Weekly Active/Pending counts SFV & Ventura - 02/28/09

I'm going to post the weekly inventory counts for Ventura County and the San Fernando Valley as more time goes by this data set will become more useful. I have broken out the Short sale and Foreclosure (REO) inventory to better track demand. Eventually the data will either turn into tables or graphs but right now I am putting it out there so others can find and use it for their own purposes.

San Fernando Valley:
Single Family Homes
Active - Total 3200
Active - Short sale 1204
Active - REO 399
Backup - Total 424
Backup - Short sale 170
Backup - REO 87
Pending - Total 1299
Pending - Short sale 476
Pending - REO 537
Distressed active / Total active = 50.0%
Distressed pending / Total Pending = 78.0%

Condo
Active - Total 1068
Active - Short sale 544
Active - REO 160
Backup - Total 129
Backup - Short sale 60
Backup - REO 33
Pending - Total 401
Pending - Short sale 132
Pending - REO 187
Distressed active / Total active = 65.9%
Distressed pending / Total Pending = 79.6%

Ventura County:
Single Family Homes
Active - Total 1891
Active - Short sale 455
Active - REO 192
Contingent - Total 653
Contingent - Short sale 418
Contingent - REO 96
Pending - Total 646
Pending - Short sale 127
Pending - REO 349
Distressed active / Total active = 34.2%
Distressed pending / Total Pending = 73.7%
Release from Showing 266

Condo
Active - Total 659
Active - Short sale 203
Active - REO 106
Contingent - Total 204
Contingent - Short sale 131
Contingent - REO 43
Pending - Total 217
Pending - Short sale 40
Pending - REO 123
Distressed active / Total active = 46.9%
Distressed pending / Total Pending = 75.1%
Release from Showing 68

Ventura County Housing Inventory vs Demand

Here is an updated version of the chart I made in early January comparing Demand and Inventory in Ventura County. Demand is defined as pending and contingent transactions and Inventory is active inventory. Please note if you are comparing the earlier graph to this graph the scale on the left has changed due to increased inventory and demand.

We are seeing the increase in seasonal demand on the chart and the strength of the lower end though we are seeing demand outpace new inventory pretty much across all areas under a million. I think the housing credit is giving a temporary boost to demand which we will see come out in the sale numbers in April and May with a tempering of demand after then (my prediction). Inventory is being hampered by the foreclosure moratoriums, many which are lifted this next week but the new CA budget law 90 day delay will have an unknown effect. I think if distressed inventory continues to be hampered coming on the market we will see a sales slow down and the median price rise due to mix shift.

Homeownership vs Renting in 2009

The Center for Economic and policy research has a report out regarding the change in wealth over the last 5 yrs broken down between renters and homeowners. The charts are interesting, take note that the scales change on the left hand side when comparing some charts between ownership and renters over the left hand side. Here is a quote from the executive summary:

These calculations imply that, as a result of the collapse of the housing bubble, millions of middle class homeowners still have little or no equity even after they have been homeowners for several decades. These households will be in the same situation as first-time homebuyers, forced to struggle to find the money needed to put up a down payment for a new home. This will make it especially difficult for many baby boomers to leave their current homes and buy housing that might be more suitable for their retirement.
Finally, the projections show that for both age groups, the renters within each wealth quintile in 2004 will have more wealth in 2009 than homeowners in all three scenarios. In the second and third scenarios, renters will have dramatically more wealth in 2009 than homeowners who started in the same wealth quintile. Homeownership is not everywhere and always an effective way to accumulate wealth. For those who owned a home in the last few years, the collapse of the housing bubble led to the destruction of much or all of their wealth.

Details of Tax Credit released.

Hat tip to Jon Lanser, IRS form 5405 is released.

New Budget proposal would limit mortgage interest deduction for some.

From the WSJ:

The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets. Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments.

The changes would be phased in gradually over the next few years. For the 2009 tax year, the 33% tax bracket starts with couples with taxable earnings of $208,850, when adjusted for personal exemptions and various deductible expenses. A taxpayer in the top bracket paying $1,000 of mortgage interest, for example, would see a tax break worth $350 reduced to $280.

