by Jim the Realtor | Nov 19, 2012 | Market Conditions, North County Coastal, Short Sales, Thinking of Buying?, Thinking of Selling? |
It’s the week of Thanksgiving – thanks for being here!
On September 27th when the comments went off, I thought we’d lose a third of the audience.
Over the last thirty days we’ve had only 13% fewer unique visitors than during the 30 days prior to September 27th. The visits and page views are down 20% and 38% respectively, which I think is a result of readers taking a more casual involvement here, which is good. I appreciate you being here – check in every few days for an update!
Bubbleinfo’s Google Analytics Aug 29 – Sept 27
Bubbleinfo’s Google Analytics Oct 19 – Nov 18
With the market in such unprecedented territory, readers continue to request a wider perspective. We want to hear eveyone’s thoughts about what they are seeing out there! Having a moderator is the happy compromise where I don’t have to drop everything to respond to a comment. If you can live with occasional delays in seeing your comment posted, then this should work for everybody.
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The ACT/CONT+PEND count was 844/563 on October 21st. Today it is 768/545, which means there hasn’t been much holiday drop-off in sales. Let’s separate out the higher-end stats to appreciate how active the market is below – sizzling hot:
| NSDCC House Listings |
# of ACT |
LP Avg $/sf |
# of CONT/PEND |
LP Avg $/sf |
| Under $1.25M |
258 |
$378/sf |
410 |
$316/sf |
| Over $1.25M |
510 |
$812/sf |
135 |
$569/sf |
| Total |
768 |
$670/sf |
545 |
$380/sf |
Here is the breakdown of the contingents and pendings – the upper crust appears to be pretty comfortable, with only 18 short-sales in the works:
| NSDCC House Listings |
# of CONT |
LP Avg $/sf |
# of PEND |
LP Avg $/sf |
| Under $1.25M |
122 |
$273/sf |
282 |
$334/sf |
| Over $1.25M |
18 |
$511/sf |
125 |
$578/sf |
| Total |
140 |
$302/sf |
407 |
$406/sf |
Deal-seekers will be sorry to see them go, but it looks like short sales are winding down. The underwater folks have to be itching to stick around another year or two to see if they might re-gain their equity. At this stage, it seems irresistible for them to wait-and-see!
by Jim the Realtor | Nov 16, 2012 | Short Sales, Short Selling, Strategic Defaults
Those who are underwater aren’t “trapped” in their homes, they are free to move.
The system has been very generous, and even if the Congress doesn’t extend the debt-tax relief, the banks will be processing short sales to enable the underwaters to move – without having to repay the debt.
The homeowners that choose the short sale – it is a choice, you can always pay it down – will probably have their credit banged up along the way and won’t be purchasing a home concurrently. But that’s OK, with the the supply-and-demand curve around here needing more supply and less demand, we welcome the sell-only short sellers.
However, as the media keeps hyping the real estate comeback, the underwater homeowners who can make their payments will be more inclined to not default/short-sale, for these reasons:
-
There aren’t cheaper alternatives in the same area.
-
Let’s wait a little longer, equity might be right around the corner.
-
Save face, and credit.
Those who have waited this long will continue to ride it out, and short-selling should diminish in the areas that see real appreciation happening. So charts like these below shouldn’t cause a lot of alarm in the NSDCC, where there are only 398 SFRs with NODs and NOTs on file currently, and half of those are in Carlsbad.
Let’s note that 91% of the San Diego homeowners with negative equity are making their payments!
From Zillow:
by Jim the Realtor | Nov 13, 2012 | North County Coastal, Short Sales, Short Selling, Thinking of Buying?, Thinking of Selling?
Yesterday we saw how the number of short-sale listings were dropping off around our north county coastal region, in spite of the expiring relief on debt-tax.
In the New Age of Coddling, we have seen the government devise several programs to rescue distressed homeowners, who enter the ‘Modification Waterfall’, where every cure is applied until one sticks. If all loan-mod attempts fail, then the next recommendation is to affect a short-sale. We’ve been hearing all year that lenders have converted to short-sales as their primary method of disposing of defaulters….by have they?
Around NSDCC, it appears that lenders took their foot of the gas altogether.
We stormed into 2012 with guns a-blazing, with both new listings of short-sale and REOs increasing rapidly in the first quarter. But then it looks like somebody pulled the plug – for the last two quarters both REO and short-sale listings have been trending lower:
If lenders don’t threaten to foreclose, there is little to no incentive for defaulting homeowners to short-sale – the free rent program is their preference!
But there are two possibilities that could cause a dual decline of REO and SS listings:
- Lenders stopped threatening to foreclose.
