Looking Closer into the East Bay REO & Short Sale Market
May 23, 2011 by Glen Bell · View Comments
When I was compiling my latest set of East Bay Housing Numbers, I decided to take a closer look at the distressed property market and chart the sales since the beginning of 2007.
The graphs consist of all sales on a month by month basis for both Contra Costa and Alameda Counties. It also shows what portion of sales were distressed property (both REO and Short Sales) since the beginning of 2007 to current April 2011 numbers.
The influence of distressed properties reached their peak during the first quarter of 2009, consisting of 72% to 76% of all sales in Alameda County, and 81% to 83% of all sales in Contra Costa County.
While the number of REO sales has since declined to its current levels, (48% in Contra Costa County and 55% in Alameda County), the number of short sales have gradually increased, now almost as much of a factor on sales as REOs.
East Bay Housing Data – Glen’s Numbers through April 2011
May 8, 2011 by Glen Bell · View Comments
The latest East Bay Housing Numbers are in, and again we’re seeing a slight increase in both inventory levels and in pendings compared to March. Inventory is up 11.4% and pendings are up 20.7% since the beginning of the year.
The months supply is now 3.5 months, above the 3.1 months at the beginning of the year and well above the 2.6 month supply we saw last year at this time.
Our Pending/Active Ratio has increased slightly to .92, slowly returning towards a “normal” market.
Distressed properties, (REOs and Short Sales), are still a large part of our local markets making up 60% of the active listings, 77% of our pending sales and 49% of the sales over the last 4 months.
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can download an entire copy of Glen’s East Bay Housing Numbers Through April 2011 here.
Other News from Around the Web
“Housing Values: The Perfect Storm,” 4/26/2011 – DSNews
“With all the news of still-declining home prices, most buyers are keeping their feet firmly planted on the sidelines unless they’re sure they’re getting a bargain.” – Carrie Bay
Sales up, Prices Down for Bay Area Housing Market, April 14, 2011 – DQNews
“Bay Area home sales last month logged the best March in four years, barely, as prices slipped back a notch. A variety of indicators – including investor and cash purchase levels and adjustable-rate loan use – pointed toward a more normal market, though suggested that it’s still a ways off, a real estate information service reported. “
“The housing market has certainly moved well back from the abyss of two years ago, but there is quite a ways to go before it’s even remotely normal. The Bay Area has much less of a foreclosure problem than the rest of the state, but by its own standards it’s still a sizeable problem that acts as a drag on prices. The big issue continues to be mortgage financing, which is still problematic for many potential borrowers,” said John Walsh, DataQuick president.
“California Mortgage Defaults Drop Again; Foreclosures up,” April 19, 2011 – DQNews
California’s priciest zip codes collectively saw mortgage defaults buck the market-wide trend again and rise slightly quarter-to-quarter, while their defaults fell less on a year-over-year basis than in the overall market. The state’s 80 zip codes with median sale prices of $800,000 or more last quarter posted a 5.8 percent quarter-to-quarter increase in default notices and a 4.7 percent year-over-year decline.
At the other end of the price spectrum, zips with medians below $200,000 saw first-quarter defaults drop 5.5 percent from the prior quarter and drop 17.7 percent from a year ago.
If you’re looking for more news throughout the month, check out the MyEastBayAgent Twitter feed for the latest links.
Taking a Closer Look Into the East Bay Condo Market Slowdown
April 13, 2011 by Glen Bell · View Comments
We are seeing a slowdown in the condo market and I decided to run some numbers to verify what I’ve been hearing.
Below is a chart showing the median price of condo/townhouses in selected cities on a quarterly basis over the past two years, (ending March 31, 2011).
Some are more obvious than others, but values have come down in the last two or three quarters. I expect that trend to continue. Keep in mind there are seasonal influences and there have been some ups and downs over the past couple of years in terms of inventory, demand and values.
The biggest influences with condos in this market are the difficulty in getting a loan based on the condo certifications, declining values, and high HOA dues. Many are being purchased now all cash. However, some investors have stayed away because prices have still not come down enough to cash flow, and many times that is because of the HOA dues.
