San Fernando Valley home sales report - December 2009

San Fernando Valley Single Family Home sales for December 2009 came in at 637 which is up 9.45% MoM and down 7.81% YoY. The median price for single family homes came in at $400,000 which is up 1.27% MoM and up 13.31% YoY. The supply constrained market is hurting sales in the SFV. I don't see any near term catalyst to drive sales higher, just a long slow slog while we get to wait and guess what the government is going to next to "fix" housing.

Condo sales came in at 236 which is up 17.41% MoM and up 2.16% YoY. Median price for condos came in at $240,000 which is up 6.67% MoM and up 6.67% YoY. Condos are faring a bit better than SFH because there is more supply and it appears some buyers are choosing to buy a condo when they can't find what they want in a detached home.

The red line was my attempt to create a predictor for sales but it hasn't been working out so well since May of this last year. IMHO, it appears that some pendings are being double counted, instead of falling out and going BOM (which would reduce my predictor), they are just switching buyers and updating the pending date which gets them counted in the current months pendings again. This is supposition on my part since I don't know how SRAR constructs their numbers but nothing much else makes sense.

Ventura County December 2009 Home Sales

Dataquick reported home sales for Ventura County for December 2009 today. Home sales came in at 896 up 2.3% YoY. The median sales price came in at $360,000 up 6.5% YoY. This report was a bit surprising to me because all of the data up through January 3rd (last time I looked) showed sales coming in down 10% YoY. The number of late reporters this year was much higher than normal by at least triple. Also the number of sales that aren't seen through my data sources were higher than average so my formula for predicting sales under predicted by much more than I have seen. This was the strongest December in the last 3 years but still a very weak sales volume. To put it in context if you look at the top chart you will notice this December doesn't even match the ultra-slow January/February sales volume for most years this past decade.

I still believe we will have a weak spring due to constricted supply caused by HAMP and higher mortgage rates. We shall see how things unfold this coming year.

ForeclosureRadar: More trustee sale cancellations than trustee sales

The ForeclosureRadar December 2009 foreclosure report is out:

Foreclosure activity dropped dramatically in December, especially when looked at on a daily average basis. For example while Notices of Default dropped 17.5 percent in aggregate, they actually dropped 32.5 percent on a daily average basis due to the fact that December had 22 days on which documents were recorded, versus 18 in November.

“The dramatic drop in foreclosure activity may have been a Christmas gift to homeowners,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com, “however, given rising mortgage delinquencies it is becoming increasingly clear that foreclosure activity no longer fully represents market realities”.

Less supply, less sales, paralyzed market for 2010 if something doesn't give.

San Diego Trustee Sales December 2009

San Diego trustee sales for December 2009 came in at 1039. The drop from the previous month is mainly due to the fewer sales scheduled during the last half of the month.

Orange County Trustee sales for December 2009

Orange County trustee sales for December 2009 came in at 655. The drop from the previous month is mainly due to the fewer sales scheduled during the last half of the month.

Ventura County Trustee sales for December 2009

Trustee sales for December 2009 in Ventura County came in at 240. Most servicers know better than to schedule sales during the last two weeks of December so sales trailed off at the end of the month. Most of those sales that would normally take place during that time were just postponed another week or two into the beginning of January so the January pace should be pretty good. One fly in the ointment may be the directive that no HAMP mod can be put into foreclosure but the servicers have plenty of inventory to choose from as to who to foreclose on so it is quite possible that might have no net effect. The trustee sale investors are having a field day with the low inventory enviroment and I bet they are looking forward to the first few weeks of January.

Trustee Sales for Los Angeles County December 2009

Los Angeles County Trustee sales came in at 2575 for December 2009. The drop from the previous month is mainly due to the fewer sales scheduled during the last half of the month.

Short Sale & Foreclosures for the San Fernando Valley - December 2009

Here is the sales breakdown for the San Fernando Valley for December 2009. The SFV has a lot more late reporters as a percentage of sales and so it is a bit tougher to discern right now just how weak sales will ultimately be for December . One thing is clear, sales will be down YoY. If I estimate 15% increase (which is about right historically) due to late reporters that means there will be a 10% drop in YoY sales. This is the context of mortgage rates down YoY, prices lower and the ongoing tax credit. Limited supply means limited sales and the market is running out of supply in the price points in which people can afford to buy homes. Sales will continue to stagnate as a result.

Short Sale & Foreclosure for Ventura County - December 2009

Here are the sales for Ventura County for December 2009. December is clearly on track to again have sales down year over year a trend that has continued since July. This is because there are fewer REO's being sold, as clearly indicated by the table. Less motivated supply will mean continued slow sales. Either prices fall and sales pickup or prices stagnate and so do sales, there is no free lunch. Based on the above numbers I predict Dataquick will report sales around 760 for December.

