bubbleinfo.com

 We could use some good old-fashioned market clearing – maybe this is a start?

JimG brought it up, and our friend Effective Demand has charted the increase in Bank of America foreclosure activity for Southern California – recently their number of auctions has spiked:

More auctions, more short sales, more REOs, let’s GO! 

Freddie Mac also announced today:

McLean, VA – Freddie Mac (NYSE:FRE) and New Vista today announced plans to auction hundreds of HomeSteps® REO homes to individual homebuyers in Las Vegas on April 24, 2010 and in California’s Inland Empire on April 25, 2010 in support of the federal Neighborhood Stabilization Program (NSP) and to help more first time homebuyers and owner occupants purchase these homes. HomeSteps is the real estate sales unit of Freddie Mac and markets a nationwide selection of Freddie Mac-owned homes.

Under the 2009 Neighborhood Stabilization Program, homebuyers are eligible for closing costs and down payment assistance when they buy foreclosed or abandoned homes in designated communities that were hit hard by the housing downturn. This federal assistance combined with the federal tax credit will provide the buyer with significant financial advantage in purchasing HomeSteps homes.

“Freddie Mac’s first-time homebuyer auctions in Las Vegas and in California’s Inland Empire builds on our long-standing effort to use our REO inventory to foster new opportunities for new homeowners and shows another way Freddie Mac is working to achieve the Obama Administration’s goals of stabilizing and reviving impacted communities,” said Ingrid Beckles, Senior Vice President, Default Asset Management at Freddie Mac.

“Together with today’s low mortgage rates, these April auctions will enable Las Vegas and Inland Empire families to take advantage of the unique convergence of opportunities that make HomeSteps homes exceptionally attractive values,” said Chris Bowden, vice president of HomeSteps. “Working with New Vista underscores Freddie Mac’s commitment to manage its REO inventory in a way that helps stabilize communities, fosters homeownership opportunities, and responsibly safeguards tax dollars.”

“Owner-occupants are the key to revitalizing and strengthening neighborhoods that have been hard hit by the economy,” said Jim Park, CEO of New Vista. “Working with Freddie Mac, New Vista has created a one day homebuyer event that gives first time and owner occupant buyers an exclusive opportunity to purchase HomeSteps homes. These unique events will help turn hundreds of foreclosed properties into homes for many deserving families.”

New Vista will hold open houses on April 10 and April 17 – 18 in Las Vegas and the Inland Empire so interested buyers can tour the HomeSteps homes before the April 24 and 25 auctions. Potential buyers can also find property descriptions at auction.com/.

Any house west of the I-5 freeway in our prime North SD County Coastal region, priced within range of Fannie/Freddie/FHA financing, is likely to find a large audience.  Here’s an example:

The first minute of this video was taken yesterday during our usual broker open house session on Wednesday mornings, and the remainder was shot today.

MLS Listings of Detached Homes in Carmel Valley, 92130:

ACTIVES:  111 

$1,778,211 average list price,  $399/sf,  132 Avg. Days on Mkt.

(25% of those homes on market more than 6 months)

PENDINGS:  63 

$1,163,104 average list price,  $336/sf,  76 Avg. DOM

(41 pending, 22 contingent)

DEC. 09 SOLDS:  47 

$1,032,650 average sales price,  $331/sf,

75 DOM,  96% SP:LP

DEC. 08 SOLDS:  20

$1,092,245 average sales price,  $346/sf

46 DOM,  95% SP:LP

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In areas like CV, I think you can count the contingents as ‘likely-to-close-someday’, because the low inventory and quick sales are causing buyers to hang in longer, and pay more if needed - just to buy something, and conclude the hunt:  

There have been 16 houses listed over $1,000,000 that have gone pending this month in Carmel Valley. In 2009, there were 121 closings over $1,000,000, averaging $338/sf.

The new year is barreling down on us, and before you know it we’ll be in the ’spring-kick’ season. How is it looking so far?

I want to update the previous stat check from a week ago – it wasn’t balanced due to fewer business days/more weekends.  Let’s compare the first 15 days of January, that way every year will have two weekends included, instead of the previous Jan. 1-11 comparison.

We can refer to the 2003-2007 period as the ’steroids era’ of mortgage lending, and consider those stats hyped up.  All years are included below:

January 1-15

You can see a historic timeline just in these numbers. In 1997, Bush passed the $500,000 tax exclusion for couples who owner-occupied for two-out-of-five years, and by 1999, the specuvestors were flipping houses. They lost some steam after 2001 because the thrill was gone after the second move, and buyers were drying up, right in line with the usual 10-year real estate cycle – in fact, a downturn was overdue.

About then there was an audible gasp from the Calabasas area, and the next thing you know CFC was flooding the streets with neg-am mortgages – and by 2003 the market took off like a rocket. So let’s call the 2003-2007 period the ’steroids era’ of mortgage lending, and not use those numbers for comparison.

Instead, let’s look at the 1999-2002 era as at least being more normal than any year since (but in reality we haven’t had a normal year around these parts since 1985!). In 1999, the flipper tax exclusion helped to boost sales, plus the interest-only mortgages were the loan du jour – and both are still available today. In addition, we have much lower rates, and higher loan limits today, so let’s at least call the 2010 market, ’semi-juiced’, and compare to the 1999-2002 era which had some juice to it too:

So we’re not quite back to turn-of-the-decade numbers, but there is a slight resemblance with the number of sales. Could we call it ‘close-enough’, just because the ultra-low inventory is impeding sales? What are other factors? The number of sales should be higher once the late-reporters wrap up, that usually adds 10%. Currently there are multiple offers on every decent-priced listing today, and if it weren’t for the graft and corruption among agents, there would be more sales at higher prices, probably at least 70-90 sales for this period. But the price has to be right – look at the disparity between active and pending listings in North SD County Coastal:

1,124 Actives: LP=$680/sf, 121 DOM

289 Pendings: LP=$375/sf (x 95% = $356/sf SP), 71 DOM

There shouldn’t be any fear of additional foreclosures, in fact; the more, the better. They are the best chance of finding more reasonably-priced homes that you can buy!

Back in September we featured the same floor plan a block down the street - it listed for $144,900, and was purchased for $177,000 by flippers.

They have since put it back on the market for $277,000 and found a buyer within 27 days – it’s now pending: http://www.youtube.com/watch?v=cWqFEvlB4BA

Two weeks ago this one hit the open market:

What’s the common denominator amongst today’s buyers?

The bidding wars are intensely competitive, and without laws or regulations – anything goes! It is pretty impressive how many buyers are hanging in the fight, and willing to bid higher than list-price. Nobody likes it, but the multiple frustrations along the way make people want to just get it over with!