Foreclosures and defaults in San Diego County continued to fall, sinking to seven-year lows in September, DataQuick reported Monday.
The trend line, according to University of San Diego real estate economist Norm Miller, points to normalcy in 2014.
The figures show:
• Foreclosures totaled 146 in September, compared with 148 in August and 497 in September 2012, a 70.6 percent year-over-year decline. The last time the total was lower was in August 2006, at 134.
• Defaults totaled 466 in September, compared with 537 in August and 1,050 in September 2012, a 55.6 percent year-over-year decline. January 2006 had a lower figure of 462.
At the depths of the real estate crash that started in 2007, San Diego saw foreclosures soar to a record 2,004 in July 2008 and defaults to 3,832 in March 2009.
In the last “normal” market in 2000-2001, DataQuick reported monthly mortgage defaults in the 400-550 range and foreclosures in the 20-80 range.
The lows occurred a few years later as prices soared and homeowners refinanced to take advantage of low interest rates. Then when easy credit evaporated, homeowners were stuck with unaffordable mortgages and began falling into default.
Miller said the numbers indicate that some homeowners are still in distress, because they are unable to refinance their mortgages. Their equity still hasn’t risen sufficiently above the outstanding balance to the 20 percent level that banks typically require before agreeing to refinance.
“Keep in mind before we play violins for them, that a lot who are stuck have first and second mortgages,” Miller said. “They pulled all the equity out of their home and are living in homes with no money (invested). ... It’s really the lender who’s getting stuck. They’re the only ones with real money in the deal.”
Miller said the number to watch is the default rate, which is a leading indicator of the health of the lending environment. “If it starts going up, foreclosures will definitely go up,” he said.
However, if current conditions continue with a slow economic recovery and stabilizing house markets, then foreclosures should fall below 100 actions per month.
“It could be as much as a year before we’re at normalcy,” Miller said.
By Roger Showley
Friday, October 25, 2013
Monday, October 21, 2013
HOME PRICES IN COUNTY UP SLIGHTLY
San Diego County home prices ticked up in September after dipping slightly in August, but the number of transactions declined for the third straight month, DataQuick reported Wednesday.
The median price in the county last month was $422,000, up from $415,000 in August and $417,500 in July. Over the past 12 months, the county’s median price has risen 20.6 percent.
The number of sales, however, dropped 17.5 percent from August to September. Last month, 3,383 homes were sold in San Diego County, the first time since April there were fewer than 4,000 transactions. Still, sales were up 5.3 percent from September 2012.
The numbers show the market is leveling off, said John Walsh, president of DataQuick, a real estate tracking firm.
“We’ve seen a fairly normal downshifting in the housing market this fall,” he said in a statement. “Couple that with the rise in inventory, higher mortgage rates and the ongoing, gradual drop in purchases by investors and cash buyers, and it’s no wonder prices have leveled off in recent months.”
Michael Lea, a real estate professor at San Diego State University, said the data show that San Diego’s housing market is in a long-term recovery mode.
“Distressed sales are falling, and from the standpoint of buyers, a lot of the deals are gone,” he said.
Short sales comprised 14.3 percent of the market in September, down from 30.5 percent a year ago. Foreclosures were 4.4 percent of the market, down from 13.2 percent in September 2012.
Lea said the drop in distressed sales, plus the double-digit, year-over-year price increases are taking some steam out of the market. Lea said a healthy annual appreciation would be 5 to 6 percent.
For noncash buyers, borrowing is also getting more expensive.
Freddie Mac reported Oct. 10 that the average 30-year fixed mortgage rate was 4.23 percent. While that’s down slightly from last month, it’s higher than the 3.35 percent borrowers could get in May. Lea noted, however, that rates are still low by historic standards.
Separately, the Greater San Diego Association of Realtors reported that there were 6,838 active listings in September, up from 5,589 in September 2012. But inventory is still relatively low, as listings regularly exceeded 10,000 per month from the spring of 2010 through November 2011. As of Wednesday morning, there were 7,050 active listings in the county, the association reported.
In Southern California, San Bernardino County had the largest year-over-year median price increase, up 32.4 percent to $225,000.
Walsh in his statement noted that any lingering effect on the housing market over political gridlock in Washington remains to be seen. The uncertainty would be reflected in future data.
“What’s not clear is how well the market can weather the job losses related to the federal government shutdown and the blow to consumer confidence caused by fears of a default in the national debt,” Walsh said. “Those impacts would start to show up in data released over the next couple of months.”
The median price in the county last month was $422,000, up from $415,000 in August and $417,500 in July. Over the past 12 months, the county’s median price has risen 20.6 percent.
The number of sales, however, dropped 17.5 percent from August to September. Last month, 3,383 homes were sold in San Diego County, the first time since April there were fewer than 4,000 transactions. Still, sales were up 5.3 percent from September 2012.
