Home prices continued to see a spring bounce in May, but fell slightly compared to the same month a year ago, according to the latest S&P/Case-Shiller Home Price Indices released today. The following article was featured in the July 31st Wall Street Journal.
Look for the S&P/Case-Shiller index to post a year-over-year decline of 1% when the latest results are released Tuesday, according to estimates from Zillow.
That would be the smallest decline in two years, when a short-lived run-up in home prices evaporated after federal home-buyer tax credits expired. Prices have been in negative territory ever since, as housing markets have struggled with a surfeit of homes and anemic demand.
But price declines are easing — and several other indexes are now reporting year-over-year gains — as the supply of homes for sale has fallen sharply. Those inventory declines, coupled with a modest uptick in demand, have helped stabilize home prices.
The Case-Shiller index, along with two others, from CoreLogic and the Federal Housing Finance Agency, use what’s known as a “repeat-sales model,” which means they look only at how prices have changed for the same home over time.
This provides a more accurate home-price level than median home price data, which instead can capture a shift in the mix of homes being sold in one month versus another month.
Case-Shiller and FHFA also provide a seasonally adjusted index, which smooths out month-over-month changes that are often distorted by seasonal factors. More homes generally sell in April than, say, January, so it shouldn’t be surprising to see prices rise as sales pick up.
Pacific Union International, an affiliate of Christie’s International Real Estate, has just implemented the Pacific Union International Market Snapshot Video Series. Wondering what’s happening in your area? Take a look at the current Bay Area real estate trends and conditions with our snapshot videos. They offer a quick, visual summary based on data sourced directly from your local MLS. Pick your favorite city and learn more about its latest trends. Just click here and select your favorite bay area town, city or zip code. Real Estate can be quite different by location so make sure you check out a few locations to get a better perspective on the overall Bay Area Real Estate market. A preview of the Larkspur Video is posted below. Jimmy Wanninger is available to answer area specific questions via phone at 415.990.8990
Marin County Home Resale Inspection Standards Urged. The Marin Association of Realtors is calling on the 10 Marin County cities and towns that do onsite residential home inspections to adopt six new inspection principles, and officials from four cities appeared receptive.
The principles involve posting inspection rules, procedures and potential penalties publicly; making timely inspections, so home sales aren’t held up; waiving or reducing fees for short sales; avoiding excessive fees; making standards between inspectors consistent in a given city; and accepting work that conformed to standards in effect at the time it was done.
Problems with inspections in Belvedere, Fairfax, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito and Tiburon have delayed sales or cost sellers tens of thousands of dollars to fix, according to the association and local real estate agents.
Marin home sales priced at the lower end of the market remain strong– with investors and first time buyers. Almost half of the properties sold were under $1 million. The largest volume and of sales was in the $1.5-$2 million price point. The properties under $3 million are selling for approximately 95%-97% of their original list price, with the highest priced homes closing at 88% list-to-sale price. There were no sales over $5 million in June and only one sale in the $4 million price range.
The second-quarter of Marin Real Estate mirrored the first quarter: extremely strong sales but a limited supply of inventory. We saw multiple offers on most desirable properties, with buyers outnumbering sellers across the county.
Home prices climbed higher in the last quarter but are still below levels at the height of the market. People who bought homes in 2005 and 2006 are choosing not to sell for a reduced price, which helps explain the dearth of homes on the market.
In another continuing trend, first-time buyers had a difficult time competing against investors able to pay cash for properties. The investment market remains strong, with buyers having no trouble finding renters for their properties.
Looking Forward: There’s no sign of a sales slowdown in the third or fourth quarters, putting us on track to post our best year since 2005. And home prices are rising, which should encourage more sellers to join the market and relieve the inventory shortfall.
Defining Marin County: The Marin Real Estate Market includes the cities of Belvedere, Corte Madera, Fairfax, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the charts below includes single-family homes in these communities.
A flurry of news reports in recent days confirms our optimism here at Pacific Union International about the accelerated pace of the housing recovery in the Bay Area. Bay Area home prices and number of homes sold posted solid gains in June, and our own data is also supporting the evidence that the housing recovery is still rolling.
Bonus good news: Job growth is booming here, too – and as the engine driving the economic and real estate market improvements we’re seeing, it’s a huge factor in what’s still to come.
Read more: http://bit.ly/QpnIT1
Second quarter Notices of Default in California dropped to their lowest level since early 2007, according to a report from real estate data provider DataQuick. The decline comes as some of the worst mortgages originated from 2005 to 2007 are being burned off and short sales are becoming more common.
A total of 54,615 NODs were recorded on houses and condos in the second quarter, down 2.9% from the previous quarter and down 3.6% year-over-year. The number is the lowest since 53,943 NODs were recorded in second-quarter 2007.
The year-over-year drop was most noticeable in the Bay Area, where filings were down 13.4% to 8,572 from 9,893 a year ago.
