Archive for the 'Sacramento RE Stats' Category

Sacramento Foreclosure Trustee Auctions up in May, But So Were Loan Modifications

According to ForeclosureRadar.com, the numbers of Trustee Sales held at the county courthouse steps in Sacramento for May were up nearly 25% compared to April. There were 709 Trustee Sales held in Sacramento in April 2009 and 936 in May 2009.

Notice of default filings and Notice of Trustee Sales are also up for all of Sacramento County. For the month of May, ForeclosureRadar.com says there were 1604 Notice of Defaults filed (the first step in the foreclosoure process, which can be filed any time after the borrower is 60 days delinquent) and 1165 Notice of Trustee Sales filed. These NOT’s are notice of sales scheduled at least 21 days after the filing.

With many more loan modifications being approved, (HOPE NOW announced this week that nationally,  270,000 homeowner solutions were completed in April. This is the largest number of workouts in any month since HOPE NOW began to compile data) surely only a portion of these 1165 NOT’s will actually go to auction, so it looks like the Trustee Auction numbers will probably be lower next month than they were in My.

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Number of Sacramento Unsold Vacant Homes Continues to Climb

I have heard from several real estate ‘old timers’, who were for the Sacramento Real Estate crash in the 90’s, that it is looking a lot more like Déjà vu; Remember Resolution Trust?  The government must be stepping in to slow the tide of incoming listings, in order to support market prices, and stop the free fall of real estate prices. So, much like they did with the Resolution Trust Corp. in the 80’s and 90’s, homes will just be trickled on the market in a more orderly fashion. I can remember vacant homes for years in the nineties… will that happen again?

The Government will systematically take the bad loans, and the subsequent foreclosed homes, off of banks books, as they take failing banks over. They will then handle the liquidation. FDIC, Fannie Mea, Freddie Mac, FHA, they would all have an incentive to support the market by slowing down the rush of inventory that would be created if they all hit the market at once.

The number of  unsold homes in inventory here in Sacramento; now approaching 25,000 properties that are vacant, but not on the market will probably continue to rise… The ‘Tsunami’ of foreclosures will not be stopped, it’s just that the number that actually make it to the market will be a much smaller number, and will help support Sacramento’s home prices. 

Statewide,there is now  4.6 months of inventory of unsold houses. Supply was as high as 16.6 months in January 2008.

FDIC Contracts Next Wave Advisors for Real Estate Services

The FDIC has certified Next Wave Advisors Inc. to assist the agency with a variety of real estate services, including lender workouts, asset valuation, and disposition of property acquired through bank takeovers and liquidations.

The FDIC has already stepped in to close 36 banks this year, and has placed 305 institutions on its high-risk watch list. But Next Wave president Dean Lyons says the new venture has “the bench strength and financial resources to handle anything that the FDIC can throw” its way.

Next Wave is a joint venture between two Southern California companies, Third Wave Partners and The Moote Group, and Houston-based Portfolio Property Advisors L.L.C. The new firm was created to fulfill FDIC assignments related to problem banks and the recapitalization of acquired assets.

All three principals in the joint venture have experience  with FDIC asset portfolio liquidation. All three participated in the Resolution Trust Corp., formed during the savings and loans crisis of the late 1980s to early 1990s.

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California Home sales rise 49% compared with April 2008.

 

Foreclosure sign sits outside home for sale in Phoenix, Arizona (Feb 2009 file photo)

The median price of homes sold in Sacramento recently dropped 34.3 percent from $190,250 in April 2008 to $125,000 last month. That’s way less than half the $342,800 in 2007, according to the California Association of Realtors.

CAR says 80 percent of Sacramento County first-timers could afford a median-priced entry-level home in the first quarter of 2009!

Central California First-time home buyers and investors are jumping to take advantage of state and federal tax breaks, low interest rates, and prices that are more affordable than they have been in many, many  years.

Inventory has gone form a high of 16.6 months to just 4.6 months! Any time the inventory is under 6 months, it is considered a sellers market! Talk about some weird combinations of market dynamics!

