Sept DQ report

Not much change this month in prices for the IE but the sales numbers continue to fall.

Southland home sales dropped for the third month in a row amid renewed doubts about a market that is recovering in fits and starts. The median price moved up on a year-over-year basis for the tenth month in a row and has regained about one-fifth of its peak-to-trough loss. The effects on the market of the latest chapter in the foreclosure crisis are unclear, a real estate information service reported.

A total of 18,091 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in September. That was down 2.4 percent from 18,541 in August, and down 16.0 percent from 21,539 for September 2009, according to MDA DataQuick of San Diego.

This was the slowest September since 2007, when 12,455 homes were sold. Last month’s sales were 26.3 percent lower than the September average of 24,578. DataQuick’s statistics begin in 1988. An August-to-September drop is normal for the season: On average, sales have dipped 9.2 percent between those two months.

“Today’s market can be characterized as much by activity that’s not happening, as by the activity that is happening. We’re seeing distress-selling, bargain-hunting and entry-level buying, while the rest of the market is still largely on hold,” said John Walsh, MDA DataQuick president.

	Sales Volume			Median Price
All homes	Sep-09	Sep-10	%Chng	Sep-09	Sep-10	%Chng
Los Angeles	7,138	6,070	-15.0%	$330,000	$340,000	3.00%
Orange	2,828	2,524	-10.7%	$429,000	$445,000	3.70%
Riverside	4,312	3,292	-23.7%	$185,000	$200,000	8.10%
San Bernardino	3,023	2,454	-18.8%	$150,000	$160,000	6.70%
San Diego	3,454	3,069	-11.1%	$325,000	$330,500	1.70%
Ventura	784	682	-13.0%	$371,750	$370,000	-0.50%
SoCal	21,539	18,091	-16.0%	$275,000	$295,500	7.50%

Mission Grove (new homes)

I finally stopped into the new Standard Pacific development up in Mission Grove (or is it Woodcrest or Orangecrest). Heck I don't know what area it officially falls into but it's near King high school. It's right next to the old Centex development. I don't know if Standard bought the lots from Centex for pennies on the dollar or if they owned these all along. My guess is they picked them up cheap, they seem to be buying a lot of land if they can get it at the right price. But I digress....onto the homes.

The homes are still big which surprised me a bit, however they are smaller than the bubble monsters. They range from 2500 s/f up to 3500 s/f. Prices are in the mid $300s. At those prices the cost per square foot is between $105 and $120. Remarkably enough that is almost in line with many of the regular resales in the area. The homes themselves are pretty nice and seem bigger than the square footage indicates. The bedrooms in particular are quite large which we found a pleasant surprise. Many other builders make huge homes with tiny bedrooms. In order to pull this off they eliminated the formal living rooms. So if you are a fan of a room no one uses you will be disappointed in these floorplans. The lots are still good sized with most of them around 1/4 acre (although many of them have a slope taking up some of that).

The builder was offering some incentives and I'm sure you could negotiate the broker fee back to yourself if you go in alone. I would imagine you could probably get them to throw in some upgrades since it looks like they have a lot of homes to sell. Of course the drawback to buying new is you get a "lot" of dirt. So you will need to spend some coin on landscaping. Of course many of the REO's and shorties still have dirt yards too. The good part is you still get to pick your flooring, cabinet colors, counters and even the exterior to some extent. So there are some definite advantages of buying new. It's often hard to find everything you like in a resale home and most of them will need carpeting or painting. So those costs often can offset the cost of landscaping a new home (unless you want a pool or some fancy back yard).

All in all, I found them not a bad deal. The prices seemed ok, the floorplans were decent and the area is good. The only drawback is Miller middle school is right across the street and traffic is horrific when school goes in and out. So if you are tired of looking at REO's short sales and such you might want to check these out.

Well, it's about time

In what could be a first in Riverside County, a former homeowner is charged with a crime in connection with damage to a property in foreclosure.

A San Diego police officer and his wife have been charged with a felony in the trashing of their six-bedroom tract home, which was in foreclosure, in the French Valley area of southwest Riverside County. From stones smashed off the facade to dye poured on carpets, the damage totaled $200,000, according to court records.

The extent of the damage and the "obvious malice" pushed the case into the realm of criminal behavior, Riverside County sheriff's Sgt. Mike Hatfield said.

The damage to the Via Laguna home included missing appliances and fixtures, torn-out wiring and trees tossed in the swimming pool, according to court records.