Carolyn Said highlighted this in her recent article in the San Francisco Chronicle
“In a vicious cycle, lending restrictions bar potential buyers from getting a mortgage in complexes where too many units are behind in homeowner association dues, are not owner occupied or are concentrated in one party’s hands. Units is such complexes must sell for all cash, which drives down their price.”
Eve Mitchell highlights another problem for the condo market in her recent Contra Costa Times article
“In a housing market in which prices continue to be battered by foreclosures and short sales, many would-be buyers of condominiums in the Bay Area instead have found bargain-priced single-family houses as the price gap between the two housing choices closes.”
In summary, the deteriorating HOA financial situations along with the tightening loan requirements & the sudden viability of single family alternatives, have resulted in a East Bay condo market that is struggling to find it’s footing right now.
East Bay Housing Data – Glen’s Numbers through March 2011
April 10, 2011 by Glen Bell · View Comments
The latest East Bay Housing numbers are in and they’re showing a slight increase in inventory levels and in pendings compared to February. Pendings are up about 3.1% over last month.
Sales remain sluggish. We’re seeing, as a trend in most cities, days on market slowly increasing, median prices decreasing slightly and the average sales price coming down slightly in comparison to the average list price.
Our Pending/Active Ratio has slightly increased to .90, still indicating that we are, on the whole, in a “buyer’s market,” but slowly returning towards a “normal” market.
The months supply remained steady at 3.3 months, still above the 2.5 month supply we saw last year at this time.
Looking Forward
I saw this post from DQ News Bay Area Housing Market Stuck In Neutral; Investors, Cash Buyers Active & thought it accurately describes what I think is in store for the Bay Are housing market.
“Over the next few months we’ll begin to see how much of the pent-up demand will play out during the traditional spring-summer home-buying season. Our sense is that we could see sales jump significantly from today’s subpar levels if the economic outlook improves, people start feeling more secure in their jobs and credit terms loosen. Some potential buyers also want to see evidence that prices have bottomed. Of course, one group will have to sit this home-buying season out: Those who don’t have enough, if any, equity in their homes.”
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can download an entire copy of Glen’s East Bay Housing Numbers Through March 2011 here.
Time to Jump in and Buy Real Estate Again!
March 30, 2011 by Glen Bell · View Comments
In an article posted on CnnMoney, on March 28th, titled “Real estate: It’s time to buy again,” Shawn Tully, senior editor, states; “Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”
This is a compelling article, with an optimistic overview on the housing market well worth the read!
This following quote lays the foundation and leads to an insightful argument in favor of recovery in the housing market.
If all the noise you’re hearing about housing has you totally confused, join the crowd. One day you’ll read that owning a home has never been more affordable. The next day you’ll see news that housing starts have plunged to nearly their lowest level in half a century, as headlines announced in March. After four years of falling prices and surging foreclosures, it’s hard to know what to think. Even Robert Shiller and Karl Case can’t agree. The two economists, who together created the widely followed S&P/Case-Shiller Home Price indices, are right now offering sharply contrasting views of housing’s future. Shiller recently warned that the chances were high for a further double-digit drop in U.S. home prices. But in an interview with Fortune, Case took a far brighter view: “The lack of new home building is a huge help that a lot of people are ignoring,” says Case. “People think I’m crazy to be optimistic, but housing is looking like the little engine that could.”
flickr photo credit Jitze Couperus Used under a creative commons license.
East Bay Housing Data – Glen’s Numbers through February 2011
March 7, 2011 by Glen Bell · View Comments
This month’s edition of Glen’s East Bay Housing Numbers is in and February seemed somewhat uneventful on the surface.
Inventory stayed relatively even compared to January with a slight increase seen in pending sales, up about 8.5%. The months supply remained steady at 3.3 months, still well above the 2 month supply we saw last year.
The Pending/Active Ratio increased to .88, still indicating that we are still, on the whole, in a mild buyer’s market.
Sales continue to remain sluggish. We’re seeing, as a trend in most cities, days on market slowly increasing, median prices decreasing slightly and the average sales price coming down slightly in comparison to the average list price.
Other Recent News
“Bay Area home sales took their normal plunge from December last month but rose slightly from a year ago as prices edged lower. Although investors stayed quite active, many potential buyers and sellers continued to play a waiting game, while new-home sales dropped to the lowest level in more than two decades.” DQ News
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can download the entire copy of Glens East Bay Housing Numbers through Feb-2011 here.