Statewide, for the first time in years, both volume and median price increased month over month for the last thirty days, the California Association of Realtors reported the other day.

The median price for a single-family home here in California was $256,700 in April, down 36.5% from a year earlier but 1.4% higher than the previous month, according to the California Association of Realtors

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Fewer Sacramento Area Homes for Sale This Spring

 

Homes for sale inventory

Sacramento Real Estate Inventory Continues to fall… at a time of year we usually see a huge ramp up of homes for sale. As you can see from the TrendGraphics chart featured in a SacBee article, spring time brings increases and fall brings decreases…

Foreclosure moratoriums and lenders deciding to give homeowners more time before filing foreclosure notices and holding Trustee sales have been a key to the falling inventory in the capital region.  

But that decline is not likely to last, After the April 1 lift of several bank and government moratoriums, thousands of foreclsoure notices have been filed Here in the metro area, and hundreds more have been sold at Trustee sale and gone back to the lender. 

At the end of April there were just over 7200 homes on the market; the lowest inventory in the Sacramento Metro area since July 2005. It was the 20th straight month of falling inventory since listings peaked at more than 16,000 in August 2007.

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Sacramento Area Affordability Index at 80%! But People Still Scrimping

Sacramento real estate has never been more affordable!

Sacramento County, According to the California Association of Realtors First Time Buyer Housing Affordability Index now at 80, up from 65 in the year-ago quarter.

C.A.R.’s First Time Buyer Housing Affordability Index measures the percentage of California households that can afford to purchase an entry-level home in here in the state.

Statewide, the percentage of households that could afford to buy an entry-level home in California stood at 69 percent for the first quarter of 2009, compared with 46 percent for the same period in 2008.

-A sacramento Couple was Featured in a Erie Times from  Erie, PA today. It’s a great piece that talks about how the economy will be effected long term, by the paradigm shift that the recession has brought…

SACRAMENTO, Calif. — Sara and David Dunham won’t apologize for scrimping when they can, even if it means taking precious dollars out of the economy.

The Fair Oaks, Calif., couple figure they’re saving up to $200 a week on clothing, food and other expenses. It’s been so long since the Dunhams have been to their favorite restaurant, they have trouble remembering the name. They dipped into savings to buy a used car recently but have chipped away at other costs, even cutting by $5 the weekly allowance they send their oldest daughter at San Jose State.

“Let somebody else beef up the economy,” Sara Dunham said. “I need to look at what my expenses and budget are.”

The Dunhams’ behavior demonstrates what’s known as the “paradox of thrift,” a phrase coined by 20th century economist John Maynard Keynes. The argument goes like this: Saving money might be a sound strategy for a family, but it can harm an already weak economy if everybody does it. As the economy deteriorates, everyone’s nest egg suffers — hence the paradox.

“It’s definitely for real,” said Howard Roth, chief economist at the California Department of Finance. “They’re cutting their spending, which from the individual’s point of view makes sense, but if you add it all up for the nation, it makes the recession worse.”

The numbers are starting to add up.

Though Americans’ confidence in the economy is rebounding, as evidenced by a recent Reuters/University of Michigan survey, pocketbooks remain snapped shut. Consumer spending, which accounts for about two-thirds of all economic activity, fell 0.2 percent in March, reversing two straight monthly gains. In California, taxable retail sales have fallen 12 percent since the fiscal year began last July, although the figure partly reflects the drop in gas prices.

Layoffs and furloughs have hurt household incomes, while savings have fallen considerably despite recent gains in the stock market.

And what money Americans do have, they’re socking away. They’re saving about 4 cents of every dollar of disposable income. That isn’t much by historical standards, but it’s a lot more than the housing boom era, when Americans saved little, spent heavily and lived large off their home equity and credit cards.

About $216 million in new deposits poured into The Golden 1 Credit Union in Sacramento during the first quarter, nearly double the volume from a year ago. The money’s staying put; Golden 1 members are writing fewer checks than in years past, said Chief Executive Teresa Halleck.