The numbers show the market is leveling off, said John Walsh, president of DataQuick, a real estate tracking firm.
“We’ve seen a fairly normal downshifting in the housing market this fall,” he said in a statement. “Couple that with the rise in inventory, higher mortgage rates and the ongoing, gradual drop in purchases by investors and cash buyers, and it’s no wonder prices have leveled off in recent months.”
Michael Lea, a real estate professor at San Diego State University, said the data show that San Diego’s housing market is in a long-term recovery mode.
“Distressed sales are falling, and from the standpoint of buyers, a lot of the deals are gone,” he said.
Short sales comprised 14.3 percent of the market in September, down from 30.5 percent a year ago. Foreclosures were 4.4 percent of the market, down from 13.2 percent in September 2012.
Lea said the drop in distressed sales, plus the double-digit, year-over-year price increases are taking some steam out of the market. Lea said a healthy annual appreciation would be 5 to 6 percent.
For noncash buyers, borrowing is also getting more expensive.
Freddie Mac reported Oct. 10 that the average 30-year fixed mortgage rate was 4.23 percent. While that’s down slightly from last month, it’s higher than the 3.35 percent borrowers could get in May. Lea noted, however, that rates are still low by historic standards.
Separately, the Greater San Diego Association of Realtors reported that there were 6,838 active listings in September, up from 5,589 in September 2012. But inventory is still relatively low, as listings regularly exceeded 10,000 per month from the spring of 2010 through November 2011. As of Wednesday morning, there were 7,050 active listings in the county, the association reported.
In Southern California, San Bernardino County had the largest year-over-year median price increase, up 32.4 percent to $225,000.
Walsh in his statement noted that any lingering effect on the housing market over political gridlock in Washington remains to be seen. The uncertainty would be reflected in future data.
“What’s not clear is how well the market can weather the job losses related to the federal government shutdown and the blow to consumer confidence caused by fears of a default in the national debt,” Walsh said. “Those impacts would start to show up in data released over the next couple of months.”
Written by,
Jonathan Horn
Wednesday, October 2, 2013
What Does the Government Shutdown Mean for REALTORS®?
Congress has failed to approve a Continuing Resolution (CR) providing funding for most government operations. Therefore, spending authority for most of the government expired at midnight on Sept. 30, 2013. Until legislation providing for funding is signed into law, many offices and programs of the federal government are now shut down. This means many, but not all, government programs, including some that impact federal housing and mortgage programs, have been suspended or slowed due to the lapse in government funding. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place. The information below is based on NAR staff review of agency agency contingency plans for the current shutdown and past experience with previous shutdowns and near-shutdowns.
Latest Status Information
(as of Oct. 1, 2013 3PM ET)
Internal Revenue Service (IRS)
The IRS is closed and has suspended the processing of all forms, including tax return transcripts (Form 4506T). These transcripts are required for many kinds of loans, including FHA and VA, so delays can be expected if the shutdown is protracted.
Social Security Administration (SSA)
The Social Security Administration is closed and has suspended most customer service functions. According to the SSA Contingency Plan, verifying Social Security numbers through the Consent Based SSN Verification Service will also be suspended during the shutdown, a further complication for mortgage processing.
Additional Status Information
(as of Oct. 1, 2013 7AM ET)
Federal Housing Administration
HUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program, but it will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate. You can expect some delays with FHA processing.
VA Loan Guaranty Program
Lenders will continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown. Expect some delays during the shutdown.
Flood Insurance
The Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown, since NFIP is funded by premiums and not tax dollars. Changes to the flood insurance program scheduled to take effect on Oct. 1 will be implemented as scheduled.
Rural Housing Programs
For the U.S. Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.
It is important to note that the traditional definition of “rural” for qualifying communities for assistance will be continued in effect during the shutdown. We expect that language to continue the current definition will be included in whatever funding measure is eventually enacted.
Government Sponsored Enterprises
Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency, since they are not reliant on appropriated funds.
Treasury
The Making Home Affordable program, including HAMP and HAFA, will not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.
realtor.org/governmentshutdown.
National Association of REALTORS®
Latest Status Information
(as of Oct. 1, 2013 3PM ET)
Internal Revenue Service (IRS)
The IRS is closed and has suspended the processing of all forms, including tax return transcripts (Form 4506T). These transcripts are required for many kinds of loans, including FHA and VA, so delays can be expected if the shutdown is protracted.
Social Security Administration (SSA)
The Social Security Administration is closed and has suspended most customer service functions. According to the SSA Contingency Plan, verifying Social Security numbers through the Consent Based SSN Verification Service will also be suspended during the shutdown, a further complication for mortgage processing.
Additional Status Information
(as of Oct. 1, 2013 7AM ET)
Federal Housing Administration
HUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program, but it will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate. You can expect some delays with FHA processing.