Robert Conrad Acosta, 39, and Monique Evette Acosta, 35, were charged Monday with destroying and carrying away items from a mortgaged property with the intent to defraud or injure. If convicted, they face up to four years in prison, district attorney's spokesman John Hall said. As of Friday, they had not been arrested.

According to court records, San Diego Metropolitan Credit Union had given the Acostas until July 1 to move out of the home, located in an unincorporated area near Murrieta.

Tina Medrud, a credit union representative, went to inspect the home June 15 and discovered that it had been vandalized inside and out, court records show.

The two-car garage door was gone, along with gates, the flagstone patio and walkway. Some of the decorative facade had been smashed off the house and the outdoor fireplace. Walls throughout the home were sprayed with black paint. Among the items missing: air conditioners, decorative beams, countertops, cabinets, fixtures and woodwork. The stone floor in a hallway was destroyed. Wiring had been pulled from the walls and cut. Trees and bushes had been thrown into the damaged backyard pool.

Medrud reported the damage to the Sheriff's Department, telling investigators that the Acostas had attempted unsuccessfully to modify their home loan and that the credit union had begun the foreclosure process, court records say.

In e-mails provided to investigators by the credit union and quoted in a declaration in support of a search warrant, Monique Acosta wrote that she believed she had been misled by credit union officials. In one message she demanded $10,000 in exchange for moving out and leaving the home in good condition, court records show.

A witness reported seeing the Acostas on June 12 removing items from the home, court records say. Later, many of the missing items were recovered by investigators from the Acostas' storage units in San Diego County.

What's wrong with this house?

2114 Westminster is in the best area of Riverside, it's dead cheap and it can't seem to find a buyer. What the heck is wrong with this place. After a boat load of price drops this house is listed for $373k. The cheaper homes in this area are in the $500k to $600k range with most of the nearby homes over a million. From the pics it doesn't look that bad. I thought this place would have sold a year ago when it was listed at $425k.

August numbers from DQ

No surprise here. Sales numbers continue to decline and the median is dropping again. However the median in the IE was about the same (Sanberdu ticked up a smidge). Our sales numbers were also about the same as last month (bad). So far price levels are holding (at least the median is) but how long that will last is anyone's guess. With the sales numbers in the toilet and the inventory starting to climb there will be a lot of pressure on prices.

Southland home sales fell last month to the lowest level for an August in three years and the second-lowest in 18, the result of a worrisome job market and a lost sense of urgency among home shoppers. The median price paid remained higher than a year ago but continued to erode on a month-to-month basis, a real estate information service reported.

A total of 18,541 new and resale houses and condos closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 2.1 percent from 18,946 sales in July, and down 13.8 percent from 21,502 sales in August 2009, according to MDA DataQuick of San Diego.

Last month’s sales didn’t fall as sharply as in July, when the market lost most of the boost that had been provided by federal home buyer tax credits. July sales fell 20.6 percent from June and fell 21.4 percent from a year earlier. The now-expired credits spurred many buyers to purchase homes sooner than they otherwise would have, creating a market lull in their wake. Last month’s sales were the lowest for the month of August since 2007, when 17,755 homes sold, and the second-lowest since August 1992, when 16,379 sold. Last month’s sales were 31.5 percent lower than the August average of 27,070 sales since 1988, when DataQuick’s statistics begin. The average change in sales between July and August is a gain of 3.9 percent, compared with last month’s 2.1 percent decline from July.

The median price paid for a Southland home fell last month to $288,000, down 2.4 percent from $295,000 in July but up 4.7 percent from $275,000 in August 2009. The median has declined on a month-to-month basis for the past three months, since hitting a high for this year of $305,000 in May.

	Sales Volume			Median Price
All homes	Aug-09	Aug-10	%Chng	Aug-09	Aug-10	%Chng
Los Angeles	7,189	6,180	-14.00%	$329,500	$330,000	0.20%
Orange	2,790	2,538	-9.00%	$427,750	$440,000	2.90%
Riverside	4,145	3,478	-16.10%	$190,000	$200,000	5.30%
San Bernardino	3,276	2,513	-23.30%	$145,000	$158,000	9.00%
San Diego	3,306	3,113	-5.80%	$325,000	$337,000	3.70%
Ventura	796	719	-9.70%	$375,500	$370,000	-1.50%
SoCal	21,502	18,541	-13.80%	$275,000	$288,000	4.70%

The most delusion developer in California

From the press enterprise,

After two months of marketing his 141 luxury condos with not one sale, Mark Rubin said he has given up wooing buyers to the Raincross Promenade project in downtown Riverside that cost him $40 million to build.

