California Shadow Inventory Report - Q3 - 2010

This is a simple graph to show the accumulation (or lack thereof) of REO inventory. When the blue line is above the green line REO inventory could be accumulating. I say "could be" because the green line is merely the number of homes sold during the quarter that were foreclosed in the past 12 months, so investors trustee flips would be captured in the data as well. I think the blue line will elevate somewhat but the two lines will stay pretty close as it makes little sense to foreclose and not market the home.I am very doubtful of the tsunami theory simply because the government has said it is not what they wish to happen and they have gone to great lengths for it not to happen. What we will have instead is stagnation in the market for a very very long time.

As you can see with the above graph, there was no great accumulation of REO's during Q3 but the spread between the two lines was at its greatest point in 5 quarters. The accumulation is about ~8000 homes. If resales stay this low and foreclosures stay this high it could be a worrying trend but as prices fall sales will pick up to absorb the excess inventory. And of course the robosigning issue could put a damper on REO supply as well.

Recontrust trustee sales

Every week I check the Recontrust page and record how many NTS and Trustee Sales are posted. You can see the latest foreclosure moratorium affecting trustee sales. The trustee sales number is the total amount of sales over the last 30 days from the date I recorded the number.

While this will mean less REO supply over the short term I don't think it will affect sales that match. Lenders have been limiting the amount of inventory they take in and they could "play catch up" if they chose to do so. I've also noted some evidence of more pre-approved short sales and short sales coming back on market after long delays which usually means the bank is responding more. This leads me to believe that the banks have shifted idle resources to work on short sales while the moratorium is in place.

San Fernando Valley home sales report - September 2010

San Fernando Valley Single Family Home sales for September 2010 came in at 581 which is up 7.79% MoM and down 15.06% YoY. This is the twelfth straight month of YoY declines and the second worst September on record for Single Family Home sales. The median price for single family homes came in at $395,000 which is down 1.25% MoM and up 3.95% YoY. The market is completed stagnated, the administration is keeping the motivated inventory generally off the market and there is no market clearing event so sales and buyers choices will continue to be horrible going forward. New pendings last month were at levels suggesting October will come in at or below September levels.

Condo sales came in at 194 which is down 6.73% MoM and up 2.64% YoY. Median price for condos came in at $220,000 which is down 4.34% MoM and down 5.17 YoY. Relative to SFH condos have been performing better but that is because there is more motivated condo supply than SFH. Sales are still horrible in historical context, just not as bad as SFH.

Based on September pendings (green line) the predictor (red line) suggest sales for October coming in about even.

Ventura County September 2010 Home Sales

Dataquick reported home sales for Ventura County for August 2010 today. Home sales came in at 682 down 13.0% YoY and down 5.1% MoM. The median sales price came in at $370,000 down 0.5% YoY and flat MoM. I noted in my early month estimate that my normal model predicted sales of 700-720 but due to changes in the underlying data used for estimates I thought closings would come in lower and that was what in fact happened. Currently October is running at 20% below September closings month to date so this horrible performance is continuing. To put these numbers in perspective the last time numbers were worse, 2007. Countrywide had just imploded and all that was left was FHA (which few were equipped to underwrite at a large scale) and the GSE's had a $417,000 limit. Additionally prices were much higher as were interest rates so the gap between buyers and sellers was much much wider. But right now we have a $729,000 loan limit, 4% mortgage rates and lower prices and sales are anemic. Prices are still too high.

Short Sale & Foreclosure for Ventura County - September 2010

Here are the sales for Ventura County September 2010. We are at levels which suggest flat to down sales from August but there is one caveat. The underlying data source has been undergoing some changes and I don't know how that will effect these numbers (there is more of a possibility of double counting now). So there is a possibility the numbers could come in a bit weaker than my call of 700-720 for the Dataquick Ventura sales number but I wouldn't think it would be dramatically lower (nothing lower than 650). I just don't have enough data at this point to know how the changes will effect my normal guesstimate.