VA Loan Guaranty Program
Lenders will continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown. Expect some delays during the shutdown.
Flood Insurance
The Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown, since NFIP is funded by premiums and not tax dollars. Changes to the flood insurance program scheduled to take effect on Oct. 1 will be implemented as scheduled.
Rural Housing Programs
For the U.S. Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.
It is important to note that the traditional definition of “rural” for qualifying communities for assistance will be continued in effect during the shutdown. We expect that language to continue the current definition will be included in whatever funding measure is eventually enacted.
Government Sponsored Enterprises
Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency, since they are not reliant on appropriated funds.
Treasury
The Making Home Affordable program, including HAMP and HAFA, will not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.
realtor.org/governmentshutdown.
National Association of REALTORS®
Tuesday, October 1, 2013
LOCAL HOME PRICES LEVELING OFF
Year-over-year jump of 20.4% puts county at 4th in index and beats national average
Home prices in San Diego County began to flatten out this summer, but their jump over the past 12 months is the largest in any yearlong period since March 2005, the S&P/Case-Shiller Home Price Index showed Tuesday.
Home prices in the county rose 20.4 percent from July 2012 to July 2013, trailing just three other cities included in Case-Shiller’s 20-city index. San Diego beat the national average of 12.4 percent.
But from June to July, prices grew 2 percent, which is a decline from the 2.8 percent they rose from May to June, according to the index, which lags two months.
David Blitzer, chairman of the index committee at S&P Dow Jones, said an increase in interest rates in May could be a reason for housing demand to decline. All 20 cities on the index saw monthly increases, but 15 of those gains were smaller from the month before.
“More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked,” he said in a statement. Blitzer noted that the Federal Reserve’s announcement last week that it would not begin to taper its stimulus program that keeps long-term interest rates low could provide a temporary boost to the housing market.
The average 30-year fixed mortgage rate was 4.5 percent, as of July 11, Freddie Mac reports. That’s up from 3.3 percent the week of May 2.
But rates are still low by historic standards, and therefore are keeping demand artificially high, said Michael Lea, a real estate professor at San Diego State University. The supply of housing is constrained because a lot of people are still underwater on their home mortgages, he said.
“If you had a normal amount of supply on the market with the given demand, you would not be seeing such hefty price increases,” Lea said.
Lea said the peak buying season ends this time of year, so he expects the market has reached its limit for the current period.
Across the country, the biggest jump in the Case-Shiller index came in Las Vegas, which saw its index increase 27.5 percent from July to July. San Francisco came in second with a 24.8 percent increase, while Los Angeles came in third, one spot ahead of San Diego, at a 20.8 percent year-to-year jump.
The index works by comparing repeat-sales prices of single-family homes.
DataQuick, another home-price monitor, reported that the median price in August was $415,000, down from $417,500 in July. But it’s still up 20.2 percent from year-ago levels.
By Jonathan Horn
Union Tribune
Home prices in San Diego County began to flatten out this summer, but their jump over the past 12 months is the largest in any yearlong period since March 2005, the S&P/Case-Shiller Home Price Index showed Tuesday.
Home prices in the county rose 20.4 percent from July 2012 to July 2013, trailing just three other cities included in Case-Shiller’s 20-city index. San Diego beat the national average of 12.4 percent.
But from June to July, prices grew 2 percent, which is a decline from the 2.8 percent they rose from May to June, according to the index, which lags two months.
David Blitzer, chairman of the index committee at S&P Dow Jones, said an increase in interest rates in May could be a reason for housing demand to decline. All 20 cities on the index saw monthly increases, but 15 of those gains were smaller from the month before.
“More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked,” he said in a statement. Blitzer noted that the Federal Reserve’s announcement last week that it would not begin to taper its stimulus program that keeps long-term interest rates low could provide a temporary boost to the housing market.
The average 30-year fixed mortgage rate was 4.5 percent, as of July 11, Freddie Mac reports. That’s up from 3.3 percent the week of May 2.
But rates are still low by historic standards, and therefore are keeping demand artificially high, said Michael Lea, a real estate professor at San Diego State University. The supply of housing is constrained because a lot of people are still underwater on their home mortgages, he said.
“If you had a normal amount of supply on the market with the given demand, you would not be seeing such hefty price increases,” Lea said.
Lea said the peak buying season ends this time of year, so he expects the market has reached its limit for the current period.
Across the country, the biggest jump in the Case-Shiller index came in Las Vegas, which saw its index increase 27.5 percent from July to July. San Francisco came in second with a 24.8 percent increase, while Los Angeles came in third, one spot ahead of San Diego, at a 20.8 percent year-to-year jump.
The index works by comparing repeat-sales prices of single-family homes.
DataQuick, another home-price monitor, reported that the median price in August was $415,000, down from $417,500 in July. But it’s still up 20.2 percent from year-ago levels.
Union Tribune
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