Although late last week the sign fronting Market Street said the homes were for sale, Rubin said the truth is they now are for lease and the sign soon would be changed.

Lots of people admired the tony project with its lush landscaping and fountains and the upscale appointments of the condos, including granite counters and stainless steel appliances, the Beverly Hills developer said.

But he said prospective buyers kept trying to beat down his prices, even after he shaved $30,000 off the initial list prices ranging from $240,000 for a one-bedroom, one-bath condominium to $475,000 for a two bedroom, two-and-a-half-bath townhouse. (By the way, that's $240k for a 680 s/f shoebox!! That's $352 s/f or about 4 times the average price per sq/ft)

"There were no sales," Rubin said. "Everyone wants a bargain. They read about foreclosures and think they can buy for distress prices." (No, but no one wants ass raped on price)

Because he paid cash to develop the property, Rubin said he is under no threat of foreclosure from a bank and under no pressure to drop his prices. (hmm where have we heard this before? "I'm not giving them away")

He said he had promised the city council he would attempt to sell the units but that none of the councilmen had expected the condos would sell in the current economy and nothing legally prevents him from converting the project to apartments.

Also he said he discovered that most of the 500 people who had signed an interest list when the project was under construction had assumed that it would be an apartment complex.

So Rubin said he decided about a week ago to convert Raincross Promenade's sales staff to a leasing staff.

"I didn't want to fight windmills," he said. "If after a year the market changes, I will start selling them. If not, I will keep renting them."

Rubin said he and his wife still intend to move into the development. He said they probably will occupy a one-bedroom unit in the next few weeks.

Some real estate experts familiar with the Riverside market said it is no wonder the condos did not find buyers since condos are the weakest part of what is a very weak housing market.

Leasing out 141 condos also could be a challenge, the experts said, especially at the monthly rents that Rubin says he wants for the one- to three-bedroom units, which range from $1,250 to $1,925.

"He will have to test the market," and lower the rents if necessary, said John Kalmikov, a senior vice president and apartment specialist with Lee & Associates in Riverside. Kalmikov said the $1,850 monthly rent Rubin plans to charge for a two- bedroom unit is $200 to $300 higher than the average rent of newer two-bedroom apartments in Riverside. Also he said the typical one-bedroom apartment in the city rents for under $1,000.

But Kalmikov said there is demand for larger two- and three bedroom apartments with laundry hookups as renters seek to double up to lower their housing costs. Also he said those who work in downtown Riverside and want to avoid the costs of commuting might pay a premium.

In any case, Kalmikov said, Rubin has a history as a savvy developer and he will get a far better return on the money he invested in Raincross Promenade from the rental receipts than from putting the same money in a bank at today's rock bottom interest rates.

"I would do the same if I were in his shoes," Kalmikov said. "I would wait it out."

Ramping up

From calculated risk,

Servicers are not initiating or processing foreclosures at the pace they could be.

By postponing the date at which they lock in losses, banks and other investors positioned themselves to benefit from the slow mending of the real estate market. But now industry executives are questioning whether delaying foreclosures — a strategy contrary to the industry adage that "the first loss is the best loss" — is about to backfire. With home prices expected to fall as much as 10% further, the refusal to foreclose quickly on and sell distressed homes at inventory-clearing prices may be contributing to the stall of the overall market seen in July sales data.
...
Banks have filed fewer notices of default so far this year in California ... than they did 2009 or 2008, according to data gathered by [RadarLogic]. Foreclosure default notices are now at their lowest level since the second quarter of 2007, when the percentage of seriously delinquent loans in the state was one-sixth what it is now.

New data from LPS Applied Analytics in Jacksonville, Fla., suggests that the backlog is no longer worsening nationally — but foreclosures are not at the levels needed to clear existing inventory.
...
"The industry as a whole got into a panic mode and was worried about all these loans going into foreclosure and driving prices down, so they got all these programs, started Hamp and internal mods and short sales," said John Marecki, vice president of East Coast foreclosure operations for Prommis Solutions ... "Now they're looking at this, how they held off and they're getting to the point where maybe they made a mistake in that realm."
...
"The math doesn't bode well for what is ultimately going to occur on the real estate market," said Herb Blecher, a vice president at LPS. "You start asking yourself the question when you look at these numbers whether we are fixing the problem or delaying the inevitable."

There is much more in the article.

