July 12, 2011

La Jolla, CA—Southern California home sales last month shot up more than usual from May to the highest level for any month since June 2010, when the market got its last big boost from homebuyer tax credits. Sales of lower-cost homes, driven by investors and first-time buyers, and even high-end sales continued to outshine traditional move-up activity in middle price ranges, a real estate information service reported.

A total of 20,532 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in June. That was up 11.6 percent from 18,394 in May but down 14.0 percent from 23,871 in June 2010, according to San Diego-based DataQuick.

On average, sales between May and June have risen 6.2 percent since 1988, when DataQuick’s statistics begin. June sales have varied from a low of 18,032 in 2008 to a high of 40,156 in 2005. Last month’s sales count was 26.1 percent below the June average of 27,772. Among all months, June has had the highest number of sales most often – in eight of the past 23 years.

In June last year, which logged the most transactions in 2010, sales were bolstered by state and federal efforts to stimulate the housing market via homebuyer tax credits. Those credits had expired or been largely depleted by July 2010, when sales plunged about 21 percent from both the month before and a year earlier. Southland sales have fallen short of the year-ago level every month since then.

“The housing market remains dysfunctional and lopsided, just somewhat less so than it was a few months or a year ago. The market mix indicates that a lot of potential buyers are either stuck, for lack of equity, or spooked and are waiting things out. Another large, lingering problem is the fussy mortgage market. Qualifying for a mortgage remains difficult for many, and the use of adjustable-rate and “jumbo” home purchase loans remains far below the historical norm,” said John Walsh, DataQuick president.

The median price paid for all new and resale Southland houses and condos purchased last month was $285,000. That was up 1.8 percent from $280,000 in May and the highest since $290,000 last December, but still down 5.0 percent from $300,000 in June 2010.

The median has declined year-over-year for the past four months. It has been unchanged or lower than a year earlier each month since last December, when it posted a 0.3 percent annual increase.

Last month’s median was 15.4 percent higher than the median’s low point in the current real estate cycle – $247,000 in April 2009 – but was 43.6 percent lower than the peak $505,000 median in mid 2007. The peak-to-trough drop was due to a decline in home values and a shift in sales toward low-cost homes, especially inland foreclosures.

Today’s median is also suppressed somewhat by abnormally low sales of newly built homes, which typically sell for more than resale homes. Builders continue to suffer on a scale not seen in decades: The 1,395 newly built houses and condos sold last month marked a 36 percent drop from a year earlier and the lowest new-home total for a June in DataQuick’s records.

In the overall market, new and resale properties combined, sales behaved differently last month depending on the price segment. Sales rose 6.3 percent from May for homes priced below $200,000 and were virtually unchanged month-to-month in the $800,000-plus range. But June sales fell 4.9 percent from May in the $300,000 to $800,000 range, where many move-up transactions occur.

Move-up buying has been subdued by, among other things, the decline in home values in recent years that’s left many homeowners “upside down,” owing more than their homes are worth.

On a year-over-year basis, home sales fell across virtually all price categories last month. But declines were greatest in the $300,000 to $800,000 range, which saw sales drop 25.5 percent from June 2010. Activity in that price band benefitted a year ago from homebuyer tax credits that spurred more move-up activity. Last month’s sales of homes priced below $200,000 fell 11.4 percent from a year earlier, while $800,000-plus sales dropped 17.6 percent.

Distressed property sales accounted for just over half of the Southland resale market last month. Roughly one out of three homes resold was a foreclosure, while almost one in five was a “short sale.”

Foreclosure resales – properties foreclosed on in the prior 12 months – made up 33.0 percent of the Southland resale market in June, down from 33.2 percent in May but up from 32.8 percent a year earlier. Foreclosure resales peaked at 56.7 percent in February 2009.

Short sales, where the sale price fell short of what was owed on the property, made up an estimated 17.7 percent of Southland resales last month. That was the same as in May but down from 20.5 percent a year ago. Two years ago the estimate was 13.5 percent.

Tight credit conditions continue to hamper sales in mid- to high-end markets that had long relied on adjustable-rate and “jumbo” home loans.