Looking forward in 2010 it is hard to see how sales pickup. Rates will start going up after Q1 due to Federal Reserve and Treasury stopping their MBS purchases. Supply will continue to be constrained as the administration continues to not allow failed HAMP mods move to short sales and foreclosures but instead tries to re-work the modification. And the tax credit will end so buyers will have even less motivation to buy. So unless something "gives" and reality starts being dealt with 2010 will a bad year for real estate sales for everyone but the trustee sale investor.

San Fernando Valley home sales report - November 2009

San Fernando Valley Single Family Home sales for November 2009 came in at 582 which is down 12.22% MoM and down 8.06% YoY. The median price for single family homes came in at $395,000 which is up 1.28% MoM and down 5.33% YoY. I doubt you will see the headline that this is the second worst November home sales on record but that is exactly what it is. The effort to remove supply off the market has worked but that means sales will stay at ultra low levels for the foreseeable future. We are going to have higher rates due to the stopping in MBS purchases and the tax credit being removed from market. It is hard to see exactly how the local market gets better unless more foreclosures or short sales make it on market. But this is exactly what the local, state and federal governments have been fighting against happening. It is going to be a tough slow grinding slog unless the market is allowed to find its equilibrium.

Condo sales came in at 201 which is down 11.84% MoM and up 1.01% YoY. Median price for condos came in at $225,000 which is down 4.26% MoM and up 2.27% YoY. Condos are faring a bit better than SFH because there is more supply and it appears some buyers are choosing to buy a condo when they can't find what they want in a detached home.

The red line was my attempt to create a predictor for sales but it hasn't been working out so well since May of this last year. IMHO, it appears that some pendings are being double counted, instead of falling out and going BOM (which would reduce my predictor), they are just switching buyers and updating the pending date which gets them counted in the current months pendings again. This is supposition on my part since I don't know how SRAR constructs their numbers but nothing much else makes sense. Also the dramatic drop in BOM this month is peculiar, I am thinking it is an error. Lately the SRAR stats have been a bit unreliable, I don't think the person in charge of that particular task is very competent (or just doesn't care).

Ventura County November 2009 Home Sales

Dataquick reported home sales for Ventura County for November 2009 today. Home sales came in at 752 up 3.2% YoY. The median sales price came in at $365,000 up 2.8% YoY and flat MoM. This months activity was pretty easy to predict based on the expectation that the tax credit would expire coinciding with ultra low interest rates. We now get to see how much demand was pulled forward. Historically for Ventura County sales go up from November to December. It is extremely clear this year that will not be the case, I am predicting DQ reporting sales of around 700 for December (and I believe I am being optimistic) which would be a 20% drop YoY and 6.9% drop MoM. Both highly unusual occurrences.

We also have Fannie Mae's underwriting change (lowering DTI to 45%) coming into effect just the other day. Lucky for agents Freddie has yet to tighten similarly, so those marginal conventional deals might just be delayed rather than blown up completely. The 10 yr note has also been rising lately and the Fed is lowering its MBS purchases. All of this combined with the low market inventory will mean 2010 will be a very slow sales year unless a miracle happens and more inventory comes on market. The only hope for that would be large number of short sales or foreclosures as they are really the inventory that will be enough to keep sales up.

Short Sale & Foreclosures for the San Fernando Valley - November 2009

Here is the sales breakdown for the San Fernando Valley for November 2009. The SFV has a lot more late reporters as a percentage of sales and so it is a bit tougher to discern right now just how weak sales will ultimately be for November. One thing is clear, sales will be down YoY. If I estimate 15% increase (which is about right historically) due to late reporters that means there will be a 7% drop in YoY sales. This is the context of mortgage rates down over 1% YoY, prices lower and the ongoing tax credit. Limited supply means limited sales and the market is running out of supply in the price points in which people can afford to buy homes. Sales will continue to stagnate as a result.

Short Sale & Foreclosure for Ventura County - November 2009

Here is the breakdown of sales for Ventura County for November 2009. November is clearly on track to again have sales down year over year a trend that has continued since July. This is because there are fewer REO's being sold, as clearly indicated by the table. Less motivated supply will mean continued slow sales. Rates for November were over 1% lower than the year before and there was the tax credit and yet demand is still dropping. Either prices fall and sales pickup or prices stagnate and so do sales, there is no free lunch.

