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REAL ESTATE BLOG & IMPORTANT NEWS

Fast Facts

(CAR Newsline 2/16/11)

Calif. median home price: January 2011: $278,900 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region January 2011: Marin $657,890 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region Janaury 2011: Merced $100,620 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth quarter 2010: 69 percent (Source: C.A.R.)
Mortgage rates: Week ending 2/10/2011 30-yr. Fixed: 5.05 Fees/points: 0.7% 15-yr. Fixed: 4.29% Fees/points: 0.7% 1-yr. Adjustable: 3.35% Fees/points: 0.6% (Source: Freddie Mac)

Fourth Quarter Shadow Inventory Update

(Inman News 1/25/11)

The volume of distressed nonagency residential mortgage properties in the U.S. continues to fall, but at an ever-slowing pace. Standard & Poor's Ratings Services currently estimates that the principal balance of these distressed homes amounts to about $450 billion, representing nearly one-third of the nonagency residential mortgage-backed securities (RMBS) market currently outstanding. We define this yet-to-be absorbed "shadow inventory" of distressed properties as outstanding properties whose borrowers are (or recently were) 90 days or more delinquent on their mortgage payments, properties currently or recently in foreclosure, or properties that are real estate owned (REO).

At the end of fourth-quarter 2010:

We estimate it will take 49 months, or more than four years, to clear the supply of distressed homes on the market in the U.S. as a whole. This is an 11% increase over the previous quarter and a considerable 40% increase from fourth-quarter 2009 for the average time to clear these properties in the U.S.
Miami is the only top-20 metropolitan statistical area (MSA) for which our estimate of the time to clear the inventory of distressed properties remained stable since the fourth quarter of 2009.
Although the Los Angeles MSA has the largest current overhang balance, the shadow inventory in the New York MSA will take the longest to clear--130 months as of fourth-quarter 2010. That is at least twice as long as it will take in any of the other top 20 MSAs and 2.7 times the average time to clear for the U.S. as a whole. This is primarily due to very low liquidation rates in New York.

Fast Facts

(CAR Newsline 1/26/11)

Calif. median home price: December 2010: $301,850 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 2010: Santa Barbara So. Coast $778,500 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region December 2010: High Desert $125,480 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third quarter 2010: 64 percent (Source: C.A.R.)
Mortgage rates: Week ending 1/20/2011 30-yr. Fixed: 4.74 Fees/points: 0.8% 15-yr. Fixed: 4.05% Fees/points: 0.8% 1-yr. Adjustable: 3.25% Fees/points: 0.6% (Source: Freddie Mac)

Foreclosures down in Arizona, California, Nevada in 2010

(Foreclosure Radar 12/10)

Foreclosure starts and sales declined in Arizona, California, and Nevada in 2010 due in large part to a reduction in foreclosure sales amid last fall’s robo-signing scandal.

The decline in foreclosure starts in the three western states was the first annual decline since the foreclosure crisis began, according to ForeclosureRadar. Foreclosure cancellations rose in the first half of 2010 as homeowners saw more short sales and loan modifications approved. Investors quickly flipped foreclosure purchases for profits as buyers hurried to take advantage of tax credits. But as the tax credits expired, the market began to slow.

Foreclosure cancellations also began to drop as the government push for loan modifications faded and short sales slowed with the rest of the housing market. In the third quarter, foreclosure sales dramatically declined after the robo-signing scandal broke, leading Bank of America to completely halt foreclosure sales for nearly two months.

Fast Facts

(CAR Newsline 1/12/11)

Calif. median home price: November 2010: $296,820 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 2010: Santa Barbara So. Coast $874,500 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region Novermber 2010: High Desert $124,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third quarter 2010: 64 percent (Source: C.A.R.)
Mortgage rates: Week ending 1/6/2011 30-yr. Fixed: 4.77 Fees/points: 0.8% 15-yr. Fixed: 4.13% Fees/points: 0.8% 1-yr. Adjustable: 3.24% Fees/points: 0.6% (Source: Freddie Mac)

Economic Forecast shows Housing & Employment Increase in 2011

(Chapman University 12/6/10)

http://www.chapman.edu/images/userImages/cwilliam/Page_4388/Dec2010_Forecast%20Press%20Release.pdf

The A. Gary Anderson Center for Economic Research at Chapman University released the results of its 33rd annual economic forecast for the U.S. and California this week.

According to the forecast, the economic recovery will continue at a relatively slow pace in 2011, but will be enough to generate 1.7 million net new jobs nationwide, which will cause the national unemployment rate to drop about one percent, to 8.6 percent, by year-end 2011.