Last month adjustable-rate mortgages (ARMs) accounted for 8.8 percent of all Southland purchase loans, the same as in May and up from 6.7 percent a year ago. While still low by historical standards, the May and June ARM share was the highest since 10.3 percent of purchase loans were ARMs in August 2008. Until a few years ago, ARMs were nothing unusual: Over the past 10 years, a monthly average of about 38 percent of purchase loans were ARMs.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 17.4 percent of last month’s purchase lending, up from 17.1 percent in May but down from 17.6 percent a year earlier. In the current cycle, jumbos fell in early 2009 to less than 10 percent of the purchase market. In the months leading up to the credit crisis that struck in August 2007, jumbos accounted for 40 percent of the market.

In lower-cost neighborhoods, many buyers – especially investors – continued to purchase homes without a loan.

Southland buyers paying cash accounted for 28.0 percent of June home sales, paying a median $210,000. Last month’s cash buyer level was down from 29.9 percent in May but up from 24.2 percent a year earlier. Cash purchases hit a high of 32.1 percent of sales this February, while the 10-year monthly average is 13.8 percent. Cash purchases are where there was no indication in the public record that a corresponding purchase loan was recorded.

Many who pay cash are absentee buyers, who are mainly investors. Absentee buyers purchased 23.6 percent of the Southland homes sold in June, paying a median $205,000. Absentee buyers made up 25.1 percent of sales in May and 19.9 percent in June 2010. The absentee share of the market peaked this February at 26.4 percent. Over the last 10 years, absentee buyers purchased a monthly average of 16.7 percent of all homes sold.

Last month 20.7 percent of total sales were for $500,000 or more, down a tad from 21.0 percent in May and down from 21.7 percent a year earlier. The low point for $500,000-plus sales was in January 2009, when only 13.8 percent of sales were above that threshold. Over the past 10 years, a monthly average of 27.5 percent of homes sold for $500,000 or more.

However, an alternative method of tracking mid- to high-end activity suggests those neighborhoods now account for a fairly normal level of sales relative to overall regional activity. Southland zip codes in the top one-third of the housing market, based on historical prices, accounted for 37.1 percent of total sales last month, compared with a 10-year monthly average of 36.9 percent. Last month’s figure was down slightly from 37.6 percent in May but up from 35.7 percent a year ago. These higher-cost zips codes’ contribution to overall sales hit a low of 26.8 percent in January 2009.

Government-insured FHA loans, a popular low-down-payment choice among first-time buyers, accounted for 31.3 percent of all mortgages used to purchase homes in June – the lowest level since 28.8 percent in August 2008. Last month’s FHA figure was down from 33.5 percent in May and 37.5 percent a year earlier. Two years ago FHA loans made up 35.0 percent of the purchase loan market, while three years ago it was 22.4 percent.

The percentage of Southland homes that were “flipped” – bought and re-sold on the open market within a six-month period – rose slightly last month to 3.4 percent of all sales. That was up from 3.1 percent in May and the same as a year earlier. Flipping varied last month from as little as 2.4 percent of sales in Ventura County to as much as 3.6 percent in San Diego County.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,169 last month, up 1.3 percent from $1,154 in May but down 5.9 percent from $1,251 in June 2010. Adjusted for inflation, current payments are 49.5 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 58.7 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 few years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

Source: DQNews.com Media calls: Andrew LePage (916) 456-7157

Copyright 2011 DataQuick. All rights reserved.

6/22/2011

The Federal Reserve stayed the course on monetary policyWednesday, keeping interest rates near zero as it cited temporary factors for the unexpectedly sluggish growth in the US economy.

The Fed open Market Committee unanimously decided to hold the ultra-low rate, end a $600 billion bond-buying program by June 30 and continue to reinvest its principal payments from security holdings.

“The economic recovery is continuing at a moderate pace, though somewhat more slowly than the committee expected,” the policy-setting FOMC said after a two-day meeting.

But the slowdown was mainly due to factors that probably would be temporary such as higher energy prices, it said.

