Sales to third parties, typically investors, rose significantly in January, according to a report by ForeclosureRadar. California saw the most activity, with investors purchasing 3,964 properties for $766.2 million. This is the fourth largest month on record in California, and the busiest since March of 2011.
Despite what appears to be significant percentage increases in foreclosure starts in California, Nevada and Washington, these increases barely offset the declines seen over the holidays. Compared with January one year ago, foreclosure starts are significantly lower.
“January’s numbers should put to rest any notion that we will see a wave of foreclosures in 2012, at least in the western states that we cover,” stated Sean O’Toole, founder and CEO of ForeclosureRadar. “Foreclosure Starts remain near record low levels, significantly lower than a year ago, when many banks still had self-imposed moratoriums in place due to the robo-signing scandal. Add to that a foreclosure timeframe of more than 8 months, and there is little chance of a wave this year even if all the banks started the foreclosure process en masse tomorrow.”
In January, foreclosure starts in California rose 15.5 percent and foreclosure sales increased 14.6 percent.
San Diego Union-Tribune
The number of loan servicers taking part in a state mortgage-aid program continues to grow roughly one year after its launch. The Keep Your Home California program now has 55 participating mortgage servicers, up from 21 in June.
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http://utsandiego.com/news/2012/jan/10/more-lenders-added-calif-mortgage-aid-program/
Los Angeles Times
The mortgage market told a sad story throughout 2011: Record low rates, but few people taking advantage of them to buy homes. The likely scenario in the new year, according to many analysts, is more of the same.
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http://www.latimes.com/business/la-fi-mortgage-rates-20120103,0,2240865.story
This week, NAR issued revised estimates for existing-home sales going back five years, saying the formula it had been using to adjust the sales data it collects from multiple listing services had drifted and was overestimating sales.
The benchmark revisions to existing-home sales data show fewer homes changed hands than NAR had previously reported. However, the revisions show little change in previously reported trends in home sales, and no change in median home price, NAR said.
Also, because NAR is making a comparable downward adjustment to unsold inventory, the revisions won’t change the months’ supply of homes for sale — a critical measure of the balance between supply and demand. Many housing analysts consider a six-month supply of homes for sale to be a healthy balance between supply and demand.
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Faced with finicky lenders, would-be home buyers are increasingly turning to family members, friends, and even strangers they meet online. While this is understandable, given the abundant bargains on the market, they also present significant risks.
Making sense of the story
- So-called peer-to-peer lending sites, such as Prosper and Lending Club, say demand for home-related financing is on the rise. In September, Weemba, a social-networking site, launched a platform to connect lenders directly with prospective home buyers and other borrowers.
- Despite historically low mortgage rates, traditional lenders remain reluctant to provide mortgages to anyone with less than stellar credit. And, in certain markets, lenders are requiring down payments of more than 20 percent of the home’s purchase price.
- Borrowers taking loans from family members – so-called intrafamily loans – save on interest since family members are likely to charge less than the banks. Additionally, parent lenders can earn a higher return from their child’s interest payments than they would on a certificate of deposit or money-market fund. Under federal law, on a loan of more than nine years, parents must charge at least roughly 2.8 percent, in most cases.
- Consumers who prefer to look for loans beyond the family can apply at peer-to-peer lending sites. If approved for a loan after a screening by the companies, applicants may then receive money from investors.
- However, these alternative routes to financing can be expensive for borrowers. Rates at Lending Club run from around 7 percent to 28 percent. At Prosper, rates run roughly 7 percent to 35 percent. The companies say these rates, which are fixed, are higher than traditional mortgage rates in part because their loans are unsecured.
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http://online.wsj.com/article/SB10001424052970203518404577094371355763672.html?mod=WSJ_RealEstate_LeftTopNews
One out of three builders reported losing signed sales contracts during the preceding six months because appraisals on their homes were less than the contract sales price, according to a survey by the National Association of Home Builders (NAHB).
Builders claim that due to faulty appraisal practices, brand new homes with upgrades get compared to distressed properties that have been sitting vacant and in disrepair. The result, in many cases, has been that the new house gets appraised at less than the cost of construction.
According to the NAHB survey, 60 percent of respondents reported they were experiencing appraisals coming in below their contract sales price. Of those reporting that they had encountered this problem, 53 percent said the appraisal amount was actually less than the cost of building the home.
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The Wall Street Journal
With the monthly cost of owning a home more affordable now than at any point in the past 15 years, homeownership is becoming less expensive than renting in a growing number of cities.
Making sense of the story
- The Wall Street Journal’s third-quarter survey of housing-market conditions in 28 of the nation’s largest metropolitan areas found that home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc.
- Meanwhile, rent levels have risen briskly across the country and mortgage rates, hovering around 4 percent, are the lowest in six decades.
- As a result, monthly mortgage payments on the median priced home – including taxes and insurance – are lower than the average rent levels in 12 metro areas, according to data compiled by Marcus & Millichap.
- Homeownership also is looking more affordable because after several years of declines, apartment rents will rise approximately 4 percent this year, and rents are poised to pick up even more momentum across the country next year, according to Marcus & Millichap.
- Affordability could continue to improve as prices slide even lower in coming months. Price declines are likely because the share of “distressed” sales, including bank-owned foreclosures, tend to rise in the winter, when traditional sales activity cools.
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http://online.wsj.com/article/SB10001424052970203764804577060502694077494.html?mod=WSJ_RealEstate_LeftTopNews
Applications for home purchase loans dropped by 20 percent in October from September, even though mortgage rates in October held close to their lowest levels of the year. Compared with one year ago, applications for home purchases were unchanged.
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http://blogs.wsj.com/developments/2011/11/11/applications-for-purchase-mortgages-declined-in-october/?mod=WSJBlog&mod=WSJ_Real Estate_BLOGSDEVELOPMENTSFEED
The average home price nationwide has declined 28.3 percent since the market peaked in June 2006, according to the most-recent Home Price Index by Lender Processing Services. The LPS HPI summarizes national home prices by tracking monthly prices in more than 13,500 ZIP codes. Within each ZIP code, it tracks five price levels from low to high.
The total value of U.S. housing inventory covered by the LPS HPI stood at $10.6 trillion at the peak. As of the end of August 2011, it was $7.65 trillion. During the period of most rapid price changes, from July 31, 2007, through December 2009, prices declined $56,000. The average annual decline during that time was 13.8 percent.
Since December 2009, prices have fallen more slowly, interrupted by brief seasonal intervals of rising prices. Since then, the LPS HPI national average home price has fallen $20,000. This corresponds to an average annual decline of 3.6 percent. Price changes were largely consistent across the country during August. Prices increased in only five percent of ZIP codes in the LPS HPI. Higher-priced homes had smaller declines: -0.72 percent for the top 20 percent of homes (prices above $321,000) compared with -1 percent for the bottom 20 percent (below $103,000).
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Realtor.com’s monthly housing report — based on information posted on brokers listing services — found the priciest big housing markets in California in September.
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http://lansner.ocregister.com/2011/11/09/wheres-priciest-homes-in-california/136083/
