from his original asking. And with all the money realtors have been raking in the last few years it's hard to fathom why in the world he could not drop a few bucks and at least put some grass in the back yard. 3.5 years of ownership and it's still dirt?

And in other Norco news....

Just over the Hill in Bretton Gait there are now 2 homes that have broken the $600k barrier!

1460 Morab Way is now listed for $595k. This one is probably a short sale. They've been dropping the price about $50k per week for the last month.

1453 Paso Fino is an REO that has been on the market forrrrrever. It started out at $950 in July and is now down to $575k. This is a nice house but very ugly from the street.

Norco Hills goes sub $500k ($500k loss)

The first sub $500k listing in the new Norco Hills development has hit the market today. I've looked at a few in this area that were in the low $500s. But this is the first listing priced under $500k that I've seen.

3221 Cutting Horse, Norco is a 4 bedroom/2.5 bath home, 3022 sq/ft on a .4 acre lot. The house looks good but the yard is still dirt and weeds. So you will need to plonk another 20k min into this home to get the back yard finished. The last sale on this home was $990k in Dec 2006. This home sold new in 2005 for $645k. This illustrates perfectly the insanity of the recent real estate bubble. To think a home could go up $345k in 18 months is just crazy. We are not talking about a home that had 300k of upgrades added. This home looks identical to the way it did the day the builder put the done stamp on it. There are no upgrades inside, there is no landscaping, no pool, no nothing. Yet this home went up $345k in 18 months. Well, now it's owned by the bank and they have it listed for $490k. That's a $500k loss (51%) in 14 months for the lenders (I am assuming this was 100% financed).

Morgan Hill $106 s/f, 53% off last sale!

They said "it couldn't happen here". We are different!

Well, it just did. Morgan hill at $106 s/f!

44817 Tudal St Temecula, is a huge 4034 sq/ft monster with 4 bedrooms/3.5 baths. This home was a former model home and sold in mid-05 for $896k. It recently became REO'd and they have listed it for $430K. That's $106 sq/ft and 53% drop from the last purchase price. A staggering loss of $466k!