In quarterly economic projections released after the meeting, the Fed slashed about a half point off its estimate of gross domestic product growth for 2011, to a range between 2.7 percent and 2.9 percent.

The central bank decided to keep its key target interest rate between zero and 0.25 percent — where it has been since December 2008 — in an effort to boost economic growth.

For the 22nd consecutive meeting, Fed policymakers said the rate would likely remain exceptionally low “for an extended period.”

Since its last meeting in April, economic conditions had unexpectedly deteriorated, the Fed said, but stressed that the negative factors would be fleeting.

“Recent labor market indicators have been weaker than anticipated,” the Fed committee said, noting the unemployment ratehit 9.1 percent in May.

“The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan.”

A recent pickup in inflation was mainly due to higher prices for some commodities and imported goods, as well as the recent supply chain disruptions from the Japan tsunami and nuclear disaster, the central bank said.

“However, longer-term inflation expectations have remained stable,” said the Fed, whose dual mandate is to foster maximum employment and price stability.

The Fed maintained an optimistic tone on the economic outlook, predicting the lackluster recovery would gather steam and the elevated jobless rate would slowly fall.

“The committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the committee judges to be consistent with its dual mandate.”

The Fed on Wednesday also said it would allow its $600 billion second round of bond buying, dubbed QE2, to expire June 30 as scheduled.

Last November the central bank was forced to abort its first effort to freeze stimulus spending and instead launched QE2 as fears grew that the world’s largest economy could suffer a double-dip recession.

The Fed also announced it would continue its existing policy of reinvesting principal payments from its securities holdings.

With its key monetary tool at a rock-bottom rate, the Fed has spent more than $2 trillion on mortgage securities and other assets to boost economic growth since the crisis began.

on the House Financial Services Committee have drafted legislation that would raise the minimum down payment for FHA mortgages to 5 percent, cut FHA loan limits in most markets, and move the Agriculture Department’s rural housing program to FHA’s parent agency, HUD.

Though the draft bill has not been introduced, titled or assigned a number, it is expected to be the main subject of a hearing Wednesday before the Subcommittee on Insurance, Housing and Community Opportunity, chaired by Rep. Judy Biggert, R-Ill. After that, the bill is likely to be formally introduced and sped through subcommittee and committee votes and head for action by the full House.

The text of the draft bill appears to be a partial answer from House Republicans to the Obama administration’s call earlier this year for a smaller federal government footprint in housing.

By lowering maximum FHA loan limits in large numbers of local areas — well below even the limits that are already scheduled to kick in Oct. 1 — the bill would squeeze down FHA loan volume across the country, cutting a resource for some home purchasers who can’t obtain a conventional mortgage.

We often point out that a buyer should be more concerned about the COST of a home rather than the PRICE. Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.

An opportunity exists today because of recent government involvement; an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future:

• Historically low interest rates
• The ability to lock in these rates for thirty years

Interest Rates

Because of the financial crisis, the government stepped in and instituted a series of programs which pushed mortgage interest rates to historic lows. If we look at 30 year mortgage interest rates before and after government intervention we see the impact these programs had (see chart below).

According to Freddie Mac, from 2006 to the start of the financial crisis (the fall of 2008), the average rate was 6.29%. Since then, the average rate has been 4.92%.

A purchaser can still get a 30 year-fixed-rate-mortgage at approximately 5%. However, interest rates this low may soon disappear. The government has questioned its role in supporting homeownership. In the administration’s  Report to Congress, they are very strong in voicing their thoughts on this issue:

…our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters, and carefully designed support for market stability and crisis response…

Under our plan, private markets … will be the primary source of mortgage credit and bear the burden for losses.

What are the probable results of this decision?

The Royal Bank of Scottland

“The (government) currently provides 95% of housing finance in the U.S.; any reductions of their involvement in supporting mortgages mean interest rates will have to go up to induce private lending.”

AnnaMaria Andriotis, writer for SmartMoney:

“In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.”

The day of a 5% rate seem to be coming to an end.

Locking in a rate for thirty years

We must also realize that having the ability to lock-in a rate for 30 years may soon be a thing of the past.