“It could be a great thing for people to get back in the habit of saving, going back to the old ways,” she said. “Part of the problem with the meltdown was things just got out of balance — just living off the equity in homes, assuming things were always going to go up.”

But here’s the problem, as some see it: Too much saving can hurt retailers, restaurants, car dealers and everyone else who relies on consumers. That harms the economy.

Sales of new cars, for instance, are down 43 percent in California. More than a dozen dealerships have folded in greater Sacramento in the past year.

Peter Welch, head of the California New Car Dealers Association, said consumers aren’t replacing their cars unless they absolutely have to.

“Unless it’s just flat worn-out or you’ve been in an accident, they’re discretionary purchases,” he said.

The ripple effects are obvious. At Il Forno Classico, the Dunhams’ favorite restaurant, business is noticeably slower. Eight jobs have disappeared because of attrition.

“We’re down, but we’re surviving,” said owner Scott Litteral. “We used to be fantastic.”

Saving can be good for the economy, Roth said, because it creates dollars that society can use for investment in infrastructure and other needs. Nearly everyone agrees Americans didn’t save nearly enough during the housing boom. The national savings rate actually went into negative territory for a while in 2005, according to the Bureau of Economic Analysis.

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Sacramento Median Home Price Drops to $169,000

The Sacramento-metro’s median home price plummeted nearly 35 percent, as Sacramento area house sellers– most of which are distressed home sellers– price homes aggressively in order to get properties sold.

In the four-county region, the median home price — where half the homes sell for more, the other half for less — fell once more; this time to $169,300 last quarter. this has been the fifth-consecutive quarterly decline, according to the California Association of Realtors. The median price is now nearly $100,000 less than a year ago, and less than half the $342,800 in 2007.

Our Sacramento region’s median-home price is just more than the national figure of $169,000. First-time homebuyers accounted for half of all purchases during the first quarter nationwide, which greatly curbed the price.

We have never seen affordability conditions like this EVER! Seriously, for as long as they have had the affordabillity index, there has never been a time when more California’s could afford a median priced home.

Distressed homes — especially those close to foreclosure — are selling for 20 percent less than the market rate, and much more in California, housing analysts say.

NAR chief economist Lawrence Yun said the housing market will likely remain in a lull for some time.

“Housing affordability conditions are at a record-high levels and we expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas,” Yun said.

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Sacramento Foreclosure Sales Rise 21 Percent

 

So the Sacramento foreclosure numbers for April have recently been released, and it only confirms what we in the real estate business have been saying for weeks… Although much lower than last years numbers, the number of foreclosed homes rose in April for each of the four counties in the Sacramento region.

 According to a monthly report released Tuesday by ForeclosureRadar, Sacramento County foreclosures sales (trustee sales) rose 21 percent in April to 867 properties. However, that figure is 48 percent lower than the same month last year. Foreclosures in Placer and Yolo counties are also significantly lower that the same time last year.

The most striking monthly change occurred in Placer County, where the 180 foreclosure sales represented a 73 percent increase over March figures.

Statewide, the report shows foreclosures show no definitive trend in 2009, jumping one month and falling the next.

The Notice of defaults are now slowing it seems and now there will be an increase in Bank owned properties as the homes that have been taken back hit the market over the next several weeks.

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Sacramento Area and the Foreclosure Moratoriums…

Sacramento County has seen the effects of the government imposed moratoriums; the tightening of listing inventories and briskness in buying activity here in the Sacramento real estate market recently has been a direct effect of the changes in the process of foreclosure here in California.

Sean O’toole, Founder of foreclosureradar.com said recently: “Unfortunately, the only tangible effect of these programs so far is a significant increase in uncertainty for homeowners, lenders, investors and even government officials trying to make sense of these wild swings in activity.”

Foreclosureradar.com the only website that tracks every California foreclosure, and provides daily auction updates, issued its monthly California Foreclosure Report for March 2009.

