4 Years of Shadow Inventory; Where Are the REO's?; Going Direct to the Listing Agent

May 27, 2010 by Andy Kaufman · View Comments

/via Housing Wire: Shadow Inventory Could Take Four Years to Clear: Morgan Stanley

The shadow inventory of homes with delinquent mortgages yet to move through the foreclosure process would take 47 months to clear at the current sales rate in the market, according to a newly-published housing finance report from Morgan Stanley

/via Allan Glass: May California Foreclosure Report – Where are the REO’s

In his stat filled post that’s defintiely worth checking out, Glass concludes that,

If you’re an investor and haven’t educated yourself on buying at trustee sales or are waiting for the REO’s to fall into you lap, you’ll likely keep waiting. If you’re a Realtor® still trying to figure out how to become an REO broker, you’re missing the boat.

/via bubbleinfo.com: More on RE Revolution

There’s some great info in this post from Jim Klinge, AKA JimtheRealtor(<-I highly recommended his YouTube channel), where he takes on a tough topic and shares his 'Thoughts About Going Direct to the Listing Agent‘ & nails it IMO.

Filed under News · Tagged with Housing, reo, shadow inventory, trustee sales

Foreclosed homeowners could still owe; Existing-Home Sales Improve; Loan Mods Often Damage Credit Scores

May 24, 2010 by Andy Kaufman · View Comments

In hopes of trying to balance my output with my input, I’m going to start summarizing what’s in some of my open tabs in my browser and sharing them with you. That way we can all be smarter

/via Sacramento Business Journal: Foreclosed homeowners could owe ‘tens thousands of dollars’ to lenders.

You may not know it, but if you’ve refinanced from your original purchase loan and lose your home to foreclosure, you may be on the hook for the difference between the amount owed & the property’s value.

For example, if a homeowner has $200,000 outsanding for a refinanced mortgage and the lender forecloses on the house with the property valued at $150,000, the former homeowner could be liable for the remaining $50,000.

Senate Bill 1178 is trying to close that loophole.

/via REALTOR.org: Existing-Home Sales Continue to Improve in April

Lawrence Yun, NAR chief economist, said the gain was widely anticipated. “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” he said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”

/via SF Gate: Loan modifications often damage credit scores

Lots of good info in this article from Carolyn Said, but if you’re looking into a possible loan modification, there’s a list of tips in the article that you should be aware of…

If you’re requesting a loan modification, here are some steps you can take to try to protect your credit:
Try to stay current on payments while requesting a trial modification.
Try to get a loan mod under the federal Home Affordable Modification Plan (HAMP), which has less impact on credit.
Request that the lender not report your trial loan payments as partial payments.
Make your trial payments on time.
Homeowners who believe that servicers are not treating them fairly or complying with program guidelines can contact the HOPE Hotline at (888) 995-4673.

Filed under News, Uncategorized · Tagged with foreclosures, Housing, loan modification, sb 1178

Residential Delinquency Rate Takes a Dip in Q4 2009

February 22, 2010 by Andy Kaufman · View Comments

The latest release from the Mortgage Bankers Association, contained a bit of good news in that the delinquency rate for mortgage loans on 1-4 unit residential properties fell 17 basis points to a seasonally adjusted rate of 9.47 percent.

Some other notable bites from the release…

The percentage of loans on which foreclosure actions were started during the fourth quarter was 1.20 percent, down 22 basis points from last quarter and up 12 basis points from one year ago.
The percentages of loans 90 days or more past due and loans in foreclosure set new record highs. The percentage of loans 30 days past due is still below the record set in the second quarter of 1985.
30-day delinquencies actually fell by 16 basis points from 3.79 percent to 3.63 percent. Only three times before in the history of the MBA survey has the non-seasonally adjusted 30-day delinquency rate dropped between the third and fourth quarter and never by this magnitude. This drop is important because 30-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures.
The pattern of mortgage delinquencies now very much follows the pattern of unemployment. Just as short-term delinquencies have fallen during the latter part of 2009, first-time claims for unemployment insurance have declined by about a third since their peak in March 2009.

My takeaway: We still have a record amount of loans in foreclosure, but the leading indicators are beginning to brighten up a bit.

Filed under News · Tagged with forecast, foreclosures, Housing, mba

Good Housing News from NAR & RealtyTrac, but is a Slowdown on the Horizon

February 11, 2010 by Andy Kaufman · View Comments

The NAR released their 4th Quarter Housing Statistics today and showed increased sales & year over year price gains in many metro areas.

Lawrence Yun , NAR chief economist, said the first-time home buyer tax credit was the dominant factor. “The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates,” he said. “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.”

Existing-home sales in the West jumped 16.2 percent in the fourth quarter to an annual rate of 1.38 million and are 18.2 percent above a year ago. The median existing single-family home price in the West was $227,200 in the fourth quarter, which is 8.9 percent below the fourth quarter of 2008, but with many areas showing notable gains.