Note: The LPS delinquency data for July will be released tomorrow. Here are some of the findings (no link):

• July showed an astounding 24.5% month-over-month increase in foreclosure starts, which dovetails with Treasury's latest report on HAMP cancellations (approx. 50% according to Treasury's numbers)
• Abysmal foreclosure rates in NV, FL and CA have led to much higher level equity loss for homeowners in those states as compared to the rest of the country.
• Cure rates remain steady, but seriously delinquent (6 mos.+) cures have declined significantly, by approximately 25%
• Origination remains depressed due to much stricter underwriting guidelines and low purchase activity, but what is being originated is of good quality.
• Until the deterioration ratio improves from its steady two deteriorations for every one improvement, it's hard to see how we're going to get out of the hole.

fliptard alert

The fliptards are still at it. Most price the stuff reasonable close to comps. But not all of them.

18771 Oak Park Dr. Nice big house in Woodcrest picked up on the courthouse steps for $473K back in April. It must have needed some serious work for it to take this long to get back on the market. But the listing price of $749k is about $150k higher than this thing has a hope of selling for. There have been a couple of really nice similar sized homes in this tract sell for under $500k. Those both had nice pools but slightly less "fluff". That leads me to think the market price of this will be in the $550k range and if the inside is really nice maybe up to $600k. $749k however is completely delusional.

Now lets rag on the realtard! Ok, first of all why the price? Getting past that what the hell is up with the all caps? Then we have all the normal misspellings, punctuations or lack there of and a few misplaced words, like the use of "state" instead of Estate. At first I thought it was a spelling error but she used it twice and spelled it the same way both times.

And where the heck are the pics of the inside?

Sales worst ever on record

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.

Am I the only one not surprised by those headlines. This was the biggest no brainer since car sales tanked after the cash for clunkers program. Really, are we to think they expected sales to stay the same after the government give away ended.

I have started to notice the inventory climbing in the nicer areas. A few months ago there was hardly anything in some of the areas I keep an eye on. Not any more. The inventory is definitely climbing with the slow down in sales.

Ron Paul gets it!

Let the Housing Market Normalize!

Recently there have been some encouraging signs that Congress is finally willing to admit what should have been evident two years ago. Even after a $150 billion bailout, Fannie Mae and Freddie Mac are still bankrupt and should be abolished. Indeed Rep. Barney Frank, a longtime champion of Fannie and Freddie has made a few statements alluding to this and I have signed on to a letter asking him to clarify his remarks and hold hearings on this topic. There seems to be a growing consensus in favor of abolishing Fannie and Freddie. This is the good news.

The bad news is that instead of simply returning to the free market, Fannie and Freddie will probably be replaced with something equally damaging, and at this point we can only guess what that will be. One possibility is that instead of these two giant Government Sponsored Enterprises (GSEs) the government will deputize thousands of smaller banks to do the same thing – that is to securitize mortgages with taxpayer guarantees to encourage lending that otherwise would not happen. In other words, there will be a myriad of smaller Fannies and Freddies, and government involvement will reach even deeper into the financial sector.

Fannie and Freddie, and thus the taxpayer, has an alarming $5 trillion exposure to the mortgage market. To some, spreading out this risk might seem tempting, and a smart thing to do. But the fact remains that if a bank expects to lose money on a loan, so will the taxpayers. Playing around with structures and definitions will still not deal with the root problem – government meddling in the housing market, playing fast and loose with our tax dollars, and central planning by the Federal Reserve.

Banks have complex risk assessment strategies in place that help them forecast if a particular loan will make them any money or not. If they expect to make money, they will approve the loan. If they have doubts, sometimes they will ask for a co-signer to improve their odds. You might do this willingly for a friend or a relative if you didn’t mind losing some money on their behalf, but current government policies essentially force taxpayers to become cosigners for risky borrowers that are complete strangers, who the banks have already determined to be bad risks. Taxpayers have no choice in the matter because politicians decided a few decades ago that dangling homeownership in front of more people seemed like a good way to garner votes.

That was sold to voters as a compassionate gesture to the poor and beneficial to society as a whole. After all, how could giving more Americans an ownership stake in society be bad? The combined policies of loose credit and government backing increased the demand for housing and drove prices sky high. When the housing market heated up to the breaking point everything came crashing down. Those suddenly facing foreclosure saw the reality of government compassion. Truly, when government offers you a gift, you should eye it with great suspicion.