NAHB / Wells Fargo Housing Opportunity Index for Q4 2008

(click to enlarge)

I like the National Association of Home Builders / Wells Fargo Housing Opportunity Index because it hasn't changed since they instituted it except to add more cities. When affordability got ultra-low they didn't change their methodology to try to redefine affordable. Now this may seem like a small thing to most, But the C.A.R. changed their methodology when affordability got low because they (apparently) couldn't exactly go around saying houses are unaffordable. To their credit NAHB/WF didn't change and as another hit to their credibility, C.A.R. did.

Ventura's lack of long history in the index and significant addition of new housing during the boom make it hard to make a judgement as to what historical affordability is. We can see in both charts that affordability is improving but still low. As we enter the recession affordability will still improve because fewer buyers will be able to buy between still high prices, job losses and continued mortgage credit tightening. Falling prices will eventually help as will lower interest rates but this is a tough environment to push volume.

Ventura County November 2008 Loan To Value chart

Here is the November 2008 Loan To Value chart for Ventura County. If you click and enlarge the chart it basically shows how much people are putting down at different price points. A dot at 80.0 and $300,000 means that a borrower put 20% down on a $300,000 place. This gives us a feel for how people (down payments, monthly payments and loan type) are getting into the market and where (sale price) they are getting into the market.

The yellow shaded areas are places where private mortgage insurers are tightening and eliminating coverage. For jumbo conforming it is getting very difficult to get PMI. So FHA is the only option for loans with less than 20% down. For conforming loans it is getting difficult to get PMI above 90% LTV and this is where we see the rampant FHA activity. The Jumbo conforming loan limit was about to drop from 729k to 625k and many lenders were phasing it out by November. The jumbo conforming limit is back to 729k but its effect was marginal on the market to begin with.

San Fernando Valley home sales for January 2009

The San Fernando Valley official home sales numbers are out. Single Family Home sales came in at 518, down 25.0% from December and up 60.4% from January 2008 which was near the all time low for sales. Median price came in at $350,000 down 0.9% from December and down 30.0% from the year before. As you can tell from the second chart above this is still very low sales for any January.

Condo sales came in at 166, down 28.1% MoM and up 58.1% YoY. Median price came in at $190,000 which was down 15.6% MoM and 48.4% YoY.

The above chart is just the absolute totals for pending sales, sales and properties that have come back on market (BOM). As you can see from the above graph the absolute number of BOM has stayed steady while sales have fallen as they seasonally do in January. This leads to the following chart:

This is the back on market percentages. Compared to current sales (How the SRAR likes to look at it), current month pendings and previous month pendings.

Weekly Active/Pending counts SFV & Ventura - 02/21/09

I'm going to post the weekly inventory counts for Ventura County and the San Fernando Valley as more time goes by this data set will become more useful. I have broken out the Short sale and Foreclosure (REO) inventory to better track demand. Eventually the data will either turn into tables or graphs but right now I am putting it out there so others can find and use it for their own purposes.

San Fernando Valley:
Single Family Homes
Active - Total 3281
Active - Short sale 1256
Active - REO 418
Backup - Total 392
Backup - Short sale 151
Backup - REO 83
Pending - Total 1249
Pending - Short sale 460
Pending - REO 515
Distressed active / Total active = 51.0%
Distressed pending / Total Pending = 78.0%

Condo
Active - Total 1110
Active - Short sale 566
Active - REO 173
Backup - Total 113
Backup - Short sale 49
Backup - REO 31
Pending - Total 404
Pending - Short sale 124
Pending - REO 196
Distressed active / Total active = 66.5%
Distressed pending / Total Pending = 79.2%

Ventura County:
Single Family Homes
Active - Total 1910
Active - Short sale 476
Active - REO 190
Contingent - Total 651
Contingent - Short sale 415
Contingent - REO 102
Pending - Total 665
Pending - Short sale 121
Pending - REO 370
Distressed active / Total active = 34.8%
Distressed pending / Total Pending = 73.8%
Release from Showing 266

Condo
Active - Total 682
Active - Short sale 208
Active - REO 116
Contingent - Total 203
Contingent - Short sale 131
Contingent - REO 47
Pending - Total 213
Pending - Short sale 36
Pending - REO 121
Distressed active / Total active = 47.5%
Distressed pending / Total Pending = 73.7%
Release from Showing 67

The Ventura County Single Family Home space is rapidly running out of REOs. You can't have such a wide disparity between distressed active and pending (if you remove short sales you will see what I mean) for very much longer. Unless foreclosures are being held off the market, the mythical shadow inventory which I have seen no evidence of, then that part of the market will start having issues. All these moratoriums will get their stated goal of reducing the number of foreclosures but it will come at the cost of the market sales staying ultra low. We should see sales stay low but "OK" during the first few months of the year but as we start getting towards June or July I think people will be wondering why sales have dropped dramatically in Ventura County and why the median is moving upward (because of the mix shift in homes sold). San Fernando Valley should do a bit better because there is a bit more of a backlog to work through.