There are a growing number of people who think that our mortgage industry should imitate those of other industrial countries around the world. If we do start limiting government support for the mortgage process, the 30-year-fixed-rate mortgage may disappear. Other countries, like Canada, only allow a purchaser to lock in a rate for a five year term. After that, the borrower must renegotiate a new mortgage at current rates. Could that happen here?

Mark Zandi, Chief Economist of Moody’s Economics.com addressing the administration’s recent report:

“A private system would likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages. Based on the experience overseas, the fixed-rate share in the U.S. would decline to an average of between 10% and 20% of the mortgage market compared with a historical average of closer to 75%.”

Bottom Line

The COST of a home is dramatically impacted by the mortgage component. Today, we can get a 5% mortgage and lock it in at 5% for the next thirty years!! Both of these opportunities may disappear in the future. You should take this into consideration if you’re looking to purchase a home.

by The KCM Crew on March 2, 2011

1.) Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3.) Buyers Are Out Early

There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.

Pete Flint, CEO of Trulia:

“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”

The National Association of Realtors just reported that the number of house  sales increased 12.9% over last month.

4.) Inventory Increases Every Spring

Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.

• February – 3,531,000
• March – 3,626,000
• April – 4,029,000

We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won’t have to worry about this increasing competition if you sell now.

5.) We Are in the Eye of the Foreclosure Storm

While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition. CNN Money quoted the leadership Of RealtyTrac on this issue:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.

“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

It doesn’t take a rocket scientist to figure out that the cream rises to the top in business when numbers are involved.  That is probably one of the many reasons Roxana Greenman has contributed to First Team’s success.

(COSTA MESA, Calif., April 1, 2011)  First Team Real Estate, Southern California’s top ranked, family-owned, non-franchised real estate company for more than a decade, bolstered its standing as one of the nation’s leading brokers, ranking number one in sales transactions in the state of Calif. and eighth in sales volume among America’s top 300 real estate companies in 2010, according to RISMedia’s 2011 Power Broker Report.

RISMedia is the residential real estate industry’s definitive source for news and information; its annual Power Broker Report surveys nearly 1,000 respondents across the U.S.

First Team’s longstanding ability to effectively connect with consumers through dedicated and well-trained agents, along with its unique set of sophisticated tools that set ever-rising standards of value for the consumer, have been instrumental to its ongoing success, according to First Team Founder and Chief Executive Officer Cameron Merage.

“Our continuous growth and ever improving performance, particularly in one of the most challenging real estate markets in history, is a testament to our aggressive leadership and constant innovation that enables us to stay ahead of the market by anticipating and meeting the changing needs of consumers and agents,” Merage said.  “The company’s consistently evolving value proposition to empower our associates to drive unmatched value and results to our clients is being rewarded more and more as First Team increasingly becomes the first choice of Southern Calif. consumers and realtors.”

Despite the housing market’s downward cycle in recent years, First Team increased its market position from 2009.  The company’s success was further evidenced through its successful expansion into seven new Calif. markets outside its home base of Orange County, including the luxury locales of Beverly Hills, Marina del Rey, Pasadena, Westlake and San Diego.

]]> http://houseonthecoast.com/stats-dont-lie-first-team-estate-rises-to-the-top/feed/ 0 http://houseonthecoast.com/fbi-pinpoints-huntington-beach-a-violent-crime-attraction/ http://houseonthecoast.com/fbi-pinpoints-huntington-beach-a-violent-crime-attraction/#comments Sun, 29 May 2011 17:11:29 +0000 ChrisGreenman http://houseonthecoast.com/?p=5011 If a community’s safety is a marketing tool for real estate, new crime stats were no help for Huntington Beach.

According to the latest FBI statistics, overall crime incidents in Surf City rose 3.2% in the past year. Violent crimes went up 19.1% in 2010 as property crimes increased 2.2% in the same period.

Every year, the FBI tallies crime statistics for the nation, states, and cities with 100,000 people or more. The FBI gets its crime-trend data from voluntary submissions from local law enforcement agencies.

These stats are often seen as a barometer of not just how local law enforcement is performing but also seen as a measure of the overall health of a community.

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