“Markets in the West such as San Francisco, San Jose and Denver are showing double-digit price increases, and other markets like San Diego and Anaheim have begun to firm up,” Yun said.

In other good news, RealtyTrac’s January 2010 Foreclosure report shows a 10% decline in foreclosure activity nationwide.

“January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January,” said James J. Saccacio, chief executive officer of RealtyTrac “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”

While the news is good, I’m guessing it will be temporary as the home buyer tax credit expires, the Fed’s program to buy mortgage backed securities ends & the banks foreclosure activity picks up after a seasonal holiday slowdown.

It’s going to be an interesting spring for the housing market.

Filed under News, Uncategorized · Tagged with foreclosures, Housing, nar

Glen's November East Bay Housing Numbers

December 3, 2009 by Glen Bell · View Comments

Here’s the latest numbers for the 38 San Francisco Bay Area Cities that I follow. Change from the last month was minimal.

We’ve heard encouraging news from NAR recently referring to the October housing numbers; “Nine Consecutive Gains for Pending Home Sales”

We’ve experienced the same trend in the San Francisco East Bay Area. However, we finally showed a drop in Pending Home Sales for November. I think we can attribute this more to seasonal factors. Inventory levels have come down, as well, but at a faster pace.

The Pending/Active Ratio is at its highest levels since I began tracking numbers in 2005, while Inventory levels are now at their lowest. Depending on where you buy, your choices are limited.

Month Supply is now at 1.8 months for this area, again, very low considering that 6 months is considered normal.

Download a pdf of Glen’s Numbers

Filed under News, Uncategorized · Tagged with east bay housing statistics, east bay real estate statistics, glen's numbers, Housing

Glen's October East Bay Housing Numbers

November 2, 2009 by Glen Bell · View Comments

Here’s a snapshot of the San Francisco East Bay Real Estate Market through October 31st. I run these numbers monthly and have been tracking 38 cities since 2005. I primarily look at two indicators, Months Supply and Pending Over Active ratios.

Pending Over Active ratio relates to buyers and sellers. Basic Econ 101, Supply and demand. Actives (represents sellers), or properties that are still available, versus Pending (represents buyers), or properties leaving the market. That relationship often indicates whether we’re in a “sellers or buyers” market.

A ratio of 1 (an equal number of Actives and Pending) is considered a normal market or in a state of equilibrium. Anything under (high inventory, few buyers), prices are flat or dropping. Anything above (low inventory, many buyers) is considered a seller’s market.

The trend since earlier this year indicates that we are in a “sellers” market in most cities. However, one factor that may be skewing the numbers is that there are longer escrows due to REOs and increased government loans.

Months Supply, Basically, months supply is the ratio of inventory to sales. What it tells us is how many months the stock of homes for sale would last, if sales continued at their current rate. Six months supply is considered normal or equilibrium.

We are currently at a two month supply of houses for sale for the entire 38 cities that I track. Many cities are now below that level with a few even below 30 days. This is also an indicator that we are in a “sellers” market in most cities.

DOM, (Days On Market), continue to decrease in most areas. Houses are going into escrow quicker. However, once in escrow, they are taking longer to close.

Also, the relationship between what, on average, homes are selling for to list price support this. We’re seeing properties in many areas getting multiple offers and actually now, on average, selling at or above the average list price. The spreadsheet takes into account sales by city during the last 4 months.

Areas that were hit hardest last year due to high inventories and downward pressure on prices due to the high number of distressed properties on the market, are now starting to see some recovery, especially in the lower priced areas. Examples would be in East Contra Costa along highway 4, (Pittsburg, Antioch, Brentwood, even Concord). More recently, in West Contra Costa in the San Pablo, Richmond, Pinole, Hercules areas).

Finally, we are starting to see a slight increase in foreclosed properties coming onto the market. 17% of active listings are foreclosed properties (REOs), as compared to 14% last month.

Call me if you’d like to chat more in depth about the San Francisco East Bay market.

-Glen 510-333-4460

Download a PDF w/ the rest of Glen’s Numbers 10-31-09

Call me if you’d like to chat more in depth about the San Francisco East Bay market.

-Glen 510-333-4460

Filed under News · Tagged with east bay housing, east bay housing market, Housing

East Bay Housing Statistics Show Dramatic Changes

May 5, 2009 by Glen Bell · View Comments

Local markets have been in transition for sometime in regards to REO inventory. However, it was a surprise to us on just how quickly the San Francisco East Bay market has changed in the last 30 days. Are we seeing the first signs of a market stabilizing? Are we hitting bottom in the San Francisco East Bay Housing Market? Some highlights on the attached ‘numbers’ spreadsheet.