Bill in California Budget adds 90 more days to the foreclosure process

California Foreclosure Prevention Act:

Existing law requires that, upon a breach of the obligation of a mortgage or transfer of an interest in property, the trustee, mortgagee, or beneficiary record a notice of default in the office of the county recorder where the mortgaged or trust property is situated and mail the notice of default to the mortgagor or trustor. Existing law provides that, after not less than 3 months after the filing of the notice of default, the parties described above may give notice of sale, stating the time and place of the sale, as specified.

This bill, until January 1, 2011, and only with respect to specified loans that were recorded between January 1, 2003, to January 1, 2008, would prohibit a mortgagee, trustee, or other person authorized to take sale from giving a notice of sale for an additional 90 days if the loan at issue is the first mortgage or deed of trust that the property secures, the borrower occupied the property as his or her principal residence at the time the loan became delinquent, and the notice of default has been filed. The bill would exempt certain loans from this prohibition, including, upon order of the Commissioner of Corporations, the Commissioner of Financial Institutions, or the Real Estate Commissioner, as applicable, the loans of a mortgage loan servicer, as defined, if the mortgage loan servicer applies to the commissioner for an exemption indicating that it has implemented a loan modification program with specified features and the commissioner concludes that the program meets specified requirements. The bill would permit a mortgage loan servicer to submit a revised application if its application is denied, and would permit the commissioner to revoke an exemption under certain circumstances. The bill would require the commissioners to adopt regulations in this regard, as specified. The bill would require the Secretary of Business, Transportation and Housing to report to the Legislature 3 months after the first exemption is granted regarding the details of the actions on exemption of loans serviced by a mortgage loan servicer under a loan modification program and to submit subsequent reports every 6 months thereafter. The bill would require the secretary to post specified information on the exemption program on the agency's Internet Web site
...

So unless a servicers offers loan modifications they will be hit with a 180 day waiting period after filing a NOD instead of a 90 day waiting period. As REO inventory gets whittled down sales will freeze up because there isn't enough inventory in the affordable ranges. People want to buy homes but can't afford them, making sure there are fewer affordable homes are out there doesn't seem like a good way of helping the housing market recover.

Ventura County Economic Forecasts.

Both the Los Angeles Economic Development Corporation and the UCSB Economic Forecast project have publicly available forecasts for Ventura County. The LAEDC forecast can be found here starting on page 39. The UCSB has their powerpoint presentations from both Kirk Lesh (here) and Bill Watkins (here). The videos of their presentations of their slides can be found here.

Obviously we are in for some difficult times, it is always interesting to hear different takes as people try to quantify the issues at hand. If you only have limited time I would watch the Watkins video posted above.

Ventura County January 2009 Sales

Dataquick released figures for Ventura County today. Sales volume was 578 up 36.6% from last January which was the worst January since Dataquick has been following sales. The median price has fallen 29.90% from $477,750 for January 2008 to $335,000 last month. This is a 46.8% decrease from the peak. Since lower quality foreclosures have been driving sales the mix of homes selling overstates the median decline. Because I am now seeing the homes higher up the food chain starting to break downwards even more in price I expect the mix shift to normalize a bit and so you will see a decline in the rate of change in median price drop. As this plays out through the year people might see the moderation of strength in the market and that would be a mistake. Prices are still falling and falling dramatically. Sales are still very poor. The local economy is deteriorating further. And the number of closed sales that are distressed in some way are very high. I don't expect the distressed sales to maintain the 70% ratio through the beginning of the selling season, I think it will drop some as equity sellers give up. I see these all as positive signs that the market is working its way to normalization, even if that normalization is far off in the future.

Weekly Active/Pending counts SFV & Ventura - 02/14/09

I'm going to post the weekly inventory counts for Ventura County and the San Fernando Valley as more time goes by this data set will become more useful. I have broken out the Short sale and Foreclosure (REO) inventory to better track demand. Eventually the data will either turn into tables or graphs but right now I am putting it out there so others can find and use it for there own purposes.