- Homeowners starting paying again, once they heard that the market might be coming back.
Either way, the distressed listings appear to closing out.
Of the 783 houses for sale today, there are 19 REO and short-sale listings – or 2.4% of the inventory!
by Jim the Realtor | Nov 12, 2012 | Short Sales, Short Selling
The extension of the debt-tax relief act is still up in the air.
There have been several bills submitted, and everyone from the N.A.R. to the nytimes.com thinks there is a good chance that our Congress will extend it….but will we need it?
Did the threat of it expiring cause a flood of short-sale listings to hit the market recently? Not really, for the September/October period, there were fewer short-sale listings than in previous years.
NSDCC Detached-Home New Listings, September/October
| Year |
Sept/Oct SS Listings |
Sept/Oct Non-SS Listings |
SS/Total % |
| 2009 |
67 |
698 |
8.8% |
| 2011 |
82 |
674 |
10.8% |
| 2012 |
55 |
575 |
8.7% |
With recent upbeat news about the housing market, those who are underwater and hanging on this long are thinking that if they wait just a few more months or years, it will be different – and prices might go high enough for them to make some money!
After the next high sale in each neighborhood, expect that there will be 2-3 more new listings hit the market, looking to capitalize – but only if they can get their price.
P.S. Of the 55 listed this Sept/Oct, only six are still for sale.
by Jim the Realtor | Oct 24, 2012 | Fraud, Scams, Short Sales
Why would anyone spread possum urine around a house, turn up the heat and close all the windows for a few days?
Because they’re flopping, of course.
Flopping is the latest in mortgage fraud, in which sellers actually want as low a price as possible.
The scheme works if they are underwater on their mortgage, and their lender agrees to a short-sale, forgiving the difference between the sale price and the amount owed.
The seller unloads the home for the sandbagged price to an accomplice, who can then clean it up and flip it for a quick gain.
Suspicious short sales, ones flipped the same day, accounted for just under 2% of all short-sale transactions in 2011, according to CoreLogic. Floppers averaged a 34% gain. The average profit: $55,000.
Fraudsters can get away with it because banks are swamped with short sale requests — they have more than tripled in the past three years.
The possum urine trick was an extreme example of the methods used to discourage homebuyers, said Ann Fulmer, a mortgage fraud specialist with Interthinx. “It smelled like a Hazmat site,” she said.
Other tactics: Floppers pull out appliances and take cupboard doors off their hinges. They leave dirty laundry lying around and paint what looks like water damage on the ceilings. They might also invent plumbing or electrical problems, and give appraisers fake repair estimates created by cooperating contractors.
The sellers point out the flaws to legitimate shoppers, and when no one buys, the sellers have a convincing argument to make to the bank, according to Tim Coyle, director in the Financial Services division of LexisNexis Risk Solutions.
They can say: “Look, I’ve tried to move this property for six months and haven’t been able to — we need to lower the price,” said Coyle. “They convince banks that the value of the property has deflated.”
It can be hard to refute bogus damage claims without full investigations, according to Rob Hagberg, associate director of fraud investigation for Freddie Mac.
One flopping scam that relied on heavy repair estimates was repeated several times in the Ogden, Utah area. A group kept claiming houses had been contaminated with residue from crystal meth labs.
“It was the same cast of characters on multiple properties,” said Hagberg.
Noticing the pattern, Freddie Mac investigated and broke up the ring.
The agency solicits help from the public to bust floppers and has a toll free number to report suspicious activity — 1-800-4fraud8.
Hat tip to Mr. T for sending this in:
http://money.cnn.com/2012/10/23/real_estate/mortgage-fraud-flopping/index.html
by Jim the Realtor | Oct 21, 2012 | Forecasts, North County Coastal, Short Sales, Short Selling
Let’s look forward to future closings – how do the active, contingent, and pending listings stack up?
San Diego County All-Residential MLS listings:
| MLS Listings |
Actives |
% of Mkt |
Pend/Cont |
% of Mkt |
Sold6mo |
% of Mkt |
| SD REO |
240 |
4% |
430 |
5% |
2,381 |
15% |
| SD SS |
466 |
8% |
4,473 |
49% |
4,250 |
27% |
| SD Non |
4,865 |
88% |
4,250 |
46% |
9,231 |
58% |
Close to half of the closed sales between April 1st and September 30th were distressed sales, but now they make up only 12% of the active inventory! While we have become dependent on the distressed sales, they get snapped up quickly. No wonder it feels dry as a bone!
What about the detached-home listings in our North SD County Coastal region?