We had this tremendous stimulus applied to housing and supply should have been liquidated while the brunt of the stimulus was in effect but instead supply was constrained. Now we have this large overhang of "shadow" inventory that is sitting in a netherworld of not paying, not being modified and not being foreclosed on. In other words, nobody is dealing with reality. Sales will suffer as a result. The NAR, who lobbied for many of these policies, should have been careful what they wished for... because they got it.

Ventura County Trustee sales for November 2009

Trustee sales for November 2009 in Ventura County came in at 258. This is about the same daily pace as the month before just reduced the total sales due to a shorter month and more holiday days. Third party sales dropped which could be an indication that as absorption rates drop for investor owned inventory they are slowing their purchases, either that or the banks weren't pricing as aggressively on the courthouse steps.

Trustee Sales for Los Angeles County November 2009

Los Angeles County Trustee sales came in at 3090 for November 2009. This is the same basic daily pace as the month before but the total number of foreclosures is lower because there is one less day in the month and more holidays in which the courthouse is closed.

Orange County Trustee sales for November 2009

Orange County trustee sales for November 2009 came in at 736. Third party sales are dropping, I am wondering if this has more to do with the banks realizing they are giving money away at the courthouse steps or if buyer participation is falling off due to seasonality. It will be interesting to see if third party sales percentage will ever hit their September highs again.

San Diego Trustee Sales November 2009

San Diego trustee sales for November 2009 came in at 1280. This is about on par with the daily pace of October minus the days lost due to holidays in November. Third party participation is slowly and steadily rising.

San Fernando Valley home sales report - October 2009

San Fernando Valley Single Family Home sales for October 2009 came in at 663 which is down 3.07% MoM and down 11.01% YoY. The median price for single family homes came in at $390,000 which is up 2.63% MoM and down 4.88% YoY. Sales continue to be tremendously depressed even in the face of massive housing focused stimulus. The flip side of asset price stability is sub par transactional volume, there is no free lunch. Single Family Home sales are at levels not seen since the early 90's which was a deep recession locally in the San Fernando Valley.


Condo sales came in at 228 which is up 20.63% MoM and down 2.56% YoY. Median price for condos came in at $235,000 which is up 1.29% MoM and up 4.44% YoY. Condos are faring a bit better than SFH because there is more supply and it appears some buyers are choosing to buy a condo when they can't find what they want in a detached home.

The red line was my attempt to create a predictor for sales but it hasn't been working out so well since May of this last year. IMHO, it appears that some pendings are being double counted, instead of falling out and going BOM (which would reduce my predictor), they are just switching buyers and updating the pending date which gets them counted in the current months pendings again. This is supposition on my part since I don't know how SRAR constructs their numbers but nothing much else makes sense.

I think because of the large number of pendings, many of them short sales, and longer underwriting times by lender we will see a more flattened out sales curve going into the slow winter months. While sales will still be very low I would guess January and February will beat YoY numbers but I think November and December will be flat to lower than the year before.

Ventura County October 2009 Home Sales

Dataquick reported home sales for Ventura County for October 2009 today. Home sales came in at 879, up 9.6% YoY. The median sales prices came in at $365,000 which was down 2.7% YoY. Assuming people lock the month before they close September 2008 rates were 6.04%, September 2009 rates were 5.06%. Such a dramatic drop in rates combined with the tax credit expiration (it has been extended but people who would have wanted to take advantage of it would have had to sign contracts before it was extended) and the desire to close before the holidays start all made October the best sales month of the year. We will now see sales drop due to seasonality and the lack of inventory on the market. Rates are below 5% currently but there is little motivating reason for purchasing right now. Between the holidays and the lack of selection people purchasing now have either lucked out and found 'the one' or just settled on a lesser home.

I expect November to come in flat to slightly down YoY and December to definitely be lower YoY for sales. We are at historically very low sales and very little evidence of that changing anytime soon. Prices kept artificially high will mean sales will be kept artificially low.

Ventura County Loan To Value Chart - August 2009

Note: I haven't posted these charts in awhile so I am putting up May through August in four consecutive posts.

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 (down payments and loan types) people are getting into the market and where (sale price) they are getting into the market.

For people in the market right now if you go to the left hand side and look and find around the price at which you are thinking of buying and then you can go to the right and see what your competition has done as far as down payments and loan types.

The FHA loans at the higher price ranges are, in my opinion, very risky. FHA used to be for low income people and were underwritten with lower DTI ratios. Now they are used somewhat by high income people at higher income ratios, their prospect of higher income is low and lower income is high. I think this will affect the higher end move up markets as the people who rushed to buy have little to no equity for many years. I think this is true of FHA used in massive quantities in the market like we have now (which was 37.4% of the So Cal market in August according to Dataquick). With little down it will take that much longer to buildup significant equity and long term move up and relocation transactions in the market should stay low.