San Fernando Valley:
Single Family Homes
Active - Total 3381
Active - Short sale 1296
Active - REO 436
Backup - Total 378
Backup - Short sale 145
Backup - REO 88
Pending - Total 1220
Pending - Short sale 450
Pending - REO 507
Distressed active / Total active = 51.2%
Distressed pending / Total Pending = 78.4%

Condo
Active - Total 1134
Active - Short sale 565
Active - REO 181
Backup - Total 104
Backup - Short sale 49
Backup - REO 29
Pending - Total 391
Pending - Short sale 125
Pending - REO 198
Distressed active / Total active = 65.7%
Distressed pending / Total Pending = 82.6%

Ventura County:
Single Family Homes
Active - Total 1955
Active - Short sale 490
Active - REO 213
Contingent - Total 610
Contingent - Short sale 395
Contingent - REO 96
Pending - Total 661
Pending - Short sale 124
Pending - REO 363
Distressed active / Total active = 35.9%
Distressed pending / Total Pending = 73.6%
Release from Showing 260

Condo
Active - Total 694
Active - Short sale 211
Active - REO 129
Contingent - Total 192
Contingent - Short sale 126
Contingent - REO 42
Pending - Total 207
Pending - Short sale 38
Pending - REO 111
Distressed active / Total active = 48.9%
Distressed pending / Total Pending = 71.9%
Release from Showing 65

One thing I am noticing is that the Ventura market is running out of foreclosures. The absorption rate is very good because the lenders are pricing the inventory and getting it off the books quickly. Without a new supply of REOs coming on the market soon sales will start to slow when compared to last year, I would guess we would see this slowdown starting mid-year unless REOs pick up. With the foreclosure moratoriums and all that going on I am not hopeful for new supply picking up anytime soon.

I was in a house today in Ventura County that was priced slightly above the price it sold at in 2001. Needless to say there was quite active amount of people going to see it. At one point there was actually four different groups of people with their agents waiting to show (I drove by at different times of the day to gauge the interest). Even with the economic downturn there is clearly latent demand waiting to be filled, it is just most don't have the means to get a home without a return to traditional, rational pricing. This was one of the few that were rationally priced and I have no doubt it will go quickly on Monday at over list price. I don't see that so much a sign of strength of the market but a lack of supply in the price range where most can afford homes. Unfortunately, I think the moratoriums are going to hit Ventura County at a bad time and freeze the market a bit. If the lenders start getting motivated on short sales this might replace the REOs as market leader.

$8,000 Home Buyer Tax Credit

It appears the home buyer tax credit will be $8,000 for first-time home buyers (which is usually defined as someone who hasn't owned a home in 2 or 3 years). This credit does not have to be repaid and is also refundable, meaning even if you don't have $8,000 in tax liability you will still receive the full credit. The credit applies for the borrowers if they closed between January 1,2009 and December 31, 2009. There are income limits as well of $75,000 for singles and $150,000 for couples but I am not sure if that is a hard cut off or a phase out.

Foreclosures for January 2009

ForeclosureRadar came out with their January 2009 foreclosure report. I think it is interesting that all categories fell. I have noted that I thought foreclosures have peaked because of servicers using various loss mitigation strategies. But this could merely be the beginning wave of the homes in the pipeline that were delayed by SB 1137. I have noticed locally in Ventura that Trustee Sales are picking up. For those that would like to follow along for free their are a couple of different choices here or here. Neither of them show all trustee sales but combined they do a pretty good job covering most sales. It will be quite interesting to see what the coming months bring.

CAR revises forecast again

Updated January 2009 Forecast..

January 2009 Forecast:

December 2008 Forecast:

October 2008 Forecast:

Less than 2 weeks ago I posted the updated CAR forecast.. they have decided to revise the median price forecast downward again...

Short Sale & Foreclosure for San Fernando Valley & Ventura County - January 2009

San Fernando Valley:

Ventura County:

Here are the short sale and foreclosure sales numbers for January 2009 for the San Fernando Valley and Ventura County. There was no dramatic change in ratios with distressed sales still hovering around 70% of the market. Short sales are still making that steady progression as a larger percentage of sales, I think with servicers pre-approving short sales and REO inventory on the market being managed to keep only a 1-2 month supply around at any one time that short sales will continue to grow. We should see the total percentage of distressed sales drop as we come into the selling season but the weekly inventory reports still show that unmotivated sellers are still finding it enormously difficult getting a home sold.