Another tragedy is that many job seekers are now tethered to their locations because of upside down loan obligations. It takes a lot of effort with their bank and damage to their credit scores to figure out how to get out and move to a place where there are jobs. Will the government now be seeking ways to subsidize renters in some way because of this lack of mobility? Some think so.

My hope is that for the long term stability and health of the economy, the government will extricate itself from the market altogether and let it normalize. My fear is that in its usual misguided efforts at solving one crisis, it will create a thousand others.

And in other news, here's an blurb that confirms the governments intentions for HAMP and other plans was indeed to save the financial system and not the screwed homeowners.

"On HAMP, officials were surprisingly candid. The program has gotten a lot of bad press in terms of its Kafka-esque qualification process and its limited success in generating mortgage modifications under which families become able and willing to pay their debt. Officials pointed out that what may have been an agonizing process for individuals was a useful palliative for the system as a whole. Even if most HAMP applicants ultimately default, the program prevented an outbreak of foreclosures exactly when the system could have handled it least. There were murmurs among the bloggers of “extend and pretend”, but I don’t think that’s quite right. This was extend-and-don’t-even-bother-to-pretend. The program was successful in the sense that it kept the patient alive until it had begun to heal. And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks. Policymakers openly judged HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock. I believe these policymakers conflate, in full sincerity, incumbent financial institutions with “the system”, “the economy”, and “ordinary Americans”. Treasury officials are not cruel people. I’m sure they would have preferred if the program had worked out better for homeowners as well. But they have larger concerns, and from their perspective, HAMP has helped to address those."

Holy Smokes Batman!

Here's your first real month of data after the government intervention ended. And it's shockingly bad. Sales from June to July were down 25% in Riverside and 28% on San Berdu. On top of that the median price also fell, with riverside seeing a 5% drop. .


La Jolla, CA---Southland home sales saw their biggest year-over-year drop in more than two years last month as the market lost most of the boost from the federal home buyer tax credits. The median sale price dipped for the second month in a row, the result of a shaky economic recovery, continued uncertainty about jobs, and the expiring tax breaks, a real estate information service reported.
A total of 18,946 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in July. That was down 20.6 percent from 23,871 in June, and down 21.4 percent from 24,104 for July 2009, according to MDA DataQuick of San Diego.
This was the slowest July since 2007, when 17,867 homes were sold, and the second-slowest since July 1995, when 16,225 sold. Last month’s sales were 27.4 percent lower than the July average of 26,085 sales since 1988, when DataQuick’s statistics begin. The average change in sales between June and July is a 6.7 percent decline – about one-third the drop seen this year.
Last month’s 21.4 percent sales drop from a year ago marked the steepest year-over-year decline for Southland sales since March 2008, when sales fell 41.4 percent.
“It appears some of the sales that normally would have occurred in July were instead tugged into June or even May as buyers tried to take advantage of the expiring tax credits. Some of last month’s underlying technical numbers were largely flat, indicating that the market is treading water,” said John Walsh, MDA DataQuick president.
The median price paid for a Southland home was $295,000 last month. That was down 1.7 percent from $300,000 in June, and up 10.1 percent from $268,000 for July 2009. The low point of the current cycle was $247,000 in April 2009, while the high point was $505,000 in mid 2007.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,204 last month, down from $1,251 in June, and up from $1,180 in July 2009. Adjusted for inflation, current payments are 46.4 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 56.1 percent below the current cycle’s peak in July 2007.
Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average, MDA DataQuick reported.

delusion isn't dead

It's nice to see that delusional sellers are still out there. Check out this guy that bought a new home from a builder just a few months ago. It looks to me he hasn't done anything and now puts the home on the market for $145k more that he paid in March. The letters WTF come to mind! The freaking builder tried for two years to dump this thing before he found this sucker. Now a few months after buying this dog the guy thinks he can make $145K. Oh my.....

Here's the home, 16773 Ponderosa. It's a big home in Woodcrest but the area is kinda funky. It's surrounded by small older homes and a whole bunch of empty lots that the builder (Gallery Homes) has given up on for now. These houses didn't even come with fences and from the pics the buyer still has not put one in. The house is nice enough, I actually looked at it when it was for sale from the builder, but the area isn't and the fact there are no fences makes it really strange. At his $158 s/f asking price he is about $50 s/f higher than the nearby comps.

I'm actually seeing quite a lot of these recent buys hitting the market again. I don't think these are flip attempts just buyers that are trying to get out without losing any cash (which means selling for about 10% more than they paid). Good luck on that!