A Closer Look Into the Fundamental Shift in the East Bay Housing Market
September 9, 2010 by Glen Bell · View Comments
photo credit Angelo DeSantis
While compiling the monthly numbers for August, I decided to take a closer look at sales during the ups and downs we’ve experienced over the past few years. The news we’re hearing today seems to always focus on one or more of these questions:
1. Sales. Are we seeing more or less in our local markets?
2. What’s going on with price?
3. How much of a factor are distressed properties?
I wanted to identify trends in our market without getting into too much detail. I looked at sales of single family homes in Alameda and Contra Costa Counties by focusing on key months.
- Current Month (August 2010)
- End of Year (December 2009)
- Last Year (August 2009)
- “Trough” (February 2009)
- “Peak” (May 2007)
What I looked at was changes in markets that have occurred in; sales, price, price levels and the influence of distressed properties. As we’ve already seen, the “mix” (sales by price levels), and the influence of distressed properties are very important factors.
“Peak” and “Trough” months were identified as such for the San Francisco Bay Area by the California Association of Realtors (based on average median price). Price levels were also suggested by CAR as a means of further breaking down markets to identify what the actual “mix” has been on sales for any given month.
In looking at what is considered our “Peak,” you can see how high price was for both counties compared to the “Trough” and our current market.
Peak (May 2007) to Trough (February 2009)
1) Average Sales Price;
Alameda County, Down 52.5% Contra Costa County, Down 64.5%
2)Median Price;
Alameda County, Down 54% Contra Costa County, Down 69.8%
Although there has been some recovery since the “Trough,” we are still well below the “Peak” of May, 2007.
Peak (May 2007) to Current (August 2010)
1) Average Sales Price;
Alameda County, Down 33.6% Contra Costa County, Down 44.6%
2) Median Price;
Alameda County, Down 36.7% Contra Costa County, Down 56.0%
The Weight of Distressed Properties on the East Bay Housing Market
We gain some additional insight by taking a closer look at what sold, “mix” (price levels), and how much the market has been influenced by distressed property over the last few years.
During the “Peak”, May 2007, distressed properties had very little influence in our market. As we experienced “the credit meltdown” with economic/employment concerns, more and more foreclosures came onto the market increasing inventories adding downward pressure to home values. The “Trough,” (our lowest median price levels), was when distressed properties were at their highest levels.
Alameda County Distressed Sales as a % of Total Sales
Contra Costa County Distressed Sales as a % of Total Sales
“Mix” (Price Levels)
Lower priced home sales were very minimal during the “Peak” with the bulk of the sales coming from price levels above $500,000 for both counties, and even more importantly, looking at houses under the $300,000 price range.
Here are the total sales in Alameda country from the Peak in May ’07 to Now. Notice, the “mix” has changed dramatically.
& here’s the data for Contra Costa County. Once again, notice how the “mix” has changed dramatically.
Take some precaution in making comparisons based on Median Price because the “mix” in sales will always “skew” the numbers. If the “mix” in sales changes from fewer lower priced homes to many as has happened in our market over the past few years, the change will appear to be more dramatic than it actually is. This has led to some recent misleading headlines and interpretations.
In summary, I believe that it is safe to say that the “mix” of sales, based on price levels, has dramatically changed. During the “Peak” sales were primarily over $500,000 with very few foreclosures. Over the past 3.5 years, we’ve seen an increase in the number of distressed properties. The ease of credit and the psychology of the markets prior to the “peak” were both factors that led to an increase in inventories fueled by the number of foreclosures coming onto the market.
We’re now seeing far more activity in the lower price levels, primarily below $500,000. Homes are now more affordable, investment activity has increased, plus federal incentives and low interest rates have been factors at this level.
Glen's East Bay Housing Numbers Through August 2010
September 7, 2010 by Glen Bell · View Comments
The August edition of Glen’s East Bay Housing Numbers is here & at the risk of sounding like a broken record, we’re seeing a continuation of the recent trends. Inventory still rising and the number of pending transactions (listings in contract, but not yet closed) continues to decline.