Weekly Active/Pending counts SFV & Ventura - 02/07/09

I'm going to post the weekly inventory counts for Ventura County and the San Fernando Valley as more time goes by this data set will become more useful. I have broken out the Short sale and Foreclosure (REO) inventory to better track demand. Eventually the data will either turn into tables or graphs but right now I am putting it out there so others can find and use it for there own purposes.

San Fernando Valley:
Single Family Homes
Active - Total 3405
Active - Short sale 1292
Active - REO 458
Backup - Total 364
Backup - Short sale 142
Backup - REO 82
Pending - Total 1200
Pending - Short sale 456
Pending - REO 488
Distressed active / Total active = 51.3%
Distressed pending / Total Pending = 78.6%

Condo
Active - Total 1140
Active - Short sale 567
Active - REO 182
Backup - Total 95
Backup - Short sale 47
Backup - REO 22
Pending - Total 381
Pending - Short sale 118
Pending - REO 193
Distressed active / Total active = 65.7%
Distressed pending / Total Pending = 81.6%

Ventura County:
Single Family Homes
Active - Total 1981
Active - Short sale 494
Active - REO 226
Contingent - Total 593
Contingent - Short sale 369
Contingent - REO 98
Pending - Total 653
Pending - Short sale 123
Pending - REO 364
Distressed active / Total active = 36.3%
Distressed pending / Total Pending = 74.5%
Release from Showing 262

Condo
Active - Total 691
Active - Short sale 209
Active - REO 130
Contingent - Total 201
Contingent - Short sale 131
Contingent - REO 45
Pending - Total 198
Pending - Short sale 38
Pending - REO 105
Distressed active / Total active = 49.0%
Distressed pending / Total Pending = 72.2%
Release from Showing 64

$15,000 Home Buyer Tax Credit

Update: I notice I am getting a lot of hits from people wondering when the credit is valid for. The amendment indicates the credit is good from the date the bill is enacted for 1 year forward. People purchasing before this time do not get this credit.

Here is the text of the new $15,000 Home Buyer Tax Credit. It has been added to the Senate version of the Stimulus bill. If passed it would have to be reconciled with the House version which doesn't have the provision but I don't see it being taken out. As the text currently stands with it being a credit after purchase not a credit at purchase I don't think it will affect the higher priced markets much. There was a previous version where it was designed to be able to be used as a down payment. That combined with FHA loans would means that 100% financing would be back for a wide swath of the market. I think that is a horrible idea and luckily it appears to be removed from the current version. I think we will see spurred home sales in the lower priced areas of the USA which are at or near affordability. For the high priced markets in California it might sucker some to jump in early but I don't see it as a game changer.

For a higher level overview you can read the press release here.

Fannie Mae Streamline Refi coming soon?

Teaser from the National Mortgage News:

New Fannie Refi Options Coming
Fannie Mae plans to introduce refinancing options as soon as this week designed to help homeowners who have been unable to take advantage of recent low rates, a person with knowledge of the program said.

This might be the rumored program for streamlined refinance. What this means is the borrower will be able to refinance their current loan under current underwriting criteria without the need for appraisal. This would allow underwater homeowners to get the new lower rate loans even though they are upside down. You might ask why Fannie would allow this. Since they are guaranteeing the loan already this will strengthen their borrowers finances and allow them to be more likely to be able to keep paying on the loan. FHA already has a streamline refinance program for the same reason. I'm sure a very big deal will be made of it but the devil will be in the underwriting details as to how many can be helped.

San Fernando Valley Home sales estimates for January 2009

Here are the preliminary sales and price estimates for the San Fernando Valley for January 2009. Single Family Home (SFH) sales are estimated to be 540 with the median price of approximately $349,000. Condo sales are estimated to be 165 with the median price of approximately $220,000. Sales are clearly not going to match the record lows we saw last year. While the yearly comparisons are easy looking at sales historically still shows they are weak but improving. This improvement comes from distressed sales rationalizing the market and prices falling. The economy faltering will probably mute any upside in sales for this next year. We will probably see a mild improvement overall for 2009 but I don't think the planned government programs (lowering of mortgage rates, foreclosure relief and tax credit) will be enough to do brunt the decline in prices or goose sales for the year much more than 15-20%.