San Fernando Valley home sales report - August 2010

San Fernando Valley Single Family Home sales for August 2010 came in at 539 which is down 8.49% MoM and down 19.55% YoY. This is the eleventh straight month of YoY declines and the WORST August on record for Single Family Home sales. The median price for single family homes came in at $400,000 which is up 0.25% MoM and down 2.83% YoY. Residential inventory is up YoY and growing. 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 September will come in at August levels.

Condo sales came in at 208 which is down 3.70% MoM and down 9.56% YoY. Median price for condos came in at $230,000 which is down 4.54% MoM and eevn YoY. The only strength in the market is in the condo space and I think that is due more to the amount of motivated supply (whole condo projects going defunct). Condo pendings aren't strong going forward and are at levels suggesting that September sales will look very much like August.

Based on August pendings (green line) the predictor (red line) suggest stagnant sales for September.

Ventura County August 2010 Home Sales

Dataquick reported home sales for Ventura County for August 2010 today. Home sales came in at 719 down 9.7% YoY and down 4.0% MoM. The median sales price came in at $370,000 down 1.5% YoY and flat MoM. Volume was lower from what I predicted at the beginning of the month. The anemic volume continues and looking forward to the weekly inventory pending and contingents it doesn't look like the malaise will end anytime soon. Prices will continue under pressure as a result.

Short Sale & Foreclosure for Ventura County - August 2010

Here are the sales for Ventura County August 2010. Sales are still very low, with late reporters I expect the official Dataquick numbers will be down YoY at around 750 sales. This continued stagnation in the market is the same boring story, less supply due to government intervention trying to keep prices high at all costs. Watching the weekly inventory reports for Ventura County you can see supply building but contingents and pendings have stopped falling rapidly due to continued price cuts by sellers. If Dataquick sales do come in around 750 that would be the worst August since in at least a decade (the period for which I have data).

Short Sale & Foreclosures for the San Fernando Valley - August 2010

Here is the sales breakdown for the San Fernando Valley for August 2010. 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 August. But, it appears that sales should be at "weakest August on record" levels. I doubt you will hear that spin in the local association press release.

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.

Ventura County September 2009 Home Sales

Dataquick reported home sales for Ventura County for September 2009 today. Home sales came in at 784, down 3.0% YoY. The median sales prices came in at $371,750 which was down 3.4% YoY. Assuming people lock the month before they close August 2008 rates were 6.48%, August 2009 rates were 5.19%. People need to put todays market in context of the rates being so ultra-low to understand just how bad these numbers really are. The Federal Reserve claims to be winding down their MBS purchases and therefore rates will rise. I have a really hard time seeing how they will do so, can you imagine this market at 6.5% rates?

We are still in a supply constrained market, sales and price movements should be pretty static as long as that is the case. But rates, unemployment , defaults, etc are all building headwinds to the market. I keep thinking it can't stay like this forever but the people who own the printing presses are telling me I am wrong (and they are clearly winning the argument right now).

San Fernando Valley Inventory August 2009

From the following graphics you can see the drop in inventory, especially on the low end. As well as the fact that in many spots demand is lower than the previous year for the market segment but Months Supply has still dropped. Inventory is being worked off and new supply is being held off the market.

San Fernando Valley home sales report - August 2009

San Fernando Valley Single Family Home sales for August 2009 came in at 670 which is down 10.07% MoM and up 0.60% YoY. The median price for single family homes came in at $389,000 which is dow 2.75% MoM and down 8.47% YoY. Sales continue to be horrible with this being the third worst August on record only missing being the 2nd worst sales on record by 5 sales. We have an interesting market dynamic, sales continue to be cratered but inventory is dropping. Few discretionary sales because sellers feel like they don't want to sell in a down market and are hoping beyond hope that somehow things will get better than ultra-low 5% interest rates and a tax credit. Few short sales because the banks are slow in responding (This might change soon, I'll post on why later). Few REOs because the administration has made them verboten. This is not a functioning market but one on life support. Reality has been suspended until Uncle Sam decides otherwise.

Condo sales came in at 230 which is up 13.30% MoM and up 33.72% YoY. Median price for condos came in at $230,000 which is up .88% MoM and down 16.36% YoY. Condo sales are doing a bit better right now than SFH sales. I think the lack of affordable SFH inventory has pushed desperate buyers wanting to cash in on the tax credit to consider condos but that is supposition on my part.

The red line is my predictor line for next months sales. There has been a disconnect since May on the predictor overpredicting sales. It could be the longer underwriting time lines is messing it up or some other variable I haven't accounted for. If pendings slow and the predictor line drops below reported sales I will know the longer time lines are affecting the prediction and make adjustments.

Ventura County August 2009 Home Sales

Here is the Ventura County home sales report based on the Dataquick news release. Sales continue to perform horribly. We are at the same basic level as the mortgage market blowup in 2007 but prices are much lower, there is a tax credit and rates are much lower. There was a small bump in rates about 6 weeks ago of a half of point that may have temporarily disrupted sales but it is doubtful that is what caused such anemic sales. The data keeps pointing to a supply constrained market, the only place strong sales are seen in the low cost markets with ready supply like Riverside and San Bernardino.

The strength in the median has been a lot based on mix shift but there has been a firming of prices on the low end. As the supply becomes more constrained fewer borrowers can buy and the few who can buy are generally of the stronger financial profile.