Taking a look of Pending Listings/Active Listings, this month we’re sitting at .86, which continues the downward trend back into buyer’s market territory (<1.00). It will be interesting to see if this downward velocity continues next month. Based on what we’re noticing with our own listings, my inclination is that we’ll start to see a reduction in the velocity of the downward trend.
So in summary, the August edition of Glen’s numbers shows that inventory is up, pendings are down & the pending over active ratio continues to trend back to the a buyer’s market. I spent a good portion of the weekend compiling some additional data for the past few months in Contra Costa & Alameda counties, which we’ll be publishing in the next few days, so stay tuned for that.
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can also download the entire copy of my numbers through August 31st here.
Glen’s East Bay Housing Numbers (through May 2010)
June 3, 2010 by Glen Bell · View Comments
The May edition of Glen’s East Bay Housing Numbers show that housing inventories continued to climb at an unusually fast pace, up 64% since the beginning of the year. Since January 1st the month’s supply has increased from 1.7 months to 2.8 months while the pending over active ratio dropped from 1.66 to 1.18.
When comparing these numbers to May of 2009, we’re able to put this in a better perspective.
Last year’s May numbers are similar to this year’s as follows:
1) Active Listings (Homes for sale) are roughly within 2% of last year’s numbers.
2) Pending Sales (Homes in contract) are within 5% of last year’s numbers.
3) We now have a 2.8 month supply, the same as last year.
4) The Pending over active ratio was 1.15 last year, now 1.18.
Although it’s typical to see a swing up in homes coming onto the market from December to May, we haven’t seen an increase of this size so quickly since I have been tracking these numbers (2005).
I think the real question to ask here is not why are we seeing such a huge increase but why were December’s numbers so low?
Government programs and concerns over bank financial statements were an influence. REOs continued to dominate sales while few were coming on to replenish the market. As an REO agent, dealing in foreclosed properties, our assignments dropped off dramatically beginning last fall. Other REO agents confirmed similar circumstances. This is also consistent with what many media sources have indicated.
A comparison over a four month period, between this year and last year, shows a dramatic drop in REO sales. 32% of the sales over the last 4 months have been REOs. For the same four month period last year, 63% of sales were REOs.
This year’s increase was not dominated by distressed properties coming onto the market. Active listings, pending sales, and sales over the last 4 months are all down by about 5% compared to what they were at the beginning of the year.
From what we’re hearing, this may change in the coming months. Foreclosure activity has increased over the last few weeks and we, as well as other agents, are beginning to see new assignments.
All indications are that distressed properties will continue to be a factor for several years.
Glen’s East Bay Housing Numbers (through April 2010)
May 5, 2010 by Glen Bell · View Comments
April is done, the Federal Home Buying Tax Credit has finally expired and the latest edition of Glen’s East Bay Housing Numbers are in.
While there are no drastic changes to report, housing inventories in the East Bay have continued to climb and are up 54% since the beginning of the year. Even with that rise, we’re sitting at 2.6 months supply of homes for sale in the Contra Costa & Alameda counties. This is still well below normal inventory levels in the area and translates into fewer opportunities for buyers.
A flurry of activity prior to the expiring tax credit caused Pending sales to rise even faster, outpacing new listings coming onto the market by almost 2 to 1 over the last 30 days (592 vs 318). It will be interesting to see the effects of the expiring federal tax credit next month in the May report.
The Pending/Active ratio ticked upwards slightly from 1.28 last month, to 1.31 this month, which essentially means that we’re still in a moderate sellers market in the East Bay.
As for distressed sales, the percentage of REOs continue to drop, comprising only 15% of the active listings , down from 17% at the beginning of the year & 35% of the sales over the last 4 months, down from 37% at the beginning of the year.
The percentage of active & pending Short sale transactions also continues to drop. They currently comprise 28% of the active listings, down from 31% at the beginning of the year & 53% of the pendings, down from 59% at the beginning of the year. Closed Short sale transactions as a percentage of the total has increased from 17% at the beginning of the year to the current 20%
If you’re interested in talking more in depth about the East Bay housing market, feel free to call me directly 510-333-4460.
-Glen
Click here to download a copy of my East Bay housing numbers through April 2010
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