NSDCC Detached-Home MLS listings:
| MLS Listings |
Actives |
% of Mkt |
Pend/Cont |
% of Mkt |
Sold6mo |
% of Mkt |
| NSDCC REO |
3 |
1% |
13 |
2% |
94 |
5% |
| NSDCC SS |
18 |
2% |
162 |
29% |
187 |
11% |
| NSDCC Non |
823 |
97% |
388 |
69% |
1,458 |
84% |
If you are looking for a “bank deal”, the NSDCC region looks like the Mohave Desert! The foreclosures and REO listings are really thinning out – look forward to next year being the battle between short-sales and regular equity sellers.
It is impressive how many regular sellers have been able to compete with the distressed sales – 84% of the closings in the last six months have been non-distrssed! Buyers want quality, and the distressed sales tend to be the inferior properties – the non-distressed sales averaged $389/sf, and distressed sales were $283/sf.
It looks like the 50/50 split of short sales vs. non-SS will likely prevail throughout the county for the next year or two, but it’s been quieter around NSDCC. Will more owners of over-encumbered quality properties decide to give up next year, especially if Congress only extends the debt-tax relief for 12 months? What if it doesn’t get extended?
by Jim the Realtor | Oct 20, 2012 | Foreclosures/REOs, Shadow Inventory, Short Sales, Short Selling, Thinking of Buying?, Thinking of Selling?
We have been told that banks and servicers are now using short-sales, instead of foreclosures, as their primary defaulter-disposal method.
It appears that the conversion is well underway in San Diego County – here are the number of residential distressed-sales and average pricing for the six months between April 1st and Sept. 30th:
| San Diego Co. |
2011 |
2012 |
% Chg. |
| REO Sales, # |
3,778 |
2,381 |
-37% |
| REO Avg. $/sf |
$178/sf |
$184/sf |
+3% |
| Short Sales, # |
3,465 |
4,404 |
+27% |
| SS Avg. $/sf |
$195/sf |
$189/sf |
-3% |
Yes, the conversion from foreclosures to short sales is happening, though it doesn’t look good for the pricing trend. You could call +/- 3% just statistical noise, but for those who believe that the lenders save big money by short-selling vs foreclosure should think again.
The fraud seems to be getting more outrageous too – did you see the one yesterday that if the realtor would have listed it at market value, the seller would have made money? Instead, he listed it at $100,000 below the loan amount, and called it a short sale – at least for the usual five seconds before he withdrew the listing!
(withdrawing a SS listing is common when the listing agent has his own buyer and doesn’t want competition – he shows the bank a copy of the listing taken during the five seconds that it was active)
by Jim the Realtor | Oct 7, 2012 | Mortgage News, Short Sales, Short Selling, Strategic Defaults
The fate of the mortgage-debt tax relief? It’s going to be decided in a lame-duck session, and there doesn’t seem to be enough politicians willing to create a big fight – an excerpt from the latimes.com:
One key strategy question: Could the Family and Business Tax Cut Certainty Act of 2012 — which passed the Senate Finance Committee in August and includes mortgage forgiveness relief and other housing-related tax extensions along with alternative minimum tax relief, research-and-development tax credits and dozens of other targeted tax benefits — be treated as a stand-alone bill? If not, there’s a strong risk of it getting caught up in the much larger partisan fights over spending, the federal debt ceiling and the whole fiscal-cliff debate.
Senate Democrats reportedly were prepared to bring the bill to the floor for a vote before the election recess, but it never happened. Now the fate of the legislation appears to be up in the air, and House leaders may come up with their own version.
Here’s a quick overview of what’s at stake for homeowners:
• Mortgage-debt tax relief. Besides the Senate Finance Committee’s bill awaiting action in that chamber, there are at least four bills that have been introduced in the House that would extend the law. Rep. Jim McDermott (D-Wash.) is sponsoring a bill that would extend the mortgage forgiveness relief through 2015. Rep. Charles Rangel (D-N.Y.) wants to extend it through 2014. Both McDermott and Rangel are members of the tax-writing Ways and Means Committee. Rep. Dan Lungren (R-Calif.) is pushing for a three-year extension, and Rep. Tom Reed (R-N.Y.) favors a one-year extension, through 2013.
The fact that there is significant bipartisan support for an extension in the House greatly increases the odds that mortgage forgiveness tax relief in some form will pass before the end of the session. One housing lobbyist gives it a 60% chance of passage, even better if post-election lame ducks and victors find ways to compromise on the bigger issues. The main obstacle to an extension: the cost to the federal government.