“The foreclosure process has always been the sanitation department of the housing sector. It’s where financial distress is processed. The question is whether these lower NOD numbers mean that there’s less distress to process, or if we’re just seeing distress get processed at a slower pace,” said John Walsh, DataQuick president.
Walsh said the drag caused by the housing market is leading to some “interesting alternatives” to the foreclosure process, including the use of eminent domain to buy and restructure mortgages.
NOD filings fell last quarter in communities across home prices, but mortgage defaults were still concentrated in California’s least expensive neighborhoods. ZIP codes with median sale prices below $200,000 saw almost nine NODs filed for every 1,000 homes, while ZIP codes with $200,000 to $800,000 medians only saw 5.6 for every 1,000. For ZIP codes with median prices above $800,000, there were 2.2 NODs filed per 1,000 homes.
Most of the loans going into default continue to be from the 2005 to 2007 period. The median origination quarter for defaulted loans is still third-quarter 2006, which as been the case for three years, indicating that weak underwriting standards came to a point at that time.
Of the state’s larger counties, mortgages were least likely to go into default in San Francisco, Marin and San Mateo counties, while the probability was the highest in Tulare, San Joaquin and Sacramento counties.
Trustees Deeds recorded was also down in the second quarter to the lowest level since second-quarter 2007. TDs saw a 27.8% drop to 21,851 from 30,261 the prior quarter, and a 48.5% drop from 42,465 in the second-quarter 2011. Only 17,458 were filed in second quarter 2007.
TDs were also the most concentrated in the least expensive neighborhoods, with ZIP codes with median sale prices below $200,000 seeing 4.3 homes foreclosed for every 1,000 existing homes. Only 1.9 per 1,000 homes in ZIP codes with medians between $200,000 and $800,000 were foreclosed on, and less than one — 0.5 — foreclosure took place for every 1,000 homes in zip codes with median sale prices $800,000 and above.
Foreclosure resales made up 27.9% of the state’s resale activity in 2Q, down from a revised 33.6% the prior quarter and 35.6% a year ago. Short sales made up 18% of statewide resale activity last quarter, down from an estimated 20.1% the quarter before, and up from 17.4% one year ago. The number of short sales last quarter was an estimated 20,141, up 13% from the prior quarter and up 10.2% from one year earlier.
Homes foreclosed on last quarter took an average of 7.7 months to get through the formal foreclosure process, beginning with an NOD. This is down from an average of 8.5 months the prior quarter and 10 months a year earlier.
At formal foreclosure auctions held in California last quarter, an estimated 40.1% of foreclosed properties were bought by investors or others that did not appear to be a lender or government entities — up from an estimated 33.4% the quarter before, and 28.3% in the second quarter of 2011.
The housing crisis has left thousands of homes across the US in a state of neglect. Some sitting empty after foreclosure, while others have suffered because their owners haven’t had the money for repairs. If you live in a home that needs a little TLC or you want to purchase a home that needs improvements, the Federal Housing Administration’s 203(k) program may help you finance long-needed repairs…
If you’ve been browsing foreclosures, you may already have noticed that many of them need some attention. But if coming up with the cash for a down payment and closing costs is already depleting your savings, funding a major renovation may be a deterrent to your home purchase. That’s where 203(k) loans come in.
A 203(k) loan requires a down payment of 3.5%, as all FHA mortgage loans do, but the total loan amount will be based on the sale price plus the estimated cost of renovation. An appraiser will need to estimate the “as-repaired” value of the home as part of the loan approval process.
You can also use a 203(k) mortgage loan for refinancing. In the past, many homeowners would take out a home-equity loan to pay for home improvements, but now that home values have dropped and mortgage-approval guidelines have tightened, many homeowners are unable to qualify for a home-equity loan.
A reverse mortgage is a type of loan that allows older borrowers to convert their home equity into cash. Often becoming a source of supplemental income for retiree’s– a popular choice of mortgage in Marin.
Unlike other mortgages where borrowers pay their lenders, reverse mortgages flip the money flow: They pay the borrower, either in the form of a credit line, monthly payments or a combination of the two.
The loan debt gets paid off with the proceeds of the sale of the home– either when a borrower moves out or passes away.
Homeowners who have a reverse mortgage are leveraging the remaining equity in their home. The most “practical, prudent” reverse mortgage is probably one that pays you in monthly payments, rather than in a lump sum.
Are itty-bitty apartments the new trend for urban dwellers in San Francisco? Yes… San Francisco micro apartments.
San Francisco is considering reducing the minimum size of rental units– prompted by a shift toward one-person households. To many, this seems like a logical and necessary response to the extremely high cost and demand for housing in San Francisco.
The new minimum would be 150 square feet plus kitchen, bathroom and closet– adding up to a total of 220 square feet! To give you an idea, that is about the size of a one-car garage. The current minimum is 290 square feet.
Some housing advocates dispute the idea that micro-units address escalating rents, saying that the compact dwellings are cheaper simply because they’re smaller.