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Real Estate

July Pending Sales and Distressed Sales Report

Equity home sales continue sharp upward trend as housing supply remains tight in distressed markets

LOS ANGELES (Aug. 22) – The share of equity home sales continued to grow in July, increasing on a monthly basis for 17 of the last 18 months, while distressed sales plunged by half compared to a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“The increase in the share of equity sales reflects a market that is fully transitioning from investor purchases of distressed homes to primary home purchases by households.  The market continues to improve as more previously underwater homes gain equity due to recent upward movement in prices,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “As a result, we’re seeing a significant decline in the supply of short sale and bank-owned properties.”

Distressed housing market data:

• The share of equity sales – or non-distressed property sales – has risen on a month-to- month basis for 17 of the last 18 months and now makes up more than four in five sales, the highest share since December 2007. The share of equity sales in July increased to 82.9 percent, up from 79.9 percent in June.  Equity sales made up three of five  (59.2 percent) sales in July 2012.

• The combined share of all distressed property sales continued to decline in July, dropping to 17.1 percent in July, down from 20.1 percent in June and down from 40.8 percent in July 2012. Twenty-five of the 38 reported counties showed a month-to-month decrease in the share of distressed sales, with San Mateo and Santa Clara each recording the smallest share at 4 percent for each county in July.

• Of the distressed properties, the share of short sales fell to the lowest point since April 2009 at 11.6 percent.  July’s figure was down from 12.9 percent in June and was about half of what it was a year ago, when short sales made up 22.7 percent of all sales.  The continuing decline in short sales indicates more previously underwater homes are moving into positive equity as home prices remain on an upward trend.

• The share of REO sales also continued to fall, dropping to single-digits for the fourth straight month.  REOs made up only 5 percent of all sales in July, down from 6.6 percent in June and from 17.7 percent in July 2012.  The July 2013 figure was the lowest since September 2007.

• The available supply of homes was essentially flat from June but remained tight.  The July Unsold Inventory Index for equity sales edged down from 3.1 months in June to 3 months in July.  The supply of REOs inched up from 1.8 months in June to 2.1 months in July, and the supply of short sales ticked upward from 2.4 months in June to 2.5 months in July.

Pending home sales data:

• California pending home sales were essentially flat in July, with the Pending Home Sales Index (PHSI)* dipping 0.2 percent in July to 114, down from 114.3 in June, based on signed contracts.  Pending sales were down 1.5 percent from the 115.8 index recorded in July 2012.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Charts:

• Pending sales compared with closed sales.
• Historical trend in the share of equity sales compared with distressed sales.
• Closed housing sales in July by sales type (equity, distressed).
• Housing supply of REOs, short sales, and equity sales in July.
• A historical trend of REO, short sale, and equity sales housing supply.
• Year-to-year change in sales by property typ

For all your real estate needs
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John J. O’Dell Realtor® GRI
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Real Estate

It’s Not Over: Report Warns Shadow Inventory Threat Remains

 

Home for sale cheap, might need a little paint. Photo credit: http://funnychill.com/
Home for sale cheap, might need a little paint.
Photo credit: http://funnychill.com/

Foreclosures have been falling in recent months, but two government watchdogs warn that the foreclosure crisis isn’t over yet. About 1.7 million borrowers have missed more than one payment on their government-backed mortgages, according to a newly released report by the inspectors general of the Federal Housing Finance Agency and Department of Housing and Urban Development.

The shadow inventory is made up of loans that have been delinquent for at least 90 days. If these delinquent loans become foreclosures, they could pose significant financial challenges to mortgage giants Fannie Mae, Freddie Mac, or other federal housing agencies, the report notes.

“Not only are current REO inventory levels elevated … they may rise over the next several years depending on the number of shadow inventory properties that are ultimately foreclosed on,” the report stated.

According to the report, the shadow inventory is more than seven times the inventory of REOs that Fannie Mae, Freddie Mac, and HUD currently own.

“Even a fraction of the shadow inventory falling into foreclosure could considerably swell … inventories of REO properties,” the report notes.

