Short Sale & Foreclosure for Ventura County - December 2010

Here are the sales for Ventura County December 2010. Based on me taking statistics a bit later than usual and adjusting for recent changes in the underlying data sources I think the Dataquick number will be around 700 for December. While historically low sales, relative to the past few months that is a strong showing. There is a couple of different reasons I can see for the late surge. First the interest rate surge from 3.875% for a 30yr fixed to 4.750% would prompt those with locks to hurry up and close, this would also scare the sellers to take a slightly lower price now rather than a greater lower price later. Secondly it appears the banks were clearing some REO inventory at the end of the year with the strongest REO sales since October of 2009. The banks may have been worried about the interest rate surge or just trying to clear up the books and take some losses to offset some profits. If these theories are true neither of them suggest a durability or robustness to the market just a pull forward of demand.

San Fernando Valley home sales report - November 2010

San Fernando Valley Single Family Home sales for November 2010 came in at 470 which is down 11.65% MoM and down 19.24% YoY. This is the fourteenth straight month of YoY declines and the second worst November on record for Single Family Home sales. The median price for single family homes came in at $385,000 which is even MoM and down 2.53% 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 December will come in below November levels.

Condo sales came in at 178 which is up 5.95% MoM and down 11.31% YoY. Median price for condos came in at $210,000 which is down 4.54% MoM and down 6.66% 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 November pendings (green line) the predictor (red line) suggest sales for December coming in lower than November.

Ventura County November 2010 Home Sales

Dataquick reported home sales for Ventura County for November 2010. Home sales came in at 592 down 20.6% YoY and down 3.5% MoM. The median sales price came in at $375,000 up 2.7% YoY and up 5.6% MoM. Slowing sales and rising median is an indication of the low end falling away while the high end volume holds up a bit better. Volume is the better indicator for the health of the market and volume has been horrible. At the same time inventory is restricted and so we just have this stagnant slowly grinding lower market.

Short Sale & Foreclosure for Ventura County - November 2010

Here are the sales for Ventura County November 2010. Based on me taking statistics a bit later than usual and adjusting for recent changes in the underlying data sources I think the Dataquick number will be around 575 for November. This is very low sales level and is usually only seen around January/February.

Interest rates recently spiked from sub-4% to mid-4.5% plus.. that will pressure the market further in the coming spring season and could blow up some existing pendings as everyone (myself included!) expected QE2 to lower mortgage rates or at least keep them at 4%.

Stagnation in the market appears to still remain the new normal.

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

Here is the sales breakdown for the San Fernando Valley for November 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 November. But, it appears that sales should be lower in November than October.

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.

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 November 2008 home sales report

The official November 2008 numbers are out. Homes sales (SFH) came in at 633 (my estimate was 630) which was down 15.03% MoM and up 78.31% YoY. Median price came in at $375,000 (my estimate was 385,000) which is down 8.54% MoM and down 32.74 YoY. SFH median prices are currently down $280,000 from the peak or -42.7%. October and November of last year were the weakest months of the year due to the lenders pulling away from securitizing mortgages and Countrywides famed troubles so the year over year comparisons are easy to beat. Sales are still weak and prices continue to fall.

Condo sales came in at 199 (my estimate was 202) which is down 14.95% MoM and up 41.13% YoY. Median price came in at $220,000 (my estimate was $245,000) which was down 2.22% MoM and down 41.33% YoY. Condo sales are still performing horribly despite massive declines. Considering all the condo projects in the valley this doesn't look to reverse anytime soon.

Here is the Back on Markets relative to sales, this months pendings and last months pendings. I am trying to find the best representative way of showing how pendings falling out of escrow are affecting sales.

Sales for November totaled 832, escrows opened in November totaled 951 and BOM came in at 355. Based on current pendings and BOM ratios compared to previous trends Decembers total sales (SFH + Condos) should come in around the 650 range.

As the PMI changes take affect combined with the Jumbo conforming limit dropping we will see the mid to high level market taking the brunt of declines. People wanting a loan above the Jumbo conforming limits will pay a high premium and the people wanting to pay less than 85% LTV on a Conforming Jumbo will have to go FHA which can be restrictive. From what I am seeing is an inkling of what is to come in some of the data. You see the conforming loans staying liquid and closing pretty well. Above the conforming limit there is this logjam of contingent homes waiting to close, I am assuming besides the normal bank delays for short sales and REOs that financing is an issue and people are working to get deals closed before buyers give up. This may have contributed to the decline in median due to mix shift. The higher up the price range you go the less demand is able to be effective.

Ventura County November 2008 Sales

Dataquick released figures for Ventura County today. Sales of 729 were down 9.1% MoM and up 41.3% YoY. The median prices was reported as $355,000 which is down 5.3% MoM and down 31.9% YoY. Foreclosure resales were 47.8% of sales for November. This is just more of the same deterioration with banks staying motivated during the slow months price suffers. Considering the headwinds of the market some might think this isn't that bad of a report. But in historical context this is clearly a dismal sales report.

Dataquick claims that sales were low because there were fewer business days that the recorders office was open. I think it is much more likely that sales were this weak and the effect on recording due to fewer business days wasn't that great. With the month ending on a holiday weekend that might have some minor affect but no data I see anywhere suggests that this will be a December of any strength.

Short Sale & Foreclosure for San Fernando Valley & Ventura County - Novemeber 2008

Here are short sales and foreclosures as a percentage of total sales for November 2008.

Here is the San Fernando Valley:


Here is Ventura County:

You can see the banks continuing to stay motivated and push inventory as much as possible and we may see distressed sales hit 2/3 of all sales in Ventura in December. An amazing statistic. Also as I have mentioned before I think distressed sales are underrepresented because some agents do not set the proper flags for foreclosure or short sale.

Anytime you hear how "great" sales are in a news article just remember that they would simply be horrible if it wasn't for the banks staying motivated. In the context of these numbers traditional metrics like months supply of homes means little. The banks are intentionally pricing low to reduce time on market. Months supply will drop as a result of this but it isn't an indication of strength. Inventory on the market should continue to drop as discretionary sellers recognize the bad market conditions and give up even though a sale now will probably net them more than a sale in the next few years.

Preliminary November 2008 San Fernando Valley Home sales

Here are my estimates for November 2008 sales for the San Fernando Valley, Single Family Home sales look to come in around 630 and median price of approximately $385,000. Condo Sales are estimated around 202 and median of $245,000. Seasonality and lending guideline changes hitting the market hurt the market in November there is a possibility that the Thanksgiving holiday will cause a higher number than normal late reporters. We will know more about that in 2 weeks.

The issues that will be affecting the market for December and January outside of seasonality will be the Federal Reserve targeting longer term interest rates trying to reduce them. This has brought mortgage rates near 5% for vanilla, well qualified borrowers. Loan modification plans are starting to be rolled out en masse trying to relieve the foreclosure pressure. The headwinds to all that is continued contraction of mortgage credit and lending guidelines and of course the economy.