Although housing affordability is at historically high levels, the forecast finds there will be no sharp rebound in housing next year. The forecast calls for housing starts to increase 7.2 percent, from 600,000 to 640,000 units. Home buyers’ concerns about unemployment and the ongoing problems in the mortgage industry, coupled with a large excess supply of vacant units on the market, will constrain production of new homes.

The forecast also calls for continuing improvement in resale housing prices in 2011, with housing prices nationwide increasing 3.3 percent. Like new housing starts, home prices will be constrained by consumer anxiety as well as the significant overhang of vacant housing units on the market.

In California, employment is forecasted to increase by 1.2 percent—167,000 net new payroll jobs, with the job recovery positively affecting housing demand. And the expected rebound in income, low mortgage rates, and lower home prices are helping to keep housing affordability at historical highs, leading to increased housing demand, particularly for first-time home buyers.

A pickup in new residential construction, high inventory of resale homes, and existing shadow inventory will mostly offset the positive factors influencing demand.

Fast Facts

(CAR Newsline 11/24/10)

Calif. median home price: October 2010: $304,220 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region October 2010: Santa Barbara So. Coast $864,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region October 2010: High Desert $125,060 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third quarter 2010: 64 percent (Source: C.A.R.)
Mortgage rates: Week ending 11/18/2010 30-yr. fixed: 4.39 Fees/points: 0.9% 15-yr. fixed: 3.76% Fees/points: 0.7% 1-yr. adjustable: 3.26% Fees/points: 0.6% (Source: Freddie Mac)

HUD Launches new Website for Economic and Housing Data

(US Department of HUD 11/22/10)

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-257

WASHINGTON – The U.S. Department of Housing and Urban Development today unveiled a new website that consolidates a wide variety of economic and housing market data at the regional, state, metropolitan area and county levels. Using data from the Census Bureau, Labor Department, State and Local governments, housing industry sources, as well as HUD’s own field economists, the new website employs interactive maps that allow visitors to access a variety of reports – from a region-wide look at employment and housing activity to individual county-level figures on population trends, rental activity and vacancy rates.

"This is a powerful new tool that’s easy to use and offers the public a remarkable look at their local economic and housing markets," said Dr. Raphael Bostic, HUD’s Assistant Secretary for Policy Development and Research. "Current and reliable data shouldn’t be hard to come by. This is precisely why this site will be so helpful to state and local leaders, developers, the real estate industry, and the general public who need the latest available data on their markets."

HUD’s new website displays an interactive map of the U.S. allowing visitors an intuitive way to seek data in a number of areas of geography – from an entire region down to a particular county. In particular, the portal offers the following reports:

"Market at a Glance" reports contain economic and housing market data trends for every metropolitan area and county nationwide with employment data updated on a monthly basis.　 Employment data is provided from the Bureau of Labor Statistics and housing data is derived from the Census Bureau’s American Community Survey. Some adjustments are made by HUD field economists based on regional information. The data are expected to be released on monthly basis for most of the metropolitan areas and counties. Eventually these reports will become "live" documents enabling field economists to include analysis as they complete more in-depth research for specific areas and monitor local conditions.
"Regional Housing Market Profiles" are based on the quarterly U.S. Housing Market Conditions report and include non-farm employment, population changes, and building activity. These regional profiles also focus on the most recent housing rental and sales activity for the past two years. In addition, approximately 10-12 individual metropolitan areas are specifically profiled each quarter to provide these same data down to the metro area level.
"Regional Narratives" are broad overviews of economic and housing market trends within ten regions of the U.S. These narratives are based on information obtained by HUD economists from state and local governments, from housing industry sources, and from their ongoing investigations of housing market conditions

"Comprehensive Housing Market Analysis" – Periodically, HUD field economists focus on particular metropolitan housing markets to produce counts and estimates of employment, population, households, and housing inventory. Each housing market analysis considers changes in the economic, demographic, and housing inventory characteristics during three periods: from 1990 to 2000; from 2000 to the as-of date of the analysis; and from the as-of date to up to up three years in the future.

To check out the new HUD website, click the link or go to:

http://www.huduser.org/portal/regional.html

7 Trends that Will Drive the Future of Housing

Source: ProSalesOnline.com (October 2010)

Hanley-Wood's ProSalesOnline.com identifies seven trends that the magazine’s editors believe will have the biggest impact on housing in 2011.

1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million "Echo Boomers" who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the "Sandwich Generation" – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.