The real estate industry who have been crowing about the recovery of the housing market will start to feel the slow sales pinch their revenue. After all, they are the rake, if the hand isn't played the rake isn't dropped. Commissions won't be made, fees won't be collected.. it will be the second leg down for an already battered industry. I also feel the lending industry, who are currently staffed up to process the HAMP wave, will then have to adjust staffing levels. Not a bright future for those in the RE business when sales stay low. Of course the NAR is renewing their push for renewal and expansion of the tax credit, they need something to artificially boost sales for their flagging membership.

The people who are doing well in this market are the trustee sale investors who are buying the supply before if ever gets to market then selling it at retail prices. REOs were one of the few things keeping the market liquid but as the trustee sale investors have become more active you see sales drop. This is a completely logical consequence of low supply and high investor activity removing motivated supply in the Ventura County area.

Short Sale & Foreclosures for the San Fernando Valley

Note: I have added a foreclosure research link to the site, see here

Here is the sales breakdown for August 2009 for the San Fernando Valley. The pace of the REO percentage decline has slowed and short sales had there best showing yet since I've been tracking the statistics. Traditionally the SFV has a higher amount of late reporters so I expect sales to come in around the 875-900 range which will be flat to slightly up from the year before. The SFV market has the same supply issue plaguing other markets and that essentially puts an upper limit on sales. The mortgage rates may be at 5% rates and a tax credit but it don't matter one bit if a buyer can't find a home they can both afford and want to pay for. This would have been a pretty good market to liquidate inventory into but instead it seems like a wasted opportunity.

Short Sale & Foreclosure for Ventura County

Note: I have added a foreclosure research link to the site, see here

Here is the sales breakdown for Ventura County for August 2009. August was the first month in which the percent of sales which are REOs increased since last December. This may be somewhat due to the increase in foreclosures since June but I think the slowdown in the total overall sales has more to do with the percentage increase. I expect the REO percentage to increase as more supply comes online and sales slow. Sales continue to be anemic, notice they are down again YoY, this is due more to limited supply than limited demand. The supply that is plentiful is in the wrong price ranges for the significant demand that is out there and so we get this stagnant market. The consistent story you see from agents is that there buyers can't find homes to buy and they end up either choosing to try to wait out a short sale or try the bidding war route with the few REOs which make it on market.

Orange County Trustee sales for August 2009

Here are the trustee sales for Orange County for August 2009. Sales were down .9% MoM and down 38.7% YoY. Third party sales continue to come in at higher and higher levels. I have a real hard time believing all of these pencil out from an investment standpoint but maybe the market is that hot in the OC. Since some of these areas are more affluent maybe buyers are just surpassing traditional buying avenues and buying themselves.

Trustee Sales for Los Angeles County August 2009

Here are the trustee sales for Los Angeles County for August 2009. Trustee sales barely beat July 2009 and came in up 1.4% MoM and down 26.1% YoY. Third party activity is picking up as investors start figuring out the areas which have low inventory and they go and try to fill the gap.

Ventura County Trustee sales for August 2009

Here are the final trustee sales number for Ventura County for August 2009. Foreclosures increased 7.2% MoM and are down 37.2% YoY. Trustee sales started off the month slow and picked up during the middle of the month only to slow down again in the final week. Third party investors are still a large part of the market. I would think if the servicers increase sales into the slower fall months the investor participation would drop. The reasons I think this would happen is that since the absorption rate drops in the Fall (less demand) so it gives investors fewer opportunities to push price and there would be the increased competition from higher REO sales.

San Diego Trustee Sales August 2009

Here are the trustee sales for San Diego County for August 2009. Foreclosures were up 3.5% MoM and down 29.7% YoY. Third party sales moderated but not dramatically so.

Ventura County Demand versus Inventory - August 2009

This is August 2009 Demand versus Inventory chart for Ventura County. Demand continues to be concentrated on the lower end "affordable" areas with inventory in those areas being drawn down. Inventory is being built up in many segments of the $500,000+ market. This is a supply constrained market and while inventory is being cleared on the low end the higher end discretionary sellers are still waiting to find a buyer. I think the headlines of median prices rising because fewer low end homes selling because of the inventory shortage will embolden the higher end sellers to keep to their price and just ensure they will not sell. It does not look good for higher sales moving forward unless some more inventory comes online.

Orange County Trustee sales for Mid-August 2009

Here are the trustee sales for Orange County for Mid-August 2009. Currently sales are on pace to slightly beat July 2009 by approximately 5%. I remain impressed at the number of third party deals being grabbed. Anything that remotely pencils out (and I suspect a few which don't!) seems to be being grabbed at the courthouse steps.

Trustee Sales for Los Angeles County Mid-August 2009

Here are the trustee sales for Los Angeles county, Mid-August 2009. Los Angeles County is on pace to match July 2009. Third party sales are ticking up as investors figure out that the LA County area has many areas yet to be fully exploited by trustee sale investors.

Ventura County Trustee sales for Mid-August 2009

Here are the trustee sales for Ventura county for Mid-August 2009. Trustee sales are roughly on pace of July 2009. Third party sales fell slightly but if you break down sales by city (not something I have done here) areas like Simi Valley and Camarillo have seen a surge in the percentage of homes sold to third parties.

San Diego Trustee Sales Mid-August 2009

Here are the trustee sales for San Diego for Mid-August 2009. We are approximately halfway through the business days for the month and we are on pace for matching July 2009 pace. There is a slight mix-shift but relatively minor. So far any surge in the pace of foreclosures is not being seen.