Source: “‘Shadow’ homes could burden U.S. housing agencies: report,” Reuters (May 31, 2013)

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John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
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Real Estate

Pending Home Sales in California Gained in February

 

Pending home sales in California gained ground for the second consecutive month in February, while the share of equity sales posted higher after two months of decline, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

Pending home sales:

C.A.R.’s Pending Home Sales Index (PHSI)* rose from a revised 102.3 in January to 127.8 in February, based on signed contracts.  The index also was up from the 111.8 index recorded in February 2011, marking the tenth consecutive month that pending sales were higher than the previous year.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Distressed housing market data:

“A lack of inventory in the bank-owned (REO) and short sale market was a contributing factor to the decline in share of distressed sales in February,” said C.A.R. President LeFrancis Arnold.  “In fact, REO inventory declined 24 percent in February from the previous year, while short sale inventory dropped 17 percent during the same period.”

• After declining for two straight months, equity sales increased in February, making up 51.1 percent of home sales in February.  Equity sales made up 49.9 and 44.8 percent of all sales in January 2012 and February 2011, respectively.
• Meanwhile, the total share of all distressed property types sold statewide decreased in February to 48.9 percent, down from January’s 50.1 percent and from 55.2 percent in February 2011.
• The share of short sales dipped slightly in February.  Of the distressed properties sold statewide in January, 23 percent were short sales, down from the previous month’s share of 23.8 percent but up from last February’s share of 22.9 percent.
• The share of REO sales also edged down in February to 25.2 percent, down from January’s 25.9 percent and down from the 31.9 percent recorded in February 2011.
For all your real estate needs:
Call or email today
John J. O’Dell Realtor® GRI
Real Estate Broker
Civil Engineer
General Contractor
(530) 263-1091
Email jodell@nevadacounty.com

DRE #00669941

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Real Estate

Getting A Fair Appraisal In A Tough Market


Since the real estate market took a downturn, some people have complained they couldn’t buy, sell, or refinance a home because an appraiser used bank-owned (REO) or short-sold homes as comparables in the valuation process, which dragged down the value of their home.  While using REO and short-sold properties can lower the value of a home, some homeowners are upset that their county assessor will not use these properties as comps for their property taxes.

  • In California,  some assessors will consider distressed sales when looking at comps, but it varies widely by county, neighborhood, and house.  In general, assessors will always look at non-distressed sales first and if there are enough, disregard REO and short sales.  However, if there are not enough standard sales, or the home is in an area dominated by distressed sales, the assessor likely will take these properties into account.
  • Under Proposition 13, property is assessed upon a change in ownership at its fair market value.  That is usually the same as the sale price.  However, with distressed property, the sale price may not equal fair market value.
  • Between changes of ownership, assessors can raise values only by an inflation rate, not to exceed 2 percent per year, plus the value of major improvements or additions.
  • Under Prop. 8, owners who think the market value of their property has fallen below its assessed value can ask for a temporary reduction to the fair market value.
  • Homeowners who think their homes are worth less than the assessed value can usually ask their assessor for an informal review.  If they are still not satisfied, they can file a formal appeal with their county’s assessment appeals board by Sept. 15 or Nov. 30, depending on the county.

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John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com
 

Real Estate

Banks Short Sales Equals Very Long Sales

2 Comments

By John O’Dell

I wrote an article last year that the banks were trying to make short sales shorter.  That post was based on news at that time that banks were streamlining their short sale process. Well, I think that was propaganda that was just made to make people think the banks are acting responsibly. Nothing has changed since the banks press release.

You can wait six months and not hear anything from a bank on a short sale. They even put the property in foreclosure in the middle of a short sale! I can give you several recent examples that I had with short sales, none of them good.

A 5,000 square foot house in Nevada County was a short sale. Listed at over $800,000, than dropped to $599,000, than $499,000, than finally to $399,000. One of my clients made a full price offer, but was in a backup position.  The buyers in first position, that is they made the first offer. The bank listed the property at $399,000, but then started negotiating with the buyer. The bank said (verbally)  OK we’ll take $450,000, but once the buyers said OK, the bank changed their mind and said no we want $475,000 and got it!  So much for fair dealing. By the way, 60 percent of the  buyers in second position are the ones that get the home, since the buyer in first position gives up and buys somewhere else.

I have several offers in for my clients in second position and several months later, we have not heard anything. We have an offer in for another client on an REO (bank owned home) in San Jose and we are in the second week of finding out if our offer has been accepted. The response we get from the listing agent is that the bank’s asset manager is over whelmed. I can’t give you the offering price, but you know real estate in San Jose is not cheap, yet the bank is “over whelmed”.

So what has been your experience in dealing with your bank?

John J. O’Dell
Real Estate Broker
Here to help you with your buying or selling of real estate.