We’ve already addressed the influence that government and bank programs delaying the foreclosure process have had on new REO inventory coming onto the market. 2/3 of the sales since the beginning of the year have been REOs. Only 18% of Actives are now REOs. It’s obvious that this inventory is being depleted without replenishment.
So what surprise has happened in the last 30 days? I’ve been tracking 38 cities in the East Bay over the past 4 years. I primarily look at two indicators, Months Supply and Pending Over Active ratios.
1. Pending Over Active ratio relates to buyers and sellers. Basic Econ 101, Supply and demand. Actives (represents sellers), or properties that are still available, versus Pending (represents buyers), or properties leaving the market. That relationship often indicates whether we’re in a “sellers or buyers” market. A ratio of 1 (an equal number of Actives and Pending) is considered a normal market or in a state of equilibrium. Anything under (high inventory, few buyers), prices are flat or dropping. Anything above (low inventory, many buyers) is considered a seller’s market.
2. The low point for the East Bay was October 2007, at .13 for the areas I track. A year ago we were at .39. We’re now at .98, near normal. The last time I saw a number this high was August, 2005.
3. What’s really remarkable is the increase from .64 to .98 in just one month! I’ve never seen a jump even close to this in just one month.
4. What is months supply? Basically, months supply is the ratio of inventory to sales. And what it tells us is how many months the stock of homes for sale would last, if sales continued at their current rate.
5. A year ago we had a 9 months supply in this area. We’re now at 3 months. 6 months is considered normal or equilibrium.
6. There are more multiple offers in areas. Offers are beginning to come in, on average, above asking in select areas.
7. Markets are still very localized. Cities along Highway 4, were the ones that were hit first by REO inventories, showing the largest price reductions, and seem to be the first ones to be recovering. Antioch’s numbers even suggest a seller’s market.
8. More affluent markets followed behind and are now appearing to have increased inventory pressure, kind of a second wave.
9. One factor that may be skewing the numbers is that there are longer escrows now due to REOs and increased government loans.
So, what does this all mean?
1. With depleting inventory a lot more buyers have jumped into the market over the past 30 days. Investors are seeing opportunities, buyers are finding homes more affordable, interest rates are low.
2. Is this market stabilizing? Maybe. Is this temporary with more REOs about to come onto the market? This will depend on what actions the government and lending institutions take in the coming months with foreclosures.

Filed under News · Tagged with ea, east bay housing statistics, east bay real estate, Housing

Big Ben Sees A Bottom in 2009

May 5, 2009 by Andy Kaufman · View Comments

In case you missed it, Federal Reserve Chairman Ben Bernanke was on CNBC this morning, testifying before the Congress’ Joint Economic Committee, where he stated the economy should grow again in later 2009

… & in case you’re wondering, Calculated Risk was busy fact checking his real estate assertions.

Filed under News · Tagged with ben bernanke, cnbc, Housing, video

Bay Area Foreclosures Lead the Way

April 21, 2008 by Glen Bell · View Comments

Anyone having read this years headlines has been hearing the same message about real estate; Inventory is up, Sales are down and Prices are down. However, little has been said about the relationship of foreclosures to our markets except in a very general manner, at least not until a recent article in the San Francisco’s Chronicle finally got it right. “Housing market muddle,” written by Carolyn Said, ran in this Wednesday’s paper.

The article talks about how foreclosures are influencing the markets. As always, these articles are never specific enough, nor quite up to date. The article uses DQ News as a source. This is definitely a great source to be using. However, the numbers used are always based on last month or the prior month. The principal message in it’s article “Bay Area home sales remain at a 2 year low,” is that “Last month’s median price in the Bay Area was 19.4 percent lower than the peak median of $665,000 reached last June and July.” The spreadsheet breaks down numbers by counties.

I’ve taken this a step further because markets are much more localized. You can view “Glen’s Numbers” (taken as of April 15), and broken down by city, HERE.

The influence that foreclosures have on markets is becoming greater than ever. The relationship between inventories, sales, prices, and REO (foreclosures), becomes a little clearer. Since February 1, 2008, in the last 2 and half months, 36% of all sales in the Bay Area have been foreclosures. Typically, banks do not spend much on curb appeal, repairs, clean-ups, staging, etc. They lead with price, and are finally becoming very aggressive as a means to lead the way in sales of those cities with far too much inventory.

Investors and buyers are now recognizing that foreclosed properties for sale are running at a discount. The message, “More people can afford to buy,” is clear, and REO (foreclosures), are getting picked up as bargains.

Those cities that have been influenced the least with price reductions are areas that typically have very little foreclosed properties and lower inventories;

Berkeley has a 2.7 months supply of homes on the market. Only 4% of its sales since 2/1/08 have been REOs.

On the other extreme, Pittsburg has a 27.3 months supply of homes on the market. 81% of its sales since 2/1/08 have been REOs.

Again, I encourage you to view the complete list of the 38 cities in the East Bay Area in the above link.

Filed under News · Tagged with bay area real estate, east bay foreclosures, east bay housing, east bay reo, Housing