• Mortgage insurance premium deductions. Under tax code provisions that expired in December, buyers and refinancers who pay either private or government mortgage insurance premiums could write them off subject to household income limitations. The Senate Finance Committee bill would reauthorize these deductions retroactively to Jan. 1, 2012, and extend them through the end of 2013. Because this would cost the government an estimated $1.3 billion over 10 years and has not attracted as intensive a lobbying effort as mortgage debt forgiveness, it may be more vulnerable if negotiators are looking for ways to boost revenue to pay for other cuts or extensions.
• Energy-efficiency improvements to homes. The Senate Finance Committee-passed bill would extend for two years — through 2013 — tax credits for installation of energy-conserving windows, doors and other improvements. The Senate’s bill would also extend credits available to builders of energy-efficient homes. These have a reasonable shot at extension, given strong support from home builders and product manufacturers.
Bottom line: On issues such as tax-system support for financially distressed households and energy conservation, the November elections are important in the long run, but the decisions made during the lame-duck session will have an immediate effect on thousands of homeowners.
http://www.latimes.com/classified/realestate/news/la-fi-harney-20121007,0,803763.story
by Jim the Realtor | Oct 5, 2012 | CA Homeowners Bill of Rights, North County Coastal, Short Sales, Short Selling, Strategic Defaults
The gap between SD distressed and non-distressed pricing appeared to be widening yesterday.
Can we get a glimpse of what to expect for the rest of the year by analyzing the current pendings and contingents? How do they look around North SD County’s Coastal region?
We only have the list prices to consider, but you can see that the gap is substantial.
Detached-Home Pendings and Contingents in NSDCC
| Town or Area |
# of Non-Dist. |
LP Avg. $/sf |
# of Distressed |
LP Avg $/sf |
| LJ/DM/SB/CV/RSF |
165 |
$565/sf |
62 |
$347/sf |
| CDF/ENC/CSBD |
237 |
$328/sf |
118 |
$262/sf |
Will lenders ramp up their short-sale approvals to close out the books for the year?
It would make sense, especially with the California Homeowners Bill of Rights taking effect on January 1st, which will give homeowners (and their attorneys) more tools to fight. If you are selling, it would be a great time to lower your price to sell now, before nearby distressed-sales start closing around you.
For those who have specific concerns about where these properties are located, here are the lists of detached short sale and REO listings that are pending or contingent. Note that the days-on-market meter does not stop running until a contingent listing is put into pending:
List of Pending and Contingent REOs and Short Sales
List of Pending and Contingent REOs and Short Sales – CDF-ENC-CSBD
by Jim the Realtor | Oct 4, 2012 | Fraud, Shadow Inventory, Short Sales
The latest C-L HPI came out on Tuesday, reporting the price increases in each market. They have two categories, the full-market number that includes “distressed sales” (short sales and foreclosures), and then another index that excludes “distressed sales”.
We don’t know the mix or types of properties, so this is pure speculation. But if the indexes are properly weighted to give an accurate depiction of the pricing, can we conclude a couple of things from this data?
| City/Area (CSBA) |
HPI (excl. distressed) |
HPI (incl. distressed) |
| Phoenix |
+16.9% |
+21.8% |
| Inland Emp |
+6.4% |
+4.0% |
| Los Angeles |
+6.0% |
+4.0% |
| San Diego |
+4.3% |
+0.8% |
| USA |
+4.9% |
+4.6% |
1. Investors have gone wild in Phoenix, with pricing of distressed properties going up faster than non-distressed. If they have more REO listings that are priced well, are easy to see, and have a fair bidding process, they should sell faster and for more money than those that are priced incorrectly, are difficult to see, and struggle to create a fair bidding process.
2. The other areas show slower price gains in the distressed-properties category, which is what people expect – that distressed properties sell for less. But not for much less.
3. San Diego has the biggest negative difference between distressed and non-distressed categories. Every REO sale that I see looks like a fair bidding process and a full-value sales price – it must be that the short sales are dragging down the pricing in that category. With the push towards fewer foreclosures and more short sales, don’t be surprised if this category suffers – because realtor manipulation of the short-sale process is wide-spread in San Diego County.
The +0.8% sticks out like a sore thumb. The index isn’t measuring just distressed sales only – they are mixed in with the full market. Yet look how they skew down the data – how can distressed sales cause a right turn in the springtime data when, without them, the trend was full tilt boogie?
Over the last thirty days we’ve had only 13% fewer unique visitors than during the 30 days prior to September 27th. The visits and page views are down 20% and 38% respectively, which I think is a result of readers taking a more casual involvement here, which is good. I appreciate you being here – check in every few days for an update!