Excerpts from that report:

o California Senate Bill 1137, which requires lenders to contact homeowners before filing a Notice of Default. This bill resulted in a significant, but temporary, drop in foreclosure filings starting in September of 2008. While the bill failed to address the issue of negative equity that many Californians now face, it did likely create a backlog of foreclosure filings, which may partially explain the recent rise in filings. More significantly this law perfectly explains at least a portion of the decrease in sales, as the average time from the filing of a Notice of Default to foreclosure sale was 176 days in March, which aligns exactly with the September drop in Notice of Default filings.

o The California Foreclosure Prevention Act, which goes into effect this summer, adds an additional 90 days to the foreclosure process if lenders fail to take certain actions. It is quite possible that the dramatic rise in foreclosure notices occurring now is an attempt by lenders to process as many foreclosures as possible before this law takes effect.

o U.S. Congressional requests for foreclosure moratoriums – many lenders instituted foreclosure moratoriums, at the request of Congress, to allow the incoming Administration time to put housing programs in place. Many of these moratoriums were in full force through March, although some are now being lifted – notably Fannie Mae and Freddie Mac – which both lifted their moratoriums effective March 31, 2008.

o U.S. efforts to stabilize financial institutions, including TARP, PPIP and changes to “mark-to-market” accounting practices, among others, may be leading some lenders to avoid completing foreclosures in the hopes of selling the troubled loans, to gain government guarantees for those loans or to continue avoiding losses by holding the assets on their books at higher values than they could get in today’s real estate market.

There are thousands of homes still to come through the system; either as Foreclosures, Shortsales or hopefully short refinances or deep loan modifications; Ocwen Financial Corporation, a subprime mortgage servicer headquartered in West Palm Beach, Florida, announced on Monday that it is the first servicer in the country to begin executing loan modifications under the Treasury Department’s new Home Affordable Modification program.

 

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The Moratoriums and Sacramento County Foreclosures

Are we just prolonging the pain?

According to foreclosureradar, I see that there have been ZERO notices of Default filed in Sacramento County in the last seven days… Compare that to the 397 Filed the last full week of March, or the 6,512  that were filed from Jan. 1st to April 1st.  I’m not sure why, there must be either a state  or federally mandated Moratorium going on right now… or is there just too much going on? Could it be that the banks just have too much on their plates right now to keep the foreclosure mill going?

We just got word last week that our IdyMac Bank assets are getting transferred to the FDIC and that they are now in FDIC receivorship.

Here is a great interview with Sheila Bair about this mess… kinda complicated, language, but really a pretty straightforward solution to the problem; The Government is taking over non-performing banks and the toxic, under performing, mortgages and their associated properties. And also a winding down, restructuring and new capitalization of the different banks.

Back to the Default filings; I under when they will start back up…

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Is Sacramento Area Real Estate close to the bottom? …That Depends…

Multiple offers, great loan programs, excited buyers, well priced homes, phones ringing off the wall, hundreds of buyer inquiries per week, referrals from past clients… There is plenty of activity in our Sacramento area real estate market lately!

I have taken twelve new listings in the last 30 days and my partners all have multiple offers out on multiple properties with multiple buyers. This time of year is always the busiest, and this year will be no different, but there is also a sense of urgency in buyers that we haven’t seen for a long time.

With home prices in our Sacramento Metro area declining for forty months straight now, many people just can’t wait any more.

Have we hit bottom? Many people are saying ‘Close Enough!’

There are some neighborhoods and price ranges of the Sacramento Metro area that will actually increase from current prices! If someone GAVE you the lot and a truckload of lumber, you couldn’t build a home for what they are selling for right now!

But then there are some area and price ranges that still have a long way to go! And the economy is not helping…

The Sacramento area, currently posting a 10.8 percent unemployment rate, is projected to increase above 12 percent in early 2010.

The Alt-A, and Pick-a-Pay, Pay option ARM loans that have just started resetting will continue to burdon our market at those homes will have to be dealt with somehow.

The moratoriums on foreclosures may have just postponed our recovery, by prolonging the inevitable.  And it seems that loan modifications have not gone far enough in reducing principle to todays values, so most modifications don’t work.  Banks are, for some reason, more interested in paying realtor fees to sell the home for far less than what the original homeowner might be willing to pay in a short refinance.

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